Pre-paid interest, sometimes called “points”, is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence. When points are paid on a refinance, they are not a current deduction but have to be taken pro-rata over the life of the mortgage.
For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, deduction of $100 per year is allowed. When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.
Your tax professional needs to be made aware of any of these situations so that he can accurately reflect the deduction in your return. Currently, the most common situation is where homeowners may be refinancing their home for the second, third or even fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.
For more information, see points in IRS Publication 936; there is a section on refinancing in this publication. For advice considering your specific situation, contact your tax professional.
It’s common for sellers to consider offering and buyers might find it an incentive, but a growing number of homeowners are purchasing the home warranties themselves to limit the unexpected expenses of repairs and replacements. We’ve had it help quite a few of our sellers at The Char MacCallum Real Estate Group.
A home protection plan is a renewable service contract that covers the repair or replacement of many of the components in a home. Some homeowners especially like the convenience that it organizes a qualified service provider as well as the cost of the items.
There are a variety of companies that offer home warranties and the coverage may differ but the majority of things will include heating, air conditioning most built-in and some free-standing appliances, as well as other specific items. Additional specific coverage may be available for other things like pool and spa equipment.
Some investors are even placing this coverage on their rental properties to limit the amount of maintenance repairs during the year. It is a viable alternative to managing the financial risk and the stress dealing with unexpected expenses.
If you’re interested in home warranties, contact us – we can help get you what you need!
We’ve had a lot of buyers out looking for homes this past week. The Char MaCallum Team has a couple of tips as the market shifts from a buyer’s market. It’s good to know how to improve your chances to have the seller accept your offer!
Once you decide on a home, don’t waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you’d expect. It’s happened several times these past week to our buyers agents on The Char MacCallum Team! Multiple offers are a seller’s advantage but here are some tips to level the playing field:
Realistic offer – don’t give the impression you’re trying to “steal” the property. Submit comparable sales that justify your offer.
Pre-approval letter – this satisfies seller’s biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
More earnest money – it shows you’re serious and makes the seller feel like the contract will actually close.
Minimize contingencies – from a seller’s standpoint, each contingency is one more reason why the sale won’t go through. They feel the home is “off the market” and they’re in limbo.
Shorten inspection period – your agent can help you set a reasonable date but let the seller know you’re willing to close prior to that if possible.
Write a personal letter to the seller telling them why you want their home – this can be the emotional connection to the seller that makes the difference in you getting the home.
A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.
Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.
For a summary of specific real estate provisions in the “Fiscal Cliff” bill, click here.
Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.
Reasons to buy now:
The house payment with taxes and insurance is probably cheaper than the rent.
Rents will continue to rise making the difference even greater in the future.
Lock-in the principal & interest payment with a fixed-rate mortgage.
30 year mortgage terms are available to most borrowers.
The mortgage interest deduction is intact for the majority of taxpayers.
The capital gain exclusion for principal residences up to $500,000 remains in place.
Prices are going up due to lower inventories and several years of low housing starts.
Looking for an Olathe Home for Sale or want to Find Kansas City Homes to view? We can help!
Do you have an anxious trick-or-treater in your family? Kids look forward to dressing up in costumes and collecting candy, making this one of the most anticipated evenings of the year in Olathe, Kansas! However, it’s important to remember a few important safety tips so that it can be fun, safe and enjoyable for everyone.
For many adults and children, wearing a Halloween costume is one of the biggest highlights of the day’s festivities. Whether your child is going trick–or-treating or just attending a Halloween party, please be sure to help them choose a costume with the following safety tips in mind.
Wear flame resistant costumes, costume accessories and wigs.
Costumes should be brightly colored so they are easily seen. If a dark-colored costume is worn, add reflective tape to the costume and the trick or treat bag to make the child more visible.
Costumes should be hemmed to prevent a child from tripping or falling.
Avoid masks that impair vision in any way. Use non-toxic and hypoallergenic makeup instead.
Many Halloween costumes seem incomplete without props. If a prop is a part of your child’s costume, be sure to follow these safety tips.
Props such as guns, knives or swords can be mistaken for real weapons. Don’t carry fake swords, guns, knives or similar accessories that look authentic. Avoid props with pointed or sharp ends, and instead choose those that are made of a soft material such as rubber with tips and points that are smooth and flexible.
Make sure hats or scarves are on securely to prevent them from falling over the child’s eyes and blocking their vision.
For young children, trick-or-treating on Halloween night is something they look forward to all year. But there are many dangers involved with trick-or-treating if kids and parents aren’t careful. Be sure to remember these safety tips as you accompany your child.
The safest time for trick or treating is during daylight hours.
Trick or treat in familiar neighborhoods.
Carry a flashlight or glow stick to stay visible at night.
Younger children should always be accompanied by an adult or older teenager.
Children, regardless of age, should never go trick-or-treating alone. They should always go in a group and always stay together.
Stay on the sidewalks and out of the streets. Cross only at intersections and designated crosswalks.
Don’t enter any houses unless you know the people.
Follow traffic signals and don’t jaywalk.
Avoid candy that has loose wrappings, is unwrapped, has puncture holes, or is homemade.
If your child is old enough and responsible enough to go trick or treating with friends, plan their route ahead of time. This allows parents to know where their children are and that the route they are taking is safe.
If possible, provide a mobile phone for kids to carry in case of emergency.
Plan a time they should check in or return home.
Also, ALWAYS use extra caution when driving while the ghouls, goblins, superheroes and princesses trick or treat in your neighborhood! Keep Halloween safe and enjoyable for the entire family.
What additional tips do you have for keeping Halloween safe and fun? Have you set certain safety rules in place for your family? Let us know by leaving a comment below.
The question plaguing every tenant who wants a home of their own is whether they should continue to rent or is it the right time to buy?
The combination of good prices and low mortgage rates make it considerably cheaper to own than rent in most markets. Assuming a person is qualified with a down payment and won’t be moving for several years, there may not be a better time to buy a home.
In the example below, the total house payment is $1,281.01 compared to $1,500 to rent the same home. Before you consider any of the financial benefits attached to home ownership, it’s cheaper to own than to rent.
The net cost of housing falls to $764 or just more than half the house payment when you consider the principal reduction due to normal amortization, a modest appreciation and the tax savings along with a reasonable maintenance expense that a tenant would not have to pay.
One of the biggest benefits is the growing equity. As the value goes up, the unpaid balance goes down. A favorable leverage causes their low down payment to grow to $40,609 in a short seven years based on a modest 1% appreciation.
There’s an expression often heard in real estate circles: “Whether you rent or buy, you pay for the house you occupy.” You’re either buying it for yourself or you’re helping the landlord buy it.
Check out a Rent vs. Own to see how your numbers will compare to this example or call me to do it for you. 913-782-8857 is the office number.
Some people believe they shouldn’t refinance more often than once every two years. The determining factors are if you’ll lower your payments and plan to stay in the home long enough to recapture the cost of refinancing. If so, you should consider refinancing.
Interest rates have actually come down significantly in the past 12 months and even more in the past 24 months. According to the Freddie Mac Primary Mortgage Market Survey®, rates on a 30 year fixed rate mortgage are down to 3.6% in August, 2012 compared to 4.27% one year earlier.
Refinancing in the example below would save the homeowner $67.04 per month and they would recapture the cost of refinancing in 3 years and 9 months based on approximately $3,000 of closing costs.
Click Here to make your own projection on a Refinance Analysis calculator.
We know we live in a relatively safe area here in Olathe, Kansas. However, a quick once-over of the items on this list may improve the safety and security of your home. Better yet, it could protect your family and friends. It is important to periodically pay attention to these items because things change over time as we all get busy with life!
Does each exterior door have a deadbolt?
Does the lock on each window work?
Have you added pins or clips to your windows for additional security?
Do you have dowels or broom sticks in the track of windows and sliding glass doors?
Do you have security company labels or signs displayed prominently?
Do you have an alarm system? Is the system monitored?
Do you have a dog that barks when strangers approach the home?
Are emergency numbers posted near the telephones?
Do you have smoke detectors near all sleeping areas?
Do you check the batteries monthly and change them annually?
Do you have two carbon monoxide detectors?
Do you have an escape ladder for upper floors?
Do you have fire extinguishers near exits and in the kitchen?
Do you have an emergency escape plan and is the family familiar with it?
Are any outlets or switches warm to the touch?
Are kitchen ventilation systems working properly?
Is the dryer ventilated to the outside and is the exhaust free of lint?
Is the furnace cleaned and serviced yearly?
Is the space around the hot water heater clear of combustible materials?
Are all electrical and phone cords out of the flow of traffic?
Are rugs and runners slip resistant?
Is your step-stool sturdy and in good condition?
Are stairs clear of objects that could cause a fall?
Are all entrance ways, exits, halls and walks well lighted?
Do bath tubs and showers have non-skid strips or suction mats in them?
“I want to buy, but I want to see if rates will go down a little more.”
Does that statement sound like anyone you know? We heard that a lot this year, but it takes the great purchase price and a low rate for the a great deal! Another famous quote we heard this summer goes like this: “Home prices are still low and there is a lot to choose from out there”. False. If it’s priced right, it’s GONE. We have had quite a few buyers miss out on their “great deal” due to waiting to see what rates are going to do. Even here in Olathe, Kansas, we are seeing homes SELL! Want to know an insider tip on what rates could mean in your home purchase?
The latest Housing Affordability Index from the National Association of REALTORS® shows an interesting trend taking place this year that needs buyers’ attention. Most people know that the mortgage rates are still at incredibly low rates but don’t feel there is much sense of urgency. If this is YOU and you are thinking of buying a home – get ready to listen!
This report shows that mortgage rates have fallen from 4.37% in January to 3.81% for June. However, the report shows that the payment as a percentage of income has gone from 12.1% to 13.9% which simply means that buyers have to spend more of their income on a home. For more information check out loanigo.co.uk
The reason is that the median price of homes nationally has gone from $154,600 in January to $190,100 in June which is a 23% increase. The two major components of housing affordability are the price of the homes and the mortgage rates a buyer must pay. Don’t miss out on an opportunity to find that great deal when you are waiting to see what a mortgage rate is “doing”!
Even if one of those components is going down, the other could have a significant affect as is shown in this year’s trend in housing affordability. In the past few weeks, the effects of which are not show in this report, mortgage rates have been moving up. So if you are on the fence – it’s time to get off that fence and buy!
Moral of the story? Don’t wait and be too late! There are some great Olathe Homes for Sale in our area that we have seen price changes on recently. Sellers still want to sell and if it’s priced right – it tends to go quickly! If you are thinking about re-financing or purchasing a home for investment, give us a call at theChar MacCallum Real Estate Group, 913-782-8857 and we can help! You can always search for homes atwww.findkansascityrealestate.com.