I am suspending my articles this month becuase of a personal tragedy I need to address this week.
Rest assured I am safe, but I need to work on my safety and security through the legal process.
Please keep me in your thoughts and prayers, and I assure you my articles will return next month.
Thank you.
Sunday, March 30, 2008
Sunday, March 2, 2008
FAQ: What is PMI?
PMI is Private Mortgage Insurance. If you have one mortgage loan for the house that is over 80% of its assessed value, most lenders require you to pay PMI to protect them (the lender) in case you default on your loan. It is not required if you make a down payment on a home of at least 20% or if you have a 2nd mortgage loan (often called a “piggyback loan”) so the primary loan is at 80% or less.
I am seeing many of my buyers obtaining loans with PMI because the cost of this insurance is less than the interest on a piggyback loan. This is a drastic change from even a couple months ago. During the runup in housing earlier this decade, paying for PMI was nearly unheard of – it was cheaper to get a piggyback loan.
The cost of PMI can be paid separately as part of closing costs or can be integrated into the mortgage. It may be tax-deductible. FHA and VA loans have other requirements that may result in not having to pay for PMI.
“Wayne is a great REALTOR®!” But he is not an attorney or CPA. Any information and advice he provides are to the best of his ability and understanding, but is not guaranteed. If any topic is of importance to you in your home buying or home selling needs, please consult your attorney or CPA. If you need a referral to a qualified professional, please let Wayne know. He loves serving his community and will be glad to recommend those he has worked with.
Questions answered in this column were asked by my clients, past clients, or prospective buyers and sellers. The questions were answered when they were asked, and they were notified if the question is a candidate for the FAQ column. Questions are chosen based on interest to a wider audience, timeliness to the current market, and possibly other factors. Those whose questions are featured in this column get a gift card to their favorite store, restaurant, mall or movie theatre in the Tri-Valley area if they allow me to publish their name or initials and the city in which they live in this column. You can email your questions for a prompt response to changhomes@gmail.com.
I am seeing many of my buyers obtaining loans with PMI because the cost of this insurance is less than the interest on a piggyback loan. This is a drastic change from even a couple months ago. During the runup in housing earlier this decade, paying for PMI was nearly unheard of – it was cheaper to get a piggyback loan.
The cost of PMI can be paid separately as part of closing costs or can be integrated into the mortgage. It may be tax-deductible. FHA and VA loans have other requirements that may result in not having to pay for PMI.
“Wayne is a great REALTOR®!” But he is not an attorney or CPA. Any information and advice he provides are to the best of his ability and understanding, but is not guaranteed. If any topic is of importance to you in your home buying or home selling needs, please consult your attorney or CPA. If you need a referral to a qualified professional, please let Wayne know. He loves serving his community and will be glad to recommend those he has worked with.
Questions answered in this column were asked by my clients, past clients, or prospective buyers and sellers. The questions were answered when they were asked, and they were notified if the question is a candidate for the FAQ column. Questions are chosen based on interest to a wider audience, timeliness to the current market, and possibly other factors. Those whose questions are featured in this column get a gift card to their favorite store, restaurant, mall or movie theatre in the Tri-Valley area if they allow me to publish their name or initials and the city in which they live in this column. You can email your questions for a prompt response to changhomes@gmail.com.
Spotlight On...Tax Changes (2nd of 3)
As I disclosed in January, I’m pleased to introduce a new column in the monthly newsletter. “Spotlight On...” will focus on our neighbors and small businesses, but per request, it will first look at tax changes affecting homeowners for its articles in February, March and April.
In May, we’ll start spotlighting a member of the community for this regular column. These are people and businesses making a difference at school, home or in the community.
Economic Stimulus Act of 2008 (HR 5140)
Although I have published information regarding rebate checks before, it is still the most frequently asked question I get regarding finances! This Spotlight will just hit the bullet points:
Rebate Amounts:
* $600 ($1,200 for joint returns)
* Net income tax liability if lower than $600, but not less than $300 ($600 for joint returns)
* Rebate increased by $300 for each qualifying child (generally, a child that qualifies for the Child Tax Credit)
* If you're disabled or get veterans benefits and are normally exempt from income taxes, you will get $300 ($600 for joint returns) - see below that you MUST file a 2007 return to get the checks, even if you are not required to.
* Fully refundable
Eligibility:
You must have either of the following:
* Qualifying income of at least $3,000 (qualifying income is defined as earned income, social security benefits, and/or disability benefits paid to veterans and surviving spouses).
* Net income tax liability of at least $1 and gross income that is more than the applicable standard deduction + 1 exemption amount (2 exemptions for Married Filing Jointly). Generally, net income tax liability is the regular tax + AMT (if any) less allowable credits other than the Child Tax Credit and refundable credits, such as the Earned Income Credit.
* The act does not apply to nonresident aliens, individuals who could be claimed as dependents, individuals who do not have valid SSNs, and estates and trusts.
* To get a rebate check, you MUST file a return for the 2007 Tax Year.
Phaseout:
* The rebate is reduced by 5% of adjusted gross income exceeding $75,000 ($150,000 for joint returns). * So for taxpayers without children, the maximum rebate is fully phased out at $87,000 ($174,000 for joint returns).
If you own a business and deduct large purchases under Section 179 as part of that, that deduction has increased to $250,000 (phaseout to start at $800,000) for 2008 (amounts would have been $128,000 and $510,000, respectively). In addition, There will be a 50% bonus depreciation for property placed in service in 2008. Both provisions apply to 2008 only.
Checks should begin to go out in May and should be all distribtued by December 2008. Let's hope we're one of the early ones!
I know a lot of you are thinking about using some of this money for down payments on your next home. Please contact me at changhomes@gmail.com to make sure we have an appropriate strategy between the deposits, downpayments and the loan!
Source: H&R Block
For additional details regarding the stimulus bill, please see my post at http://changhomesnews.blogspot.com/2008/02/special-economic-stimulus-bill-awaits.html
In May, we’ll start spotlighting a member of the community for this regular column. These are people and businesses making a difference at school, home or in the community.
Economic Stimulus Act of 2008 (HR 5140)
Although I have published information regarding rebate checks before, it is still the most frequently asked question I get regarding finances! This Spotlight will just hit the bullet points:
Rebate Amounts:
* $600 ($1,200 for joint returns)
* Net income tax liability if lower than $600, but not less than $300 ($600 for joint returns)
* Rebate increased by $300 for each qualifying child (generally, a child that qualifies for the Child Tax Credit)
* If you're disabled or get veterans benefits and are normally exempt from income taxes, you will get $300 ($600 for joint returns) - see below that you MUST file a 2007 return to get the checks, even if you are not required to.
* Fully refundable
Eligibility:
You must have either of the following:
* Qualifying income of at least $3,000 (qualifying income is defined as earned income, social security benefits, and/or disability benefits paid to veterans and surviving spouses).
* Net income tax liability of at least $1 and gross income that is more than the applicable standard deduction + 1 exemption amount (2 exemptions for Married Filing Jointly). Generally, net income tax liability is the regular tax + AMT (if any) less allowable credits other than the Child Tax Credit and refundable credits, such as the Earned Income Credit.
* The act does not apply to nonresident aliens, individuals who could be claimed as dependents, individuals who do not have valid SSNs, and estates and trusts.
* To get a rebate check, you MUST file a return for the 2007 Tax Year.
Phaseout:
* The rebate is reduced by 5% of adjusted gross income exceeding $75,000 ($150,000 for joint returns). * So for taxpayers without children, the maximum rebate is fully phased out at $87,000 ($174,000 for joint returns).
If you own a business and deduct large purchases under Section 179 as part of that, that deduction has increased to $250,000 (phaseout to start at $800,000) for 2008 (amounts would have been $128,000 and $510,000, respectively). In addition, There will be a 50% bonus depreciation for property placed in service in 2008. Both provisions apply to 2008 only.
Checks should begin to go out in May and should be all distribtued by December 2008. Let's hope we're one of the early ones!
I know a lot of you are thinking about using some of this money for down payments on your next home. Please contact me at changhomes@gmail.com to make sure we have an appropriate strategy between the deposits, downpayments and the loan!
Source: H&R Block
For additional details regarding the stimulus bill, please see my post at http://changhomesnews.blogspot.com/2008/02/special-economic-stimulus-bill-awaits.html
Tri-Valley Housing Market at a Glance
SCV Home Sales Hit Record Low: Sale of only 99 homes in January is down 45 percent from a year ago.
Home and condominium sales in the Santa Clarita Valley hit a record low in January, according to a report from the Southland Regional Association of Realtors released Wednesday.
Additionally, the median price of a single-family home sold in January fell below the $500,000 for the first time in three-and-a-half years.
The realtors organization reported that only 99 homes sold in January, which is down 42.4 percent from a year ago when 172 single-family homes changed owners.
The January number surpasses the previous record low set in September 2007 when 105 homes sold, according to the association.
The record high of 405 sales was set in June 2005.
Condos are also at a record low as a total of 31 condos closed escrow in the first month of 2008, which is a 57.7 percent decrease from January 2007, making it the lowest total on record for the realtors organization.
The previous record low was the 38 sales tallied for November 2007.
The record high continues to be the 204 condos sold in April 2003.
The median price of $460,000 for a single-family home was down 21.8 percent when compared to a year ago, according to the association's report.
January's median price is also considerably lower than the record high of $643,000 set in April 2006.
The association's statistics also show that the condominium median price for January was $284,900, a decrease of 20.9 percent from the prior year.
This was the first time in three-and-a-half years that a condo's median price went below the $300,000 mark.
The record high of $397,000 came two years ago in January 2006.
Statistics from the association show that the pending escrow total increased 21.9 percent on a month-to-month basis, which supports its belief that next month's sales numbers may be slightly higher.
But the pending sales are still down 48.7 percent compared to a year ago.
semblance of normalcy, stability and realistic pricing will begin to emerge."
The organization reports that a total of 2,163 active listings were reported at the end of January, up 22.9 percent from a year ago.
At the current pace of sales, the number represents a 16.6-month inventory, continuing a buyer's market.
The association considers a five-to-six-month inventory to be a balanced market.
Officials of the Southland Regional Association of Realtors believe that the inventory was much higher during the economic recession of the early 1990s, although statistics to support this belief are unavailable.
(Source: Santa Clarita Signal)
Information for San Fernando Valley and Antelope Valley have not been released. These figures should be released this week, so please check my weekly blog for the latest information - http://changhomesnews.blogspot.com/
Home and condominium sales in the Santa Clarita Valley hit a record low in January, according to a report from the Southland Regional Association of Realtors released Wednesday.
Additionally, the median price of a single-family home sold in January fell below the $500,000 for the first time in three-and-a-half years.
The realtors organization reported that only 99 homes sold in January, which is down 42.4 percent from a year ago when 172 single-family homes changed owners.
The January number surpasses the previous record low set in September 2007 when 105 homes sold, according to the association.
The record high of 405 sales was set in June 2005.
Condos are also at a record low as a total of 31 condos closed escrow in the first month of 2008, which is a 57.7 percent decrease from January 2007, making it the lowest total on record for the realtors organization.
The previous record low was the 38 sales tallied for November 2007.
The record high continues to be the 204 condos sold in April 2003.
The median price of $460,000 for a single-family home was down 21.8 percent when compared to a year ago, according to the association's report.
January's median price is also considerably lower than the record high of $643,000 set in April 2006.
The association's statistics also show that the condominium median price for January was $284,900, a decrease of 20.9 percent from the prior year.
This was the first time in three-and-a-half years that a condo's median price went below the $300,000 mark.
The record high of $397,000 came two years ago in January 2006.
Statistics from the association show that the pending escrow total increased 21.9 percent on a month-to-month basis, which supports its belief that next month's sales numbers may be slightly higher.
But the pending sales are still down 48.7 percent compared to a year ago.
semblance of normalcy, stability and realistic pricing will begin to emerge."
The organization reports that a total of 2,163 active listings were reported at the end of January, up 22.9 percent from a year ago.
At the current pace of sales, the number represents a 16.6-month inventory, continuing a buyer's market.
The association considers a five-to-six-month inventory to be a balanced market.
Officials of the Southland Regional Association of Realtors believe that the inventory was much higher during the economic recession of the early 1990s, although statistics to support this belief are unavailable.
(Source: Santa Clarita Signal)
Information for San Fernando Valley and Antelope Valley have not been released. These figures should be released this week, so please check my weekly blog for the latest information - http://changhomesnews.blogspot.com/
Fast Facts in California Housing
* Calif. median home price - January 08: $430,370 (Source: C.A.R.)
* Calif. highest median home price by C.A.R. region January 08: Santa Barbara So. Coast $1,135,000 (Source: C.A.R.)
* Calif. lowest median home price by C.A.R. region January 08: High Desert $234,310 (Source: C.A.R.)
* Calif. First-time Buyer Affordability Index - Third Quarter 07: 33 percent (Source: C.A.R.)
* Mortgage rates - week ending 02/21: 30-yr. fixed: 6.04%; Fees/points: 0.6% 15-yr. fixed: 5.64%; Fees/points: 0.5% 1-yr. adjustable: 4.98%; Fees/points: 0.6% (Source: Freddie Mac)
For this week’s latest mortgage rates, check out my weekly blog at http://changhomesnews.blogspot.com/
* Calif. highest median home price by C.A.R. region January 08: Santa Barbara So. Coast $1,135,000 (Source: C.A.R.)
* Calif. lowest median home price by C.A.R. region January 08: High Desert $234,310 (Source: C.A.R.)
* Calif. First-time Buyer Affordability Index - Third Quarter 07: 33 percent (Source: C.A.R.)
* Mortgage rates - week ending 02/21: 30-yr. fixed: 6.04%; Fees/points: 0.6% 15-yr. fixed: 5.64%; Fees/points: 0.5% 1-yr. adjustable: 4.98%; Fees/points: 0.6% (Source: Freddie Mac)
For this week’s latest mortgage rates, check out my weekly blog at http://changhomesnews.blogspot.com/
March Holidays
March is...
Optimism Month
American Red Cross Month
Music in Our School Month
National Craft Month
National Frozen Food Month
National Noodle Month
National Nutrition Month
Woman’s History Month
Youth Art Month
Week-long Observances:
Week 1 – Newspaper in Our School Week
Week 2 – Bubble Gum Week
Week 2 – Crochet Week
Week 3 – National Poison Awareness Week (March 16-22)
March 1
National Pig Day
Peanut Butter Lover’s Day
Saint David’s Day in Wales (UK)
Share a Smile Day
March 2
Dr. Seuss’s Birthday
Read Across America Day
March 3
Doll Festival (in Japan)
National Anthem Day
March 4
National Poundcake Day
March 5
Multiple Personalities Day
Parachute was Invented
March 6
Dentist Day
Oreo Cookies go on sale for the 1st time in 1912
March 7
Telephone Patent granted in 1876
March 8
Working Women’s Day
March 9
Daylight Savings Time Begins: SPRING FORWARD! - Daylight Saving Time (DST) begins at 2 a.m. on March 9, so move clocks AHEAD one hour. DST ends at 2am on November 2, 2008.
Barbie’s Birthday
Buzzard Day
No Smoking Day
Panic Day
March 10
Commonwealth Day
First Paper Money Issued in 1862
March 11
First public basketball game in 1892
March 12
Girl Scout Day
March 13
Good Samaritan Day
March 14
Pi Day
Potato Chip Day
March 15
Ides of March
March 16
Everything You Do Is Right Day
Freedom of Information Day
March 17
Rubber Band Invented in 1845
St. Patrick’s Day
Submarine Day
March 18
Sparky the Fire Dog’s Birthday
First Walk in Space in 1965
Johnny Appleseed Day
March 19
Swallow’s Return Day – the traditional return of swallows to San Juan Capistrano
March 20
Big Bird’s Birthday
First Day of Spring!
National Quilting Day
Purim begins at sundown
March 21
Children’s Poetry Day
Chinese Lantern Festival
National Teen-agers Day
Single Parents’ Day
March 22
National Goof Off Day
National Sing-Out Day
March 23
Easter
Toast Day
March 24
Chocolate Covered Raisin Day
Harry Houdini’s Birthday
March 25
Greek Independence Day
Pancakes first made in New York City in 1882
March 26
Make Up Your Own Holiday Day
March 27
National “Joe” Day – everyone who hates their name can be called Joe this day
March 28
Something on a Stick Day
March 29
Coca-cola invented in 1886
March 30
Alaska Purchased from Russia in 1867
Doctor’s Day
Pencil with Eraser Patented in 1858
March 31
Cesar Chavez Day
First Map of the US published
Tater Day
Source: About.com’s Family Crafts
Optimism Month
American Red Cross Month
Music in Our School Month
National Craft Month
National Frozen Food Month
National Noodle Month
National Nutrition Month
Woman’s History Month
Youth Art Month
Week-long Observances:
Week 1 – Newspaper in Our School Week
Week 2 – Bubble Gum Week
Week 2 – Crochet Week
Week 3 – National Poison Awareness Week (March 16-22)
March 1
National Pig Day
Peanut Butter Lover’s Day
Saint David’s Day in Wales (UK)
Share a Smile Day
March 2
Dr. Seuss’s Birthday
Read Across America Day
March 3
Doll Festival (in Japan)
National Anthem Day
March 4
National Poundcake Day
March 5
Multiple Personalities Day
Parachute was Invented
March 6
Dentist Day
Oreo Cookies go on sale for the 1st time in 1912
March 7
Telephone Patent granted in 1876
March 8
Working Women’s Day
March 9
Daylight Savings Time Begins: SPRING FORWARD! - Daylight Saving Time (DST) begins at 2 a.m. on March 9, so move clocks AHEAD one hour. DST ends at 2am on November 2, 2008.
Barbie’s Birthday
Buzzard Day
No Smoking Day
Panic Day
March 10
Commonwealth Day
First Paper Money Issued in 1862
March 11
First public basketball game in 1892
March 12
Girl Scout Day
March 13
Good Samaritan Day
March 14
Pi Day
Potato Chip Day
March 15
Ides of March
March 16
Everything You Do Is Right Day
Freedom of Information Day
March 17
Rubber Band Invented in 1845
St. Patrick’s Day
Submarine Day
March 18
Sparky the Fire Dog’s Birthday
First Walk in Space in 1965
Johnny Appleseed Day
March 19
Swallow’s Return Day – the traditional return of swallows to San Juan Capistrano
March 20
Big Bird’s Birthday
First Day of Spring!
National Quilting Day
Purim begins at sundown
March 21
Children’s Poetry Day
Chinese Lantern Festival
National Teen-agers Day
Single Parents’ Day
March 22
National Goof Off Day
National Sing-Out Day
March 23
Easter
Toast Day
March 24
Chocolate Covered Raisin Day
Harry Houdini’s Birthday
March 25
Greek Independence Day
Pancakes first made in New York City in 1882
March 26
Make Up Your Own Holiday Day
March 27
National “Joe” Day – everyone who hates their name can be called Joe this day
March 28
Something on a Stick Day
March 29
Coca-cola invented in 1886
March 30
Alaska Purchased from Russia in 1867
Doctor’s Day
Pencil with Eraser Patented in 1858
March 31
Cesar Chavez Day
First Map of the US published
Tater Day
Source: About.com’s Family Crafts
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