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Shari Mattingly-Bevan – “Remodeling the Mortgage Interest Deduction”

February 16, 2011 | Filed Under Finance, Real Estate, Retirement Savings, Tax Articles | Comments Off

2/16/11

The decision to purchase a home is often influenced by the tax break a homeowner receives with the mortgage interest deduction. Recently, even those who just take the standard deduction can take advantage of the property tax deduction on their federal return.

The federal government is in desperate need of revenue and is looking for it in places it once did not touch. Altering the deduction has been a consideration by both Democrats and Republicans for years. The national concern over the federal debt may be the window of opportunity both parties are looking for.

One idea is to lower the cap on the loan amounts that qualify for the interest deduction. The Congressional Budget Office examined a proposal to cut the loan amounts to $500,000 by 2018. I speculate many of California homeowners would be left out because of this cap. Considering California’s own financial troubles, I imagine this could send California into the Pacific, sooner than an earthquake would.

Another recommendation put forth by President Bush’s 2005 Tax Reform Advisory is to remodel the deduction to a tax credit. This would mean a dollar-for-dollar reduction in the taxes you owe.

The projected revenue the modification in the benefit would bring the Federal government, is in the billions, according to the Congressional Budget Office. Perhaps, it is only a matter of time, not if, before the government takes this sacred cow to the butcher?

Reducing the national debt is going to hurt, if it is to be done right and quickly. Nobody wants “their benefits” to be on the chopping block. However, with the housing market in a whirlwind, making home buying less attractive might not be the smart choice to fix our financial woes.

Tax-friendly states for retirees. Do they exist?

February 8, 2011 | Filed Under Finance, Real Estate, Retirement Savings, Tax Articles | Comments Off

Looking for tax savings can be a full-time job these days. Whether it’s income tax, sales tax, estate tax and even taxes on your Social Security Benefits or Pension, we all could improve our financial picture by reducing the amount of taxes we pay out. Retirement brings a reduced income for most people, even with Social Security Benefits and Pensions to draw upon. That is all the more reason to look for legitimate ways to decrease your tax liability.

Reducing your taxes doesn’t always have to be complicated. Retirees have an advantage over the working class. That is, they aren’t tied down to any one spot because of a job. Freedom to pack it up, and move to greener pastures is one way that you could save on taxes.

I found this great guide to looking up which states are more favorable for reducing taxes. For instance, you can look up the 5 states with no sales tax, the 9 states with no income tax, states with the lowest sales and real estate tax. Particularly important for retirees, is the states that don’t tax your Social Security Benefits and that are Pension-Friendly. I recommend you take a look at the guide and see if perhaps a move is in your future.

Check out http://www.kiplinger.com/tools/retiree_map/index.html

Lenders Still Tightening Credit in the Housing Markets

December 15, 2010 | Filed Under Finance, Investment, Real Estate, Retirement Savings | Comments Off

12/13/10
The housing market may be headed for another downturn, according to some economists, because mortgage lenders continue to tighten the already restrictive lending standards for home loans.

Earlier this year, the housing market was buoyed by the home-buyer tax credits, but sales have plunged in the second half of the year after the tax credits expired. New and existing home sales were down by more than 25% in October from a year ago.

Even though mortgage rates are at the lowest in 60 years, mortgage applications are hovering near their lowest levels in more than a decade. Housing economists are very concerned that tight credit at the bottom of a housing cycle could result in continued retardation of the hoped for recovery. An expanding housing market will usually help lift an economy as it exits a recession, but in this current market, it appears the glut of foreclosures will continue to hit the market without buyers who can qualify for home loans due to restrictive lending parameters. Because the lending standards have increased significantly, the housing market will not be propping up the economy in the near future. Economists say lending standards typically ease at this point in the business cycle as banks look for new business. Banks are not looking for new business at this point, could it be because they are flush with cash from the Troubled Asset Relief Program (TARP monies)? If banks were not in possession of the TARP cash, would they be looking for new business? Did the TARP money to banks interrupt the normal business cycle which will lead to prolonged financial difficulties for consumers? It appears the more big government spends, the more consumers experience financial woes.

Housing Still Hamstrung, Consumers Not As Confident As Expected

October 26, 2010 | Filed Under Finance, Real Estate | Comments Off

by Heather Struck, 10.26.10, 02:10 PM EDT   Reported on Forbes.com

September housing prices betray continued weakness and consumers stay cautious in October.

Data that point to slower growth in housing prices and still middling consumer confidence failed to inspire stock investors on Tuesday. Analysts say that without a real change in unemployment, the consumer economy will continue to sag.

The Standard & Poor’s/Case-Shiller home price index showed slowing growth in home prices for August, after consistent gains since April of 2009. Annual appreciation rates decreased in all but three of the 20 metropolitan statistical areas. The 10-city composite was up 2.6% and the 20-city composite was up 1.7% from August, 2009, slower growth on both composites than was reported in July. Twelve of the 20 MSAs posted a negative annual growth rate in August, with Detroit and Miami turning negative since July.

The hard-hit Las Vegas area saw improvement from July, with -4.5% growth from last year, as well as Charlotte, N.C., and Cleveland, Ohio, which improved from July with year over year growth rates of -3.4% and -0.4% respectively. San Francisco, Los Angeles and San Diego, all with growth rates above 5% from last year, have all declined since July by 0.3%, 0.4% and 0.6% respectively.

The S&P’s Index chairman David Blitzer called it a “disappointing report.”

The Federal Housing Finance Agency had slightly better news, with a narrower decline between July and August in its house price index. The agency revised the decline in U.S. house prices to 0.5% from 0.7%, and it reported a 2.4% decline in house prices for the twelve months ending in August. Home prices remain 13.6% below April’s 2007 peak.

A third component to Tuesday’s data releases was the Consumer Confidence Index measured by the Conference Board, a private research group. The index increased to 50.2 from 48.6 in September. The survey polled 5,000 American households before October 19. Economists surveyed by Thomson Reuters expected a reading of 49.2

Confidence on jobs fell in October, according to the index. Survey respondents claiming jobs are “hard to get” in the survey rose to 46.1 percent from 45.8 percent, while those stating jobs are “plentiful” fell to the year’s low at 3.5 percent from 3.8 percent in September. The percentage anticipating more jobs declined to 14.1 percent from 14.5 percent. The index did reveal that those expecting an improvement in business conditions over the next six months rose to 16 percent from 15 percent.

Michelle Girard, an analyst at RBS, said the confidence index reinforces that economic conditions are basically steady.”The

good news is that, despite relatively sour moods, consumers are still willing to spend at a moderate pace,” she wrote in a note after the Conference Board’s report. “The data suggest that consumers see and feel little change in economic conditions

The unemployment level was last reported at 9.6% in September by the Bureau of Labor Statistics.

A season of generally better-than-expected earnings has had mixed results on the street, boosting consumer stocks like Verizon ( VZ news people ) and Google ( GOOG news people ) after good reports, and causing others to decline. The way the remainder of the current earnings season will affect consumers will be clearer next month.

“If earnings boost stocks, that could help confidence, but the most important thing is jobs,” said Girard.

Reverse Mortgage

October 21, 2010 | Filed Under Finance, Real Estate | Comments Off

Reverse Mortgage is something, which can enable an individual to withdraw the money from the bank in lump sum. There are several banks out there where one can apply for the same. But before jumping into any decision about the Mortgage one should make sure that the place is safe and reputed.

To apply for Reverse Mortgage one must fulfill certain conditions. One needs to fill in an application form with information like age of the borrower, interest rate, and loan fees etc. People can apply for the same not only by visiting the banks, one can also log on to online sites and apply for the same.

This type of Mortgage is lucrative and will not affect the borrower’s ability to collect social security and pension benefits. People can take Reverse Mortgage loans to pay for home repairs, taxes, insurance payments, medical bills etc. this Mortgage is of different types.

Before applying one needs to do a lot of home work i.e. research work, that can include talking to a financial experts, going through bank literatures etc. One needs to be careful and clear about the terms and conditions involved in Reverse Mortgage as any kind of carelessness can lead to problem.

Reverse Mortgage loan enables the people to take loan from lenders in lump sum without much difficulty. The good thing about this mortgage is that the borrower still remains the owner of the house just like he was when he had a forward mortgage. Before making any decisions one should always do proper research work about the bank, the loan types, rate of Interest

Before making any decision about Reverse Mortgage it is very important on the part of the borrower to be well aware of his ability to pay back the amount he has borrowed. People can apply for the same for education, home, car and other purposes. Loan is something which people have to payback that too within fixed period of time.

People should always apply for the Reverse Mortgage loans from good and safe banks! Thus one should always browse around to find the best place. One can find out about such financial programs not only by visiting various banks, but also by taking the help of Internet. Apart from one can also take the help of Mortgage lenders or even the Brokers as they can provide details about such financial programs!

People with bad financial history may not be eligible for getting Reverse Mortgage loan however good places can be an exception. After choosing the right bank and the loan one needs fill in the registration form offered by the banks. People need to show documents and papers, and fulfill certain criteria to borrow the money. One could payback the amount either together or in installments. Good places do not want your home but need the repayment!

Author Bio
Jim is writer of many mortgage and loan related topics. This article of www.greatmortgageservices.com has been written by Jim.Great Mortgage Services

Article Source: http://www.ArticleGeek.com

Getting a Home Inspection

September 3, 2010 | Filed Under Real Estate | Comments Off

By: Jennifer Hershey

If you are in the process of purchasing a new home, it will definitely be in your best interest to have a home inspection done.

Not only will you want to have a home inspection done for your own sake, and peace of mind. But most lenders will require that you have a home inspection before they will proceed with the loan. The lending institution has just as much interest in the home as you do, so that is why they require a home inspection.

Getting a home inspection requires hiring a company to send out a home inspector to go through the home you are going to purchase. With you present, the home inspector goes through the home, and thoroughly inspects to make sure nothing in is need of major repair that cannot be seen with the naked eye.

Basically, a home inspector goes through a home and checks wiring, fixtures, plumbing, and the foundation of the home to make sure it is structurally sound. He will also inspect the outside of the home along with the roof to make sure there isn’t any exterior damage.

Along with the home inspection, it would also be in your best interest to inspect for wood boring insects, such as termites and beetles.

A pest inspection is also required by the lender before they proceed with a loan.

A pest inspection is done separately from the home inspection and is done through a different company that specializes in pest inspections.

Not only are home and pest inspections required by the lending institutions, but it would be in your best interest even if they were not. They cost anywhere from $300.00 to $400.00 depending on the size of the home, and you are aloud to be present and ask questions through the entire inspection.

Imagine if you found your dream home and loved it so much that you purchased it without having the home inspection done. On the day that you and your family move in, it is the happiest day of your lives. Than, three days after you move in, you get your first rain fall while in your new house. Than, the next thing you know, you have rain coming through the ceilings up stairs.

After something like this, you’ll be wishing you had the home inspected. Trust me.

Believe me, this stuff happens. So be smart, and get a home inspection. It beats paying $15,000.00 to $20,000.00 for a new roof.

In addition, once you have a home inspection done, you will have peace of mind that the house is sound and in good living condition. However, should anything happen to go wrong after you move in that was covered under your home inspection, you will have the home inspection company to hold accountable for the damage, and not have to pay it out of your own pocket.

To summarize, the home inspection is very important to both you and the lending institution. You both have an interest in the property, so have the home inspection done, you will sleep a lot easier.

Author Bio

Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of www.explainingmortgages.com <http://www.explainingmortgages.com/> , a mortgage resource site devoted to making mortgage terms and products easy to understand.