Friday, March 16, 2007

How to prevent real estate, mortgage and insurance companies from mining your credit report without your authorization

The major credit firms (Experian, Transunion and Equifax) offer a rather abhorrent product to real estate, mortgage and insurance companies.

As everyone knows, when a borrower applies for a loan or asks to be prequalified, the lender pulls a credit report. What is for sale by the credit agencies is the fact that a mortgage firm (bank or broker) has made a credit inquiry, as well as the individual’s name and address. To the types of companies which stoop to this method of obtaining leads, this is a signal that someone is considering a real estate purchase, and they would like to contact such individuals with advertising of their own.

In this country, we all advertise, and we all compete. But do many people know that the credit agencies are allowing this information to be mined, and if they knew, would they like it?

There is a way to stop it. Check out this website:
It has a super simple way to restrict this type of use of your personal information.

Friday, March 2, 2007

Don’t Forget These Write-offs!

When there is a real estate transaction, there will usually be write-offs. Make sure you claim every one you are entitled to.

If there are origination fees, and if they are paid for the use of money, the IRS considers them tax-deductible. If the fees are classified as a service fee, then they aren’t.

For details, including how much you can deduct in the year the points are paid, check out IRS Publication 936.

Sometimes borrowers simply must refinance or sell their property even though a nasty prepayment in involved. If this happens, the prepayment penalty IS tax deductible.

Property taxes are deductible.

The year-end statement from the mortgage lender will detail exactly how much interest was paid during the year, and it is all deductible.

Recently enacted legislation enables mortgage borrowers to deduct the cost of mortgage insurance. There are limitations, so be sure and check out the fine print of the new law.

Interest on a construction loan is deductible during a period of two years before the new residence is inhabited by the borrowers.

Some of the settlement fees (the charges you would pay no matter if you were paying all cash or financing the property) may be added to the cost basis of the property. Common ones include title abstract fees, recording fees, transfer or stamp taxes, owner’s title insurance. These may apply to seller or buyer.

Don’t overlook the need to verify the applicability of these to your individual situation.