Lowest Interest Rates In History

historicpartnersusa — Sat, 10 Jan 2009 19:51:05 +0000

On Thursday of this week (1/8/09) Prosperity Mortgage had an interest rate of 4.25% for a 30 year fixed conventional loan with 3 points (the points can be paid by the seller). That is truly incredible. Alot of home owners are refinancing, because of the low rates, and banks have limited funds available to lend, so the word on the street is borrow now (buy now) rather than later. Many analysts say that home values are near 2003 prices, which is great if you are buying, but may make refinancing a challenge. The key to taking advantage of the great buying opportunities in this market is having two things – good credit and a good downpayment. With those two things, the opportunities abound.

Now, if you have been considering a purchase, but felt the house you wanted would require monthly payments that are just out of your range, well… @ 4.25% that house may have just gotten cheaper. Something to think about…

Tax Credits for Energy Efficient Home Imrovements

historicpartnersusa — Sun, 04 Jan 2009 07:29:38 +0000

BREAKING NEWS! President Bush has signed into law new consumer tax credits for energy efficiency home improvements, as well as purchases of plug-in hybrid vehicles. These provisions were included in H.R. 1424, the Emergency Economic Stabilization Act of 2008, which the president signed on October 3, 2008. The homeowner tax credits are largely the same – but not identical – to those that expired at the end of 2007, and begin again on January 1, 2009.

What is a tax credit? You don’t receive an income tax credit when you buy the product, like an instant rebate. You claim the credit on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay.

What is the difference between a tax credit and a tax deduction?

In general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions – such as those for home mortgages and charitable giving – lower your taxable income. If you are in the highest 35-percent tax bracket, the income tax you pay is reduced by 35 percent of the value of a tax deduction. But a tax credit reduces your federal income tax by 100 percent of the amount of the credit.

Taxpayers who claimed some but not all of the $500 federal income tax credit for energy efficiency home improvements that was in effect in tax years 2006 and 2007 may utilize the unused portion in 2009, the IRS has informed the Alliance to Save Energy. Please consult your tax advisor for details.You can get a one-time income tax credit of up to $500 in total for installing efficient new windows, insulation, doors, roofs, and heating and cooling equipment in your home.

Who gets it?

Individuals who install specific energy-efficient home improvements.

What energy-efficient home improvements are eligible?

The overall $500 cap can be reached in several ways with the purchase and installation of energy-efficient products:

Exterior windows: 10 percent of the total cost, up to $200. Includes skylights and storm windows.
Insulation, exterior doors, or roofs: 10 percent of the cost of the product (but not the installation), up to $500. Includes seals to limit air infiltration, such as caulk, weather stripping, and foam sealants, as well as storm doors.
Central air conditioner, heat pump, water heater, or bio gas (e.g. corn) stove: up to $300 towards the full purchase price, including installation costs. Starting in 2009, geothermal heat pumps are instead eligible for a separate tax credit for 30 percent of the cost up to a maximum credit of $2,000-see Section 5 below.
Furnace or boiler: up to $150 towards the full purchase price, and/or $50 for an efficient air-circulating fan in a furnace, including installation cost.

In addition, to be eligible for the federal tax credits:

Windows, doors, and insulation must meet the requirements for your region of the 2001 or 2004 International Energy Conservation Code, a model energy code for buildings. All ENERGY STAR windows qualify.
Roofs must be metal with pigmented coatings or asphalt with cooling granules that meet ENERGY STAR requirements.
Heating and cooling equipment must meet stringent efficiency requirements – not even all ENERGY STAR products will qualify.

Also, windows, doors, insulation, and roofs must be expected to last at least five years (a two-year warranty is sufficient to demonstrate this). Manufacturers can certify (in packaging or on the company’s web site) which of their products qualify for the tax credit. All the improvements must be installed in or on the taxpayer’s principal residence in the United States. Condo and co-op improvements are apportioned to the owners. The credit cannot be taken against the Alternative Minimum Tax (AMT).

When are they available?

The home improvement tax credits apply for improvements “placed in service” from January 1, 2009, through December 31, 2009. They are not available in 2008, but mostly were available in 2006 and 2007. The IRS defines “placed in service” as when the products or materials are ready and available for use – this would generally refer to the installation, not the purchase.

What do I need to do to get the tax credit?

You will need to file IRS Form 5695 with your taxes. In addition, you will need to keep at least receipts proving that you purchased the improvements and a copy of the manufacturer’s certification (or the ENERGY STAR label for windows).

Ask your accountant or tax advisor for further guidance.

Historic Partners USA

Lowest Interest Rates In History

Tax Credits for Energy Efficient Home Imrovements