It’s 2009 and a new year has begun!.. We at Ford Financial would like to wish everyone a happy and prosperous new year!! I’ve set a goal to blog much more on here with all the activity going on in our economy, my fellow bloggers can definitely use my point of view.. See you all soon!!
If you haven’t noticed, mortgage rates are at a new low. But does that mean our economy is at a new low or is it on the rise? Probably both, I really don’t know.
It kind of sucks because people have been hearing “record low interest rates” or “lowest rates in 30 years” for a while now but those are only sales terms.. They finally have a new connotation. Rates really are at a new low which explains why mortgage applications have shot up to a record 5 year high.. thats back in 2003. 80% of that rise in applications are Refinances. Rates have dropped because of The Federal Reserves pledge of billions of dollars just one month ago.
For people with REALLY poor credit… example.. you haven’t paid your mortgage/bills in over 3 months. Anything over 600 credit score is kosher for a new interest rate around 5.18% … This is real.. 5.18% is very low. The lowest Freddie mac has recorded since 1971.
But say you have ok credit.. and you have some equity in your house. The 30 year fixed rate is at 5.18%.. cheap money right? You can pick up a 15 year extension on your mortgage, Cash out with a rate of 4.92%..
Even 5 year Adjustable rates are low.. around 5.49%
I would say all of these low rates is going to be the stick of dynamite needed to break up the clogged log fluke and bring home sales back up from the free fall it was in. It might be able to stir up our economy too with all the homeowners cashing out.
So if your in New Jersey and you are wondering what to do because you’re short on money and you just spent a good portion of your reserves on christmas presents, give us a call. See what we can do for you over at Ford Financial!
MERRY CHRISTMAS, HAPPY HANNUKAH, And A GREAT KWANZA
Early mortgage payment could cut tax bill
Friday December 19, 6:00 am ET
Kay Bell
A little year-end attention to your mortgage could lower your upcoming Internal Revenue Service bill.
Unlike rent, which you pay beforehand (i.e., your Jan. 1 bill covers your stay in the rental unit for that coming month), your mortgage payments are made at the end of your occupancy period. That means your Jan. 1 mortgage statement represents interest for the month of December, making it a tax-break-eligible bill for this year.
By accelerating that payment even by just a day (Dec. 31, if your financial institution is open for business then), you get an additional deduction for the interest paid.
Don’t get greedy, though. You can’t make your February, or any other upcoming mortgage payment, early to boost your year-end deduction amounts. Tax law generally prohibits write-offs for prepaid interest (there is an exception for loan points in some cases). Each year, you can deduct only that home mortgage interest for that year.
You also want to make sure you don’t cut it too close in making the early payment. Get the check in the mail in plenty of time for it to arrive at your lender by year’s end. If you pay online, be sure you make the electronic transaction in time to have it credited to your 2007 payment amount.
That way the added interest will show up on the annual statement (usually a Form 1098 or an IRS-acceptable substitute) you’ll get from your lender in late January, detailing your deductible mortgage activity.
Timing your payment
Some tax professionals say you can simply make your extra mortgage payment late this month with a check dated Dec. 31 and count it toward your deductions.
However, if you actually get your payment to the bank by the last business day of the year, which happens to be Monday, the 31st this year, or a weekday or two early, the extra interest will show up on the lender’s official paperwork. And that means no curious tax examiner will question any difference between the amount you claim on your Schedule A and what your lender reported (and copied to the IRS) on the 1098 form.
If your year-end mortgage statement doesn’t reflect the extra payment’s interest, go ahead and deduct the correct amount on your tax return and attach a statement explaining why your number, not the lender’s, is accurate.
If your mortgage holder pays your annual property tax bill from an escrow account, that also will be listed as a deductible home-related expense on your Form 1098. But if you, not your lender, pay your property tax bill, and it’s due early next year, consider paying it in December, too. As with your mortgage interest, this payment — and deduction — will be shifted into this tax year.
When shifting deductions doesn’t pay
A word — actually, three words — of warning about accelerating some tax payments: alternative minimum tax. This parallel tax system was devised almost 40 years ago to guarantee that wealthy filers paid their fair share to the IRS. But nowadays, more middle-class filers are finding the AMT applies to them, in large part because the alternate system isn’t designed to keep up with inflation.
The latest count: Around 4 million taxpayers, mostly middle-income families in high-tax states such as New York and California, now pay the tax. The projection for 2007 returns if the system isn’t changed: 23 million new AMT victims.
There are a couple of reasons so many taxpayers now potentially face the AMT. First, the parallel tax system isn’t indexed for inflation. Without that annual adjustment, regular income increases have pushed many filers close to or into the earnings level where the AMT kicks in.
Currently, the 2007 AMT income exclusions are $45,000 for married taxpayers filing a joint return; $33,750 for single or head of household taxpayers; and $22,500 for a married taxpayer filing a separate return. Congress is working on legislation to increase those amounts more along the lines of the 2006 figures ($62,550 for married filing jointly; $42,500 for single or head of household; $31,275 for married filing separately).
Secondly, under the AMT, some usually acceptable tax breaks aren’t allowed. Mortgage interest on your main and second home is still AMT-deductible, but home equity loan interest could be disallowed. And real estate and personal property taxes aren’t deductible under the AMT. So before you shift payment of those taxes into this year, make sure you won’t face an AMT bill where the write-offs won’t be of any tax use.
Also be careful about accelerating deductions if you’ve earned a lot this year.
Taxpayers with adjusted gross incomes of more than $150,500 ($75,250 if married and filing separately) could find their itemized deductions amount reduced. There’s a work sheet in the Form 1040 instruction booklet to help you determine if you’ll face the deduction limitation. If you do, it makes no sense to pull deductions you won’t be able to fully use into this tax year.
And remember: While an early payment will give you 13 mortgage interest amounts to deduct this year, it means that on your 2008 taxes you’ll only have 11 (or 12 if you pay a little early next December, too). So before you send off that check, make sure you really need the added deduction amount on this coming return.
With the Implosion of the mortgage market. Unfortunately we had to slow up and focus more attention on other areas of the business EXCLUDING this blog!! Wellll on that note things have picked up a bit and rates are at a CRAZY low. NOW is the oppurtunity for everyone to refinance. The Fed (short for federal reserve.. aka the people that print off our money) cut mortgage rates because of the poor state of our economy.
What happens is the federal reserve lends money that they print off and charge an interest rate to banks. The banks then charge an interest rate on that money to us, the consumer. The “prime” rate is the rate directly influenced by the federal reserve and is usually 3 percentage points higher. The fed rate is down to about .25% which translates a prime rate of about 3.25%. This is extremely low causing mortgage rates to drop to the low 5 percentage, even as low as 4.75%.
Call us to talk about how low we can get your current rate. This is cheap money. The only tough part is that the credit crunch is still effecting many and shaky credit may not get the same low rates.
Loans, Buy Down Mortgage, Save money, Money, Mortgage
I found a great resource for people looking for ways to save tons of money on accumilating interest.
Its called “How to knock 9 years off your mortgage.”
I feel that mortgage brokers should be the “good guys” when it comes to owning a home. When a lot of money is moved around in real estate there is definitely room for greed’s nasty face to show up. If banks had it their way they would be constantly lending money to you and gaining tons of interest on that money. It’s what they’re good at. Although its not all that bad. If you know how to make it work to your advantage! Do your homework. Study how a mortgage can work for you. And if youre reading this, you are moving in the right direction.
The reason why we should be the good guys is that we’ve already done the homework, we know the material. We should be guiding clients in the best possible direction just as a financial planner would. We should be earning our comission through good sound advice and life long/Mortgage long guidance. We SHOULDN’T be putting people into loans we know they can barely make it by. Why let the public suffer with a sub par quality of life paying tons of money towards a mortgage they cant afford? But thats what was happening for a while.. knowlegeable mortgage brokers letting their loan officers solicit without the clients best interest in mind. Greed played a big part in the mortgage meltdown. I’m hoping to help turn it around one loan at a time.
*UPDATE* I am a finishing up my degree and classes had just started a week ago. There is a lot of transformations going on and I would like to apologize to the readers of this blog for not posting regularly like I should. There has been a few changes.
The Down Payment Assistance programs are most likely going to be non existant by october 1st of this year. This is very close. It will be one of the Bush administration’s final blow to the mortgage industry. Although I understand the reasoning behind its dismantlement, the down payment assistance program helps alot of renters that don’t want to throw their money out the window with monthly payments to their landlords. It will be devistating to many.
*Exciting News* – Ford Financial is now one of 3 institutions helping with a 220 apartment units transition into condominiums. This is great for us because the other two banks have a limit credit score or they can’t do the conversion. I know we will help alot of people stay in their homes.
If you have any questions about your current mortgage, credit repair, or getting a mortgage please contact us today!
Hello everyone! We are in the process of creating a fully functional website. This is taking a while because we are looking into several different website services. We want the best serviced website to match the service we give to each and every client. This is the site that we have up right now. We hope we will be making the mortgage process a painless procedure. You can apply online, fax all the documents you need, log in to our site and get updates about where you stand in the loan process. Also, by doing this maybe we can save some trees!
I suggest you check it out. Especially if your in the market right now looking for a top notch mortgage professional to finance your dreams.
We always love when visitors come by. If your in the Somerville, New Jersey area don’t be afraid to walk in and see what Ford Financial is up to!
Our Address is 14 E. Main Street
Somerville, NJ 08876
Right across from the Court House and next to the Courthouse Deli!!
You’ve worked hard to own your home. If you are 62 years or older or know someone that is 62 years and older that would benefit you or someone you know could be converting some of your home’s equity into tax-free income. Whether you use that money to pay bills, cover taxes, or finally buy that vacation home, youll have a newly found peace of mind.
I know reverse mortgages may SEEM confusing. But really it’s a pretty simple process. Let me show you.
Basically the name explains it. Instead of paying off the mortgage when you first buy a house, the bank pays YOU an equivalent of that same mortgage payment every month. But just like with a regular mortgage you have choices.. (By the way the money you or someone you know will receive is Tax-Free.)
Choice A – Lump sum – Make funds availabel immediately
Choice B – line of credit – Makes funds available upon request – If not touched it will GROW
Choice C – Monthly installments – Fixed installments based on requirements
Choice D – Line of credit + Monthly installments (My personal favorite) – Receive a monthly payment while having the line of credit growing there for any emergencies.
So who is elgible?
Anyone 62 years or older and occupies the residence atleast 6 months out of the year. The home must be owned free and clear or have a small remaining balance that can be paid with the reverse mortgage.
NO INCOME, EMPLOYMENT, OR CREDIT REQUIRMENTS NEEDED
Why would this benefit anyone?
The reverse mortgage customer retains ownership and lives in their home
Cash advances can be used for any purpose.
Loan proceeds are not considered income and will not affect social security or medicare benefits.
What types of interest rate options are there?
The reverse mortgage is a variable-rate loan linked to the one year U.S. Treasury Security Rate which does not change very often. Any adjustment to the rate has no effect on the number of loan advances a customer can receive, but causes the loan balance to grow at a faster/slower rate.
Typically, there is no out of pocket expenses.
How is the reverse mortgage repaid?
It can be repaid at any time. You can get a reverse mortgage, sell your home a year later, and receive the balance of the equity. There is no requirement that the house be sold, just that the loan is repaid.
Hopefully that answered alot of questions out there.. If theres anything that didn’t fully absorb, Give us a call any time! Check out our Contact page
As some of you know the Down Payment Assistance programs offered by FHA were on the verge of being shut down. Something like 30% of all FHA government loans were done with downpayment assistance programs. The two most popular non-for-profit’s, Nehemia and Ameridream, were in question of whether or not they actually were non-for-profits and if they deserved to stay afloat.
Well i’ll just copy and paste the email I recieved the other day…
August 1, 2008 Last night, Congress introduced bipartisan legislation, H.R. 6694 <https://www.ameridream.org/Documents/Congress/HR6694.pdf> that would reauthorize and reform charitable downpayment assistance. This bill would remedy a harmful provision in the new housing law which limits homeownership opportunities for low and middle-income Americans. The legislation, sponsored by U.S. Reps. Al Green (D-TX), Gary Miller (R-CA), Maxine Waters (D-CA), and Christopher Shays (R-CT) reauthorizes and reforms charitable downpayment assistance funded in part by sellers, which has helped over one million families and individuals become homeowners since 1999. The program was eliminated by legislation signed by President Bush on July 30, 2008. The Green-Miller-Waters-Shays plan would re-authorize and reform non-profit downpayment assistance and secure it as an allowable source for FHA borrowers. The bill seeks to ensure that providers of the downpayment assistance operate in a transparent manner to guard against conflicts of interest. The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers. It is important that you contact your elected officials in Congress and tell them that you support downpayment assistance and urge them to support H. R. 6694. To reach your elected officials, please call the US Capitol Switchboard at 202.224.3121. To learn how you can support it, visit http://www.supporthomeownership.com <http://takeaction.supporthomeownership.com/ahaa/issues/alert/?alertid=11521436> . AmeriDream continues to be your trusted advisor, bringing timely and accurate information when you need it most. Thank you for your continued support and confidence.
We at Ford Financial pledge to always give you the real deal, up to date information about your home mortgage and the benefits/downfalls that come with it. Contact us today if you have any questions!!
When it comes to Ditech, you’ve got a big name your dealing with. I’m sure everyone’s seen the commercials offering low rates. What I don’t understand is how they can run an ad with a set rate when rates can change HOURLY. Must be all that fine print. Ever read all that fine print? There are alot of fee’s involved in that fine print that your local mortgage broker (Ford Financial) won’t ever charge you. Like a “Lock in Fee”. They actually charge you money to lock in an interest rate.
..Like you even know when the best time to lock in a rate is?
That’s not meant as an insult in anyway, one of the advantages you get with us is the expertise of when to lock in the rate. Usually, our clients say. “ok I trust you just lock me in whenever you feel it will be the lowest”. This could mean saving you a hundred bucks every single month because you went with a knowlegable loan officer rather than a profit machine. So Whatever you do, if you dont use us here at ford financial, just please dont use Ditech.
Disclaimer – Ditech is probably an upstanding mortgage company that will finance/refinance your home. What it comes down to is EVERYONE offers the same low rates, Ditech is no lower than our rates, the difference is the knowledge our loan officers have in getting you the perfect loan while giving you the perfect service. So, go ahead and give us a look, you’ll be glad you did.
Sharon Ford's Blog 