Unfortunately Southern California is still threatened by wildfires. Below is an article from the California Association of Realtors (www.car.org), that links to various articles regarding the current situation in Southern California.
Southern California remains on high alert as the threat of new wildfires competes with the on-going efforts to help those struggling to rebuild after wildfires destroyed their homes and businesses more than a month ago.
A round-up of news articles on the status of all of the Southern California wildfires, legislative efforts to aid the recovery process, and other information is posted daily on the REALTORS® Care pages of C.A.R. online. For more information, go directly to this link on the car website that will forward you to a roll up of different articles related to the wildfires in Southern California CAR Wildfires .
Monday, November 26, 2007
Tuesday, November 13, 2007
Propositions 60, 90 and 110
Propositions 60, 90 and 110 relate to those persons 55 and older or severely and permanently disabled.
Proposition 60 was approved by voters in November 1986 allows under certain circumstances the transfer of the property tax base from a primary residence to a replacement dwelling in the same county.
Proposition 90 approved in November 1988 permits the Legislature to authorize each county's board of supervisors to adopt an ordinance which extends Proposition 60 benefits to qualified homeowners outside the county.
Proposition 110 approved by voters in June 1990, extends the proposition 60 benefits to severally and permanently disabled individuals.
An example of this would be a person age 55 is living in a home in LA. The person moves to Berkeley and purchases a home in Berkeley that will be the primary residence. The individual in this case could transfer the property tax base from the house in LA to the house in Berkeley.
There are some restrictions and guidelines that must be met.
1. This is a one time event. Once you transfer your tax base once, you cannot transfer it again.
2. You must apply to have transfer tax base moved from one house to the next.
3. The replacement property must be purchased or newly constructed within 2 years before or after the sale of the original residence.
4. The transfer of the original residence must be a change in ownership which subjects the property to reappraisal at its current market value.
5. The replacement property must be of greater or equal value.
For more details and questions and answers regarding Proposition 60, 90 and 110 you can visit this site http://www.boe.ca.gov/proptaxes/faqs/reappraisal.htm
www.LisaCartolano.com
Proposition 60 was approved by voters in November 1986 allows under certain circumstances the transfer of the property tax base from a primary residence to a replacement dwelling in the same county.
Proposition 90 approved in November 1988 permits the Legislature to authorize each county's board of supervisors to adopt an ordinance which extends Proposition 60 benefits to qualified homeowners outside the county.
Proposition 110 approved by voters in June 1990, extends the proposition 60 benefits to severally and permanently disabled individuals.
An example of this would be a person age 55 is living in a home in LA. The person moves to Berkeley and purchases a home in Berkeley that will be the primary residence. The individual in this case could transfer the property tax base from the house in LA to the house in Berkeley.
There are some restrictions and guidelines that must be met.
1. This is a one time event. Once you transfer your tax base once, you cannot transfer it again.
2. You must apply to have transfer tax base moved from one house to the next.
3. The replacement property must be purchased or newly constructed within 2 years before or after the sale of the original residence.
4. The transfer of the original residence must be a change in ownership which subjects the property to reappraisal at its current market value.
5. The replacement property must be of greater or equal value.
For more details and questions and answers regarding Proposition 60, 90 and 110 you can visit this site http://www.boe.ca.gov/proptaxes/faqs/reappraisal.htm
www.LisaCartolano.com
Thursday, November 8, 2007
Cancellation of Mortgage Debt - Questions and Answers
There have been a lot of question regarding the Cancellation of Mortgage Debt Relief Bill and the Realtor.org has outlined some of the questions and answers in a recent article The full article can be viewed at http://www.realtor.org/subprime_lending.nsf/Pages/mort_cancellation_qna?OpenDocument
Here is a short synopsis of the article. To view the entire article click on the link above.
Has this law been passed?
No. The House of Representatives has passed a bill, but it needs the Senate's approval, and then the signature of the president.
Current Law: The cancellation of mortgage debt rules apply only to a limited number of taxpayers. The provision is best understood with an example.
Assume you purchased a home for $650,000 with a mortgage of $600,000. Now you need to sell the home, and values in the area have declined and you can sell for only $550,000.
At the time of the sale, the outstanding balance on a mortgage might be, for example, $569,000. In this scenario there will not be enough cash closing to repay the lender the full balance of the mortgage. In some limited circumstances, a lender might forgive the amount of the balance that exceeds the purchase price ($19,000 in this example).
What happens to the seller when a portion of mortgage debt is forgiven? Under current law, the amount of forgiven mortgage debt (the $19,000 in this example), is treated as income, and taxed at ordinary income rates. Thus, the seller, who has experienced a true economic loss, is required to pay tax on this phantom income, even though no cash has changed hands and even though he has experienced a loss.
What about a refinanced mortgage? As currently drafted the provision would apply to either an original or refinanced mortgage.
The provision would also apply to commercial real estate as well.
Why is the law being considered?
Historically real estate has appreciated in value. But as need in some markets recently values have declined. This may be due to an major employer leaving and area or a homeowner needs to sell in a down market due job relocation. It seems particularly unfair to tax phantom income at a time when a taxpayer is in reduced economic circumstances.
There are a lot of mixed feelings out there regarding this potential law. Some will say that the homeowners should have been more prudent when purchasing their home and not overspent. At the same time no could predict the timing for the change in the Real Estate market. What seemed like a great deal a couple of years ago might not look that way right now. This is obviously can be an emotional process for the homeowner if they are facing this situation and potentially a huge financial impact to the lenders who forgive the loans.
There is sure to be a lot of debate over this issue to come in the months to come. It will be interesting to see how the Senate and President react.
Here is a short synopsis of the article. To view the entire article click on the link above.
Has this law been passed?
No. The House of Representatives has passed a bill, but it needs the Senate's approval, and then the signature of the president.
Current Law: The cancellation of mortgage debt rules apply only to a limited number of taxpayers. The provision is best understood with an example.
Assume you purchased a home for $650,000 with a mortgage of $600,000. Now you need to sell the home, and values in the area have declined and you can sell for only $550,000.
At the time of the sale, the outstanding balance on a mortgage might be, for example, $569,000. In this scenario there will not be enough cash closing to repay the lender the full balance of the mortgage. In some limited circumstances, a lender might forgive the amount of the balance that exceeds the purchase price ($19,000 in this example).
What happens to the seller when a portion of mortgage debt is forgiven? Under current law, the amount of forgiven mortgage debt (the $19,000 in this example), is treated as income, and taxed at ordinary income rates. Thus, the seller, who has experienced a true economic loss, is required to pay tax on this phantom income, even though no cash has changed hands and even though he has experienced a loss.
What about a refinanced mortgage? As currently drafted the provision would apply to either an original or refinanced mortgage.
The provision would also apply to commercial real estate as well.
Why is the law being considered?
Historically real estate has appreciated in value. But as need in some markets recently values have declined. This may be due to an major employer leaving and area or a homeowner needs to sell in a down market due job relocation. It seems particularly unfair to tax phantom income at a time when a taxpayer is in reduced economic circumstances.
There are a lot of mixed feelings out there regarding this potential law. Some will say that the homeowners should have been more prudent when purchasing their home and not overspent. At the same time no could predict the timing for the change in the Real Estate market. What seemed like a great deal a couple of years ago might not look that way right now. This is obviously can be an emotional process for the homeowner if they are facing this situation and potentially a huge financial impact to the lenders who forgive the loans.
There is sure to be a lot of debate over this issue to come in the months to come. It will be interesting to see how the Senate and President react.
Tuesday, November 6, 2007
Mortgage Crisis Not For Everyone
I belong to Costco and I was recently flipping through the magazine they send to members, Costco Connection, and ran into an article Mortgage Crisis Not For Everyone.
Of course Costco was trying to sell their services, but they pointed some good reminders.
Mortgage companies are going to continue the shakeout in 2008 that has been observed this year. Despite all of this interest rates are still historically low and there are still competitive mortgages out there to be found.
Of course with the recent changes, there are modifications to the the criteria a buyer must meet to obtain a loan. Gone are the days of the stated income, 100% financing with less than perfect credit.
If you are a borrower with decent credit and some money to put down you are in a great position.
Do Your Homework!
Before looking for a mortgage or to re-finance look at your current situation
Check Your Credit
It is a great time to buy. Being educated is the first step.
Of course Costco was trying to sell their services, but they pointed some good reminders.
Mortgage companies are going to continue the shakeout in 2008 that has been observed this year. Despite all of this interest rates are still historically low and there are still competitive mortgages out there to be found.
Of course with the recent changes, there are modifications to the the criteria a buyer must meet to obtain a loan. Gone are the days of the stated income, 100% financing with less than perfect credit.
If you are a borrower with decent credit and some money to put down you are in a great position.
Do Your Homework!
Before looking for a mortgage or to re-finance look at your current situation
Check Your Credit
- Take a look at your credit report to make sure there are not any erroneous dings on your credit. By dealing with these issues before you are looking to buy or re-fiance you could potentially increase your credit score and could expand the mortgage options available to you.
- Saving for a down payment will tremendously help find you the best loan possible. There are programs out there that do allow for 100% financing but if you have a decent down payment you will have more options
- This is tremendously important. You really want to sit down with a reputable loan person who can help you understand the different loan options, the monthly cost of a mortgage, the added expenses of taxes and insurance.
It is a great time to buy. Being educated is the first step.
Monday, November 5, 2007
Banks Follow The Fed
In response to the Federal Reserve lower interest rates, Banks are following suite. Institutions including Bank of America, Wells Fargo, and KeyCorp., announced that they were cutting their prime lending rate — for certain credit cards, home equity lines of credit, and other loans — by a corresponding amount, to 7.5 percent.
This also will bring down rates for first mortgages and re-finanance loans.
The Fed indicated they believe that this most recent interest rate cut along with the one in September will be enough to balance the risk of inflation. What this seems to indicate is that the Fed will leave interest rates alone when they next meet on December 11th.
This also will bring down rates for first mortgages and re-finanance loans.
The Fed indicated they believe that this most recent interest rate cut along with the one in September will be enough to balance the risk of inflation. What this seems to indicate is that the Fed will leave interest rates alone when they next meet on December 11th.
Thursday, November 1, 2007
Fed Lowers Rates
The Federal Reserve lowered rates by .25%
The intention is to promote moderate growth and try to get us back on track after the most recent mortgage "crisis."
The tone of the Fed's meeting led many to believe a future rate cut is not a guarantee. For now, the concensus is the Fed will not cut rates again at their next meeting in December.....further speculation on this will continue with the results of economic data reported between now and then.
For now, this rate cut will immediately affect the prime index which will go down to 7.5% (we were as high as 8.25% a few months ago). First mortgages may dip slightly as well, but it may take a day or so for us to see those results.
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