Sep
30
If i switch title of a property from my name to an LLC, what income tax form do I file?
Filed Under Renting & Real Estate | 3 Comments
senzualsindhique asked:
my name would still be with the morgage. What do experienced investors that place property in LLC’s usually recommond? do I file my corporate income tax for the LLC claiming mortgage interest and expenses and have the losses or gain pass through to my personal income tax 1040? are there any consequences in leaving my name on the mortgage tax and audit wise??
Miguel
my name would still be with the morgage. What do experienced investors that place property in LLC’s usually recommond? do I file my corporate income tax for the LLC claiming mortgage interest and expenses and have the losses or gain pass through to my personal income tax 1040? are there any consequences in leaving my name on the mortgage tax and audit wise??
Miguel
Sep
30
Save Money By Paying Mortgage Weekly?
Filed Under Real Estate | Leave a Comment
Lin Ennis asked:
If paying your mortgage biweekly (every two weeks) cuts about seven years off your pay back schedule, then paying weekly should cut off 14 years, right? If you find a place where that works, let me know and I’ll sign up with you!
Though there are international variations in the way mortgages are calculated, most United States home loans have some common characteristics. Two notable ones are that interest is computed monthly (usually at 1/12th of the annual rate) and that the interest is charged “in arrears,” that is, after it was used. Though these can vary among lenders, most follow this format.
Therefore, your mortgage interest is the same for the month of March with 31 days as it is for February when there are only 28 days. In addition, any payment you make this month will not reduce the interest you owe next month, because of that “arrears” thing. It has already been established you will pay your interest rate times .o8 (1/12th of the rate) times your remaining loan balance.
One more basic to keep in mind: most U.S. lenders want to process your mortgage payment only once a month. Biweekly mortgage plans are usually implemented by companies external to your lender, and provided as a service to you (you pay a fee for the service) and to the bank (there are fewer mortgage defaults since the payment is automatically deducted from your bank account). It’s a win-win-win. Properly implemented, you could pay back a 30-year fixed-rate loan in about 23 years, depending on loan specifics, of course. (For $200,000 at 6%, the technique eliminates nearly $50,000 of mortgage interest.)
I learned about this “hold for full payment” policy the hard way on a remote rental property on which the property taxes were increased. I paid my usual payment to the mortgage company. Next thing I knew, I got a 30-day late notice. A phone call to the mortgage servicing company revealed they weren’t equipped to notify borrowers of property tax increases uploaded to their computers by tax assessment offices. Their method was to wait for the next month’s payment, slice the $28 off needed to supplement the last payment, and carry me forward a month behind from then on. They-and other mortgage companies-are quite rigid about the “no partial payments” thing.
This is why for a biweekly payment plan to work, either an outside party collects your two week’s worth of mortgage principal and interest and holds it for you until they collect the next two weeks’ worth, then combines the two half-payments and delivers them to your bank; or your bank has a system in place, totally at their discretion, for applying your payments. Payments are usually still held and applied monthly, but a rare bank might actually apply the two-week portion when it is received.
The reason the biweekly payment plan works so effectively is that there are 26 two-week periods in a year. Fifty-two divided by two equals twenty-six. I hope by seeing how a biweekly plan actually works-which is a bit different from how most of us are used to thinking they work-the problems with a weekly payment plan become clear.
Lenders are not set up to accept payments four times a month, or 4.2 times a month (the average number of weeks in a month). You could operate your own weekly payment plan, with your year’s payments due divided by 52. You would then set the money aside, not to spend it, until you have collected two (if you are also working with a biweekly service company) or four, if you are doing this completely on your own.
Either way, you are squeezing in an extra month’s payment every year. And the best part about it is-if done correctly-that the 13th lump sum goes to principal only!
To receive a free report called “Warnings About Biweekly Payment Plans,” simply check the box at www.letyourmortgagemakeyourich.com Or you can select the free list of credit card companies that pay rewards points directly to your home loan.
Ruth
If paying your mortgage biweekly (every two weeks) cuts about seven years off your pay back schedule, then paying weekly should cut off 14 years, right? If you find a place where that works, let me know and I’ll sign up with you!
Though there are international variations in the way mortgages are calculated, most United States home loans have some common characteristics. Two notable ones are that interest is computed monthly (usually at 1/12th of the annual rate) and that the interest is charged “in arrears,” that is, after it was used. Though these can vary among lenders, most follow this format.
Therefore, your mortgage interest is the same for the month of March with 31 days as it is for February when there are only 28 days. In addition, any payment you make this month will not reduce the interest you owe next month, because of that “arrears” thing. It has already been established you will pay your interest rate times .o8 (1/12th of the rate) times your remaining loan balance.
One more basic to keep in mind: most U.S. lenders want to process your mortgage payment only once a month. Biweekly mortgage plans are usually implemented by companies external to your lender, and provided as a service to you (you pay a fee for the service) and to the bank (there are fewer mortgage defaults since the payment is automatically deducted from your bank account). It’s a win-win-win. Properly implemented, you could pay back a 30-year fixed-rate loan in about 23 years, depending on loan specifics, of course. (For $200,000 at 6%, the technique eliminates nearly $50,000 of mortgage interest.)
I learned about this “hold for full payment” policy the hard way on a remote rental property on which the property taxes were increased. I paid my usual payment to the mortgage company. Next thing I knew, I got a 30-day late notice. A phone call to the mortgage servicing company revealed they weren’t equipped to notify borrowers of property tax increases uploaded to their computers by tax assessment offices. Their method was to wait for the next month’s payment, slice the $28 off needed to supplement the last payment, and carry me forward a month behind from then on. They-and other mortgage companies-are quite rigid about the “no partial payments” thing.
This is why for a biweekly payment plan to work, either an outside party collects your two week’s worth of mortgage principal and interest and holds it for you until they collect the next two weeks’ worth, then combines the two half-payments and delivers them to your bank; or your bank has a system in place, totally at their discretion, for applying your payments. Payments are usually still held and applied monthly, but a rare bank might actually apply the two-week portion when it is received.
The reason the biweekly payment plan works so effectively is that there are 26 two-week periods in a year. Fifty-two divided by two equals twenty-six. I hope by seeing how a biweekly plan actually works-which is a bit different from how most of us are used to thinking they work-the problems with a weekly payment plan become clear.
Lenders are not set up to accept payments four times a month, or 4.2 times a month (the average number of weeks in a month). You could operate your own weekly payment plan, with your year’s payments due divided by 52. You would then set the money aside, not to spend it, until you have collected two (if you are also working with a biweekly service company) or four, if you are doing this completely on your own.
Either way, you are squeezing in an extra month’s payment every year. And the best part about it is-if done correctly-that the 13th lump sum goes to principal only!
To receive a free report called “Warnings About Biweekly Payment Plans,” simply check the box at www.letyourmortgagemakeyourich.com Or you can select the free list of credit card companies that pay rewards points directly to your home loan.
Ruth
Sep
25
Juliette Van Rooyen asked:
When you think of owning a house, you think of your self in two or three decades relaxing in a property that you own outright. This reduced the financial strain you would have to live with in your later years. Unfortunately, this concept is rapidly flying out of the window. Along with a lot of other traditional banking and lending rules, the maximum length of mortgages is on the rise in a major way. It used to be standard practice that mortgages were for twenty five years and it was exceptional if a mortgage was granted for a longer period. This has been turned out by the huge rise in property prices in the last few years.
People are becoming less and less able to repay their mortgages in the standard twenty five year span and are opting for thirty year mortgages. There are even reports of people taking out mortgages for terms over fifty years to be able to afford the home they want now. This leaves people with the prospect of trying to pay off their mortgages off when they have retired. This is dependant on the age the person was when they took out the mortgage. This does not help to reduce the amount of financial pressure that people face after they have retired at all.
People want to own a house so that when they are older they don’t need to be financially responsible for paying rent after their income is reduced by retirement. This benefit is completely nullified if they are repaying a mortgage at that stage of their lives. The worst part is that financial pressure on you is never reduced in any way until the day that the mortgage is completely paid off. It also means that you have to begin hunting for property and planning for your life at the age of eighteen if you have any chance of repaying of repaying the mortgage by the age of seventy.
This means that if you’re in your twenties or thirties you are going to be lucky if you can truly claim your home as your own before you die. This is an incredibly scary thought and one that an increasing number of people have to consider when applying for a mortgage to buy their home with. This also means that you have to spend your entire life repaying this debt and not missing a single payment or you will have to forfeit the home you have worked so hard to buy in the first place. Having a mortgage hanging over your head for such a period of time can lead to a lot of problems, not least of which are the financial implications.
Colleen
When you think of owning a house, you think of your self in two or three decades relaxing in a property that you own outright. This reduced the financial strain you would have to live with in your later years. Unfortunately, this concept is rapidly flying out of the window. Along with a lot of other traditional banking and lending rules, the maximum length of mortgages is on the rise in a major way. It used to be standard practice that mortgages were for twenty five years and it was exceptional if a mortgage was granted for a longer period. This has been turned out by the huge rise in property prices in the last few years.
People are becoming less and less able to repay their mortgages in the standard twenty five year span and are opting for thirty year mortgages. There are even reports of people taking out mortgages for terms over fifty years to be able to afford the home they want now. This leaves people with the prospect of trying to pay off their mortgages off when they have retired. This is dependant on the age the person was when they took out the mortgage. This does not help to reduce the amount of financial pressure that people face after they have retired at all.
People want to own a house so that when they are older they don’t need to be financially responsible for paying rent after their income is reduced by retirement. This benefit is completely nullified if they are repaying a mortgage at that stage of their lives. The worst part is that financial pressure on you is never reduced in any way until the day that the mortgage is completely paid off. It also means that you have to begin hunting for property and planning for your life at the age of eighteen if you have any chance of repaying of repaying the mortgage by the age of seventy.
This means that if you’re in your twenties or thirties you are going to be lucky if you can truly claim your home as your own before you die. This is an incredibly scary thought and one that an increasing number of people have to consider when applying for a mortgage to buy their home with. This also means that you have to spend your entire life repaying this debt and not missing a single payment or you will have to forfeit the home you have worked so hard to buy in the first place. Having a mortgage hanging over your head for such a period of time can lead to a lot of problems, not least of which are the financial implications.
Colleen
Sep
23
Koosha Hashemi asked:
Mortgage Brokers in Canada
Surprisingly, one of the recently conducted surveys revealed that only 43% of people actually shopped around for the best mortgage, including mortgages packaged by brokers. Comparing rates of various lenders can help you save tens of thousands of dollars, get flexible terms and also get valuable assistance with hefty down payments.
Types of Mortgages in Canada
A fixed rate mortgage has a “fixed” rate of interest. The benefit offered by a fixed rate is that it remains constant throughout the life of the loan. These mortgages allow for consistency and are not dependent upon the marketplace. Experts recommend fixed rate mortgages so that borrowers as well as lenders can predict exactly what their payments will be every month.
With an adjustable rate mortgage, the interest rate is tied to the Bank of Canada’s interest rates. The major benefit of an adjustable rate mortgage is the low monthly payment during the time that the economy is faring well. However, there is the risk that interest rates could go up substantially if the market is not favorable. Many lenders entice borrowers by offering lower initial interest rates, which can increase a few fractions of a point each year. Within a few years, these rates can be much higher than traditional, fixed rate loans.
One of the more popular mortgages in Canada is called a “refi”, which is the refinancing of one loan by taking out a new loan, using the same property as collateral. Borrowers are cautioned to make sure the savings outweigh any fees associated with the refinancing. The reason these mortgages have become so popular in Canada is because many borrowers wish to escape their adjustable rate mortgages.
Mortgage Market Prediction
Canadian mortgage rates are directly affected by the actions of the Bank of Canada. By monitoring the interest rate on bonds issued by the Bank, anyone can get an indication of interest rate directions. The bond market is essentially a reflection of investors’ interest rate expectation for the future of the Canadian economy.
Investors who do their homework know that bond rates have been declining. The decline in bond rates results in lower interest rates on mortgages in Canada. The Bank of Canada has backed away from increasing rates due to recent unrest in the market. However, there is speculation the Bank of Canada may slightly raise interest rates in the coming months.
Corey
Mortgage Brokers in Canada
Surprisingly, one of the recently conducted surveys revealed that only 43% of people actually shopped around for the best mortgage, including mortgages packaged by brokers. Comparing rates of various lenders can help you save tens of thousands of dollars, get flexible terms and also get valuable assistance with hefty down payments.
Types of Mortgages in Canada
A fixed rate mortgage has a “fixed” rate of interest. The benefit offered by a fixed rate is that it remains constant throughout the life of the loan. These mortgages allow for consistency and are not dependent upon the marketplace. Experts recommend fixed rate mortgages so that borrowers as well as lenders can predict exactly what their payments will be every month.
With an adjustable rate mortgage, the interest rate is tied to the Bank of Canada’s interest rates. The major benefit of an adjustable rate mortgage is the low monthly payment during the time that the economy is faring well. However, there is the risk that interest rates could go up substantially if the market is not favorable. Many lenders entice borrowers by offering lower initial interest rates, which can increase a few fractions of a point each year. Within a few years, these rates can be much higher than traditional, fixed rate loans.
One of the more popular mortgages in Canada is called a “refi”, which is the refinancing of one loan by taking out a new loan, using the same property as collateral. Borrowers are cautioned to make sure the savings outweigh any fees associated with the refinancing. The reason these mortgages have become so popular in Canada is because many borrowers wish to escape their adjustable rate mortgages.
Mortgage Market Prediction
Canadian mortgage rates are directly affected by the actions of the Bank of Canada. By monitoring the interest rate on bonds issued by the Bank, anyone can get an indication of interest rate directions. The bond market is essentially a reflection of investors’ interest rate expectation for the future of the Canadian economy.
Investors who do their homework know that bond rates have been declining. The decline in bond rates results in lower interest rates on mortgages in Canada. The Bank of Canada has backed away from increasing rates due to recent unrest in the market. However, there is speculation the Bank of Canada may slightly raise interest rates in the coming months.
Corey
Sep
22
Atlanta Mortgage Rates
Filed Under Real Estate | Leave a Comment
Jimmy Sturo asked:
Based on interest rates, Atlanta Mortgages can be divided into two types namely fixed rate and adjustable rate loan. In the case of a fixed rate loan, a monthly payment including the principal and the interest will never change for the duration of the loan.
These types of mortgages are available for different maturity periods ranging from biweekly to 30-year. The rate of interest also increases with the increase in the maturity period of the loan.
Adjustable rate mortgages offer an introductory rate of interest in the beginning for a fixed time period and later an adjusted rate based on the market index rate. The rates of interest of these mortgages fluctuate with market rates of interest on securities like the six-month Certificate of Deposit (CD), the one-year Treasury Security or others. Adjustable rate mortgages have a lifetime cap which protects the borrower from the monthly payment going too high too fast. The interest payments under adjustable rate mortgages are lower than those under fixed rate mortgages.
In Atlanta, mortgage rates differ throughout the city-and throughout Georgia. Generally rates range from 4 to 6 percent. For instance, the 30-year mortgage holds an interest rate of 5.3 percent in the case of Metro Atlanta’s best home mortgages. A borrower can find plenty of useful information via online research directories.
A mortgage calculator gives you an idea as to how much a borrower has to pay every month for a home loan. Information required for using the mortgage calculator are the amount of the loan, the expected interest rate, which is an estimate based on current interest rates, and the period of loan.
Andrew
Based on interest rates, Atlanta Mortgages can be divided into two types namely fixed rate and adjustable rate loan. In the case of a fixed rate loan, a monthly payment including the principal and the interest will never change for the duration of the loan.
These types of mortgages are available for different maturity periods ranging from biweekly to 30-year. The rate of interest also increases with the increase in the maturity period of the loan.
Adjustable rate mortgages offer an introductory rate of interest in the beginning for a fixed time period and later an adjusted rate based on the market index rate. The rates of interest of these mortgages fluctuate with market rates of interest on securities like the six-month Certificate of Deposit (CD), the one-year Treasury Security or others. Adjustable rate mortgages have a lifetime cap which protects the borrower from the monthly payment going too high too fast. The interest payments under adjustable rate mortgages are lower than those under fixed rate mortgages.
In Atlanta, mortgage rates differ throughout the city-and throughout Georgia. Generally rates range from 4 to 6 percent. For instance, the 30-year mortgage holds an interest rate of 5.3 percent in the case of Metro Atlanta’s best home mortgages. A borrower can find plenty of useful information via online research directories.
A mortgage calculator gives you an idea as to how much a borrower has to pay every month for a home loan. Information required for using the mortgage calculator are the amount of the loan, the expected interest rate, which is an estimate based on current interest rates, and the period of loan.
Andrew