Federal Reserve leaders left their target interest rate near zero on Tuesday and restated their intention to keep rates very low for an "extended period" Wednesday, even as they modestly upgraded their assessment of the economy.
Fed leaders left the federal funds rate in a range of zero percent to 0.25 percent, where it has been since December 2008, and said conditions are likely to justify leaving it at "exceptionally low" levels for "an extended period."
This is good news for those still looking to buy or refinance (if possible). However it is unclear how the market will adjust now that the Fed is no longer buying mortgage backed securities and word that a possible sell-off may be in the near future to shrink their balance sheets.
The point is interest rates are at historically low levels and as they begin to rise it might price you out of a home! If you're thinking of buying or are tired of renting contact me and we might be able to figure out a way for you to capitalize before rates begin to climb.
Friday, April 30, 2010
Sunday, April 25, 2010
5 Things to Think About as a First-Time-Buyer
Here are 5 quick tips to keep in mind if you're a first-time-buyer. Being a first-time-buyer you don't have the experience you might need so here are a few good tips to try to help you out:
1. Low credit-score borrowers can pay thousands of dollars in interest over the life of the loan because they get charged a higher rate than someone with better credit.
2. Shopping for other things before closing. Lenders will continue to check credit scores right up to the closing date. Too much shopping could cause the lender to cancel the loan because they are worried you won't be able to pay the mortgage with your new added debt. Don't shop before your home closes...be patient.
3. Scrimping or opting out of inspections. Being surprised by things after you move in can be horribly frustrating. Know what you are getting into by having those who know what to look for find what might be wrong with the home during your inspection period. I cannot stress this point enough...GET INSPECTIONS!!!
4. Write an offer with contingencies. Buyers should leave themselves an opportunity to opt out if the inspections uncover problems that were not anticipated. Contingencies are your safety net so make sure your agent knows what they are writing in your offer.
5. Reserve fund for insurance, taxes and misc moving/home improvement. Insurance and taxes can be a surprise if you're not budgeting for them. I like impound accounts as you pay into it monthly and you don't have to worry about coming up with the money. Also, leave yourself a pad in case an appliance doesn't survive the move or you want to paint before you move-in. Plan ahead so that the moving experience is a good one.
There are obviously a thousand other things to keep in mind but I've found that these 5 seem to pop up most frequently. Contact me anytime if I can help you or someone you know with their Real Estate needs. Thanks!
1. Low credit-score borrowers can pay thousands of dollars in interest over the life of the loan because they get charged a higher rate than someone with better credit.
2. Shopping for other things before closing. Lenders will continue to check credit scores right up to the closing date. Too much shopping could cause the lender to cancel the loan because they are worried you won't be able to pay the mortgage with your new added debt. Don't shop before your home closes...be patient.
3. Scrimping or opting out of inspections. Being surprised by things after you move in can be horribly frustrating. Know what you are getting into by having those who know what to look for find what might be wrong with the home during your inspection period. I cannot stress this point enough...GET INSPECTIONS!!!
4. Write an offer with contingencies. Buyers should leave themselves an opportunity to opt out if the inspections uncover problems that were not anticipated. Contingencies are your safety net so make sure your agent knows what they are writing in your offer.
5. Reserve fund for insurance, taxes and misc moving/home improvement. Insurance and taxes can be a surprise if you're not budgeting for them. I like impound accounts as you pay into it monthly and you don't have to worry about coming up with the money. Also, leave yourself a pad in case an appliance doesn't survive the move or you want to paint before you move-in. Plan ahead so that the moving experience is a good one.
There are obviously a thousand other things to keep in mind but I've found that these 5 seem to pop up most frequently. Contact me anytime if I can help you or someone you know with their Real Estate needs. Thanks!
Monday, April 12, 2010
SB401 to forgive CA Cancelled Debt Income THROUGH 2012
Underwater homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Signed into CA law today, Senate Bill 401 generally mimics Federal tax treatment of Cancellation of Debt Income. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is outlined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds if both were used in the same manner. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012!! Californians who have already filed their 2009 tax returns may still claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may however be exempt under other provisions. Taxpayers who are bankrupt or who are insolvent may also be exempt from debt relief income tax (please consult your tax attorney or CPA for consultation specific to your circumstance).
"Qualified principal residence" indebtedness is outlined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds if both were used in the same manner. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012!! Californians who have already filed their 2009 tax returns may still claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may however be exempt under other provisions. Taxpayers who are bankrupt or who are insolvent may also be exempt from debt relief income tax (please consult your tax attorney or CPA for consultation specific to your circumstance).
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