Top 5 Ways to Use a Tax Refund
May 21st, 2010 categories: Financial Information
Thousands of Americans are receiving income tax refunds from the U.S. government, with the IRS reporting an average refund of $2,940 this year. In the current economy, consumers can make strategic choices to make sure that refund pays off for them.
As a member of the Top 5 in Real Estate Network®, I, along with my team, am often asked about financial matters, including advice on smart ways to manage income tax returns. According to Freedom Tax Relief (www.freedomtaxrelief.com), many tax refund recipients might be thinking of creative ways to spend that cash as the economy starts to recover. But before getting carried away, they suggest thinking more long term.
Freedom Tax Relief suggests the following as the top ways to wisely spend an income tax refund:
1. Pay down credit card and other high-interest debts (including payday loans). Few investments can top the rate of return for eliminating debt. Paying off credit card debt at typical interest rates effectively makes an investment that returns 20 percent or more per year. The only caveat: Be certain you change your mindset as well. If you pay off debts, only to charge up the credit cards or sign for a new car loan a few months later, you have ultimately gained nothing. If credit card debt is your problem, cut up or freeze your credit cards to ensure you do not re-create the same problem you have left behind. Use a debit card for future purchases that require a card.
Ready to pay down your debt? List and pay secured debts first (mortgage, car). Mortgage payments should take absolute priority. Then list unsecured debts (credit cards, loans) in order of highest interest rates. Make minimum payments on all but the highest-rate card. Use every cent of available income to make large payments on the card with the highest rate. When that card is paid off, apply the big payment plus the old minimum payment on the next-highest rate card until it is paid off. Continue until all debt is eliminated.
2. Create an emergency fund. The Great Recession has pointed out the importance of an emergency fund. Those who do not yet have enough readily accessible money set aside to cover several months’ worth of expenses should consider a tax refund a prime opportunity to create a fund that ultimately includes 6-9 months’ living expenses. These amounts are not necessarily equal to salary. Instead, they should include only what the household would spend if it were in dire straits. House these savings in a money market fund or rolling CDs so that the money earns interest and cannot easily be spent — but can be accessed in an emergency.
3. Make sure you have adequate insurance. Everyone should have health, auto, and home or renters insurance. If dependents rely on breadwinners’ income, look into life insurance. Consider an umbrella policy to protect from additional liability. And if the household could not survive without an income, purchase disability coverage. This is a huge savings step – one trip to the emergency room or one minor accident can easily end up costing thousands or tens of thousands of dollars out of pocket.
4. Fund the future. Contribute to retirement savings, whether an individual or Roth IRA, 401(k) or other plan.
5. Invest in the home. Homeowners might consider using refunds to cover major or minor maintenance to make sure no bigger (and more expensive) problems arise down the road. You can also use these funds toward a downpayment on a vacation home, a college apartment for your children or for your very first home.
No matter how big or small the amount, and despite the temptation to celebrate and splurge, make your choice on what to do with any refund carefully, experts say. Take time to make sure your money works for you and helps build wealth.
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HOMEPATH FINANCING by Fannie Mae
May 18th, 2010 categories: Real Estate News
The HomePath Mortgage Program offers buyers a mortgage opportunity with incentives. HomePath Financing applies to both single family homes and condominiums that have been repossessed by Fannie Mae. This program is intended to help clear the thousands of FNMA foreclosed properties off the books while providing great incentives for buyers, including owner occupants and investors.
“The unique thing about this program is that borrowers can purchase one of these homes with only 3% down. In addition to the small amount down there will be no Private Mortgage Insurance.” stated Todd Wheeler of Homeservices Lending, an affiliate of Wells Fargo and HomePath Lender.
Other Benefits Include:
Flexible mortgage terms (fixed-rate, adjustable rate, or interest-only)
Lower credit scores required (Minimum Score 660)
Investors are required to make a 10% down payment with 5% of the down payment coming from the investors own funds. Normal credit scores apply. Investors can purchase up to 4 Fannie Mae owned properties through HomePath financing.
The 3% down payment for owner occupied properties can be a gift or grant, a loan from a nonprofit organization, state or local government of employer.
The Seller can contribute up to 6% toward the buyers closing costs and pre-paids
No appraisal
No Condo Questionnaire required
The HomePath Mortgage Program applies as long as the property is designated by FNMA on the HomePath website.
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Closed Sales in Forest Ridge
May 14th, 2010 categories: CLOSED SALES
The real estate market heated up during the last 30 days. Six homes were closed in Forest Ridge while 6 remain in Pending Status.
2811 Morning Glory Circle, Old Orchard, List Price $479,900 Sold Price $470,000 Days on Market: 1
5 Bedrooms/3 Full Baths, Pool, Lake
9875 Ridge Trace, The Ridge on Nob Hill, List Price $399,000 Sold Price $370,000, Days on Market: 37
Short Sale 4 Bedrooms/3 Baths, Dry Lot, No Pool
2937 Oak Park Circle, Oak Park, List Price $324,500 Sold Price $305,000, Days on Market: 47
3 Bedrooms/2.5 Baths, Lake, No Pool
, Zero Lot
9260 Oak Grove Circle, Oak Grove, List Price $319,000 Sold Price $295,00 Days on Market: 55
3 Bedrooms/2.5 Baths, Lake, Zero Lot
8932 S Lake Park Circle, Lake Park, List Price $299,000 Sold Price $285,000 Days on Market: 44
3 Bedrooms/2 Baths, Dry Lot, No Pool, Zero Lot
9844 W Tree Tops Court, The Ridge on Nob Hill, List Price $470,000 Sold Price $405,000 Days on Market: 35
3 Bedrooms/2 Baths, Lake, No Pool
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What will it take to turn this market around?
April 29th, 2010 categories: Real Estate News
There are five major factors that are significantly affecting the real estate market.
The first is UNEMPLOYMENT. There are 12.5 million people on unemployment according the Bureau of Labor Statistics. There are 8 – 10 million who have fallen off the charts or are underemployed. Seventy percent of the economy is consumer driven and 20% of the GDP is related to real estate. People who want to buy homes can’t unless they are employed with a savings account.
The second is CONSUMER CONFIDENCE. It is currently bouncing somewhere near the bottom. On a national level, home ownership never lost value from the time of the Great Depression until the time of the Great Recession. We are struggling to prove that the owning a home is still the American Dream.
The third is INVENTORY OF HOMES. There are 3.5 million homes listed for sale. In the 10 years trailing the average was 2.5 million homes; there are 30% more homes for sale today. There has to be an absorption of homes currently for sale before new construction can begin.
The fourth is SHADOW INVENTORY. In 2008 there were 1.8 million foreclosures. In 2009 there were 2.1 million foreclosures and in 2010 it is predicted that we will see somewhere close to 2.9 million homes in foreclosure. 25% of all mortgages are underwater and out of 55 million mortgages, 8 million are 90 days or more in arrears.
The fifth is GOVERNMENT STIMULUS AND SUPPORT. We saw a “false” high which was provided by the tax credit and low interest rates. Without continued support many people believe that we we see a sharp decline in home sales beginning in May, 2010.
I believe that we are at the beginning of the end of the real estate slump and the climb is going to be slow. The long term road to recovery is going to be considered the “new normal” according to real estate experts.
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Tax Credit Extended
April 12th, 2010 categories: Real Estate News
The Tax Credit for homebuyers expires April 30th, 2010. But, it’s not over for everyone. If you are a member of the Armed Forces, Intelligence or U.S. Foreign Service and you have been outside the United States on an official assignment for at least 90 days between January 1, 2009 and April 30th, 2010, or if you have been returned to the United States for medical reasons and could not complete your assignment of at least 90 days, you still qualify for the Tax Credit until April 30, 2011. You must be under contract by April 30th 2011 and close by June 30, 2011. For more information go to IRS.gov.
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Forest Ridge Real Estate Update
March 25th, 2010 categories: Real Estate News
Have we reached our real estate day of reckoning or is Armagedon upon us? Experts all over the country have posted different views about this subject. | Discussion: 1 Comment »
KNOW THY NEIGHBOR
March 11th, 2010 categories: Real Estate News
It has been recently reported that a new “scam” is taking place in Broward County involving unoccupied homes that are REO’s (bank owned) or Short Sales. A group of people have found a loophole in the system and they are taking ADVERSE POSSESSION , (see Adverse Possession without color of title (Fla. Stat. section 95.18).
Upon taking possession of the home they rent the homes to other individuals and they file a QCD (Quit Claim Deed). There is nothing the police or the Clerk of Courts can do to prevent it. In a quick search of records, over 150 filings have taken place since late last year.
Realtors who list these properties are forced to evict the tenants, who through no knowledge of their own have rented the property. In some cases the Realtors have to pay off the people who filed the QCD or take them to court to prove that they do not have title in order to sell the house.
This is a list of of companies that have been known to participate in this activity:
1. SAVING FLORIDA HOMES
2. COLONIAL PROPERTIES
3. HELPING HANDS PROPERTIES.
4. MAS & SONS Inc.
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Stop Foreclosure
March 4th, 2010 categories: Real Estate News, Short Sale Info
A recent study by Amherst Securities stated that homes where the homeowner is at least 90 days in arrears on his mortgage payment has less than a 1% chance of catching up. 99% of these homes end up in foreclosure or a short sale. The state of Florida ranks #1 in the country in foreclosures and delinquency according to the Mortgage Bankers Association 2009 4th Quarter report.
The Obama Administration is urging participating servicers to follow through on short sales as an alternative to foreclosure for those homeowners that don’t qualify for a reworked mortgage under the the Home Affordable Modification Program (HAMP). Banks are now reaching out to their customers to help them save their home from foreclosure.
Steve Harney, one of the foremost experts in real estate in our country, gave his advice during a recent interview stating that banks have taken a softer approach in allowing homeowners to short sell their home with dignity, rather than walk away with a foreclosure on their recordthrough The Home Affordable Foreclosure Alternatives Program (HAFA).
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Consumers Call the Shots
March 2nd, 2010 categories: Real Estate News
Buyers today have all the power and they know it. Anything that is not out of the ordinary just doesn’t cut the mustard. They spend their money more judiciously and are only attracted to properties that offer value and are superior in their class. They are more cautious and they take their time before making a decision. Your home will be under greater scrunity than ever before. In order to earn their trust you must provide them with unmatched quality. People now have more opportunity, power and awareness and they will not settle for anything less than what matches their needs, interests and desires. They are not on shopping sprees. If you have had more than your share of lookers and not one decent offer, ask your agent to show you the relevant sales in your neighborhood and consider what a buyer sees when making a comparison. A new roof or air conditioner may be a selling point but it won’t add value to your home since roofs are required and most homes have air conditioners in South Florida.
These are the rules of the New Economy and they apply not only to the sale of homes but to all products and services. So, get a grip on reality and adjust your way of thinking because the old economy is not coming back. You will know when you have priced your home to sell because you will have more than one qualified buyer bidding on your home.
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Under Priced Properties Are Selling Quickly
February 27th, 2010 categories: Real Estate News
In the past two weeks I listed 2 properties, both were priced below market value. In one instance I received an offer that was $11,000.00 higher than the list price within the first week. On the other listing I received an “AS IS” offer the day it went into the MLS for just under list price, which the sellers felt was reasonable considering the repairs that had to be made to the property.
Using statistics and projections from reliable resources I was able to persuade the sellers not to price their properties above market value. Most sellers want to leave room to negotiate and they miss the point that if their home is priced below market value they will actually get a higher price than if it is priced above market value.
Many real estate experts who study facts and trends are encouraging sellers to follow this rule in order to stop the bleeding. There is another wave of foreclosures due to hit the market; it is known as the Shadow Inventory. An article written by Steve Harney, entitled Dry Your Eyes and Lower Your Price gives a few more examples of how proper pricing is helping others throughout the country.
My advice is, if your Realtor tells you it is time to reduce the price of your home….do it.
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