tag:blogger.com,1999:blog-81036825302775594202024-03-19T02:55:43.606-07:00Myrietta Leach Sells Real EstateAnonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.comBlogger197125tag:blogger.com,1999:blog-8103682530277559420.post-7943057582580686152024-01-14T18:39:00.000-08:002024-01-14T18:40:11.025-08:00Navigating Closing Costs During Your Home Sale <img src='http://betterhomeowners.com/image.ashx/b770a529-2669-43cc-bcbd-f5ec98db2af1.jpg' style='width:100%; height: auto; border: 0px;' /><p>Buying or selling a house is an exciting and sometimes confusing experience that includes expenses called "closing costs" that can often catch us by surprise. Closing costs are simply the fees and expenses incurred by buyers and sellers during a real estate transaction's closing or settlement process.<span> </span></p> <p>Typical closing costs can vary depending on what is customary in an area, the mortgage type, property value, and other factors.<span> </span>The largest expenses can be the real estate commission and the title policy.<span> </span>Total closing costs for a buyer can characteristically range from 2% - 5% <span> </span>of the sales price and 4% - 7% for a seller.</p> <p>The most common buyer's closing costs include loan origination fee, title insurance, attorney fees, appraisal, homeowner's insurance, underwriting, miscellaneous fees associated with a new mortgage, and prepaid interest to the end of the month.</p> <p>Interest is paid in arrears on mortgages after the borrower has used the money.<span> </span>The payment due on the first of the month pays the interest for the previous month and is calculated for a full month.<span> </span>The prepaid interest covers the time from the closing date to the end of that month.<span> </span>The borrower's first payment will usually not be the first of the month following the closing date but the next one.</p> <p>Separate from the closing costs, lenders usually itemize the additional fees collected at closing used to pre-pay portions of the property taxes and insurance to establish the escrow account.<span> </span>Insurance is always purchased annually in advance which would be due at closing.</p> <p>The seller will owe the taxes from January 1<sup>st</sup> to the closing date, and it will generally show as a credit to the buyer if they haven't been paid to the taxing authority for the year yet.<span> </span>Lenders generally like to have two months of funds for the annual insurance and taxes so they can be paid or renewed before it is due.</p> <p>Some expenses are paid outside of closing like the inspection fees that would be due to the provider at the time they are made.</p> <p>While both buyers and sellers are responsible for paying certain closing costs, it is possible for a buyer to negotiate for a seller to pay part or all their closing costs.<span> </span>VA loans restrict the buyer from paying certain fees and they become the responsibility of the seller.<span> </span>Such fees include attorney fees, agent fees, escrow fees to establish the account, rate lock fees, appraisal fees or inspections ordered by the lender.</p> <p>The actual expenses will be determined by the lender and special provisions in the sales contract. Your agent can supply you with an estimate of closing costs you typically will be responsible for at the beginning of the transaction and again at the time the sales contract is written.<span> </span>Buyers will receive an estimate from their lender at the time of application. </p><h3 style="-webkit-text-size-adjust: auto;">Buying or selling a house is an exciting and sometimes confusing experience that includes expenses called "closing costs" that can often catch us by surprise. Closing costs are simply the fees and expenses incurred by buyers and sellers during a real estate transaction's closing or settlement process. </h3><p style="-webkit-text-size-adjust: auto;">Typical closing costs can vary depending on what is customary in an area, the mortgage type, property value, and other factors. The largest expenses can be the real estate commission and the title policy. Total closing costs for a buyer can characteristically range from 2% - 5% of the sales price and 4% - 7% for a seller.</p><p style="-webkit-text-size-adjust: auto;">The most common buyer's closing costs include loan origination fee, title insurance, attorney fees, appraisal, homeowner's insurance, underwriting, miscellaneous fees associated with a new mortgage, and prepaid interest to the end of the month.</p><p style="-webkit-text-size-adjust: auto;">Interest is paid in arrears on mortgages after the borrower has used the money. The payment due on the first of the month pays the interest for the previous month and is calculated for a full month. The prepaid interest covers the time from the closing date to the end of that month. The borrower's first payment will usually not be the first of the month following the closing date but the next one.</p><p style="-webkit-text-size-adjust: auto;">Separate from the closing costs, lenders usually itemize the additional fees collected at closing used to pre-pay portions of the property taxes and insurance to establish the escrow account. Insurance is always purchased annually in advance which would be due at closing.</p><p style="-webkit-text-size-adjust: auto;">The seller will owe the taxes from January 1<sup>st</sup> to the closing date, and it will generally show as a credit to the buyer if they haven't been paid to the taxing authority for the year yet. Lenders generally like to have two months of funds for the annual insurance and taxes so they can be paid or renewed before it is due.</p><p style="-webkit-text-size-adjust: auto;">Some expenses are paid outside of closing like the inspection fees that would be due to the provider at the time they are made.</p><p style="-webkit-text-size-adjust: auto;">While both buyers and sellers are responsible for paying certain closing costs, it is possible for a buyer to negotiate for a seller to pay part or all their closing costs. VA loans restrict the buyer from paying certain fees and they become the responsibility of the seller. Such fees include attorney fees, agent fees, escrow fees to establish the account, rate lock fees, appraisal fees or inspections ordered by the lender.</p><p style="-webkit-text-size-adjust: auto;">The actual expenses will be determined by the lender and special provisions in the sales contract. Your agent can supply you with an estimate of closing costs you typically will be responsible for at the beginning of the transaction and again at the time the sales contract is written. Buyers will receive an estimate from their lender at the time of application.</p>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-1652790111389850182022-01-23T10:05:00.001-08:002022-01-23T10:05:50.190-08:00#wish I knew then <h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/3c74771c-21af-43e6-b31a-78f3bda523b5.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">We have all heard this expression that implies that had a person known earlier in life what they know now, they would have done things differently. The subject possibilities are endless While no one has a crystal ball to see into the future, it may be possible to learn from people who have experienced similar situations.</p><p style="-webkit-text-size-adjust: auto;">In the late sixties, mortgage rates hit 8.5% but before the decade had finished, the rates had come down to 7% where they stayed for some time. Homeowners who purchased at the higher rate, could buy a larger, more expensive home for the same payment if they could get out from under the obligation of their existing mortgage.</p><p style="-webkit-text-size-adjust: auto;">FHA and VA mortgages, up until the late 80's, could be assumed by anyone, regardless of credit worthiness. Since these homes were purchased one or two years earlier, the sellers didn't really have much equity in them, and many homeowners were willing to "give" them to investors so they could qualify on a new, lower rate mortgage.</p><p style="-webkit-text-size-adjust: auto;">It was a fantastic opportunity for investors who could afford the negative cash flow because the homes wouldn't rent for the payment. As the 70's economy, started heating up, so did inflation. Most people consider inflation an undesirable thing but for people who owned rental property, it meant the values were going up and so were the rents.</p><p style="-webkit-text-size-adjust: auto;">Soon, the rentals no longer had negative cash flows and the investments turned the corner. If you talk to investors who purchased those homes during that period, you'll very likely hear, "I should have bought more of them."</p><p style="-webkit-text-size-adjust: auto;">If we could fast forward into the future to see how people will be talking about the period we're currently in, we might see an even greater opportunity in our present time. Interest and mortgage rates have been on a downward trend for thirty years. In the past ten years, they hit an historic low. They are trending up currently and it appears they will continue to do so.</p><p style="-webkit-text-size-adjust: auto;">Homes are in short supply which has caused the prices to go up. Builders haven't returned to the number of new units needed to meet demand and that has been going on for over ten years. Even when the supply does increase, it will take a long time to catch up with demand.</p><p style="-webkit-text-size-adjust: auto;">Combine that with supply chain shortages due to the pandemic and prices look like they are unaffordable. Many millennials and some Gen Xers believe the "window of opportunity" has closed. </p><p style="-webkit-text-size-adjust: auto;">For tenants, rents are continuing to increase due to the same causes that home prices are increasing. Buyers, by acting now, can lock in their mortgage rate and the purchase price of the home. As prices continue to increase and the amortization of the mortgage pays down the unpaid balance, homeowners' equity increases and so does their net worth.</p><p style="-webkit-text-size-adjust: auto;">Unfortunately, for tenants, the rents will continue to rise, along with prices which will make it more difficult in the future to purchase. Their rent is used to pay the landlord's mortgage who benefits in the principal reduction for each payment made.</p><p style="-webkit-text-size-adjust: auto;">The market is changing and people who don't own a home currently must find a way to buy one. The longer they wait, the harder it will be to buy one.</p><p style="-webkit-text-size-adjust: auto;">People wanting to purchase a home in today's market must educate themselves with facts and not hearsay. There are all sorts of programs available to address low down payments, varieties of mortgages, credit issues and other things. </p><p style="-webkit-text-size-adjust: auto;">It starts by meeting with a real estate professional who can recommend a trusted mortgage professional. Download our <a class="Guide.2t8UpHE4I0a3evWeuNc5aw" href="https://www.betterhomeowners.com/MyriettaLeach/guide/2t8UpHE4I0a3evWeuNc5aw">Buyers Guide</a> and check out your numbers using the <a class="FinApp.RentvsOwn" href="https://www.betterhomeowners.com/FinancialApps/RentvsOwn.aspx?AccountId=eup9ytNmk02x5OCAZ0r-PA&Auth=1">Rent vs. Own</a>.</p><br><div dir="ltr"><div><p style="margin: 0px; font-stretch: normal; line-height: normal;"><br></p><div dir="ltr"><div><p style="margin: 0px; font-stretch: normal; line-height: normal;"><br></p><div><div class="x-apple-transform-wrapper" style="height: 174.53053812257977px;"><table cellpadding="0" cellspacing="0" border="0" style="transform-origin: 0px 0px; transform: scale(0.6255574843103218); width: 585.078125px !important; height: 279px !important;"><tbody><tr><td style="padding: 0px 1px 0px 0px;"></td></tr></tbody></table></div></div><div dir="ltr"></div><p style="margin: 0px; font-stretch: normal; line-height: normal;"></p></div><div style="font-size: 19px; -webkit-text-size-adjust: auto;"><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-90574185969974042602022-01-17T17:05:00.001-08:002022-01-17T17:05:29.197-08:00Your Home is a Hedge Against Inflation<br><h3 style="-webkit-text-size-adjust: auto;"><img src="https://betterhomeowners.com/image.ashx/f09d009f-0dd4-4d87-8aba-e063822929c5.jpg" processed="true" width="100%" height="auto" style="width: 366px; height: auto; border: 0px;" data-unique-identifier=""></h3><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">The concern about inflation is the sustained upward movement in the overall price of goods and services while the purchasing value of money decreases. Tangible assets like your home consistently become more valuable over time. In inflationary periods, your home is a good investment and a hedge against inflation.</span></p><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">Money in the bank loses purchasing power due to inflation and the interest you may be earning is almost always less than inflation.</span></p><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">Home prices are going up but so is rent. With mortgage rates near historic lows, the interest is, generally, less than the appreciation the property is enjoying. Combine this with the leverage that occurs using borrowed funds to control an asset and your equity is most likely, growing at a faster rate than inflation.</span></p><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">A 90% mortgage at 3.5% for 30-years on a $400,000 home that appreciates at 4% a year will have an estimated equity of $220,000 in seven years due to appreciation and amortization. That is a 27.5% annual rate of return on the down payment. That is a significant hedge against a current inflation of 4%.</span></p><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">If a person were to put that same $40,000 in a certificate of deposit that earned 2%, it would be worth only $45,947 in seven years. If it was invested in the stock market that earned 7% annually, the $40,000 would grow to $64,231. The equity in the example for the home would be almost 3.5 times larger.</span></p><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">The assets that are considered to be good bets against inflation include some bonds, gold and other commodities and real estate. Another distinct advantage of investing in a home is that you would be able to live there with your family and enjoy it which is not possible with bonds and commodities. </span></p><p style="-webkit-text-size-adjust: auto;"><span style="background-color: white; letter-spacing: 0.4pt;">There are certainly other considerations in a comparison like this such as maintenance, but it could be offset, at least partially, by the cost of housing being less than you would be paying for comparable rent. And with the shortage of rental units available, the rent will certainly continue to increase annually where your housing costs are fixed with the exceptions of increases in property taxes and insurance.</span></p><div dir="ltr"><div><div dir="ltr"><div style="font-size: 19px; -webkit-text-size-adjust: auto;"><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-64518535222718182252020-09-28T11:14:00.000-07:002020-09-28T11:15:00.700-07:00Alternative Investments in Hay, KS<h3 style="-webkit-text-size-adjust: auto;">Alternative Investments</h3><img src="https://betterhomeowners.com/image.ashx/4586beaa-f84e-4314-b1a4-a0c2ff86f13f.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">In a recent article, The Wall Street Journal reported that investors have rarely been this flush with cash. The economic uncertainty due to the pandemic and the volatility of the stock market has caused assets in money-market funds to increase to approximately $4.6 trillion, the highest level on record according to Refinitv Lipper.</p><p style="-webkit-text-size-adjust: auto;">The question becomes should an investor be "out of the market" until things settle down or should they seek to find alternative investments to produce satisfactory results. Even in the middle of this uncertainty, residential rental property has been a stable performer.</p><p style="-webkit-text-size-adjust: auto;">Rents are continuing to increase along with values. Investor mortgages are available at 80% loan-to-value at fixed interest rates for 30-year terms. Most other investments must be purchased for cash or at best, are limited to low loan-to-value loans, at floating interest rates for relatively short time frames.</p><p style="-webkit-text-size-adjust: auto;">The use of borrowed funds, especially at today's low interest rates, contribute to the rate of return and in some cases, increase it. This characteristic is known as leverage.</p><p style="-webkit-text-size-adjust: auto;">Income properties enjoy specific tax advantages like long-term capital gains rates lower than ordinary income rates, standard depreciation, which is a non-cash deduction, as well as expensing many big-ticket items in the year purchased.</p><p style="-webkit-text-size-adjust: auto;">Tax deferred exchanges are available for investors wanting to avoid the tax due on sale and defer the profit into the replacement property.</p><p style="-webkit-text-size-adjust: auto;">One of the most cited reasons people invest in rental homes is that they feel they are more in control. They understand a rental home because it is the same type of property and requires the same maintenance as the home they live in. They can make the decisions to improve it, repair it, what rent to charge and when to sell it. For most owners, a home represents their largest financial asset. That familiarity becomes a natural bridge to decide to invest in rental property rather than something they are less familiar.</p><p style="-webkit-text-size-adjust: auto;">If you'd like to know more about the benefits, download the <a class="Guide.4duFhqtCZUCGUVrZsm_LlA" href="https://www.betterhomeowners.com/MyriettaLeach/guide/4duFhqtCZUCGUVrZsm_LlA">Rental Income Properties</a> guide and call me at <a href="tel:(785)%20650-4370" dir="ltr" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="4" style="color: currentcolor;">(785) 650-4370</a> to discuss what kind of opportunities are available.</p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com1tag:blogger.com,1999:blog-8103682530277559420.post-3530387718403804072020-09-08T20:58:00.001-07:002020-09-08T20:58:17.956-07:00It's Worth Digging a Little Deeper buying a home in Hays, Ks<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/62dc7993-2280-4c78-a284-2668cce2c7b0.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">There are hundreds of thousands of people who believe, for one reason or another, they cannot afford to buy a home currently. Some people may not for any number of reasons but it would be very surprising to know how many who can buy but have gotten some bad information along the way. It's worth digging a little deeper to find out the facts.</p><p style="-webkit-text-size-adjust: auto;">John and Karen have been renting a home for the last five years at $2,000 a month. During that time, the value of the home they were renting went up by $30,000 in value while the unpaid balance decreased by $18, 400. Even though they were fortunate enough the rent remained constant over the five years, they missed out on close to $50,000 of equity that the owner realized instead of them.</p><p style="-webkit-text-size-adjust: auto;">Another thing to consider with today's low interest rates, it is quite common for a mortgage payment to be lower than a tenant is paying rent for a similar property. So, in this example, John & Karen paid more to rent than a house payment would have been <span style="text-decoration: underline;">and </span>missed out on the equity build-up that occurred due to appreciation and amortization.</p><p style="-webkit-text-size-adjust: auto;">The simple fact is when tenants like John and Karen pay their rent, the landlord is the beneficiary of the rent received as well as the equity earned. Over time, the rent paid by John and Karen and other tenants will pay for the landlord's rental. It a great concept and a good investment.</p><p style="-webkit-text-size-adjust: auto;">True, not everyone can afford a home. A buyer needs money for a down payment and closing costs. They also need to have income and good credit to qualify for the mortgage. Some of these may seem insurmountable but instead of imagining that buying a home is not in the cards at the current time, talking to a real estate professional is a better route to take.</p><p style="-webkit-text-size-adjust: auto;">There are lots of low-down payment mortgages available including 100% financing for qualified veterans and USDA eligible buyers. It is sometimes more difficult to find sellers willing to pay all or part of a buyers closing costs when inventory is low, but lenders do allow it. It is a matter of finding the willing seller.</p><p style="-webkit-text-size-adjust: auto;">The source of the down payment could be a gift from a family member as long as there is no repayment expected. It's amazing how many parents or grandparents might be willing to help a relative get into a home. Funds for a down payment may be available as loans or withdrawals from qualified retirement programs like IRAs or 401k plans. It's worth investigating based on what retirement programs you have.</p><p style="-webkit-text-size-adjust: auto;">Good credit is necessary to qualify for a loan but buyers should not assume that theirs is not adequate. A trusted mortgage professional can assess a situation and may be able to suggest some things that will not only raise the score enough to be approved but possibly, even raise the score enough to qualify for a better interest rate.</p><p style="-webkit-text-size-adjust: auto;">There are a lot of misunderstandings about whether a person can or cannot qualify for a home at this time. Instead of relying on second hand information or something that might be floating around on the Internet, spend some time with a real estate professional who can give you the facts, assess your situation and if necessary, point you in the right direction to get help from a trusted mortgage professional. Call <a href="tel:(785)%20650-4370" dir="ltr" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="7" style="color: currentcolor;">(785) 650-4370</a> to schedule an appointment where we'll help you dig deeper to determine whether you can buy a home now.</p><p style="-webkit-text-size-adjust: auto;">Download our <a class="Guide.2t8UpHE4I0a3evWeuNc5aw" href="https://www.betterhomeowners.com/MyriettaLeach/guide/2t8UpHE4I0a3evWeuNc5aw">Buyers Guide</a> to give you </p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-6277954252803965752020-08-24T10:12:00.001-07:002020-08-24T10:12:16.409-07:00Forbearance is Not Forgiveness<h3 style="font-family: Helvetica-Oblique;" class=""><br class=""></h3><img src="https://betterhomeowners.com/image.ashx/edb5bf84-cf52-4436-9ce5-10ef88c54a50.jpg" processed="true" width="100%" height="auto" style="font-family: Helvetica-Oblique; width: 1595px; height: auto; border: 0px;" class=""><p style="font-family: Helvetica-Oblique;" class="">Forbearance is a temporary postponement of mortgage payments. The lender can grant this option to a borrower instead of forcing the property into foreclosure. The CARES Act provides protections for homeowners with mortgages that are federally or Government Sponsored Enterprise backed or funded such as FHA, VA, USDA, Fannie Mae and Freddie Mac.</p><p style="font-family: Helvetica-Oblique;" class="">A mortgage holder should contact the lender to explain the temporary difficulty they are having making payments and ask for relief under forbearance or other options. Once the lender grants approval, it is important for the borrower to get the terms of the forbearance agreement in writing to be clear about when the payments will resume and how the missed payments will be recovered.</p><p style="font-family: Helvetica-Oblique;" class="">Generally speaking, homeowners in a forbearance plan will not incur late fees and it should not adversely affect their credit. Unfortunately, borrowers must be vigilant to see that the lender is protecting them from delinquent credit marks according to their agreement.</p><p style="font-family: Helvetica-Oblique;" class="">Forbearance is easy to receive but not so easy to recover from. Free credit reports can be obtained on a weekly basis until April 21, 2021 at <a href="http://www.annualcreditreport.com/" class="">www.AnnualCreditReport.com</a>. Reports are available from Experian, Equifax and TransUnion. This will allow borrowers to monitor whether the lender has inadvertently reported items inaccurately.</p><p style="font-family: Helvetica-Oblique;" class="">Prior to the end of the forbearance period, borrowers should contact their loan servicer, the company that accepts their payments. Review the terms of the forbearance plan and expectations for repayment. Verify the unpaid balance and that there are not any payments marked as late or delinquent during the forbearance period.</p><p style="font-family: Helvetica-Oblique;" class="">One more item to discuss with the loan servicer is the payment of the property taxes and insurance. Since multiple mortgage payments may have been missed and most payments include 1/12 of the annual amounts for these items, there may not be enough to pay for them when they become due.</p><p style="font-family: Helvetica-Oblique;" class="">Since it is estimated that there are over four million borrowers in forbearance currently, it may be difficult to talk to the servicer but starting the process early and being persistent will be helpful. </p><p style="font-family: Helvetica-Oblique;" class="">At the end of forbearance, the borrower needs to resume regular payments and establish a plan with the lender to repay the missed payments. The terms are negotiated between the borrower and the lender.</p><p style="font-family: Helvetica-Oblique;" class="">One way is through a loan modification which can restructure the loan. In some cases, it would add the missed payments to the loan balance and recalculate the payments for the remainder of the term. </p><p style="font-family: Helvetica-Oblique;" class="">A borrower could pay the forbearance money in cash but the practicality of that is not realistic. If the person couldn't make the payments during forbearance, they probably don't have the liquidity to pay them afterward. This option is entirely at the buyer's election.</p><p style="font-family: Helvetica-Oblique;" class="">Forbearance is a temporary way to postpone the mortgage payments with the understanding that you will be able to resume repaying the loan. If the circumstances that caused the issue initially become permanent, then, other remedies must be considered. If there is equity in the property, selling the home may be the way to materialize it for the homeowner.</p><p style="font-family: Helvetica-Oblique;" class="">Please contact us at (785) 650-4370 if you need to know what your home is worth and how long it would take to sell it. We're happy to provide this information as a service without obligation so you can be aware of your options.</p>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com1tag:blogger.com,1999:blog-8103682530277559420.post-27302617174603976002020-08-10T14:01:00.001-07:002020-08-10T14:01:13.326-07:00Three Reasons to Refinance<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/856d365a-f954-4540-9a6b-3551b2e8985e.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">Three reasons to refinance a home include lowering the cost of housing, shortening the term of the mortgage to pay it off sooner or to using the equity to accomplish another purpose.</p><p style="-webkit-text-size-adjust: auto;">Replacing the mortgage at a lower interest rate, which is entirely possible in today's market, would reduce the payment. On the other hand, shortening the term of the mortgage could make the payments increase but would allow the home to be paid for sooner. In either case, the equity would not be reduced unless the refinancing costs were rolled into the new mortgage.</p><p style="-webkit-text-size-adjust: auto;">Refinancing the home to take money out would increase the mortgage on the property and lower an owner's equity; careful consideration should be made before doing so.</p><p style="-webkit-text-size-adjust: auto;">Mortgage rates are considerably lower than credit card rates and usually lower than short term borrowing like student loans or car loans. For that reason, homeowners will sometimes refinance to payoff higher cost debt.</p><p style="-webkit-text-size-adjust: auto;">Some people refinance for more than their current balance to improve their cash position, possibly, to have funds available in case they need it. Other reasons could be to use it for an investment such as rental property or other things. Still others may use it to make capital improvements on their home like remodeling or a pool.</p><p style="-webkit-text-size-adjust: auto;">Another legitimate reason to refinance may be to combine a first and second lien on the home that might result in lower payments and a savings in interest. </p><p style="-webkit-text-size-adjust: auto;">One more situation that causes a person to refinance a home is to remove a former spouse or co-borrower from the existing mortgage. In the case of a divorce, a couple may no longer be married and one of the former spouses may have no financial interest in the home any longer but because they signed the note originally, they are still liable along with the other spouse. This could be an untenable position. </p><p style="-webkit-text-size-adjust: auto;">There can be a lot of reasons that cause a homeowner to refinance the home. The equity is a valuable asset that has powerful borrowing power combined with the good credit and income of the homeowner. A <a class="FinApp.Refi" href="https://www.betterhomeowners.com/FinancialApps/RefinanceAnalysis.aspx?AccountId=eup9ytNmk02x5OCAZ0r-PA&Auth=1">Refinance Analysis</a> can help you to determine the new payments and how long it will recapture the cost of refinancing.</p><p style="-webkit-text-size-adjust: auto;">For the recommendation of a trust lender, give me a call at <a href="tel:(785)%20650-4370" dir="ltr" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="3" style="color: currentcolor;">(785) 650-4370</a>.</p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-62372844334334875322020-08-03T16:16:00.001-07:002020-08-03T16:16:52.036-07:00Things Have Changed<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/378530da-ffc4-4aa7-b44a-dca40eb96167.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">The soothsayer in Shakespeare's Julius Caesar issued his famous warning "Beware the Ides of March." Who knew that in 2020, around the middle of March, the world, as we knew it, would force such dramatic changes on us from the Coronavirus.</p><p style="-webkit-text-size-adjust: auto;">In America, it has brought our economy to its knees as we sheltered in place for over four months. During this time, changes have affected our lives and many of those changes could be permanent.</p><p style="-webkit-text-size-adjust: auto;">Previously, smaller homes were becoming the trend for not only efficiency but upkeep so owners would have more time to do things including travel. Now, travel is minimal and our world, in some respects, is reduced to our home.</p><p style="-webkit-text-size-adjust: auto;">For families with children, their home has become a school. With so many people working from home, it has become our office or store or studio. If there is more than one working adult in a home, it needs to have space for each party to work. The home fitness industry is experiencing record sales in exercise equipment so the home can become a gym.</p><p style="-webkit-text-size-adjust: auto;">Since we're all spending more time at home, it is also the place to recreate. We're cooking more; a larger kitchen and dining area would be nice. We want to enjoy the yard, garden, pool or balcony and our current home may not even have them or we'd like to upgrade. </p><p style="-webkit-text-size-adjust: auto;">People are wanting and needing more space to do all of these things at home. Many experts are anticipating that these changes we thought were temporary may be part of the new normal even after a vaccine and cure have been discovered.</p><p style="-webkit-text-size-adjust: auto;">If you have had any of these thoughts and would like to know more about how to buy or sell a home in our current market, we would love to tell you about the many options available while being responsible to stay safe. Whether it is buying for the first time, moving up or moving on, I would like to help. Call me at <a href="tel:(785)%20650-4370" dir="ltr" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="3" style="color: currentcolor;">(785) 650-4370</a>.</p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-56189242821775968762020-07-20T05:48:00.001-07:002020-07-20T05:48:30.396-07:00REALTORS Thoughts on the Recovery<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/6df5380a-2903-4040-b1bf-73d3d0b52d9c.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">The National Association of REALTORS® just released the <a href="https://www.nar.realtor/sites/default/files/documents/2020-market-recovery-survey-07-09-2020.pdf">Market Recovery Survey</a>of a random sampling to close to 100,000 members conducted June 24-26, 2020. The following statements are the members' opinion on various aspects of the recovery to the Covid-19 pandemic as it relates to real estate.</p><p style="-webkit-text-size-adjust: auto;">In response to the safety of buyers, sellers and agents, REALTORS® are expecting within the next year to have increased demand for the following technologies used to market properties:</p><ul style="-webkit-text-size-adjust: auto;"><li>67% - Zoom or other video technology to communicate with clients</li><li>66% - virtual tours</li><li>63% - live virtual tours conducted by agent using video</li><li>60% - virtual open houses</li></ul><p style="-webkit-text-size-adjust: auto;">Nine out of ten respondents indicated that some of the buyers have returned to the market or never left the market. Agents currently working with buyers report that slightly more than half of buyer's timeline has remained the same with about the same level of urgency. 27% believe the buyers have more urgency.</p><p style="-webkit-text-size-adjust: auto;">The most popular reason cited by buyers with an increased timeline is that the delay during the pandemic has amplified their demand for a new home. Others realize that new home features would make their home life more comfortable. Some buyers are wanting to buy before a potential second peak of Covid-19 occurs. </p><p style="-webkit-text-size-adjust: auto;"><span style="font-size: 1rem;">During the week the survey was taken</span><span style="font-size: 1rem;">, three out of four buyers saw the home in person physically while 26% did not.</span></p><p style="-webkit-text-size-adjust: auto;">Roughly 2/3 of the buyers are looking for the same features as they were prior to Covid-19 while new feature considerations include home office, space to accommodate family, larger home for more space, place to exercise and bigger kitchen.</p><p style="-webkit-text-size-adjust: auto;">Most buyers are looking for the same type home, however, respondents reported that 13% are moving away from multi-family properties to a single-family home and only 1% are going from SFH to multi-family.</p><p style="-webkit-text-size-adjust: auto;">89% of respondents stated that some of the sellers have returned to or never left the market. Only 23% reported more urgency to sell a home due to the pandemic.</p><p style="-webkit-text-size-adjust: auto;">On the commercial side, 2/3 of REALTOR® respondents felt like the demand for office space would decrease and 72% felt that retail space demand would decrease.</p><p style="-webkit-text-size-adjust: auto;">The stats mentioned in this article pertain nationwide. To find out specifics in your market, call your REALTOR® Myrietta Leach at <a href="tel:(785)%20650-4370" dir="ltr" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="3" style="color: currentcolor;">(785) 650-4370</a>.</p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-11474739964935386642020-07-06T14:10:00.000-07:002020-07-06T14:11:01.302-07:00Good Decision for a Second Opinion<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/a0032b51-545e-4cb9-9954-bcc84977bc79.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 366px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">You've done your homework, contacted a mortgage company and believe you are pre-approved. That part of the process is finished and you can concentrate of finding a home and moving...or can you?</p><p style="-webkit-text-size-adjust: auto;">Pre-qualified and pre-approved are two different things but some people, including some in the business, use the terms interchangeably. Pre-qualified is an opinion of likelihood that a borrower will be approved based on preliminary information about their income and credit. Whereas, in a pre-approval, the borrower's credit report is updated and pulled, income and assets verified and involves pre-underwriting.</p><p style="-webkit-text-size-adjust: auto;">Even when you have a highly qualified loan officer, the real decision maker is the underwriter who can commit the lender. Generally speaking, a person who has been pre-approved receives a written letter stating the terms and conditions of the commitment.</p><p style="-webkit-text-size-adjust: auto;">A second opinion from a different lender can be a comforting thing for a borrower. It will either confirm that the first lender was correct and that the rate and terms being offered are competitive or it will reveal that there could be differences that would warrant more investigation.</p><p style="-webkit-text-size-adjust: auto;">Mortgage money is a commodity and while competition usually keeps lenders close to each other in the rates and terms they offer, you won't know for sure unless you shop around. The cost for being pre-approved is usually a nominal amount and when you are considering the size of the mortgage you'll be borrowing for up to thirty years, it makes sense to get a second opinion.</p><p style="-webkit-text-size-adjust: auto;">Occasionally, during the process of being pre-approved, an unexpected credit problem may be discovered. It is better to learn about it early so you'll have time to correct it before you have contracted on a home.</p><p style="-webkit-text-size-adjust: auto;">Your real estate professional, Myrietta Leach, will be able to recommend lenders who are active, experienced in the area and can share their experience with you regarding previous loans they have made. The benefits far exceed the time and effort it takes. You'll be looking at the right priced homes; getting the best loan, rate and terms; have increased negotiating power with the Seller and can close quicker because many of the verifications have already been made.</p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com1tag:blogger.com,1999:blog-8103682530277559420.post-4016956281886789422020-04-13T11:39:00.001-07:002020-04-13T11:39:20.258-07:00Check this off your list<p style="-webkit-text-size-adjust: auto; font-size: 17px;">Everyone knows someone it has happened to or has heard a tragic story. It could have been a fire, a flood, a burglary or some other disaster but to file a claim on their insurance, they need the receipts or a list for what is being claimed.</p><p style="-webkit-text-size-adjust: auto; font-size: 17px;">Since you're at home anyway and may even have kids at home who need something to do, now is a great time to get a current home inventory done. One of the easiest ways to accomplish this seemingly, daunting task is to put together a collection of pictures of every room in your home. </p><p style="-webkit-text-size-adjust: auto; font-size: 17px;">The more valuable, the more important it is to take a close-up picture. It will be necessary to open the drawers and closets and, in some cases, to pull things out in order to show everything in the picture. That's why having someone to help you makes it faster and easier.</p><p style="-webkit-text-size-adjust: auto; font-size: 17px;">Not to get distracted from the job at hand, you may discover things that you had forgotten you had which is why you should do an inventory rather than trying to reconstruct it after the loss. In some cases, it may be years after you've filed a claim when you remember you forgot some things.</p><p style="-webkit-text-size-adjust: auto; font-size: 17px;">Having photos or videos of the different rooms in your house combined with a list of the items can serve as the proof you need for your claim.</p><p style="-webkit-text-size-adjust: auto; font-size: 17px;">There are other benefits to doing a home inventory also. You'll know the "right" amount of insurance to have on your personal belongings by assigning replacement costs to them. It will simplify filing a claim if you ever need to. </p><p style="-webkit-text-size-adjust: auto; font-size: 17px;">To organize your photos and even provide a detailed list of higher value items, you can download a <a class="Guide.LR6tWOpVT0WXvwd0qenMdg" href="https://www.betterhomeowners.com/MyriettaLeach/guide/LR6tWOpVT0WXvwd0qenMdg">Home Inventory </a>in an interactive PDF that you can complete. You can put it together on your computer and store it online to make it available if the computer is stolen or damaged.</p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-6382746046884295232020-03-09T17:21:00.001-07:002020-03-09T17:21:54.691-07:00Rates are low<p style="-webkit-text-size-adjust: auto;"><br></p><p style="-webkit-text-size-adjust: auto;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1LaOXEjEXwZDyakknHCJDkK2GZYOkpOrmsF1HKGu5JylKxx-VTw2ax2cSKCBSGFogP3HtR7MCL_7-KIBxfqXOQM_IN4B-ZTdq-B7KBDgr7j-XttyNKz9F5e4pAnncwavxEkc6wSMpfs3B/s1600/image0-714696.jpeg"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1LaOXEjEXwZDyakknHCJDkK2GZYOkpOrmsF1HKGu5JylKxx-VTw2ax2cSKCBSGFogP3HtR7MCL_7-KIBxfqXOQM_IN4B-ZTdq-B7KBDgr7j-XttyNKz9F5e4pAnncwavxEkc6wSMpfs3B/s320/image0-714696.jpeg" border="0" alt="" id="BLOGGER_PHOTO_ID_6802367980876370034" /></a><br></p><p style="-webkit-text-size-adjust: auto;">A lower rate will not only result in a lower payment, it will amortize the loan quicker. A $250,000 mortgage at 4.5% for 30 years will have a $1,266.71 principal and interest payment. At 4%, the same loan will have $1,193.54 payment saving $73.18 a month and the unpaid balance would be $1,776 lower at the end of five years.</p><p style="-webkit-text-size-adjust: auto;">Mortgage lenders tend to price their mortgages based on the credit score of the borrower. The higher the credit score, the lower the mortgage rate. There is an inverse relationship that the lower the credit score, the higher risk and therefore, a higher rate is needed to balance the risk.</p><p style="-webkit-text-size-adjust: auto;">In order to get a valid rate that will be available to you with your credit score, you need to be pre-approved. The process of making a loan application before you find a home, allows the lender to verify your credit, income, and ability to repay the loan. Lenders usually only charge the cost of the credit report for this type of service. Be aware that pre-approval is not the same thing as pre-qualification which is simply a loan officer's opinion.</p><p style="-webkit-text-size-adjust: auto;">When you shop for a mortgage with multiple lenders, the credit bureaus count them as a single credit inquiry if they are done within a two-week period. On the other hand, restrain yourself from applying for other credit such as cars, furniture or credit cards until after you have closed on the purchase of your home because those inquiries can negatively affect your credit score.</p><p style="-webkit-text-size-adjust: auto;">The Consumer Financial Protection Bureau recommends that you let lenders know that you are shopping the mortgage for the best rate and fees.</p><p style="-webkit-text-size-adjust: auto;">Instead of going to the Internet and Googling mortgage lenders, start with recommendations for a lender from your real estate professional. They see the good, the bad and the ugly and can save you a lot of time. Another reliable source would be from a friend who has recently purchased a home.</p><p style="-webkit-text-size-adjust: auto;">There are lenders who bait unsuspecting borrowers with lower rates and fees into making an application and after critical time has lapsed, try to switch them to a different program. By that point, many buyers feel they don't have any choice but to accept what is offered.</p><p style="-webkit-text-size-adjust: auto;">Another confusing factor is the way that loans are priced to the public. They are usually quoted at a rate with a certain amount of points. A point is one percent of the amount borrowed. An example would be a quote for a loan at 4.5% with 1 point or at 4% with 2.5 points.</p><p style="-webkit-text-size-adjust: auto;">The points combined with the rate affect the yield the lender will earn, and you will pay. A simple way to make this an apple to apple comparison is to have the lender quote the loan as a "par-value" loan with no points involved. Then, the lowest rate will produce the lowest cost to you.</p><p style="-webkit-text-size-adjust: auto;">Another way to compare loans will be to uses a financial app called <a class="FinApp.PointsMakeDiff" href="https://www.betterhomeowners.com/FinancialApps/Points.aspx?AccountId=eup9ytNmk02x5OCAZ0r-PA&Auth=1">Will Points Make a Difference. </a>You can plug in the rate and points to calculate the lowest yield over a projected holding period or the full term.</p><p style="-webkit-text-size-adjust: auto;">The lenders do not want to make it easy for you to compare. Mortgage money is a commodity and shopping will be worth the effort. </p><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com1tag:blogger.com,1999:blog-8103682530277559420.post-5840263225939904512020-02-24T19:46:00.001-08:002020-02-24T19:46:47.946-08:00What kind of properties are these?<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/bb254d8f-bd8f-46b0-87c2-9581726a7d44.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 327px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">It is the way the property is used that determines the type of property it is, not what it looks like. Based on the intent of the owner, the property could be a principal residence, income property, investment property or dealer property.</p><p style="-webkit-text-size-adjust: auto;">A principal residence is a home that a person lives in. There can be only one declared principal residence. It is afforded certain benefits like deducting the interest and property taxes on a taxpayers' itemized deductions, up to limits. Up to $250,000 of gain for a single taxpayer and up to $500,000 for a married couple filing jointly can be excluded from income if the property is owned and used as a principal residence for two out of the previous five years.</p><p style="-webkit-text-size-adjust: auto;">An income property is an improved property that is rented for more than 12 months. The improvements can be depreciated based on a 27.5-year life for residential property or 39-years for commercial property. This is a non-cash deduction that shelters income. When the property is sold, the cost recovery is recaptured at a 25% tax rate.</p><p style="-webkit-text-size-adjust: auto;">An investment property could be an improved property or vacant land that does not produce income and is not eligible for depreciation or cost recovery. The gain on both income and investment properties are taxed at a lower, long-term capital gain rate and are eligible for a tax deferred exchange.</p><p style="-webkit-text-size-adjust: auto;">Second homes are properties that a taxpayer primarily uses for personal enjoyment but is not their principal residence. For IRS purposes, it is treated as an investment property in that the gain is taxed at preferential long-term rates if it is held for more than 12 months. However, it is not eligible for exchanges because personal use properties are excluded from that benefit.</p><p style="-webkit-text-size-adjust: auto;">Properties that are built or bought to make a profit are considered inventory and are labeled dealer properties. The gain is taxed at ordinary income rates and they are not eligible for section 1031 deferred exchanges.</p><p style="-webkit-text-size-adjust: auto;">The financing available differs considerably based on the intent of the owner which determines the type of property. Owner-occupied homes, used as a principal residence, are eligible for low down payment mortgages like VA, FHA, USDA and conventional ranging from nothing down to 20%.</p><span style="-webkit-text-size-adjust: auto; font-size: 11pt;">A second home, in most cases, requires a minimum of 10% down payment. Investment and Income properties, generally, require 20% or more in down payment with some possible exceptions. There is not any long-term financing available for dealer property.</span><span style="-webkit-text-size-adjust: auto; background-color: rgb(255, 255, 255);"> </span><div dir="ltr"><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-29357580745400191382020-02-17T13:11:00.001-08:002020-02-17T13:11:08.697-08:00Why Put More Down<h3 style="font-family: Helvetica-Oblique;" class=""><br class=""></h3><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsAf2Thu_HDKW1m9uxPxno75_mGZXOAYlDJ36PcDVN2CXaFz74dh_2sb-iwGLociMpGv8reHLgTRbZSrunTRg-6tZagzH8SrzvOgP3UEJmGIUMr-veC015cJTfgYECwUFuAna9b6dalJaW/s1600/Screen+Shot+2020-02-17+at+3.09.32+PM-768704.png"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsAf2Thu_HDKW1m9uxPxno75_mGZXOAYlDJ36PcDVN2CXaFz74dh_2sb-iwGLociMpGv8reHLgTRbZSrunTRg-6tZagzH8SrzvOgP3UEJmGIUMr-veC015cJTfgYECwUFuAna9b6dalJaW/s320/Screen+Shot+2020-02-17+at+3.09.32+PM-768704.png" border="0" alt="" id="BLOGGER_PHOTO_ID_6794526031312969026" /></a><div class=""><span style="font-family: Helvetica-Oblique;" class=""><br class=""></span></div><div class=""><span style="font-family: Helvetica-Oblique;" class="">The least amount in a down payment is an attractive option when people are thinking of buying a home. A common reason is to have cash available for furnishing the new home and possible unexpected expenses.</span><span style="font-family: Helvetica-Oblique;" class=""> </span><p style="font-family: Helvetica-Oblique;" class="">Some people don't have any options because they only have enough for a minimum down payment and the closing costs. For those fortunate buyers who do have extra money available, let's look at why you'd want to do such a thing.</p><p style="font-family: Helvetica-Oblique;" class="">Most loans in excess of 80% loan to value require mortgage insurance to protect the lenders for the upper portion of the loan if the home were to go into foreclosure. FHA requires an up-front premium of 1.75% of the amount borrowed plus a monthly amount of .85% on the balance. FHA mortgage insurance premium must be paid for the life of the loan.</p><p style="font-family: Helvetica-Oblique;" class="">Mortgage insurance on conventional loans varies depending on the borrowers' credit and the amount of down payment being made. Unlike FHA, when the unpaid balance reaches 78% of the original amount borrowed, the mortgage insurance is no longer needed. If the home enjoys rapid appreciation, after a period, the lender may allow the borrower to get an appraisal to show that the unpaid balance is now less that 78% of the current appraised value.</p><p style="font-family: Helvetica-Oblique;" class="">The premium for mortgage insurance on conventional loans can be paid as a single premium upfront in cash or financed into the mortgage. A second option would be monthly mortgage insurance included in the payment until it is no longer needed. A third option could be lender-paid MI where the cost is included in the mortgage interest rate for the life of the loan.</p><p style="font-family: Helvetica-Oblique;" class="">VA loans do not require mortgage insurance but there is a one-time funding fee of 2.3% that can be paid in cash at closing or added to the amount borrowed. Disabled veterans and Purple Heart recipients are not required to pay the funding fee.</p><p style="font-family: Helvetica-Oblique;" class="">Putting at least 20% down payment on a home not only will avoid the mortgage insurance, it could also help you to get a little lower interest rate. Since the loan to value is lower, there is less risk for the lender.</p><p style="font-family: Helvetica-Oblique;" class="">A $350,000 with a 10% down payment at 4% interest could have a monthly mortgage insurance cost between $70 to $130. A trusted mortgage professional can help you assess the options you have available. It is always better to make some of these decisions before you start shopping for a home.</p><span style="font-family: Helvetica-Oblique; font-size: 11pt;" class="">This is another reason it is good to start by getting pre-approved with a trusted mortgage professional. If you need a recommendation, call me at (785) 650-4370.</span><span style="font-family: Helvetica-Oblique;" class=""> </span></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-84817649774455026902020-01-20T19:22:00.001-08:002020-01-20T19:22:11.886-08:00Take the Standard Deduction & the Home<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/KNRDU--t0E2Vv-0rHmISAA.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 335px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">Now that the standard deduction is increased to $12,200 for single taxpayers and $24,400 for married ones, many homeowners are better off with the standard deduction than itemizing their deductions to write off their mortgage interest and property taxes. There was some speculation that without the tax advantages, homeownership is not the investment it once was.</p><p style="-webkit-text-size-adjust: auto;">By looking at the other benefits, you can see that homeownership is still one of the best investments people can make.</p><p style="-webkit-text-size-adjust: auto;">A $275,000 home financed with a 4.5%, 30-year FHA loan would have an approximate total payment of $2,075. The difference in the value of the home and the amount owed on the mortgage is called equity. Two things cause equity to increase: the home appreciating in value and the principal loan balance being reduced with each payment made on an amortizing loan.</p><p style="-webkit-text-size-adjust: auto;">In this example, if the home were appreciating at 2% annually, the value would increase by $5,500 the first year which would be $458.33 per month. At the same time, with each payment made, an increasing amount would reduce the unpaid balance which would average $363.00 a month in the first year.</p><p style="-webkit-text-size-adjust: auto;">The homeowner's equity would increase over $800 a month. Instead of paying rent, the homeowner is building equity in their home. It becomes a forced savings and lowers their net cost of housing. In seven years, the homeowner in this example would have $80,901 in equity instead of seven years of rent receipts.</p><p style="-webkit-text-size-adjust: auto;">This example doesn't consider tax advantages at all. If the homeowner would benefit from itemizing their deductions, it would lower their cost of housing even more.</p><p style="-webkit-text-size-adjust: auto;">The IRS recommends each year to compare the standard and itemized deductions to see which would benefit you more. Items such as substantial charitable donations, mortgage interest, property taxes and large out-of-pocket medical expenses could increase the likelihood of itemizing deductions.</p><span style="-webkit-text-size-adjust: auto; font-size: 11pt;">You can see the benefits using your own numbers without tax advantages by using the <a class="FinApp.RentvsOwn" href="https://www.betterhomeowners.com/FinancialApps/RentvsOwn.aspx?AccountId=eup9ytNmk02x5OCAZ0r-PA&Auth=1">Rent vs. Own</a>.</span><span style="-webkit-text-size-adjust: auto; background-color: rgb(255, 255, 255);"> </span><br><br><div dir="ltr"><div><div><br></div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><br></div></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-11421401435655934682020-01-13T13:57:00.001-08:002020-01-13T13:57:31.770-08:00Understanding Reverse Mortgages<h3 style="font-family: Helvetica-Oblique;" class=""><br class=""></h3><img src="https://betterhomeowners.com/image.ashx/tidOvquMYEiZxI1twFMB1g.jpg" processed="true" width="100%" height="auto" style="font-family: Helvetica-Oblique; width: 300px; height: auto; border: 0px;" class=""><p style="font-family: Helvetica-Oblique;" class="">Reverse mortgage loans are like traditional mortgages that permits homeowners to borrow money using their home as collateral while retaining title to the property. Reverse mortgage loans don't require monthly payments.</p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 1rem;" class="">The loan is due and payable when the borrower no longer lives in the home or dies, whichever comes first.</span><span style="font-size: 1rem;" class=""> </span><span style="font-size: 1rem;" class="">Since no payments are made, interest and fees earned are added to the loan balance each month causing an increasing unpaid balance.</span><span style="font-size: 1rem;" class=""> </span><span style="font-size: 1rem;" class="">Homeowners are required to pay property taxes, insurance and maintain the home, as their principal residence, in good condition.</span><br class=""></p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 1rem;" class="">Reverse mortgages provide older Americans including Baby Boomers access to their home's equity. Borrowers can use their equity to renovate their homes, eliminate personal debt, pay medical expenses or supplement their income with reverse mortgage funds.</span><br class=""></p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 1rem;" class="">Homeowners are required to be 62 years and older and meet the following requirements:</span><br class=""></p><ul style="font-family: Helvetica-Oblique;" class=""><li class=""><span style="font-size: 1rem;" class="">Own the home free and clear or owe very little on the current mortgage that can be paid off with the proceeds</span><br class=""></li><li class="">Live in the home as their primary residence</li><li class="">Be current on all taxes, insurance, and association dues and all federal debt</li><li class="">Prove they can keep up with the home's maintenance and repairs</li></ul><p style="font-family: Helvetica-Oblique;" class="">Payouts are based on the age of the youngest spouse. The younger the age, the less money can be borrowed. Reverse mortgages offer two terms ... a fixed rate or variable rate. Fixed rate HECMs have one interest rate and one lump sum payment. Variable rate loans offer multiple payout options:<br class=""></p><ul style="font-family: Helvetica-Oblique;" class=""><li class="">Equal monthly payouts</li><li class="">A line of credit with access until the funds are gone</li><li class="">Combined line of credit and fixed monthly payments for a specified term </li><li class="">Combined line of credit and fixed monthly payments for the life of the loan</li></ul><p style="font-family: Helvetica-Oblique;" class="">Traditional reverse mortgages, also called Home Equity Conversion Mortgage, HECM, are insured by FHA. There are no income limitations or requirements and the loan funds may be used for any purpose. The borrower must attend a counseling session about the HECM, its risk, benefits, and how much can be borrowed. The final loan amount is based on borrower's age and home value. FHA HECMs require upfront and annual mortgage insurance premiums but can be wrapped into the loan.<br class=""></p><p style="font-family: Helvetica-Oblique;" class="">Proprietary HECM loans are not federally insured. Lenders create their own terms, including allowing loan amounts higher than the FHA maximum. Proprietary HECMs don't require mortgage insurance (upfront or monthly), which may result in more funds available. Proprietary reverse mortgages typically have higher interest rates than FHA HECMs.<br class=""></p><p style="font-family: Helvetica-Oblique;" class="">Advantages<br class=""></p><ul style="font-family: Helvetica-Oblique;" class=""><li class="">Create a steady stream of income during retirement</li><li class="">The proceeds aren't taxed or risk borrower's Social Security payments</li><li class="">Title and rights to the home are retained by the homeowner</li><li class="">Monthly payments are not required</li></ul><p style="font-family: Helvetica-Oblique;" class="">Disadvantages<br class=""></p><ul style="font-family: Helvetica-Oblique;" class=""><li class="">The loan balance increases over time rather than decreases as with an amortizing loan<br class=""></li><li class="">The loan balance may exceed the property value eliminating inheritance </li><li class="">The fees may be higher than traditional mortgage loans</li><li class="">Any absence of the home for longer than 6 months for non-medical or 12 months for medical reasons makes the loan due and payable</li></ul><p style="font-family: Helvetica-Oblique;" class="">More information is available about reverse mortgages from the <a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-reverse-mortgage-en-224/" class="">Consumer Financial Protection Bureau</a> or <a href="https://www.consumer.ftc.gov/articles/0192-reverse-mortgages" class="">Federal Trade Commission</a> or <a href="https://www.hud.gov/program_offices/housing/sfh/hecm/hecmhome" class="">HUD.gov</a>.<br class=""></p><div class=""><br class=""></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-77818749022634921082019-12-30T14:41:00.000-08:002019-12-30T14:42:03.310-08:00Another Source for a Down Payment<h3 style="font-family: Helvetica-Oblique;" class=""><br class=""></h3><img src="https://betterhomeowners.com/image.ashx/7P180UzAzEW2Op2HhH55Hw.jpg" processed="true" width="100%" height="auto" style="font-family: Helvetica-Oblique; width: 565px; height: auto; border: 0px;" class=""><p style="font-family: Helvetica-Oblique;" class="">Borrowing from a 401k, 403b or the cash value of life insurance policy is a common financial strategy. While taxpayers are not allowed borrow from either a traditional or Roth IRA, they can withdraw funds before age 59 ½ for specific purposes like a first home purchase, qualified higher education expenses or permanent disability without incurring a 10% penalty.</p><p style="font-family: Helvetica-Oblique;" class="">First-time home buyers can make a penalty-free withdrawal of up to $10,000 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.</p><p style="font-family: Helvetica-Oblique;" class="">In many cases, the money would be used for a down payment or closing costs. However, some buyers might consider this source to increase their down payment so they could qualify for a loan without mortgage insurance.</p><p style="font-family: Helvetica-Oblique;" class="">There is another condition where a taxpayer can withdraw money from their IRA without triggering the tax or penalty if it is returned to the IRA within 60 days. This can only be done once in a 12-month period. Unless you're certain you can redeposit the money in the strict time frame, the potential tax and penalties makes this a risky and expensive way to arrange temporary funds.</p><p style="font-family: Helvetica-Oblique;" class="">If the taxpayer qualifies for the penalty-free withdrawal, there may still be taxes due. Contributions to traditional IRAs are made with before-tax dollars and the tax is paid when the funds are withdrawn. Since Roth IRAs are made with after-tax dollars, there is no tax due when the funds are withdrawn.</p><p style="font-family: Helvetica-Oblique;" class="">Another interesting fact about this provision is that the taxpayer making the withdrawal can help a qualified relative which includes children, grandchildren, parents and grandparents.</p><p style="font-family: Helvetica-Oblique;" class="">Before withdrawing money from an IRA, taxpayers should get advice from their tax professional concerning their individual situation.</p><div class=""><br class=""></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-35427064996778474912019-12-27T08:17:00.001-08:002019-12-27T08:17:54.812-08:00Renting vs Buying <section class="rich-text" style="font-family: -webkit-standard; -webkit-text-size-adjust: auto; box-sizing: border-box;"><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUQfXBTtiyP6K88miRw_GQYnLyTbYJU7zBEDGDv093qow4nRxK8yPuuGngLS64MQF8fV2BpTkSlDyw0nuPYS8vVjSrE3DOOaf_5Pi4Q5hADtY90T4ZW94f9Bhv5N7ExkkkSTqV1tZoN46c/s1600/image0-774840.jpeg"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUQfXBTtiyP6K88miRw_GQYnLyTbYJU7zBEDGDv093qow4nRxK8yPuuGngLS64MQF8fV2BpTkSlDyw0nuPYS8vVjSrE3DOOaf_5Pi4Q5hADtY90T4ZW94f9Bhv5N7ExkkkSTqV1tZoN46c/s320/image0-774840.jpeg" border="0" alt="" id="BLOGGER_PHOTO_ID_6775154036980536514" /></a><br></p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);"><br></p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);">It might seem like kind of an odd concept, but there are a number of companies that let you rent your home décor these days. Companies like Feather and CasaOne allow you to lease your furniture and other décor for a limited period or until you decide to buy it outright. Even some older rent-to-own companies have options to change furnishings after completing a portion of your lease. The big question is, how viable is this as a way to decorate your home?</p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);"><br></p><h3 style="box-sizing: border-box; padding: var(--gutter-default) 0px 0px; margin: 0px 0px var(--gutter-default); font-size: var(--font-size-h3); line-height: 1.26562;">Renting vs. Buying</h3><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);">With just about any situation where you have the option to rent or buy something, there will be proponents on both sides extolling why that option is the better deal. People will discuss markets when talking about renting or buying a home, or depreciation rates when discussing automotive lease options versus outright purchase. With furniture, however, the discussions have long been fairly one-sided due to the excessive cost associated with many rent-to-own furniture options. Unless you had another other choice, buying your furniture was the only way to avoid paying nearly twice as much in some cases.</p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);">The difference here is that these new options are intended as a way to provide flexibility in your décor instead of simply providing a path to purchase. While you do have an option to purchase, you also have the option to change your furniture options as your needs and tastes change. Because services like Feather are focused more on providing an actual service than simply selling furniture with installment plans, they have a larger focus on benefits than what you would get from a standard rent-to-own purchase.</p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);"><br></p><h3 style="box-sizing: border-box; padding: var(--gutter-default) 0px 0px; margin: 0px 0px var(--gutter-default); font-size: var(--font-size-h3); line-height: 1.26562;">Is It a Viable Option?</h3><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);">There are two questions to ask when trying to decide if renting home décor in this fashion is a viable option for you. The first concern is the cost: is it really worth it to you to have the sort of flexibility these services provide, versus owning your furniture outright? Feather, for example, has a $19/month service charge in addition to the monthly furniture payments for members on annual contracts. If you don't plan on taking advantage of all the services that Feather offers, it might not be worth paying this extra cost in your case. On the other hand, if you're the sort that would like to be able to reinvent your living space on a regular basis, then the discounts and annual free change that membership provides might be more than worth that added monthly fee.</p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);">The second thing to consider is how viable these companies are in the long term. If there's no market for this sort of a service, then you might find yourself without a service to use a few years down the road. This may not be a concern, however; the market has supported multiple more traditional rent-to-own services over the years, but companies like Feather aren't really competing with those. Instead, they're taking an updated version of their model and targeting a slightly higher income bracket. With reasonable pricing, some great style and a solid service model in place, these early movers into this new bracket could have significant staying power.</p><p style="box-sizing: border-box; padding: 0px; margin: 0px 0px var(--gutter-default);"><br></p><h3 style="box-sizing: border-box; padding: var(--gutter-default) 0px 0px; margin: 0px 0px var(--gutter-default); font-size: var(--font-size-h3); line-height: 1.26562;">Nailing Your Décor</h3><p style="box-sizing: border-box; padding: 0px; margin: 0px;">Regardless of whether you plan to rent or buy, it's a good idea to plan out your décor before you start decorating. This is especially important if you're using an online service like Feather where you'll be doing your planning and shopping online. This is where it can help to have a professional interior decorator or designer there to assist you in choosing the pieces that will work best together.</p></section><div dir="ltr"><div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><br></div></div><div><font style="background-color: rgba(255, 255, 255, 0);"><b data-removefontsize="true" data-originalcomputedfontsize="10"><br></b></font></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com1tag:blogger.com,1999:blog-8103682530277559420.post-71098606237464406112019-11-19T04:41:00.001-08:002019-11-19T04:41:52.999-08:007 Reasons to Buy a Home<h3 style="-webkit-text-size-adjust: auto;"><br></h3><img src="https://betterhomeowners.com/image.ashx/q5So720Qe0GREMaHopY-Tw.jpg" processed="true" width="100%" height="auto" style="-webkit-text-size-adjust: auto; width: 335px; height: auto; border: 0px;" data-unique-identifier=""><p style="-webkit-text-size-adjust: auto;">Some people don't need a reason to buy a home, they just want it. That can be enough justification by itself. Other people need some solid logic before they're ready to make the commitment. The following reasons might help you to make a decision.</p><ol style="-webkit-text-size-adjust: auto;"><li>Pride of ownership ... among the most popular reasons given by homebuyers is that they want a place they can call their own and decorate and improve it the way they want. It is a place to feel safe and secure and a place for their family. They can share it with their friends and enjoy living in it.</li><li>Good investment ... Homeowners have a 80 times greater net worth than renters. By investing in a home that appreciates over time, it contributes to an increasing equity. The high loan to value mortgages that are available combined with the low mortgage rates also contribute to the investment through leverage which has been described as "using other people's money" to control an investment.</li><li>Interest and property tax deductibility ... Homeowners can deduct their qualified mortgage interest and up to a maximum of $10,000 of their property taxes as itemized deductions on their federal income tax return. In some instances, the standard deduction may benefit them more, but they can elect to choose either method each year, whichever helps them the most. </li><li>Capital gain exclusion ... A single homeowner can exclude up to $250,000 of capital gain and if married filing jointly, can exclude up to $500,000 of gain on their principal residence. The need to have owned and occupied it as their home for two of the last five years.</li><li>Cash out refinance ... Generally speaking, a lender will allow an owner with good credit and income to borrow the difference in their current unpaid balance and 80% of the fair market value. This money can be used for any purpose and is not a taxable event.</li><li>Equity buildup ...The difference in the value of the home and the unpaid mortgage balance is called equity and it increases with each payment made. It is like automatic savings.</li><li>No landlords ... Instead of dealing with landlords who may impose restrictions on things like painting, improvements and pets. Owners are not concerned about rent increases and will have a fixed principal and interest payment for as long as they have a mortgage.</li></ol><p style="-webkit-text-size-adjust: auto;">A bonus reason to buy a home now are the low mortgage rates available. The lowest rate recorded by Freddie Mac is 3.35% in December 2012. Today's rates are 3.75% on a 30-year fixed rate mortgage and 3.21% on a 15-year fixed rate mortgage. So, they are certainly very close to all-time lows.</p><p style="-webkit-text-size-adjust: auto;">The highest rate on a 30-year fixed rate mortgage was 18.45% in October 1981. When you put today's rates in perspective, they are an incredible bargain. Many industry experts expect that they will not remain as low as they are now. Locking in a low rate can keep your housing costs low.</p><p style="-webkit-text-size-adjust: auto;">A $275,000 mortgage at 3.75% for 30 years has a principal and interest payment of $1,273.57. If the rate goes up by 1%, the payment would increase to $1,434.53 or $160.96 per month for the 30-year term. Check the <a class="FinApp.RentvsOwn" href="https://www.betterhomeowners.com/FinancialApps/RentvsOwn.aspx?AccountId=eup9ytNmk02x5OCAZ0r-PA&Auth=1">Rent vs. Own <span style="color: rgb(0, 0, 0);">to see how the numbers look in your situation.</span></a></p><br><div dir="ltr"><div><div><br></div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><span style="background-color: rgba(255, 255, 255, 0);"><br></span></div><div><br></div></div><div><font style="background-color: rgba(255, 255, 255, 0);"><b data-removefontsize="true" data-originalcomputedfontsize="10"><br></b></font></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-82397521842173221602019-11-04T11:05:00.000-08:002019-11-04T11:53:48.918-08:00Buy Your Retirement Home Now<meta http-equiv="Content-Type" content="text/html; charset=us-ascii"><div style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><meta http-equiv="Content-Type" content="text/html; charset=us-ascii" class=""><div style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><meta http-equiv="Content-Type" content="text/html; charset=us-ascii" class=""><div style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><h3 style="font-family: Helvetica-Oblique;" class=""><img src="https://betterhomeowners.com/image.ashx/pIexcXjoREqET0akwW_fvQ.jpg" processed="true" width="100%" height="auto" style="width: 310px; height: auto; border: 0px;" class=""></h3><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 11pt;" class="">Maybe you're not ready to move into it but that doesn't mean that you shouldn't take advantage of the present opportunities to acquire the home you want to live in during retirement. The combination of the low mortgage rates, high rental rates, positive cash flows and tax advantages can help you get it paid for by the time you're ready to move into it.</span></p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 11pt;" class="">Your tenant could literally buy your retirement home for you. One idea would be to finance it with a 15-year loan that will have a lower rate than a 30-year loan and it will obviously be paid for in half the time. With every monthly rental check from your tenant, you make the payment on the mortgage which includes a portion that reduces debt and builds equity. Even if you don't have the home paid for by the time you retire, your equity will be larger. </span></p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 11pt;" class="">Consider you sell your current home <span style="font-size: 14.6667px;" class="">which could be paid for by then </span>when you are ready to move into this retirement home . Taxpayers can exclude up to $500,000 of tax-free gain for a married couple. That profit could be used to fund your retirement.</span></p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 11pt;" class="">Even if you don't retire to this home, it could be a placeholder to control the costs of the home you do move into. For example, you could buy a home in a destination location now, rent it out and build equity in it until you're ready to use it as your principal residence. That home would have kept pace with other homes in the area so that you would not be priced out of the market you want to retire to.</span></p><p style="font-family: Helvetica-Oblique;" class=""><span style="font-size: 11pt;" class="">With home prices and mortgage rates certain to rise, this may be one of the best decisions you can make. We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between. </span></p><span style="font-family: Helvetica-Oblique; font-size: 11pt;" class="">Contact us if you'd like to talk about the idea or if you need a recommendation of real estate professional in another city.</span><span style="font-family: Helvetica-Oblique;" class=""> </span><br class=""><div class=""><br style="caret-color: rgb(0, 0, 0); color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; text-decoration: none;" class=""><br style="caret-color: rgb(0, 0, 0); color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; text-decoration: none;" class=""><br style="caret-color: rgb(0, 0, 0); color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; text-decoration: none;" class=""><br style="caret-color: rgb(0, 0, 0); color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; text-decoration: none;" class=""><br style="caret-color: rgb(0, 0, 0); color: rgb(0, 0, 0); font-family: Helvetica; font-size: 12px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; text-decoration: none;" class=""></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-47149516671473189672019-09-30T10:31:00.001-07:002019-09-30T10:31:23.897-07:00Price It Right the First Time<br class=""><div class=""><h3 style="font-family: Helvetica-Oblique;" class=""><img src="https://betterhomeowners.com/image.ashx/gHB_xqtD5EG-cTDiupFOLg.jpg" processed="true" width="100%" height="auto" style="width: 565px; height: auto; border: 0px;" class=""></h3><p style="font-family: Helvetica-Oblique;" class="">The Internet has empowered all buyers with information and home buyers are no exception. The amount of information available to public includes details on size, condition, sales history, current inventory, recent sales, photographs, videos, school info, drive-times, entertainment and much more.</p><p style="font-family: Helvetica-Oblique;" class="">When a seller realizes that buyers are educated with facts, it becomes unlikely that they will pay more than a home is worth. </p><p style="font-family: Helvetica-Oblique;" class="">If a home is priced too high in the beginning, it may stay on the market longer than normal which could adversely affect the ultimate sales price. It is a natural reaction from people, personally or professionally, to assume that something must be wrong with a home that doesn't sell in a reasonable time for that market.</p><p style="font-family: Helvetica-Oblique;" class="">The seller is entitled to maximize the equity in their home and pricing it properly in the beginning is the best way to achieve that. Overpricing can reduce buyers activity because they assume that the best homes are purchased soon after they are offered for sale and if one has been on the market longer than normal, there must be a problem with it. Similarly, sales associates may come to the same conclusion.</p><p style="font-family: Helvetica-Oblique;" class="">After buyers have seen a few homes in a certain price range, they begin to expect similar amenities in each home they look at. If a home is overpriced, it will not compare favorably with the other homes that are being viewed. Sometimes, the buyer may even think that another home could be a bargain because it offers much more for the same price as the overpriced listing.</p><p style="font-family: Helvetica-Oblique;" class="">Shopping the market means looking at the homes that meet a buyers' wants and needs and selecting the one that gives them the most, whether it is in price or amenities. The overpriced listing doesn't compete well, and it extends the market time. There is a documented study that shows that the longer a home stays on the market, the lower the price will be.</p><p style="font-family: Helvetica-Oblique;" class="">It is essential that a seller receive factual information to price their home to compete favorably in the current market. Some of the obstacles can include:</p><ul style="font-family: Helvetica-Oblique;" class=""><li class="">Failure to objectively compare the current and sold homes with theirs</li><li class="">Neighbors who mislead the seller as to how much they got for their home</li><li class="">Fear of making a mistake and thinking they can start high and always lower the price</li><li class="">Loss of perspective because the seller is emotionally involved</li><li class="">Expecting the home to sell for more than fair market value because they need the money</li><li class="">Agents who will accept a listing at any price in order to tie up the property until the seller realizes the price is too high</li></ul><p style="font-family: Helvetica-Oblique;" class="">What a seller paid for the home or the cost to rebuild it today do not affect market value. Neither does the amount spent by sellers on certain improvements that were made for their own pleasure and enjoyment.</p><p style="font-family: Helvetica-Oblique;" class="">It is unrealistic to expect a buyer to pay more than market value for a home. The seller sets the price of a home but the buyer determines the value. If the home is priced properly in the beginning, it is more likely to sell for a higher price, in a shorter period and with less problems.</p><br class=""></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-63446123496162881312019-09-17T13:31:00.001-07:002019-09-17T13:31:27.305-07:00Tips when buying land<div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><div style="text-align: left;" class=""> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBcVwJMFmuuAQCFJreis9ahEilJcLG9GMvskFHFnBvUP8SLH-Dy2UnzOeUZxEH2A3a3UAl5vpjWEdDuue8rnhwT-GpdpHjQ1bczdmCokPoLwpyUTmhVtLIHtJ2sOSs3Dsi8JLg9FP9QIa6/s1600/Screen+Shot+2019-09-17+at+3.25.26+PM-787334.png"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBcVwJMFmuuAQCFJreis9ahEilJcLG9GMvskFHFnBvUP8SLH-Dy2UnzOeUZxEH2A3a3UAl5vpjWEdDuue8rnhwT-GpdpHjQ1bczdmCokPoLwpyUTmhVtLIHtJ2sOSs3Dsi8JLg9FP9QIa6/s320/Screen+Shot+2019-09-17+at+3.25.26+PM-787334.png" border="0" alt="" id="BLOGGER_PHOTO_ID_6737739772221903826" /></a></div><div style="text-align: left;" class=""><br class=""></div><div style="text-align: left;" class=""> <div class="page" title="Page 1"> <div class="layoutArea"> <div class="column"><p class=""><span style="font-size: 24.000000pt; font-family: 'Calibri'; font-weight: 700" class=""> </span><span style="font-family: Calibri; font-size: 24pt; font-weight: 700;" class="">Top Tips When Buying Vacant Land</span></p> <div class="page" title="Page 1"> <div class="layoutArea"> <div class="column"><p class=""><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Building a new home from scratch can be a dream come true. The idea of designing the perfect property with morning sun in the kitchen and evening breezes on the deck can be exhilarating; the first step to a successful project is finding the right piece of land on which to build. This can present challenges if not approached correctly. </span></p><p class=""><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class=""> </span></p><p class=""><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class=""> Top Tips When Buying Vacant Land </span></p> <ul style="list-style-type: none" class=""> <li class=""><p class=""><span style="font-size: 14.000000pt; font-family: 'SymbolMT'" class=""> </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">Hire Experience </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">– </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">More than most real estate transactions, it's critical to </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">hire an agent who specializes in vacant land purchases and can guide you through the steps. </span></p> </li> <li class=""><p class=""><span style="font-size: 14.000000pt; font-family: 'SymbolMT'" class=""> </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">Expect to Pay Cash </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">– </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Finding a lender for vacant land can be very difficult. Those who will finance land typically require a 50% or higher down payment and above average interest rates and terms. </span></p> </li> <li class=""><p class=""><span style="font-size: 14.000000pt; font-family: 'SymbolMT'" class=""> </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">Get the Neighborhood Comps </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">– </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Do not neglect to understand home values in the community so you do not over, or under, build your home. </span></p> </li> <li class=""><p class=""><span style="font-size: 14.000000pt; font-family: 'SymbolMT'" class=""> </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">Do Your Due Diligence </span><span style="font-size: 14.000000pt; font-family: 'Calibri'; font-weight: 700" class="">– </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">It is critical to research the property thoroughly. Just a few considerations much include. </span></p><p class=""><span style="font-size: 14.000000pt; font-family: 'CourierNewPSMT'" class="">o </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Site Surveys and Environmental Testing </span><span style="font-size: 14.000000pt; font-family: 'CourierNewPSMT'" class="">o </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Easements and Zoning Restrictions<br class=""> </span><span style="font-size: 14.000000pt; font-family: 'CourierNewPSMT'" class="">o </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Lot Survey and Boundaries<br class=""> </span><span style="font-size: 14.000000pt; font-family: 'CourierNewPSMT'" class="">o </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Utilities and Water Rights </span></p><p class=""><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">Once you've completed these preliminary reviews, it's time to consult with an </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">architect and General Contractor who will then begin to develop concept drawings to consider. Even at this stage, you might find that the home you want is </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">not appropriate for the land you've chosen. Staying flexible is a key component to </span><span style="font-size: 14.000000pt; font-family: 'Calibri'" class="">searching for land; remember that by following a few tips, you can ensure you find the right lot for your dream home. </span></p> </li> </ul> </div> </div> </div></div></div></div></div><div class=""><div class="page" title="Page 1"><div class="layoutArea"><div class="column"><ul style="list-style-type: none" class=""><li class=""> </li> </ul> </div> </div> </div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-26817243781439383192019-09-15T11:20:00.001-07:002019-09-15T11:20:10.168-07:00Want to be a Landlord? <br><h3><img src="https://betterhomeowners.com/image.ashx/EztQfggOz02exdG2CY9uDQ.jpg" processed="true" width="100%" height="auto" style="background-color: rgba(255, 255, 255, 0); width: 343px; height: auto; border: 0px;"></h3><p><span style="background-color: rgba(255, 255, 255, 0);">Real estate has consistently been one of the highest rated investments available to individuals. TV shows certainly make rentals look easy and you may even know someone who has made a lot of money with them. Possibly, the thought has crossed your mind that if they can do it, you can too.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Before you contract for your first investment, ask yourself some questions that could save you time and energy. Not all people have the time, the inclination or even the skill to manage property. Landlords need to be good business people who can maximize revenue and minimize expenses. If investors don't have the skills and talent to handle some of the repairs, they at least need to know reputable and reasonable service professionals.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Another important element is to be familiar with the state and local landlord tenant laws. You'll need to know what are allowable security deposits and where the money can be held. Knowing how long you have to return it to a tenant is important and what to do if you plan to keep all or part of it for damages done. It is important to know about the eviction process and how fair housing applies.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">If you decide that you may not be cut out for being a landlord, it won't eliminate investing in rentals. It does mean that you will need to engage a property management company who is capable of dealing with all aspects of the process. The peace of mind and convenience will cost you a fee, usually a percentage of the rent collected. They can handle finding a tenant, doing the background check and writing the lease but there will be an additional fee for that service.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Even though your expenses will be higher with a property manager, with their experience, they should be able to help you lease the property for more money than you can get and will probably have service providers to do the work needed for less.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Occasionally, rental property requires out of pocket expenses for repairs and improvements which is like making another capital contribution. As equity builds in a rental property due to appreciation and principal reduction, the owner does have the option to take cash out of the investment either to pay additional expenses or to use any way the owner wants. Pulling equity out of a rental doesn't even trigger a taxable event.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Single-family homes and up to four-unit buildings offer an investor the opportunity to get a high loan-to-value mortgage at a fixed interest rate for 30 years on appreciating assets with tax advantages and reasonable control compared to other alternative investments.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Many investors like the fact that you can borrow to purchase a rental investment where many other investments require cash. The use of borrowed funds can create an advantage called leverage. Assume you paid cash for a $100,000 home that generated $7,000 income after the rent was collected and expenses were paid. Divide the value of the home into the income and it would earn 7%.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">If you decided to put an $80,000 mortgage on it at 5% interest, the interest expense would be $4,000 leaving only $3,000 income. However, at that point, you'd only have $20,000 invested in the property. Divide the cash invested into the income and the rate of return would increase to 15%.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">This is a simple example of leverage showing that borrowed funds can increase an investor's yield on a property.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Rental property can be an excellent investment when it is treated like the business that it is. Knowledge of the investment will reduce the risk and enhance the opportunity to make a profit. Some investors consider their rental income as "mailbox money" because each month, they go to their mailbox and they have money being sent to them by their tenants. The benefits of rental property can easily outweigh risk involved.</span></p><span style="background-color: rgba(255, 255, 255, 0);">Contact me for more information on rental properties and the option to be the landlord or to delegate it to a property manager. </span><br><div dir="ltr"><div><div><br></div></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-1342117060838652092019-09-09T14:01:00.001-07:002019-09-09T14:01:40.077-07:00Money You Saved for a Down Payment<div class="ydpc5eb13fayahoo-style-wrap" style="font-family: Helvetica Neue, Helvetica, Arial, sans-serif; font-size: 13px;"><div><br></div><div><h3 style="font-family: Helvetica-Oblique;"><img src="https://betterhomeowners.com/image.ashx/Lm3N_HXfj0mHvYiKJQDsQQ.jpg" class="" style="font-weight: normal; font-size: 12px; width: 299px; border: 0px; max-width: 800px;" data-id="1568062874152"><br></h3><p style="font-family: Helvetica-Oblique; font-size: 12px;">Occasionally, buyers who can qualify to purchase a home decide to "take a break" and wait to purchase a home. When the focus of buying a home is relaxed, other uses for the money that was going to be used for the home are considered. </p><p style="font-family: Helvetica-Oblique; font-size: 12px;">Maybe they think how much fun it would be to have a Sea-Doo or a motorcycle or a new car. It is amazing how many people would like to buy a home but either <g class="gr_ gr_59 gr-alert gr_gramm gr_inline_cards gr_disable_anim_appear Grammar multiReplace" id="59" data-gr-id="59">don't</g> have the down payment, the income or the good credit to make it possible.</p><p style="font-family: Helvetica-Oblique; font-size: 12px;">Instead of spending the money, consider investing the money for two years until the time is right to buy a home. Let's look at putting the money in a certificate of deposit that earns 2% or in the stock market that could average a 5% return.</p><p style="font-family: Helvetica-Oblique; font-size: 12px;">Assume you were purchasing a $295,000 home on <g class="gr_ gr_61 gr-alert gr_gramm gr_inline_cards gr_disable_anim_appear Grammar multiReplace gr-progress sel" id="61" data-gr-id="61">a FHA</g> loan with 3.5% down payment. The $10,325 would grow to $10,742 in the CD which isn't a big increase but at least it is safe and secure, and it will be available when you're ready.</p><p style="font-family: Helvetica-Oblique; font-size: 12px;">If the same amount were invested in a safe stock or mutual fund that earned 5%, it would grow to $11,383 in the same two-year period. It earns more but there is more risk involved.</p><table border="1" cellspacing="0" cellpadding="0" style="font-family: Helvetica-Oblique; border: none;"><tbody><tr><td width="623" colspan="4" valign="top" style="width: 467.5pt; padding: 0in 5.4pt; border: 1pt solid rgb(191, 191, 191);"><p align="center" style="text-align: center;"><strong>Your Best Investment</strong></p></td></tr><tr><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191); border-left-width: 1pt; border-left-color: rgb(191, 191, 191);"><p> </p></td><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;"><strong>CD</strong></p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;"><strong>Stock Market</strong></p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;"><strong>Home</strong></p></td></tr><tr><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191); border-left-width: 1pt; border-left-color: rgb(191, 191, 191);"><p>Cash to Invest</p></td><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">$10,325</p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">$10,325</p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">$10,325</p></td></tr><tr><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191); border-left-width: 1pt; border-left-color: rgb(191, 191, 191);"><p>Wealth Position</p></td><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">$10,742</p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">$11,383</p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">$38,871</p></td></tr><tr><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191); border-left-width: 1pt; border-left-color: rgb(191, 191, 191);"><p>Profit Taxed as</p></td><td width="156" valign="top" style="width: 116.85pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">Ordinary Income</p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">Long-term capital gains</p></td><td width="156" valign="top" style="width: 116.9pt; padding: 0in 5.4pt; border-style: none solid solid none; border-right-width: 1pt; border-right-color: rgb(191, 191, 191); border-bottom-width: 1pt; border-bottom-color: rgb(191, 191, 191);"><p align="center" style="text-align: center;">§121 exclusion applies</p></td></tr></tbody></table><p style="font-family: Helvetica-Oblique; font-size: 12px;"> </p><p style="font-family: Helvetica-Oblique; font-size: 12px;">Alternatively, if you invest the same amount in purchasing a home that appreciates at 3% a year, the equity would be $38,871 two years from now. The dramatic increase is due to leverage, being able to control a large asset with a small amount of cash. The appreciation is based on the purchase price <g class="gr_ gr_54 gr-alert gr_gramm gr_inline_cards gr_disable_anim_appear Punctuation only-ins replaceWithoutSep" id="54" data-gr-id="54">not</g> the down payment.</p><p style="font-family: Helvetica-Oblique; font-size: 12px;">Another factor is that there is principal reduction with each payment that is made.</p><div>Make your own projections with <a class="ydpde8df333FinApp.BestInvestment" href="https://www.betterhomeowners.com/FinancialApps/BestInvestment.aspx?AccountId=eup9ytNmk02x5OCAZ0r-PA&Auth=1" rel="nofollow" target="_blank">Your Best Investment</a>.</div></div><div class="ydpc5eb13fasignature"><div style="font-family:Helvetica Neue, Helvetica, Arial, sans-serif;font-size:small;"><span class="ydp87fa51ebyiv7505188436HOEnZb" style="font-family:'Helvetica Neue', 'Segoe UI', Helvetica, Arial, 'Lucida Grande', sans-serif;font-size:13px;"><div style="font-family:Helvetica Neue, Helvetica, Arial, sans-serif;font-size:small;"><br></div></span></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0tag:blogger.com,1999:blog-8103682530277559420.post-47090676394790498692019-08-06T04:53:00.001-07:002019-08-06T04:53:52.781-07:00Determining Property Type<h3><br></h3><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0DfVVyGyN80GZu5_9n5h-rkTGZ2wXiIOaR_hXhxC6piZgRChWBIjt1PWzfodFmFXhVu2YogAGi5JhfDy1D0f6aWxjBryzXhC6myWOoy2OfafALhgv3-LQSEpq9rnmORnGFGYapKQwtLFl/s1600/image1-732812.jpeg"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0DfVVyGyN80GZu5_9n5h-rkTGZ2wXiIOaR_hXhxC6piZgRChWBIjt1PWzfodFmFXhVu2YogAGi5JhfDy1D0f6aWxjBryzXhC6myWOoy2OfafALhgv3-LQSEpq9rnmORnGFGYapKQwtLFl/s320/image1-732812.jpeg" border="0" alt="" id="BLOGGER_PHOTO_ID_6722020818837516210" /></a><br><p><span style="background-color: rgba(255, 255, 255, 0);">The Internal Revenue Service considers four different types of real estate. Specific types of properties have benefits based on their classification. The determination does not depend on the property itself as much as it depends on how the property is used and what the owner's intentions are.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);"><strong>Principal Residence</strong> ... a principal residence is the place a person lives or expects to return if they are temporarily away from it. It could be a single family, detached home or condominium or a duplex, tri-plex or four-unit. The owner(s) can deduct the qualified mortgage interest and property taxes on the schedule A of their tax return. There is a capital gains exclusion on profit of up to $250,000 for a single taxpayer and up to $500,000 for a married taxpayer. </span></p><p><span style="background-color: rgba(255, 255, 255, 0);"><strong>Income Property</strong> - is improved property that is rented or leased to tenants as opposed to using it personally. It can include houses and condos, apartment buildings, office complexes, shopping centers, warehouses and other commercial buildings. Depreciation is allowed on the improvements. For property held more than one year, the profits are taxed at long-term capital gains rates. This type of property is eligible for a tax deferred exchange.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);"><strong>Investment Property</strong> ... can be raw land or improved property that is not rented or leased. This property is not subject to depreciation. If the property is held for more than one year, the profits are taxed at long-term capital gains rates. It is also eligible for a tax deferred exchange. </span></p><p><span style="background-color: rgba(255, 255, 255, 0);"><strong>Dealer Property</strong> ... this type of property is primarily considered inventory because the intention is to sell it without intentionally holding it for more than a year. It could be new construction such as a home builder. It could be an investor who buys a property and expects to sell it for more. There is not a requirement to make improvements. The profits on dealer property are taxed as ordinary, "sweat of the brow" income. Dealer properties cannot be exchanged.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">A <strong>second home</strong> is like a principal residence in that you can deduct the interest and property taxes on your Schedule A, up to the limits. A second home, as well as a principal residence, can be rented out up to 14-days a year without threatening the status of the property. Seconds homes are not eligible for exchange because personal use properties are not allowed. A second home is not a principal residence and profits are taxed like an investment property. If you own it for more than a year, it is taxed at long-term capital gains rates.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);"><strong>Vacation homes</strong> are rented for more than 14 days a year and are like income property but with some additional rules that apply. If your personal use is 14 days or less or 10% of the time it is rented, your expenses can be deducted in excess of income. If you use it for more than 14 days or more than 10% of the number of days it is rented, it is considered personal use and your expenses are limited to the amount of income collected with no losses being deductible.</span></p><p><span style="background-color: rgba(255, 255, 255, 0);">Taxpayers can strategically change the property type based on their intentions. A principal residence can be converted to income property. Dealer property could become a principal residence. A rental property could become a principal residence.</span></p><span style="background-color: rgba(255, 255, 255, 0);">Professional tax advice is always recommended to be able to understand the information and how it applies to your specific situation. </span><br><div dir="ltr"><div><div><div><div><div><div><div><br></div></div></div></div></div></div></div><div><div><div><div class=""><div class=""><span style="background-color: rgba(255, 255, 255, 0);"><span class="" style="float: none; display: inline !important;"></span></span></div></div></div></div></div></div>Anonymoushttp://www.blogger.com/profile/00934293854241935060noreply@blogger.com0