VA Loan / Veteran Mortgage News

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DECEMBER 2006

President Bush Signs Comprehensive VA Legislation

President George Bush signed into law a $3.2 billion comprehensive benefits and health care bill for veterans sponsored by U.S. Senator Larry Craig, the outgoing chairman of the U.S. Senate Committee on Veterans' Affairs. The bill the President signed is S. 3421, the Veterans Benefits, Healthcare, and Information Technology Act of 2006.

Among its many provisions, the new law partially overturns a policy dating back to the Civil War era that has prohibited veterans from hiring attorneys to help them seek veterans' benefits until they have spent months - sometimes years - exhausting the administrative process. The original policy came during a time when lawyers were often self trained and notoriously unscrupulous. As signed into law, this bill will now allow veterans or other VA claimants to hire attorneys during VA's appeal process.

The legislation will also require VA to establish an Office of Rural Health. The new law should also help rural states by allowing VA to create a pilot program which makes non-VA facilities - such as private nursing homes or community hospitals - eligible for state veterans' home per diem payments.

Source: U.S. Senate Committee on Veterans' Affairs

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Homes are Solid Investments

House prices no longer are soaring to new heights - but most real estate experts also don't foresee them crashing. In fact, the worst effects of the housing slowdown may be behind us. Even areas which have seen rapid price increases, such as coastal cities, will find that demand in 2007 keeps values from dropping much. A lack of land for new development in neighborhoods where many people want to live prevents prices from falling drastically.

A solid job market and improved wage gains in 2007 also will keep home sales healthy in much of the U.S., economists predict. One reason we're willing to spend more on homes is that today's houses offer more space and features than buyers enjoyed in the past. We also can afford to spend more because food and clothing expenses take up less of our budgets now than in previous decades.

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Avoid Costly Mistakes

Unscrupulous lenders today are finding ways to lure consumers into taking out mortgages that aren't in their best interest. Here are some common tactics used by these firms:

• Letters are sent out referencing your current home loan, and encouraging you to refinance into a new mortgage. Public records which give a property's address, the owner's name, and the mortgage lender are used to draft these solicitations.
  
  While they aren't illegal, they often are misleading. Because of the cost to mail thousands of letters to homeowners, these loans also may be high-priced.
  
  That's true even if the initial payment on them is unbelievably low. Most borrowers find their payments quickly moving up on these adjustable-rate loans.
• Some consumers are receiving calls and e-mails from lenders they've never heard of shortly after applying for a loan. That's because credit reporting bureaus sometimes sell personal information about people who recently have pulled a credit report.
  
  Your name and phone number may be purchased by a lender in another state who is completely unfamiliar with your financial needs or even the neighborhood you live in. Needless to say, consumers should steer away from these companies.

Contact us if you ever have a question about a mortgage offer from someone you don't know. And make sure that a communication which has information about your existing loan isn't a mass solicitation before acting on it. Earning and retaining the trust of our clients is the most important work that we do. We're here as an ongoing financial resource for you, your family, and friends.

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Best Wishes for 2007!

A New Year is a time to reflect, and look back at the joys of the past twelve months. We also can anticipate the coming year, and be thankful for the strength we have to meet our daily challenges. We truly enjoy helping families in our community to gain the greatest benefit from owning real estate. We look forward to assisting you when you're ready to purchase a home.

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Claim Your Tax Breaks

Many Americans have added to their real estate holdings in recent years. Owning rental units provides tax deductions beyond the usual write-offs for mortgage interest payments and property taxes. Income property owners also can deduct expenses for managing and maintaining their investment. Utility payments, insurance, and repairs all are deductible.

But the tax rules change if owners stay in an investment property part of the year, and rent it out at other times. Vacation home owners often find themselves in that situation. Rental income doesn't need to be reported to the IRS if a vacation home is rented out fewer than 15 days in a year. However, your deductions then are limited to the ones homeowners take. Owners who rent their second home for more than two weeks annually must report the rental income, but also can deduct expenses connected with operating as a rental unit.

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Create Tax Losses

When owners personally use the property for two weeks or less per year, they may be able to claim a tax loss if their expenses exceed the rental income. Although there are limitations on the amount of losses you can claim, some owners can defer losses to future years.

Further tax benefits are gained by depreciation, or writing off much of the property's cost over time. However, your profit after selling the unit then will be taxed at a higher rate. Owners who both stay in a property more than two weeks annually and also rent it out at least 15 days must report their rental income, and can claim all rental-related expenses. Yet their total write-offs can't exceed the rental income. In other words, the owner can't claim a loss for tax purposes.

Maintaining accurate records is important when you own a rental property. Also work with a knowledgeable accountant, to insure that tax rules are applied properly to your situation.

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The GI Bill Can Change Your Future.

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