PghRealtorMom Tip of the Month:
Tuesday, January 28, 2014
Congratulations, you’re engaged… married… relocating… moving up or down-sizing! Wherever your life has taken you, if you are reading this, you may be contemplating buying or selling your home. Before you begin your home search, it's important to understand your purchasing power. How much home can you afford? Do you need to sell before you buy? What is your monthly budget?
“Few experiences are more frustrating than falling in love with a home that’s for sale and then discovering you can’t afford to buy it… a consultation with a mortgage lender is a crucial step in the home-buying process because you need to understand your purchasing power before you begin to look at homes.”
Step 3 - A Pre-Qualification* Letter will state the amount a lender believes you can borrow based on your income and your FICO credit score. This letter will give you peace of mind when shopping for a home and when submitted with your offer to purchase your new home, will assure the seller that you are a qualified buyer. If you are selling, insist that your Realtor gathers this for you before accepting any offer.
Another very important step is to review a Cost Estimate with your Realtor, which provides your estimated closing costs, mortgage, home-owner’s insurance and real estate tax payments calculated on your offer for a specific home. Be sure you are comfortable with the numbers before you make the commitment to purchase the home by signing the Agreement of Sale. You may be eligible for various programs or loan products that would make your payments more favorable.
10-Step Guide to Buying a House: http://www.realtor.com/advice/10-step-guide-to-buying-a-house/
Definitions:
Closing Costs: fees for final property transfer not included in the price of the property. Typical closing costs include charges for the mortgage loan such as origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate professional fees, prepayment of taxes and insurance, and real estate transfer taxes. A common estimate of a Buyer's closing costs is 2 to 4 percent of the purchase price of the home. A common estimate for Seller's closing costs is 3 to 9 percent.
FICO Score: FICO is an abbreviation for Fair Isaac Corporation and refers to a person's credit score based on credit history. Lenders and credit card companies use the number to decide if the person is likely to pay his or her bills. A credit score is evaluated using information from the three major credit bureaus and is usually between 300 and 850.
Offer: indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.
Pre-Qualification* vs. Pre-Approval
Pre-Qualification: a lender informally determines the maximum amount an individual is eligible to borrow. This is not a guaranty of a loan.
Pre-Approval: a lender commits to lend to a potential borrower a fixed loan amount based on a completed loan application, credit reports, debt, savings and has been reviewed by an underwriter. The commitment remains as long as the borrower still meets the qualification requirements at the time of purchase. This does not guaranty a loan until the property has passed inspections underwriting guidelines.
More Definitions at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/buying/glossary
PghRealtorMom Needs:
(If your home fits any of the below descriptions and you are thinking of selling, please contact me immediately.)
· Mid-Century Modern design surrounded by private green space or with an attractive view / any area ok
· Victorian-Style 3+ bedroom with potential for 1st floor master / Fox Chapel Area School District
· Maintenance-Free 3+ bedroom in secure “lock & leave” community with private outdoor space / North Hills area
· Ranch 3+ bedroom fixer-upper with basement on large, private lot / North Hills area
· 3+ bedroom, move-in ready with open kitchen/family area, finished basement and large 2+ garage / Plum, Kiski or Franklin Regional SD
· Maintenance-Free 4+ bedroom, single-family with yard / Fox Chapel area
· Large move-in ready, 4+ bedroom with finished basement in secure neighborhood in Pine Richland or Hampton School Districts
PghRealtorMom Current Mortgage Rates:
| 30 Year Fixed | 15 Year Fixed | 5 Year ARM | FHA |
01/24/2014 | 4.375% | 3.50% |
| 3.75% |
01/28/2014 | 4.375% | 3.375% | 2.99% |
|
*rates deemed to be reliable, but must be verified.
Know your home financing options. There are lending limits for some loan products. It is important to speak with a mortgage professional to fully understand what mortgage program is best for you.
Fixed-Rate Mortgage: a mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.
Adjustable-Rate Mortgage (ARM): a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap.
Conventional Loan: a loan secured by investors, but neither insured by the FHA nor guaranteed by VA. Both fixed rate and adjustable rate loans are available with conventional financing.
Federal Housing Administration (FHA) Financing: is a government, mortgage insurance backed loan which is provided by a FHA-approved lender; this product enables lenders to make loans to borrowers who may not qualify for conventional mortgages.
203(k) Financing: this FHA mortgage insurance program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan.
VA Financing: a loan guaranteed by the Veterans Administration (VA) to a qualified veteran and made by an authorized lender on an approved property. Fixed and adjustable rates are available with VA loans. The VA charges borrowers a funding fee.
Who is PghRealtorMom?
I am a hard-working Pittsburgh Mom with a background deeply rooted in Real Estate. I began my career in real estate finance, moving into my current role as I worked with a real estate developer then entered exclusively into the sales aspect of the business in the spring of 2010. Since then, I have formed strategic relationships with agents around the region to match qualified buyers to the right homes.
Find Me Online at:
LinkedIn: www.linkedin.com/pub/lisa-rutkowski/85/b35/619
Facebook: www.facebook.com/pghrealtormom
Twitter: www.twitter.com/pghrealtormom
Pinterest: www.pinterest.com/pghrealtormom
Instagram: www.instagram.com/pghrealtormom
5-Star Zillow Rating: http://www.zillow.com/profile/Lisa-Rutkowski/
I am proud to be listed in The Pittsburgh Mom-Owned Business Directory; a collective effort to support Pittsburgh’s working mothers: http://pittsburghmommyblog.com/pittsburgh-mom-owned-business-directory/wpbdp_category/real-estate/
Why Choose PghRealtorMom For Your Residential Real Estate Needs in Pittsburgh?
Choosing a real estate agent who has the tools, skills and experience to make your dreams come true can be as challenging as the home buying/selling process itself. Let me make it simple for you! I am a Full-Time, Licensed Residential Realtor with Howard Hanna's award winning Fox Chapel Office, a member of the National Association of Realtors® and have earned a strong, professional reputation that you can trust. It will be my pleasure to answer questions throughout this process and provide information so that you have realistic expectations about the future sale of your property.
In addition to yard signs, newspaper ads, details/photos on the MLS and televising your house, there are thousands of ways to advertise your home. With a combination of traditional and modern sales tools, I will work hard to be sure that your listing reaches the global and regional network of real estate agents and consumers to find the right, qualified-buyer looking for a home like yours!
Good communication is the cornerstone of any successful relationship. You can count on me to provide you with the information you need on a schedule and manner that suits you best. You will also have access to statistical Listing Activity Reports providing every opportunity to track my success in finding your buyer.
For professional, courteous "concierge-style" service, customized to fit your lifestyle and needs…
| Please contact me with any questions or to schedule an appointment. Lisa Rutkowski, Realtor (412) 491-2453, Cell | (412) 963-6301, x218, Office | (412) 252-2945, Fax lisarutkowski@howardhanna.com, Email www.PghRealtorMom.com, Website |
Under the Taxpayer Relief Act of 1997 and effective for property sales after May 6, 1997, home sellers will not pay taxes on capital gains in excess of $250,000 ($500,000 for a married couple filing jointly) on the sale of their home. Generally, if you can exclude all the gain, you do not need to report the sale on your tax return.
You will pay taxes on a home sale on amounts of gain in excess of the excludable amount. This type of gain will be taxed at the capital gains tax rate. If you have a loss on the sale, you cannot deduct it on your return. However, you may need to report it.
To qualify for the tax exclusion on your home sale you must meet the following IRS requirements:
1. Ownership Test - Owned the home for at least 2 years
2. Use Test - Lived in the home as your primary residence for at least 24 months within a 5 year period prior to the sale, (not necessarily consecutive), and
3. During the 2-year period ending on the date of sale, you did not exclude gain from the sale of another home.
Definitions
Capital Gains Tax - the tax you owed upon the sale of an investment. The increase or decrease in the value of a Capital Asset is taxed when it is sold. The capital gains tax rates are determined by the type of investment asset and the holdingperiod of the asset.
Capital Asset - investments such as stocks, mutual funds, bonds, real estate, precious metals, coins, fine art, and other collectibles. Capital Assets may also produce income (interest, rents) and this income is taxed when it is generated.
Capital Gain - a profit made from the sale of any capital asset where the sale price exceeds the purchase price of the investment.
Capital Loss - a loss made on an investment.
Holding Period - the length of time you have held an investment. The IRS states, "To determine how long you held the investment property, begin counting on the date after the day you acquired the property. The day you disposed of the property is part of your holding period." (Publication 550; also refer to Revenue Ruling 70-598.)
The short-term holding period is one year or less. Short-term capital gains are taxed at ordinary income tax rates. The long-term holding period is more than one year. Long-term capital gains are taxed at long-term capital gains rates, which is usually less than ordinary tax rates.
Exceptions to the 2 out of 5 Year Rule
You can use this 2-out-of-5 year rule to exclude your profits each time you sell or exchange your main home. Generally, you can claim the exclusion only once every two years. If you lived in your home less than 24 months, you may be able to exclude a portion of the gain. Exceptions are also allowed if you sold your house because the location of your job changed, because of health concerns, or for some other unforeseen circumstance.
Change in the Location of Your Job - If you lived in your house for less than two years, you can exclude a part of your gain on the sale of your house if your work location has changed. This exception would apply if you started a new job, or if you are moved to a new location with your employer.
Health Concerns - If you are selling your house for medical or health reasons, be ready to document those reasons with a letter from your physician. Such a letter does not need to be filed with your tax return. Instead, keep the documentation in your personal records just in case the IRS wants further information.
Unforeseen Circumstances - If you are selling your house because of unforeseen circumstances, be ready to document what those reasons are. IRS Publication 523 defines an unforeseen circumstance as "the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home." The IRS has given specific examples of unforeseen circumstances:
*In addition to the federal capital gains tax rates, your capital gains will also be subject to state income taxes. Many states do not have separate capital gains tax rates. Instead, most states will tax your capital gains as ordinary income subject to the state income taxes rates.
This brief guide has been prepared solely to help my clients familiarize themselves with Capital Gains relating the sale of their property. Please consult a Tax Professional with specific questions about Capital Gains or call the IRS with further tax questions at 1-800-829-1040.
For all of your Real Estate needs... I am PghRealtorMom!
Find me online at
For professional, courteous "concierge-style" service customized to fit your lifestyle and needs... please contact me with any questions or to schedule an appointment.
Lisa Rutkowski, Realtor
Howard Hanna Real Estate Services - Fox Chapel Office
I've heard for a while about extended school days and/or areas of the world sending their children to school year-round. In 2014–2015, classroom schedules for more than 13,000 students at select schools across five states will be extended as part of a collaborative program announced last December. The Time (Time for Innovation Matters in Education) Collaborative program was developed specifically for schools and communities of concentrated poverty.
The Connecticut, Colorado, Massachusetts, New York and Tennessee schools that participate have agreed to redesign their school days to add 300 hours of additional instruction and other enrichment activities in each school year. The Time Collaborative program not only allows for longer class periods so students can focus on core studies in greater depth, but entire classes have been added for small-group instruction for those who need it.
What about in Pennsylvania, specifically Pittsburgh area schools? According to the US Department of Education, the average school day in the U.S. is 6.7 hours. My own children are in school for 6 1/2 hours each day.
The students who will spend an extra 300 hours a year at school, learning technologies and studying world cultures, healthy living, foreign languages, fitness and healthy living as part of their core curriculum, will absolutely benefit from the TIME Collaborative program. Should I be concerned that MY kids will not able to compete in the real world simply because their classroom schedules are not as aggressive? Absolutely not!
I believe that learning should begin as soon as a child walks into the classroom. Lessons should be engaging enough to keep students focused every minute of every single class. My children attend a school with certain sociological and economic challenges and I have seen firsthand the efficiency and compassion of our teachers. At this time, it is unnecessary to further strain the school board budget to support additional school hours. As with anything, there is room for continued growth and improvement, but I can say that when a specific need has been identified, the administration has addressed it. If the children in our area face the issues that the students in the other five states are facing, I am sure that this will become a priority.
The PTA organization at my children's school financially supports diverse programming to reinforce that every child has an opportunity to be well-rounded (without extending their school days). Advocacy through the PTA has helped me stay informed about the needs in our school community and across the country. Involvement also ensures the continued success of PTA supported enrichment programming like Multicultural Night, Run for Fun, Traveling Art Gallery (just to name a few).
Finally, we all want what is best for our children and are well aware of the importance of education. If you are moving in the Pittsburgh area and would like to compare PSSA test scores of the various school districts, check out the following:
http://www.bizjournals.com/pittsburgh/promo/schoolguide?r=full&full=true
For more information on how to get involved in the national PTA Organization or to learn more about the TIME Collaborative Program, check out the following links:
http://www.pta.org/
http://www.timeandlearning.org/files/TIMECollabOverviewNov2013.pdf
How many times have I taken a buyer into a home, it fits them... Right price point, right location and it has all everything that want but we go into the basement and their noses start twitching? Dampness raises so many concerns for buyers, even on a home that they may otherwise love. 'If your basement has a damp, musty odor, it is probably a breeding ground for mold.' Home buying is stressful and it is my job to educate my buyers & sellers so that the Right Home doesn't get away from them for the Wrong Reason.
"Mold spores are notorious for causing reactions such as wheezing, stuffy or runny noses, itchy and watery eyes, rashes or hives, and even asthma attacks. Because these invisible spores, or seeds, can catch convective drafts and begin new colonies elsewhere in the home, remediation and prevention should be your first order of business."
If you're selling your home, check out these tips for removing any possible buyer objection about dampness in your basement...
