Bridge Loans Offer A Cash Infusion
If you've never heard of a bridge loan, it's probably because the housing market has been so hot for so long that most people haven't needed them.
In the last five years many homes sold within days of being listed, meaning few homeowners had to worry about paying for their new homes before they'd sold the old ones. But a slowdown in a number of major housing markets in the U.S. region suggests that more consumers may need a helping hand to bridge the gap between buying and selling a home.
If you're one of the unfortunate home sellers caught between two closings, a bridge loan -- also known as a swing loan or gap financing -- can provide you with the cash infusion you need. There are two types of bridge loans.
If you would like to discuss this option for your situation,
call 1-800-741-2483.
But wait…Here is another option!
If You Think You Need a Bridge Loan…
Same scenario…You're thinking of buying a house so you go out with a Realtor and find the perfect "move-up" home. You fall in love with it. If you're a married man, your wife falls in love with it. Same difference. So you present an offer. The only problem is that you need to sell your house in order to buy that house. But you haven't even put your house on the market yet.
So you make a "contingent" offer. Your offer to buy is contingent upon your ability to sell your house in time to close. You haven't even listed your house yet. That's a little bit "too" contingent for most sellers nowadays. They are likely to turn you down. Bummer.
In hindsight, you realize you should have listed your house first, got an offer (and accepted it), then gone out looking for a new home. But it's too late and you really want that home.
You remember reading about the "bridge loan." It's cheaper to borrow from your 401K (if you have enough money in it). Lenders allow that as a source of funds for down payment. Any secured loan is an acceptable source of funds for a down payment. If you have stocks or bonds or an insurance policy, you can borrow against that, too. Even a car. Any loan "secured" by a physical or financial asset.
Or you can get a "gift" from a family member to make up whatever shortfall you need.
Or...if you have enough equity and can qualify for a bridge loan, you can qualify for a home equity line. It only costs about $350 at your local bank.
Just get the loan before you list your property for sale.
For More details on these options call 1-800-741-2483.
Owner Finance can FIX the Real Estate MESS! Sellers still want to sell and Buyers still want to buy.
So what's missing is REASONABLE Financing. Owner Finance can be just that...with common sense underwriting, reasonable down payments and terms and a little bit of paperwork to keep everyone compliant and informed.
Owner Finance is a great solution.
ADVANTAGES OF OWNER FINANCING THE SALE:
Sell Your Property For Your Desired Asking Price
A buyer may be perfectly happy to pay market value (and maybe more) for a house that requires a smaller down payment and that a bank won't help them finance.
Charge a Higher Interest Rate Than a Bank Would Give
By charging a higher interest rate than a bank (say 8%, 9% or even 10%) you are, in effect, increasing the overall sales price of the property, and making the note more attractive for an investor.
Faster Sell
You can sell a home with owner financing a lot quicker than with bank financing and there can be tax advantages in spreading the buyer's payments out over time (talk with an accountant about that).
Great Monthly Cash Flow Investment
Many owners simply like the idea that they can receive a monthly income and a high interest rate from a property even after they have sold it - and no longer have to worry about repairing leaky roofs or replacing dead water heaters.
Sell The Note To An Investor
A seller who owner financed the deal also has the option of selling that note to an investor for cash either right after closing or after waiting a number of months or years (give me a call or email and I can get you more information about selling your note).
Call Geni Manning for more details 1-800-741-2483 ext. 8000.
Ask a roomful of homeowners what's so great about owning versus renting, and you'll hear them holler in unison: "the tax deductions!" And it's true – homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns.
That means that if you're in a 28% tax bracket, Uncle Sam effectively subsidizes about a third of your borrowing costs or more, making your home more affordable or allowing you to buy a larger home than you could have otherwise. Also, big chunks of your closing costs are tax deductible, and hundreds of thousands of dollars of any profit (or capital gains) that you realize when you sell your home are exempt from income taxes.
At tax time, it's critical to know what you're entitled to, so you can claim it. So, here are five essential need-to-knows about home-related income tax tips to help you get the most tax-reducing bang out of your home-owning buck – and to avoid hefty home ownership-related tax traps.
1. You Have to Itemize Your Return to Claim Your Deductions
During the recent debate on Capitol Hill about whether the mortgage interest deduction should be eliminated (it won't be, not anytime soon), it came out that nearly 40% of homeowners lose out on their major tax advantages every year when they fail to itemize their income taxes. If you own a home and otherwise have a fairly simple return, it might be tempting just to take the standard deduction – and if your mortgage, property taxes and income are low enough, the standard deduction might outweigh your homeowners' deductions. But you'll never know if you're losing out on the tax advantages of itemizing unless you try; before you grab a pen and start filling in that 1040-EZ grab those forms from your mortgage company and answer the questions on tax software like TurboTax, which will automatically do the math on whether itemizing or taking the standard deduction will result in the lowest tax bill – or the highest tax refund – for you.
2. Plan Ahead and Be Strategic When Taking a Home Office Deduction
According to the Small Business Administration, the average home office deduction is $3,686 – multiply that by your tax bracket – 15%, 20%, 30% or whatever it is, and that's what you'll save on your taxes by writing off your home office. Know, though, that the space you designate as your home office cannot be exempted from capital gains tax when you sell your home later. The $250,000 (single)/ $500,000 (married filing jointly) income tax exemption for capital gains is only good on your personal residence, after all – not including any space in your home you've claimed as your tax-advantaged office. If you foresee selling your home for much more than you bought it in the future, near or far, discuss this with your tax preparer to see if the few hundred bucks you save is worth the capital gains complication later.
3. Tax Relief for Loan Modifications, Short Sales and Foreclosures Is Only Around Through 2012
While the long-term housing outlook is beginning to look up, 2011 is projected to be the peak year for foreclosures during this market cycle. Distressed homeowners who are on the brink of a short sale, loan modification or foreclosure should be aware that normally, any mortgage balance that is wiped out by one of these outcomes is taxed as what the IRS calls Cancellation of Debt Income, or CODI.
Under the Mortgage Debt Forgiveness Relief Act of 2007, the IRS is currently not charging income taxes on CODI incurred through a loan mod, short sale or foreclosure on most primary residences through 2012. But right now, banks are taking many months, or even years, to work out mortgages in all of these ways; the average foreclosure in New York state right now occurs only after 22 months of missed mortgage payments. If you foresee any of these outcomes in your future, don't put things off. Do what you can to get to closure on your distressed home and loan, ASAP, while you won't have income taxes to add as the insult on top of your significant housing injury.
4. Project the Income Tax Consequences of a Refinance or Property Tax Appeal
Homeowners everywhere are working on applying for a lower property tax bill on the basis of the last few years' decline in their home's value. Those who have equity have flocked en masse to refinance their 7% home loans into the 4% to 5% rates of the last few months. These strategies offer some of the heftiest household savings out there for the corresponding investment in time and money they take. But here's a caveat for savvy homeowners who slash these costs: remember that property taxes and mortgage interest, the very costs you're minimizing, are also the basis for the major tax benefits of being a homeowner. So plan ahead for your income tax deductions to go down along with your taxes and interest.
5. Don't Forget Those Closing Costs If you bought or refinanced your home in 2010, you may be so focused on your mortgage interest and property tax deductions that you forget all about your closing costs. Any origination fees or discount points that were paid to your mortgage lender at closing are tax deductible on your 2010 return, get this – even if the seller paid your closing costs. If you can't figure out exactly what you paid, look for your HUD-1 settlement statement, that legal sized paper full of line item credits and debits that you should have received from your escrow provider or title attorney at, or just after, closing. Can't find it? Drop your real estate agent or mortgage broker an email; they can usually get a copy to you quickly.
If you have any others questions call us at 1-800-741-2483.
- NUMBER1EXPERTS™ 
