AOL real estate has a great article with 10 very detailed credit card moves buyers and sellers should consider making in 2010. This is especially timely because lending guidelines are tightening (again) and the new Credit Card Accountability Responsibility and Disclosure Act (CARD) takes effect on February 22, 2010.

There are a number of provisions in the CARD Act with significant implications and action points for homebuyers and sellers (most of the latter of which will also be homebuyers soon). One, in particular, is to request credit limit increases – if you qualify for them and need a boost to your FICO score – before the act takes place. Afterwards, the CARD Act will make it harder to obtain an increase.

If you’re applying for a mortgage soon, you might also want to use any accounts you have that have been inactive. Credit card companies are highly likely to close those accounts, in this marketplace, which reduces your debt-to-available credit ratio – a major component of your FICO score. I know this seems like a penalty for being responsible, and it is to some extent, but fair or not, it makes sense to avoid inactive accounts being closed by simply using them and paying the balance off ASAP.

Homebuyers wanting to jump into the dawning Era of Conspicuous Frugality might want to look at the free spending and credit management tools referenced in the article.

Check it out! Get the article, here.

lending guidelines are tightening (again) and the new Credit Card Accountability Responsibility and Disclosure Act (CARD) takes effect on February 22, 2010.

The Big REThink

In my world, the biggest news story of 2009 had zero to do with Michael Jackson, Jon and/or Kate, or even the literally and figuratively overexposed Tiger Woods.

Instead, the biggest story of the year — maybe even the decade — in my real-estate-fixated consciousness was The Big Rethink: Americans’ wholesale reconsideration of whether homeownership still belongs in “The American Dream.”

You see, in my business I rethink, therefore I am. My company, my Web site, this column, my book series, my “brand” — all are called REThink Real Estate. Since 2006, I have literally traveled coast to coast and back again (and again) hollering “REThink real estate!” from the rooftops and satellite media tours.

This, all because I became convinced through personal experience that real estate presented the purest opportunities ever to consciously design and upgrade our lifestyles.

What I didn’t fully appreciate at the beginning of the decade was that if real estate decisions were made unconsciously, there were lifestyle consequences in store that were just as extreme — in the opposite direction. But I learned this, both through personal experience and through those of my clients and readers.

By the end of 2009, we had all become painfully aware of the collective disaster that the unconscious, unsustainable and unwise real estate and mortgage decisions of even a relatively small chunk of the population could wreak on the entire nation — actually, on the entire globe.

And it was this revelation, this apocalypse (in the sense intended by the original Greek definition: “lifting of the veil”) that might have sparked The Big Rethink. It led many Americans to question whether owning a home was even a good thing to do anymore.

I heard stirrings of this, to me, earth-shattering concept that it might be OK, or even desirable, to rent in perpetuity among the same old disgruntled contrarians (sorry, guys — my perception only) who were cranky (”you’d have to be nuts to pay ‘X’ for a house!”), committed renters for years.

But the vast majority of people who opt in to my life experience, both personally and professionally, are and have always been confirmed homeowners and real estate investors.

As such, I first realized that the national tide of opinion on homeownership was choppy in a non-isolated way while reading an article in the New York Times in August, entitled “A Reluctance to Spend Might be This Recession’s Legacy.” I was expecting the article to chronicle the slowdown in consumer spending, rediscovery of simple pleasures and increase in the savings rate — which it did.

What I wasn’t expecting was a quote from a laid-off patent attorney in her early 30s to the effect that she would be happy as a clam if she never owned a home. That, to me, was a real estate rethink of epic proportions.

Maybe it was simply that the swell of The Big Rethink coincided with my reading of that article. Or perhaps such a bold statement from a member of my real-estate-fixated peer group (young, female, professional, attorney, etc.) was my own personal lifting of the veil. But around the end of the summer, the stirrings of homeownership being reconsidered deeply penetrated my consciousness, and I tweeted: “Homeownership needs to step its game up.”

Owning a home had lost the lure of fast appreciation, though it continues to hold its less-sexy wealth-building characteristics (tax advantages and slow-and-steady value increase). And, on top of that, ownership had become newly associated with the traumas of adjustable-rate mortgages, upside-down indebtedness, foreclosure and even eviction.

I wondered — in the aftermath of this crisis, would homeownership be retrained out of the American palate? You know, like when you go on a whole foods eating plan. No matter how much you loved Doritos, Kit Kats and root beer when you started, after your palate has been retrained to Jack LaLanne’s “if man made it, don’t eat it” standard, the thrill of your former faves is gone.

Would homeownership forever after seem like a trans-fat-laden, illusory thrill that, in fact, threatened the wellness of personal economies of all but the wealthiest Americans?

For some homebuyers, the affordability spawned by the deep decline in value was motivation enough, but that would only be temporary. So, what would motivate Americans to want to own homes once they weren’t dirt cheap to buy?

The answer recently came to me: desire. It’s the wish to own the place you live in and, thereby, gain that much more control over the design of your life.

The National Association of Realtors’ recently released 2009 Profile of Buyers and Sellers revealed that overall, homebuyers cited the desire to own their home as the most common, primary reason for buying.

When it came to first-time homebuyers, the number was even more staggering, giving an indication of how non-homeowners are coming out on The Big Rethink: 62 percent of first-timers said that their primary reason for buying was that they plain old wanted to own the place where they live.

But, after The Big Rethink, the desire to own is no longer that voracious-for-square-feet, grasping, by-any-means-necessary, sign-no-matter-what-the-mortgage-papers-say desperation to own before prices go any higher that motivated buyers during the subprime era. The people who go through The Big Rethink and decide to own are motivated by a holistic desire to be the masters (and mistresses) of their own domain.

An article I read at year’s end chronicled the post-layoff lifestyle of creative executive Catherine Goerz, who is now currently, to quote the title, living “happily on 75 percent less” than what she made before she was downsized. Goerz has intentionally eschewed full-time employment to focus on her newly discovered calling as a documentary producer.

Her new 10-minute short, “RE:Invention” tells the tales of several people who were forced by the recession to do their own big rethink, and did so creatively and to life-transforming effect.

As content as she is with her current trajectory, working temp jobs while aiming to parlay the full-length version of “RE:Invention” into a film industry position, according to the article, Goerz’ financial plans have one primary aim: she “craves her own place.”

” ‘I have this niggling fear that I’m screwed,’ she says. ‘Will I ever be able to buy a home or a car? That’s my biggest motivation to succeed financially: to get my own place.’ ”

If 2009 was the year of The Big Rethink, homeownership has been vindicated, at least in the hearts and minds of those who simply desire it. But when “frugalistas” like Goerz finally do buy, they’ll do as 47 percent of buyers this year did, according to the NAR Profile: make sacrifices. Homeownership might still be in style, but overextending oneself to take part is decidedly passé.

Real estate is a tree-killing business. I estimate that my average buyer client’s transaction file is three to four inches thick and hundreds of pages long. The lion’s share of these pages is comprised of disclosures and inspection reports. If you’re a goal-oriented type of gal, it is tempting to attack that stack of paper like an unpleasant chore—to initial and sign away to get it out of the way as fast as you can. I’m here to tell you to fight that impulse—just this once!

When the typical Smart Woman prepares to buy a $30,000 car, she goes to the Blue Book to research market values, goes to epinions.com to check out the feedback of others who already own the car, and maybe to the purchase decision-making gurus at Consumer Reports. She may also email a bunch of folks she knows to see if anyone has the type of car she’s considering, and
how their experience has been with the vehicle. If she’s buying used, she’ll go to CarFax.com to get a vehicle history report, and take it to her own mechanic to get a professional opinion on the car before she buys it.

Well, homes aren’t like cars in that there is no standard repository of information about your “model” of home, and no database that keeps track of the history of repairs done to individual homes. That thick set of disclosures, inspections, and other reports are the safety net that keeps you from buying a lemon of a house.

The point of these documents is to equip you to make your final decision whether to buy the property only after you have full and unbiased information. Instead of looking at these papers like a stack of signatures you have to churn out, look at them as the final phase of a study project.

Depending on the length of your contingency or objection period, you’ll have up to about a three-week time period after you get into contract. In that time, your job is to research, study and familiarize yourself with the details of the property by attending your inspections and reading disclosure and reports. That’s the only way you’ll be able to say a fully informed ‘yea’ or ‘nay’ to the purchase, or to renegotiate the price or other terms if you need to.

General Rules for How to Read and Use Disclosures,
Inspections & Reports

• Read them front to back – there is some potential for eye-glazing, but persevere and pay close attention;
• Keep a running, written (or digital) list of questions, and present it to your broker or agent. Then follow up and get answers—from your agent, the inspector(s) or the sellers. Feel free to call inspectors directly with questions, if you’d like;
• There is no such thing as a “bad” inspection report or an absolute “deal breaker,” other than a home that needs repairs that you don’t want (or can’t afford) to complete;
• If the inspection results are surprising, you might be able to renegotiate your deal with the seller (unless your seller is a bank and you’re buying an REO – then, as-is means as-is). For minor items, though, you should plan to use the inspection reports as the start of your long-term home maintenance/upgrade plan;
• Keep everything in perspective—even brand new homes sometimes have items that should be repaired, replaced, or installed differently: no home is perfect, and the older the home is, the more of a “history” it will have.

Don’t assume that once your final underwriting approval is in, you’re totally off the hook. Underwriting continues up until the time the deed has recorded. As I’ve stated before, many lenders, for example, will verify your employment on the day they fund the loan, or the morning the escrow agent plans to go record the deed in your name!

Ironically, after all you’ve gone through to get the house, if all goes well it will close with a whimper, not a bang. I recently sold a home to a woman who hadn’t bought real estate in over 20 years. The sellers signed at home the night before she and I went to the title company for her signing appointment. I explained that the mortgage would fund the next day, and that the day after that the sale would close. The seller would leave all the keys and garage door opener on the counter, and I would access the front door using the lockbox, which the listing agent would later remove.
Well, my client was sorely disappointed at how anti-climatic her closing was. In her imagination, she pictured a momentous event with both parties, both agents, and some other distinguished-looking folk all dressed to the nines, and seated around a mahogany table in a mahogany paneled room. After everything was signed, a trumpet blast would sound and the Handing Over of the Key would take place.
In real life, any celebratory climax around closing escrow is something you’ll have to create by going out to dinner or having a housewarming soiree.
Closing can be around-the-conference-room-table formal or around-your-dining-room-table informal, as the circumstances of your case and the standard practices in your area require. Your escrow agent will drive this phase, keeping your Realtor constantly apprised of any and everything that is required of you. One day during the last week of your escrow, you will be asked to sign the final documents. Ideally the signing will take place at the escrow agent’s office, but you may request to do it at your home or office with a mobile loan signer, who is also a notary public in your state. At this signing, you will sign a huge stack of documents:
° Title documents, which allow the property to be placed in your name on the public records and which secure your mortgage lender’s interest in your property (e.g., the grant deed from the seller and the deed of trust you sign for the benefit of your lender). These make up a small fraction of your closing documents;
° Loan documents, which set forth every last detail of your mortgage loan, and constitute your agreement to repay the lender and the lender’s various legal and corporate disclosures to you (e.g., the note which evidences your agreement to repay the lender); and
° Escrow documents, which constitute your final authorization of the escrow or closing agent’s disbursement of all the money and property in your escrow account (e.g., your settlement statement or HUD-1).
Most of these items vary dramatically state-by-state, county-by-county, lender-by-lender, and even transaction-by-transaction. However, there is one important element of closing that has been standardized nationwide—your closing, or settlement, statement. The federal Department of Housing and Urban Development has created a standard form, called the HUD-1 (check out a sample HUD-1 on www.REThinkRealEstate.com by going on our blog and typing keyword “HUD1” into the Tara’s Tips box), for use by closing agents everywhere in disclosing to buyers and sellers in line item format:
° All the debits to both Buyer and Seller, including every penny of closing costs;
° All the credits to both Buyer and Seller;
° All deposits that have been made to the escrow account; and
° All monies which must still come in to close the transaction.
At closing, you will receive a preliminary or proposed HUD-1 statement, because some items, like property tax prorations or prepaid interest, cannot be determined definitively until the day of closing. This is because if the lender funds the loan a day early or a day late, these amounts will change. Usually, the closing agent will very slightly overestimate the cash you need to bring in to close, so that they don’t have to ask you to come back in with a cashier’s check for $13.25 before your deed can be recorded. Your final HUD-1 will be sent out the day of closing, and often a week or so later you will receive a refund check with the overage left in the escrow account, if any. This final HUD-1 will do double duty as a tax document the following January 1; mortgage discount points and pre-paid interest are fully tax deductible (in addition to your regular monthly mortgage interest) for the year in which you paid them. Don’t forget to give your tax preparer your HUD-1 with your W-2’s or 1099’s the next year!

Download Tax Credit Comparison Chart from the National Association of Realtors©

Home Buyer Tax Credit FAQ from the National Association of Realtors©

Download from the IRS Important Facts: Extended Home Buyer Tax Credit

Download from the IRS Extended Home Buyer Tax Credit Information

Download from the IRS Tax Credit Form (5405)

Mood of the Market

Tara-Nicholle Nelson
Inman News

My buyer clients know that they count on me to remind them that while fair market value, the comparables and the likely appraised value are all important inputs to their decision on how much to offer for any given property, the price they offer must also pass the final gut-check question: "What’s it worth to you?"

I’ve been finding myself asking that same question of homebuyers in a different context lately, though — the context of what they’re willing to do, to what lengths of personal inconvenience are they willing to go — to do the work of house hunting and successfully buy a home on today’s market.

Taking a step back, let me preface this mini-rant with another phrase my clients are used to hearing me say: "I don’t sell shoes." Not to minimize the importance of shoes and shoe salespeople whatsoever — shoes are a source of utility, comfort and, sometimes, even delight(!) in my world. However, my reality is that the item I sell is, for most of my clients, the single largest, most important purchase they will ever make.

Throughout my real estate career, I have used exactly this rationale to explain away the freak-outs, anxiety and drama some clients experience and even create — they’re not nut-jobs, they’re just stressed out. And while it is certainly possible to have a drama-free real estate transaction, I also have a great deal of compassion for those who don’t know that yet. Long story short: If there’s a purchase that warrants being stressed out about, it’s this one.

I have also used the import of the transaction of homebuying to justify years of working at all hours of the day and night, extreme family sacrifices (e.g., showing houses on even the most sacred of holidays, if necessary) and other personal lifestyle concessions to my profession, like getting up at 4:30 a.m. everyday, among other things.

I’ve actually had more than one client say something like, "Geez, T, you work so much. You really need to take a vacation. Just please don’t do it during my deal!"

And for the most part, I acquiesce. The obvious complication with this, from my perspective, is that if I do this for everyone, I would never take a vacation! But, you know what? I don’t sell shoes, I sell houses, so I make some sacrifices in honor of what I see as the sacred trust my clients have placed in me.

So, I’m not complaining. However, what concerns me sometimes is the misalignment between:

1. a broker/agent’s willingness to go to all sorts of time-sacrificing extremes in the name of the extreme import of this purchase; and

2. the clients’ willingness (or lack thereof) to do the same — for their own transactions!

Weddings, funerals, business trips and on-call hours — I get it when these inescapable, "unreschedulable" obligations stop you from getting out to see a property or delay your ability to make an offer.

But in our current market’s landscape of multiple offers, super-short average days on the market and looming changes to loan guidelines that threaten to slash your buying power in a couple of weeks, when you get a once-in-a-lifetime chance to see a place and you don’t show up because of the following reasons — "I’m helping my friend move that day"; "I have a barbecue to go to"; "That would mean I’d have to get up at 9 a.m. on a Sunday — and that’s just too early!" or "I have a friend here from out of town, and we wanted to go to brunch" … I begin to question just how much of a priority this purchase really is for you, and even to rethink the extremes I’ve been willing to go to in the name of this being your biggest deal ever.

I’ll go to extremes — without complaint, because that’s what I do. But when our calendar is booked and you want an appointment at the last minute, and we get you one then you remember that there’s a church concert you wanted to attend right at the same time, as important as church is, it becomes a little bit harder in that moment for me to take you as seriously when you say your purchase is super-urgent.

Here’s the deal — flat out — you should be at least as willing as I am to make scheduling sacrifices for your house hunt. It can’t be all urgent for me, and not for you. Good, mutually beneficial human relationships don’t work like that — in life or in real estate.

And, sellers, you are not off the hook on this one. You ask how to get top dollar for your home and we give you a list of things to do around the house and otherwise.

But the $300 pest inspection the $500 handyman bill or the weekend it’ll "cost" you to declutter is just beyond what you can do, because you’re going to a high school debate or you’d rather spend the cash on a weekend away. Uh, well, OK, but don’t call me when you don’t get what you want! You’re making a clear statement of your priorities here.

Buying or selling a home is something that you do somewhere between once and a few times in your lifetime. And, like everything, doing it well and wisely takes some work, time and sacrifices. I know literally dozens, even hundreds of brokers and agents who are willing to work nights and weekends, invest their own money and go to all sorts of extremes to help you pull it off. You should be, too.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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REThink Real Estate

Tara-Nicholle Nelson
Inman News

Q: I would like to buy a home right now. This seems like a really basic question, but I’m not sure whether it’s better to wait and save the 20 percent down or to just buy with the minimum 3.5 percent downpayment? I feel like if I save the 20 percent downpayment it won’t be a buyer’s market by the time I have the money.

A: The decision as to when to buy (or sell, for that matter) to best take advantage of market dynamics faces every real estate consumer.

Mindset Management

I generally advise buyers and sellers to make their real estate moves at the time that makes the most sense for their lives, rather than trying to time the market at all. Smart buyers and sellers use what’s going on in the market to direct their specific strategies for executing their real estate decisions (e.g., how much to offer for a home, or how much to price their home at), whenever it is that they decide to make a move.

The upshot of this general rule is that your buying timeline and strategy should be custom-tailored to your life. Don’t tailor your life to the market — if you’re ready and want to buy now, get a professional’s personalized assessment of what purchasing power you have now. A good mortgage professional will also help you create a savings target and action plan in the event your current resources aren’t sufficient to buy the sort of home you want and need.

Need-to-Knows and Action Plan

The amount of money you have at your disposal for cash to close (downpayment and closing costs) is only part of the total financial picture of your home purchase. That number interacts with your credit score, interest rate, property taxes, monthly mortgage payment and purchase price (among other things) to create the holistic financial snapshot of what buying a particular property at a particular spot in your process of saving downpayment money.

Without this holistic snapshot, you’ve got nothing more than someone else’s general rules of thumb on which to base your decision. One person might say you should never buy with less than 20 percent down; another might advise you to buy as much as you can as soon as you can scrape up the minimum 3.5 percent downpayment for an FHA loan.

Neither piece of advice is right or wrong for every homebuyer. The fact is, you need this holistic snapshot in order to make a decision that makes sense for you.

Your first step should be to get clear on how much you have at your disposal right now and how much you feel your current monthly budget can bear in terms of the total cost of owning your home.

Then, find a reputable mortgage broker, preferably by referral from family members, colleagues, friends, or even a trusted local real estate broker or agent. Work with them to determine if your current savings would be a sufficient downpayment to make any sort of realistic purchase in your market. If so, allow your mortgage broker to run your credit — a key step of the troubleshooting phase in any serious real estate transactional planning conversation — and analyze your income, assets and other mortgage application details. Then, tell them what you would like your maximum monthly housing costs to be, and ask them to provide you with some alternative scenarios:

• with X, Y and Z dollars toward your downpayment (and closing costs, if they’re not normally paid by the seller in your area), and

• a maximum total monthly ownership cost (mortgage principal, interest, property taxes, insurance, mortgage insurance and homeowners association dues, if applicable) of the amount you came up with earlier, and

• what purchase price can you afford to pay for a home.

Then, connect with a local broker or agent (again, by referral), and ask them to show you homes at the price range you could afford to pay with what you have saved right now. Do a gut check — could homes similar to this work for you? Keep in mind that your first home need not be your dream home — you might want to save that for your next purchase (or the one after that!).

If the homes you see in this price range aren’t even close to fulfilling your housing needs, you might need to keep saving. But this analysis is not strictly an either-or, 3.5 percent or 20 percent proposition. Perhaps 5, 10 or 12.3 percent is the magic downpayment amount that will get you into a home that will work for you at the price you can afford. That’s how you’ll make use of the various downpayment/monthly payment/purchase price scenarios your mortgage broker put together for you.

You are smart, though, to keep in mind that prices generally will tend to inch up over time, and many buyers find that the inflation in home prices — even in today’s market — outpaces their ability to save up funds toward their downpayment.

Also, don’t neglect to factor in how important it might be to take advantage of the tax credit (assuming you qualify for it). In about 17 states, you can use it toward your downpayment up front; everywhere else, you might have to wait until after closing to obtain the funds, but at that time you could use them to bring down your loan balance if you so choose.

If you have the financial discipline to apply your tax credit in one of these two ways, by getting into contract prior to the April 30, 2010, deadline you can essentially gain an instant downpayment boost equivalent to the credit amount you qualify for, up to $8,000.

If you choose to wait to save up 20 percent, you might have to save up an additional $8,000 to get to the same spot as if you bought in time to obtain the tax credit. That doesn’t mean you should rush out and buy something right now to get the tax credit; it’s just another relevant data point that you should factor into this important decision.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

At REThink Real Estate, we believe that buying a home is not just a business transaction, it’s also the purest opportunity at designing your whole life that you might ever have!

So often, though, the lifestyle design opportunity gets lost in the drama and stress that seems to go hand-in-hand with homebuying.

It’s time to REThink Real Estate, ladies – it doesn’t have to be stressful. In fact, buying a home can be chock full of yummy, juicy opportunities to evolve as a person and obliterate things that have been getting in your way.

Smart real estate decisions are those that:

(a) enhance and protect the people and experiences you care about, while

(b) being sustainable and non-damaging to your lifestyle and finances over the long haul.

Confusion, fear and mystery about the homebuying process get in the way of smart real estate decision-making by causing panic and impulsivity or paralysis and procrastination. So let’s get rid of the mystery – here are our

Simple Steps to Smart Homebuying

STEP 1:  Cultivate a clear ‘Estate of Mind’.

The Mindset Matrix
Fear:  How to Overcome This Homewrecker
The Power of Alignment

STEP 2:  Handle your homebuyer money matters.

Know Your Numbers
Lifestyle Inputs to Your Mortgage Equation
Risky Business:  What Lenders Want to Know About You
Surprise Prevention:  Owner-Only Utilities and Costs

STEP 3:  Master the art of the house hunt.

Anatomy of a Listing
House Hunting: A Three-Hour Tour – What to Expect and What to Demand

STEP 4:  Cover yourself with your contract and negotiations.

Always Have a Backup Plan
Contingencies You Must Have

STEP 5:  Experience the escrow process.

What is Escrow?

Disclosures, Inspections and Reports: Your Paper Safety Net

STEP 6:  Close the deal and collect your keys!

Closing Without a Bang

Like any life-changing move you make, buying, selling or financing a home has its share of drama. But don’t sweat it! Tara and REThink Real Estate have teamed up with our partners over at HGTV’s FrontDoor.com to offer tips, advice and inspiration to take the fear and stress out of any real estate *situation*.

Note from Tara:

Here are two Drama-Free Real Estate articles for the oft-neglected Smart Owners just looking for some guidance to help them be wise stewards of the homes they already own.

Don’t Freak Out If: You Can’t Afford to Pay Your Mortgage or You’re Upside Down on Your Home

Foreclosure-Proof Your Home: Before or After You Buy It!

For the rest of my insider secrets, strategies and mindset management tools for Buying, Selling and Financing your home Drama-Free, visit the entire Drama-Free Real Estate wonderland over at my second home on the web, HGTV’s FrontDoor.com

What do you get the smart woman who already has everything she wants? $8,000 (or $6,500, if one of the things she already has is a house)!

These are the Obama Administration’s gifts to first-time and move-up homebuyers via the Extended 2009-2010 tax credit. This credit, the 3^rd (and likely final) extension of the first-time buyer’s credit originally implemented in 2008 has gotten better with every iteration, and this extension/expansion is no exception.

The 2008 version was a $7500 tax credit for first-time buyers earning under $75K per year, but it was also a loan that had to be repaid. Bleh.

The original 2009 version was an improvement, expanding the amount of the first-time buyer’s credit to $8,000 and, more importantly, removing the repayment requirement, rendering it a true tax credit. If you bought a home and closed escrow between January 1 and November 6, 2009, that’s your credit – click here for a fuller explanation of the credit itself, and here for a complete 2009 First-Time Buyer’s Credit Resource Center.

But the Expanded/Extended 2009-2010 credit trumps all previous versions, in several respects. At its core, it’s still an $8,000 tax credit for first-time homebuyers. However, it also offers:

• An extension of the $8,000 first timer credit through April 30, 2010 (the deadline to get into contract to buy your first home)
• A new, $6,500 credit for current or previous homeowners who buy a new or existing home by April 30, 2010 – so long as their current/previous home was their primary residence for at least 5 of the past 8 years, and
• Expanded income limits – you’re eligible for the whole credit if you make less than $125,000 a year (single buyers) or $225,000 (married couples). You might be eligible for a prorated credit (less than the full $8,000 or $6,500) if your income exceeds these limits, but if you make more than $145,000 (single) or $245,000 (married) – sorry, you’re out of luck (but you have other reasons to be happy, so get over yourself).

We’ve put together an entire 2009-2010 Tax Credit Resource Center, here.

The extended/expanded credit also imposes a new purchase price limit of $800,000 (i.e., you can’t get the credit if the home you’re buying costs more than that). The vast majority of people who fall into the program’s income guidelines aren’t buying homes more pricey than this anyway, so it’s not really a hardship.

Key Timelines & Deadlines.

• This credit doesn’t have to be repaid, so long as you live in your home for at least 3 years.
• To get it, you have to be in contract (meaning, have a purchase agreement signed by both buyer and seller) on or before April 30, 2010, and you must close escrow between November 7, 2009 and June 30, 2010.
• If you bought between January 1 and November 7, 2009, your credit is the 2009 Tax Credit, more here and here.
• If you bought in 2008, your credit is the 2008 Tax Credit, see here.

To collect the credit,you have a couple of options:

• If you close escrow before December 31, 2009, you can claim it on your 2009 tax return.
• If you close escrow after you’ve filed your 2009 tax return, you can file an amended 2009 return, or you can claim it on your 2010 tax return – your choice.
• Whenever you claim it, you need to include documentation of your purchase (like your HUD-1 settlement statement) and Form 5405 with that return.

If you’re just thinking about whether you might be able to qualify for the new tax credit, visit our 2009-2010 Tax Credit Resource Center, here.