SavvySugar

What to Know About the Extended Homebuyers Tax Credit

SavvySugar — Mon, 09 Nov 2009 06:00:09 -0800

Stimulating the economy is the motivation behind many discussions and decisions coming from the White House these days. The original $8,000 first-time homebuyers credit was developed with economic improvement in mind, and the measure's popularity led to President Obama signing an extension and expansion of the credit on Friday.

The tax credit was scheduled to expire on Dec. 1, but the new version comes with a later date and widens the range of those eligible to claim the credit. Learn more about the new tax credit when you read more.

Homebuyers must sign a contract before April 30 and close on the home by June 30.
The previous credit was limited to first-time buyers or buyers who haven't owned a home in the past three years. The new version has been expanded to include those who have owned a home for five out of the past eight years and want to buy a new one.
First-time homebuyers are still eligible to receive the $8,000, while existing homeowners can qualify for a $6,500 tax credit.
The income limits have been significantly raised. With the previous credit, single people making more than $75,000 or couples earning more than $150,000 didn't qualify for the full credit. Under the new version, single buyers can earn up to $125,000 while a married couple can earn $225,000 and still get the full credit.

Are you hoping to take advantage of the extended homebuyers tax credit?

Cost of 4-Bedroom Homes in the Most and Least Pricey Cities

SavvySugar — Mon, 28 Sep 2009 04:32:16 -0700

Homes are one category where you cannot judge the cost by its cover. Housing prices vary wildly depending on geography - the same chunk of change can buy a 1,000 square-foot condo in one part of the country or a 5,200 spacious home in another area.

The 2009 Coldwell Banker Home Price Comparison Index was released this week, and it's an "apples-to-apples" comparison of the prices around the nation for 2,200-square-foot, four-bedroom, two-and-one-half bath, single-family homes. See a side-by-side cost comparison of the 10 most and least affordable cities below.

Location	Price	Location	Price
La Jolla, CA	$2,125,000	Grayling, MI	$112,675
Beverly Hills, CA	$1,981,750	Akron, OH	$121,885
Greenwich, CT	$1,519,250	Fayetteville, NC	$130,875
Palo Alto, CA	$1,489,726	Canton, OH	$131,867
Santa Monica, CA	$1,460,912	Detroit, MI	$132,000

See five more comparisons when you read more.

Location	Price	Location	Price
San Francisco, CA	$1,363,250	Arlington, TX	$138,775
Boston, MA	$1,337,578	Macon, GA	$139,007
Newport Beach, CA	$1,315,505	Eau Claire, WI	$141,270
Palos Verdes, CA	$1,237,041	Port Charlotte, FL	$142,750
San Mateo, CA	$1,090,000	Wichita, KS	$144,625

Would You Rent an $1,850 Apartment With No Bathroom Sink?

SavvySugar — Wed, 23 Sep 2009 13:15:26 -0700

The next time you're kvetching about your apartment's shortcomings, consider 27-year-old Atossa Movahedi's one-bedroom Chelsea apartment. The New York Times tells the story of Atossa's search for something within her price range that wasn't a studio and located in one of her preferred neighborhoods. After living with roommates in various Manhattan neighborhoods, she was determined to find a place to call her own for about $1,600 a month.

When it became obvious her budget and vision wouldn't work together, she reconsidered and increased what she was willing to pay for monthly rent. After a long, frustrating search, Movahedi found something she could live with in her now apartment, but the place isn't perfect - the apartment is missing a bathroom sink. She says the shortcoming doesn't really bother her (she notes that her hairdresser doesn't even have a bathroom) and said, "It forces me to do my dishes right away. I make sure the kitchen is really clean."

Would you sign a lease on an apartment with no bathroom sink?

7 Guidelines For First-Time Home Buyers

SavvySugar — Tue, 15 Sep 2009 04:30:22 -0700

Just about a year ago, our financial system as we knew it was collapsing - Wall Street was in shambles. Things kept getting worse in pretty much every corner of the economy, and we're still trying to figure out whether or not the country has reached a state of recovery. The housing market has been particularly tumultuous, but many new buyers are taking advantage of lower home prices and finding themselves in escrow for the first time.

Home-buying is a different game than it used to be, so The New York Times' Ron Lieber gathered a list of seven suggestions for navigating the new housing economy.

Start with the basics. Lieber lays the foundation for conservatively getting into the market and says, "Put 20 percent down, so you have less of a chance of owing more than your home is worth if prices fall again. Get a fixed-rate mortgage, so the biggest part of your monthly housing bill remains stable." On top of that, he recommends spending no more than about 35 percent of your pretax income on mortgage, property tax and home insurance payments.
Consider your income. Income overconfidence may have had something to do with the mortgage mess, but Princeton economics professor Harvey S. Rosen thinks “People can, on average, make reasonably good predictions of their future incomes and act on them in sensible ways by buying bigger houses."
Bow to unknowns. Financial planner Bobbie D. Munroe encourages her clients, especially the younger ones, to model their budget in three ways: with both spouses working full time, one working part time, and one staying at home for a few years (and maybe even practicing living on one income).

See the four more guidelines when you read more.

Map out expenses. Financial planner Dennis G. Stearns "estimates that owners of a newer home that do some work for themselves but contract major work out to others will pay 3.6 percent of the original purchase price annually for maintenance and 4.5 percent if it’s an older home."
Buy best (or cheapest). Financial planner Michael Kalscheur "suggests buying the dream house you covet (if you can afford it) or an inexpensive starter house but not anything in the middle." He reasons that buying the entry-level home instead of the second place home will allow you to save enough money to buy what you really want down the road.
Stretch the house. Stretching out your tenure in a home by making periodic upgrades might be more sensible than ever moving from that first home.
The eight-hour rule. Lieber advises, "If an impending loan has you stretching for the Ambien, it’s a pretty good sign that the loan is a bit of a stretch as well." In other words, sleep on it before making any decisions.

Where It Costs Less to Own Than Rent

SavvySugar — Thu, 27 Aug 2009 10:30:26 -0700

We got some good economic news during the past week with announcements that July's new and existing home sales jumped significantly, beating analysts expectations. While buying a home isn't the best choice for everyone and not every American considers home ownership part of the dream, lower prices have made it an option for more people who want it.

Because the market has sunk deeply in certain areas, owning a home can cost nearly the same as renting. BusinessWeek and research firm Reis discovered that it actually costs less to own than rent in Detroit and Pittsburgh, and they found 20 other metros where renting costs almost the same as buying. It doesn't look like they took into account the added maintenance expense that comes with home ownership, so keep that in mind when perusing the results.

Are You Hoping to Take Advantage of the Homebuyer's Credit?

SavvySugar — Mon, 24 Aug 2009 12:00:38 -0700

First-time buyers hoping to take advantage of the homebuyer's credit are feeling the pressure to find a place soon. Eligibility for the tax credit states that the deal must be done before Dec. 1, and that deadline is creeping up quickly. Are you hoping to get the $8,000 credit?

The 10 Strongest US Real Estate Markets

SavvySugar — Mon, 17 Aug 2009 04:30:31 -0700

Bubble-induced regret has a lot of Americans kicking themselves over buying property at the wrong time. Some places managed to avoid the bubble trap and now have strong housing markets relative to the greater real estate picture.

BusinessWeek and Zillow.com ranked metro areas based on the number of single-family homes with increased values in the second quarter compared to the same period last year. They used the findings to determine the strongest housing markets in the country, and below are the top 10.

Boulder, CO
Spartanburg, SC
New Orleans, LA
Binghamton, NY
Fayetteville, NC
Pittsburgh, PA
Little Rock, AK
Gainesville, GA
Burlington, NC
Oklahoma City, OK

Gone Are the Days of the McMansion?

SavvySugar — Fri, 14 Aug 2009 04:30:24 -0700

US home foreclosures are still occurring at record rates. July's foreclosures were up seven percent from June and 32 percent from a year earlier - one in every 355 households with a loan got a foreclosure filing. The jump can be partly attributed to the rising unemployment rate as people lack wages to pay their mortgages.

The good news is that new homes being built are seven percent smaller (about the size of one average-sized room) than homes built in the last 15 years. Hopefully, the downsizing means some people are smartening up and not biting off more than they can chew.

Sarah Susanka, author of the book The Not So Big House, commented, "As more and more people build or remodel homes that satisfy in quality rather than quantity, there will be a huge shift in what we perceive as desirable." What do you think - will there be a permanent shift to more modest homes?

Ask Savvy: What Are Your Tips For Renegotiating Rent?

SavvySugar — Thu, 13 Aug 2009 10:30:23 -0700

Dear Savvy,

My boyfriend and I have been considering downsizing into a cheaper apartment. I was looking online and noticed that a similar apartment to ours in our complex is being offered for $300 less a month than we pay. Our lease is up in two months. Do you have any advice on renegotiating our rent? We are willing to move, but it would be ideal if we could stay and pay less per month.

Savvy says: I definitely think you and your boyfriend should try to renegotiate your rent. It can't hurt, and depending on your renter's history, you might have a good chance of getting what you want. See my thoughts on your situation when you read more.

Your argument for rent reduction will be strong if you have been reliable tenants that have always paid on time (some NYC landlords have even been voluntarily reducing rent for good tenants to get them to stay). If possible, find out the key differences between your unit and the one that's advertised for $300 less. The apartments may be more different than you think, thus justifying the difference in rent, but if they're in fact very similar then your case will be even stronger.

Because you only have two months left on your lease, you should contact your landlord ASAP and explain that you'd like to discuss renegotiating the rent on your apartment. Say that you very much like living there and want to stay, but you've checked out similar apartments for less money - including one in the same complex. If possible, present other places for rent that are also charging less. If your landlord is unwilling to come down as much as you'd like, consider offering to extend your lease if you're granted a reduced rent.

Be prepared to answer questions like whether your employment situation has changed; your landlord might be paranoid that you want cheaper rent because you're having financial problems. If your finances are as good as they were when you were first approved as a tenant, then your case is solid. Good luck!

Three Lessons to Learn From the Housing Fiasco

SavvySugar — Fri, 24 Jul 2009 08:30:14 -0700

The deflated housing bubble has had widespread effects that continue to poison the lives of many Americans and the greater economy. As much as we are faced with stories of foreclosure after foreclosure, the results of a recent survey by real estate website Zillow suggest that many aren't taking away important lessons from the housing debacle. ABC News Consumer Correspondent Elisabeth Leamy is discouraged by this and offers a few key takeaways from the popped bubble.

17 percent of people say they plan to buy a house with zero percent down. Leamy says: "Zero-down loans are not available anymore . . . A 20 percent down payment makes a lot more sense. Time to start saving up."
55 percent of people say the reason they want to buy a new home is so they can get a bigger one than they have now. Leamy's reaction: "Hey, if your family can afford a bigger house in this economy buy it . . . But for those who can't afford it, it's time to get comfortable with more modest living."
30 percent of home buyers told Zillow they plan to own their next home for five years or less. Leamy's response: "Experts are horrified. Most real estate watchers are saying you should not bother buying a home these days unless you plan to stay for at least seven years. Why? Because the market is volatile."