New tax Bill Proposes Elimination of Certain Tax Deductions for California Homeowners – How Will It Affect You?

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Nicole Emanuel Real Estate – Coldwell Banker

(408) 410-2060

nicole.emanuel@cbnorcal.com

http://www.realestatebynicole.com

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Does Moving Up Make Sense?

Couple moving house

With prime home buying and selling season upon us, it’s a good time to ask yourself if a move up is right for you. Sometimes we talk with buyers that are considering a move but faced with the reality of a larger mortgage payment, find that its best for them to wait. Or some clients need to know what their home might sell for in order to decide if moving into a new home is right for them. There are many things to consider when deciding if selling your home and buying a new home is right for you. Whatever the case, we are here to help you decide whats best for you and your family.

Whether your family size is growing, you are running out of space or simply want to seize the opportunity to “move-up” to your next home, below are a few questions to consider as you weigh your options.

  1. Have you built substantial equity in your current home? Home equity can be defined as the value of a home, minus the amount of outstanding debt. Although equity does not generally develop in the first few years of home ownership, five or more years of home payments may create significant unrealized gains.
  2. Has your income or financial situation improved? Homeowners should consider their overall financial situation including current and future expenses in order to make an educated decision on price range for a new home. For example, an increase in salary may allow for an increased mortgage.
  3. Has your lifestyle changed? Lifestyle changes are one of the most common reasons people choose to move. Starting or adding to a family may require an extra bedroom or additional square footage, as well as a desire to live closer to work or family may provide the impetus for a move to a larger home.
  4. Is your current residence one that could potentially be rented out? For those homeowners who are ready to make a move but are concerned about purchasing a new home before the current property is sold, renting out the current residence may be a viable option. We also work with a variety of clients who decide they want to find a home to purchase before they sell their current home.
  5. Are interest rates attractive? A low interest rate means lower mortgage payments on homes of the same price. I’d be happy to refer you to a mortgage advisor should you need to check on interest rates.

No matter what you decide, you need an expert team to help you balance a concurrent purchase and sale transaction seamlessly. Nearly two-thirds of our client base is either moving up or downsizing and we have successfully assisted them with both sides of the transaction. If you want to discuss any of the questions above or have more to ask, don’t hesitate to give us a call or email! Nicole.emanuel@cbnorcal.com, (408) 410-2060.

What Your Lender Needs to Know (and what not to do during the home buying process)

buy-home1When you are buying a home the first thing you need to do is get pre-approved. This is different from pre-qualifying as it is a full loan approval instead of simply an opinion letter of your creditworthiness. Its is best that you take this step before looking at homes as finding out what you qualify for will help you look in the right price range and avoid disappointment. On the flip side, you might be able to look at more expensive homes than you originally thought possible.

Here are some things your lender will need (and need you to do or not to do) during the application and escrow process):

1) All funds used for the downpayment and closing costs need to be carefully scrutinized by your lender.

  • You must provide detailed and accurate information to show which accounts the funds are in and where the funds are coming from.
  • You must document the source of any funds that have been in your accounts for less than 2 months.
  • Any changes that occur to your financial condition will need to be explained to the lender.
  • Changes to your assets, employment, income or credit scores during the escrow process could jeopardize your ability to obtain a loan.
  • Provide complete documents – all pages!
  • Provide documents with names, addresses and account numbers.

2) Things not to do during the escrow process:

  • Do not transfer funds from one bank account to another.
  • Do not make unusual large deposits into your bank account or you will need to provide documentation for the source of any deposits.
  • Do not buy a car just prior to buying a house of during the escrow process.
  • Do not spend large sums of money buying furniture or appliances.
  • Do not change jobs.
  • Do not apply for new credit cards.
  • Do not close existing credit cards.

3) The lender is going to require a letter of explanation and/or support documentation for:

  • Recent inquiries on your credit report.
  • Derogatory items on your credit report.
  • Recent deposits into your bank account.
  • Recent transfers of money from one account to another.
  • Evidence earnest money deposit has cleared your account.

4) If you are receiving gift funds the lender will require:

  • A gift letter signed by you and the gift donor.
  • Evidence of the donors ability to gift the funds – a bank statement.
  • Evidence of the receipt of the gift funds – a copy of the check or wire.
  • Evidence of the funds being received into your account.

If you have questions or are looking for a wonderful lender, give me a call today at (408) 410-2060!

7 Things You Should NOT do when Applying for a Home Loan

1) Don’t buy or lease an auto – Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

2) Don’t move assets from one bank account to another –  These transfers show up as new deposits and complicate the application process as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if necessary.

3) Don’t change jobs – A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

4) Don’t buy new furniture or major appliances with a credit card – If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is a possibility this may disqualify you from getting the loan or even cut down the amount of available funds for closing costs.

5) Be aware of who runs your credit report – This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

6) Don’t attempt to consolidate bills before speaking with your lender – The loan officer can advise you if this needs to be done.

7) Don’t pack of ship information needed for the loan application – Important paperwork such as W-2 forms, divorce decrees and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

If you need help finding a reliable & reputable lender, give me a call! I have some fantastic lenders I can refer you to to qualify you for buying a new home.