South Orange County Blog from Bob Phillips

What’s Ahead For Mortgage Rates This Week – March 31, 2014

Whats-Ahead-Mortgage-Rates-HouseLast week’s economic news includes several reports about housing markets.

The S&P Case-Shiller 10 and 20 city housing market indices, the FHFA House Price Index, New Home Sales and Pending Home sales reports suggest that the national housing market continues to grow, but at lower rates.

Regional readings varied and suggested that winter weather was a negative influence on affected markets.

In a press conference held on March 19 Federal Reserve Chair Janet Yellen said that severe winter weather had interfered with the Fed’s ability to get a clear reading on economic developments.

The Case-Shiller 10 and 20-City Home Price Indices for January showed year-over-year growth of 13.50 and 13.20 percent respectively. The 20-City Home Price Index reported that 12 of 20 cities reported slower rates of home price appreciation.

The 10-City Index ticked upward, but was little changed. The 20-City index posted its third consecutive month-to-month decline in home prices with a reading of -0.10 percent.

Las Vegas, Nevada led cities posting gains with a month-to-month reading of +1.10 percent, but home values remain 45 percent below peak prices achieved in August 2006.

David M. Blitzer, chair of the Index Committee at S&P Dow Jones Indices, noted that home prices were up 23 percent over their lows in 2012.

FHFA Data Reflects Slower Growth in Home Prices

The FHFA House Price Index reports home price trends for sales of homes with mortgages owned or guaranteed by Fannie Mae or Freddie Mac. January’s data reported a year-over-year gain of 7.40 percent, which is approximately 8.0 percent below its peak in April 2007.

Month-to-month home prices varied within the nine U.S. Census regions and ranged from -0.30 percent to +1.30 percent.

FHFA reported that year-over-year, all nine regions reported gains in home prices that ranged from +3.20 percent in the Middle Atlantic region to 14.0 percent home price growth in the Pacific region.

New and Pending Home Sales Slow

According to the U.S. Department of Commerce, February sales of new homes matched projections at 440,000 as compared to January’s revised reading of 455,000 new homes sold, which was a year-over-year high.

New home sales improved by 37 percent in the Midwest, but fell in the Northeast, South and West. This suggests that while winter weather played a role, but that housing markets are cooling in general.

Rising mortgage rates and concerns over new lending standards likely contributed to the drop in sales.

Pending home sales slumped in February according to the National Association of REALTORS®.

February’s index reading of 93.9 as compared to January’ index reading of 94.7 represented the eighth consecutive monthly drop for pending home sales and was the lowest reading since October 2011.

Pending home sales indicate future completed sales. Lawrence Yun, the NAR’s chief economist, noted that home sales delayed by winter weather may be completed this spring.

Mortgage Rates Rise, Jobless Claims Lower Than Predicted

Freddie Mac reported that average mortgage rates rose across the board last week with the rate for a 30-year fixed rate mortgage rising eight basis points to 4.40 percent. 15-year fixed mortgage rates rose 10 basis points to 3.42 percent.

Average rates for a 5/1 adjustable rate mortgage rose from 3.02 percent to 3.08 percent.

Discount points for fixed rate mortgages were unchanged at 0.60 percent and ticked upward from 0.40 to 0.50 percent for 5/1 adjustable rate mortgages.

What’s Coming Up This Week

This week’s scheduled economic news includes Construction Spending for March,  ADP payrolls for March along with Freddie Mac’s PMMS weekly report on mortgage rates and the BLS Non-Farm Payrolls report.

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7 Financial Benefits of Home Ownership This Tax Season

An article by Michael Corbett, from Trulia.

tax-time-3The financial benefits of homeownership are evident year round, but particularly around tax time – they seem to jump off the page. Let’s examine how homeownership makes “cents” –  from the tax benefits, to good old fashioned financial stability.

1. Homeownership Builds Wealth Over Time

We were always taught growing up that owning a home is a financially savvy move. Our parents knew it, and their parents knew it. But this past decade of real estate turbulence has shaken everyone’s confidence in homeownership. That is why it’s so important that we discuss this again now that we’re in a ‘new market.’ Homeownership can be a very savvy financial  move – but only if people buy homes they can actually afford. In 2014, this idea of sticking to a home you can afford to gradually build wealth is a “rule” that just happens to be new and old at the same time.

2. You Build Equity Every Month

Your equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe.  That reduction of your mortgage every month increases your equity. That is especially true now with the elimination of risky mortgages like negative amortized and interest-only loans – thanks to the new “Qualified Mortgage” rules. The way mortgages work is that the principal portion of your payment increases slightly every month year after year. It’s lowest on your first payment and highest on your last payment. Thus, as the months and years go by, your equity grows!

3. You Reap Mortgage Tax Deduction Benefits

  • Mortgage deduction: The tax code allows homeowners to deduct the mortgage interest from their tax obligations. For many people this is a huge deduction, since interest payments can be the largest component of your mortgage payment in the early years of owning a home.
  • Some closing cost deductions: The first year you buy your home, you are able to claim the points (also called origination fees) on your loan, no matter whether they are paid by you or the seller. And because origination fees of 1 percent or more are common, the savings are considerable.
  • Property tax is deductible: Real estate property taxes paid on your primary residence and a vacation home are fully deductible for income tax purposes.

4. Tax Deductions on Home Equity Lines

In addition to your mortgage interest, you can deduct the interest you pay on a home equity loan (or line of credit). This allows you to shift your credit card debts to your home equity loan, pay a lower interest rate than the horrendously exorbitant credit card interest rates, and get a deduction on the interest as well.

5. You Get a Capital Gains Exclusion

If you buy a home to live in as your primary residence for more than two years then you will qualify. When you sell, you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capital gains taxes. Now, it may sound ridiculous that your house could be worth more than when you purchased it after these past several years of falling house prices. However, if you purchased your home anytime prior to 2003, chances are it has appreciated in value and this tax benefit will come in very handy.

6. A Mortgage Is Like a Forced Savings Plan

Paying that mortgage every month and reducing the amount of your principal is like a forced savings plan. Each month you are building up more valuable equity in your home. In a sense, you are being forced to save—and that’s a good thing.

7. Long Term, Buying Is Cheaper than Renting

In the first few years, it may be cheaper to rent. But over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But more importantly, you are not throwing away all that money on rent. You gotta live someplace, so instead of paying off your landlord’s home or building, pay off your own!

As always, you must look very hard at your personal situation before making the big decision to buy.

 

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Job Growth Ramps Back Up in California

Posted in Financial Reports, Jobs, Real estate, The Economy by southorangecounty on March 28, 2014

An article by Colin Robins, the online editor for DSNews.com

downloadAfter losing 32,000 jobs in January, nonfarm employment rebounded in February, adding 58,800 jobs in February, according to the Wells Fargo Economics Group. February’s increase reflected a 2.3 percent growth over the past   year, creating a net gain of 345,600 jobs.

Three industries led the way in job creation, according to the Group’s report. Construction employment increased    2.2 percent during the month, with a net gain of 14,100 jobs. Residential and commercial construction, particularly  in the Bay Area and Los Angeles, helped fuel the spike in job growth.

Construction payrolls increased by 6.1 percent.

The tech sector in California remains strong, with professional, scientific, and technical services adding 10,300 jobs in February, pushing employment up 4.1 percent from last year. “Hiring also continues to ramp up in wholesale trade, reflecting growth in international trade and online retailing,” the report said.

Retail, however, did not improve for the month of February, losing another 200 jobs to add to the 14,400 lost jobs in January. The Wells Fargo Economics Group attributes the loss of retail jobs to a disappointing holiday shopping season.

Overall, California’s unemployment rate continues to trend lower, reported at 8.0 percent for the month. The rate has fallen for seven consecutive months, narrowing the gap relative to the nation from 1.7 point to just 1.3 points for February.

The report found, “Because the drop in the unemployment rate nationally and in California has been accompanied by a decline in the labor force participation rate, the sharp drop in the unemployment rate has been met with a great deal of skepticism.”

Regardless, the group believes there are encouraging signs for California. The civilian labor force has picked up considerably, rising by 35,700 people in February, outpacing a 23,700 gain in civilian employment. The group notes, “We suspect that the improvement in the construction sector is pulling some folks back into the labor market that were discouraged when fewer high-paying job opportunities were available.”

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Is Southern California a real estate seller’s market this spring?

1793840_FI_prices__“As the busy spring real estate season gets into gear, sellers appear to have the upper hand across much of Southern California.

That’s the word from Zillow, the real estate data website that tracks housing markets nationwide. It released a report     on the top 10 buyer’s and seller’s markets in the U.S. Wednesday morning, and Los Angeles made the list as the fourth-strongest market for sellers right now. Riverside ranked sixth.

A strong seller’s market, says Zillow, doesn’t necessarily mean its prices are soaring — and indeed median prices have been flat here in recent months — but rather quick sales, few price cuts, and homes selling at or above   asking price.

In buyer’s markets, sales are taking longer and price cuts are more common.

Right now, Zillow said, there are big differences in different parts of the country.

Of the top 10 seller’s markets, seven are in the West and two are in Texas. San Jose, San Francisco and San Antonio topped the list. For buyers, nine of the top 10 markets are in the Midwest or Northeast, with Cleveland, Philadelphia and Tampa, the only Florida market on either list, the most buyer-friendly.

“The real estate data in markets on both coasts are telling markedly different stories,” said Zillow chief economist Stan Humphries. “Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced.”

Zillow also crunched data at the local level to see what neighborhoods are good for sellers, and for buyers, around Los Angeles. Red-hot Eagle Rock took the top spot for seller’s market, followed by Canyon Country in Santa Clarita, Tujunga, Mar Vista and Valencia. The top buyer’s markets included the Hollywood Hills, Beverly Glen, Northwood in Irvine, San Pedro and Venice.” ( End of article.)

From Bob Phillips:  Last year was an extreme seller’s market at this point of the year, due to very low inventory, relatively low prices, and low interest rates – a veritable trifecta of optimal selling conditions.

So, what’s different this year?  Three important – and related – factors.

First, More inventory to choose from.  While more houses available would usually be good for buyers, the other two factors are preventing that from happening.

Second, Prices are about 20% higher. That factor has almost entirely eliminated investor buyers, who either bought low – early in the year, last year – to “flip” the house at a higher price, or – bought in order to hold the property for a while, as a rental. Today’s higher prices make both of those reasons to buy, much less attractive – to investors.

Third, interest rates are at least a full percentage point higher, now, which has dramatically affected monthly payments, making the combination of higher prices, and higher payments, making homes much less affordable than they were a year ago.

So, does that mean that this is not a good time to buy?

If that were the case, there wouldn’t be many sales occurring, which is currently not the case. What I’m seeing is a good, steady stream of transactions happening – just not the flurry we had in 2013. This has resulted in more of a balance, which, to me – contrary to the article above – seems like more of a balanced market – equal for both buyers and sellers – at least here in South Orange County.

That means that prices aren’t really escalating – not much, anyway, so buyers can afford to take a little more time, to sort out their options. ( No more – for the most part – of houses selling in hours.)  Nice houses are still selling fairly quickly – a week or two – unless they’re obviously a lot higher than recent closed escrows. Many selling prices are pretty much what we were seeing in July and August of last year – some, a bit lower, or higher.

What’s the bottom line?

I see the rest of this year being a relatively flat year, price wise. That means that there is no compelling reason to hurry to buy, and not much reason for sellers to wait for higher prices, before putting their houses on the market.  If there are good reasons for you to buy, then it’s pretty much an OK time to do so. ( Meaning that I don’t think that prices are going to go either up, or down, more than a couple of percentage points, between now and next February.)

If you have a good reason to sell, it is also a good time – just don’t expect to sell for much more than nearby houses have sold for during the past 6 or 7 months.

What about sellers who don’t have equity?

One category of potential sellers this isn’t going to be helpful to, are those who are still either underwater – owe more on their loan than the house is presently worth – or even break even.  For that reason, there are still going to be some homeowners who may finally resort to a short sale – meaning that they walk away with nothing, other than the relief of no longer being slave to a high mortgage payment, that they haven’t been able to refinance out of.

If YOU – or someone you know – are in such a position, there are some solutions, and I am trained to assist such homeowners. Short sales have become easier to do, not necessarily requiring a “hardship”, as they used to, and you don’t necessarily have to be behind in your payments. One other thing,  there has been some misinformation that the IRS or the State of California, can still come after you, ( For liability on debt “phantom income” that you never really received, in a short sale.) that is really NOT usually the case, here in California. For those so affected, just give me a call, for me to clarify in detail.

If you’ve been thinking of buying, selling, or short selling, give me a call and let’s discuss your options.

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4 Myths About Buying Your Home That Just Aren’t True

Posted in Home Buyer Tips, Home buying, Homebuyer Tips, Real estate, Real Estate Tips by southorangecounty on March 26, 2014

BUSTED 4 Myths About Buying Your Home That Just Aren't TrueIt can be pretty intimidating to dip your toes into the realm of home ownership, especially if you’re a first-time homebuyer. To make things worse, there are a number of myths floating around out there surrounding the home buying process.

Such misconceptions have many kept many would-be homeowners from realizing the personal and financial rewards of owning a property. To clear things up, here are 4 myths about buying your first home that simply aren’t true.

Myth #1 – It’s Cheaper To Rent Instead Of Own

If you buy a property that is within your budget and your mortgage terms allow you to make comfortable monthly payments, the cost of rent can often be higher than mortgage payments.

Sure, there are other expenses associated with owning a property that you wouldn’t be responsible for if you were renting, but one thing that many people forget is the fact that renting does not allow you to build equity.

The ability to build equity into a property that you own is like paying into a savings account – if you buy a home for $200,000, and pay down your mortgage to $175,000 in 5 years, you’ll have $25,000 in home equity that can be tapped into later if you need a lump sum of cash to pay for other large expenses.

If you sell your property down the line, any equity that the property has accumulated will provide you with more profit from the sale of the home.

Myth #2 – Whatever Shows Up On The Inspection Report Is The Seller’s Responsibility

Most offers on a home usually come with a home inspection condition that makes the offer contingent on the acceptance of a home inspection report by the buyer. Many buyers, however, are under the impression that sellers are responsible for any issues that show up on the inspection report.

Although the seller is required to make certain major repairs as stipulated by the lender, everything is still negotiable. A buyer may ask the seller to fix a minor crack in the basement wall or repair any scuff marks on the hardwood flooring, but the seller can essentially refuse, leaving the buyer with the decision of whether or not to continue with the offer anyway.

Myth #3 – The Perfect Home Is Out There – I Just Have To Wait For It

Buyers have a tendency to focus too much on all the little things that may be wrong about a house rather than on the majority of the things that are right. Homes are much like people – they aren’t perfect. Even brand new homes might have a few minor flaws.

The goal of a house hunt is to find the perfectly acceptable home – one that may have a couple of quirks that you can either live with or fix, but is otherwise ideal. An experienced buyer’s agent can help you identify issues that are deal-breakers, and help keep some perspective by separating irritating details from the big picture.

Myth #4 – I Don’t Need A Real Estate Agent To Buy A House

Without the proper team behind you – especially if you’re a first-time homebuyer – you could potentially find yourself in a compromised position. Many buyers don’t take the time necessary to shop for an agent who can best represent them in their purchase.

Think about it this way – would you perform surgery on yourself? Do you feel comfortable filing your own income taxes, or do you opt to use the services of an accountant? Being represented by a licensed real estate agent will give you the benefit of professional skills and knowledge, including the ability to find financing and close the deal with your best interests put first.

It’s always in your best interests to have an experienced, knowledgeable agent representing you in a home purchase. With such a major investment on the line, you want to have someone who can help you complete a purchase leaving no stone unturned, and ultimately saving you money – and a lot of headaches.

A professional real estate agent – like me – will be able to sort the myths from the reality and make your home-buying experience a positive one.

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Where to Look for Hidden Gems in Real Estate

Posted in Home Buyer Tips, Home buying, Homebuyer Tips, Homeowner Tips, Real estate, Real Estate Tips by southorangecounty on March 24, 2014

From Activerain.com, a Nationwide real estate community of agents.

Pricing a home is more art than science.

Get beyond the standard information you can search online like square footage, bedrooms, bathrooms, year built, etc. Homebuyers should be on the lookout for some of these hidden gems that may undervalued (or not even included) in the listing price.

We asked the ActiveRain community to tell us what they thought were some   of the hidden gems in real estate, it’s no surprise that some people thought certain features ‘a waste of money’ while others thought the exact same   feature ‘worth every penny!’

But at the end of the day, real estate professionals are in agreement, there are certain hidden gems in a home that have the potential to add long term value for a buyer and might not be actually reflected in the selling price.

This community sourced data allows a buyer to look beyond the obvious things that affect price and identify hidden gems that could add value to the next home they purchase.
ActiveRain_Hidden_Gems

As real estate professionals, the ActiveRain community sees a lot more homes get priced and sell than any other community on the internet. This makes  them uniquely qualified to share with you what are some of the best hidden gems in real estate, those things that often get missed in the listing price but that can add tremendous value for a buyer looking for their next place to call home.

We asked over 1500 real estate professionals three primary questions. Their answers shed some light on the hidden gems every buyer should be on the  look out for and also that every seller should consider highlighting when they market their own home for sale.

Rate These Hidden Gems that Frequently are Not Reflected in the Listing Price that Buyers Should Be on the Lookout for.

Each potential gem could be rated

  • not valuable
  • slightly valuable
  • moderately valuable
  • very valuable…..hidden gem!

Here is how real estate professionals saw things…..

Are there hardwood floors lurking under the carpet? If you’re a seller, you should play up that angle. Sure, it’s going to take a little work from the buyer to make them shine, but based on these results, real estate professionals believe that hardwood floors under the carpet are a hidden gem that doesn’t get adequately reflected in the listing price of a home.

Who doesn’t want great neighbors? For many people moving in, the neighbors are an afterthought. You meet them after you move in. Real estate professionals however believe there is intrinsic value in having great neighbors. Over 42% of real estate professionals believe having great neighbors is generally not reflected in the listing price of a home but something buyers will ultimately come to value a great deal.

Unfinished spaces aren’t as valuable as you might think, or at least as valuable as we thought. Over 67% of real estate professionals believe that having unfinished spaces in a home (that you could seemingly finish to give yourself more space) adds only slightly or moderately to the value of a home.

These Items are Typically Reflected in the Listing Price. Rate These Items….Are They ‘Worth Every Penny’ to the Buyer?

Each potential gem could be rated

  • Waste of money
  • slightly worth it
  • moderately worth it
  • worth every penny!

Here is how real estate professionals saw things……

Sellers, in particular, should take notice of these results. Real estate professionals believe amazing views and a new roof are typically worth every penny that a buyer will spend to buy a home with those attributes. How do they know this? Because every day they work with buyers looking for certain things in a home. Most of us can’t change the view from our home, but if we have a great one, these results say it makes sense to market the heck out of the view if you are trying to sell.

As a seller have you been marketing the fact that the home sits on a corner lot? Maybe that’s not the best angle. It could be that marketing the fact that home has a large yard is a better route to take. Real Estate professionals seem to agree that a large yard is more valuable than a corner lot.

Lifestyle attributes are about location, not the physical home. Rate these items that are normally reflected in the listing price based on their value.

each potential attribute could be rated

  • waste of money
  • not usually worth it
  • usually worth it
  • worth every penny!

Here is how real estate professionals saw things…….

Neighborhood quality and schools dominate. Commute times and access to transit and other amenities are rated less high. Which would seem to mean that people are willing to sacrifice being closer to jobs and amenities if it means they can find a home with great schools and a neighborhood they love.

These results also seem to indicate that lifestyle is pretty important across the board as very few real estate professionals saw any of the lifestyle attributes as a complete waste of money.

 

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What’s Ahead For Mortgage Rates This Week – March 24, 2014

Whats-Ahead-Mortgage-RatestLast week’s economic news included several housing-related reports including the Housing Market Index (HMI) for March, a report on housing starts, and building permits for February.

The National Association of REALTORS® also released its Existing Home Sales report for February and the Federal Reserve issued its first FOMC statement under the helm of Fed Chair Janet Yellen.

Home Builders Conservative On Housing Market Conditions

The National Association of Home Builders Wells Fargo Housing Market Index rose by one point to a reading of 47 in March against a reading of 46 in February and against an expected reading of 50. Readings above 50 signify that more builders have     a positive view of housing market conditions than not.

Conditions contributing to the sluggish reading included a lack of lots for development and labor shortages. The NAHB also  cited rising home prices and mortgage rates as reasons for builders’ conservative outlook.

Commerce Department: Housing Starts And Building Permits

The U.S. Commerce Department released reports on Housing Starts and Building Permits Issued for February. Housing starts dipped to 907,000 in February against expectations of 908,000 expected housing starts and January’s reading of 909,000 housing starts. Severe winter weather froze construction and transport of building supplies.

Building permits issued increased to 1.02 million on a seasonally adjusted basis against January’s reading of 945,000 building permits issued.

February’s reading represents a 7.70 percent increase over January’s permits issued and was attributed to a sharp rise in plans for condominiums and rental housing projects.

407,000 permits for multi-unit buildings were issued in February and represented a 24.3 percent increase on an annualized basis. Analysts saw the increase in building permits as a sign that construction will pick up as warmer weather arrives.

Existing Home Sales Fall, Rising Home Prices And Mortgage Guidelines Cited

The National Association of REALTORS® reported a decrease of 0.40 percent in sales of existing homes from January’s reading. February’s reading of 4.60 million homes sold on a seasonally-adjusted annual basis was lower than January’s reading of 4.62 million existing homes sold, but exceeded expectations of 4.58 million existing homes sold.

Analysts identified familiar causes such as high mortgage rates and home prices, bad weather and a short supply of available homes for the dip in existing home sales. New standards for “qualified mortgages” became effective in January and were seen as a possible obstacle to would-be home buyers as mortgage lenders keep a tight rein on mortgage credit policies.

Federal Open Market Committee Statement Details $10 Billion Dollar Change

Reports indicate that Fed Policy is expected to stay much the same as it was under its previous chairman. FOMC approved an additional $10 billion reduction in asset purchases designed to keep long term interest rates low.

The Fed will now purchase $55 billion monthly in mortgage-backed securities and treasury bonds as compared to its original level of $85 billion monthly.

Wall Street did not respond well to FOMC’s revised projections for short-term interest rates, which were revised from 1.75 percent by the end of 2016 to a possible short-term rate of 2.25 percent.

FOMC removed the benchmark 6.50 percent national unemployment rate for raising the federal funds rate, which is currently 0.250 percent. Instead, the Fed will review a wide range of economic indicators before changing monetary policy.

Janet Yellen, in her first press conference as fed chair, said that the Fed may consider rising short-term interest rates a few months before its original target of October to December of 2015.

Mortgage Rates Drop

Mortgage rates dropped last week according to Freddie Mac. Average mortgage rates fell from 4.37 percent to 4.32 percent for 30-year fixed rate loans. Rates for 15-year mortgages dropped from 3.38 percent to 3.32 percent.

The average rate for a 5/1 adjustable rate mortgage fell from 3.09 percent to 3.02 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead This Week

Scheduled economic reports for this week include the Case-Shiller and FHFA Home Price Indexes for January. New Home Sales and Pending Home Sales will also be released.

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Taxes and Your Home

tax-time-2Taxes and Your Home

There are many benefits to owning a home: gaining control over your environment, becoming part of a community, the opportunity to build equity, and of course, tax breaks. *

The Most Common Tax Deductions
There were once again rumblings that the mortgage interest deduction was going to be eliminated, but we’ve gotten a reprieve for yet another year. Why is this a great benefit? The government is giving you a credit just for paying interest on your home loan. You can even deduct interest paid on a loan secured by a second home or a home equity loan. Houses, condos, co-ops, mobile homes, and even some RVs or boats may qualify.

Points are a way of defining the cost you pay to the lender for your home loan. One point is one percent of the principal amount of the loan. Points on a purchase can be deducted in the year of the purchase, while points paid on a loan refinance are deducted over the life of the loan. That is, on a 30-year loan, you divide the points by 30 and then deduct that amount each year. Your home mortgage servicing company will send you a Form 1098 at the end of the year to let you know how much you paid in interest and in points during the year.

Note that if you have rental properties or more than two homes for personal use, you should consult an experienced tax advisor for more information on available deductions.

Property Tax
If you’re itemizing your federal return, you can deduct your property tax. These fees are also known as real estate tax, and they are based on the assessed value of the home. Property tax can be collected by local and state governments. It’s possible to challenge your property tax bill if you feel your assessment is too high; check your local laws and requirements to find out more.

Investment Properties and Taxes
There are a number of deductions associated with investment properties. In general, you can deduct interest on the mortgage loan with which you obtained the property, as well as the expenses associated with maintain the property, such as retaining a property manager and making necessary repairs. You can also get credit on depreciation of the property.

Owning a home is a benefit in so many ways, from establishing a sense of community and putting down roots for your family, to fostering your sense of independence, to easing some of the burden at tax time. If you have more questions about purchasing or refinancing your home, or if you need a referral to a qualified tax consultant, I’m happy to help. Call me today to learn more about making your mortgage work for you!

* I am not a qualified tax advisor. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions and regulations.

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It’s Spring Cleaning Time! Kick Clutter to the Curb With These Home Cleaning Tips

It's Almost Spring Cleaning Time! Kick Clutter to the Curb With These Home Cleaning TipsSpring is here, and it’s time to get your home in order!

Spring cleaning can be fun and easy if you follow some general guidelines, which are sure to get your home ready for the nice weather and looking as beautiful as the weather is about to. Kick the winter clutter to the curb with these spring cleaning tips.

Start With The Closets

Spring is here, and winter wear is no longer needed! It’s time to box up all of the winter boots, jackets, gloves, and scarfs until next season.

Starting your spring clean with your closets is a good tip, and will get you prepared for the rest of the process while creating more space and organization in the bedrooms of the house. This is also the perfect opportunity to create a “give away” box full of clothes that are no longer being worn.

Reorganize: Bookshelves, Countertops, And Desks

Reorganizing is the perfect way to prepare your home for the spring and summer. Good clutter is common in many homes, like useful books that are interesting for guests to read or decorations that offer a sense of warmth and character to the home.

So pick up the fallen and leaning books on the bookshelf, reorganize your kitchen countertops, and de-clutter your home office. For busy home offices, purchase organizational tools like additional shelving units, compile and file away old bills and receipts, and toss anything else that is no longer needed or of any use.

Get Scrubbing: Removing Stains And Odors

Getting ready for spring means removing the stains, dirt, and odors that accumulated in your home over the colder months. First, you should start with wiping your painted walls with a wet cloth to remove scuffmarks and dust.

If the water doesn’t do the trick, you can try mixing a little dishwashing soap in with the bucket of warm water. You may even want to repaint certain high-traffic areas, like entrance halls and the baseboards around the front door.

Next, you can go for the floors. Having a fresh carpet cleaning is sure to kick-start your spring cleaning; this may be something that you wish to have done by a professional. To make the most out of your carpet cleaning, have it scheduled for when the kids are out of the house for a while, and wait until the worst of the weather is over.

Make sure the kids take their shoes off inside, but get them to leave their socks on to avoid natural oils from getting into your freshly cleaned carpet. Vacuum area rugs in the same fashion, and mop the kitchen and bathroom floors at the same time you clean your hardwood floors.

Give the showers, bathtubs, and toilets in the house a good scrub. In the kitchen, empty the fridge and freezer of their contents, and give the inside a good scrub down as well.

Once the tidying, de-cluttering, and scrubbing are done, you will get to enjoy the fun part of spring cleaning: spring decorating! And while you’re at it, why not buy yourself and your home some spring flowers for a job well done.

If you’re doing a big spring clean this year because you’re looking to sell your home, these tips will get your home ready for any buyer’s eyes.  Give me a call or shoot me an email to discuss other ideas for making your house ready for the market.  This next 4 months is the best selling season of the year.

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4 Important Questions To Ask Before Refinancing Your Mortgage

4 Important Questions To Ask Before Refinancing Your Mortgage

So you are thinking of refinancing? Well you are in luck because I have 4 quick and important questions you should  ask yourself before doing so.

1) Do I Have Enough Equity To Get A Mortgage?

To get a conventional loan, you will usually need to have at least 20 percent equity. This means that your house will have to be worth at least $500,000 to get a $400,000 loan.

If you have less equity, you could end up having to pay for private mortgage insurance, which can easily add $100 or more to your monthly payment.

By the way, if you live in South Orange County, and not sure of the present value of your property, give me a call and I would be happy to help you estimate it.

2) How’s My Credit?

Most lenders will look at your credit score as a part of determining whether or not to make you a loan. With conventional lenders, your rate will depend on your score and the higher it is, the lower your payment will be.

Other lenders, like the FHA and VA programs have an all or nothing rule. If you qualify, your rate won’t be based on your credit, but if your score is too low, you won’t be able to get any loan. Generally, 620 credit scores are the lowest that will qualify you for any loan.

3) What Do I Want To Accomplish?

Mortgages typically offer a choice as to their term. While the 30-year loan is the most popular, shorter term mortgages save you money since you pay less interest over their lives. They also get you out of debt sooner, at least as regards your house.

The drawback is that they carry higher payments since you pay off more principal every month. This can make them less affordable for some borrowers, generally, you’ll need to keep your current house and loan for anywhere from three to six years to break even on the costs of refinancing.

4) How’s My Current Loan?

If you have an adjustable rate mortgage, you may want to switch to a fixed rate mortgage simply for the additional security it offers you. On the other hand, if you are planning to move relatively soon, your current mortgage could be a better deal whether it’s fixed- or adjustable-rate.

When trying to decide what to do, compare the cost of refinancing with what it would cost you in additional interest to hold on to your existing loan. While the breakdown is different for every borrower, generally, you’ll need to keep your current house and loan for anywhere from three to six years to break even on the costs of refinancing.

Deciding what to do with your mortgage can be complicated. Working with a qualified loan broker that can consider every angle with you can help you to make a better decision. I have a couple of excellent lenders I can wholeheartedly recommend, if you’re looking for one.

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