Lansing MI real estate listings and homes for sale, home buying, home selling information – The Laforet Team

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December 3rd, 2010 4:25 PM

As of this writing there is still no news on the state of our Federal government voting to withdraw the mortgage interest deduction, so if you haven't yet, call your Congressman! Preserve one of the last few tax deductions we have: your mortgage interest!

In the meantime, GOOD news out of Michigan's legislature. It was just passed that the principle homestead exemption (a lower tax rate on your principle residence) will be carried over up to 3 years on foreclosed properties. Why is this important to you?

Well.....let's say you found a GREAT deal on a foreclosure, made your offer then went to the lender to make your final loan application. IF the taxes were put into non-homestead status after the previous owner had been evicted, the bank is now the owner and banks can't have a principle residence! So, the taxes that were previously $2000 for example, may now be as high as $3300....raising your monthly payment by over $100 per month! The mortgage company would have to approve you figuring the higher payments even though the following year they would be adjusted downward to reflect the homesteaded status again. If you can't qualify for the higher payments, you can't buy the house. This has been knocking good buyers out of the market due to the tax rates (especially high in the State of Michigan to begin with).

So, with the government allowing these tax rates on single family homes to remain at the lower level for 3 years is HUGE! Thank your legislator for doing something positive for our economy!

Posted by The Laforet Team on December 3rd, 2010 4:25 PMPost a Comment (0)

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