Still Paying PMI? Your Home’s Equity May Hold the Exit Key

 

Still Paying PMI? Your Home’s Equity May Hold the Exit Key

Could it be time for you to review your mortgage to determine the ability to cancel your mortgage insurance premium?  Let’s unwrap the topic and learn more about the executive order signed this week and how it may affect you.

If your downpayment at purchase was less than 20% you are likely paying a mortgage insurance premium.   This premium insures the lender’s investment in your loan in the event of default.  If your equity position changes that calculation you may be able to cancel the policy and save significantly every month. Mortgage insurance premiums typically range from 0.5% - 3% of the loan amount annually.  That actual rate is determined by many risk factors considered by the lender.

Next steps?  The first thing you’ll need to do is call your mortgage company to determine how much you are paying and what documents will be required to cancel. In most cases a new appraisal will be required to support a value of 80% loan to 20% equity.  In other cases, a market analysis may be sufficient.  The next questions will be requirements for the individual or firm determining that market value. If you’ve owned your home long enough a tax assessment may be all that is required.  Actually, pretty simple.

A new executive order has been signed which will automatically cancel the premium when equity reaches the 20% level.  The details haven’t been disclosed yet but rest assured, it won’t be retroactive so in the short-term evaluating your mortgage, mortgage insurance and any other insurance policies should be done annually.  Is it time to call your realtor for help?

Financial Friday - Understanding Capital Gains Taxes on Primary Homes

 

Understanding Capital Gains on Primary Homes        

By Peggy Gachet

 

In 1997 capital gains taxes were updated to reflect:

$250,000 in capital gains on primary homes tax free for an individual

$500,000 in capital gains on primary homes tax free for a married couple filing jointly.

Let’s break down how that is calculated.  Use the original purchase price of the property then add major improvements. In many cases improvements made to ready your house for the market may be used.   Add those figures to the base purchase price thereby establishing the adjusted basis.

Next take your sales price and subtract closing costs, commissions and the adjusted basis to determine your taxable earnings. You are taxed on earnings greater than those reflected in the table above based on your income level and the duration the asset was held.

For most it is that simple. For those who move frequently there are three very important caveats and limitations that are frequently misunderstood. You must own the home for at least 24 of the 60 months leading up to the sale. You must have lived in the home as your principal residence for at least 24 of the 60 months leading up to the sale (the months do not have to be consecutive) and lastly, you haven’t used the exclusion on another home sale in the 2 years prior to this sale.

Years ago, my husband and I faced the loss of a pension.  Fortunately for us, we were young enough to recover and build our own pension by exercising the very program outlined in this blog article. It works! Especially if you can control the urge to continually upgrade with each purchase. Try to find a home you can improve while you live in it and your earnings potential grows.  It is a great opportunity to build wealth but requires discipline and intention.  Are you ready to take the next step. If so, interest rates become less important in the big picture.. It’s worth exploring.

Is it time to call your Realtor and CPA?

 

Financial Friday

 

Take a Deep Breath—The Fed’s Rate
Increase May Not Mean What You Think

by John Stickle

Take a deep breath and relax. The Fed's latest quarter-point interest-rate hike may have very little direct effect on a 30-year mortgage.

The Fed primarily controls short-term interest rates. While mortgage rates can react to its decisions, the 30-year mortgage rate is driven more by inflation, Treasury bond yields and what investors believe is coming next. A quarter-point Fed increase does not automatically mean mortgage rates will increase by a quarter point.

Even if a $400,000, 30-year mortgage moved from 6.95% to 7.20%, the principal-and-interest payment would increase by approximately $67 per month. Nobody likes paying more, but it may not be the budget-buster the headlines make it sound like.

Interest rates matter, but they are not the only factor driving the real estate market. Here in St. Augustine and St. Johns County, it still comes down to the basics: price, inventory, condition and competition.

A well-priced home in good condition can still sell, while an overpriced home can sit regardless of what the Fed does.

The bottom line: one quarter-point increase should not cause buyers or sellers to panic. Look past the headlines and pay attention to the numbers that actually affect your property and your monthly payment.

Financial Friday - Does the price of your home determine how long it takes to sell? The numbers may surprise you.

 

Does the price of your home determine how long it takes to sell? The numbers may surprise you.

by John Stickle

Most people assume higher-priced homes take much longer to sell, but that may not be as true as you think in the BORSMLS market.

I reviewed 1,668 closed residential sales from the past year and divided them into three price ranges:

·  Under $500,000: 61 median days on market

·  $500,000 to $999,999: 58 median days on market

·  $1 million and above: 64 median days on market

What surprised me was how close those figures were. The difference between the shortest and longest median was only six days. In other words, the typical home sold in roughly two months, regardless of price range.

My takeaway: Price range makes a slight difference, but pricing a property correctly for its condition and competition may make an even bigger difference.

Based on closed BORSMLS residential sales from September 13, 2025, through September 13, 2026. Sold Comp Only transactions excluded.

Financial Friday

 

Some may say property appraisals and Agency Relationships don’t fall into the Financial conversations….think again.

We recently experienced an appraisal issue on the sale of a listing so I am very much in favor of the changes that started earlier this year and will be phased in over the course of the next few months. In this case the property listed had amazing views a resurfaced pool, new fenced in rear yard and total updated renovations over the course of the past 5 years. The appraiser and I had extensive conversations about the condition of the property and every dollar spent on updates outlined for him. The problem was a house a few doors down sold for a LOT less and he refused to make adjustments for the improvements. Adjustments for condition weren’t required, detailed photos of the interior weren’t required and he hit the easy button.  Everyone else involved (including the buyer and their agent) felt the value was there  but the appraisal fell short of contract price.  The end result was an agreement between buyer and seller to split the difference. A reasonable position and one made possible by close communication between realtors and their customers with the best example of Transaction Broker relationship I’ve seen in a while. Open, direct and honest discussion vs. a debate that would have resulted in disappointed buyers and sellers.

So, YES, appraisals, appraisal requirements and Agency Relationships matter to the bottom line.