There’s nothing quite like a home that you can truly call your own. A place where you can have the gleaming hardwood floors you’ve always dreamed of, a space to cultivate your own vine-lined patio, a way to provide a good neighborhood for your kids to grow up in, and a freedom from the whims of your landlord. These are the images that immediately come to mind, for many of us.
Yet some of the biggest advantages of owning a home are less romantic and more practical – in fact, there are financial advantages to owning a home:
Tax Deductibility You can deduct the cost of your mortgage loan interest from your state and federal income taxes. Since interest generally will account for most of your payment during the first half of your mortgage, the savings can be significant. Some of your costs at the time of closing (including prepaid mortgage interest) can be taken as deductions on that year’s income tax return, and points paid up front at the time of closing represent additional mortgage interest and may be taken as a deduction.
Tax Deductibility of Property Taxes You can deduct all of the property taxes you pay.
Appreciation Potential Real estate is considered a good long-term investment because it usually appreciates in value. The effects of borrowing potential can increase as the value of the home appreciates.
Capital Gains Exclusion When it’s time to sell your home the amount of capital gains you have to pay is reduced. A homeowner can exclude up to $500,000 per couple if married and filing jointly, or $250,000 if single or filing separately for homes that have been the taxpayer’s principal residence for the previous two years.
Capital Gain Treatment Congress allows preferential tax treatment on gains from capital assets held for more than one year. This would be important for a homeowner who has gains in excess of the allowable exclusion.
Principal Accumulation Mortgages are designed to pay the interest for the time that the money has been used, as well as to retire the principal debt over a period of time. This payment plan means that part of the payment each month is for principal accumulation.
Personal Enjoyment Pride of ownership is a valid reason for wanting to own a home. You can personalize your home while enjoying the financial benefits.
For the best evaluation of your financial situation, consult your financial advisor. He/she will be the most qualified to discuss the financial consequences of a home purchase decision, as well as help you to establish a plan that will achieve your home ownership goals.
Tuesday, September 1, 2009
Foreclosure Rescue Scams
Foreclosure Rescue Scams
With the recent rise in foreclosures, foreclosure-related scams have exploded onto the real estate scene. These so-called “foreclosure rescue companies” claim they will help save your home, but in reality are out to make a profit -- at your expense.
Red Flags for Foreclosure Rescue Scams
If you are at risk of or in foreclosure, you should be on the lookout for foreclosure scams. Here are some of the red flags to
watch out for:
• Asks for money upfront before providing any service
• Instructs you not to contact your lender, lawyer, housing counselor, family, friends, or others
• Asks for mortgage payments to be made directly to his or her company or a bank account set up by that person, rather than your lender.
• Requires payment only in the form of cash, cashier’s check, or wire transfer
• Promises to stop the foreclosure process, no matter the circumstances
• Advises you to transfer your property deed or title to his or her company
• Offers to fill out paperwork for you
• Asks for something to be done immediately and without delay. This includes pressuring you into signing paperwork that you have not had the chance to read thoroughly or do not fully understand
• Encourages you to lease your house and buy it back over time
• Offers to buy your house for a fixed price that is not set by the housing market at the time of sale
• Asks for you to give a power of attorney
• Asks for signatures on a grant deed or deed of trust
• Asks for signatures on a document that has lines left blank
• Fails to provide copies of signed documents
• Refuses or fails to put an oral promise in writing
Report Fraud
If you have been a victim of a foreclosure-related scam or approached by a scam artist, you may report the incident to the following organizations and government enforcement agencies:
• California Attorney General
http://ag.ca.gov/
• California Department of Real Estate
http://www.dre.ca.gov/
• Department of Housing and Urban Development (HUD)
http://www.hud.gov/
• Federal Trade Commission (FTC)
www.ftc.gov
• Your local Better Business Bureau
http://www.bbb.org/
Legitimate Resources
If you are at risk of foreclosure or have already received a foreclosure notice, you should contact your lender immediately. Homeowners also may seek the advice of a reputable housing, financial or credit counselor, attorney, or other qualified professional.
Homeowners may visit the U.S. Department of Housing and Urban Development (HUD) Web site at http://www.hud.gov/ to view its Guide to Avoiding Foreclosure and its list of California HUD-approved housing counseling agencies. In addition, the non-profit
Homeownership Preservation Foundation has a 24/7 toll-free Homeowner’s HOPE Hotline at (999) 995-HOPE.
Copyright© 2009 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reproduce this material for non-commercial purposes. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved.
The information contained herein is believed to be accurate as of April 9, 2009. It is intended to provide general answers to general questions and is not intended as a substitute for individual
legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.
With the recent rise in foreclosures, foreclosure-related scams have exploded onto the real estate scene. These so-called “foreclosure rescue companies” claim they will help save your home, but in reality are out to make a profit -- at your expense.
Red Flags for Foreclosure Rescue Scams
If you are at risk of or in foreclosure, you should be on the lookout for foreclosure scams. Here are some of the red flags to
watch out for:
• Asks for money upfront before providing any service
• Instructs you not to contact your lender, lawyer, housing counselor, family, friends, or others
• Asks for mortgage payments to be made directly to his or her company or a bank account set up by that person, rather than your lender.
• Requires payment only in the form of cash, cashier’s check, or wire transfer
• Promises to stop the foreclosure process, no matter the circumstances
• Advises you to transfer your property deed or title to his or her company
• Offers to fill out paperwork for you
• Asks for something to be done immediately and without delay. This includes pressuring you into signing paperwork that you have not had the chance to read thoroughly or do not fully understand
• Encourages you to lease your house and buy it back over time
• Offers to buy your house for a fixed price that is not set by the housing market at the time of sale
• Asks for you to give a power of attorney
• Asks for signatures on a grant deed or deed of trust
• Asks for signatures on a document that has lines left blank
• Fails to provide copies of signed documents
• Refuses or fails to put an oral promise in writing
Report Fraud
If you have been a victim of a foreclosure-related scam or approached by a scam artist, you may report the incident to the following organizations and government enforcement agencies:
• California Attorney General
http://ag.ca.gov/
• California Department of Real Estate
http://www.dre.ca.gov/
• Department of Housing and Urban Development (HUD)
http://www.hud.gov/
• Federal Trade Commission (FTC)
www.ftc.gov
• Your local Better Business Bureau
http://www.bbb.org/
Legitimate Resources
If you are at risk of foreclosure or have already received a foreclosure notice, you should contact your lender immediately. Homeowners also may seek the advice of a reputable housing, financial or credit counselor, attorney, or other qualified professional.
Homeowners may visit the U.S. Department of Housing and Urban Development (HUD) Web site at http://www.hud.gov/ to view its Guide to Avoiding Foreclosure and its list of California HUD-approved housing counseling agencies. In addition, the non-profit
Homeownership Preservation Foundation has a 24/7 toll-free Homeowner’s HOPE Hotline at (999) 995-HOPE.
Copyright© 2009 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reproduce this material for non-commercial purposes. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved.
The information contained herein is believed to be accurate as of April 9, 2009. It is intended to provide general answers to general questions and is not intended as a substitute for individual
legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.
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