Is it better to rent or own? It is a matter of opinion. According to the New York Real Estate news, a professor UC Berkeley, who did a case study said it is better to rent all the time. “And not just from a practical standpoint; also from a financial one, Reuters reported.
The reason is that the carrying costs associated with homeownership, such as property taxes and renovations, often cause homeowners to fail to meet their other financial goals, the professor, Rich Arzaga, said.
Of course, there are critics of that logic.
“To state that owning a home is or isn’t a good investment is too simplistic,” said Jeffrey Rogers, president of Integra Realty Resources, a New York-based real estate appraisal firm. “It depends. In times of relatively higher rents, low home values, and low interest rates, it makes sense to own a home. But in a reverse market, it wouldn’t be economically feasible. Over time, those who purchase in down or flat markets with low interest rates come out ahead.”
click here on story: Reuters
What is a loan modification? A loan modification is when your mortgage terms, rate and payments are modified to reach an affordable monthly payment. You must meet certain criteria to qualify for the most popular loan modification program provided by the government which is called HAMP or Home Affordable Modification Program.
There are various reasons why homeowners are trying to get a loan modification. One of the main reasons is due to a job loss which becomes a financial hardship. And the question is ‘Can I do my own loan modification?’. The answer is YES. If you, the homeowner, is willing to spend time on the phone and do some paperwork, then you can do it.
The first thing a homeowner should do is call their lender (mortgage company), request for the loss mitigation department and ask for a loan modification package. This will let them know that you are willing to work with them on getting your loan back on track. They will give you a list of items that they want. These items can include proof of income, hardship letter which states why you can’t pay the current mortgage, bank statements, and so on. Be honest and provide what they are asking for and let them know your situation. The lenders do not want to hear sob stories but just the facts and a summary of your ability to repay your loan.
If the lender doesn’t respond quickly, be patient. There is a process and many homeowners, like you, have submitted their requests, too. At the same time, keep detailed records of all your calls. Once contact is made, write down the name of the person with whom you spoke, his or her identification number, the date and time of your conversation and a summary of what was said. Also make copies of all your correspondence and other paperwork. Lenders tend to lose things.
Avoid SCAMS from companies who offer services to do your loan modification for a fee. That is illegal. Only pay for services rendered, if any. The main thing is keep informed, keep pushing and stay in communication with your lenders. Nothing will kill your chances of modifying your loan than not communicating your situation to them and waiting until the last minute to work something out.
According to the Wall Street Journal, affordable home prices and historically low interest rates have created an ideal situation for many qualified first-time home buyers to purchase a house. Despite this opportunity, some buyers may be overconfident and make mistakes during the home-buying process.
MAKING SENSE OF THE STORY FOR CONSUMERS
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Some first-time buyers are unaware of the vast amount of paperwork and negotiations that go into purchasing a home. As a result, buyers may think they can save money by forgoing the use of a REALTOR®. However, managing the nuances of offers, inspections, financing, and other pivotal steps when buying a home often causes confusion and anxiety for buyers. Working with a REALTOR®–who is obligated to put the buyer’s best interests first–will help to alleviate buyer concerns during this process.
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Online mortgage calculators can help buyers estimate the amount of house they can afford, but calculators should not be the sole source for mortgage-approval information. Buyers are advised to meet with a mortgage broker or banker prior to beginning the home search to help determine the loan amount for which they are most likely to be approved.
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Although there is a large selection of homes available for sale, home buyers should not assume they can make low offers or unreasonable demands. Even in hard-hit housing markets, homes in desirable neighborhoods are receiving multiple offers.
To read the full story, please click here.
We receive lots of questions about tax liability of short sales and foreclosures. As real estate brokers we are not licensed to give advice on this topic however we can lead you to the information that may answer your questions.
On December 20, 2007 the Mortgage Forgiveness Debt Relief Act of 2007 was enacted. Usually, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude certain cancelled debt on your principal residence from income. More information regarding the Mortgage Debt Relief Act can be found on the IRS website below:
http://www.irs.gov/individuals/article/0,,id=179414,00.html
Or the California Association of Realtors, Legal Department has put together an FAQ regarding the taxation of Foreclosures, Deeds in Lieu of Foreclosure, and Short Sales. This is more detailed and specific to California. For more information, please click here.
According to the California Association of Realtors, qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the U.S. Dept. of Housing and Urban Development (HUD) recently announced.
Currently, borrowers applying for an FHA-insured mortgage are required to issue minimum down payments of 3.5 percent. Buyers still must issue the mandatory 3.5 percent down payment, but the tax credit now can be used as an additional down payment, or for other closing costs, which can help lower principal balances and monthly payments.
To read the full story, please click here
SF Chronicle
Beginning April 1, Fannie Mae and Freddie Mac will increase mandatory fees and toughen credit-score and down-payment rules.
Under the new guidelines, applicants will be charged more for down payments of less than 30 percent. Home buyers with FICO scores between 700 and 720 will pay an extra three-quarters of a point. Applicants who purchase a condominium and do not have a 25 percent down payment also will pay a three-quarter point add-on penalty, regardless of their FICO score, for purchasing a condominium instead of a single-family home.
The two Government Sponsored Enterprises (GSEs) said the additional fees are to counter higher risks and losses associated with certain loan products, buyer equity stakes, and credit scores.
