Sep 192012
 

Look who made the list!  Thats right #8 on the small business list.

NW Mortgage Group

Happiness is … a great place to work

Published: Saturday, September 15, 2012, 12:00 PM

Scott Bernard Nelson, The Oregonian By Scott Bernard Nelson, The OregonianThe Oregonian

two people work.JPGBrent Wojahn/The OregonianShauna-Rae Jarman and Maddi Thompson in the call center at Consumer Cellular’s Tigard headquarters.

GS.11LIST116-02.jpgView full sizeTop 10 large companies (500 or more employees)
GS.11LIST216-02.jpgView full sizeTop 10 mid-size companies (150-499 employees)
GS.11LIST316-02.jpgView full sizeTop 40 small companies (fewer than 150 employees)

It’s a tricky thing to figure out how satisfied someone is feeling about life. Or relationships. Or faith. Or health.
Or a job.
Tricky, but not impossible. Academics and professional researchers make a living teasing out our sentiments on issues that can’t easily be broken down into yes/no questions. And in the realm of business it turns out to be a particularly important thing to measure: A number of studies over the years have found that happier workplaces tend to be more profitable workplaces.
To find out which organizations in Oregon and southwest Washington are doing a good job on that front, we partnered with WorkplaceDynamics LLP, a consulting and data-gathering firm from Exton, Pa. The result is the special coverage you’re reading now, a first-time effort for The Oregonian.
Starting with employee recommendations and self-nominations, then reaching out more broadly, WorkplaceDynamics invited 939 companies in Oregon and southwest Washington to participate in confidential employee surveys this spring. Of those, 111 agreed to make their almost 27,000 combined employees available for either paper or online surveys.

The roughly two-thirds of those employees who completed the surveys answered 22 questions with a range of answers on a seven-point scale, and left additional comments on ones they felt strongly about or wanted to explain further. Anonymously, they gave their opinions on everything from pay and benefits to working conditions to corporate leadership.
After running a series of statistical tests to look for questionable results — making sure organizations aren’t trying to game the system in some way — WorkplaceDynamics averaged the scores and named the top 10 large companies, top 10 mid-size companies and top 40 small companies in the region in terms of workplace satisfaction.
It’s an impressive list of companies, representing a wide range of businesses and sectors. Like their counterparts in other parts of the country surveyed by WorkplaceDynamics, the majority of employees in the region answer in the positive when given a series of questions about their organizations, their leaders, their career prospects.
Survey respondents in Oregon and southwest Washington, though, were slightly less positive then their peers in 29 other metro areas polled by WorkplaceDynamics. Survey takers in this region registered a positive response more than the national average on only two of 19 statements — “My pay is fair for the work I do” and “I feel genuinely appreciated.”
Otherwise, from “I get the formal training I want for my career” to “My job makes me feel like I am part of something meaningful,” workers here were slightly less bullish than their counterparts in other regions. But the differences were remarkably small from market to market, which means conclusions drawn from a survey like this tend to be fairly universal.
Employees want to feel they are part of an organization moving in the right direction, that their contributions are valued by management, that they’re doing something that feels meaningful, that their employer operates with a strong sense of its own values and ethics.
And they want to balance their work and home lives. Repeatedly, across companies from diverse industries doing entirely different sorts of work, employees who took the time to comment frequently praised structures that allowed them to be flexible and keep things in balance.
Congratulations to the 60 companies you’ll see on these lists and read about in the stories that follow. They’re doing these things well, and their employees are feeling relatively good about it.
Scott Nelson

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 Posted by at 7:46 pm
Mar 092012
 
By  on March 09, 2012

Who would have imagined in 2000, when the unemployment rate dipped below 4 percent, that people would be cheering someday about a monthly jobs report featuring an 8.3 percent rate? It’s the “light at the end of the tunnel” phenomenon. The February jobs report, released Friday morning, “adds to the evidence that the U.S. labor market has turned a corner,” said Capital Economics.

No question, the U.S. economy and the jobs market remain weak, but what people are focusing on is the direction, which is positive. Friday’s report confirmed the trend, showing an increase of 227,000 jobs in February and an upwardly revised 284,000 in January. That capped the strongest half-year since 2006, when Lehman Brothers, AIG (AIG), and NINJA loans were problems of the future, not the past.

True, the unemployment rate was unchanged at 8.3 percent. But that’s partly because of an inflow of half a million people who were emboldened to enter the labor market as word got around that there were jobs to be had. Not all of them were immediately successful.

Even the all-important employment-to-population ratio ticked up a bit. That’s the share of adult Americans with jobs. It plummeted when recession struck at the end of 2007 and has bobbed around its cyclical lows since the beginning of 2010. It went up a tick to 58.6 percent in February—still a far cry from nearly 65 percent back in 2000.

Not to say all is well. The average workweek did not lengthen, staying at 34.5 hours. Employers typically give more hours to their current workers before they bring on new hires, notes Heidi Shierholz, an economist at the Economic Policy Institute. When the recession hit, they cut workers’ hours. The average hourly workweek fell to as low as 33.8 hours in March 2009. It’s been climbing back, but it needs to go higher before employers will turn aggressively to bringing on new workers.

The young and the less-educated remain the hardest-hit. The unemployment rate for teenagers was 23.8 percent, and the rate for people without a high school diploma was 12.9 percent.

People who do have jobs are still quitting at a very low rate, indicating that they’re too nervous to explore other opportunities—and presumably too nervous to ask for big raises. According to a separate report from the Bureau of Labor Statistics released on Feb. 7, Americans quit their jobs at a seasonally adjusted annual rate of just 1.9 million in December, down from over 3 million annually before the recession.

Shierholz noted today that the U.S. has 5.3 million fewer jobs now than before the recession, when it should have added 4.6 million jobs just to keep up with population growth.

Federal Reserve Chairman Ben Bernanke sought to curb enthusiasm in congressional testimony last week, saying the labor market remains “far from normal” and continues to require extreme monetary measures like near-zero short-term interest rates.

Still, there seems to be a positive feedback loop between jobs and stocks. Stronger employment helps Wall Street, and the bull market in stocks has helped buoy the economy, which in turn pumps up the job market. On March 8 the Federal Reserve reported that household assets grew 1.7 percent in the fourth quarter as gains on stocks more than offset continued declines in home prices.

Americans seem to be gaining enough confidence to start borrowing again: Household debt rose in the last three months of 2011 for the first time since the recession ended in mid-2009. Non-mortgage consumer borrowing rose 6.9 percent in the fourth quarter. Housing was the exception: Mortgage borrowing fell 1.5 percent, notes IHS Global Insight, an economics research firm.

Coy is Bloomberg Businessweek‘s economics editor.
 Posted by at 7:57 pm
Mar 082012
 

By Associated Press, Updated: Thursday, March 8, 7:28 AM

WASHINGTON — Fixed mortgage remain a bargain at the start of the spring-buying season: The average rate on the 30-year mortgage dipped this week, while the 15-year loan fell to a new record low.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan ticked down to 3.88 percent, from 3.90 percent the previous week. That’s slightly above the 3.87 percent average rate hit three weeks ago, which was the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage fell to 3.13 percent, from 3.17 percent a week ago.

Rates on the 30-year loan have been below 4 percent for three months. That has made home-buying and refinancing more attractive for those who can qualify.

The super-low rates are helping the housing market recover, albeit slowly. Home sales have been rising and the four-week average of home purchase applications was up in January and February, according to the Mortgage Bankers Association.

In recent months, other signs have emerged that suggest the troubled housing market could start to turn around this year.

Builders are more optimistic after seeing more people express interest in buying a home. Construction has picked up and builders are requesting more permits to build single-family homes. And the supply of homes on the market is falling, which could send home prices higher.

A key reason for the optimism is the improving jobs market. Employers have added an average 200,000 net jobs per month from November through January. That has helped lower the unemployment rate for five straight months to 8.3 percent, the lowest level in nearly three years.

Frank Nothaft, Freddie Mac’s chief economist, said a typical U.S. family now has more than double the income needed to purchase a median-priced home. That’s the first time that’s happened since records on home affordability were first recorded in the 1970s.

Still, home prices continue to fall. Millions of foreclosures and short sales — when a lender accepts less than what is owed on a mortgage — remain on the market. And the housing crisis and recession have also persuaded many Americans to rent instead of buy, which has led to a drop in homeownership.

Economists say housing is years away from returning to full health.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fees for the 30-year and 15-year fixed loans were unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.81 percent from 2.83 percent, and the average fee was unchanged at 0.7.

The average on the one-year adjustable loan ticked up to 2.73percent from 2.72 percent, and the average fee was unchanged at 0.6.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 Posted by at 6:15 pm
Feb 282012
 

Monday, February 27th, 2012 | Posted by 

FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES
New premium structure will help protect FHA’s MMI fund

FHA MIP to Increase in AprilWASHINGTON – As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans.  FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount.  Upfront premiums (UFMIP) will also increase by 0.75 percent.

These premium changes will impact new loans insured by FHA beginning in April and June of 2012.  Details will soon be published in a Mortgagee Letter to FHA-approved lenders.

“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante.  “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent.  This change is effective for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500.  This change is effective for case numbers assigned on or after June 1, 2012.

The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount.  This increase applies regardless of the amortization term or LTV ratio.  FHA will continue to permit financing of this charge into the mortgage.  This change is effective for case numbers assigned on or after April 1, 2012.

FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.  These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan.  Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.

Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.

 Posted by at 12:10 am
Jul 112011
 

Win a new Apple iPad!!!

All you have to do is click the picture below which will take you to our Impac Mortgage Page.  In the upper left corner of the center section click the “Like” button to become a fan of our page.  Then click on the Enter Contest tab and upload a picture that shows just how much you love being a home owner.  Its just that easy and if you get picked you can win one of 3 prizes.

We want to see how thrilled you are to be a home owner.

 Posted by at 9:44 pm
Feb 102011
 

http://www.irs.gov/individuals/article/0,,id=96596,00.html/

Have you seen this page.  If you have filed your 2010 taxes, the IRS has this handy page the helps you track your refund.  From this page you can click on the “where’s my refund?” link and the IRS will ask you some identifying questions:

1.   Social Security Number

2.   Filing Status

3.  Dollar amount of the expected return.

If  it has been 72 hours since you Efiled they do a quick search and then tell you when you should expect your return.

Give it a shot, it worked for me and its a pretty neat little site

Even the IRS is keeping up with technology.

 Posted by at 7:35 pm
Feb 092011
 

By NICK TIMIRAOS of the Wall Street Journal

Home affordability returned to pre-bubble levels in a growing number of U.S. markets over the past year as price declines laid the groundwork for a housing recovery.

Data provided by Moody’s Analytics track the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom began in 2003.

During the boom, lax lending and speculation pushed house-price inflation far beyond the modest rise in household income. Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003.

“Based on incomes, this is as affordable as it gets,” said Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”

But the bad news is that those price declines are leaving more borrowers underwater, or in homes worth less than the amount owed.

Many economists and housing analysts expect an additional decline of 5% to 10% before prices reach bottom later this year or early next year. Housing demand remains weak because buyers are skittish about the economy and lending standards are tight.

Markets that now appear to be undervalued include Detroit, Las Vegas, Atlanta and Phoenix. Even in such markets, high rates of foreclosure and underwater borrowers should keep downward pressure on prices. “They’re undervalued, but they’re going to get even more undervalued,” said Mr. Zandi.

Measuring home prices relative to income is not the only way economists calculate housing affordability. They also examine the relationship between house prices and rents. Measured by the price-to-rent ratio—the price of a typical home divided by the annual cost of renting that home—prices are fairly valued, or undervalued, in around 20 markets. Nationally, the price-to-rent ratio stood at 14.85 at the end of September, above the 1989-2003 average of 12. The data suggest pockets of the country have further to fall.

Home prices still remain overvalued by both measures in several markets, including Seattle, Charlotte, New York and Portland, Ore.

Based on rents, “it’s still not a slam dunk to buy” in those markets, said Mr. Zandi. He said markets appeared most overvalued in the Pacific Northwest, which was among the last regions to enter the housing downturn. Historical measures also showed prices were still high along the Northeast corridor from Baltimore to Boston.

The cost of owning a home looked less affordable based on rents than on incomes in part because rents also fell through 2009 and the first half of 2010. As rents rise, that could tip the scale back in favor of owning in some areas.

Of the 74 housing markets, Baltimore appeared to be the most overvalued. By contrast, prices in Cleveland, the most undervalued market, have returned to 1991 levels based on the price-to-rent ratio.

Historical measures comparing rents and incomes with home prices provide a useful gauge of affordability, but can be imperfect at measuring how close different markets are to recovering from a bubble. After a severe housing downturn, home prices rarely stop falling once they reach equilibrium.

Some areas will stay undervalued for years as they deal with a glut of foreclosures and weak demand. Historical trends show housing could remain undervalued in many markets for six to seven years, seconomists at Capital Economics.

“It’s become cheaper to buy than to rent” in Phoenix, said Jon Mirmelli, a real-estate investor in Scottsdale, Ariz., who is renting out foreclosed homes. “But the question is: Can you qualify for a loan?”

Meanwhile, some areas that appeared overvalued relative to historic norms, such as Washington, D.C., may not completely return to pre-crisis levels thanks to structural changes in the economy that support higher prices.

 Posted by at 7:01 pm
Feb 032011
 

The Tax Guy by Bill Bischoff (Author Archive)
Published October 28, 2010

Back in 2008, when the housing market was in even deeper trouble than it is in now, Congress passed the Housing and Economic Recovery Act to help move a glut of homes off the market. One of the key provisions was a tax credit for first-time home buyers. That provision would be extended (twice) – and getting in early would have been a mistake.

If you claimed a federal income tax credit for a 2008 home purchase, you’ll probably have to pay it back over 15 years, starting with your 2010 Form 1040 (due next April). In contrast, if you claimed a credit for a 2009 or 2010 purchase, you probably won’t have to pay it back. (Blame Congress’s patchwork legislating.)

Before getting into whether the credit repayment rules will affect you, let’s briefly revisit how the homebuyer credit itself works.

Homebuyer Credit Basics

First Version: The original credit was up to $7,500 for individuals who bought a U.S. principal residence between April 9, 2008 and Dec. 31, 2008 and had not owned one for the three-year period ending on the purchase date.

Second Version: Congress increased the credit to up to $8,000 for individuals who bought a U.S. principal residence between Jan. 1, 2009 and April 30, 2010 and had not owned one for the three-year period ending on the purchase date. However, the closing deadline was extended to June 30 for homes that were under contract as of April 30. The deadline was further extended to Sept. 30 for homes that were under contract as of April 30 and were contracted to close by June 30 but did not.

Third Version: This credit offers up to $6,500 to so-called longtime homeowners, which means those who had owned a U.S. principal residence for at least five consecutive years during the eight-year period ending on the purchase date for a new U.S. principal residence. For this third version, the purchase date had to be between Nov. 7, 2009 and April 30, 2010. However, the closing deadline was extended to the same dates as for the second version.

Repayment Rules for First Version

Buyers who claimed the original version of the credit (for 2008 purchases) are generally required to repay the credit in equal installments over 15 years, starting with their 2010 tax return.

Example: Say you claimed a $7,500 credit for a $200,000 purchase in 2008. You’ll generally have to add $500 (one fifteenth of $7,500) to the tax bill shown on your 2010 Form 1040. Assuming you continue to own the home, you’ll do the same thing for the following 14 years (2011 and beyond). However if you sell in 2010, you’ll have to repay the lesser of: (1) the $7,500 credit or (2) your gain on sale (if any).

To see if you have a gain for credit repayment purposes, you must reduce your cost basis in the home by the credit. In this example, if you sold the home in 2010 for $195,000, you’re considered to have a $2,500 gain for credit repayment purposes. That’s because the $195,000 sale price exceeds your home’s $192,500 cost basis ($200,000 actual cost reduced by the $7,500 credit). So you’ll have to repay $2,500 (lesser of the $7,500 credit or the $2,500 gain on sale) with your 2010 return.

However, if you have a loss on sale (after reducing the home’s basis by the credit), you don’t have to repay the credit.

Exceptions: If you or your spouse is in the military and had to sell because of an order to relocate for extended duty, you don’t have to repay the credit. If you transfer the home to your ex as part of a divorce settlement, the credit repayment obligation becomes his or her problem. Finally, folks who die don’t have to repay the credit (nor do their heirs).

Repayment Rules for Second and Third Versions

If you claimed a credit for a 2009 or 2010 purchase, the 15-year repayment rule doesn’t apply (it only applies to 2008 purchases). But if you sell the home in 2010 or stop using it as your principal residence this year, you’ll generally have to repay the lesser of: (1) the full amount of the credit or (2) your gain on sale (if any). If you have a loss, you don’t have to repay the credit. The earlier example explains how to determine if you have a gain or loss.

Exceptions: For post-2008 purchases, the credit repayment obligation disappears after you’ve owned and used the home as your principal residence for over three years. In addition, the credit repayment exceptions listed for the first version of the credit also apply to the second and third versions.

The Last Word

The credit repayment rules are confusing, but you won’t have any difficulty following them at tax-return time. Just fill out Parts III and IV of the 2010 version of IRS Form 5405 (First-Time Homebuyer Credit and Repayment of the Credit), and add the credit repayment amount to your tax bill on the indicated line of Form 1040. You can get an advance look at Form 5405 at the IRS web site: www.irs.gov. While I hope you’re blissfully unaffected by the credit repayment rule, you now know the score if you are.

Read more: Do You Have to Repay Your Homebuyer Credit? – Personal Finance – Taxes – SmartMoney.com http://www.smartmoney.com/personal-finance/taxes/do-you-have-to-repay-your-homebuyer-credit/#ixzz1CvExOHyY

 Posted by at 6:44 pm
Feb 012011
 

By Walter Updegrave, senior editor February 1, 2011: 11:03 AM ET

(Money Magazine) — My wife and I are 62 and just starting to take Social Security. We’re thinking about taking out a reverse mortgage and using it as a line of credit. The extra money could come in handy. What do you think? — S.W., Red Oak, Texas

A reverse mortgage can be a good way for people 62 and older to turn their home equity into extra spending cash that can supplement Social Security and withdrawals from savings, making retirement more enjoyable than it otherwise might be.

Typically, you can take the loan proceeds in a lump sum, monthly payments for life, as a credit line or a combination of these.

One of the big appeals of this type of arrangement — as opposed to, say, tapping your home equity by refinancing or opening a home equity line of credit — is that you don’t have to repay the loan until you die or move out of your house.

Another plus is that the payments you receive from a reverse mortgage don’t affect your Social Security benefits (although they could affect your eligibility for programs like Medicaid and Supplemental Security Income, or SSI, the program that provides income to people with low incomes and disabilities).

Until recently, though, there’s been a practical problem for anyone who, like you, plans to use a reverse mortgage primarily as a line of credit that could be drawn upon when and if needed, versus taking out a large amount for some immediate need (renovating a home, replacing a car, whatever).

That problem: In addition to interest expense and an annual insurance charge (now 1.25% a year) on the outstanding balance, the Department of Housing and Urban Development’s popular Home Equity Conversion Mortgage reverse mortgage program (aka HECM Standard) also levies an initial one-time insurance premium of 2% of the value of your home.

That amounts to $6,000 for a $300,000 home. You don’t have to pay this charge out of pocket. Still, it boosts the overall cost of borrowing, and can significantly drive up the effective annual interest rate you pay if you wind up drawing very little against the reverse mortgage or if you die or move from your home shortly after taking out the loan.

But in October, HUD unveiled a new reverse mortgage program, known as HECM Saver, that whittles down the initial insurance premium from 2% to 0.01% of your home’s value, reducing that one-time charge from $6,000 to just $30 on a $300,000 home.

You’ll still incur interest charges and the annual insurance fee. But by lowering the upfront cost, the HECM Saver potentially makes a reverse mortgage a more viable option if you intend to use it primarily as a back-up line of credit or an emergency fund, or if you think you will use it sparingly or not remain in your home for many years.

I say “potentially” for two reasons. For one thing, you’ll still have to pay closing costs on the loan, which can include such expenses as an appraisal, title search and insurance, credit checks, mortgage taxes and a loan origination fee.

Lenders can charge an origination fee of as much as $2,500 if your home’s value is less than $125,000. If your home is worth more than that, lenders can charge 2% of the first $200,000 of your home’s value plus an additional 1% on the amount over $200,000.

That translates to a $5,000 origination fee on a $300,000 home. (The origination fee is capped at $6,000.) As my MONEY colleague George Mannes noted previously, some lenders may be willing to waive origination fees and pick up a portion of other upfront costs, such as the initial insurance premium.

But you’ll still want to take a close look at what you’re being charged upfront and decide if that amount makes sense given the likely amount you’ll be borrowing.

You should also know that because it levies a lower initial insurance premium, the HECM Saver doesn’t allow you to borrow as much as you can with a HECM Standard reverse mortgage.

For example, a 62-year-old who owns a $300,000 home with no mortgage debt might qualify for just under $102,000 with an adjustable rate HECM Saver.

Under the HECM Standard program, that same person might be able to borrow almost $141,000. (To see how much you might get under each program given your age, where you live and the market value of your home, check out AARP’s reverse mortgage calculator.)

No matter how enticing getting money on the house might seem, remember, a reverse mortgage isn’t something you should take on lightly. As part of the deal, you’re required to pay homeowners insurance premiums and property taxes. You must also maintain the property in good condition.

Fail to do so, and you could be forced to repay the loan even if you’re still living in the house. If you don’t have other resources to do that, you would have to sell. So before signing up for a reverse mortgage, consider whether there are other options for you and your spouse.

In some cases, retirees can be better off tapping a cash-value life insurance or freeing up their home equity by downsizing to smaller or less expensive digs that have lower ongoing maintenance and utility costs.

Fortunately, HUD has beefed up the mandatory no- or low-cost counseling that borrowers must get before taking out a reverse mortgage.

And to help people considering a reverse mortgage more fully understand the pros and cons of such a loan, counseling agencies must now provide potential reverse mortgage borrowers with a packet of information before the counseling session, including material for assessing these loans’ true costs and a booklet from the National Council on Aging that outlines how reverse mortgages work.

Remember too that while HECM reverse mortgages are insured by the federal government, the loans themselves are made by private lenders who do not set identical terms.

So compare the offerings of several lenders before settling on a loan. You can find tips on choosing the best loan by clicking here. I also suggest you peruse the material on the reverse mortgage section of AARP’s site.

Finally, a recent Consumers Union report contends that some unscrupulous reverse mortgage lenders push these loans on people who might be better off without them or even use reverse mortgages to perpetuate various financial scams.

I’ve also warned about such abuses as putative advisers recommending reverse mortgages and then persuading borrowers to invest the money in high-cost investments like annuities. So certainly, you and your wife should look into a reverse mortgage as a way of getting some extra income.

But don’t commit until you’ve thought about other options, you understand all the costs and you’re convinced that the person making the loan is on the up and up.

 Posted by at 8:51 pm
Jan 262011
 

By: G. M. Filisko

Published: January 25, 2011

Don’t rouse the IRS or pay more taxes than necessary—know the score on each home tax deduction and credit.

As you calculate your tax returns, consider each home tax deduction and credit you are—and are not—entitled to. Running afoul of any of these 10 home-related tax mistakes—which tax pros say are especially common—can cost you money or draw the IRS to your doorstep.

Sin #1: Deducting the wrong year for property taxes

You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind—that is, you’re not billed for 2010 property taxes until 2011. But that’s irrelevant to the feds.

Enter on your federal forms whatever amount you actually paid in 2010, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

Sin #2: Confusing escrow amount for actual taxes paid

If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

Sin #3: Deducting points paid to refinance

Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

Sin #4: Failing to deduct private mortgage insurance

Lenders require home buyers with a downpayment of less than 20% to purchase private mortgage insurance (PMI). Avoid the common mistake of forgetting to deduct your PMI payments. However, note the deduction begins to phase out once your adjusted gross income reaches $100,000 and disappears entirely when your AGI surpasses $109,000.

Sin #5: Misjudging the home office tax deduction

This deduction may not be as good as it seems. It often doesn’t amount to much of a deduction, has to be recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. Hampton’s advice: Claim it only if it’s worth those drawbacks.

Sin #6: Missing the first-time home buyer tax credit

If you met the midyear 2010 deadlines, don’t forget to take this tax credit into account when filing.

Even if you missed the 2010 deadlines, you still might be in luck: Congress extended the first-time home buyer credit for military families and other government workers on assignment outside the United States. If you meet the criteria, you have until June 30, 2011, to close on your first home and qualify for the tax credit of up to $8,000.

Sin #7: Failing to track home-related expenses

If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer’s certification statement for energy tax credits, insurance company statements for PMI, and lender or government statements to confirm property taxes paid.

Sin #8: Forgetting to keep track of capital gains

If you sold your main home last year, don’t forget to pay capital gains taxes on any profit. However, you can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if you bought a home for $100,000 and sold it for $400,000, your capital gains are $300,000. If you’re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523.

Sin #9: Filing incorrectly for energy tax credits

If you made any eligible improvement, fill out Form 5695. Part I, which covers the 30%/$1,500 credit for such items as insulation and windows, is fairly straightforward. But Part II, which covers the 30%/no-limit items such as geothermal heat pumps, can be incredibly complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully.

Sin #10: Claiming too much for the mortgage interest tax deduction

You can deduct mortgage interest only up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

G.M. Filisko is an attorney and award-winning writer who was once mortified to receive a letter from the IRS—but relieved to learn the IRS had simply found a math error in her favor. A frequent contributor to many national publications including AARP.org, Bankrate.com, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

 Posted by at 7:35 pm