The 2012 standard deduction, available to all taxpayers, regardless of whether they own a home, is $11,900 for married filing jointly and $5,950 for single taxpayers.

Let's look at an example of a homeowner couple with a $150,000 mortgage at 3.5%.  The standard deduction would give them $2,650 more than the total of their interest paid and property taxes of approximately $9,250.  If they were in the 28% tax bracket, the actual tax savings would be $742.00.

When mortgage rates were considerably higher, many people expected the interest and property taxes to easily exceed the standard deduction but with today's low rates, a comparison is certainly justified.

There are other things that could come into consideration like charitable contributions, medical expenses and casualty losses.  Tax professionals will compare available alternatives to find the one that will benefit the taxpayer most.

For more information, see www.IRS.gov and consult a tax advisor.

Low inventory is a relative term depending on how you're comparing it.  Would the comparison be to total number of homes on the market last year, homes in a certain price range or homes in a certain area?  In some situations, it's a combination of all of those things.

In any given market, inventories will fluctuate based on area and price range.  The National Association of REALTORS® considers a balanced market to be six months' supply of homes.  If it takes longer than six months to sell, it is thought to be a buyer's market and less than six months, a seller's market.  Most buyers and sellers probably feel inventory equilibrium is more like three month's supply of homes.

Inventory has a direct impact on price.  During the housing bubble, demand decreased, supply ballooned to four million houses and prices dropped dramatically.  Increased inventories due to foreclosures, bank' revised lending practices and builder's lack of new housing starts each contributed to the dramatically lower prices.

As the market has recovered, economic conditions have improved, banks have loosened their requirements, interest rates have remained low, foreclosures have slowed and gradually, the inventory has been reduced to approximately two million houses.  When demand is constant but inventory is reduced, price tends to increase because the same number of people are trying to buy a smaller than normal number of homes.

Based on the low mortgage rates that have been inching up each week in 2013 and an improving consumer confidence level, most markets are experiencing some increase in demand.  With inventory decreasing, buyers in the marketplace can see that prices are increasing.

Just as signs of spring can be seen to be just around the corner, it should be recognized what direction prices will be moving.  Hindsight is 20/20 but we can't purchase or sell in the past.  We need to make decisions today on what we think will happen in the future.

If you're curious to know what inventory conditions are for your specific market, send me an email with the price range and area and I'll send you a report.  Mike@MikeParker.com

How much evidence is needed to make a decision to get out of the rent race and become a homeowner?

Compare your rent with a mortgage payment on a similar size property. If you want a larger home than your current one, use the rent that property would require instead of what you're currently paying. If it's considerably cheaper, you may not need any further encouragement.

By the time you consider the principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you're paying.

The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation. The equity is part of your net worth and an investment in your family's future.

The income tax savings can be an additional financial consideration if the combined interest and property taxes exceed the allowable standard deduction.

Trends are showing that both tenants and homeowners are staying in their homes longer. It's been said that whether you rent or own, you're paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own.

Once you decide on a home, don't waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you'd expect. Multiple offers are a seller's advantage but here are some tips to level the playing field:

• Realistic offer - don't give the impression you're trying to "steal" the property. Submit comparable sales that justify your offer.
• Pre-approval letter - this satisfies seller's biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
• More earnest money - it shows you're serious and makes the seller feel like the contract will actually close.
• Minimize contingencies - from a seller's standpoint, each contingency is one more reason why the sale won't go through. They feel the home is "off the market" and they're in limbo.
• Shorten inspection period - your agent can help you set a reasonable date but let the seller know you're willing to close prior to that if possible.
• Write a personal letter to the seller telling them why you want their home - this can be the emotional connection to the seller that makes the difference in you getting the home.

Housing affordability is over 180, an all-time high when 100 is considered good and you're still renting. Really? Are you waiting for it to get to 200? Do you think prices and rates are going to get lower? Really?

You know it's costing you more every month to rent than to own. Tax savings, appreciation and principal reduction lower the monthly cost of housing and yet you'd rather let your landlord benefit...Really? Have you heard that the average homeowner has 41 times greater net worth than a renter? Do you think it's a coincidence? Really?

And have you heard that most people want a place of their own; a place to raise their family; to share with their friends; to feel safe and secure. So, you'd rather go home after working hard all day to your landlord's home. You'd prefer to invite some friends over to your landlord's home for dinner next weekend. Really?

You haven't checked out whether you can actually take advantage of the best buyer's market ever. You haven't invested thirty minutes to find out the facts as they apply to you and your situation. Really? You're basing a decision on national news, chat rooms and Facebook. Really?

Every market is different. Every buyer is unique. If you want a home; if you have a down payment; if you have good credit, you owe it to yourself and your family to explore the possibilities...but with a real estate professional; someone who can really show you the reasons and really give you options.

Welcome home to 589 Mustang Dr. located in beautiful Walton, Kentucky. This immaculate home features four spacious bedrooms, three full bathrooms, one half bath, a formal dining room, a gourmet chef's kitchen, a partially finished lower level, a large first floor laundry, and much, much more.

Walk-in to stunning hardwood floors with a marble inlay. The rich hardwood floors continue on into the formal dining room where stunning tray ceilings, a lovely chandelier, columns, chair rail and crown molding are sure to impress those over for those wonderful home cooked dinner parties. Located just off the dining area sits the kitchen which is definitely sure to please the chef in your family. The kitchen boasts granite counter-tops, 42 inch Maple cabinets, a walk-in pantry, an extra deep sink, and center island with additional storage and electric. Appliances included with the kitchen are the gas oven, dishwasher, garbage disposal and the refrigerator. Entertain in style in the amazing living room complete with gas, stone fireplace - perfect for those chilly months out of the year. You'll also enjoy the all season sun-room with it's double walkout to the fantastic deck and backyard. The sun-room also features soaring cathedral ceilings and ceramic tile.

After a long day, you'll enjoy relaxing in the unbelievable master suite that is fit for royalty. This bedroom is located on the second floor and includes an adjoining full bathroom, spacious walk-in closet and plush wall to wall carpeting. You'll enjoy soaking the days worries away in the awesome jetted bathtub. A large walk-in separate shower, private restroom and double vanity sinks round out the master bath. Three additional guest bedrooms are also located on the second floor and share a full bathroom with shower/tub combination.

This home is located on a cul-de-sac street and sits on an amazing wooded lot loaded with professional landscaping and mature shade trees. You'll also enjoy the incredible Trex Deck that is stain resistant and has limited up-keep. For those extra sunny days, use your remote and bring out the Sunsetter Awning to keep cool. The deck is the prefect spot to relax as you enjoy your favorite drink and listen to the birds sing. Entertain family and friends underneath in the outdoor living area. This expansive area is super private and features a ceiling fan and superb views of the backyard.

Loaded with upgrades this home sits in the Boone County Public School system and is super convenient to shopping, places of worship, the expressway, the Boone County Public Library, area attractions, restaurants and much more. It includes a fenced backyard, ceiling fans, recessed lighting, a security system window treatments and much more. For your private tour of this simply stunning home, contact The Mike Parker Team/HUFF Realty today. 859-647-0700

At existing rates, the monthly MIP on a $168,875 mortgage is $178.99 per month. Under the current rule with normal amortization, the MIP would no longer be required in 9 years and 9 months. However, under the new rule, it would last for the entire 30 year term.

They also announced that the annual MIP will also be increased from 1.25% to 1.35% at some point in the near future. HUD, the parent agency for FHA, is making the changes to restore the capital reserves of the program that are needed to fund failed loans.

People that can close a FHA loan before the change takes place will fall under the old rules for canceling MIP and the lower rates. Since no date was announced, it is not known exactly when the changes will take effect.

While this information will probably not make the evening news, it will have a big impact on borrowers planning to use an FHA loan. Please pass it on to anyone you know who might be considering purchasing or refinancing with a FHA loan.

This week finds us expressing gratitude to family and friends,
co-workers and colleagues, clients and customers.
However you choose to celebrate Thanksgiving,
The Mike Parker Team wishes you a joyful week of gratitude.

Here are the rankings for Northern Kentucky's school districts:

Beechwood School District – Ranks 2^nd out of 174 school districts

Ft. Thomas School District – Ranks 3^rd out of 174 school districts

Walton-Verona School District – Ranks 6^th out of 174 school districts

Boone County School District – Ranks 21^st out of 174 school districts

Campbell County School District – Ranks 25^th out of 174 school districts

Kenton County School District – Ranks 32^nd out of 174 school districts

Ludlow School District – Ranks 102^nd out of 174 school districts

Dayton School District – Ranks 126^th out of 174 school districts

Bellevue School District – Ranks 131^st out of 174 school districts

Southgate School District – Ranks 134^th out of 174 school districts

Erlanger-Elsmere School District – Ranks 138^th out of 174 school districts

Newport School District – Ranks 171^st out of 174 school districts

Silver Grove School District – Ranks 173^rd out of 174 school districts

Covington School District – Ranks 174^th out of 174 school districts

Here are some of the top haunted houses in the Tri-State, and when and where you can find them to get spooked:

1. The Land of Illusion- Thru Nov. 3
8762 Thomas Road, Middletown Ohio
Website: www.thelandofillusion.com
Phone: 513-423-9960 begin_of_the_skype_highlighting FREE 513-423-9960 end_of_the_skype_highlighting
Hours: Friday and Saturday
Times: 8 p.m. – 2 a.m.

2. The Dent School House - Thru Nov. 3
5963 Harrison Avenue, Cincinnati, Ohio
Website: www.frightsite.com
Phone: 513-598-4600 begin_of_the_skype_highlighting FREE 513-598-4600 end_of_the_skype_highlighting
Hours: Thursday – Sunday
Time: Thursday and Sunday: 7:30 p.m. – 10 p.m.
Friday and Saturday: 7:30 p.m. – 12 a.m.
Lights Out Tour – Nov 1 and 2 7:30 p.m. – 12 a.m.

3. Halloween Haunt at Kings Island – Thru Oct. 27
Kings Island Drive, Mason, Ohio
Website: haunt.visitkingsisland.com
Phone: 513-754-5700 begin_of_the_skype_highlighting FREE 513-754-5700 end_of_the_skype_highlighting
Hours: Friday and Saturday
Time: Fridays 6 p.m. – 1 a.m. and Saturdays 11 a.m. -1 a.m.

4. Haunted Hollow Ride– Thru Oct. 27
1261 Dalton Road., Wilmington, Ohio
Website: www.wilmingtonhauntedhollowride.com
Phone: 937-382-6147 begin_of_the_skype_highlighting FREE 937-382-6147 end_of_the_skype_highlighting
Hours: Friday and Saturday
Time: Last Bus leaves at 11:45 p.m.

5. Nightmare Penitentiary– Thru Oct. 27
1261 Dalton Road., Wilmington, Ohio
Website: www.wilmingtonhauntedhollowride.com
Phone: 937-382-6147 begin_of_the_skype_highlighting FREE 937-382-6147 end_of_the_skype_highlighting
Hours: Friday and Saturday
Time: Remains open until the last victim goes through

6. USS Nightmare - Thru Nov. 3
101 Riverboat Row, Newport, KY
Website: www.ussnightmare.com
Phone: 859-740-2293 begin_of_the_skype_highlighting FREE 859-740-2293 end_of_the_skype_highlighting
Hours: Wednesday - Sunday
Time: 7 p.m. – 1 a.m.

7. Dungeons of Delhi - Thru Oct. 28
362 Anderson Ferry Road, Cincinnati, Ohio
Website: http://www.dungeonsofdelhi.com
Hours: September 14-15: Open 7 p.m. - 1 a.m.
Friday and Saturday 7 p.m. - 11 p.m.
Sunday 7 p.m. - 9 p.m.
Sunday Lights on Tours Sunday October 21 and 28 from 4 p.m. - 6 p.m.

8. Mt. Healthy Haunted Hall- Thru Oct. 27
7700 Seward Avenue
Mt. Healthy Oh 45231
Website: http://www.hauntedhallinfo.com/
Hours: Friday and Saturday 8 p.m. - 11 p.m.
Sunday 7 p.m. - 9 p.m.

9. Scream Acres Ct.- Thru Oct. 27
5055 Glencrossing Way, Cincinnati
Website : http://www.cincyscreams.com/
“Spooky Laser Tag” runs from 7 p.m. until 9 p.m. and
“Haunted Laser Tag” runs from 9 p.m. until midnight.
Overnight haunted laser tag event on Oct. 26 from midnight until 7 a.m.
For more info, call (513)703-7384 begin_of_the_skype_highlighting FREE (513)703-7384 end_of_the_skype_highlighting or send an email contact@cincyscreams.com .

Rent or Buy?

The question plaguing every tenant who wants a home of their own is whether they should continue to rent or is it the right time to buy?

The combination of good prices and low mortgage rates make it considerably cheaper to own than rent in most markets. Assuming a person is qualified with a down payment and won't be moving for several years, there may not be a better time to buy a home.

In the example below, the total house payment is $1,281.01 compared to $1,500 to rent the same home. Before you consider any of the financial benefits attached to home ownership, it's cheaper to own than to rent.

The net cost of housing falls to $764 or just more than half the house payment when you consider the principal reduction due to normal amortization, a modest appreciation and the tax savings along with a reasonable maintenance expense that a tenant would not have to pay.

One of the biggest benefits is the growing equity. As the value goes up, the unpaid balance goes down. A favorable leverage causes their low down payment to grow to $40,609 in a short seven years based on a modest 1% appreciation.

There's an expression often heard in real estate circles: "Whether you rent or buy, you pay for the house you occupy." You're either buying it for yourself or you're helping the landlord buy it.

Check out a Rent vs. Own to see how your numbers will compare to this example or call me to do it for you.

FHA loans require mortgage insurance premium to cover a possible loss to the lender if the property has to be foreclosed and sold. The premium is substantial and eliminating the MIP would reduce the payment considerably.

The MIP must remain in effect for five years but after that, when the balance is 78% of the original purchase price, FHA will release the requirement and your monthly payment will go down. Since amortization is affected by interest rates, the normal time to reach this 78% point could be from 9 to 12 years at today's interest rates.

In the example below, the MIP would be released in 9 years 6 months with normal payments. An extra $100 a month would allow the borrower to reach the release point in 7 years 1 month. To reach the release point in the minimum five years, the borrower would have to make an extra $268.04 per month principal contribution.

Releasing the MIP in this example would save the borrower $177.67 per month. The borrower would also save interest, build equity and shorten the term of their mortgage. Once the MIP is released, the borrower could continue the same payment schedule to further accelerate the debt reduction.

To make some projections on your mortgage, click here.

The following chart is meant to be a general guide for how long a person might have to wait.  During this waiting period, it’s important that the person be current on all payments and maintains a history of good credit.

A recommended lender can give you specific information regarding your individual situation and can make suggestions that will improve your ability to qualify for a mortgage.  We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.

The following chart is meant to be a general guide for how long a person might have to wait.  During this waiting period, it’s important that the person be current on all payments and maintains a history of good credit.

A recommended lender can give you specific information regarding your individual situation and can make suggestions that will improve your ability to qualify for a mortgage.  We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.

These rules can help protect your investment and make homeownership more enjoyable.

1. Don't overpay for your home
2. Maintain your home's condition
3. Minimize your assessed value to lower property taxes
4. Make extra principal contributions to save interest and build equity
5. Validate the insured value of improvements and contents
6. Stay current on surrounding property values
7. Make mortgage interest payments deductible
8. Invest in capital improvements that increase market value
9. Don't over-improve the neighborhood
10. Keep records of capital improvements and other maintenance

We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.

An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.

Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.

Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.

The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact me if you'd like to know more about available opportunities.

Most of us learned basic flag etiquette when we were young but occasionally, it is a good idea to review the procedures so that we treat the flag with the respect that it deserves.

• The U.S. flag should not be flown at night unless a light is shown on it.
• The flag should never touch the ground.
• The U.S. flag should not be flown upside down except as a distress signal.
• A U.S. flag should be displayed at the peak of the staff unless the flag is at half-staff.
• When displaying multiple flags of a state, community or society on the same flagpole, the U.S. flag must always be on top.
• When flown with flags of states, communities or societies on separate flag poles which are of the same height and in a straight line, the flag of the United States is always placed in the position of honor - to its own right. No flag should be higher or larger that the U.S. flag. The U.S. flag is always the first flag raised and the last to be lowered.
• When the U.S. flag is flown with those of other countries, each flag should be the same size and must be on separate poles of the same height. Ideally, the flags should be raised and lowered simultaneously.

While a principal residence and a second home have some similar benefits, they have some major differences. A principal residence is the primary home where you live and a second home is used for personal enjoyment while limiting possible rental activity to a maximum of 14 days per year.

The Mortgage Interest Deduction allows a taxpayer to deduct the qualified interest and property taxes on a principal residence and a second home. The interest is limited to a maximum of $1,000,000 combined acquisition debt and a combined $100,000 home equity debt for both the first and second homes.

The gain on a principal residence has a significant exclusion for taxpayers meeting the requirements. The gains on second homes must be recognized when sold. Even if you sell a smaller second home and invest all of the proceeds into a larger second home, you'll need to pay tax on the gain.

Tax-deferred exchanges are not allowed for properties having personal use including second homes.

If the home is owned for more than 12 months, the gain is taxed at the long-term capital gains rate. If the home is owned for less than 12 months, the gain is taxed as ordinary income which would be a considerably higher rate.

The article is intended for informational purposes. Advice from a tax professional for your specific situation should be obtained prior to making a decision that can have tax implications.

Now that you've selected a Realtor, and you've been pre-qualified, it’s time to figure out what you’re looking for in a home.  There are so many decisions to be made.  The best way to figure out what it is that you need in a home is to make two lists.  The NEED List and the WANT list.  Your need list should contain things that you absolutely must have in your home. 

Example:

NEEDS                                                                         WANTS

• 3 beds/ 2 baths                                              Updated kitchen
• Finished basement                                        Mature trees in yard                               
• Lots of closet space                                       Ceramic tile in bathrooms
• Open floor plan                                               Additional parking
• Flat back yard                                                 Close to shopping
• Fenced back yard                                           Front porch

In today’s market there are a number of different purchase options for buyers aside from a traditional sale.  It’s important to consider the benefits of each option.  There are plenty of foreclosures, short sales (pre foreclosure), and other types of lender owned homes on the market.  These are homes that you could get a good deal on.  With a little hard work, they can sometimes be a great way to build equity quickly.   Maybe a fixer upper is not what you have in mind which is fine.  Just know that they are out there.

Written by: Ray Straub, Team Agent, The Mike Parker Team