Weekly Rate & Market Update 2-19-16
Question of the week: I’m doing my taxes, what is deductible from my transaction last year?
Answer: I am not a Certified Public Accountant, nor a professional tax preparer. Depending on your situation the following items may be deductible when you file your taxes:
• Mortgage Interest
• Origination/Discount Points
• Mortgage Insurance Premiums
• Property Taxes
Each of these is subject to not being eligible for deductions depending on the nature of your transaction (purchase, cash-out refinance, home improvements, etc) and your income.
My standard answer to this question was answered in the first sentence; I am not a tax professional. I have a hard enough time trying to keep up with the changes Congress, the Fed, HUD, DRE, Fannie Mae or other government agencies have regulated, I certainly have not been able to keep up with all the changes in the state and federal tax codes these past few years.
I can tell you this, if you purchased, sold or refinanced property last year I strongly advise you to take copy of the HUD-1 closing statement from your escrow documents to a professional tax preparer or CPA. S/He will be able to assist you in maximizing your deductions while staying out of trouble with the IRS and State Franchise Tax Board.
Provide your tax professional with your IRS Form 1098 showing mortgage interest paid, and if applicable mortgage insurance paid and amount paid in property taxes for the year.
If you need a recommendation for a tax preparer do not hesitate to contact me.
Remember, with Dennis it’s not just a mortgage, it’s your complete financial picture.
It’s price week with data for producer and consumer prices being released this week. Wednesday the Producer Price Index for January was released and it rebounded nicely from December. Total wholesale prices were up 0.1% for the month and taking out volatile food and energy costs (the core rate) producers paid 0.4% more for goods and services. Year over year all prices are down 0.2%, the core rate is up 0.6%. A healthy start to the year as rising wholesale prices support a growing economy. The news is mortgage rate unfriendly.
Consumers also paid a bit more for everything but food and gas as the core Consumer Price Index rose 0.3% for the month, while the total CPI was unchanged from December. Year over year the core rate is up 2.2%. This data validates the Fed’s rate increase in December and adds support to those who want to see the Fed push rates up again next month. The news is mortgage rate unfriendly.
Rates for Friday February 19, 2016: Despite the positive economic data that should push rates up we are flat from last Friday. There is some volatility in the mortgage markets and some indication we may see a break out causing higher rates. If we can hold the current levels through trading on Monday we should see rates remain constant for the medium term. “Should.”
FIXED RATE MORTGAGES AT COST OF 1.25 POINTS
30 year conforming 3.375% Flat
30 year high-balance conforming 3.625% Flat
30 year FHA 3.25% *** Flat
30 year FHA high-balance 3.25% *** Flat
Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down (3.5% for FHA) with 740 FICO score for purchase mortgages. ***FHA rates have no points and credit towards closing costs, recent rate change reduces credits
Big weekend in the Smith household as our youngest turns 14 today. A bright and happy soul who with quick wit and a big heart brings smiles wherever she goes, we are very fortunate. Thinking back to my 14th birthday, it was the day after the Bicentennial Celebration. So long ago Paul McCartney and Wings topped both the album and singles charts!
Take some time this weekend and reacquaint yourself with the carefree, fun loving 14 year old inside of you, do something fun and silly!
Have a great week,
Dennis
