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Propositions 60 and 90 and how they can help you save money on your next property purchase

March 9, 2017

save-money-6090

Information provided by BOE.CA.GOV

What is Prop 60?

The perks associated with being 55 or older don’t just come from AARP !  Prop 60 allows transfers of base year property values/property taxes within the same county (intracounty). This can save you thousands of dollars in property taxes on the new property you purchase!

What is Prop 90?

It allows transfers from one county to another county in California (intercounty) and it is the discretion of each county to authorize such transfers. So if approved, your savings can be put into effect for a purchase in another county!

What are the eligibility requirements for Propositions 60/90?

  1. You, or a spouse residing with you, must have been at least 55 years of age when the original property was sold.
  2. The replacement property must be your principal residence and must be eligible for the homeowners’ exemption or disabled veterans’ exemption.
  3. The replacement property must be of equal or lesser “current market value” than the original property. The “equal or lesser” test is applied to the entire replacement property, even if the owner of the original property purchases only a partial interest in the replacement property. Owners of two qualifying original properties may not combine the values of those properties in order to qualify for a Proposition 60 base-year value transfer to a replacement property of greater value than the more valuable of the two original properties.
  4. The replacement property must be purchased or built within two years (before or after) of the sale of the original property.
  5. To receive retroactive relief from the date of transfer, you must file your claim within three years following the purchase date or new construction completion date of the replacement property.
  6. Your original property must have been eligible for the homeowners’ or disabled veterans’ exemption either at the time it was sold or within two years of the purchase or construction of the replacement property.

The original property must be subject to reappraisal at its current fair market value at the time of sale, unless the buyer(s) of your original property also qualify the property as a replacement property for a base year value transfer due to disaster relief or a base year value transfer for a severely and permanently disabled person. Therefore, most transfers between parents and children will not qualify.

This is a one-time only benefit. Once you have filed and received this tax relief, neither you nor your spouse who resides with you can ever file again, even upon your spouse’s death or if the two of you divorce. The only exception is that if you become disabled after receiving this tax relief for age, you may transfer the base year value a second time because of the disability, which involves a different claim form.

Please contact me to discuss how you can take advantage of these tax saving opportunities! Just send me an email or call me at 619-888-2117. 
 

(For a more detailed Q & A regarding 60/90 visit this site or call the Assessment Services Unit at 916-274-3350.)

 

Should I Pay My Mortgage or Other Loans Off Sooner or Later

March 2, 2017

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Clients often assume it is always a good thing to pay a mortgage (and other debts like student loans) off sooner vs. later- however that is not always true.

Here are some things to consider and discuss with financial professionals like CPAs and Financial Planners:

1) How does your mortgage interest rate compare to rates on your retirement and investment accounts? The “extra” money you may be contributing to pay down the mortgage might earn more elsewhere if you have a low mortgage rate.

2) If you think you might apply for need-based college aid for your children home equity could count against you with some colleges because the equity is viewed the same as money in the bank.

3) There can be tax advantages to writing off mortgage interest and if that disappears early your tax liabilities could increase.
Remember, you can’t get the money back from the bank once you pay down the mortgage, however if after doing your research you decide paying off the mortgage early is to your advantage, Bankrate offers these illustrated options.

Consider me your #1 resource for all things Real Estate! Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

Home Projects and Resale ROI

February 23, 2017

Consider me your #1 resource for all things Real Estate! Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

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Lowering Credit Card Interest Rates

February 16, 2017

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Article: MDC FINANCIAL SERVICE GROUP

When was the last time you evaluated the interest rate on your credit cards? The higher the rate, the more that “borrowed’ money is costing you. If you’d like to keep more of your hard-earned cash, consider the following action plan for securing a lower rate.

Negotiate — Sometimes it’s as simple as asking. In fact, three out of four people who request an interest rate reduction are successful. First, take note of your history with the company, including how long you’ve been a customer and the timeliness of your payments, and collect interest rate offers you’ve received from their competitors. Then make the call, and share this information. If the representative can’t help, politely ask for a supervisor.

Transfer — Even if your company refuses to budge, you may be able to move your high-interest balance to another card. Companies frequently lure customers from their competitors with low-interest or even zero-interest offers. If you’re able to pay off your debt during the promotional period, you can save money just by making a switch. Just be sure to compare the terms of each offer before you decide to go for it.

Improve — It’s always worth it to take steps to improve your credit score, which impacts your ability to qualify for low rates. Paying off debt is key, but there are other things you can do as well. Set up bill reminders or automatic payments to ensure timely payments, correct errors on your credit report and keep your balance low compared to the credit available on your card.

It may take a little while, but once you successfully reduce your interest rates, you’ll have more money at your disposal to achieve your financial goals.

Consider me your #1 resource for all things Real Estate! Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

Is a 15 Year OR 30 Year Mortgage Loan Better For You?

February 9, 2017

Home finance

 

From MDC Financial Service Group

If you’re looking to buy a home, one of the biggest decisions you’ll make is whether to go with a 15-year or a 30-year mortgage loan. There are some simple and straight forward mortgage calculators available online that will give you a good ballpark figure of what you can expect to be out each month based on which mortgage option you select, however, they are other things to take into consideration besides your monthly mortgage payment. An experienced mortgage professional will be able to guide you through the differences between a 15-year and a 30-year loan, but we’ve also collected some factors to think about when deciding what is best for you and your family.

What are the key differences between a 15- and 30- year loan?

The most obvious difference is the term of the loan. Additionally, generally 15-year loan terms will come with lower interest rates. The shorter term of the 15-year mortgage means that you’ll make higher mortgage payments each month, but you’ll save in the long term via both the lower interest rate you’ll have on your shorter-term loan and also because you’ll pay more towards the principal each month and you’ll pay less in overall interest than you would on a 30-year loan. Did you know that you might pay almost double with a 30-year mortgage over what you would pay on the same mortgage that’s a 15-year term? What would you do with the savings?!

Some people assume at first that your monthly mortgage payment on a 15-year mortgage will be double what it would be on a 30-year mortgage, but this simply isn’t the case. 15-year mortgages generally come with a payment that’s about 45-50% higher than it would be spread over 30 years – though you’ll want to consult a mortgage professional to determine mortgage payment amounts for your unique purchase and financial situation. For example, if you took out a $200,000 loan at 4% interest, you would expect to pay about $1475 each month for 15 years, or $955 a month for 30 years. As you can see, paying roughly an additional $500 a month will net you a home that’s paid off in just 15 years.

What are some considerations when deciding between a 30-year or 15-year mortgage?

You’ll want to talk to your lender and weigh any original fees, closing costs or other fees accompanying the loan and whether those amounts may vary between 15 and 30-year term mortgages. Also, you’ll want to look at where you’re at financially and in life: will you be nearing retirement in 15 years or in another position where having a paid-off home would be more benefit? Could you get a better rate of return investing the additional money you would have put towards your home, making a 30-year mortgage the better financial option? Do you have enough income and liquid savings to comfortably swing the additional mortgage payment each month that comes with a 15-year loan?

We suggest talking to a mortgage professional before deciding which loan is best for you. An experienced lender will be able to adequately evaluate your financial situation and discuss your concerns in order to help you make the best decision for you and your family.

 

Consider me your #1 resource for all things Real Estate! Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

Real Estate Forecast for 2017

January 30, 2017

 

 

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Another year has come and gone so it is time to reflect on what was and what may be!

The year 2016 was unprecedented in many ways and the housing market road the wave-experts anticipated increased building activity but production was still inadequate, prices appreciated beyond expectations with many crossing the 2006 peak mortgage rates toyed with record lows before crossing 4% for the first time in two years.

Here are some trends that shaped our state’s residential real estate market:

  1. Tight inventories. Many homeowners were too nervous to enter the competitive market and cautious of what they might face as home buyers. I helped six clients successfully sell their    current home and buy their new home, most without having to move twice. Through teamwork and strategy it can be done!
  2. Lower home ownership rates. Rates hit a 50 year low, with California hovering at 54%, compared to 63.5 % for the country as a whole (Mortgage Bankers Association). Decreased affordability and millennials delaying purchases were likely the biggest culprits.
  3. Low mortgage rates. Despite a predicted rise, rates continued to go down to near historic lows. Brexit and other news events were contributors. Refinances went up and buyers got more bang   for their buck.
  4. Transaction delays. When the Consumer Financial Protection Bureau required new disclosure forms in October 2015 (TILA-Respa Integrated Disclosure) delays were anticipated.  However, the forms created more clarity and technology adapted well for smoother transactions, with in most cases, only slight delays.
  5. Increase in outmigration. More Californians left in 2016 than since 2011 (California Department of Finance).The silver lining is more inventory from homeowners who leave and sell.

According to Forbes here are eight things housing experts expect to see in 2017:

  1. Prices will continue to rise slowly. Prices rose every month last year (through October) with the largest gains coming in the later half and a 5.61% increase nationally.
  2. Affordability will still be a challenge.  Wages are expected to grow in America’s big cities this year, but the share of homes affordable to someone earning the median income is not. This trend, which has stymied many aspiring to buy their first home, will be intensified by a continued shortage in low- to moderate-priced inventory and rising mortgage rates.
  3. Mortgage rates will fluctuate. The two major political events of 2016 set mortgage rates moving in opposite directions. The British vote to exit the European Union put rates near a record low and the U.S. election of Donald Trump had the opposite effect, sending rates above 4% for the first time in two years. By historic standards rates are still low. In 2017 experts expect movement, but differ on where the 30-year fixed rate will land. Estimates range from between 3.75% and 4.6%–not so far from where it is today.
  4. Credit availability will likely improve. Early Trump administration priorities are not expected to deal directly with housing. However, the president-elect and his team have made it clear they hope to roll back much of the post-crisis financial regulation laid out in the Dodd-Frank Act. This could open up banks to lend more freely to a wide-range of would be buyers. There is speculation that Trump would return government- controlled mortgage companies Fannie Mae and Freddie Mac to private control. Investors cheer the possibility some housing economists worry such a move would further restrict who could get credit.
  5. Supply will improve but remain short.  Declining inventory was the defining feature of the housing  market in 2016. It led to price appreciation, a hyper fast market for buyers, and discouraged would-be-sellers who feared entering the buying fray. A complete turnaround is unlikely in 2017, but there are some signs we could see a small bump in housing supply on the new home front. When it comes to existing       homes “rate lock” may constrain inventory. Homeowners who locked in a mortgage below 4% are likely to stay in low priced homes rather than upgrade, a pattern that last emerged when rates briefly rose in 2013.
  6. More Millennials will become homeowners. According to some estimates, nearly half of buyers are under age 36. Not every economist agrees with this assessment, however it is clear that Millennials (born after 1980 and now the largest adult generation) will continue to make up a growing part of the buyer pool.
  7. Competition will grow fiercer. Sellers will maintain the edge over buyers as demand increases.
  8. Political uncertainty will be replaced with policy uncertainty. Experts agree that three of the President’s priorities could impact the housing market: pledges to spend more on infrastructure, to cut taxes and to crack down on immigration. The consensus is that in the very short term any moves in these areas could have a neutral-to-positive impact on the housing market. Over the longer term opinions vary.

In San Diego the news was good overall- values increased, a majority of properties sold at or over list price, market time shrunk. Low inventory though meant stiff competition and some delays in finding the right property. See the December/year to year statistics.

If you have any future plans you have been keeping secret, now may be the time to review the value of your property with me and I can provide you with a Seller’s Estimated Net Sheet. Sellers that act on their plans to up-size, down-size, change neighborhoods and/or move out of San Diego will create more inventory for all Buyers (including themselves)!

 

 

Market @ A Glance: January 2017 Edition

January 26, 2017

 

 

Here is the latest scoop on our national, state and local housing markets.  For specific information on your neighborhood or a market analysis on your home, please send me an email or call me at 619-888-2117.

 

For the country existing-home sales closed out 2016 as the best year in a decade.

In California sale prices at the end of 2016 were the highest since 2007.

San Diego’s inventory was drastically down in year-over-year comparisons along with days on market and months of supply. Meanwhile, sales and prices were up in most markets.

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