They're Back - 100% LTV

Well, I can tell we are all slowly getting back on proverbial real estate "horse".  It was not too long ago that I could get a young professional into a 500K home without any downpayment.  Yep, that went away with the financial meltdown. To steal a term from the beloved Arnold Schwarzenegger - "I'll be back".

As a real estate professional I surely can remember thinking "Boy, those were the days!".  Welp, strap on your bootstraps cowboys.  I found a 100% conforming professional mortgage for up to 500K!  I know, us conservative folk say that was not then, and is not now, a prudent decision.  I do not personally disagree with that sentiment in general.  However, the key word in this mortgage description  is professional.  Are you a resident doctor?  If you are, then IMO you are professional that may need this type of product.  In my PC opinion...give me a call  (I am not a loan officer nor a mortgage professional) I will be happy to connect you to those in the know!

Truly Trulia and Zillow

With over 1 million visitors per month, Zillow has become a popular site for home buyers & sellers. I too have visited Zillow and Trulia on occasion.  Typically it is due to a client call or inquiry relating to the home for sale down the street.  While I do not expect nor want the general public to only go where I tell them.  I must stress that 20% to 30% of the data on these sites is not accurate or reliable.  90% of all real estate website traffic in Central Indiana is in three sites (Zillow 40%, MIBOR 40%, Homes.com 10%).  If you would like to find a home that fits your needs, MIBOR.com provides real-time data and market information unparalleled in the industry.  Zillow and Trulia are not as accurate and presents homes based on sponsorship dollars more than your needs as a seller or buyer.

Knowlegeable Representation

The past few months has been quite exciting.  Having been afforded the opportunity to join MIBOR's Academy of Leadership, I have been diving neck deep into current issues relating to our community.  I have met with Mayor Ballard (Indianapolis), and Mayor Cook (Westfield) and discussed multiple issues such as the transit initiative, employment, and exciting new developments.  No, I don't call myself and expert.  However, it is really educational and quite interesting to get involved in current affairs.  Not to mention the fact that this knowledge, in my opinion, is really helping me represent my clients on a different level!

One of my biggest concerns over the past few months has been the status of homeowner's mortgage tax deduction. While that issue still seems to be continually on the proverbial chopping block.  On Jan. 1 both the Senate and House passed H.R. 8, legislation to avert the “fiscal cliff.” The bill has been signed into law by the President. The measure permanently extends current income tax and capital gains rates for all taxpayers with taxable income up to $400,000 for individuals and $450,000 for couples. The bill also extended several real estate related tax provisions, most notably, a one year extension to the end of 2013 of the Mortgage Debt Forgiveness Act that exempts loan amounts forgiven by lenders in short sales and foreclosures from being included in taxable income.

Other real estate provisions included:

• Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012.
  
• 15 year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
  
• The 10% tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.
  
• Finally, so called “Pease Limitations” that reduce the value of itemized deductions were permanently repealed for most taxpayers but will be reinstituted for individuals earning above $250,000 adjusted gross income and couples above $300,000.

ObamaCare Real Estate Tax

Question:  "OH NO!  If I sell my home do I have to pay a 3.8% tax on the proceeds! "
Answer: " I don't know!"

Sounds like a true politician right?  Well, it is true.  It is hard for anyone to tell you that answer because it is a very detailed response.  How much do you make?  Are you married filing jointly? How much money (capital gains) will you see on your sale?

I have noted a great piece of information that will help you determine the answer!  Click here and go to the National Association of Realtors press release.

It all depends on your income - If you make less than $200,000 per year and file a single return then the answer may be NO ($250,000/year married filing jointly).

Reverse Mortgages - Saving Homes

Reverse Mortgage - What is it? Simply put - If you owe 100K on your home that appriases for 200K and you refinance with a "Reverse Mortgage" your loan balance may (most likely will) go up! When you sell your home, later in life, your loan balance will be higher than what it was when you took out the loan.

Why? You don't have to pay any monthly payments! Yep, go ahead, refinance your 100K loan through a "Reverse Mortgage" and you might be able to NEVER PAY MONTHLY PAYMENTS AGAIN. Even if you live to a ripe old age of 120.



What's the "Catch"? You have to be 62 years or older. You have to have significant equity in your home. YOU MUST USE A HECM FHA PRODUCT (in my opinion)! What does that mean? A Home Equity Conversion Mortgage insured through FHA NOT a traditional "Reverse Mortgage".


Talk to a licensed Financial advisor for details. Make sure you mention that this is not the traditional "Reverse Mortgage". The bank will not take your home if you live too long!

Pros: You have a lot of equity in your home...That equity is great but it does not buy bread or support to you or a loved one...You can get some of your equity out of your home and put it to work for you. You can pay any amount of payments per month (including zero)! If your principal and interest exceeds the amount your home sells for when you die. FHA will pay back any losses to the lender.

It is a gamble from the banks perspective - FHA and the bank are in it to make money. They do hope you dont live to be 120. But, we hope you do...In the mean time...No more mortgage payments plus a possible "cash out" option on your equity to do with as you please.

Cons...Your loved ones may not be able to inherit the equity in your home. True..but, if they or you need money now...What does it matter?

Remember - I am not a financial advisor. I just feel as though this may be an attractive benefit and option for many people that are having trouble paying for their mortgages in the tight economy. Royal United Mortgage - Indianapolis Based - has an entire department working on HECM loans. Dont be scared - get information!

Skyrocketing Building Prices - Don't blame U.S.

So, you want to build a home? With 4% interest rates (the lowest in 50 years) and labor available at a discount, it seems to make sense. Most of the cost of housing is in materials (Lumber, copper, concrete, steel, etc.). Houston, there's a problem in the claimed "recovery" from the recession. Just because our economy is lagging it does not mean the world economy is following suit. If you can just imagine what the world thought of our massive growth over the last 75 years. It is time for us to consider looking out our windows at our chief competition as consumers. Right now India, China, and Brazil are exploding with growth. Their economies are booming so much that we are exporting most of our lumber, steel, and copper (to name a few items) to these countries. There is such a demand that we are exhausting natural resources around the globe at a staggering pace and thus driving up prices. Steel has increased 30% since Sept. 2010! Material costs have risen so much that the mere savings you will find in labor cannot offset the skyrocketing cost of the product itself. It makes you wonder how much money Brazil is putting into the infrastructure for the 2016 olympics (i.e. Birds Nest II).

The secret is to buy existing homes at recessed prices and upgrade. Yep, it sounds easy. I know that everyone wants to buy a home and immediately start the construction project, right? Don't be scared off - you can save tens of thousands of dollars or more and live in a home built on a mature site with quality materials. That's my tip (or word for the wise)!

However the Buck Stops Here

The holidays always try my patience. The respect for the almighty dollar really deminishes during that time. True, there are a lot people who seem to think they are getting good deals during this time. The worst thing about the Holiday Season is that 99% of all my transactions always contained one of three words..."However", "But", or the worst of all "BUCKS"!

Why you may ask...does that bother me? Good deals always seem to be tied to some other "thing". You may have to open up a new credit card. You need to buy two of the same item. You may need to come back tomorrow to use the coupon.. My latest experience was from a Disney Representative who said, "You can get a cheap hotel room, however you have to book it 14 days out. But, without an Disney Visa card you wont be able to save the $50 bucks."

That made me think - when someone refers to my money as "BUCKS" does that mean they are belittling my money? No, it may mean that it is not worth much...or...does it mean it is worth a lot? I don't know... I just feel it is disrespectful. It makes me think that there are a bunch of them (bucks) running around somewhere and I need to just lean out the window and grab one. I guess this is silly but why don't we call it a "dollar" or "dollars". I know it's old school, YET, when I am selling a property I respect my client's money - every last cent - enough to call it what it is.

Home sales are littered with contingencies(Buts), counter offers (Howevers), and obvious fiscal negotiations/responsibilities (BUCKS). I've learnedthat the dollar's value is different to each person. I have also learned that you can never go wrong with respect.