TOP REASONS TO OWN A HOME
1.SAVINGS-Long term home ownership is still a way to get big savings!!
2.TAX BREAKS-Interest deductions,rebates and tax credits are still available. They can add up fast.
3.EQUITY-Why build up a landlords equity? Invest in a home and build up equity for yourself and your family. And don't forget about appreciation. If you buy a home for $200,000.00, and hold it for 15 years you will have built up equity equal to about $24,000.00 by paying down your mortgage,plus if it appreciated $25,000.00 you would have realized almost $50,000.00. What would you have if you were renting???
4.BUDGETING-If you are renting you will never know how much your rent is going to go up - and it will go up. If you own, you will know exactly what your monthly expenses will be and you will be able to budget.
5.SECURITY-You own it!!! It's yours to do with what you like.
FSBO FOUNDER USES AGENT TO SELL MANHATTAN DIGS
For Sale By Owner .Com founder Colby Sambrotto recently abandoned his efforts to sell his 2 $million apartment himself and turned it over to a real estate broker. The Broker promptly sold the unit for $150,000.00 more than he had been asking. The For Sale By Owner.Com web site boasted that homeowners did not need real estate professionals to sell their properties. Hum! Kind of makes you wonder does it not?
HAVE YOU HEARD?
Foreclosures were reported to be down 7% in July. Here's what they did not tell you- the decline was largely due to problems in getting notices into the hands of consumers rather than an improving housing market. It looks like more distressed homeowners have been able to stave off foreclosure.
DO YOU OWN RENTAL PROPERTY?
Rental property owners continue to enjoy the benefits of a struggling real estate market. If you are able you can buy investment properties that will give you a return on your money 5 to 10 times what you will realize putting your money in a bank. Food for thought.
AND FOR US SENIORS-
AARP has found that 32% of seniors believe their home values have deteriorated so badly that they will be forced to put off retirement. They found that seniors had planned to sell their large homes and downsize and use the profit to finance their retirement. The question is how long will this last.
THE BRIGHT SIDE-
Despite all the negative news we get these days there is a bright side. That is, we are probably half way or better through this economic crises. We are Americans and we are tough -always have been- so we can handle this even though it is rather unpleasant.
Wednesday, September 21, 2011
Wednesday, August 17, 2011
MORE ON THE MORTGAGE INTEREST DEDUCTION
Recent speculation over eliminating or reducing the mortgage interest deduction has caused widespread rumors and myths about the vital tax benefit for homeowners. The MID is not only crucial to the stability of the American housing market and the overall economy, but any changes to it could lower the homeownership rate in the U.S.
“As the leading advocate for homeownership, Realtors® believe the MID makes a real difference to homeowners, especially hard-working middle-class families,” said Bob Neuwoehner of American Realty. “This fundamental tax benefit reduces the carrying costs of owning a home, making homeownership more attainable for families. It also helps those without thousands of dollars in savings who cannot buy their home outright begin to build their financial future through homeownership.”
As Congress has looked for ways to address the deficit, some have suggested placing additional limits on the MID. We question the connection public policy makers are trying to make between the debt and the MID.
“It’s ridiculous to say that the MID is suddenly part of the deficit problem – the MID has been part of the federal tax code for nearly 100 years,” said Mr. Neuwoehner “Reducing or eliminating it is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. That share could rise to 95 percent if the MID is eliminated.”
According to the 2011 National Housing Pulse Survey, Americans are adamantly against eliminating the MID. Two-thirds of respondents opposed eliminating the MID, and 73 percent of Americans said eliminating the MID would have a negative impact on the housing market and the overall economy.
We also dispute the misconception that only the wealthy benefit from the MID, when in reality it primarily benefits middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners; 65 percent of families who take the MID earn less than $100,000 a year, and 91 percent earn less than $200,000 a year.
“Is focusing solely on tax rates a better goal than protecting the wealth of the middle class?” “Changes to the MID could further damage the housing market’s recovery as well as the overall economy and job market. It is imperative that the MID remain intact and that Americans continue to receive this important benefit.”
“As the leading advocate for homeownership, Realtors® believe the MID makes a real difference to homeowners, especially hard-working middle-class families,” said Bob Neuwoehner of American Realty. “This fundamental tax benefit reduces the carrying costs of owning a home, making homeownership more attainable for families. It also helps those without thousands of dollars in savings who cannot buy their home outright begin to build their financial future through homeownership.”
As Congress has looked for ways to address the deficit, some have suggested placing additional limits on the MID. We question the connection public policy makers are trying to make between the debt and the MID.
“It’s ridiculous to say that the MID is suddenly part of the deficit problem – the MID has been part of the federal tax code for nearly 100 years,” said Mr. Neuwoehner “Reducing or eliminating it is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. That share could rise to 95 percent if the MID is eliminated.”
According to the 2011 National Housing Pulse Survey, Americans are adamantly against eliminating the MID. Two-thirds of respondents opposed eliminating the MID, and 73 percent of Americans said eliminating the MID would have a negative impact on the housing market and the overall economy.
We also dispute the misconception that only the wealthy benefit from the MID, when in reality it primarily benefits middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners; 65 percent of families who take the MID earn less than $100,000 a year, and 91 percent earn less than $200,000 a year.
“Is focusing solely on tax rates a better goal than protecting the wealth of the middle class?” “Changes to the MID could further damage the housing market’s recovery as well as the overall economy and job market. It is imperative that the MID remain intact and that Americans continue to receive this important benefit.”
HOUSING ISSUES CURRENTLY BEING DEBATED IN CONGRESS
HERE ARE SOME HOUSING ISSUES CURRENTLY BEING DEBATED IN CONGRESS THAT SHOULD BE OF INTEREST TO YOU.....
Mortgage interest decuction (MID)-This is one way some politicians are trying to address the deficit problem - they want to eliminate the MID. How about that!! Take your real estate taxes and multiply it by your tax rate and that's about how much it will cost you. You say you don't agree with that? Better contact your representatives soon!!!
Penalties for down payments less than 20%. A loan that is 80% or less of the value of the property being purchased (usually the purchase price of the property) is called a Qualified Residential Mortgage or (QRM). In a nut shell buyers who can't come up with 20% down would be required to pay .8 to 1.85% more interest. There was a time when that was probably appropriate. But given the situation now, and with the underwriting requiements that are in place now it does not make much sense to me. How about you???
FHA loan limits The FHA has been a big part of the backbone of home ownership for years. They help people who may not have that 20% down and who may not have high credit scores become homeowners. Some politicians want to shrink FHA and limit the number of buyers it supports. Bad idea in my book.
Give some thought to these issues. When you do remember that housing is a huge part of our national economy. SHARE YOUR THOUGHTS, WHATEVER THEY ARE, WITH YOUR LIGISLATORS AND REPRESENTATIVES
Mortgage interest decuction (MID)-This is one way some politicians are trying to address the deficit problem - they want to eliminate the MID. How about that!! Take your real estate taxes and multiply it by your tax rate and that's about how much it will cost you. You say you don't agree with that? Better contact your representatives soon!!!
Penalties for down payments less than 20%. A loan that is 80% or less of the value of the property being purchased (usually the purchase price of the property) is called a Qualified Residential Mortgage or (QRM). In a nut shell buyers who can't come up with 20% down would be required to pay .8 to 1.85% more interest. There was a time when that was probably appropriate. But given the situation now, and with the underwriting requiements that are in place now it does not make much sense to me. How about you???
FHA loan limits The FHA has been a big part of the backbone of home ownership for years. They help people who may not have that 20% down and who may not have high credit scores become homeowners. Some politicians want to shrink FHA and limit the number of buyers it supports. Bad idea in my book.
Give some thought to these issues. When you do remember that housing is a huge part of our national economy. SHARE YOUR THOUGHTS, WHATEVER THEY ARE, WITH YOUR LIGISLATORS AND REPRESENTATIVES
Tuesday, April 12, 2011
HAVE YOU HEARD ABOUT THE NEW REAL ESTATE TAX TO SUPPORT HEALTH CARE REFORM?
Lots of people are talking about the new 3.8% tax which will support Mr. Obama's new health care plan. LOTS OF PEOPLE ARE CONFUSED ON THIS ISSUE SO HERE IS THE SCOOP-PLEASE SEE DISCLAIMER BELOW.
Beginning Jan 1, 2013, a new 3.8% tax will be levied on "unearned income" of "high income taxpayers". These levies are being referred to as "medicare taxes". Unearned income is any income you would earn from investing your capital. W2 and 1099 income for instance is not classified as unearned income. For example, if you purchase a real estate investment any income form that investment is considered unearned income. So, who is a "high income" tax payer? If your filing status is "single" and your AGI (adjusted gross income) is $200,000.00 of more, or if you are married and your filing status is "joint" and your AGI is $250,000.00 or more you are probably subject to the tax. The portion of your unearned income that will be subject to the tax is the amount of income you derive from the unearned sources reduced by the expenses associated with earning that income. That would be "net" investment income. So, if your gross rents from operating a real estate investment were $100,000.00 and associated expenses of operating that investment were $40,000.00 you would realize net rents of $60,000.00 and that would be the amount you would include in your AGI. Note that the tax does not apply to annual appreciation of an investment. The tax one might pay here is calculated using a formula ( the government seems to do everything by or based on a formula). The tax imposed will be determined by the LESSER OF 1) net investment income or 2) the excess of AGI over the $200,000.00/$250,000.00 AGI thresholds. Thus if net investment income is the smaller amount then the 3.8% is applied only to that number. If the excess over the threshold number is the smaller amount the 3.8% would be applied to that number. HERE IS THE QUESTION EVERYONE HAS BEEN WAITING FOR!!!! Will this tax apply to the any gain on the sale of my personal residence? Any gain on the sale of a personal residence will be protected from this tax the same as it is from income tax - that is, if your filing status is "single" and your gain is less than $250,000.00 or your filing status is "joint" and your gain is less than $500,000.00 you are protected from this tax. If you realize a gain more than those numbers then you would be subject to the tax as described in the formula above. There are other provisions in this new tax law that we will not discuss here- vacation homes etc. DISCLAIMER*********I am not an accountant but I feel this information is accurate. If you have any questions feel free to call me. HOWEVER, if you feel you may be subject to this tax I would suggest you call your accountant for advice.
Beginning Jan 1, 2013, a new 3.8% tax will be levied on "unearned income" of "high income taxpayers". These levies are being referred to as "medicare taxes". Unearned income is any income you would earn from investing your capital. W2 and 1099 income for instance is not classified as unearned income. For example, if you purchase a real estate investment any income form that investment is considered unearned income. So, who is a "high income" tax payer? If your filing status is "single" and your AGI (adjusted gross income) is $200,000.00 of more, or if you are married and your filing status is "joint" and your AGI is $250,000.00 or more you are probably subject to the tax. The portion of your unearned income that will be subject to the tax is the amount of income you derive from the unearned sources reduced by the expenses associated with earning that income. That would be "net" investment income. So, if your gross rents from operating a real estate investment were $100,000.00 and associated expenses of operating that investment were $40,000.00 you would realize net rents of $60,000.00 and that would be the amount you would include in your AGI. Note that the tax does not apply to annual appreciation of an investment. The tax one might pay here is calculated using a formula ( the government seems to do everything by or based on a formula). The tax imposed will be determined by the LESSER OF 1) net investment income or 2) the excess of AGI over the $200,000.00/$250,000.00 AGI thresholds. Thus if net investment income is the smaller amount then the 3.8% is applied only to that number. If the excess over the threshold number is the smaller amount the 3.8% would be applied to that number. HERE IS THE QUESTION EVERYONE HAS BEEN WAITING FOR!!!! Will this tax apply to the any gain on the sale of my personal residence? Any gain on the sale of a personal residence will be protected from this tax the same as it is from income tax - that is, if your filing status is "single" and your gain is less than $250,000.00 or your filing status is "joint" and your gain is less than $500,000.00 you are protected from this tax. If you realize a gain more than those numbers then you would be subject to the tax as described in the formula above. There are other provisions in this new tax law that we will not discuss here- vacation homes etc. DISCLAIMER*********I am not an accountant but I feel this information is accurate. If you have any questions feel free to call me. HOWEVER, if you feel you may be subject to this tax I would suggest you call your accountant for advice.
Tuesday, March 29, 2011
HERE ARE SOME NATIONAL STATISTICS
Existing home sales dropped 9.6% in February. The market is 2.8% below the pace set in Feb. 2010. Some economists think this is normal given the type of recovery we are experiencing. Home sales seem to be constrained by the dual problem of unnecessarily tight credit and unacceptable appraisals which do not support prices negotiated between buyers & sellers. The national median existing-home price for all housing types was $156,100.00 in February. This was 5.2% below the February 2010 value. Get this though- sales of newly built single family homes declined 16.9% in February. This is a record low and is certainly a reflection of consumer uncertainty regarding the overall economy. So, is this bad news? Well, it's not good news but it's better news than you would have heard on the subject a few months ago. For those of you who are in a position to buy-now seems to be the time to buy. NEXT WEEK MORE ABOUT THE SUPPOSED TAX ON THE SALE OF REAL ESTATE TO SUPPORT THE PRESIDENTS HEALTH CARE BILL.
Thursday, March 24, 2011
THE LOCAL MARKET
The Dubuque Board of Realtors has reported that home sales for the first quarter are up very slightly from last year. They also report that home prices have seen a modest increase during that same period. What the report does not reference however is the number of properties that are currently on the market. We have been very fortunate here in Dubuque that the local market has not eroded as the markets in many other areas have. One of the big problems, as I see it, is financing. As a result of predatory lending practices across the country some buyers are having a tough time qualifying for financing. Let me make it clear that to our knowledge there were no predatory lending practices in our local market. We are blessed with numerous first class lenders. They, however, are feeling he brunt of some of the lending practices that took place in other parts of the country. All in all we are in pretty good shape for the shape we are in. As soon as our economy and world economies settle down and smooth out we should experience improved market conditions.
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