Need HELP with refinance knowledge

[lepetitangel]

Hi All
We need some help here to clarify whether we should refinance or not. Appreciate all your comments and advices!

I’ll give an example here but the $ numbers may not be real. Let’s say:

We purchased a condo for $400K 3 years ago. We put down $80K and borrowed $320K loan at 5.5%.

The condo has been depreciating in the past 3 years. Now the property value is only $340K. We want to refinance and we can get a loan of $260K. Our old loan balence is now $290K. We would have to put down another $30K cash to refinance. But we would be getting a rate of 4.5%.

So the original loan amount value our property at $400K.
The new loan amount value our property at $340K.

If we keep the property for 30-years+ and decide to sell it afterwards, and we keep it as a rental unit prior to that “sell”:

Will we be taxed at the cost basis of $400K? or $340K?

My husband was researching online and it seems like we will be taxed at the new loan value of $340K instead of the amount that we really paid for the condo ($400K). Is that true? To me that doesn’t make sense cuz we seriously paid $400K instead of $320K.

Please share with us your knowledge if you know how things really work in this case.

Thanks!

[bearishgurl]

lepetitangel,

If you are referring to property taxes here, you can just appeal them with the county assessor by sending in this form (better to hand-carry it in to the Clerk of the Board on the 4th Flr. on the north end of the County Administraton Bldg., 1600 Pac. Hwy) and get your copy stamped “recieved.”

http://www.sdcounty.ca.gov/cob/docs/aab/aabadobeapp.pdf

In a few months, they will send you a postcard telling you of your place “in line” to process your appeal. You don’t need to refi (a “refi” will NOT trigger a reassessment) or PAY for an appraisal to do this. All you have to do is go to:

http://arcc.co.san-diego.ca.us/services/propsales/propsales_search.aspx

and obtain recent sales that occurred in the last three months. Since you have a condo, start with the first 8 digits of your parcel number. If no sales come up, then go down to 7 digits, then 6 digits. Use ONLY those parcels which have a 10-digit parcel number (other condos). Do NOT use parcels which have 8-digit parcel numbers (SFR’s). Pick out recent sale comps which have similar square footage to yours to get good comps for your condo. These are the county’s own records and they cannot refute them. Print out the sale comps you will use and include copies of these comps with your Assessment Appeal application.

Obtaining a lower assessment on your property HAS NOTHING TO DO with refinancing. But you are now too late to appeal for F/Y 10/11 and will have to pay the tax shown on your bill. The bills for F/Y 10/11 were all generated last week and have been mailed or are in the process of being mailed. Your appeal will affect tax year 11/12.

[bearishgurl]

lepetitangel,

If you are referring to property taxes here, you can just appeal them with the county assessor by sending in this form (better to hand-carry it in to the Clerk of the Board on the 4th Flr. on the north end of the County Administraton Bldg., 1600 Pac. Hwy) and get your copy stamped “recieved.”

http://www.sdcounty.ca.gov/cob/docs/aab/aabadobeapp.pdf

In a few months, they will send you a postcard telling you of your place “in line” to process your appeal. You don’t need to refi (a “refi” will NOT trigger a reassessment) or PAY for an appraisal to do this. All you have to do is go to:

http://arcc.co.san-diego.ca.us/services/propsales/propsales_search.aspx

and obtain recent sales that occurred in the last three months. Since you have a condo, start with the first 8 digits of your parcel number. If no sales come up, then go down to 7 digits, then 6 digits. Use ONLY those parcels which have a 10-digit parcel number (other condos). Do NOT use parcels which have 8-digit parcel numbers (SFR’s). Pick out recent sale comps which have similar square footage to yours to get good comps for your condo. These are the county’s own records and they cannot refute them. Print out the sale comps you will use and include copies of these comps with your Assessment Appeal application.

Obtaining a lower assessment on your property HAS NOTHING TO DO with refinancing. But you are now too late to appeal for F/Y 10/11 and will have to pay the tax shown on your bill. The bills for F/Y 10/11 were all generated last week and have been mailed or are in the process of being mailed. Your appeal will affect tax year 11/12.

[bearishgurl]

lepetitangel,

If you are referring to property taxes here, you can just appeal them with the county assessor by sending in this form (better to hand-carry it in to the Clerk of the Board on the 4th Flr. on the north end of the County Administraton Bldg., 1600 Pac. Hwy) and get your copy stamped “recieved.”

http://www.sdcounty.ca.gov/cob/docs/aab/aabadobeapp.pdf

In a few months, they will send you a postcard telling you of your place “in line” to process your appeal. You don’t need to refi (a “refi” will NOT trigger a reassessment) or PAY for an appraisal to do this. All you have to do is go to:

http://arcc.co.san-diego.ca.us/services/propsales/propsales_search.aspx

and obtain recent sales that occurred in the last three months. Since you have a condo, start with the first 8 digits of your parcel number. If no sales come up, then go down to 7 digits, then 6 digits. Use ONLY those parcels which have a 10-digit parcel number (other condos). Do NOT use parcels which have 8-digit parcel numbers (SFR’s). Pick out recent sale comps which have similar square footage to yours to get good comps for your condo. These are the county’s own records and they cannot refute them. Print out the sale comps you will use and include copies of these comps with your Assessment Appeal application.

Obtaining a lower assessment on your property HAS NOTHING TO DO with refinancing. But you are now too late to appeal for F/Y 10/11 and will have to pay the tax shown on your bill. The bills for F/Y 10/11 were all generated last week and have been mailed or are in the process of being mailed. Your appeal will affect tax year 11/12.

[bearishgurl]

lepetitangel,

If you are referring to property taxes here, you can just appeal them with the county assessor by sending in this form (better to hand-carry it in to the Clerk of the Board on the 4th Flr. on the north end of the County Administraton Bldg., 1600 Pac. Hwy) and get your copy stamped “recieved.”

http://www.sdcounty.ca.gov/cob/docs/aab/aabadobeapp.pdf

In a few months, they will send you a postcard telling you of your place “in line” to process your appeal. You don’t need to refi (a “refi” will NOT trigger a reassessment) or PAY for an appraisal to do this. All you have to do is go to:

http://arcc.co.san-diego.ca.us/services/propsales/propsales_search.aspx

and obtain recent sales that occurred in the last three months. Since you have a condo, start with the first 8 digits of your parcel number. If no sales come up, then go down to 7 digits, then 6 digits. Use ONLY those parcels which have a 10-digit parcel number (other condos). Do NOT use parcels which have 8-digit parcel numbers (SFR’s). Pick out recent sale comps which have similar square footage to yours to get good comps for your condo. These are the county’s own records and they cannot refute them. Print out the sale comps you will use and include copies of these comps with your Assessment Appeal application.

Obtaining a lower assessment on your property HAS NOTHING TO DO with refinancing. But you are now too late to appeal for F/Y 10/11 and will have to pay the tax shown on your bill. The bills for F/Y 10/11 were all generated last week and have been mailed or are in the process of being mailed. Your appeal will affect tax year 11/12.

[bearishgurl]

lepetitangel,

If you are referring to property taxes here, you can just appeal them with the county assessor by sending in this form (better to hand-carry it in to the Clerk of the Board on the 4th Flr. on the north end of the County Administraton Bldg., 1600 Pac. Hwy) and get your copy stamped “recieved.”

http://www.sdcounty.ca.gov/cob/docs/aab/aabadobeapp.pdf

In a few months, they will send you a postcard telling you of your place “in line” to process your appeal. You don’t need to refi (a “refi” will NOT trigger a reassessment) or PAY for an appraisal to do this. All you have to do is go to:

http://arcc.co.san-diego.ca.us/services/propsales/propsales_search.aspx

and obtain recent sales that occurred in the last three months. Since you have a condo, start with the first 8 digits of your parcel number. If no sales come up, then go down to 7 digits, then 6 digits. Use ONLY those parcels which have a 10-digit parcel number (other condos). Do NOT use parcels which have 8-digit parcel numbers (SFR’s). Pick out recent sale comps which have similar square footage to yours to get good comps for your condo. These are the county’s own records and they cannot refute them. Print out the sale comps you will use and include copies of these comps with your Assessment Appeal application.

Obtaining a lower assessment on your property HAS NOTHING TO DO with refinancing. But you are now too late to appeal for F/Y 10/11 and will have to pay the tax shown on your bill. The bills for F/Y 10/11 were all generated last week and have been mailed or are in the process of being mailed. Your appeal will affect tax year 11/12.

[(former)FormerSanDiegan]

Refinance has nothing to do with potential taxes when you sell, or property taxes.

The taxes when you sell will be based on the cost basis, which is the purchase price, plus any improvments you may have made (such as adding a bath or major remodels, etc, but not maintenance).

Cost basis is:
Purchase price
+ Purchase costs (title & escrow fees, real estate agent commissions, etc.)
+ Improvements (replacing the roof, new furnace, etc.)
+ Selling costs (title & escrow fees, real estate agent commissions, etc.)

If you convert it to a rental property, you would also have to account for depreciation.

[(former)FormerSanDiegan]

Refinance has nothing to do with potential taxes when you sell, or property taxes.

The taxes when you sell will be based on the cost basis, which is the purchase price, plus any improvments you may have made (such as adding a bath or major remodels, etc, but not maintenance).

Cost basis is:
Purchase price
+ Purchase costs (title & escrow fees, real estate agent commissions, etc.)
+ Improvements (replacing the roof, new furnace, etc.)
+ Selling costs (title & escrow fees, real estate agent commissions, etc.)

If you convert it to a rental property, you would also have to account for depreciation.

[(former)FormerSanDiegan]

Refinance has nothing to do with potential taxes when you sell, or property taxes.

The taxes when you sell will be based on the cost basis, which is the purchase price, plus any improvments you may have made (such as adding a bath or major remodels, etc, but not maintenance).

Cost basis is:
Purchase price
+ Purchase costs (title & escrow fees, real estate agent commissions, etc.)
+ Improvements (replacing the roof, new furnace, etc.)
+ Selling costs (title & escrow fees, real estate agent commissions, etc.)

If you convert it to a rental property, you would also have to account for depreciation.

[(former)FormerSanDiegan]

Refinance has nothing to do with potential taxes when you sell, or property taxes.

The taxes when you sell will be based on the cost basis, which is the purchase price, plus any improvments you may have made (such as adding a bath or major remodels, etc, but not maintenance).

Cost basis is:
Purchase price
+ Purchase costs (title & escrow fees, real estate agent commissions, etc.)
+ Improvements (replacing the roof, new furnace, etc.)
+ Selling costs (title & escrow fees, real estate agent commissions, etc.)

If you convert it to a rental property, you would also have to account for depreciation.

[(former)FormerSanDiegan]

Refinance has nothing to do with potential taxes when you sell, or property taxes.

The taxes when you sell will be based on the cost basis, which is the purchase price, plus any improvments you may have made (such as adding a bath or major remodels, etc, but not maintenance).

Cost basis is:
Purchase price
+ Purchase costs (title & escrow fees, real estate agent commissions, etc.)
+ Improvements (replacing the roof, new furnace, etc.)
+ Selling costs (title & escrow fees, real estate agent commissions, etc.)

If you convert it to a rental property, you would also have to account for depreciation.

[lepetitangel]

Thanks guys.

I’m talking about tax I have to pay when I sell the property, not property tax.

I’m just afraid that if we refi at $260K our cost basis will turn into $260K. But I think it’s right that it depends on your purchase price ($400K) but not the refi price ($340K).

thanks.
lepetitangel

[lepetitangel]

Thanks guys.

I’m talking about tax I have to pay when I sell the property, not property tax.

I’m just afraid that if we refi at $260K our cost basis will turn into $260K. But I think it’s right that it depends on your purchase price ($400K) but not the refi price ($340K).

thanks.
lepetitangel

[lepetitangel]

Thanks guys.

I’m talking about tax I have to pay when I sell the property, not property tax.

I’m just afraid that if we refi at $260K our cost basis will turn into $260K. But I think it’s right that it depends on your purchase price ($400K) but not the refi price ($340K).

thanks.
lepetitangel

[lepetitangel]

Thanks guys.

I’m talking about tax I have to pay when I sell the property, not property tax.

I’m just afraid that if we refi at $260K our cost basis will turn into $260K. But I think it’s right that it depends on your purchase price ($400K) but not the refi price ($340K).

thanks.
lepetitangel

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