Realtors Work Hard These Days…
By JoAnn Rooney
They deal with short sale negotiations with banks that can go on for 6 months to a year. They deal with foreclosures that need renovations and banks that won’t spend a
dime to fix up the property. They deal with buyers who think they need to see 50 homes before they can find the right one and sometimes it’s the first one they looked at but is now under contract. Realtors drive around for weeks with buyers. They deal with appraisals that come in short and home inspections that bomb. I cannot imagine the gas bills and the time they spend away from their families because someone flew into town and wants to see properties NOW.
My article today is about so-called pre-approved buyers and how to avoid being one. Realtors put clients in their cars who tell them they are pre-approved with a lender only to find out they worked with someone that did not ask the right questions.
So if you are in the market to purchase a new home, find a mortgage broker or a bank and get approved 3 months before you start seriously looking. I don’t mean you call a broker or banker and tell them what you need and they type up a piece of paper that says you’re good to go. If your financial person does not ask you for your tax returns, recent paychecks, bank statements and information to pull your credit, then find one that will.
Getting a loan today is a totally different experience than when you bought a home prior to 2008…you now have to QUALIFY! We are all paying for the sins of the past and we should be. There are plenty of loans available for home buyers: VA loans for anyone that served in the military or reserves with 0% down, there are FHA loan with 3.5% down, USDA loans with 0% down and conventional loans now available with as little as 3% down. Sellers are helping with closing costs and even paying for mortgage insurance policies. Mortgage professionals are busy, properties are selling and it’s a great time to be a buyer. Interest rates are great no matter what product you pick- – but, here it is again- – you must be properly pre-approved. I like to see my client 90 days before they go look for a home. I want to be able to look at their credit and help them increase their scores before they purchase. The better the score the better the rate!
I cannot tell you how often I see a medical collection for under $20, which if recent can actually decrease your credit score. I had one go down a 112 points…that’s crazy! I got it removed and the score went up 112 points. That took a week to accomplish. I work with people to increase scores with a strategy that is fairly simple and easy for the client to follow. I look at tax returns for any “surprises” that might get a loan denied. I look at tax returns for self-employed borrowers and show them what income the lender is going to allow. I look at bank statements to make sure there aren’t any large deposits that cannot be sourced. I look at paycheck stubs and check for commission, bonus or overtime that must be averaged. I talk about closing costs and how much of a home a buyer will qualify for.
It’s difficult to keep up with 15 lenders and all their products and guidelines. I have to think outside the box today more than ever. Every loan is different and some are very challenging but at the end of the day when I’m sitting at the closing table with the Realtor and the buyers, it is one of the most rewarding jobs imaginable.
Make sure you qualify for that home before you fall in love with it. And don’t be a “so-called” pre-approved client. Your realtor will appreciate it and work even harder to find you your dream home. Call me today 727-787-2299 X 1!
How to Get Your Home Sold in a Shifting Market
Four tips for success…
By Marlene Crawford
Let’s face it. Our market is changing at a rapid clip. If you’re trying to get your home sold sooner rather than later – let’s take a look at some of the top things you need to know before you take another step. As someone who spent years and years as a real estate professional and mortgage professional – I can share with you the top tips you need to understand to protect your best interests and get your home sold.
They are…
Price It Right! Contact your local real estate professional to ensure you have the most current CMA or Comparative Market Analysis for the homes sold in your area. This valuable tool will help you price your home in such a way that it will make it attractive to not only buyers, but other real estate professionals who may have clients interested in purchasing a home just like yours.
Don’t Try to Go it Alone. While I know it’s tempting to want to sell on your own and save a commission. I can tell you – in today’s market – a great agent will more than earn that commission and more often than not, you’ll save so much more in money, time and headaches. Why? Buyers are more savvy than they’ve ever been. The market is currently to their advantage. What you don’t know in terms of negotiations, market trends and mortgage connections can definitely cost you on the bottom line. An agent can make sure your family’s rights and best interests are protected, negotiate a contract that is fair and equitable and push your transaction through the proper channels rather than have it fall through the cracks which is so prevalent in today’s market. If you don’t currently have an agent and you need to find someone – give me a call. We have a bank of referral partners who we know, trust and feel confident can help you every step of the way.
Out With the Old! While the shelves full of novelties, mementos and family photos are treasures to you, prospective buyers need a “clean landscape” in which to envision their own personal possessions. Clear away the clutter, box up the personal items and store them. This presents a better “showplace” and also safeguards those items precious to you when your property is being reviewed by potential buyers.
Grading on the “Curb.” “Curb Appeal” has never been more important than in a changing market. First impressions are everything and your home can be a masterpiece inside but if your outside is drab, dirty, cluttered or unkempt you can be sure that your prospective buyers will drive on by. Polish or replace hardware such as door knockers, knobs and light fixtures. Plant colorful flowers in the beds, trim hedges, keep your lawn tidy and consider a nice accent piece for your porch. If your door is faded or chipped – spruce it up with an inexpensive sand and paint job.
Little things mean a lot in today’s market. For more great ways on how to get your home sold or how to take advantage of our extraordinarily low interest rates to purchase your next home, call us today! We’re here to help!
Three Ways to Save on Taxes…
By Marlene Crawford, Your Mortgage Source
When it comes to constants in life – it’s been said that there are two you can count on: Death and Taxes! When it comes to keeping more of every dollar you make in today’s
economy, you may have something else you can count on: Big Savings from the IRS! I know we’re not anywhere near April 15th, but the decisions you make this quarter – can and will affect how you file next year!
Let’s take a look at three key ways home ownership can help you save on your income taxes!
1. Mortgage interest. This is the one of the most important advantages to home ownership! Generally, if you itemize deductions on Schedule A of your federal income tax return, you can deduct the qualified residence interest that you pay on certain home mortgages taken on your principal residence. In the very early years of a loan, this savings is significant, as most of your monthly payment is interest, rather than principal. Consider as well, if you are in a 28% federal tax bracket, this can have the effect of lowering your borrowing costs by almost a third, depending on which state you live in.
For example: Jill is single, with no children and rents an apartment for $1200 per month. In this scenario, on her federal return she can only take her standard deduction. Now, if Jill was a homeowner, with a monthly mortgage payment of $1200, her tax liability would be lowered and she would receive a form 1098 from her mortgage company detailing how much of her annual mortgage payments went towards interest. Let’s say she paid $11,400 in interest, and also paid $1500 in real estate taxes. That would mean she would get her mortgage interest and real estate taxes deducted!
In addition, there is a “Home Equity Loan” exception that allows home owners to tap into their home equity and gives them the ability to do what is called “debt-shifting.” Take that same scenario and let’s just say Jill from above was also sitting on $10,000 in credit card debt. If she was renting she would not have any tax advantages to paying off that debt. However, if Jill was a homeowner and had taken out a home equity loan to pay off that debt, she would have the ability to write off all of the interest from her home equity loan! As with so many things in life though – there is a catch! The loan must be secured with your house as collateral – so failure to make payments could wind up in foreclosure.
2. Points and closing costs. When you take out a mortgage loan to purchase a home, you’ll more than likely be charged closing costs which include points, attorney fees, recording, title, appraisal and processing fees. “Points” are costs charged by your lender. One point equals one percent of the borrowed loan amount. The IRS says that, in most cases, loan discount points and origination fees are tax deductible to the buyer, regardless of who pays them. Look at lines 801 and 802 of your settlement statement. While many “closing costs” are not deductible, these points generally are. See IRS Publication 936 at www.irs.gov to learn more.
3. Taxes. In addition to mortgage interest and points charged at closing, you can generally deduct the real estate taxes that you’ve paid on your property in the year they are paid.
BONUS! Write off moving costs! The government may allow you to write off some of your moving costs when you buy a new home if it’s at least 50 miles closer to your job than your old home. To qualify, you must continue to work full-time in the area of your job for 39 weeks during the following year. If you are self-employed and work from your home, any move of 50 miles or more will qualify. However, you must work full-time near the location for 78 weeks during the next 24 months. Tax law varies based on income for this one, so be sure to check with your tax consultant.
Earlier we mentioned that there were only two constants in life: Death and Taxes. There is of course one more, and that is change. Our tax laws are always going to be in a state of change. That’s just the nature of the beast! As a mortgage professional, I always advise my clients to seek the wise advice of a certified tax professional. I’m fortunate to have a number of trusted resources that I can recommend that you can turn to for all of your tax questions!
Please give us a call today to obtain your list of resources and find out a little more about how home ownership can help you save big on your bottom line!