Without the proper documentation your IRS First-time Buyer Tax Credit will be delayed. Below are tips on what you need to gather before you make your claim. It is important that you provide them appropriately for your transaction. Since I am not a tax advisor though, I will not be held liable to the accuracy of the below information, and I strongly encourage you to seek council from a tax professional.

Settlement Statement: Your closing agent will send you a certified copy of your final settlement statement a from called HUD-1.

1. Properly Executed Settle Statement: Generally, a properly executed settlement statement shows all parties’ names and signatures, property address, sales price and date of purchase. However, settlement documents, including the Form HUD-1, can vary from one location to another and may not include the signatures of both the buyer and seller. In areas where signatures are not required on the settlement document, the IRS encourages buyers to sign the settlement statement when they file their tax return — even in cases where the settlement form does not include a signature line.

2. Mobile Homes: Purchasers of mobile homes who are unable to get a settlement statement must attach a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.

3. New Construction: For a newly constructed home, where a settlement statement is not available, attach a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

4. Long-Time Residents: If you are a longtime resident claiming the credit, the IRS recommends that you also attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.

For more information about the First-Time Homebuyer Tax Credit and the documentation requirements, visit IRS.gov/recovery.

Ingrid Pierson
(530) 885-1545
ipierson@teamvitek.com

As a lender, I am continually asked many questions about the First-time Homebuyer Tax Credit and Repeat Buyer Tax Credit. Below I have posted some common questions I am asked about the program, and answers to those questions as posted on the IRS’s website. Since I am not a tax advisor though, I will not be held liable to the accuracy of the below information, and I strongly encourage you to seek council from a tax professional.

Q. I am a long-time resident (have owned and used my current home as a principal residence for five consecutive years out of the eight-year period ending on the date of purchase of the new residence) but my spouse has lived there for only three years. Can we qualify for the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both spouses must have owned and used the same previous principal residence for five consecutive years out of the 8-year period ending on the date of purchase of the new principal residence to qualify for the credit. (12/14/09)

Q. I am a long-time resident and current homeowner and my spouse is a first-time homebuyer (has had no ownership interest in a principal residence during the three-year period ending on the date of purchase of a new principal residence) and we purchased a new principal residence. Can we qualify for either the first-time homebuyer credit or the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both you and your spouse must be first-time homebuyers in order to qualify for the first-time homebuyer tax credit. Since you had an ownership interest in a principal residence during the three-year period ending on the date of purchase, neither you nor your spouse qualifies for the credit. Similarly, both you and your spouse must be long-time homeowners of the same previous principal residence in order to qualify for the long-time resident homebuyer credit. Since your spouse is not a long-time homeowner of your current principal residence, neither of you qualify for the credit. (12/14/09)

Q. I am a long-time homeowner of a principal residence and my spouse is a long-time homeowner of a different principal residence. Can we qualify for the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both spouses must have owned and used the same previous principal residence for five consecutive years out of the eight-year period ending on the date of purchase of the new principal residence to be eligible for the credit. Since you and your spouse owned and used different principal residences, neither of you qualify. (12/14/09)

Q. How does the allocation provision work when unmarried taxpayers purchase a home together and both qualify for the first-time homebuyer credit under different tests?

A. Co-purchasers who are not married may allocate the credit using a reasonable method. A reasonable method is any method that does not allocate any portion of the credit to a taxpayer who is not eligible for that portion of the credit. The maximum credit for a taxpayer who qualifies under the long-time resident test is $6,500, and the maximum credit for a taxpayer who qualifies under the first-time homebuyer test is $8,000. One example of a reasonable method is to allocate $6,500 to the long-time resident homebuyer and $1,500 to the first-time homebuyer. (12/14/09)

The above information is for informational purposes only and hopefully will help you to better understand this Federal Tax credit and what it means to you.

To access the IRS website for other detailed answers click here

Ingrid Pierson
(530) 885-1545
ipierson@teamvitek.com

New guidelines are changing the way all lenders disclose closing costs to homebuyers. The purpose of the new Good Faith Estimate (GFE) is to level the playing field for borrowers, so they can compare loans simply with apples-to-apples comparisons of loan scenarios. In essence, HUD is working to bring all lenders up to the same standard of excellence in reporting closing costs, estimating realistic fees that a buyer should expect to pay at closing with no last minute surprises. While these changes in guidelines will not be substantial for VITEK as we have always strived to adhere to these principles in accuracy, it is important for you to know what these changes mean to you.

Here are some important facts you should be aware of on how these new guidelines may affect you:

1. All lender fees are consolidated in one line, including processing fees, origination fees, etc. Actual costs cannot change from the original estimate without a material change to the loan requested.

2. When fees are being charged to obtain a lower rate, they are broken out and itemized for ease of comparison to other loan programs.

3. Estimated costs for third party settlement providers will be itemized, when lender chooses the provider. Should actual costs increase more than 10% of the original estimates, the lender is responsible for the difference.

4. Services the buyer may shop and choose can change at settlement without the lender being held accountable if the buyer uses a service provider the lender does not identify with. This includes title charges, homeowner’s insurance, and initial deposits for an escrow account.

You can continue to rely on VITEK to provide you with accurate estimates of closing costs!

Nick Lavoie
(916) 209-6567 ext. 103
nlavoie@teamvitek.com

Health, it is something we all strive for while often seeking direction on ways we can improve it and retain it. Here at VITEK we believe the well-being and health of our team and their work environment is extremely important. Sitting on the sidelines is not an option when we can be an active participant in helping to keep our company, employees, and clients healthy and safe! Recently we formed a “VITEK Wellness Team”, made up of volunteers from different departments across the company to help plan and implement initiatives designed to promote both our employee’s and client’s health and well-being!

Our first goal was to develop a practical plan to safeguard our workplace from harmful germs and viruses, including the potential H1N1 flu pandemic. We distributed VITEK hand foam sanitizers to each employee and stocked our front desk with additional sanitizers for our clients. Also, in October every branch received a ‘VITEK Healthy Habit Wellness Kit’ full of resources and items designed to prevent the spread of germs and viruses. At our corporate office we are now in the habit of taking a few minutes every Monday to do our ‘Morning Wipe Down’ of our phones, keyboards, doorknobs, and office equipment with Clorox surface wipes.

We had a huge turnout in early December for a special presentation on nutrition and meal planning for our employees by Lorin Brown, a Kaiser health professional. Her ‘Bid Your Body Well’ talk was full of useful information and easy habit forming ways to put into practice. Armed with a much greater understanding and awareness of how a proper diet impacts our health and well-being, we have eliminated our corporate vending machine in our lunchroom and replaced it with a second refrigerator to allow for healthier snacks for our employees.

Starting in February, we will be launching our ‘VITEK Team Walk Challenge’, encouraging our employees to take at least five minutes each day to get up from their desk, stretch and walk around the office.

Already we’ve accomplished much and we’re just getting started! As a follower of our Blog, we encourage you to grab hold of your health too, and begin practicing healthier habits and choices. Next time you feel like a snack, grab for an apple instead of a candy bar or take the stairs rather than the elevator. Each little thing adds up to so much!

Philip Duncan
Executive Vice President

Want to buy a home but need more money for desired or required repairs? You now have a solution! The Department of Housing and Urban Development’s FHA Streamline 203(k) loan allows you to finance up to $35,000 more into your mortgage to repair or upgrade the home before you move in.

Whether cosmetic or necessary, you can quickly and easily tap into the additional money needed to afford the home improvements. Even better, the additional funds are included in your mortgage. You only have one loan and rates are the lowest ever!

Of course there are limitations and not every repair qualifies. If you or anyone you know is interested, give us a call. We’ll gladly provide you more information about this special program. Call now and you may be eligible for up to $8,000 in additional government tax credits!

Evelyne Jamet
(916) 486-6926
ejamet@teamvitek.com