Fences make good neighbors, but what happens if you are not happy with your fence?

Homeowner was not happy with the location of his fence.

Sues fencing contractor and loses.

We've all heard the saying, "good fences make good neighbors."  As a title insurance agent, we come across our share of cases where the fence is over the property line onto the neighbor's property.  So, the safe thing is to build your fence slightly within your property line. We always recommend that a surveyor be hired to accurately locate the boundary line.

Here's a case where the fence installer placed the fence 1 foot from the boundary line.  Safe, right?  Well, the homeowner wasn't happy and he sued the contractor claiming the fence violated the zoning ordinance.

The Court sided with the fence installer because there was no evidence the fence violated the zoning ordinance.

You can read the decision here.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Reverse mortgages and an increase in home value

Reverse mortgage and an increase in home value and equity

The homeowner gets to keep it

Those familiar with reverse mortgages understand that it is the value of the senior citizen's home that serves as the basis for the amount of the reverse mortgage.  The mortgage has a face amount larger than the amount borrowed.

So, the borrower's question then arises, if my home increases in value, do I get to keep it?

The discussion follows on NJMoneyHelp.com:

Q. When there is a reverse mortgage, what happens if the value of the home goes up? Does the owner get the difference between the mortgage amount and the higher home value, or does the mortgage company get it?
— Homeowner

A. Let’s go over how reverse mortgages work.

A reverse mortgage is a loan that is available to homeowners who are 62 and older. The loan is a payment-free loan and interest accrues over the life of the loan, said Marnie Hards, a certified financial planner with Aznar Financial Advisors in Morris Plains.

She said the loan must be repaid in full upon the borrower’s death, when the home is sold or when the homeowner moves out of the home.

There are several ways you can tap the equity in the home.

“You can take a lump sum, a monthly payment or set up a line of credit that you may draw from,” Hards said. “The amount that will be available to you in the form of a reverse mortgage is based on a combination of the age of the youngest borrower, the property value and the interest rate available.”

When you establish a reverse mortgage, there is a principal limit, which is the maximum amount that you can receive from the mortgage, Hards said. This amount is determined at closing.

“If the value of your home increases and you want to increase the loan amount of the reverse mortgage, you would need to refinance your existing mortgage,” Hards said. “Homeowners may choose to refinance their mortgage if the lending limit increases, the interest rate decreases or if the current value of the home has increased since it was first set up.”

The current reverse mortgage limit amount in 2020 for the HUD home equity conversion mortgage (HECM) is $765,000, she said.

At the homeowner’s eventual demise, the beneficiaries would receive the market value of the home less the balance on the reverse mortgage at that time, Hards said.

There you have it!

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Homebuyers to be affected by changes in FICO score?

Homebuyers and the FICO score, will the changes help or hurt?

NYTimes.com points out- FICO is tweaking its all-important formula. Scores will rise for about 40 million people and drop for another 40 million.

The New York Times reports:

Your credit score — that all-important passport within the financial world — may be about to change. And it won’t necessarily be because of anything you did or didn’t do.

The Fair Isaac Corporation, the company that creates the widely used three-digit FICO score, is tweaking its formula. Consumers in good financial standing should see their scores bounce a bit higher. But millions of people already in financial distress may experience a fall — meaning they’ll have more trouble getting loans or will pay more for them.

For homebuyers, this can be trouble as those who are down-rated may not qualify for the best mortgage rates.  In those cases, borrowers may have to obtain private mortgage insurance (PMI) to complete the loan transaction.

Read the full article here.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Pennsylvania resident asks: Can I deduct the ‘exit tax’ on my tax return?

New Jersey's "exit tax" again raises questions.

We recently posted another column about New Jersey's supposed "exit tax."  But out of state sellers keep asking questions about the minimum 2% of the sales price that was withheld at the time of closing and sent to the New Jersey Division of Taxation.

At NJMoneyHelp.com, a Pennsylvania resident asks if the payment can be deducted on his Federal income tax return.  Here's the answer:

Q. We live in Pennsylvania and sold a townhouse in New Jersey. We were charged the exit tax. Can this tax be claimed on our federal income tax return? — Taxed enough

A. Let’s first clarify what the so-called exit tax means.
 It’s not a special tax levied on a person who sells property in New Jersey.
 Instead, it’s an estimated income tax withholding imposed by the New Jersey Division of Taxation on the closing of a nonresident taxpayer’s sale of a New Jersey residence, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Holmdel.
 The amount withheld is the greater of 10.75% of the gain realized or 2% of the selling price.
 Even if the residence was sold at a loss, this withholding will apply, Becourtney said.
 Becourtney said you can include this state income tax as part of your state and local income and real estate tax deduction, commonly referred to as the SALT deduction.
 “However, the Tax Cuts and Jobs Act (TCJA) imposed a severe limit on the SALT deduction: $10,000 if your filing status is single, married joint, or head of household, $5,000 if it’s married separate,” Becourtney said. “If you had more than $10,000 of state income tax and real estate tax payments during the year, the `exit tax’ will produce no federal tax benefit because you will have already reached the maximum SALT deduction.”
 This situation is predicated on your itemizing your deductions, he said. With the $10,000 SALT deduction limit, far fewer taxpayers itemize their deductions and instead take the larger standard deduction.
 “The standard deduction for a joint filer for 2019 is $24,400, with an additional increment of $1,300 for a spouse who has attained age 65,” he said. “If both spouses have attained age 65, the standard deduction for 2019 is $27,000.”

* * *
There you have it.  The answer - it depends!  But it is the correct answer.

As one of New Jersey's most experience title insurance agents, we get a lot of questions from buyers and sellers.  Have one for us?

Let us know!

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Florida resident sells a home in New Jersey? What taxes will you pay?

Sold a home at a profit, what taxes will you pay?

Is it really New Jersey's "exit tax"?

Out of state residents who own real estate in New Jersey are often shocked to find that a minimum of two percent (2%) of the sales proceeds is collected at closing and sent to the State of New Jersey Treasury.  Some call this an "exit tax" when, in reality, it's nothing more than an estimated income tax payment.

This article from NJMoneyhelp.com discusses this payment:

Q. I have been a resident of Florida for the past 16 years and have just sold a two-family family house in New Jersey. Do I need to file anything other than an A3128 for a refund? We did make a substantial profit. What should I expect? — Seller

A. Congrats on your home sale.

It looks like you may need to pay taxes to New Jersey on your profit.

Unless the house was used solely as a personal residence and falls within the guidelines for the sale of a personal residence — which is unlikely given that you’ve lived in Florida for 16 years — you should expect a tax bill, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

You will have to file Form NJ-1040-NR as a non-resident, he said.

The profit will be calculated based on the difference between the selling price and the cost basis,” Karu said. “ If the property has been rented, there may be depreciation recapture as well.”

Upon the sale of a business, business interest, or real property in New Jersey, a non-New Jersey resident is subject to New Jersey gross income tax on the profit from that sale, he said.

“In order for the State of New Jersey to be sure that it gets paid, taxes are withheld at closing,” Karu said. “While people call it an ‘exit tax,’ the reality is that the payment is simply an estimate tax payment against the tax that gets calculated when the non-resident income tax return is filed.”

* * * *

So, there you have it, it's a tax but not an "exit tax."

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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