Tagged: mortgage

What does the fiscal cliff mean for real estate?

January 1, 2013 marks the day that the Senate and the House passed the legislative bill to avoid the looming fiscal cliff. So, what does this mean for the real estate market and, more importantly, home owners and buyers?

Mortgage relief

Ahhh. Many of us can breathe a sigh of relief at the sight of those two words. The new bill extends the mortgage debt forgiveness relief until January 1st of next year. This is great news for homeowners going through a short sale or a foreclosure. This means that they don’t have to pay tax on the amount of debt that is forgiven.

There are also deductions for mortgage insurance premiums. Those of us making $110,000 or less qualify for this new condition which has been extended through 2013 and is applicable for the year of 2012 as well.

Time to go green

Going green is not just a trend to make you feel good about yourselves! It is finally time to reap some fiscal benefits for being friendly to our environment. Home owners who have made energy improvements to their homes are now eligible for a 10% tax credit, up to $500. This is applicable for the new year and for 2012.

Taxes, taxes, taxes

That lovely little word that packs so much of a punch for most of us, taxes. Estate taxes are exempted for the first $5 million in individual estates and the first $10 million for family estates. Estates which supersede these amounts are subject to 40% taxation, which is indexed for inflation.

Sellers who have resided in their primary home 2 out of the last 5 years, can continue to take a deduction of upto 250,000 on the gains from the sale of their primary home. For married couples, this would be upto 500,000. Capital Gains rate stays at 15% for individuals with the top rate of $400,000 and couples with $450,000 joint return. Any gains above those amounts will be taxed at 20%.

Pease, please

Remember those “Pease limitations?” They have been repealed for most of us, but those who have $250,000 annual income ($300,000 for joint income), are now subject to these laws once again. Tax reduction cannot be greater than 80% of the filer’s total itemized deductions, and rates are indexed for inflation.

Commercial recovery

The new bill also has an effect on commercial properties. There is now a straight-line cost recovery spanning 15 years for leasehold improvements on these properties. This is extended through 2013 and also active for 2012.

What are your concerns about the effects of the new bill? As always, feel free to contact me, Sujatha Bhaskara, with any questions about this or anything about real estate. I can be reached at 732-536-9010 or sbhaskara@optonline.net.

For more information, revert to this article or NJ Real Estate

Why should buyers have pre-approvals?

When looking to buy properties, it is natural to be very excited and want to start visiting homes as soon as possible. In that excitement, you may hold off on the important step of starting a mortgage pre-approval. A pre-approval is a preliminary evaluation of your finances and credit worthiness to determine whether you may be approved for financing. It is not a guarantee for a mortgage, but a guess prior to a full mortgage application. Having a pre-approval letter in-hand is important for a variety of reasons. This blog details reasons why buyers should have pre-approvals before visiting New Jersey properties.

Understand Your Options

Financing requirements and mortgage rates change regularly. A pre-approval provides an understanding of the programs and options that you can use, what your up-front expenses will be, and more importantly, what you can purchase. Without this information, you may waste valuable time visiting homes that you can not finance or that are basically beyond your affordability. Identifying your price range also saves you the heartache of visiting and wanting a property that you cannot have. This is one of the most important reasons why buyers should have pre-approvals before visiting New Jersey properties.

Purchase Power

New Jersey properties with highly sought after amenities or the best price tend to move fast. A pre-approval gives you the power to make an offer on that perfect listing. When you prepare an offer, you normally must include a pre-approval letter. This demonstrates to the seller that you are ready, willing, and able to purchase. It is unlikely that a seller would consider an offer and move forward with a buyer without any documentation that a buyer can even obtain a loan. In multiple offer situations, a pre-approval is even more essential.

Saving Time

A pre-approval saves time when making an offer and on the processing of a loan. Most sellers request a pre-approval with offers. Not having one ready will lead to delays in submitting your offer and may result in a missed opportunity. Pre-approvals involve reviewing documentation of income, assets, debts, etc. This can take a couple of days based on whether you have the documentation readily available. Errors in your credit reports can cause additional delays. Starting and addressing this step in advance will also save significant time when processing your loan and achieving a quick closing.

Reasons Why Buyers Should Have Pre-approvals Before Visiting New Jersey Properties

The information above on reasons why buyers should have pre-approvals before visiting New Jersey properties is something to remember when thinking of buying a home. The home buying process can be complicated and stressful to begin with. Being diligent and prepared can reduce the stress and issues encountered along the way. For additional guidance, contact Sujatha Bhaskara at Keller Williams Realty by emailing sbhaskara@optonline.net or calling 732-536-9010.

I invite you to begin your Marlboro, NJ home search at www.bestinnjrealestate.com, a great buyer resource. Here you can save your favorite properties, set up a custom listing alert for homes in Marlboro that meet your needs, view Real Estate trends in the area, get local Marlboro, NJ school and community information, and much more!

Typical lender closing charges in Marlboro

There are many different types of fees associated with purchasing a home. Below are some typical lender closing charges you may encounter in Marlboro, NJ (and anywhere for that matter!)

Lender Closing Charges

Points

Points, sometimes also called a “discount point”, are a form of pre-paid interest. Borrowers can offer to pay a lender points as a method to reduce the interest rate on the loan, thus obtaining a lower monthly payment in exchange for this up-front payment.

Appraisal Fee

An appraisal is mandated by a lender but generated by an independent professional. Appraisals verify the value of a property and its condition. A loan will not receive final approval without a satisfactory appraisal.

Tax Service Fee

Real estate taxes may be included in your monthly mortgage payment. The mortgage company receives the funds from you on a monthly basis and places it in an escrow account. When the tax is due, the necessary amount is withdrawn from that escrow account. Many lenders will require a up-front fee to set up this tax service.

Flood Certificate

Real estate located within a flood zone will require flood insurance. Mortgage companies order a flood certificate to determine the status of a home. Flood certificates are always billed to the home owner.

Credit Report

Credit reports are how mortgage companies determine credit worthiness and applicable mortgage rates. There is a cost associated with obtaining credit scores from the 3 major credit bureaus. Lenders will often pass on this expense to home buyers.

Other Lender Closing Charges

The lender closing charges detailed above are only a few of the actual charges that may be imposed by your lender. For a complete list of potential expenses that you may incur, or for help with other real estate or mortgage matters in Marlboro, NJ and surrounding cities, contact Sujatha Bhaskara at Keller Williams Realty by calling 732-536-9010 or emailing sbhaskara@optonline.net. I invite you to begin your Marlboro, NJ home search at www.bestinnjrealestate.com, a great buyer resource. Here you can save your favorite properties, set up a custom listing alert for homes in Marlboro that meet your needs, view Real Estate trends in the area, get local Marlboro, NJ school and community information, and much more!

Mortgage approval factors for homebuyers

Mortgage Approval Factors For Marlboro NJ BuyersPre-approvals do not guarantee final mortgage approval. Lenders perform a thorough analysis prior to giving an approval. This formal process does not often begin until after a property is identified as they must look at both the financial information of Marlboro NJ buyers and specifics of the real estate being purchased. The following are a few mortgage approval factors for Marlboro NJ buyers.

Financial Data Assessed

Ability to Repay the Loan

Mortgage Companies will analyze your assets, earnings and debts to determine whether you can make the monthly payments. Good savings and a regular work history demonstrate economic health. The amount and kinds of bills you maintain are also factors. Lenders gauge not only your present situation. They also attempt to figure out the future capability to pay bills.

Willingness to Repay the Mortgage

Mortgagees assess how likely buyers are to continue paying over the life of the mortgage. This is where credit history is important. Your previous conduct is the best predictor of future behavior. A bad credit background may weaken your prospects of obtaining a home loan or lead to larger interest rates.

Property Concerns

Appraised Price

Lenders depend on appraisers to provide important data on a property. The most essential part of an appraisal is the valuation, which is given in an exact figure. Mortgage Companies grant loans up to a specific percentage of the market value and the appraisal is applied to confirm that number.

Mortgage Company Protection

After a mortgage is issued, mortgage companies want assurances that their investment will be protected. They typically expect title insurance. For mortgages with low down payments, mortgage insurance may also be required. The amount of both title and mortgage insurance may differ depending on the loan type and can ultimately impact the amount a buyer can afford.

More Mortgage Approval Factors For Marlboro NJ Lenders

Lenders may take a few weeks to examine a mortgage application before granting an approval, a denial, or asking for more details. Approval criteria can differ based on the kind of loan and the situation of the buyer or home. The mortgage approval factors for Marlboro NJ buyers above include just a few general factors to be cognizant of. Always consult with a mortgage consultant for guidance on your real estate purchase. Contact Sujatha Bhaskara at 732-536-9010 or sbhaskara@optonline.net for more advice on this and other similar topics.

I invite you to begin your Marlboro, NJ home search at www.bestinnjrealestate.com, a great buyer resource. Here you can save your favorite properties, set up a custom listing alert for homes in Marlboro that meet your needs, view Real Estate trends in the area, get local Marlboro, NJ school and community information, and much more!

Steps In The Mortgage Process For Purchasing Marlboro, NJ Homes

Steps In The Mortgage Process For Purchasing Marlboro, NJ HomesThere are many distinct steps in the real estate buying process, and many relate to the mortgage. It can be confusing for both new and experienced buyers. This blog provides important details about steps in the mortgage process for purchasing Marlboro NJ homes and covers what you may want to know prior to beginning the process.

Steps In The Mortgage Process For Purchasing Marlboro NJ Homes

Pre-approval

A pre-approval is an introductory review of your finances and credit history to estimate what you may be able to receive as a loan amount. It verifies that you meet the preliminary criteria for financing. Pre-approvals are not a guarantee that you will be able to obtain financing, but is a typical first step in the mortgage process.

Formal Application

An application occurs usually after you have an accepted offer on a home. You may be asked for additional financial paperwork and information. The details on the home are also submitted to the mortgage company for review. They will request a copy of the Purchase and Sales agreement in order to proceed. Your contract will typically specify that you submit an application before a specific date.

Mortgage Appraisal

An appraisal is ordered by a lender (although buyers are in most cases charged the fee for it) to identify the current market value of the property. Appraisers will compare your property to others that recently sold in the area within the last several months. An exact dollar amount is generated. Ultimately, the value of the real estate must satisfy the loan amount.

Commitment Letter

After your financial information and the details on the property are analyzed, the mortgage company issues a commitment letter. This assures the parties that no major problems have been identified and that the mortgage company is somewhat certain that the mortgage will obtain approval. There can be a few conditions included in the letter such as an employment verification and additional credit check. Therefore, it is essential not to complete costly purchases or alter your financial situation even after a commitment is issued as it may lead to last minute issues.

Clear to Close

A clear to close is basically the final approval of a loan. It verifies that all requirements have been satisfied and that the mortgage company can release the information to the closing agent. This sometimes takes place within days or hours before the anticipated closing date.

Settlement

The settlement includes signing of documentation and filing of paperwork into public record. Be sure to bring acceptable identification and a money order or bank check for any monies you are paying. Personal checks or cash are traditionally not acceptable. The transfer of funds takes place at or shortly after and the real estate will be officially yours!

A Few More Tips

Deadlines are an important factor of any real estate transfer, so make sure that you know the deadlines and what you must perform to satisfy each one. Getting representation from a experienced mortgage consultant and real estate broker is very important. They can offer advice and assistance, monitor deadlines, and ensure a more positive experience. As a local real estate consultant, I will offer representation during the mortgage and overall home purchase process. You may reach me, Sujatha Bhaskara, at Keller Williams Realty via phone at 732-536-9010 or email at sbhaskara@optonline.net. To begin your home search in Marlboro, NJ, please visit Best in NJ Real Estate – Marlboro, NJ Homes for Sale.