Friday, February 28, 2014
It's getting to be that time of year that winter is dragging on and everyone is anxious for springtime to fully settle in. Flirtation with warm weather still turns to snow showers in a matter of hours, and we're reminded that it's not quite time to retire the snow shovels yet.
Before we can completely turn the page into spring, one other task remains that may be nagging your subconscious: tax time. There's about six weeks left before you'll need to ask the IRS for an extension or risk additional penalties.
There are a few changes this year to be aware of if you haven't filed yet, including new requirements for health insurance policies and same-sex couples. As this list of tax tips details, the Affordable Care Act mandates that all adults obtain some form of health insurance by March 31, 2014, or pay a fine by next year. In other 2013 news, the federal government now recognizes all same-sex marriages in states allowing couples to do so, including five states where Vertex is licensed to do business: California, Connecticut, Illinois, Utah and Washington. All married couples in these states can file taxes jointly and benefit from multiple tax savings.
There are several places to file your taxes online for free, including "Free File" on the IRS website if you earned $58,000 last year or less: http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free. The Boston Globe provided additional steps to consider before approaching tax season.
Still facing tax dilemmas? Especially if you are self-employed, making mistakes on your taxes could cost you dearly. Three Vertex loan officers also hold distinction as Certified Financial Planners and can offer advice to your particular financial situation.
If you are seeking consultation from a CFP, contact:
Friday, February 21, 2014
Foreclosure rates finally drop to 2008 levels
Graphic courtesy of The Wall Street Journal
Good news: Home foreclosure rates are way down compared to the last couple of years, a sign that stricter lending standards have done their job to only allow mortgage loans to properly qualified candidates.
Decreased foreclosure rates also reflect a sharp increase in home values in 2012 and 2013 and dropping unemployment rates. Fewer homeowners are now "underwater" on their mortgage thanks to higher home values, and more people have jobs today than a few years ago.
It may be tempting to complain that the refinance process takes longer than it did in 2008 and that lenders' new requirements are too stringent. However, these restrictions appear to at least be effective in minimizing the numbers of people getting loans who can't afford to pay them back. Lenders have less risk of borrowers falling delinquent on loans when lending standards are higher.
Bad news: Home sales in January were down, partially due to unusually cold weather, slightly higher interest rates and a smaller supply. This is likely only a seasonal loss, though: Most analysts predict a sales bounce back by springtime as the weather warms up and buyers are eager to see what's on the block.
Thursday, February 13, 2014
It might seem counterintuitive in our debt-fearing culture, but spending money you don't have (yet) can be a very good thing. Your history of taking on debt, buying things on credit, can be the difference between getting approved or denied for your new home. Beyond that, it can determine how low of an interest rate you can get and, ultimately, how much money you will pay for it.
For better or worse, a person's credit history is used as a barometer of trust and reliability. A person with several credit cards and a mid-level to high credit score and no late payments is viewed as a stronger loan candidate than someone with no debt and a vague credit history. As unfair as that may seem, a lender wants to see borrowers with a proven track record of making regular, full payments and thus less likely to miss any mortgage payments.
To increase your chances of getting loan approval, make sure you already have some form of credit and that you use it. Keeping a low balance on your credit card - and making at least the minimum payment each month - can build your credit score, positioning you as a more attractive candidate for a $200,000 mortgage loan. This article does a great job of explaining why this borrowing principle empowers you in our lending economy.
Raising your credit score can help you get jobs, new phones, new cars, new homes - the list goes on. It is worth digging into if it can save you thousands of dollars in the long run. Generally, you want to aim for a credit score of 700 or above to guarantee loan qualification. If building credit is a goal for you, check out this list of ways to improve your financial security.
Thursday, February 6, 2014
Life (and the housing market) next to the Rockies is pretty golden.
So the Denver Broncos are not the Super Bowl champs of 2014. It wasn't quite the intense matchup Denverites were hoping for - in fact, I'm glad I didn't bet on it. After the sorrows were washed away, though, the fact remains that the metro Denver area is a pretty great place to live. On top of that, it's a growing city with strong property values and low interest rates, making a home in the Mile High City a great investment.
If you are new to Denver or thinking about making a move, there's lots of information out there to get a feel for different neighborhoods, both within city limits and in the surrounding suburbs. With the influx of new residents in the past couple of years - it was the 2nd fastest growing large city in the U.S. in 2013 according to Census Bureau data - it's caused the rental market to skyrocket, raising rental prices along with it. This makes buying a home here either as a primary residence or rental property a very practical and profitable option.
To see what you are qualified to get a mortgage for, talk to a Vertex loan officer today. On the flip side, if you've always wanted to downsize or try living in a different neighborhood, this is also a great time to sell in the Denver market. High home values mean you can sell the larger house you no longer need and afford a downtown loft. To get a sense for home price trends, check here. Combining the Rocky mountain quality of life with a booming housing market makes putting roots down here a very wise investment.