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Dear Quentin,
I have spoken with an attorney, but I see several online will services that are very inexpensive that include a will and a healthcare power of attorney. Is an online will service sufficient for most people? I am in the process of trying to figure out the best way to go about getting a will written as clearly and, hopefully, as affordably as possible.
Can my will specify that my life insurance and other money be used to pay off my mortgage, so I can then leave my home to a family member or friend?
“‘I plan to leave everything to my husband, but I would like my will to specify that if he predeceases me, our estate be split among others in our families.’”
I work as a consultant with my own LLC, taxed as an S corporation, but I have no employees. I live in sunny Florida. Outside of my business bank account, I believe my finances are fairly straightforward and typical — a few retirement accounts, one primary residence, an investment property, a term-life insurance policy. My husband and I have mortgages on two properties, but we should have our primary home paid off in about seven years.
I plan to leave everything to my husband, but I would like my will to specify that if he predeceases me, our estate be split among others in our families. My in-laws are moving in with us, so I would like them to inherit our home. We have no children but have very close relationships with our nieces and nephews.
I appreciate any guidance you have on writing a will.
Hoping This Won’t be Needed for a Very Long Time
Dear Hoping,
If you have a home and a business and enough assets to pay off your mortgage, pay for an attorney. You can scrimp on eating out or take one less vacation this year if you need to save money, but don’t scrimp on making sure your will is rock solid.
You should be able to find an attorney who can create a last will and testament for $300 to $500 and a durable power of attorney/living will for the same amount. The latter covers issues like end-of-life care and what happens if you become incapacitated.
You can instruct the executor of your will to use assets from your estate to pay off your mortgage, thereby allowing you to leave the house free and clear to a third party. Everyone should have a will, even people who are in their 20s and 30s or who don’t have children.
What’s more, if you leave your entire estate to your husband — that is, whatever you own that is treated as separate rather than community property — he too will need to make a will, and his may or may not align with your wishes.
“If you leave your separate property to your husband, he too will need to make a will, and his may or may not align with your wishes.”
A person making a will or signing a power of attorney must be of sound mind — also known as “testamentary capacity” — and not be under or subject to duress, restraint, fraud or undue influence. But laws do vary by state.
For example, in Pennsylvania, each spouse can write a separate will, but you can’t can’t create a will that cuts your husband out of all inheritance, according to Karen Ann Ulmer Attorneys at Law, which has offices in that state.
There are many cautionary tales of people who died without a will — like Prince and Michael Jackson — or decided to do an online will. One lawyer told me a wealthy client wrote a will with an online service, but he forgot to sign it.
If you die without a will or without a legal will — one that is not notarized or that has some other legal anomaly that invalidates it — it will be left up to the laws in your state to decide who gets what, which could get complicated if your husband dies before you do.
And when you do write a will, you should review it every three to five years. But here’s to many more years before your executor needs to step up to the plate.
“You can scrimp on eating out or take one less vacation this year if you need to save money, but don’t scrimp on making sure your will is rock solid.”
MarketWatch illustration
Readers write to me with all sorts of dilemmas.
By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
The Moneyist regrets he cannot reply to questions individually.
More from Quentin Fottrell:
Do children get 529 accounts in a divorce? My in-laws opened two plans for our kids, but their marriage is on the rocks.
I gave my daughter $5,000 for her divorce, but she lashed out when I refused to give her more. When will enough be enough?
He wanted nothing to do with me’: I discovered my biological father through Ancestry.com. Am I entitled to a share of his estate?
Americans Are Bailing on Their Home Insurance
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A short supply of homes for sale is a contributing factor to buyers’ dampened spirits.
Joe Raedle/Getty Images
Anyone looking to venture into the housing market got whacked with another jump in mortgage rates last week. That means a return to any semblance of housing affordability is a long shot for now.
Mortgage rates’ recent run-up in tandem with the 10-year Treasury yield is one reason why home affordability has again become a hot topic. Economists and analysts frequently talk about affordability, but there’s no one central way of measuring it. Most measures take home prices, mortgage rates, and median incomes into consideration.
The hurdles to homeownership presented by housing costs relative to income was a topic of conversation even before the pandemic, but buying a house back then looks downright pleasant in hindsight. “For home affordability to return to pre-pandemic levels, mortgage rates must fall to 4%, incomes must rise quickly by 30%, and home prices must drop by 30%,” National Association of Realtors Chief Economist Lawrence Yun said in a statement to Barron’s. “All of these, individually and collectively, are unlikely scenarios.”
Home affordability indexes released by two separate trade groups earlier this month hit record or near-record lows in the second quarter, indicating a difficult environment for purchasing homes.
And this quarter doesn’t look promising: A weekly
Redfin
gauge tracking home sale prices on a rolling four-week basis has risen above year-ago levels for five straight weeks, while mortgage rates this past week hit their highest level in more than 20 years, according to
Freddie Mac
.
Buying a home was already difficult before mortgage rates’ ascent back above 7%. A record share of respondents to
Fannie Mae
‘s survey measuring housing market sentiment, 82%, said in July that it was a bad time to buy a house. “Unsurprisingly, consumers continue to attribute the challenging conditions to high home prices and unfavorable mortgage rates,” Fannie Mae chief economist Doug Duncan said in a statement.
Indeed, assuming a 20% down payment on a $400,000 home, the buyer of a home at last week’s average Freddie Mac mortgage rate would owe roughly $400 more a month than the same week last year.
Compared with 2019’s average rate, at just under 4%, such a buyer would owe $600 more. And that’s before accounting for the impact of rising prices, which as of May were about 46% higher than the same month in 2019, according to S&P CoreLogic Case-Shiller.
A short supply of homes for sale is likely a contributing factor to buyers’ dampened spirits: “Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales,” Sam Khater, Freddie Mac’s chief economist, said last week.
Such headwinds may have dented existing-home sales in July. Consensus estimates compiled by FactSet foresee previously owned homes having been sold at a seasonally-adjusted annual rate of roughly 4.14 million in July, down from 4.16 million in June. New home sales, a measure of contract signings to buy newly constructed homes, is expected to rise slightly, to 701,000. Data for both are expected on Tuesday and Wednesday, respectively.
Consensus estimates for August are not yet available, but leading data doesn’t paint a promising picture: a Mortgage Bankers Association index tracking the volume of applications for home loans has hovered less than 4% above record lows in the first two weeks of the month.
Unfavorable conditions in the for-sale market could push would-be buyers towards renting—particularly in southeastern markets where a large number of rental units are under construction, a team of
Goldman Sachs
analysts wrote in a note earlier this week. “While rental affordability is also challenging in absolute terms, the stark deterioration in mortgage affordability has made renting more compelling for potential homeowners,” they said.
With plenty to be pessimistic about when it comes to current home buying conditions, one must wonder: how bad can headwinds get from here? Affordability looks set to improve over the next few years, says CoreLogic chief economist Selma Hepp—even if it remains more difficult compared with prepandemic.
Hepp says she expects home prices to stagnate over the next several years, reducing some of the cost headwind, while new construction provides supply and wages increase. “We have now gone through the biggest shock of loss of affordability,” Hepp told Barron’s. “We’ve gone through the worst, and now it’s a matter of income growth” and readjusting home prices, she said.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
I am selling my house and the price is $504,999. After paying off this house I will net $400,000. Do I have to pay a capital gains tax as I’m planning to pay off my retirement home with the money I netted?
– Thomas
The answer is solidly “it depends,” both in terms of whether you’ll have to pay capital gains tax and how much you might have to pay. Let’s talk about the rules around this situation first, and then we can get into some examples to see how they work.
Is Your Home Sale Taxable?
The IRS allows single filers to exclude up to $250,000 of capital gains from the sale of their home, and married couples filing jointly to exclude up to $500,000, if they meet certain criteria.
In order to qualify for either of those exclusions, all of the following have to be true:
-
You must have owned the home for at least two of the five years immediately preceding the sale.
-
You must have used the home as your primary residence for at least two of the five years immediately preceding the sale.
-
You can’t have claimed the exclusion in the two years immediately preceding the sale.
If you meet all of those criteria, you can claim the exclusion. If any of those criteria are not true for you, you will have to pay capital gains taxes on all of the proceeds.
Let’s look at some examples.
Example 1: Meets Exclusion Criteria, Married Filing Jointly
Let’s say that you’re selling the home you have owned and been living in for the past few years and that you are married and file taxes jointly.
In that case, you would qualify for a $500,000 exclusion on the sale of your home. Since you are netting $400,000, which is less than the exclusion, you would not have to pay any capital gains tax on those proceeds.
Example 2: Meets Exclusion Criteria, Single
Let’s assume the same situation as above, except that in this scenario you are single instead of married filing jointly. In that case, you would qualify for an exclusion but it would only be $250,000. With $400,000 in proceeds, that means that $150,000 would be subject to capital gains tax. The question then is at what rate those proceeds would be taxed. You can click here for a full breakdown of capital gains tax rates, but let’s assume that you would fall in the 15% bracket.
Multiplying $150,000 by 15%, you would have to pay $22,500 in taxes, leaving you with total net proceeds of $377,500. Of course, you may be subject to state income tax as well, which would increase the amount you have to pay.
Example 3: Does Not Meet Exclusion Criteria
If you don’t meet the exclusion criteria then the entire $400,000 will be taxed as capital gains. In that case, the first big question is whether those gains are taxed as short-term or long-term capital gains.
If you have owned the home for one year or less, your proceeds will be taxed as short-term capital gains, which means they will be subject to the same tax rates as ordinary income.
Let’s say that you are married filing jointly and that you and your spouse have $100,000 in income aside from your home sale. The $400,000 in proceeds would push your total ordinary income to $500,000 and into the 35% tax bracket, but because of our progressive tax code not all of that money would be taxed at the 35% rate.
Again, you can click here for a full breakdown of the 2023 tax brackets, but here’s how it would apply to your $400,000 home proceeds in this case:
-
$90,750 would be taxed at 22% = $19,965 in taxes
-
$173,450 would be taxed at 24% = $41,628 in taxes
-
$98,300 would be taxed at 32% = $31,456 in taxes
-
$37,500 would be taxed at 35% = $13,125 in taxes
That’s a total tax bill of $106,174 on just your home sale, leaving you with net proceeds of $293,826. Though again there may be state income taxes on top of that.
If you’ve held your home for one year or longer, you will only have to pay the lower long-term capital gains rate. Using the same example as above, with $100,000 in taxable income aside from the sale of your home, the entire $400,000 would be subject to a 15% capital gains tax. That’s a tax cost of $60,000, for net proceeds on your home sale of $340,000.
There Are Exceptions
There are exceptions to the general rules laid out above. You can click here for an overview of those exceptions, and you can click here for details regarding all of these rules.
But for the most part, it comes down to whether you’ve owned and lived in the home for at least two of the past five years. If so, you will qualify for a significant exclusion. If not, you will have to pay capital gains tax on the entire amount.
Bottom Line
Figuring capital gains tax that may be owed on a home sale depends on several factors. One is whether you meet the criteria for excluding $250,000 for single filers and $500,000 for couples filing jointly. A second factor is how long you have lived in the house and whether it has been your primary residence. In addition, you must not have claimed the exclusion in the two years previous to the home sale. Keep in mind, though, that there are exceptions
Tips on Taxes
-
If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
-
Our free capital gains calculator, for both short-term and long-term, can be used for gains on the sale of a wide variety of assets, not just a residence.
-
Check out our no-cost property tax calculator to get a quick estimate of what you will owe based on the property’s location and its assessed value.
Matt Becker, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.
Please note that Matt is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article.
Photo credit: ©iStock.com/:ArLawKa AungTun, ©iStock.com/designer491
The post AAA: I’m Selling My House and Netting $400k to ‘Pay Off My Retirement Home.’ Do I Have to Pay Capital Gains Tax? appeared first on SmartReads by SmartAsset.
My wife and I are elderly. I have an individual retirement account (IRA) worth about $100,000, and we have a trust set up through our children to protect our assets. If one or both of us have to go into a nursing home, can they take our IRA? What do we need to do to protect it?
-Dawn
Long-term care (LTC), which may include nursing home stays, is expensive and can quickly suck up savings you may have intended for something else.
How do you prevent that from happening? The specific answer depends on variables you didn’t reveal. But in my experience, when people talk about “protecting” assets from LTC costs, they often have Medicaid in mind. So what does that look like? (And if you need more help planning for long-term care costs, consider working with a financial advisor).
Qualifying for Long-Term Care Through Medicaid
Medicaid is often viewed as a “safer” option for long-term care for the simple reason that it is less expensive and therefore less likely to drain your assets. But Medicaid eligibility is governed by strict income and asset limits. While those limits vary by state, having a $100,000 IRA will likely disqualify you from Medicaid coverage.
So now you are faced with a paradox: The assets you want to save by means of cheap healthcare are an obstacle to getting cheap care in the first place.
It is at this point that an estate attorney or well-meaning friend might suggest you rearrange your assets in such a way as to exempt them from the eligibility limits. The idea is to make yourself less wealthy on paper to qualify for Medicaid without actually giving away your assets.
If this sounds tricky, that’s because it often is. For one thing, many states use a five-year lookback period when determining Medicaid eligibility. This means that if you do any fancy asset-shuffling in the five years before applying, your efforts will have been in vain. (And if you need help determining whether you’re eligible for Medicaid, consider matching with a financial advisor.)
3 Ways to Protect Your Assets from Medicaid
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
If you’re willing to plan ahead and do your homework, there are a few options for relocating your assets so that you can potentially qualify for Medicaid.
-
Annuities: Any money you put into a “Medicaid-compliant” annuity will not count against your asset limit and will be exempt from the lookback period, as well. The catch – and it’s a big one – is that the money is totally locked up, except for whatever periodic payment you receive from the annuity. And that payment will count against the income eligibility limit.
-
Home equity: In most cases, any equity you have in your primary residence will not count against the Medicaid asset limit. So you could protect your assets by putting them toward your mortgage or even upgrading your home. But the lookback period also applies here, and in some states, the government may claim part of your home equity to recoup care costs after your death.
-
Trusts: You mentioned having a trust already set up, but there is a type of trust designed specifically for this situation. Putting your money into a Medicaid asset protection trust (MAPT) effectively hands it over to someone else, so it is technically no longer yours and does not count against your Medicaid eligibility. Just remember that the handoff must be completed five years before you go on Medicaid.
As you may notice, the common problem with these methods is that they drastically restrict what you can do with your assets. And by taking away your financial independence, to some extent they leave you poor in reality – not just on paper. (And if you need help executing one of these strategies, consider matching with a financial advisor.)
That may be preferable to the alternatives, but it depends on another variable: Why do you want to protect your assets from long-term care expenses, including nursing home costs, in the first place?
Is Cheap Care Worth it?
The options discussed above often make the most sense as estate planning measures. If you do not expect to use your assets yourself and are instead concerned about preserving them for your heirs, perhaps it does not matter if they get locked up in a trust, an annuity or your home equity.
But there is still an elephant in the room. Remember that these asset-protection techniques will ultimately leave you with cheap healthcare and long-term care. And that may impact your access to care and its overall quality.
Ask yourself this: What are you trying to “protect” your money for? Is it worth all the hoop-jumping and the risk of mediocre care in your twilight years? It may be if you want to leave a sizable inheritance behind or save assets for your spouse. (And if you need more help with estate planning, consider working with a financial advisor.)
Next Steps
A middle-ground solution be the best course of action. Something like LTC insurance or an “aging-in-place” strategy may not completely protect your assets from long-term care costs. But such an option could reduce those costs while still providing the care that preserves your quality of life.
Remember, the point of saving money is ultimately for your well-being and that of your loved ones – not just to save it for its own sake.
Tips for Finding a Financial Advisor
-
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
-
Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Graham Miller, CFP® is a SmartAsset financial planning columnist and answers reader questions on personal finance topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.
Please note that Graham is not a participant in the SmartAdvisor Match platform. Find more money insights from Graham at the Wiegand Financial blog.
Photo credit: ©iStock.com/shapecharge, ©iStock.com/Ridofranz
The post Ask an Advisor: Can a Nursing Home ‘Take Our IRA?’ My Wife and I Are Elderly. We Have a $100K IRA and a Trust to Protect Our Assets. appeared first on SmartAsset Blog.
Home buyers are feeling weighed down by how expensive it is to buy a home. But for those who already own their own property, their ability to tap their home’s rising equity has become a big boon.
Homeowners’ equity hit $10.5 trillion in June, the fourth-highest month on record, up from $10.3 trillion in May, according to a Black Knight report released this week. (It reached $10.8 trillion at the end of 2022, a bumper year for house prices.)
The Black Knight Home Price Index has also reached a record high. The company’s data goes back to 2000.
“Tappable” equity — what is available for homeowners to borrow against while maintaining a 20% equity stake — climbed to $10.5 trillion in June and is within $434 billion or 4% of the 2022 “tappable equity” peak.
The average mortgage holder had $199,000 in equity in June, up from $185,000 in the first quarter of the year, Black Knight said.
Some 14 million homeowners refinanced during the pandemic and secured ultra-low mortgage rates, the New York Fed said. Homeowners who refinanced over the last three years saved $42 billion cumulatively, Black Knight added.
On the flip side, only 344,000 homeowners are “underwater,” or owe more on their homes than their properties are worth. During the height of the Great Recession, more than 16 million homeowners were underwater on their mortgages, Black Knight added.
Rising home prices have been a drag for homebuyers as they find fewer attractive and financially appealing options.
It cost homeowners $2,308 in July to buy a typical home worth $443,000, up from $2,292 in June, Black Knight said. That cost includes the principal and monthly interest. A household earning median wages would have to spend 36% of their income on their home.
Some of the least affordable housing markets include Los Angeles, where the typical household would have to spend 68.9% of their income on mortgage payments, followed by San Diego (60.4%), and San Jose (58.4%), Black Knight said.
The most affordable markets are in the Midwest. A typical buyer would have to spend just 22.9% of their income on their mortgage in Cleveland, 25% of their income on a house in Pittsburgh, and 25.2% in Oklahoma City.
The Federal Reserve just boosted interest rates and may do so again. The most relevant question for ordinary investors is not how high rates will go but where they will settle once the Fed is done with this cycle of curtailing inflation.
Fed Chairman Jerome Powell insists he is committed to bringing inflation down to 2%. He may have to settle for something higher as he confronts both deflationary and inflationary forces.
COVID-era supply-chain problems have mostly resolved. In China, the economic recovery is halting, factories are operating at less than full capacity and the yuan
CNYUSD,
is down against the U.S. dollar
DX00,
All of which should make importing from China cheaper for U.S. consumers. However, record heat, drought and new disruptions to Ukrainian grain exports threaten renewed food commodity inflation.
Many sectors that higher interest rates should have slowed are proving stubborn. Automakers have rebounded from pandemic-era semiconductor shortages and are making cars and light trucks at a pre-COVID pace. The U.S. government’s Infrastructure, Chips and Science and Inflation Reduction acts are instigating double-digit annual gains in medical, road and public works construction. Factory building was up 76% in May. No surprise, concrete and cement are in short supply and prices have jumped.
Labor shortages and layoffs
Labor and equipment shortages continue to plague service industries. Auto repair shops can’t find enough technicians. The sale of electric vehicles alongside gasoline cars challenges suppliers to adequately stock a broadening range of replacement parts — shortages abound.
Meanwhile, tourism is booming. Airplanes are crammed and airlines can’t get new planes delivered fast enough or find enough qualified pilots.
Yet in other places industries are slowing— witness the layoffs in big tech and finance and slowing sales of clothing and footwear. If the U.S. economy slips into a recession, it will be mild, or it may last only a few quarters with GDP advancing but at less than 1%.
Overall, labor markets may not be as red-hot as they were earlier this year but those are tight enough. According to the Atlanta Fed, wages continue to rise at about 5.6% a year.
Consumer expectations about inflation are hardening. The Conference Board, New York Federal Reserve Bank and University of Michigan latest surveys of one-year inflation expectations all average about 4.3%. In this environment, mortgages above 6% are not terribly high if homebuyers expect inflation to persist and expect their incomes to keep rising too.
That’s an important reason why home prices are rising again. During the decade between the Global Financial Crisis and COVID shutdowns, the Consumer Price Index rose an average of 1.8% a year, and the overnight bank-lending rate the Fed targets averaged 0.62% and never exceeded 2.5%.
This was the golden era of globalization when multinational enterprises concentrated sourcing on least cost suppliers without regard to geopolitical, pandemic or other systemic risks.
Now decoupling and hardening of supply chains to cope with continuing tensions with Russia, the potential for rupture in U.S.-China relations, the expensive shift to carbon free energy sources and mitigating climate change damages are pushing up costs.
All this portends inflation closer to 4% than 2%. If the economy manages to grow 2%, that translates into overnight lending rate closer to 6% than the rock-bottom levels of the 2010s.
Buying and investing now
If you want to buy a home, there is no time like the present. Mortgage rates may dip but will generally stay significantly elevated. Prices could fall in cities that many people want to flee, like San Francisco, but in most places, both new and existing home prices will continue rising.
Interest on U.S. bonds should be decent but U.S. stocks historically have and will likely continue to outperform bonds by a wide margin. Large-cap stocks like those in the S&P 500
SPX
are particularly favorable because big firms tend to have more pricing power and can more easily pass along higher costs for labor and material than smaller businesses can.
If you go with the traditional conservative portolio prescription of 40% bonds and 60% stocks, put aside some cash in a money-market account. If you are in a high-tax bracket, consider a mutual fund or exchange-traded fund that invests in near-dated state- and local debt that virtually guarantees the value of your principal will not be affected by abrupt movements in interest rates — for example, the Vanguard Municipal Money Market Fund.
Put the rest of your fixed-income allocations into staggered-maturity U.S. Treasury securities — depending on the yield at the time and how long you can tie up your money. Those can be purchased at TreasuryDirect.com.
For the 60% in equities, consider a low-fee S&P 500 index fund from a large provider such as USAA, Fidelity Investments or Vanguard. If you can afford to tie up more of your money and are far from retirement age or don’t need the cash right now, for example for college expenses, weigh more to stocks, perhaps 80%.
Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.
More: The market needs a lot more to worry about for stocks to rise from here
Also read: U.S. stocks would be much lower if it wasn’t for ‘excessive’ government spending, Morgan Stanley’s Mike Wilson says
A Canadian police department has issued a public warning of a possible trend where high-value cryptocurrency investors are being robbed in their own homes.
On July 19, the Royal Canadian Mounted Police (RCMP) in Richmond, a city south of Vancouver, said several similar robberies involving cryptocurrency investors have occurred over the last 12 months.
Staff Sergeant Gene Hsieh of the Richmond RCMP Major Crime Unit said someone is “targeting these victims for cryptocurrency” and believed a public warning was necessary for public safety.
Richmond RCMP and Delta Police
FOR IMMEDIATE RELEASE
Police issue warning to high-value cryptocurrency investors following home-invasion style robberies.
Date: 2023-07-19
For the full News Release, see below:https://t.co/27JLFKcV10#DeltaPolice #DeltaBC pic.twitter.com/7CqONzUdUl
— Delta Police Department (@deltapolice) July 19, 2023
The RCMP didn’t release specific details on the incidents but explained in each case the perpetrator impersonated a delivery driver before robbing the victim.
“The suspects gain access to a victim’s home by posing as delivery people or persons of authority. Once let inside the home, the suspects rob the victims of information that gives access to their cryptocurrency accounts.”
Staff Sergeant Jill Long of the Delta Police Investigative Services said the suspects appear to know that the victims are “heavily” invested in cryptocurrency along with knowledge of where they live.
The police department confirmed it made one arrest but has not confirmed whether several incidents are linked. It did not provide specific details about the incidents or how much cryptocurrency was stolen as the investigations are still ongoing.
To avoid a home robbery the department advised not letting strangers or delivery people — whether seemingly legitimate or not — into the household and instead ask them to leave deliveries outside.
If in doubt, a call should be made to the delivery company to confirm the person’s identity and authorities should be called if danger is or appears imminent.
Valuables and financial information should be kept somewhere safe within the household, such as a safety box, the police advised.
Related: Thodex CEO sentenced to Turkish prison for failure to submit tax documents
More generally the police recommend only discussing financial matters in private — not on social media — and only with trusted people.
In March, Canada’s self-proclaimed “Crypto King” — Aiden Pleterski — was allegedly kidnapped, falsely imprisoned and assaulted by five men who fell for an apparent cryptocurrency scheme from Pleterski.
One of the men, who reportedly invested 740,000 Canadian dollars ($560,000) into the scheme, was charged with kidnapping Pleterski on July 17, according to the Canadian Broadcasting Corporation.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
Magazine: Web3 Gamer: District 9 director’s shooter, Decentraland red-light district battle
For first-time homebuyers, finding the perfect time to enter the real estate market can feel like a never-ending game. In the face of record-high inflation, steep interest rates and a dwindling supply of new homes, the path from renter to homeowner has become increasingly challenging.
But amidst the economic uncertainties, there are strategic moves potential buyers can make to ensure they are well-prepared when the right opportunity arises.
To begin with, it is crucial to have a clear understanding of your financial situation and determine the buying power your annual income can provide. The average sales price of houses sold in the U.S. so far this year is $487,300, according to U.S. Census Bureau data.
The cost of everyday expenses has been on the rise, potentially making it more challenging for homebuyers to cover the upfront costs associated with purchasing a home. While the consumer price index (CPI) indicated a slowdown in overall prices, as reported by the U.S. Department of Labor, specific indexes such as shelter, household furnishings and operations, motor vehicle insurance, recreation and apparel experienced a slight increase.
Understanding the 28/36 rule can serve as a helpful benchmark for prospective buyers. This rule suggests that no more than 28% of a buyer’s pretax monthly income should be allocated to housing costs, and the total housing costs plus monthly debt payments should not exceed 36% of their pretax income. Housing costs encompass various expenses, including mortgage payments, property taxes, home insurance, mortgage insurance and homeowners association fees. Debt payments, on the other hand, account for monthly bills related to student loans, car loans, credit cards and other debts.
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It’s worth noting that buyers can still qualify for a mortgage even if their housing and debt costs surpass the 28/36 rule. For instance, FHA loans backed by the Federal Housing Administration allow housing costs of up to 31% of pretax income and debts plus housing costs of up to 43% of pretax income. In certain cases, there may be some flexibility available.
To provide a practical example, if you were to put 10% down on a $333,333 home, your mortgage would amount to approximately $300,000. According to calculations, you would ideally need an annual pretax income of at least $110,820 to qualify for this scenario, although a slightly lower annual income of $100,104 might still be eligible. These calculations assume a 7% interest rate, a 30-year term, no recurring debt payments, no homeowners association fee and estimated monthly costs for private mortgage insurance, property tax and home insurance.
Similarly, if you were to put 10% down on a $555,555 home, your mortgage would total around $500,000. In this case, the recommendation is a minimum annual pretax income of $184,656, but qualifying may still be possible with an annual income of $166,776. Again, these calculations consider a 7% mortgage rate, a 30-year term, no recurring debt payments, no homeowners association fee and estimated monthly costs for private mortgage insurance, property tax and home insurance.
Now, getting closer to the average home price, if you were to put 10% down on a $444,444 home, resulting in a mortgage of approximately $400,000. The recommended annual pretax income is at least $147,696, but a lower annual income of $133,404 may still qualify.
It’s important to note that these figures are general guidelines, and the exact amount you can comfortably pay each month will depend on your financial obligations and goals.
Considering the average personal income in the United States is $63,214 as of 2023, with a median income of $44,225, it is evident that affordability varies significantly across different regions. Real wages averaged $67,521 in 2022, with average household incomes reaching $87,864. With an annual income of $70,000, it is reasonable to expect that you could afford a home within the range of $290,000 to $360,000.
Finding affordable homeownership may seem out of reach for average-income earners, but there are still options to consider. While the average income may not align with the income needed to purchase a home at the median sales price, don’t lose hope. One alternative avenue to explore is real estate investing.
Real estate investing provides an opportunity for people to build wealth and generate passive income. Although homeownership may be challenging, investing in real estate allows you to participate in the market and potentially benefit from its returns.
While you continue to work toward homeownership, renting for an extended period doesn’t have to be a setback. Use this time to your advantage by living as if you already have a mortgage. Save the difference between your rent and the estimated mortgage payment to boost your down payment, pay off debts or start an emergency fund. Remember, there is more to life than mortgage payments, and it’s essential not to become fixated on achieving homeownership at the cost of your financial well-being.
Flexibility and open-mindedness are key when navigating the real estate market.
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This article Average Income Earners Don’t Make Enough to Qualify For The Average Home – Here’s How Much You Need To Make For A $500,000 Mortgage originally appeared on Benzinga.com
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