- SENIOR HOMEOWNERS CAN BUY A NEW HOME AND HAVE NO MONTHLY MORTGAGE PAYMENTS!!
- Congress passed the HECM for Purchase Plan allowing Seniors to get a new home.
- Homeowners keep more of their money, and have no monthly mortgage payments.
- Seniors can sell their current home and only use a portion of the sale's proceeds as a down-payment toward a "downsized" home.
- The Revers Mortgage for Purchase picks up the difference and you;ll have no monthly mortgage payments ever!
Friday, March 2, 2018
Tuesday, June 7, 2011
How To Lower Your Property Tax Bill
Its common for the tax assessors office to continue charging the higher amount until the owner goes through the process of contesting the bill. Fortunately, its realitively easy to have your property tax assessment lowered…here’s how:
To get your property taxes reduced on the basis of the recent decline in market value:
- Search Yahoo! or Google to find the Web site for your County Tax Assessor’s Office or Tax Collector’s Office.
- Go to the Forms section and look for a form with the words “reassessment request” or “decline in market value.” If you can’t find it, give the office a ring and ask them to fax, mail or email the form to you.Usually the request will ask you for (a) an estimate of the current market value of your home, and (b) a list of recent, comparable sales in your neighborhood supporting that estimate of value.
- Call Myself or Natosha and ask for help to complete the form for you or to at least provide the information you need about comparable sales.
- Alternatively, find a trustworthy online comparables site, like CyberHomes.com, where you can get both an estimated value and a list of the comparable sales on which it was based.
- Keep in mind that you are trying to make the case that your property value is significantly lower now than when you bought it, so list legitimate comparable sales which support that argument or you are wasting your time! And keep in mind that if you bought your home 10 or 20 years ago, your property’s assessed value might not be out of whack with current market values, even though your home’s market value may have declined from the peak of the market.
- Sign it and mail it! Allow several weeks, then call and check on the progress of your request. If it’s accepted, you’re golden — for this year. Most areas require you to revisit the reassessment issue every year. If it’s denied, there will be a more formal application and appeals process available to you, and you can decide at that time whether it makes sense to undertake that.
Thursday, March 3, 2011
Ask a roomful of homeowners what's so great about owning versus renting, and you'll hear them holler in unison: "the tax deductions!" And it's true – homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns.
That means that if you're in a 28% tax bracket, Uncle Sam effectively subsidizes about a third of your borrowing costs or more, making your home more affordable or allowing you to buy a larger home than you could have otherwise. Also, big chunks of your closing costs are tax deductible, and hundreds of thousands of dollars of any profit (or capital gains) that you realize when you sell your home are exempt from income taxes.
At tax time, it's critical to know what you're entitled to, so you can claim it. So, here are five essential need-to-knows about home-related income tax tips to help you get the most tax-reducing bang out of your home-owning buck – and to avoid hefty home ownership-related tax traps.
1. You Have to Itemize Your Return to Claim Your Deductions
During the recent debate on Capitol Hill about whether the mortgage interest deduction should be eliminated (it won't be, not anytime soon), it came out that nearly 40% of homeowners lose out on their major tax advantages every year when they fail to itemize their income taxes. If you own a home and otherwise have a fairly simple return, it might be tempting just to take the standard deduction – and if your mortgage, property taxes and income are low enough, the standard deduction might outweigh your homeowners' deductions. But you'll never know if you're losing out on the tax advantages of itemizing unless you try; before you grab a pen and start filling in that 1040-EZ grab those forms from your mortgage company and answer the questions on tax software like TurboTax, which will automatically do the math on whether itemizing or taking the standard deduction will result in the lowest tax bill – or the highest tax refund – for you.
2. Plan Ahead and Be Strategic When Taking a Home Office Deduction
According to the Small Business Administration, the average home office deduction is $3,686 – multiply that by your tax bracket – 15%, 20%, 30% or whatever it is, and that's what you'll save on your taxes by writing off your home office. Know, though, that the space you designate as your home office cannot be exempted from capital gains tax when you sell your home later. The $250,000 (single)/ $500,000 (married filing jointly) income tax exemption for capital gains is only good on your personal residence, after all – not including any space in your home you've claimed as your tax-advantaged office. If you foresee selling your home for much more than you bought it in the future, near or far, discuss this with your tax preparer to see if the few hundred bucks you save is worth the capital gains complication later.
3. Tax Relief for Loan Modifications, Short Sales and Foreclosures Is Only Around Through 2012
While the long-term housing outlook is beginning to look up, 2011 is projected to be the peak year for foreclosures during this market cycle. Distressed homeowners who are on the brink of a short sale, loan modification or foreclosure should be aware that normally, any mortgage balance that is wiped out by one of these outcomes is taxed as what the IRS calls Cancellation of Debt Income, or CODI.
Under the Mortgage Debt Forgiveness Relief Act of 2007, the IRS is currently not charging income taxes on CODI incurred through a loan mod, short sale or foreclosure on most primary residences through 2012. But right now, banks are taking many months, or even years, to work out mortgages in all of these ways; the average foreclosure in New York state right now occurs only after 22 months of missed mortgage payments. If you foresee any of these outcomes in your future, don't put things off. Do what you can to get to closure on your distressed home and loan, ASAP, while you won't have income taxes to add as the insult on top of your significant housing injury.
4. Project the Income Tax Consequences of a Refinance or Property Tax Appeal
Homeowners everywhere are working on applying for a lower property tax bill on the basis of the last few years' decline in their home's value. Those who have equity have flocked en masse to refinance their 7% home loans into the 4% to 5% rates of the last few months. These strategies offer some of the heftiest household savings out there for the corresponding investment in time and money they take. But here's a caveat for savvy homeowners who slash these costs: remember that property taxes and mortgage interest, the very costs you're minimizing, are also the basis for the major tax benefits of being a homeowner. So plan ahead for your income tax deductions to go down along with your taxes and interest.
5. Don't Forget Those Closing Costs
If you bought or refinanced your home in 2010, you may be so focused on your mortgage interest and property tax deductions that you forget all about your closing costs. Any origination fees or discount points that were paid to your mortgage lender at closing are tax deductible on your 2010 return, get this – even if the seller paid your closing costs. If you can't figure out exactly what you paid, look for your HUD-1 settlement statement, that legal sized paper full of line item credits and debits that you should have received from your escrow provider or title attorney at, or just after, closing. Can't find it? Drop your real estate agent or mortgage broker an email; they can usually get a copy to you quickly.
Note: This post first appeared on Wallet Pop on 2.28.2011.
Tuesday, March 1, 2011
In the Chinese language, the symbols for the word “crisis” are translated as “Opportunity Riding on the Dangerous Wind.” In other words, crisis and opportunity are synonymous. Learning to persist and respond effectively through a crisis is the essence of personal growth. To avoid becoming distracted, depressed or frustrated, follow these 11 steps and take control of your future:
1. Stop brewing and start doing. Action is one of the best methods of overcoming stagnation. Walking, running, speaking with people, learning something new…ACTION is the best cure for inaction.
2. Remember that persistence can turn adversity into greatness. As the Reverend James Keller once noted, “Abe Lincoln lost is job in 1832. He was defeated for the legislature, also in 1832. He failed in business in 1833. He was elected to the legislature in 1834. His sweetheart died in 1835. He suffered a nervous breakdown in 1836. He was defeated for Speaker in 1838. He was defeated for nomination for Congress in 1843. He was elected to Congress in 1846. He lost his re-nomination for Congress in 1848. He was rejected for land officer in 1849. He was defeated for the Senate in 1854. He was defeated for the nomination for vice president of the United States in 1856. He was again defeated for the Senate in 1858. Abraham Lincoln was elected President of the United States in 1860.
3. Inventory your BAG regularly: Review your Blessings, Accomplishments, and Goals. You’ll be surprised how many reasons you have for being grateful, rather than depressed, anxious or worried.
4. Focus on what you are here to GIVE. Be in a mindset of service. How can you help as many people as possible?
5. Stay connected. Cultivate lilies and avoid leaches. If someone or something is bringing you down, replace it with someone or something that brings you up. You have this choice every day.
6. Stick to your Media Free Morning. No news, talk radio or print…Instead, choose to read inspirational nonfiction, listen to uplifting music or books on tape, and congregate with lilies, not leaches.
7. Take the blame and credit. Acknowledge your position in life honestly and openly. How did you get here and what are you doing to change?
8. Make a self-evaluation list of two columns. In the “I am” (or “Assets”) column, write down 10 things you are good at. In the other column, write down 10 things you need to improve on. Take the first three liabilities and schedule an activity to help you improve each of these three areas. Forget about the rest of your liabilities. Relish and dwell on all 10 of your best assets. They will take you anywhere you want to go in life.
9. Invest in your education. Since the only real security in life is the kind that is inside each of us, practice what Ben Franklin wrote: “If an individual empties his purse into his head, no one can take it from him.” If you aren’t taking action because you don’t know how to, ask for help.
10. Concentrate all your energy and intensity on the successful completion of your current goal. FOCUS = Follow One Course Until Successful. Forget about the consequence of failure. Failure is only a temporary change in direction to set you straight for your next success.
11Proverbs 3:5-6 “Trust in the Lord with all your heart, and lean not on your own understanding; in all your ways acknowledge Him and He shall direct your paths.”
Saturday, February 26, 2011
Are mortgage loan modifications really working…Well, no.
Matter of fact, it appears that the Obama Administrations HAMP program (major element of HAMP being loan mods) may be canceled very soon.
Wells/ Fargo describes how their loan modifications work…or don’t work. What is not discussed are the terms of a typical loan modification. For example, most loan mods are only temporary. Most loan mods do nothing with the negative equity. Most loan mods will temporarily reduce the borrowers payment by 50% (give or take). What happens to the 50% they are not paying? It’s added to their unpaid loan balance. You get the idea. Loan mods in their present form are nothing other than more…extending and pretending.
It’s crucial to help clients understand the true ramifications of a loan mod. Bottom line, its temporary relief. The negative equity remains with the home 99% of the time. For many underwater owners the smartest move truly is a Short Sale.
If the $7500 first time home buyer tax credit was used to purchase the home…its payback time.
Unlike the buyer ‘credits’ that came in 2009 and extended into 2010 the 2008 $7500 credit was in essence a loan. Now, that loan is due.
For many people who purchased a home for the first time in 2008, it’s payback time.
It sounded like a great deal: become a first-time homebuyer and pocket up to $7,500 in a tax credit. But if you bought that house in 2008 and received the credit, you’re required to start paying it back – now.
That’s because the credit was actually an interest-free loan provided by the government to stimulate a near-dead housing market.
Unlike the homebuyer credits of 2009 and 2010, this one must be paid back over 15 years beginning with this year’s tax return. For someone who got $7,500, that’s $500 a year.
“This is not a freebie,” said Jackie Perlman, a tax analyst at H&R Block’s Tax Institute.
The 2008 credit was available to qualified homebuyers who purchased after April 8, 2008, through the end of that year. The IRS has sent letters reminding folks who fall into this category.
Many have been caught off-guard. They either forgot that the credit was a loan, or believed the loan had been forgiven as Congress subsequently passed different versions of the homebuyer credit that did not require a payback.
“I had one client who called me in a slight panic,” said Jonathan Horn, a certified public accountant. “People are confused.”
If you got the credit and have sold your house or it is no longer your primary residence, the total amount you owe is due on the return for the year those events took place, with some exceptions.
You can choose to accelerate your payments. While the loan is interest-free, some might want to pay it back sooner rather than later.
“A loan is still something hanging over your head,” Perlman said.
“Some people will say, ‘Let me get this over with.’”