Two Extra Days To File Taxes Means Two Extra Days To Find Deductions

Many of us are knee-deep in paperwork from our banks, our advisors and lenders as we prepare for the April 17, 2007 tax deadline.

Yes, I said April 17, 2007.

April 15 is a Sunday and April 16 is Emancipation Day, a legal holiday in the District of Columbia. So, this year, we all have two extra days to get our federal taxes filed.

If you purchased a home in 2006, you may be entitled to a few extra tax deductions, courtesy of the IRS. Some of the deductions for which you and your accountant should be on the lookout include:

1. Interest on a primary mortgage
2. Home improvement loan interest
3. Discount Points
4. Property taxes
5. Capital gains exclusion
6. Home-based business deductions
7. Selling costs and capital improvement
8. Moving costs
9. Mortgage interest tax credit
10. Energy tax credits

If you are not currently working with a tax professional and need a recommendation, call or email me anytime. It would be my pleasure to help you.

The Week In Review (March 5, 2007) : What To Watch For

Two weeks ago, the tone on Wall Street was overwhelmingly positive and the glass was half-full. Last week, however, that all changed.

The week began with former Fed Chairman Alan Greenspan's remarking that a 2007 recession may be looming, and it ended with Dow posting its worst one week loss in more than four years.

The glass is now half-empty.

Two weeks ago, market bears could barely be heard above the bulls. The roles are now firmly reversed and that is good news for mortgage rates.

Remember, rates generally fall when the economy sputters.

The economic calendar is sparse this week until Friday's jobs report. Until then, expect extreme volatility as market psychology dictates the market (and mortgage rate) movement.

The Good ... Bad ... Ugly of it All

A couple of weeks ago I read a Yahoo Finance article titled: "Throwing Good Money After Bad" by Robert Kiyosaki.

With all of the recent talk about whether or not we will experience rampant inflation, or a recession is getting ready to show its ugly head, or worse yet, the U.S. economy will suffer through a deflationary period ...

I think the points made, as well as, the examples Robert Kiyosaki uses to illustrate those points are interesting (to say the least). Whether or not you agree or disagree with Mr. Kiyosaki's views is, actually, irrelevant ...

The fact is that if you are involved in the mortgage and/or real estate business ... You probably have clients/customers that read Robert Kiyosaki books, articles, etc. and will have questions regarding his views.

You should be prepared to answer the questions/concerns of your past, present, and future clients/customers. A great resource for staying informed and updated with what is happening in the economy is The Mortgage Market Guide.

The Mortgage Market Guide (MMG) is a comprehensive series of daily market commentaries. Information includes Rate Alerts, FNMA Bond Charts, FNMA Bond Chart Commentary, Stock Market Commentary, Economic and Fed Talking Points, Economic Indicators and Forecasts for the Week and advice just for Originators. Lock or Float advice is delivered in a format that is easy to understand.

Whether you are a manager, loan officer or real estate agent, the newsletter is an invaluable tool to gain the knowledge necessary to educate your prospects, clients and partners, as well as, provide accuarate and informative advice regarding their mortgage.

There is even a FREE 14 Day Trial.

Fed President Poole Says "There Could Be A Recession"

Speaking in Chile this morning, St. Louis Fed President William Poole said that while "there could be a recession" in the coming months, the Fed is not expecting it.

This echoes Ben Bernanke's speech earlier this week in which he stated that the U.S. economy still has room for growth.

Poole's comments are soothing markets at the end of a volatile week for mortgage rates and what will likely be the worst one-week slide in stock prices since 2002.

The biggest wild card to mortgage rates today and through early next week is the continued stigma attached to sub-prime lending.

There is a growing concern that defaults will spill over to other sectors of the economy, raising the overall risk in mortgage lending. With higher risk comes higher rates -- sub-prime borrower or not.

(Image Courtesy: Federal Reserve)

Sharing Your Credit Card Balances Can Lower Your Mortgage Rates

Typically, higher credit scores get lower mortgage rates and access to a wider array of mortgage products.

Extent of Indebtedness comprises 30% of a credit score and is the second largest component in the credit scoring model. In plain-speak, Extent of Indebtedness is: "How close is this person to maxing out his cards?"

The ideal percentage of credit balance to credit limit is around 35%. Anything over 70% can be hazardous.

If you are close to your credit limit on one or more cards, you can "trick" the agencies into improving your scores by moving high balances to other, "under-used" cards.

For example, let five cards at 10% of their credit limit receive portions of the balance from a 70% card.

"But my 70% card has a 2.9% introductory rate; the other cards are at 18% or more! What a waste."

That's okay -- just keep this advice in context. If you aren't applying for a home loan in the coming months, there are fewer reasons to try to boost your score and no reason to shift to your balance. I don't recommend increasing your cost of credit solely for a higher credit score.

However, if you need to get your scores up quickly, sharing credit card balances among all your cards -- even if the rate of payment is much higher -- can result in substantial savings on a mortgage month over month.