Tax Breaks for Homeowners

March 1st, 2018

 

Top Four Tax Breaks for Homeowners
As tax time rolls around, it’s good to know that some of your largest home-related expenses are often tax-deductible – which is great news! Here are the tax breaks you may be able to take advantage of as a homeowner.
1. MORTGAGE INTEREST
This is usually the most significant tax break you’ll receive, since a big chunk of your monthly mortgage payment goes towards paying off interest for a while after your purchase. All of the interest you pay during the tax year will be deductible.
Own a second home? Your interest for that mortgage is also deductible. If you rent out your property part of the year and live in it the other part, you may be eligible to deduct that interest. Just beware, if you live or vacation there less than 14 days out of the year or less than 10% of the number of days you rent it out, the IRS may consider it a residential rental property, eliminating your ability to take an interest deduction.
2. POINTS
When you buy a home, you have the ability to pay “points” to your mortgage lender in order to lower your interest rate. Typically, a point is 1% of the loan price – so if you bought or built a new home that costs $250,000 and you paid your lender for one origination point, you should be able to deduct the $2,500 in closing costs paid, from your taxes the year of the home purchase. Let’s say your lender asks for 1.5%; this would mean you can deduct $3,750 from your taxes the year of the home purchase. Generally, you can also deduct points on the year’s taxes if you took a home equity line of credit in order to make home improvements.
If you refinanced or took out a home equity loan for something other than home improvements, you might have the ability to deduct points as well. However, it usually must be spread over the life of the loan instead of in a single year’s tax return. While it may not provide as big of a tax break, the savings will still add up over time.
3. REAL ESTATE TAXES
You’ll also have another big deduction to take on your tax return – property taxes. No matter where your home is located, you’ll pay some form of real estate tax. If you have an escrow account(most mortgages do), it means you’ve been paying a portion of your total property tax bill for the year as part of your monthly mortgage payment. But don’t fret, you don’t have to keep up with the dollars and cents in order to take this deduction. Your lender will send you an annual statement, which will break down what you’ve paid in taxes and interest and what portion went to your escrow account to be used towards taxes. You can only deduct the amount your lender paid from your escrow towards taxes.
4. ENERGY EFFICIENCY CREDITS
In addition to saving you money on energy costs, making improvements to the efficiency of your home may qualify you for a tax credit. Tax credits are actually somewhat superior to deductions, since they are dollar-for-dollar savings no matter what tax bracket you fall into.
Upgrading your home’s windows, roofing, appliances and more with energy efficient equipment will generally count toward a tax credit of this nature, but it’s important to check with the IRS to be sure, as things can change from year to year.
WHAT’S NOT TAX-DEDUCTIBLE?
You may be wondering if there are any home expenses that are off-limits when it comes to lowering your tax bill – and the answer is yes. Here are just a few things you unfortunately cannot deduct from your tax return:
  • Insurance premiums, such as comprehensive, fire, or title insurance
  • Principal paid on your mortgage
  • Home utilities, such as water, gas, or electricity
  • HOA dues
Even though not every home expense qualifies you for a deduction, taking advantage of the big-ticket items like interest and property tax deductions can help you save a pretty penny come tax time.

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For more information about this loan program or to discuss which loan option is best for you, give me a call… Bill Duggan, Atlantic Bay Mortgage Group,  757-615-5172 or billduggan@atlanticbay.com
 

In the News for Buyers and Sellers

February 26th, 2018

Feeling and Selling Like Spring!

We realize the calendar doesn’t say April, but as we are writing this, the expected high is 76 degrees and the buyers are out looking as if it is peak season. There were 8,773 homes for sale in January according to the numbers from Real Estate Information Network (our local MLS). This is a year over year decline (January 2018 compared to January 2017) of 6.87% which holds a two and a half year trend of a decline in the number of homes for sale.

As we wrote last month, buyers are having trouble finding what they want and the number of homes for sale is down to under 3.92 months (divide the number of homes for sale by the number of homes that sold that month). In an average market the months of supply is between 5 and 7 months. All the signs are pointing to a spring that should see the average sales price continue to drift upwards and demand to remain strong especially over the next couple of months.

Studies show that Sellers will often wait to list their house until later in the spring and summer. We feel, and the data backs us up, that if you are planning on selling this year you should go ahead and get your home on the market now.

If you are thinking about selling, and/or are starting to do some work to get ready to list your home please let us come and give you advice first. Sellers will often do repairs that don’t bring them as much return as they think, or they would have been better off doing something else. We don’t charge for coming by and giving advice, so give us a call (Lee: 757-726-SOLD (7653) or Harry: 757-434-9084).

By: Lee Cross

 

Looking To Renovate?

January 30th, 2018

Atlantic Bay Mortgage group is excited to announce a VA Renovation Loan.  This VA renovation loan may be the right loan option for qualified veterans looking to make home renovations. This loan allows active duty and retired service members to bundle renovation costs into a new or existing VA home loan. With a VA Renovation Loan, borrowers can make the changes they want, with one loan, one rate, and one monthly payment. The VA Renovation Loan allows borrowers to make home renovations, repairs, or improvements totaling up to $35,000. Your loan amount will be based on the appraised value of your home after improvements have been made. Repairs must start within 30 days of closing and take no more than 3 months to complete. The loan product is not applicable for major renovations, but rather intended for upgrades to your new or existing home.

VA RENOVATION LOAN HIGHLIGHTS:
* Minimum credit score: 640 (purchase) 660 (refinance)
* No monthly mortgage insurance needed
* No down payment required
* Renovations up to $35,000 with a $5,000 minimum repair amount
* Must be primary, owner-occupied residence
* For purchase or refinance (no streamline)
* Renovation costs are financed into your VA loan
* Borrower must use a licensed general contractor
For more information about this loan program or to discuss which loan option is best for you, give me a call… Bill Duggan, Atlantic Bay Mortgage Group,  757-615-5172 or billduggan@atlanticbay.com
 

In the News for Buyers and Sellers

January 29th, 2018
It’s Cold Outside, but Sales are Warm!
The end of the year numbers are in for 2017, and they continue to show a positive trend for sellers.  The number that sellers care the most about, the median sale price across Hampton Roads, was $230,000 for 2017 which is up roughly 2.2% from 2016, according to numbers from the Real Estate Information Network (our local MLS).  More exciting for sellers is that the number of homes for sale has declined for 29 straight months when comparing year over year numbers (December 2017 to December 2016).  December 2017’s supply of homes for sale was down to 3.90 months.  An average market is between 5 and 7 months, and average days on market for homes across Hampton Roads dropped to 87 days in 2017.  The average days on market was 108 in 2016.
While we don’t have a crystal ball, 2018 is looking like a year in which the average sale price for houses should continue to drift upwards.  Demand is very strong in the $150,000 to $300,000 price range.  In fact, we have several buyers looking that can’t find what they want.  If you are thinking about selling give us a call (Lee: 757-726-SOLD (7653) or Harry: 757-434-9084).
by: Lee Cross
 

6 MISTAKES TO AVOID WHEN GETTING A MORTGAGE

December 29th, 2017
 

 

 

 

 

A new year brings new goals!  If home-ownership is one of your aspirations in 2018, below are the top six mistakes you should avoid when getting a mortgage.

MISTAKE 1: FAILING TO CHECK YOUR CREDIT

There are so many things that that rank high in terms of importance, but realistically, having good credit is a big factor to obtaining a mortgage. Start by first educating carefully reviewing your credit report – you can get one free from each credit reporting agency annually. If your credit needs work, it’s best to take some time to whip it into shape so you’ll qualify for the lowest interest rate – which can save you a lot of dough over the life of your mortgage loan!

MISTAKE 2: NOT PLAYING THE COMPARISON GAME

When it comes to obtaining a mortgage, not all lenders are created equal. Each lender has different mortgage rates, so shopping around for the best deal can save you a big chunk of change. Also, you’ll have several different loan types to choose from – these vary widely and have a huge impact on the size of your monthly mortgage payment. I’m happy to discuss the various options that will work best for you.

MISTAKE 3: NOT LINING UP FINANCING FIRST

It’s so easy to find yourself casually browsing Zillow and falling in love with the “perfect” home. One of the biggest disservices you can do to yourself is to become attached to a home, only to realize during the mortgage application process that you can’t afford it. One of the smartest things you can do as a new homebuyer is to meet with mortgage lender first to see how much you can afford. Taking this step as a buyer paints a detailed picture of your finances, allowing your lender to tell you the specific amount you’re approved for and giving the seller peace of mind that you’ll be able to move forward with an offer.

MISTAKE 4: NOT SAVING ENOUGH FOR A DOWN PAYMENT

Perhaps your lender said you qualify for a $200,000 home, so you begin looking at homes right around that amount – but don’t forget to consider the down payment that you’ll need to have at closing. At a minimum, for a $200,000 FHA loan (with 3.5% down), you would need to bring $7,000 plus additional closing costs and fees in cash to the table in order to close on the home. If you don’t have that amount of money stashed away, take some time to build up your savings before you start your home search.  One way to plan savings for a down payment is to automatically deposit into your savings account- start by putting 20% of your paycheck into savings for a few months.

MISTAKE 5: NOT PREPARING FOR ADDITIONAL FEES

In addition to the cash you’ll need for a down payment, there are other fees you’ll be responsible for in order to close on your new home. Some of these fees may be negotiable, but many are fixed. Be prepared to shell out cash for the appraisal, title, insurance, up-front real estate taxes, lender fees, and more. Several days before closing, you’ll receive a closing disclosure, which breaks down the terms of your loan, all final costs expected at closing and the details of who pays and who receives money at closing.

MISTAKE 6: MAKING BIG PURCHASES BEFORE CLOSING DAY

You’re probably so excited about moving and planning how you’re going to decorate your new home – but before you go on a spending spree, put that credit card away!  Your finances will be thoroughly analyzed during the underwriting process, and your lender will expect your financial situation to remain largely the same until closing day. As hard as it may be, avoid spending money on things outside of your necessities (groceries, gas, utilities, etc.) until you’ve closed on your new home.

If you can avoid these big mistakes when buying a home, the mortgage process should be smooth sailing! Be sure to contact me to discuss your mortgage options-

Bill Duggan, Sr. Mortgage Banker, Atlantic Bay Mortgage Group  757-615-5172 email: billduggan@atlanticbay.com

 

In the News for Buyers and Sellers

December 29th, 2017
The Weather Outside is Frightful but the Real Estate Market is….?
The weather outside is frightful, but the real estate market is steadily moving closer to delightful!  In fact, compared to the market we were in ten years ago, we are way beyond delightful and approaching wonderful.
Based on numbers from our local MLS system (Real Estate Information Network), last month was the 39th straight month that prices have increased when you compare year over year numbers (November 2017 to November 2016).  Plus, the number of homes for sale across Hampton Roads continues to decrease.  This decrease holds true in both year over year numbers and comparing month to month (October 2017 to November 2017).
If you are a long time reader, you know that studies show that the ideal time to list your house is early spring.  But, both in our office and from conversations with fellow agents, buyers are having trouble finding a house that they want. Thus, a good argument can be made that if you are planning on selling your house this year, you should consider listing your home now.  This decision really should be made on a case by case basis, so give us a call (Lee: 757-726-SOLD (7653) or Harry: 757-434-9084) or just reply back to this email and we will be happy to set up a time to talk in more detail about your personal situation.
We appreciate your support over the past year and are thankful for you.  We  hope you had a great Christmas and lastly, make sure you check out our Facebook page for the Christmas light contest!
Happy New Year,
Lee and Harry Cross
 

In the News for Buyers and Sellers

November 27th, 2017
There Are Not Many Black Friday Deals
Last month we wrote how things normally slow down in the fall and while that is still true, the last week around the office has felt more like the real estate market has just pumped the breaks.  We aren’t anywhere near a complete stop.  We have been averaging a ratified contract every other day over the last ten days, which would be a lot, even for spring time.
Based on numbers from our local MLS system (Real Estate Information Network) the number of homes for sale across Hampton Roads continues to go down.  In October there were 10,172 homes for sale which is 287 fewer homes than September and 679 fewer homes than August.  In just two months, the number of homes for sale has gone down over 6% across Hampton Roads.
Please keep in mind that as a general rule, no one wants to move their Christmas Tree (speaking of Christmas Tree, make sure you check out our contest below).  There are almost always more homes available for sale in the spring, but at this point our inventory of homes for sale is down below normal numbers and buyers are having trouble finding homes in certain price ranges.
Seller’s sometime wait until Spring and Summer to list, but with the inventory level low, if you know you are going to move, we should go ahead and talk through the pros and cons of listing now.  Give us a call (Lee: 757-726-SOLD (7653) or Harry: 757-434-9084) or just reply back to this email and we are happy to set up a time to talk in more detail about your personal situation.
 

In the News for Buyers and Sellers

October 31st, 2017

Is it Fall?

As I (Lee) was driving my girls to school Friday morning, my car was telling me it was 38 outside and the weather forecast was calling for it to be in the high sixty’s today. I have heard several people wishing the cool weather would arrive and stay around for a while and I can’t say I blame them. Our local real estate market normally cools down some in the fall as well, but as you can see below, seller’s don’t have to break out their winter jackets quite yet.

Based on numbers from our local MLS system (Real Estate Information Network) the number of homes for sale across Hampton Roads continues to go down. In September 2017 there were 10,459 properties listed for sale, which is 510 fewer homes than in September 2016. Plus, it is a reduction of 392 homes from the month before (August 2017).

To put the number of properties for sale in better context, you need to look at the months’ supply of inventory. You get that number by dividing the total number of homes for sale by the number of homes that sold month. Said another way, if the demand from buyer’s stayed the same and there weren’t any other houses listed, how many months would it take to sell all of the homes that are currently listed? The month’s supply in September 2017 was 4.81 months. Between five and seven months’ supply is considered an average market, and, the lower the number, the more bargaining power seller’s traditionally have. Last year (September 2016) the months’ supply was 7.85 and locally it was over 10 during the bottom of the last recession.

Both the statistics and our experience show home prices creeping up. The median sales price was up 3.84% in year over year numbers, while the median sales price for the third quarter of 2017 was up 2.13% over the third quarter of 2016.

Sellers sometime wait until Spring and Summer to list, but with the inventory level low, if you know you are going to move, we should go ahead and talk through the pros and cons of listing now. Give us a call (Lee: 757-726-SOLD (7653) or Harry: 757-434-9084) or just reply back to this email and we are happy to set up a time to talk in more detail about your personal situation. We also greatly appreciate any referrals you can send our way and promise to take great care of them.

by: Lee Cross

 

Community Event

April 6th, 2017

 

Featured Property

April 6th, 2017

208 Widgeon Ct, Suffolk – $209,900

Updated kitchen with tile, fenced-in backyard, and only 21 miles to Norfolk or 23 to Newport News. Two first floor bedrooms (including the master), two first floor full bathrooms and another full bathroom along with two more large bedrooms upstairs. Plus the roof heating/air systems, windows and appliances are only a couple of years old.

Listed by: Lee Cross 757-726-7653

 

 

 

 

 

 

 

 

 

 

 


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