Both mortgage guidelines and the economy have tightened since 2006, bringing more attention to “joint homeowners” — non-spousal partners that buy and share a home as roommates. The practice is not new, but, anecdotally, co-purchasing is becoming more common. In the video above — filmed two years ago but still on-target today — real estate expert Barbara Corcoran provides good advice for co-purchasing partners. Like any business relationship, it’s important to plan ahead. Hire an attorney to draft contracts and agreements Have a plan for when one or both parties wants to move or sell Consider life insurance policies on each other The over-riding theme for co-purchasing arrangements is to be prepared. Done right, however, they can create two proud homeowners where there would have otherwise been none.
It’s Tax Day today and who among us doesn’t love a legitimate tax deduction? The IRS expects to process 138 million tax returns this year and accompanying those returns will be a melange of tax deduction requests. Most will be run-of-the-mill including such staples as mortgage interest, vehicle mileage, and child care deductions. Others, however, will be less ordinary. On its website, TurboTax pays homage to some of the most off-the-wall, offbeat tax deductions through the years permitted by the IRS. Among the “weirdest deductions allowed“: A bodybuilder’s body oil so his muscles would glisten in competition A private airplane for owners of investment properties Landscaping for a sole proprietor that meets clients at home A swimming pool for a man with emphysema Tax deductions are prized by U.S. taxpayers. Hopefully, your 2008 tax returns included some good ones, too.
Shopping for low mortgage rates is a game of luck. Some days, mortgage rates are favorable. Other days, they’re not. And while you can sometimes make an educated guess about where rates might be headed, you’re not always going to guess right. Even the experts get it wrong more often than they’d like. But some parts of the rate shopping process can be predicted and one of them is the future of mortgage guidelines. In general, the more often homeowners default on their respective mortgages, the harder it is for future mortgage applicants to be approved. This is why “now” may be the best time to apply for a FHA mortgage. Defaults are climbing, suggesting that FHA underwriting guidelines are about to tighten. Indeed, the FHA has implemented two major changes since last summer: The minimum downpayment requirement was raised by a half-percent to 3.5% Cash out refinances are now limited to 85 percent, down from 95 percent. These changes […]
When conforming mortgages adjust, they’re often tied to an interest rate index called LIBOR. LIBOR is an acronym for London Interbank Offered Rate. But what LIBOR stands for isn’t as important as the role it plays. LIBOR is an interest rate at which banks borrow money from each other. Therefore, when banks feel the banking system as a whole is unsafe, LIBOR rises to compensate. It’s why LIBOR spiked last October after Lehman Brothers failed. Financial institutions wondered what other institutions would fail and that added risk to the system. Since October, however, and because of massive government interventions worldwide, LIBOR has been on a steady retreat. Moreover, with close to $30 billion in conforming mortgages scheduled to adjust by Labor Day, the timing couldn’t be better for homeowners with conforming ARMs. Typically, a Fannie Mae- or Freddie Mac-backed mortgage adjusts once annually. The adjusted interest rate is always equal to some constant — usually 2.250 percent — plus the […]
April 4, 2009, marked the official start of the Making Home Affordable refinance program. Expected to help 5 million homeowners, the Making Home Affordable program “looks the other way” with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner. Not every homeowner is eligible for a Making Home Affordable refinance, however. There are 3 basic criteria that must be met. First, your existing home loan must be backed by either Fannie Mae or Freddie Mac. Thankfully, both companies provide online lookup services. Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac’s site requires your social security number. Next, you must have a perfect mortgage payment history over the last 12 months. Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program. It is okay, however, if you were 20 days late on your payment and incurred […]