20262 4TH AVE Stevinson Ranchette 3bds/3-1/2bths 9.66acres

Price Reduced $515,000

Property Description for 20262 4th Ave, Stevinson CA 95374

Imagine the possibilities… almost 10 quiet acres, room for custom home, barn & business. Minutes to Hwy140 & 9 miles to Turlock; great shopping, medical facilities & university. Current home is 3bds/2bths built in 2004, sits back off road for privacy. Detached building has 2 offices, 1/2 bath & kitchenette. Detached garage has full bath & guest quarters. Property extends to irrigation ditch at rear of property. Includes a pump house and storage building, mobile home is negotiable.

  • Property Class: Residential
  • Listing Status: Active
  • City: Stevinson
  • State: CA
  • Zip: 95374
  • Area: 20416 – Stevinson
  • County: Merced
  • Class: Single Family
  • Property Subtype: 1 House on Lot
  • Approx Lot Size: 9.660
  • Stories: 1
  • Beds: 3
  • Baths Total: 4
  • Baths (F/H): 3/1
  • Living Area (SqFt): 1,456 sqft
  • Lot Sq Ft Apx: 420790
  • Garage: 2
  • Year Built: 2005
  • Listing#: 18011040
  • School District: Merced
  • Association: Default MLS Association
  • Value Range Price (H/L): $0
  • List Date: 2/23/2018
  • Last updated on: 3/14/2018

Property Features for 20262 4th Ave, Stevinson CA 95374

  • Bedrooms: 3.00
  • Acres: 9.660
  • Area: 20416 – Stevinson
  • Air: Central
  • Energy Features: Ceiling Fan(S), Dual Pane Full
  • Exterior: Wood
  • Foundation: Concrete Slab
  • Heat: Propane
  • Kitchen Description: Counter Stone
  • Master Bath: Shower Stall(S)
  • Road Description: Gravel, Public Maintained
  • Room Description: Great Room Concept
  • Style Description: Contemporary
  • Utilities: 220 Volts, Propane
  • Baths Other: Tub W/Shower Over
  • Dining Description: Breakfast Nook, Dining/Living Combo, Space In Kitchen
  • Features Misc: Patio Covered
  • Floor Covering(s): Laminate
  • Kitchen Appliances: Dishwasher, Range Gas F/S, Refrigerator F/S
  • Master Bedroom: Closet
  • Recreational Parking: Boat Storage, RV Storage
  • Security Features: Gate Unguarded, Secured Access, Security Sys Owned, Video System
  • Site Description: Level, Shape Regular
  • Water: Well Domestic
  • Construction: Frame
  • Improvements: None
  • Laundry Description: In Garage, Inside Room
  • Other Structures: Outbuilding, Tool Shed
  • Roof Description: Comp Shingle
  • Sewer: Septic Connected
  • Subtype Description: Ranchette/Country

Additional Information for 20262 4th Ave, Stevinson CA 95374

  • HUD: No
  • APN: 055-177-018-000
  • School County: Merced
  • CCRs: No
  • Census Tract: 4.01
  • Lot Measurement: A
  • Pool Y/N: Yes
  • School District 1: Hilmar Unified
  • Lot Dimensions: 323 X 1304
  • Square Footage Source: Assessor/Agt-Fill

A Glimpse at Life Without the 30-Year Fixed-Rate Mortgage

As Congress contemplates a permanent fix to its decade-long “temporary” mortgage patch, the lore of the 30-year fixed-rate mortgage is permeating Capitol Hill.

Mortgage giants Fannie Mae and Freddie Mac (known as Government Sponsored Enterprises, or GSEs) don’t issue mortgages directly. Instead, they buy certain mortgages originated by other lenders and bundle them into mortgage-backed securities that are then sold to investors. Critically, these securities are guaranteed against default by Fannie and Freddie, protecting investors and making the securities more attractive. That guarantee enables long-term mortgage products like fixed, 30-year loans to be made widely available at lower rates.

But Fannie and Freddie have been under conservatorship of the federal government since 2008, which means those guarantees are largely backed by U.S. taxpayers, not private capital. Because Fannie and Freddie play such an outsized role in mortgage finance in this country, one of the longstanding legacies of the recession is that taxpayers today back a large majority of the nation’s mortgage market. Fears around the degree to which taxpayers would be on the hook if the market soured have kept Fannie and Freddie in Congress’ crosshairs.

Hoping to reduce taxpayers’ risk, policymakers are considering changing the guarantee, which may lead to a shift toward adjustable-rate products, higher fixed interest rates and/or shorter-duration loans. Those opposed to curtailing the government’s guarantee argue that without it, today’s 30-year fixed-rate mortgage could change drastically – to borrowers’ detriment.

What exactly would lending – and, critically, borrowers’ monthly costs – look like without the venerable 30-year, fixed-rate mortgage that has become the bedrock of housing finance? The Bureau of Labor Statistics estimates roughly seven in 10 mortgages held in 2014 were 30-year fixed-rate.

The figures below provide a glimpse at mortgage alternatives, and illustrate how sensitive house payments are to changes in interest rates and loan duration (use our comparison tool to see the differences across metro areas).

30-Year Fixed-Rate Mortgage, at Current Rates

  • The most common mortgage product today is the 30-year fixed rate mortgage. Last month, to buy the typical U.S. home with a 30-year fixed rate mortgage, the monthly payments would be $777, or 15 percent of the metro’s median income.

Adjustable-Rate Mortgage, at Current Rates

  • If the terms of 30-year fixed-rate mortgages become less favorable after GSE reform, more buyers could choose adjustable-rate mortgages (ARMs). While ARMs often provide a better deal for the first few years of the loan, rates and payments eventually increase unless a borrower refinances. Last month, to buy the typical U.S. home with an adjustable rate mortgage, the first year’s monthly payment would be $736 or 15 percent of the metro’s median income. But those payments would rise when the adjustment takes place.

Non-Conforming Jumbo Loan, at Current Rates

  • Another possibility as a result of GSE reform is that interest rates could climb in response to the elimination of a government guarantee. We don’t know how much they might climb, but they could resemble rates on current loans that don’t have a government guarantee: non-conforming, jumbo loans (a relatively small market currently skewed toward the wealthy). So the exact terms of today’s jumbo loans may not scale to the larger housing market. Last month, to buy the typical U.S. home with a 30-year, fixed rate, non-conforming jumbo mortgage, the monthly payments would be $797 or 16 percent of the nation’s median income.

30-Year Fixed-Rate Mortgage, at 7 Percent Rate

  • Interest rates overall are at historic lows, but reforms to Fannie and Freddie in tandem with other trends in the economy could raise mortgages rates across the board. If they reach 7 percent, a rate common 20 years ago, monthly payments could rise substantially. Last month, to buy the typical U.S. home with a 30-year fixed rate mortgage common in the late ‘90s, the monthly payments would be $1,098 or 22 percent of today’s metro median income.

15-Year Fixed-Rate Mortgage, at Current Rates

  • Even if rates remain similar to today, more buyers may shift toward shorter-term loans as a result of GSE reform and/or other economic shifts. While today’s 15-year, fixed-rate mortgages usually provide lower interest rates, the shorter time frame makes each payment larger. Last month, to buy the typical U.S. home with a 15-year fixed ratemortgage, the monthly payments would be $1,166 or 23 percent of the metro’s median income.

15-year Fixed-Rate, Non-conforming Jumbo Mortgage, at Current Rates

  • Finally, it’s possible that rates rise and buyers move toward shorter-term loans. In that case, new loans could resemble 15-year, fixed-rate, non-conforming jumbo loans. Last month, to buy the typical U.S. home with a 15-year fixed rate non-conforming mortgage, the monthly payments would be $1,210 or 24 percent of the metro’s median income.

We don’t know what exact effects, if any, GSE reform might have on the 30-year mortgage. It’s possible any resulting dominant mortgage product would be wildly or only mildly different from what we have today. The figures in the comparison tool above provide a glimpse at mortgage alternatives and illustrate how sensitive house payments are to changes in interest rates and loan duration.

If monthly payments soar and stay elevated, at some point we’d expect home prices to fall in response to this decreased purchasing power. However, while some households may be able to absorb the extra borrowing cost, in the nearer term first time homebuyers or buyers on the margin could feel a real pinch as homeownership becomes less affordable.

Source: forbes.com ~ By: Svenja Gudell 

7 Factors to Consider When Searching for the Perfect Neighborhood

Good restaurants aren’t the only amenities worth looking for in a neighborhood.

You can remodel a home, but there are some things about a neighborhood you can’t change. And many neighborhood factors can add value to your home. Here are some of the best features to look for:

Nearby Services
If restaurants, a grocery store, post office, bank and other retail services are within walking distance of your home, chances are you’ll use them more often. A short drive to them isn’t so bad either, but walking or biking out to lunch can make a home much more marketable. Police and fire services should also be nearby.

Walkability
A walkable neighborhood helps your health, the environment, finances and the community. The average resident of a walkable neighborhood weighs 6 – 10 pounds less than someone who lives in a sprawling neighborhood, according to Walk Score—an app that measures walkability.

Not driving a car lowers a household’s expenses, and for every 10 minutes a person spends in a daily car commute, they spend 10 percent less time in community activities, Walk Score says.

A truly walkable neighborhood can have a town center or public space nearby with enough people for businesses to flourish and public transit to run frequently. It may have affordable housing located near businesses, plenty of public parks, buildings close to the street and parking lots in the back to encourage pedestrians. It might also be close to schools and workplaces so people can walk from home. Lastly, its streets may be designed for bicyclists, pedestrians and transit.

Dog Parks
Parks and green space are beneficial to everyone, but dog owners specifically need parks and walking trails to exercise their pets. Look for a clean dog park within walking distance of the home you want to buy. See if the dogs are well trained and get along, which can make going to the dog park more enjoyable.

Planned Improvements
Check with the city’s Planning Department to see what improvements are planned for the neighborhood and when they’re scheduled to be completed. Is a four-story apartment complex planned for an empty lot near your home? Will streets be widened? Are certain retailers coming soon?

Mature Trees
Trees can cut a home’s cooling bill in half in the summer and can block wind in the winter to reduce heating by 20 – 50 percent. A healthy, mature tree can add $1,000 – $10,000 to the value of a home, according to the Council of Tree and Landscape Appraisers. Large, healthy trees can be worth preserving and can add to the aesthetics of a neighborhood.

Source: rismedia.com

Housing in 2018: Where Are Home Values Headed?

Analysts are expecting even higher home prices in 2018 than originally projected, according to new research.

Zillow’s 2017 Q4 Home Price Expectations Survey reveals experts are anticipating a 4.1 percent hike in the new year, up from the 3 percent they forecasted a year ago. Over 100 experts, including economists, participated in the survey.

Their reasoning? Home-building has not panned out as planned—yet.

“The American labor market is stronger than it’s been in decades, and Americans, particularly young Americans, are increasingly feeling confident enough to buy homes,” says Aaron Terrazas, senior economist at Zillow. “Home-building has not kept pace with this surge in demand and remains well below historical norms. We don’t expect that these demand-supply imbalances will fundamentally shift in 2018. Demand will continue to grow and, though supply should increase somewhat, we still won’t build enough new homes to meet this demand, contributing to higher prices.”

Less than 20 percent of experts forecast home-building to pick up next year, the survey shows. Approximately 313,000 new homes were on the market in October, representing 4.9 months supply, according to the U.S. Census Bureau. Entry-level homes, especially, are scarce—down 20.4 percent year-over-year over the summer, reports Trulia.

Additionally, experts foresee increasing mortgage rates, with the 30-year, fixed rate ranging anywhere from 4.28 to 4.70 percent. Currently, the 30-year averages 3.90 percent, according to Freddie Mac.

“Higher mortgage rates will eat into buyers’ budgets, putting even more price pressure on the most affordable homes for sale,” Terrazas says. “Unless there is a fundamental shift in the number and type of homes for sale, this is the new normal of the American housing market.”

One factor in the health of the housing market is the homeownership rate; experts predict it, too, will rise, though slightly, to 64 percent. The homeownership rate has improved twice thus far this year, up to 63.9 percent in third quarter, according to the Census.

Beyond 2018, analysts are divided.

“Our most optimistic group of experts projects average annual home value appreciation of almost 5 percent annually through the five-year period ending in 2022, while the most pessimistic group expects an average annual rate of just 1.4 percent,” says Terry Loebs, founder of Pulsenomics, which conducted the survey in conjunction with Zillow. “I don’t foresee a stronger consensus emerging until we have greater clarity concerning tax reform and the pace of entry-level home building.”

For more information, please visit www.zillow.com.

Source: rismedia.com ~ By: Suzanne De Vita

 

What Is Your Property Really Worth?

Question. Over the years, I have been involved in questions dealing with the value of certain property. This has involved such diverse issues as appealing the County’s assessment for tax purposes, obtaining a refinance mortgage to avoid private mortgage insurance, and recently challenging an IRS valuation of property we just inherited.

Is there a way to determine what our property is really worth. We have often obtained different appraisals on the same property, and would like to determine our true net worth. How do the appraisal prices work?

Answer. The most commonly used method to determine the value of one’s property is to obtain an independent appraisal from an experienced appraiser. However, appraising market value of real estate is an art — and not a science. And at best, it is an inexact art. My own experience with appraisals and appraisers has led me to question the validity of a number of appraisals.

It should be understood that an appraisal is an estimate and an opinion of value. The appraisal will not determine or establish the value of your property, but it can only estimate what that value is. The Supreme Court of the United States has defined fair market value as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”

All too often, however, the appraiser does not understand — or even know — the neighborhood, and brings to bear his or her subconscious prejudices while considering the value of your house. This is even worse now since lenders often have to rely on appraisers who are not even in the locality of the property.

There are three methods used by appraisers. First, the cost approach. Under this method, the cost of reproducing the building is added to the value of the land, and a discount is applied for depreciation and deterioration that the buildings might have suffered.

A second approach is known as the capitalization of income. Since this is generally used in considering income-producing property, and is complicated and controversial, this column will not enter into a discussion of this approach.

The third formula is known as the market comparison. Here, the appraiser must consider the value of comparable properties, and once again, this is a highly subjective task. For example, your next door neighbor’s house recently sold for $410,000. Your house looks identical to your neighbor’s from the outside.

But inside your house there are major differences. You have a finished basement; your neighbor does not. You have wall-to-wall carpets; your neighbor does not. You have recently installed a very modern kitchen; your neighbor’s kitchen is from the l940’s.

Needless to say, unless the appraiser actually visits and inspects both houses, the comparable method may adversely affect you.

Nevertheless, this market comparison method is widely utilized by appraisers in determining property values for mortgage lenders.

This does not mean to imply that you must take the appraisal without question. Here are some tips in dealing with your appraiser:

1. Insist on obtaining a written report from the appraiser. Obtain the appraiser’s name and address, and inquire as to the methods used to determine the value of your property.

2. If the appraisal was obtained by a mortgage lender, appeal that appraisal through that lender. Advise the lender you are dissatisfied with the value placed on the property, and that you will insist on a second appraisal being done, by an appraiser of your selection.

3. Although it may be considerably more expensive for you, it may be worth your effort to hire your own appraiser. While they have to give you an objective, independent market value determination, you certainly have the right to obtain your own evaluation as to the worth of your property.

Several years ago, the United States Tax Court was called upon to determine — for estate tax purposes — the value of certain property located in New York city. The Court concluded that a 19 percent discount from market value should be applied to the property because the decedent owned a small percentage of the property and could not — by himself — exercise full control over the property. Furthermore, the Court discounted another 26 percent because of market conditions in New York in the late l980s. (Barudin v. Commissioner, T.C. Memo. 1996-395). Thus, each property is different, and you — and your appraiser — should be completely familiar with all of the factors to be considered when determining the market value of your property.

Incidentally, there is a legal provision contained in the Equal Credit Opportunity Act of 1991 that should utilized by every mortgage borrower in this country. In Section 701(e) of the Act, Congress made it clear that every creditor “shall promptly furnish an applicant, upon written request by the applicant made within a reasonable period of time of the application, a copy of the appraisal report used in connection with the applicant’s application for a loan that is or would have been secured by a lien on residential property.” The law does permit the creditor to require the applicant to reimburse it for the cost of the appraisal.

It is strongly recommended that everyone request and obtain a copy of the appraisal report from the mortgage lender.

There are, of course, on-line websites that attempt to project — or perhaps predict is a better word — the value of your house. While all these are helpful, I would not rely solely on what you see on the internet.

Source: realtytimes.com  ~ By: Benny Kass

How Much Commute Is Too Much Commute?

Rising home prices send buyers further out of the city in search of an affordable home – or more home than they can swing closer to where they had rather be. It’s an age-old tale and one that forces buyers to accept a cringe-worry tradeoff for a home of their own: a longer commute.

Currently, the average commute is around 26 minutes, but anyone in Los Angeles or New York or Dallas or Chicago or any one of the dozens of cities across the country with a lengthy commute would scoff at that number.

WNYC’s cool commuter map allows you put your cursor on different cities and areas throughout the country and see its average commute time, like the 60.5-minute average in Sonoma County, CA and the 18.3-minute average for North Canaan, CT. Overflow Data’s similar interactive map uses census data of the average commute times throughout the U.S. “Zoom in on a state, or check out the range within each state,” said Lifehacker. “Commutes are worst along the East coast; L.A. traffic still isn’t as bad as New York subways. And the worst commutes of all are in Pike County, PA, a three-hour drive from New York.”

According to Census Bureau data, commutes have increased by 20 percent since they first started tracking them in 1980. The combination of continued urban sprawl and rising home prices will likely cause this number to jump even further over the next few years. The good news is that remote work and flexible schedules are also on the rise. “The number of telecommuting workers has increased 115% in a decade, according to a new report from Global Workplace Analytics and FlexJobs,” said CNN: Money. “That translates to 3.9 million workers, or almost 3% of the total U.S. workforce, working from home at least half the time in 2015, an increase from 1.8 million in 2005.” Negotiating some flexibility into your schedule or new job offer could reduce the number of days you have to drive to work and make a longer commute easier to deal with.

How much is too much?

The question of “How much commute is too much commute?” is one that each individual has to answer for themselves. Twenty minutes each way may not seem like a big deal, but what if it creeps past 30? And what if you’re considering becoming a “super commuter,” defined as someone who commutes three hours per day, like nearly four million American workers do? “That works out to more than a full month out of the year commuting,” said the Washington Post. “Imagine spending the entire month of August – 24 hours of every day – stuck in your car or riding the bus.”

Chances are you’ll go through the five stages of grief – denial, anger, bargaining, depression, and, finally, acceptance when weighing the advantages of owning a home against the disadvantages of never being there. But the acceptance here can take two roads: In one, you realize you don’t want to spend so much time in the car and ask your Realtor to start looking into areas that are closer in; the other requires you to resign yourself to this new reality of a daily date with a packed freeway, a grande mocha, and endless morning radio shtick.

The dangers of long commutes

Before you pull the trigger on a house with a 45-minute commute each way, there are a few things you’ll want to ask yourself:

How much will this actually change your life? If you’re buying a new home for your family but you never see them because you’ll be leaving for work at the crack of dawn and getting home after the kids go to bed, is it worth it? The fact that townhomes are currently the “fastest-growing segment of the single-family housing construction market,” according to the National Association of Home Builders, is important to note. “They made up about 12.4% of all new construction in the single-family home market last year, according to U.S. Census Bureau data,” proving that many homebuyers are seeking out attached residences that are often well-located for their needs and more affordable than single-family homes in the city.

How much time can you really see yourself spending behind the wheel before you lose it? Are you able to zone out and enjoy the ride, or are we talking potential road rage situation?

Have you considered the added costs? More gas, tolls, and wear and tear on your car can add to your bottom line and chip away at the savings you thought you’d enjoy with a home out in the suburbs.

What about the cost to your mental health? It’s not just about road rage. You may think you can adapt to anything, but commuting can be a serious buzzkill. “In happiness studies, commuting consistently ranks at or near the bottom of human activities,” said Smartasset. “The biggest offender is commuting alone in a car. It makes us feel more isolated and powerless, and cuts into our time for community engagement, exercise and sleep.” Nobel laureate Daniel Kahneman and economist Alan Krueger did a study with 900 Texas women and found that, “People hate their commutes more than just about any other activity in their lives,” said the Washington Post. “The morning commute came in dead-last in terms of positive emotions, behind work, child care, and home chores.” Higher rates of divorce and depression have also been linked to long commutes.

Have you thought about the effect on your body? Longer commutes have been linked to everything from high cholesterol, high blood pressure, and obesity to back and neck issues.

Source: Realtytimes.com ~ By: JAYMI NACIRI

Don’t Wait: Buying Will Cost More in Just One Year

Are you on the fence about owning a home? It may be better to buy now than wait.

The nation’s median home value is expected to grow by $6,275 to $208,975 just one year from today, according to Zillow, adding on to the already considerable funds homebuyers need now to own a home. The average homebuyer, in fact, has to add $105 more each month to their down payment savings (assuming a 20 percent down payment on a median-priced home) over the next year, or $1,260 total, to keep up with the rise in values.

In other words: It costs more to hold off.

“Sky-high rents and rising home prices are putting first-time buyers in a bit of a catch-22,” says Dr. Svenja Gudell, chief economist at Zillow. “Buying now with a low down payment can be riskier, and the offer may not be considered as competitive by the seller; however, a renter who saves for another year to reach a larger down payment may find that the home they love today is outside their budget a year from now. For those considering buying in the next year, getting into the market today may make more financial sense than they think.”

Homebuyers in hotter markets have to contribute even more to their savings if they wait. In San Jose, Calif., the average homebuyer has to add $599 more each month to their savings to purchase a median-priced home ($1,088,434) with 20 percent down ($1,088,434); in Seattle, Wash., the average homebuyer has to add $394 more each month to their savings to purchase a median-priced home ($479,451) with 20 percent down.

In other markets:

San Diego, Calif.
Additional Down Payment Savings Per Month: $267
Expected Median Home Value (Sept. 2018): $569,906

Riverside, Calif.
Additional Down Payment Savings Per Month: $266
Expected Median Home Value (Sept. 2018): $348,949

Sacramento, Calif.
Additional Down Payment Savings Per Month: $246
Expected Median Home Value (Sept. 2018): $388,336

Las Vegas, Nev.
Additional Down Payment Savings Per Month: $229
Expected Median Home Value (Sept. 2018): $247,331

Portland, Ore.
Additional Down Payment Savings Per Month: $227
Expected Median Home Value (Sept. 2018): $383,348

Boston, Mass.
Additional Down Payment Savings Per Month: $206
Expected Median Home Value (Sept. 2018): $443,047

San Francisco, Calif.
Additional Down Payment Savings Per Month: $192
Expected Median Home Value (Sept. 2018): $876,938

Denver, Colo.
Additional Down Payment Savings Per Month: $181
Expected Median Home Value (Sept. 2018): $383,667

Source: rismedia.com ~ By: Suzanne De Vita

Who Owns the Home When Two Names are on the Mortgage?

We shed some light on buying a home as a couple so you’re not in the dark when it’s time to sign on the dotted lines.

When couples start a new journey as homeowners, questions can linger as to whose name (or names) should be listed on the mortgage and title. Many couples want a 50/50 split, indicating equal ownership to the asset, but sometimes that isn’t the best financial decision. Plus, with more than one person on the loan, the legalities of who owns the home can get tricky. A home is often the largest purchase a couple or an individual will make in their lifetime, so ownership can have big financial implications for the future.

Title vs. mortgage

For starters, it’s important to note the difference between a mortgage and a title. A property title and a mortgage are not interchangeable terms.

In short, a mortgage is an agreement to pay back the loan amount borrowed to buy a home. A title refers to the rights of ownership to the property. Many people assume that as a couple, both names are listed on both documents as 50/50 owners, but they don’t have to be. Listing both names might not make the most sense for you.

Making sense of mortgages

For many, mortgages are a staple of homeownership. According to the Zillow Group Consumer Housing Trends Report 2017, more than three-quarters (76 percent) of American households who bought a home last year obtained a mortgage to do so.

When a couple applies jointly for a mortgage, lenders don’t use an average of both borrowers’ FICO scores. Instead, each borrower has three FICO scores from the three credit-reporting agencies, and lenders review those scores to acquire the mid-value for each borrower. Then, lenders use the lower score for the joint loan application. This is perhaps the biggest downside of a joint mortgage if you have stronger credit than your co-borrower.

So, if you or your partner has poor credit, consider applying alone to keep that low score from driving your interest rate up. However, a single income could cause you to qualify for a lower amount on the loan.

Before committing to co-borrowing, think about doing some scenario evaluation with a lender to figure out which would make more financial sense for you and your family.

True ownership

If you decide only one name on the mortgage makes the most sense, but you’re concerned about your share of ownership of the home, don’t worry. Both names can be on the title of the home without being on the mortgage. Generally, it’s best to add a spouse or partner to the title of the home at the time of closing if you want to avoid extra steps and potential hassle. Your lender could refuse to allow you to add another person — many mortgages have a clause requiring a mortgage to be paid in full if you want to make changes. On the bright side, some lenders may waive it to add a family member.

In the event you opt for two names on the title and only one on the mortgage, both of you are owners.

The person who signed the mortgage, however, is the one obligated to pay off the loan. If you’re not on the mortgage, you aren’t held responsible by the lending institution for ensuring the loan is paid.

Not on mortgage or title

Not being on either the mortgage or the title can put you in quite the predicament regarding homeownership rights. Legally, you have no ownership of the home if you aren’t listed on the title. If things go sour with the relationship, you have no rights to the home or any equity.

To be safe, the general rule of home ownership comes down to whose names are listed on the title of the home, not the mortgage.

Source: zillow.com ~ BY BRITTAN JENKINS

How To Get The Biggest Tax Break When You Sell Your Home

Well, the time has finally arrived. After more than 22 years, we have begun the process to sell our home.  Our three daughters have all established themselves in New York and Boston and a multi-bedroom house seems way too large for the two of us.

We have begun the exhausting and time-consuming task of de-cluttering 22 years of life.  We followed the approach of many – which is, if you have closet space you might as well fill it.  And fill it we did.

There is an important financial aspect regarding selling a home that you have lived in for many years that deals with an issue in the tax code.  It is a valuable tax break available to sellers of a personal residence, whether house, condo or co-op.  It allows for exclusion – meaning you pay no taxes to the Internal Revenue Service – for certain amount of capital gains on the sale.

The exclusion which currently is capped at $500,000 for married couples who file jointly and $250,000 for singles and married couples who file separate returns.  As we are married and file a joint return so we will be able to exclude $500,000 in gains from the taxman.

How do you claim this exclusion? It all starts with the original cost of your home.  This is known as cost basis.  What can be added to the original cost basis are any home improvements as well as the costs incurred when buying or selling the home such as real estate commissions.

This is where good record-keeping comes in handy.  When you improved your home by adding new windows or undertook a large addition, these amounts get added to the original cost basis.  In our case, we undertook two large renovations which will be able to offset potential gains from the sale price.

If you are able to sell your home in excess of this cost basis plus the additions, normally these gains would be subject to taxes on the profit.  This profit would be taxed as a long-term capital gain tax, which for high-income sellers could be as high as 23.8% federal tax, as well as additional state taxes.

Now this is where the benefit comes in for exclusion.  A married couple filing jointly can exclude up to half million dollars of profit from any capital gains tax. A valuable tax break indeed.

To qualify for this tax break, the seller must have lived and owned the property for two out of last five years that ends on the day of the sale.  Not consecutive years, just two of the last five years.  In addition, sellers can only claim an exclusion every two years.

We have begun determining not just the original cost basis of our home, but all of the money that we added to the property in improvements over the last 22 years.  It’s a good idea to create a file that documents these home improvements as they occur so the task is easier when the time comes for them to sell.

Hopefully you have sold your home for more than you paid for it. And, if like many who are selling after 15 to 30 years, the likelihood is that you will have a capital gain from the sale of your home.

How do you determine the cost basis?  And what costs are allowed to be included in this calculation?

The IRS has specific guidelines and worksheets to assist you.  Publication 523- Selling your Home provides insights to determine your tax implications for your filing.

The following are some of the improvements that can be included to your cost basis:

Additions: Bedroom, bathroom, deck, garage, porch, patio.

Lawn and grounds:  Landscaping, driveway, walkway, fence, retaining wall, swimming pool.

Systems:  Heating, central air conditioning, furnace, duct work, central humidifier, central vacuum, air or water filtration, wiring, security system, lawn sprinklers.

Exterior:  Storm windows and doors, new roof, new siding, satellite dish.

Plumbing:  Septic system, water heater, soft water system, filtration system.

Insulation:  Attic, walls, floors, pipes and duct work.

Interior:  Built-in appliances, kitchen modernization, flooring, wall-to-wall carpeting, fireplace.

It’s helpful to begin to itemize all these improvements before you decide to sell your home.  These improvements that were completed over the years should be included in your cost basis before you file your tax returns.

If you would like to view what the tax collectors say on the subject, click here: IRS Guidelines. 

Source:  forbes.com ~ By: Larry Light 

5 Questions To Ask Your Estate Planner After The New Tax Law

An estate plan is like a car or a house: It needs regular maintenance to function as intended. Yet unlike your car or home, external events can create the need for adjustments. Among such events is legislation like the tax bill Congress passed in late December.

So this is an important time to schedule a meeting with your estate planner and be certain your plan is up-to-date. Even if your estate plan won’t be affected by the new tax law, it’s smart to confer with your estate planner periodically to be certain your current wishes are reflected in your estate planning documents.

During this checkup, you may find that your plan no longer meets all of your needs because of changes in your life and the lives of your heirs. Or you may find that your plan didn’t cover your needs from the get-go. In my experience, many clients leave their estate planner’s office with a thick folder of documents and fail to read them carefully or discuss them in detail with their planner before signing.

When you meet with a professional for a thorough evaluation and possible updating, you might ask some key question to assure your plan documents fully support your interests and those of your heirs, including these five:

1. Will the new federal law affect my estate tax picture?

Estate tax is the tax that estates pay governments upon death; when it applies, there’s less left for your heirs. The federal government exempts a certain amount of an estate’s value from this tax and Congress just doubled that amount, known as the exemption. The new law eliminated tax on estates for many wealthy families.

There will no longer be any federal tax on estates valued between $5.6 million and $11.2 million. Previously, the limit was $5.6 million. By exempting estates between $5.6 million and $11.2 million ($22.4 million for married couples), Congress gave substantial relief to all but the wealthiest families, since only about 5,000 estates per year are estimated to be above the new limit. So unless you’re rich (but not ultra-rich), the doubling of the exemption shouldn’t  affect your estate plan.

2. What does the new tax law mean by the exemption limit for married couples?

This can be confusing, since couples general die one spouse at a time. The exemption limit for couples refers to portability — the ability of a spouse to avoid estate tax on amounts inherited from the other spouse that were within the exemption limits. The new law preserves portability, which was introduced in a revision of tax rules by Congress in 2012.

To assure that exemption limits from the estate of a deceased spouse are portable, estate planning documents of the surviving spouse must correctly invoke portability, using the right language. Otherwise, the estates of these spouses might be forced to create something known as a bypass trust — a costly, time-consuming route that can have the effect of reducing the amounts that heirs ultimately receive.

3. Will the new federal law affect my state estate tax?

There are 15 states that still have some form of estate tax: Minnesota, Iowa, Nebraska, Washington, Oregon, Kentucky, Tennessee, Pennsylvania, New Jersey, Massachusetts, Rhode Island, Connecticut, Delaware, Maryland and the District of Columbia.

Some of these states yoke their exemption limits to the federal limits, so the federal increase will automatically trigger the same increase in those states. But some of these states have no such linkage, so their exemption limits will remain the same, assuming their legislatures don’t act to change them. (Some states have limits under $1 million.)

Detailed, state-by-state information on estate tax can be found on the Tax Foundation website.

4. Are my estate documents customized to fulfill my wishes and avoid unintended consequences?

Outcomes directly contrary to your intentions can result when documents aren’t specific enough because boilerplate, off-the-shelf documents were used without being customized to your situation. It’s not uncommon for this to happen with financial powers of attorney (POA), which direct how your finances are to be managed if you’re incapacitated and unable to make decisions.

Without specific provisions to assure your wishes are carried out, vague or overly general POAs — which don’t include specific provisions of wishes, limits and prohibitions — might allow the agent managing these finances (often, the person’s spouse) to:

Legally make gifts to whomever they wish and change beneficiaries on financial accounts — 401(k)s, IRAs, life insurance policies and annuities  In some cases, agent spouses have made gifts to themselves or their grown children from their first marriages or have designated these grown children as account beneficiaries without express permission.

Discontinue existing financial support for an aging parent or a disabled child

Manage the incapacitated individual’s assets in ways that person never would, such as taking risks that jeopardize the inheritance of heirs listed in the incapacitated person’s will

To prevent such negative outcomes, ask your estate planner to assure that your POA is specific enough.

5. How soon should I come in for another review of my estate plan?

Many experts advise doing a review every three years, and/or after major life changes, including: your divorce or the divorce of a grown child; the birth of a grandchild; your receipt of a significant inheritance; the sale of your business; your retirement; newly developed disabilities or chronic illnesses or a death in your family.

An estate plan should change with changing circumstances. By attending to this, you can show your loved ones that you cared about outcomes affecting them after you’re gone.

Source: forbes.com ~ By David Robinson, Next Avenue Contributor