VA Loan / Veteran Mortgage News
Bruce Reichstein (NMLS #273132) is Sr. Loan Officer specializing in VA Home Loans with Emery Federal Credit Union and VALoans.com. Bruce has originated and underwritten VA loans in all 50 states for over 25 years and is a Nationwide Lender.
APRIL 2006
Federal Benefits for Veterans and Dependents
The 2006 edition of the popular publication Federal Benefits for Veterans and Dependents is now available.
The booklet, which will be available in print in approximately four weeks, updates the rates for certain
federal payments and outlines a variety of programs and services provided by VA and other federal agencies.
It also includes toll-free phone numbers, Internet addresses and a directory of VA facilities throughout the
country.
TOP Department of VA Websites for Veterans
VA Home Page
VA Health Care
Returning Veterans
Survivors
VA Facilities
VA Forms
VA Benefit Payment Rates
Education Benefits
Home Loan Guaranty
Life Insurance
Voc Rehab
Burial and Memorial Benefits
Veterans Employment and Training
Federal Jobs
Records
Department of Defense
A Stable Market
Rising mortgage rates are moving America's real estate markets back into balance. Low rates in recent years have
encouraged home buying. Heavy demand for houses helped push prices higher. But will today's rate increases cause real
estate to crash? Most experts don't think so, for these reasons:
- Rates remain at attractive levels. We'll still see healthy demand for housing, rather than a collapse. The National Association of Realtors forecasts home sales this year will reach the third-highest total on record.
- Fewer sales will keep prices from rising rapidly, but they won't cause them to fall. Most owners simply will stay in their homes, and enjoy living in them.
Home prices generally drop only when lots of folks must sell at once, and a lack of buyers causes values to fall.
Typically that occurs only when a region is in an economic recession, and losing jobs. View a real estate purchase
as a long-term decision, and you're bound to be happy with the results. We'll work with you to insure your
monthly payments remain affordable as long as you own your home.
More Sellers Are Taxed
Rapid appreciation in home values over recent years has created a problem for some owners when they sell.
More of them are shocked to find they owe taxes on their profits. Married homeowners typically can shield $500,000 in
sale gains from federal income taxes. Single owners are treated to a profit exclusion of $250,000.
Yet some owners who have been living for decades in their residence, or who are in an area that's seen rapid housing price
appreciation, may be surprised to learn that they owe taxes. Some aren't even aware of how the current law works.
Prior to its passage in 1997, owners could defer taxes by purchasing a home of equal or greater value within three years
of selling. Homeowners age 55 or over also could enjoy a one-time tax exclusion of $125,000 in profits.
Today both those provisions are gone, and owners in high-priced areas are feeling the squeeze. Median home prices in San Francisco rose by almost $500,000 from 1996 to 2005, notes The Wall Street Journal.
Home profits also increase the adjusted gross income on your tax return. Some taxpayers find that causes them to lose certain personal exemptions and itemized deductions.
You can reduce the impact of higher profits by keeping records of your home improvement expenses. Those costs are added on to your original purchase price before calculating your sale profit.
Talk with an accountant or other tax expert before selling if you suspect some of your gains may be taxable. Being able to plan for that event can minimize the tax hit.
Save on Your Next Home
Households looking to move up may be surprised by the cost of homes today. Yet you may be able to reduce that expense
while still finding a house you'll love. Here are some ideas to consider:
1. Look at smaller homes. You may not need as much living space as you think. Some buyers sell, give away, or throw out items which they have stored but rarely use.
Doing so before purchasing can show you whether it's possible for you to downsize and save money. A smart move can be to buy a small home now that's affordable, in order to gain the benefits of ownership.
In a few years you can add on another room, or finish the basement or attic. Your home will be able to grow to fit your needs.
Buying a house that needs work now is another great way to save thousands of dollars when purchasing. Knowing that you can handle the projects required makes purchasing a fixer-upper a smart strategy.
2. Examine other neighborhoods. You may be able to save by living on a street you didn't think about at first. If you don't have school-age children, there's no need to pay extra to live in a top school district, for instance.
Look for a neighborhood that's coming up, rather than spending more for an address that's already fashionable. Streets where most of the properties are owner-occupied, and where you see ongoing home improvement projects often offer bargains to households looking for a nice place to live.
3. Get ready to negotiate. Try to find a home whose current owners are willing to cut their asking price.
Do so by looking for sellers who have to be out of their house shortly. Someone who is relocating to a new job, or has a baby on the way, is thinking more about moving than about getting the highest price for their home.
Offering a clean contract at a reduced price may be enticing to them. Having your mortgage pre-approved also shows sellers that you'll be able to complete the transaction.
4. Make sure your financing is affordable. Talk with us before you look at homes. We'll show you what your payments would be and how they could change in the future.
You'll then be ready to make a commitment to a smart buy once you find the fight home. Purchasing now can be easier than you think!
Owners Win!
Every day homeowners enjoy many benefits that renters can't claim. Homeowners stay in one spot longer than renters do, \
so they're more likely become friends with the other owners living around them. Besides making life more pleasant, knowing
your neighbors and owning property translate into safer areas. "Homeowners are far less likely to become crime victims,"
notes the National Association of Realtors.
Owners also are more likely to maintain their properties, and keep adding improvements. Doing so increases their pride
of ownership, while turning their property into their dream home. Renovating our homes also increases their value.
On the other hand, renters receive nothing in return while watching their checks to the landlord getting larger every year.
The Right Choice
Many families willingly make sacrifices to buy the home they long for. Eating out less and selling a seldom-used
vehicle are common ways to gain the necessary funds. Once you've made that important purchase, your household will
gain advantages every day you live there. You can decorate and improve your house to suit your needs both now, and
in the future.
You'll be able to live in the neighborhood you prefer, and send your children to the school you want them to attend.
Tax benefits also help owners, since you can deduct mortgage interest payments and property tax. Most owners also
don't pay any tax on their profits after selling a home. And real estate values tend to go up faster than inflation,
which means you'll build wealth simply by living in your house.
We understand the sacrifices and patience required to find the right home. And we know that having monthly payments
you can afford is just as important as locating the perfect house. That's why we'll work with you to make sure
your financing suits you as well as your home does. You'll then feel free to enjoy every day you live there!
