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WASHINGTON — The Federal Reserve signaled Wednesday that a full economic recovery could take nearly three more years, and it went further than ever to assure consumers and businesses that they will be able to borrow cheaply well into the future.

The central bank said it would probably not increase its benchmark interest rate until late 2014 at the earliest — a year and a half later than it had previously said.

The new timetable showed the Fed is concerned that the recovery remains stubbornly slow. But it also thinks inflation will stay tame enough for rates to remain at record lows without igniting price increases.

Chairman Ben Bernanke cautioned that late 2014 is merely its “best guess.” The Fed can shift that plan if the economic picture changes. But he cast doubt on whether that would be necessary.

“Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” he said.

The Fed has kept its key rate at a record low near zero for about three years. Its new time frame suggests the rate will stay there for roughly an additional three years.

The bank’s tepid outlook also suggests it’s prepared to do more to help the economy. One possibility is a third bond-buying program that would seek to further drive down rates on mortgages and other loans to embolden consumers and businesses to borrow and spend more.

Information obtained from the Calif. Asso. of Realtors with permission.

Article printed in the Mercury News and A.P.  Jan. 25,  2012.

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• Interest Rates will Stay Low, Low, Low (marvicirealtygroup.wordpress.com)

• Insufficient income: Lenders want to be sure borrowers can afford to make the mortgage payments. Lenders typically look for at least a two-year track record of income, which could hurt those who have changed jobs recently.
• Cloudy financial picture: Generally, total debt payments, including the mortgage, cannot exceed 45 to 50 percent of a borrower’s adjusted gross monthly income. Overtime and bonuses are included only if the borrower has worked for the same employer at least two years, and has a history of receiving them.
• Poor credit: Lenders typically reject applicants with FICO scores below 620.
• Low appraisal: One of the predominant reasons buyers are turned down for home loans is because the appraisal on the property is too low.
• Property problems: Sometimes issues turn up within a house, like a major repair or safety issue that needs to be addressed, before an application can be approved.
• Information mix-ups: Approximately 12 percent of new mortgage applications were denied because of unverifiable information or incomplete credit applications, according to the Federal Financial Institutions Examination Council.

Related articles

• How to Boost Your Odds of Getting Approved for a Mortgage (dailyfinance.com)
• First-time buyers hit by lenders’ caution (guardian.co.uk)
• How to Know if You Qualify for a House Loan (thinkup.waldenu.edu)

Higher credit score requirements – although you may get approved with a 620 credit score, you likely won’t get the most favorable interest rate and fee.  The solution?? Contact all three credit reporting agencies—Equifax, Experian & TransUnion, by calling 1-877-3222-8228 or going to www.AnnualCreditReport.com . Once you get your credit reports, check all information for accuracy.  If you find any discrepancies, report it to the credit company immediately.

Greater scrutiny of income & assests – mortgage lenders have to verify your information, so be prepared when you apply for your loan by having documentation that supports your income & assets. Have copies of tax returns, paystubs, bank statements and any investment accounts.

With a little preparation, you’ll be able to take advantage of today’s low interest rates and reasonable home prices…and buy the home of your dreams.

• Click with Caution. When shopping online, check out the website before entering your credit card number or other personal information.
• Check your bills and bank statements. Open your credit card bills & banks statements right away. Check them carefully for any unauthorized charges and report them immediately.  Call if your bills don’t arrive on time…it may mean that someone stole your mail or changed your contact info to hide fraudulent activity.
• Stop pre-approved credit card offers.   Those make a tempting target for identity thieves who may steal your mail. Go to: www.optoutprescreen.com .
• Ask Questions.  Ask questions whenever your asked for personal information that seems inappropriate for the transaction.  Ask how that info will be used or if it’s shared with others.
• Check your Credit Report.  One of the best ways to protect yourself is to monitor or credit history.  You can get a free report every year for free from each of the three credit bureaus. One source is:  www.annualcreditreport.com .

I hope this information is helpful for you.

You can find more information about cyber security and safeguarding your personal information at the  California Office of Information Security: http://www.cio.ca.gov/OIS/

1–Protect your Social Security number.     Don’t carry it in your wallet or purse.  Also, if your health plan uses your SS number for a medical number, as them for a different number.

2– Fight “phishing” …don’t take the bait.  Scam artists “phish” for victims by pretending to be banks, stores, or government agencies. They do this over the phone, in email, & regular mail. Don’t give out your personal information – unless you contacted them. Furthermore, don’t respond to a request to verify your account number or password.

3– Keep your identity from getting trashed. Shred papers that have your personal information before you throw them away. Shred credit card offers and those “convenience checks” that you don’t use.

4– Control your personal financial information. California law requires your bank to get your permission before sharing your financial information with outside companies.  You also have the right to limit some sharing of your info with your bank’s own affiliates.

5– Shield your computer from viruses and spies. Protect your personal information on your home computer.  Use strong passwords: with at least 8 characters, including numbers and letters.  Use a firewall, virus & spyware protection software…and keep it updated.

I hope you pay attention to your identity before someone else does.

Watch for part 2 coming soon.

  ~ Barry Ripp

If you claimed a federal income tax credit for a 2008 home purchase, you’ll probably have to pay it back over 15 years, starting with your 2010 Form 1040 (due next April). In contrast, if you claimed a credit for a 2009 or 2010 purchase, you probably won’t have to pay it back. (Blame Congress’s patchwork legislating.) 

It gets much more complicated, so please click the following link to get more information.  

http://www.smartmoney.com/personal-finance/taxes/do-you-have-to-repay-your-homebuyer-credit/   

~ Barry Ripp

For example; small employers are considered to have fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year. However, because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.

The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers. Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt employers, the IRS will provide further information on how to claim the credit.

Earlier this week, the National Association of Realtors (NAR) reported some lenders and loan services have been slow to implement the program or are unaware of its availability.

NAR has prepared resources to help REALTORS® answer questions about HAFA. Their new short sale Web page includes HAFA forms, breaking news and Fannie Mae and Freddie Mac real estate commission policies.

Call your Realtor today for more info, or contact me and I will be happy to forward you some information.

~ Barry Ripp emailto: barry@barryripp.com

www.barryripp.com 510-794-7690

Governor Proposes $10K home buyer Tax Credit: During his final “state of the State” speech on Wednesday Jan. 6, Governor Schwarzenegger proposed a state income tax credit of $10,000 for first-time home buyers. The proposal would expand the tax credit for those purchasing newly constructed homes to include the purchase of existing homes by first-time home buyers.

For more information, contact me.

 ~  Barry

Recent good news about the housing market has many home buyers wondering whether now is a good time to buy. For example, home sales activity increased 9.4 percent nationally in September, a 26 percent increase from a low point in January, according to the National Association of Realtors.

The $8,000 first-time buyer tax credit has stimulated the market, and it has been extended. A credit of up to $6,500 is now available to repeat home buyers who qualify.

Many buyers are having difficulty finding a home to buy. The inventory of good listings on the market is low in many areas because prospective sellers who don’t have to sell now are waiting for a better market. To aggravate the situation, many sellers who need to sell now often take their home off the market after Thanksgiving and will bring it back on the market next year.

Buyers may find there’s very little on the market to choose from for the next several months. However, they may also find that some buyers will drop out of the market over the holiday season, leaving less competition for the listings that are on the market during this period.

 ~ Barry Ripp
Information provided by C.A.R and used with permission.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/12/06/REAI1ARGC5.DTL&type=realestate#ixzz0ZnrVz7Rf