Helpful Articles

Article on Oct 18, 2024

IRS Extends 1031 Exchange Deadlines for Victims of Milton and Helene

In response to the devastating impacts of Hurricanes Helene and Milton across the southern United States, the Internal Revenue Service...

Daniel Goodwin

Article on Sep 9, 2024

One Way to Stay Ahead of Inflation: Qualified Opportunity Funds

Learn the potential benefits of utilizing Qualified Opportunity Funds (QOFs) as a strategy to combat inflation within an investment portfolio. This article highlights how investing in QOFs can offer tax advantages and potentially hedge against inflation by diversifying one's investment portfolio.

Daniel Goodwin
Published by Kiplinger

Article on Sep 4, 2024

721 Exchange to Defer Taxes: Pros and Cons

A 721 exchange, also known as a UPREIT (Umbrella Partnership Real Estate Investment Trust) transaction, allows real estate owners to defer capital gains taxes by exchanging their property for operating partnership units in a REIT. Pros include tax deferral, diversification of real estate holdings, and potential for ongoing income. It can also provide estate planning benefits and relief from property management responsibilities.

Daniel Goodwin
Published by Kiplinger

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Common Questions

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Glossary Definitions

note

A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

no-cost loan

Many lenders offer loans that you can obtain at “no cost.” You should inquire whether this means there are no “lender” costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a “no-point” loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

no cash-out refinance

A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is caculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a “rate and term refinance.”

negative amortization

Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rate. In essence, the borrower is deferring the interest payment, which is why this is called “deferred interest.” The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.

multidwelling units

Properties that provide separate housing units for more than one family, although they secure only a single mortgage.

mortgagor

The borrower in a mortgage agreement.

mortgage life and disability insurance

A type of term life insurance often bought by borrowers. The amount of coverage decreases as the principal balance declines. Some policies also cover the borrower in the event of disability. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds. In the case of disability insurance, the insurance will make the mortgage payment for a specified amount of time during the disability. Be careful to read the terms of coverage, however, because often the coverage does not start immediately upon the disability, but after a specified period, sometime forty-five days.

mortgage insurance premium (MIP)

The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

mortgage insurance (MI)

Insurance that covers the lender against some of the losses incurred as a result of a default on a home loan. Often mistakenly referred to as PMI, which is actually the name of one of the larger mortgage insurers. Mortgage insurance is usually required in one form or another on all loans that have a loan-to-value higher than eighty percent. Mortgages above 80% LTV that call themselves “No MI” are usually a made at a higher interest rate. Instead of the borrower paying the mortgage insurance premiums directly, they pay a higher interest rate to the lender, which then pays the mortgage insurance themselves. Also, FHA loans and certain first-time homebuyer programs require mortgage insurance regardless of the loan-to-value.

mortgagee

The lender in a mortgage agreement.

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Helpful Articles

IRS Extends 1031 Exchange Deadlines for Victims of Milton and Helene

One Way to Stay Ahead of Inflation: Qualified Opportunity Funds

721 Exchange to Defer Taxes: Pros and Cons

Common Questions

Learn Through Video

Glossary Definitions

(281) 466-4843

[email protected]

Book A Strategy Call

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The Woodlands, Texas 77380

Resources

Helpful Articles

IRS Extends 1031 Exchange Deadlines for Victims of Milton and Helene

One Way to Stay Ahead of Inflation: Qualified Opportunity Funds

721 Exchange to Defer Taxes: Pros and Cons

Common Questions

Learn Through Video

Glossary Definitions

(281) 466-4843

[email protected]

Book A Strategy Call

25511 Budde Road, Suite 1002 The Woodlands, Texas 77380

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25511 Budde Road, Suite 1002
The Woodlands, Texas 77380