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Sometimes, as people approach the inevitable, they start trying to get their things "in order".   They may even have a will, but they decide to transfer title to real estate prior to their death which could be an unnecessary expense for the would-be heir. Generally, when property is passed through direction of a will, the heir will receive a stepped-up basis which means that the fair market value of the property at the time of death becomes the cost basis for the heir.   If the property were sold for that fair market value, there would be no gain and no capital gains tax due. However, if the property is gifted prior to death of the donor, along with the title to the property comes the cost basis of the property.   The transfer of title does not trigger the capital gains tax but when the property is sold, the gain is calculated by subtracting the basis from the sales price leaving a capital gain subject to tax.   In other words, the person receiving the gift does ...

Mortgage insurance benefits the lender if a borrower with less than a 20% down payment defaults on their loan.   Most conventional mortgages greater than 80% and all FHA loans require the borrower to have this coverage. Private mortgage insurance on conventional loans can range from 0.5% to 2.25% based on the loan-to-value and the credit worthiness of the borrower.   A $350,000 mortgage would have a monthly mortgage insurance premium of $146 a month at the low-end of the scale and over $600 on the high-end. You may request that your mortgage servicer cancel the PMI when the principal balance reaches 80% of the original value at the time the loan was made.   You should have received a PMI disclosure form when you signed the mortgage documents stating the date.   If you have made additional principal contributions, it will accelerate the date. Other criteria considered to cancel the PMI on your loan is: The request must be in writing. You must be cu...

This strategy is not about trying to negotiate the best price; it is about beating out the competition and buying the home.   It may be difficult to understand until you have lost a few homes to better offers but when the reality of the situation is that there are not that many homes on the market, the competition heats up and different tactics are necessary.   Sales in December were annualized at 6.76 million, a 22.2% increase year over year according to the National Association of REALTOR®.   The median sales price is $309,800 which is up 12.9% from the previous year.   Inventory for December fell to 1.9 months' supply from 3.0 months' supply in December of 2019.   Six months inventory is considered a balanced market. Things that work in a buyer's market will not work in a seller's market.   The shortage of available homes for sale has led to not only shorter market times but multiple offers that have sales prices above the listing price.   B...

Many homeowners with mortgages pay for both types of insurance but only one of them protects the owner. Homeowner's insurance covers damage to your property and losses from fire, burglary, vandalism, and other named natural disasters.   When an insured has a loss, they file a claim with the insurance carrier which would be subject to the deductible mentioned in the policy. If the homeowner has a mortgage on the property, the lender will require that the borrower carry adequate insurance on the property and name the lender as an additional insured.   This protects the lender that the home will continue to be sufficient collateral for the loan in case of a loss. Mortgage insurance is not like homeowner's insurance in that it is solely for the protection of the lender if the borrower defaults on the loan.   Usually, lenders require mortgage insurance on any loan greater than 80% loan-to-value.   Occasionally, they may require it on some loans less than 80% based o...