Does the Mortgage Forgiveness Debt Relief Act apply to all debts?

Congress passed a bill including, The American Taxpayer Relief Act of 2012 (Sec. 202) which extends the Mortgage Forgiveness Debt Relief Act through December 31, 2013. This legislation extends dozens of other tax cuts that have expired or are set to expire at the end of the year, including one that extends homeowners’ ability to deduct the cost of mortgage insurance on a qualified personal residence.

Under the federal tax code, all types of forgiven debt are treated as income, subject to regular taxes. Because of the Mortgage Forgiveness Debt Relief Act, homeowners who get their mortgage debt forgiven through either a short sale or loan modification won’t be taxed on the amount forgiven up to $2 million. This law was set to expire December 31, 2012. If it hadn’t been extended, any forgiven amount of debt would be considered taxable income, which would be devastating for homeowners who are already experiencing financial hardship. If you're in search of mortgage relief, a short sale is still a better option than foreclosure. 

The recommmendatiion to all my investors selling in a short sale, make sure you have a very sharp CPA! If you are in search of mortgage relief contact me at kgblady@cfl.rr.com. My team and I helped so many investors relieve mortgage distress in 2012, please reach out and let us help you!

5 things to Know About Investor Financing for Real Estate

Feature post by Tim Horr, Thomas Louis Mortgage

As a mortgage broker I come across people who eager to invest in properties and take advantage of the current real estate values. With mortgage interest rates currently at a 40 year low and home prices so reasonable. It makes sense to invest in real estate because it really is a great time to buy Brevard County investment properties.  It’s a no brainer if you plan to pay cash, but if you want to leverage and obtain financing there are parameters to follow. Here are the top 5 things you need to know before you move forward on financing an investment property.

  1. You will need a relatively high credit score 680 at a minimum. Investor financing is the most credit scrutinized of any loan.
  2. The optimum purchase is with 25% down. You can get in with just 20% down but  I highly recommend  25% down. Once you see the numbers you will agree.
  3. You will have to qualify with your current monthly debt and the new mortgage. The new mortgage debt will include principle, interest, taxes, insurance and any homeowners association fees.
  4. Avoid trying to secure financing for condominiums in Florida. Hopefully this trend will end in a few years. But currently condo’s are real hard to secure financing.
  5. Use a local mortgage professional like myself to help you with your financing. And most importantly , once you own the investment property I highly recommend you hire Karen Gunn Bardot and her team to manage your investment property.

I have been a licensed Mortgage Originator since 1997 and have helped many investors who were new to investing and those who are pros. I can say confidently, now is the time  to invest in real estate, the real estate opportunities are ideal to  expand and diversify your portfolio. . . and Brevard County is excellent choice.

Tim Horr  | Thomas Louis Mortgage | 321-698-0417 | tim.horr@gmail.com | TimHorr.com