Mortgage Rates Might Not Be Low For Long.....

According to REALTOR Magazine, the near-record low mortgage rates seen during the past few weeks may not be around too much longer.

Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to RAISE key interest rates, which would drive up mortgage rates, according to Chief Economist at Pierpont Securities LLC, Stephen Stanley.

Evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34% compared to a year ago. Target Corp., reported its lowest delinquency rate in two years during the second quarter.

Another sign of economic improvement, fewer banks reported tightening lending standards in the month of May, one reason consumer borrowing rose for the second time in three months.

"If lending standards start to stabilize, that will be another reason to remove the emergency measures, including the zero rate", says Jay Bryson, Sr. Global Economist at Wells Fargo Securities LLC in Charlotte, N.C., whom formerly worked at the Fed in Washington.

Until next time -- Live Aloha!! Ciana

Source: Bloomberg, Bob Willis & Anthony Feld, May 28, 2010

Wills and Trusts

I have clients whom are interesting in exploring a 1031 Exchange. During my conversation with them, I realized that they really did not understand the difference between a "Will" and a "Trust". I therefore wanted to share some general information with all of you on this topic.

Many 1031 Exchange clients hold title to their investment property in a Trust. Here are the basic differences between a "Will" and a "Trust".

Will:

• A Will is a legal documents which states your intentions. It identifies to whom you wish to pass your property & money to upon your death.
• A Will MUST be administered by Court Order via probate process.
• Probate can be costly. Fees are set by law and computed based on the gross value of the Estate.
• A Will is part of the public record.

Trusts:

• A Trust allos you to transfer legal title of your property to another person (or to yourself as Trustee) to hold for the benefit of yet another person (beneficiary).
• Trustor -- Person who owns the property and creates the Trust.
• Trustee -- The person designated to make all the decisions about the money and property in the trust.
• Beneficiary -- The person who will receive the assets upon Trustor's death.
• Revocable living trusts are income and estate tax neutral (they do not have a unique taxpayer ID number)
• Trusts are not part of the public record and therefore are private.

A quick update on the differences.

If you are contemplating a 1031 Exchange and would like the names of some very qualified 1031 Exchange companies, please let me know.

Until next time -- Live Aloha!! Ciana