Oct
29
What’s Up With Real Estate?
Filed Under Real Estate | Leave a Comment
Kelli Bennett asked:
This is a question that is being asked in a somewhat panicked way across the nation. Over past 10 or more years this country had experienced a real estate boom of epic proportions. This boom inflated prices and kept the market in a seller’s market for quite some time. This also increased the number of homes and condos being developed and there was an incredible supply and a matching demand. This also made it more difficult for some people to get into a home as rising prices kept some people out of the market. This also caused what is now being referred to as the sub-prime lending crisis. So many people chose to take out 100% financing or high-interest loans to be able to purchase a home and when those mortgages could not be paid it led to an all-time high in foreclosures.
What does all this mean? Well, that is not exactly a short answer. As we have seen there is a slow down happening on a national real estate level. Certain areas are still showing good growth but the major markets that had exploded in past years are definitely seeing a reduced interest. This is a cause of concern for sellers and investors that have purchased numerous homes with the intent of selling them, as the market has moved back into a buyer’s market. It also means that those who are currently looking for homes have much more sway and the ability to find homes at great deals if they are willing to deal with foreclosures and short sales.
This has been a huge surprise for buyers in this country as they have not been used to having this much sway in the market. There really has not been a better time for buyers to get into the home market. However, today’s buyers should take example from the buyers of the past years and learn a few lessons from what has transpired over the long stretch of seller’s markets. Sub-prime lending is really not the way to go. Standard mortgage loans are really the preferable choice. If you cannot get a standard mortgage loan yet then take the time to correct your credit and finances. Don’t try to jump into a purchase they you may not be able to pay for in the long run. There are some real lessons to be learned from the recent history of the real estate market. Be sure to learn them before launching a home purchase.
VERNON
This is a question that is being asked in a somewhat panicked way across the nation. Over past 10 or more years this country had experienced a real estate boom of epic proportions. This boom inflated prices and kept the market in a seller’s market for quite some time. This also increased the number of homes and condos being developed and there was an incredible supply and a matching demand. This also made it more difficult for some people to get into a home as rising prices kept some people out of the market. This also caused what is now being referred to as the sub-prime lending crisis. So many people chose to take out 100% financing or high-interest loans to be able to purchase a home and when those mortgages could not be paid it led to an all-time high in foreclosures.
What does all this mean? Well, that is not exactly a short answer. As we have seen there is a slow down happening on a national real estate level. Certain areas are still showing good growth but the major markets that had exploded in past years are definitely seeing a reduced interest. This is a cause of concern for sellers and investors that have purchased numerous homes with the intent of selling them, as the market has moved back into a buyer’s market. It also means that those who are currently looking for homes have much more sway and the ability to find homes at great deals if they are willing to deal with foreclosures and short sales.
This has been a huge surprise for buyers in this country as they have not been used to having this much sway in the market. There really has not been a better time for buyers to get into the home market. However, today’s buyers should take example from the buyers of the past years and learn a few lessons from what has transpired over the long stretch of seller’s markets. Sub-prime lending is really not the way to go. Standard mortgage loans are really the preferable choice. If you cannot get a standard mortgage loan yet then take the time to correct your credit and finances. Don’t try to jump into a purchase they you may not be able to pay for in the long run. There are some real lessons to be learned from the recent history of the real estate market. Be sure to learn them before launching a home purchase.
VERNON
Oct
25
Top 7 FAQs About IRS Tax Liens
Filed Under Taxes | Leave a Comment
Roni Deutch asked:
1. What is an IRS tax lien?
A federal tax lien is the government’s claim on your property as security against an IRS tax debt. Before a lien can be filed, the IRS must notify you and send a notice of payment due. If a delinquent taxpayer refuses to pay the debt after 10 days, then the IRS can create a tax lien for the amount of the debt. Once filed, it will be attached to all of a taxpayer’s property including houses, cars, and even accounts receivable for businesses. The lien also becomes a public document, and will usually affect the recipient’s credit score.
2. How will I know if there is a federal tax lien on my property?
Before the IRS can file a federal tax lien, they will first send you what is called a Notice and Demand for Payment. If no action is taken to resolve the payment due, then the IRS will mail you a Notice of Federal Tax Lien. Legally, this notice must be mailed within 5 days after a tax lien has been filed. They might also try to contact you by telephone, but legally they are required to send you notice via standard mail.
3. What is the difference between a tax lien and a levy?
Although taxpayers frequently confuse tax liens with a levies, they are actually two completely different things. A tax levy is the actual collection of property or assets in order to pay off the debt you owe the IRS. It can take the form of a wage garnishment, a bank levy, or even a property seizure. A tax lien, on the other hand, is a notice that the government has the right ensure payment of the debt by securing the debt against your property. It’s a good idea to think of a tax lien almost as a mortgage against the property, and if you decide to sell it, then the IRS will claim a right to the proceeds of the sale.
4. Why did the IRS file a lien against me?
Tax liens are normally filed against taxpayers who have acquired IRS back tax liabilities. This “taxpayer” could be any individual, but can also be an estate, company, corporation, partnership, association, or trust. Although the exact reasons for the owed back taxes will vary case by case, it is usually the result of unpaid income taxes.
5. How do I get the lien released?
The only way to have a tax lien released is by settling the original tax debt. It will be immediately removed if you pay your debt immediately through a lump sump payment or if you file an Offer in Compromise that is accepted by the IRS. However, if you enter into a monthly payment program with the IRS, such as an Installment Agreement, then the lien will stay in tact until you have satisfied the terms of the agreement. Additionally, if the statute of limitations on the debt expires, then the lien should be automatically removed.
6. What law gives the IRS authority to file a tax lien?
Section 6321 of the Internal Revenue Code gives the IRS the legal authority to file a tax lien. It states: “If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.”
7. How can I prevent a tax lien?
The best way to avoid a tax lien is to avoid a tax debt in general. This can be accomplished by filing accurate tax returns with the IRS so that you stay 100% compliant. However, if you are already behind on your taxes, then you might want to consider entering into an IRS settlement program such as an Offer in Compromise to avoid getting a tax lien in the future.
VALENTIN
1. What is an IRS tax lien?
A federal tax lien is the government’s claim on your property as security against an IRS tax debt. Before a lien can be filed, the IRS must notify you and send a notice of payment due. If a delinquent taxpayer refuses to pay the debt after 10 days, then the IRS can create a tax lien for the amount of the debt. Once filed, it will be attached to all of a taxpayer’s property including houses, cars, and even accounts receivable for businesses. The lien also becomes a public document, and will usually affect the recipient’s credit score.
2. How will I know if there is a federal tax lien on my property?
Before the IRS can file a federal tax lien, they will first send you what is called a Notice and Demand for Payment. If no action is taken to resolve the payment due, then the IRS will mail you a Notice of Federal Tax Lien. Legally, this notice must be mailed within 5 days after a tax lien has been filed. They might also try to contact you by telephone, but legally they are required to send you notice via standard mail.
3. What is the difference between a tax lien and a levy?
Although taxpayers frequently confuse tax liens with a levies, they are actually two completely different things. A tax levy is the actual collection of property or assets in order to pay off the debt you owe the IRS. It can take the form of a wage garnishment, a bank levy, or even a property seizure. A tax lien, on the other hand, is a notice that the government has the right ensure payment of the debt by securing the debt against your property. It’s a good idea to think of a tax lien almost as a mortgage against the property, and if you decide to sell it, then the IRS will claim a right to the proceeds of the sale.
4. Why did the IRS file a lien against me?
Tax liens are normally filed against taxpayers who have acquired IRS back tax liabilities. This “taxpayer” could be any individual, but can also be an estate, company, corporation, partnership, association, or trust. Although the exact reasons for the owed back taxes will vary case by case, it is usually the result of unpaid income taxes.
5. How do I get the lien released?
The only way to have a tax lien released is by settling the original tax debt. It will be immediately removed if you pay your debt immediately through a lump sump payment or if you file an Offer in Compromise that is accepted by the IRS. However, if you enter into a monthly payment program with the IRS, such as an Installment Agreement, then the lien will stay in tact until you have satisfied the terms of the agreement. Additionally, if the statute of limitations on the debt expires, then the lien should be automatically removed.
6. What law gives the IRS authority to file a tax lien?
Section 6321 of the Internal Revenue Code gives the IRS the legal authority to file a tax lien. It states: “If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.”
7. How can I prevent a tax lien?
The best way to avoid a tax lien is to avoid a tax debt in general. This can be accomplished by filing accurate tax returns with the IRS so that you stay 100% compliant. However, if you are already behind on your taxes, then you might want to consider entering into an IRS settlement program such as an Offer in Compromise to avoid getting a tax lien in the future.
VALENTIN
Oct
25
How do I become a mortgage broker or mortgage agent in California?
Filed Under Renting & Real Estate | 3 Comments
Nelson asked:
I am fresh out of a college. Not just any college; a community college. And I need step by step how to become a mortgage broker or mortgage agent please. Thanks alot.
NED
I am fresh out of a college. Not just any college; a community college. And I need step by step how to become a mortgage broker or mortgage agent please. Thanks alot.
NED
Oct
24
James Lowe asked:
A big advantage of working from home is the tax benefits of operating a home based business. Working from home allows you to deduct portions of bills that you are already paying to live there.
You can deduct home expenses if you actually work in your home. It is easiest to do this if you have a room set aside for your business. Measure out how big that room is in proportion to the house, and you can deduct expenses using that percentage.
For example, if your place of doing business takes up 5% of your house, you can deduct 5% of your heating expenses for the days you work. (In other words, if you don’t work weekends, you can’t deduct for weekends.)
You can deduct items such as mortgage interest (though not your mortgage itself), electricity, telephone, insurance, and expenses for maintenance and repair. In general, you can deduct the portion of expenses that directly relates to your business.
You can deduct costs for your internet service provider in proportion to the amount you use it for your business, too. If it’s used completely for business you can deduct it all, but be certain before you do this that you are not using it for other reasons.
Having a CPA do your taxes for you has major benefits. They have computer software made up by tax pros and former IRS workers that you wouldn’t ever be able to use unless you went through lots of accounting training.
Be 100% honest with your CPA about everything. If you are called in for an audit your CPA will tell you to say nothing but your name and your CPA does all the talking. The IRS has to find mistakes not you. If a CPA does your tax you will get deductions you would never know to take and your CPA will also take away deductions you cannot legitimately take.
A CPA will cost you more but will get you much more back. Tax filings done by CPAs are far less likely to be called in for audits because the IRS knows the CPA’s reputation is at stake with every tax form filled out and so the CPA will be very careful that every little detail is done correctly.
Keep a separate notebook for tax deductions and on each page make a heading for all possible deductions like advertising, supplies, repair parts, phone, computer, etc. and write them down and save ALL your receipts in a separate large envelope. Write your deductions in this notebook, everyday, as they happen. Remember, your tax preparation is a daily, year round effort and is an important part of your business.
Write everything in your notebook that could be a deduction and then at the end of the year let your CPA decide what is and is not a deduction. He or she knows and you don’t. It is their job to know. This way you won’t miss out on any deductions you don’t know for sure on and you won’t take any deductions you don’t have coming. Pretty neat huh?
You will get a lot bigger income tax refund this way and have a clear conscience you did all the right things and you will not have any worries about a scary IRS audit. Talk over with your CPA what he thinks about the way you are keeping records and learn from him or her better ways to do it. They will usually have valuable tips for you to help you run your business better. This chit chat at the end of your tax preparation is invaluable to you.
The tax benefits of operating a home based business enable you to deduct things you would otherwise be paying in full. If you are considering a business from home, it’s a good way to lower your costs. This is just one more advantage of working from home. Source: http://www.irs.gov/faqs/faq-kw82.html Plus my own life business tax experience of over 40 years
CHRIS
A big advantage of working from home is the tax benefits of operating a home based business. Working from home allows you to deduct portions of bills that you are already paying to live there.
You can deduct home expenses if you actually work in your home. It is easiest to do this if you have a room set aside for your business. Measure out how big that room is in proportion to the house, and you can deduct expenses using that percentage.
For example, if your place of doing business takes up 5% of your house, you can deduct 5% of your heating expenses for the days you work. (In other words, if you don’t work weekends, you can’t deduct for weekends.)
You can deduct items such as mortgage interest (though not your mortgage itself), electricity, telephone, insurance, and expenses for maintenance and repair. In general, you can deduct the portion of expenses that directly relates to your business.
You can deduct costs for your internet service provider in proportion to the amount you use it for your business, too. If it’s used completely for business you can deduct it all, but be certain before you do this that you are not using it for other reasons.
Having a CPA do your taxes for you has major benefits. They have computer software made up by tax pros and former IRS workers that you wouldn’t ever be able to use unless you went through lots of accounting training.
Be 100% honest with your CPA about everything. If you are called in for an audit your CPA will tell you to say nothing but your name and your CPA does all the talking. The IRS has to find mistakes not you. If a CPA does your tax you will get deductions you would never know to take and your CPA will also take away deductions you cannot legitimately take.
A CPA will cost you more but will get you much more back. Tax filings done by CPAs are far less likely to be called in for audits because the IRS knows the CPA’s reputation is at stake with every tax form filled out and so the CPA will be very careful that every little detail is done correctly.
Keep a separate notebook for tax deductions and on each page make a heading for all possible deductions like advertising, supplies, repair parts, phone, computer, etc. and write them down and save ALL your receipts in a separate large envelope. Write your deductions in this notebook, everyday, as they happen. Remember, your tax preparation is a daily, year round effort and is an important part of your business.
Write everything in your notebook that could be a deduction and then at the end of the year let your CPA decide what is and is not a deduction. He or she knows and you don’t. It is their job to know. This way you won’t miss out on any deductions you don’t know for sure on and you won’t take any deductions you don’t have coming. Pretty neat huh?
You will get a lot bigger income tax refund this way and have a clear conscience you did all the right things and you will not have any worries about a scary IRS audit. Talk over with your CPA what he thinks about the way you are keeping records and learn from him or her better ways to do it. They will usually have valuable tips for you to help you run your business better. This chit chat at the end of your tax preparation is invaluable to you.
The tax benefits of operating a home based business enable you to deduct things you would otherwise be paying in full. If you are considering a business from home, it’s a good way to lower your costs. This is just one more advantage of working from home. Source: http://www.irs.gov/faqs/faq-kw82.html Plus my own life business tax experience of over 40 years
CHRIS
Oct
24
How do I find out the mortgage company of a condo in foreclosure?
Filed Under Renting & Real Estate | 3 Comments
Amie A asked:
I live in a three unit condo. The second unit is vacant (the owners moved out 2 years ago) and the unit is in foreclosure. We (the condo association) needs to contact unit 2’s mortgage company for back payment of unpaid condo fees. How do I find out their mortgage company?
EVERETTE
I live in a three unit condo. The second unit is vacant (the owners moved out 2 years ago) and the unit is in foreclosure. We (the condo association) needs to contact unit 2’s mortgage company for back payment of unpaid condo fees. How do I find out their mortgage company?
EVERETTE
Oct
22
honeybear asked:
I got a letter in the mail from the bank that says paying our mortgage payment bi-weekly instead of monthly could save us $40,000 to $100,000 in interest and reduce our mortgage term by 7 to 9 years without refinancing. How does this work?
JOHNIE
I got a letter in the mail from the bank that says paying our mortgage payment bi-weekly instead of monthly could save us $40,000 to $100,000 in interest and reduce our mortgage term by 7 to 9 years without refinancing. How does this work?
JOHNIE
Oct
20
When not to Buy
Filed Under Real Estate | Leave a Comment
Virginia Wherland asked:
While it may be seen as a bad career move for a real estate agent to publish an article advising people not to buy a home, there are a few times when the decision to make a real estate investment should be put on hold.
If you have recently changed jobs, you may have a hard time getting financing for a new home. Rather than wasting valuable time looking for a home, a smarter option at that time might be to continue saving for a down payment while maintaining a regular work schedule. You could also work at building your good credit history by purchasing things on credit and promptly paying them off. Once your current employment history and monthly income has been consistent for at least a year, and you have a healthy down payment saved up, then contact an agent to be shown homes for sale in the area you are wanting to buy in.
Similarly, if you suspect you will need to change jobs soon it is best not to purchase a home. The process of buying a home is expensive even if you don’t consider the actual cost of the home. Imagine being laid off or transferred shortly after buying a home. If you are forced to make a quick sale of a home you just purchased, chances are you could lose thousands of dollars. Waiting until there is stability in your life is the best idea.
Let’s say you got a promotion, or recently hit your savings goal, and thought it would be a great time to buy a car. You need to decide what you’d rather buy, a house or a vehicle, because chances are good you will be unable to do both. When getting pre-qualified for a loan, the assessor looks not only at your credit history and income stability, but also at your debts. If you have a couple-hundred dollar vehicle payment every month, it will probably compromise your ability to be approved for a loan. A lender needs to see your income as far higher than your debts to know you will not default on their loan to you. While you may be willing to live frugally to make up for having both a mortgage and car payment, the bank isn’t going to see it that way. So if you are wanting to get into the real estate market in the near future, either purchase a much older and cheaper vehicle, or do with what you have for the time being. If you have just gotten into a vehicle loan, focus on paying it back as soon as possible before you try to enter the real estate market.
If you are new to an area, it might be a good idea to explore it a little before jumping into purchasing a home there. It can take time for the character details of different neighborhoods to reveal themselves, and buying in the “wrong neighborhood” is a decision that could affect you for life. Renting for at least a few months can seem like a waste of money, but in fact it gives you valuable time to make a wise decision about where you want to live and invest.
Of course no one likes to think about things like divorce or separation, but the reality is that some couples think buying a home together may save a failing marriage. Just like deciding to have a baby under similar circumstances, buying a home with a partner you aren’t completely stable with is not a good idea. Separations are never easy, but adding financial negotiations to divide up your assets only makes it more stressful.
MARCO
While it may be seen as a bad career move for a real estate agent to publish an article advising people not to buy a home, there are a few times when the decision to make a real estate investment should be put on hold.
If you have recently changed jobs, you may have a hard time getting financing for a new home. Rather than wasting valuable time looking for a home, a smarter option at that time might be to continue saving for a down payment while maintaining a regular work schedule. You could also work at building your good credit history by purchasing things on credit and promptly paying them off. Once your current employment history and monthly income has been consistent for at least a year, and you have a healthy down payment saved up, then contact an agent to be shown homes for sale in the area you are wanting to buy in.
Similarly, if you suspect you will need to change jobs soon it is best not to purchase a home. The process of buying a home is expensive even if you don’t consider the actual cost of the home. Imagine being laid off or transferred shortly after buying a home. If you are forced to make a quick sale of a home you just purchased, chances are you could lose thousands of dollars. Waiting until there is stability in your life is the best idea.
Let’s say you got a promotion, or recently hit your savings goal, and thought it would be a great time to buy a car. You need to decide what you’d rather buy, a house or a vehicle, because chances are good you will be unable to do both. When getting pre-qualified for a loan, the assessor looks not only at your credit history and income stability, but also at your debts. If you have a couple-hundred dollar vehicle payment every month, it will probably compromise your ability to be approved for a loan. A lender needs to see your income as far higher than your debts to know you will not default on their loan to you. While you may be willing to live frugally to make up for having both a mortgage and car payment, the bank isn’t going to see it that way. So if you are wanting to get into the real estate market in the near future, either purchase a much older and cheaper vehicle, or do with what you have for the time being. If you have just gotten into a vehicle loan, focus on paying it back as soon as possible before you try to enter the real estate market.
If you are new to an area, it might be a good idea to explore it a little before jumping into purchasing a home there. It can take time for the character details of different neighborhoods to reveal themselves, and buying in the “wrong neighborhood” is a decision that could affect you for life. Renting for at least a few months can seem like a waste of money, but in fact it gives you valuable time to make a wise decision about where you want to live and invest.
Of course no one likes to think about things like divorce or separation, but the reality is that some couples think buying a home together may save a failing marriage. Just like deciding to have a baby under similar circumstances, buying a home with a partner you aren’t completely stable with is not a good idea. Separations are never easy, but adding financial negotiations to divide up your assets only makes it more stressful.
MARCO
Oct
19
Wondering???? asked:
I know the mortgage industry is in a mess right now, but I am looking toward the future when we rebound. Wondering what requirments there are to become a mortgage broker in Ohio. I am looking to work this industry on the side, as I already have a full time sales job. Also what are the typical commisions paid to brokers for sub-prime, prime, and jumbo mortgage loans…is this split with the company you work for? I already work 100% commission, so that is not a problem. Any input on this career is greatly appreciated, ie the ups and downs.
JULIAN
I know the mortgage industry is in a mess right now, but I am looking toward the future when we rebound. Wondering what requirments there are to become a mortgage broker in Ohio. I am looking to work this industry on the side, as I already have a full time sales job. Also what are the typical commisions paid to brokers for sub-prime, prime, and jumbo mortgage loans…is this split with the company you work for? I already work 100% commission, so that is not a problem. Any input on this career is greatly appreciated, ie the ups and downs.
JULIAN
Oct
15
mortgage?
Filed Under Other - Home & Garden | 5 Comments
bjm_116 asked:
if i buy a home of $350,000 detached / semidetached and 10,000 down payment then how much mortgage will i have to pay every month????
if i buy a home of $350,000 detached / semidetached and 10,000 down payment then how much mortgage will i have to pay every month????
thanks for the answers 
well if not 10,000 then wat abt 20 or 25 ?
PIERRE
Oct
14
2nd mortgage Foreclosure: How long is the delay to put it on your credit?
Filed Under Credit | 4 Comments
hruss7 asked:
We paid off a 2nd mortgageforeclosure before it went through. We continued to pay on our first mortgage with no problem. The attempted forclosure was not on our credit report until we refinanced with a new mortgage company. Is this fair? It looks suspicious that it only appeared on our credit after we refinanced with a new company. We understand that business is business but it seems that they were fine with everything until we pulled our mortgage from them and went with another company.
MERLIN
We paid off a 2nd mortgageforeclosure before it went through. We continued to pay on our first mortgage with no problem. The attempted forclosure was not on our credit report until we refinanced with a new mortgage company. Is this fair? It looks suspicious that it only appeared on our credit after we refinanced with a new company. We understand that business is business but it seems that they were fine with everything until we pulled our mortgage from them and went with another company.
MERLIN