Why It Is Getting More Expensive To Be A Renter

Senior Director of Economic Research, Svenja Gudell, for Zillow, an online real estate database company, recently reported that rental affordability is getting worse, and is likely to remain the same without a change. “We will continue to see rental increases and affordability will worsen before it gets better.”

Income has not kept up with the rental increases. More of your monthly income is now being spent on rent and is a big concern. This is a national epidemic, not restricted to a local market or big cities. Rents have been soaring so high they are even outpacing home values! Places that were affordable are growing more quickly. An unbelievable fact is that there is a shortage of available rentals.

Seattle, San Francisco and Denver have been hit the hardest. These markets are having a difficult time keeping up with the demand for more rental buildings. As you can see, even with the higher rental costs, there is still the strong demand for rentals and is creating a housing crunch in some cities.

Low mortgage rates make purchasing a home very attractive, but with the rising rental rates, it is becoming more difficult for potential homebuyers to save money for down payments and other costs. Frustrations remain high when a renter sees approximately 30% of their income is spent on rental costs, while homeowners statistically pay 15% of their income on their mortgage payment. Those living in a high-income area are paying nearly 50% of their income on rents.

Low and middle income renters are feeling the pressure of rising rental costs the most. Unfortunately, it appears that new rental construction is being targeted for the high-end and luxury renters. Building is not proportionate to the renters that need a place to live.

CNN Money reports, http://cnnmon.ie/1MlCJj5, the rising rent prices as a percentage in some of the most popular cities, just to name a few, over the last year:

Denver-11.6%, Charlotte-6.6%, San Francisco-14.9%, Austin, TX-6.2%, Atlanta-4.9%, and New York-3.4%.

Today, inventory of available homes is limited and rental construction slowed down considerably when the housing crisis halted new construction. Now that the housing market is slowly recovering and the economy is showing more confidence, the rental properties are at a minimum. Building more rental units will clearly make the rental costs go down, but the average time for building may take up to two years to complete. Relief is not immediate. Thus, the law of supply and demand prevails.

Families paying 50%, 60% and 70% of their household income indicate that this rental fever is not going away anytime soon. Many renters who have long awaited the American Dream to be a homeowner will need to wait even longer, with the hopes that the low interest rates today will remain unchanged in the future.

Is there a solution to this crisis of rising rental costs and what can you do as a renter? If wages and employment opportunities improve, it may be a small solution to help ease the cost of renting. Be proactive and consult myself or my team who can assist you with providing ways of saving for your home purchase. Call today at (770) 888-2232 or click here to complete our contact form to get started!

Unnecessary Household Expenses You Can Cut Today

Prior to the mortgage meltdown, Americans were flying high on money. People were making substantial returns in the real estate and the stock market. It was easy to make big money and borrow big money.  Then 2008 came……the financial tidal wave hit the American shorelines from all angles and BOOM it crushed us. In the last seven years we have become fiscally fit.

Today people have less debt and save more.  The fiscal mindset of consumers is ever present.  

We have listed some topics you can begin to research for immediate cost cutting opportunities that will save you money.  We hope this help strengthens you fiscally and allows you to be a wiser, more discerning household consumer. Here are some of the most unnecessary household expenses you may consider eliminating immediately.

Cable TV

With so many devices available today for the addicted sports or movie fan, think about eliminating your cable TV service and its high costs. Consider a Blu-ray player with an internet connection, a Roku or any other appliance that can tap into programming delivered free via the Internet from network websites. Another option is to consider paying a minimal cost for Hulu Plus, Netflix or Amazon Prime membership through streaming.

Try using a high-powered antenna. You may be pleasantly surprised at the volume and variety of programming that may be offered.

Sports fans can find many choices on new sport-specific services that cost much less than one year of cable.

Cleaning Products and Toiletries

There are two household products that surpass all others for cleaning: vinegar and baking soda. Think about it! They clean countertops, unclog drains, clean the dishwasher, make tubs and toilet bowls sparkle, boost laundry, and can even clean hair! Imagine the savings of purchasing unnecessary household cleaning items, plus these two are among the least expensive cleaners to buy.

Late Fees

When it is time to pay, don’t delay. A Google or Outlook calendar reminder to pay your bills will avoid unnecessary late charges. If you have the money to pay your bills, be diligent and pay on time. Your credit rating will improve by showing no late fees and help you for qualifying for a home loan. Another helpful hint is to set up automatic bill paying through your checking account that may be a free service.

If you should have a late payment, make a phone call and request the late fee be waived. If the representative will not cooperate, ask for a supervisor. You may try telling them you will close out your account. If you have an account in good standing for several years, chances are they will abide by your request.

Landscaping Services

Become an active participant in your landscaping. You will find that paying for landscaping services can be avoided if you minimize the amount of lawn you have by planting low maintenance native plants. Try planting a variety of grass that requires less care. Clippings from the lawn could be used in place of expensive fertilizer.

Phone Bills

If you are familiar with Skype and use it for video or voice calls from computer to computer, you can also use it for mobile or home calls, both domestically and internationally with great rates. Using Skype Credit in $10 or $25 increments, you can add credit through the Skype app or website. The credit can be used for home or mobile calls, Skype Wi-Fi hotspots or to send SMS messages.

Subscriptions and Memberships

Review all the magazine and newspaper subscriptions, online services and all organizations that you are a member. You may be surprised at those you have not used in a year or find that the magazine could be found online or read in the library. Find options that are free to replace the membership and subscription fees.

Service Plans, Extended Warranties and Some Insurance

Consumer Reports state that many extended warranties and service plans are not worth the money. Think twice before selecting cell phone or identity theft insurance, while renter’s, homeowner’s and auto insurance are among the must haves.

Credit Monitoring Services

Check your credit periodically for any fraud or credit theft. It may not be necessary to pay additional fees for high-end credit monitoring. If you feel you have been a victim of identity fraud, you can freeze your credit for free. You can monitor your credit on a regular basis without the high costs of paying for a service.

If you are interested in charting your household budget google household budget software and check out some options at www.quicken.com, www.mint.com, and www.youneedabudget.com to organize your game plan.  This will help you measure and monitor your money.

There are many ways to reduce costs in your home and the best time to start is now. For any specific loan or mortgage questions, speak with your mortgage banker today. With low interest rates, ask how you can save thousands a year by refinancing into a lower interest rate. Find out more at 770-888-2232.

What Homebuyers Are Really Looking For

Today’s homebuyers are searching for their perfect “dream” home. Here are the most desirable features that will attract the future homeowner. These “wants” will also help sellers who want to make best marketable improvements on their property.

Wireless Home Security - According to the NAHB, this is a feature that most tech-savvy buyers are wanting in their home. Security for a family is a top priority. Having the ability to control security by a smartphone or tablet is key. A wireless system is less costly than a hard-wired system and doesn’t require a professional to install.

Costs to install: $100-$300
50% of homebuyers desire this feature

Exterior Lighting - First impressions are lasting ones. This is surely attractive to a potential homebuyer before setting foot in the door. It is the most wanted outdoor feature with minimal costs to improve. Curb appeal is important and having exterior lighting will accent and grab their attention.

Costs: $150-$300 per fixture
90% of homebuyers desire this feature

Energy-Star Qualified Windows - Homebuyers are always looking for energy efficiency and this is a good solution to help reduce energy costs.

Costs: $270-$850 to install per window
89% of homebuyers desire this feature

Garage Storage Space - For those with a garage, there is always the need for extra storage. Easy accessibility to the home’s front door makes it a bonus to have shelving, cabinetry and places to store tools, toys or sports equipment. Having the organization will ease in locating your items. Those without a garage, may consider constructing a storage shed that conforms to home plan style, color and features.

Costs: $2000-$3000 per 350 square foot space
86% of homebuyers desire this feature

Eat-in Kitchens - Kitchens are a gathering place for breakfast in the morning and dinner at night. Families with children appreciate time around the table before school or off to work. An existing kitchen could have walls extended, added cabinetry and counter space, a breakfast bar, or a bay window to make the kitchen more desirable. Always consult a licensed professional to be sure guidelines are followed and possible improvements may be made.

Costs: $1400+ install
85% of homebuyers desire this feature

Walk-in Pantry - Walk-in pantries are always a necessity for families needing extra storage. A shelving system that keeps food and supplies organized is an added bonus to the homebuyer. Adjustable shelving will give flexibility in storage and takes away counter clutter. Having extra space to store small appliances and countertop items gives the kitchen an open feeling and less cluttered. Easy access to mops, brooms and cleaning supplies is helpful to store in a pantry.

Costs: This will vary. Consider adding cabinetry or a rolling cart that can be moved
85% of homebuyers desire this feature

Separate Laundry Room - over 55% of homebuyers are saying they would not buy a home without a separate laundry room! Space for washer and dryer, folding laundry, ironing, and keeping laundry separate from living space in the home are huge benefits. Renovation may include additional plumbing and electrical wiring, countertops, cabinetry and flooring will be based on available space and budget.

Costs: Variable
93% of homebuyers desire this feature

With the ever-changing economy and fast-paced lifestyle today, homebuyers are wanting their dream home to be more efficient, stylish and storage rich. Above all, a professional should always be the top priority in making improvements, whether as a new homebuyer or as a homeowner. Call me today to find the most professional and experienced contractor in your area and learn ways to increase your asking price when selling your home.

Tips to Successfully Restoring Your Credit after Tax Liens

A recent article from CNBC brought to light some of the common misconceptions about the realities of tax liens and the effects they have on your credit score. A tax lien, which is a serious strike that occurs when you neglect or fail to pay a tax debt, can be longer lasting than you might have expected. Here’s some information and resources that may help if you’re dealing with a tax lien on your credit report.

What is a tax lien and how does it affect my credit?

Tax liens can vary depending on your individual situation. A tax lien can be one of the worst items to appear on your credit report, and can cause your credit score to drop significantly. Essentially, when you fail to pay your tax debt on time, the government can claim all or some of your assets. It can occur at the local, state or federal level.

It’s important to remember that any tax penalty against you becomes a matter of public record, and will negatively affect your credit score. Worse still, under federal law, unpaid tax liens can remain on credit reports indefinitely, though more often, credit bureaus tend to remove them after a decade or so. Once you’ve paid off the debt and the lien is released, it will be removed from your score seven years from the date it was filed.

Because no two credit histories are alike, there is no way to state equivocally how much change removing the tax lien will have or even what an average change might be for any given scoring system. Further complicating the issue is that there are many different credit scoring systems. So, the impact on one system could be very different from another because the numeric scales are different.

Do I qualify to have the lien withdrawn from my credit score?

You qualify if:

• your tax liability has been satisfied (you’ve paid what you owe) and your lien has been released; 
• you are in compliance for the past three years in filing your individual and business returns, and; 
• you are current on your estimated tax payments and federal tax deposits. 

Even if you haven’t paid the IRS what you owe, you may be able to qualify for this program if you currently owe $25,000 or less and have entered into a direct debit installment agreement where your payments to the IRS are taken from your bank account automatically.

How do I remove a tax lien from my credit report?

First, it's important to know that unpaid tax liens, unlike other public records, may remain on your report indefinitely. Because of this, the best way to get rid of a tax lien is to pay your tax debt in full.

If your credit report shows an outdated paid tax lien, you could file a dispute with the credit bureaus, just like you can for other credit report errors. You could also dispute a tax lien on your credit report if you have proof that you should not have been subject to it in the first place.

If the debt has been paid in full, then Form 12277 is your new best friend. As CNBC outlined, there are five suggested tips to ensure the lien is removed from your account using this form:

1. Locate your state IRS field collection office. This is where you will be sending forms or asking any questions you might have.

2. Search the Internet for IRS Form 12277 and fill it out.

3. Call the IRS office and ascertain the fax number. Inform them that you will be submitting Form 12277, and call a couple of days later to confirm they have received it. The turnaround time is about 30 days. If you haven’t received a letter confirming the lien withdrawal, follow up with another call.

4. Contact the three credit bureaus, Experian.com, Equifax.com and Transunion.com, and follow their specific step-by-step instructions for submitting the withdrawal. Within 30 days you should receive updated credit reports from each of the three credit bureaus.

5. Check each report to ensure that the tax lien was expunged. If any of the three bureaus did not remove the lien, contact the bureau continuously until it’s removed.

The Road to Recovery

BrandMortgage and the Loan Star Team want you to understand how tax liens work, how they affect your credit score and what you can do to deal with them. Because the laws regarding liens can vary, it's always smart to consult the proper resources, such as the IRS, your state or local tax authority or a credit counselor. Protect your credit by paying your taxes promptly to avoid tax liens appearing on your credit report whenever possible.

Should I Buy or Rent?

Who shot Kennedy? How were the Pyramids built? Is the Oscar dress gold and white or blue? Why didn’t Seattle run the ball on their last offensive play to win the Super Bowl? These questions may never be answered. However two questions that can be answered this week are: Who is Jihadi John and should I buy or rent? Scotland Yard has solved the first question and The Loan Star team will provide a clear answer for the latter question.

For years it has been one of the biggest parts of the American Dream, Home Ownership. Historically the benefits have been so advantageous that home ownership was “a no brainer”. While the drive to be a homeowner is still strong, the housing crisis of 2008 has caused some uncertainty in the mind of some. Let’s take a look at the benefits of renting vs buying.

REASONS PEOPLE RENT:

• Flexibility. Renting allows you to explore an area before making the longer-term commitment of homeownership. Unless you are certain about a specific neighborhood, renting allows time for research and discovery.
• Career uncertainty. If you think you might need to move in the near future, or are mulling job changes that span several areas of town or are located elsewhere in the country, you might want to rent. Buying ties you down to a greater extent.
• Income uncertainty. If you expect a pay hike or cut in the near future, that can change your borrowing ability as well as impact your ability to pay a mortgage.
• Bad credit. Creating a history of on-time rental payments can help you build the sort of credit you’ll need to qualify for a mortgage.
• No maintenance expenses. When a pipe leaks, you don't head to the store; you head for the telephone and call the landlord.
• Utilities (sometimes) included. In some instances, the landlord may pay for many utilities such as water, sewer, garbage, and, in some cases, even heat and hot water.

But there is a downside, too: You may have no control over the fluctuation of your rent, a big-budget item that can change often. Long-term budgeting becomes more difficult. The Loan Star Team would recommend purchasing a home if the following benefits appeal to you:

REASONS PEOPLE BUY:

• Equity. When you pay rent, you are paying your landlord’s mortgage or adding equity to his or her bank account. However, when you have a home mortgage, you increase your degree of ownership in your home with every payment. A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value. In the event that equity in the home grows to more than a 20-to-80 percent loan-to-value ratio, you will be able to borrow against your equity in the home.
• Tax deductions. You can deduct mortgage interest as well as your property taxes. Uncle Sam doesn't give renters this bonus. Not only that, but if you meet certain requirements the IRS won't apply a "capital gains" tax on your profits from the sale of your home. You can keep the first $250,000 in profit you make when selling the home if you're single, or the first $500,000 if married. In addition, those who work from home may be eligible to take deductions for their home office and portions of utilities.
• Creative control. You like dozens of pictures on the wall? Well, hammer away -- they are your walls now. Go ahead and paint them mango! Wish you had another room? Go ahead and add one.
• Maintenance choices. If you live in a house, you can decide how to approach maintenance, either doing it yourself or picking your own contractor. If you live in a condominium or homeowners' association, you may pay a monthly fee to have maintenance work covered by the association's contractors.

Still unsure of what’s the best option for you? Ask Gary Welch or Jeff Morris for help and we’ll talk through the various scenarios and available options together. Not sure how much you qualify for?

We’ll provide you with a free, detailed credit report and choose the most creative financing available for you.  

Call us at 770-888-2232 (Gary), 770-842-3480 (Jeff) or email us at gary@loanstarteam.com or jeff@loanstarteam.com to get started!

Debt Consolidation: Truth or Myth?

We often hear the words, debt consolidation, but what does it mean? Debt consolidation is a debt management plan. You may choose to create your own plan for paying off your debt, or choose to use a third party, such as a non-profit credit counseling organization.

Here are some important tips and information truths and myths that will help you decide which management plan best suits your needs:

HOW DO YOU KNOW DEBT CONSOLIDATION IS FOR YOU?
If you have most of your balances in credit or charge cards, personal loans and collection accounts then this may be a wise choice to pursue. These types of debts are called unsecured debts. If the balances you have for example are in old violation or parking tickets, tax debts or child support/alimony arrearages, then debt consolidation plans will not help.

Before you choose debt consolidation, review your debts carefully. You may only need counseling. With the Loan Star Team we can help you make your own plan to pay off your debt. Homeowners may consider refinancing as an option to reduce high interest rate loans.

TRUTH: DEBT CONSOLIDATION IS NOT BANKRUPTCY.
These terms can cause confusion. Debts will always be debts until all are paid in full. Bankruptcy is a discharge or settlement for debts. While debt consolidation payment plans seem like a solution, your credit report will be affected. If a payment plan to pay off your credit card is lower than what you normally pay each month, it may show creditors that you have trouble paying your bills.

TRUTH: DEBT CONSOLIDATION CAN WORK BECAUSE IT IS SIMPLE AND STEADY.
For those that need the discipline of a never changing monthly payment, then debt consolidation is the answer. You payment will be the same each month to each of your creditors until all your debts are paid in full. You will never need to worry about how much to pay-it is just that simple. One thing to remember…as your monthly payment is lowered, it will expand the time it will take to pay off your debts.

MYTH: YOU CAN CONTINUE TO CHARGE.
When you choose debt consolidation, you will need to be charge-free until all the debts are paid. This is a true adjustment for most accustomed to using lots of plastic.

TRUTH: YOU CAN DO THIS ON YOUR OWN.
At first, it may seem difficult, but you can do it. It is not easy to change your habits, but determination will work in your favor, financially and mentally. Ask your creditors for a reduction in rates, stop the frequent charging, revisit your budget and see exactly how much you can afford to spend. Make all efforts to be diligent in saving and making payments on time. Your credit report will be affected positively and you will be more confident in securing a loan for your home needs.

Get advice from the professionals before considering debt consolidation with agencies. The Loan Star Team is at your doorstep to provide this guidance and counseling. With the lowest interest rates of all times, consider refinancing to a lower mortgage rate and pay off your debt faster!

We provide you with professional help for your refinancing and future home loan needs. Call us at 770-888-2232 (Gary), 770-842-3480 (Jeff) or email us at gary@loanstarteam.com or jeff@loanstarteam.com to get started!

Filing Homestead Exemption Is Near

The beginning of a new year reminds us that the tax season is soon approaching. As a first time homebuyer or if you recently purchased a new property, you have a tremendous tax advantage and may be eligible for what is known as Homestead Exemption. The term homestead exemption can refer to exemptions from property tax that homeowners can claim. It can also refer to homestead protection, which protects a person's primary residence in the case of financial hardship, such as the death of a spouse.

Homestead Exemption laws are not the same in all states. Some states provide automatic protection under the law, while other states require the filing of a claim for Homestead Exemption. In Georgia, it is required that you file a claim for Homestead Exemption. An important note is that your registration of all vehicles and filing of your Georgia and Federal State income taxes must reflect your primary residence address. A claim for Homestead Exemption may not be made on any rental or vacant property, or more than one property. Interestingly enough, as a homeowner, you may lose your right to Homestead Exemption if you abandon the property or if you should occupy a different primary residence than the one previously claimed.

If you have occupied your new residence on January 1st, you will need to file in person, online or by mail at the County Courthouse or Tax Commissioners Office. The amounts of exemption will vary for each county and filing procedures may be different. Typically, filing applications in Georgia is January 2 through March 31.

To make it simple for those filing for the first time, here are the Tax Commissioners Offices for filing your claim:

CHEROKEE COUNTY – 678-493-6120
http://qpublic.net/ga/cherokee/exemptions.html

CLAYTON COUNTY – 770-477-3311
http://www.claytoncountyga.gov/departments/tax-commissioner/exemptions.aspx

COBB COUNTY – 770-528-8600
http://www.cobbtax.org/property/exemptioninformation

DEKALB COUNTY – 404-298-4000
http://taxcommissioner.dekalbcountyga.gov/TaxCommissioner/tc-home.html

DOUGLAS COUNTY – 770-920-7272
http://www.douglastaxcommissioner.net/Exemptions_31XR.html

FAYETTE COUNTY – 770-461-3652
https://www.fayettecountytaxcomm.com/subpages/Homestead.asp

FORSYTH COUNTY – 770-781-2106
https://www.forsythco.com/DeptPage.asp?DeptID=175&PageID=1681

FULTON COUNTY – 404-612-6440
http://www.qpublic.net/ga/fulton/homestead_inst.html

GWINNETT COUNTY – 770-822-8800
http://gwinnetttaxcommissioner.manatron.com/Tabs/Property/HomesteadExemption.aspx

HENRY COUNTY – 770-288-8180
http://www.co.henry.ga.us/taxcommissioner/propertytaxexemptions.shtml

PAULDING COUNTY – 770-443-7606
http://www.paulding.gov/index.aspx?NID=210

For more information, please contact the Loan Star Team of Gary and Jeff at gary@loanstarteam.com or jeff@loanstarteam.com. Stay connected and follow us on LinkedIn!