Where Foreclosures are Booming

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Diversification - An Important Term
"Succeeding is not really a life experience that does that much good. Failing is a much more sobering and enlightening experience." -Michael Eisner

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It is easy for an adult to ask a child what they want to do when they grow up. There are limitless possibilities available to them. When you grow older, this question should still be asked, even beyond the work force.

There are several different things that should be considered for you to fully enjoy the later years of your life. If you want to do everything right, you should begin reti... Read personal finance article



Where Foreclosures are Booming
The home foreclosure market - if that is a proper term to use - is blooming, but not evenly across the nation. True, home foreclosures can be found in virtually every town or neighborhood across America but there are areas where foreclosures are much higher than in other areas. Let's take a look at several areas around the country where the number of foreclosures appears to be the highest.

Southern California - The Golden State's huge run up the housing market shows little sign in ebbing. That being said, many buyers who jumped into the housing market just a few years ago are finding that their adjustable rate mortgages are beyond their ability to repay. What had once been a good deal for these owners has turned into a bad deal as the adjustment period kicks in. Paying $500 or more per month over an already high mortgage rate is catastrophic for some. Fortunately, some buyers will be able to refinance or sell out in a hot market.

Northern New Jersey - Like Southern California, the 12 counties closest to New York City have seen a huge run up in prices over the past decade. On the other hand, some towns have seen their housing markets flatten out as local price corrections kick in. For owners who were on the edge before this time, they can be pushed over the edge as their mortgage readjusts too. Unfortunately, many of these owners will lose their overvalued homes as willing buyers are only looking for a bargain.

South Florida - Hurricane damage notwithstanding, the southernmost market of the Sunshine State remains overheated. Unfortunately, some homeowners are sweating it out as they deal with homes that still need to be repaired, job displacement, and big mortgage payments. Default rates in some counties are up under such pressure.

Falling Markets - Across there are pockets of housing markets where prices are finally retreating. While this is good news for buyers, it is terrible news for homeowners who may end up owning more for their home then it is worth. Couple that information with ongoing financial pressures and homeowners and mortgage companies are likely to lose their shirts with any sale.

Of course, the painfulness for one party could be the gainfulness for another party. If you are in the right place at the right time, then you could capitalize on a fast changing housing market and come out the winner.

Jeff Lakie is a freelance finance writer, His website The Foreclosure List Guide is a great place to find out more about free foreclosure listings. Visit his site today and find out more.

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Real Estate Tax Breaks for Homes

It is always beneficial during tax season to own real estate, which gives you many annual deductions. If you purchased residential real estate during this year, however, you can look forward to even more generous savings at tax time.

Mortgage Interest

Though there are several real estate deductions you will be able to take this tax year, the largest is the interest you paid on your mortgage. According to Kiplinger's (August 31, 2006), you may write off up to $1 million in mortgage interest for your primary or secondary home (does not apply to third home real estate, unless it is a business or rental property). This can be an enormous tax savings, especially within the first years of ownership with most of your monthly payments going to interest.

Property Taxes

Each year, you may deduct the property taxes you paid. If you recently purchased your home real estate, you also may deduct any taxes the seller paid in advance that were applied to your property tax debt. This applies even if you did not reimburse the seller for these real estate taxes.

Points Paid for Mortgage

Even if the seller paid your points, you may deduct them on your tax return within the year of purchase of the real estate. Each point is worth one percent of the real estate mortgage. For a loan principal of $250,000, you may deduct $2,500 for each point. For a loan face value of $500,000, you may deduct $5,000 per point.

If you refinanced your real estate, you also may deduct these points paid. However, the deduction must be spread over the life of the loan. If you sell the real estate or pay off the loan early, then the remaining deduction may be taken within the year of sale or loan payoff.

Home Equity Debt

You are allowed to deduct up to $100,000 of home equity debt each year, regardless for what you used the money. This makes home equity loans low-interest alternatives for purchasing cars, paying student tuition, underwriting your dream vacation, and so on.

Home Business Use Deductions

If you run a business out of your home or use the real estate for business purposes, such as rental property, you have many deductions for the use of this space. For home offices, the percentage of space you actually use may incur the same percentage in deductions for mortgage payments, utilities and home insurance. Improvements made to accommodate the business, such as bringing the real estate up to standard as rental property or installing a private bathroom when renting out a room, may qualify for a deduction against your profits.

Property Damage

If you incurred uninsured real estate damage due to a qualifying disaster (especially within a presidential declared disaster area), you may qualify for a tax deduction. There are limitations, however, and the deduction generally must be taken within the year the disaster occurred.

What You Cannot Deduct

If you recently purchased or sold real estate, you incurred many costs but not all may be deducted from your taxes. Examples of nondeductible expenses are closing costs, major home improvements to attain a higher sales price, title insurance, appraisal and inspection fees, or attorney fees.

Don't forget, deductions that lower your federal tax debt also decrease your state tax obligation! As with all financial advice, always check with a qualified accounting professional.




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Where Foreclosures are Booming
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