Mario Gonzalez - Wednesday, March 18, 2015
Finding a mortgage lender is not a problem. Selecting someone who will help you find the best loan product for your situation even if it means sending you to another lender is paramount. There is a huge advantage to be able to sit across the table from someone you’re doing business with and look them straight in the eye. It’s difficult to make an informed decision based on a website and a phone call. Doing business with a full-time professional who specializes in residential loans like you’re trying to get is important. You want the loan officer to be familiar with local conditions, values and practices. It’s to your benefit to have a loan officer who has the experience to put the unusual transaction together even if yours is not. Here are a few questions that will be helpful in selecting the right loan officer.
- What percentage of your business are FHA & VA compared to conventional mortgages and how long have you been doing them?
- What percentage of your loans close on time according to the sales contracts?
- Will my credit score affect my interest rate?
- Will you help me select the best loan product for me regardless of your commission?
- Are there prepayment penalties on any of the loans we’re considering?
- Are there any restrictions on refinancing any of the loans we’re considering?
- When is my loan rate locked-in? Is there a charge for that?
- Is your loan underwriting in-house?
A real estate professional can be your best source of information and can recommend a trusted lender. If you have any questions as to what kind of answers you should expect, please give me a call.
Mario Gonzalez - Wednesday, March 11, 2015
Most people’s first introduction to Radon is during the inspections of a home. It can be as much a surprise to a seller as it is a buyer. Radon is an invisible and odor-free, cancer-causing radioactive gas. Radon can get into a home through cracks in solid floors, construction joints, cracks in walls, gaps in suspended floors, gaps around service pipes, cavities inside walls and even the water supply. It is estimated that one out of every fifteen homes in the United States has elevated radon levels. The EPA recommends that you test your home which is the only way to find out if you and your family are at risk. If the level found is 4 picocuries per liter or higher, the EPA suggests that you make repairs or install a radon reduction system. Even lower levels can have health risks. The EPA’s interactive map is available to find state and county information but still recommends that all homes should test for radon. More information can be found from the EPA in A Citizen’s Guide to Radon. Test kits are inexpensive and can be purchased at stores like Lowe’s or Home Depot if you choose to do it yourself. If levels indicate a high enough level, you can contact a qualified radon service professional for another test or to mitigate your home. You can get information on identifying these professionals at www.nrpp.info and www.nrsb.org.
Mario Gonzalez - Wednesday, March 4, 2015
There are sites all over the web that offer to tell you what your home is worth. Simply plug in your address and email and you’ll get a value. It’s fast; it’s easy but is it accurate? The value is determined by what is called an Automated Valuation Model (AVM) that analyzes public record data with computer decision logic. Square footage, age, number of bedrooms and location are easily definable objective data. The challenge is identifying, measuring and comparing the subjective data. An AVM cannot identify how unique features might add or detract from the value, if the market is declining or why the comparable sales apply or don’t apply to the subject property. Is a home worth more because it is near shopping or less because it is across the street from a high-traffic commercially zoned property? Experienced professionals are more likely to make proper adjustments for condition, market appeal and positive and negative influences. Imagine that you’re going out for dinner and you consult HamburgerAVM.com to tell you how much a hamburger is worth. It might be accurate based on condiments, vegetables and weight but can it address things like taste, quality, cleanliness, service, convenience or atmosphere. You certainly couldn’t present the printout to the waiter to negotiate a lower price. An AVM can be a tool that a homeowner, prospective buyer, mortgage officer, appraiser or real estate agent can use to get a quick idea of price but there are inherent limitations that can only be considered by personal examination balanced with experience in the market place. Experience and understanding of the subject property and the marketplace are critical to having confidence that a value is accurate. Any person could go through the same steps to arrive at a value but an experienced, well-trained professional is far more likely to assess all of the variables more accurately.
Mario Gonzalez - Wednesday, February 25, 2015
There are many reasons people want a home with the most frequent responses being a place of their own, to raise their family, share with their friends and feel safe and secure. These are all strong motivations fueling the American Dream of owning your own home. The motivation is so dominant that buyers are willing to make sacrifices to have their dream come true. According to the 2014 National Association of REALTORS® Home Buyers and Sellers Survey, 72% of first-time buyers cut spending on luxury or non-essential items. They also cut spending on entertainment, clothes and even cancelled vacation plans. The value of getting their own home is more important than the immediate gratification of things that are considered less important. While qualifying guidelines were increased last year, there are still more buyers purchasing homes at near record-low mortgage rates.
Mario Gonzalez - Wednesday, February 18, 2015
Insurance is a way to hedge the risk of a possible loss on an asset that a person or entity cannot afford. The cost of the coverage is determined by risk and exposure to the insurer and reflected in the premium. Another way to say it is: don’t buy insurance when you can afford the loss. If you have a mortgage on your home, you must have insurance. It is probably prudent for most people to have property insurance but certain coverage might be avoided because you can afford the loss if you were to have an occurrence.
- Call your current agent and review your insurance coverage. Ask if there are any available discounts whether your property qualifies for now or after certain improvements are made. Monitored alarm systems, dead bolts, smoke detectors, updated electrical, certain types and ages of roofs among other things may be eligible for individual discounts.
- Compare the newly revised coverage and premium with other reputable agencies and insurers. Shopping can be time consuming but experts agree that the exercise can be valuable and should be considered every few years.
- Deductibles are an easy way to affect the premium based on the initial amount of loss that the insured wants to assume. The higher the deductible, the lower the premium. Determine the amount of risk you want to assume and select an appropriate deductible.
- Consider bundling your home and auto policies for possible discounts and leverage for better service.
- Don’t become a co-insurer. Most policies stipulate that a building must be insured for at least a certain percentage, usually 80% of its insured value to be able to collect the full amount of a partial loss. Insured value is not always the same as market value. The land is not considered in the value but replacement cost of the dwelling is.
It isn’t possible to purchase insurance after a loss; it must be purchased before a loss is incurred. Premiums are based on careful analysis of insurer’s loss and overhead expense plus a profit. As a homeowner and an insured, it would be equally wise to analyze coverage, claim service, your risk tolerance and the premium you’ll pay for that coverage.
Mario Gonzalez - Wednesday, February 11, 2015
Even if you’re having a professional help you with your income tax return, you need to provide them with information on the money you spent that might be deductible. Look at the following list to see if any of these things need a little more investigation to determine if they apply to your situation.
- If you refinanced your home for the second or subsequent time in 2014, there may be points that can be taken as an interest charge.
- Compare mortgage interest, property taxes and other eligible itemized deductions to your standard deduction to see which will give you a larger deduction.
- If you’re paying mortgage insurance premiums with your payment, you may be eligible to deduct them.
- If you purchased a home in 2014, there may be some deductions found on the HUD-1 form you received at closing.
- If you purchased a home in 2014 and the seller paid points on your behalf in order to get a mortgage, you may be able to deduct them.
- If you purchased and installed in 2014 qualified residential energy efficiency property or improvements, you may be eligible for tax credits.
- If you have dedicated, exclusive space in your home for a home office, you may be eligible for a deduction that may include a pro-rata share of insurance, utilities and other things.
For more information, see IRS Publication 936, Home Mortgage Interest Deduction; 2014 Instructions for Schedule A. If you need another copy of your closing statement for the home you purchased or sold in 2014, contact your real estate professional.
Mario Gonzalez - Wednesday, February 4, 2015
Over 50% of homebuyers don’t shop to find the best interest rate for their mortgage. While a buyer would rarely purchase the first home they look at, they will accept the rate and terms offered by only one lender. While the borrower and the property affect the rate and terms that a lender may offer, it is not to be said that all lenders will offer the same terms and rates to the same buyer. Credit score, home location, home price and loan amount, down payment, loan term, interest rate type and loan type all affect the interest rate but different lenders can interpret this information differently. Shopping around to compare rate and terms for a mortgage is a reasonable exercise considering that a half percent lesser interest rate could not only lower the payment but the cumulative interest that is paid while that loan is outstanding. Some borrowers don’t shop the mortgage because they are concerned that having their credit checked multiple times could adversely affect their credit score. The credit bureaus take this into consideration when several requests are made by the same category of lender in a short period of time. Check to see the difference 0.5% could make in the mortgage you’re considering by using the calculator provided by Consumer Financial Protection Bureau. Contact your real estate professional for a list of trusted mortgage professionals to consider.
Mario Gonzalez - Wednesday, January 28, 2015
A simple decision to rent your current home instead of selling it when moving to a new home could have far reaching consequences. If you have a considerable gain, in a principal residence and you rent it for more than three years, it can lose the principal residence status and the profit must be recognized. Section 121 provides the exclusion of capital gain on a principal residence if you own and use it as such for two out of the last five years. This would allow a temporary rental for up to three years before the exclusion is lost. Let’s assume there is a $100,000 gain in your principal residence. If it qualifies for the exclusion, no tax would be owed. If the property had been converted to a rental so that it didn’t qualify any longer, the gain would be taxed at the current 20% long-term capital gains rate and it may incur a 3.8% surcharge for higher tax brackets. At least $20,000 in taxes could be avoided by selling it with the principal residence exclusion. Depreciation, a tax benefit of income property, is determined by the improvement value at the time of purchase or at the conversion to a rental whichever is less. If the seller sold the home and took the exclusion and then, bought an identical home for the same price, he would be able to have 60% more cost recovery and avoid long term capital gains tax. It is always recommended that homeowners considering such a conversion get advice from their tax professional as to how this will specifically affect their individual situation.
Mario Gonzalez - Wednesday, January 21, 2015
A well-planned garage or yard sale can make room in your home, get rid of unused items and make some money but it needs some planning to be successful.
- Start early to research and plan
- Promotion is key
- Display items attractively
- Price items right
- Organize checkout
Saturdays are generally the best day but there may be some exceptions. Experienced garage-salers believe that a well-planned one-day event will do as well as a multi-day event. Serious purchasers will look for the “new” sale and most people don’t come back multiple days. Advertise in local newspapers and free online classified sites like craigslist. If several families are going together for the sale, mention that in the ad; it will be a big draw. Mention your bigger-ticket items like furniture, equipment and baby items. Garage sale signs can be purchased or made at Staples, Fedex Office or Kwik Signs. Signs need large lettering so they’re easy to read while people are driving. Most important info: Garage or Yard Sale, address, date and time. Directional signs are also important. Balloons and streamers to attract attention to the signs are very helpful. Consider using the service Square so that you can take credit cards. The cost is 2.75% per swipe and can be done on your smartphone or iPad. You’ll need to sign up at least two weeks in advance to receive your reader. Unless you’re having an estate sale, keep your home locked. You don’t want people wandering through your home while you’re outside. If you start to accumulate a lot of money, take some of it inside. Don’t discuss how much money you’ve made during the sale or how successful it has been. People will want to bargain; it’s the nature of the game. Consider this strategy: less negotiations early in the sale and possibly, more toward the end of the sale.
Mario Gonzalez - Wednesday, January 14, 2015
With roughly 12.5% of the population over 65 years of age, it is understandable that some of them are thinking of downsizing because they may not need the amount of space they did in the past. There is something to be said for the freedom acquired by divesting yourself of “things” that have been accumulated over the years but are no longer needed. Moving to a less expensive home, could provide cash that could be invested for additional income or savings for unanticipated expenditures. Savings can also be recognized in the lower utility costs associated with a smaller home, not to mention, the lower premiums for insurance and property taxes. Going from the home where you reared your family to one of the new tiny homes may be a bit extreme but downsizing to 2/3 or 50% of your current home may certainly be reasonable. In some situations, your interests may have changed so that a different area or city might be a possibility. At one time, IRS had a once-in-a-lifetime exclusion of $125,000 of gain from a principal residence but it was changed so that homeowner’s are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home two out of the last five years and haven’t taken the exclusion in the previous 24 months. Homeowners should consult their tax professionals to see how this may apply to their individual situation.
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