estar mortgage: How to Successfully Get a Mortgage in 2019 - 09/09/19 10:51 AM
 
If you've traveled in an airplane recently, you probably went through a security check at the airport.  These security checks are required by a federal law called the USA Patriot Act.  This very same law has a provision that requires mortgage companies, banks, and financial institutions to document your source of funds when you buy a house or refinance a mortgage.  In short, the US government has recruited mortgage lenders in its fight against terrorism!  In fact, lenders are required by law to ask you for:
The exact source of funds used for your down payment and earnest money deposit. … (1 comments)

estar mortgage: 3 Ways to Improve Home Buying Power - 08/19/19 12:01 PM
 
If you or anyone you know is buying a house this summer, chances are you’ll be dealing with competing for offers and low inventory issues.  Here are three ways to avoid getting priced out of the house you want:
1 – Consider Your Overall Debt Strategy
For example, what would it look like if you used some of your down payment funds to pay off other debts instead of using those funds for a down payment?  This may open the door to getting you qualified for a larger mortgage so you can bid higher on the house. Plus, home loans often carry … (1 comments)

estar mortgage: Thinking of Pulling Money Out of a Retirement Account? - 08/12/19 10:15 AM
 
Clients often ask about whether it makes sense to pull money out of a retirement account to purchase a home or pay for large expenses. Here’s the inside scoop:
Note: visit the IRS web site for info on any of these items and check with a CPA for details about how these general rules apply in your specific situation.
Conventional IRA
When you take money out of a conventional IRA, you’ll generally need to pay income taxes on the funds. For example, assume you want to withdraw $50,000 out of your conventional IRA and your income tax bracket is 22%. You would be … (1 comments)

estar mortgage: Three Questions to Ask Before Investing in Real Estate - 07/22/19 07:39 AM
 
How can I increase my rate of return?  The cornerstone of any smart investment strategy is to calculate your rate of return.  With real estate this is done by running the numbers using an internal rate of return (IRR) formula that takes into account: Present Value (PV) - what am I paying out of pocket to get into this investment? Term (N) - what's my timeline and how long am I going to hold this investment? Periodic Cash Flow (PMT) - what's my monthly cash flow? Future Value (FV) - what are my net proceeds (after expenses) when I sell … (2 comments)

estar mortgage: Why You're in Danger of Closing Delays (and how to avoid them) - 07/02/19 08:40 AM
  Closing delays are one of the many unintended consequences of recent government regulation.  Mortgage lenders are required to prepare a "Closing Disclosure" and adhere to the timelines illustrated below.  Any last-minute changes to your deal structure could cause delays of up to a week on purchase transactions, and up to two weeks on refinance transactions. Delays can be even longer if your transaction takes place anytime close to a federal holiday.

 
 
 
Here are five things you should consider doing in order to avoid unnecessary delays:
Write a longer timeline into your purchase agreement so that you don't … (2 comments)

estar mortgage: Summer 2019 Guide to Mortgage Rates - 06/03/19 09:20 AM
 
Mortgage rates are determined by the supply and demand for mortgage bonds in the bond market.
Why Mortgage Bonds? When you get a mortgage in the US, your mortgage company is getting the money from Fannie Mae, Freddie Mac or other "securitizers". These "securitizers" get their money by issuing bonds to bond market investors.  These bonds are called "mortgage bonds" or "mortgage-backed securities".  Therefore, the mortgage rate you pay is really determined by the supply and demand for mortgage bonds in the bond market.

The Role of the Federal Reserve As you can see from the chart, the Fed owned … (1 comments)

estar mortgage: How to Trade-Up (or Down) Using a Reverse Mortgage - 05/28/19 10:37 AM
 
Home prices in many markets have gone up recently.  This is leaving many retirees with sticker shock when it comes to trading up, or even trading down. 
Consider Anna and Olaf who are in the process of selling their $400,000 home.  They’ll be left with net proceeds of approx. $364,000 after paying 9% in sales expenses (transfer taxes, real estate commissions, etc.).  The new house they want to purchase costs $500,000, leaving them $136,000 short.
Option 1: sell or liquidate $136,000 worth of investments or retirement assets. They will need to “gross up” the withdrawal to account for taxes if the … (1 comments)

estar mortgage: 3 Reasons to Finance Your Home Improvements - 05/13/19 07:56 AM
If you’re thinking of paying cash for home improvements, you may want to think twice.  Here are three reasons why you may want to consider a cash-out mortgage refinance or home equity loan instead:
1 – Preserve your cash: a large home improvement project could quickly deplete your savings. Think about this project in the context of the next 3-5 years. What other large expenses could crop up during that time period, and would it be useful to keep your savings on hand for those items?
2: Opportunity Cost of Money: would it more useful to invest that money in a college savings plan or … (1 comments)

estar mortgage: Real Estate Investors Now Get a Special 20% Tax Deduction - 04/16/19 06:28 AM
 
The IRS recently issued some guidelines that allow real estate investors to take a tax deduction for up to 20% of the income they generate from rental properties. These guidelines were issued in January 2019 to clarify certain provisions of the 2017 Tax Cuts and Jobs Act. Click here to view the full announcement and the new guidelines.
The new tax deduction is generally available to eligible taxpayers with 2018 taxable income at or below $315,000 for joint returns and $157,500 for other filers. Those with incomes above these levels are still eligible for the deduction but are subject to limitations. … (1 comments)

estar mortgage: How to Successfully Get a Mortgage in 2019 - 04/01/19 09:23 AM
 
If you've traveled in an airplane recently, you probably went through a security check at the airport.  These security checks are required by a federal law called the USA Patriot Act.  This very same law has a provision that requires mortgage companies, banks, and financial institutions to document your source of funds when you buy a house or refinance a mortgage.  In short, the US government has recruited mortgage lenders in its fight against terrorism!  In fact, lenders are required by law to ask you for:
The exact source of funds used for your down payment and earnest money deposit. … (2 comments)

estar mortgage: How to Swim With the Sharks (and not get eaten alive!) - 03/25/19 10:49 AM
 
Getting a mortgage today is a lot like swimming in a pool filled with sharks.
My role is to help you navigate these dangerous waters and get you to the other side safely. Here are just a few of the sharks we'll need to watch out for:

Buy-Back Sharks Most mortgages today are sold after the closing to large financial institutions like Fannie Mae and Freddie Mac. These gigantic companies are in business to make money... a lot of money. These sharks have been under a lot of pressure by the government lately, and they're circling the waters looking for … (1 comments)

estar mortgage: 3 Reasons to Finance Your Home Improvements - 03/04/19 09:31 AM
If you’re thinking of paying cash for home improvements, you may want to think twice.  Here are three reasons why you may want to consider a cash-out mortgage refinance or home equity loan instead:
1 – Preserve your cash: a large home improvement project could quickly deplete your savings. Think about this project in the context of the next 3-5 years. What other large expenses could crop up during that time period, and would it be useful to keep your savings on hand for those items?
2: Opportunity Cost of Money: would it more useful to invest that money in a college savings plan or … (1 comments)

estar mortgage: 3 Ways to Get Prepared for Home Ownership - 02/25/19 09:20 AM
 
1: Prepare Your Credit Mortgage lenders typically require at least 24 months of good credit history in order for you to qualify for a mortgage.  It's normally a good idea to have a few credit cards, a few installment loans and 24-month history of making rent payments on time.

2: Prepare Your Cash Flow Mortgage lenders typically require less than a 43% debt-to-income ratio in order to qualify for a mortgage.  This means that your total monthly debt payments (including the new mortgage payment) should be no more than 43% of your monthly income.

3: Prepare Your Savings Mortgage lenders typically require … (2 comments)

estar mortgage: Three Steps to Get Started as a Real Estate Investor - 02/18/19 08:32 AM
 
1 – Determine your approach and your investment objectives Are you looking to “buy and flip” or “buy and hold”?  If you’re looking to buy and flip, you’d probably want to start looking for homes that have the highest potential resale value after-improvements.  If you’re looking to buy and hold, you’d probably want to start looking for homes that have the highest potential cash-flow opportunities.

2 – Determine your budget It’s a smart idea to “never be 100% invested” when you invest in real estate.  For example, if you have $100,000 available to invest, you may want to set aside … (0 comments)

estar mortgage: Two Ways to Win a Bidding a War - 02/04/19 08:28 AM
In today's housing environment, you will most likely compete with multiple offers when you go to buy a house.  Here are two strategies you may want to consider if you’re serious about winning a bidding war:
1 – Offer More Than the List Price
Money talks.  Imagine if someone offered you an extra $5,000 or $10,000 for something you’re trying to sell.  It would certainly catch your attention.  The question becomes, how likely is it that the buyer can actually follow-through and get you that extra money?  If you’re the buyer in this scenario, it’s crucial to get a solid mortgage approval BEFORE you … (0 comments)

estar mortgage: The Rules of 25 and 72 - 01/28/19 08:31 AM
 
Here are two easy-to-remember formulas that can be very useful as you budget for retirement:
 
The Rule of 25 – How much “critical capital” do I need?
According to this formula, if you multiply the annual income you need by 25, that’s approx. how much money you need to save in order to retire.  This would allow you to live off your retirement assets without dipping into principal.  This assumes your after-tax rate of return during retirement is 4%. 
For example, if I want to generate $60,000 per year in after-tax retirement income, I would need to save a … (3 comments)

estar mortgage: Two Reasons Why You Should Keep Your Home Improvement Receipts - 01/21/19 08:49 AM
 
1: Ability to Deduct Your Mortgage Interest: If you take out a mortgage for home improvement purposes, the IRS may ask you to prove the project was a "substantial improvement" that:
Adds to the value of the home, Prolongs the home’s useful life, or Adapts the home to new uses.  For example, painting a room may not qualify, but an addition or a new kitchen may qualify. Keeping the receipts from your home improvement project would go a long way toward proving this. Also, keep in mind that the IRS gives you 24 months to reimburse yourself for improvements made in the past, or … (0 comments)

estar mortgage: 3 Ways to Avoid Getting Outbid on Your New Home - 01/14/19 09:14 AM
Bidding for a new home can get pretty fierce in today's market.  Here are three potential solutions to avoid getting outbid on your new home:
Turn in your loan paperwork BEFORE you place an offer.  In many cases, you are bidding against cash buyers who don't need to wait for financing approvals.  Look at it this way:  if you were the seller, would you prefer to do business with a buyer who needs to wait for financing approvals or a cash buyer who can close the deal quickly?  With that in mind, it's important to be proactive and provide your mortgage … (1 comments)

estar mortgage: When is Mortgage Interest Tax Deductible? - 01/07/19 08:35 AM
   Contrary to popular belief, mortgage interest is not always tax deductible.  Here's the inside scoop:

1. Do you itemize your tax deductions? You cannot take the mortgage interest deduction if you are taking the standard deduction. In 2018, the standard deduction is $12,000 for single taxpayers, $18,000 for heads of household, and $24,000 for married taxpayers filing a joint return. Please see a CPA for details.

2. Is Your Home a "Qualified Residence"? Mortgage interest is only deductible if the mortgage is attached to a "qualified residence". Taxpayers can generally deduct the mortgage interest on two qualified homes:
One Primary … (2 comments)

estar mortgage: Two Approaches to Consider When You Invest in Real Estate - 01/02/19 07:36 AM
 
1 – Buy and Flip This strategy involves buying a house with the intention of selling it for a short-term profit.  Typically, investors who take this approach look for homes that need improvements and renovations.  Here are three questions to ask yourself before you take the leap with this strategy:
How much will the investment cost you? This includes all the costs of renovations as well as the “carry costs” of paying the property taxes, home insurance and maintenance on the property while you own it. What is a reasonable sales price? A real estate agent or appraiser should be … (2 comments)