Are you thinking of snagging a home this year? If so, every twist and turn of the housing market is likely grabbing your attention. Housing is a hot topic right now, and it seems everyone is talking about it – in the news, on social media, and during dinner table conversations. 

Certified Mortgage Advisor and Raleigh Mortgage Broker Kevin Martini says, “There are two key questions to ponder if you are considering buying a home this year. Number one, where are home prices headed, and number two, where are mortgage rates headed.”

What’s the Forecast for Home Prices?

For some solid insights, turn to the Home Price Expectations Survey. Fannie Mae’s Home Price Expectations Survey, produced in partnership with Pulsenomics, LLC, polls over 100 housing experts across the industry and academia for forecasts of national home price percentage changes in each of the coming five calendar years. Their consensus? 

Home prices are expected to rise through 2028! The growth might not be as steep as in recent years, but the trend is upwards! This means buying now could be wise, as your home’s value will likely increase, boosting your equity. If you wait, you might pay more.

Where are Mortgage Rates Headed?

Mortgage rates have recently been a rollercoaster, reacting to various economic factors. But here’s some potentially good news: mortgage rates follow suit as inflation starts to ease. And with the Federal Reserve pausing their rate hikes, experts like Raleigh Mortgage Broker Logan Martini from Martini Mortgage Group suggest that mortgage rates become more favorable in 2024. Lower Raleigh mortgage rates improve housing affordability and create a more inviting market for homebuyers.

The Martini Mortgage Bottom Line

If you’re considering a home purchase, staying informed about home prices and mortgage rates is crucial. While it’s impossible to predict the future with absolute certainty, having the latest data at your fingertips can help you make a well-informed decision. 

Connect with the Martini Mortgage Group to ensure you have the most current information, giving you a clearer view of why now might be an excellent time to buy.

Gift taxes are a complex yet vital part of financial planning. To maximize your wealth one needs to know the intricacies of two significant tax exclusions: the $18,000 Annual Exclusion and the $13,610,000 Lifetime Exclusion. These provisions can substantially influence estate planning and personal financial strategies.

$18,000 Annual Exclusion

The U.S. federal government permits individuals to gift up to $18,000 per person per year without incurring any gift tax. This yearly allowance resets annually, providing a continuous opportunity for financial gifting. Notably, this limit has increased from $17,000 in 2023.

$13,610,000 Lifetime Exclusion

Beyond the annual exclusion, there is a substantial $13.61 million lifetime exclusion, an increase from $12.92 million in 2023. If a person gifts more than the annual limit in a year, the excess amount taps into this lifetime exclusion. However, unlike the annual exclusion, the lifetime exclusion is a one-time cumulative total and does not replenish.

Practical Implications of These Exclusions and Additional Insights

• Estate Size Considerations: If an individual’s estate is under $13.61 million, their heirs typically face no estate tax. However, estates exceeding this value may incur taxes on the excess amount.
• Gift and Estate Tax Relation: Utilizing the lifetime exclusion for gifts reduces the available exclusion for estate taxes.
• No Relationship Requirement for Gifting: These tax exclusions apply to gifts to any individual, not limited to family members.
• Tax Exemption for Recipients: Individuals receiving gifts under these exclusions do not owe taxes on these amounts.
• Enhanced Exclusion for Married Couples: In 2024, married couples can jointly leverage an exclusion of $27,220,000, effectively nullifying gift tax concerns for most.

Reporting and Compliance

Gifts within the $18,000 annual exclusion do not require reporting to the IRS. However, gifts using the lifetime exclusion must be reported via a gift tax return. Additionally, it’s recommended to issue separate checks for each gift to ensure compliance and proper tracking.

About the Author and Author Notes

Kevin Martini, a Certified Mortgage Advisor and experienced Raleigh Mortgage Broker, has been instrumental in assisting families with creating wealth through real estate. His innovative strategies in mortgage solutions have been recognized nationally, with features in Forbes and CNET. Kevin shares his extensive knowledge through the Martini Mortgage Podcast and various social media channels, offering up-to-date information on real estate and mortgage topics.

For individuals planning their financial future, understanding these gift tax exclusions is crucial. Always consult with a qualified tax advisor for personalized advice. For more detailed information, refer to IRS Publication 559.

This article is for informational purposes only and does not constitute legal, tax, or financial advice. State gift tax laws may vary.

When it comes to buying a home in Raleigh, the question of whether to pay cash or secure a mortgage is more than a financial decision – it’s about shaping your future. Kevin Martini, a renowned Raleigh Mortgage Broker, and Certified Mortgage Advisor, brings a wealth of expertise to guide you through this critical choice. With over a billion dollars in home loans originated since 2006, Kevin’s innovative approach has transformed the consumer-lender relationship in the mortgage industry.

Understanding the Costs: Cash vs. Mortgage

Paying Cash: Analyzing Opportunity Cost

hen you pay cash, you’re also paying an “opportunity cost” – the potential returns you forego by not investing that money. Whether it’s in stocks, bonds, or other properties, this cost can vary:

• $100,000 cash not invested @ 8% rate of return equals an $8,000 annual opportunity cost
• $500,000 cash not invested @ 8% rate of return equals a $40,000 annual opportunity cost
• $1,000,000 cash not invested @ 8% rate of return equals an $80,000 annual opportunity cost

Opting for a Mortgage: Interest Costs Considered

A mortgage comes with its costs, primarily the interest you pay on the loan. For instance, at a 7% mortgage rate:

• $100,000 mortgage equals $7,000 in annual interest
• $500,000 mortgage equals $35,000 in annual interest
• $1,000,000 mortgage equals $70,000 in annual interest

Evaluating the Best Option for You

The choice between cash and a home loan hinges on comparing these costs. If your investment returns are likely to outpace the mortgage interest rate, a mortgage could be the more financially sound option. Remember, mortgage interest can often be tax-deductible, potentially lowering your costs further.

Additional Factors to Consider

• Risk Tolerance: Your comfort with investment risks versus the security of outright home ownership.
• Financial Goals: Align this decision with your long-term financial objectives.
• Market Conditions: The current state of the real estate and investment markets.
• Personal Cash Flow: Monthly income implications of each choice.

Connect with Kevin Martini for Tailored Raleigh Mortgage Advice

Recognized as a top 50 Mortgage Originator nationally, and featured in Forbes, Bankrate, and CNET, Kevin Martini doesn’t just offer loans; he crafts tailored mortgage strategies. His commitment to empowering families in creating generational wealth through real estate is unmatched. Stay informed through his Martini Mortgage Podcast, Instagram, and YouTube channel, where he shares the latest in real estate and mortgage trends.

Ready to Make Your Decision?

Navigating the Raleigh real estate market requires more than just understanding numbers; it demands a strategic partner who can guide you toward making intelligent financial decisions. Whether you’re a first-time homebuyer in Raleigh, exploring mortgage options, or considering paying cash for your next property, Raleigh mortgage Broker Kevin Martini is here to help you assess your unique situation.