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Just a thoughtWhether you’re refinancing your current home or buying a new one, something worth considering is a 15 year loan rather than a 30 year term. The payments will be a little higher but you’ll get a lower interest rate and you’ll build equity much faster.
Let’s look at an example of a $200,000 mortgage with the choice of a 30 year term with a 3.75% rate compared to a 15 year term with a 2.875% rate. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.
Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you’d like a recommendation of a trusted lender. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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15 Year Mortgage Benefit
Property Values-Tax Assessement
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It’s Worth Checking Out“Anyone may arrange his affairs so that his taxes shall be as low as possible…for nobody owes any public duty to pay more than the law demands.” Judge Learned Hand
This opinion refers to federal income tax but the logic and spirit can easily be applied to any tax including property tax. Most property tax is based on a valuation called an assessment placed on the property by a government taxing authority. When property values rise due to appreciation, the assessments usually rise. However, when values decline as they have done in many areas in the past few years, the assessments should follow accordingly. If you don’t believe your assessment reflects market value, put together proof to support your position. Recent comparable sales, similar in size, condition and location are very persuasive. Check to see if the square footage on the assessment is accurate. If the home is not in good condition, take pictures to show that. As your real estate professional, I can supply the comparables, filing deadlines and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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Tax-Free Income
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Tax-Free IncomeSome residents of Augusta, Georgia have purchased tickets to the Master’s for years but have never attended the famous golf tournament. It’s because they include the tickets as a bonus to the people who rent their home during the event.
Each year, owners rent their home for a big premium during the Masters and make tax-free income. Homeowners benefit from a little known provision in the tax code that does not require taxpayers to recognize the income derived from renting their home for less than 15 days per year. See Rental of property also used as home on IRS.gov. Large sporting events like golf and tennis tournaments, championship games and other high attendance events increase the demand for a temporary rental of a private residence. Obviously, there are challenges with personal belongings and damage but getting a premium rental rate with a substantial deposit and not having to recognize the income could be worth it. You’ll certainly want to discuss this with your tax professional prior to making this decision. You’ll probably also want to get some help from an experienced real estate professional. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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Save Money…Be Comfortable
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Save Money…Be ComfortableAutomatic thermostats can lower your monthly utility costs while conveniently regulating your comfort by adjusting temperatures on your heating and cooling systems. These can be particularly effective in homes with zoned systems where you live in one area during the day but sleep in a different zone.
There are programmable thermostats available at home improvement stores that can make the adjustments for specific times during the day and specific days of the week. They’ll allow you to override the setting when needed without tampering with the programming. They’ll even remind you to change your filter. An exciting development is the Wi-Fi enabled thermostat that allows adjustments from any Internet connection such as computer or Smartphone. Imagine how convenient it can be to change your temperature from the car before you get home. Reasonably priced under $100 for most models, it makes it easy to recapture the cost of the thermostat quickly. Most of the thermostats are designed for do-it-yourselfers; however, you can always have a heating and cooling professional install it for you. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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Have You Backed Up Your Home?
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Have You Backed Up Your Home?Personal computers have been around long enough that everyone has experienced or knows someone who has lost their data due to a hard drive crash, accident or burglary. If they had a backup, the loss was inconvenient but not critical.
Do you have a backup for your personal belongings? Not that you need duplicates of all the items but do you have a journal listing of all the items with a description and their approximate values? That record becomes the backup that supports the claim for your insurance. If a building sustains a total loss, the insurance company will usually pay the face amount of the policy. When it comes to personal property which might be 40% to 50% of the insured value of the dwelling, the insurance company is going to expect an accounting with receipts or at least, a relatively recent inventory. The better your inventory, the less likely you’ll have difficulty with the claim. Almost everyone has a digital camera that can take stills and probably even videos. The combination of the images as well as a written description will help you replace the belongings and serve as proof to the insurance company. Once you’ve made the inventory, store it off site for safe keeping. Online storage in the “cloud” might be the best place to insure you’ll always know where it is. Contact me for a free Home Inventory form; it’s my way of helping you be a better homeowner. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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MID Limited per Residence
MID Limited per Residence
A recent U.S. Tax Court ruling clarified the IRS position that the $1.1 million limit for mortgage interest deduction applies per residence and not per taxpayer as some high-priced homeowners were hoping.
A married homeowner filing jointly can have fullly deductible interest on a mortgage of up to $1,000,000 of acquisition debt and up to an additional $100,000 of home equity debt. If the married couple files separately, each party is limited to deducting the interest on half of those maximum amounts.
The court case came about when two unmarried individuals who owned a home together as joint tenants felt that they were entitled to deduct the interest on $1.1 million of debt each. IRS did not agree with their understanding and neither did the Tax Court. The Court ruled that the limits apply per residence, not per taxpayer even if a home is co-owned by unmarried taxpayers.
The result for the taxpayers in this case was that their deduction was cut in half resulting in much more income tax due. While this situation only affects a few taxpayers, homeowners in this position should have a discussion with their tax professional.
Leave the first comment ▶Before You Call The Repairman
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Before You Call the RepairmanHave you ever had a service company to your home to repair something and find out that it really wasn’t “broken”? It probably conjured up ambivalent feelings of joy that it wasn’t something serious and frustration that you had to pay a service call for something so simple. Before you call the repairman next time, keep these things in mind to see if it is something simple:
Whether it’s preparing a home to market or arranging repairs required by the sale, REALTORS® know reputable, reasonable and reliable service contractors. We’re here to share our contacts with you to help make home ownership better. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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Don’t Miss The Recall
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Don’t Miss the RecallOccasionally, you hear about an important recall on a product you have and you take care of it immediately. However, if you were to miss such a notice, it could put you or your family in jeopardy.
You can subscribe to the U.S. government’s service to notify the public when recalls are made on vehicles, tires and child restraints through the National Highway Traffic Safety Administration on their site called SaferCar.gov. You’ll receive a notification by email when there is a new recall based on the type you selected. You can change your selections or unsubscribe at any time by going back to their website in the “Manage Your Notifications” section. We’re committed to helping you be a better homeowner by providing information on items that can protect your home’s value, reduce expenses, improve maintenance and increase the enjoyment of your home. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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When Mortgage Debt is Cancelled
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When Mortgage Debt is CancelledThe Mortgage Forgiveness Relief Act of 2007 was passed by Congress to avoid additional financial hardship that some homeowners might experience due to a foreclosure or short sale. The law affects mortgage relief that occurs from January 1, 2007 to December 31, 2012.
Normally, IRS considers partial or total debt forgiven by a lender to be treated as ordinary income. This not only affects foreclosures but even short sales where only part of the debt is forgiven would trigger additional taxes for the homeowner. There are exceptions that apply such as bankruptcy and insolvency. The forgiveness is only applicable to taxpayers’ principal residence and only acquisition debt used to buy, build or improve the home. The additional cash taken out when refinancing a home will not be eligible for the relief unless it is used for capital improvements. The lender is required to submit a 1099 form to IRS and provide the homeowner a copy who will file the forgiven amount on Form 982 as part of their 1040 tax return. How this affects your individual situation may differ due to other circumstances and advice from a tax professional is recommended. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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Information to Improve Homeownership
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Another IndicationThe Housing Affordability Index was developed over thirty years ago to help consumers determine when it is a good time to buy a home. It’s considered advantageous to the buyer when the index is over 100 because a median income family can qualify for a median price home.
Recent figuresreleased by the National Association of REALTORS’ economic department show that the 2011 index of 184.5 is the highest annual average since it has been calculated. The most recent month released, December 2011, was 194.9. The index is also broken down into four regions of the country.
The two major components that contribute to the index are home prices and mortgage interest rates which are lower than they’ve been in the last five years which account for the dramatic rise in the index since 2006. The Housing Affordability Index is another indication that this is a good time to buy a home for people who have good credit, a down payment and want a home. It may be the best time we’ll see in our lifetimes. As your real estate professional, I have the training and experience to provide solutions to make homes more marketable and help structure favorable transactions. Please forward this article to your friends or family who could benefit from it. Alan Smith RE/MAX PROFESSIONALS alanjsmith@remax.net |
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