Kim Daneault
KELLER WILLIAMS REALTY / Metropolitan | 603-345-7783 | [email protected]


Posted by Kim Daneault on 3/29/2020

Image by Gino Crescoli from Pixabay

The common understanding of an asset-based debt is a loan meant to be repaid with interest, over time, and backed by a physical asset such as a building or a car. The asset serves as collateral that can be claimed by the lender in case of borrower default.

An Asset-Based Security (ABS), however, in investment terminology, is somewhat different.

Even though the common understanding of an Asset-Backed Security (ABS) might be a loan that is based on an actual asset, such as a home or an automobile, that is only partially the case in investment terminology. By definition, the ABS represents a pool of debt -- usually a group of individual loans -- that can include any type of debt other than mortgages. It may include loans that are backed by real property, such as equipment, land, buildings, or business inventory, but not necessarily.

Mortgages are specifically excluded and classed separately today. The ABS evolved from the mortgage-backed securities that were first introduced in the 1980s, but a debt secured by a mortgage is today known as Collateralized Debt Obligation (CDO). To make it more confusing, a CDO is a specific type of ABS.

An ABS represents other types of debt. Liability might be associated with an automobile loan, student loan debt, credit card debt, home equity loan or other types of loan debt that are to be repaid, with interest, over a specified period of time. Investors in asset-based securities assume the risk; the anticipation is that payment of outstanding principal and interest will be repaid as scheduled, so that investors will earn a reasonable rate of return. The risk is that borrowers may default on the loans, or that a collection process will delay repayment and involve unexpected costs. 

The relative risk and anticipated return depends on the way such loans are packaged and sold. And the packaging depends in part on the reasons an original lender has for wanting to transfer the liability.

The original lender, often a small bank, credit union or other type of funding agency, will "sell the paper" as part of a package to a larger investor. This is accomplished in many ways and for a variety of reasons. Sometimes, it is to better the creditor's financial position or to comply with government rules regarding loan percentages and cash reserves. Such a sale may also be an attempt to dispose of non-performing loans by transferring the burden of collections to another entity. 

Investment institutions package loans based on risk assessment. The loans are separated into three classes known as tranches. Risk and potential return are proportional: A higher-risk tranch also promises higher yield, while lower risk invariably holds potential for a lower interest rate return on investment.

Working with a knowledgeable financial advisor is recommended if you are interested in ABS investing. Almost any brokerage firm can be used for such investment.  





Posted by Kim Daneault on 3/22/2020


Image by 3D Animation Production Company from Pixabay

Understanding the type of loan you're getting matters, to protect your financial interests. You also need to know when to choose one type of loan over another. So, should you choose a bridge loan? When might that be the best choice for getting into the home of your dreams? Here's what you need to know about this particular loan type.

What Are Bridge Loans?

Bridge loans typically provide temporary home financing, and are designed for use for six to 12 months. They carry an interest rate that is approximately two percent higher than a standard mortgage. These loans can "bridge" the gap between buying one property and selling another, allowing the borrower to get into a different home before their original home is sold and closed.

Who Can Receive a Loan Like This?

Anyone who owns a home and is trying to buy another one could potentially get a bridge loan. Just as with a traditional mortgage, though, you would have to qualify. Income and equity requirements must be met. There is also usually a debt-to-income ratio that's very important, since you'll have to make loan payments for a few months.

Why Would Someone Want a Bridge Loan?

When you're selling your home but you haven't found a buyer yet, you might find another home you want to buy. Since you don't have the funds from the sale of your current home, you wouldn't normally qualify to buy the other home. If you can get a bridge loan, though, you can buy the second home while still trying to sell the first one. When the first one sells and you receive the proceeds, you can use that money to pay off the bridge loan. Bridging that gap between the financing for the two homes can be vital in markets where housing is very competitive, or where you need to move quickly to purchase a particular home.

How to Get This Type of Loan

Getting a bridge loan involves talking to your bank or other lender, just like you would with another type of loan. Not all lenders offer bridge loans, so it's important to shop around. Additionally, your real estate agent can be a great resource when it comes to finding a bridge loan. Some agents even partner with lenders for these kinds of loans, to give their clients more options.

If you're not sure whether a bridge loan is the right choice for your home buying and selling needs, talking to your lender and real estate agent can help. There are times when borrowing additional money isn't a good choice, but these kinds of loans can also be very beneficial in certain real estate circumstances.




Tags: loan   home loans   mortgage loan  
Categories: Uncategorized  


Posted by Kim Daneault on 3/15/2020

Image by Steve Buissinne from Pixabay

Suppose you’ve inherited your parents’ longtime home. Suppose they paid $100,000 for it, and it’s now worth $300,000. Had they sold it while it was in their possession, they would have avoided paying capital gains tax due to the Taxpayer Relief Act of 1997.

Now that it’s yours, has that tax avoidance opportunity been lost? If you sell it for $300,000, will you have to pay taxes on the $200,000 gain?

The answer is no, and the reason is step-up basis.

What is step-up basis?

When you sell an asset, you may owe capital gains tax. For example, if you buy stock for $10,000 and sell it 10 years later for $15,000, you owe tax on the $5,000 you profited. The original cost, the $10,000, is your basis, and you are taxed on your sale proceeds minus that basis.

If you buy stock, the original cost is your basis. But if you inherit stock, your basis is stepped up to what it’s worth when you inherit. If your mother leaves you that same stock, now worth $15,000, your basis is $15,000, not the $10,000 she paid. The IRS looks at it as if you acquired the stock for $15,000. If you sell it later for $18,000, your taxable gain is ($18,000 - $15,000) or $3,000.

Real estate works the same way. Going back to our example, your basis in the inherited home is $300,000, not the $100,000 your parents paid. If you sell it immediately for $300,000, you've made no taxable profit and you keep everything. You pay no capital gains tax at all. If you sell in a few years for $350,000, you pay tax only on the $50,000 difference. The appreciation that happened while your folks were alive never gets taxed.

Depreciation Benefit

If you decide to rent that house out (or if you inherit an apartment building) there’s yet another benefit. You can depreciate the dwelling at the step-up value, even if the previous owner used it as an income property and depreciated it. For that $300,000 building, you can deduct $10,909 a year from your rent income over the 27 ½ year depreciation period, rather than the $3,636 if your basis had been $100,000. You’d pay taxes on $7,273 less every year for a long time.

Step-Up During Your Lifetime

Under special circumstances you can take advantage of step-up basis on real estate when you give it away. You can donate property to a charity and deduct the step-up amount rather than your original basis. However, rules are strict. There are appraisal requirements, limitations based on taxable income and the charity must use the property in its work rather than resell it.

There is an even more specialized opportunity under the recent Tax Cuts and Jobs Act to sell appreciated property, invest in a designated opportunity zone, and defer or avoid taxes on your gain.

In both of these specialized cases, you must follow stringent regulations. Don’t wade in without the help of an expert.





Posted by Kim Daneault on 3/11/2020


15 Cushing Corner Road, Freedom, NH 03836

Single-Family

$219,900
Price

2
Bedrooms
9
Rooms
1
Baths
Updated and lovely charm in a great location and with great views. This Farmhouse home located near all that Downtown Freedom has to offer! Less than a mile away from Loon Lake for canoeing, Ossipee River and so much more. King Pine Ski is only 9 minutes away! Enjoy activities throughout the whole year, such as, skiing, hiking, indoor swimming and shopping- all conveniently located. This home features a lovely floor plan with some original pieces carefully maintained. The care in which the owners have enjoyed and lived here through the years is quite evident. Cozy and character with modern amenities and room to grow. Wood stove dining and light filled living room, eat-in kitchen, laundry room, foyer and a 3 seasoned porch all on the first floor with as well a large almost finished space and attached large shed. Also and detached shed. The second floor boasts an updated large bathroom and spacious bedrooms and a cute office with access to a walk up potential for 3rd floor living! Views are beautiful and sitting out on the porch with a coffee watching the sun and changing colors of the seasons are just one of the enjoyments here. Want a weekend getaway? This home is just over one hour to Portsmouth and Portland Maine. About 2 hours to Boston. Something not cookie cutter and well cared for!
Open House
Saturday
March 14 at 2:30 PM to 4:30 PM
Cannot make the Open Houses?
Location: 15 Cushing Corner Road, Freedom, NH 03836    Get Directions






Categories: Open House  


Posted by Kim Daneault on 3/10/2020

This Single-Family in Dunbarton, NH recently sold for $288,000. This Antique style home was sold by Kim Daneault - KELLER WILLIAMS REALTY / Metropolitan.


211 Stark S Highway, Dunbarton, NH 03046

Single-Family

$279,900
Price
$288,000
Sale Price

3
Bedrooms
9
Rooms
2
Baths
BURNHAM HILL SCHOOLHOUSE of District North Notable antique home established in 1855. Beautiful antique home with rustic charm yard filled with gardens. Arrive to a brick and newly painted wooden shingled home from the large curved driveway. Walk into a large enclosed porch used as a mudroom leading to glass French doors with tiled space to use as home office or sitting area. Detailed original thick brick foundation structure with large granite transom doorways to open concept living area of wood floors, 10' ceilings and large brick hearth gas fire-placed center. UPDATED KITCHEN includes bright cabinets, floor to ceiling light filled windows, large copper sink, lots of counter space. A pull down access to the attic for extras storage space. First level a full oversized BATHROOM COMPLETELY RENOVATED down to studs with new insulation, tile flooring, tile surround tub. Master bedroom with wide pine wood floors and 2 closets. Second bedroom also includes lovely wide pine flooring. Finished lower level is the third bedroom that is currently being used as a family room, which also includes a bathroom and laundry room. ALSO Newer roof, heating, septic, and water filtration. Built-ins and character abound in the historic home; a perfect mixture of old and new, with seasonal views of the mountains from kitchen window. Only 1.9 miles to Long Pond, a small 31-acre hidden gem in Dunbarton access to hiking, canoe and kayaking. Make a future with the history in this ADORABLE HOME!






Categories: Sold Homes  




Tags