During a training meeting for agents and loan officers with a CPA, I was surprised to see how much confusion there is about the tax deductibility of mortgage interest. Many agents seem to have a fair general knowledge of tax issues, but very little specific knowledge. While we are not able to give our clients tax advice, we are not excused from having a working knowledge of the tax code and its impact on real estate.
Home mortgage interest is deductible only for the portion paid on the original purchase loan, minus any principal repayment, plus up to $100,000 in additional debt (from a subsequent refinance) up to a maximum loan amount of $1,100,000. This means that for a home that was purchased in 2000 with a $400,000 loan, and then refinanced in 2006 with a new $550,000 loan, not all the interest will be deductible.
Assuming that the original $400,000 loan was paid down to $360,000 in the 6 years before it was refinanced, and then the owners refinanced with their $500,000 loan, this would mean that because of the $140,000 increase in the loan amount, $40,000 of the loan is NOT eligible for deductible interest. Should the borrowers deduct the interest from their whole $500,000 loan, then they would be deficient (to the tune of about $850)should the IRS come knocking. The fallout is far worse for ignoring the $1,100,000 limit!
Just another example of why it is so important to pay attention to the details and work with a team of professionals - including a good CPA and mortgage consultant.
How often do we ask our clients to refer their friends and family to us? Perhaps some of us don't do it enough, but we seldom think of our obligation to refer our clients to someone else. I am not talking about earning referral fees from service providors (which I do NOT reccomend for a number of reasons), I am talking about using our unique relationship with our clients to improve their lives by referring them to other financial professionals.
An associate recently told me of a client's thank you letter. He had urged them to get a term life insurance policy after noting that they did not have one while he took thteir loan application. I know as a younger person I neglected to buy coverage for myself because I thought I didn't have a pressing need. His client was in the same boat, but gave in and got a small policy at the loan officer's prodding. Several months later he got a thank you note. The client was diagnosed with breast cancer and was grateful that the insurance was purchased while she was healthy. Now that she was effectively uninsurable, she felt the (obvious) pressing need for the coverage.
What would have happened if the loan officer had not made a point of pressing the issue? It wasn't within the scope of his job as a loan officer, but he had a deep and lasting impact on his client's life. We owe it to our clients to expand the scope of our interviews to include some friendly advice on Insurance, estate planning, retirement planning, and college savings. Be careful not to cross the line and overstep the limits of our licensing, but also be careful not to ignore our obligation to protect our clients by referring them to other professionals they might not know they need.
LA MESA Townhome with Oversized 1 Car Garage and In-Unit Laundry!
7940 University Avenue #5 2 bed 1.5 bath 990 sq ft condo offered at $269,900 - CBB4
This two story unit has only one direct neighbor - nobody above or below and attached on only one wall. There is new flooring and paint in all rooms, new bath fixtures, new lighting, new fridge - this unit shows like a model. Oversized 1 car garage, a patio large enough for a table & bbq and there is laundry in the unit!
Small Town Country Living just 30 min from Downtown San Diego and Mission Valley!
With Great Schools, Active community and PTA, and less than 5 min to all major shopping, Jamul is the ideal community for families wanting more than just a house. The home is a two story Victorian built in 1991 with a wrap around porch and great views. 4 bedrooms and 3 baths do not include an unfinished game room above the 3 car garage! Interior styling is in keeping with the Victorian era, but with larger rooms and a large kitchen, open to the family room to accommodate a modern lifestyle. There is downstairs bedroom and full bath for a great guest room, office, or for family members who prefer no stairs. Laundry is in over sized downstairs bathroom. Steps from kitchen door is a detached 3 car garage with a LARGE game-room (not incl in sq ft) which could be converted to a guest house. The pool area is fully fenced and enjoys all day sunshine and panoramic views. The property is 4+ usable acres suitable for horses, pets, or even kids, and includes a full acre of 'hidden' parking away from the house and out of sight for storing all the toys and 'projects'! The property currently has several large kennels with misters to keep Rover cool on those hot days, chicken coop, and other animal pens for peacock and miniature pigs...
Given the sorry state of the Alt-A and Subprime markets today (although they are slowly coming back) I have been seeing more and more call for my old pal - the Govie loan. The FHA and VA loans that were my bread and butter when I started in the business are starting to look pretty good again! No FICO? New on the Job? Getting your Down Payment from Grandma? No Down Payment? Yea - I can do that loan...
When you add in the multitude of Down Payment Assistance Loans and Grants - and the market starts looking pretty ripe with opportunity! And that's even before looking at the REVERSE mortgages! Talk about the coming boom...
DataQuick, a company that compiles and analyses national and regional real estate data for a variety of of public, private and institutional clients, has released a really interesting and refreshingly level headed report on housing trends in Southern California. The report points out that the recent slowdown in sales volume, while pronounced, has not resulted in dramatic decreases in housing prices. According to DataQuick's President, Marshall Prentice:
"These are interesting times because the slowdown in home sales isn't part of a broader economic slowdown, it's a post-frenzy re-balancing act. The last time we had sales this slow, Southern California had been in recession for a few years. Jobs were being lost in droves, people were leaving the area and home prices fell significantly. This time around we haven't seen that, sellers are holding out and we can only assume demand is building up."
Sales data for the last year supports this claim:
All Homes
No Sold Jul-06
No Sold Jul-07
Pct. Chg
Median Jul-06
Median Jul-07
Pct. Chg
Los Angeles
8,844
6,809
-23.0%
$520,000
$547,500
5.3%
Orange
2,982
2,391
-19.8%
$640,000
$640,000
0.0%
Riverside
4,763
2,769
-41.9%
$415,000
$399,000
-3.9%
San Bernardino
3,500
2,008
-42.6%
$366,500
$355,000
-3.1%
San Diego
3,584
3,106
-13.3%
$500,000
$489,000
-2.2%
Ventura
941
784
-16.7%
$614,000
$582,500
-5.1%
SoCal
24,614
17,867
-27.4%
$487,000
$505,000
3.7%
I think with the strong underlying economy we are pretty safe in assuming that there will be a strong resurgence in sales levels coming just around the corner as pent up demand finally reaches the market toward the end of the year. Once again - for those savvy enough to read the tea leaves - it looks like a great time to buy!
Address: 1720 E 4th Street Type: Residential Style: 2 Story Bedrooms: 6 Bathrooms: 6 Suite: Yes Living Area: 3,398 square feet Year Built: 1949 More Details
Description
Three large and very recently upgraded units. Back units have large private patio areas. Listed rents are projected per a 7/2006 appraisal. Call listing agent for more information and to schedule showing. One 1 car garage plus 6 off street parking spaces. More Description
Brokered and Advertised by San Diego Realty Partners LID 1233451
Information is deemed to be correct but not guaranteed.
7940 University Avenue #5 2 bed 1.5 bath 990 sq ft condo offered at $294,900 - CBB4
This two story unit has only one direct neighbor - nobody above or below and attached on only one wall. There is new flooring and paint in all rooms, new bath fixtures, new lighting, new fridge - this unit shows like a model. Oversized 1 car garage, a patio large enough for a table & bbq and there is laundry in the unit!
Small Town Country Living just 30 min from Downtown San Diego and Mission Valley!
With Great Schools, Active community and PTA, and less than 5 min to all major shopping, Jamul is the ideal community for families wanting more than just a house. The home is a two story Victorian built in 1991 with a wrap around porch and great views. 4 bedrooms and 3 baths do not include an unfinished game room above the 3 car garage! Interior styling is in keeping with the Victorian era, but with larger rooms and a large kitchen, open to the family room to accommodate a modern lifestyle. There is downstairs bedroom and full bath for a great guest room, office, or for family members who prefer no stairs. Laundry is in over sized downstairs bathroom. Steps from kitchen door is a detached 3 car garage with a LARGE game-room (not incl in sq ft) which could be converted to a guest house. The pool area is fully fenced and enjoys all day sunshine and panoramic views. The property is 4+ usable acres suitable for horses, pets, or even kids, and includes a full acre of 'hidden' parking away from the house and out of sight for storing all the toys and 'projects'! The property currently has several large kennels with misters to keep Rover cool on those hot days, chicken coop, and other animal pens for peacock and miniature pigs...
Michael Cooper, San Diego Realtor
This two story unit has only one direct neighbor - nobody above or below and attached on only one wall. There is new flooring and paint in all rooms, new bath fixtures, new lighting, new fridge - this unit shows like a model. Oversized 1 car garage, a patio large enough for a table & bbq and there is laundry in the unit!
Small Town Country Living just 30 min from Downtown San Diego and Mission Valley! 
Given the sorry state of the Alt-A and Subprime markets today (although they are slowly coming back) I have been seeing more and more call for my old pal - the Govie loan. The FHA and VA loans that were my bread and butter when I started in the business are starting to look pretty good again! No FICO? New on the Job? Getting your Down Payment from Grandma? No Down Payment? Yea - I can do that loan...
This two story unit has only one direct neighbor - nobody above or below and attached on only one wall. There is new flooring and paint in all rooms, new bath fixtures, new lighting, new fridge - this unit shows like a model. Oversized 1 car garage, a patio large enough for a table & bbq and there is laundry in the unit!
Small Town Country Living just 30 min from Downtown San Diego and Mission Valley! 
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