Mortgage Insurance Premiums Deductible...

Helpfully, the government extended the mortgage insurance premium deduction through 2013. You can deduct the cost of private mortgage insurance as mortgage interest on Schedule A — meaning you must itemize your return. The change only applies to loans taken out in 2007 or later.

 

What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted, so long as your income is less than $100,000 (or $50,000 for married filing separately).

 

If your adjusted gross income is more than $100,000, your deduction is reduced by 10% for each $1,000 ($500 in the case of a married individual filing a separate return) that your adjusted gross income exceeds $100,000 ($50,000 in the case of a married individual filing a separate return). So, if you make $110,000 or more, you lose 100% of this deduction (10% x 10 = 100%).

 

Besides private mortgage insurance, there's government insurance from FHA, VA, and the Rural Housing Service. Some of those premiums are paid at closing and deducting them is complicated. A tax adviser or tax software program can help you calculate this deduction. Also, the rules vary between the agencies.

 

My advice is to contact a qualfiied tax expert when calculating the amount due for taxes at the end of the year.   Tax laws are complicated and always changing.  

 

NancyPuder is the broker and owner of Signature Properties, a real estate sales andmanagement firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 She always enjoys hearing from you!

 

Why Should I Pay the Buyer to Buy My House?

Q.  My neighbor is selling his house and mentioned to me that he is paying the buyer's closing costs.  That doesn't make sense to me.  Can you tell me why he would do that?

 

A.  Usually, a buyer will ask the seller to pay their closing costs if they are entering the market and have limited cash available beyond the required down payment.   This buyer need or request is often accompanied with VA or FHA financing.  

 

With FHA financing, the buyer can purchase with less than a 5% down payment.  With VA financing, the buyer can purchase with a zero down payment.  As long as the buyer qualifies to make the payments on the home, the lender is fine with the seller paying the costs. 

 

Most sellers are only interested in their bottom line, meaning the amount that he or she will walk away with at the closing.  How the financing or terms are structured is of secondary importance.  A good Realtor will help explain this process to both seller and buyer and will also take steps to ensure that the transaction is in the best interest of the parties involved.

 

Buyers who cannot purchase unless the seller helps with their financing costs, should be prepared to pay full price or even more than the listed price so that their offer can compete with others who who may not be asking for this seller concession.

 

It can be discouraging for a buyer when the seller takes an "all cash" offer or an offer with conventional financing instead of theirs.  My advice to buyers with minimal cash down is this. Continue to save as much money as you can by eliminating some unnecessary expenses.   The more cash that you are able to contribute to the transaction, the more seriously your offer will be taken by the seller. 

 

NancyPuder is the broker and owner of Signature Properties, a real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 She always enjoys hearing from you!

 

 

Real Estate Powers Up Job Market

History tells us that when the real estate market improves, so does the economy overall.  More jobs are produced through the construction, furniture and mortgage industry, just to name a few.

 

Now that the real estate market has stabilized and is getting it's bearings, there will be more construction jobs, construction-related manufacturing jobs, transportation and distribution jobs, retailing jobs, financial services jobs and a range of service jobs from cable hookups to landscaping.   Some economists say that a better housing market is the principal missing link to a better job market.

 

Right now housing is at record highs for affordability, due to falling home prices the last few years and record low mortgage rates. Plus, rents are rising, leading more renters to realize that home ownership might make more financial sense than continuing to rent.  In addition, as the housing market continues to improve, more households are being formed further increasing the demand.

 

Rarely has homeownership been as attractive as it is right now.  This certainty will continue to drive optimism among potential home buyers throughout the rest of the year.

 

Tip of the Week:  Get a pre-approval letter from a lender before you start looking at properties.  You will be glad you did!  If you need a referral to a great lender or Realtor, contact me at Nancy @NancyPuder.com

 

NancyPuder is the broker and owner of Signature Properties, a real estate sales andmanagement firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 She always enjoys hearing from you!

 

 

Are There Any Deals Left?

As the housing market continues to heat up, buyers are asking themselves if they have waited too long to jump into the market.  There is an old saying in the real estate business that the way you know when the market has hit bottom is after it has already happened!

 

Foreclosures and short sales are still plentiful, but more regular sales are emerging as sellers are making the decision to sell now.   While banks and some short sale agents are putting properties on the market at a low price,  the buyers are bidding over the listed price in most cases.

 

So, are there any deals left?  I suppose it depends on what you consider a deal.  Home prices are still lower than they have been in years.  In my opinion, almost anything you buy right now on the beautiful Central Coast of Calfornia, is a deal.  But then again, I may be a little biased in that opinion.

 

Prices are going up slowly, so home-flippers have a better chance of coming out ahead these days, as do long term investors.

 

Nancy Puder is the broker and owner of Signature Properties, a real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 She always enjoys hearing from you!