Send a FREE card to the troops this holiday season

Let’s Say Thanks will print the card and send it to someone serving our country overseas…for FREE!

This only takes a few seconds to complete…so what are you waiting for?  Click and go send a card, or two, or more.

 Pass this along to your friends…

The Top 10 Ways To Be Safe On The Slopes.

From Club Colorado…Ski & ride like a local! 

1. Be aware, ski with care. Do your part to help keep the slopes fun for everyone!

2. Hydrate, hydrate, hydrate. At 10,000+ feet…altitude sickness can hit hard and fast – proper hydration will help keep it at bay.

3. Get in shape. When bodies are tired and out of shape, it’s easier to get hurt.

4. Know “Your Code.” Memorize your seven responsibilities of the Code and you could win a prize during National Safety Awareness Week.

5. Ski with a buddy. Even on a powder day!

6. Space not speed. Slow down Mario! It’s not NASCAR. Watch your speed and keep your distance when on crowded slopes.

7. Look up hill when trails merge. Seriously? Don’t make us explain.

8. Obey all posted signs. If it’s closed, it’s closed for a reason…even if the snow is whiter on the other side of the fence!

9.Use proper safety gear. Sorry bindings with safety straps from the ‘80’s just don’t cut it anymore!

10.Know your limits. no need to be macho, there’s nothing worse than a guy crying for his mother on a black diamond run.

Ski & Snowboard for FREE at Crested Butte

  

“Ski Free” is back!

November 25 – December 15, 2007

Yes, Crested Butte Mountain Resort is offering FREE skiing and snowboarding from November 25 – December 15, 2007. Absolutely, positively, incredibly, 100 percent FREE, with no strings attached!

The resort known for “Colorado’s Best Corduroy” and “Legendary Extreme Terrain” invites you to “Test Ride” Crested Butte this winter at no charge! So plan your Colorado ski vacation early this year to enjoy incredible savings and start the ski and snowboard season off on the right foot.

“Ski Free” Lodging Special

Lodging packages for 2 people start at just $73 per person, per night* at the Grand Lodge Hotel in Crested Butte. Lodging Packages for 4 people start at only $50 per person, per night* in a two bedroom Wood Creek condominium.

Contact Crested Butte Vacations ~ the local travel experts ~ to customize a trip for you.
One call does it all! toll-free: 800-810-7669 or local: 970-349-2222

The New CB Card

On sale at Crested Butte Mountain Resort: Nov 25 – Dec 15, 2007 (during Ski Free!).

Learn more about the CB Card….

“Ski Free” Ski & Snowboard Instruction Specials

Adults First-time skiers and boarders can take a Beginner’s Shortcut Ski or Snowboard Lesson during Crested Butte’s “Ski Free” and save up to 47% off regular season prices. Take a full-day lesson for $77 or a half-day lesson for $67.Ski and Snowboard Workshops for levels 2 – 9 are only $67 for a half-day morning or afternoon lesson. Save up to $32 off regular season workshop prices! For ski school reservations and info, call toll free 800-444-9236 or 970-349-2252. Or email us.

Kids Save up to 20% on Kids’ Group Skiing & Snowboarding lessons!Take an all-day lesson for $95 or a half-day lesson for $85.Yep, Kids Rule at Crested Butte Mountain Resort! For Kid’s World reservations and info, call toll free 800-600-7349 or 970-349-2259. Or email us.

2-for-1  Deal for On-Mountain Pics

Get your picture taken while skiing or boarding at Ski Free and take home 2 photos for the price of 1! Offer valid in-store only. Stop by CC’s Ski Pics for more information.

Tips to improve your credit score

Here is the follow up to the last blog on explaining the breakdown of a credit score.  Here are a few tips to insure you increase your credit score.

1. Pay all your bills on time or early.  Even a 30 day late on a small credit card can have a significant negative impact on your scores.
2. Do NOT co-sign loans – their late payments are yours!  Though my parents did co-sign the loan on my first home as I was earning enough money to pay for it but since it was a restaurant position the paper trail did not show that…so thank you Mom & Dad for not following my current advice.
3. Do NOT close old revolving accounts no longer in use.
4. Do NOT open new accounts unless absolutely necessary.  Inquiries may or may not affect your score depending on the rest of your credit history.
5. Report fraud immediately!  If you find yourself the victim of fraud, immediately contact the credit bureaus, your credit card companies, banks and the FTC at www.ftc.gov.
6. Monitor your credit.  Order a copy of your credit report once a year from www.annualcreditreport.com.
7. If you are planning to refinance or buy a home, do NOT make any purchases or run up the balances on your credit cards prior to the transaction.  Put off buying new furniture till after the close of escrow.

Your credit score is your key to homeownership.  The higher your credit score, the lower your interest rate will be, the more loan options will be available and all this will make your monthly mortgage lower. 

So isn’t it worth it to make a plan now to increase your credit score so that in 6 months to 1 year you might be able to afford a home while the interest rates are still at all time lows? 

Remember just 20 years ago interest rates for homes were in the 16%-18% range!!  We are below 7.5% in most cases!

If you would like assistance in creating a plan to improve and increase your credit score then please contact me.

Little known facts about credit scores

What exactly is a credit score and how is it determined?

This was a great question posed to me by a first time potential home buyer and here is the long answer.

Your credit score is a numerical representation of your statistical likelihood to repay credit that is extended to you.  Scores range from 350-850.  Your score is a snapshot of a specific moment and can change with new actions and the passage of time.

Here is an estimation on how a credit score is weighted.

Payment history = 35%

• Do you pay your credit on time?
• Length of positive credit history
• Severity & quantity of delinquencies

Amount owed = 30%

• Quantity of credit accounts – too many credit cards with balances can lower a score.

Length of credit history = 15%

• The longer the history, the better.
• How long have your credit accounts been established?
• How long has it been since you used certain accounts?

New credit = 10%

• Research shows that opening several credit accounts in a short period of time does represent greater risk especially for people who do not have a long established credit history.

Types of credit in use (healthy mix) – 10%

• 2 Installment loans
• 3 revolving accounts with balances
• Balances on revolving debt below 30% of the high credit
• No collection accounts
• No public records
• No foreclosures
• No late payments

I hope you found this helpful especially if you are just thinking about buying your first home or maybe need to improve your credit score first.  I’ll be following up this entry with another blog on the things to do to improve your credit score. 

Please feel free to send me any questions you might have about credit scores and how it will effect you when you buy a home.

The battle of Renting vs. Buying a home

Is now the right time for YOU to buy a home?

You have many options to consider and choices to make.  Buying a home is a big responsibility, financially and emotionally, but most people want to own a home.  What makes homeownership (the American dream) so special?  The main reason is real estate often is an excellent investment and perhaps the number one source of wealth building for families.

Owning a home has many benefits.  When you make a mortgage payment, you are building equity and that’s an investment.  Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities such as homeowner’s insurance, real estate taxes and upkeep.  But given the freedom, stability, and security of owning your own home, they are definitely worth it! 

But homeownership may not be for everyone.  It is a big financial commitment.  When you decide to purchase a home, you accept responsibility for paying monthly mortgage payments, real estate taxes, property insurance and maintenance costs…and don’t forget utilities.  One of the advantages of renting is being generally free of most maintenance responsibilities and the flexibility of moving almost as soon as you decide.  But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases.  Also, you probably won’t be able to decorate unless you get the landlord’s blessing.

There are many considerations in choosing between renting and buying:

• Do you want to spend several years in a house and in a particular neighborhood?
• Do you enjoy lawn and house work?
• Might you need to move suddenly to care for family?
• Do you want to keep your assets accessible in the bank or do you want to invest long-term in a home?

There are tax advantages to homeownership in both the short and long-terms.  The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing related expenses from your taxable income which could reduce your tax bill. 

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage.  With the tax benefit for homeowners, the savings can be significant.

Here are some of the pros and cons of buying versus renting.

Pros of buying:

• Property builds equity
• Sense of community, stability & security
• Free to decorate & landscape
• Not dependent on landlord to maintain property

Cons of buying:

• Responsible for maintenance
• Responsible for property taxes
• Possibility of foreclosure and loss of equity
• Less mobility than renting

Pros of renting:

• Little or no responsibility for maintenance
• Easier to move

Cons of renting:

• No tax benefits
• No equity is built up
• No control over rent increases
• Possibility of eviction

Please let me know if you have any questions about homeownership.  If you live in Northern Colorado and are curious about first time home buyer programs then email me, Mike@MikeMalvey.com.  You can also search for homes in Northern Colorado.

Your feedback is always appreciated.

Invest in real estate to pay for college

Most people would like to be able to pay for their child’s college education but not many are prepared to do so.  According to a recent study by CollegeInvest, only 46% of families with children have any kind of fund set up for college and 38% of those with children ages 15-19 who intend to pay for all of their children’s college expenses have less than $1,000 set aside…which as we all know just won’t cut it today.  The College Board estimates the annual cost of attending a 4-year public university at $15,600 in 2005.  That is $60,000 for a typical degree earned in 4 years!  Who can realistically afford to cover that cost which is going to continue to rise each year?

What options are there?  Well one great option that my wife and I began 8 years ago is to invest in real estate.  A rental property can provide additional income to offset college expenses and increase your net income by reducing your taxable income through IRS tax benefits of owning rental property such as writing off mortgage interest and property taxes and being able to claim property depreciation.

A parent can buy a property when their child moves away to college and sell it when they graduate using the profits to put towards college loans or keep it as a rental property.

Here is a 10-year scenario similar to the one I created when we purchased our first of five investment properties.

Purchase price…………………………………………………………$225,000

Down payment………………………………………………………….$45,000

Tax benefit………………………………………………………………..$20,000

Principal reduction…………………………………………………….$25,000

Rental cash flow……………………………………………………..<$28,000>

Net proceeds (year 10)………………………………………….$114,000

Net additional cash to investor……………………….$69,000

Assumptions used for this example:

Interest rate = 7.25% amortized over 30-years

Rent = $1,200 per month

Rent & expenses increase 4% each year

7% vacancy rate

3% reserves

3.5% appreciation factor

7% property management expense

30% income tax bracket

15% long term capital gains tax

2% buying costs, 7% selling costs

Contact me to discuss the benefits of investing in real estate to help send your child to college.

As always, your thoughts and feedback are strongly encouraged.

More advice about foreclosures

So you have just completed a stressful short sale with the lender accepting less money than they are owed on the property.  A buyer purchased a home, the lender avoided a costly foreclosure process, and the seller walks away without any further financial burdens…or so they think.

There are always tax consequences whenever real estate is sold.  The seller may still owe taxes for capital gains on the home and on the unpaid portion of the mortgage.  This is often overlooked and can be even more costly to the seller down the road.

A lender has 3 possible ways to handle the deficient mortgage balance in a short sale.

1) The lender can attempt to collect the deficient balance from the seller after the property has closed.

2) The lender may require the seller to sign an unsecured promissory note for the deficient funds as a condition of agreeing to the short sale.  If the new note is for less than the balance of the original debt, the difference would be considered forgiven debt.

3) The lender may agree to cancel the entire deficient balance.

Though option 3 seems to be the best for the seller, the IRS considers any canceled mortgage debt to be ordinary income…meaning the amount of forgiven debt is taxed at the same rate as the seller’s salary, usually between 15%-30%.  The IRS requires the lender to file a 1099-C form stating the amount of canceled debt.

There are four situations that the IRS allows which will not result in tax liability for the seller. 

A seller may avoid tax liability when:

1) The borrower receives a bankruptcy discharge and the deficiency was included in the bankruptcy.

2) The borrower is insolvent at the time of the cancellation of the debt.  Insolvency would occur when a borrower’s liabilities exceed assets.  The seller would have to prove this insolvency to the IRS when filing a tax return.

3) The debt was secured by a nonrecourse loan.  Under a nonrecourse loan, the lender does not have the legal right to collect a deficiency judgment from any assets of the debtor not pledged to secure the loan.  While most home mortgages do not fall into this category, purchase loans on a person’s residence are nonrecourse in some states.

4) The tax liability from the cancellation of debt on an investment property can be offset against other business liabilities and expenses.  This exception does not apply to properties occupied as a residence by the mortgagor.

In many short sales, a seller would be able to qualify under the first two of these exemptions, especially since it was almost certainly necessary to show financial hardship in order to convince the lender to agree to a short sale.  However, it is the SELLER’S responsibility to notify the IRS why the amount in the 1099-C should not be counted as ordinary income.  Otherwise, the IRS will consider the forgiven debt as income and penalize the seller for unpaid taxes.

All sellers should seek professional tax advice regarding the possible tax consequences of selling their home. 

If you found this post valuable please submit a comment…or if you have any questions please contact me.

The best city park in Northern Colorado!

If you haven’t visited the brand new Spring Canyon Community Park in Fort Collins then you are missing out.  The 100-acre park just opened on October 27, 2007 and is loaded with facilities including the largest playground I have ever seen…I mean it is breathtaking when you first see it.  If you have kids then this is a must see park and I’ll guarantee it will become their favorite place to go…check out my video at the end of this blog

I made my first visit last week and have since gone back again.  Not only is the playground (called Inspiration Playground) stellar but unlike too many parks this one has a restroom at the playground…and it has kid sized toilets and sinks.   The playground is universally accessible for people of all abilities.

There actually are more facilities than the playground…there are ballfields, lighted tennis and basketball courts, sidewalks, trails, covered picnic shelters, dog park, skate park, ample parking, and lots of open area.

On a scale of 1 to 10 I rate this a solid 10!  Finally a park done right.  To get there just take Horsetooth Road west all the way till it ends and the park is on the right…believe me you can’t miss it.

I’d love to hear comments from other people that visited this park so please let me know what you think and how you rate it. 

Demographic information for any city

Would you like to know the demographics of your neighborhood or the neighborhood you are moving to?  I found this cool website that will provide demographics for any zip code in the states and you can compare up to 20 different zip codes.  If this sounds interesting then click here to go to the site.

 Let me know what you think of the site.

And for all your real estate needs in Northern Colorado visit my website and search the MLS for homes.