There are many signs that the foreclosure market in Hartford County is alive and well.
There aren’t that many on the market. In Hartford county, there are less than 50 active listings for foreclosed single family homes. Only a few more than 100 have sold in the last 6 months.
They are selling for close to asking price - the median list-to-sell price ratio is 97%.
They are selling quickly -the median days on market is 22. That is faster than the median for typical resales.
Why are there so few foreclosures and why are they going so fast?
Investors, novice and experienced, think it’s a good time to buy properties in distress.
Sellers in trouble are trying to sell their homes by negotiating a short sale so there are fewer actual foreclosures. There are many more homes for sale now with the description, “short sale,” “subject to lien-holder approval,” or “subject to lender approval.”
Friday, February 22, 2008
Wednesday, February 20, 2008
Tax Talk
Dear Tax Talk:I have some questions regarding taxes and home equity lines of credit, or HELOCs. I owned a home with a mortgage balance of $360,000. I used all of the funds from a $90,000 HELOC to put a down payment on a second home, renting out the first. I bought a second home with a mortgage balance of $287,000, and took a $57,000 HELOC out on the second home (now my primary residence). I used $30,000 of this HELOC to make repairs and the rest to consolidate some debt.
How much of the interest paid on each of these four loans (two mortgages, two HELOCs) is deductible? (i.e.: What are the deduction thresholds given this situation?)
Does it matter what the money used from a HELOC is spent on? Do home improvements count as a deduction, but not other kinds of spending? How does the IRS track this?-- Brian
Dear Brian,First off, the IRS doesn't track this, you do. The general rule is that you can deduct as home mortgage interest the interest paid on up to $1 million in mortgages used to acquire or substantially improve a principal residence and a second home that you use personally. You can also deduct the interest on up to $100,000 of home equity debt that is used for any purpose.
Because the $90,000 HELOC is on a rental property, it does not qualify as home mortgage interest unless you use the home as a vacation home during the year. Furthermore, because the $90,000 loan was used for personal purposes, it is not deductible against rental income. The $360,000 mortgage would be deductible against the rental property income.
The $287,000 debt was used to acquire your home, so that is home mortgage interest, deductible within the $1 million ceiling. The $57,000 HELOC is home equity debt within the $100,000 limit. In fact, the $30,000 used to make repairs can be considered part of the acquisition debt, so that only $27,000 of this HELOC fits within the $100,000 ceiling. Because you have $73,000 available under the $100,000 ceiling, you might want to consider refinancing the HELOC that is not deductible on the rental property.
How much of the interest paid on each of these four loans (two mortgages, two HELOCs) is deductible? (i.e.: What are the deduction thresholds given this situation?)
Does it matter what the money used from a HELOC is spent on? Do home improvements count as a deduction, but not other kinds of spending? How does the IRS track this?-- Brian
Dear Brian,First off, the IRS doesn't track this, you do. The general rule is that you can deduct as home mortgage interest the interest paid on up to $1 million in mortgages used to acquire or substantially improve a principal residence and a second home that you use personally. You can also deduct the interest on up to $100,000 of home equity debt that is used for any purpose.
Because the $90,000 HELOC is on a rental property, it does not qualify as home mortgage interest unless you use the home as a vacation home during the year. Furthermore, because the $90,000 loan was used for personal purposes, it is not deductible against rental income. The $360,000 mortgage would be deductible against the rental property income.
The $287,000 debt was used to acquire your home, so that is home mortgage interest, deductible within the $1 million ceiling. The $57,000 HELOC is home equity debt within the $100,000 limit. In fact, the $30,000 used to make repairs can be considered part of the acquisition debt, so that only $27,000 of this HELOC fits within the $100,000 ceiling. Because you have $73,000 available under the $100,000 ceiling, you might want to consider refinancing the HELOC that is not deductible on the rental property.
Tuesday, February 12, 2008
Zig Ziglar
What Is Success? By Zig Ziglar
Very frequently I'm asked to give my definition of success. Here is one of my responses: I believe success is getting a reasonable number of the things money will buy and all of the things that money won't buy. (People who say they're not interested in money will lie about other things, too!) I confess that I like the things money will buy. I like to live in a nice house, drive a nice car, wear nice clothes, belong to the country club, play on beautiful golf courses, travel to nice places, take my family out for relaxing dinners. I like all of those things, but I love the things that money won't buy. Money will buy me that house, but not a home. It'll buy me a companion, but not a friend. It will buy me pleasure, but not happiness. Money will buy me a bed, but not a good night's sleep. It will buy me a good time, but not peace of mind.
Very frequently I'm asked to give my definition of success. Here is one of my responses: I believe success is getting a reasonable number of the things money will buy and all of the things that money won't buy. (People who say they're not interested in money will lie about other things, too!) I confess that I like the things money will buy. I like to live in a nice house, drive a nice car, wear nice clothes, belong to the country club, play on beautiful golf courses, travel to nice places, take my family out for relaxing dinners. I like all of those things, but I love the things that money won't buy. Money will buy me that house, but not a home. It'll buy me a companion, but not a friend. It will buy me pleasure, but not happiness. Money will buy me a bed, but not a good night's sleep. It will buy me a good time, but not peace of mind.
Friday, February 8, 2008
New FHA & Fannie Mae News!
*One-year Increase in FHA's Ability to Guarantee More Loans
Currently borrowers in many parts of the country are cut off from FHA financing. This revision would boost FHA loan limits to 125% of an area's median home price (but not to exceed $729,750) for 2008. This will provide needed mortgage financing to borrowers in markets where such funds are currently unavailable or limited.
According to a 2007 GAO report, during the recent housing boom (where the number of nationwide loans rose), the total number of FHA loans fell from 763,584 in 2001 to 286,470 in 2005. "FHA's market share in terms of numbers of loans fell from 19 percent in 1996 to 6 percent in 2005, with almost all of the decline occurring since 2001." This will help FHA return to its traditional role in housing finance.
*Temporary Increase in GSE Conforming Loan Limits
Similarly, the stimulus package will provide for a temporary increase for the GSEs conforming loan limits to match the new levels established for the FHA. Currently Fannie Mae and Freddie Mac are only able to purchase loans under $417,000. Loans with balances above that limit have fewer buyers and are significantly more expensive and difficult to finance.
Even when financial institutions are willing to make these loans, because there is no secondary market for them, they cannot sell the loans and fund new ones. By permitting the GSEs to buy these loans, this change would provide vital liquidity to mortgage markets where funds are currently unavailable or limited.
Currently borrowers in many parts of the country are cut off from FHA financing. This revision would boost FHA loan limits to 125% of an area's median home price (but not to exceed $729,750) for 2008. This will provide needed mortgage financing to borrowers in markets where such funds are currently unavailable or limited.
According to a 2007 GAO report, during the recent housing boom (where the number of nationwide loans rose), the total number of FHA loans fell from 763,584 in 2001 to 286,470 in 2005. "FHA's market share in terms of numbers of loans fell from 19 percent in 1996 to 6 percent in 2005, with almost all of the decline occurring since 2001." This will help FHA return to its traditional role in housing finance.
*Temporary Increase in GSE Conforming Loan Limits
Similarly, the stimulus package will provide for a temporary increase for the GSEs conforming loan limits to match the new levels established for the FHA. Currently Fannie Mae and Freddie Mac are only able to purchase loans under $417,000. Loans with balances above that limit have fewer buyers and are significantly more expensive and difficult to finance.
Even when financial institutions are willing to make these loans, because there is no secondary market for them, they cannot sell the loans and fund new ones. By permitting the GSEs to buy these loans, this change would provide vital liquidity to mortgage markets where funds are currently unavailable or limited.
Tuesday, February 5, 2008
RE_FINANCE
Last week, the average rate for a fixed-rate 30-year mortgage was 5.68%, down sharply from 6.34% a year ago, according to Freddie Mac (FRE). The drop in rates has prompted a surge of refinancing as homeowners look to get out of adjustable-rate mortgages or lower the rate on their fixed-rate mortgages. Applications for mortgage refinancing rose 22% for the week ended Jan. 25 from the week earlier, the Mortgage Bankers Association says.
Saturday, February 2, 2008
winter/spring?
Punxsutawney Phil saw his shadow Saturday, leading the groundhog to forecast six more weeks of winter.
The rodent was pulled from his stump by members of the Punxsutawney Groundhog Club Inner Circle, top-hat- and tuxedo-wearing businessmen who carry out the tradition.
Each February 2, thousands of people descend on Punxsutawney, a town of about 6,100 people some 65 miles northeast of Pittsburgh, to celebrate what had essentially been a German superstition.
The tradition is that if a hibernating animal sees a shadow on February 2 -- the Christian holiday of Candlemas -- winter will last another six weeks. If no shadow is seen, legend says spring will come early.
The rodent was pulled from his stump by members of the Punxsutawney Groundhog Club Inner Circle, top-hat- and tuxedo-wearing businessmen who carry out the tradition.
Each February 2, thousands of people descend on Punxsutawney, a town of about 6,100 people some 65 miles northeast of Pittsburgh, to celebrate what had essentially been a German superstition.
The tradition is that if a hibernating animal sees a shadow on February 2 -- the Christian holiday of Candlemas -- winter will last another six weeks. If no shadow is seen, legend says spring will come early.
Subscribe to:
Posts (Atom)
