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Why are you renting?

by The Jana Caudill Team

There are many young people in Northwest Indiana considering whether to renew a lease on their apartment or sign a contract to purchase their first home.

Housing Cost & Net Worth

Whether you rent or buy, you have a monthly housing cost. As a buyer, you are paying YOUR mortgage.

Every mortgage payment is a form of what Harvard University’s Joint Center for Housing Studies calls “forced savings.”

    “Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

The principal portion of your mortgage payment helps build your net worth through building the equity you have in your home.
As a renter, you are paying YOUR LANDLORD’S mortgage.

Below is an example of the home equity that would be accrued over the course of the next four years if you were to buy a home by the end of this year; based on the results of the Home Price Expectation Survey.

Interesting Real Estate Related Articles 2

by The Jana Caudill Team

As we said last time, we believe the best way to come to an informed opinion on any topic is to rely on multiple, reputable resources for the information upon which you ultimately base your views.  Here are three more timely articles for our friends and neighbors in Crown Point, Hobart, and Cedar Lake from the end of last year to help shed a little light on the Real Estate landscape for 2014:

REPORT: BIG SHIFT IN US HOUSING MARKET IN 2014

Next year will mark the end of the refinance boom and the start of a market dominated by purchase money lending, the first purchase-dominated market in 14 years, according to Freddie Mac.

By: World Property Channel Staff, November 20, 2013 | To read the article in full, please visit: big shift article

GSES UPDATE SHORT SALE POLICIES

Fannie Mae and Freddie Mac announced changes to their Servicing Guides Monday aimed at helping more borrowers avoid foreclosure through short sales and deeds-in-lieu of foreclosure (DILs).

By: Carrie Bay, DSNews, November 25, 2013 | To read the article in full, please visit: gses update article

FORECLOSED SALES AT U.S. AUCTIONS DOUBLE AS PRICES GAIN

Purchases of foreclosed homes at auctions jumped last month as banks benefited from surging prices and shunned approvals of sales by homeowners dumping their dwellings at a loss.

By Kathleen M. Howley, Bloomberg, November 26, 2013 | To read the article in full, please visit: foreclosed sales article

Interesting Real Estate Related Articles 1

by The Jana Caudill Team

We believe the best way to come to an informed opinion on any topic is to rely on multiple, reputable resources for the information upon which you ultimately will base your views.  Below we’ve listed four interesting articles from the end of 2013, all from reputable resources, to help shed a little light on the Real Estate landscape of 2014.  Whether you’ll be buying or selling a home in Crown Point, Hobart, or Cedar Creek, or not, we invite you to check out the links for the full articles.

INSIGHT: A NEW WAVE OF U.S. MORTGAGE TROUBLE THREATENS

U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country's biggest banks.

By: Peter Rudegeair, Reuters, November 26, 2013 | To read the article in full, please visit: insight article

REAL ESTATE CROWDFUNDING: WHY IT’S A BIG DEAL

Sometimes, when you cover your ears to escape all the chatter about real estate crowdfunding, you may ask yourself, “What is the big deal?”

By: Teke Wiggin, Inman News, November 25, 2013 | To read the article in full, please visit: crowdfunding article

BUILDING PERMITS IN U.S. JUMP TO FIVE-YEAR HIGH

More applications for home construction were issued in October than at any time in the past five years, a sign the U.S. residential real-estate market is gaining momentum heading into 2014.

By Victoria Stilwell, Bloomberg, November, 26, 2013 | To read the article in full, please visit: building permits article

RESIDENTIAL HOME SALES CONTINUE TO CLIMB: REALTYTRAC

Residential property sales, including single-family homes, condominiums and townhomes, continue to rise, increasing to an estimated annualized pace of 5.649 million in October, a 2% hike from a month ago and an increase of 13% from October 2012, the latest RealtyTrac Residential and Foreclosure Sales Report revealed.

By: Brena Swanson, HousingWire, November 26, 2013 | To read the article in full, please visit: residential home sales article

Property Tax Exemption Site for Lake County Up and Running

by The Jana Caudill Team

Here’s an update for all our Lake County friends, family and neighbors, copied from our friends at Professional’s Title Services:

 

Some really good news this morning…

The Lake County Auditor’s website for filing Property Tax Exemptions is now up and running.  There’s even a short video tutorial, for those uncomfortable online. 

To submit the form online, taxpayers must have the following before they access the application:
A valid driver's license or state ID
A credit card (There is a $5.50 convenience fee charged for online filing.  Well worth not having to suffer the hassles of the LCGC.)
A valid email address
Acrobat Reader 4.05 or higher  (Acrobat Reader is available for free from the Adobe website)

Please follow this link:
https://www.lakecountyin.org/portal/media-type/html/group/auditor/page/file-exemptions

It’s quite simple, but if people feel better about it, they can also print out the forms and mail them in.  If taxpayers provide an email address when they file, the Auditor will let them know when their exemptions are approved or denied (and, if so, why).

Please call PTS if you have any questions or problems.

-John

John P. Hagerman
Professionals' Title Services
Office (219) 736-1825
Fax (219) 736-1835


Have a wonderful day!

Does Your Renter's Insurance Cover It?

by The Jana Caudill Team

First of all, this article is not a definitive answer to the question.  It can’t be.  Every policy is different from the next just as every company issuing those insurance policies is different from the next company.  There are many similarities between companies and policies, however if you want the bottom line answer to, “Does my renters insurance policy cover (fill in the blank)?” you need to consult your policy paperwork and your insurance agent.  As food for thought, and to prompt you to review your policy and make sure you have proper coverage for your possessions and liability during your rental arrangement, here are some general points addressed by most renters insurance policies:

  1. Theft and vandalism to personal possessions.  Makes sense.
  2. Damage to personal possessions by specific cause.  An example would be damage or destruction by fire or other natural cause.  Be careful here.  Do not rely on your policy covering losses from flooding unless it is spelled out specifically in your policy.  Flood insurance is almost always separate from these policies.
  3. Secured personal possessions temporarily outside your apartment, such as in your car or inside luggage while you’re on vacation.  This is another tricky one.  Check your policy to be sure, and don’t count on it unless you see it in writing.
  4. Temporary living expenses if your unit is undergoing damage repairs.  Let’s say a tree fell through the roof of your Crown Point, Schererville, or Merrillville rental during a windstorm.  Does your policy cover temporary living expenses such as a place to stay while repairs are completed?
  5. Liability.  Just like with homeowners insurance, who pays if someone slips and breaks a hip while in your apartment?

Maybe you have renter’s insurance, and you’re comfortable that your policy addresses those items important to you.  The last question to ask yourself is, “Do I have enough coverage?”  When you add up the value of all your electronics alone – television, microwave, stereo and/or iPod, laptop computer, cell phone, even your CD and DVD collection – will your policy cover the entire replacement value or will it fall short?  Food for thought.

Considerations for Moving Elderly Parents

by The Jana Caudill Team
  1. Get help.  You don’t have to do it all on your own.  There’s packing, unpacking, garage or yard sales, selling the old Crown Point, Hobart, or Valparaiso home, cleaning and prepping the new one.  Enlist your brothers and sisters, other family members, even your children and long-time good neighbors of your parents to help out with some of the smaller tasks.  The job can seem daunting.  This is one of those times you should take advantage of the relationships you have with others who like you love your mom and pop.  Recruit them to help you help your parents.
  2. Prepare the elderly friendly new home.  Do you need handrails in bathrooms?  Maybe a wheelchair ramp to the front door?  How about no skid matting in the tub?  Do a walkthrough of the new home, even if mom and dad are moving in with you, to make sure when they arrive they can get in and out and around safely.
  3. Be there emotionally.  Moves like these are trying for everyone involved.  Just keep in mind how many years your folks have lived in the home they now see themselves as leaving forever.  Honor the memories they and the rest of the family have created over the years while living there, yet focus on a positive future of opportunity in their new digs.  What benefits will the new location provide that the old one lacked?  Proximity to family?  A more active and healthy social life?  Help them view this move as an exciting new chapter in the family history, not the end of the book.

3 Reasons to Re-evaluate Your Homeowner's Insurance

by The Jana Caudill Team

Property values are not static, especially in these tumultuous economic times.  Your Crown Point, Chesterton, or Dyer home’s value can depreciate in a rough housing market just as it can appreciate during a boom, and your homeowner’s insurance policy needs to cover more than just the replacement cost of all structure(s) sitting on your lot or land.  Here are three additional reasons beyond the fluctuating cost of rebuilding the physical house that I hope motivate you to re-evaluate your current policy:

  1. Personal possessions.  Let’s just say it’s been five years since you’ve evaluated your policy.  Here’s a question:  Do you own more (and more expensive) possessions?  Your policy can cover a certain dollar limit of replacement value for any personal possessions lost, for example, in a fire.  Have you purchased a new wide-screen TV, or in-home exercise equipment, or a closet full of new suits purchased for your new job?  Better to be safe than sorry.  Check it out.
  2. Cost of living.  The value of your home may have taken a little hit over the last few years, but the cost of living sure hasn’t.  For most people it has gone up, and if your policy covers any portion of cost of living expenses while your replacement house is being built you’ll want to make sure you’re not underinsured and susceptible to further financial strife.
  3. Home improvements.  Do you have a new addition off the back of the house, or maybe you finally built that detached two car garage at the back of your country lot.  These additional improvements increase the total value of your property and your insurance property should reflect these additions.

The worst way to find out if you have enough homeowner’s insurance is after disaster strikes.  Take a minute or two and give your insurance agent a call or send them an email.  They will take the time to walk you through the process.  If nothing else you’ll sleep easier knowing you’re already covered.

Subtraction by Addition

by The Jana Caudill Team

Thinking about doing a large remodel or addition?  Are you justifying the expense with the belief that you’ll get that money right back out of the house when you sell it?  Be careful.  You might just discover you’re losing money – subtraction by addition.

There are many inexpensive fixes, updates, repairs, etc. you can do to your home and expect to get your money back after selling your house.  The key in today’s economy is fixing what you already have rather than adding.  Of course home buyers love more space, but that sun room addition or garage addition may not equate to the return you are expecting down the road.

Anytime you add onto a home, increasing the footprint of the structure, you should see dollar signs flashing before your eyes, and I don’t mean money going into your pocket.  Think about your reasoning for the addition.  Is this something your family needs?  Do you only have one bathroom for your family of five?  That expense might be justifiable.  But is a new master suite built off the back of the house a good decision?  How long are you going to be around to enjoy the new space?  Over-improving compared to the rest of the neighborhood is another recipe for diminishing returns.

Here are a couple resources for cost effective fixes for your Crown Point, Munster, or Lowell home, inside and out.

Winning the Debt Game

by The Jana Caudill Team

Debt, like most things, is okay in moderation.  Too much and an unpleasant conversation with a bankruptcy attorney might just be in your future.  Too little or none and you might be hampering your ability to get a college loan or a mortgage for your new Crown Point, Dyer, or Schererville home.

Here are a few debt tips with links where you can get more information:

  1. Cash cushion.  Have a little extra cash on hand, in the bank, under the mattress (no, not really under the mattress).  This is for emergencies, not for that little black dress or movie tickets.  Life happens.  Cars break down, water heaters break down – things break down.  Have some emergency cash available so your finances don’t go into a tail spin when the unexpected happens.
  2. Know your spending habits, then break bad habits.  Do you really know where your money is going?  Really?  Are you stopping by Starbucks once a week or is it really closer to every day of the week?  How often do you eat out?  What does the final tally on your Friday and Saturday nights look like?  Take a look at that monthly credit card bill.  You might be surprised.
  3. Pay down debt with highest interest rates first.  Makes sense.  Whatever money you have to pay down debt should go toward the credit card with the highest interest rate.  Once that is paid off, start paying extra on the next highest, and so on.  This is the best way to shrink those ugly credit card balances.  But remember, minimum payments are not your friend.  You’ll have to do more to get rid of that debt.
  4. Learn more.  Start at the CNN Personal Finance web page for great ideas on improving all aspects of your financial life.

The Real Estate Gift

by The Jana Caudill Team

I am not an authority on tax law, so I’m not qualified to give tax advice.  If, however, this scenario sounds familiar and you find yourself on either the giving or the receiving end of a gift of Northwest Indiana Real Estate I’d like to advise you to consult with a tax professional to learn of the possible tax obligations you may be facing.  Now, on to some of the basics:

If you are giving a gift of Real Estate, as with any gift in the eyes of the IRS, there are potential tax implications.  This article references a law from 2009 that states gifts totaling under $13,000 in value given over the course of a calendar year do not require the giver to file a gift tax return.  If the total is over $13,000 you will need to file form 709.  The good news is even if you are required to file a form 709 it does not automatically mean you are going to owe any tax.  There is a lifetime $5,000,000 gift allowance tax exemption, according to a 2011 law.

Gifts are tax deductible ONLY if given to an eligible charity.  Your Great-Uncle Julius is probably not an approved charity.  As well, loans are not considered gifts.

As the recipient you do not have to pay taxes on a gift received because the IRS does not look at the value of the gift as income.  One stipulation here is if you in turn receive income, such as rent from tenants on a building that was gifted to you.  You still don’t pay taxes on the value of the Real Estate, but you will have to claim the rent collected on your tax return.  And finally, at such point in the future you decide to sell the Real Estate you had been gifted in the past you may have a capital gains tax obligation.

Plenty of food for thought.  The best advice I can give you is to consult with a tax professional prior to gifting.  It may save you some money in the end.  Here’s the latest on the gift tax from the IRS.

Displaying blog entries 1-10 of 13

Contact Information

Photo of The Jana Caudill Team Real Estate
The Jana Caudill Team
Redkey Realty Leaders
503 East Summit St., Suite 2
Crown Point IN 46307
219-661-1256
Fax: 219-663-5949