By now everybody has heard of the First Time Home Buyer tax credit, and to take advantage of the $8,000, you have to meet the April 30th deadline. What the government is now saying that your second time is almost as good as the first!

Now anyone who has owned a principal residence home for five consecutive years is eligible for a $6,500 tax credit!

The same rules apply to the Repeat Home Buyers tax credit that apply to the First Time Home Buyers, meaning you must have a household income no more than $75,000 for singles, and no more than $150,000 for married couples filing a joint return.

Just to be clear, the government is considers the following to be acceptable principal residences:

• Single-Family Detached Homes
• Townhouses
• Condominiums
• Manufactured/Mobile Homes
• Houseboats

The tax credit will only be 10% of the purchase price of the home, to a maximum of $6,500. If you meet the requirements to get the tax credit, it’s a great way to help you get your first home! You better hurry though because the April 30th deadline is quickly approaching.

Good luck house hunting and enjoy that $8,000 or $6,500 tax credit!

Source: Federal Housing Tax Credit
Photo by: Spaunsglo // CC 2.0

You’re going up to a register and you find that you’ve got no cash on you! You quickly try to find your bank so you can use their ATM, but there isn’t one nearby. So you just use the next ATM that you find and you take the ATM fee. Something you may not have noticed is that these fees have increased 12.6% over the last year!

Some banks now will charge up to $3 for an ATM usage fee, and on top of that, your bank may charge you an out of network ATM fee that is about $1 to $2 extra. All for getting access to your own money.

However, there are ways you can prevent getting these ATM fees.

Review your policy – Look through your bank’s ATM usage policy or ask at your local branch—they may reimburse you for the ATM fee. Many eBanks do this as they do not have a physical location. Credit Unions may waive any out-of-network ATM fees as well.

No ATMs – If you know there is no ATM nearby, but you know you have the funds. You can write a check, use your debit card, or use your credit card. These are ways to access your cash, but be certain that your bank account has enough money in it. Otherwise you will be slapped with overdraft fees and interest.

No more cash – The cash on you was your budget that you have set for yourself and you have run out. Set your stuff down and walk out. Your budget is there for a reason, you should stick with it.

There is some good news though! Since these various bank fees have become a concern for many people, it hasn’t gone unnoticed, beginning with credit cards and the CARD act, now Senator Charles E. Schumer (D-NY) wants to review these fee increases to make sure there is no foul play.

Have you ever been charged an ATM fee? What are your thoughts on it?

Effective January 1, 2010, all loan applications must use a new Good Faith Estimate form in order to be accepted. The Real Estate Settlement Procedures Act (RESPA) requires all mortgage lenders to provide you with a Good Faith Estimate for your mortgage loan. This form is provides you with an itemized list of fees and costs associated with your loan, allowing you to compare the real total costs of different lenders when making your decision.

The new version of this form has been revised by the Department of Housing and Urban Development in order to be more consumer-friendly. The new form will make it easier for you to compare settlement service providers when shopping around by giving you a more clear presentation of loan terms and total settlement charges.

The form includes an improved disclosure of yield spread premiums (YSPs) to help you understand how they influence charges associated with your settlement. The main purpose of these revisions is to prevent home buyers from entering into loan agreements they do not completely understand and may not be able to afford in the long run.

Fees included on the form will fall into three categories:

• Fees that will not increase from the upfront estimate to final closing.
These include lender or broker origination, processing, and underwriting charges, as well as discount charges or “points” based on the quoted interest rate, and local transfer taxes.

• Fees that may increase, but must stay within 10% of the upfront estimate.
This category specifies that while individual items may increase more than 10%, the combined total must not exceed this limit. These items include services such as appraisals, title insurance, settlement services, owner’s title insurance, and other services required by the lender where the lender selects the provider or supplies a list of providers that the borrower must select from.

• Fees that may increase without limit.
This category is of items that are beyond the lender’s control or realm of prediction. These include services that are required by the lender when the borrower chooses the provider, such as title insurance, escrow, homeowner’s hazard insurance, daily interest charges on the loan, and the amount of initial deposit by the borrower into an escrow account.

The form also requires a new standard closing cost statement, the HUD-1. This allows you to do a side-by-side comparison of the costs that you were given upfront to what you were actually asked to pay at closing. In addition to this, the HUD-1 also requires disclosure of confusing fee splits of title insurance premiums for the insurance underwriter and the title agent. The estimate must be provided by a lender and made available to you within three days of accepting your loan application and will be good for ten days.

For more complete information on the changes being made to the Good Faith Estimate form, watch this informational video provided by United Wholesale Mortgage.

Source: The Washington Post. www.washingtonpost.com.
Department of Housing and Urban Development. 24 CFR Parts 203 and 3500, RIN 2502-AI61. Office of the Assistant Secretary for Housing – Federal Housing Commissioner, HUD.
Photo by: atoach // CC BY 2.0

With the season changing, the temperature is going to be changing day by day. It might be hot one day and cold the next, which is a prime time for flu season. But beware! The cold you have may have a bigger effect on you than just a stuffy nose and cough. When you have a cold, it keeps you away from work (not earning money), makes you take trips to the doctor’s office (losing time), and makes you buy medicine to take care of yourself (losing money)!

So keep your body healthy this season, here’s a couple ways to do so:

Keep rested – When you don’t get enough sleep, your body feels it. It will be tired, and you will become more vulnerable to cold bugs.

Drink water – Water will keep your body hydrated. Many people don’t drink enough water for the day, which leaves their body dehydrated. Try to take frequent drinks of water, try to avoid waiting until you’re thirsty, as you are already considered dehydrated by then.

Eat well – When you’re hungry, try avoiding loads of unhealthy foods. This will leave your body tired and sluggish, which could lead to you catching a cold. Snacking on fruits and veggies can help energize your body, and can provide it with essential vitamins that can keep your body healthy to fight off colds.

Avoid concentrated areas – Places like the mall are great places to catch a cold during the flu season. People that don’t realize their sick yet will go around to the stores touching various products, and with other people touching the same things, the cold bugs get passes around very quickly.

Wash your hands – Washing your hands means that you are washing away any germs or viruses that you may have had contact with. This is especially important if you are about to eat.

Stay in – If your body is telling you that it’s tired, and you feel as though you might be sick, try to stay in as much as you can and stay rested. Avoid any strenuous activities like a work out, as you body will need the energy to help it fight off the cold.

Stay healthy so you don’t have to stay away from work and lose money. There are a wide range of manufactured and herbal remedies to keep you healthy during the cold season.

Are there any that work for you?

Excellent news if you didn’t get a chance to take advantage of the $8000 First Time Homebuyer Tax Credit – it’s been extended! The Senate voted unanimously yesterday to approve an extension of the credit through April 2010. They also amended the bill to expand it to allow those purchasing their second home a credit of up to $6500. All that’s left is the President’s John Hancock sealing the deal.

The credit was approved largely in part due to the boost that it gave to the economy this first time around. The National Association of Realtors and the National Association of Homebuyer have played vital roles in lobbying for this extension to become a reality.

For those who were thinking about purchasing, this is an excellent incentive. We are all hopeful that this will further the momentum that was gained from the original tax credit.

What do you think of this extension? Will this affect your decision to purchase a home?

Source: Housing Wire. www.housingwire.com
Photo by: jakemohan // CC BY 2.0

It has been nearly a year since the CEOs of the Big Three flew their over-sized private jets to Washington begging for bailouts. Now that the bailouts have had time to set in and reconstruction of these flawed companies has been under way, how are they doing? Have these three big automakers done enough to create companies that will be sustainable in the future?

Take a look at what’s been going on at the Big Three:

Chrysler

U.S. Brands: Chrysler, Dodge, Jeep

Headquarters: Auburn Hills, Michigan

Bailout: $15.2 billion (repaid $1.5 billion)

Declared Bankruptcy: April 30, 2009

Post-Bailout Company:
In June 2009, Italian automaker Fiat took a 20% stake in Chrysler in exchange for partnering with them on new products. In this partnership, Chrysler LLC has become Chrysler Group. Chrysler’s former CEO and Chairman, Bob Nardelli, has been replaced by Fiat CEO Sergio Marchionne, with former Chrysler President Jim Press as his Deputy CEO. Fiat brings to Chrysler billions of dollars worth of advanced technology, while Chrysler offers the Italian automaker opportunities to market more of their brands in the U.S. The company plans to unveil a revised business plan this November, though has done little to cater to the demands for smaller, more fuel-efficient cars.

August 2009 Sales: Down 15% nationwide from August 2008.

The Outlook: Predictions for Chrysler seem to be the most dismal. Upon acquiring a stake in Chrysler, Fiat was said to be “surprised” by the lack of effort that had been put into a recovery. “Chrysler is over, basically,” says Industry Analyst Todd Turner of Car Concepts Automotive Research of the Chrysler brand. “Within five years, you’re going to see nothing.”

General Motors

U.S. Brands: Chevrolet, Cadillac, Buick, GMC

Headquarters: Detroit, Michigan

Bailout: $49.9 billion

Declared Bankruptcy: June 1, 2009 (came out of bankruptcy on July 10, 2009)

Post-Bailout Company:
Former CEO Rick Wagoner resigned as a part of the bailout agreement and was replaced by GM’s President and Chief Operating Officer, Fritz Henderson. This past July, NGMCO Inc. purchased GM, changing its name to General Motors Company. A new strategy is in the production of smaller, more fuel-efficient cars, and the new Chevrolet Cruz is due out next year, as well as a plug-in model of the Chevy Volt. Having the long-standing reputation of being primarily a pick-up and SUV maker, this change could sustain the company.

An additional note, The New York Times reported recently that GM will be calling back 2400 laid off factory workers to meet a surge in demand after the recent Cash for Clunkers stimulus.

August 2009 Sales: Down 20% nationwide from August 2008.

The Outlook: Stephen Spivey, Senior Auto Analyst for business consultant Frost & Sullivan, comments, “It’s way too early to say if they’ve done enough in bankruptcy.” We’ll just have to wait and see if GM has made enough progress to have a future.

Ford Motor Company

U.S. Brands: Ford, Lincoln, Mercury, Volvo

Headquarters: Dearborn, Michigan

Bailout: None.

Declared Bankruptcy: None.

Post-Bailout Company:
Ford remains the only automaker of the Big Three to have avoided bankruptcy. In July 2008, Ford has taken the initiative to embrace the production of more fuel-efficient cars and announced in July 2008 that it would bring six of its models to the U.S. Recently, the Department of Energy granted Ford a $5.9 billion loan to help them reequip many of their factories to produce more fuel-efficient cars.

August 2009 Sales: Up 17% nationwide from August 2008.

The Outlook: Moody’s Investor Service has upgraded Ford’s ratings from “negative” to “stable,” stating that, “the period of greatest risk in Ford’s restructuring has passed.” Ford seems to have the best odds out of the three for long-term survival.

Photo by: madaise // CC BY 2.0
Sources: CNN Money/ Assignment Detroit. money.cnn.com. Wikipedia. www.wikipedia.com

The government has started cracking down on credit card companies. Feeling relieved? Well, you might want to take a look at your policy again. As a last ditch effort, many of these companies are trying to hoard up as much money as they can before the new laws are implemented by anything from increasing your rates to an outrageous amount to canceling your account, all without prior notification!

These sneaky tactics haven’t gone unnoticed though—Representatives Barney Frank and Carolyn Maloney are pushing for the Credit CARD Act’s rules to be enforced earlier, on December 1st, 2009 instead of February 22, 2010.

They are hoping to send a strong message to these companies, saying to stop taking advantage of you! A date of December 1st is to also help alleviate some of your concerns with a big shopping season coming up. Opponents to the earlier date say that it will only have the companies increase rates faster, and will make debt worse for people.

Are you for the push for the December 1st date?

This past April, the government began accepting applications for a homeowner assistance program called Making Home Affordable, or MHA. This program is a $75 billion initiative aimed at keeping homeowners in their homes by making their mortgage payments more affordable. MHA has two plans: the Home Affordable Refinance Plan (HARP), and the Home Affordable Modification Plan (HAMP). If you are struggling to make your mortgage payments, one of these plans might be right for you!

Here are the details:

Home Affordable Refinance Program:

Under HARP, borrowers who have been unable to take advantage of current low interest rates because their home’s value has decreased are given the opportunity to refinance, making monthly payments more affordable.

Are you eligible?

• Your mortgage is guaranteed by Fannie Mae or Freddie Mac.
• You are current on your mortgage payments and have not been more than 30 days late on a mortgage payment in the past 12 months.
• The amount you owe on your first lien mortgage does not exceed 125% of its current market value.
• You will reasonably be able to make the payments under the refinanced mortgage.
• The refinanced mortgage will improve the long term stability or affordability of your loan.

How do you apply?

• Find the phone number for your lender on the back of a mortgage statement or coupon book.
• Call your lender and ask for a Home Affordable Refinance application.

What do you need to apply?

• Documentation of the gross monthly income for all borrowers on your mortgage loan (i.e. pay stubs)
• Your most recent tax return.
• Information on any junior lien mortgage you have on the house.
• Account balances and minimum payments due on all of your credit cards.
• Account balances and monthly payments on all other debts.

HARP refinances must have a mortgage note date on or before January 10, 2010.

Home Affordable Modification Program:

Through HAMP, borrowers who are having trouble making mortgage payments can modify their monthly payments to receive relief. Borrowers who maintain timely payments on their modified loans can also accrue rewards up to $1000 per year for up to five years.

How does it work?

The objective of this plan is to get your monthly mortgage payments below 31% of your gross monthly income. The loan servicer will adjust your interest rates to as low as 2% in order to reach this goal. If your monthly mortgage payments are not low enough, your loan may be extended to a maximum of 40 years. If your payments are still above the 31% threshold, your loan servicer will defer a portion of the principal owed (called principal forbearance). In the event that the modification is still not below 31% of your gross monthly income, your loan servicer has the option to forgive a portion of the principal, though this step is not required. You will be placed on a 3-month trial period under the new modified loan agreement. At the end of the trial period, if you have been able to make your monthly mortgage payment, you will remain on the modification plan. Otherwise, you will not be eligible to continue.

Are you eligible?

• You own and occupy the home as your primary residence.
• Your first lien mortgage is no more than $729,750.
• Your first lien mortgage was originated on or before January 1, 2009.
• Your monthly mortgage payment is over 31% of your gross monthly income.
• You can provide documentation that you are struggling due to financial hardship.

How do you apply?

• Check to see if your lender is participating in this program.
• Call your lender and ask for a Home Affordable Modification application.

What do you need to apply?

• Documentation of the gross monthly income for all borrowers on your mortgage loan (i.e. pay stubs)
• Documentation of your most recent tax return.
• Information about your assets.
• Information on any subordinate lien mortgage you have on the house.
• Account balances and minimum payments due on all of your credit cards.
• Account balances and monthly payments on all other debts.
• A letter describing why your mortgage is unaffordable.

Trial modifications must be in place by December 31, 2012.

For more information on these programs, see the MHA website.

Photo by: futureshape // CC BY 2.0

There are talks in Congress to extend the $8000 tax credit that is set to expire in the end of November. Is this a good thing for our economy? Many people believe so, and some are willing to fight for this extension.

The two largest housing groups in the U.S., the National Association of Realtors and the National Association of Homebuyers, have been busy lobbying to see this tax credit continue for another six to twelve months. They argue that this housing stimulus has increased home sales and provided benefits for businesses, manufacturers, and service industries throughout the nation. They also note, the increase in jobs related to the purchase of homes, and tax revenue generated from the sales themselves.

Sponsoring the movement are Senator Christopher J. Dodd (D-Connecticut) and Senator Johnny Isakson (R-Georgia). They are pushing to increase the credit allowance to a maximum of $15000, with an extension to include all purchases made in 2010.

Could this extension become a reality? Would it keep money moving in our economy?

We’ll just have to wait and see.

Source: Baltimore Sun. www.baltimoresun.com
Photo by: zieak // CC BY 2.0

Great news! On August 20th, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (Credit CARD Act) began effect. This establishes new regulations to protect people like you from the implementation of unfair and deceptive practices by large credit companies. As of now, only the first phase is in place, but the second, more significant phase will become effective February 22, 2010.

Here are the rules that have recently been enforced:

• Changes in terms. Providers are obligated to give at least 45 days notice of any major changes in credit card terms. This has been increased from the previous requirement of 15 days.

• Billing. Billing statements must be issued at least 21 days before payments are due, either by electronically or by mail. This has been increased from the previous requirement of 14 days.

• Balance payment. Borrowers have the option to pay off any outstanding balance within five years at current rates. With this option, the borrower may not make additional charges until the balance is paid.

Here are the changes you can expect to see in February:

• Interest rates. For payments that are less than 60 days late, no increase in interest rates may take place, unless the consumer has signed up for a variable indexed interest rate account.

• Due dates. Payments must be due no earlier than 5 p.m and on the same day each month. If the due date falls on a holiday or weekend, the credit card providers may not count payments received the next day as being late.

• Minimum payments. Monthly statements must exhibit additional information, including the projected period of time to pay off a balance making only minimum payments, the monthly amount required to pay off a balance over 36 months, and a toll-free number to call for credit counseling and debt management.

• Over-limit fees. Providers may not enforce fees for transactions that exceed the borrower’s credit limit where previous consent from the borrower was not given. Without this consent, all transactions that would go beyond the set limit must be denied at the time of purchase.

• Borrower age. Applicants under 21 years of age must demonstrate their ability to make payments or have a parent cosign before being approved for a credit card.

• Calculating interest. Credit card issuers may not calculate interest based on the information from more than one billing cycle.

Photo by: Ebu Cehil // CC BY 2.0
Source: CreditCards.com. www.creditcards.com.