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Verify with Your Lender

November 25, 2014

iStock_000030685604-200.jpgIf you have a mortgage with an escrow account to pay your property taxes and insurance, you expect the company servicing your loan to pay this year’s taxes this year so that you can deduct them on your 2014 income tax return. After all, your monthly payment includes 1/12 the annual amount so there will be money available for them to be paid on time.

IRS requires that expenses must actually be paid in the year that a deduction is to be taken.

The predicament occurs when you’ve made your payments but the mortgage company didn’t pay the taxing authority in the tax year they were due. If they paid your 2014 taxes in January of 2015, they wouldn’t be deductible for you until you file your 2015 income tax return.

Verify with your lender after you make the December payment that they did indeed pay your property taxes. The question for your lender’s customer service is: “Have you or will you pay the 2014 property taxes this year so I’m eligible to deduct them on my 2014 income tax return?”

Black Friday 2014 is almost here…

November 20, 2014

Based on data from previous Black Fridays, most Black Friday sales will start early on Thanksgiving and extend throughout the Black Friday weekend and into Cyber Monday 2014.

Black Friday 2014 Prediction:

For Black Friday 2014, opening hours are expected to continue to creep more and more into Thanksgiving Day. It is anticipated that more stores following Walmart’s Black Friday strategy from last year by holding multiple sales events to keep shoppers busy throughout Thanksgiving and into Black Friday.

Check out the latest Black Friday Ads by visiting: https://blackfriday.com/black-friday-2014

Consider an Adjustable Rate

November 18, 2014

ARM vs FRM.pngWith fixed rate mortgages as low as they are, most purchasers or owners wanting to refinance might not even consider an adjustable rate loan. The determining factor should be how long the person plans to be in the home and which mortgage will provide the cheapest cost of housing.

For instance, if you compare a $300,000, 30 year term mortgage with a 4.125% rate on the fixed and a 3.25% on the 5/1 adjustable, the breakeven point would be almost seven years assuming the rates adjusted the maximum that they could in each year.

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Therefore, if a person is going to stay in the house less than 7 years, the ARM would provide the cheapest cost of housing. This example shows that at the end of five years, the ARM would generate almost $13,000 savings over the fixed-rate.

On the other hand, this could be a good time for homeowners with an existing adjustable rate mortgage to consider refinancing into a fixed-rate mortgage. The longer that they intend to stay in their home, the more advantageous it might be for them to convert their mortgage to lock-in their payment and fix their housing costs.

A trusted mortgage professional can analyze the alternatives to provide you with the information necessary to make a good decision. You can try the Adjustable Rate Comparison with your own numbers to see the effect.

Sweet Potato-Pecan Casserole…

November 14, 2014

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Ingredients
Cooking spray
3 1/2 pounds sweet potatoes (about 5 medium), peeled and cut into 1-inch chunks
1/3 cup honey
1 large egg
1 teaspoon ground cinnamon
1/4 teaspoon ground nutmeg
1/8 teaspoon ground ginger
Kosher salt
1 tablespoon packed dark brown sugar
1/3 cup finely chopped pecans
Directions
Preheat the oven to 350 degrees F. Mist an 8-inch square baking dish with cooking spray.

Bring a few inches of water to a boil in a pot with a large steamer basket in place. Put the sweet potatoes in the basket, cover and steam until tender, 20 to 25 minutes. Transfer the potatoes to a bowl and let cool slightly. Add the honey, egg, 1/2 teaspoon cinnamon, the nutmeg, ginger and 1/2 teaspoon salt; whip with an electric mixer until smooth. Spread the sweet potato mixture in the prepared baking dish.

Mix the brown sugar, pecans and the remaining 1/2 teaspoon cinnamon in a bowl; sprinkle over the potatoes. Bake until hot and beginning to brown around the edges, 40 to 45 minutes.

Per serving: Calories 160; Fat 4 g (Saturated 1 g); Cholesterol 25 mg; Sodium 180 mg; Carbohydrate 31 g; Fiber 3 g; Protein 3 g

Photograph by Andrew Mccaul

Recipe courtesy Ellie Krieger for Food Network Magazine

Read more at: http://www.foodnetwork.com/recipes/ellie-krieger/sweet-potato-pecan-casserole-recipe.html?oc=linkback

Realize Tax Savings Sooner

November 12, 2014

Increase Allowances.pngA homeowner’s tax saving benefit is generally realized when they file their federal income tax return after the money has been spent for the interest and property taxes. Some people look forward to the refund as a means of forced savings but some people need to realize the savings during the year.

It is possible to adjust the deductions being withheld from the homeowner’s salary so they realize the benefit of the savings prior to filing their tax returns in the form of more money in their pay checks. Employees would talk to their employers about increasing their deductions stated on their W-4 form.

By increasing the exemptions or deductions, less is taken out of the check and the employee will receive more in each pay check. If a person over-estimates their exemptions and therefore, underpays their income tax, they might incur interest and would have additional tax to pay when they filed their tax return.

Buyers considering this strategy should seek tax advice and discuss it with their human relations department at work. Additional information is available on the Internal Revenue Service website about Completing Form w-4 and Worksheets.

Talking Points with an Agent

November 4, 2014

Speech bubble-250.jpgA list of talking points can be very valuable to guide the conversation with an agent that will lead to a decision to have him or her represent you in the sale of your home. If you haven’t been through the process before or it has been a while, the answers to these questions can reveal things about the experience and where-with-all of your candidate.

Even if you only intend to interview one agent and maybe they are a trusted friend, it is appropriate to understand how different issues will be handled. Professionals should not feel challenged to discuss these important concerns.

1. Tell me about your experience and training.

2. Do you work real estate full-time?

3. Are you a REALTOR® and a member of MLS?

4. What is the average price of the homes you have sold and how many did you sell last year?

5. Which neighborhoods do you primarily work?

6. How many homes have you sold in my neighborhood?

7. What is your list price to sales price ratio?

8. How many buyers and sellers are you currently working with?

9. Tell me about the positives and negatives of my home?

10. Describe your marketing plan for my home and if you will use outside professionals.

11. Specifically address Internet exposure, open houses and showings.

12. Describe how you’ll keep me informed all along the way.

13. Will I work directly with you or with team members?

14. Can you provide me with three recent references?

You might have noticed that price was not in the list of talking points. The seller sets the price but the market and the buyer determine the value. The agent can advise you about the proper range that will insure activity and ultimately affect your final proceeds. The advice should be based on facts that are available to all agents as well as the prospective buyers and the appraisers.

The decision to list a home with a particular agent and company should never be based on the listing price suggested by the prospective agent.

Relax…There’s an Alternative

November 2, 2014

for rent-250.pngIs the stock market keeping you up at night? Are you consuming more antacids than ever before? Are the ups and downs causing more stress than you want or need? There is a simple alternative in rental real estate.

Single family homes for rental purposes offer an excellent rate of return in an investment that most people understand better than other investments. The concept is simple: stay with predominantly owner-occupied homes in a slightly below average price range. In most areas, tenants are easy to find and they’ll usually stay two to three years or more.

For the person who doesn’t want to be bothered with calls from tenants, professional management is available and commonly won’t dramatically affect the rate of return. Managers can achieve economies of scale that individuals can’t due to managing multiple properties and having good connections with the best workmen.

Unlike most commercial property, single family homes are much more liquid because of the higher demand for residential property. Single family homes offer the investor the opportunity to borrow high loan-to-value mortgages at fixed interest rates, for long periods of time on appreciating assets with tax advantages while providing the investor a higher than normal level of control.

Spend an hour investigating the benefits and you might sleep better at night, eat less antacids and find yourself more mellow than you’ve been in years.

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