MORTGAGE RATES FALL: The bond market dropped 66 bps last week – marking a good week for lowering interest rates. A lot of this is spurred by bad news in the economy / Japan. It’s unfortunate, but when these things happen – the stock market typically goes down and mortgage rates get better. The par rate on a 30 year fixed loan dropped to 4.875%. 5/1 ARMs back down to 3.25%. 15 year fixed loans down to 4.25%.
MORTGAGE RATE ADVERTISEMENTS: I get asked this all the time – why are the rates you quote higher than other advertisements I see. First, I quote par rates – the lowest rate you can get without paying discount fees to get the rate. A lot of companies/individuals quote low on the rate so you will call them – they forget to mention that the rate they quote will involve a ton of closing costs.
Keep in mind when getting a quote – I can get you any rate that you want. Lower rates are more expensive. I try to quote rates with reasonable closing costs as that is what most customers want.
IRS ENDING TAX BREAKS FOR SHORT SALES / FORECLOSURES IN 2012: Congress enacted the Mortgage Forgiveness Debt Relief Act in 2007 that says the IRS will not tax foreclosure/short sale losses on primary residence homes until 2012. For example if you owed $300,000 on your home and you short sold it for $200,000 – you would be sent a 1099 for the $100,000 that you would have to pay income taxes on. This was temporarily suspended until 2012.
The end is coming soon and you will be paying taxes on these losses. I would never recommend foreclosure/short sale unless it is absolutely necessary, but if you are planning on doing one of these – I would do it now.
Here is a good CNN article on when the IRS can tax you: http://money.cnn.com/2011/04/15/real_estate/taxes_mortgage_debt/index.htm