When you refinance you are obtaining a new loan, even if you stay with your original lender. Your lender will usually require a new title search and Loan Policy to protect their investment in the property. You will not need to purchase a new Owner’s Policy; the one you bought at closing is good for as long as you and your heirs have an interest in the property.

Even if you recently purchased or refinanced your home, there are some problems that could arise with the title. For instance, you might have incurred a mechanics lien from a contractor who claims he/she has not been paid. Or you might have a judgment placed on your house due to unpaid taxes, homeowner dues, or child support for instance. The lender needs reassurance that the title to the property they are financing is clear.

Ask if you qualify for a “refinance” rate, sometimes called a “reissue” rate. These rates are not available in every state, and you might have to meet some criteria to be eligible, so be sure to ask.

The other day I was looking at my yellow legal pad ( my list), the things I needed to get done, the people I needed to follow up with, several meetings on my agenda and at the end ot the day I thought I need more time.. I am typically up at 6:45am while going to bed about 10:45 or 11pm. This gives me 16 hours everyday to make and impact on my business and on my family. To be productive and at least half of that time is for building my business so that I can take care of my family, pay the bills, and take a vacation once in a while.  This is not a lot of time considering the following…. morning routine 1 hour, drive time for the day 1 hour or more,  3 hours  of meetings, 1 hour to follow up with clients by phone/email ,eating meals, 2.5hours, workout 1.5 hours, kids ball game 1.5 hours, and of course there is the household chores, grocery store, homework, yard work, down time with the family…..etc. it is very easy to run out of time. here are some tips from the Mayo Clinic on time management I use as a reminder so I can give my business and my family my best, and maximize my time.

• Plan each day.  Write a to-do list, putting the most important tasks at the top. Keep a schedule of your daily activities to minimize conflicts and last-minute rushes.
• Prioritize your tasks. Time-consuming but relatively unimportant tasks can consume a lot of your day. Prioritizing tasks will ensure that you spend your time and energy on those that are truly important to you.
• Say no to nonessential tasks. Consider your goals and schedule before agreeing to take on additional work.
• Delegate. Take a look at your to-do list and consider what you can pass on to someone else.
• Take the time you need to do a quality job. Doing work right the first time may take more time upfront, but errors usually result in time spent making corrections, which takes more time overall.
• Break large, time-consuming tasks into smaller tasks. Work on them a few minutes at a time until you get them all done.
• Practice the 10-minute rule. Work on a dreaded task for 10 minutes each day. Once you get started, you may find you can finish it.
• Evaluate how you’re spending your time.
• Limit distractions. Block out time on your calendar for big projects. During that time, close your door and turn off your phone, pager and e-mail.
• Get plenty of sleep, have a healthy diet and exercise regularly. A healthy lifestyle can improve your focus and concentration, which will help improve your efficiency so that you can complete your work in less time.
• Take a break when needed. Too much stress can derail your attempts at getting organized. When you need a break, take one. Take a walk. Do some quick stretches at your workstation. Take a day of vacation to rest and re-energize.

Property Converted from Investment to Primary Residence

Taxpayers used to be able to trade into a rental, rent the home for a while, move into it and then exclude all or some of the gain under Section 121.  Provided they lived in the home as their primary residence for at least two years, they could sell it and exclude the gain under Section 121 up to the maximum level of $250,000/$500,000.  In recent years Congress enacted two amendments to Section 121 in order to limit the benefits of Section 121 when the property has been used as a rental.

First, if you acquire property in a 1031 exchange and then convert it to your primary residence, you must own it at least five years before being eligible for the Section 121 exclusion.

Second, the amount of gain that you can exclude will be reduced to the extent that the house was used for something other than a primary residence during the period of ownership.  The exclusion is reduced pro rata by comparing the number of years the property is used for non-primary residence purposes to the total number of years the property is owned by the taxpayer. For example, a married couple uses a tax deferred exchange under Section 1031 to acquire a house as investment property.  The couple rents the house for three years, and then moves into it and uses it as their primary residence for the next three years.  The couple sells the property at the end of year 6, netting a total gain of $800,000.  Instead of being able to exclude $500,000, the couple will not be able to exclude some of the gain based on how many years they rented the house.  Since they rented it for three years out of six, 50% of the gain, or $400,000, will not be able to be excluded.  Because of this new limitation, the couple will be able to exclude $400,000 of the gain rather than $500,000.

Exceptions

There are a couple of exceptions to this restriction.  If the house was used as a rental prior to January 1, 2009, the exclusion is not affected.  Using the example provided above, if the three year rental period occurred prior to January 1, 2009, the exclusion would not be reduced and the couple would be able to exclude the full $500,000. Another important exception is that property that is first used as a primary residence and later converted to investment property is not affected by these restrictions on excluding gain.  For example, if you own and live in a house for 18 years and then you move out and rent the house for two years before selling it, you can receive the full amount of the exclusion.  Because your investment use occurred after the last day of use as a primary residence, all of the gain accumulated over your 20 year ownership of the property can be excluded, up to $250,000, or $500,000 for married couples.

References:   Internal Revenue Code §121; Housing Assistance Tax Act of 2008 (H.R. 3221).