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The low interest rates secured by borrowers recently on FHA mortgages may become valuable in a different way in the future. FHA and VA mortgage are assumable at the existing interest rates subject to buyer qualification.
Buyers wanting to assume an existing FHA mortgage must be owner-occupants and meet the current FHA guidelines. Applicants should have a minimum 600 credit score, total debt with house payment to be assumed not to exceed 41% of their monthly gross income and meet other standard income, credit and qualifying requirements.
The benefits are not only assuming a lower interest rate resulting in lower payments but the closing costs on an assumption are much less than originating a new loan. The fact that the mortgage is already into an amortization schedule and that lower interest rate loans amortize faster than higher interest rate loans make it build equity faster than a new mortgage.
When interest rates eventually rise, assumptions will provide an opportunity for buyers to lower their cost of housing significantly while improving their wealth positions.
Home is a place you should feel safe and secure. Sometimes, we take it for granted and unfortunately, we do need to remain vigilant about things we do that could compromise our well-being. Here are a few tips you might want to consider.
Whether you're refinancing your current home or buying a new one, something worth considering is a 15 year loan rather than a 30 year term. The payments will be a little higher but you'll get a lower interest rate and you'll build equity much faster.
Let's look at an example of a $200,000 mortgage with the choice of a 30 year term with a 3.75% rate compared to a 15 year term with a 2.875% rate. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.
Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you'd like a recommendation of a trusted lender.
“I would buy a home and I would finance it with a 30 year mortgage. It’s a terrific deal. “
Warren Buffett, CNBC, February 27, 2012
Let me know if I can help you follow Warren Buffett’s advice.
"Anyone may arrange his affairs so that his taxes shall be as low as possible...for nobody owes any public duty to pay more than the law demands." Judge Learned Hand
This opinion refers to federal income tax but the logic and spirit can easily be applied to any tax including property tax. Most property tax is based on a valuation called an assessment placed on the property by a government taxing authority.
When property values rise due to appreciation, the assessments usually rise. However, when values decline as they have done in many areas in the past few years, the assessments should follow accordingly.
If you don’t believe your assessment reflects market value, put together proof to support your position. Recent comparable sales, similar in size, condition and location are very persuasive. Check to see if the square footage on the assessment is accurate. If the home is not in good condition, take pictures to show that.
As your real estate professional, I can supply the comparables, filing deadlines and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket.
Automatic thermostats can lower your Hawaii monthly utility costs while conveniently regulating your comfort by adjusting temperatures on your cooling systems. These can be particularly effective in homes with zoned systems where you live in one area during the day but sleep in a different zone.
There are programmable thermostats available at home improvement stores that can make the adjustments for specific times during the day and specific days of the week. They'll allow you to override the setting when needed without tampering with the programming. They'll even remind you to change your filter.
An exciting development is the Wi-Fi enabled thermostat that allows adjustments from any Internet connection such as computer or Smartphone. Imagine how convenient it can be to change your temperature from the car before you get home.
Reasonably priced under $100 for most models, it makes it easy to recapture the cost of the thermostat quickly. Most of the thermostats are designed for do-it-yourselfers; however, you can always have a heating and cooling professional install it for you.
A recent U.S. Tax Court ruling clarified the IRS position that the $1.1 million limit for mortgage interest deduction applies per residence and not per taxpayer as some high-priced homeowners were hoping.
A married homeowner filing jointly can have fully deductible interest on a mortgage of up to $1,000,000 of acquisition debt and up to an additional $100,000 of home equity debt. If the married couple files separately, each party is limited to deducting the interest on half of those maximum amounts.
The court case came about when two unmarried individuals who owned a home together as joint tenants felt that they were entitled to deduct the interest on $1.1 million of debt each. IRS did not agree with their understanding and neither did the Tax Court. The Court ruled that the limits apply per residence, not per taxpayer even if a home is co-owned by unmarried taxpayers.
The result for the taxpayers in this case was that their deduction was cut in half resulting in much more income tax due. While this situation only affects a few taxpayers, homeowners in this position should have a discussion with their tax professional.
Have you ever had a service company to your home to repair something and find out that it really wasn't "broken"? It probably conjured up ambivalent feelings of joy that it wasn't something serious and frustration that you had to pay a service call for something so simple.
Before you call the repairman next time, keep these things in mind to see if it is something simple:
Whether it's preparing a home to market or arranging repairs required by the sale, REALTORS® know reputable, reasonable and reliable service contractors. We're here to share our contacts with you to help make home ownership better.
Occasionally, you hear about an important recall on a product you have and you take care of it immediately. However, if you were to miss such a notice, it could put you or your family in jeopardy.
You can subscribe to the U.S. government's service to notify the public when recalls are made on vehicles, tires and child restraints through the National Highway Traffic Safety Administration on their site called SaferCar.gov.
You'll receive a notification by email when there is a new recall based on the type you selected. You can change your selections or unsubscribe at any time by going back to their website in the "Manage Your Notifications" section.
We're committed to helping you be a better homeowner by providing information on items that can protect your home's value, reduce expenses, improve maintenance and increase the enjoyment of your home.
