Many people aren’t aware of the fact that, in most situations, there really is no gift tax. Here’s why…

$14,000 Annual Exclusion

The federal government gives each of us an allowance to gift anybody $14,000 per year without incurring any gift tax. This $14,000/year replenishes every year, and it’s $14,000 per person. So, theoretically, I could gift every person that I know $14,000 today, and then another $14,000 next year and the year after, and there would be NO gift tax.

$5,450,000 Lifetime Exclusion

What most people don’t realize, is that there’s a second allowance of $5.45mm! In other words, let’s say that I want to give you $114,000. That’s $100,000 more than what I can give you out of my $14,000 annual bucket. That’s not a problem at all, because I also have the $5,450,000 bucket. The $5.45mm bucket is called my “Lifetime Exclusion.” If I use any of it during my lifetime, I simply reduce my estate tax exclusion by that amount.

So in our example, if I gift you $114,000, I would take $14,000 out of my annual bucket and $100,000 out of my lifetime bucket. My annual bucket replenishes each year. But my lifetime bucket does NOT replenish. In fact, I must reduce my lifetime ...


Tax Tips When Owning a Home

Feb 22
2:20
PM
Category | Blog

Did you just close on your new home? It was a fun journey, wasn’t it? You applied for your mortgage and with your preapproval letter in hand you went shopping and found the perfect home. You now have a place to call your very own and you’re no longer paying your landlord’s rent. But now that you’re all moved in and settled, it’s also time to start thinking about income taxes and as a homeowner, there are some tax advantages you now have that you didn’t when you were a renter.

You probably know this already but perhaps the single biggest advantage is the mortgage interest deduction. What you probably didn’t know is that very early on with a new mortgage, the bulk of your monthly payment goes toward interest to the lender and less to the principal balance. That means almost all of your monthly payment in the early years is an income tax deduction. Interest is deducted from your gross income, reducing your income tax obligation. For example, with a 30 year term on a $300,000 loan at 3.75%, the principal and interest payment is $1,389 and in just the first year, your total interest paid is $11,155 which is the amount that will be deducted from your taxable income.

Your new lender will send a form 1099-INT which will list the amount of interest paid during the previous year. If you just closed in December and are ready to file but have not yet received ...


Little Falls – NJ Lenders Corp., a tri-state area mortgage company privately owned and licensed as a residential mortgage banker, is celebrating its 25th year of business.

The company, said a spokesperson, is proud to have a 25-year commitment to providing homeownership through its dedication to its clients and their needs to purchase or refinance homes. Founded in 1991, the company currently originates mortgage loans in New Jersey, New York, Connecticut, Pennsylvania, Virginia, Maryland and Florida. With seven offices and more than $20 billion in closed mortgage loans, its track record of success can be seen in its client retention rates. More than that 70 percent of NJ Lenders Corp. mortgage loans are currently derived from previous customer referrals.

"Our customers have choices and they continue to choose us, year after year," said NJ Lenders Corp. President Glenn Durr. "Our loan officers have earned their reputations by recognizing and responding to what’s important to our borrowers. We are not only defined by our competitive rates and broad product offering, we focus on ensuring a best in class customer experience by partnering with our clients to help guide them to the right mortgage solution that best fits their goal."

Over the last 10 years, shifts in the U.S. economy as well as the recession and housing crash ...


As you begin the process to find and purchase a new home you will quickly learn the road to homeownership is laid with acronyms. Two of the most mysterious you will certainly hear are PMI and LTV.

PMI stands for Private Mortgage Insurance. It is insurance that a borrower must purchase, in certain scenarios, that protects the lender’s obligation on a mortgage if a borrower defaults.

LTV stands for Loan To Value. It is a way to compare the amount of your mortgage loan and the value of your home.

Your LTV changes over time, and once it reaches 80 percent or lower, the PMI is no longer a requirement.

Here’s how it works:

Say you have $10,000 saved to buy a house, and the house you want to buy is $180,000.

That means if you qualify for a mortgage, the lender is paying $170,000, which is 94% of the obligation to the seller. The Loan To Value (LTV) is 94% ($170,000 divided by $180,000).

In most cases, the lender will require the borrower to purchase PMI to protect the money they are providing to purchase the home if the LTV is above 80%.  So in the example above, the borrower would have to pay the mortgage costs (principal and interest) as well as a ...


As housing inventories remain constrained in many markets, some buyers may face increased competition and more bidding wars heading into the spring-selling season. Bidding for a new home can get pretty fierce in today's market.  Here are three potential solutions to avoid getting outbid on your new home:

http://cmpsinstitute.org/images/housingdemand.jpg

  1. Turn in your loan paperwork BEFORE you place an offer.  In many cases, you are bidding against cash buyers who don't need to wait for financing approvals.  Look at it this way:  if you were the seller, would you prefer to do business with a buyer who needs to wait for financing approvals, or a cash buyer who can close the deal quickly?  With that in mind, it's important to be proactive and provide your mortgage lender with things like your source of down payment funds, your asset documentation, your credit report and your income documentation.  This way, you'll be in a better position to close the deal quickly and compete with those cash buyers.
  2. Pay cash, but do it right.  Keep in mind that you only have 90 days after closing to place a mortgage on a property that you bought with cash if you want to secure your tax deduction. ...

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