Monday, November 25, 2013

When to Sell the Temporary Rental


How to Know When to Sell the Temporary Rental




Some homeowners, who were not able to sell during the recession, chose to rent their homes instead. In some cases, they didn't need to sell their home at the depressed prices and opted to rent it until the market recovered.

It's a valid strategy but there are time restrictions that could have serious tax implications for some homeowners.

The section 121 exclusion for gain in a principal residence requires that the home is owned and used as a main home for at least two years during the five year period ending on the date of the sale. This allows a homeowner to rent their home for up to three years and still have some part of the exclusion available.

The sale of a home with a $200,000 gain that qualifies as a principal residence would result in no tax being paid by the owner. Comparably, a rental property with the same gain could have a $30,000 or higher tax liability depending on the length of ownership and tax brackets of the investor.

The housing market has dramatically improved in the last year. If you have a gain in a home that has been your principal residence and it has been rented less than three years, you might want to consider selling it while you qualify for the exclusion.

If you are considering a sale on your principal residence that has been rented, consult with your tax professional for advice on your specific situation. For additional information, see IRS Publication 523.
 

Mary Zohar is a long-standing member of the Coldwell Banker North Tampa Office and an active member of the Greater Tampa Assoc. of Realtors. Besides having a Bachelor in Science from the University of Florida, she holds: Certified Home Marketing Specialist, Certified Negotiation Specialist, e-Pro, Short Sale and Foreclosure, and Accredited Buyer Representative certifications. And is current in Continuing Education and licensure for the State of Florida.
Having lived in the Tampa Bay area for over 30 years makes her an expert in the market as well as the community at large. If she doesn't know what you're looking for, she surely knows who to ask or how to find out. Watching Tampa Bay grow, after these years makes her knowledge priceless. For more information visit her website at: http://www.home4utampa.com/

 
 

Monday, November 18, 2013

Cut Refinancing Expenses

 

Tips to Cut Refinancing Expenses




Every single day, homeowners who are excited about lowering their rate have a tendency to ignore the refinancing costs because they’re being rolled back into the new mortgage. If the payment is lower than what they’re currently paying and there’s no money out of pocket, it seems like a good deal.

Refinancing your home because a lower rate is available is one thing but the closing costs associated with that new loan could add several thousand dollars to your mortgage balance. By following some of the suggestions listed below, you may be able to reduce the expense to refinance.

• Tell the lender up-front that you want to have the loan quoted with minimal closing costs.

• Check with your existing lender to see if the rate and closing costs might be cheaper.

• If you’re refinancing a FHA or VA loan, consider the streamline refinance.

• Shop around with other lenders and compare rate and closing costs.

• Credit unions may have lower closing costs because they are generally loaning deposits and their cost of funds is less.

• Reducing the loan-to-value so that mortgage insurance is not required will reduce expenses.

• Ask if the lender can use an AVM, automated valuation model, instead of an appraisal.

• You may not need a new survey if no changes have been made.

• There may be a discount on the mortgagee’s title policy available on a refinance.

• Points on refinancing, unlike purchase, are ratably deductible over the life of the loan.

• Consider a 15 year loan. If you can afford the higher payments, you can expect a lower interest rate than a 30 year loan and obviously, it will build equity faster and pay off in half the time.

A lender must provide you a list of the fees involved with making the loan within 3 days of making a loan application in the form of a Good Faith Estimate. Every dollar counts and they belong to you.
 
Mary Zohar is a long-standing member of the Coldwell Banker North Tampa Office and an active member of the Greater Tampa Assoc. of Realtors. Besides having a Bachelor in Science from the University of Florida, she holds: Certified Home Marketing Specialist, Certified Negotiaton Specialist, e-Pro, Short Sale and Foreclosure, and Accredited Buyer Representative certifications. And is current in Continuting Education and licensure for the State of Florida.
Having lived in the Tampa Bay area for over 30 years makes her an expert in the market as well as the community at large. If she doesn't know what you're looking for, she surely knows who to ask or how to find out. Watching Tampa Bay grow, after these years makes her knowledge priceless. For more information visit her website at: http://www.home4utampa.com/