Country Loans: 3 Things You Need To Know Before You Buy Land


Building a new house can be attractive because of the low maintenance level that is required in the first few years. Unfortunately, it also introduces an obstacle: get land financing. Here are some factors that you should consider before buying land.

1. Fundamentals

1. Fundamentals

First of all, it is important to be clear about what the potential purchase involves. That is why it is vital that the boundaries are indicated by surveyors and that everything on paper is ready to be presented to the lender. Another important detail is checking zoning plans and land use restrictions.

For residential plots, access to facilities is a major factor. With water, sewerage, electricity and cable connections ready for use, you save a lot of time, money and hassle. Similarly, access to the public highway can be an important issue, as the buyer must have a permanent service to gain access to a public highway if it is not yet available.

It is also wise to check with the local planning department what the future holds for the immediate environment. A new park further down the street can benefit the value of real estate in the coming years, while a new highway or sewage treatment plant will do so less quickly.

2. Use of the Land

2. Use of the Land

The conditions of the loans, such as prepayment and interest rate, are usually related to the intended use of the land, as this is directly related to the bank’s risk exposure. In this way, obtaining land loans is always more difficult than buying an existing house, because an existing house gives the bank immediate, tangible collateral, while new buildings have more moving parts that can go wrong.

Of the existing houses, the next step on the bank’s trust ladder is to buy a ready-to-build plot with the intention of immediately starting the construction of a primary home. Things can go wrong, cause delays or increase costs, but the schedule is still manageable in the eyes of the bank. The down payment is usually in the range of 10 to 20%.

Unrealized lottery tickets are the ones that do not yet have the required basic services and for which utilities still have to be established. It often happens that unforeseen problems and cost overruns are encountered, which means that months are added to the timeline.

Finally, there is also unprocessed land without specific plans to build something, which is in fact a speculative investment. A project in this spirit may, for example, be buying land awaiting the completion of a new highway nearby. The hope would be that when the highway is completed, the land would be attractive for a developer to build a new, trendy subdivision with a convenient trip to the city. The land can then be sold for a decent profit to the developer. These loans can require a down payment of up to 50%.

3. Loan options

3. Loan options

Seller financing can be a good option to get favorable terms, especially if the seller wants to unload the land and the market is cool. Since this is an agreement between two citizens, everything is negotiable, from down payments to interest rates. It is important to have the papers reviewed by a legal adviser before signing anything to avoid gaps and unpleasant surprises for both parties.

Local banks and credit unions generally look more favorable on loans to land than the large colossi. They can also offer better conditions because of their local knowledge of the property. In any case, a potential borrower will have to present a loan package with specifications and plans for the country, as well as persoLemminkäinenijke financial information to prove creditworthiness.

A buyer with an existing property and a small debt may consider considering a loan with equity. This type of loan ticks the equity of the existing real estate, making it much better conditions than any regular construction or land loan.

How can buyers buy land if the banks and credit unions do not offer the financing? If the property is national and agricultural, the buyer can receive federal support. The USDA offers a range of subsidized loans with minimum requirements and advantageous conditions.

Loan Request and grants by Choice


Who is your primary contact when it comes to making a loan request?


 Who is your primary contact when it comes to making a loan request? The question should be answered as simply as well as quickly by a majority of the consumers as follows: The friendly customer advisor of my house bank! This answer is initiated by the fact that as a consumer at the own house bank one has been known as a customer for years and the relationship to one’s own customer advisor is rated as consistently positive. He is there for you, knows the financial situation such as salary, payment obligations, payment behavior, etc., in addition, you appreciate each other – so actually the best basis for a good conscience to turn to a credit need to just this trusted bank. The bank will certainly make a good offer for a loan.

As far as the desirable theory – unfortunately, the practice is often in a frightening way, another!

But why is that?

 But why is that? A common everyday situation: You will receive an advertisement from your bank online or via mail in which the bank of your trust is currently offering a current and highly attractive loan offer. This is just right for you, because you just want to take out a small loan due to a liquidity shortage. You take this attractive loan offer as a basis for a discussion with your bank and then learn: We are sorry, but the loan offer is only for new customers. However, as a long-standing, loyal bank customer, who is also known to the bank as such a loyal customer, in comparison to an “unknown new customer” gets significantly worse conditions for his desired credit. They should ultimately pay more interest on their desired loan.

The freedom of choice

 The freedom of choice The positive side of finance is the fact that as a consumer you are free to choose the lender. Which means that one can and should look for another lender, even if the own house bank does not want to offer good credit conditions. Damon Wildeve is such an alternative credit provider, because Damon Wildeve Regardless of whether you are a new customer or an existing customer, you always have a fixed, fair and above all standard market interest rate without any ifs or buts. Although the available loan sums are at Damon Wildeve not very high, but the conditions are always the same, fair and transparent .

Tax Implications and Consequences of a Short Sale or Foreclosure


Over the past few years, millions of Americans have endured the pain of foreclosure and many are still engaged in the frustrating process of short sales selling their homes. Every ordeal comes with a long list of hardships, but most people ignore tax implications – until the end of the tax season. The IRS rules are too complicated to invade in April before the deadline for filing tax returns, but help is available (and perhaps also good news).

If you take out a loan by default or reach a settlement for less than the full amount owed, your lender issues a 1099 tax form for the year in which the standard occurred, forcing you to include the unpaid or “forgiving” part of the debt as income on your tax returns. If that happens, you should pay taxes on “income” that you never actually passed on. This can be very frustrating, not to mention the high budget. Depending on the size of the debt canceled, the extra income – and the resulting tax on it – may be shakuntal.

Fortunately, taxes will not necessarily reverse the healing effects of your forgiven loan. At the end of 2007, Congress adopted the Mortgage Forgiveness Debt Relief Act, which offers tax relief to the millions forced to settle their mortgage loans for less than the amount they owe. According to the IRS:

The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from debt cancellation at their principal place of residence. Debt reduction through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, are eligible for this assistance. This provision applies to debts that have been forgiven in the calendar years 2007 to 2012. Up to $ 2 million in written off debts are eligible for this exclusion ($ 1 million if married applications are submitted separately). [emphasis added]

The law not only covers foreclosure sales, but also short sales or a debt settlement at your principal residence for less than the full amount due.

How the mortgage permit debt relief works

Although the action will help to reduce your tax assessment, this will not reduce the amount of paperwork that you are dealing with. To get the tax credit, you still have to register and report the income level. When you settle a debt for less than it is worth, your lender must issue a form 1099-C (Cancellation of the debt). This form reports the fair market value of your home just before foreclosure and the amount of the debt waived. The tax consequences of debt cancellation are reported and calculated on your tax return on form 982.

You must report two possible tax consequences:

  1. Income from the cancellation or cancellation of the debt
  2. Possible advantage of the disposition of the house

To calculate the debt cancellation on form 982, subtract the fair market value of the house (as reported on 1099-C, box 7) from the total amount of the debt just before foreclosure. A number greater than zero represents the debt settlement result and must be transferred to line 21 (other income) of page 1 of your 1040 tax form. As with most elements of the tax code, there are exceptions and exceptions that we will discuss.

To calculate the profit from the disposition of the house, subtract your adjusted home base – what you have paid for the home plus major home improvements that increase the value – from the real market value of the home in foreclosure (again from 1099-C, line 7). If the foreclosure value of the property exceeds your adjusted basis, you have a profit that can be reported on Form 1040, Schedule D (capital gains and losses).

What is not covered

What is not covered

Note the use of the word “general” in the IRS explanation. It is possibly the most loaded word that appears in the IRS regulations. And this ambiguous escape clause of a word is very common in their rules. In this case, this means that not all forced sales and short sales are covered, so you need to know whether the operation can really help you or not.

There are two notable, important exceptions to the law:

  1. Second homes and investment property do not fall under the law. If a lender lose your fault for one of these properties, you must report it as income. The provisions of the law only apply to your main residence .
  2. Perhaps even more important is that the law stipulates that you can only exclude the discharge of the debt of a principal residence . That is the debt that is used to buy, build up or improve your main residence, or to refinance debts for those purposes. Simply put, if you refinanced your home mortgage (only once or many times) and you have cashed more money than your original debt, you cannot exclude any debt canceled from the payout portion of your refi. You must declare it as taxable income.

For example, if you took out a $ 180,000 mortgage on a $ 200,000 home last year and the value increased to $ 250,000, you may have cashed in an additional amount to pay for credit cards. The difference between the original mortgage and the new value, in this case $ 70,000, is considered taxable income after a foreclosure or a short sale.

If the real estate market crashes and the bank closed the house with a value of $ 190,000, the remaining $ 60,000 that your lender has forgiven is taxable. If the house under closed its initial value, say at $ 160,000, then while $ 70,000 is still taxable, $ 20,000 of forgiven debt (the amount below the value of your original mortgage) remains under the protection of the act.

Similarly, credit lines for home loans and second mortgages that you can take out after purchasing your home are also excluded. But if you use the proceeds to make major improvements to your home, that money is protected.

Some good news: even if you are in one of the exceptions to the act, you can exclude up to $ 250,000 ($ 500,000 if married joint Shakuntal application) under the one-time exclusion of a profit at a primary residence.

 If you do not qualify

 If you do not qualify

If you fall under one of these exceptions, or if the IRS finds another reason why their “in general” clause excludes you, you can still find relief in other parts of the tax code.

  1. Bankruptcy . If your home and mortgage have been taken out and have been discharged due to bankruptcy, the debt canceled is usually not taxable.
  2. Non-recourse loans . In several states, home loans are “non-recourse”, which means that the ability of your lender to recover is limited to the value of the property covered by your loan. The lender may not execute your other assets in an attempt to settle the debt. Forgiveness of a non-recourse loan is not a taxable income for the borrower. Mortgages are non-recourse in 12 states (AK, AZ, CA, CO, FL, ID, MN, NC, ND, TX, UT, WA), but ask your lawyer to see if there are other facilities in your community.
  3. Insolvency . If your total obligations exceed your total obligations, you are technically “insolvent” and can qualify forgiven debt under the exclusion of insolvency. If you are insolvent, the IRS does not normally require you to include forgiven debts in your income. If you think you fall into this category, talk to your tax advisor. The substantiation requirements for this exclusion are Shakuntalaijk and you will need a professional to help you prepare the paperwork.

Last word


Hopefully a foreclosure or short sale is a once-in-a-lifetime situation, but if you are faced with the challenge of losing your home, you need to know what the tax consequences and implications are before they sneak at you and cause more damage to your budget. Understanding mortgage forgiveness Debt relief can alleviate part of the burden, or at least prevent you from being surprised by your accountant or the IRS.

You definitely do not want to deal with paperwork, calculations or legal decisions yourself. Do not attempt to handle these matters with a self-made tax return or using free oShakuntalaine tax preparation software. If you are dealing with property debt forgiveness, you should definitely consult a CPA, especially if you have to use one of the methods that are not covered by the law.

Full information on mortgage debt cancellation is available in IRS publication 4681, which is currently not available on the IRS website. If you want to order a copy, contact the IRS directly at (800) 829-3676 or visit an IRS field office.


Is Lasik Surgery worth the costs?

If someone asked you what the best money you ever spent was, would you know the answer? For me, the best money I ever spent had been on my Lasik eye surgery three years ago. The $ 2,500 I spent on my eye surgery has paid off a million times for improvements in quality of life and not having to buy glasses


7 updated financial money mantras for the modern age

We live in a modern world. I wake up in the morning and find my smartphone that tells me that my daughter’s slip strip is due and that it is ‘pirate day’ for my son’s kindergarten. I jump out of bed and store a smoothie while watching an episode of “Mad Men” on my iPad and then work remotely from my computer – all things I barely existed when I was a kid. Du