Posts Tagged ‘property taxes’
To Rent Or To Buy – That Is The Question
No matter where you live right now, at some point you have probably considered whether to buy or to rent. The answer to the question of renting versus buying lies in the factors you must consider. There is no right or wrong decision, but your personal situation determines which choice is right for you.
First, remember that owning a home is a very involved process and is not right for each situation. If you have issues with your credit, move often, desire a lifestyle that is low maintenance, or cannot afford the additional expenses mentioned in the next section, you might be better off renting.
Many people rate buying above renting as a financial decision, because if you rent, you are just “throwing away your money.” On the contrary, there are many expenses that come with buying a home, and most people don’t consider these expenses. Money you put toward your home in the form of mortgage interest, property taxes and insurance, closing costs, and routine maintenance, could also be considered “throwing away your money.” Although the total you spend depends on many factors, these costs can add up very quickly.
Many experts presenting the positives and negatives of renting versus buying tend to focus on the outrageous prices of a home on the east and west coasts. In these locations, the price you must pay to own a home is substantially less than you could spend to rent a similar home, so owning a home is much less financially viable for the average person. Huge down payments, extremely high monthly payments, and high property taxes make home ownership a near impossibility for people in these regions.
In an area like Rolla, Missouri, though, the cost of buying and maintaining a home is substantially less, so it is more feasible for the average home shopper. For example, a California resident recently sold his 720 square foot condo in San Diego for $350,000. He moved to the St. James/Rolla, Missouri area and paid cash for a spacious 3500 square foot home with some land, spending less on this home than he made on the sale of his condo. Also, taxes in the Phelps County area are very reasonable compared to other parts of the country.
Putting aside local real estate costs, home buying is a different experience than renting for many reasons. In purchasing a home, you not only build equity, but you will eventually be able to pay of your home. Although a homeowner with a paid-off home still encounters expenses like taxes and insurance, these costs are much less than what you would spend on mortgage payments or monthly rent.
Another positive aspect of buying vs. renting is that property you own continues to appreciate. In the Rolla/ St. James area, the real estate market experiences gradual peaks and valleys compared to other markets, but based on history, real estate has always appreciated. Although waiting for property appreciation requires patience, this is a benefit that renters never experience.
A third benefit of buying vs. renting is that you can secure a fixed payment over a period of time, and maybe even reduce your payments. With a fixed-rate loan, your interest rate is locked in for 15-30 years, and even variable-rate loans have a limit on how high they can climb. You also have the opportunity to refinance and reduce your payments if interest rates drop. On the other hand, landlords always have the right to increase rents, and generally rent is raised on a relatively consistent basis as the market continues to grow.
The final benefit to owning a home is not sizeable but still a consideration. Most renters are unaware that mortgage interest and property taxes are tax deductible, so part of your housing-related expenses can be deducted from your income, thus reducing your income tax liability.
When deciding whether to buy or to rent a home, you should make sure that you talk to a lender to find out what your options are in the loan department, both what you qualify for and the possible costs involved with different kinds of loans. Also, consult a Realtor® about current market conditions in your area. Consider the positives and negatives involved in buying a home versus renting a home, and make an educated decision based on your circumstances. The only wrong decision you can make is an uneducated decision where you don’t consider all of the factors involved in buying versus renting a home.
Justin Renaud is a REALTOR working in the Rolla Missouri Real Estate market. He has been working with buyers and sellers full-time for the last three years. His website http://www.justinrenaud.com is a resource for buyers, sellers, and homeowners to find helpful advice as well as resources discussing the areas of Rolla, MO and St. James, MO.
Author: Justin Renaud
Article Source: EzineArticles.com
Provided by: Cellphone news
is it ok to take money under the table on a mortgage?
I am currently selling our home and the person wants to pay part of the total price cash under the table and then finance the rest to help keep the value of the home low and help lower his taxes on the home. Is this a good idea? and can this come back to bite either one of us down the road? I am currently selling our home and the person wants to pay part of the total price cash under the table and then finance the rest to help keep the value of the home low and help lower his taxes on the home. Is this a good idea? and can this come back to bite either one of us down the road? Let me clarify that I am not the one wanting this to happen, its the buyer and we arent going to go along with it. I was simply asking some advice and not wanting to be scolded for doing something illegal. I keep hearing that the economy and housing market is horrible right now, could have fooled me. We have a signed contract on our house to be sold for full asking price after only 5 days on the market. Here is some advice for all of the naysayers out there: Stop listening to the media and go live your lives. They have everyone so paranoid they arent wanting to spend money on anything and that is whats hurting this economy.
Answer:
The buyer is kidding himself if he believes this subterfuge will keep taxes low. Property taxes are determined by the city/county and the selling price must be considerably lower than market to be less than the assessed value. Keeping everything above board would mean the buyer putting the cash toward his downpayment (which looks good for him) and then everything is properly spelled out on the closing statement. Since this sale involves the purchase of a primary residence, there are no tax implications either way so hiding money doesn’t make any difference. This sounds like an attempt to be sneaky. There’s no benefit in it, and your playing along make you complicit. The buyer is putting himself at considerable risk since all the details of the purchase are not being revealed to the bank; they could cancel his loan. Don’t do it.
We are semi retired and are thinking of taking out a mortgage to renovate several of our properties to rent.?
With the current economic problems, should I be borrowing money? I know I can afford to make the payments just from a military retirement paycheck. But what is going to happen w/ prop taxes and will there be any renters? Issue is I have plenty people out of work that are will to do the repairs rather cheap. VA offering great re-fi rates too. Undecided
Answer:
I would refi and make the repairs, since it sounds as if you could comfortably make the payments. This would also help the people you know who need work, but be wary of who you hire. Sometimes the cheaper the bid, the shabbier the work or work ethic of the person you hire. As far as renters, as long as you price your rental fairly, there is going to be no shortage of renters due to a lot of people losing their homes, or leaving them due to inability to pay their mortgages. I really cannot address property taxes, hopefully those won’t go too far up to compensate for the amount of empty houses..but, even if the bank owns these homes someone is paying the taxes (banks) This is why banks want to avoid foreclosure at all cost. (or should!)
Government Home Foreclosure May Offer Best Deals
Possibly some of the best deals on real estate are available with a government home foreclosure, as most entities are more willing to sell the property for any amount of money it is owed on the home. Past due income taxes, property taxes, bankruptcy and even court fees and fines can be grounds for a government home foreclosure as they take possession of the property in order to recoup money owed to the government. Still, selling homes at near the fair market value is one of the goals in home sales of this type.
Reading the classified ads can often give details about government home foreclosure sales, typically performed at a public auction. The property is also usually open for inspection prior to the home foreclosure auction and enough time is given for potential buyers to research the true value of the property as well as adjacent properties before bidding. It pays to thoroughly research the property as, in some instances, there may be costs hidden in purchasing from a government home foreclosure sale that do not come apparent until after the deal is made.
There have been many movies in which the land owner was able to come up with the taxes they owed just as the property was going to auction and with government home foreclosure properties, this is an accurate depiction. The owner has until the time of the sale in which to make good on their debt to remove the property from the auction block.
Reasons Vary For Homeowners’ Loss
There are a variety of reasons a government home foreclosure sale will take place and the reason for the sale will also help determine any minimum bid accepted for the property. If there is no mortgage on a property that has been put up for auction based on past due taxes, usually the government only wants that amount, plus the administrative costs of the government home foreclosure and sale.
In these instances, homes can be purchased sometimes for pennies on the dollar of value while the homeowner’s debt is settled with the government. Some government agencies may have guaranteed the loan to a lender and once the property is foreclosed upon, the government will pay the lender the guaranteed amount and put the property up for sale at a government home foreclosure auction, with the minimum acceptable bid being what is owed. Typically, these properties will not sell for less than two-thirds of the home’s value.
Go here for more about Foreclosure Prevention and Stop Foreclosure
What can i do, I own 166 achers , with about 40-50 co owners?
the deed is in heirship, so to the owners who wont sign over there share and wont help with taxes , is there anything i can do besides get a lawyer, i cant afford a lawyer, so dont tell me to get a lawyer. maybe thats the only option, but what is a lawyer going to do that i cant. if i go to clear the deed , but so and so jackass wont sign over or respond or pay any taxes, cant that automatically exclude them. can i clear the deed without them? p.s. dont tell to use spell check, if acher isnt spelled this way, then though, spell check doesnt work for this word.
Answer:
So you are one owner of 50 other owners of the property. Your ownership is 3.32% of 166 acres. You are responsible for 3.32% of the property taxes. So for every $100.00 of taxes owed you will need to pay $3.32. That is your part that you owe. Now it is really ridicules that the others will not pay there $3.32 per $100.0 owed. You could send them all a certified letter asking for them to pay there share or sign a quit claim deed over to you in lu of you paying the taxes for them. Outside of that the other remedy would be to sell and take your 3.32%.