Mortgage Blog

WITH DECLINING real estate values in many parts of the country, now is the time for home owners to explore opportunities that may exist to reduce their occupancy cost through a reduction in their real-property taxes.

Our nation's current economic woes have translated into a tax-revenue shortfall for many local and regional governments throughout the country. Stagnant or shrinking tax bases are also putting pressure on these public entities' budgets. When property values are declining, chances for tax rates to drop also decline. However, constant vigilance and an understanding of market conditions can ensure that home owners don't overpay.

Here are a few points to keep in mind:

1. Property tax valuation will only be reduced IF the fair market value of the property has dropped to below the tax basis for that property. If you purchased a home for $1,500,000 last year (so tax basis is $1,500,000) and it is now only worth $1,300,000, you almost certainly would be granted a reduced tax basis. But if you purchased your property for $800,000 ten years ago and the basis has increased the full 2% per year allowed in each of those ten years, your tax basis will still only be $975,196 and your property value would have to drop below that amount to qualify for a reassessment;
2. The reduced valuation is temporary. If prices go back up again, your tax basis will go back up again;
3. As property values start to increase again (and they will!!) reassessments are not limited by the 2% rule until you basis gets back to where it was before, at which time the 2% annual cap is reinstated. So, if there is a dramatic upturn in home values it is possible your tax relief may be short lived. Still, nobody likes paying taxes and even temporary relief is welcome.

Please contact me if you need comps in your area.

We all know the importance of being informed before taking out any loan, and as more and more people take out FHA Loans it’s critical to understand your obligations before starting the process. A simple way to do this is by using a mortgage calculator. One of these such tools can be found at the Mortgage Loan website. You plug in your information and the calculator provides an estimate of the loan amount you could be approved for and your monthly payments. The information to be plugged in includes:

• Yearly Salary
• Other Income
• Property Tax
• Hazard Insurance
• Monthly Auto Payment
• Credit Cards and Other Payments

The Calculator already has the Loan Term (30) and Interest Rate (6) plugged in, but these can be changed to fit your plans. Tools like this one are a great way of understanding what you can expect before starting the FHA lending process.

With the right combination of programs, banks and mortgage consultant; you can still obtain 105% financing.

Capitalize on opportunities to meet the home financing needs of your borrowers looking for low down payments and flexible sources of funds, including first-time homebuyers, and move-up borrowers.

With Our Home Possible Mortgages, you can do just that by offering your borrowers:

• Low down payments and flexible sources of funds
• Flexible credit terms, including expanded ratios
• Options for less-than-perfect credit and/or non-traditional credit

What’s more, you have even greater flexibilities to serve borrowers who work in your community—like teachers, firefighters, healthcare workers, law enforcement officers and military personnel—so that they can live in the communities they support so well.

More Choices to Reach More Borrowers

• Borrower Contribution not required for 1-unit Primary Residences (excluding Manufactured Homes)
• Flexible credit terms, including expanded ratios and options for borrowers with less-than-perfect credit
• Secondary financing including Affordable Seconds
• Low mortgage insurance coverage levels