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!

Sell or Remodel?

 

Should I sell now or remodel?  That's a popular question these days as the economy is beginning to improve.  Home sales have definitely increased and along with low inventories, prices are starting to go up also.

 

If you purchased during the height of the market, however, you probably still have a way to go before you will recapture a significant amount of equity lost during the recession.

 

These are some questions you should ask yourself:

 

1.  What is the primary reason that I would like to move?

2. If I did move, what would be the top 3 things that I would want in my new house that I don't have now?

3. If I could have at least 1 or 2 of those things without moving, would I be ok with staying here a few more years?

 

Remodeling can be expensive, but selling and then buying another home can be too.  I was in this situation myself recently and due to the recession had lost a lot of equity in my home.  I love my home, but there were things that I definitely would want if we moved out of it.  One of them was a decent master bedroom closet!

 

The closet in my master bedroom was miniscule to say the least.  I had always dreamed of having a huge closet and while I was dreaming about it, I envisioned a master suite that made me feel like I was on vacation.

 

After sitting down and crunching the numbers, I decided to do the remodel.  I now love my home and am content to stay for several more years.  My remodel was expensive, but even so, we are happy and believe that it would have cost us a lot more to move.

 

Everyone's situation is different so I encourage you to speak to a real estate professional who will tell you if you are over-improving for your neighborhood, guide you into choices that will not hamper a future sale and to give you a referral to a reputable and dependable contractor.

 

NancyPuder is the broker and owner of Signature Properties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 Your calls are always welcome! 

 

 

 

 

 

 

Landlord Law Requires Disclosure

Landlords have a legal responsibility to disclose to a potential tenant if there has been a Notice of Default filed on the property.   


Over the years I have had a lot of working experience with both landlords and tenants.  What I have found is that some landlords feel disclosure is not necessary if their intention is to catch up the payments and reinstate the loan.  Their attitude is that it is unnecessary to inform the potential tenant since they are planning to catch up the payments and to keep the property.  Unfortunately, as most of us know, financial stress can lead to one-sided thinking and that is why this law has been established.


Under current law, if the landlord has received a Notice of Default,  it must be disclosed to the potential tenant, in writing ,before the tenant enters into a contract with the landlord. If the Notice of Default has been rescinded, then no disclosure is required. This law applies to any single family residence and residential units with one to four units.

Landlords in default should know that the law also states that if a landlord violates this disclosure law, the tenant can elect to void the lease. If voided, the tenant can recover one month’s rent or twice the amount of actual damages, whichever is greater, plus all prepaid rent, as well as any other remedies available. If the lease is not voided and the foreclosure sale has not occurred, the tenant may deduct one month’s rent from future amounts owed. The written disclosure notice as provided by statute must be in English, Spanish, Chinese, Tagalog, Vietnamese, and Korean. 

It is also important to note that a property manager will NOT be held liable for failing to provide the written disclosure notice unless the landlord has given the property manager written instructions to deliver the written disclosure to the tenant.

NancyPuder is the broker and owner of Signature Properties, a unique company that specializes in both Real Estate Sales and Property Management on the CentralCoast.  You may contact Nancy at Nancy@NancyPuder.com or (805)710-2415.  She always enjoys hearing from you!

 

 

 

 

The Big Question

 

What does it mean when we hear that home sales are up?  That is the big question from homeowners who purchased their home before the recession and are now thinking of selling.  Many are confused because the media reports upward trends one week and the seemingly same numbers fall the next.

 

 

Homeowners who have been waiting to sell their property are wondering if now is the right time to move forward.   They want to know is if their home value has increased to the point where they can regain at least some of the equity that they lost during the recession.

 

The truth is that it's been a rollercoaster ride for the past year or so, but most professionals in the real estate industry agree that the overall trend is a positive one.  Investors are scrambling to buy right now, but price and location are still a major factor.  

 

It's important to recognize that the numbers reported through the media can be fooling for many reasons.  Figures are often based on national information and sometimes conflict with your own local activity.  Some numbers reference a small faction like new home sales which only represent 6% of the housing market.

 

What to make of all this?  The housing market will be directly affected by the economy.  My opinion is that we are stabilizing, but we do have a way to go before we see any huge increases in value. 

 

It appears that home values have increased on the Central Coast by 5-10 percent over the past few months.  It is yet to be seen, however, if the increase in home values will be sustained and continue to gradually increase throughout 2013.  

 

NancyPuder is the broker and owner of Signature Properties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 Your calls are always welcome!