Homebuyer assistance for Davie Florida home buyers

HUD is changing the MIP(Mortgage Insurance Premium)

HUD has released the date for the pending MIP (Mortgage Insurance Premium) increase.

Something that would be good to know if you have buyers on the fence about moving forward with a purchase.

HUD is changing the annual percentage on FHA loans. For a while now HUD has been putting out information that they will have to raise premiums to keep the insurance fund for FHA loans solvent and properly funded to continue to ensure new FHA loans. With FHA being the best low down payment programs out there, (along with VA) this change will affect a lot of homebuyers.

The annual premium will increase by .25% per year. That means the buyer that was looking at .90% per year in FHA MIP premiums will now play 1.15% per year. Since the approximate term for a FHA loan to hit the mandatory drop off point is roughly 10 years, this means a pretty significant increase in overall cost. On a $200,000 loan the fee increases $500 per year or $41.67 per month. This will also affect the buyers qualifying debt ratio.

That's the bad news, the good news is that the FHA fun will remain viable and we should be able to rely on this great product for years to come. MIP is also tax-deductible just like mortgage interest.

What can you do to ensure that your buyers get the lowest rate? HUD requires that the new premiums be implemented on all loans with FHA case number pulled on April 18 are thereafter. If you have a buyer that is already now are nearly ready, be sure there lender pulls the case number before April 18.

James Loftis

Florida Licensed Mortgage Broker

Florida licensed Real Estate Broker

http://RealEstate911.com

954-261-3361

The Flexibility you Need: Benefits of Home Equity Lines of Credit.

You may wonder what the differences between home equity loans and home equity lines of credit are.
Home Equity
When you have a mortgage on your home but the value of the property exceeds the amount owed, the difference between the outstanding debt and the property value is referred as Home Equity. This remaining property value can be used to guarantee another loan: A Home Equity Loan or Line of Credit.
Home Equity Loans are secured loans with a fixed or variable interest rate, a fixed loan amount and a fixed, though negotiable, repayment program. A home equity loan is just like any other loan, only it is secured with the equity you have built on your home and thus carries fewer interests.
A Home Equity Line of Credit on the other hand, comes only with a variable interest rate, there is no fixed loan amount, though there is a credit maximum and the repayment is extremely flexible. The home equity line of credit is also secured on the home equity.
Interest Rate
Since both are secured, the interest rate charged is considerably low. Only home equity loans with a fixed rate can have a slightly higher interest. Home equity loans with a variable rate usually carry a somewhat lower interest rate. Home equity lines of credit, on the other hand, carry only a variable interest rate that is usually similar to the home equity loan fixed interest rate.
Loan amount
Home equity loans come with a fixed loan amount that can equal or be a bit higher than the home equity value. Home equity lines of credit are somewhat different: There is no loan amount, a credit maximum amount is set and you can borrow as much money as you need up to that amount. For example: If a $50.000 limit is set you could borrow $10.000 and a month later borrow $20.000 more. And so on till you reach the credit maximum.
Repayment
Home equity loans come with a fixed repayment schedule which has to be followed strictly with some exceptions. Though, there are in some cases grace periods and waivers you could apply for, if you request a home equity loan you will probably have rigid installments or at least a fixed amount plus a variable amount depending on interest rate variations.
Home equity lines of credit let you repay the amount you owe they way you want to do it. You have an open line of credit where you can borrow and repay as much as you want as long as you do not exceed the credit limit. Moreover, as opposed to home equity loans, lines of credit do not require to be renewed as you can always borrow more as long as there is credit left. If your home equity grows either by an increase on your property value or because of a reduction on your mortgage debt, you can ask for your credit

James Loftis Broker/Owner Real Estate 911 Inc
CRS,CIPS,GRI,EPRO,TRC
http://RealEstate911.com

HUD is changing the MIP(Mortgage Insurance Premium)

HUD has released the date for the pending MIP (Mortgage Insurance Premium) increase.

Something that would be good to know if you have buyers on the fence about moving forward with a purchase.

HUD is changing the annual percentage on FHA loans. For a while now HUD has been putting out information that they will have to raise premiums to keep the insurance fund for FHA loans solvent and properly funded to continue to ensure new FHA loans. With FHA being the best low down payment programs out there, (along with VA) this change will affect a lot of homebuyers.

The annual premium will increase by .25% per year. That means the buyer that was looking at .90% per year in FHA MIP premiums will now play 1.15% per year. Since the approximate term for a FHA loan to hit the mandatory drop off point is roughly 10 years, that means a pretty significant increase in overall cost. On a $200,000 loan the fee increases $500 per year or $41.67 per month. This will also affect the buyers qualifying debt ratio.

That's the bad news, the good news is that the FHA fun will remain viable and we should be able to rely on this great product for years to come. MIP is also tax-deductible just like mortgage interest.

What can you do to ensure that your buyers get the lowest rate? HUD requires that the new premiums be implemented on all loans with FHA case number pulled on April 18 are thereafter. If you have a buyer that is already now are nearly ready, be sure there lender pulls the case number before April 18.

James Loftis

Florida Licensed Mortgage Broker

Florida licensed Real Estate Broker

http://RealEstate911.com

954-261-3361

HUD is changing the MIP(Mortgage Insurance Premium)

HUD has released the date for the pending MIP (Mortgage Insurance Premium) increase.

Something that would be good to know if you have buyers on the fence about moving forward with a purchase.

HUD is changing the annual percentage on FHA loans. For a while now HUD has been putting out information that they will have to raise premiums to keep the insurance fund for FHA loans solvent and properly funded to continue to ensure new FHA loans. With FHA being the best low down payment programs out there, (along with VA) this change will affect a lot of homebuyers.

The annual premium will increase by .25% per year. That means the buyer that was looking at .90% per year in FHA MIP premiums will now play 1.15% per year. Since the approximate term for a FHA loan to hit the mandatory drop off point is roughly 10 years, that means a pretty significant increase in overall cost. On a $200,000 loan the fee increases $500 per year or $41.67 per month. This will also affect the buyers qualifying debt ratio.

That's the bad news, the good news is that the FHA fun will remain viable and we should be able to rely on this great product for years to come. MIP is also tax-deductible just like mortgage interest.

What can you do to ensure that your buyers get the lowest rate? HUD requires that the new premiums be implemented on all loans with FHA case number pulled on April 18 are thereafter. If you have a buyer that is already now are nearly ready, be sure there lender pulls the case number before April 18.

James Loftis

Florida Licensed Mortgage Broker

Florida licensed Real Estate Broker

http://RealEstate911.com

954-261-3361

Pmi Insurance

So, you’re putting less than a 20% down payment on the house you are buying and you are getting a conventional loan. Your lender has given you the option of paying a monthly private mortgage insurance (PMI) premium or offering you a higher rate where the lender pays it, known as lender paid mortgage insurance (LPMI). Which scenario is better for you? You’re confused and don’t really understand it all; you’d prefer to just have the decision made for you rather than weigh the options yourself. However, if you don’t consider all the options, you could be making a financial mistake.

PMI protects the lender against default and is required on loans that are deemed higher risk If you are investing less than 20% of your own money into a home, a lender considers it easier for you to walk away from your debt obligation if you find yourself in a pickle and can’t pay your mortgage. Your lender can buy/pay your mortgage insurance for you, but to do so, they charge you a higher rate plus a profit margin. To make a decision as to which route to take, you need to weigh the pros and cons. PMI

You have more interest to deduct on your taxes because of your higher rate when you have LPMI. But if you and your spouse make $100,000 annually or less, or individually you make $50,000 annually, your monthly mortgage insurance is deductible. Depending on your tax bracket, the higher interest rate may or may not benefit you. You should crunch the numbers or ask your accountant’s advice.

PMI automatically terminates when your loan to value (of the original property value) reaches 78%, but you can request it terminated when it reaches 80%. Some lenders will allow you to terminate the insurance when the appreciated loan to value reaches 80%. So, how long are you keeping this loan? Will you be paying down the principal balance rapidly? Is this your forever home and your forever mortgage rate? Then perhaps LPMI isn’t such a hot option. You can review an amortization schedule when making this decision to figure out just what payment will get you to that target loan to value (LTV). If you know that you will be making extra principal payments regularly, your lender should be able to help you analyze that scenario as well. However, if you’re going to be in the house a short time, then LPMI might just be the way to go.

Finally, just look at your basic payment both ways. Which way is more affordable for your current needs? The pricing on these products fluctuates. One product may be cheaper than another based on loan amount, term, down payment and other factors. You may also qualify for a second mortgage to make up the remaining 20% down payment and avoid private mortgage insurance altogether. What works best for your needs?

When considering your options, discuss your plans with your lender. Consider the above points and discuss them with her/him. By doing so, you should be able to clear the fog and make an educated decision.

James Loftis http://RealEstate911.com

1031 Exchange and the Capital Gains Tax Rule

A 1031 exchange and the Capital Gain tax rule is not a tax loophole. It is a section of the Internal Revenue Code, written by Congress, to allow anyone who meets all the requirements to sell their property and defer paying taxes on the gain.

If your plans include using the money from the sale of a business or investment property to buy more of the same, a 1031 real estate exchange provides greater proceeds for your next investment-more than you could gain through the re-investment of after-tax proceeds.

Understanding the Capital Gains Tax Rule and Avoiding the Capital Gains Tax
All relinquished (old) and replacement (new) property must be vacant land, rental property or property used for trade, business or investment. The property must be held for at least a year and a day to qualify for a 1031 Exchange. If the properties meet these requirements, you may exchange any real estate for any other type of real estate.

• You cannot have actual or constructive control of any of the proceeds received from the sale of the old property. By law, all money is held by a Qualified Intermediary (also referred to as an Accommodator or Facilitator). You cannot have an associate or employee, your attorney, broker or CPA hold the proceeds, nor can you leave the proceeds in escrow until the second property is purchased.  
• You must reinvest all cash proceeds from the sale, and purchase a new property or properties of equal or greater value, in order to avoid taxation on the gains.  
• You have 45 days from the date of closing on the old property to identify a list of properties, from which you will purchase the new property.  
• From the date of closing, you have 180 days to close on one or more of the properties from your 45-day list.  
• The titleholder on the old property must be the same titleholder on the new property.

Hope this information helps.

James Loftis   Broker/Owner Real Estate 911 Inc.

Http://RealEstate911.com

Information to consider before buying a foreclosure

Many home buyers are attracted by the increasing number of foreclosed homes that are constantly becoming available in the market. Although foreclosed homes often present a great opportunity for buyers, foreclosed homes are not always the best option. There are many things that buyers need to consider before they decide to make an offer on a foreclosed home.

There is enough available information out there for buyers to be informed on all the negative aspects that could be involved in a foreclosure deal, but sometimes they buyers need to be reminded that this information is out there. Home buyers need to be well informed in order to take advantage of the positive aspects that some foreclosure deals do offer.

Among the issues that buyers need to deal with is title work. Buyers of a foreclosure home should get a title check even if the foreclosure buying process doesn’t account for one. Buyers need to be aware that additional liens such as second mortgages and tax liens may still be attached to the property and passed on to the new buyer.

Furthermore, inspections are a great way of finding out the accurate condition of foreclosed homes. Some foreclosure properties are open to inspections, but others are not. Buyers need to be aware that many foreclose properties are not in the best condition, and most of them are sold “as is.” Since foreclosed homes often remained abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism. Therefore, it is highly recommended that you always get an inspection done on any property you plan to purchase.

Another thing to consider is that a property disclosure statement is not always required, it all depends upon the state the foreclosure property is in; this in another reason why an inspection is even more necessary. It is recommended that buyers check everything from plumbing, electric wiring, foundation, etc.

These are just a few of the issues that buyers of foreclosed homes have to deal with. There are others to consider, and buyers need to do their homework in researching as much as possible before they make an offer on a foreclosed home. They must realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of problems.

Good luck

James Loftis Broker/owner Real Estate 911 Inc.

Http://RealEstate911.com

Free advice on saving on your property taxes

Many home owners are overpaying there property taxes and for those who are willing to extend the effort there are ways to save on this tax.

Step 1: Visit your local property tax assessor. Your tax bill should give the office’s location. Inquire in advance about which forms you must fill out and when the deadline for filing is, while there, get a copy of your property card, which contains information about your house, like square footage and the number of bedrooms and bathrooms that the assessor uses to determine its value.

Step 2: Check the property card for mistakes. Look for math errors (property taxes are generally based on a percentage of a property’s value, multiplied by a tax rate set by the local government); clerical errors, such as how your property is classified (commercial vs. residential); and inaccurate descriptions that indicate your home is worth more than it is Catching such simple mistakes may lead to a reduced assessment.

Step 3: Compare your home’s value with that of others in the neighborhood. This public information can be found at your local municipality or online at valueappeal.com or Trulla.com Look up homes that are close to yours in terms of location, age, size, and amenities, and then note their appraisals.

Step 4: File an appeal. While the rules for appeals vary from one state to the next, most require you to submit a written statement to a county board explaining why the evaluation is inaccurate. You must support this claim with hard evidence: property cards, other house valuations, and even photos can be useful when comparing your home with others. One of the best ways to support your claim of value I s to have your local Realtor work up a Bpo (Broker Price Opinon) for your property and present this to your county property tax appraiser to certify your home value, this may cost you a few dollars but it may very well be money well spent, And be sure to mention your home’s flaws (a leaky roof, termite damage). Those problems might save you enough cash that you’ll be able to afford to fix them.

Property tax values have been declining in most areas and you may be surprised to find that you can actually save money by following these simple steps.

James Loftis Broker/Owner Real Estate 911 Inc

Http://RealEstate911.com