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2018 taxes for homeowners: How 2018 tax law changes affect you

Tax law changes: Homeowners are likely paying more You’re not alone if you think 2018 taxes for homeowners seem odd, scary, and costly. Projections on the new tax law estimate that property owners will pay an additional $668.4 billion in the next few years. This is due to eliminating deductions such as: Taxes not paid or accrued in a trade or business (except for up to $10,000 in State and local taxes), Interest on mortgage debt in excess of $750K, Interest on home equity debt, Non-disaster casualty losses So what can you expect when you file 2018 taxes? Itemized deductions Taxpayers are allowed to write off either their standard deduction or itemized deductions — but not both. Under tax reform, interest on home equity debt is only deductible if the money is used to make a “substantial improvement” in the property. Third, it used to be that taxpayers could write off both property taxes and state income taxes. Under tax reform, state and local taxes (i.e. property tax and sales tax) remain deductible. Homeowners with high property and sales tax states like Washington, Louisiana, Texas and others will likely exceed this limit. Those who paid mortgage insurance in 2018 must file their taxes before the deadline, then, can submit an amended return if Congress approves the deduction later in the year. Most homeowners will elect to take the standard deduction.

The most expensive and affordable states to buy a house, ranked

BakerJarvis/Shutterstock Buying a house has become more expensive than ever — home prices have increased significantly since the 1960s, when the median price of a home was less than $100,000 in today's dollars. Today, the median home listing price in the US is nearly $280,000, according to Zillow, but that varies by state. Using data from Zillow, we took a look at the median home listing price in every state, including Washington, DC. Coastal states, such as Massachusetts and California, comprised the majority of the top ten most expensive places to buy a home. Meanwhile, Southern and Midwestern states, such as Ohio, Mississippi, and Iowa, are the most affordable places to buy a house. Below, see how much a typical house costs right now in every state, ranked from least to most expensive. West Virginia Andrei Medvedev/Shutterstock Median listing price: $159,000 Median listing price per square foot: $94 2/51 50. Arkansas Kat Byrd I/Shutterstock Median listing price: $174,900 Median listing price per square foot: $99 4/51 48. South Carolina Sean Pavone/Shutterstock Median listing price: $249,900 Median listing price per square foot: $127 24/51 28. Washington, DC Jon Bilous/Shutterstock Median listing price: $598,995 Median listing price per square foot: $554 51/51 1.

We Have Learned Nothing From The Mortgage Market Meltdown

This worked because they made money on the volume, not quality or loans, and suffered no losses because all the loans were bundled and resold before any could go into delinquency or default. Yet, even though we know requiring large down payments protects both borrowers and lenders, 3% down loans are rapidly returning to the mortgage market and zero down loans are likely to reappear soon. Thus, they had little incentive to ensure borrowers could pay. Dodd-Frank was supposed to reform the mortgage market and require lenders to have skin in the game, by forcing them to retain an ownership share (some of the mortgage-backed securities they created) in all but the safest of mortgages. This would have changed the incentive structure so that originators did care (at least a little) about borrowers making their payments, but the final rules that implemented Dodd-Frank made almost all mortgages exempt from this requirement. Contributing to this mal-incentive, mortgage brokers, the people borrowers actually interact with, still operate under a commission system that incentivizes them to make lots of loans, not good loans. Mortgage brokers get paid upon the loan closing, with no financial interest in whether the borrowers ever make even a single payment. Recent reports show that the average credit score in mortgage backed securities is declining while the share of average borrower’s debt payments as a share of income has risen from below 32% up to 36%, a figure considered quite high by those who want consumers to borrow responsibly. No new regulations put in place since the recent recession have done anything to prevent a recurrence of a financial crisis. This is not a case of those who don’t know history being doomed to repeat it.

Renters: how to make a winning repair request

Know your rights and how to make repair requests. Unless it's an emergency, you must request the repair from your landlord and not undertake it yourself. The general idea is that when you rent property, there is a “warranty of habitability.” What happens if you break a lease? Your obligations can change depending on whether you are renting a single-family home, townhouse, or detached property. For example, dozens of small circular holes in a ceiling of one rental property, requiring repair. But what repairs are those? “There are minor problems that a landlord is not required by law to fix,” explains FindLaw.com. "Even though these problems may be annoying for you, the tenant, to live with, your landlord may not be under any obligation to repair these issues.” Making a repair request the right way When you see problems, you have to send a repair request to the landlord in writing. If you have been paying rent in full and on time, and if you have been maintaining the property, a repair request is not likely to be an issue. Show Me Today's Rates (Apr 1st, 2018) The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker.

Home prices soar in these cities, states

Homes.com President David Mele on how artificial intelligence is used to improve the home-search process. Home prices are still on the rise, but cost increases are greater for residents in some states’ housing markets than others. By June 2019, the financial and property data analytics firm forecasts prices will increase by another 5.1% nationwide. CoreLogic predicts prices in the state will rise by more than 9% over the period ending in June 2019. In Washington state, home prices increased by 12.1% over the course of the year ending in June, the second largest jump during that timeframe. Meanwhile, in Idaho, prices rose by 11.4%. Also experiencing double digit price increases? When it comes to specific metro areas, in the 12 months leading up to June, Las Vegas saw the biggest spike in prices, at 12.9%, followed by San Francisco at 11.2% and Denver at 8.1%. On the other end of the spectrum, Connecticut saw just a 0.1% increase in housing prices, the lowest of any state. In North Dakota, the average cost rose by just 1.2%, while home prices increased by 1.7% in Louisiana.

Flipping; Turning into a Dangerous Game?

CoreLogic says flipping is back. The term applies to the act of buying, renovating and/or repairing a house, then reselling it, all within a short timeframe. He found that 6.2 percent of home sales in the first quarter appeared to be flips. But, he points out, it was a different world back then. Prices were just beginning to rebound from their 2012 lows, the supply of homes was outstripping demand, and distressed sales had a 30 percent market share. Prices? Well everyone knows what has happened there in the last five years. CoreLogic puts the acquisition cost for a typical flipping candidate at about $170,000 in 2006. He says the high acquisition cost and tight inventories along with rising flipping activity can only mean investors are speculating, betting on continuous home price growth. Is it just us, or is this story not only an old one, but a little disturbing?

Americans want to buy but need to be savvier mortgage shoppers

For many Americans the desire to own a home is not being dampened by rising prices. Rather, 37% of adults - rising to 52% among Millennials – say they plan to buy within the next two years, including 48% of those who do not currently own a home. The PenFed Credit Union National Mortgage Survey released Tuesday, also shows that renovation intention remains strong with 54% of homeowners wanting to renovate, even though most (95%) say they like their current home. "Americans are undeterred when it comes to owning their dream home and we are finding that for many that means renovating their current homes," said Craig Chapman, vice president of mortgage sales and business development, PenFed. "At PenFed our second trust loans are up and we expect to end the year with a 20% increase over last year. If they were to pick a dream location, on the beach would be the top choice for 30% with other popular choices including a ranch/farm (22%), in their favorite city (22%), and in the mountains (18%). Most buyers didn’t shop around for a mortgage The survey also shows that many homebuyers are not getting the best mortgage deal, often due to some misconceptions. Almost two-thirds of buyers (65%) didn’t shop around for a mortgage when buying their home and 44% believe that the lowest rate is always the best deal. There is also some confusion around the terms ‘pre-approved’ and ‘pre-qualified’ with 30% believing they are the same and another 22% not sure. More market update:

The Most Mortgage-Free City Is …

When it comes to metro areas where homeowners are not burdened with mortgage debt, Detroit leads the nation—albeit for a not-positive reason. According to new data issued by LendingTree, 55 percent of homeowners in Detroit do not carry mortgage debt. But LendingTree Chief Economist Tendayi Kapfidze noted the city was at the top of the list because “mortgage lenders have historically viewed housing in the city as risky and, as a result, there are fewer homeowners here. This was often driven by discriminatory lending practices which excluded many Detroit residents from the mortgage market.” Miami ranked second of LendingTree’s list, with 52 percent of homeowners without mortgage debt. LendingTree observed that this ranking could be attributed to Miami’s attractiveness with foreign buyers, many of whom pay with cash. Third-place ranking went to Las Vegas, with 48 percent of homeowners without mortgage debt, also benefited from a larger than normal percentage of buyers making home purchases with cash. At the other end of the spectrum, LendingTree cited Washington D.C., Virginia Beach and Seattle as being among the least mortgage debt-free markets. Washington D.C. and Seattle made the bottom of the list, according to LendingTree, due to their expensive housing markets, while Virginia Beach has one of the highest rates of military households in the country that access mortgages from the Department of Veterans Affairs. “A curious result is that six cities in California are among the top 20 free and clear cities, despite relatively high home prices in the state,” said Kapfidze. “California’s property tax laws discourage homeowners from moving, so many have long tenures and have had the opportunity to pay down their mortgages.” Sponsored

Half of renters spend more than 30% of their income on rent

In fact, according to new data, nearly half of all U.S. renters are cost-burdened, spending more than 30 percent of their monthly income on rent. Verify your new rate (Oct 3rd, 2018) Bogged down by housing costs According to data from Apartment List, 49.5 percent of all American renters are burdened by their housing costs. That’s down slightly from last year when 49.7 percent of renters were cost-burdened. According to Chris Salvati, Apartment List’s housing economist, the change is simply a result of who’s renting, not what renting costs. “Much of this decrease in the cost burden rate is attributable to an influx of high-income households to the rental market,” Salvati said. The city has the highest cost burden rate in the country, with 62.7 percent of renter households burdened by housing costs. Other cities with high shares of cost-burdened renters include Riverside, California; Philadelphia; San Diego; Los Angeles; Boston; Orlando; New York; and Baltimore. Verify your new rate (Oct 3rd, 2018) The median renter in 20 out of the nation’s 25 largest metros is cost-burdened. “Framing the problem in this way highlights the fact that rental housing affordability affects not just low-income households, but also millions in the middle-class.” Get today’s mortgage rates Ready to get out of the rent race and get your housing costs in check? Show Me Today's Rates (Oct 3rd, 2018)

The Problem With Real Estate Agents

What makes the profession such a big target for headlines, reality TV and venture capitalists? Let’s start with how the real estate industry has put a target on its own back. The 90/10 rule is true in this profession, and in my observation: 10% of real estate agents do 90% of the business. In order to protect the public, a licensed broker is required to hold the license of the salesperson and supervise them for at least three years before they can become a broker themselves. Uncle Bob ends up doing all the work and feels like Stan left him in the lurch. At closing, when he sees the commission that will be paid to Stan, he is furious — Stan didn’t earn that! Now the holidays are awkward anyway, Uncle Bob thinks all real estate agents are chumps and, in the end, Stan lets his license lapse and gets out of the business. The majority of the licensed agents a typical consumer knows are non-practicing. And so, our industry gets downgraded from a respectable profession to a pastime. Mentor and train the agents who are serious, and dump the agents who are not.


3 Reasons Beginners Don’t Invest Out-of-State (& How to Overcome Them!)

This is one of the most important reasons people hesitate when investing, and it’s even more so the case when you’re talking about investing outside of your state or country. The Legal Hurdle Understanding the laws and regulations, like property taxes and rental laws, can form a real barrier, even for people that live there. Property taxes and property management costs can contribute a substantial amount to your total expenses. Depending on where you’re investing, you might have some very strict regulations regarding the amount of rent you can ask. If you were looking to buy property in an area you know, you’d have no trouble, especially if you’ve invested in property before or have friends that have. A Real Estate Agent Having someone who actively looks for the best opportunities for you to invest in is key. You’re probably not investing full time, and you want to have the best deal possible, so a real estate agent is a good way to go. Keep in mind, though, that you will never get the best of the best like a local investor would. Related: Interview With a Bi-Coastal Investor: Why I Purchased My First Multifamily Property Thousands of Miles Away A Contractor After you’ve found the perfect property to invest in, if you’re not buying turnkey, you’re probably going to want to make some changes to it. There are many advantages of buying a piece of real estate that is located far from you, and there are certain challenges as well.