Better Homeowners Information to Improve Homeownership             Linda

Just a thought       Whether you're refinancing your current home or buying a new one, something worth considering is a 15 year loan rather than a 30 year term. The payments will be a little higher but you'll get a lower interest rate and you'll build equity much faster.                               Let's look at an example of a $200,000 mortgage with the choice of a 30 year term with a 3.75% rate compared to a 15 year term with a 2.875% rate. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.             Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you'd like a recommendation of a trusted lender.                                 As a Residential Finance Consultant, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions.  Please forward this article to your friends or family who could benefit from it.       Linda Schneider Prudential Team Realty linda@lindaschneider.com

     

 

     
     

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Linda Schneider Prudential Team Realty 457 E. Wonderview Avenue, PO Box 2807PO Box 2807 Estes Park, CO 80517 (970) 586-3838 linda@lindaschneider.com Privacy Policy

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"Anyone may arrange his affairs so that his taxes shall be as low as possible...for nobody owes any public duty to pay more than the law demands." 
Judge Learned Hand

     

This opinion refers to federal income tax but the logic and spirit can easily be applied to any tax including property tax. Most property tax is based on a valuation called an assessment placed on the property by a government taxing authority.

     

When property values rise due to appreciation, the assessments usually rise. However, when values decline as they have done in many areas in the past few years, the assessments should follow accordingly.

     

If you don’t believe your assessment reflects market value, put together proof to support your position. Recent comparable sales, similar in size, condition and location are very persuasive. Check to see if the square footage on the assessment is accurate. If the home is not in good condition, take pictures to show that.

     

As your real estate professional, I can supply the comparables, filing deadlines and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket.

 

     

The Mortgage Forgiveness Relief Act of 2007 was passed by Congress to avoid additional financial hardship that some homeowners might experience due to a foreclosure or short sale. The law affects mortgage relief that occurs from January 1, 2007 to December 31, 2012.

     

Normally, IRS considers partial or total debt forgiven by a lender to be treated as ordinary income. This not only affects foreclosures but even short sales where only part of the debt is forgiven would trigger additional taxes for the homeowner. There are exceptions that apply such as bankruptcy and insolvency.

     

The forgiveness is only applicable to taxpayers' principal residence and only acquisition debt used to buy, build or improve the home. The additional cash taken out when refinancing a home will not be eligible for the relief unless it is used for capital improvements.

     

The lender is required to submit a 1099 form to IRS and provide the homeowner a copy who will file the forgiven amount on Form 982 as part of their 1040 tax return. How this affects your individual situation may differ due to other circumstances and advice from a tax professional is recommended.

     

 

Points refer to prepaid interest on a home mortgage and can be fully deductible by the buyer in the year paid if the right conditions exist. The points must be used to buy, build or improve a taxpayer's principal residence but not all fees charged by the lender are necessarily deductible.

     

According to IRS Publication 936, "The term 'points' is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. A borrower is treated as paying any points that a home seller pays for the borrower's mortgage."

     

If you purchased a home in 2011, have your tax professional evaluate your closing statement to see if there are loan fees that may be used as a deduction on your tax return regardless of whether you or the seller paid them.

     

Refinancing a principal residence or purchasing an investment or income property require that points must be deducted ratably over the term of the mortgage rather than deducting them fully in the year paid. Borrowers in these situations should consider the benefits of lower interest rates from paying point to higher interest rates without points.

     

This article is meant to provide information that can be discussed with your tax professional about your specific situation and is not to be considered tax advice.

Work hard, buy a home, start a family and continue to upgrade your home until everyone has enough room. This has been the blueprint for lots of homeowners for the last fifty years but there is certainly a shift in thinking that could change all of that.

     

Interestingly, Americans live in much larger homes than most people in other countries throughout the world. The U.S. Census reported in 2006 that the average single family home completed had 2,469 square feet which was 769 feet more than in 1976.

     

Once the children are grown and have moved out, homeowners are finding they have too much room. Even if their home is paid for, they have higher property taxes, insurance, utilities and maintenance on the larger home than they'd have if they were living in the "right size" home.

     

Some homeowners state thaty they're keeping their larger home because it has luxury features that smaller homes don't have. There's a movement that seems to have started in the United States to find the "right size" home with the amenities and convenience that homeowners want.

     

This philosophy has been expressed by Sarah Susanka in her book http://www.amazon.com/Creating-Not-So-Big-House/dp/1561586056/ref=sr_1_2?ie=UTF8&qid=1325513786&sr=8-2#_"> style="COLOR: #2e5892; TEXT-DECORATION: none; text-underline: none">Creating the Not So Big House. It proposes a house that "values quality over quantity with an emphasis on comfort and beauty, a high level of detail, and a floor plan designed for today's informal lifestyle."

     

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You don't have to be Dorothy in the Wizard of Oz to feel like there's no place like home.

     

Home is a place to call your own. It's a place to raise your family and share with your friends. It's a place to create memories. A home is a place to feel safe and secure.

     

Consumers are vigilant about buying opportunities like Black Friday, Small Business Saturday and Cyber Monday along with sales, coupons and rebates. Some cautious buyers will even risk shopping early to find exactly what they want to waiting until the last moment for potentially lower prices.

     

     

In retail, the hype is more obvious and the signs may be easier to read than that of the home market. Certainly, volumes have been written about the record low mortgage rates and that home prices have adjusted considerably lower in the last four years.

     

     

A more subtle indication of a home buying bargain is that statistics indicate that year-after-year, the average home prices fall in the fourth quarter. The holidays beginning with Thanksgiving, winter weather and the distractions of gift purchases certainly contribute to lower home sales.

     

     

Regardless of what is causing the reduced volume, the smart buyer can take advantage of the end of the year to get their best possible deal on a home purchase. The buyers willing to buck the trend could easily benefit from lower prices and less competition from other buyers.

Summertime greetings from Estes Park! 

     

 

     

I have included 2011 year to date Estes Park real estate statistics compared to the same period of time during 2010.

     

 

     

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

2011 Property for sale	Median List Price	Days on Market
235 Houses in Estes Park	$398,000	207
80 Houses outside of Estes Park	$300,000	209
133 Condos in Estes Park	$258,900	198
120 Parcels of Land in Estes Park	$199,000	467
68 Parcels of Land outside of       Estes Park	$74,500	309

     

 

     

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

2010 Property sold (1/1-07/7)	Median List Price	Days on Market
65 Houses in Estes Park	$347,000	176
22 Houses outside of Estes Park	$239,028	172
36 Condos in Estes Park	$193,500	183
9 Parcels of Land in Estes Park	$125,000	195
11 Parcels of Land outside of       Estes Park	$45,000	275

     

 

     

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

2011 Property sold since 1/1/2011	Median Sold Price	Average Number of days on Market
70 Houses in Estes Park	$325,724	206
26 Houses outside of Estes Park	$204,950	179
28 Condos in Estes Park	$248,000	259
3 Parcels of Land in Estes Park	$165,000	6
6 Parcels of Land outside of       Estes Park	$38,000	128

     

 

     

 

     

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

Pending Sales	Median List Price	Average Number of Day on the Market
27 Houses in Estes Park	$349,000	218
11 Houses outside of Estes Park	$289,000	156
12 Condos in Estes Park	$299,000	196
2 Parcels of Land in Estes Park	$215,950	189
1 Parcel of Land outside of Estes Park	$95,000	240

     

 

     

If you have plans of buying or selling property, I am always available to help.  The Estes Park real estate market is stable and I have many interested prospects.  If you are not interested right now, perhaps you know of someone else that might want to buy or sell real estate.  Please give them my name or pass my card along.

     

 

     

Looking forward to seeing you,

     

     

 

In today's real estate market, there is no shortage of lenders.

     

How do you know which one to use? 

     

Here's a few tips to help make a decision.

     

1. Is the loan officer familiar with the local real estate market?

     

2. If possible, it is helpful to have a face to face meeting rather than just a phone interview or by email. 

     

3. Does the lender offer in house underwriting?  With ever-changing underwriting guidelines, the unexpected is now commonplace.

     

4. What percentage of loans close on time?  Many lenders do not seem to care about contract deadlines, which put the buyer- you in jeopardy of losing your loan lock and possible default of your purchase contract.. 

     

 If you have any questions as to what kind of answers you should expect, please give me a call.

Estes Park offers numerous outdoor rereational opporutnities.  At this time of the year, you can enjoy hiking, snowshoeing, and back country skiing.

     

And if you like to shop, there are some great bargains that can be found in the stores along Elkhorn Avenue. 

     

Elk and Deer winter in the Estes Valley and you will find large herds for viewing.