Financing Archives

Great incentive: 5% financing with 3% Downpayment

Posted by Mike Parsons
October 07, 2008 at 08:26 PM

Hey folks! If you are a first time home buyer, chances are you are using FHA financing. Wells Fargo has come out with a new program that buys down your market interest rate 1% for the first year. This buy down or temporary interest rate reduction doesn't cost the buyer any money. If the current interest rate is 6%, your first year interest rate will be 5% and change to 6% fixed for the next 29 years. This is a great bonus compared to anything else I have seen out there currently. If you have any questions you can email me or contact Dave Dikeman with Wells Fargo at 614-310-1126 to learn more.

$7500 First Time Homebuyer Tax Credit and OFHA

Posted by Mike Parsons
October 02, 2008 at 12:20 AM

One of the most exciting new provisions of the Housing and Economic Recovery Act of 2008 is the First-Time Homebuyer Tax Credit. The credit is designed to encourage first-time homebuyers to go ahead and make the leap to purchase their first homes. Combine this tax credit with the fact that home prices are at historical lows, and indeed it is an ideal time for many first-time homebuyers to purchase homes.
Here are some things to keep in mind:
The credit is available for homes purchased between April 9, 2008 and July 1, 2009
The credit amounts to 10% of the purchase price of the home not to exceed $7,500
A first-time homebuyer is defined as someone who has not owned a home in the last three years
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
The tax credit works like an interest free loan and must be repaid over a 15 year period
How does a tax credit work?
A tax credit is a special provision that reduces income tax liability on a dollar for dollar basis. When filing a tax return, you must include income items, deduction items and the number of exemptions, among other things, to figure your total tax liability. If your total tax liability ends up being $7,500, and you qualify for the full $7,500 tax credit, this credit would be applied and would wipe out all of the tax due. If your employer had already deducted the $7,500 from your pay checks throughout the year, you would receive a tax refund of $7,500.
Does the credit have to be repaid?
Yes, the credit does have to be repaid, so it is really more like an interest free loan. Homebuyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a homebuyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Conclusion:
For more information about the first-time homebuyer tax credit or other changes resulting from the Housing and Economic Recovery Act of 2008, just give me a call. I would be happy to assist you with your mortgage in the purchase of your new home!
$7500 Tax Credit with Ohio Bond Money
The Housing and Economic Recovery Act of 2008 (H.R. 3221) prohibits the use of the $7,500 new First-Time Home buyer Credit in conjunction with tax-exempt Mortgage Revenue Bonds. Because the OHFA First-Time Home buyer Program is financed with tax-exempt Mortgage Revenue Bonds, homeowners who use the OHFA program are not eligible for the credit.
If you are a first time homebuyer and qualify for bond money, it still may better choice than the tax credit. Remember the tax credit has to be paid back. It will depend on your circumstances.
Best regards,
Michael Reeve, MBA, CMPS®
The Guernsey Bank, Vice President
614-547-1570 x307
mreeve@guernseymortgage.com
guernseymortgage.com

Interest Rates Drop Due to Fannie Mae Bailout-About to be the best time to buy a home in Columbus, OH in a decade

Posted by Mike Parsons
September 09, 2008 at 07:51 PM

We have seen rates drop almost a half point in the last week. Many buyers that have been sitting on the fence may jump in now. Many of these teetering buyers are first time buyers. They help stimulate the domino effect of buying a home that allows another family to move up to a more expensive home and so on. This will help to counteract the typical slowdown in Columbus, OH starting in September after school starts. My own thoughts lead me to believe this winter will be on of the most ideal times to buy a home in the last decade. High home inventory due to adjustable mortgaqes going adjustable, school starting which really slows the market, temporarily over protective lenders that make it tough to get financing on homes that aren't perfect, and super low interest rates will lead to a perfect storm of excellent real estate values. Buyers who buy in December and January when the market is the slowest and there is snow on the ground will be very happy with their Columbus home investment in the next five years after our inventory stabilizes. I believe values/prices will begin to stabilize in Spring of 09'. Don't get me wrong, around Spring its still going to be a little messy out there I just think this Winter will be the bottom of prices. By this time we will see almost all of the ARM's have been foreclosed upon, sold their homes, or have refinanced out of their problems. This will lead to less Bank Owneds on the market and less new inventory coming into the marketplace. Our older, established areas have been solid (Worthington, Grandview, Upper Arlington, Clintonville) and even getting multiple offers for homes in awesome shape or that were renovated. We have seen the biggest problems in areas that have newer homes, condos, and in areas that have lesser rated school districts. Some of the best below market opportunities might be in some of these newer areas that are nice but are swamped with temporary huge numbers of competing listings. It will take a couple years for these sub markets to stabilize but for the buy and hold homeowner or investor I think this winter will be the bottom

How to dispute a tax valutaion on your property in Columbus, Ohio

Posted by Mike Parsons
September 05, 2008 at 04:30 PM

Do you think your property, or your client's property, is valued too high by the Auditor's office for real estate taxes? Check out this article written by good friends of mine Ralph and Brian Berger. There is a complaint process that is administered by the Board of Revision.
If you believe your value is high you will need undisputable evidence to support the valuation. Once you appeal your value, it can go up, down, or stay the same.
Taxes are one year in arrears. Therefore, your tax bill that will come out around December 20, 2007, is for the valuation of your property up to 1/1/07. This means if you have an appraisal for the appeal it should be dated as of 1/1/07.
If property values are dropping in your neighborhood in the year 2007, then this will take effect with your 2008 tax bill.
The county re-evaluates your property taxes every three years. Therefore, the county will be re-evaluating your tax valuation in 2008 (also upon transfer assessed valuation is adjusted to the sales price).
Instruction on filing a tax complaint and forms are located on the Auditor's web site. All local Auditor's web sites are on ColumbusRealtors.com under `Related Links'. Once at the Auditor's web site look for tax complaint or board of revision.
Also you will need to pull up your property record card from the auditor's office (under property search). This will have information needed to fill out the board of revision tax complaint form (i.e., tax district, parcel number, assessed valuation, owner of property and sales history).
Typically for residential properties, if the form is filled out properly and submitted and received before the deadline (March 31), and with evidence (an appraisal completed by a state certified appraiser) supporting a lower value, the board will make a decision and either will accept the appraisal value or set up a formal hearing.
The board of revision, the school board representative, and the person filing the tax complaint (and their attorney and/or appraiser) are usually the parties at the hearing.
The board will review your evidence (usually an appraisal or recent sales of properties or comparable sales of similar properties) for a lower property value. The school board attorney will also have the right to review the evidence and ask questions.
The board then takes the evidence under advisement and will notify by certified mail of their decision.
If the school board is involved they will (1) accept the board's decision or (2) appeal the case if they are in disagreement.
The school board if in disagreement may elect to have the property appraised for the appeal. The school board has a vested interest in real estate property taxes as they receive most of their funds from these taxes.
The appeals hearing is similar to the first hearing except now there is an opposing side.
After all evidence is presented, the board again will take under advisement and notify of their decision later by certified mail.
It is very important to fill out the form completely and properly. If an entity other than an individual is owner of the property the complaint may need to be signed by an attorney. Be careful to meet the deadline, and have substantial evidence to show a reason for a lower value. This form needs to be notarized. Complaints will only be accepted from December to March 31.
I have appeared before several boards of revision on numerous occasions and have found them to be very fair in both the complaint process and their decision.
The auditor's office uses a mass appraisal system to determine the value of your property. The system is good, however, most are expected to be the correct property valuation, but some are also expected to be high and low.
We are currently in a buyer's market in central Ohio as evidenced by larger inventory of houses, longer selling periods and generally leveling prices. Therefore, tax complaints will probably increase in 2008 even though the county will be doing a complete re-evaluation of properties.

By Ralph F. Berger, MAI, SRA and Brian R. Berger, R.F. Berger and Associates, Inc.

Low interest rates are keeping our market strong!

Posted by Mike Parsons
April 10, 2008 at 04:43 PM

Mortgage rates are the biggest factor in determining how much one can afford, so when rates are as low as they are today, you and I have incredible buying power. How low are they ? People who bought a home in 1963 were paying the same rate that is available today. A lower interest rate means you can afford more home. A lower interest rate will save you thousands of dollars over your lifetime. Financing is readily available for those with a steady job history and a suitable credit rating. Lower interest rates mean many first time buyers may finally be able to afford a home.
Call the Parsons Real Estate Group to talk about the advantages of buying a home today !

Central Ohio's Housing Market is Healthy and Stable!

Posted by Mike Parsons
at 03:29 PM

All real estate is local in nature, yet the media often quotes national trends and statistics. Central Ohio is a healthy and stable marketplace. Over 24,000 homes sold in Central Ohio in 2007. According to a Forbes.com report Columbus is the 7th most affordable place to live well. A Forbes and MoodysEconomy report called Columbus the 3rd most stable housing market in the country based on the strength of our economy,the affordability and availabilty of housing and the availability of the local credit markets. Home sales are affordable ! the average sale price of homes in Central Ohio continues to be considerably lower than the national average. 2007 was the 4th best housing market in history coming off the biggest housing boom in years 2003-2006. Home prices have a steady increase of 40% over the last decade. The chief economist of the National Association of Realtors considers Central Ohio undervalued. Housing prices are lower than what experts would expect . In Summary, The Grass is Greener here ! Call The Parsons Real Estate Group to buy or sell your next home !

Rates are Great!

Posted by Mike Parsons
February 01, 2008 at 05:46 PM

Interest rates have come down! Third Federal Savings and Loan's website offers their current rates. As of today, 2/1/2008, their 30 year fixed is 5.49% and their 15 year fixed is 4.9%. As you know, mortgage rates change every day. Many believe that rates still may come down more over the next couple months. These are the lowest rates we have seen in the last 50 years. This is a great time to refinance or purchase your new home. If you can think back to the 1980's many of us or our parents were still buying homes when rates were hovering around 15%. Under 6% sounds good to me.

You can view Third Federal's rates at View Rates

Remember these are rates for good credit borrowers with at least 20% down.
If you have less than 20% down payment to work with there are some very competitive programs out there but at a higher rate than the ones displayed.
Other great banks/lenders we have worked with are Dave Zambo at Park National Bank, Antonio Benton at Mid-American Mortgage Solutions, Natalie Moore at National City Bank, and Dave Dikeman at Homestead Mortgage.

Don't hesitate to email or call for any recommendations for using a bank to refinance or purchase a home. We work with many great banks and brokers everyday.