Read below for some great tips to stage homes to
give them the extra 'oomph' they need during the cooler season to help it
sell!
1. Less is more when it comes to
decorations.
It's important to keep decor
simple and only accentuating the home's best features to create an inviting
setting. Try displaying fall foliage or festive bouquets throughout the
home.
2. Warm up the
walls.
A fresh coat of paint will always help revive
the home's interiors. It's a great idea to keep the walls neutral yet warm and
inviting. For the autumn season, pops of color with accessories in oranges, deep
reds and yellows add a festive touch.
3. Keep rooms well
lit.
Open blinds and plenty of tasteful lamps
through the home add additional illumination and highlights the home's best
features.
4. Make it
cozy.
As the weather cools down,
encourage home buyers to stick around during showings by providing a warm and
welcoming atmosphere. Accentuate the sofas and chairs with plush throw pillows and
cuddly throws.
5. Play up the seasonal scents.
Add to the welcoming atmosphere by
burning seasonal scented candles throughout the home. Or, even better, simmer hot
apple cider on the stove and offer it to potential home buyers.
6. Accentuate gathering areas.
Especially fireplaces if the home has
one. A cozy fireplace is a fantastic feature to highlight during the crisp fall
months. Arrange the furniture to make a focal point and set the scene for home
buyers to imagine gathering with their own friends and family for the holidays and
cold seasons.
7. Add a touch of luxury.
Layering the bedding with sumptuous
fabrics and adding dimension with throw pillows will enhance the bedroom's comfort
appeal. You can also display plush towels in the bathroom or drape a silky table
cloth over the dining room table to give the home a more luxurious
feel.
8. Curb appeal, curb appeal, curb appeal.
No matter how beautiful and inviting a
home's interior, buyers won't make it inside if the exterior isn't welcoming as
well.Especially during the fall season when the weather is turning colder and home
buyers will want to move in and stay indoors. Sprucing up the lawn by raking up
leaves and patching up brown spots in the grass will give home buyers the sense of
a more turn-key purchase. They'll be able to imagine themselves hosting holiday
parties and dinners instead of making a mental to-do list to rush through before
the seasonal events begin.
Saturday, October 24, 2015
Thursday, October 22, 2015
BABY, IT'S COLD OUTSIDE BUT THAT DOESN'T MEAN YOUR HOUSE CAN'T BE WARM AND INVITING!!
With winter approaching, it's time to say goodbye to long sunny days and green lawns. But don't hibernate yet. Start these projects now to ensure your home looks beautiful—not barren—as temperatures drop.
Baby, it’s (going to be) cold outside, but that doesn’t mean your house can’t be warm and inviting.
With winter approaching, long days of sunshine, colorful fall foliage, and green lawns are coming to an end. So too are the hours spent outside, raking up leaves and washing your windows. But don’t fully retreat into your humble abode to hibernate quite yet — especially if your home is on the market.
There are projects you can start now, when it’s just starting to get cooler outside, to ensure your home will look gorgeous, warm, and inviting throughout the upcoming winter months — whether you have a home for sale in Birmingham or Atlanta!!
Plant flowers that bloom in the winter
Fall is the time to plant early-blooming bulbs such as crocuses, which will flower in late winter, even if they’re covered in snow. Other bulb flowers such as daffodils and tulips are hardy enough to survive cold winter temperatures below ground and bloom beautifully in early spring/late winter. Perennials, shrubs, and trees also do well with a fall planting.
According to the National Association of Landscape Professionals (NALP), the warm fall soil is great for root development, and plants have several months to establish themselves before the stress of the summer heat. Get your early planting done and enjoy a little taste of spring curb appeal while you’re still cuddled up in your flannel pajamas and slippers.
Lighting is often overlooked but can make such a huge difference when strategically placed and tinted correctly. Consider sticking a few vintage lanterns along your driveway, or installing a soft-hued light bulb in your porch light. You could also light up your walking path with solar lights and finish off the look with some statuary or tree up-lighting.
Pro tip: Less is usually more for path lighting; too many lights, and you may create a runway effect.
Now is the time to make sure you’re helping your lawn make it through the winter, so your grass and other plants survive the harsh weather. NALP recommends applying 2 to 3 inches of mulch to protect plant roots from extreme temperatures.
The mulch barrier will also preserve moisture if your region doesn’t receive enough winter precipitation. Bonus: A thick layer of woodsy mulch lends a nice aesthetic touch to an otherwise barren landscape.
There’s not much you can do about brown, unsightly-looking grass during the winter months. But you can rake and remove the leaves that build up from falling foliage and winter storms. The raking work will pay off big time in the spring for lawn health and also keep it looking its best this season and into spring. A tidy lawn is the key for curb appeal in the long winter months.
Small upgrades and holiday decor
Alone, a new mailbox, doorknob, or set of address numbers on your house can seem inconsequential. But when replaced together as a set, these little details can make all the difference in the world — particularly from a distance. Now is the time to make a weekend project out of replacing all the small stuff for a big aesthetic reward.
From lights and greenery to candles in the windows, you can really get creative for the holidays with embellishments that won’t die off when the snow starts. There’s no need to get all Clark Griswold with the front yard, but tasteful, minimalist decor can really beautify your home.
There’s plenty to be done this fall to enhance your curb appeal through the winter months. Work to extend the interior’s cozy, well-kept feeling to the exterior of your home. Not only will you save yourself some maintenance in the spring, but also your home will shine all winter long.
Baby, it’s (going to be) cold outside, but that doesn’t mean your house can’t be warm and inviting.
With winter approaching, long days of sunshine, colorful fall foliage, and green lawns are coming to an end. So too are the hours spent outside, raking up leaves and washing your windows. But don’t fully retreat into your humble abode to hibernate quite yet — especially if your home is on the market.
There are projects you can start now, when it’s just starting to get cooler outside, to ensure your home will look gorgeous, warm, and inviting throughout the upcoming winter months — whether you have a home for sale in Birmingham or Atlanta!!
Plant flowers that bloom in the winter
Fall is the time to plant early-blooming bulbs such as crocuses, which will flower in late winter, even if they’re covered in snow. Other bulb flowers such as daffodils and tulips are hardy enough to survive cold winter temperatures below ground and bloom beautifully in early spring/late winter. Perennials, shrubs, and trees also do well with a fall planting.
According to the National Association of Landscape Professionals (NALP), the warm fall soil is great for root development, and plants have several months to establish themselves before the stress of the summer heat. Get your early planting done and enjoy a little taste of spring curb appeal while you’re still cuddled up in your flannel pajamas and slippers.
Lighting is often overlooked but can make such a huge difference when strategically placed and tinted correctly. Consider sticking a few vintage lanterns along your driveway, or installing a soft-hued light bulb in your porch light. You could also light up your walking path with solar lights and finish off the look with some statuary or tree up-lighting.
Pro tip: Less is usually more for path lighting; too many lights, and you may create a runway effect.
Now is the time to make sure you’re helping your lawn make it through the winter, so your grass and other plants survive the harsh weather. NALP recommends applying 2 to 3 inches of mulch to protect plant roots from extreme temperatures.
The mulch barrier will also preserve moisture if your region doesn’t receive enough winter precipitation. Bonus: A thick layer of woodsy mulch lends a nice aesthetic touch to an otherwise barren landscape.
There’s not much you can do about brown, unsightly-looking grass during the winter months. But you can rake and remove the leaves that build up from falling foliage and winter storms. The raking work will pay off big time in the spring for lawn health and also keep it looking its best this season and into spring. A tidy lawn is the key for curb appeal in the long winter months.
Small upgrades and holiday decor
Alone, a new mailbox, doorknob, or set of address numbers on your house can seem inconsequential. But when replaced together as a set, these little details can make all the difference in the world — particularly from a distance. Now is the time to make a weekend project out of replacing all the small stuff for a big aesthetic reward.
From lights and greenery to candles in the windows, you can really get creative for the holidays with embellishments that won’t die off when the snow starts. There’s no need to get all Clark Griswold with the front yard, but tasteful, minimalist decor can really beautify your home.
There’s plenty to be done this fall to enhance your curb appeal through the winter months. Work to extend the interior’s cozy, well-kept feeling to the exterior of your home. Not only will you save yourself some maintenance in the spring, but also your home will shine all winter long.
DO YOU HAVE A VACATION HOME?
If you have a vacation home, here are a few tips on getting that home ready for the winter!!!
For a home to remain in good shape throughout the winter it needs regular care and attention. When a home is occupied, many of the things that are necessary to keep it in good working order happen by default. But when the home is vacant, it is up to the owner or the property manager to prepare it from freezing temperatures and other winter risks.
The worst risk comes from bursting pipes, which can lead to water damage that can significantly impact the value of the home. Left alone, water can ruin everything it touches – walls, floors, electrical systems, etc. It can even damage the foundation. Other risks exist as well, such as pest infiltration, which can leave nasty surprises for the homeowner.
Taken together, the dangers of failing to winterize a home are too severe to ignore. Any real estate agent who has been involved with selling bank owned properties or vacant short sales can certainly tell you the necessity of knowing how to winterize a vacant home! In order to get an informed opinion on the subject we reached out to a well-known real estate agent in Westborough, Mass., Bill Gassett, who has been selling homes for nearly 30 years. Gassett runs a popular real estate blog known as Maximum Real Estate Exposure that offers numerous tips to buyers and sellers. Below he shares all of his tips for getting your place winterized.
When readying a vacant home for winter weather, there are several things you can do to prepare before freezing temperatures and other winter risks arrive. These include:
Bring in a plumber.
Hiring a professional plumber to winterize the pipes and water system in the home is extremely important if you want to avoid the incredibly expensive water damage that can occur from freezing pipes. The plumber can examine the entire system, inside and out, and then prepare it for freezing temperatures. The plumber will drain all areas where water is stored, like water heaters and hot tubs, and will use an air compressor to expel water from the pipes throughout the house. With the water removed, you do not have to keep the house heated to prevent freezing. The pipes are protected and you save money in utility costs.
Drain outdoor garden hoses.
Water hoses must be disconnected from the home and drained of water to prevent damage to both the hoses and the spigots where they attach to the house. Left undrained, the water inside will freeze and burst not only the hose, but often the spigot as well. If winter watering must be done to keep landscape plants alive, make sure the person who does the watering drains the hoses and disconnects them from the house after each use.
Close up all openings to the house.
To prevent animals and insects from entering the home for shelter, you will need to close up all openings throughout the house. These include dryer vents and the chimney.
Have the gutters cleaned and repaired if necessary.
Gutters must be free of debris and attached properly to the house to funnel water away from the roof, siding and foundation. When debris accumulates, the gutter may stop working properly. If enough water collects and a freeze hits, the weight of the ice can pull the gutter away from the home, damaging the siding and leading to potential ice hazards where water collects at the base of the house. If you live in a cold weather climate then you understand just how bad ice damning was last year. Knowing how to prevent ice dams is something every homeowner should have a grasp of. Ice dams can cause serious damage to a home including mold behind ceilings and walls that you may not be able to detect! Have the gutters cleaned periodically until all leaves have dropped from the trees, and make sure they are in good repair.
Remove anything touching the side of the house, such as leaves and firewood.
Water and insects can accumulate in firewood and debris, causing damage to the siding and leading to potential infestations. Keeping everything away from the house creates a safe barrier and prevents water damage. This includes shrubbery and other landscaping. Keep a minimum of a couple of feet to allow the home to breath.
Have trees trimmed over the home.
Remove any tree branches that may touch the house or hang too closely. Tree branches increase the leaves that accumulate in the gutter and can also break and fall on the house in a snow or ice storm. If you are negligent about keeping branches over your home it could lead to insurance denying your claim.
Use moth balls to keep insects out of the house.
Moth balls may smell unpleasant, but they are effective at keeping insects away. Use them anywhere you think insects may be a problem.
Talk to the gas company about disconnecting the gas supply.
A gas explosion can cause even more damage than frozen pipes. Let the gas company know the home is vacant and ask them to disconnect the gas supply to the home. Obviously if you are not living in the home this becomes important because if a gas leak were to form it would be too late for you to do anything about it. This is one of the major reasons why nearly all bank owned properties get winterized.
Make the home appear occupied at a glance.
It is better for potential buyers and discouraging to unwanted visitors if the home appears occupied. You can setup lights on timers and have the landscaping tended to periodically to keep things looking nice. If snow is an issue you can also have the driveway cleared. We provide a list of many tips on how to sell a home in the winter. This advice applies to both occupied and non-occupied homes. Keep in mind that if your home is on the market you are going to need to get it un-winterized with fairly short notice when the buyer schedules a home inspection. Buyers will want to be able to check the heating and plumbing systems and will not be able to do so if the home is winterized.
Hire a landscaper to perform a fall cleanup.
As the weather gets colder, plants will die and you will be left with a disheveled looking yard and landscape. It is beneficial for the sales process if you have someone come in and cleanup around the home after the first freeze or two, when most of the vegetation has died off. The landscaper can cut back any dead growth, rake up leaves and prepare plants for the winter.
Check on the home periodically.
An unoccupied home, even when the lights come on and the driveway is plowed, can be appealing to burglars and to squatters. It can also be a destination for kids in the neighborhood to come hang out for fun. The only people you want visiting are potential buyers, so you should maintain a schedule of visiting the home periodically to make sure it is being left alone and to discourage unwanted visitors.
Use of all these tips and your experience with winterizing a home should be a breeze!
Let TEAM RED help you with all your Real Estate needs. If you don't have a vacation home yet, let us help you find that perfect vacation home!
For a home to remain in good shape throughout the winter it needs regular care and attention. When a home is occupied, many of the things that are necessary to keep it in good working order happen by default. But when the home is vacant, it is up to the owner or the property manager to prepare it from freezing temperatures and other winter risks.
The worst risk comes from bursting pipes, which can lead to water damage that can significantly impact the value of the home. Left alone, water can ruin everything it touches – walls, floors, electrical systems, etc. It can even damage the foundation. Other risks exist as well, such as pest infiltration, which can leave nasty surprises for the homeowner.
Taken together, the dangers of failing to winterize a home are too severe to ignore. Any real estate agent who has been involved with selling bank owned properties or vacant short sales can certainly tell you the necessity of knowing how to winterize a vacant home! In order to get an informed opinion on the subject we reached out to a well-known real estate agent in Westborough, Mass., Bill Gassett, who has been selling homes for nearly 30 years. Gassett runs a popular real estate blog known as Maximum Real Estate Exposure that offers numerous tips to buyers and sellers. Below he shares all of his tips for getting your place winterized.
When readying a vacant home for winter weather, there are several things you can do to prepare before freezing temperatures and other winter risks arrive. These include:
Bring in a plumber.
Hiring a professional plumber to winterize the pipes and water system in the home is extremely important if you want to avoid the incredibly expensive water damage that can occur from freezing pipes. The plumber can examine the entire system, inside and out, and then prepare it for freezing temperatures. The plumber will drain all areas where water is stored, like water heaters and hot tubs, and will use an air compressor to expel water from the pipes throughout the house. With the water removed, you do not have to keep the house heated to prevent freezing. The pipes are protected and you save money in utility costs.
Drain outdoor garden hoses.
Water hoses must be disconnected from the home and drained of water to prevent damage to both the hoses and the spigots where they attach to the house. Left undrained, the water inside will freeze and burst not only the hose, but often the spigot as well. If winter watering must be done to keep landscape plants alive, make sure the person who does the watering drains the hoses and disconnects them from the house after each use.
Close up all openings to the house.
To prevent animals and insects from entering the home for shelter, you will need to close up all openings throughout the house. These include dryer vents and the chimney.
Have the gutters cleaned and repaired if necessary.
Gutters must be free of debris and attached properly to the house to funnel water away from the roof, siding and foundation. When debris accumulates, the gutter may stop working properly. If enough water collects and a freeze hits, the weight of the ice can pull the gutter away from the home, damaging the siding and leading to potential ice hazards where water collects at the base of the house. If you live in a cold weather climate then you understand just how bad ice damning was last year. Knowing how to prevent ice dams is something every homeowner should have a grasp of. Ice dams can cause serious damage to a home including mold behind ceilings and walls that you may not be able to detect! Have the gutters cleaned periodically until all leaves have dropped from the trees, and make sure they are in good repair.
Remove anything touching the side of the house, such as leaves and firewood.
Water and insects can accumulate in firewood and debris, causing damage to the siding and leading to potential infestations. Keeping everything away from the house creates a safe barrier and prevents water damage. This includes shrubbery and other landscaping. Keep a minimum of a couple of feet to allow the home to breath.
Have trees trimmed over the home.
Remove any tree branches that may touch the house or hang too closely. Tree branches increase the leaves that accumulate in the gutter and can also break and fall on the house in a snow or ice storm. If you are negligent about keeping branches over your home it could lead to insurance denying your claim.
Use moth balls to keep insects out of the house.
Moth balls may smell unpleasant, but they are effective at keeping insects away. Use them anywhere you think insects may be a problem.
Talk to the gas company about disconnecting the gas supply.
A gas explosion can cause even more damage than frozen pipes. Let the gas company know the home is vacant and ask them to disconnect the gas supply to the home. Obviously if you are not living in the home this becomes important because if a gas leak were to form it would be too late for you to do anything about it. This is one of the major reasons why nearly all bank owned properties get winterized.
Make the home appear occupied at a glance.
It is better for potential buyers and discouraging to unwanted visitors if the home appears occupied. You can setup lights on timers and have the landscaping tended to periodically to keep things looking nice. If snow is an issue you can also have the driveway cleared. We provide a list of many tips on how to sell a home in the winter. This advice applies to both occupied and non-occupied homes. Keep in mind that if your home is on the market you are going to need to get it un-winterized with fairly short notice when the buyer schedules a home inspection. Buyers will want to be able to check the heating and plumbing systems and will not be able to do so if the home is winterized.
Hire a landscaper to perform a fall cleanup.
As the weather gets colder, plants will die and you will be left with a disheveled looking yard and landscape. It is beneficial for the sales process if you have someone come in and cleanup around the home after the first freeze or two, when most of the vegetation has died off. The landscaper can cut back any dead growth, rake up leaves and prepare plants for the winter.
Check on the home periodically.
An unoccupied home, even when the lights come on and the driveway is plowed, can be appealing to burglars and to squatters. It can also be a destination for kids in the neighborhood to come hang out for fun. The only people you want visiting are potential buyers, so you should maintain a schedule of visiting the home periodically to make sure it is being left alone and to discourage unwanted visitors.
Use of all these tips and your experience with winterizing a home should be a breeze!
Let TEAM RED help you with all your Real Estate needs. If you don't have a vacation home yet, let us help you find that perfect vacation home!
Wednesday, October 7, 2015
Neighborhood Details to Consider When Buying a Home
When it comes to investing in real estate, it’s not only the house that should be considered, but also the location, neighborhood, and everything in its proximity. Buying your first home can seem overwhelming, but it doesn’t have to be.
Before finalizing the exact home to buy, here are some helpful tips to determine if that home’s neighborhood is the right one for you and your family.
Every neighborhood has rules.
Depending on your lifestyle now, your next home may be in a neighborhood with laws that you’re completely not accustomed to. According to a recent article by real estate expert Bill Gassett, there may be restrictions on where you can park (some neighborhoods do not allow parking on the street) as well as which outdoor renovations that are allowed or prohibited on the land you own. These rules are referred to as “restrictive covenants” and can put a damper on your daily life in the new house. Learn them before you move in.
Do you have easy access to your favorite hobbies?
Another huge factor that comes into play is your new home’s proximity to favorite activities or hobbies. Many people tend to overlook what they’ll do in their downtime because they’re busy looking for a place that’s close to work or school. Don’t you want to live in a home that’s convenient for both business and pleasure? Having fun is just as important!
Know the HOA or Property Manager.
Before a decision is made, gain an understanding of the type of neighborhood you’re getting yourself into. Is it owned by a Homeowner’s Association or property manager? What are their rules? What about reviews? According to Forbes Magazine, you may be able to find reliable ratings online if it’s managed by a large company. Do your research, talk to neighbors, and read up on local news stories to determine if it’s the right neighborhood for you.
The noise factor.
If interested in a home whose neighborhood is right near a busy road, keep in mind how noisy it’ll be. There are a number of things that can cause noise around your home, such as nearby event centers, stadiums, pedestrian traffic, and crowded streets. Some people are okay with a little noise if that means they’re closer to the hustle and bustle of the city. If that’s not you, then you should probably re-think the location of your home and neighborhood.
Changes in property taxes & insurance rates.
It’s important to know that taxes and insurance can vary according to the area or county. Learn how your area handles taxes before you move in. Otherwise, it will come as an unpleasant surprise when you discover that you actually owe much more than expected. Living in this new area may also have an impact on your car insurance rates.
When it comes to investing in real estate, it’s not only the house that should be considered, but also the location, neighborhood, and everything in its proximity. Buying your first home can seem overwhelming, but it doesn’t have to be.
Before finalizing the exact home to buy, here are some helpful tips to determine if that home’s neighborhood is the right one for you and your family.
Every neighborhood has rules.
Depending on your lifestyle now, your next home may be in a neighborhood with laws that you’re completely not accustomed to. According to a recent article by real estate expert Bill Gassett, there may be restrictions on where you can park (some neighborhoods do not allow parking on the street) as well as which outdoor renovations that are allowed or prohibited on the land you own. These rules are referred to as “restrictive covenants” and can put a damper on your daily life in the new house. Learn them before you move in.
Do you have easy access to your favorite hobbies?
Another huge factor that comes into play is your new home’s proximity to favorite activities or hobbies. Many people tend to overlook what they’ll do in their downtime because they’re busy looking for a place that’s close to work or school. Don’t you want to live in a home that’s convenient for both business and pleasure? Having fun is just as important!
Know the HOA or Property Manager.
Before a decision is made, gain an understanding of the type of neighborhood you’re getting yourself into. Is it owned by a Homeowner’s Association or property manager? What are their rules? What about reviews? According to Forbes Magazine, you may be able to find reliable ratings online if it’s managed by a large company. Do your research, talk to neighbors, and read up on local news stories to determine if it’s the right neighborhood for you.
The noise factor.
If interested in a home whose neighborhood is right near a busy road, keep in mind how noisy it’ll be. There are a number of things that can cause noise around your home, such as nearby event centers, stadiums, pedestrian traffic, and crowded streets. Some people are okay with a little noise if that means they’re closer to the hustle and bustle of the city. If that’s not you, then you should probably re-think the location of your home and neighborhood.
Changes in property taxes & insurance rates.
It’s important to know that taxes and insurance can vary according to the area or county. Learn how your area handles taxes before you move in. Otherwise, it will come as an unpleasant surprise when you discover that you actually owe much more than expected. Living in this new area may also have an impact on your car insurance rates.
Monday, September 28, 2015
6 Financial Perks of Being a First-Time Homebuyer
From mortgage points to PMI, unlock the essential info about how homeownership affects your tax burden.
Hours after we closed on our first house, my husband and I sat in our empty new living room and stared at the walls. He was the first to speak, saying simply, “I thought it was painted.”
We learned a lot about that old house over the next 15 years, and while we knew to expect some changes, others, such as the need to paint the walls, we would figure out as we went along. That included making some adjustments to our tax forms.
All of those forms you filled out to buy your house were just the beginning. We learned that first-time homeowners have years of mortgage and insurance paperwork to look forward to, and, of course, taxes.
To sort through that pile of paperwork and make sure you’re saving as much money as possible, here are six tax benefits for new homeowners.
1. You can deduct the interest you pay on your mortgage
The home mortgage interest deduction is probably the best-known tax benefit for homeowners. It lets you deduct all the interest you pay toward your home mortgage with a few exceptions, including these big ones:
Your mortgage can’t be more than $1 million.
Your mortgage must be secured by your home (unsecured loans don’t count).
Your mortgage must be on a qualified home, meaning your main or second home (vacation homes count too).
Don’t assume that if you are married and file a joint tax return, you have to own your home together to claim the interest: For purposes of the deduction, the home can be owned by you, your spouse, or jointly. The deduction counts the same either way.
And don’t worry about keeping track of how much you’re paying in interest versus principal each month. At the end of the year, your lender should issue you a form 1098, which reports the amount of interest you’ve paid during the year.
Warning: Since, as a first-time homeowner, you pay more interest than principal in the first few years, that number can be fairly sobering.
2. You may be able to deduct points
Points are essentially prepaid interest that you offer upfront at closing to improve the rate on your mortgage. The more points you pay, the better deal you get.
You can deduct points in the year you pay them if you meet certain criteria. Included in the list (and it’s a long one): Points must be paid on a loan secured by your main home, and that loan must be to purchase or build your main home.
Pro tip: Points that you pay must also be within the range of what’s expected where you live — unusual transactions may cause you to lose the deduction.
3. For 2015, you can deduct PMI
Private mortgage insurance, or PMI, protects the bank in the event you default. PMI may be required as a condition of a mortgage for first-time homebuyers, especially if they can’t afford a large down payment.
For most years, PMI is not generally deductible. However, for 2015, qualifying homeowners who itemize may claim a tax deduction for the cost of PMI for both their primary home and any vacation homes.
4. Real estate taxes are deductible
Real estate taxes are imposed by state or local governments on the value of your property. Most banks or other mortgage lenders will factor the cost of your real estate taxes into your mortgage and put those amounts into an escrow account.
You can’t deduct the amounts paid into the escrow, but you can deduct the amounts paid out of it to cover the taxes (you’ll see this amount on a form 1098 issued by your lender at the end of the year).
If you don’t escrow for real estate taxes, you’ll deduct what you pay out of pocket directly to the tax authority.
And don’t forget about those taxes you paid at settlement. If you reimburse the seller for taxes already paid for the year, you get to deduct those too.
Those amounts won’t show up on a form 1098; you’ll need to check your settlement sheet for the totals.
5. Your other tax deductions may matter more
To take advantage of these tax benefits, you have to itemize your deductions on your tax return.
For most taxpayers, this is a huge shift: in many cases, you’re moving from a form 1040-EZ to a form 1040 to list expenses on Schedule A.
In addition to interest, points, and taxes, Schedule A is where you would report deductions for charitable donations, medical expenses, and unreimbursed job expenses.
For itemizing deductions to make good financial sense, you generally want to have more total deductions than the standard deduction (for 2015, it’s $6,300 for individuals and $12,600 for married couples). Most taxpayers don’t reach those numbers — unless they’re homeowners.
The home mortgage interest deduction, in particular, tends to tip most homeowners over the standard deduction amount, making those other deductions (such as medical expenses) that might otherwise go unclaimed more valuable.
6. You’ll get capital gains tax relief down the road
I know you just bought your home, but admit it: Resale value is something you considered when you chose your home. And different from other investments for which you’re taxed on the full value of any gain, you can exclude some of the gain attributable to your home when you sell.
Under current law, you can avoid paying tax on up to $250,000 of gain ($500,000 for married filing jointly) so long as you have owned and lived in the property for two of the last five years (those years of owning and inhabiting don’t have to be consecutive).
Gain over that amount is taxed at capital gains rates, which are generally more favorable than ordinary income tax rates.
Hours after we closed on our first house, my husband and I sat in our empty new living room and stared at the walls. He was the first to speak, saying simply, “I thought it was painted.”
We learned a lot about that old house over the next 15 years, and while we knew to expect some changes, others, such as the need to paint the walls, we would figure out as we went along. That included making some adjustments to our tax forms.
All of those forms you filled out to buy your house were just the beginning. We learned that first-time homeowners have years of mortgage and insurance paperwork to look forward to, and, of course, taxes.
To sort through that pile of paperwork and make sure you’re saving as much money as possible, here are six tax benefits for new homeowners.
1. You can deduct the interest you pay on your mortgage
The home mortgage interest deduction is probably the best-known tax benefit for homeowners. It lets you deduct all the interest you pay toward your home mortgage with a few exceptions, including these big ones:
Your mortgage can’t be more than $1 million.
Your mortgage must be secured by your home (unsecured loans don’t count).
Your mortgage must be on a qualified home, meaning your main or second home (vacation homes count too).
Don’t assume that if you are married and file a joint tax return, you have to own your home together to claim the interest: For purposes of the deduction, the home can be owned by you, your spouse, or jointly. The deduction counts the same either way.
And don’t worry about keeping track of how much you’re paying in interest versus principal each month. At the end of the year, your lender should issue you a form 1098, which reports the amount of interest you’ve paid during the year.
Warning: Since, as a first-time homeowner, you pay more interest than principal in the first few years, that number can be fairly sobering.
2. You may be able to deduct points
Points are essentially prepaid interest that you offer upfront at closing to improve the rate on your mortgage. The more points you pay, the better deal you get.
You can deduct points in the year you pay them if you meet certain criteria. Included in the list (and it’s a long one): Points must be paid on a loan secured by your main home, and that loan must be to purchase or build your main home.
Pro tip: Points that you pay must also be within the range of what’s expected where you live — unusual transactions may cause you to lose the deduction.
3. For 2015, you can deduct PMI
Private mortgage insurance, or PMI, protects the bank in the event you default. PMI may be required as a condition of a mortgage for first-time homebuyers, especially if they can’t afford a large down payment.
For most years, PMI is not generally deductible. However, for 2015, qualifying homeowners who itemize may claim a tax deduction for the cost of PMI for both their primary home and any vacation homes.
4. Real estate taxes are deductible
Real estate taxes are imposed by state or local governments on the value of your property. Most banks or other mortgage lenders will factor the cost of your real estate taxes into your mortgage and put those amounts into an escrow account.
You can’t deduct the amounts paid into the escrow, but you can deduct the amounts paid out of it to cover the taxes (you’ll see this amount on a form 1098 issued by your lender at the end of the year).
If you don’t escrow for real estate taxes, you’ll deduct what you pay out of pocket directly to the tax authority.
And don’t forget about those taxes you paid at settlement. If you reimburse the seller for taxes already paid for the year, you get to deduct those too.
Those amounts won’t show up on a form 1098; you’ll need to check your settlement sheet for the totals.
5. Your other tax deductions may matter more
To take advantage of these tax benefits, you have to itemize your deductions on your tax return.
For most taxpayers, this is a huge shift: in many cases, you’re moving from a form 1040-EZ to a form 1040 to list expenses on Schedule A.
In addition to interest, points, and taxes, Schedule A is where you would report deductions for charitable donations, medical expenses, and unreimbursed job expenses.
For itemizing deductions to make good financial sense, you generally want to have more total deductions than the standard deduction (for 2015, it’s $6,300 for individuals and $12,600 for married couples). Most taxpayers don’t reach those numbers — unless they’re homeowners.
The home mortgage interest deduction, in particular, tends to tip most homeowners over the standard deduction amount, making those other deductions (such as medical expenses) that might otherwise go unclaimed more valuable.
6. You’ll get capital gains tax relief down the road
I know you just bought your home, but admit it: Resale value is something you considered when you chose your home. And different from other investments for which you’re taxed on the full value of any gain, you can exclude some of the gain attributable to your home when you sell.
Under current law, you can avoid paying tax on up to $250,000 of gain ($500,000 for married filing jointly) so long as you have owned and lived in the property for two of the last five years (those years of owning and inhabiting don’t have to be consecutive).
Gain over that amount is taxed at capital gains rates, which are generally more favorable than ordinary income tax rates.
Sunday, September 27, 2015
Discover 7 Mortgage Pre-Approval Tips For First-Time Home Buyers
If you are a first time home buyer and need mortgage, discover our mortgage pre-approval tips to get one.
1. It’s Not The Same As Getting Pre-Qualified
Mortgage Pre-Approval
When you get pre-qualified, your lender will estimate how much you can borrow based on the financial information you supply them with. They can give you an idea of what kind of mortgage you can apply for, but they won’t actually verify your information.
When you get pre-approved, the lender is typically ready to make you a loan once they verify your information, after which you can complete an official mortgage application. The letter says that once you submit the necessary documents and make an offer on a home, your loan will be approved.
2. It Should Be One Of The First Things You Do
Things to do - Mortgage Pre-Approval
Before you fall in love with your dream home, you should probably find out if you can actually afford it. Pre-approval takes the guesswork out of searching for homes when it comes to your budget since you’ll receive, in writing, the exact loan amount available to you.
3. Home Sellers Expect It
Home Sellers - Mortgage Pre-Approval
Getting pre-approved will not only help you discover the maximum that you can borrow, but it will also help sellers take you more seriously in a competitive market. Sellers will be more likely to negotiate a sale with you if you prove to them that your finances are already in place.
4. You Need To Check Your Credit
Credit - Mortgage Pre-Approval
Source: Flickr user Simon Cunningham
Since you’ll need to provide this information to your lender, it’s a good idea to check your credit score and report prior to your pre-approval appointment. The scores will help your lender provide you with the different kinds of loans available to you.
5. Gather Necessary Financial Information
Financial Information - Mortgage Pre-Approval
Source: Flickr user Adam Rifkin
There are quite a few documents you’re going to have to bring with you to your pre-approval appointment for your lender to verify:
W-2 forms (from the past two years)
pay stubs
bank account statements
investment account statements
tax returns
other sources of income (side job, bonuses, etc.)
In addition to your financial information, your lender will also need personal information like your driver’s license and social security number, so be sure to bring those along, too.
6. Sort Out Any Remaining Conditions
Conditions - Mortgage Pre-Approval
Once you have all the information you need, the underwriting system should deliver your pre-approval letter in a matter of minutes with one of four conditions: approved, approved with conditions, suspended, or denied.
If there are more conditions that still need to be met, it probably means that there’s some missing information that they need in order to complete the process. If it’s denied, it might mean that your financial situation isn’t currently sufficient enough to take on a home loan, or maybe you need to work on your credit score.
It’s okay if you have a bit more work to do before getting the letter in hand—your lender will be able to provide you with some advice to help you meet any existing conditions.
7. The Letter Isn’t Valid Forever
Letter - Mortgage Pre-Approval
Things change, including your financial situation. A typical pre-approval letter will only be valid for 60-90 days after getting it, but since the time frame varies, be sure to ask your lender about it when you apply.
If you are a first time home buyer and need mortgage, discover our mortgage pre-approval tips to get one.
1. It’s Not The Same As Getting Pre-Qualified
Mortgage Pre-Approval
When you get pre-qualified, your lender will estimate how much you can borrow based on the financial information you supply them with. They can give you an idea of what kind of mortgage you can apply for, but they won’t actually verify your information.
When you get pre-approved, the lender is typically ready to make you a loan once they verify your information, after which you can complete an official mortgage application. The letter says that once you submit the necessary documents and make an offer on a home, your loan will be approved.
2. It Should Be One Of The First Things You Do
Things to do - Mortgage Pre-Approval
Before you fall in love with your dream home, you should probably find out if you can actually afford it. Pre-approval takes the guesswork out of searching for homes when it comes to your budget since you’ll receive, in writing, the exact loan amount available to you.
3. Home Sellers Expect It
Home Sellers - Mortgage Pre-Approval
Getting pre-approved will not only help you discover the maximum that you can borrow, but it will also help sellers take you more seriously in a competitive market. Sellers will be more likely to negotiate a sale with you if you prove to them that your finances are already in place.
4. You Need To Check Your Credit
Credit - Mortgage Pre-Approval
Source: Flickr user Simon Cunningham
Since you’ll need to provide this information to your lender, it’s a good idea to check your credit score and report prior to your pre-approval appointment. The scores will help your lender provide you with the different kinds of loans available to you.
5. Gather Necessary Financial Information
Financial Information - Mortgage Pre-Approval
Source: Flickr user Adam Rifkin
There are quite a few documents you’re going to have to bring with you to your pre-approval appointment for your lender to verify:
W-2 forms (from the past two years)
pay stubs
bank account statements
investment account statements
tax returns
other sources of income (side job, bonuses, etc.)
In addition to your financial information, your lender will also need personal information like your driver’s license and social security number, so be sure to bring those along, too.
6. Sort Out Any Remaining Conditions
Conditions - Mortgage Pre-Approval
Once you have all the information you need, the underwriting system should deliver your pre-approval letter in a matter of minutes with one of four conditions: approved, approved with conditions, suspended, or denied.
If there are more conditions that still need to be met, it probably means that there’s some missing information that they need in order to complete the process. If it’s denied, it might mean that your financial situation isn’t currently sufficient enough to take on a home loan, or maybe you need to work on your credit score.
It’s okay if you have a bit more work to do before getting the letter in hand—your lender will be able to provide you with some advice to help you meet any existing conditions.
7. The Letter Isn’t Valid Forever
Letter - Mortgage Pre-Approval
Things change, including your financial situation. A typical pre-approval letter will only be valid for 60-90 days after getting it, but since the time frame varies, be sure to ask your lender about it when you apply.
Fixer Upper Vs. Move-In Ready
Think you can save a ton of money by buying a Fixer-Upper? Look a little closer to understand all of the costs associated with buying a fixer upper.
The Advantages:
• Price: Cheaper and may have more room for negotiation.
• Location: Established neighborhoods tend be older with more wear and tear.
• Personality: Put your stamp on a house by adding finishes that speak to you.
What to Watch Out For:
• Time: Large home repairs can take as much as 2x the quoted amount of time.
• Structural Problems: Cracks in foundation, leaning walls, water damage.
• Wiring, Plumbing, Roof: Have these items been addressed in the last 30 years?
• Animals: Check for mice, roach, & termite droppings or any signs of infestation.
Is It Worth It?
Get a professional inspection, then have a licensed (and trusted) contractor look through the house with the inspecter's report in hand and provide a realistic bid. Then increase that bid price by 10-30% as no project is ever completed on budget.
Final Equation:
90% Of Expected Market Value > Purchase Price + 120% Of Bid For Repairs
Think you can save a ton of money by buying a Fixer-Upper? Look a little closer to understand all of the costs associated with buying a fixer upper.
The Advantages:
• Price: Cheaper and may have more room for negotiation.
• Location: Established neighborhoods tend be older with more wear and tear.
• Personality: Put your stamp on a house by adding finishes that speak to you.
What to Watch Out For:
• Time: Large home repairs can take as much as 2x the quoted amount of time.
• Structural Problems: Cracks in foundation, leaning walls, water damage.
• Wiring, Plumbing, Roof: Have these items been addressed in the last 30 years?
• Animals: Check for mice, roach, & termite droppings or any signs of infestation.
Is It Worth It?
Get a professional inspection, then have a licensed (and trusted) contractor look through the house with the inspecter's report in hand and provide a realistic bid. Then increase that bid price by 10-30% as no project is ever completed on budget.
Final Equation:
90% Of Expected Market Value > Purchase Price + 120% Of Bid For Repairs
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