Financing

Mortgage Rates Take a Teensy Dive

But just a teensy one. The average on a 30-year fixed-rate mortgage is down to 4.34% from last week’s 4.41%. Still SUPER low and worth taking advantage of if you’re a buyer! Here’s the full story from UrbanTurf, along with a very handy chart showing the path that rates have taken over the past few years (please note the disclaimer at the bottom, which I subscribe to as well!):

4.34: Mortgage Rates Head Back Down a Bit

Mortgage rates headed back down on Thursday from their position last week. Freddie Mac reported 4.34 percent with an average 0.7 point as the average on a 30-year fixed-rate mortgage, down from 4.41 percent. Last year at this time, long-term rates averaged 3.43 percent.

It was a week of economic news that did little to signal big changes to the economy, and the shift in the rates was a small one. Frank Nothaft, Freddie Mac’s vice president and chief economist, had this to say in a news release on the rates:

“Mortgage rates eased a bit following the decline in 10-year Treasury yields. Also, the economy added 192,000 jobs in March, which was below the market consensus forecast but followed an upward revision of 22,000 jobs in February. Meanwhile, the unemployment rate held steady at 6.7 percent.”

UrbanTurf is tracking the path of the rates in this chart:

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The UrbanTurf Mortgage Rate Disclaimer: The rates reported by Freddie Mac for 30-year mortgages are usually the best rates that the most qualified borrowers can get, so borrowers or those considering refinancing should not necessarily read this news and think that they can go out and get a loan with the quoted interest rate.

Homeowners: Are You Taking All of Your Tax Deductions?

One of the joys of homeownership is the accompanying tax breaks. Do you know what all of them are? Here’s a great article that outlines the various tax breaks that homeowners can qualify for – make sure you know which ones apply to you! Also, note that this list does not include DC-specific tax credits, like the Homestead Exemption. Expect a follow-up post on those soon!

Tax Breaks That Every Homeowner Should Know About

accountant filling the forms...

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U.S. tax season officially runs from Jan. 31 to April 15. While several energy-efficient home improvement tax credits recently expired, there are still many tax breaks available to homeowners. Whether you own a single-family home, condo, co-op apartment or mobile home, you may qualify — just be aware that, in most cases, you’ll need to itemize your taxes in order to take advantage of these deductions and credits. Here are a few of the tax breaks you’ll want to check out.

Mortgage interest deduction: In most cases, you can deduct all of your home mortgage interest. How much you can deduct depends on when you took out the mortgage, the amount of the mortgage and how you use mortgage proceeds. You can deduct your home mortgage interest only if your mortgage is a secured debt. Your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. You may qualify for a mortgage interest deduction on a loan secured for your primary and second home, even if your second home is a boat or RV with cooking, sleeping and bathroom facilities.

The interest you pay on a mortgage for a third, fourth or fifth home may be deductible if the proceeds of the loan were used for business, investment or other deductible purposes; check with a tax accountant for details.

Deduction of points: If you bought a home in 2013 and paid points in order to obtain your home mortgage, these fees are included on the income tax deductions list and can be deducted. If you refinanced your home, these points are still deductible, but it must be done over the life of the mortgage.

Exclusion on sales gains: If you sold a home in 2013, you may qualify for an exclusion on the net sales gain (selling price minus purchase price plus improvements) of up to $250,000 for an individual or $500,000 for a couple. This exclusion requires that the home was used as your personal residence for two of the past five years. Things become more complicated if you lived in the house, moved out and then moved back in; be sure to consult a tax professional to see if you qualify for a partial exclusion.

Deduction of property taxes: You can deduct your state and local property taxes, as long as they are based on the assessed value of the real property. If you pay your property taxes out-of-pocket, you need to locate your bills to determine how much you paid.

If your money is being held in escrow for the purpose of paying property taxes, you cannot claim this deduction until the money is actually taken out of escrow and paid. If you receive a partial refund of your property tax, the amount of the deduction you can claim will be reduced.

Mortgage insurance deduction: Mortgage insurance provided by the U.S. Department of Veterans Affairs is commonly known as a funding fee; if provided by the U.S. Department of Agriculture Rural Development, it’s referred to as a guarantee fee. The funding fee or guarantee fee can be included in the amount of your home loan or paid in full at the time of closing. These fees can be deducted fully in tax year 2013 if the mortgage insurance contract was issued in 2013.

If you pay private mortgage insurance, or PMI, that’s a cost you probably won’t be able to deduct — unless you meet the requirements of a special PMI law that allows deductions of PMI payments on loans originated or refinanced between Jan. 1, 2007, and Dec. 31, 2013, and that meet certain loan amount limits.

Home office deduction: Beginning in tax year 2013, taxpayers may use a simplified option when figuring the deduction for business use of their home. Both homeowners and renters can take advantage of this deduction, as long as the space serves as your principal place of business and is regularly and exclusively used for business purposes. You’re entitled to a deduction of $5 per square foot of the home used for business, up to 300 square feet.

If the simplified option doesn’t appeal to you, you may still use the regular method (required for tax years 2012 and prior) and determine the actual expenses of your home office: mortgage interest, insurance, utilities, repairs and depreciation. If you use the regular method, deductions for a home office are based on the percentage of your home devoted to business use.

Energy-savings deductions: If you installed a geothermal heat pump, small wind turbine or solar energy system in your home in 2013, you may be able to claim a tax credit for up to 30 percent of the cost of installation. The credit has no upper limit and applies to both existing homes and new construction, but not to rental properties. This credit runs through the end of 2016.

You can also get a credit of up to 30 percent of the cost of residential fuel cells, up to $500 per 0.5 kilowatt of power capacity. This credit also expires Dec. 31, 2016.

Clergy, military housing allowance: Ministers and members of the U.S. armed services who receive a housing allowance that is not taxable can deduct their real estate taxes and home mortgage. Even better news? You don’t have to reduce your deductions by your nontaxable allowance.

Mortgage Fee Hike Delayed – For Now

Percent Graphic

 

If you’re the sort of person who keeps track of things like what mortgage rates are doing, then you may have heard back in December that Fannie Mae and Freddie Mac were going to be increasing the fees that they charge lenders to guarantee mortgages, effectively making mortgages more expensive. These fees were supposed to take effect this spring. However, Melvin L. Watt, the new and recently sworn-in director of the Federal Housing Finance Agency (which regulates Fannie and Freddie) has delayed the planned fee increases, stating that he wants to asses the impact these fees would have on the housing market before allowing them to take effect. He hasn’t given a time frame for this assessment, so the best we can say is that you definitely have til April to take advantage of the lower fees.

And don’t forget, this is useful news for buyers AND sellers. Buyers will of course want to take advantage of less expensive mortgage offers, but sellers will also want to take advantage of the more robust market that results from these less expensive mortgages.

Questions? Ready to start your house hunt and/or put your place on the market? Email me at: Alia@rlathome.com

Is a Low Down-Payment Loan Right for You?

Lenders are now offering the opportunity to put down as little as 3% when buying a home. The good news is, this time around they’re actually underwriting the loans properly (i.e. doing financial background checks) so as to avoid another subprime lending fiasco. Are you debating between taking out a low-downpayment loan or holding out til you can save up for a larger downpayment? There are lots of factors to consider, including your cash-on-hand needs, current mortgage and rental rates, and your long-term job outlook. This article walks you through the main pros and cons that you should consider when debating what path to take when it comes to financing your new home.

 

The lowdown on low down payments

MOLLY RILEY/REUTERS – The resurgence of low-down-payment financing may seem dangerous, but the loans are different this time

By Michele Lerner, Published: August 15

Mortgage down payments as low as 3 percent — and even 100 percent loans — are returning. That may be good news for buyers who haven’t accumulated a lot of savings.

But there are some trade-offs: Mortgage payments will be higher because more money is being borrowed and because private mortgage insurance is required for down payments that are less than 20 percent. With that in mind, buyers may want to consider renting for a longer time and saving more for a larger down payment to make sure they can truly afford a home…

Full article: http://www.washingtonpost.com/realestate/the-lowdown-on-low-down-payments/2013/08/15/3b47417e-fb83-11e2-8752-b41d7ed1f685_story.html

Mortgage Rates on Vacay Too

Mortgage rates appear to have taken an August vacay too. After a steady creep upward, they have leveled off – for now.
‪#‎ulba‬ ‪#‎rlathome‬

Mortgage rates seem to have leveled off for the time being

By Kathy Orton, Published: August 15 at 10:00 am

(Pablo Martinez Monsivais/Associated Press)

(Pablo Martinez Monsivais/Associated Press)

Following a run-up in the spring and early summer, mortgage rates seem to have leveled off for the time being, according to the latest data released by Freddie Mac…

Continued: http://www.washingtonpost.com/blogs/where-we-live/wp/2013/08/15/mortgage-rates-seem-to-have-leveled-off-for-the-time-being/