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Alexandra Zega

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Selling your Home? 6 Tax Tips

by Alexandra Zega

Tax season may still feel far off, but with the rush of the holiday season, it's important to start thinking ahead, especially if you sold a home this year. Below are several need-to-know facts about tax season for home sellers.
Under $250,000? You may be able to exclude gains. Just because you profited on your home sale does not mean you have to pay taxes on it. In fact, if you're eligible to exclude your gains, you don't even need to note that you sold your home at all when you file.
To be eligible, you need to have made a profit of less than $500,000 on a joint return or $250,000 on an individual return, and the home must have been your primary residence for at least two years prior to sale.
You may not have to report your home sale at all. If you can exclude all of the gain--meaning it was under 500,00 on a joint return or $250,000 on a single--you probably don’t need to report the sale of your home on your tax return at all. Double check this with your accountant, but this is the case in most situations.
But you can't deduct your losses. While it's great you can exclude financial gains, you can't deduct financial losses, which is unfortunate.

The more homes, the more complicated tax-time can be. Several complications can arise from owning more than one property, be it an investment or vacation home. The home you live in the majority of the time is considered your primary residence. This is important because it's necessary for you to report any gains you may have made on your second home.
If you can't exclude gains...If you can’t exclude all of the gain because it was over the allotted amount, or you choose not to exclude it, then you will need to report the sale on your tax return. Keep an eye out for Form 1099-S, Proceeds From Real Estate Transactions.
If you’re selling your first home...One more reminder about selling your home and tax season: Special rules may apply when you sell a home for which you received the first-time homebuyer credit.
Keep in mind that tax time can be stressful and busy, so it's always a good idea to have a professional look over your paperwork if you had an unusual financial year.
As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

5 Big Mortgage Mistakes to Avoid

by Alexandra Zega

Applying for a mortgage can be a daunting task. It takes many hours, lots of paperwork, and possibly a headache or two. Below are several mistakes to avoid when on the hunt for a mortgage.
Not checking your credit. This should be your first step in applying for a mortgage. Check your score months before applying for a mortgage so you know where you stand, and have time to make any changes if necessary.
Not getting pre-approved. A mortgage pre-approval is one of the best things you can do to ease the home-buying process. During pre-approval, your bank checks your credit and examines your income, assets, and employment. Before shopping for a home, get pre-approved. Many sellers won't take you seriously otherwise.

Applying for new credit AND a new mortgage. Do not apply for a new line of credit before or during the mortgage application process – it hints at financial instability, and you're seen as a greater risk.
Changing jobs. If you're thinking about switching jobs, then hold off on the mortgage application, or stick out your current position for longer. While a change in the same field doesn't necessarily mean you will be rejected, a big change - like a brand new career - can be a red flag.
Not seasoning your assets. Uncle John is giving you $10,000 to put toward your mortgage? Terrific. Make sure it's in your account months before you apply for a mortgage. New funds do not equate to financial stability, and your underwriter will catch on.
As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

How to Buy a Group Vacation Home

by Alexandra Zega

It sounds like a dream; splitting the cost of a lakefront home or woodland cabin with your close friends. However, purchasing a group home can end up being more complicated, and that's before you throw in any possible falling outs or conflicting schedules. Below are a variety of things to consider before purchasing a home with others.

1. Discuss finances first.
Can everyone afford to do this? To minimize complication, it's best for everyone going in on the purchase to be able to put down equal funds. In addition to discussing purchase costs, go over who will pay for furnishing the home, improvements, monthly bills, taxes, etc.
It's important to really scrutinize the financial coverage, from little things like landscaping to emergencies, like a flooded basement.

2. Write it down.
After you have a clear plan that all parties agree to, get everything in writing. This will be helpful in the future should someone forget who agreed to pay for those new energy efficient windows. It might be a good idea to bring in a lawyer to help come up with a contract everyone agrees to. A lawyer will not only help document your decisions, but also map out any additional legal concerns – like what will happen to an individual's share of property should they pass away.

Although it may be uncomfortable, you should also talk about what will happen to a property share should someone want to sell or liquidate their assets.

3. Decide how the home will be used.
After you've taken care of the legal and financial issues, it's time to talk about the fun stuff: how you will enjoy your home. Will you split up visiting dates throughout the year? Will you all visit at once, reunion style? While it might seem silly to designate days up-front, it will ease any future tension should schedules clash. Additionally, talk about what will happen to the property as your lives progress. A group of friends purchasing a home in their late 20s will surely use the property differently than a group of friends who are now in their 40s.
After you have your basics covered, celebrate with your friends and enjoy your new vacation home!

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

What is A Mortgage Credit Certificate?

by Alexandra Zega

With the market making a rebound, buyers who had been on the fence are coming to the table to take advantage of favorable mortgage rates before they continue to rise. For those who have been having difficulty qualifying for a mortgage, it may be a good idea to try for a mortgage credit certificate.
A mortgage credit certificate, or MCC, makes it easier for eligible buyers to qualify for a mortgage loan. Offered by many city and county governments, they allow first-time buyers to take advantage of a special federal income tax write-off.
Under MCC programs, the lender can reduce the housing expense ratio – the percentage of gross monthly income applied toward housing expenses – by the amount of the tax savings. Normally, lenders reject loans if the housing expense ratio is too high.
Program requirements for MCCs vary, although most adhere to the following guidelines:
• The buyer must live in the home being purchased with an MCC-assisted mortgage.
• Total household income cannot exceed certain limits.
• The buyer cannot have owned a principal residence within the past three years. This restriction may be waived if a property is purchased within a certain targeted area.
• The purchase price must fall within an established limit.
If you are interested in applying for an MMC, call your local housing or redevelopment agency for more information, or contact your real estate agent.
As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

Byuing in a Low Inventory Market

by Alexandra Zega

The temperature in the real estate market has begun to re-adjust; the hot arena once reserved for buyers has begun to cool, and sellers are again taking the reigns. With many markets now displaying scarce inventory stock, and multiple offers making it even more difficult, it's easy to become discouraged as a buyer. However, just because you may be looking for a home in a low inventory market doesn't mean you need to give up your dream of landing your ideal property. Below are four tips for buying in a low inventory market.

Be prepared financially

These days, many buyers won't even work with those who aren't pre-approved. Additionally, it would be heart-breaking to find that dream home only to have someone else buy it while you're going through the mortgage process. Before you even begin looking, make sure all of your finances are in order. This will not only make buyers take you more seriously, but will help speed along the entire process.

Know what you're looking for

From the right neighborhood, to the budget and the number of bedrooms, have a good idea of what you're looking for so you don't waste any time—yours, or your agent's.

Act fast

Gone are the days when you could mull over a property, or visit ten homes only to circle back to the first one you saw. With properties flying fast, if you see a place you like, put in an offer right away.

Be aggressive

If you see something you like, be sure to act not only fast, but smart. Putting in an offer may not be enough. If you can buy in cash, this is more appealing to sellers. Don't have the cash? Another trend that is hot right now is writing a “love letter” to the sellers. Or better yet, make a video. Tell them exactly why you love their home, and tell them a bit about yourself and your family. New baby on the way? Go into detail about how their extra bedroom would be the perfect nursery, and how you can really see your child playing in their big back yard with that maple tree just perfect for a swing. Make them see you as a person and not just a name on a page, and you have a better chance of winning them over.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

Buying a Home? First, Check for These Costly Problems

by Alexandra Zega

Buying a home is a hefty task, and with so many things to consider (do I need that extra bedroom? How important is a big yard?), it is easy to get a little lost in the process. There is nothing worse than purchasing a home only to find out you need to sink thousands of unexpected dollars into your new place, all because you weren't sure what to look for.

Below are a few tips to make sure you're focusing on the right home features, so you can enjoy your new home AND still be able to afford that new dining room set.

Hire a home inspector. Getting a home inspected is the No. 1 way you can avoid surprises after closing. However, it's still important to know what to look for on your own, as it can save you precious time and energy expenditure. For instance, if you know you can't afford a new foundation, then you can skip over making offers on homes that are clearly in need.

Check the basement. After you ooh and ah over the walk-in closets, head on down to the basement. Check out the plumbing, examine building materials, and check out insulation. Can you see daylight peeking through cracks in the walls? That spells high heating bills, as the home may have some insulation issues.

Scope out the foundation. Big cracks or corrosion can spell big trouble down the line. Foundation is an expensive repair, so make sure the home is sound.

Look for water damage. Check for discoloration and rings around pipes, windows and doors, as well as kitchen and bathroom fixtures.

Eye the roof. You probably shouldn't climb up to the roof while visiting a potential home, but you can scope it from the outside. Can you see any visible missing tiles or discoloration? And feel free to ask the agent when the roof was last replaced.”

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

How-To: Win Your Bidding War

by Alexandra Zega

When entering a bidding war, you need to put your best foot forward. With multiple offers to consider, the seller needs to see that you're serious and ready to act fast. Below are a few tips to help you knock out the competition.

Be prepared. While it might seem smart to lay your offer on the table right away, don't do so unless you're fully prepared, pre-approved for a loan, and have all of your paperwork and finances in order. Otherwise, the seller won't take you seriously and will pass your offer over for someone who has completed their homework.

Be quick. This may seem counterintuitive to being prepared, but it's important to act fast when you see a home you like, or it will go to another bidder. This is why it's important to get your finances in order before you even begin searching. That way, you can put an offer in right away when you find a good fit.

Don't overbid. Offering more than the home is listed for may seem like a way to get a leg up on the competition, but overbidding and exceeding the home's appraised value can decrease your chances of a loan--and the seller (or their agent) knows that. If you overbid, be sure you can afford the excess cost flat out.

Don't underbid. In a bidding war, your offer needs to be just right. Just like the seller won't take you seriously if you overbid too much, they surely won't consider your lowball offer if they have offers from many other buyers. To find your “Goldilocks” price point, figure out the maximum you can afford, and then offer that.

Get under their emotional skin. Last year, everyone was back to writing “love letters” to the sellers of a home they were crazy about. Now, you can one-up everyone and really stand out from other offers by making a video of you and your family talking about why you love this home, and why you can see yourself in it. Does that third bedroom look perfect for your new baby? Then get her on the camera. Is that basement office perfect for running your business? Talk about that.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

What is the Difference: Amortization and Negative Amortization

by Alexandra Zega

If you’re applying for a mortgage for the first time, it may feel like you’re learning a second language. All of the terms and regulations can seem daunting. One that doesn’t need to be is “amortization,” which is just the act of paying off debt in regular installments over a period of time.

When you amortize a loan you basically pay off the principal by making regular installment payments; the process typically takes place gradually over several years.

Another term you may be hearing is “negative amortization.” What is the difference? When your monthly payment isn’t enough to cover the loan interest, then your loan principal increases rather than decreases. This is called negative amortization, otherwise referred to as “deferred interest.”

Negative Amortization causes the loan balance to increase rather than decrease. This often happens with adjustable rate mortgages (ARMs). Negative amortization has to be repaid, which means your payment will rise in the future. The larger the negative amortization, the more you will be required to amortize the loan in full.

So you may be wondering, why would anyone use a negative amortization loan?

The main reason people use negative amortization loans is to lower monthly payments. Some homeowners use loans with negative amortization to purchase a house they otherwise can’t afford, resting on the idea that in the future, they will have more income and can make larger payments.

With negative amortization, a persistent rise in interest rates reduces the equity in the house unless the negative amortization is offset by house appreciation. As a result, some use negative amortization if they believe that the house will be worth much more in the near future.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

How to Pick the Right Lender

by Alexandra Zega

 

For many borrowers, the challenge is not merely finding a lender. It’s sorting through the confusion of banks, brokers, online lenders, and more to find the right lender. With so many options, it can be confusing and challenging to find the best deal, or a company that you trust. Below are a few pro tips.

1. Talk with your real estate professional
It’s always a great idea to ask your real estate agent for lender recommendations. While some brokerages have affiliations with specific lenders, most professionals will suggest several credible lenders, not just their in-house option. And because the lender they recommend wants to keep a good relationship with the agent who is sending them referrals, they will most likely take great care of you.

2. Contact the lender before you fill out an application
Before you spend a ton of time filling out an application, call or visit your local bank to talk with someone one-on-one.

This will give you great insight before you even begin the paper work. How do they treat you? Is their customer service up to par? Are they pressuring you into filing an application?

There’s no point in pursuing a lender that doesn’t make you feel comfortable, so why waste time with an application?

3. Turn the interview tables
After your application is submitted, you will be asked to have an interview. Interviews are always nerve wracking, whether they’re for a new job, or a new loan. But take this opportunity to ask the lender any and all of the questions you may have.

While you want to be approved, you also want to make sure you’re making the right lending choice, so don’t be afraid to turn the tables a bit in the interview. Not sure what to ask? Try a few of the following questions:

  • How long will it take to process my loan application?
  • What is the minimum down payment required?
  • What might delay my approval?
  • Do you offer loan rate locks?
  • Is there a prepayment penalty?
  • What are the discount points and origination fees?

4. Study rates, points and fees
When comparing lenders, there are three things you can whittle your attention down to: rates, points, and fees. Things like taxes and insurance won’t vary too much from lender to lender, so these aren’t as important. However, rates, points, and fees can differ greatly from lender to lender, and the numbers all affect one another, so be sure to pay close attention and calculate carefully.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

Do You Have the Right Home Insurance?

by Alexandra Zega

Buying a home is a wonderful feeling. But now that you’re a proud owner, are you also a safe one? Do you have adequate home insurance? Below is a guide that will help you navigate through the ins and outs of several different types of home insurance.

HO-1

This is bare-bones policy, and has actually been discontinued in several states. This policy offers liability insurance, hazard insurance and a list of “named perils”— fire or lightening, volcanic eruption, explosions, and more.

This protects against several natural disasters and catastrophic events, as well as your personal belongings. However, it will not guard against earthquakes, floods, war, and nuclear accidents.

Often, your lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.

HO-2

This is an expanded version of HO-1, and includes any structure on your property, like that shed or pool house. The list of perils in HO-2 is longer than HO-1, and includes things like falling objects, freezing, and the weight of ice, snow or sleet.

HO- 3

HO-3 is the most commonly used coverage. This is most likely because it protects homes against any damage, so long as it is not specifically excluded. This coverage is also called the special form policy.

It’s important to read your policy thoroughly. With HO-3, while your home is covered against anything that is not excluded, your personal belongings are only covered for the listed perils.

Be sure to understand what this means, as well as have a grasp on what exactly is excluded.

Cash Value

A cash value policy pays owners the original purchase price of whatever was damaged, but cannot exceed the original purchase price, even if the home is valued at more.

Replacement Value Policy

This type of policy covers the cost of repairing a house and its belongings, regardless of the original purchase price. However, it cannot exceed the policy limit, meaning that a $250,000 policy, will pay for repairs and replacements up to $250,000.

Guaranteed Replacement Cost Coverage

If you want something more extensive, then the most comprehensive insurance policy is guaranteed replacement cost coverage.

This kind of coverage will pay to rebuild your home even if the cost to rebuild is more than your policy limit. Replacement cost coverage is more expensive and can cost from about $400 to $1,000 a year or more, depending on the area and the price of the home. However, even if you can afford it, this insurance is not available everywhere or for every property. For example, older homes may not be eligible. And some big insurance companies have begun to limit the amount they will pay to 120 percent of the policy's face value.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time and be sure to forward this article on to any friends or family that may be interested as well.

Displaying blog entries 1-10 of 250

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