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Some Freddie Mac Borrowers Get New Break
Over the past few years, unemployment has been a major issue in the country. Many homeowners are unable to pay their mortgages once they lose their job and are often put in a very difficult situation. In fact, Freddie Mac attributed about 10% of its delinquent loans to unemployment – and they just passed a new directive to try and help. Beginning in February, Freddie Mac will provide up to one year of forbearance (postponing foreclosure) for unemployed borrowers to pay their mortgage. Unemployed borrowers can work with their servicer to receive six months of forbearance without prior approval. Freddie Mac can then extend the forbearance for an additional six months. Of course, this only applies if your loan is owned or guaranteed by Freddie Mac. Be careful because your loan may be owned by Freddie Mac but serviced by another company. If you are not sure who owns your loan, visit www.freddiemac.com to see if Freddie Mac is the owner.
Location: 11400 Sunshine Terrace Studio City, CA 91604 Beds: 5 Baths: 6 full 1 half Square Feet: 7,600 Lot Size: 3.14 acres History: Kara DioGuardi, former American Idol Judge who has written songs for Britney Spears, Pink, Carrie Underwood and Christina Aguilera, purchased this home for $3.5 million in 2007. Since then, DioGuardi extensively renovated and expanded the home. Asking Price: $10,000,000 Features: Inside, the home is full of luxurious amenities, including a sauna, a solarium, an art studio, multiple fireplaces (including one 20 foot fireplace and another double sided fireplace ) and a master bedroom suite (with cathedral ceilings, balcony, and fireplace). Outside fountains and ponds can be found around the property, along with multiple outdoor entertaining areas. The gated property has city and mountain views, including the amazing views from the infinity pool, as seen above. The property is also within walking distance of some of the finest restaurants and shops in Los Angeles
Home Sales – In Numbers
In December 2011, home sales hit an 11 month high. Existing home sales rose 5% to an annual rate of 4.61 million units. This is the third straight month of gains. The number of properties on the market was the lowest in close to several years. There were about 2.38 million unsold homes on the market, which is the fewest since early 2005. This translates into just over 6 months of supply, the lowest since early 2006. The median sales price in December was $164,500 – a 2.5 percent drop from a year ago.
Tax Time – What About Vacation Homes?
Taxpayers are entitled to take deductions for their primary residence (as we discussed last week) and a vacation home. It is important to first define a vacation home. Vacation home owners often use their homes in different ways – some keep it solely for their own use and others rent their homes when they are not using it. The IRS requires you to treat expenses and income from a vacation home differently depending on how often the home is used and if (and how often) renters are present. This article will examine the tax rules for homes that are true ‘vacation homes’ – those homes kept for the exclusive use of the owner. The IRS defines these as homes used by the owners for more than 14 days and rented to others for less than 15 days. For tax purposes, vacation homes that meet this definition are treated similar to a primary residence. If you meet these conditions, you may be able to deduct mortgage interest (just like on your primary residence) and property taxes on your Schedule A. Plus, you may also be able to deduct uninsured casualty losses. What happens if you do rent the home for 14 days or less? Any rental income you collect is tax free, and does not have to be reported on your tax return. Once your home is rented for more than 14 days, you’ll have to start claiming your income and following a new set of rules – which will be covered in a future issue. Remember, that a vacation home doesn’t necessarily have to be your typical home. Your time share unit, boat, or RV may qualify as long as these dwellings include sleeping, cooking, and toilet facilities. There are also always restrictions, income limits, exceptions, caveats, and many other complications to the tax code. Plus, some of these deductions can only be taken if you itemize on Schedule A of your tax return (instead of taking the standard deduction). So, consult your tax advisor to get the details on your specific situation. .
If you want to know exactly where the property line is, just watch the neighbor cut the grass.
Riddle of the Week:
A Panda Bear walked into a restaurant. He sat down at a table and ordered some food. When he was finished eating, he took out a gun and shot his waiter. He then left the restaurant. When the police caught up with him, they asked him why he had killed the waiter. He replied, "Look me up in the dictionary." What did the dictionary say?
Check back next week for the answer.
The information in this newsletter is not meant as legal, financial, or any other type of recommendation. Please consult a qualified professional to discuss the details of your individual situation.