Blog

Before You Leave Town

Before You Leave Town... - 7/23/2018
 

Along with all the planning of what you're going to do and where you're going to stay, consider this checklist to make you feel more comfortable while you're away from home.

  • Ask a trusted friend to pick up your mail, newspaper and keep yard picked up to avoid an appearance of not being at home.
  • Stop your mail (USPS Hold Mail Service) and your newspaper.29938746-250.jpg
  • Don't post about your trip on Facebook and other social media until you return; some burglars look for this type of announcement to schedule their activities.
  • Do notify police or neighborhood watch - especially if you're going to be gone for more than just a few days. Let your monitoring service know when you'll be gone and if someone will be checking on your home for you.
  • Light timers make it look like someone is home. Set multiple timers for various times to better simulate someone at home. There are plug-in modules for lights and appliances that would allow you to control them from your phone while your out of town.
  • Do unplug certain appliances - TV, computers, toaster ovens that use electricity even when they're off and to protect them from power surges.
  • Don't hide a key; burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you're gone while adding a level of serenity to your trip.

    Comments

    1. No comments. Be the first to comment.

    Owning Makes More Sense

    Owning Makes More Sense - 7/16/2018
     

    When comparing the cost of owning a home to renting, there is more than the difference in house payment against the rent currently being paid. It very well could be lower than the rent but when you consider the other benefits, owning could be much lower than renting.31066694-250.jpg

    Each mortgage payment has an amount that is used to pay down the principal which is building equity for the owner. Similarly, the home appreciates over time which also benefits the owner by increasing their equity.

    There are additional expenses for owning a home that renters don't have like repairs and possibly, a homeowner's association. To get a clear picture, look at the following example of a $300,000 home with a 3.5% down payment on a 4.5%, 30-year mortgage.

    net cost of housing.jpg

    The total payment is $2,264 including principal, interest, property taxes, property and mortgage insurance. However, when you consider the monthly principal reduction, appreciation, maintenance and HOA, the net cost of housing is $1,218. It costs $1,282 more to rent at $2,500 a month than to own. In a year's time, it would cost $15,000 more to rent than to own which is more than the down payment and closing costs to buy the home.

    With normal amortization and 3% annual appreciation, the $10,500 down payment in this example turns into $112,00 in equity in seven years. Check out your own numbers using the Rent vs. Own or call me at (941) 366-7673. Owning a home makes sense and can be one of the best investments a person will ever make.

      Comments

      1. No comments. Be the first to comment.

      A Word Homeowners Need to Understand

      A Word Homeowners Need to Understand - 7/9/2018
       

      Acquisition Debt is the amount of money borrowed used to buy, build or improve a principal residence or second home. Under the new tax law, mortgages taken after 12/14/17 are limited to a combination of $750,000 on the first and second homes. The mortgage interest on this debt is tax deductible when itemizing deductions.12844696-250.jpg

      It is a dynamic number that is reduced with each payment as the unpaid balance goes down. The only way to increase acquisition debt is to borrow money to make capital improvements.

      Prior to the new law, homeowners could additionally borrow up to $100,000 of home equity debt for any purpose and deduct the interest when itemizing deductions. Mortgage interest on home equity debt is no longer deductible unless it is for capital improvements.

      Acquisition debt cannot be increased by refinancing. Some confusion occurs because mortgage lenders are concerned in making home loans that will be repaid according the terms of the note and using the home as collateral. That does not include making a tax-deductible mortgage.

      Another thing that adds confusion to the issue is that the lenders will annually report how much interest was paid in a year but only the amount that is attributable to acquisition debt is deductible.

      Even if the interest on the cash-out refinance is not deductible, it may be advantageous to pay off higher interest debt such as credit card debt and replacing it with lower mortgage debt.

      It is the responsibility of the taxpayer to know what part of their mortgage debt is deductible. The challenge becomes more difficult after a cash-out refinance. Homeowners should keep records of all financing and capital improvements and consult with their tax professional.

        Comments

        1. No comments. Be the first to comment.

        Unexpected Expenses

        Unexpected Expenses - 7/2/2018
         

        It's common for Sellers to consider offering a home warranty or protection plan to make their home more marketable. A growing number of homeowners are now purchasing this type of protection for themselves to limit the unexpected expenses of repairs and replacements.34399062-250.png

        A home protection plan is a renewable service contract that covers the repair or replacement of many of the components in a home. Some homeowners especially like the convenience that it organizes a qualified service provider as well as the cost of the repairs or replacements.

        There are a variety of companies that offer home warranties and the coverage may differ but the majority of things will include heating, air conditioning, most built-in and some free-standing appliances, as well as other specific items. Additional specific coverage may be available for other items like pool and spa equipment.

        Some investors are even placing this coverage on their rental properties to limit the amount of repairs during the year. It is a viable way to manage the financial risk and the stress dealing with unexpected expenses.

        Call me at (941) 366-7673 if you'd like a recommendation of available programs.

          Comments

          1. No comments. Be the first to comment.

          Don't Let a Killer In

          Don't Let a Killer In - 6/25/2018
           

          Carbon monoxide is a silent killer you don't want in your home but because it is colorless and odorless; you may not even be aware the deadly condition exists. The Center for Disease Control says more than 400 people in the U.S. die annually from carbon monoxide poisoning and over 10,000 require medical treatment each year.16485740-250.jpg

          Unmaintained furnaces, water heaters and appliances can produce the deadly gas. In addition, other sources could be leaking chimneys, unvented kerosene or gas space heaters or exhaust from cars or trucks operating in an attached garage.

          The Environmental Protection Agency suggests the following to reduce exposure in the home:

          • Keep gas appliances properly adjusted
          • Install and use an exhaust fan vented to the outdoors over gas stoves
          • Open flues when fireplaces are in use
          • Do not idle car inside garage
          • Have a trained professional inspect, clean and tune-up central heating systems annually

          Headaches, nausea, vomiting, dizziness and feelings of weakness or fatigue are a few of the most common symptoms. Lower levels of exposure to carbon monoxide may be mistaken for the flu.

          Carbon monoxide alarms should be on every level of a home and especially, in sleeping areas. The alarms can be purchased for as little as $25 and plugged into the wall like a night light.

          Regardless of the government requirements, no one would want to put their family, guests or themselves at risk for something so deadly.

            Comments

            1. No comments. Be the first to comment.

            Waiting Will Cost More

            Waiting Will Cost More - 6/18/2018
             

            An economist responded when asked how interest rates would change: “They may fall some and then, rise and after that, they’ll fluctuate.”43276292-250.jpg

            Just because interest rates have been low for ten years doesn’t mean they are supposed to be low. The Federal Reserve has raised interest rates twice this year and are expected to go up twice more plus three times next year.  Mortgage rates have risen from 3.95% to 4.62% since the first of January.

            Increased rates directly affect the payments on homes but so does the price. With inventory levels remaining low, the prices will continue to go up. When interest rates and prices rise at the same time, it costs buyers a lot more.

            If the mortgage rates go up by one percent and prices increase by five percent in the next year, the payment on a $250,000 home could go up by $200 a month. In a seven-year period, the buyer would pay $18,000 more for the home.

            People planning to buy a home, need to investigate the possibilities of accelerating their timetable to take advantage of lower rates and prices. Use the Cost of Waiting to Buy  calculator to see how much more it could cost you to wait.  Call (941) 366-7673 if you have questions about what can be done now.

            Cost of Waiting 061818.jpg

              Comments

              1. No comments. Be the first to comment.

              The Tax Difference in Second Homes

              The Tax Difference in Second Homes - 6/11/2018
               

              A principal residence and a second home have some similar benefits, but they have some key tax differences. A principal residence is the primary home where you live and a second home is used mainly for personal enjoyment while limiting possible rental activity to a maximum of 14 days per year.10213246-250.jpg

              Under the 2017 Tax Cuts and Jobs Act, the Mortgage Interest Deduction allows a taxpayer to deduct the qualified interest on a principal residence and a second home. The interest is reduced from a maximum of $1,000,000 combined acquisition debt to a maximum of $750,000 combined acquisition debt for both the first and second homes.

              Property taxes on first and second homes are deductible but limited to a combined maximum of $10,000 together with other state and local taxes paid.

              The gain on a principal residence retained the exclusion of $250,000/$500,000 for single/married taxpayers meeting the requirements. Unchanged by the new tax law, the gains on second homes must be recognized when sold or disposed.

              Tax-deferred exchanges are not allowed for property used for personal purposes such as second homes. Gain on second homes owned for more than 12 months is taxed at the lower long-term capital gains rate.

              This article is intended for informational purposes. Advice from a tax professional for your specific situation should be obtained prior to making a decision that can have tax implications.

                Comments

                1. No comments. Be the first to comment.

                When Neighbors Don't Seem to Care

                When Neighbors Don't Seem to Care - 6/4/2018
                 

                A home that isn't being maintained like others in the neighborhood can negatively affect your visual sense of appeal and in some extreme cases, even affect property values. It might be an overgrown yard, a fence in need of repair, excessive noise, unruly pets, paint peeling on the home or even a car or boat parked in front of the home that hasn't moved in weeks.2676519-250.jpg

                Most people want to be good neighbors and may be willing to correct an issue once it is brought to their attention. A practical but possibly, confrontational solution is to contact the responsible person and describe your perception of the issue. However, they may not always agree with the same urgency and it might be necessary to seek other remedies.

                An owner-occupant may be more sympathetic to the neighbors and willing to correct the issue. If you think the home might be a rental property, check with the county tax records to identify the owner. They may be unaware of the situation and welcome the notification to protect their investment.

                Another alternative might be to notify the homeowner's association, if there is one. One of the benefits of a HOA is to enforce community appearance standards as set in the covenants or bylaws that specify how properties must be maintained. This could be a less personal method of reaching a beneficial outcome.

                If the source of the problem is a code or housing violation, the city may be the ultimate authority. Most cities have a separate code and neighborhood services division and some cities have 311 for non-emergency assistance.

                  Comments

                  1. No comments. Be the first to comment.

                  Flag Protocol

                  Flag Protocol - 5/28/2018
                   

                  The American flag is obviously a symbol of our country but it has come to remind us of every man and woman who has fought for the freedom that we enjoy. The emotions that are stirred by images of our flag can run from happiness to sadness to trust and everything in between.flag2.png

                  Most of us learned American flag etiquette or the Flag Code when we were young but occasionally, it is a good idea to review the guidelines so that the flag is treated with the respect it deserves.

                  • The U.S. flag should not be flown at night unless a light is shown on it.
                  • The U.S. flag should not be flown upside down except as a distress signal.
                  • The flag should never touch the ground.
                  • A U.S. flag should be displayed at the peak of the staff unless the flag is at half-staff in mourning.
                  • When displaying multiple flags of a state, community or society on the same flagpole, the U.S. flag must always be on top.
                  • When flown with flags of states, communities, or societies on separate flag poles which are of the same height and in a straight line, the flag of the United States is always placed in the position of honor - to its own right. No flag should be higher or larger than the U.S. flag. The U.S. flag is always the first flag raised and the last to be lowered.
                  • When the U.S. flag is flown with those of other countries, each flag should be the same size and must be on separate poles of the same height. Ideally, the flags should be raised and lowered simultaneously.

                  More information on flag etiquette can be found at the Veterans of Foreign Wars website.

                    Comments

                    1. No comments. Be the first to comment.