A Glimmer of Hope? Mortgage Payments Improving

Fannie Mae says serious delinquencies on home mortgages fell this summer for the fifth month in a row.

Read the Wall Street Journal article here.

Pay off Your Mortgage in Half the Time?

You could!

According to this Wall Street Journal article,"a growing number of homeowners are choosing to pay down their mortgages at a faster rate--even if it means a substantial jump in their monthly payments."

It represents a "shift" in borrower thinking from even just a few years ago.

The articles lists some lifestyle recommendations for those who might consider the increased payments.

"Mr. Walters [chief economist at online lender Quicken Loans] says you shouldn't take on a 15-year fixed-rate mortgage unless you have substantial savings, including at least a year's worth of living expenses in liquid accounts.

Also, he recommends having a debt-to-income ratio below 35%. So if you have a gross salary of $5,700 per month, for instance, your monthly debt--including any mortgage payments, taxes, insurance, homeowners-association dues as well as auto and student loans and credit-card debt--would have to be a max of $1,995 to get a 35% ratio.

Link here.

Three Things You Can Do With the Extended Home Buyer Tax Credit

1. Talk to your parents about selling their house. If (you or) your folks, like many of ours, have owned their home for years and years, they are in a unique situation to sell, actually make a profit and still find another house at a great price.

2. Stop sweating over that short sale. Are you one of the thousands of buyers taking advantage of the tax credit and trying to get your short sale closed? You aren't alone! Now you don't have to worry about getting it closed before December 1.

3. Buy. These tax credits are sweet, but they won't last forever. It's hard to imagine a better time to buy. When you're at the bottom, there's nowhere to go but up.

No Federal Income Tax Due on Principal Mortgage Debt Forgiveness

Here is an innovative way the government is encouraging home owners to "short sale" their home (rather than be foreclosed upon) and helping keep them out of bankruptcy court.

The IRS has created an exemption from its general rule to treat debt forgiveness as ordinary income. In the past, a lender that reduced the payoff amount on a home would 1099 the Seller for the amount of debt forgiveness. Under the new law, there is no federal income tax due on debt forgiven on a loan that is secured by the Seller's principal residence, provided that the loan was made to acquire, construct, or substantially improve the principal residence.

A refinance of that type of loan also qualifies for the exemption.

Sorry, the rule doesn't apply if you pulled money out of your house to pay for something like a vacation and got debt relief on that loan.

The exemption applies to any portion of loan debt forgiven beginning January 1, 2007 through December 31, 2009. Put another way, it doesn't matter when the loan was made; what matters is when a portion of the debt is forgiven.

More Good News for Spokane

Northwest retailer G. I. Joes is opening another Spokane store, according to the Spokane Journal of Business. The store will employ between 45 and 55 workers.

Another G.I. Joes is already being built just west of the Spokane Valley mall.

Click here for the full article.