Wednesday, November 30, 2016

Looking For An Investment Property?

While you are preparing to look for an Investment Property, here is a check list that may be helpful with your search.

It can be very helpful to take time before you start looking at individual properties, to identify specifically the things you want in a rental property. This will help you focus on target properties that will help you meet your investment objectives.

Must physically have:

 Single-family detached housing
 4 bedroom, minimum 2 bath
 $125,000 – 175,000 sales price
 Plano west of Coit Road
 Dallas, north of Beltline; west of Coit
 Less than 15 years of age; preferably, less than 10 years
 Average condition
 Predominantly owner-occupied neighborhood
 Traditional style
 Something good about location
 Two-car garage
 Fenced yard

Must have financially:

 A 10% minimum discount from fair market value
 New 80% loan-to-value mortgage
 No PMI
 Estimated rate of return in excess of 12% after-tax 
Would like to have:

 Sprinkler system 
Will not consider:

 On or backing up to busy street
 Backing up to shopping center 

Monday, November 28, 2016

It's not over until it's FUNDED!!

It Isn't Final Until It's Funded

Mortgage approval isn’t final until it’s funded.  Things can change prior to the loan being closed that can affect a pre-approval such as changes in the borrowers’ financial situation or possibly, factors beyond their control like interest rate changes.
Good advice to buyers is to do nothing that can affect your credit report until the loan closes. Opening new credit cards, taking on new debt for a car or furniture or changing jobs could affect the lender’s decision if they believe you may no longer be able to repay the loan.
The benefits of buyer’s pre-approval are definitive: it saves time, money and removes the uncertainty of knowing whether the buyer is qualified. The direct benefits include:
  • Amount the buyer can borrow - decreases as interest rates rise
  • Looking at “Right” homes - price, size, amenities, location
  • Find the best loan - rate, term, type
  • Uncover credit issues early - time to cure possible problems 
  • Bargaining power - price, terms, & timing 
  • Close quicker - verifications have been made
It is a very common practice for mortgage lenders to require income and bank verifications and to re-run the borrowers’ credit one final time just prior to closing. Mortgage approval isn’t final until it’s funded.

Monday, November 21, 2016

Inherit or Gift

Should you Gift your property or let your leave it for an Inheritance?

A person called into a radio talk program with a situation that was troubling to the caller and disturbing based on the potential tax liability that may have been avoided.18732493-250.jpg
The caller’s elderly father had deeded his home to his daughter a few years earlier because in his mind, his daughter was going to get the home eventually and this would be one less thing to be taken care of after his death. The daughter didn’t really care because the father was going to continue to live in the home and take care of it so that it would be no expense to her.
Obviously, unknown to either the father or the daughter, transferring the title of a home from one person to another could have significant tax implications. In this case, when the father “gave” the home to his daughter, he also gave her the basis in the home which is basically what he paid for it. If she sells the home in the future, the gain will be the difference in the net sales price and her father’s basis which could be considerably higher than had she inherited it.
If the home was purchased for $75,000 and worth $250,000 at the time of transfer, there is a possible gain of $175,000. However, when a person inherits property, the basis is "stepped-up" to fair market value at the time of the decedent's death.  If the adult child had inherited the property, at the time of the parent's death, their new basis would be $250,000 or the fair market value at the time of death and the possible gain would be zero.
In most cases, there are less tax consequences with inheritance than with a gift. There are other factors that may come into play but being aware that there is a difference between a gift and inheritance is certainly an important warning flag that would indicate that expert tax advice should be sought before any steps are taken.

Friday, November 18, 2016

The Power of the Mortgage Rate!!

As we move forward, it may be time to take a look at the possibility of a change in Mortgage Rates.

Monday, November 7, 2016

A Cost to Consider

Homeownership, part of the American Dream: a home of your own where you can feel safe, raise your family, share with your friends and enjoy life. The benefits are easily recognizable but maintenance is just a real and should be considered.
Property taxes and insurance are two of the largest expenses homeowners have aside from their mortgage interest. But, as any homeowner knows, there will be occasional expenses for repairing toilets, faucets, windows and other things. There are also the significantly larger expenses that arise like replacing a water heater or HVAC unit. And don’t overlook the periodic maintenance like painting or floor coverings.
Financial experts suggest that homeowners save one to four percent of the home’s value per year for repairs and maintenance. Two to eight thousand dollars a year may sound like more than you’ll need but the cost of an air conditioning unit can easily be $6,000.
Some homeowners purchase home warranties to avoid the unexpected costs. An annual premium instead of an unexpected large expenditure. Coverage varies from company to company and are not intended to cover existing conditions.
The alternative to not saving for these anticipated expenditures means that a homeowner might have to put it on a credit card at a very high interest rate or get a home improvement loan. Appreciation is a distinct benefit of home ownership and deferred maintenance can limit the value as well as lengthen the market time when it sells.