mortgage: First Time Home Buyer? Down Payment Source
- 06/09/14 04:04 AM
Another Source for a Down Payment Most taxpayers know that they will pay a 10% penalty if they withdraw funds from their IRA before they turn 59.5 years old. There is an exception for first-time home buyers that allows a penalty-free withdrawal of up to $10,000 per person if they haven’t owned a home in the previous two years.
This would allow a married couple who each have an IRA to withdraw a lifetime maximum of $10,000 each, penalty-free for a home purchase.
In many cases, the money would be used for a down payment or closing costs. However, … (0 comments)
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mortgage: 50 Percent Off Housing Costs
- 05/30/14 10:20 AM
Cut Your Housing Costs in Half
Serious shoppers wait for a 50% off sale to make the decision because of the bargain factor. Renters who are serious about lowering their monthly cost of housing should consider buying with today’s low mortgage rates. For an example, let’s assume a person buys a $200,000 home with 3.5% down payment on a 4.5% FHA mortgage for 30 years.
The total house payment would be approximately $1,508 per month. However, once you consider the equity build-up due to normal amortization, a monthly appreciation estimated at 2% annually for this example, the tax savings and paying maintenance … (0 comments)
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mortgage: The Question Every Cash Buyer Should Answer
- 05/02/14 09:50 AM
The Question Every Cash Buyer Should Answer
Paying cash for a home seems like a huge advantage to qualifying for a mortgage and an appraisal. However, for the fortunate few who don’t need a mortgage, there is a question they should answer before they make that decision: Do you think at any point in the future, you might put a mortgage on this property?
It’s important because paying cash for a home could affect the ability to deduct the interest if the homeowner should place a mortgage on the home at a later date.
Most homeowner’s know they can deduct the … (3 comments)
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mortgage: Refinance to Remove a Person
- 11/25/13 06:26 PM
Refinance to Remove a Person
Most people are familiar with the various reasons a homeowner refinances their home which generally result in two major benefits: saving interest and building equity.
There is however another reason to refinance which may not be as common which is to remove a person from the loan. In the case of a divorce, when one party wants to keep the home and the other party wants their equity out of the home, it is possible for the remaining party to refinance the home. If the equity is sufficient to justify it and the remaining owner can … (1 comments)
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mortgage: Who's Paying Your Mortgage?
- 11/25/13 06:13 PM
Who's Paying Your Mortgage?
As a homeowner, you obviously pay for your mortgage but as an investor, your tenant does. Equity build-up is a significant benefit of mortgaged rental property. As the investor collects rent and pays expenses, the principal amount of the loan is reduced which increases the equity in the property. Over time, the tenant pays for the property to the benefit of the investor.
Equity build-up occurs with normal amortization as the loan is paid down. It can be accelerated by making additional contributions to the principal each month along with the normal payment. Some investors consider this … (0 comments)
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mortgage: Don't Do It!
- 10/27/13 04:06 AM
Don't Do It! You’ve seen lists telling buyers what to do to find the right home but knowing what not to do can be just as important. After finding the right home, negotiating a contract, making a loan application and inspections, buyers, understandably, start making plans to move and put their personal touches on the home.
In today’s tenuous lending environment, little things can derail the process which isn’t over until the papers are signed at settlement and funds distributed to the seller. Verifications are made by a lender at the beginning of the loan process to determine if the buyer qualifies for the … (1 comments)
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mortgage: Equity Dynamics
- 09/28/13 03:00 PM
Equity Dynamics
Equity is the difference in what your home is worth and what you owe. Ideally, as the value goes up and the unpaid balance goes down with each amortized payment made, the equity grows from two directions.
This dynamic leads to increasing a person’s net worth much faster than many other investments.
A homeowner has minimal control over value. It is necessary to maintain the property to avoid depreciation and make good decisions on capital improvements. After that, appreciation is generally controlled by supply and demand and the economy.
Mortgage management is something that the homeowner does have … (0 comments)
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mortgage: Who is my agent?
- 09/22/13 01:00 PM
Who is my agent?
More often than you’d expect, homeowners refer to the person they bought their insurance from as their agent. It sounds reasonable but it’s definitely not accurate. That person is the agent of the insurance company and they legally represent the company, not the customer. Even an independent agent who can place a policy with different companies is still an agent of the company.
A mortgage officer, in most cases is an employee and represents the company. And the same is true for a title or escrow officer. It’s important to understand the actual relationship to know what you … (1 comments)
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mortgage: Mortgage Interest Deduction
- 09/14/13 01:44 PM
Mortgage Interest Deduction
Originally, in 1913 with the Sixteenth Amendment, Income Tax allowed a deduction on any interest paid by a taxpayer. Prior to World War I, most interest was paid for business purposes and very little paid by individuals. Credit cards, revolving credit, student loans and home equity loans that would charge interest would not become popular for decades.
However, by the 1930’s, the Federal Housing Authority was created to help people to finance homes. Later, other quasi-governmental agencies like FNMA, FHLMC and GNMA were created to help facilitate mortgage lending.
Even though, Congress never intended to use this deduction to encourage … (0 comments)
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mortgage: Get Regular Check-ups
- 08/13/13 05:07 AM
Get Regular Check-ups
Following his heart surgery last week, after an issue was discovered during his annual physical, President George W. Bush encouraged everyone to get regular check-ups.
Another important checkup that should be done on a regular basis and can be just as beneficial for your finances is an annual homeowner advisory. Why would you treat your investment in your home with less care than you treat your car or even your HVAC system?
Consider investigating the following:
• Know the value of your home by obtaining a list of comparable sales in your immediate area as well as what is … (0 comments)
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mortgage: 13,918 Houses Sold Yesterday!
- 07/29/13 11:53 AM
13,918 Houses Sold Yesterday! - 7/29/2013
There are many naysayers declaring that the housing market is still challenged. Young adults are burdened with too much student debt. Interest rate increases are killing demand. Homeownership is no longer seen as part of the American Dream.
We just want to let these naysayers know three things: 13,918 houses sold yesterday, 13,918 will sell today and 13,918 will sell tomorrow. 13,918!
That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 15.2% over the … (2 comments)
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mortgage: Selling a House: What Does it Take?
- 07/21/13 11:44 AM
Selling a House: What Does it Take?
The most important need of anyone attempting to sell their house is – TO GET IT SOLD! It is imperative that you, the agent, are very direct in what it takes to get a house sold. Here is a checklist we put together.
ACCESS A seller should be willing to give almost unlimited access to potential purchasers if they are looking to sell. Any restrictions to showing the home will result in fewer buyers which could result in a lower price, a longer time on market or both.
CONDITION Condition goes a long way … (0 comments)
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mortgage: When Rates Go Up
- 07/09/13 06:08 AM
When Rates Go Up
Rising interest rates are great if you are renewing a certificate of deposit but not so much when you’re borrowing money. With interest rates on the rise as well as home prices, housing affordability is a concern for would-be homeowners.
A rough rule of thumb is that a person’s or family’s housing should not exceed 28% of their monthly gross income. While rental rates and home prices have been consistently increasing, mortgage rates have been soaring in the past month. In one week, according to the Freddie Mac Primary Mortgage Market Survey, they jumped by .5%.
This means that people have … (1 comments)
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mortgage: Buying a Home? How the Serenity Prayer May Help
- 07/03/13 02:44 PM
Buying a Home? How the Serenity Prayer May Help
You may be frustrated while attempting to buy a home in today’s market. You may feel powerless to the process. How could YOU possibly know whether the current good news about housing will continue? There is no doubt that today’sreal estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.
It is totally within your power to decide whether it is the … (0 comments)
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mortgage: Debt Relief = Income
- 06/28/13 07:36 AM
Debt Relief = Income
Many times a homeowner might feel relieved being out from under the obligation of a mortgage they can’t afford even though the property was lost due to foreclosure or short sale. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious.
Congress enacted the Mortgage Relief Act specifically to help homeowners who might be affected in the housing crisis that started approximately in 2007. The Act expired on 12/31/12 but was temporarily extended by Congress until December 31, 2013.
This … (0 comments)
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mortgage: Tips on Closing Your Credit Cards
- 12/27/12 11:42 AM
Tips on Closing Your Credit Cards: The Real ConsequencesWhen someone is considering paying off debt, they are often under the misconception that closing a credit card will damage their credit score. While this may be true in some circumstances, there are many instances in which it will not cause a score to drop. When helping people decide whether to close a credit card account, there are two important factors to consider.First, consider whether you still owe a balance on the credit card. If you do, this is probably not the time to close the card. By electing to close a credit … (3 comments)
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mortgage: Let Your Tenants Send Your Kids to College
- 12/10/12 01:23 PM
Let Your Tenants Send Your Kids to CollegeMost people have lots of things to save for but not always enough discretionary income after the family essentials have been met.
A relatively small investment in a rental home can control a good home that will easily rent, generate positive cash flows and pay for itself. The borrowed funds create leverage that earn a return on the total value of the home and not just the amount of cash you have invested.The strategy is simple. Find a slightly below average priced home that will rent well. It will appeal to a larger group … (0 comments)
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mortgage: FHA to Cost Borrowers More - 12/3/2012
- 12/08/12 02:39 PM
FHA to Cost Borrowers More - 12/3/2012FHA has announced a major change to its loan program which allows borrowers to cancel the mortgage insurance premium (MIP) when their unpaid balance reaches 78% of the original purchase price. While no specific date has been set for the change, sometime in 2013, new FHA loans will require the mortgage insurance for the life of the loan.At existing rates, the monthly MIP on a $168,875 mortgage is $178.99 per month. Under the current rule with normal amortization, the MIP would no longer be required in 9 years and 9 months. However, under the new … (4 comments)
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mortgage: Is it Time to Buy or Just Keep Renting?..Look at This Chart
- 10/22/12 03:33 PM
The question plaguing every tenant who wants a home of their own is whether they should continue to rent or is it the right time to buy?
The combination of good prices and low mortgage rates make it considerably cheaper to own than rent in most markets.
Assuming a person is qualified with a down payment and won't be moving for several years, there may not be a better time to buy a home.
In the example below, the total house payment is $1,281.01 compared to $1,500 to rent the same home.
Before you consider any of the financial … (5 comments)
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mortgage: Rates Are Down But It Costs More?
- 09/10/12 12:32 PM
The latestHousing Affordability Index from the National Association of REALTORS® shows an interesting trend taking place this year that needs buyers' attention. Most people know that the mortgage rates are still at incredibly low rates but don't feel there is much sense of urgency.
This report shows that mortgage rates have fallen from 4.37% in January to 3.81% for June. However, the report shows that the payment as a percentage of income has gone from 12.1% to 13.9% which simply means that buyers have to spend more of their income on a home.
The reason is that the median price of … (2 comments)
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Another Source for a Down Payment Most taxpayers know that they will pay a 10% penalty if they withdraw funds from their IRA before they turn 59.5 years old. There is an exception for first-time home buyers that allows a penalty-free withdrawal of up to $10,000 per person if they haven’t owned a home in the previous two years.
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