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Apparently, as part of the new budget that increased taxes on everyone there is a tax credit for people who purchase brand new homes.  This means that the home cannot be occupied previously by anyone.  This seems like it would be a boost to home builders.

Here are the specifics:

1) The home has to be brand new, but the tax credit applies to all buyers who intend to live in the home.  You do not have to be a new  homebuyer to qualify.

2) There is no income limit to qualify for this tax credit.

3) You have to close escrow on the home between March 1, 2009 and Feb 28, 2010.

4) There is a total of $100 million assigned to this credit, so that means only 10000 homes will qualify.  It is first come first serve by closing date.

5) You have to live in the home for at least 2 years and you will receive the $10000 in 3 installments of around $3,333 each for the next three years.

6) This tax credit can be combined with the Federal Tax credit of $8000 for new home buyers.

This tax credit actually makes me quite angry because right now California is not even paying tax refunds to people who qualify.  Now they want to use all this extra money to help home builders sell homes?

Additionally, there is a very small supply of new homes here in the Bay Area so I do not see this helping many people here.  This is definitely beneficial to some friends we know in Southern California, where the markets have a glut of new homes that are not selling.

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Today I randomly stumbled onto a blog called   It is written by a guy named Steve.  He happens to be a fellow startup engineer  in the Silicon Valley who started an online store with his wife.  On his site he writes about how he and his wife worked on replacing her considerable income while she was pregnant so that she could quit her job for good to be a stay at home mom.

What this couple did was to start an online store that sells wedding linens with optional personalized embroidery, and they are now having revenues in the six figures.   The blog covers many topics including driving traffic to their store, their motivation for starting the store, and how they learned from their mistakes.  They also have a collection of funny customer stories.

I sat here and read this site for hours, and it kind of made me want to resurrect my retail “businesses” again.  In the past I have sold used books and jewelry to varying degrees of success.  I could definitely identify with some of the things Steve wrote.  Basically, you cannot just sit on your butt and hope for money to roll in with a business with actual inventory.  Also, customers can be quite demanding and and unreasonable sometimes.

I could easily start selling used books again, but it takes quite a bit of time, and the income is not passive because I have to list each individual book and ship them when they sell.  The profit margins were quite decent, but I gave it up because it just took too much time.  Right now, I am seriously pursuing writing as a side business

I would definitely quit my job if I could replace my income.  I am taking it slow and I am nowhere as successful as some bloggers who have expanded their blogs very quickly in a short amount of time, but I consider myself a plodder and I am happy with the progress I have achieved.

A little over a year ago much I am earning by blogging, and the grand total for January 2008 was $161.  I am happy to report that for February 2009 I have a grand total of $1016 for the month from all of my blogs and this is about 6.3 times my earning last year.  This is nowhere near my job income, but I am hoping that I could get there eventually.  I have added new streams of income including eHow and affiliate links and every little bit adds up.

I highly doubt that next February I would be earning 6.3 times of $1016 a month from writing alone, but maybe one day I will also be a wife that quit her job.

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Just when I thought that my husband and I have been paying too much taxes, we are having another tax hike in California.  This is a basic run down of the new taxes.

  •  The vehicle licensing fee is doubling to 1.15%.
  • Sales tax is going up 1%, which means in San Mateo County I will be paying 9.25% on services and non-food goods.  So guess what, my hubby and I will probably shop more on Amazon for the non-essentials.
  • Income tax is going up by 0.25% so the top bracket is now 10.55% for those making over $1 million per year and 9.55% for everyone else.    For the hubby and I the extra amount we will pay is just under  the .  So our net stimulus would be around 50 cents a week.  Haha!
  • The dependent tax credit is reduced by $210, so families with tons of kids will see a hit in their tax bill.

It is unfortunate, but this state has way too much debt and something had to be done.  Raising taxes is a almost inevitable.  Supposedly these tax hikes are temporary for two to four years, but the economic crisis might make them permanent.

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Last October my husband and I spent a lot of time and money to from  his parents.  Everything went through at the moment we .  So far it is going well.  Our entire family spent winter break at the house for over two weeks and now we have a wonderful family taking care of the home and we can visit whenever we want.  Since October, mortgage rates have dropped significantly so I was shopping around for a refinance.  Today we will be doing the signing with the same lender we are with now for a Fannie Mae to Fannie Mae streamline loan.  Our interest rate is going from 5.875% to 4.875% and we will be saving over $200 a month on interest.

Personally, I did not know that there was an option of the Fannie Mae to Fannie Mae streamline loan, but I talked to my lender in January about refinancing and they said that we qualify for a streamline loan  Basically, there is no need for a new appraisal and  broker fees were waived since we are just doing the refinance with  the same bank.  Some fees cannot be avoided, such as a new title search and title insurance.  They also ran a new credit check, but the process was very easy overall since they had pretty much all of our information.

After running a bunch of calculations on the costs I determined that it was still worth it to refinance because we would be saving over $80,000 on interest over the lifetime of the loan with the 1% difference in the rate.  We will recover our costs in a little less than 2 years and since we intend to keep the home for a long time it is not a bad deal.

Also, since we only paid our old loan for 3 months, we are not really stretching out the loan by all that much.  Now if we apply the extra money we are saving towards the principal every month, we will pay off the loan six years early so I consider this a good move for us.

I am not sure if interest rates will move even lower, but 4.875% is a rate I am willing to stick with for a while and if it really goes down to 3.5 I could just refinance again.  If you are interested in finding out about the Fannie Mae to Fannie Mae streamline refinance you can check out.

The basic requirements are these:

1. Your loan must be originally fully documented and underwritten by Fannie Mae guidelines.  It has to  be held by Fannie Mae right now.

2. You cannot have late payments within the 30 days you are applying

3.  You have to submit to a credit check, and your credit score needs to be 720 – 740 if your loan is more than 90% of the value, and 660 – 680 if your loan is less than 75% of the value.  Basically, your credit score has to be fairly good.

There are also a bunch of variations on the requirements based on the type of property and loan to value calculations that you have to read the Product Matrix to figure out.  I think this could be helpful to people who have homes that lost value dramatically because they really do not do an appraisal.  I would have been okay with an appraisal since we just bought the home 3 months ago and prices haven’t slid 20% in 3 months, but I know a lot of people who bought in 2006 or 2007 who have lost 20% to 30% and can’t take advantage of the great rates now.  My suggestion is to ask your lender if you qualify for a streamline, and you may be able to save thousands of dollars.

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Before I begin, I will flat out admit that  is a pretty stupid film overall.  The premise of the movie was that imbeciles were procreating at a faster rate than highly educated people so after 500 years the whole earth was filled with idiots.  They created giant piles of trash and watered their crops with energy drinks.  It was a dumb movie, and my husband said he felt stupider after watching it.

The first time I got reminded of Idiocracy was when we watched in the theatre.  These two movies both had giant piles of trash and also a very similar ending. The main difference was that Wall-E’s protagonists were cute little robots.  After watching that movie my husband said, “Idiocracy ruined Wall-E for me”.

This week I remembered the story of Idiocracy again after reading about Nadya Suleman.  Nadya Suleman is the mother of the now famous octuplets.  Apparently she now has a total of 14 kids.  Three of her older six kids are disabled so she’s receiving food stamps and money for them, and she funded her invitro treatments with her disability payments.  She is unemployed and now Kaiser is demanding money from MediCal to pay for the care of her octuplets.

I totally believe that everyone should be able to have as many kids as they want, but people need to understand that kids are huge responsibilities financially, physically, and emotionally.  An understanding these of responsibilities is what prevents a lot of folks from having a lot of kids, and this was illustrated in the movie Idiocracy.

So what’s my point?  I actually do not believe that book smarts is totally hereditary so I think it is possible that parents that are considered to be “dumb” can have very successful children. Basically, I do not believe that the world in Idiocracy would actually become a reality.  However, I am pretty annoyed by people who are perpetually unemployed and have  kids just to milk the system and collect welfare checks or discounted housing.   If you intend to provide for the kids you have and find a way to do it then there is nothing wrong with having tons of kids.  In fact, I admire the Duggar family of Arkansas a lot for what they are doing with their brood of 18.

With that said, if Nadya Suleman gets a reality show I think I would puke, because that would be true idiocracy.

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