22. February 2011 by Michael McFarlane.

Does that sound a bit confusing?  Stated in that simple form, it is.  The reality is that it is an indication that our economy is healing.  The High is the number of homes in the process of foreclosure, while the Low is the number of homes in default and being filed upon.

The HIGH  At the end of 2010 about 4.63% of homes were in the process of being foreclosed upon, up from the 4.39 percent the previous quarter.  However, some of these were the result of the temporary halt to foreclosures that occurred while the lenders reviewed their processes (either voluntarily of by mandate).  Property seizures dropped 32$, leaving many “in the process” of foreclosure.

The good news in this is that the increase was caused largely by that process interruption.  New foreclosure action filings have dropped to 1.27% for the 4th quarter of last year.  And the percentage of mortgages with overdue payments dropped to 8.22, down from the previous 9.13%.

$ Source: San Francisco Chronicle ð

The LOW  As mentioned above, the number of mortgages in default has dropped significantly.  Also, the number of foreclosure procedures starting has dropped.  Both of these are signs that things are getting better. 

These numbers are the lowest seen in the last 2 years!  That is really great news.  Unemployment is still high, the number of home loans in default are still high, and consumer confidence is still low, but these things are improving.  That is good.  In order for a recovery to last, it must be paced.

$ Source: Inman News ð

Our take on what it means to YOU?  Like any set of statistics, these are general indicators.  We do know that the positive indicators stimulate more positive growth.  And that is a good thing for us all.

Questions about YOUR best action?  Contact us today for your free analysis.

For ALL your real estate related needs and/or questions call ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.  Please note: all visits to our sites are secure AND confidential.  We do NOT track your activity!

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17. February 2011 by Michael McFarlane.

Negative Press aside, ARMs can be a great benefit to the economy.  While they received their fair share of criticism and blame in the recent market collapse, they are not a negative thing in themselves.  They are a tool.  Like any tool, used incorrectly they can (and did) have disastrous results.

For the investor an ARM gives greater leveraging power.  They are betting that the price will increase quickly allowing them to sell before the interest rate raises.  This is a gamble of course, and like most things a higher pay-off is usually balanced with a higher risk.

For the frequent mover an ARM can give them higher buying power.  They know they will be selling before the rate goes up so the monthly payment is lower during the time they live there.  The risk is that if the market drops they may not be able to sell quickly (sound familiar?).

For the buyers that KNOWS their income will increase in the near future the ARM can allow them to purchase that dream home rather than passing on it and waiting until the money comes in.  The least risky group here is someone who’s income is temporarily reduced rather than one betting on a raise.

According to CNN Money during the boom ARMs were used in nearly 70% of the mortgages written.  During the bust their usage dropped to less than 3%.  Today they are back up to 5% and climbing, with 10% expected by year’s end according to Freddie Mac.

$ Source: CNNMoney ð

Our take on what it means to YOU?  Like any tool, misuse can create problems.  We do think the ARM is a great tool if use properly, if one understands the risks involved AND is able to absorb the loss if the gamble fails.  The use of ARMs can speed the rate of recovery for our market, and therefore the economy in general.  AND that benefits us all!

Questions about YOUR best action?  Contact us today for your free analysis.

For ALL your real estate related needs and/or questions call ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.  Please note: all visits to our sites are secure AND confidential.  We do NOT track your activity!

Subscribe to Listings Updates           Free Home Warranty

                  Search the MLS                                     Over the Back Fence 

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15. February 2011 by Michael McFarlane.

Interest rates have inched up to over 5%.  That’s higher than they have been since May 2010, nearly one year ago.  For the week ending 11 Feb the average was 5.05% with the 0.8 average buy-down rate included.  Loans not backed by Fannie Mae or Freddie Mac were even higher with a spike of 5.25% last week.

For buyers this increase is not overwhelming.  Most can easily absorb the increase of $20-$35 in monthly payments created by it.  The listing prices tend to decrease slightly to compensate for MINOR increases, lowering the down payment slightly.

For sellers however, this is not good news.  As mentioned, selling prices tend to drop slightly to compensate for the interest increase.  In a neighborhood with many homes for sale this slight drop can lower ALL home values in the area, which drops the price slightly more!  This will drop the amount the banks are willing to lend.  And for the buyer that was borderline, well, your home just may be out of their price range now.

This increase is compounded by the uncertainty of the government’s role (via Freddie Mac & Fannie Mae) which is being questioned.  What will be the result on the housing recovery?

$ Source: CNNMoney ð

Our take on what it means to YOU? 
…If you are thinking about buying, the stable lending environment of today probably outweighs any minor gain by price reductions in the near future.  And we expect interest rates to continue to climb slowly.
…If you are thinking of selling any time soon, stable prices and raising interest rates make this the ideal time.  We don’t expect prices to rise significantly until the foreclosure mess is cleaned up, and that won’t be for another year or so in our opinion.  If you are waiting for the high selling prices of 2005, well, studies we have seen expect that to happen around 2035!

Questions about YOUR best action?  Contact us today for your free analysis.

For ALL your real estate related needs and/or questions call ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.  Please note: all visits to our sites are secure AND confidential.  We do NOT track your activity!

Subscribe to Listings Updates           Free Home Warranty

                  Search the MLS                                     Over the Back Fence 

 Home Rescue Group               Free Home Market Analysis  

             Yuba-Sutter Real Estate Today

Posted in Buying a Home, Finance, Selling Your Home | No Comments »

12. February 2011 by Michael McFarlane.

#1  Deducting porperty taxes for the wrong year  Often, your tax bill will not be dated from January to January the next year.  To the IRS, this is irrelevant.  Enter the amount of money you actually paid during the current year.

#2 Confusing the escrow amount with the tax amount  If your mortgage has funds escrowed for taxes, insurance may be included also.  Even if it is not, the escrow amount may be adjusted periodically to increase or decrease reserves to pay the taxes when actually due.  The IRS only wants the amount PAID to taxes for the filing year.

#3  Deducting points on a refinance  You can deduct points on the original purchase loan up front, but not on a refinance.  Here they must be spread over the life of the loan.

#4  NOT deducting PMI (Private Mortgage Insurance)  This one is not the same for everyone.  If included in your mortgage, it usually begins to phase out as your adjusted gross income climbs above $100,000, disappearing as your AGI exceeds $109,000.

#5  Misjudging the Home Office Deduction  This one requires some careful calculations.  It may not be so great in the long run.

#6  Missing the First Time Home Buyer’s Credit  If you qualify, use it.  Refer back to our post on 07 January for more on this one.

#7  Failure to track home maintenance costs  If you own a home, you ARE going to have maintenance involved.  Know how to track what can save you here.  Good records and filing are essential.

#8  Capital Gains are taxed differently than regular income.  Know the difference and keep them separate

#9  Incorrectly Filing  for Energy Credits  Our last posting will cover this for you.  Take a look.

#10  Claiming too much Mortgage Interest Deduction  You usually are not allowed to deduct mortgage interest over $1,000,000.  While home prices were at their peak this was a lot easier than it might sound.

$ Source: HouseLogic.com ð

Read more at the link above.  As always, we can speak in general terns only.   We do hope that these guidelines help get you going in the right direction.  Every situation is different, and you should consult your tax advisor to answer your specific questions. 

For ALL your real estate related needs and/or questions call ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.  Please note: all visits to our sites are secure AND confidential.  We do NOT track your activity!

Subscribe to Listings Updates           Free Home Warranty

                  Search the MLS                                     Over the Back Fence 

 Home Rescue Group               Free Home Market Analysis  

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11. February 2011 by Michael McFarlane.

Like so many things tax related, form 5695 may seem overly complicated to many.  We have located some helpful information and sources for those doing it themselves.  Even if your accountant does your taxes, you have to know what they need to get the most you are entitled to.

First of all, make sure you are filling out the right part of the form. 

What type of system did you install? If it’s one of the following, complete Part 1 for Non-business Energy Tax Credits.

• Biomass stoves

• Insulation

• HVAC systems

• Roofs

• Non-solar water heaters

• Windows, doors, skylights

• Storm windows and doors 

Max credit: 30% of the cost of the improvement, up to $1,500.

If you installed one of these souped-up systems, complete Part 2 for Residential Energy Efficient Property Credit.

• Geothermal heat pumps

• Residential wind turbines

• Solar energy systems

• Fuel cells  

Max credit: 30% of the cost, with no limit except for a kilowatt limit on fuel cells.

Like other major expenses, keep your receipts.  For these tax credits, you also need to separate the labor from the materials costs, as the labor is not deductible here.  Manufacturers’ certifications should be kept on file also.  You don’t need to send them in with your return however.

Coordinate with Form 1040 and other forms  Part 12 is pretty simple.  Just enter the total (line 11) on form 1040 line 52.  Part 2 gets a bit more tricky.  Other credits claimed on other form can affect the deduction here.

$ Source: HouseLogic.com ð

Read more at the link above.  As always, we can speak in general terns only.   We do hope that these guidelines help get you going in the right direction.  Every situation is different, and you should consult your tax advisor to answer your specific questions. 

For ALL your real estate related needs and/or questions call ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.  Please note: all visits to our sites are secure AND confidential.  We do NOT track your activity!

Subscribe to Listings Updates           Free Home Warranty

                  Search the MLS                                     Discussions & News 

 Home Rescue Group               Free Home Market Analysis  

             Yuba-Sutter Real Estate Today

Posted in Home Maintenance, Finance, Home Improvement | No Comments »

8. February 2011 by Michael McFarlane.

Tax Benefits  Just about everyone has heard that there are tax benefits to owning your own home.  Just what are these benefits?  Do they apply to everyone?  One of the major tax advantages of owning is the ability to write off the interest you pay on your mortgage.  In many cases, this number is amplified because this reduction will also drop one’s tax bracket to a lower percentage.  And yes, these tax deductions will apply to most if not all homeowners who are making mortgage payments.  For your specific case please consult your tax advisor or attorney.  Your Realtor® can help you get started.

Better neighborhoods  Records show that stable neighborhoods tend to have less crime and maintain their financial value better than areas with a high turnover.  Since renters tend to move more often than owners home ownership benefits all.

Better schools  We are not saying that one school is better than another, nor do we want to get into that discussion here.  We are saying that a school which has the ability to anticipate its student’s needs can better meet those needs.  Since renters move more frequently than home owners the school’s attendees will change as does the population, and therefore so do the teaching needs.

Greater  feeling of security  As the population of a neighborhood stabilizes neighbors have more of a tendency to get to know their neighbors.  Besides the friendliness issue, one might argue that security is actually increased because 1) since your neighbor knows you they will recognize a stranger poking around your property; and 2) since you and your neighbor have established a relationship you will naturally tend to look out for each other more, being more apt to call the police or get personally involved.  It is also easier on the mind to let the children play in an area where people watch out for each other.

Higher property values  All of these things (and more I’m sure you can think of) will increase the desirability of an area.  As the desirability increases naturally so the values also tend to increase.  To see actual numbers for YOUR scenario contact us today!

For ALL your real estate related needs and/or questions call ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.  Please note: all visits to our sites are secure AND confidential.  We do NOT track your activity!

Subscribe to Listings Updates           Free Home Warranty

                  Search the MLS                                     Discussions & News 

 Home Rescue Group               Free Home Market Analysis  

             Yuba-Sutter Real Estate Today

Posted in Buying a Home, Real Estate Market | No Comments »