Tag Archives: Mortgage Rates

Rebuilding Your Credit

13 Oct

Metro®Boston, Publication Date: October 12, 2011
By Attorney George Warshaw

 “I couldn’t get a loan because my credit was lousy.”

 What can you do about it? There are a few simple things that can help. The starting place is your credit report. Get a free copy and see what went wrong, then start to rebuild.

 The first thing is dispute any inaccuracies in the report. Is something on the report that belongs to a person with a similar name? Has something already been paid? Don’t hesitate to challenge the credit bureau or call the creditor directly.

 Second, and I consider this the most important, start paying all your bills on time, especially mortgage and credit cards. There’s an easy way to avoid future late payments.

 Nearly every credit card or mortgage lender allows you to set up an automatic payment method in which money is taken directly out of your bank account by the creditor to pay the bill.

 If you put every credit card on an automatic minimum payment plan with the creditor, you won’t miss a payment! You can always write a check and send in more later when you look at your written statement, but at least you won’t miss a payment!

 Go to the creditor’s website, register, and look for the payment screen. It will solve a lot of problems.

© 2011 George Warshaw. All rights reserved.

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George Warshaw is a real estate attorney, estate planner and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, prenuptial agreements and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how or if the foregoing may apply to your circumstances.

Where Are Interest Rates Going?

11 Aug

Metro®Boston, Publication Date: August 10, 2011

By Attorney George Warshaw

Lost in the debris of the deficit debacle and the stock market free fall is the effect on mortgage interest rates. Will they rocket upwards, stay the same or decline?

Mortgage rates rise or fall based on something. But what?

There are actually two types of mortgage loans and two types of rates: first mortgages are long-term interest rates; home equity loans are short-term monthly rates. The rate on each is established differently, and often go in different directions based on the exact same news.

When the Fed announces that it is lowering or raising rates, that immediately affects the monthly rate charged on home equity loans, not first mortgages.

First mortgage rates are determined by the longer-term bond market. I’ve heard it said that first mortgage rates follow “the 10-year Treasury” or “mortgage backed securities” instead. In other words, as prices on a specific longer-term “fixed income investment” rise or fall on Wall Street, first mortgages interest rates ultimately bounce along with it.

Confused? Since no one seems to be managing our economy right now, you are not alone. Be safe. If you can lower your first mortgage rate, do it now.

Need a recommendation for a good mortgage lender? Email me. I know several good lenders.

© 2011 George Warshaw. All Rights Reserved.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

It’s Tax Time Again – Deducting Interest

30 Apr

Metro® Boston, Publication Date: March 30, 2011

By Attorney George Warshaw 

Last week I wrote about the advantages of paying off your mortgage early. A reader asked whether that was wise since a homeowner gets a tax deduction for all or part of the mortgage interest one pays. 

I’ve known many homeowners who say they like to have a mortgage so that they can deduct the interest on their taxes. I’ve never fully understood the rationale. 

A mortgage is not an investment; it’s a debt.  A dollar of mortgage interest does not reduce your taxes by a dollar. A homeowner only gets to offset income taxes by a percentage of that dollar. 

A tax deduction is not a tax credit. A tax credit reduces your taxes dollar for dollar. A deduction merely reduces the amount of income subject to tax. Here’s an example: 

Let’s suppose you are single and your taxable income is between $34,000 and $82,400. Of every taxable dollar you earn over $34,000, 25% (or 25 cents) is paid to the IRS in income taxes. Since a dollar of mortgage interest merely reduces your income by a dollar, a dollar of interest saves you only 25 cents. 

If you don’t need a mortgage, talk to your accountant or lawyer about the best tax strategy for you. © 2011 George Warshaw. 

The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.

Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties, prepares wills and trusts for inheriting real estate, and trusts that protect your children and pets. George welcomes new clients and questions at  george.warshaw@warshawlaw.com.

Getting Out of Debt

30 Apr

Metro® Boston, Publication Date: March 23, 2011 

By Attorney George Warshaw 

If you own a home, you’ve probably refinanced by now and lowered your interest rate to a level you never thought possible. That’s a good thing. 

Now consider this: get rid of the debt! 

There are two types of real estate investments you can make: one that makes you money and one that saves you money. They’re both equally important. 

The home you buy today will likely be worth a great deal more many years from now – though as we’ve seen, you can’t count on it being worth more on any given day. The investment you can plan is your mortgage. 

By continually paying down your mortgage, you increase your available cash equity and reduce the consequences of losing your job or becoming seriously ill or injured. 

But be careful in how you do it. I’m not a fan of a 15 year mortgage. The high monthly payment may be affordable today, but not tomorrow. Your health and your job are not guaranteed, but the monthly payment will be there for 15 full years.

So take my advice: as part of your overall investment strategy, pay off your mortgage as early as possible but don’t impoverish yourself in the way you do it. © 2011 George Warshaw. 

The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.

Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties, prepares wills and trusts for inheriting real estate, and trusts that protect your children and pets. George welcomes new clients and questions at  george.warshaw@warshawlaw.com