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[14] March 4, 2009


Your guide to Real Estate and home buying & selling

[$8,000 TAX DEDUCTION from page 13] couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial firsttime homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000. Example 2: Assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyers income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800. Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify:

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.

Homes that Qualify:

More good news is there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard jumbo loan rates. In our Puget Sound area, the dollar amount is $506,000.

More Help for Homeowners in the Future:

Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage. According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster. While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That is because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices. The Economic Stimulus Plan is huge, and impacts a number of industries. I have highlighted just some of the major provisions that may impact you now and in the future. Did You Know That You Need A Job, A Good Credit Rating and Promise To Pay The Lender Back Before You Can Get A Loan? You must have heard about Fannie Mae and Freddie Mac? Because it’s important to me that you get the ‘Straight Talk” I thought I would take a minute and interpret for you exactly what it means and how it will impact you personally. First a little history: A few months ago the federal government took action to shore up Fannie Mae & Freddie Mac. So here’s what’s going on now: Freddie and Fannie have lost about $14 billion dollars year to date. Now the guys at the top of both companies are getting kicked out, and there have been some revelations

of poor management as well as the possibility of cooked books. So the Fed is stepping in, and putting the companies into conservatorship. Sort of like Chapter 11 reorganization. They’re going to buy around 100 billion dollars worth of Fannie and Freddie mortgage backed securities. This is a big deal, because not only does it show the government’s commitment to keeping these companies afloat, but also because it can have a positive effect on rates. What we can expect is more of what we’ve seen in the past year. Lenders have gotten away from the very loose underwriting guidelines of the last several years. Borrowers will really have to have their ducks in a row with good documentation, & credit issues dealt with in advance. So here’s the bottom line - Mortgages are going to continue to be available with good rates, but lenders are going to be very strict in their underwriting. Why am I sharing this? Because it is absolutely critical before you start looking at home ownership for FirstTimers and/or Move-Up Buyers, you want to connect with a reputable Mortgage Broker, Credit Union, Bank or Lender who can determine if and what you are qualified and preapproved to purchase. This will allow your skilled Realtor® to negotiate the very best deal for you! Good Luck and I encourage you to be VERY excited that we now have 8,000 additional incentives to participate in the many joys of home ownership! For further information or suggestions on future topics, please contact Debbie Walter @ or (206) 930-8699. Debbie is a REALTOR® with RE/MAX NW Realtors in Kirkland. Debbie is a member of the National Association of Realtors (a trade organization that promotes real estate information, education and professional standards).

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Kirkland Real Estate March 2009  

Your Guide to Real Estate home buying & selling

Kirkland Real Estate March 2009  

Your Guide to Real Estate home buying & selling