Closing Rules Take Effect: Understand the Changes

Uncategorized — admin @ 5:38 pm

Closing Rules Take Effect: Understanding the Changes.

The Consumer Financial Protection Bureau offers an online “Real Estate Professional’s Guide” to help you and your clients understand the new TILA-RESPA Integrated Disclosure rule, or TRID, that took effect Oct. 3. The guide, part of the bureau’s larger ” Know Before You Owe” initiative, include a look at the new mortgage closing forms and a closing fact sheet. Also included on the site are a disclosure  timeline and educational videos. The National Association of Realtors has been working with the CFPB to communicate the resources available to REALTORS and to address the impact TRID will have on closings. Access the guide at realtorm.ag/cfpb-realestatepro . For more information and resources on TRID, visit realtor.org/trid

When Your Parents Are Out of Money

Uncategorized — admin @ 7:04 pm

Marc Lichtenfeld, Chief Income Strategist, The Oxford Club Editorial Note: As we explained yesterday, the Fed’s decision to keep interest rates low will likely have disastrous long-term consequences. “Thanks to the death of interest rates,” Andrew Snyder wrote, “gone are the days of ‘safe income.'” Without a doubt, pensioners and retirees are the ones most at risk. That’s why today we’re sharing an article that originally ran last week in Wealthy Retirement. In it, Marc shares some options to help seniors and their loved ones secure a bright financial future. Our hope is that you never have to lean on these instruments. But, unfortunately, for millions of Americans, it may be unavoidable.

Many people remember fondly when their parents gave them allowances for doing chores around the house or maybe a few bucks for their birthdays. However, with over half of today’s seniors unable to pay for their basic needs, more and more adult children are taking care of their parents’ finances. There are several ways to do it, each with certain advantages and disadvantages.

Gift the Money The easiest way to help your folks out financially is to simply give them the money. Think of the $10 you got for Christmas 40 years ago as a long-term loan. Now you’re paying it back… with interest. There is a limit on what you can give them before they run into gift taxes. Each person can give a parent $14,000 per year. In other words, a married couple could give one parent $28,000 or a mother and father $56,000 per year before Uncle Sam starts putting his hand out. You can also pay some of your parents’ bills, although that might be considered a gift too. So before you send your parents on that $75,000 around-the-world cruise, talk to a tax professional. In some cases, you can pay for your parents’ medical bills in a way that won’t be considered a gift and you might even be able to take it off your taxes as a qualified medical expense. However, be careful: If your parents are on Medicaid or receive other government benefits, your gift could make them ineligible for those benefits, so be sure that it makes sense ahead of time.

Upward Trusts An upward trust is usually set up by a child for his or her parent. It’s a way of giving the parent the income from a lump sum that the parent will use for living expenses. They may or may not be given the right to draw on the trust’s principal. You can specify that the money be used for only certain expenses, such as housing or healthcare. That way the parent can’t send the money to a Nigerian prince. David Conover, president and CEO of EverBank Wealth Management, an Oxford Club Pillar One Advisor, stated that an upward trust is similar to any other irrevocable trust, like one set up for a disabled child, for example. However, he indicated that upward trusts come with a caveat similar to that of cash gifts, advising to “make sure the trust doesn’t disqualify the parent from receiving Medicaid, veterans’ or any other benefits.” Conover added that wealthy individuals who set up these trusts for their parents often have the trust reverted to their children’s names after the parent dies in order to obtain estate tax benefits.

Medicaid Trust In order to qualify for Medicaid, a senior essentially has to be broke. Some seniors decide they don’t want the nursing home to get all of their money; they’d rather leave it to their kids and grandkids, so they set up a Medicaid Trust. The move leaves the seniors with very few assets, but qualifies them for Medicaid. There are a few things to be aware of before sheltering money to get free care from the government. In most states, the trust has to have been in effect for five years. You can’t set up a trust and then claim the following week that your mom or dad has no cash so that they can live off the taxpayers. And a Medicaid trust can be expensive to set up. As much as $10,000 versus $1,500 to $2,500 for most other trusts. Lastly, are you sure Medicaid is the best option for your parent? You have a lot less control over which nursing home they’ll wind up in if you are relying on the government to pay for it. And a Medicaid facility might not be as nice as one that you pay for out of pocket.

Insurance Policies A problem facing a lot of older couples is, when one spouse gets sick, it drains their wealth and the surviving spouse has nothing left to live on. One solution is a hybrid long-term care/life insurance policy. The policy allows sick patients to receive a tax-free monthly benefit of up to $9,900, which can offset the astronomical costs of a nursing home. The long-term care benefit reduces the death benefit. So, if a husband with a $500,000 policy got sick and received the $9,900 monthly benefit for two years, he would use $237,600. At his death, the wife would receive a tax-free life insurance benefit of $262,400. Evan Belaga, a certified financial planner and Oxford Club Pillar One Advisor, says these combination policies “create instant wealth by leveraging your money.” For example, a $50,000 lump-sum payment, or $375 monthly premium, can enable you to receive the $500,000 policy mentioned above. Rather than gifting the money or setting up a trust, a child could pay the premium on this type of policy and know that, should a parent fall ill, their long-term care expenses will be met and the surviving parent will also have a nest egg to fall back on.

These are complex issues. Many people would gladly repay their parents for all they have done. There are options to help your parents if you are able. Look into the ideas above to find out which makes the most sense for you and your family. Make sure you talk with an experienced professional who is knowledgeable about elder care laws and topics, particularly when it comes to trusts, taxes and insurance.

Real Estate Market Recap, Sept 8 to 11th, 2015

Uncategorized — admin @ 5:49 pm

The following is a reprint from Inman and gives us an insight into the market from Sept 8 to Sept 11th 2015.

MBA’s Builder Applications Survey for August 2015:

  • Mortgage applications for new-home purchases decreased by 6 percent month over month in August.
  • Conventional loans comprised 68.5 percent of loan applications; FHA loans comprised 19 percent.
  • New single-family homes were estimated at a seasonally adjusted annual rate of 524,000 units in August, down 1.9 percent from July.

Freddie Mac’s Primary Mortgage Market Survey:

  • 30-year fixed-rate mortgages averaged 3.9 percent with an average 0.6 point for the week ending Sept. 10, 2015. This is up from last week’s 3.89 percent average.
  • 15-year fixed-rate mortgages averaged 3.1 percent this week with an average 0.7 point. This is up from last week’s 3.09 percent average.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.91 percent with an average 0.5 point, down from last week’s 2.93 percent average.

RealtyTrac’s Best Day of the Year to Buy a Home study:

  • The best month to close on a home purchase is October — and the best day of the year to close is Oct. 8.
  • The best weekday to close on a home purchase is Monday.
  • The worst month of the year to close on a home is April.
  • In July 2015, appraiser opinions of home values were 2.33 percent lower than homeowner estimates.
  • This is nearly double the gap between homeowner estimates and appraiser opinions that Quicken noted in May 2015.
  • National housing values dropped by 0.27 percent.

Featured Listing Page

Uncategorized — admin @ 5:23 pm

The featured listing page is up and running under the Listing headline!

Hello world!

Uncategorized — admin @ 7:43 pm

Coming soon!  Featured Listing Page. We will feature our new listings here and rotate in various other listings that we think are wonderful and need more attention! Check back soon!