The Homestead Law is technical in nature and complex in its application. A Declaration of Homestead, which is not

properly prepared, may be invalid. The following is for general informational purposes only and should not be considered legal advice. We therefore suggest that you contact an attorney for any legal advice on your specific situation.

What is the purpose of the homestead exemption?

The homestead exemption gives you rights against many debts you might incur through accident, illness or misfortune. However, there are limitations and exceptions. The policy underlying homestead laws is to provide a place for the family where they may live free from the anxiety that it may be taken from them.

How does the homestead exemption work?

Example: If the market value of your home is $120,000 and you have a first mortgage or deed of trust of $65,000 and a second mortgage of $25,000, you have an equity of $30,000 in your home. The homestead exemption protects this equity against creditors.

What is a judgment lien?

When you owe someone money he is considered your creditor. If a creditor sues and wins a judgment against you, he can file a lien against your home. The homestead exemption is protection against such liens.

What kind of property is covered?

A house, a condominium, a duplex, a mobile home, a community apartment project, or a planned development.  Who is eligible for this homestead exemption? Every homeowner who resides in his or her home is entitled to this protection. A person can only have one valid homestead at a time.

Who may file a Declaration of Homestead?

Every homeowner may file. A homestead will remain in effect until the house is sold, or the homestead is abandoned by recording an Abandonment of Homestead.  Are their limits to the amount of equity protected?  Yes, for married couples, or single parents with dependents living at home the homestead exemption is $75, 000; unmarried individuals, $50,000. For persons 65 years or older, or for persons physically or mentally disabled, the exemption limit is $100,000.

What situations are not covered by the homestead exemption?

Judgment liens recorded before you have recorded your Declaration of Homestead will attach to the house. Loans or debts secured by the property (mortgages, deeds of trust, etc.) are not covered by the homestead exemption. When you voluntarily put up your home as security against a debt, a homestead will not protect it. When a contractor or laborer puts labor or materials into repairs or improvement on your property, and you do not pay him, the homestead exemption will not protect against the mechanic’s lien. Tax liens by federal, state and local governments.

Can I remove the homestead exemption if I want to?

Yes. You can remove the homestead exemption at any time by filing a form called Abandonment of Homestead. Also, if you were to record a homestead on another property, it would remove the homestead on the first property. When you sell your home, the homestead on it is automatically removed.

info@WeSpeakRealEstate.com   for more questions?

Here are some key interest rate change indicators for your information. 

For current listing or current solds in your area - we invite to visit our website at

www.WeSpeakRealEstate.com. 

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Things that may raise interest rates.

Consumer Price Index Rises

Indicates rising inflation.

Durable Goods Orders Rise

Pickup in business activity usually leads to increased credit demand.

Housing Starts Rise

Shows growth in economy and increased credit demand. Fed tightens money supply by

raising rates.

Leading Indicators Up

Signals strength in the economy leading to greater credit demand.

Personal Income Rises

The higher one’s income, the more consumed, prompting higher prices of debt securities.

Producer Price Index Rises

Indicates rising inflation. Demand for, and prices of, goods rises.

Retail Sales Fall

Indicates stronger economic growth. Fed may tighten money supply.

What will lower interest rates?

hat May Raise Interest Rates

Gross National Product Falls

Reflect a slowing national economy. Fed loosens money supply by lowering rates.

Industrial Production Falls

Indicates slowing economic growth. Fed loosens money supply by lowering rates.

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Inventories Up

Indicates a slowing economy since sales are not keeping up with production.

Oil Prices Fall

Reduces upward pressure on interest rates, thereby enhancing prices of debt securities.

Precious Metal Prices Fall

Reflects decreased inflation. Demand for inflation hedges falls.

Unemployment Rises

Indicates stronger economic growth. Fed may tighten money supply.

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When you sell a stock, you owe taxes on your gain — the difference between what you paid for the stock and what you sold it for. The same holds true when selling a home (or a second home), but there are some special considerations.

How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate, follow these steps:

1. Purchase price: _______________________ The purchase price of the home is the sale price, not the amount of money you actually contributed at closing.

2. Total adjustments: _______________________

To calculate this, add the following:

• Cost of sale — including inspections, attorney fees, real estate commission, and money you spent to fix up your home just prior to sale.
• Cost of improvements — including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

.3. Your home’s adjusted cost basis: _______________________

The total of your purchase price and adjustments is the adjusted cost basis of your home.

4. Your capital gain: _______________________Subtract the adjusted cost basis from the amount your home sells for to get your capital gain.
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A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.

• You have not sold or exchanged another home during the two years preceding the sale.

• You meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

We advise you to consultant a Certified Public Account for more

accurate information on your specific situation.

Free admission and seminars at the Los Angeles convention center April 12-13 2008 hours of 9 a.m. to 6 p.m. topics of interest include how to buy a home, how to monitor and fix your credit, how to avoid mortgage fraud, how to buy a home in foreclosure, how to invest in real estate, understanding the home inspection process, first- time home buyer assistance programs. This is a great forum for any one with concerns about the buying process. A first time buyer or first time investor may avoid future pitfalls by obtaining some helpful information.

Zero Down Program

If you qualify for a mortgage but are still lacking the funds to meet the minimum down payment the HART program may interest you. First the seller must participate in the program for buyer to receive the Hart funds and help support future homebuyers. The seller makes a contribution to the HART program after closing. The Amount of the funds from seller is equal to the amount gifted plus the HART processing fee. The contribution made to the HART Program is not a charitable income tax deduction. The HART funds will be gifted to the buyers down payment of an owner occupied property.

Chain of events

The buyers agent retains seller participation and prepares the purchase agreement.

The agreement shall be written to include the clause “ Buyer and seller agree to participate in the HART Program. The seller agrees to give $ (XXX) to the Hart program.”

The Sellers amount will equal to what the buyer’s HART Gift will be plus a processing fee.

The purchase agreement is fully executed and a loan originator will complete the process.

A loan originator will crunch the numbers and determine loan costs.

 Loan originator then request letter of gift funds from HART.

The HART processing department reviews the request and sends the gift letter to the loan originator.

Upon receiving the letter the loan originator contacts the settlement agent.

The settlement agent then sends the estimated closing statement to HART funding department.

Sellers non-income tax deductible contribution is sent to HART after the final closing of the transactions.

Looking to improve your credit score or maintain a high fico score. Understand how Equifax, TransUnion, Experian.  Rate your credit and generate a fico score.

35%Payment History- Do you pay on time?

30%Amount owed-Balances close to the credit limit.

15%Length of credit- How long have you had credit?

10%New credit-Do you have to much new credit?

10%Type of credit-Mortgage, credit, installment loans.

Three percent down (3%), Private Mortgage Insurance (PMI), seller can provide you  with up to 6% closing cost credit. 

One of the most effective ways to make sure your home looks the best is setting the stage for showings.

You may have already made some repairs, repainted, and cleaned the carpets. But the eyes of the buyers are in the small details.The power of the details start by removing the first thing in the way as you enter in the front door. Gradually a path opens up, and the features of the house start to emerge. The goal is to make the house look bigger, brighter, and more open.  You might just imagine your home not looking like “your home” but and Inviting and expensive penthouse.  Setting the scene in each room sells the house—A Buyer appreciates your personal involvement. It shows you care.You must remember to uncluttered.  Beautiful items but crammed to the rafters with collectibles, floral arrangements, antiques, tapestries, and other treasures.  Try to remove 25%-35% of those items- your home is still beautiful, but now you could see the space, features, and detailing.

Recap -

1. Depersonalizing the space by removing family photos, taking everything off the refrigerator, and stripping the kids’ rooms of posters and baseball trophies.

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2. Clearing high-traffic areas of excess furnishings to maximize feelings of space and comfort

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3. Highlighting the key features in every room–such as fireplaces or French doors–by making sure they’re not obscured by plants or furnishings.

Sometimes, when you’re selling a vacant house, you need to switch gears and add a little clutter. Add two table settings for the breakfast bar, wine glasses, decorative pillows, candles, floral arrangements, towels for the baths, and pretty items for the shelves and counters.

Remember -

  Begin with the living room. It is  often the buyer’s first interior impression and can make or break the sale. If extensive clutter exists throughout the home, do the living room first and the rest later.

   Partially clear off built-in shelves, cabinets, and countertops. These are important features that need to be prominently displayed.

  Be encouraging.  Removing clutter is a giant stress reducer as well as a good way to get a head start on packing.

Is it wise to rent my home?  -Many millionaires have been born through the use of buying holding and eventually cashing out on their real estate holdings. In this down market, where prices and loan products have become volatile, it may pay off to rent that home rather than let it stay vacant. Renting the home insures you do not have to take in a depreciated offer at this time. Real estate traditionally does appreciate with time.  This market is where investors are looking to swallow the losers, sit and sell them when they become winners again. If you are unable to care for the property hire a professional management company that will look after your property. Keep in mind that the rental may be subject to regular maintenance and cleaning when it is time for a new tenant or is sold. 

- Moving or trading up may have  you in need of a cash down payment.  You may refinance your current home and take the necessary funds  needed for a down payment making sure that the rental house does  not leave a great negative position on your finances.

 - If you just want it out of your life than selling for a less than expected price may be the answer for you. It would bring closure and you could  move on with cash in hand.

Is paying down my mortgage debt a good idea?

Strategy 1. Not every case is the same. If your money is in a savings account with low interest earnings and are close to retirement then paying off your mortgage would give you the flexibility to have extra dollars in those retirement years. This strategy is good for people looking for limiting their risk from swinging interest rates on their mortgage and can more effectively predict retirement costs.

Strategy 2. If you maintain steady earnings and are not planning to retire soon, you may want to keep your debt as long as possible for their tax benefits. You then can invest your money into more lucrative gaining investment vehicles. Approaching the retirement stage you may consider strategy 1.