Entertainment can be a big chunk of your monthly expenses. Cut the cost of fun with these five tips.
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Interest rates gain the most attention from mortgage borrowers, but two other expenses, points and mortgage insurance premiums, are significant, as well. And both may come into play as you fill out your tax returns this year.
When you shop for a mortgage loan — which is something every potential home buyer should do — you will be given a lot of information. Loan points are among the items that must be listed on the good-faith estimate of closing costs given to you before you commit to the loan. The good faith estimate also attempts to explain — in simple English — all of the terms and conditions of the mortgage loan you are considering.
Each point is 1 percent of the amount of your mortgage loan. So if you were to borrow $350,000, each point would cost $3,500. Lenders can charge as many points as they want, but at some level, the loan becomes usurious and could represent what is commonly known as "loan sharking."
Points paid to obtain a new mortgage are fully deductible in the year they are paid by the borrower. The Internal Revenue Service originally required that the borrower write a separate check to the lender for these points, but in recent years, the IRS has backed off of this position. If you pay points to obtain a refinance loan, however, in most circumstances those points are not deductible in full for the year they are paid. Rather, the IRS requires that you allocate the points by the number of years of your mortgage loan.
Sometimes during negotiations, especially during slow market times, a buyer may ask a seller to make certain financial concessions, such as the seller paying some or all of the buyer's closing costs. The IRS allows seller-paid points to be deducted by the buyer, and although the seller cannot deduct this expense, the IRS allows seller-paid points to be deducted by the buyer. It can get complicated, so if you were involved in a seller-paid-points transaction, discuss your situation with you own financial advisor or accountant.
For more information, go to the IRS Web site, and print Publication 936, "Home Mortgage Interest Deduction." This information is general in nature. Every taxpayer has different situations. You must consult your financial advisor or accountant on your set of facts.
With tax time upon us, many people are suddenly realizing they don't have the money to pay their taxes. What do you do if you find yourself in this situation?
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Here are some simple tips to help you save money when remodelng your home.
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The freefall in home prices may be over, but the buyers' market persists–there's stiff competition to get a house sold for a good price. In a competitive market sellers need to make every effort for their properties to appear more attractive so they sell for more.
Believe it or not, it's the simple touches–not the big renovations–that often matter the most. HomeGain surveyed 1,000 real estate agents last year to determine which home repairs offer the biggest rewards. After ranking for return on investment, the survey found that cleaning and de-cluttering–including removing personal possessions, polishing woodwork and glass and removing excess furniture–is the most important. Spending $100 to $200 tidying up can increase a home price by $1,500 to $2,000.
Certain renovations can also add value, but they don't have to be major overhauls. One simple suggestion would be to install a new front door. It's an inexpensive exterior improvement. Also consider replacing worn-out siding. New fiber-cement siding will generate the best return on investment, but vinyl siding will work for those with smaller budgets.
Pre-sale home inspections have gained traction in the down real estate market because sellers are trying anything and everything to outdo one another. With a heavy supply of houses on the resale market, a pre-sale inspection can provide extra assurance that there won't be any surprises after signing the sale contract.
Sellers needing to move quickly should remain focused on the basics, neutral paint jobs and replacing or cleaning carpets. That could be the difference between a signed contract and the for-sale sign remaining on the lawn.
