Tax Benefits of Owning a Home
Wednesday, March 9th, 2011It’s that time of year again…tax time! If you purchased a home in the last year, you might be in for a pleasant surprise. Check with your tax accountant, but you may be able to deduct the following items:
- Mortgage Interest Payments: Mortgage interest is usually deductible on a primary residence, as well as on a second home that meets certain requirements.
- Mortgage Insurance Payments: aka MIP, PMI
- Points (Loan Discount or Mortgage Origination Fees): The points that you paid to your lender upon purchase of a home, or even the points that were paid by the seller on the buyer’s behalf, may be tax deductible as a prepayment of interest if certain basic requirements are met.
- Property Taxes: These annual taxes are based on the assessed value of the property and may lead to a considerable deduction each year.
- Home Equity: The interest paid on home equity loans could mean tax benefits that are not available through other credit sources.
VA LOAN RATES
Thursday, February 24th, 2011NEW HOME LOANS: as of February 24,2011
30 yr Fixed-
0.000 Points
4.875%,4.980% APR
15 yr Fixed-
0.000 Points
4.500%/4.676% APR
VA GUIDELINES
Thursday, February 24th, 2011
WHAT IS A VA LOAN?
The VA Loan became known in 1944 through the original Servicemen’s Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation’s economy.
With more than 25.5 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses
VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.
VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.
HOPE for Homeowners; Maryland’s Foreclosure Mediation Program
Thursday, February 24th, 2011What You Need to Know About Foreclosure Mediation
Maryland’s new Foreclosure Mediation Law will take effect July 1, 2010. The law requires mortgage lenders and servicers to be much more responsive to homeowners facing foreclosure. The goal of the law is to help homeowners get relief through a loan modification if they qualify or to find an alternative to foreclosure. The law gives homeowners a new opportunity to meet with the lender and an independent party to ensure that alternatives to foreclosure have been considered and evaluated.
Mediation is a process that can be used to resolve disagreements outside a courtroom. Both sides meet with a neutral third party who tries to help them find a resolution. “Foreclosure Mediation” under this new law is designed to help foster a dialogue between homeowners and lenders to make sure a fair assessment is made and the homeowner is offered any options they may qualify for.
Responsibilities of Lenders
Under this law, when a lender notifies a homeowner about possible foreclosure, the lender also must provide more complete information about options available to homeowners, including information about specific modification programs, such as the federal Home Affordable Modification Program (HAMP), any lender-specific programs, and resources and assistance available from nonprofit organizations and government. If a homeowner fills out and returns a loan modification application, the lender must evaluate the request and document their decision before foreclosure can proceed to the next step. Should a lender take the next step, and initiate foreclosure proceedings with the court system, they must also send the homeowner a “Request for Mediation” form.
Responsibilities of Homeowners
Homeowners must contact their lenders and be responsive to any applications for loan modification programs or other alternatives to foreclosure that they may offer. If the home facing foreclosure is a homeowner’s principal residence, the homeowner will have the right to request mediation once the lender initiates foreclosure proceedings with the court system. At that time, the lender must send a “Request for Foreclosure Mediation” form. Homeowners will have 15 days to complete the form and file it with the Circuit Court. Homeowners must pay a non-refundable $50 fee when they formally file this request for mediation.
You should not wait until you can request mediation before starting efforts to save your home. The opportunity to participate in mediation occurs at a late stage in the foreclosure process and does not guarantee you may avoid foreclosure. Contact your lender and a housing counselor at the earliest sign of financial difficulty. A list of housing counseling agencies near you can be obtained by calling the MDHOPE hotline at 877-462-7555 or by clicking on the Counseling tab.
MOST SAY ITS A GOOD TIME TO BUY!!!
Wednesday, November 10th, 2010Most Say it’s a Good Time to Buy
by Broderick Perkins
Most Americans believe the housing market has hit the bottom and that it’s a good time to buy, in part because many also think rents will rise faster than home prices.
Fannie Mae’s latest nation housing survey found that 70 percent of Americans think it’s a good time to buy a home, up from 64 percent in January. By an overwhelming majority, 78 percent, also believe home prices will either hold steady or increase over the next year, compared to 85 percent believing the same thing about rental increases. While Americans expect rents to rise by 3.6 percent on average, home prices are expected to turn up only by 0.9 percent, Fannie Mae found. ”Given the remaining level of shadow inventory, as well as the high number of adjustable rate resets still looming which could in turn lead to further defaults, it is difficult to see the supply of housing falling in an amount sufficient to move prices upwards in many parts of the country,” said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker. Also 67 percent believe housing is a safe investment, down three points since January and down 16 percentage points from a similar 2003 survey and the largest drop by far among all investment types tracked since then. Housing ranked second behind putting money into a savings or money market account (76 percent).
“Our survey shows that consumers see a mixed outlook for housing and homeownership,” said Doug Duncan, Fannie Mae’s vice president and chief economist. ”These findings indicate a return to a more balanced and realistic approach toward housing. While this will likely weigh on the housing recovery in the near-term, it should, over time, help to build a stronger and healthier market focused on sustainable homeownership,” he added.
The Fannie Mae National Housing Survey polled homeowners and renters between June 2010 and July 2010 and compared the findings to similar surveys released earlier this year and 2003.
The survey also found:
• Mortgage borrowers (74 percent) and underwater borrowers (69 percent) are more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent). However, this measure has fallen among all sub-groups since January, with delinquent borrowers and renters showing the largest declines, down eight and seven points, respectively.
• More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, up three points from the beginning of the year.
• Fifty-four percent think it would be very difficult or somewhat difficult to get a home loan today, down six points since January.
• Thirty-three percent of all Americans said they would be more likely to rent rather than buy if they were going to move, up from 30 percent in January.
• Among renters, 60 percent said they would rent again if they were to move, up from 54 percent in January. However, 69 percent of renters think it makes more sense to buy a home than to rent.
• Mortgage borrowers (83 percent) and underwater borrowers (77 percent) remain bullish on housing and said they are more likely to buy in the future than rent — both groups increased two points from January.
“If you couple this (high inventories and rate resets) with the reality that it is far more difficult to obtain a mortgage as well as a job, when selling a home to someone who presumably needs financing to buy it, housing is still facing a conundrum.” Osborne added.
Published: November 4, 2010
Top Ten Mistakes Buyers And Sellers Often Make…And How To Avoid Them
Thursday, September 30th, 2010Home Buyer Mistakes
Mistake #1: Not knowing how much they can afford before making an offer.
The easiest way to avoid this mistake is to get pre-qualified for a mortgage by a lender so you’ll know in advance exactly how much you can afford.
Mistake #2: Not realizing in advance who the Real Estate Agent really represents.
Most people think that the agent they are working with is working for them. Unless the agent is working as a buyer representative, they represent the seller.
Mistake #3: Not realizing that the wrong mortgage can cost thousands of dollars in needless interest and taxes.
Mortgages can and should be part of your total financial investment planning. Check with your accountant. Your CPA will be able to tell you what the long-term effects of a new mortgage will be on your overall financial picture.
Mistake #4: Not discovering hidden defects before buying a home.
This is one of the most expensive mistakes and it is also one of the easiest to avoid. Have a professional pre-purchase inspection done before you close.
Mistake #5: Not knowing how their credit affects their ability to buy or refinance a home.
Before you buy a home, many of the clouds on your credit history can be cleared up or even eliminated. Your mortgage professional can help you review your credit file in advance and possibly suggest things you can do to help improve your score.
Home Seller Mistakes
Mistake #6: Basing the asking price on needs or emotions, rather than the true market value.
Many times a seller will base the list price on what they paid or invested into the property. This can be an expensive mistake. Overpriced homes take longer to sell, and eventually net the seller less money. Consult a professional Real Estate Agent, they can assist you in pricing your home correctly from the beginning.
Mistake #7: Failing to “Show Case” their home.
First impressions are the most important. Experience shows that for every $100 in repairs your home needs, a buyer will deduct between $300-$500 from their offer. Thoroughly clean and prepare your home before putting it on the market – if you want top dollar.
Mistake #8: Failing to take the first offer seriously.
Many sellers believe that the first offer received will be one of many to come, hoping to hold out for a higher price, especially if the offer comes in soon after the home is listed. Often the first offer ends up being the best buyer, and many sellers have had to accept far less money than the initial offer much later in the selling process. Homes are most saleable early in the marketing period.
Mistake #9: Choosing the wrong agent, the wrong company or choosing them for the wrong reasons.
Many homeowners list their home with the agent who tells them the highest price. You need to list your home with the agent and company with the best marketing plan and track record to sell your home.
Mistake #10: Not knowing all of their legal rights and obligations.
Real Estate law is complex. The contract that you will sign when selling your home is legally binding. Small items that are neglected in a contract can wind up costing you thousands of $’s. You need to work with knowledgeable professionals who understand the “ins and outs” of your Real Estate transaction.