Tax Credit Extension Could Happen
October 27, 2009 by Heidi Franklin
On Monday, Florida Democrat Sen. Bill Nelson told reporters that he thought that the extension would be approved. However both senators and representatives thought spending any more money on the stimulus effort also could stir up a hornets’ nest.
The proposal in the Senate that could happen has the following points:
- Extend the $8,000 credit through March 31, 2010
- Drop by $2,000 for each of the subsequent three quarters of 2010
The current tax credit expires on November 30th 2009.
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AB 957 “The Buyers Choice Act” Passes
October 20, 2009 by Heidi Franklin
Governor Schwarzenegger signed Assembly Bill 957 into law. This bill, authored by Assembly Member Cathleen Galgiani (D-Tracy), protects consumers by ensuring that they have the right to choose their own real estate service providers when purchasing foreclosed properties.
AB 957, known as the Buyer’s Choice Act, prohibits sellers of REO properties – typically foreclosed properties owned by banks – from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider. This unethical, anti-competitive practicedrives up costs for homebuyers and takes business away from locally owned companies. The problem has become particularly acute in the Central Valley and Inland Empire, areas that have faced some of the highest foreclosure rates in the country. Recent data indicate that 11 of the nation’s top 20 foreclosure rates are in California metropolitan areas.
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What are points?
August 27, 2009 by Heidi Franklin
The term “points” may come up during a discussion of real estate financing and can be a very important consideration when choosing a loan. Points are fees paid at closing, with each point equal to one percent of the loan amount. For example, on a $120,000 mortgage, one point is $1,200.
There are two different types of points that may be associated with your loan.
Discount Points
Discount points can actualy be considered as “prepaid interest” on your loan, so they may be tax deductible and reduce the amount of interest you will haveto pay later on. Paying discount points may make you, as a borrower, look more attractive to the lender. Check with your tax professional about the potential tax deductions that this and other closing and moving expenses can provide you when you buy a home.
Origination Points
Origination Points are esentially lender fees. If you have good credit, you probably won’t pay origination points. However, if your credit is less then steller, you may have to pay points in order to provide the lender with additional”insurance” for the credit risk taken by loaning you money.The point may be called a loan origination fee, commitment fee, warehousing fee, or funding fee.
Points are not set by government regulation, but by each lender individually. I t is important to discuss points with your lending professional so that you understand what you are paying and why.
