Good news about Mortgage Insurance
I found this on
Behind the Mortgage website. This is very good news.
Congress Passes Tax Deductibility of Mortgage Insurance PremiumsA rare bit of good news from the beltway: Early last Saturday morning, congress passed a "tax extender" package that included the deductibility of mortgage insurance on new mortgages originated in 2007. Though this is great news, and a long anticipated change, there are some restrictions, so not every homeowner will benefit. The rules, as we understand them, follow:- Permits federal personal income tax deduction for mortgage insurance premiums
- Applies to new originations only in 2007 (like many other provisions in the bill, it must be reauthorized for 2008)
- Only taxpayers earning less than $110,000 per year are eligible for the deduction (We understand that the deduction is phased out for borrowers w/ incomes between $100,000 and $110,000)
- Applies to premiums for both private and government (FHA,VA & RHS) insurance programs.
As with any bill, this one now heads to the President's desk for signature, and there has been no indication of any veto action on this bill. Will post a link to this as soon as we can dig it up at congress.org
Labels: Financing, Mortgage Insurance
Baby is here!
My baby boy was born on Wednesday, December 13th. He is a healthy 6 lbs 10 oz and he and mother are doing fine.
Understandibly, my posts may be a little sporadic over the next few weeks as we celebrate Christmas and adjust to the new family member.
Here is a very cute picture!
Thanks!
John
Labels: Family
Building a new home?
I found a link to a very interesting article on REALTOR(r) magazine online. Here is the abstract of the article:
New-Home Contracts Get Tougher on BuyersBuyers of new homes are discovering that their contracts with home builders leave very little wiggle room as settlement day nears.
Some consumer advocates and real estate lawyers who have been fielding calls from remorseful buyers in recent months say few contracts are as rigid and one-sided as those for new home sales.The contracts are "written in a way to give every possible edge to the home builder," says Allen J. Fishbein, director of credit and housing policy at the Consumer Federation of America. Some developers have added provisions that block buyers from getting any "remedy" beyond reimbursement of their earnest money, even if the builder breaks its agreement. Other provisions keep consumers from taking the dispute to court — instead forcing them into arbitration.Builders say they're trying to protect themselves against buyers who frivolously try to back out from completing purchases, and they say that buyers weren't complaining about the contracts during the boom, when many were earning a profit even before they went to settlement.However, it should be noted that in today's softer real estate market, an increasing number of builders are willing to work with buyers to keep the deal alive.Nonetheless, consumers should take precautions. Jeffrey Silverstein, a real estate lawyer, say buyers should get legal help to insert contingencies in contracts that outline when construction will begin and what will have to happen for the buyers to get their deposits back.The full text article can be found online at
WashingtonPost.com.
Have a great day!
Labels: Buyers, New Construction
Title Insurance
Sorry that I have been away. I was finishing up this semester in my MBA program. Thankfully, I only have one more semester to go and then I am done!
I wanted to post something I wrote awhile back on title insurance...
When you close a loan, if you are borrowing money to purchase the property, you will find a title insurance premium in the attorney section of the Settlement Statement. What is this premium? Title insurance is insurance to the lender that you have a clean title (no judgments, liens, etc). It is also an assurance that the new lender is in the first lien position on the home. In addition, if an issue ever arises that would affect the title, like an heir to a prior owner trying to claim your land, then title insurance would kick in.
However, the premium you pay for through the closing only covers your lender. It DOES NOT cover your interest in the property. Now, most buyers lately put very little down on the purchase, so their exposure is limited. However, if you put money down OR as you pay off the loan, your exposure (this could also be called our equity) increases. You can purchase an owner's policy for title insurance. It is relatively inexpensive, especially at the time you purchase or refinance the home. If you inquire about it prior to the closing, the cost can be rolled into the Settlement Statement.
Let me give you an example. You buy a home with a contract purchase price of $100,000. You put down 5%, or $5000. You are borrowing $95,000. The title insurance premium to the lender on this would be $262.50. You could also purchase an owners policy to cover your interest in the property. In the above scenario, the owners policy would be less than $100. The exact figure can depend on the title insurance company. Any attorney will be happy to handle this for you. After all, if the attorney is an agent of the title insurance company, they get to keep 60% of the premiums.
Labels: Buyers, Title insurance
