Money in your pocket with first-time homebuyer credit.

"The First Time Homebuyer Credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. The credit operates like an interest free loan because it must be repaid over a 15-year period."

"The credit is 10 percent of the purchase of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing a joint return; $3,750 for married persons filing separate returns. The full credit is available for homes costing $75,000 or more."

"Only the purchase of a main home located in the United States qualifies. You must buy the home after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home."

"Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit. If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return."

"You must begin repaying the loan the second year after claiming the credit. For example, if you properly claim the maximum available credit of $7,500 on your 2008 federal tax return, you must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on your 2010 federal tax return. Normally, $500 will be due each year from 2010 to 2024."

Article Source: First-Time Homebuyer Credit Information Center

Home Loans: 10 Ways To Invest Your Tax Refund at Home.

A sizable tax refund might be just the incentive you need to tackle some long-wanted home improvement projects.

According to the Internal Revenue Service, the average income-tax refund is more than $2,100. That's enough to at least get started on any number of upgrades. Investing your refund in home improvement projects can boost your home's beauty and value.

1. Replace your kitchen countertops. As the highest-traffic area of the home, the kitchen experiences a lot of wear and tear. It's also the room that can become outdated the quickest. One of the best ways to invest your tax refund in the kitchen is to upgrade your countertops, even if you just start with the island or perimeter surfaces. Granite remains a popular choice among homeowners, although similarly priced concrete and quartz-composite surfaces are growing in popularity.

2. Upgrade the bathroom with new flooring. Next to kitchens, bathrooms are the most-remodeled room in the home. If your budget doesn't allow for an entire bathroom makeover, then start at the bottom. Consider changing the bathroom floors to low-maintenance ceramic tile, which offers virtually endless color and design choices.

3. Spruce up the yard. Spring is the perfect time to reinvent your yard. Whether you're looking for a few well-placed shrubs or an elaborate flower garden, landscaping experts can advise on design and layout plans, drainage systems, lighting, and plant types. Also consider other exterior cosmetic changes such as a revamped sidewalk, driveway, fence, or retaining wall.

4. Start or refinish your deck. A deck is a highly desirable amenity, the perfect place to gather with friends and family during nice weather. If you don't have a deck, your tax return could be a down payment for a new one. If you already have a deck, consider giving it a face-lift by restaining, waterproofing or even adding a built-in bench. Outdoor kitchens are gaining in popularity ? so consider enhancing your deck or patio with a grill island or wood-fire pizza oven.

5. Paint your interior. We all know what a fresh coat of paint can do for a room ? or an entire home, for that matter. Match the paint that's already on your walls, or consider expressing your new style with different colors and textures.

6. Start replacing windows. Change your outlook ? literally ? by adding several vinyl high-grade windows. The benefits are numerous: They'll last for decades, enhance your curb appeal and lower your energy bills. Perhaps best of all, new windows require very little maintenance and are easy to clean.

7. Warm up with a fireplace. From the master bedroom to the basement, a direct-vent gas fireplace can heat up your space while adding a decorative touch. If your rebate is a little larger, upgrade to a midlevel fireplace and surround it with brick, tile or stone. As a bonus, many fireplace manufacturers give special rebates in spring.

8. Install a new vanity or sink. If you've looked through a home improvement store, catalog or magazine lately, you've likely noticed the sleek, contemporary design options for bathroom basins and vanities. Such an addition can brighten and modernize your entire bathroom. Choose a vanity with built-in shelves and cabinets, and you'll also gain additional storage space.

9. Change out your kitchen faucets. Maybe your faucets are leaky, low-flowing or just outdated, but updating them can add instant luxury to your kitchen. New models offer plenty of advantages, including temperature presets, built-in resistance to hard-water buildup, and proper height for filling up pots and pans.

10. Go for the garage. With your tax return in hand, perhaps now is the time to start paying attention to your garage, the home's oft-forgotten, mistreated catchall. Quality built-in cabinetry can serve as an attractive storage solution, while a new garage door or epoxy flooring can easily enliven an outdated space.

Article Source: http://www.servicemagic.com/article.show.10-Ways-To-Invest-Your-Tax-Refund-at-Home.14287.html?oids=29c1

What about having multiple lenders compete for your loan?

How to Get Good Credit: "What about having multiple lenders compete for your loan?
Many Internet services and brokers allow you to submit one form and have up to four lenders review your credit information.

Credit agencies understand that these services may require an inquiry by 'multiple lenders' at the same time.

These kinds of inquiries, coming from multiple lenders within 20-30 days of each other, indicate that you are shopping for the best deal. Credit agencies will count these inquiries as being only one inquiry. This allows you to shop and negotiate the best deal without being penalized on your credit report."

How to Get Good Credit Final Step

How to Get Good Credit: "Step 7: Review Your Credit Report Annually
About one in four credit reports have errors. Either a payment on a loan amount has not been recorded correctly or another billing company has posted incorrect non-payment information to your account.

Your credit report also maintains records on your employment, salary, bank accounts, etc., especially the information that you supplied when making a previous credit application.

You should review your report annually for errors and make the necessary corrections as instructed by the credit agency.

Step 8: Limit Inquiries on Your Credit Report
Multiple credit report inquiries over a period of time may negatively impact your credit score.
Every time you apply for credit, seek some kind on contractual service, or in some cases employment, a credit inquiry will be made on your report.

Models show that multiple inquiries over a period of time indicate an applicant who is anticipating credit problems. So limit credit inquiries when only necessary."

How to Get Good Credit Step 3-6

How to Get Good Credit: "Step 3: Maintain only a Few Credit Cards As your credit rating improves, you will soon receive pre-approved offers from credit card companies and lenders with attractive rates and programs.

You should limit your credit to three to four cards only. Maintaining a large collection of cards can hurt your credit rating.

Step 4: Close All Retail and Gas Cards
Since you maintain three to four major credit cards (e.g., VISA, MasterCard, Discover, or American Express), it isn't necessary to hold gasoline cards, retail store cards, and other specialized credit cards.
Simply use your major credit cards.

Again, holding multiple cards can drag down your credit score.

Step 5: Don't Have Too Many Outstanding Loans
Excessive loan balances (especially loans that exceed your Debt-to-Income ratios) can effect your credit rating:

Maintaining a good credit rating requires that you reduce your debt holdings by consolidating balances, closing unused credit card accounts, and paying off outstanding loans.

Step 6: Avoid Charging Close to Your Credit Line Limit
Don't use your credit card up to your maximum credit line balance because this can negatively impact your credit rating.

Maximized credit lines (including home equity lines, credit cards and unsecured credit lines) indicate that you are a consumer who borrows willingly. Many lenders consider this a great risk and may not approve you for additional credit.

A good rule to follow is to keep your balances at or below 60 percent of the available credit line."

Bad Credit? How to Get Good Credit? Step 2

How to Get Good Credit: "Step 2: Build a Strong Payment Pattern
Adverse conditions such as late or non-payments are two of the most common items that are reported to the credit agencies. You can avoid adverse conditions by making on-time payments.
Your credit report will also list all open credit cards and loans, listing the amount borrowed and the amount owed on the account.

Your objective is to build a pattern where you pay off large credit card balances in full each month. This pattern conveys a sense of responsibility for your debt obligations.

You can build a strong payment pattern by charging everyday living expenses on your credit card, deducting the charge from your money account, and then paying off the monthly credit card charge in full each month with your money deductions.

Note that you need to follow these rules before you can undertake this credit payment pattern:

1. You must set aside funds for every credit card purchase you make.
2. You must pay your credit card balance in full each month.
3. You must have an existing credit line or home equity line (with lower interest rate) to finance large ticket items. Never finance purchases with your credit cards."

Bad Credit? How to Get Good Credit? Step 1

How to Get Good Credit: "Step 1: Pay Your Bills on Time
Make it your personal goal to pay your credit and other obligations on time and for the required amount each month.

Debt obligations will include:

· Credit card charges

· Loan payments

· Rent or mortgage payments

· Utility bills

· Service or product bills

· Taxes

· Support payments

· Other

Take advantage of automatic payments and other online bill payment strategies offered by lenders and credit card issuers. This will ensure timely payments.

If you forget to make a payment, act promptly on any notices of non- or late payments. Call the bill servicer to notify them that your payment will be sent immediately.

Do not ignore any creditor notices of non-payment. Contact the creditor to fix the problem."

Home Equity Credits.

Home Equity Line of Credit Home Equity Loans: "Home Equity Loans
Home Equity Loans are yet another way to finance larger projects from the equity you have in your home. These are often called second mortgages (as are HELOCs), and you are allowed to borrow a certain amount no larger than the current equity you have in your home, either from principle payments or property value increases. These are standard loans with fixed rates, and they usually have to be paid back in 15 years or less. With these loans, you borrow a specific amount and have a set monthly payment.

Advantages to Financing Home Remodeling Projects with Home Equity
The average cost of a complete kitchen remodel in the United States in 2004 was $30,000. This is a big enough number that most homeowners need some type of financing, if only partially, to help cover the cost. While both Home Equity Lines of Credit and Home Equity Loans are good candidates for any remodeling project, depending on the project, one might be better than the other.

Kitchen & Bathroom Remodels
These are the two most popular home remodels. They add value to a house, and in many cases have a massive return on their investment. The problem is that estimates from contractors are exactly that, and nearly every project ends up costing a different amount—whether higher or lower—than was originally planned. You will change your mind about 100 times on which materials you want to use, the contractor will run into unforeseen problems, the market price of your materials will fluctuate, among many other things that will swing the price.

The great thing about HELOC is that it is a credit card and you are only paying interest on what you borrow. Let's say you have a $25,000 line of credit that you have earmarked for a kitchen remodel. Your contract"

Using Home Equity for Remodels.

Home Equity Line of Credit Home Equity Loans: "You have already paid all of this money in principle, and it stands to reason that you should leverage that in whatever way you can. There are two basic ways to get the most of your home equity when you are considering a remodeling project. The two smartest and most common methods of financing a home remodeling project are using your Home Equity Line of Credit (HELOC) and/or a Home Equity Loan. These two methods are often difficult to distinguish, but this article can shed a little light on which is which, while getting you on your way to a fantastic home remodel.


HELOC
So how does it work? A Home Equity Line of Credit is exactly like a credit card that you set up with your lender. You have a credit limit that is proportional to the amount of equity you have in your home. Once you have your HELOC account set up, simply advance yourself funds by writing a check. You will pay interest only on the amount you borrow, just like with a credit card. You can use your home equity line whenever you need just like the plastic you have now."

Home Refinance vs. Home Equity

Home Refinance Mortgage Rates: "Refinance vs. Home Equity
How about using the existing equity in your home to pay off your mortgage? Let's illustrate an example.
Say your existing home has an estimated market value of $250,000 and the amount remaining on your first mortgage loan is $150,000.

You will find that most banks charge zero closing costs with minimal hassle. You simply apply for a home equity loan with a participating lender and instruct the lender to use the equity in your home to pay off your mortgage.

Note that interest rates at 80 percent LTV or lower for large borrowing amounts come with very attractive rates. And many lenders offer up to 15-, 20- and, in some cases, 30-year repayment plans.

You can even use your excess home equity to:
Remodel your home
Finance a new car, truck or recreational vehicle
Consolidate your loans
Send your child to college

Unlike traditional refinancing programs where you pay a lot to refinance your home, using the equity in your home to pay off your mortgage saves you all of the up-front mortgage refinancing costs"

Is it Beneficial to Refinance?

Home Refinance Mortgage Rates: "Is it Beneficial to Refinance?
Whether or not it's beneficial for you to refinance will depend on prevailing interest rates, costs to refinance, the expected length of stay in your home, among other factors.

Refinancing will also require the same steps as when you purchase a home, except for the presence of a seller.

You hear a lot about refinancing your home mortgage when rates are falling. But did you know that the cost to refinance can be very expensive?

Think back to the day you closed on your existing home. Remember those excessive closing and filing fees you had to come up with? Many of those similar closing costs may be charged again when you refinance, such as:

Mortgage Points
Attorney Fees
Appraisal And Inspection Fees
Title Search And Insurance Fees
Document Preparation

In fact, experts say that your new refinancing rate should be anywhere from 1.5 to 2.0 percent lower than your existing mortgage loan rate in order to recoup your cost to refinance."

Refinancing Your Home

Home Refinance Mortgage Rates: "Refinancing simply means paying off your mortgage loan with another mortgage loan that carries a lower interest rate.

For homeowners with mortgage rates that are 1.5 to 2.0 percent higher than current prevailing rates, refinancing can reduce their current monthly payments.

Some homeowners may refinance a home to switch into a different mortgage product. For example, homeowners with adjustable rate mortgages may refinance to get into a more stable fixed-rate mortgage, especially if interest rates are low.

QUICK TIP:For homeowners with mortgage rates that are 1.5-2.0% higher than current prevailing rates, refinancing can reduce their current monthly payments.


Some homeowners may also refinance to take cash out for home improvement, college education, auto buying, and other. They will refinance at a higher value to repay their existing mortgage loan and take cash out of their home equity for expenditures."

Mortgage Loan Hints #2

Mortgage Hints: "Don't forget about closing costs. In addition to your downpayment, you will need to reserve funds for closing costs. Depending on the type of loan and your location, these costs can range from 3-5% of the mortgage amount, will be paid in cash at the closing and cannot be borrowed funds.

Compare. There are lots of sources for mortgage funds--be sure to make comparisons. Your local bank or credit union, mortgage brokers and Internet resources are all available. Be certain to compare equal terms, downpayments and loan types.

Consider points when comparing. Your total mortgage cost will be determined by 3 factors: The interest rate, the term and the amount of points.

Consider a 15 or 20 year term. Many home buyers make the assumption that a shorter term will boost their payments out of reach. Unless you make the comparison, though, you may never know if a 15 or 20 year (if available) term could have been affordable. See a comparison of a sample loan.

If you are concerned about committing to the higher payment of a shorter term, try this tactic: Mortgage the home with a 30 year loan but have the lender develop a 15 and a 30 year amortization sheet for you. Then, do your best to pay the mortgage at the shorter term payment. It will do wonders for your equity position!"

Mortgage Loan Hints

Mortgage Hints: "Don't build yourself a mortgage mountain. It's fine to want the best home you can afford, but be certain that it is comfortable affordability. Although you may find certain mortgage lenders who will stretch your qualification ratios (the ratio of your total mortgage payment to your total income) the traditional ratios--the mortgage payment as 28% of your income and the total of your mortgage payment plus your monthly debt payments as 36% of your income--are good basic guidelines.

Get your budget under control. Spending some time reviewing your budget (or developing one if you don't already have it) and sharpening your money saving skills can bring big rewards later. A coordinated budget allows you to get the most home for your money without strapping yourself while eliminating wasteful spending.

Prepare to pay off small debts. Having 3 credit card balances, for example, one with a $125 balance, a second with a $165 balance and a third with $275 balance will only cloud the picture. Even though the total is only $565, all 3 will have minimum payments, credit lines, etc. If possible, prepare to pay them down to $0 balances.

Begin to gather documentation. It is not necessary that you have all items on hand before you apply, but there are a number of documents you will need eventually and the approval process will go much smoother if you begin to gather them now. Examples: W-2's and income tax returns from the last few years (especially if you are self-employed), copies of pay stubs, a copy of your credit report (you can get a free copy of your credit report here), records of any child support or alimony (either going out or coming in) and bank statements for all accounts (checking and saving) for the last several months."

Which Type of Financing is Best for You?

Home Remodel Financing - home equity, lines of credit, & loans: "Which Type of Financing is Best for You?
Again, this is going to vary a lot on a case-by-case basis. Loans are granted based on your credit history, income, present level of debt, and securable assets. Your lender will review all of these things and use what they discover to determine what kinds of financing you qualify for. Depending on your situation, here's a list of some of the most common financing options for homeowners to use (though keep in mind this list is by no means an exhaustive one):

Cash-out refinancing. If you've built up a substantial amount of equity in your home, and interest rates have dropped since you acquired your mortgage, this can be a financial windfall. You'll pay for your project and lower rates on the rest of your mortgage to boot.

Home equity lines of credit and home equity loans. These two financing options are very similar and very popular for home improvement. Both offer financing based on the equity you've built up in your home. Because of that they usually come with very reasonable interest rates, and the interest you pay is tax deductible.

Value Added Loans. These loans are granted based on the value that will be added to your home after the project you hope to undertake is finished. It allows owners of homes that have a lot of potential to borrow more than the home is presently worth.

Homeowner Loans. This type of financing is generally based on your income rather your equity. You won't be able to borrow as much, and your interest rate will be a little bit higher, but you won't have to jump through all the hoops that equity secured loans require."

Why Choose Home Financing?

Home Remodel Financing - home equity, lines of credit, & loans: "Why Choose Financing?

There are a number of practical reasons to finance a home improvement project. The first is simply time. With any home improvement project you want to get it done as soon as possible so you can enjoy the benefits in the present, not somewhere far off in the future. Saving up for a major project is a sound financial decision, but it will likely take years to stow away enough for what you've got in mind, years that you could have spent enjoying your new kitchen, bath or deck if you'd have chosen to finance instead. And of course, the truth is few individuals are disciplined enough to leave that money untouched. Other unforeseen expenses come up, people dip into the penny jar, and in the end most homeowners find themselves right back where they started.

Where to Start?
When you're ready to finance, the first step is talk to a lender about financing options available to you. Where you choose to go is really a matter of personal preference and your situation. Many contractors offer financing, though it's often unsecured and will usually run a higher interest rate than other options. Still, it is an attractive, convenient, and reasonable way to go, especially if you're unsure about qualifying for financing elsewhere.

Besides that, most homeowners choose to patronize more traditional lending institutions. Your bank or credit union is an excellent place to begin. They often offer good interest rates, generous terms, and many will bend over backwards for their members. Mortgage brokers are also good places to inquire. Home financing is their business, so they bring a wealth of experience to the table and a wide array of options for you to choose from."

Basic Home Financing

Home Financing Financing Options Mortgage Lenders: "Basic Home Financing

Qualifying for a Loan
Before actually applying for a loan, talk to lenders about all your financing options. Keep in mind, the lender will tend to focus on the options they carry. This is why many people like to start with an established mortgage broker as they usually carry more types of loans. Besides helping you understand your options and the various trade-offs involved, the lender can pre-qualify you for one or more loans.

Points and Interest Rates
Many loans involve something called points. Points are nothing more than a fee for the loan that is expressed as a percentage of the loan amount. One point equals one percent. So if you take out a loan for $50,000 and the lender charges two points, the fee costs $1000. Points exist so the lender can pay for the loan set-up expenses, as well as, make a profit.

Mortgage Lenders
Mortgage brokers represent a number of money sources including regional and national banks, specialized lenders, insurance companies and even wealthy individuals. This diversity is their greatest strength. It means that they are likely to offer a wide number of options.

Banks are another very popular way to get loans. If you have a good personal relationship with this mortgage lender and the lender offers a wide variety of loans, this can be a great route to go. If you don't already have a strong relationship with your banker, yet you are confident about getting the loan, this can be a good opportunity to start up that relationship."

Home Construction Financing

Home Construction Financing: "Home construction lending is a little different than regular mortgage financing.

First, you will be given a construction line that will be used to pay subcontractors and suppliers who perform work and provide supplies.

And then at the end of the construction project, you will use a residential mortgage to pay off the construction line.

Construction Line
You will ask the lender to open a home construction line that will be used to pay subcontractors and suppliers during the construction phase of the project. Generally, these players require payment within 30 to 60 days following work completion.

Once each month, or after each stage of the home construction, your builder will submit a request for funds to pay for subcontracting work and supplies that were used during the construction phase. The lender will release funds after they have verified that the amount requested will be used for the construction phase that has been completed.

Let's run through a simple illustration: Say that your construction project is estimated to cost $100,000. The project will be completed in five phases.

At the end of the first phase, you will request a release of funds ($20,000) from the bank to pay subcontractors and suppliers who completed work during this phase.

Typically, the lender will send out an inspector to verify that the work has been completed. If passed, funds will be released to line the next day.

(This example was a simple illustration on how the construction line may work. The actual procedure may differ by lender.)

Lenders normally have a fixed draw schedule tied to each major phase of the construction. If you request more draws than allowed per project, you may"

Home Construction Loan/Perm Loans

Home Construction Financing: "Construction/Perm Loans
Some lenders offer both the construction line and residential mortgage as one loan.
The Construction/Perm loan is a combined loan made directly by the lender to the borrower. It functions as a construction line for financing the construction of the home, and then it serves as a permanent mortgage by paying off the construction line after you complete the construction project.

The Construction/Perm loan has some advantages, namely:
The borrower can save money by paying for only one set of closing costs, attorney's fees, appraisal and taxes.

Since the construction line is contingent upon approval of the residential mortgage, obtaining a construction/perm loan allows the borrower to submit and provide documentation for one loan application and work through one lending institution. The borrower will work with one loan and one lender.

Because the loan is made directly to the homeowner, the borrower can take full tax advantage of the interest rate charges.

The Construction/Perm loan may also carry some disadvantages:
Obtaining the best rate and terms. Some Construction/Perm loans carry higher than prevailing market rates.

Even though you may be working with one lender, usually the loan is managed by two separate departments. You may need to provide duplicate documentation.
It is best to shop around to determine your best options."