Either way, you're still painting mortgage

Source: KCM

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with our parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As a recent paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since prices and interest rates are still at bargain prices. 

Today's Interest rates

Yesterday interest rates took quite a beating And have started to increase.
If you have considered looking into a mortgage of any kind, now is the time to start moving.

Interest rates are still considered to be at an all-time low although there has been an increase in rates and in home prices, both are still considered to be great. The consumer should not be discouraged due to the mortgage rate increase but should focus on pursuing that mortgage that they've looked into as we are starting to see a trend in rates moving up.

Spring projects

Already set with your “honey do” list to start the transition into spring? Here are a few easy steps to de-clutter your home and help your family enjoy the warming temperatures!

Clean your dryer vent to prevent dryer fires. When clothes are taking longer than usual to dry, it may mean it's time to clean it out.

Empty out cluttered pantries of expired goods and restock if needed. It's always a good idea to have some canned foods on hand in case of emergency.

Prep your soil. Want to enjoy the spring gardens? Rake away leftover winter debris and use a hoe to loosen the soil to prepare for new growth.

New Legislation Benefits Homeowners

Source: Indusrty Insider 2/1/2012

New legislation recently passed by Congress has brought back a popular tax break on mortgage insurance premiums.

The American Taxpayer Relief Act of 2012 extends the tax break — which expired at the end of 2011 — allowing borrowers to deduct the amount they pay for mortgage insurance.

The mortgage insurance premium deduction is retroactive to January 1, 2012. This means that eligible borrowers who paid a mortgage insurance premium in 2012 will be able to use the deduction when they file their 2012 returns this year. The deduction applies to all loans*, including FHA, VA, USDA and conventional loans.

Also, the mortgage insurance deduction has been extended until December 31, 2013. This means that eligible borrowers who pay a mortgage insurance premium in 2013 will be able to use the deduction when they file their 2013 returns in 2014.

To benefit from the tax deduction, homeowners must itemize the deduction on their federal tax return. Households with an adjusted gross income (AGI) of less than $100,000 per year can deduct 100% of their annual mortgage insurance premiums. Those households with an AGI over $100,000 per year can benefit from the tax deduction but are subject to a sliding scale of benefits.

The American Taxpayer Relief Act of 2012 also extends a provision that exempts homeowners from being taxed on the forgiven amount of their principal residence through a debt reduction plan, such as a short sale, foreclosure or loan modification.*

If you would like to know more about the new legislation recently passed by Congress and how it may benefit your clients, please contact me today.

* Certain restrictions may apply. Your clients should check with their tax advisor to find out if their loan qualifies.

The above content is for informational purposes only and should not be used as a substitute for consultation with a tax advisor.

5 Step Tax Season Plan to Avoid Your Own Fiscal Cliff

This week tax season jumps into full swing and so do the nervous ticks and twitches that come with it.

That means you have a choice. You can be one of those agents who waits until April 15th and risk an audit, or worse—major penalties. Or, you can get smart and develop a plan for attacking this and next year’s tax season.

Take the dread out of one of every business owner’s most feared seasons. Here’s how:

1. Round up your receipts and make them electronic
While you might be tempted to dump a pile of paper onto your accountant and walk away this year, consider an intermediary step that may prevent hassle and headache down the road.

Before you turn over your paper records and risk losing your only documentation of your tax deductions, turn them into digital/electronic files.
FEATURED
5 Step Tax Season Plan to Avoid Your Own Fiscal Cliff


Jovan Hackley
January 29th, 2013
13
inShare

This week tax season jumps into full swing and so do the nervous ticks and twitches that come with it.

That means you have a choice. You can be one of those agents who waits until April 15th and risk an audit, or worse—major penalties. Or, you can get smart and develop a plan for attacking this and next year’s tax season.

Take the dread out of one of every business owner’s most feared seasons. Here’s how:

1. Round up your receipts and make them electronic
While you might be tempted to dump a pile of paper onto your accountant and walk away this year, consider an intermediary step that may prevent hassle and headache down the road.

Before you turn over your paper records and risk losing your only documentation of your tax deductions, turn them into digital/electronic files.

How?

Send your documents off to a service like Shoeboxed.com or scan them yourself to create electronic copies you can store on your computer or the cloud.

While this step seems like extra work now, if you ever get audited or, even worse, your tax preparer should misplace a critical piece of paper before you even file, having a digital backup of your receipts keeps you covered.

2. Start tracking your mileage now
One of the most commonly missed tax deductions for real estate agents is unclaimed or under claimed vehicle mileage. Cars are one of the fastest depreciating purchases for an agent and not maximizing the current deductions for their use can be a major misstep.

While 2012 is done, this tax season is the best chance to start gearing up for smart deductions in 2013.

This includes using an app like Milebug or TripLog to track your mileage all year long. Both generate easy-to-use reports that are compliant with IRS guidelines and easy for your accountant to use to make sure you get every dollar possible in tax deductions.

Also, if you just got a new Smartphone, check out these other five apps that can help you save money as a real estate agent.

3. Get your extension early if needed
It’s the end of January and most agents are only going to get busier. If you don’t have a plan to tackle your taxes already, chances are you may need an extension to get everything done on time.

If so, don’t wait until the last minute to get in your paperwork. Visit the IRS’s website to download and complete the necessary documents to apply for your tax extension now.

4. Don’t neglect the obvious
When you’re tallying up deductions, don’t forget one of the most common overlooked items by some real estate agents like licensing and education fees.

If you renewed your license this year or attended professional development classes, those expenses are tax deductible.
If you used a part of your home to do business, those expenses could be deductible.

Be sure to take all of your business-related receipts to your accountant and download our helpful handout on commonly missed tax deductions for real estate to make sure you’re maximizing your deduction opportunities.

5. Talk to your pro about your future, too
The final step in every smart agent’s tax plan this year should be to develop a plan for the year ahead. Tax laws have changed in a number of ways for 2013 that could increase your tax liability. Talk to your accountant or certified tax professional about money management tips and tools to help make sure you’re ahead of the game and ready to maximize your deductions in the year to come.

Here are five of our suggestions for avoiding tax crises this year. What would you add to the list based on your experiences?

Source: Jovan Hackley via Trulia Blog January 30, 2013

New Kid On The Block? Meet The Neighbors

Great advice on being the new addition in your new neighborhood, courtesy of New American Funding's Blog. Enjoy!

New Kid On The Block? Meet The Neighbors

Source: NAF Blog by Brian 1/16/13 11:45

If you followed our advice, then you made an effort to talk to your potential future neighbors before purchasing your new home. Now that you’re moved in it’s time to branch out and meet the rest of the neighborhood. Even the most outgoing extrovert might find this unappealing, but it’s not as overwhelming as it may seem. Check out these tips for getting to know your neighbors:

Say Hello
Seems obvious, I know, but a simple hello could open the door to conversation. Introduce yourself then maybe ask for advice or recommendations on nearby needs like grocery stores or dry cleaners. It may seem like obnoxious small talk, but making the effort will show your neighbors you’re approachable and eager to become part of the community.

Find Common Ground
You’re bound to have something in common with any neighbor, it’s just a matter of figuring out what that might be. Maybe they drive the same type of car as you, or maybe you spot them putting away a surfboard as you’re hanging your own wetsuit up to dry, or maybe they’re out gardening as you’re coming home with a trunk full of mulch and manure. Look for a chance to open up a dialogue over shared interests.

Walk Your Dog
Dog lovers are an easy and willing audience. Walking your dog around the block will, sooner or later, lure them out of the woodwork – it’s inevitable. They can’t resist the opportunity to find out what breed you have/ how old they are/ if it’s a boy or girl. Not only is this an effortless way to meet a neighbor or two, but play your cards right and you may have found a potential dog-sitter for the next time you go on vacation.

Use Your Kids
Kids are more than just little germ factories – they’re also, much like pets, great catalysts for socializing. Take ‘em to the local park or playground and bond with fellow neighbors/parents. Or, when they ask if they can go play at Bobby or Sally So-and-so’s, walk them down and introduce yourself to the parents. Two birds: a simple way to meet a new neighbor and a great opportunity to familiarize yourself with people your kid may be spending a lot of time with. For bonus points, try to pick their brain about surroundings that could affect your children – schools, sports organizations, shady neighbors, high-traffic streets, whatever concerns you.

BBQ or Par-tay!
Everyone loves food - it’s just science - and hosting a BBQ offers a casual and comfortable atmosphere with the promise of delicious grub. If weather or space make a BBQ impractical, then throw a small party instead. Either one gives you the opportunity to meet several of your neighbors at once while also putting you in central position as host. Better still, inviting all the neighbors means you probably won’t get any noise complaints.
Be smart about your approach. Obviously filling your new home with a bunch of strangers poses a number of concerns, as does getting caught leering into your neighbors’ garages to see if they enjoy the same hobbies as you. Don’t do anything you’re not comfortable with and, in turn, don’t do anything that might make the neighbors uncomfortable with you.

Ultimately, you’re all striving for the same thing – an enjoyable living situation – so chances are any efforts you make to demonstrate sharing that goal will be met with open arms.

Why 'Fiscal Cliff' Deal Will Help the Housing Recovery

The housing market is on firmer ground today, as two major tax provisions survived the "fiscal cliff." Congress did not touch the mortgage interest deduction, and it extended tax relief for one year on mortgage debt forgiveness.

"An extension of the tax break is positive for home values by reducing the number of foreclosures and helping more troubled borrowers stay in their homes," wrote Jaret Seiberg of Guggenheim Partners. "That means less supply on the market."

Under a law signed in 2007, debt relief on loan modifications, short sales, and foreclosures were no longer taxable; that break expired at the end of 2012. The fear was that if the tax break was not extended, home owners would not agree to short sales (when the home is sold for less than the value of the mortgage) because they would then face a tax bill. They would also not agree to principal reduction loan modifications, which have proven to be far more successful than other modifications that leave the principal balance as is.

Under the $25 billion mortgage servicing settlement, borrowers have received $6.3 billion in mortgage principal relief through September, according to the settlement's monitor, Joseph A. Smith, Jr. The average loan balance reduction, $150,000. Banks completed 13,351 principal reduction loan modifications in November alone, according to Amherst Securities Group, a 62 percent jump from September.

Source: CNBC.com | January 02, 2013 | 11:33 AM EST

93% of Young Adults Plan to Buy a Home

It is believed, that young adults between the ages of 18-34 will be a major percentage of all buyers purchasing a home in 2013. Some believe we are overestimating the millennials’ believe in homeownership. However, a new study by Trulia reveals we may be dead on. Regarding young adults, the study reports:

43% are already homeowners
93% that currently rent plan to purchase a home
72% say homeownership is part of their personal American Dream

Jed Kolko, Trulia’s Chief Economist, explained:

“Millennials have been shaken, not scarred by the housing bust. Nearly all of them want to own a home someday, if they’re not homeowners already. But many of them think today’s low prices and low mortgage rates will last. They may be in for sticker shock if the cost of homeownership has returned to normal levels by the time they’re ready to buy.”

If you are a young adult waiting to buy, you must realize that the price of a home and the cost of a mortgage are both projected to increase in the next 12 months.

Source: The KCM Blog:
Posted: 18 Dec 2012 04:00 AM PST

2 Home Buying Tips

1. Start by polishing up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct. Fix any problems you discover. This is where I can help.

2. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, it's still a good idea to use an agent. I work with knowledgeable real estate professionals who will have your best interests at heart and can help you with proven strategies during the bidding process.

Conforming Loan Limits Will Remain at 2012 Levels

On Thursday, November 29, 2012, the Federal Housing Finance Agency announced that the maximum dollar limits for conforming loans will remain at 2012 levels for Freddie Mac and Fannie Mae in 2013. This applies to one unit properties across the country, however some "high cost" areas may have limits as high as $625,000. Multi-unit loan limits will also remain the same, as these are "simply multiples of the one-unit limits."

How are loan limits established?

Loan limits are determined by the median home values in local areas, and are established annually under the terms of Housing and Economic Recovery Act of 2008.

This method applies to both the determination of conforming limits and limits for higher cost areas.

Why did 2013 loan limits remain unchanged from 2012?

While recent Home Price Index numbers have increased, they have not fully offset the "cumulative decline in prior years." For example, the U.S. home price fell "more than 19 percent through mid-2011," and under the rules of HERA, the prior declines in price must be "fully offset before loan limits can increase."

What is the bottom line?

The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows.

Find out How Much Mortgage Can You Afford

You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that's your monthly income before taxes and other paycheck deductions are taken out.) You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you'll be able to afford.

I can help focus your attention on homes that are realistically within your budget. Better yet, I can help you find the hottest values as they come to market, so that you get more for your money.

Why Should I Buy, Instead of Rent?

You'll love the feeling of having something that's all yours - a home where your own personal style will tell the world who you are. A thriving vegetable garden in the backyard, a tiled entryway, a yellow kitchen...when you own, you can do it all your way! But there's more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too. And interest will compose nearly all of your monthly payment , for over half the number of years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the proven possibility its value will go up through the years.

I can help you make a wise business investment by finding the perfect first home for you. Just tell me what you are looking for and I'll make sure you'll be aware of every possible new listing in the area that matches your needs.

Inspiring Food for Thought

"Motivation is what gets you started. Habit is what keeps you going."
– Jim Rohn

Who is considered a first time Home Buyer?

Did you know that if you do not currently own a home and have not owned a home within the last 3 years, you would be considered a first time home buyer and might qualify for special first time home buyer loan programs? This is true and definitely worth looking into.

Home buying tip: Moving Funds in and out of bank accounts during and right before your home buying transaction

There is so much to remember when purchasing a home. One very important tip when it comes to buying your home is to be sure NOT to make any deposits into your bank accounts that can not be explained or sourced with documentation.

My advice to my clients is to always check with me before moving any funds in or out of a bank account. Unfortunately a move like this can compromise your home loan if it is not done correctly or talked over first with your mortgage lender. A simple task to discuss, which will create a much smoother closing on your home buying journey.

Two Weeks Before Your Move

*Check with your insurance company to cancel current coverage or transfer coverage to your new home.
*Make arrangements for transporting your pets and any house plants, because movers can't take them in the van.
*Meet with your bank to change account status.
*Transfer all current prescriptions to a drug store in your new town.
*Cancel any delivery services such as newspapers. Consider starting a subscription to the newspaper in your new town to introduce you to local news happenings.
*Have your automobile serviced if you're traveling by car.
*Be sure to empty secret hiding places to remove valuables and spare house keys.
*Make new bank safety deposit box arrangements in your new hometown. Make arrangements to safely transfer items from your old safe deposit box to your new one.
*Hold a garage sale to avoid unneeded clutter in your new home.

Mortgage Lenders in Today's Real Estate Market

You may not realize the importance of dealing with a Mortgage lender who is fully licensed with the Nationwide Mortgage Licensing System and Registry.

To see if your current mortgage lender is fully licensed, log onto: www.nmlsconsumeraccess.org

Thinking about refinancing???

With interest rates at an all time low, now is the perfect time to see how refinancing can benefit you and your family.

Visit my Website for up to date Mortgage News and Information:

www.lucyibarra4loans.com

Buying cheaper than renting...

Home ownership is now around $100 a month cheaper than renting as a result of the flat housing market and low interest rates, according to Halifax.

Food for Thought.