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New "opportunity zones" give investors big tax breaks
By Jeff Lazerson
What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take.
Rate news summary
From Freddie Mac’s weekly survey: The 30-year fixed averaged 4.37 percent, down four basis points from last week to the lowest level in a year. Thirty-year rates have increased just once in the past 14 weeks. The 15-year fixed rate averaged 3.81 percent, down three basis points from last week.
The Mortgage Bankers Association reported a 3.7 percent decrease in loan application volume from the previous week.
Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $484,350 loan, last year’s payment was $2 higher than this week’s payment of $2,996 – the first time in years the payment is lower than a year ago.
What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages at a zero point cost: A 15-year FHA (up to $431,250 in the Inland Empire, and up to $484,350 in Los Angeles and Orange Counties) at 3.50 percent, a 30-year FHA at 3.75 percent, a 15-year conventional at 3.625 percent, a 30-year conventional at 4.25 percent, a 30-year FHA high-balance (from $484,351 to $726,525 in L.A. and Orange counties) at 4.25 percent, a 15-year conventional high-balance (also $484,351 to $726,525) at 4.0 percent, a 30-year conventional high-balance at 4.375 percent, a 15-year jumbo (over $726,525) at 4.125 percent and a 30-year jumbo at 4.75 percent.
What I think: Talk about a whopper of a real estate tax provision that just might work to your advantage!
Under the 2017 Tax Cuts and Jobs Act, investors can get a big break on their capital gains taxes by investing an economically depressed “opportunity zones.”
Officials recently released guidelines for investing one of these 8,761 government-certified zones, or OZ’s, as they’re called. And they were a hot topic at the Mortgage Bankers Association’s San Diego convention, which I attended earlier this week.
Here are some highlights of an excellent presentation by panelists David Leavitt of PwC and Timothy Lee of Signet Partners:
Be mindful, there are still lots of unanswered questions regarding these recently released guidelines. I strongly suggest you get counsel from your tax advisor or tax attorney.
Jeff Lazerson - Mortgage Columnist since 2011