FHA: More Expensive Than Expected

FHA: More Expensive Than Expected

Marina bay Sands, Singapore

The Marina Bay Sands is situated within a quick walk to the city centre and features a golf course, a tour desk and an outdoor pool.The Marina Bay Sands offers many services including a 24 hour reception, conference room(s), a sauna and a restaurant serving Chinese dishes. In addition to a business centre and a free airport shuttle, the hotel features meeting rooms, a kids club and a city centre shuttle service

Top Ten things you need to know about the 3.8% Tax.

Top Ten Things You Need to Know

About the 3.8% Tax


1) When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return),
you will NOT be subject to this tax.

2) The 3.8% tax will
NEVER be collected as a transfer tax on real estate of any type, so you’ll NEVER pay this tax at the time that you purchase a home or other investment property.

3) You’ll
NEVER pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.

4) If you sell your principal residence, you will still receive the
full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will NOT pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

5) The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents
after expenses).

6) The tax goes into effect in 2013. If you have investment income in 2013, you won’t
pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.

7) In any particular year, if you have NO income from capital gains, rents, interest or dividends, you’ll
NEVER pay this tax, even if you have millions of dollars of other types of income.

8) The formula that determines the amount of 3.8% tax due will
ALWAYS protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would NEVER be imposed on more than $1000.

9) It’s true that investment income from rents on an investment property
could be subject to the 3.8% tax. BUT: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

10) The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

Reason #1 why buying a home is still a good idea:

* A mortgage can function like an automatic savings plan. By now, you've read the news reports about how little Americans save these days. Well every year you pay on your fixed-rate mortgage, is a year of building equity, and equity is like money in the bank. When it's time to sell-whether you've stayed in your home seven years or 30 years-you'll have created equity and should be able to sell your house for more than you owe.

Tips to maximize your home appraisal

From houzz.com

By Inman News, Monday, June 11, 2012.

Appraisal factors image via Shutterstock.

Editor's note: The following item is republished with permission of houzz.com. See the original article: The Do's and Don'ts of Home Appraisal.
By Vanessa Brunner
Selling a home was difficult even before the market started to slide. Now, every penny counts more than ever, which means that every leaky window, every dangling gutter and every ugly cabinet can make a big difference in the price of your home. While we all have a natural tendency to nest in the places we live, the reality is that many of the changes we make (or don't make) can make or break our home's asking price.
What to do -- and what not to do -- before and after a home appraisal? We asked Houzz users and professional appraisers across the country for their tips.
When remodeling, DO tackle all the major features in each room.


Photo credit: Feinmann Inc.

Article continues below

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KITCHEN
DO have:

• An open layout.
• Newer, matching appliances; stainless steel.
• Extra perks like small-beverage refrigerators, dual dishwashers, instant hot water, and a central vacuum clean-out.
• Granite countertops.
• Custom cabinetry.

DON'T try to fix outdated cabinetry or countertops. These need to be replaced if you want to add value -- new hardware won't be enough to fix them.
BATHROOM

Photo credit: Rikki Snyder
DO have:

• New fixtures and mirrors.
• A freshly painted tub, if necessary.
• Natural light.
• Good ventilation.
• New or refaced cabinetry.

DON'T let your bathroom feel dark or have any outdated colors or materials.
BEFORE YOUR APPRAISAL

Photo credit: Kenny Craft, CNU LEED AP
DO make a list of recent improvements to your home. Think big and small here -- this can range from renovating the kitchen to painting your deck. Make sure your appraiser has a list when comparing your home to others in the area.

DO talk to your appraiser before the inspection. Discuss your house and its history. Find out the appraiser's history, number of years in business, and knowledge of the area. "The key in getting a fair appraisal is to have an appraiser that is experienced and knowledgable in the local market, and that you've checked out," said Greg Wilkinson of Worth Every Dollar Appraisals in Atlanta.

DO ask your agent to do a walk-through with the appraiser. Houzz user Genevieve Llerena says this is the best decision she made. "She pointed out all of the work that I'd done and made sure the appraiser was familiar with all of the comparables in our area. She reminded him of how our location made a difference in the comparables."

Buyer's can compete in today's market!!

HOUSE HUNTING TIP: You might have only one opportunity to grab the sellers' attention, which means that your first offer may need to be your best. You need to feel confident that the price you're offering -- particularly if it's significantly over the list price -- is reasonable in terms of your long-term housing needs and in light of the fact that the current uptick in many segments of the market may not be a sustained recovery.

Before writing an offer, find out how many offers the agent anticipates. If you can barely afford the asking price and there are seven offers, you might reconsider and wait for an opportunity that will allow you to move up in price, if necessary.

It's hard to compete with an all-cash offer if you need to qualify for a mortgage. Make sure to get preapproved for the financing you need. Some sellers will accept an offer with a loan contingency from a well-qualified buyer over a cash offer if the price is higher. A large cash down payment makes your offer more attractive.

Make the cleanest offer you can without taking on too much risk. Offers made contingent on the sale of the buyers' home have little chance of being accepted. In the example above, four buyers were willing to make offers without any contingencies. That's as clean as it gets.

In this case, the buyers preinspected the property. In 2005 and 2006, buyers waived inspection contingencies to compete. Sometime negative consequences such as drainage or foundation problems were discovered after closing.

But if you're willing to pay to inspect a home before the sellers have accepted your offer, you can gain the information about the property's condition before moving forward. Be sure to ask for the sellers' permission before preinspecting their home.

It's always a good idea to find out as much as possible about the sellers' situation. This may allow you to offer a perk that could swing the deal your way. Recently, buyers of a Piedmont, Calif., home offered the seller 30 days to rent back at no cost.

Housing Market on upswing

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