Saturday, November 05, 2005

Mortgage Interest Tax Deduction at Risk!

President Bush’s Tax Advisory Board wants to take away your mortgage interest deduction. Charged with the task of developing more simple and fairer tax laws, the board decided that the mortgage interest tax deduction does more for rich folks than for people struggling to buy a home.

Let me ask you a question. Would you have bought your house if the interest deduction were not available to you?

If congress and the President, follow the recommendation of the board, a series of events will take place, though not necessarily in this listed order.

1.Middle America will no longer be able to afford to buy a house. 2. investors will stop buying properties for rentals. 3. Rents will go up, sales prices will come down. 4. Those who already own will loose a great deal of their investment and their retirement nest egg will fall short of their needs. 5. Bush’s oil money pals will buy up entire cities and create private communities for people who don’t pay taxes anyway. 6. Riots will ensue. 7. Terrorists will loose interest in harming Americans because at least they have nice warm caves to live in. 8. Homelessness and hunger in America will increase. The economy will fail, Canada will invade and the United States as we know will cease to exist.

Okay some of that might not happen but, removing the interest tax deduction for homeowners will do ABSOLUTELY NO GOOD! Bad things will happen folks, but only if we fight this, and, make it clear to the President and Congress that this is a bad decision!

I would urge you to contact your Congress(wo)man and the President and tell them “Do not take away the American Dream”.

E-mail the President of the United States

Search for and Contact your Representative

Thursday, November 03, 2005

The holiday slowdown

The holiday slow-down is upon us. Agents everywhere are gearing up to disappear, until spring at least. Even though, there are plenty of properties for sale. Some, looking for a fast sale before the Xmas lights come out.

So sellers want to sell but where are the buyers? Mortgage rates are up and continue to rise, prices are holding steady, but sales are beginning to slow. Partly because of the seasonal change and partly because interest rates are locking buyers out of the market.

If you are looking to buy, this might be a good time for you really ramp up your house hunting and offer writing. Sometimes in real estate, you have to jump on opportunities as they come about, because, when they do – they don’t stick around long.

Look at this time as an opportunity, one that will fade. Right now, there aren’t as many buyers clamoring for bid positions. So if you have been on the cusp of getting offers accepted, now is a time to re-evaluate your potential properties and start writing offers. Sellers with one good offer on the table in the “off season” are happier then waiting out the season with no offers at all. If your neighbor wants to sell quick, offer a short escrow period. There are ways to get into homeownership during this seasonal slowdown that might be easier than if you wait until spring.

If you want help locating properties in Southern California, as always, feel free to call on me. Some agents don’t work during the season, I work a little harder. Especially for my loyal clients who can’t seem to get in on the peak season.

Wednesday, November 02, 2005

Halloween is over, wanna buy a house?

Two days after Halloween and, I’m sick to my stomach. Too much candy! Anybody want to stop by the office and pick up some leftover candy, be my guest.

And now for the Realty Report:

According to data just released, most Californian’s are falling short on income required to qualify for a loan on a median priced home. The shortfall, $73,810 is based on qualifying income of $127,950 required to purchase a $545,910 home.

The Long Beach median price is at $457,000, about 100,000 less than the statewide median price.

Here’s a fun trick, I call math.

Lets figure out if you can buy a home. Let’s assume you have 45,700 saved in your piggy bank. (that’s 10% of the median, which is what we’re going for)

Your banker gives you a loan at 5.75% amortized over 30 years. Your payment is $2400, less tax, insurance, and lawn service.

Now lets assume you are just like everybody else and you fall short by 73,810 on qualifying income; you earn approximately $54,140 annually or $4511.67 per month. Already you know you don’t qualify because you’re now over 50% of our income to debt ratio.

So now, in order to afford this price, we need to lower the payment or increase the down payment. We can lower the payment by choosing an interest only loan which puts our mortgage payment at $1257.00.

If we find out that Aunt Edith has an extra $10,000 burning a hole in her mattress, she might lend it to you cheap. Our down payment now is, $55,700 which will save a whopping $100 on either payment choice. Not much help there.

What!? You didn’t tell me you had a wife, sugar daddy, or a brother who wants to buy a house too! Good. With a co-applicant on the loan you now double qualifying income and can buy this house! Congratulations you’re a homeowner. Now its time to figure out who gets to live there. We’ll talk about that some other time.

For more:

Monday, October 31, 2005

Happy Halloween

Please, have a safe and happy halloween!!!