1. Shop around for the best value. Check online for quotes from at least three reputable agencies. Be aware that some companies offer a discount of 30% to 40% if you buy online. Other possible discounts can result from insuring both the home and the contents or by insuring your home and your car with the same firm.

Also know the replacement value of your home, taking into consideration any unique features that will be expensive to replace. Keep in mind probable inflation increases at renewal time. Does your insurer automatically adjust your coverage or do you have to request the change?

2. Make periodic updates to your Gainesville FL home or property. Ways to reduce insurance costs include the following:

A) Replacing the existing heating system to one which is safer and more cost-efficient.

B) Keep plumbing in good working order and protect it from freezing.

C) Replace fuses. Inspectors are looking for circuit breakers and a safe wiring system

D) install fire detectors or even a central alarm system. Be sure to keep a record of all repairs/replacements and inform your insurance company of each one.

3. Maintain the building and grounds. Regular repainting or installing siding is essential to protecting your Gainesville FL home from moisture damage. Hire professionals to clean any chimneys and check for termites. Repair unsafe sidewalks and remove dangerous tree roots. Again, keep your insurance company current on your efforts to eliminate hazards.

4. Consider tenant-based liabilities. The type of dog you allow on your property influences your insurance rate, as does permitting smoking on the premises. You may also want to specify acceptable locations for outdoor grill use and make renters aware of their responsibility to cover damages caused by them and the need for renters’ insurance.

By following these tips and consulting with your insurance representative, you should be able to lower your premium, avoid cancellation, and stay off the industry’s “bad list.” Also think about raising your deductible amount and avoid making too many small claims to keep your premium costs down.

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Basic terminology;

Fixed rate–The interest rates do not change during the life of the loan, thus allowing you to know the amount of your payments.

Adjustable rate (ARM)–the interest rate is tied to certain indexes plus a margin and can fluctuate up or down, thus affecting each payment,

Step–the interest rate and monthly payment remain the same for a specified period of time. After that the interest will change to the prevailing rate and will remain there for the duration of the loan.

Balloon–a loan payment that expands after a certain amount of time. Basically it functions similarly to a fixed rate mortgage in the earlier months/years with a delayed steep increase at the end,

The following information, courtesy of Mortgages.Interest.com, outlines the type of mortgage, the loan characteristics, and the situations most appropriate for each one. If, for instance, you plan to live in your Gainesville Florida real estate more than 10 years and desire stability in payment amounts, then a fixed rate mortgage is for you. If, however, your finances are currently strained, but you know that in 5 to 10 years your monetary situation will improve or that you will most likely move within 10 years, then an ARM or balloon mortgage may be better for you. Being familiar with these options allows you to discuss them intelligently with your real estate agent and/or lender and then select the type which best fits your circumstances.

Fixed rate mortgage (30, 20, 15, 10 years)*

• Interest rate & monthly payment remain the same for the entire term of the loan

• plan to live in property more than 10 years

• like total payment stability

0/1 year adjustable rate mortgage1

• Interest rate & monthly payment remain the same for 10 years

• Starting the 11th year, interest rate adjusted every year, so payment is subject to change every year for remainder of loan

• plan to live in property more than 10 years

• like initial payment stability, can accept later changes OR

• plan to move within 10 years

• want loan to remain in force in case plans change

7/23 (2-Step) or ‘30 due in 7′ mortgage

Interest rate & monthly payment remain the same for 7 years

• Conversion option: On the 8th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan

• plan to live in property more than 10 years

• can tolerate one payment adjustment OR

• plan to move within 7 years

• want to remain in force in case plans change

7/1 year adjustable rate mortgage

• Interest rate & monthly payment remain the same for 7 years

• Starting the 8th year, interest rate adjusted every year, so payment is subject to change every year for remainder of the loan

• plan to live in property more than 7 years

• like initial payment stability, can accept later changes OR

• plan to move within 7 years

• want loan to remain in force in case plans change

7 year balloon mortgage

• Interest rate & monthly payment remain the same for 7 years

• At the end of 7 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates

• plan to live in property more than 7 years

• are willing to refinance at prevailing market rates OR

• plan to move within 7 years

• like payment stability

In addition, there are variations of the ARM, step, and balloon mortgages which differ primarily in the duration of the loan and of the planned residency.

Another good source of information for first-time home buyers is the Department of Housing and Urban Development (HUD), an agency which oversees FHA loans. This type of loan is particularly useful if you have little money for a down payment, less than great credit, or large monthly bills. An FHA loan requires as little as 3% down (and it can be a gift from a relative or friend). In terms of your credit rating, the FHA is primarily concerned that for the past two years you have paid bills in a timely manner and have been steadily employed. With FHA you have to wait only two years after declaring bankruptcy, and your debit-to-credit ratio can be higher than for a conventional loan. You can qualify for an FHA loan if your monthly payments are no more than 43% of your income, and, as with conventional loans, you can choose from many types.

Of course, there are some negatives to consider before taking on an FHA loan. Interest rates generally run about 1/8 of a percentage point higher than conventional rates, but the real disadvantage of an FHA loan is that the borrower must pay an up-front insurance premium of 1.75% of the mortgage if the down payment is less than 20%. This cost can, however, be added to your total loan amount.

So there you have it–an easy-to-understand guide to mortgage types. As always, you should feel free to contact me anytime with questions. I am glad to recommend a number of outstanding mortgage lenders if you are interested in talking with one.

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HAFA provides incentives to families to take advantage of selling their Gainesville Florida home by means of a short sale (the home is sold for less than the value of the loan), or a deed-in-lieu of foreclosure (the home owner voluntarily gives the deed to the lender.

HAFA helps families quickly sell their Gainesville Florida homes by giving them pre-approved short sales terms before listing the property. They are fully released from future liability for the first mortgage debt, and can receive $1,500 for borrower relocation assistance. HAFA also allows investors and servicers to receive financial assistance for administrative costs, processing fees, etc. The program sounds simple, but is actually quite complex with many guidelines and rules. HAFA officially began on Monday, April 5, 2010 and will end on Monday, December 31, 2012.

Here you can watch ‘An Animated HAFA Story’, an informative video explaining HAFA…

I am a Certified Distressed Property Expert (CDPE), trained in helping families in distress avoid foreclosure. Are you or someone you know behind on mortgage payments? You do have options! A short sale may be what is needed to save your, your family and your credit. Please contact me anytime for a private consultation.

Basic facts Home Buyers Tax Credit:

• The new deadline is April 30, 2010 (June 30^th with a binding, signed contract)

• First-time buyers are eligible for a tax credit of 10% of the purchase price–up to $8000.00

• Repeat buyers (those who have lived in one residence for 5 consecutive years of the last can receive a credit of up to $6500.00.

• Income levels–$125,000 for individuals; $225,000 for couples.

• The credit may be claimed on this year’s tax return (for 2009).

***Remember that a tax credit is a dollar-for-dollar deduction in what a taxpayer owes. If the credit exceeds the amount owed, a refund will be issued.

Because it generally takes 3 to 4 weeks to process a loan and often an additional month for inspections and paperwork, there are some important and beneficial steps you can take to expedite the purchase of your Gainesville Florida home.

Beating the deadline:

• Get pre-approved for a loan. Have your credit report, proof of funds, and employment certification ready to submit.

• Know what you are looking for. Have some well-thought-out ideas about the desired location, style, and price of your new Gainesville Florida home.

• Supply all documents to your lender in a timely manner.

• Communicate often with your lender. Stay on top of the loan status, closing date, etc.

• Avoid buying a short sale, which is often a lengthy and unpredictable process.

• Take advantage of the expertise and advice of your real estate agent. He/she can be an indispensable asset and guide in your Gainesville Florida home buying experience.

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Calculating Capital Gains

(+) PURCHASE PRICE – Price paid for property

(+) COST OF PURCHASE – Transfer fees, attorney fees, inspections

(+) COST OF SALE – Repairs, commissions, attorney fees, inspections

(+) COST OF IMPROVEMENT – Room additions, deck, for example, though not replacing existing

(=) ADJUSTED COST BASIS OF YOUR HOME

(-) AMOUNT YOU SELL YOUR HOME

(=) CAPITAL GAIN

A Special Real Estate Exemption for Capital Gains

Even though the above calculation may indicate you owe Capital Gains, there is a special real estate exemption. Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a Gainesville FL home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.

• You have not sold or exchanged another home during the two years preceding the sale.

NOTE: As of 2003, you may also qualify for this exemption if you meet what the IRS calls “unforeseen circumstances” such as job loss, divorce, or family medical emergency.

Learn more about selling your Gainesville FL home by visiting MyGatorHome.com and MyGator Condo.com.

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Always consult a tax attorney regarding current tax laws.

Myth: Checking a credit report can either damage or lower your score.
A credit report can be conducted by you or someone like an employer as many times as desired with out having any impact on your credit score. Reviewing your credit report will never change your credit score. Just make sure that reports are retrieved through the bureaus or a legitimate score seller.

Myth: Age, sex, and income are factors that affect your score.
None of this information plays a role in determining your score. A higher income may make it easier to pay off debts, but income and net worth have no impact of credit scores.

Myth: A credit score can be destroyed by shopping for a loan.
When seeking to extend credit, too many inquiries can have a negative impact your credit score. However, when several inquiries are made by the same type of lender with in a 14 day period they only count as one inquiry against your credit.

Myth: Your score can be hurt by credit card offers.
When companies offer you their credit cards it does not have any affect on your score. Unless, your take advantage of all the offers and carelessly use all of the credit available. The number of credit cards a person manages does not matter. The important thing is maintain a low ratio of used to available credit.

Myth: Credit scores of married couples are shared.
A credit score can only belong to one person, just as one person can only have one score. A married could does not share a credit score, but their scores could have an affect each others. When opening a joint account, the information accumulated from that account’s activity will be reflected on both people’s credit report. If all of the couple’s accounts are joint, then their scores will be somewhat similar.

Myth: Closing unused accounts improves credit scores.
Unused accounts most likely contain available credit, which is an important part of a credit score. Closing unused accounts removes available balances from the equation. This causes your ratio of used to available credit to increase, ultimately affecting your credit score.

Myth: Paying off bills is a quick way to boost credit.
Over time, a good record of properly paying bills will improve credit. Credit reports reflect your long term history, scores do not change overnight.

Learn more about how credit scores affect the amount of home you can buy.

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Myth: Checking a credit report can either damage or lower your score.
A credit report can be conducted by you or someone like an employer as many times as desired with out having any impact on your credit score. Reviewing your credit report will never change your credit score. Just make sure that reports are retrieved through the bureaus or a legitimate score seller.

Myth: Age, sex, and income are factors that affect your score.
None of this information plays a role in determining your score. A higher income may make it easier to pay off debts, but income and net worth have no impact of credit scores.   

Myth: A credit score can be destroyed by shopping for a loan.
When seeking to extend credit, too many inquiries can have a negative impact your credit score. However, when several inquiries are made by the same type of lender with in a 14 day period they only count as one inquiry against your credit.

Myth: Your score can be hurt by credit card offers.
When companies offer you their credit cards it does not have any affect on your score. Unless, your take advantage of all the offers and carelessly use all of the credit available. The number of credit cards a person manages does not matter. The important thing is maintain a low ratio of used to available credit.

Myth: Credit scores of married couples are shared.
A credit score can only belong to one person, just as one person can only have one score. A married could does not share a credit score, but their scores could have an affect each others. When opening a joint account, the information accumulated from that account’s activity will be reflected on both people’s credit report. If all of the couple’s accounts are joint, then their scores will be somewhat similar.

Myth: Closing unused accounts improves credit scores.
Unused accounts most likely contain available credit, which is an important part of a credit score. Closing unused accounts removes available balances from the equation. This causes your ratio of used to available credit to increase, ultimately affecting your credit score.

Myth: Paying off bills is a quick way to boost credit.
Over time, a good record of properly paying bills will improve credit. Credit reports reflect your long term history, scores do not change overnight.

Learn more about how credit scores affect the amount of home you can buy at GatorHomes.com and MyGatorCondo.com.

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Monthly house payments bring the biggest tax benefit to home owners. The interest included in the monthly mortgage payments is tax deductible as long as the loan is for less than a million dollars. IRS guidelines also allow deductions for interest on refinancing and home equity loans. However, they do put limits on how much is actually allowed to be deducted. Borrowing against the equity of your Gainesville home is an option renters do not have. Renters also do not have the ability to file federal tax deductions on their monthly rental payments. 

Homeowners are also allowed to deduct the points paid in order to purchase their home. If the deductions are itemized, points can be deducted the same year the home is purchased. Every point is equal to 1% of the entire loan amount. When the seller pays certain fees during the purchase, points are also deducted. 

Depending on the state, homeowners who meet specific criteria may qualify for real estate tax exemption. A portion of capital gains may also be deducted. When selling the property, the IRS allows a certain portion of the profit made to be excluded. Single taxpayers are allowed to exclude up to $250,000 in capital gains, and $500,000 for married couples. 

In 2007, the government added more to the miscellaneous tax credits receivable by homeowners. For example, the Energy Credit allows homeowners to receive $200 for home improvements that make the property more energy efficient. 

There are many benefits to owning a Gainesville home. Renters and hesitant prospective homeowners should take advantage of the tax breaks that are now available.

The $8000 first-time home buyer tax credit was scheduled to expire in just a few short weeks…Nov 30, 2009. I say ‘was’, because the Senate voted unanimously to extend the credit on Monday and the House of Representatives approved the extension yesterday afternoon by a vote of 403-12. The extension includes an expanded tax credit to repeat home buyers. The bill now goes to the President for his signature which is expected to happen today. 

Home Buyer Tax Credit Expansion and Extension 

1. The $8,000 tax credit will be extended and available for first-time home buyers through May 1, 2010.
2. A new $6,500 tax credit will be available for repeat buyers who purchase between December 1, 2009, and May 1, 2010. To qualify, buyers must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.
3. Prospective buyers with binding contracts in place as of April 30, 2010, will be allowed an additional 60 days to complete the transaction.
4. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
5. Limitation on the cost of a purchased home is $800,000. 

If you know anyone looking to buy their first Gainesville home at a time when prices and interest rates are still down, or if you are thinking of buying another Gainesville home and getting the new $6,500 credit please contact me today.

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1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe.  If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer’s oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit – installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, visit www.myfico.com.

Thinking of buying Gainesville FL real estate? Learn about the home buying process at GatorHomes.com or MyGatorCondo.com or give me a call for more personal service. 

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Reprinted from Realtor Magazine with permission of the National Association of Realtors.