3Tips to Help Ensure Homeownership Success

                    How to Beat the Competition This Buying Season

                    

From:  RISMEDIA, Thursday, March 24, 2016— 

Mortgage rates are very low and home prices are stable or rising in most communities across the United States, and a recent poll by NeighborWorks America found that nearly nine-of-ten consumers say that homeownership is at least somewhat important. In order to get a leg up on the home buying competition, 

NeighborWorks recommends consumers follow three simple rules to help make home buying go smoothly.

1. Consult a housing counselor for a homebuyer check-up.
Knowing the numbers that matter when buying a home is extremely important. More than two-thirds of consumers in a NeighborWorks America survey said that the home buying process is complicated. The best way to get a thorough understanding of the process is to consult with a nonprofit housing counselor. Look for a housing counselor who is a certified professional who could walk a homebuyer through the different types of mortgages and interest rates; the effect credit scores have on being approved for a loan; and how much down payment is needed for purchase.
  

                   

“The housing market is tough right now, with fewer homes for sale on the market than usual, and new mortgage rules and many mortgage products from which to choose,” says Marietta Rodriguez, vice president for homeownership and lending at NeighborWorks America. “To be in the strongest position to make an offer that is accepted, consumers have to be prepared. That’s where initial consultation with a housing counselor is a great first-step.”

2. Build a budget.

                     

There’s no better way to accurately know how much money is coming and going than with a budget, and pursing homeownership without a clear budget could be a recipe for disaster. National surveys have shown that less than one-third of consumers have a budget. Going into this home buying season with a budget that includes potential changes in commuting costs after purchase, home maintenance expenses, and even estimates for changes in life circumstances, such as becoming a parent or paying for college, will give a consumer a leg-up on the competition and provide peace of mind.

“Once all the numbers are on the table, it’s easier to see what type of home suits a family’s budget and needs, what might be necessary financial trade-offs, and what could be a direct line to trouble,” says Rodriguez.

3. Be determined and informed.

                       

While the supply of homes on the market is anticipated to be tight this season, making a bid and winning one on a home that isn’t right could lead to trouble. Getting into a bidding war could weaken a consumer’s determination to get the right home at the right time, and push a consumer to the edge of their budget and even beyond.

The mortgage process is very complicated and it could be frustratingly slow. Pressing ahead without all of the facts and costs understood could be disastrous, especially when it comes to home inspection decisions.

“Forgoing a home inspection to move up a place in the bidding process could be costly down the road if problems and defects with the home arise. NeighborWorks recommends that homebuyers have a home inspection and know as much as possible about the inside of a home as the outside,” adds Rodriguez.

Following these three tips will help ensure homeownership success this season and for the long run.

Source: NeighborWorks.org

Homeowner Tax Deductions: Are you getting all you deserve to save your money?

The Ultimate List of Homeowner Tax Deductions

 From:  Dottie Wells Home Actions Newsletter, L&F Mgr Bethany Beach DE

Tax season is winding up, and some of us are still sorting out W2s, receipts and documents to determine all the tax deductions we may have, while others are sitting back and (hopefully) waiting for the refund checks. But either way, you should already be thinking about next year: taxes should be on your mind so that next year's returns go smoothly and you can plan around allowed deductions. 

If you own your own home, you may be entitled to tax deductions that you don't even know about. Before you file your taxes, take a look at this list of homeowner tax deductions — you could save thousands of dollars!

Mortgage Interest

You can deduct the interest you paid on your mortgage if you have taken out a loan to purchase your home, with a balance of up to $1 million. Rather than taking the standard deduction, you will have to itemize to access the deduction. 

There are, of course, limitations, such as if you are helping out a friend or family member by paying his or her mortgage — that interest cannot be deducted on your tax return.

Property Taxes

You can also list state and local property taxes as itemized deductions on your taxes. The amount of the deduction will depend on when you pay the tax, not when it is due. Paying your property taxes earlier could have a positive effect on your tax return.

Home Office

Do you work from home or have a dedicated space only for when you need to work? If so, you can deduct it as a home-office expense. It doesn't even have to be an entire room — it can be a portion of a room or just a dedicated space.

Discount Points

Discount points are paid to reduce the interest rate on your mortgage loan and can be deducted for the entire year they were paid. Also, if you are buying a home and the seller pays the points as a bonus to get you to buy the house, you can deduct those points as well.

Rental

Did you rent out your home for two or fewer weeks during the course of the year? If you did, the income on the rental has the potential to be tax-free.

Energy-Efficient Tax Credit

You can reap the benefits of an energy-efficient tax credit of 10 percent of the amount you paid for green improvements to your home, like energy-efficient windows, storm doors, and heating and air conditioning systems.

Loan Forgiveness

If you owned a home that was sold in a short-sale, you can take advantage of mortgage-debt forgiveness. For example, if you make a short sale of your home at $350,000 and you owe $450,000 on your mortgage, your lender will forgive that $100,000 you owe, and you also don't have to pay taxes on that money.

5 Tips to Halt Mortgage Fraud in its Tracks

Posted on Feb 17 2016 by Suzanne De Vita

Predatory lending has declined sharply in the years since Dodd-Frank, but it, and other types of mortgage fraud, still steep into housing even today and affect every stage of the homeownership cycle.

Mortgage fraud, an umbrella term, is “a crime characterized by some type of material misstatement, misrepresentation, or omission on a loan which is then relied upon by a lender,” according to the FBI. It generally falls into one of two categories: fraud for profit and fraud for housing. Fraud for profit crimes are typically committed by those within the industry; fraud for housing crimes are committed by borrowers.

Mortgage fraud includes:

• Air Loans
• Builder Bailouts
• Condo Conversions
• Equity Skimming
• False Commercial Leases
• False Residential Loans
• Foreclosure Rescue Scams
• Fraudulent Appraisals on Flips
• HECM (Reverse Mortgage) Scams
• Loan Modification Scams
• “Silent Second” Mortgage Schemes

Many of these crimes are sophisticated in nature, and homeowners and homebuyers easily mistake them for legitimate actions.

Read More: Don’t Let a Rental Scam Ruin Your American Dream

Don’t become a statistic—avoid mortgage fraud with these 5 tips :

1. Ask your REALTOR® to refer you to a reputable lender. Consult your local regulatory agency to confirm the lender’s licensing and other credentials.

2. Be honest and transparent when completing a loan application. Do not include false information in the application, even if another party attempts to convince you otherwise.tax

3. Read (and re-read) all mortgage documents before signing them, or have a third party review them with you. Assess the information in the documents for accuracy. Do not sign documents that are blank or incomplete.

4. Consult property records and review tax assessments and title history before purchasing a home. Conduct your own research on comparable home sales in the neighborhood to validate pricing.

5. Steer clear of too-good-to-be-true offers, like “no money down” loans or claims to help homeowners profit or eliminate debt overnight. These offers, often made with high-pressure sales tactics, can come in the form of unsolicited phone calls and emails or online advertisements. Do not pay upfront or advanced fees for these offers. Do not sign over the deed to your home, even if facing foreclosure

Are you about to be an Empty Nester? Kids Moving Out? It's about their First Home!

Are the Kids Finally Moving Out?

by The KCM Crew on February 18, 2016 

During the recession, many young adults graduating from college were forced to move back in with their parents. This caused new household formations to drop dramatically from the long term average of 1.2 million formations annually to half that number. However, this may be the year this turns back around.

According to the Urban Land Institute’s report, Emerging Trends in Real Estate, household formations will increase dramatically. They project that 3.68 million additional households will be formed in the next three years. This brings household formations back to pre-recession numbers of 1.2 million a year

What will happen in 2016?

One of the key indicators to an improving housing market is household formation: How many people are moving out and forming an independent living unit? Many of the people “moving out on their own” will be those Millennials who can finally move from their parents’ basements to their first home.

Not every person moving out will decide on an apartment. A certain percentage of consumers will decide that homeownership is a better option for themselves and their families.

Jonathan Smoke, Chief Economist at realtor.com, believes:

“Demand for for-sale housing will grow and will continue to be dominated by older millennials, aged 25 to 34. This demographic has the potential to claim a third of home sales in 2016 and represent 2 million home purchases.”

What about household formations moving forward?

And Louis Keely, the President of The Demand Institute, predicts strong household growth will continue over the next ten years:

“We expect new household formation to be robust over the next decade as the large millennial generation ages and forms new households of their own.”

Bottom Line

Here come the Millennials!! They will finally be entering the housing market in 2016 and will dominate real estate sales over the next decade.