Louisville Properties Blog
Louisville Properties Blog

Louisville Properties Blog

First-Time Home Buyer Tax Credit Information

The government's first-time home buyer program is one of the very few bright spots in a generally lousy real estate climate. We've put together a short list of requirements to help people gain a better understanding of the requirements of the program and take advantage of the many benefits the program offers.
  • $8,000
Qualified first-time home buyers are eligible to receive up to $8,000 in tax credit or ten percent of the price of their home. To qualify, the home must be the buyers' principal residence.
  • Who are first-time home buyers
For the purposes of this program, the government defines first-time home buyers as someone who hasn't owned their own home in at least 3 years.
  • When the plan is in effect
The tax credit is in effect for homes purchased between January 1 and December 1, 2009 only. However, newly proposed legislation extends the program until December 1, 2010.
  • Income limits for eligibility
In order to qualify, first-time home buyers must have an adjusted annual gross income of $75,000 or less and couples buying a home together must earn less than $150,000 annually.
  • Commitment
As part of the tax credit program, first-time home buyers must agree to live in their new home for at least three years to qualify for the credit. If they move within three years, they must return the amount of tax credited to the government; however, there are exceptions made for divorce, the homeowner's death and a few other situations. If you're thinking of buying a home and taking advantage of the tax credit, right now is an...

Purchasing Foreclosure Property

Home foreclosures have received a lot of coverage in the media for the last 18 months. The number of people losing their homes has skyrocketed as the economy has flagged. People who bought their homes at the top of the market are so upside-down on their loans that many are simply walking away from them. The situation has communities and states scrambling to deal with the steadily increasing amount of vacant foreclosed homes. However, foreclosures can be a real bargain for home buyers if they exercise some caution. Many homes in foreclosure were owned by people with little or no equity in the home, and that is a huge disadvantage to buyers as the lender will try to recover as much of their investment as possible. Another "buyers beware" note is that most foreclosed homes sell "as is." In some cases, the previous home owner bitterly vandalizes or sabotages the house and necessary repairs to make the home livable may eat up the attractive 30 percent price reduction. When considering the purchase of a foreclosed home, you should also think about the financial considerations that may have nothing to do with the home itself. Depending on whether your buy the foreclosure at an auction, a pre-foreclosure sale by the owner or through a real estate company, if a lender cannot inspect the home first, they probably will not be willing to issue a mortgage for it. Prospective buyers should also be diligent about having a title search performed on a foreclosure they are interested in buying. If the home went into foreclosure, it's possible that the former homeowner used the house as collateral and there could be liens against the home that will be uncovered during a title search. When considering the purchase of a foreclosed home, let the buyer beware. If you are interested in buying a foreclosure or other Louisville Real Estate, please contact Louisville...

Refinancing Your Home

If you're thinking about refinancing your home, it can save many thousands of dollars over the life of a mortgage; however, home refinancing is not without peril. You have to be willing to make a sober assessment of your financial situation and conduct your own research before making the decision to refinance (refi) your home. There are potential pitfalls to a refi if you aren't careful. An old and enduring rule about refinancing says that it only makes sense to refi if you can shave two percentage points off your current interest rate. A lower interest rate is certainly helpful, but your prevailing concern should be how long it takes to break even on a refi. For instance, when closing on a home, there are usually points paid on a refinance. If you don't plan to stay in the home long enough to realize the savings, a refinance does not make financial sense for you. Next, make sure the new mortgage will actually save you money. For example, a mortgage with a variable interest rate for 15 years instead of 30 years might sound attractive initially. However, when interest rates go up, so will your monthly payment. Mortgages for shorter periods of time can save you a ton of money over time, but make sure that you can comfortably afford the higher monthly payments. It's a good idea to shop around with different lenders to see which offer the most favorable terms. While it may be more convenient to refinance through the lender that issued the mortgage since they have all the documentation, shopping around for the best rates is smart money management. Most of all don't be afraid to ask tough questions when refinancing your home. Driving a hard bargain might inspire the loan officer to shave a few more points off the interest rate in order to make the deal! If you are looking to buy or sell Louisville Real Estate, Louisville Properties can help.  Please contact us and 502-744-9504 today. ...

Advice for FSBOs

If you're a homeowner that wants to save money by selling your home the For Sale by Owner (FSBO) route and don't mind doing your own marketing, there are some steps you can take that will help prevent your home from languishing on the market. Here is some Internet marketing advice for FSBOs:
  • Join a local FSBO group
Many communities have local FSBO groups that already have a website and have lots of tips and tools for selling your own home. They generally allow someone to build a page for their home, provide contact information and have a template that homeowners can fill use to provide pertinent information about the home.
  • List Your Home on the MLS
The main disadvantage to selling your home as a FSBO is the exposure you lose out on with your local MLS.  A real estate agent or broker lists your property on your local MLS for everyone interested in buying a home to see.  What few people realize is that you can list your home on your local MLS for a flat fee.   Local flat fee MLS services are low cost alternative to high cost real estate agent commissions.
  • Virtual tours
In the Information Age, a single picture of the front of the house just doesn't cut it. A decent digital camera makes it easy to take a number of pictures of the home and upload the images to your home's FSBO page so that potential buyers can take a virtual tour of the home. Provide as many pictures as the FSBO site will allow and encourage site visitors to set up an appointment to see the home.
  • Proactively market your FSBO
Visit local forums, real estate sites and other web sites that cater to your community and proactively market your home by providing links to your home's page. Also take part in relevant discussions and mention the features of your home...

Tax Incentives to Owning a House

Buying a home is a major financial commitment; however, taking this step affords the owner many significant tax benefits that they can enjoy year after year. The federal government has created these tax advantages in an effort to promote home ownership across the country. The tax rebate for first-time home buyers makes owning a home an even better deal. Here is a brief outline of the tax incentives of owning a home:
  • Tax-deductible mortgage interest
Any interest a homeowner pays on a mortgage is deductible from their income taxes up to $1 million. In addition, if they take out a home equity loan, they may be able to deduct the interest on that loan up to $100,000.
  • Property tax deduction
Any local or state property taxes that a homeowner pays on their property are deductible from their income tax. However, any money in an escrow account to pay future taxes is not deductible from income tax.  
  • Tax-free profits
When a homeowner sells their home at a profit, that money is not taxed up to $250,000 for a single homeowner or $500,000 for a couple. There are conditions, i.e., a homeowner can only claim this type of exception every two years; however, a partial exemption may apply to any profit from selling a home under unforeseen circumstances.
  • Deductible moving expenses
If a homeowner buys a home at least 50 miles closer to their place of employment than their last home, the government allows the homeowner to claim moving expenses as a deduction. Naturally, there are some conditions that apply, such as the need for the homeowner to work full-time for at least 39 weeks the next year. Still, most of these conditions are very easy to meet for the overwhelming majority of homeowners. ...

Fed Report Disappoints Louisville Real Estate Professionals

The Federal Reserve issued its Beige Book report for July 2009 recently and the report indicated that the rate that economic activity declined in Louisville, other Eighth District cities and towns had moderated somewhat since the last report. When Business First of Louisville asked their contacts in Louisville commercial real estate and local home construction industries about current market conditions, they claimed disappointment in the slow progress of the government's stimulus bill and the relatively small size of local projects it has funded. Louisville homes sales also continued their decline according to the report. Compared to the same period in 2008, Louisville homes sales for May 2009 were down 35 percent in Louisville, 22 percent in Memphis, 32 percent in Little Rock and down 13 percent in St. Louis. Housing permits for single-family homes built in Louisville were also down 44 percent, down 56 percent in Memphis, down 30 percent in Little Rock and down 37 percent in St. Louis. The number of outstanding loans from small- and medium-sized banks in the Eighth District was also down 1.3 percent from early April 2009 to the middle of June. The report also looked at other Louisville industries and indicated that the decline had slowed in area manufacturing and service sectors. Area auto dealers reported mixed results. Demand for Louisville residential and commercial real estate remained fairly weak. Announcements of layoffs include Louisville's education, aerospace, information, medical services, business support, electrical equipment, frozen food and auto parts and auto manufacturing sectors. However, the dour economic news wasn't all bad. Companies that make fabricated metal products, paper, rail technology, health and social services, furniture and plastic products expected to expand their facilities and hire workers to staff new positions in the near future. If you need ...
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