Gainesville FL Real Estate Blog

Subscribe to our Blog
Enter your email address:

Entries Tagged as 'Money matters'

Tips on Getting a Free Credit Report

July 3rd, 2015 · No Comments

Did you know that you are entitled to a free credit report once a year from all of the major credit reporting companies? I don’t know about you but that is news to me! If you are in the market to purchase a new home and have not had your credit report pulled lately you may be happy to find credit reportthis news out! By checking your credit report before you purchase a home or for any other reason for that matter you will be able to see if there is anything on your credit report that is not accurate and remove it and you may also be able to find out if you have been the latest victim of identity theft. The major credit reporting companies are Equifax, TransUnion, and Experian. If you want to get your yearly free credit report all you have to do is go to each of these sites and click on “Request Your Credit Reports”. You can also send a letter to each of the three major credit reporting companies. A few tips to follow are below.

  • Be sure that if you get on a credit report website and are asked for money that you do not respond. There are many hackers out there trying to get your information and this is just one of the many ways in which they do it.
  • Do not give out your social security number unless you are on a site that you know is secure.
  • Check your credit report every four months or so to be sure that your account hasn’t been compromised.
  • There are credit monitoring companies you can hire to keep a watchful eye on your credit report if you feel it is necessary to do so.

Again, be sure that you are not asked for any monies when trying to get your free credit report. Be assured that there are many companies out there that claim they will give you a free credit report only to ask you for your credit card information at the very last step. Step away from those companies and continue with your search until you find one that lets you leave the page without asking for any form of payment. Once you get your report you can then be on your way to making any changes needed to help improve your score. When you get your credit where you want it and where it needs to be, the world will open up to you in ways you never thought possible.

Information courtesy of Gainesville FL Realtor Linda Luetjen!

Tags: Buyer Info · Money matters · North Central Florida Real Estate

Understanding Your Credit Score

March 27th, 2015 · No Comments

Is your credit score a big deal? If you want to buy a home, it’s a huge deal!

Your credit score will determine if you can get a loan. It will also determine how much you can borrow and what your interest rate will be! To buy a home with a mortgage loan you must have a strong credit score.

credit scoreThere are three primary sources for credit scores in the US: Equifax, Experian and TransUnion. They all use the FICO system. These are the most used sources by creditors.

FICO developed the computer software the major credit scoring companies use. FICO scores range from 300 to 850. However, many creditors consider 500 to be the bottom of the acceptable range.

Your score is a measure of your credit-worthiness and determines the interest rate that you will pay for a loan. It’s not unusual for a creditor to obtain all three of the major scores and average them. A very good score is 700, and an excellent score in 750.

The primary factors that determine your score are:

  • payment history (35%)
  • debt/amounts owed (30%)
  • age of credit history (15%)
  • new credit/inquiries (10%)
  • mix of accounts/types of credit (10%)

65% of the total score is determined by only two factors: payment history and amount of debt owed. You must have a good history of paying your bills on time. And you must be very careful about how much debt you have relative to your income!

That last point is extremely important when borrowing for a home mortgage. As of 2014 the federal regulations governing mortgage lending have changed. Borrowers can no longer carry total debt of more than 43% of gross annual income, including the mortgage debt! Lenders are going to be very strict about adhering to that ratio. There are serious consequences for the lender not doing so.

Many actions you take affect your score. Most people don’t think about:

  • unpaid medical bills and parking tickets can lower your credit score
  • heavy credit use can lower your score, even if you pay large balances off in full in a short time
  • credit scores drop if you sign up and use store cards for initial discounts

For more advice about managing your credit, click here.

Looking forward to buying a home? Educate yourself, manage your credit score, and know your credit score before your lender does.

Information courtesy of Gainesville FL Realtor Linda Luetjen.

Tags: Buyer Info · Money matters

Alachua County & Gainesville FL Foreclosure Trends for January 2015

March 6th, 2015 · No Comments

In January, the number of properties that received a foreclosure filing in Alachua County, FL was 26% higher than the previous month and 11% higher than the same time last year, according to RealtyTrac.com.

Alachua County & Gainesville FL Foreclosure Status

The current distribution of foreclosures based on the number of active foreclosure homes in Alachua County, FL.

Auctions accounted for 53.2% of foreclosure activity in January 2015, Bank-owned properties accounted for 35.5%, and Pre-foreclosures 11.3%.

gainesville fl foreclosure

 

Alachua County & Gainesville FL Foreclosure Activity by Month

In January, Pre-foreclosures decreased 27.3% from the previous month and decreased 65.2% from the previous year. Auctions increased 78.6% from the previous month and 97.4% from the previous year. Bank-owned properties increased 4.2% from the previous month and 16.3% from the previous year.

gainesville fl foreclosure

 

Alachua County & Gainesville FL Foreclosure Geographical Comparison

The number of Alachua County foreclosures were 0.03% higher national statistics and 11.0% lower than state figures in January.

gainesville fl foreclosure

Are you or someone you know behind on your mortgage payments and facing a Gainesville FL foreclosure? You do have options. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE). Give me a call for a private consultation.

Search all Gainesville FL real estate and Gainesville FL homes for sale.

Linda Luetjen assists buyers looking for Gainesville FL real estate for sale and aggressively markets Gainesville FL homes for sale.

Tags: Area Info · Market Trends · Money matters · North Central Florida Real Estate · Real Estate

Tax Deductions New Homeowners Often Miss

February 27th, 2015 · No Comments

It’s that time of year again; time to file your taxes. You may or may not be happy about that but there are two things that are always going to happen, death and taxes. On a not so morbid note, let’s look into a few homeowner tax mistakes that folks typically make so that you can be sure to avoid them.

tax dayMany times when folks purchase a home that needs a lot of renovations, they forget to keep the receipts for these renovations and take advantage of them at tax time. Some home renovations can be a tax write off. If you do such things as installing energy-efficient features into your home you need to be sure to take these as a tax right off. There are some home improvements that will not qualify as a tax deduction but they will still be helpful if you ever decide to sell your home.

  • If you have been a home renter for many years, you may have been able to file a very easy tax form known as the 1040ez. Do not make the mistake of thinking you can continue to file this simple form for taxes once you purchase your own home. It may be to your benefit to talk to a tax professional about what all you can deduct once you become a homeowner and what forms to use. You may in fact want to just hire a professional to make sure that your taxes are done correctly and save yourself a lot of worry.
  • Be careful not to list your full escrow amount on your taxes. Many homeowners try and list their full escrow balance on taxes.   You may be surprised to find that if you are a homeowner not all of your funds in escrow are used to pay taxes. Again, hiring a tax professional may be in your best interest at least for the first year after becoming a homeowner. Why have unnecessary stress when you can let someone who knows what they are doing take care of your taxes.
  • You may find this surprising but many folks file their new home on their tax forms in the wrong year. Remember that taxes are a year behind. If you purchased your home in the first part of 2015, you do not need to include it in your tax return this year because you are filing 2014 taxes. You can actually end up filling the wrong amounts if you make this mistake and that can lead to less of a refund than you had anticipated.

Hopefully these tips will be helpful to you this tax season. If you haven’t yet filed your taxes, go ahead and do so to avoid having to file extensions. Better to get it all out of the way and enjoy whatever 2015 is going to bring your way and stop worrying about your taxes so that you can enjoy your new home!

Courtesy of Gainesville Realtor Linda Luetjen.

Tags: Buyer Info · Money matters · Real Estate

Impact Of Divorce On Your Florida Real Estate

October 17th, 2014 · No Comments

If you are considering a divorce or are currently going though one, it is important that you learn as much as you can about divorce laws and how they can impact your Florida real estate holdings. To learn about the laws in Florida, click here.

divorceAlthough a divorce eventually involves the distribution of all of a couple’s assets, generally the most pressing issue (other than child custody) is the division of your real estate. To make this potentially complicated and emotion-laden process work as smoothly and civilly as possible, consider the following suggestions to help combat volatile issues and strong feelings:

  • Consult with your divorce attorney. A well-crafted settlement agreement can help to avoid many types of disputes. The agreement should be quite detailed, including all potential issues that could arise during the sales process. The agreement should ensure that the interests of both parties are aligned towards selling your real estate so that you both can move on with your lives. Have the property sold or refinanced into one name, while all of the other details of the divorce are being negotiated. Even if your divorce decree assigns possession of those assets to one party, or if one of you voluntarily transfers title to the other, the liability for the loan will remain for both if you do not sell or refinance the asset.

  • Find a real estate agent who specializes in selling property for divorcing couples. With divorce rates continuing to rise, many Realtors are beginning to market themselves as specialists in selling homes for couples who are divorcing. These agents understand the complexities of a pending divorce case and will work with you on an individual basis.

Before you can decide how your real estate is to be divided, you must first determine its value. If both parties are unable to agree on the current market value, there are several valuation methods that can be used, including current tax assessed value, request for a new appraisal, or an evaluation by a Realtor. Determining equity in order to equitably divide assets is a complex process which can become quite complicated. For more information about this topic, click here.

Information courtesy of Gainesville FL Realtor Linda Luetjen.

Tags: Money matters · Real Estate

What Boomers Need To Know About Mortgages

September 26th, 2014 · No Comments

If you are a retiree who wants to take advantage of low interest rates to refinance the mortgage on your existing home or obtain a new mortgage on a smaller home in order to downsize, you may be in for an unpleasant surprise when you apply to your lender.  Even with a spotless credit history and significant financial assets in baby boomersretirement accounts, your diminished monthly income may not be sufficient to meet some lenders’ hyper-strict underwriting rules—and you may be rejected.

Take heart, however, Knowing that lenders are looking for a consistent monthly income in line with their usual debt-to-income standards, both Freddie Mac and Fannie Mae now allow seniors to include money in their individual retirement account (IRA) or 401(k) to qualify for a mortgage.  (This revision in policy is actually two years old, but word has been slow to spread.)

In keeping with the fact that many retirees have sizable nest eggs, the change allows lenders to consider that money in a lending decision.  Even better, retirees don’t have to actually use any of the money in an IRA or 401(k); it is simply used as proof that they can afford a monthly mortgage payment.

Thanks to the Equal Credit Opportunity Act, retirees can’t be refused a mortgage as long as their credit, debt-to-income ratio, and factors required of anyone applying for a mortgage loan are met. Many retirees assume that a 30-year mortgage is impossible, but that is not so; you’re just as eligible at 90 as you were earlier in your life.

Because some loan officers aren’t aware of techniques available for qualifying retirees who are asset-rich but income-deficient, you must take steps to ensure that you are not rejected:

  • Look for a lender who will annuitize your assets. Both Fannie Mae and Freddie Mac, who buy or guarantee loans made by many banks and other lenders, have procedures allowing loan officers to factor retirement assets into underwriting decisions.
  • Borrow less so that your income will become higher as a percentage of your debt. The way to do this is by tapping your savings to pay off a portion of your current mortgage, which will then reduce the size of the loan you’ll apply for in your refinancing.

Good news for baby boomers, whose numbers swell by an estimated 8,000 per day!

Information provided by Gainesville FL Realtor Linda Luetjen, Gator Homes Realty.

Tags: Money matters · North Central Florida Real Estate · Real Estate

Tips For Buying With a Small Down Payment

August 15th, 2014 · No Comments

Looking for another sign that the housing market is bouncing back?  In addition to continued low interest rates, bidding wars, and increased building starts, you can now add low down payments to the list of good omens.

home buyerSince 2007, amassing the down payment has presented the biggest obstacle to purchasing Gainesville FL real estate, especially for first-time buyers and those in lower income brackets.   However, homebuyers with little money for a down payment are now finding more home loans available for a low down payment– or even no down payment.

Consider the following:

  • Piggyback loans are reappearing.  (In a piggyback loan, one lender loans 80 percent, while a second lender loans enough to equal 20 percent of the purchase price when combined with the buyer’s down payment, thus allowing the purchaser to avoid paying private mortgage insurance).
  • Mortgage lenders are starting to ease mortgage restrictions. This time around, though, lenders are much more discerning about who gets to put 10% down.  To qualify, your monthly housing, car, student loan, and credit card debt can’t be higher than 45% of your monthly income. And you must have a credit score above 700.
  • Options for borrowers have increased:
    If you’re a veteran, you can get a mortgage with no down payment. Additionally, mortgages backed by the Federal Housing Administration allow you to purchase a home with as little as 3.5 percent down. Banks also offer various programs for those with less The Department of Agriculture’s Rural Development mortgage guarantee program is so popular that it has been known to run out of money before the end of the fiscal year.

    Navy Federal Credit Union offers 100 percent financing to qualified members for buying primary homes. Credit union eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense, and family members.

    The Department of Agriculture’s Rural Development mortgage guarantee program is so popular that it has been known to run out of money before the end of the fiscal year. Offering 100% financing, it is designed to assist rural homebuyers with limited or moderate incomes.

    About 15 percent of all purchasers get FHA-insured loans, up from 3 percent during the housing boom. The FHA gained market share after many other low-down-payment options evaporated in the housing bust.

Search all Gainesville FL real estate and Gainesville FL homes for sale.

Linda Luetjen assists buyers looking for Gainesville FL real estate for sale and aggressively markets Gainesville FL homes for sale.

She understands the purchase of any Gainesville FL home represents not only one of the largest and most significant investment a person can make, but also a decision that affects the entire life of a family. It should be handled with all the care and attention such a significant transaction deserves. You may rest assured that Linda never forgets this. Her reputation depends on your satisfaction.

For more information about buying or selling your Gainesville FL home, please call Linda toll free at 888-424-8841 or via email with our convenient contact form.

Tags: Buyer Info · Money matters · North Central Florida Real Estate · Real Estate

Investing In Real Estate With an IRA

April 11th, 2014 · No Comments

Investing In Real Estate With an IRA

You probably already know that you can invest your IRA money in stocks and bonds and even in mutual funds if you so desire, but did you know that investing in real estate with an IRA is possible?  Doing so, however, is a bit gainesville fl real estatecomplicated, and IRS rules concerning such purchases must be followed to the letter.

Usually, when you take money out of an individual retirement account before you reach age 59 1/2, the IRS considers these premature distributions. In addition to owing any tax that might be due on the money, you’ll face a 10 percent penalty charge on the amount.  This is not the case, however, when you use the money to buy your first investment property.  (Note: Technically, you don’t have to be purchasing your very first home or building. You qualify under the tax rules as long as you, or your spouse, didn’t own a principal residence at any time during the previous two years.)  You can use up to $10,000 in IRA funds toward this purchase. If you’re married, and you and your spouse are both first-time buyers, you can each pull from retirement accounts, giving you $20,000 to use.

The restrictions are many (and perhaps time-consuming) and include the following:

  • You will need to find an IRS custodian who handles these investments (and the options are currently limited).  Generally banks and brokerage firms do not handle IRA distributions for real estate transactions.
  • Only the custodian may handle your IRS funds.
  • The type of property you buy must be for investment only and may not be used by you or by relatives.
  • All proceeds from the investment will go back into your IRA fund.  Likewise, however, all expenses must be paid from that fund, so you must have enough liquidity in your IRA to cover such costs.
  • You must let the IRS know that you used the retirement money early for a tax-acceptable purpose by filing Form 5329.
  • You must use the IRA funds within 120 days of withdrawal to pay qualified acquisition costs. This includes the costs of buying, building or rebuilding a home, along with any usual settlement, financing or closing costs.

The above information applies only to traditional IRSs.  To learn about the procedure for an Roth IRA, click here.

Search all Gainesville FL real estate and Gainesville FL homes for sale.

Linda Luetjen assists buyers looking for Gainesville FL real estate for sale and aggressively markets Gainesville FL homes for sale.

She understands the purchase of any Gainesville FL home represents not only one of the largest and most significant investment a person can make, but also a decision that affects the entire life of a family. It should be handled with all the care and attention such a significant transaction deserves. You may rest assured that Linda never forgets this. Her reputation depends on your satisfaction.

For more information about buying or selling your Gainesville FL home, please call Linda toll free at 888-424-8841 or via email with our convenient contact form.

Tags: Buyer Info · Money matters · North Central Florida Real Estate · Real Estate

Mortgage Regulation Changes in 2014

March 14th, 2014 · No Comments

New mortgage lending changes were implemented in January 2014. Most changes are the result of the need to change underwriting standards that fueled the real estate and credit bubbles in the last decade.

mortgage4The changes promise to have a direct effect on any home buyer seeking Gainesville real estate. The primary changes will be built around an “ability to repay” rule and a “Qualified Mortgage” rule (known as the QM rule).

According to Ron Haynie, VP of Independent and Community Bankers Association, these changes will be implemented in the early months of the year. However, we will likely not see the full effect of the changes until later in the year.

The new regulations effectively provide benefits to both lenders and borrowers. According to Bob Davis, VP of the American Bankers Association, the QM shields lenders from legal liability in case the loan defaults, as long as they do the underwriting properly.

For the borrower QM prohibits loans that are generally considered not good for consumers, such as balloon payment loans, interest-only loans and negative amortization loans. It also limits the number of points the lender can charge to 3% of the loan.

A Qualified Mortgage requires more stringent borrower qualifications. It requires the lender to look comprehensively at income, assets, employment, all housing costs, current debt, monthly debt-to-income ratio, and credit history (not just credit score). According to Haynie it also draws “a line in the sand” requiring a maximum of 43% debt to gross income ratio. The more stringent guidelines translate into a lot more paperwork for the borrower and the lender.

Previously, there was flexibility in the debt-to-income ratio in that a higher ratio could be offset by other factors such as a larger down payment or setting aside a large cash reserve for debt service. The new guidelines, being implemented by the Consumer Financial Protection Bureau, do not allow such offsets.

Stan Humphries, chief economist with Zillow, thinks the new rules won’t affect the real estate market. But, he is in the minority. Most lenders, including Bob Davis, think lenders are going to be very conservative in the short term until they see how the courts interpret the rules.

Three groups of borrowers will be particularly impacted: lower income buyers; middle income buyers; and self-employed buyers. The first two groups will experience difficulty because the lenders will not be interested in the smaller loans because fees are limited and risks are increased. Self-employed borrowers will be impacted because there is much more documentation needed to prove their ability to repay stemming from their tendency to see fluctuations in monthly income.

There will still be the potential to obtain a mortgage that is not “qualified” by using Freddie Mac and Fannie Mae. But, the lender must be willing to meet Freddie’s and Fannie’s standards. That is more work for the lender, but will provide a mortgage for buyers who otherwise could not get a loan. Lenders will also have the option of providing a loan that is “non-qualified”, but the lenders will have to hold the mortgage themselves…and that adds additional risk.

Overall, the mortgage industry is changing dramatically and we won’t know exactly how much until toward the end of the year.

Search all Gainesville FL real estate and Gainesville FL homes for sale.

Linda Luetjen assists buyers looking for Gainesville FL real estate for sale and aggressively markets Gainesville FL homes for sale.

She understands the purchase of any Gainesville FL home represents not only one of the largest and most significant investment a person can make, but also a decision that affects the entire life of a family. It should be handled with all the care and attention such a significant transaction deserves. You may rest assured that Linda never forgets this. Her reputation depends on your satisfaction.

For more information about buying or selling your Gainesville FL home, please call Linda toll free at 888-424-8841 or via email with our convenient contact form.

Tags: Money matters · North Central Florida Real Estate · Real Estate

Early Mortgage Pay-off – Good Idea Or Not?

November 14th, 2013 · No Comments

With interest rates so low and economic uncertainty so high, it is no wonder that many owners of Gainesville FL homes are considering paying off, or at least paying down, their mortgages earlier than expected. The topic is a controversial one, however, with real estate and financial experts vociferously arguing about both the advantages and disadvantages of such a move.

MortgageProponents of early pay-offs cite benefits such as a strong sense of financial stability, added housing security, and financial flexibility, whereas opponents point out the loss of liquidity and investment opportunities.  Both sides agree, however, that you should pay off high interest loans first, establish a comfortable emergency fund, and utilize a mortgage calculator to analyze financial gain or loss incurred in the early pay-off of the mortgage on your Gainesville FL home.

In the event that you decide that you do wish to own your Gainesville FL home free and clear now—or in the near future– there are steps you need to follow.   First, the process is the same whether you obtained your loan from a bank, a credit union, or a mortgage broker/banker. You signed a promissory note and a deed of trust (or mortgage) which was recorded among the land records in the jurisdiction where your property is located.

Before you send in a check, contact your lender and get a written payoff statement, which will include a per-diem interest. Remember that interest accrues daily, and you have to pay the lender up to the date it actually receives your check.( Many title attorneys actually send the lender a few more days’ interest just to be on the safe side. Legitimate lenders will refund any overage.)

After you have paid the lien off, some documentation (release or satisfaction) must be recorded among those same land records reflecting that the loan has been paid in full. Talk to your lender as to its procedure. Most will take care of recording the release for a nominal fee; some will send you the promissory note and deed of trust marked “paid and canceled” and ask you to handle the recording.  Be sure you get the original documents back from the lender.

You should also (1) advise your insurance carrier in writing that you no longer have a mortgage; (2) request the real estate taxing authorities in your jurisdiction send you the original tax bills; and (3) stop any automatic payments with your bank.

Search all Gainesville FL real estate and Gainesville FL homes for sale.

Linda Luetjen assists buyers looking for Gainesville FL real estate for sale and aggressively markets Gainesville FL homes for sale.

She understands the purchase of any Gainesville FL home represents not only one of the largest and most significant investment a person can make, but also a decision that affects the entire life of a family. It should be handled with all the care and attention such a significant transaction deserves. You may rest assured that Linda never forgets this. Her reputation depends on your satisfaction.

For more information about buying or selling your Gainesville FL home, please call Linda toll free at 888-424-8841 or via email with our convenient contact form.

Tags: Money matters · North Central Florida Real Estate · Real Estate