Posts made in February 2015

6 Tax Deductions for Homeowners

Most people who rent take the standard deduction, while most people who own their own home get to itemize their deductions on their tax return— and usually wind up paying less in income taxes as a result!  For one thing, if you own a house, your home deductions will be large enough that you will be able to take other deductions as well (ie. charity, non-reimbursed work-related expenses, medical bills, and more).  For renters, those deductions are typically money left on the table.

Ok, so just what deductions can a homeowner take?

#1  Mortgage interest.  In the early years of a mortgage, most of the money goes to pay interest, and that is usually all deductible.

#2  Points.  When you take out a mortgage, you sometimes pay points, and these are usually deductible.

#3  Property taxes.

#4  Home office.  If you work from home a certain percentage of your housing costs may be deductible.

#5  Home improvements for medical care.  These must usually be doctor prescribed.

#6  Moving expenses.  Not all moving expenses are deductible, so like everything else on this list- check with your tax professional to develop the best money saving strategy.


5 BIG reasons why you should get pre-qualified

Unless you’re paying cash… if you wanna’ buy a home, then you really should get pre-qualified.  (And that’s true no matter what your situation is.)  Here’s 5 BIG reasons why:

#1  If you’re going to need a mortgage to make it all happen, then getting pre-qualified will let you know how much of a mortgage you can qualify for.  And when you coombine that number with the cash you have to work with- you’ll know the upper limit of your purchasing power.

#2  Typically when a seller receives an offer, they want to see a pre-qual letter attached.  If one is nowhere to be found then they will likely hold up responding to your offer until you get that piece of business taken care of.  And if they happen to get two offers at the same time, and one has a pre-qual letter and the other does not—- just guess which one they’re most likely to accept?  (Thinkaboutit… if you were selling a house, would you want to pull it off the market for someone who hadn’t been to see their local mortgage guy yet?)

#3  Getting pre-qualified will save you time.  It may allow you to get into your new home sooner.  Or possibly even make a deal work that otherwise would not!

#4   While getting pre-qualified you may discover that you’re eligible for one or more lending programs you were not aware of.  That just might save you money, allow you to buy a bigger house, or qualify for a tax credit—- or all of the above!

#5  Btw, if you think you won’t qualify… RELAX, you just might get a pleasant surprise.  (And even if you don’t, what you & I learn will allow us to negotiate a better contract deal for you!)

And the cost to get pre-qualified?  Why, there isn’t any.  So call me— I know a guy!


How Paperless Banking Can Get in Your Way

My clients had finally found THE HOUSE, and we’d just finished writing up an offer to purchase.  When I explained to them how the earnest money check was to be made out, they took on that deer in headlights look and told me, “But, we don’t have checks.”  Ah, yes, paperless banking.  And since it was past 5, we spent the next fifteen minutes strategizing how they could come up with the $1000 so that could be converted into a money order.  I got to thinking about it and realized that paperless banking could really be a PITA for people wanting to buy a home.

Here’s a few situations that come quickly to mind, and why you just might want to have a checkbook available to help you accomplish your real estate and financial goals.

#1  Earnest Money Deposit–  when you write an offer to purchase, the buyer is required to tender a good faith deposit.  Yes, it’s true that you can use a money order.  However, if you’re taking out a mortgage, the mortgage company will want a copy of the front and back of the cancelled check.  If you can’t produce one then the amount of cash in the bank needing to be verified by your mortgage company will be affected- and that could leave you in a Catch 22 situation.

#2  If you’re doing contract financing, when you get ready to close, you’ll want the cash to close to come directly out of your bank account.  It will likely help you to satisfy lender requirements down the road when you get ready to refinance.  If you don’t have a bank account, it may be a real challenge to prove that those funds were “your money.”  If you have nothing but a cash card, you may not be able to create a satisfactory paper trail and your mortgage company will require you to come up with the down payment all over again.  Ouch!

#3  If you’re currently renting and are thinking about buying a house in the near future, you may want to pay with a check.  You see, when you get ready to buy, your mortgage company will be obligated to verify your rental payment history for the past twelve months.  (In fact, depending on circumstances, they may not be able to approve your loan without this crucial piece of information.)  Now, if you pay your rent to an individual, your mortgage lender will require copies of cancelled checks for the past twelve months.  (Paid receipts won’t work, and neither will money order receipts.)  If you pay a poperty manangement company, your mortgage lender will accept a form from the property management company.  That usually makes it fairly easy— that is, unless they refuse to cooperate or fill out the form in such a way that it puts you in a bad position.  In that case, you would be relieved to be able to produce cancelled checks.

#4  If you’re buying on contract and are thinking about refinancing anytime in the future, then Paragraph #3 above applies to you as well.

Paperless banking may otherwise fit your life style to a T, however you just may want to have a set of checks set aside just for your real estate and financing needs.



ing cloWhen you get ready to closee if they are to count that money in