Good News for Maryland Homeowners

Good news for Maryland homeowners looking for possible relief on their property tax bills. 

For some time now the Maryland State Department of Assessment and Taxation has no longer automatically credited homeowners the Homestead Credit as seen on previous tax bills. The homestead credit used to be a standard credit to all owner-occupied residents in Maryland, however, due to the housing market downturn and lost Maryland State reviews, this policy changed. The changes actually went into effect as of 2008, but most homeowners are still not aware they are able to reinstate this credit and save big money off their property tax bills for their existing homes.

The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year. The homeowner pays no property tax on the market value increase which is above the limit.

The original goal of the Homestead Credit Legislation was to help homeowners deal with large assessment increases on their principal residence. This is a quite an important step to take at a time when homeowner’s are struggling to make ends meet. With high unemployment, declining home prices, and household expenses, even a few hundred dollars a year can mean the difference to local families

The Homestead Credit Legislation does set out certain rules to ensure no homeowner incorrectly receives the credit. This credit isn’t available on rented or multiple properties of a single owner, and a new amendment enacted in 2007 requires all homeowners to submit a one-time application to establish eligibility for the credit.

The application form is automatically mailed to new purchasers of residential property with their first assessment. Current homeowners were mailed a copy at the end of December as part of three different mailing groups over 2008-2010.  

Didn’t get a copy? I did you throw it out as “Junk Mail”?

Homeowners now have to apply in person, via mail, or online. I encourage all homeowner’s to fill out this one time Homestead Credit Application as soon as possible.

If you have been denied a Homestead Tax Credit and you believe that you are eligible, contact the Central Office for the Homestead Tax Credit Program. A final denial of a Homestead Tax Credit by the Central Office may be appealed within 30 days to the Property Tax Assessment Appeal Board in the jurisdiction where the property is located.

For questions about the Homestead Tax Credit in Maryland check out the Homestead Department’s website.

Buying a new home in 2011

Millions are beginning to see the American Dream of homeownership as something not as economically feasible or worthwhile to pursue as it once was. A growing number of Americans are determining renting is all they will ever be able to achieve. Existing homeowners, looking to get out from under the weight of crippling mortgage debt, are looking to downgrade their existing homes. These homeowners will find greater challenges in this market.

The strength of the housing market is quite dependent on small regional differences and area markets can vary greatly. Certain housing markets in areas of California, Florida and Arizona have seen tremendous drops in home values during the Bubble Burst, while other markets throughout the US never were subject to such swings, remaining quite steady through the initial real estate downturn. 

While last quarter 2010 economic numbers have helped boost the existing housing sales in the greater Baltimore/Washington DC area, sales are still down from last year. Fortunately, the stabilization, or leveling off, of many area housing markets has economists predicting the light at the end of the tunnel. The months leading into the spring of 2011 are looking like a good time to buy. Mortgage interest rates are still near their record lows, and this combined with the current reasonable housing prices has created an ideal Buyer’s Market.

While mortgage financing may have become challenging for some homebuyers, the last few years have opened considerable opportunities for FHA and VA loans. These options allow down payments of as little as 3.5%, offer help toward seller closing costs of up to 6% of the purchase price, and give hope to those of us with credit scores as low as 600.

The standard conforming loan limit is $417,000. For those looking to purchase homes which require a loan size above this limit, HUD has expanded loan size eligibility. Depending on statutory county limitations, refinances and purchases up to $729,750 may be eligible to receive today’s low rates.

Your grandfather always advised you to buy low, sell high. For those who have sat on the sidelines and rented for the last few years, or are first time homebuyers, the perfect storm has arrived. 

So what happens to those with an existing home when the mortgage is more than the house is worth? Well – options still remain. Renting out the home or refinancing into lower fixed rate mortgage through the Making Home Affordable Program are options more homeowners seek every day. Mortgage companies continue to work with customers to modify existing loans and keep Americans in their homes when financially feasible. The most risky options, such as letting your home foreclose, can have many long term ramifications and will create an inability to qualify for your next home, car, or even credit card.

Everyone’s housing situation remains unique and no one should be taking more than a casual look at the home buying search without a comprehensive evaluation completed by a licensed, qualified mortgage consultant or realtor. Only someone with experience can give you the information you need that is customized to your own unique needs.

Home value websites such as Zillow, Cyberhomes, and Homesdatabase are meant to be a guide and not indicative of a likely sales price. Be cautious in allowing them to affect your offering, or asking prices. Furthermore, county tax assessments are not indicative of true value. These are really nothing more than the basis for how the county assesses property values for taxation.

A key bottom line that is often overlooked is the change in your budget once you’re in that new home. As with any major purchase it is vital to plan realistically, and consult experts accordingly to see if buying a home is not only possible, but the right idea for you.   

The Mortgage Market in 2011

Happy New Year to all!

As the New Year hits us with feelings of hope, new chances and resolve; it also can come with a feeling of uncertainty. As the media talks about “rebounds” in the economy and a better overall outlook in 2011, it’s a whole different ballgame in the housing market and, as a result, the mortgage market. There is still several months worth of inventory left on the market, near record numbers of homeowners behind on their mortgages, rising interest rates……not to even mention tighter than ever lending restrictions!  Even with today’s unemployment rate drop to 9.4%, the fact remains millions remain out of work and can’t pay their mortgages.

The mortgage market has made great progress toward correcting the lending practices of the early part of the last decade. Many of these changes have been implemented over the last couple of years and continue to be tweaked. A National Mortgage Lending System, better known as NMLS, requires individual state licensing and regulation of loan officers. The homeowner is able to access this database to insure the loan officer company they are working with is licensed person and has a clean track record. Banks and regulatory agencies are required to verify all loan officers and lenders are properly licensed and can more easily track those who are not.

Other changes include requiring the appraiser to be independent of the loan officer, the ban on upfront fees collected at application through the Mortgage Disclosure Information Act (MDIA)  and the Good Faith Estimate changes implemented on 1/1/2010 banning fee changes at settlement. These, as well as many other changes have given us better lending practices, and thus better loans. This will result in a stronger, long term housing market which will benefit all homeowners.

As many of you may know, just qualifying for a home loan is a challenge. Just having a solid job, good credit and equity in your home doesn’t guarantee an easy loan process in 2011. Easy loan underwriting with limited documentation is a thing of the past. Get ready for lenders to delve much further into your records this year to qualify for a loan. Those who haven’t gone through the loan process in the last few years will see how exceedingly different the lending process has become. These higher standards for loan origination strengthen the lending system, and hopefully will continue to help the market as a whole. As we move forward into a more prosperous market in 2011, we do so with the knowledge that it is also a stronger market, one not plagued with the weakness of bad lending practices.

Fortunately, 2011 brings a lot of positives. Rates, while having risen up to .75 to the rate over the last two months, are still at record lows. Everyone knows someone who still hasn’t refinanced – thinking rates would continue to drop. Rates remain quite volatile and can change several times a day. It is still a very good time to refinance or even reduce  your loan term to a 15 year mortgage. For those who may have little equity or no equity at all - The government’s Making Home Affordable Program is still in effect through June 2011, allowing many to refinance to today’s low rates even with reduced housing values. For those thinking of moving this year or buying their first home, this year looks like it will continue to be a buyers market. There are many sites to search for home– but I recommend Homes Data Base. This site provides clearer information on the subject property, better research tools, and filters out more unwanted information in the home buying search.

We’ll get more into these topics weekly over the coming months. Please feel free to contact us with any requested topics. Also, Integrated Financial Solutions, LLC is now on Facebook. By becoming a fan, you will get market updates and weekly postings and specials!

Welcome to Integrated Financial Solutions, LLC

Our office is a small, locally owned mortgage brokerage company located in Ellicott City, Maryland. The experienced advisors at IFS specialize in ensuring our clients get the best programs and the most favorable rates customized to their unique needs. Below is an example of some of the many programs offered:

• Primary, Secondary or Investment home financing
• Purchase money, refinance and/or cash out refinancing
• Less than perfect credit allowed
• Government Financing options: including FHA, VA, and USDA
• Jumbo financing up to $1.5 million
• Government and conventional high balance loans (where applicable)
• Making Home Affordable Programs – helping those facing declining home values

Integrated Financial Solutions, LLC has many relationships with outside lenders thus allowing our clients to often receive below-market interest rates. Clients often comment how pleased they are to receive such excellent service and expertise at such low rates. Happy clients are paramount to the continued success at IFS. As a result of these clients, our relationship with them lasts well after the mortgage process is complete. When the changing needs of our clients occur, clients know they have an advisor at IFS for life and our office is only one call away. Such a relationship allows us to enjoy working exclusively with our existing clients and their referrals.

We guarantee a courteous, no hassle approach. We’ll also provide your own personalized plan to show how we can help and well as an update of today’s current market conditions. And, if you’re better off staying with what your current loan program, we will let you know too! Please call or email us to day to discuss how our expert advice can help you with your mortgage needs.