Posts filed under ‘Your Home’
New Loan Delinquencies on the Rise Again
By: Diana OlickMore Share
Just when you thought things might be turning around, the mortgage crisis takes yet another little dip to the downside.
Lender Processing Services just put out its May “Mortgage Monitor,” and some promising trends aren’t so promising anymore, specifically new delinquencies and cure rates.
While the total delinquency rate rose 2.3 percent, which is not surprising given how much is in the pipeline, the 30-day delinquent bucket jumped 10 percent. That is surprising because the that number had been coming down of late. The LPS data report says that’s because the “seasonal improvement period has expired,” but I’m not sure normal seasonal patterns really apply to this market anymore.
More likely is that home prices are not rebounding at the expected/hoped for pace, prompting more borrowers who are underwater on their loans to choose not to pay. And while the job market isn’t bleeding so much anymore, it’s not adding jobs back at the rate we need, nor is it re-instituting those full time jobs that were slashed to part-time, leaving many borrowers still “underemployed.” So the delinquency rate nationwide now stands at 9.2 percent from this particular data set, and with the rise in new delinquencies, it won’t be coming down any time soon. Read More: http://www.cnbc.com/id/15837671
First-Time Homebuyer Credit Closing Deadline Extended to September 30, 2010
by Getachew Teklu
The deadline for the completion of qualifying First-Time Homebuyer Credit purchases has been extended. Taxpayers who entered into a binding contract before the end of April now have until September 30, 2010 to close on the home.
The Homebuyer Assistance and Improvement Act of 2010, enacted on July 2, 2010, extended the closing deadline from June 30 to Sept. 30 for eligible homebuyers who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, 2010.
Here are five facts from the IRS about the First-Time Homebuyer Credit and how to claim it.
1. If you entered into a binding contract on or before April 30, 2010 to buy a principal residence located in the United States you must close on the home on or before September 30, 2010.
2. To be considered a first-time homebuyer, you and your spouse – if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
3. To be considered a long-time resident homebuyer, your settlement date must be after November 6, 2009 and you and your spouse – if you are married – must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.
4. The maximum credit for a first-time homebuyer is $8,000. The maximum credit for a long-time resident homebuyer is $6,500.
5. To claim the credit you must file a paper return and attach Form 5405, First Time Homebuyer Credit, along with all required documentation, including a copy of the binding contract.
New homebuyers must attach a copy of the properly executed settlement statement used to complete the purchase. Long-time residents are encouraged to attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statements, property tax records or homeowner’s insurance records.
For more information about the First-Time Homebuyer Tax Credit and the documentation requirements, visit IRS.gov/recovery.
To-Buy or to rent a Home
Your New Home
by Dr. Sharon L. Bender
Each year a new wave of first time home buyers hits the trail in search of their humble abode. As a realtor for nine years I was often met with the challenge of helping these eager buyers to understand the true value of home ownership. There are pros and cons to buying a home and there is the matter of timing, which can have a lot to do with the housing market and related financing programs.
What to consider when deciding on buying a home vs. renting.
Consideration #1 on buying a Home vs. renting.
Buying a home means garnering equity, if the owner keeps the house long enough to overcome the initial cost of its purchase, that is. That can be one of the most surprising matters associated with home ownership.
Consideration #2 on buying a Home vs. renting.
Buying a home brings a sense of pride and accomplishment. Buying a home is also an opportunity to express more freely your personal taste, as long as the neighbors don’t have to view your idea of a decent-looking sculpture in your front yard every time they pull out of their driveway. Not only is there more freedom with home ownership, but there is likely more space than one would find in a rented apartment.
Consideration #3 on buying a Home vs. renting.
Buying a home brings a realization that you are part of a more permanent community in which you might be a contributor to the well being of others around you. In a rented home or apartment one might feel less involved and temporary when we humans tend to be territorial, inherently needing to claim a piece of ground as our own with its sense of permanence. We think about raising children and providing them with “roots” that grow in a yard rather than on a crowded balcony.
Financial considerations on buying a Home vs. renting.
Financial consideration #1 on buying a Home vs. renting.
When owning a home, each monthly payment is like putting money into a savings account rather than giving it to the landlord when renting. Each time the mortgage is paid a percentage goes toward your “equity.” This is indeed like having money in the bank as it is something you can draw upon later if needed. Whereas rental rates increase yearly, the principle on your mortgage is going down with each payment. Plus as the housing market grows, so do the valuations of homes.
Financial consideration #2 on buying a Home vs. renting .
Buying a home is also accompanied by some interesting tax benefits. Every interest payment you make becomes a tax deduction later. You can’t do that with a rental payment. You surely can’t do that with an auto loan either. But imagine buying your next car with a home equity loan that is indeed tax deductible. In this sense you are leveraging your equity.
Buying a home sounds great! But it isn’t for everyone. Just getting into home ownership can be a nightmare. Buying a home is a time-consuming and complex, not to mention costly, endeavor.
The responsibilities involved in buying a home vs. renting.
Responsibility #1 in buying a home vs. renting.
As a tenant in a rented home or apartment you have more freedom to move about the country. Owning a home requires an investment of time. You are now out mowing lawns, pruning hedges, managing the leaking pipes, and spending countless hours you had not expected keeping things running smoothly.
Responsibility #2 in buying a home vs. renting .
Many small home improvements can add up to big dollars invested in upkeep expenses. You might also find yourself paying for utilities that are otherwise covered in a rental agreement. If all of the upkeep outside the home is a problem, you might consider buying a condo. You will reap the rewards of home ownership with some minor constraints; and there is typically a monthly fee attached to condo and townhouse living called the “association fee.”
Responsibility #3 in buying a home vs. renting.
If you find you aren’t exactly thrilled with your new neighborhood, you may find yourself “stuck” until the value of your home increases enough to get back your initial investment. Selecting a home that you will occupy for a good long time takes patience, and initial homework. Anything can happen once you become a home owner to unexpectedly deteriorate the value of the home along with its enjoyment. In a rental you can pick up and move on. In a home you have to stay and endure what nature, neighbors, and nearby businesses might throw at you.
Responsibility #4 in buying a home vs. renting
Rivers can flood, parking lots can become extended to your lot line, and teens can become drum players, keeping you up for nights on end with raw talent. All of this can happen a month after you’ve moved into the peaceful neighborhood. Residential neighborhoods usually come with dogs. You might be tempted to own one yourself. Keeping yours quiet can be a challenge when ten others are sounding off.
Weighing the pros and cons of renting and buying a home can be challenging. There is a possible freedom of movement in one instance and financial freedom in the other. Homeowner responsibilities can be far greater than expected.
Tips on what to look for when buying a home
Tip #1 on what to watch out for when buying a home
Drive the neighborhood at different times of the day and week to see how your potential neighbors behave both during the week and on weekends.
Tip #2 on what to watch out for when buying a home
Check into the schools and surrounding businesses. Look for those conditions that contribute to “economic obsolescence.”
If you choose your new home (and the mortgage) wisely, you will find home ownership greatly rewarding. Although most people today don’t remain in their homes long enough to see the mortgage release arrive in the mail, personal satisfaction abounds.
For some additional help, Buying a New Home offers some tips on knowing what you can afford, knowing your rights, and shopping for a home. When it comes to searching for the mortgage, there are few parameters you need to digest in order to make the best selection. The mortgage is a major consideration in deciding whether to rent or buy.
Choosing a mortgage is not only about the lowest interest rate. There are other factors to consider in determining if the mortgage is right for you. The lease on an apartment or house is pretty straightforward. The mortgage process is a great deal more complex. You will need to do an analysis of your financial position much more exactingly. Consider your income, savings, and cash on hand. Determine your debt-to-loan ratio ability. The analysis should include a look at your past spending habits, your present needs, and your potential for success in not only getting the right loan, but in keeping it paid. As to your lifestyle, consider how long you intend to live in the home, whether you are going to need to save for college expenses, and whether you are expecting an increase in pay. These and any other eventualities will need to be considered in your affordability determination.
A short-term loan might be the right choice for a short-term stay, but a traditional 30-year fixed rate loan like your parents likely held when you were in grade school are still and often the best choice. Payments are stretched out over an extended period, with lower payments involved, making these types of loans more affordable. You can still double up on the payments and get the principle paid faster like the short-term loan, but without the threat of foreclosure if you have an unforeseen event. In unfortunate times, you can resort to making the lower payments as originally scheduled.
In your haste to pay off your mortgage, however, you may forget to account for college or other expenses that may crop up. There are also a host of conditions that will affect your determination such as age. If you are close to retirement when buying the home, you may not want the mortgage around in ten years. But again, with a 30-year mortgage you have the option and leeway to pay more each month and pay the loan off sooner. There are even some interest only and 40-year mortgages cropping up to help make home ownership more affordable. The mortgage may outlive you, but with the prices of homes souring and incomes somewhat dropping, these options can become the only means to gain home ownership.
Understanding the financing can be a complicated matter. People who can help you to make your financial decision are the lender, the realtor, the attorney handling the closing, and a tax preparer. For some additional tips on mortgage selection, Choose the right Mortgage and Save provides some advice on how to get the right mortgage plan. Once you have made your mortgage selection, examine the monthly payments and tax benefits as well as any hidden home ownership expenses such as potentially higher utility bills against the monthly rental fees at the apartments around the corner. Those may or may not include paying for utilities. You need to include all costs in both instances in order to make a fair comparison.
Generally, buying a home is more costly than renting. Often people make the same mistakes when they purchase a car. They do not allow for the maintenance such as new tires. With a house this can mean putting money aside for the leaking roof or the failed heating system. A good rule of thumb is to put aside 10% of your income toward home ownership expenses. If the tax savings are indeed saved, this may very well cover it. So let the house pay for itself in essence. Don’t rely on the tax reimbursement for the purchase of a new set of golf clubs. Chances are it will go right back into the home. And it should. If you can put the taxes into paying the mortgage, you have found another way to put the savings to good use.
Even though buying a home is more costly than renting and the threat of foreclosure can be at the discretion of the lender, you have a sense of security knowing that if you can’t maintain the cost, you may be able to sell it or rent it rather than lose it. In an apartment or home rental situation you can be evicted with no recourse other than to try to find another rental. And without good references, that can be very difficult. Likewise it is important to keep your credit in good standing in order to get a better mortgage rate the next time around.
Beyond the mortgage complications you will need to consider getting the best deal on the purchase price. You need to keep the emotional aspect out the purchasing process because the more emotional you are about the home, the more you are likely to pay. With a rental, the monthly fee is typically not negotiable. The purchase of a home typically is negotiable. Check the logistics in your state concerning buying and renting so that you are familiar with any parameters that affect the purchase and financing as well as any rights you may have as a tenant. These are additional factors to consider when weighing the pros and cons of renting and buying a home.
Health Benefits of Green Tea
Drink Green Tea
Experts explain green tea’s potential benefits for everything from fighting cancer to helping your heart.
By Julie Edgar
WebMD Feature
Reviewed by Louise Chang, MD
It’s difficult not to gush about green tea.
More than a decade’s worth of research about green tea’s health benefits — particularly its potential to fight cancer and heart disease — has been more than intriguing, as have limited studies about green tea’s role in lowering cholesterol, burning fat, preventing diabetes and stroke, and staving off dementia.
“I believe in green tea based on everything written about it,” says Katherine Tallmadge, RD, LD, a nutritionist and spokeswoman for the American Dietetic Association. “Green tea, white tea, black tea — I like all of them.”
Still, real-world evidence is lacking; most of the consistent findings about green tea’s health benefits have come out of the lab.
The few large-scale human studies that have focused on green tea’s impact on heart disease and cancer are promising, but many of those were conducted in the East, where green tea is a dietary mainstay. The outcomes are likely influenced by other lifestyle factors such as high consumption of fish and soy protein, says cardiologist Nieca Goldberg, MD, a spokeswoman for the American Heart Association and medical director of the New York University Women’s Heart Center.
But Goldberg agrees with other health professionals: green tea has important antioxidants and compounds that help in maintaining good health.
Ten Facts about Mortgage Debt Forgiveness
Your House
If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.
1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
2. The limit is $1 million for a married person filing a separate return.
3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
6. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.
9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. Taxpayers may obtain a copy of this publication and Form 982 either by downloading them from IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Source IRS
What You Should Know Before Buying Furniture
How to Choose the Best Furniture
BY Getachew Teklu
What you should know before buying furniture, any furniture, is how to find the best fit for your own needs. Every piece of furniture has certain features that determine whether it is a good buy for you or not. Some general rules apply to all furniture purchases, but today there plenty of choices. Since buying furniture is such an investment, understand your choices and how to choose the best furniture for you.
A sofa is one of the most important furniture purchases for your home, so before you buy a sofa make sure you are getting one that fits your needs.
A sofa that is perfect for your living room could be a terrible idea for your family room. First figure out how you want to use your sofa and who will be using it. Determine whether your sofa is a good fit for your space, and since there are sofas to fit any style of room, look for one that satisfies your own personal sense of style. The fabric you select for your sofa contributes immensely to its usability and beauty.
Just as when you buy any furniture, you should be confident that you are buying the best quality sofa for your budget, and that it offers you the comfort you need from it.
A sleeper sofa is a great multifunctional piece of furniture with the potential to turn any room into a bedroom. You can fit a sleeper sofa in so many places – a child’s room, an office or even an appropriately sized alcove.
Almost any sofa can be bought as a sleeper sofa, and sleeper sofas come in all sizes. If you only have room for a twin bed, find one in a chair. A slightly bigger room might be able to accommodate a full-size sleeper sofa, which could function as loveseat when not in use for sleeping. A sofa that seats three people easily can be transformed into a queen-sized bed.
Buy furniture that functions both as comfortable seating and a comfortable bed in any size, and what’s more many sleeper sofas come with hidden storage.
Before you buy a bed, you should know that a comfortable bed is a piece of furniture that is essential to getting a good night’s sleep. But beds also go beyond that function by providing a focal point for your bed room. So look beyond comfort alone to find a bed that is in a style that you like.
Beds are available in all styles, sizes and heights. You can go for a simple uncluttered look, or buy an elaborately carved bed.
In addition to buying a bed for yourself, you may also want to buy a suitable bed for a child or a guest. Sometimes, you may be short on space. But there are plenty of choices for all kinds of beds, such as bunk beds, toddler beds, daybeds, or even regular beds in twin, full, queen or king sizes depending on your needs.
What should you look for before you buy an office chair? An office chair is a piece of furniture that is a sound investment for anyone who spends long hours at a desk.
, seat, and armrests are adjustable. You should be able to adjust the seat height and tilt of your office chair to your own preferences, and ideally the seat should be comfortable enough to support you comfortably, while letting your body breathe. The most important feature to look for is good lumbar support, as an office chair with a good lumbar support lets your back stay in a position that is good for its spine health.backrestsBefore you buy an office chair, check to see if the
5. Before You Buy a Home Entertainment Center
Home entertainment centers come in all different shapes and sizes. With the changing look of today’s televisions, entertainment centers have evolved, too.
You have the choice of buying an entertainment center that completely conceals your equipment or buying one that displays it. If you need a place to organize all your media as well as equipment, you can find entertainment centers that offer plenty of efficient built-in storage.
You should always judge for quality because you are storing expensive and fragile equipment in it. Additionally make sure you are buying an entertainment center that complies with tip-over rules, and lets your equipment breathe to prevent heat buildup.
6. Before You Buy a Table Lamp 
Before you buy a table lamp, determine what kind you need. A table lamp is a furniture accessory that can add so much to a room besides light.
Since table lamps come in all shapes, sizes and styles, they can enable you to dress up a room in style. You can choose a table lamp for its decorative value, as much as for the light it provides. A tall table can be a major source of light in a room, as the taller a lamp the greater its area of illumination. Smaller table lamps can be used accent lighting.
Another wonderful thing about table lamps is that you can change the look of a lamp by the style of shade you choose. And remember, the bulb and wattage you pick should be appropriate for the function and type of your table lamp. For all your furniture needs visit Chicago Furniture Warehouse, inc. www.chicagofurniturewarehouse.com
The best investments you can make
Many people – especially singles and young couples who are just starting their careers – have mixed feelings about purchasing a house. They worry about getting tied down and taking on a lot of debt.
Here are 10 compelling reasons why anybody who can afford it should consider buying a home:
1) House prices tend to rise over time, so a house is one of the best investments you can make. Home prices in the U.S. have risen three percent to six percent a year for the past 20 years. That trend is likely to continue. So if you buy a home now, you’ve put your capital in a safe investment where it is likely to grow.
2) You’ll pay less tax. You can deduct the interest you pay on your mortgage from your taxable income. The value of this tax break depends on factors like your personal tax bracket, the size of your mortgage, the rate of interest you pay on it and how long you’ve held the mortgage. As a rule, the newer the mortgage, the greater the amount of interest you pay each month and the bigger the tax break. Therefore, recent buyers with young mortgages tend to get the greatest benefit.
3) You’ll be buying a piece of real property rather than putting money in a landlord’s pocket each month. The real cost of renting is higher than the monthly payment. There is also an opportunity cost equal to the amount you would gain by using the money to purchase a home instead. Even if the house you purchased did not appreciate in price, you would be able to sell it and recoup some of the money you put into it.
4) Interest rates are still historically low. This makes it relatively inexpensive to take out a mortgage. The lower the interest rate, the less you actually pay for your house and the sooner you can pay the mortgage off. Our loan calculator can show you how different interest rates affect the total cost of your mortgage and the time it takes to retire it.
5) You’ll be able to use the equity in your home for low-cost loans for other purposes. You can access the paid-up equity you accumulate in your home in the form of a home equity loan or a home equity line of credit. Because they are secured, home equity loans and lines of credit generally carry a lower interest rate than other types of consumer loans, such as auto loans. The interest on them is generally tax-deductible, as well.
6) You’ll have the stability and emotional security of owning your own home. No more worrying about dictatorial or negligent landlords, rent increases or the possibility your building will be sold and redeveloped or turned into a condo. You’ll be able to live in your house as long as you like, fix your monthly payments for as long as 30 years and you’ll be in charge.
7) You’ll be able to redecorate and renovate any way you like, any time you like. Rules about the paint colors you can use will be a thing of the past. And you’ll be able to tear out walls, install a powder room and make any other improvements you want. Best of all, if you decide to sell, you’ll recoup at least part of the cost of the improvements.
8) You can have a garden. This is one of the big pluses of ownership – a little piece of land you can call your own, where you can grow tomatoes or roses, barbeque, and play with your kids and pets.
9) You’ll be able to put down roots in a community. When you’re a homeowner, you’ll get to know your neighbors, participate in street sales, meet potential baby-sitters and play Saturday-morning touch football in the park. Renters tend to live more insular lives.
10) You’ll have a greater voice in community affairs. Local homeowners generally have more clout – individually and through ratepayer’s associations – when it comes to development proposals, school issues, changes to traffic control and routing and the like. Because renters tend to be more transient than homeowners, they have less influence on policymakers.
Seven Facts about the Nonbusiness Energy Property Credit
Taxpayers who take energy saving steps this year may get bigger tax savings next year. The Nonbusiness Energy Property Credit, a tax credit for making energy efficient improvements to homes has been increased as part of the American Recovery and Reinvestment Act of 2009.
Here are seven things the IRS wants you to know about the Nonbusiness Energy Property Credit:
- The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined.
- The credit applies to improvements such as adding insulation, energy-efficient exterior windows and energy-efficient heating and air conditioning systems.
- To qualify as “energy efficient” for purposes of this tax credit, products generally must meet higher standards than the standards for the credit that was available in 2007.
- Manufacturers must certify that their products meet new standards and they must provide a written statement to the taxpayer such as with the packaging of the product or in a printable format on the manufacturers’ Website.
- Qualifying improvements must be placed into service after December 31, 2008, and before January 1, 2011.
- The improvements must be made to the taxpayer’s principal residence located in the United States.
- To claim the credit, attach Form 5695, Residential Energy Credits to either the 2009 or 2010 tax return. Taxpayers must claim the credit on the tax return for the year that the improvements are made.
Homeowners who have been considering some energy efficient home improvements may find these tax credits will get them bigger tax savings next year.
Source: IRS
