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How Long Will Mortgage Rates Stay This Low?

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how long will mortgage rates stay this low

Whether you’re considering buying your first home, moving to a new one, or refinancing an existing loan, mortgage interest rates may play a big role in your decision. Today, mortgage rates hit a record low during 2020, motivating some people to buy or refinance. However, if you aren’t able to get into the market now, you may wonder, “Will these low mortgage rates last?” If you fall into that category, here’s what you need to know.

COVID-19 and 2020 Mortgage Rates

The coronavirus did have an impact on mortgage interest rates in 2020. In June, they fell below 3 percent due to the effect of a previous Federal Reserve policy update and certain investor activity. The Fed was aiming to stabilize the economy, while investors sought out safe havens to protect them from market fluctuations and uncertainty.

Currently, the Fed rate is also sitting near zero and has been since March. That has also been keeping rates at or close to record lows.

Mortgage Rates in 2021

While it is impossible to predict exactly what mortgage rates will do, they will likely stay low during the early months of 2021. COVID-19 is still a concern, and that may not change until coronavirus vaccines begin safeguarding significant portions of the population and, ultimately, slow the spread.

Some experts believe that mortgage rates will stay near where they are now through the first half of 2021. The thought is that, beyond that point, economic conditions may improve. If that is the case, mortgage rates will rise during the latter half of the year.

But even if mortgage rates rise, they might not go up quickly. Many experts believe the rate could stay below 3.5 percent during 2021, which is still incredibly low in a historical sense.

How Long Will These Rates Last?

Overall, the existing economic climate means that rates will likely remain near today’s rates for several months, if not through mid-2021. After that, increases are possible if economic conditions improve.

However, the rise in interest rates will likely remain fairly slow. The United States may see near record lows for all of 2021, particularly if the Fed chooses not to revise its rates until 2022, as some experts predict as being likely.

Exactly what will happen depends on factors that can’t be fully predicted, such as the impact of the COVID-19 vaccines. With that in mind, if securing a low rate is your goal, it may be wise to act as quickly as possible, suggesting it doesn’t cause an undue hardship. That way, you can snag a near-record low rate before they begin to trend upward.

Are you taking advantage of low mortgage rates? Why or why not? Share your thoughts in the comments below.

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How to Find Out if a House Is in Foreclosure

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Find Out if a House Is in Foreclosure

Buying a house that’s in foreclosure can be a smart way to start investing in real estate. You can get your own home for a bargain. Therefore, you would have a lot of housing security. Even better, you can buy the house, flip it, and make good income. Do you know how to find out if a house is in foreclosure? Here’s what you need to know …

What Does It Mean to Buy a House That’s In Foreclosure?

When a homeowner is unable to make payments on their mortgage, the lender can take the house back. The house is in foreclosure. Then, the lender can put the house up for auction to recoup some of their costs. They want to offload that property quickly. Therefore, they offer those houses at very low prices. The result is that you can get those homes at a very low price.

How to Find Foreclosure Houses for Sale

You can find foreclosure houses for sale on various websites. For example, Foreclosure.com and Auction.com are two are websites that offer exactly this kind of real estate investment opportunity. Additionally, you can search for foreclosed homes for sale on major real estate websites such as MLS and Zillow.

On Zillow, you would go to the listing type and select “foreclosures” from the Sale section. If you want to see which houses might become available for seen, then you can select both “foreclosed” or “pre-foreclosure” under the Potential Listings section (in contrast to the Sale section.)

In fact, Zillow is a great resource not just for finding the home to buy but also for getting information about how to buy a home that’s in foreclosure. Obviously, the process is slightly different from buying other homes. There are some details to be aware of so that you get it all done as easily, affordably, and appropriately as possible.

How to Find Out if a House Is in Foreclosure

So, that’s how you find foreclosed homes for sale. But how do you find out if a house is in foreclosure? In other words, what if you want to check about the status of a home that you’re interested in purchasing? Zillow lists three good ways to find out if a house is in foreclosure:

1. Search Public Records

There’s a process that the lender must go through when putting a home into foreclosure. Part of that process requires that they file a variety of different legal notices with the county recorder. Those legal notices are public record. Therefore, if you want to find out if a house is is foreclosure, you can check for those public records.

Just go to the county recorder’s office for the county in which the home is located. Search for a Notice of Default, Notice of Sale, or lis pendens. The latter is a public notice that there’s a lawsuit associated with the property. This tells you the state of the home. It’s an easy, free way to find out if a house is in foreclosure.

Tips for Searching Public Records

Tip #1: Sometimes you’ll first need to search the County Assessor’s website. You’ll go there to find out the property’s parcel number. This will also give you the owner’s name. Then you’ll use that information to search the county recorder’s office. SF Gate has more information on this.

Tip #2: Depending on where you live, it’s possible that not all records will be available online. In some counties, you may have to visit the courthouse or City Hall in person in order to search the public records. However, you do have that right. Don’t be intimidated.

Tip #3: Check back often. They update the public records regularly. Therefore, the status can change quickly. If you’re serious about buying a home in foreclosure then you might want to check weekly.

2. Check Government Agencies

There are government agencies that publish foreclosure listings. This is one way to find a house in foreclosure for real estate investing. It’s also how you can check if a house you’re interested in is in foreclosure. Furthermore, these agencies usually make the guidelines really clear for you in terms of what would be necessary to purchase the home. Websites to check include:

  • The Federal Housing Administration (FHA)
  • Fannie Mae
  • The Treasury Department
  • Small Business Administration (SBA)

3. Check the Sign

Did you see a house in your neighborhood that you’re interested in purchasing? If so, then you might be able to just check the for sale sign to find out if it’s in foreclosure. Oftentimes, the sign will have a mark reading “foreclosure” or “bank repo.” Then you know for sure that this is the status of the house.

4. Check Bank Listings

In addition to Zillow’s advice, WikiHow offers two more tips. The first is that banks generally list pre-foreclosure and foreclosure homes for sale. You can search their database. If you have a specific address that you want to know about, use that information to find out if a house is in foreclosure.

5. Check the Taxes

Local tax authorities are sometimes aware of the foreclosure status of the home. If you give them a home’s address, then they can search for you to find out if it’s in foreclosure. They aren’t the number one resource but they can be an important tool in your search.

Working with Real Estate Agents on Foreclosure Home Purchases

Another way that you can find out if a house is in foreclosure is to ask the real estate agent. When you call to learn about the property, simply ask. They’ll tell you if that’s the case. In particular, if you see a very low price for a home, then you should ask this question.

If you’re interested in purchasing homes that are in foreclosure, then you might also want to work with a realtor of your own to make the purchase. There are realtors who specialize in exactly this type of home sale. They’ll be able to to help you figure out homes that are available for purchase. Moreover, they’ll know all of the steps to take in order to process the purchase.

Finally, it’s important to know that when a home is in foreclosure, a real estate attorney gets assigned to the property. If you find out the name of that individual, then you can contact them directly. RealtyTrac says that this is the best way to confirm whether or not a home is in foreclosure.

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What Can You Expect From a Luxury Condominium?

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From bungalows to lofts, you have a lot of different options available to you for a residence. If you’ve explored some options but never before considered a luxury condominium, then you might be missing out on a great opportunity. Luxury condos, such as Coastline Residences, offer you a high quality of life both inside and outside the home, giving you the chance to indulge in the finer things while also making a cozy nest for yourself.

What is a Luxury Condominium?

Like any other condo, a luxury condominium is one home (which can be small or large) within a complex of other similar units. What makes it luxury is the amenities within the condominium itself as well as the amenities in the larger building, complex, or housing community.

What Features Make It Luxury?

There isn’t a “standard” set of amenities that makes a condominium rank as “luxury”. However, you’re looking at a high quality of living in these places. Some of the types of things you can expect in a luxury condo include:

  • Stylish interior and exterior decor; these homes often have marble countertops, remote-controlled drapes, expensive flooring and other key details that make you feel like you’re truly living somewhere special.
  • Engaging, entertaining, enjoyable amenities; the building or complex often has rooftop dining, a well-equipped gym, pools and hot tubs and saunas, and other similar amenities.
  • Location; more often than not, luxury condominiums are located in beautiful, comfortable, affluent areas. For example, Coastline Residences has seaside views and is located close to terrific schools.

Picture some of the best hotels that you’ve ever stayed in. Convert that experience to a condo that you own and you get a sense of what a luxury condominium has to offer.

Luxury Condo Case Study: Coastline Residences

Coastline Residences in Singapore is a terrific example of what you can expect from a luxury condominium.

Housing Options

There are more than 140 condos available at this location. If you truly want to live in the lap of luxury, then you can purchase the five-bedroom penthouse. However, the other units – which range from 1-3 bedrooms each – are also luxurious.

The condos are outfitted inside and out with expensive materials. More than their price, pay attention to their beauty, which extends down to the smallest detail. If you want to live in a beautiful space that you don’t have to build yourself from start to finish, a luxury condo is a great option.

In addition to the indoor decor, this condo complex prides itself on eye-catching architecture and landscaping.

The Facilities and Amenities

When you live in a luxury condo, you don’t just enjoy what’s inside your home. You also get to partake of all of the amenities offered for a luxury lifestyle. At Coastline Residences, those amenities include:

  • Multiple areas for fitness including a gym and a yoga lawn
  • Several pools including one for workouts and one for children but most importantly a rooftop pool
  • Serene garden areas for meditation or relaxation
  • Community rooms that you can rent out for parties and events
  • Various pavilions for lounging and dining

Again, picture your favorite luxury hotel. Now imagine that you live there. You can. That’s what a luxury condominium is all about.

 

Use These Tips to Pass Your House to Your Heirs Tax-Free

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pass a house tax-free

You would like to pass a house tax-free to your heirs. After all, you want to give them a gift, not the burden of taxes. But how do you do that? Here are some key tips:

Tips to Pass a House Tax-Free Through a Will

When you do your estate planning, you can make a plan to pass your house tax-free to any heir(s) that you would like. For most people, this is the best way to make sure that you’re passing along the home with the least cost to anyone.

The most important thing is to consider the total value of your entire estate (not just your home). If the value is over $11.58 million (this is called the unified federal estate gift and estate tax exemption amount; the amount is as of 2020), then you’ll have estate taxes. If it’s under that amount, you won’t have taxes. Therefore, you can pass a house tax-free through a will if your assets are below that amount. Note this amount is federal; check with your state about local maximums to make sure that your heirs won’t owe any state taxes on the inheritance.

Things to consider:

  • Make sure you, and your heirs, understand the capital gains taxes that your heirs may have to pay when they sell the property. The great thing about using a will to pass a house tax-free is that it generally gives you the best option as far as this goes.
  • If you owe any money to Medicaid upon your death, they can place a lien on your property, which can impact your heirs

Use an Irrevocable Trust

If you do have an estate that exceeds the $11.58 million amount then you might want to consider putting the house into an irrevocable trust instead of simply including it in the estate will. Specifically, you might want to look into a qualified personal residence trust.

Once you pass away, the house will go to the heir(s) you’ve designated with the trust. However, if you sell the house, the money goes into the trust; it can’t be cashed out should circumstances change. (Hence, the term “irrevocable.) So, this is not a move to take lightly but it’s something to consider if you have a high-value estate and want to pass a house tax-free to your children or other heirs.

Tips to Pass a House Tax-Free As a Gift

You can gift a house to your children. Don’t you have to pay taxes on that? Not necessarily. If the value of your home is less than the $11.58 million mentioned above, then you probably won’t have to pay taxes on it nor do your children. You do, however, have to file a gift tax form when you do your annual taxes. As long as the value is below that amount, it should just be a matter of filing the piece of paper but not paying any fees.

  • Review the total value of your estate and your home.
  • File a gift tax form with the IRS in the year that you gift the home (unless the home is worth less than $15,000)
  • Offset the total amount of the gift by first using your annual gift-tax exclusion ($15000); note that this is per donee and per donor (so if you and your spouse jointly own the property and you gift it to multiple children then you can increase the exclusion amount accordingly.)
  • Again, make sure you and your heirs are both aware of the capital tax gains. If your child eventually plans to sell the home, they may pay more if you gift them the house than if you will it to them.
  • Do not apply for Medicaid within five years of gifting your home to your child. The details on this depend on exactly what your assets are worth but generally speaking there’s a transfer penalty if you gift assets just before applying for Medicaid.

Can You Sell the House and Gift the Money?

Some people really want to pass on their home to their children. And some children really want their childhood homes. But in many instances, it’s more about the money/value than about the home itself. If that’s the case in your family, then you might think about selling the house.

  • You can sell the home at current market value then gift that money to your child. You can gift it in a will or trust or give it to them directly.
  • Gift up to $5.49 million to one person are allowed without having to pay taxes on it. You will still need to file the aforementioned gift tax form with the IRS.
  • Another option is to sell the home to your child at a very low price. The plus side is that they get the house, then they can sell it themselves at a higher value when the time is right for them to do so. The downside is that they may have to pay higher taxes when they do.

Can You Sell The House to Your Child for $1?

This was a common practice for awhile. You technically sell the house, so it’s not a gift. However, this isn’t something that flies anymore, legally speaking. Of course, you could sell the house to your child for $1 if you wanted. But the rest of the value of the house is considered a gift. Therefore, the gift tax rules are still relevant. Moreover, if your child sells the house, they have to report that entire difference as a gain, which impacts taxes.

If you want to sell your house to your child, your best bet as far as taxes go is to sell it to them with a small down payment as a seller-financed sale. You’ll carry the note for the balance. Your adult child will make affordable payments. You can even offset what they pay you by gifting them up to $15,000 per year (which is low enough to not qualify for that gift tax.) Since you’ve sold the home, it’s no longer part of your estate, so you don’t have to worry about that come tax time.

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Here Are 3 Of The Best States For Military Retirees

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best states for military retirees

When your military career comes to a close, you are often faced with a tough decision. Military retirees can essentially move to any state in the nation, allowing them to set up their post-military life. Deciding where to go is a challenge for many, especially since every state offers something different. If you are trying to figure out the best states for military retirees and whether one, in particular, is right for you, here’s what you need to know.

Understanding Military Retirement

Military retirement isn’t always the same as a traditional retirement. Active duty personnel can be eligible after 20 years of service. Suggesting that a person signed up for the military at age 18, they could qualify for retirement when they are 38 years old.

That means many military retirees aren’t necessarily leaving the workforce. When they decide where to retire, they usually factor in job prospects, as many will continue working full-time, potentially for the next two to three decades.

However, you aren’t required to retire from the military after 20 years of service. A person could remain in the military until they reach the mandatory retirement age of 62, in most cases, creating an opportunity for over 40 years of service.

There can also be other forms of military retirement to consider, as well. For example, a person may end up medically retired before the 20-year mark. Depending on the reason for the retirement, whether they choose to pursue additional work opportunities after separating from service could vary.

Choosing Where to Head After Retiring from the Military

Which states are best for military retirees isn’t universal. Each of the situations above could lead to different needs, altering where they may be best off.

Additionally, there are also other factors to consider. Some retirees would rather be near friends and family or in a particular region. If this preference is important, it needs to be part of the decision-making process.

Ultimately, military retirees need to examine the pros and cons of different options. That way, they can choose a destination that will serve them well for the years, if not decades, to come.

3 of the Best States for Military Retirees

1. Virginia

One of the biggest reasons to choose Virginia is for federal jobs and defense-related contractor positions. With its proximity to Washington DC and numerous government and military installations, opportunities in those arenas are plentiful.

Additionally, the climate is relatively mild, and housing in certain cities is decently affordable. There’s also access to military bases for medical care as well as VA hospitals in many metro areas.

It’s important to note that Virginia does fully tax military retirement pay. However, if you’re looking for a state with exceptional job opportunities for those with military and defense experience, it’s worth keeping on the table. Plus, sales tax in Virginia is relatively low, helping to offset the presence of an income tax.

2. Florida

If you don’t want to pay state income tax on your military retirement pay, Florida is a great option. The state doesn’t have its own income tax, allowing you to keep more of your money in your pocket.

Florida also offers a great quality of life for those who would like to retire near beaches and in a warmer climate. Additionally, the healthcare services for veterans are fairly accessible. Along with VA facilities, there are numerous military bases throughout the state, giving retirees access to certain clinics and other on-base or on-post amenities.

Defense contractor and federal positions are also widely available in Florida. This creates career-oriented opportunities for those who aren’t leaving the workforce.

3. New Hampshire

When it comes to state income taxes, New Hampshire only levels one on dividend and interest. That means, by and large, your military retirement pay isn’t going to be taxed.

Additionally, the state has a surprisingly high number of defense contractor positions, something that may appeal to military retirees who aren’t leaving the workforce yet. The state doesn’t have a sales tax, either, which makes daily living more affordable.

Housing itself isn’t necessarily incredibly expensive in New Hampshire. However, the property tax rates are some of the highest in the nation. But, since there isn’t income or sales tax to contend with, that isn’t necessarily a major financial burden as it is offset by savings in taxation.

Ultimately, all three of the states above are top contenders for anyone retiring from the military. However, they each come with pros and cons. It’s wise to consider your unique needs and preferences as you make a decision. That way, you can head to a state that offers everything you require and is a place that you’ll enjoy long-term.

Can you think of any other states that are great for military retirees? Share your thoughts in the comments below.

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