Tax Tips for Homeowners

Apr 6
Category | Blog

For most people, owning a home is like moving a step up the American-dream ladder. It is indeed wise of you to buy a home instead of continuing to pay hefty rent. Your home is an excellent investment in the long run because it helps you not only build up an equity but also garner substantial tax breaks.

There are certain deductions that can be claimed by homeowners only. If you have taken out a homeowner’s loan, consider these deductions as Uncle Sam’s gift to you. These tax breaks will surely alleviate the financial burden of many taxpayers, especially those who are paying their mortgage.

As April 15 approaches, let us take a look at the most significant tax breaks that only homeowners can claim:

  • Interest on Home Improvement Loan. Interest on a home improvement loan is fully deductible if the improvement is made in the main home and it enhances its sale value.
  • Property Tax. The taxes paid to acquire the property are fully deductible from the taxable income and the same is reflected in the Form 1040. Transfer tax arising from the transfer of the property to the new owner is a very common item.
  • Redeemable Ground Rents. The redeemable grounds rents can be deducted if you have been paying monthly or annual rentals.
  • Interest Accrued on a Reverse ...

Spring is here, and so is spring home-buying and -selling. Buyers and sellers preparing to take action this season should put those plans into play now—according to Zillow Group's Report on Consumer Housing Trends, the No. 1 regret for both buyers and sellers is "not starting their home search or prepping their home to sell soon enough."
"This spring, both buyers and sellers should be prepared for fast-moving sales, intense negotiations, and even bidding wars. Home shoppers and sellers are motivated to become more strategic and knowledgeable about what's happening in their neighborhood. Understanding whether you are in a buyer's or a seller's environment will help you manage your expectations and will give you insight into what you're going to need to bring to the table in order to close the deal."
For buyers, that means:
Keep your options open. More than half (52 percent) of homebuyers surveyed in the report said they also considered renting, and more than one-third (37 percent) of first-time buyers seriously considered continuing to rent. Savvy shoppers should have a Plan B in place, hoping to buy if it works out, but willing to sign a lease for a home if they don't make a deal by the time they need to move.
Be ...

Saving for a down payment often represents the biggest hurdle for first-time home buyers. In December, 25% of buyers on® who were looking to purchase their first home said a key factor holding them back was lacking funds for a down payment. No matter how you cut it, it represents a big chunk of cash. But here’s the thing: It doesn’t always need to be quite so big as most think.

Many first-time buyers don’t realize that it doesn’t necessarily take 20% down to purchase a home.

Indeed, the average down payment in the U.S. on mortgages used to purchase a home was 11%, according to our analysis of loan records from Optimal Blue, an enterprise lending software company.

As with many stats, that 11% average hides lots of variation across loan types and locations. And for some buyers, it may even take more than 20% to buy a home.

Borrowers with jumbo mortgages had to put the highest percentage down, with an average of 23%. Conforming mortgages averaged 18% in 2016. On the other hand, government-backed FHA, VA, and USDA mortgages featured average down payments of 4.8%, 2.2%, and 0.4%, respectively. These government programs are meant to open up more pathways to homeownership for first-time buyers, veterans, and heads of households in rural areas.

The average purchase price of homes ...

What The Fed Rate Hike Means For You

Mar 20
Category | Blog

Looking to buy a house? You might want to act sooner rather than later.

In a nearly unanimous vote, the U.S. Federal Reserve increased the Fed Funds Rate by a quarter of a percent Wednesday. It is the second rate hike since December. While the rate increase indicates a strong economy, it will mean higher interest rates for mortgages and other consumer and business loans across the country. The Fed doesn't directly set mortgage rates, but its actions can affect long-term interest rates and the housing market.

The good news is, even with the increase, rates are still relatively low and many experts doubt they will reach 5% this year but these numbers could change.

At current interest rates, buyers will pay approximately $120 more per month compared to a year ago, assuming a $430,000 price tag and a 20% down payment.

Borrowers who are on the fence are urged to lock an interest rate before any further increases occur. Zillow economists predict home prices will most likely increase in 2017. These factors are all indications that prospective homebuyers should not delay.

The Fed has now raised rates three times since the end of 2015.

Len Kiefer, deputy chief economist at Freddie Mac,expects rates to stay around 4.25% to 4.50% this immediate buying season.

Don't be afraid of the housing market. The key step for any prospective homebuyer is to get aligned with a team of experts to help guide you. Choose a ...

What do most people do when they can't afford that hot, new item they just can't live without? Charge it. Credit cards have made instant gratification a way of life, but getting what you want whenever you want is not always a smart move for your finances. Credit card debt can add up quickly, and too much debt can actually be a hindrance to achieving your long-term goals, like buying a home, getting a new job, starting a business, or saving for retirement. According to NerdWallet's 2016 American Household Credit Card Debt Study, the average U.S. household carries about $16,061 in credit card debt and pays around $1,292 in credit card interest each year.
If you're trying to dig your way out of credit card debt, rest assured, there are ways to pay it down. Before you start, make sure you've saved up enough for an emergency fund so you no longer have to make purchases on credit. Once you've got enough of a cushion to fall back on, use the following strategies to start paying down your debt:

1. Pay off the highest interest rate first.
Paying off the card with the highest interest rate first allows you to reduce the amount you spend on interest, which saves you the most money in the long run. To do this, continue making minimum payments on your other credit cards, and put more than the minimum amount toward your highest interest card.

2. Pay off the lowest balance.
Also known as the snowball method, this is the opposite ...

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