Arn Cenedella

Archive for the 'Pending Legislation' Category

Additional opportunity to use Retirement Funds to buy real estate

I have written on several occasions about the ability to use retirement funds to purchase real estate.

There is a window of opportunity to convert IRA funds into Roth IRA funds and spread the tax impact out over two years.

As you probably know,  for “regular” IRAs, before-tax funds are placed in an IRA where it grows tax free until the funds are withdrawn and taxed at withdrawal.  In a Roth IRA, “after” tax funds are placed in a Roth IRA and they grow tax free and are TAX-FREE upon withdrawal.

The general theory on IRAs is to put money in and then withdraw after retirement when theorectically your tax bracket will be lower. Of course, with all our government borrowing and defecit spending, who knows tax rates may be higher 10 to 20 years from now than they are today.

Currently, most individuals due to a new law are able to convert IRA funds to ROTH IRA funds and pay the tax due on said conversion over a 2 year period.

Read the rest of this entry »

Do any of these government mortgage relief programs work?

I have generally been pretty skeptical about whether any of these much talk-about government programs will actually help any homeowners? Are these programs just more of the “promise a lot, deliver a little” that we seem to get out of Washington DC the past 10 years or will they actually help people.

I like to stay in touch with my past clients on a regular basis and try to speak with each of them at least every quarter and often once a month.

Today I called a first-time home buyer, Jim, who in January 2009 bought a home in Redwood City at a very affordable price. After a few minutes of chit chat, I suggested it might be a good time to look into a refi since rates have dropped maybe about 1% since they bought. He told me that they were already working on that through the Making Home Affordable program. They hope to reduce their rate over 1%.  Jim said since he mortgage was owned by Freddie Mac and Fannie Mae, Jim and his wife, Lynn, were eligible for an interest rate reduction. Please understand, Jim and Lynn are current on their mortgage payments – a requirement for the loan refinance. Jim and Lynn purchased with 5% down on a house a little over $500,000 – so a typical refiance that requires 20% equity is not possible for them – but with the MHA program refinances up to 105% of the value are allowed.

Jim told me they hope to know by June whether their application will be approved.

I am interested to see if the progrma will actually work as intended and reduce their loan payments to a more affordable level. Stay tuned and I will keep you posted.

Check the Making Home Affordable site for more info.

Click here to see if your loan is owned by Freddie Mac and Fannie Mae.

Obama Home Mortgage Rescue Plan part 6

One of the things President Obama promised was greater use of the internet to make information about government programs and activites more accessible to the general public.

The MakingHomeAffordable website is now up and runnning.

This is a very useful site which will help homeowners determine if they are eligible for either the refinance plan or the loan modification. You can find out if your loan is owned by Freddie Mac or Fannie Mae.

There is a wealth of information here. Check it out.

If you need further guidance just let me know.

Full details on CA Franchise Tax Board $10K credit for NEW home purchase

Here is all the info you want about this credit directly from the proverbial horse’s mouth – The California State Franchise Tax Board including how much of the money is left and how many applications they have received – 173 to date!

http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml

First-time home buyer tax credit form

If you are a first-time home buyer (defined as someone who has not owned a home in three years), here is the tax form you need to file along with instructions as to how to do so.

It is fairly straight forward.

Obama Home Mortgage Rescue Plan part 5

Obama’s plan contains 2 main parts:

1. Refinance options for loans that are up to 105% of the current market value of the home.

2. Loan modifcation programs for people where option #1 does not apply and they are having a hard time making the monthly payments.

Obama has named the plan #1 – Making Homes Affordable.

Katie Curmutte, Zillow on Mortgages Unzipped blog provides lots of details on the plan.

Katie covers option #2.

Further details are available at: http://www.financialstability.gov/ and here and over here too.

If you are a homeowner in trouble or just want to know what your options are, just let me know.

I have written several posts on this issue and these posts contain links to other great information.

Looking to take advantage of the CA $10,000 tax credit

The $10,000 CA tax credit applies to NEW construction (never lived in properties) purchased as a primary residence.

There are several new condo/townhomes projects right now in Palo Alto and Los Altos and a soon to be released project in San Carlos.

Marrian Bennett Half Moon Bay Coldwell Banker has provided a list of new homes in the San Mateo Coastside area.

Please let me know if you want information on new homes on the Peninsula or have questions about recent tax credits approved by the US and the State of California.

More info on new California $10,000 tax credit

In an earlier post, i wrote about a recently passed California State Franchise Tax Board $10,000 credit for the purchase of a NEW principal residence. This credit is available to all purchasers of a NEW house or condominium.

Kappy Mann from beautiful Truckee Lake Tahoe area (where I will be going for a week of skiing with my buddies next Monday) has obtained lots of wonderful detailed information that explains the entire process including what paperwork to file at close. Check it out. Thanks for the good information.

This credit as well as the $8,000 Federal Tax Credit will be one of the many topics I discuss in my up-coming First-Time Home Buyer Information and Opportunity meetup March 21, 2009.

Regulations and Forms available for $8000 first time home buyer credit

Diane Tuman of Zillow provides all the latest info on this credit.

I have recently represented a young first-time home buyer who got into contract on an REO prior to the passage of the stumulus package but they closed after the package becoming law so they will receive the $8,000 credit. That was an unexpected and very welcome bonus to buying a home.

Take advantage of this credit and the $10,000 CA state credit.

Contact me for more details.

Jackie Speier proposers to raise Obama refi limit from $417,000 to $729,500

Jackie Speier one of our US House representatives rightly believes the current limit of $417,000 for Obama’s refi plan will not help many folks in the San Francisco Bay Area.

The SF Chronicle published an article that indicates only 7% to 8% of the homeowners in San Francisco, San Mateo, and Santa Clara Counties will be helped under Obama’s plan.

Julie Joyce Coldwell Banker Piedmont/Montclaire informs her readers of Jackie’s proposal.

We will also keep an eye on Obama’s latest proposal to limit the mortgage interest deduction for high-income earners.