NLIC.org

Wallace Said:

Thinking about buying a home.. How much more over mortgage can I expect to pay?

We Answered:

You need to figure in other costs, such as homeowner's insurance, repair costs, PMI (if you don't put down 20%), in addition to your monthly mortgage payment.

A breakdown of these monthly costs is shown in the site below. Good luck!

Jamie Said:

how and where to obtain information about someone's purchase of a house, price, down payment, mortgage pymnts?

We Answered:

Possibly, if they went to the wrong lender.

Leo Said:

How can I get more money out of a mortgage than what the selling price is?

We Answered:

Have the seller increase the price and then take back a second with a forgive clause

Melvin Said:

Why is there no limit to how much a mortgage company can charge for a house ?

We Answered:

Um, OK.

Mortgage companies are the ones who make loans on the homes.

Homeowners, with the help of their agents, set the sales price.

It's clear you have no idea what you're talking about. Calm down and think about how little sense you're making before you hurt yourself.

Alma Said:

Capital gains tax based on original price or refi mortgage?

We Answered:

Any financing amounts whether for the purchase or re-fi have nothing to do with the capital gains calculations.

The formula is Net Proceeds - Adjusted Basis = Gain.

Net Proceeds is fairly simple -- whatever you sold it for less any selling expenses such as commissions and non-recurring closing costs. So, if you paid a 6% commission ($4,680) and $1,000 in closing costs, your net proceeds would be $72,320.

Adjusted Basis is where it gets tricky, especially as you rented out the property. You start with the purchase price -- $43k in your case. Then you add any improvements, $20k in your case for a total investment of $63k. Now you must subtract any depreciation allowed OR ALLOWABLE while you held the property as an investment. That "OR ALLOWBLE" can get you since you must adjust for depreciation even if you didn't take a depreciation expense deduction while renting it out. So, for sake of argument you took a total of $9,500 in depreciation deductions over the years (an amount that I could justify, by the way, if I were an IRS auditor) then you subtract that from your total investment of $63k to arrive at an adjusted basis of $53,500.

Subtract your Adjusted basis of $53,500 from the net proceeds of $72,320 and you get a taxable gain of $18,820. Since you don't qualify to exclude the gain from the sale you'll pay capital gains tax on the entire amount. But since you held it for over 1 year, the gain is taxed at the long term rate, normally 15%. However if your tax bracket is already 15% or lower, the rate is 5%. Assuming that your tax bracket is higher than 15%, the total tax due from the sale would be $2,823.