Apr 15

Four Places To Look For Tax Deductions In Your Home

real-estate-tax-deductions-tipsPaying your income taxes each year leave your wallet a bit thin? There may be money hiding in your home that lessens your tax burden. Here are four places to look:

1. Home-Office Deduction

If you work from home, you could qualify for a home-office deduction. Taking the deduction can be a bit complicated; so many people who qualify don’t claim the exemption. An estimated 26 million Americans have home offices, but only 3.4 million claim them on their tax return.

Perhaps that’s why the Internal Revenue Service attempted to simplify the process in 2013.

The write-off takes into account depreciation, utilities, insurance, the amount of square footage dedicated for office space, whether you host clients at your house and other factors.

Because the parameters involved in filing a home-office exemption are rather complicated, it’s best to keep all business-related receipts, records of client meetings and other pertinent information to make things easier when you prepare your return.

2. Casualty Loss

Damage to your home from an act of God or a theft or burglary may qualify you for an income tax exemption. To qualify for the write-off, the causality loss must meet the “sudden event test.” That means it must be sudden, unpredictable, have involved some natural force and occur in a single instance.

To claim thefts and burglaries, you must be able to prove that a wrong doing has actually occurred. It can’t just be a case of a lost item that you suspect was stolen. Proof can come in the form of witness statements, police reports or newspaper accounts.

3. Energy Efficiency Upgrades And Repairs

Upgrading your home with energy efficient improvements can qualify you for a tax deduction. New roofs, insulation, windows, doors and a number of additional items qualify for the deduction. The deductions lets homeowners claim 10 percent of the total bill for energy efficient materials. The maximum credit is $500.

4. Real Estate Taxes And Newly Purchased Homes

New home owners should look at their settlement statement a bit closer. If the previous owner prepaid property taxes that cover any of the time you owned the home, you can include the prepaid taxes in your property tax deduction.

Don’t pay more than you have to when you file your taxes each April. Consider these commonly overlooked deductions that can lessen the amount you have to pay.

Apr 14

What’s Ahead For Mortgage Rates This Week – April 14, 2014

mortgage-news-mymortgagenewsdailyWhile little housing-related news was released, last week’s economic news showed signs of a brighter economic picture.

Labor statistics were stronger, with job openings up and new jobless claims filed lower than expected.

Mortgage rates fell, and the University of Michigan’s Consumer Sentiment Index was higher than expected.

More Jobs Available, Fewer New Jobless Claims

The Bureau of Labor Statistics (BLS) reported that February job openings rose to 4.20 million, which exceeded January’s reading of 3.9 million jobs. New jobless claims were lower than expected with 300,000 new jobless claims filed against expectations of 316,000 new jobless claims and the prior week’s reading of 332,000 new jobless claims filed.

The Federal Open Market Committee (FOMC) of the Federal Reserve released minutes of its meeting held March 18 and 19. The minutes noted that payroll jobs expanded, but the unemployment rate remained elevated, and inflation was below the committee’s goal of 2.00 percent. Indicators of longer-run inflation expectations were seen as stable.

Severe winter weather was viewed as a cause for slowing economic activity. FOMC noted that it would be difficult to determine the effects of winter weather on the economy as opposed to slower economic growth caused by unemployment or other negative factors.

Housing Starts and Building Permits were lower, but FOMC noted the impact of winter weather on these reports. FOMC asserted its intention to continue reducing its monthly asset purchases by $10 billion per month as economic conditions permit.

The FOMC emphasized its commitment to continuous review of financial and economic news as it makes month-to-month decisions concerning asset purchases.

Mortgage Rates Fall, Consumer Sentiment Rises

Freddie Mac reported lower average mortgage rates last week. The rate for a 30-year fixed rate mortgage fell from 4.41 to 4.34 percent. The rate for a 15-year fixed rate mortgage dropped from 3.47 to 3.38 percent, and the rate for a 5/1 adjustable rate mortgage fell by three basis points from 3.12 percent to 3.09 percent.

Discount points were unchanged at 0.70, 0.60 and 0.50 percent respectively. Lower mortgage rates may encourage more buyers into the market as the spring and summer buying season gets under way.

The University of Michigan’s Consumer Sentiment Index for April rose to 82.60 percent against the March reading of 80.00 percent and the projected reading of 80.80 percent. If expectations prove correct, this week’s economic reports are expected to bring more good news.

Whats Coming Up This Week

This week’s scheduled economic news includes Retail Sales for March, which are expected to show a gain, the Consumer Price Index which is expected to hold steady, and the Home Builder Index, which is expected to rise.

Projections for Housing Starts are also higher. Fed Chair Janet Yellen is set to give a speech in New York on Wednesday, and the Fed Beige Book report will also be released. This week’s economic reports will wrap up Friday with Leading Economic Indicators.

Apr 11

Give Your Home An Instant Facelift, Wallpaper Is Back!

upgrade your home with wallpaperThough it can be an entirely different story for a trend shift in the opposite direction, which then requires you to get out the soaking bucket and scraping tool, wallpaper coming back into style is a home décor blessing for many.

Wallpaper is back in – in a big way! – and it’s making your dreams of accomplishing a fashionable living space come true much faster and easier than you could have imagined.

Quite frankly, wallpaper can do the “fashionable home” trick to virtually any room in your house, adding that touch of warmth and personality you’ve so far only seen in show homes. It’s time to get with the trends, and give your home a quick and easy facelift!

A World Of Design With Wallpaper

Let’s face it: wallpaper can achieve a world of options that paint simply never could! Now that wallpaper has come back in to style, we are seeing plenty of homes being “glammed” and “dolled” up accordingly.

With many patterns and styles available, suddenly your home’s imperfections can easily be hidden. You can give the small room in your home a facelift with a wallpaper pattern with vertical stripes, instantly making the room feel larger.

Or you can suddenly have the accent wall you’ve always dreamed of but have been to afraid to commit to, creating a focal point behind the bed in your master bedroom, or behind the sofa in the living room. Or if you’re an artsy person, you can add more art to your walls without lifting a nail – instead just install some patterned, decorative wallpaper.

Modern Innovations: Digitally Printed Wallpaper

Wallpaper is certainly back in style, but not without new and creative innovations since its last time around. Now, homeowners can get ultra creative and get personalized wallpapers for their homes with the technical innovation that allows for digitally printed wallpaper designs.

Do you have a specific wall or room in your house that you want to transform for a particular theme? Do you have a photograph that you’d like to use as the inspiration for a one-wall mural in your living room? Well, with customized digital printed wallpaper, you’re in luck.

Vinyl Wallpaper: Easy Installation And Removal

Now that wallpaper is back in style, more innovations have been made in terms of how it is installed and removed. Luckily, for us wallpaper fans, we will no longer have to struggle when we choose to put it up or when we decide to take it down! Now there are many vinyl wallpapers that are self-adhesive and very simple to install.

They are also available in a range of textures and finishes, and make use of eco-solvent inks. Easy to install, easy to remove, and cleanable with simply a damp cloth, a vinyl wallpaper print might be just the key to your home’s quick and easy facelift.

Whether you opt for the vinyl or digitally printed innovation of wallpaper or choose to stick with the good old paper version, you’ll have your home beautified in no time. There’s no need to worry about changing trends either; regardless of what you choose, advancements in the modern return of wallpaper mean that less rigorous activity will be required should the wallpaper trend go back “out.”

So take advantage of this practical design trend, and give your home the facelift it deserves! And of course you can always contact your trusted real estate advisor for design tips or places where you can get your show home inspiration.

Apr 10

Millenials Have Great Homebuying Tools Available To Them

great home buying tools mobile appsThe economy seems to be finally turning, and home loan interest rates are still historically low. Real estate values are starting to climb as well, all of which makes for a growing opportunity for new homeowners to get into the market before it gets too expensive again.

Millennials Don’t Seem To Be On Board

They represent the next generation of homebuyers, but a number of barriers can seem to be smack in the way, discouraging many. Yet there are ways around these issues.

According to the Boston Globe, only 32 percent of Millennials are homeowners in 2014, either with a house or a condominium. A number of factors contribute to this situation, and the big issue is finding a viable career. The general unemployment rate for young people is at 16 percent nationwide, almost double the regular average for all ages combined.

Add in the fact that many have large student loans eating up what income is earned in loan payments, and that doesn’t leave much for saving into a down payment or a mortgage payment. In fact, one out of three college graduates right now has moved back in with the parents.

The career-chase situation is not a new one. The previous bunch, Generation X, experienced the same thing in the early 1990s with just as high an unemployment rate. The big takeaway from their experience is that the dip and labor famine is temporary. Most Generation X folks now are well-employed and living in regular, affordable homes across the country.

Further, Some Very Helpful Tools Are Still Available For New Buyers:

  • Any homebuyer with military status can take advantage of Veterans Administration loans with far better rates than the normal market, making mortgage payments cheaper.
  • Those buying in rural areas can take advantage of rural homebuyer’s assistance programs provided by the U.S. Department of Agriculture to help people move to small towns and similar communities.
  • The Housing and Urban Development Agency provides HUD loans that make it very affordable for those with limited income to purchase HUD-owned homes as first-time buyers and get into real estate.
  • And the current market still has plenty of quality used homes from prior foreclosures that are marked well below their real value to move these units in sales.

Of course, the big response from Millenials is how do I earn more to even get started. Like Generation X folks before them, Millenials can’t wait for a job to be made available on a platter. While looking, many smart folks have started their own businesses on the Internet. If a current job is enough to cover current bills, a second income can be entirely dedicated to saving, which can generate thousands of dollars quickly. Even a part-time second job that creates $1,000 a month produces $12,000 a year and in two years enough for a sizable down payment.

Don’t give up, but definitely try smarter.

Apr 09

Are Interest Rates On The Rise – What’s The Next Move?

home loan rates on the riseAs the federal reserve continues to taper quantitative easing measures, financial experts project mortgage interest rates will climb in the next two years. Could this be the much awaited ray of light at the end of the proverbial tunnel for builders and investors or will it drive hesitant home buyers to dig in and shelter in place?

Homeowners who are vacillating between refinancing for a lower interest rate and staying the course may find the time has come to make a decision.

Shrinking unemployment numbers and rising retail sales figures signal that the economy is improving. Even if no one is ready to label the US economy as recovered, Fed Chairman Janet Yellen’s decision to follow through on tapering plans reinforces other market indicators that the economy is gaining strength.

What’s The Next Move

Bob Moulton, president of Americana Mortgage, told BankRate that people thinking of buying in the next year should move quickly if they find a property they like. Inventory is still fairly tight. Although there is no guarantee that rates will suddenly escalate, Moulton recommends locking in a property as soon as possible.

Harris Interactive reported that 39% of homeowners who planned to invest in renovations to increase property values in 2013 did not follow through with their plans. If upgrades and renovations are on the agenda, homeowners should evaluate how a 1% or 2% increase in interest rates will affect their budget.

Mortgage rates are still historically low based on the average over the past couple of decades. As the economy strengthens and mortgage lenders lose a steady stream of customers seeking home equity loans, less-stringent lending requirements emerge.

Forbes reported that as much as 80% of mortgage activity in late 2012 was refinancing applications. Consumers with lower credit scores and budgetary constraints have a better chance of securing a loan with a higher rate.

Refinance Or Pay Down The Mortgage

Deciding whether to refinance or pay down the mortgage quicker is tricky for some homeowners. Cost of financing isn’t the only consideration. It is essential to consider long-term goals and risks. If doubling up on the mortgage compromises retirement planning, it defeats the purpose.

Likewise, refinancing to gain a lower interest rate within one or two years of plans to sell the home would probably produce insignificant financial gains.

Apr 08

Important Legal Tips For Homeonwners

Legal Considerations For Homeowners2Being a homeowner is exciting. It can be financially rewarding, too. Unfortunately, it can also put you in a tough legal position. Between the complexities of owning a house, having to deal with lenders and the risk that comes from owning something valuable, keeping yourself legally protected is a good idea.

Here Are Some Risks — And Some Ways To Handle Them.

HOAs. If you own a condo, townhome or other property in an association, the homeowner association is extremely powerful. Not paying their dues, violating their rules, or doing just about anything else to end up on the wrong side of them could leave you subject to fines or even foreclosure.

Neighbors. Whether or not good fences make for good neighbors, bad neighbors make for legal problems. Before dealing with your neighbors, research your community’s laws to see what options you have to deal with their unlicensed backyard dog breeding facility, teenager that steals your oranges or their tree that keeps breaking your window. It’s good to know what your responsibilities are as a neighbor, as well.

Legal Paperwork. Part of having a house is having paperwork. Keeping it in a safe place where you can get to it when you need it is always a good idea.

Being A Landlord. If you’re thinking about moving out and turning your house into a rental, take the time to see if you can really do it. Your mortgage, your homeowner association bylaws and your community’s laws can all either prevent you from renting out your house or can impose conditions or extra costs.

Financial Scams. When you own a house, you’re at risk of being the victim of mortgage scams. If you also have strong credit, you could also be a target for identity thieves that want to steal your good name to steal money.

Insurance. Your insurance does more than pay if something happens to your property. It can also give you liability protection that pays off if you harm someone at or away from your home. Given that you could lose your house in a suit, this protection is particularly valuable.

Being a homeowner requires more than just mowing the lawn and painting on occasion. You will also want to pay careful attention to your legal exposure and manage it. A little bit of care could save you a lot of money and trouble down the line.

Apr 07

What’s Ahead For Mortgage Rates This Week – April 7th 2014

real estate and mortgage newsLast week’s economic news included readings on February construction spending and multiple reports on employment data.

Private sector employment was higher in March, but The Bureau of Labor Statistics reported that Non-Farm Payrolls for March fell short of expectations. According to Freddie Mac, mortgage rates ticked upward.

Employment And Unemployment News
ADP’s payrolls report for March was higher than February’s reading, with 191,000 new private sector jobs added. In February, 178,000 jobs were added. February’s reading originally showed 138,000 new jobs added.

While analysts were confident that private-sector employment was showing signs of stability, the U.S. Bureau of Labor Statistics swamped excess confidence in labor markets Friday with its March reading for Non-Farm Payrolls.

192,000 jobs were added in March against predictions of 200,000 jobs added and February’s reading of 197,000 jobs added.

The news was not all bad as job gains for January and February were revised upward. January’s job gains were revised from 129,000 to 144,000 and February’s reading was revised from 175,000 to 197,000 jobs added. The revised readings represent a total of 37,000 more jobs added.

As data impacted by severe winter weather “shakes out,” it would not be surprising to see a revision to March’s new jobless claims reading as well.

Unemployment Rate Holds Steady, Workforce Numbers Higher
While readings on employment have been up and down in recent months, the national unemployment rate has held relatively steady, with last week’s reading at 6.70 percent. 503,000 workers joined the workforce this increased the labor participation rate for March from 63 percent to 63.20 percent.

Mortgage rates were incrementally higher last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage increased by one basis point to 4.41 percent; discount points moved from 0.60 percent to 0.70 percent.

The average rate for a 15-year fixed rate mortgage rose by five basis points to 3.47 percent with discount points unchanged at 0.60 percent. 5/1 adjustable rate mortgages had an average rate of 3.12 percent, which was two basis points higher than the previous week. Discount points for 5/1 adjustable rate mortgages were unchanged at 0.50 percent.

This Week’s Economic News Highlights
Job openings for February, FOMC minutes and the University of Michigan consumer sentiment index for March are set for release this week. As usual, Freddie Mac will post results of its latest Primary Mortgage Market Survey and weekly unemployment claims will also be reported.

Apr 04

Get Your Lawn Ready For Spring

prepare-lawn-for-springIf you live in a climate where your yard has been hibernating for months, then you’re probably ready for warmer weather and a hint of green outside your kitchen window.

So, in preparation for children running on lush grass through spritzing sprinklers, use the five tips below to get your lawn ready for spring. It will reward you with picnic perfect grass all summer long.

1. Clean Up Winter’s Clutter

Take a rake and remove all of the dead leaves and debris left over from the winter months. Leaving a layer of last-year’s foliage on the ground can smother your grass and hinder your lawn’s growth.

Once your yard is clear, spread a thin layer of compost to enrich your soil and provide nutrients for when you grass is ready to sprout.

2. Aerate Your Yard

Compacted soil makes it hard for roots to grow and water to drain and distribute throughout your yard. So rent an aerator. It uses steel tubes to take plugs from your lawn. These holes will allow air and water to penetrate your soil, which will create healthier and lusher grass.

3. Check Your Soil’s PH

Most grass and plants grow best when your soil’s pH level is between 6.0 and 7.0. Some plants like a little bit more acidic soil, such as hydrangeas and azaleas. Plants grown in soil with their proper pH level are healthier and more resistant to disease. You can buy soil test kits at local garden centers.

4. Prevent Weeds From Growing

Once you’ve aerated and only if you’re not planning to plant new grass seed, then distribute a chemical weed preventer, which can be found at any home improvement store. When watered, it creates a barrier on the soil to keep weeds from sprouting.

5. Have Your Lawn Mower Inspected

Your lawn mower has been sitting idle all winter, so give it a tune-up before those first blades of grass get too long. Take it into a local service shop to have the carburetor and fuel lines cleaned and the blades sharpened. This will make it run more efficiently and put out a little less pollution.

Even if you live in a warm climate and your flowers have been blooming all year, spring is the perfect time to do an annual assessment of your yard.

Apr 03

S & P Case-Shiller Shows Home Prices Down For Third Consecutive Month

home-prices-slightly-down-trendHarsh winter weather conditions contributed to home prices falling in January. The S&P Case-Shiller 20-City composite index reported that home prices dropped by 0.10 percent in January, but after seasonal adjustments, home prices increased by 0.80 percent in January as compared to December. 12 of 20 cities posted declines in home prices in January.

There’s no cause for alarm, as year-over-year home prices increased by 13.20 percent as compared to year-over –year readings of 13.40 percent in December and 13.70 percent in November. David Blitzer, chair of the S&P Dow Jones index committee, said “The housing market is showing signs of moving forward with more normal price increases.” Home prices remain about 20 percent below a peak reached in 2006.

Housing Markets Face Challenges
Analysts expect home prices to grow at a slower pace in 2014. Factors impacting home prices include higher mortgage rates that make homes less affordable, new mortgage rules that may affect some homebuyers’ ability to qualify for a mortgage.

A shortage of available homes overshadowed housing market growth in 2013; there just weren’t enough homes available to meet demand in some areas. The Federal Reserve’s Federal Open Market Committee (FOMC) noted in its statement last week that it was difficult to determine the exact scope of winter weather on recent economic reports.

Regional Markets Show Discrepancies In Recovery
The S & P Case-Shiller 10 and 20-city home price index reports shed light on a “patchwork quilt” housing recovery. While some areas have seen a higher than average rate of year-over-year home price growth, other areas are underperforming.

Here is a sampling of Case-Shiller’s January data throughout the U.S:
Las Vegas, Nevada +24.90 percent
San Francisco, California +23.10 percent
Chicago, Illinois +10.80 percent
Washington, D.C. +9.20 percent
New York, New York +6.70 percent
Cleveland, Ohio + 4.00 percent

The S & P Case Shiller 10 and 20 city home price indices posted year-over-year gains of 13.50 and 13.20 percent respectively.

FHFA Data Shows Similar Trend
The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released its House Price Index (HPI) for January with similar results for homes mortgaged or backed by Fannie Mae and Freddie Mac. The House Price Index indicated that home prices rose by a seasonally-adjusted rate of 0.50 percent from December to January. According to the FHFA HPI, home prices increased by 7.40 percent year-over-year.

January’s HPI was 8.00 percent below the index’s April 2007 high.
The FHFA HPI data is seasonally adjusted and is based on home purchases only.

FHFA month-to-month data for the nine census bureau districts reflects the differences in housing markets throughout the U.S.

FHFA month-to –month home price growth December 2013 to January 2014:
Middle Atlantic division: + 1.30 percent
New England + 1.00 percent
West North Central + 1.00 percent
Pacific + 0.80 percent
East South Central + 0.70 percent
Mountain + 0.50 percent
South Atlantic + 0.30 percent
East North Central + 0.10 percent
West South Central – 0.30 percent

Along with warm weather’s arrival is the potential for regional housing markets sidelined over the winter to recover.

Apr 02

4 Myths About Buying Your Home That Just Aren’t True

home-buying-myths-couple-houseIt can be pretty intimidating to dip your toes into the realm of home ownership, especially if you’re a first-time homebuyer. To make things worse, there are a number of myths floating around out there surrounding the home buying process.

Such misconceptions have many kept many would-be homeowners from realizing the personal and financial rewards of owning a property. To clear things up, here are 4 myths about buying your first home that simply aren’t true.

Myth #1 – “It’s Cheaper To Rent Instead Of Own“
If you buy a property that is within your budget and your mortgage terms allow you to make comfortable monthly payments, the cost of rent can often be higher than mortgage payments.

Sure, there are other expenses associated with owning a property that you wouldn’t be responsible for if you were renting, but one thing that many people forget is the fact that renting does not allow you to build equity.

The ability to build equity into a property that you own is like paying into a savings account – if you buy a home for $200,000, and pay down your mortgage to $175,000 in 5 years, you’ll have $25,000 in home equity that can be tapped into later if you need a lump sum of cash to pay for other large expenses.

If you sell your property down the line, any equity that the property has accumulated will provide you with more profit from the sale of the home.

Myth #2 – “Whatever Shows Up On The Inspection Report Is The Seller’s Responsibility“
Most offers on a home usually come with a home inspection condition that makes the offer contingent on the acceptance of a home inspection report by the buyer. Many buyers, however, are under the impression that sellers are responsible for any issues that show up on the inspection report.

Although the seller is required to make certain major repairs as stipulated by the lender, everything is still negotiable. A buyer may ask the seller to fix a minor crack in the basement wall or repair any scuff marks on the hardwood flooring, but the seller can essentially refuse, leaving the buyer with the decision of whether or not to continue with the offer anyway.

Myth #3 – “The Perfect Home Is Out There – I Just Have To Wait For It“
Buyers have a tendency to focus too much on all the little things that may be wrong about a house rather than on the majority of the things that are right. Homes are much like people – they aren’t perfect. Even brand new homes might have a few minor flaws.

The goal of a house hunt is to find the perfectly acceptable home – one that may have a couple of quirks that you can either live with or fix, but is otherwise ideal. An experienced buyer’s agent can help you identify issues that are deal-breakers, and help keep some perspective by separating irritating details from the big picture.

Myth #4 – “I Don’t Need A Real Estate Agent To Buy A House“
Without the proper team behind you – especially if you’re a first-time homebuyer – you could potentially find yourself in a compromised position. Many buyers don’t take the time necessary to shop for an agent who can best represent them in their purchase.

Think about it this way – would you perform surgery on yourself? Do you feel comfortable filing your own income taxes, or do you opt to use the services of an accountant? Being represented by a licensed real estate agent will give you the benefit of professional skills and knowledge, including the ability to find financing and close the deal with your best interests put first.

It’s always in your best interests to have an experienced, knowledgeable agent representing you in a home purchase. With such a major investment on the line, you want to have someone who can help you complete a purchase leaving no stone unturned, and ultimately saving you money – and a lot of headaches.

A professional real estate agent will be able to sort the myths from the reality and make your first home-buying experience a positive one.

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