Real Estate Information Archive

Ask a roomful of homeowners what's so great about owning versus renting, and you'll hear them holler in unison: "the tax deductions!" And it's true – homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns.

That means that if you're in a 28% tax bracket, Uncle Sam effectively subsidizes about a third of your borrowing costs or more, making your home more affordable or allowing you to buy a larger home than you could have otherwise. Also, big chunks of your closing costs are tax deductible, and hundreds of thousands of dollars of any profit (or capital gains) that you realize when you sell your home are exempt from income taxes.

At tax time, it's critical to know what you're entitled to, so you can claim it. So, here are five essential need-to-knows about home-related income tax tips to help you get the most tax-reducing bang out of your home-owning buck – and to avoid hefty home ownership-related tax traps.

1. You Have to Itemize Your Return to Claim Your Deductions

During the recent debate on Capitol Hill about whether the mortgage interest deduction should be eliminated (it won't be, not anytime soon), it came out that nearly 40% of homeowners lose out on their major tax advantages every year when they fail to itemize their income taxes. If you own a home and otherwise have a fairly simple return, it might be tempting just to take the standard deduction – and if your mortgage, property taxes and income are low enough, the standard deduction might outweigh your homeowners' deductions. But you'll never know if you're losing out on the tax advantages of itemizing unless you try; before you grab a pen and start filling in that 1040-EZ grab those forms from your mortgage company and answer the questions on tax software like TurboTax, which will automatically do the math on whether itemizing or taking the standard deduction will result in the lowest tax bill – or the highest tax refund – for you.

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One of my favorite loan officers, Charlotte Quinn of Primary Residential Mortgage sent me this today. Charlotte has helped many of my clients get into their dream homes and also helped them plan for the future by analyzing their financial situations and structuring loans and tax exemptions to get the biggest bang for their hard earned bucks. She will show you how to use your home to put more money into your bank account every month. She can be reached at www.CharlotteQuinn.com.


As mortgage rates tumble, many would-be buyers and refinancers are missing the chance to lock in loans at record lows.  The reason?  Their credit scores aren't high enough to qualify for the best rates -- and in some cases are too low to qualify for any loan at all.

Credit scores are three-digit numbers lenders use to gauge your creditworthiness, and in recent years a 700 FICO credit score was enough to get the best rates and terms.  Even people with lower scores could get a decent deal, and at the peak of the lending boom it seemed no score was so low that it merited a rejection.

These days, some lenders demand a 740 score for the best mortgage rates.  Lower scores mean higher rates; if your scores are below 580, forget about it.

Missing out on what may be once-in-a-generation interest rates is painful enough.  But less-than-stellar credit can hurt in other ways.  After all, credit information is used:

By insurance companies to evaluate applicants and set premiums.
By landlords to decide who gets apartments.
By employers concerned about higher risk of theft from those with troubled finances.
Clearly, cultivating good credit scores is an essential 21st-century skill.

The good news is that it's possible to boost your numbers if you have a handle on your finances and you know how credit scores work.  After all, the median credit score is 720 on the 300-to-850 FICO scale, meaning half the adult U.S. population has a higher score and half has a lower score.  Forty percent have scores over 750, and 13% have scores above 800, according to Fair Isaac, the company that created FICO scoring.

Plenty of folks are handling their credit well enough to earn good scores.  You can, too.  But first you need to recognize that:

You can't raise your scores if your finances are still in free fall.  If you're unable to pay your bills, you certainly can't fix your credit.  Real credit score repair will have to wait until your financial crisis has been solved and you have enough money to cover your expenses, plus some extra to begin paying down your debts.

You can't raise your scores if you don't use credit.  Credit scores try to predict how well you're likely to use credit in the future by how well you've used it in the past.  So while living a cash-only lifestyle may do wonders for your wallet, it won't boost your scores; in fact, without continuing use of some type of credit, eventually your credit reports won't even generate credit scores.

You don't have to pay credit card interest to achieve great scores.  "Using credit" is not the same as "carrying a balance on your credit cards."  Carrying a balance is expensive, bad for your finances and completely unnecessary.  Many of us who have achieved 800-plus scores pay off our balances religiously, and we know you can build and keep great credit scores without ever paying a dime of credit card interest.

You can't expect overnight results.  You're likely to see improvement in your scores within 30 days if you pay down significant chunks of your credit card debt.  But otherwise, credit repair takes time, and how much time depends on the many details of your credit reports.  If you have serious black marks, such as bankruptcies or foreclosures, you can see significant improvement in your scores as time passes, but you may have to wait until those negatives drop off your credit reports before you can join the 700-Plus Club.

Now that you understand the basics, use the following techniques to get your scores over 740.
You have to nail the basics

Patrol your credit reports.  Your credit scores are based entirely on the information in your credit reports on file at the big three credit bureaus: Equifax, Experian and TransUnion.  If the information is wrong, your credit scores could suffer.  You can get your reports once a year for free from the government-run AnnualCreditReport.com; you can buy subsequent copies directly from the bureaus or from MyFico.com.  Dispute any serious errors, such as: accounts that aren't yours, reports of late payments when you paid on time, bankruptcies older than 10 years or accounts that were wiped out in bankruptcy but are listed as still due, and other negative information that's older than seven years (the seven-year clock typically starts 180 days after the account first went delinquent).

Get a major credit card.  Retail cards and gas cards can help you build your credit history initially, but to get your scores into 700-plus territory you'll want at least one big kahuna: Visa, MasterCard, Discover or American Express.  If you can't qualify for a regular card, consider a secured version, for which you make a deposit with an issuing bank.  Just make sure the card reports to all three bureaus and that it converts to a regular credit card after 12 to 18 months of on-time payments.

Arrange automatic payments for every card or loan.  Credit scores are extraordinarily sensitive to whether you pay your bills on time, so don't let travel, a busy schedule or a simple brain fart trash your scores.  Most lenders will let you set up automatic payments that take an amount you specify -- the minimum payment, a set dollar amount or the full balance -- every month from your checking account.

Don't let disputes go to collections.  Yes, your insurance should have covered that bill; no, you shouldn't have to pay for a broadband connection that doesn't work.  But if you let a commonplace problem like these escalate, your account will be turned over to collections and become a big black mark on your credit reports.  Pay under protest and get your revenge in small claims court.  (Don't get sued yourself, though: Lawsuits and judgments are another major stain on your credit reports.)

Give your limits a wide berth

Spread out your debt.  More than a third of your FICO score depends on how much of your available credit you're using -- your so-called credit utilization.  The FICO formula likes to see big gaps between your balances (whether you pay them off each month or not) and your limits, especially on credit cards.  You're rewarded for paying down installment debt, such as mortgages and auto loans, but your scores improve much more dramatically when you pay down revolving debt such as credit cards.  In short, it's better to have small balances on several cards than a big balance on one card.

A balance is a balance.  You have to worry about your credit utilization ratio even if you pay your balances in full each month.  The balance that's reported to the credit bureaus is typically the one on your last statement, not the balance that's left over after you pay your bill.  So if you charge $9,000 on a $10,000 card, it's going to look like you're using 90% of your limit (which is really, really bad), even though you paid off the balance in full when you got the bill.

The less of your available credit you use, the more FICO rewards you.  Keeping your credit utilization below 30% on your cards is good; getting it below 10% is even better.  If you regularly use more, ask for a higher limit, spread your charges out on more than one card or make two payments every month -- one just before your monthly statement closing date to lower the balance reported to the credit bureaus and a second one just before the due date to avoid late fees.

Push back against lower limits.  Credit card issuers are reducing limits right and left; in fact, one banking analyst estimated that the newly risk-averse companies would slash $2 trillion of the $5 trillion in existing credit limits.  This can be awful news for your credit scores, but you can and should try to push back.  If you can't get the issuer to reverse its decision, move your balance elsewhere.

3 strategies for lowering utilization

Move debt to installment loans.  If you've got high balances that you can't pay down quickly, consider transferring the debt to a personal installment loan.  The interest rate you'll pay is typically higher -- 13% or so for people with good credit, compared with less than 10% on many credit cards -- but the scoring formula treats installment loan balances more kindly than the same debt on credit cards.

Or move debt off your credit reports entirely.  You can make debt seem to disappear by paying it off with a loan from a friend, family member or retirement plan, none of which typically show up on your credit reports.  If you're tempted to tap your retirement account, though, let me be clear: I am not a fan of 401(k) loans.  Lose your job, and any unpaid balance can quickly become a tax nightmare.  It's an especially bad idea if your finances are on the edge, because credit card debt can be erased in bankruptcy; 401(k) loans can't.

Walk a fine line on plastic

Don't close accounts or let them be closed.  Closing accounts can't help your scores and may hurt them.  Yet many issuers these days are slamming shut inactive cards rather than continue to carry these unprofitable accounts.  If you've got cards you haven't used in a while, take them out for dinner or a movie, and pay the balance promptly.  Better yet, use them to charge a regular expense, such as your electric bill, and arrange for automatic payments.

Apply for credit sparingly.  Applications for credit don't ding your scores as much as some people fear; typically, you lose five points or less.  But when every point counts, such as when you're in the market for a mortgage or a car loan, you don't want to squander any of your scores.  Wait to apply for any other credit until you've secured the loan you want.
 
By: Liz Pulliam Weston, www.moneycentral.msn.com

My sister-in-law, Pat Fales, a great real estate agent and associate broker at Re/Max Elite sent me this little gem this morning. Since family is important and houses and families go together I thought I would share it with you here. Thanks Pat, love you too!

BEING A MOTHER After 21 years of marriage, my wife wanted me to take another woman out to dinner and a movie. She said, 'I love you, but I know this other woman loves you and would Love to spend some time with you.' The other woman that my wife wanted me to visit was my Mother, who has been a widow for 19 years, but the demands of my work and my three children had made it possible to visit her only occasionally. That night I called to invite her to go out for dinner and a movie. 'What's wrong, are you well,' she asked? My mother is the type of woman who suspects that a late night call or a surprise invitation is a sign of bad news. 'I thought that it would be pleasant to spend some time with you,' I responded 'just the two of us.' She thought about it for a moment, and then said, 'I would like that very much.' That Friday after work, as I drove over to pick her up I was a bit nervous. When I arrived at her house, I noticed that she, too, seemed to be nervous about our date. She waited in the door with her coat on. She had curled her hair and was wearing the dress that she had worn to celebrate her last wedding anniversary. She smiled from a face that was as radiant as an angel's. 'I told my friends that I was going to go out with my son, and they were impressed,' she said, as she got into the car. 'They can't wait to hear about our meeting.' We went to a restaurant that, although not elegant, was very nice and cozy. My mother took my arm as if she were the First Lady. After we sat down, I had to read the menu. Her eyes could only read large print. Half-way through the entrees, I lifted my eyes and saw Mother sitting there staring at me. A nostalgic smile was on her lips. 'It was I who used to have to read the menu when you were small,' she said. 'Then it's time that you relax and let me return the favor,' I responded. During the dinner , we had an agreeable conversation nothing extraordinary but catching up on recent events of each other's life. We talked so much that we missed the movie. As we arrived at her house later, she said, 'I'll go out with you again, but only if you let me invite you.' I agreed. 'How was your dinner date?' asked my wife when I got home. 'Very nice, much more so than I could have imagined,' I answered. A few days later, my mother died of a massive heart attack. It happened so suddenly that I didn't have a chance to do anything for her. Sometime later, I received an envelope with a copy of a restaurant receipt from the same place Mother and I had dined. An attached note said: 'I paid this bill in advance. I wasn't sure that I could be there; but, nevertheless, I paid for two plates - one for you and the other for your wife. You will never know what that night meant for me. 'I love you, son' At that moment, I understood the importance of saying in time: 'I love YOU' and to give our loved ones the time that they deserve. Nothing in life is more important than your family. Give them the time they deserve, because these things cannot be put off till some 'other' time. Somebody said it takes about six weeks to get back to normal after you've had a baby... somebody doesn't know that once you're a mother, 'normal' is history. Somebody said you can't love the second child as much as you love the first... somebody doesn't have two or more children. Somebody said the hardest part of being a mother is labor and delivery....somebody never watched her 'baby' get on the bus for the first day of kindergarten... or on a plane headed for military 'boot camp.' Somebody said a Mother can stop worrying after her child gets married... somebody doesn't know that marriage adds a new son or daughter-in-law to a mother's heartstrings. Somebody said a mother's job is done when her last child leaves home... somebody never had grandchildren.. Somebody said your mother knows you love her, so you don't need to tell her... somebody isn't a mother. This isn't just about being a mother; it's about appreciating the people in your lives while you have them... no matter who that person is!

From Steven Salvatore of Preferred Service Mortgage:

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!

Phaseout Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.

Higher Loan Amounts

More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008.  This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750.  These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

For more information contact Steven at Steve.Salvatore@mortgagefamily.com

Our nation is facing an unprecedented lack of liquidity throughout every sector of the economy. This has placed insurmountable barriers in the path of too many homeowners wishing to avoid foreclosure and save their home and home buyers wishing to take advantage of the low mortgage rate environment and realize the American dream of owning a home. The NATIONAL ASSOCIATION OF REALTORS® believes it is imperative that Congress take action and restore consumer confidence in homeownership. We are calling on Congress to enact measures that address foreclosures, stabilize housing and real estate, energize credit markets, restore bank lending capacity and revitalize the economy.

Download the PDF version> (PDF: 334K)
Unlock America's Economy homepage>

Make the $7500 first-time homebuyer tax credit available to all buyers, eliminate the repayment requirements and extend the credit to December 31, 2009.  In July 2008 Congress passed legislation creating a refundable tax credit for first-time homebuyers. The $7500 credit is in effect for purchases between April 9, 2008 and July 1, 2009. Consumers have shown little interest in the credit, in large part because it is not available to all purchasers and because, unlike other credits, this tax credit must be repaid.
View NAR's First-Time Homebuyer Tax Credit Survey Results>

Restore the FHA, Fannie Mae and Freddie Mac maximum loan limits to $729,750 and make them permanent.  The economic stimulus loan limits for Freddie Mac, Fannie Mae and FHA expired on December 31, 2008.  As a result, the maximum limit for Fannie Mae, Freddie Mac and FHA dropped from $729,750 to $625,500.  Returning these limits to their 2008 levels and making them permanent will strengthen the availability of mortgage credit and expand mortgage affordability in a time when home sales and refinance activity are necessary to stabilize the housing market and move the broader economy towards recovery. This will also assure that a wide range of borrowers have access to fair and affordable mortgages.

Get Treasury’s Troubled Asset Relief Program (TARP) back on track and target more funds to mortgage relief. Create a federal mortgage interest buy-down program to bring down interest rate spreads to historical averages and reduce mortgage interest rates. It is crucial that the government continue its actions to bring down interest rate spreads between mortgage and Treasury rates to historical norms which will significantly reduce mortgage interest rates.  Recent actions by the Federal Reserve and the Treasury are making mortgage interest rates more affordable. Mortgage rates are near 50-year lows but the spread between mortgage rates and Treasury rates are abnormally high. If rates drop in line with historic trends, home sales could rise nationally by 10 to 15 percent and stabilize prices in many parts of the country.  While this is a good boost, mortgages need to be more attainable. There continues to be continuing problems impeding the delivery of mortgage credit to home buyers and those trying to avoid foreclosure.  The federal government must step in and address these problems. 

Corrective actions that NAR is advocating include:

• The Treasury Department should provide additional TARP funds to make added loans for housing, establish foreclosure prevention programs, modify more mortgage loans to prevent foreclosures to the maximum extent possible, establish an efficient and effective short sales process, or a combination of these activities.
  
  
• All mortgage lenders, their servicers, Fannie Mae and Freddie Mac, and investors in mortgage assets should adopt and implement aggressive policies that result in more mortgage loan modifications to prevent as many foreclosures as possible.  Where sustaining homeownership is not possible, these entities should facilitate short sales that will benefit all parties.
  
  
• Mortgage lenders and private mortgage insurers should (1) reexamine underwriting standards to determine whether they have over-corrected in response to abuses in the mortgage market, and (2) remove unnecessarily strict underwriting standards (such as requiring excessively high credit scores that result in qualified borrowers being arbitrarily denied a loan).
  
  
• Consumer reporting agencies (credit bureaus) should improve compliance with the Fair Credit Act, including prompt responses to consumers who seek to correct files and errors.
  
  
• The FHA should make investors eligible to participate in its Section 203(k) Rehabilitation Loan Program to help dispose of large numbers of vacant foreclosed properties for rehabilitation and conversion to homeownership.  Additionally, Fannie Mae and Freddie Mac should increase their selling guide ceilings on investor loans to facilitate investor participation in the housing recovery.
  
  
• Congress should oppose the imposition of fees or increased fees by Fannie Mae and Freddie Mac that translate into major new costs on homebuyers and homeowners seeking fair and affordable mortgage loans.
  
  
• FHASecure, which helped more than 450,000 families modify their mortgages and stay in their homes before it was sunset, should be reinstated.  In addition, reforms to the Hope for Homeowners program should be made to increase its efficiency and effectiveness.

Unlock America's Economy homepage>

...starting this Sunday, January 18th, 2009, you'll want to keep up on the latest transportation information. Dr. Gridlock over at the Washington Post has all the information you need to get in and out of the city safe and sound during this historical event.

Here's the latest adjustment in the transportation plan for inauguration weekend: The Memorial and Roosevelt bridges will be restricted Sunday, because of the inauguration opening ceremony at the Lincoln Memorial. The rules on each bridge are different

The Memorial Bridge is completely closed in both directions. No cars, no buses, no bikes no pedestrians. The Roosevelt is closed to inbound vehicles, but will be open outbound. And it has a walkway.

If you could drive across the bridges, there would be no where to go once you got to the D.C. side. There are many streets closed around the Lincoln Memorial and in the blocks from Constitution Avenue north from 5 a.m. to about 5 p.m.

Couple of things about getting to and from this Sunday afternoon event, which could draw several hundred thousand people:
* Metrorail is a best best. Just remember that you won't be able to get off at Arlington Cemetery Station and walk across the Memorial Bridge. (We still think that's a good option for Tuesday, when the bridge will be open to pedestrian traffic.)
* There will be a special shuttle bus service from the RFK Stadium parking lot 8. The shuttle will drop off and pick up passengers at Independence Avenue between 7th and 9th streets NW.
* Watch for the District Department of Transportation's traffic control officers at some intersections along M Street from Wisconsin Avenue to 28th Street NW; Pennsylvania Avenue from M Street to 18th Street NW; K Street from 27th Street to 18th Street NW; Washington Circle NW; 23rd Street from Washington Circle to Virginia Avenue NW.
* On the way out, drivers will find that traffic signals on evacuation corridors near the Lincoln Memorial have been adjusted to ease the flow out of central Washington.

You can find out more about the Metro and county connector bus service here: http://blog.washingtonpost.com/getthere/

I like this guy's attitude. As it is the beginning of a new year and we all have resolutions and changes we want to make, (after all, this is supposed to be the year of change, right?) I thought I'd include some words of wisdom from somebody who actually succeeded in making a positive change last year. You go Todd!


Post Christmas is always a great time to do some personal clothes shopping. I took advantages of the sales this weekend to bolster my wardrobe in preparation for my trip to New York city next week.

I have a huge smile on my face tonight. The picture below is the reason why.

Yes, paying $10 bucks for a $48 pair of pants is nice, but I’m more happy about the 36X30 part. Last year, at this same time, 40X30’s no longer fit. I purchased one pair of pants sized 42X30 and made the most typical of resolutions. To loose weight in 2008.

I haven’t had a size 36 inch waist since I was a sophomore in high school. If I had set today’s accomplishment last year, it might have been, no… it would have been far to daunting of a challenge to accomplish. I would have given up.  Instead, I made one, simple resolution, with a promise to myself that I would set another once the first was mastered.

I resolved to stop eating candy bars.

That’s it. My only resolution. Later, I cut (for the most part) Cheetos and Potato chips. Then French Fries. By summer I added daily walks to the regimen. Then I resolved adjust my meals. Eating at least one super low calorie meal a day. Then I adjusted again to two low calorie meals. Then, in September, I joined 24 Hour Fitness.

Today, nothing fits. Really, nothing. Anyone need a closet full of XXL shirts? I’ve given a bunch of stuff to Good Will. It’s a great problem to have. People who follow me on twitter are asking how I did it. So are my relatives. I ask them, “how do you eat an elephant? One bite at a time.”

My friend poppy's making resolutions. I think resolutions and goal setting is a good thing. But, considering our environment, with our whole industry turned upside down, consider making just one resolution (whatever it is) with the promise that once you have mastered that one, you’ll move on to another.

Sticking it out as a loan officer right now is a little like eating an elephant. But you can do it if you like. Start with just one bite.

By Todd Carpenter.

Todd has been a veteran of the lending industry since 1992. He's the creator of lenderama, organizer of REBlogWorld and a social media consultant.

Lots of times clients ask me what this or that means in a real estate transaction. I think it would be fun to include some new words every week that will help you understand some of the lingo you hear during the course of a transaction. This will help me brush up too, (since I took that real estate licensing test almost fifteen years ago!)

If you have any questions about any of this, you know who to call. : )


Acceleration Clause

1.  A condition in a real estate financing instrument giving the lender the power to declare all sums owed to the lender immediately due and payable upon the happening of an event such as sale of the property or a delinquency in the repayment of the note. 2.   Clause in a deed of trust or mortgage which "accelerates" the time when the indebtedness becomes due. For example, some mortgages or deeds of trust contain a provision that the note balance shall become due immediately upon the resale of the land or upon the default in the payment of principal and interest.

 

Biweekly Payment Loan

A mortgage which requires principal and interest payments at two-week intervals which is exactly half of what a monthly payment would be which over a year's time, the 26 payments are equivalent to 13 monthly payments on a comparable mortgage loan.

Commitment Letter An official notification to a borrower which generally specifies the terms of the loan and a date for the closing by a lender of the intent to grant a loan.

Deed Of Trust   A document which transfers title in a property to a trustee, whose obligations and powers are stipulated; often used in mortgage transactions.   Earnest Money A sum of money or other consideration tendered by a prospective purchaser as evidence of good faith in conjunction with an offer to purchase rights in real property. Fair Market Value   The amount of money that would be paid for a property offered on the open market for a reasonable period of time with both buyer and seller knowing all the uses to which the property could be put and with neither party being under any pressure to buy.