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Showing posts from April, 2019

iBuyers - Convenient at a Price

There are an increasing number of real estate companies, termed iBuyers, like Open Door, Offerpad, Zillow, Knock and others that market a service that has an appeal to homeowners.The pitch for these quick cash offer companies will include some variation of "let us buy your home in days without the normal hassles of listing."This approach attempts to provide an alternative to selling a home in a normal manner at the expense of not realizing the full equity a homeowner is entitled. There is no fiduciary relationship requiring the broker to put a seller's best interest above their own interest.An iBuyer does not represent a seller and does not owe client-level services like loyalty, obedience disclosure among other things required by most state license laws.The offer is based on an automated valuation model, many times, without a physical inspection of the home.In some cases, a contract is written but there are provisions that allow iBuyers time to possibly "flip"…

One Loan for Purchase & Renovations

The FNMA HomeStyle conventional mortgage allows a buyer to purchase a home that needs renovations and include them in the financing.This facilitates the purchase of the home and the renovations in one loan rather than getting a separate second mortgage or home equity line of credit.The combination of these loans should save closing costs as well as interest rates which would typically be higher on a home improvement loan.The borrower will need to have an itemized, written bid from a contractor covering the scope of the improvements.Any type of renovation or repair is eligible if it is a permanent part of the property.Improvements must be completed within 12 months from the date the mortgage loan is delivered.15 and 30-year fixed rate and eligible adjustable rate loans are available.Typical FNMA down payments are available starting as low as 3% for a one-unit principal residence to 25% for three and four-unit principal residence and one-unit investment properties.Borrower must choose h…

Get Rid of Things You Don't Need

Periodically, you need to rid yourself of things that are taking up you time and space to make room for more of what you like and want.There's a frequently quoted suggestion that if you haven't used something for two years, maybe it isn't essential in your life.If you have books you'll never read again, give them to someone who will.If you have a deviled egg plate that hasn't been used since the year your Aunt Phoebe gave it to you, it's out of there.Periodically, go through every closet, drawer, cabinet, room and storage area to get rid of the things that are just taking up space in your home and your life. Every item receives the decision to keep or get rid of.Consider these questions as you judge each item:When was the last time you used it?Do you believe you'll use it again?Is there a sentimental reason to keep it?You have four options for the things that you're not going to keep.Give it to someone who needs it or will appreciate itSell it in a gara…

Qualified Charitable Contribution

If you're at an age where you need to be taking Required Minimum Distributions (age 70.5) from your IRA, a qualified charitable contribution and some planning may allow you to lower your overall tax liability.Let's say that a couple's 2019 itemized deductions include $8,000 in property taxes, $4,400 in interest and $20,000 in charitable contributions.That would total $32,400 which exceeds the 2019 $25,300 standard deduction for married couples, 65 years of age or older, filing jointly.Their required minimum distribution from their IRA is $40,000 which will be taxed at ordinary income.If this couple is in the 24% tax bracket, the tax liability would be $9,600.Alternatively, if they made the $20,000 in charitable contributions from their IRA as a Qualified Charitable Contribution, it would not be taxable in the withdrawal.The balance of the RMD of $20,000 would be taxable at 24% which would have a tax liability of $4,800.Their $32,400 worth of itemized deductions would be re…

Auto Pay Your Mortgage Payment

In the time that it takes to write one check, you can set it up with your bank and never have to do it again.You won't have to write checks, envelopes or buy stamps anymore.You'll save time, money and benefit in other ways too.Never be late ... avoid late fees and protect your creditSchedule additional principal contributions monthly to save interest, build equity and shorten the mortgage term.
An extra $200 a month applied to the principal on a $200,000 mortgage at 4.5% for 30 years will result in shortening the loan by 8.5 years.If the loan was paid to term, it would save $52,977 in interest.Use the Equity Accelerator to see how much you can save.It's convenient ... by doing it online with your bank, you'll have a centralized history of the payments.Protect your credit ... your payment history is the single biggest component of your credit score and accounts for over 1/3 of your credit score.Establishing the practice of auto bill pay could run the risk of overd…