“Borrowers spend an average of 10 hours researching a car purchase and only five hours researching a mortgage or home equity loan.”
Yet another good reason to rely on the recommendations from your Realtor for competent lenders.
THE 14 QUESTIONS YOU SHOULD ASK A LENDER
April 8, 2010 By Leave a Comment
. . . Before you sign anything!
Mortgage lending in Washington State is not a regulated industry. There are hundreds of lenders in our area. Choosing the right lender for your
real estate needs can be confusing. It is especially difficult when you speak with several different lenders and they seem so convincing. There is a way to determine who is the most likely to succeed in getting you the loan package best suited for your needs. The key is knowing the right questions to ask.
This list provides you with questions to ask your prospective lender. The list will not only help you select the right lender, but will also get you the very best from the one you choose.
Click here to order “The 14 Questions.”
EVERYTHING YOU WANTED TO KNOW ABOUT SHORT SALES!!
March 30, 2010 By 1 Comment
Whether you are a Buyer, a Seller or simply curious . . .
Short Sales – An Overview
As lenders search for the best way to respond to the mortgage difficulties faced by millions of Americans, it’s clear no single answer is right for every situation. For many, the best option is to sell the home for less than is owed and ask the lender to accept the sales proceeds to settle the debt.
Usually called a Short Sale, the transaction allows the homeowner facing financial challenges the opportunity to sell the property and avoid foreclosure. The lender is able to solve the delinquent mortgage without going through the time and expense of a foreclosure.
SOME FACTS ABOUT SHORT SALES:
Short Sales Take Time
Getting a Short Sale sold, approved and closed takes time. If you feel a Short Sale might be the best option for you, do not wait until the last minute to get started. In our experience, it may take at least 45 days to get lender approval for a Short Sale.
Find an Experienced Agent
Because Short Sales are different from standard real estate transactions, in our experience, it’s best to engage an agent with experience handling Short Sales. I am a Certified Short Sale/Foreclosure expert.
When you need additional clarifications . . . or a list of homes currently noted as Short Sales or Foreclosure, please contact me.
HIDDEN TREASURE AWAITS YOU!
March 24, 2010 By Leave a Comment
Tax day is just around the corner, and many homeowners forget that they’re sitting on a wealth of potential savings — in their home. Tax deductions for homeowners
are plentiful, so keep these guidelines in mind as you prepare your return this year.
First, know that if you deduct home expenses, you have to file form 1040 (also known as the long form) and itemize your deductions on Schedule A. While it can be a headache, the rewards are usually worth it.
Remember that the mortgage on your home is deductible — at least the real estate taxes, qualifying interest and premiums, for a loan up to $1 million, according to the IRS. Note that fire or homeowner’s insurance premiums and the principal mortgage amount are not deductible. Here’s how to calculate what’s deductible: Enter your total real estate taxes for the year, and enter the number of days in the property tax year that you owned the property. Divide the number of days by 366, and multiply that number by your total real estate taxes for the year.
Paid off your mortgage early? The prepayment penalty you might have received is tax deductible as home mortgage interest, as long as it’s not for a specific service performed or a cost connected with your mortgage loan.
You may have heard that home repairs can qualify for tax deductions, but home improvements are the real winners. An improvement is classified as anything that adds to the value of the home — for instance, making a room handicapped accessible or adding a deck to the back of your home. Always keep receipts and records — and remember, if you borrowed money for that improvement, the interest on the loan is tax deductible, just as it is with the mortgage payments.
Another item many homeowners forget is deductions for loan origination fees, better known as “points.” One point is equal to 1 percent of your loan. Depending on how many points you’ve accumulated, you may be eligible to deduct them. There are rules about deducting points, but a financial professional can help you sort through them.
And finally, don’t forget that if you upgraded to energy-efficient Energy Star windows, stoves or water heaters, those may be eligible for a tax credit. Check www.energystar.gov to see if your improvements are included.
HOME AND WEALTH . . . Keep your home costs under control.
February 24, 2010 By Leave a Comment
These days, most people are trying to control their expenses a little more tightly. Often they don’t realize how much they’re paying to live in their homes. So let’s take a look at that home budget and see if we can’t do a better job of staying on top of the costs.
1. Your largest expense is probably your mortgage. These days mortgage rates are historically low, so you might be able to refinance and lower your monthly payment. Contact me for a referral to a QUALITY lender who will let you know if this makes sense.
2. Another major expense is likely to be your homeowner’s insurance. Check in with your agent once a year to see if you’re getting the right coverage at the best price.
3. Next look at your real estate taxes. The higher the assessed value of your property, the higher your real estate taxes. So the next time you receive your King County notice of assessed value, contact me to help with your homework. I will provide you with values of comparable homes in your neighborhood.
4. Recurring monthly expenses:
- If you pay for public water, public sewer or a homeowners’ association, those are probably fixed expenses you can’t cut.
- But if you pay for private trash collection, snow removal, lawn and gardening services, periodically look around for cheaper rates. Even if you’re happy with your current supplier, this information could help you get a better deal.
- Phone, internet and cable TV services should be reviewed at least once a year to see if competitors offer better prices.
- Energy costs. Oil companies should be reviewed once a year, before heating season begins. And if you think oil may be going up, pick a supplier who will lock in the price. In a growing number of areas, you can also find competing electric companies. Find out who has the best deal. If you heat and air condition with gas, ask your local gas company about special offers.
5. Maintenance and repairs. It is always cheaper to fix a problem as soon as it comes up, rather than letting it go. It costs very little to re-caulk around a bathtub, but if you ignore it, you could wind up replacing a wall. Put aside $500 to $1,000 a year to take care of minor repairs and maintenance.
6. Major improvements. If you have you heart set on updating a kitchen or bath, installing a deck, or even putting on a new addition, get a rough cost estimate and decide how many months from now you’d like to start. Divide the cost by the months and begin putting money away for it each month.
Your home is your biggest investment. But with a little effort you can make your home costs smaller.
CENTS AND SENSIBILITY
February 22, 2010 By 1 Comment
Creating a household budget is hardly a fun exercise, but it is necessary, especially in these economic times . . . it can also be an excellent family project to help every member understand your options. Determining where monthly income goes can help rein in over-spending habits and create fiscally friendly ones.
To start, financial planners suggest you gather a year’s worth of bills and loan payments to create a complete picture of your expenses. Make a list and assign each to a category (the Quicken computer program can be of amazing help with this aspect). Be sure to note when your spending increases throughout the year, such as around holidays or annual vacations.
Next, determine fixed and variable expenses. Fixed expenses have little or no 
change each months (mortgage, car payments, cable bills). Variable expenses change monthly (groceries, gas or personal expenses such as morning coffee runs),
Once you have sorted your expenses and calculated a monthly average, figure out your total monthly income (all sources of revenue). Ideally your expenses should not be greater than your income! Your ultimate goal is to create a “zero-dollar budget” to see exactly where each dollar of your income goes. The money left over should be put into savings accounts or used to pay down credit card debts.
When you are through with this exercise, look for ways to build up your emergency fund. Consider putting aside enough for three to six months’ living expenses.
INVESTOR QUESTIONS . . .
February 16, 2010 By Leave a Comment
With answers from real estate tax experts.
“If I purchase rental property through a self-directed IRA, does the rental income go to me or back into my account?”
If you purchase through a self-directed IRA, your IRA is the owner, not you. All income generated from the property must go back into your IRA account. And all expenses – such as maintenance, repairs and capital improvements – must come out of the account. You (if you are the trustee), can hire a real estate broker or local manager to collect rents and maintain the property.
The rules governing real estate IRAs are strict. You cannot personally manage the property, lend it money or rent it to relatives – or you risk having your IRA confiscated by the IRS.
“If I help my son and his wife buy their first home by paying the interest on their mortgage loan for them, can I deduct the interest on my taxes?”
No – not unless you co-sign the loan. To deduct mortgage interest, you must be legally liable to pay back the loan. If you did not co-sign as a borrower on the mortgage loan and simply make payments on it on behalf of your child, you get no deduction. A Better Way: Give your son the money so that he can pay the mortgage and deduct the interest.
CUT YOUR GROCERY BILL IN HALF . . .
February 14, 2010 By Leave a Comment
Avoid These Common Shopping Mistakes. Too often shoppers end up paying more than they need to. Here are the most common shopping mistakes:
MISTAKE: Assuming sale prices are attractive prices. Supermarket sale circulars often contain some great deals – but they usually have items priced at or near their regular prices as well.
MISTAKE: Shopping in the wrong department. Cheese can cost twice as much in the deli or gourmet section as it does in the dairy section. The brands may be different but the quality is usually as good. Nut prices in the produce, snack and baking sections can differ. Salsa is often more expensive 
in the snack aisle than in the condiments aisle. Organic foods found in supermarket organic aisles usually are substantially more expensive than those shelved among nonorganic goods elsewhere.
MISTAKE: Assuming items shelved on supermarket aisle endcaps and display islands are special deals. For example, a display in the fruit section may have a sale price on strawberries but regular prices on shortcakes and whipped cream.
MISTAKE: Not watching as prices are rung up at the register. Watch the register readout carefully as items are scanned to catch mistakes as they happen. Then skim your receipt for any mistakes you may have missed . . . preferably before leaving the store.
MISTAKE: Assuming there is a one-coupon-per-item limit. Most stores let shoppers use both a manufacturer’s coupon and a store coupon on the same item if both happen to be available.
MISTAKE: Forgetting to peel of instant-use coupons from packages.
MISTAKE: Thinking the largest-sized package will be the best deal. Compare the per-ounce or per-unit prices listed on the shelf price tag. If you have a coupon valid for any size, the smallest package is often the best deal.
MISTAKE: Not adhering to the five-minute rule when buying prepared food. If the preparation time involved is five minutes or less you may find it is worth it to do the preparation yourself.
Now that you have saved all of this money, it is time to make an additional contribution to the Buy A Home With Barbara Fund. I am ready when you are!
ESTATE TAX RULES
February 8, 2010 By Leave a Comment
Unless Congress changes the law as it stood on January 1, 2010, the estate tax will swing wildly over the next few years.
2009 Rules . . .
- Estates are taxes at 45% on amounts greater than $3.5 million.
- The value of assets is reset at the time of death. That new value serves as the cost basis for figuring capital gains when heirs eventually sell the assets and pay taxes on those gains.
2010 Rules . . .
- Estates are not taxed.
- The value of assets is based on prices at which they are acquired by the person who dies. That value then serves as the cost basis for figuring capital gains when heirs sell the assets and pay taxes (with an exclusion of $1.3 million or up to $4.3 million if the heir is a spouse who is a US citizen).
2011 Rules . . .
- Estates are taxed at rates ranging from 41% on amounts greater than $1 million to 55% on amounts greater than $3 million.
- 2009 rules on capital gains return.
IS IT TIME TO REFINANCE YOUR HOME?
February 4, 2010 By Leave a Comment
Should you keep your adjustable-rate mortgage or refinance? Generally, stay with the ARM if you plan to move before it adjusts or can handle a modest increase in payments. Refinance to a fixed rate loan if you expect to stay for at least three years or if you owe more on your home than it is worth in today’s market AND you qualify for government assistance. To see if you qualify for the government’s Home Affordable Refinance Program (HARP), go to http://makinghomeaffordable.gov and click on “Refinancing”.
