Claim the Home Buyer Federal Tax Credit with IRS Form 5405

Earlier this month, the IRS released form 5405, which allows homebuyers to claim up to an $8000 tax credit for the purchase of a home.  You can get a copy of IRS form 5405 by clicking here or check out the copy embedded below. You can find full details on claiming the tax credit on IRS.gov.

IRS form 5405 home buyer tax credit –

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First Time Home Buyer Federal Tax Credit Extended and Expanded

Credit Scores Explained in One Easy-To-Read Chart

Ever wonder why your credit (aka FICO) score is what it is? Do you think it’s lower than it should be especially since you’ve never had anything repossessed nor ever been foreclosed on? Well, here’s an easy-to-read chart explaining how not paying your credit card bills on time can effect your credit score (click chart to enlarge)…

(courtesy of SpendOnLife.com via AgentGenius.com)

Upcoming Changes to FHA Home Loan Guidelines = Higher Costs to Home Buyers

Upcoming changes to FHA home loan guidelines will increase the cost of buying a home for buyers – especially first-time home buyers. It may sound crazy considering the state of the national housing market, but it’s true.

Here’s the official HUD press release (click here if you don’t see the embedded HUD press release regarding FHA home loan guidelines)…

FHA guideline changes 2010 –

In a nutshell, here are the FHA home loan guideline changes and what they mean to you…

• The upfront Mortgage Insurance Premium (MIP) is going up from 1.75 points to 2.25 points (1 point = 1 percent of the loan amount). On a $200,000 FHA home loan, that’s an added cost of $1,000
• FHA home loans to borrowers with a FICO score (aka credit score) of 579 or less will go up from 3.5 percent to 10 percent. On a $200,000 FHA home loan, that’s an added cost of $13,000
• Many home buyers going with an FHA home loan ask for closing cost assistance from the seller in order to minimize the amount of cash they need to come up with out of their pocket. Currently, FHA guidelines allow seller closing cost assistance of up to 6 percent of the purchase price. The new FHA home loan guidelines will decrease the amount from 6 percent to 3 percent. I typically see closing costs (including pre-paid items) on FHA loans of between 4 to 5 percent. Under the new guidelines, the home buyer would have to come up with the last 1 to 2 percent out of their own pocket rather than asking for all of it to be paid for by the seller.

To put the changes into perspective, let’s see what the difference in cost will be to John and Jane Smith, first-time home buyers in Northern Virginia using an FHA home loan under today’s guidelines versus the new guidelines…

Today’s FHA home loan guidelines

John and Jane Smith are buying a town home in Northern Virginia for $300,000. They will need to come up with 3.5 percent of the sales price ($10,500) for the down payment. They’re happy that they don’t have to come out of pocket for their closing costs because the sellers agreed to credit them back 4.5 percent of the sales price ($13,500) to cover them. John and Jane need a total of $10,500 cash out of pocket to buy the town home.

Upcoming FHA home loan guidelines

John and Jane Smith will need to come up with $10,500 for the down payment if their credit score is 580 or above. If their credit score is less than 580, they will need to come up with $30,000 for the down payment. The seller will only be able to pay up to 3 percent of their closing costs so they will need to come up with the remaining 1.5 percent ($4,500) out of their own pocket. In addition, they will pay an extra .5 percent ($1,500) in upfront Mortgage Insurance Premium (MIP). The total increase in cost to buy the same town home will be either $16,500 or $36,000 depending on their credit score with the majority of it coming out of their pocket in cash.

Under the new FHA home loan guidelines, Jane and John will need at least 62 percent, if not 343 percent more cash out of pocket to buy the same town home.

When do the new guidelines go into effect? No official date has been set. But they are coming and the word on the street is sometime late spring/summer 2010.

If you’re sitting on the fence when it comes to buying a home right now, you may want to jump off and take advantage of the current FHA home loan guidelines (and federal tax credit) before they change. If you don’t, you could be in John and Jane’s shoes and need an additional 62 percent (if not 343 percent) to buy the same home in the future.

If you have specific questions about the FHA home loan guidelines, the housing market or real estate in general, email or call me – 703.582.6900 – danilo.bogdanovic (at) gmail (dot) com.

Camberley Homes is Bringing “Urban” Style Town Homes to Brambleton

You can soon add Camberley Homes to the list of names on the Brambleton home builder roster. Camberley Homes will begin selling “urban” style town homes in Brambleton this spring. Camberley Homes is calling this their “Boulevard at Brambleton” community. Delivery of the first town home should be fall/winter 2010.

Here is some basic info…

• Models range from 1700 to 2200 square feet
• Option for a 4th level loft with terrace space/rooftop deck
• Rear load garage
• Contemporary and “customizable” floor plans
• Prices have not been released yet, but I’m guessing they will start in the high $300K’s to mid $400K’s based on square footage and the particular model

Camberley’s “Boulevard at Brambleton” town homes will be located directly across Ryan Rd (Route 772) from the Brambleton Town Center (see brochure below for map). Their location is very convenient to the Brambleton Town Center, Legacy Park and Brambleton Regional golf course.

Note: There are plans for a walkway across (or possibly below) Ryan Rd from where these and neighboring town homes and condos are located, but that’s still a ways out.

Check out the temporary brochure and floor plans (click here if you do not see the embedded document below)…

Camberley Homes building urban style town homes in Brambleton, Virginia –

If you are interested in getting more information about the Camberley town homes or any other new construction town homes in Brambleton, send me an email or call me – danilo.bogdanovic@gmail.com – 703.582.6900.

To search for existing homes for sale in Brambleton, click here.

Homeowner’s Guide to Septic Systems

A septic system is one of those thing that costs some money and energy to maintain. But, if you do not maintain it, it will cost you a whole heck of a lot more money and headaches. To help you out with what to do to make sure your septic system costs you the least amount of money and headaches, here is the EPA’s “Homeowner’s Guide to Septic Systems”…

(Click here if you do not see the embedded document below)

Homeowners Guide to Septic Systems –

Careful Who You Mess With…

Video is safe for work. (Click here if you do not see the video below)