2015 Programs for Home Buyers

2015 Programs for Home BuyersAlthough the federal government has offered homebuyer programs in the past, for Tax Year 2015, most of the available home buyer programs will be at the local and state levels. State and local agencies, along with lenders and non-profit organizations often offer support for homebuyers in the form of grants or lower-interest loans, or assistance in paying down payments and closing costs.

Types of programs

First-time homebuyer programs try to encourage homeownership in a variety of ways. Often, the goal of a homebuyer program is to either encourage ownership among a certain economic demographic or to increase ownership in a certain target area. Some ways agencies use to increase ownership include:

  • Offering free courses on home buying.
  • Consumer counseling with a goal of homeownership.
  • Favorable lender terms.
  • Local or state tax credits.

There are dozens of programs, even hundreds spread out throughout various cities and states across the U.S. for 2015. Often, these programs have specific requirements of the buyers such as “first time ownership” or an income threshold. Other programs require that potential homeowners attend classes on owning a home, credit, financing a mortgage and other types of education geared toward insuring homeowners fully understand the ramifications of homeownership.

Find programs in your area

To locate programs in your area, or even in nearby locations, first try searching under variations of “home buyer assistance 2015” plus the name of your neighborhood, city or state in your favorite browser. Make certain you include the year so that you find programs available in 2015.

Next, go to HUD.gov. There you can find a database of programs offered by cities, counties and states across the U.S. Type some version of “home buyer program” and your state, county or city in the search box. You will retrieve a list of links to various programs available in given areas. This electronic database is not organized in any specific way, so you will need to research each link, but the types of programs and incentives available may be just what you need to move into the homeownership category.

Mortgage programs

One of the potential boons for homebuyers with limited funds for down payment is a so-called 97% loan. Offered through both Freddie Mac and Fannie Mae, loans to otherwise qualified buyers with as little as three percent down payment would allow more buyers to enter the market. The program is slated to begin December 2014 and last through 2015.

These products seem similar to those considered predatory lending practices just a few years ago. Differences include creditworthiness stipulations and full documentation, the fact that the loans will be fixed-rate and not adjustable, and with terms maxing out at 30 years. Careful control of these areas and other risk-management practices should minimize the number of defaults for these programs while opening up homeownership to first-time buyers.

Where to start

As real estate professionals, we know what is available in our area. If you are a first-time homebuyer or are looking for help getting back into the housing market, let us know when you call us so that we can connect you with the programs that best meet your needs.

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Tax Considerations for Home Sellers

Tax Considerations for Home SellersNow that the wrapping is all of the gifts and the tree is looking a little bedraggled, it’s time to take a look at your end of the year financial picture. Congress recently passed a bill extending a collection of tax breaks. While many of these only apply to special interests such as research and development, some of them apply to homeowners and could help lower your tax bill.

Debt forgiveness

Following the housing crisis of 2007, Congress passed the Mortgage Forgiveness Debt Relief Act. Originally slated to be a temporary measure, Congress has extended the Act three time … the most recent being the extension through the 2014 tax year. Under this rule, certain homeowners that lost their home through foreclosure, or qualified for one of the repayment adjustment plans, do not need to pay income taxes on the forgiven debt.

PMI deductions

Because of the volatile housing market in recent years, some lenders erred on the side of caution by requiring buyers to purchase private mortgage insurance (PMI). At the time, you could not write off the PMI even though your lender required it. But this year, homeowners that qualify and that itemize their deductions can now claim a tax deduction for the cost of paying PMI on both their primary home and on vacation homes.

Interest

Most people already know that they can get a tax break for the interest they pay on their mortgage. What they may not know is that the bigger the loan, the bigger the tax deduction. Just remember that it is not a huge deduction. For the average homeowner making between $40,000 and &75,000 the deduction amounts to just $50 per month or so. When your income is in the $250,000 range, however, the mortgage interest deduction is closer to $500 per month. Check with your tax advisor before taking out a mortgage just for the income tax break on the interest. Most states that have income tax also offer mortgage-holders a break on their taxes.

Property taxes

While property taxes take from your bottom line, the good news is that you can deduct your property taxes from your gross income. This reduces your taxable income and lowers you tax responsibility.

Sales tax deductions

Several states have no income tax. For homeowners in these states—Alaska, Florida, Nevada, South Dakota, Texas and Washington—Congress passed a temporary tax break so that in 2014, taxpayers may deduct paid state and local general sales tax instead of income tax.

Improvements

Homeowners that added improvements such as Energy Star heating and air conditioning units, energy efficient windows, water heaters, insulation or roofs may be able to take advantage of tax credits. Check with your local energy provider for information on what qualifies.

2015 Breaks

  • U.S. Code 121 exempts certain home sellers from paying income taxes on the profit of the sale of their home. Qualifications include: a profit of less than $250,000 for a single filer or less than $500,000 for a joint return and you lived in the house for at least two of the five years prior to the sale.
  • Selling Costs: These include legal fees, escrow fees, title insurance, inspections, real estate agent’s commission and advertising costs.
  • Moving deduction: If your home sale is due to relocation for work, you may be able to deduction transportation costs, travel to and lodging in your new city, and costs for storage.
  • Home improvements to sell your home: While general home improvements are not deductible unless they add to energy efficiency or another special program, you can deduct home improvements made within 90 days of closing on the sale of your home.
  • Points: When you refinance hour home, if you paid points in order to get a lower interest rate you can deduct a proportional share until the loan is paid.

Deductions can be confusing and change from year to year, so be sure to consult with your income tax professional for specific deductions you can take.

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8 Creative Tips on Saving for a Down Payment

8 Creative Tips on Saving for a Down PaymentYou’re finally ready to think about buying a home, but you doubt your ability to save up the necessary down payment. Twenty percent of even a modest home can seem out of reach for first-time homebuyers. Here are some creative tips for eking out some extra to boost your savings:

Find alternatives

Nearly all discretionary funds (the money left in your budget to spend on entertainment, eating out, and other frills) can be redirected. For example:

  • Ditch the cable or satellite: If you pay $50 for cable, you can switch to Amazon Prime or Netflix and have an extra $30 to put into your down payment savings account.
  • Revise gym membership: If you pay for monthly gym membership, you can find an extra $35 to $55 per month by switching to a lower-priced gym or working out in a local park or recreation center instead.
  • Check out the local library: Most libraries offer more than books. They have DVDs, audio books and magazines. You can access Wi-Fi, free classes and even tutoring, book clubs or game nights.
  • Socialize at home instead of going out: host a game or movie night and convince your friends to do the same. You’ll all save money and have fun.

When using this method to save for your down payment, it is important to isolate the savings, so continue to pay the full amount for everything, just pay it into your savings account instead.

Monetize hobbies

This is a tricky idea because sometimes hobbies cost you money instead. However, sometimes you can make gifts instead of buy them, or sell what you make for more than it cost you to make it. When this is the case, consider setting up an online store such as Etsy and earmarking the income for your savings account.

Make a game of it

A way to create the discipline of saving is to make a game of it.

  • Indulgence Matching: One idea is to set up a matching game where whatever you spend on non-essentials (that latte at your favorite coffee shop or wine, beer or cigarettes) requires you to put an equal amount into savings. So if you can’t afford to pay eight dollars for your non-fat half soy espresso drink ($4 for the drink and $4 for savings), you’ll have to find a less costly alternative to enjoy.
  • Savings Challenge: Compete against a spouse, partner or friend to see who can save the most money in a specific timeframe (one month, six months, etc.). Create a savings metric (actual dollar amount, percentage of income, etc.) you can each achieve with disciplined effort. Make the prize be another savings for the winner such as the loser hand-washes the winner’s car.

Side jobs

Consider adding a side job, or doing chores for elderly neighbors and family members. Let them in on your purpose so they can tell their friends that you’re available to rake leaves, wash windows or help with the deep cleaning. If you don’t know anyone that needs help, sign up with TaskRabbit to get connected with people that do.

Coin jar

This is a simple way to add $500 or more a year to your savings. First, you have to choose to use cash for casual spending (coffee, fast food, beer runs, parking). Then, take the change and put it in a jar, only spending the paper money. To keep yourself from dipping into the jar, consider putting a slit in the lid and then gluing the lid onto the jar. You’ll have to break the jar to get the money.

Increase savings by investing

As the money in your savings account grows, transfer it to a secure short-term savings account like a CD or money market account. Even an online savings account will earn more than your big-bank savings account.

Gifts

Let family members know that you’re saving up to buy a home. That way, they’ll know to gift you with either money or something to increase your savings (restaurant certificates so you can save on eating out, gas cards, etc.).

eBay or Craigslist

Most of us have stuff lying around that we don’t use, don’t need and could sell to someone that wants it. While you may wince at selling that original flat screen TV you bought new for pennies on the dollar, letting it collect dust while you watch Netflix on your larger on is just a waste of money. Take those pennies and add them to your savings.

Stay in touch

When you know you’re nearing your savings goals, stay in touch with your real estate professional. We know when a listing drops in price or the seller is offering incentives that can stretch your savings into the amount you need.

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How Oil Prices Affect the Housing Market

How Oil Prices Affect the Housing MarketMost of us rejoice when the prices at the pump go down. To use that means freed-up cash in our personal economy. When we’re consider buying or selling a home, however, the price at the pump can impact our bottom line in ways we don’t realize.

Local economy

When the local economy relies on income from crude oil sales, a drastic reduction in prices can depress the local market. So in places like Houston or the Canadian Province of Alberta, for example, a dip in the price of crude oil could mean fewer people moving into the area so sales to newcomers may slow down. Or, it could mean that folks whose income relies on the oil industry may decide not to move into that bigger home until things stabilize.

Conversely, communities that rely on delivery of good from other areas might see an improvement in their local economy. If your city relies on the trucking or train industries, lower prices on fuel can mean more money freed up to spend on housing. Economies that depend on air travel should also see an uptick since lower fuel prices means lower cost air travel.

Inflation

One of the historic predictors of inflation was a rise or decrease in oil prices. Economists would predict that an increase in fuel costs would depress the consumer aspect of the economy while a decrease would raise consumer spending. In this scenario, a decrease in fuel prices should result in an increase in housing prices since more people would be able to enter the house-buying market. Recent forecasts run by the Federal Reserve Bank of Cleveland question the long-term use of oil as an inflation predictor, but for current decades, the connection is striking. For many housing markets, a decrease in fuel costs should improve the selling market.

Costs of goods

While most consumers know how prices at the pump affect their driving habits and even some of their spending habits, most do not reflect on the way it changes the price of products made from petroleum byproducts. These products include most of the products on the shelves of discount retailers like Wal-Mart and Target. From your plastic milk jugs and water bottles to that flat-screen TV, clothing to carpeting, oil prices affect the products you use in your home every day. When prices go up, the cost of goods sold goes up. As prices of crude oil go down, however, manufacturers and retailers may not be as quick to pass those savings on to consumers. Volatility in the crude oil market means they may have to plan for the prices to go back up in the future so they may delay lowering the price of goods.

An unstable market means that the cost to build new homes can change from day to day. Year over year, the cost to build the same home varies dramatically. According to the National Association of Home Builders, the average share of a home’s sale price that goes to the construction cost jumped from 59 percent in 2009 to 62 percent in 2013. This means that new homes built during higher costs times may not see the same price reductions as older pre-owned homes.

Talk to an expert

To learn how the changes in fuel prices and crude oil affect your local housing market, talk to a real estate professional. We can help you determine if this is the right time for you to buy or sell. We know the best ways to market your home and how to watch the trends for the best home-buying options. Give us a call and we can get started.

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Is this Neighborhood Headed Up? Or Down?

Is this Neighborhood Headed Up? Or Down?When searching for a home on a budget, you’ll often find great deals on the edge of up-and-coming neighborhoods. But how do you tell if a neighborhood is headed up? Or, if it’s on its way down?

Of course, the first consideration might be financial: Are the home prices going up but still affordable? Are the taxes reasonable but enough to support great infrastructure and schools? Are there places to shop for essentials like groceries?

More than the financial considerations, however, you need to be clear about the neighborhood’s livability … that is, does it offer the quality of life you’re looking for? Will you enjoy living there? Can your family form an emotional connection to the neighborhood?

Signs of potential

There are several signs to look for in a neighborhood that point to its becoming the next hot area.

  • Proximity: One of the first things to look for is access to public transportation or easy-to-reach major roads. Young professionals and families want affordability, but need accessibility to jobs, restaurants and entertainment, and medical facilities. Find a trendy neighborhood, and then visit two freeway exits or two transportation stops past it to spot an emerging neighborhood. Neighborhoods adjacent to trendier or more gentrified ones may be next for growth.
  • Convenience: In larger cities and denser metropolitan areas, even a neighborhood that appears subprime may be on the verge of urban renewal. Check with city offices to see if an area has been reclassified as an enterprise zone or if there are special tax breaks for new businesses. If the neighborhood is convenient to shopping, workspace and public transportation it may just be the next hot area.
  • Low crime rates: when an area is on a positive growth trajectory, crime rates will trend downward. When the general safety of an area increases, that is a sign that the neighborhood is attracting young families, first-time buyers and even more single women. Use a website such as Crime Reports to check for criminal activity.
  • Gentrification: One of the first signs that a neighborhood is trending upward is a larger population of artists, musicians and other creative residents. Often, when artists settle in an area, restaurants, galleries, music venues, farmer’s markets and other desirable amenities soon follow. A thriving music or art scene in the Hudson Valley in upstate New York, for example, has attracted a green economic revitalization that mixes art culture with sustainable agriculture, and the thriving music and film scene on the east side of Austin, Texas is a magnet for both young professionals and empty-nesters.
  • Prized architecture: When an older neighborhood has significant historic architecture, there is more likelihood that it will experience a renaissance. As you drive around a neighborhood, look for signs that historic buildings and older houses are under reconstruction or remodeling. Areas with a large number of warehouses that are being repurposed into office, residential or live-work space are great indicators.
  • Retail, restaurants and recreation: When large retailers, restaurants, grocers and even coffee shops invest in an area, that is a prime indicator that the neighborhood is trending up. After all, these companies invest millions of dollars in research before investing in an area. In fact, when the retailers are ones that appeal to more affluent residents (Whole Foods, Starbucks, etc.) studies show that property values nearby can increase dramatically. In the same vein, a popular bar, night spot or consistently crowded restaurant points to a positive trend.

Finding the best neighborhood for you

As your real estate professionals, we can help you find properties in growing areas, or those on the verge of a turnaround. The more we know about what you’re looking for, the better we can help you find it. Call us today to get started finding the perfect neighborhood for your family.

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Attracting Homebuyers in the Winter Months

Attracting Homebuyers in the Winter MonthsAs temperatures drop, snow piles up and people’s minds turn to holiday celebrations, you may think that your house won’t sell. In fact, many people take their homes off the market during this time and wait for spring to relist them. Unfortunately, not everyone has the luxury of waiting. If you need to sell your home now, consider changing up what you’re offering.

Location, location, location

Especially in winter, a home’s location is important. So, if your home is near to public transportation access and major roads likely to be kept plowed or cleared, or conversely, it is near to winter sports and recreation, highlight those facts as selling points. Easy access to the places they want to go is one way to attract winter buyers.

Don’t neglect curb appeal

While a blanket of snow can cover a host of landscaping issues, make sure your home looks well cared for when buyers pull up to the curb. Make sure walks are clean, gutters are clear and the exterior is well lighted. Remove any debris or piles of leaves. You want your home to look well kept no matter the season.

Add festive décor, such as a wreath on the door or greenery on your mantel, but don’t go overboard. To appeal to the widest possible audience, your decorations should be less personal and neutral.

When house hunters visit your home in inclement weather, make sure to have a welcoming atmosphere in your house. Leave warm beverages or homemade cookies for them. Light fireplaces and candles. Make sure your home is warm, light and bright.

Price your home right

While this is true at any time of the year, make sure your price reflects both the value of your home and the winter market expectations. People that need to buy and move during the winter months often have specific budget constraints. Otherwise, they might choose to wait for a more convenience time of year. Consider offering incentives or concessions for home improvements, closing costs, new appliances or other items to sweeten the deal for potential buyers.

Use a professional

During the winter months, selling on your own may not be the best strategy. Professional real estate agents have access to several advertising channels. They more likely know how to highlight your home’s best selling points. Most of all, they have access to buyers such as those moving to your area for a new job, or investors looking to make a purchase before the end of the year. Knowing how to target the right buyer or investor is one of the many advantages a professional can bring to a home sale.

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Is Painting Cabinets a Good Idea?

Is Painting Cabinets a Good Idea?Gone are the days of the sticky painted kitchen cabinet that peels, chips and generally looks cheap. Modern paint finishes means you can rejuvenate or renovate your dated kitchen or bath cabinets with just some elbow grease and your own creativity.

Know your product

Like any paint job, painting cabinets is not hard, but it does require some prep work to get the perfectly finished outcome you want.

Before putting brush to wood, there are some steps you just can’t skip:

  • Cleaning: the most important step in your renovation project, cleaning is the one newbies try to skip most often. Your cabinets have years of fingerprints, cooking grease, grime, smoke and other surface contaminants that can keep your paint from adhering. Your local hardware or paint store can direct you to the best cleaners and degreasers to remove that surface gunk from your cabinets. Very old cabinets, or those exposed to tobacco smoke, may need to be cleaned more than once.
  • Sanding: Another step newcomers are prone to skip is proper sanding. Sanding is the hardest step because you need to break the surface of the existing finish. If your surface has nooks and crannies, you’ll want to get in there with some 100-grit sandpaper.
  • Primer: Priming your cabinet doors can make the difference between a classy new renovation and a slapdash cover-up. To make your surface smooth, you need a so-called “high build” sandable primer. One primer, the Eurolux Primer/Undercoat from Fine Paints of Europe can give your doors and drawer-fronts that smooth, glassy look you want. The primer fills the wood grain, so you may need a coat or two for deeply grained woods such as oak.
  • Paint: The best outcomes for kitchen cabinets come from oil-based paints because they are self-leveling. When your cupboard doors are flat on your sawhorses, an oil-based paint will fill in any ridges or imperfections to leave a smooth finish. Unfortunately, oil-based paints can be messy to work with and have toxic fumes. But, while latex paints may not be perfect, they are getting closer. These days you can find 100% acrylic paints that will create a durable finish, so check with your paint specialist to find the right one for you.
  • Specialty Products: The popularity of DIY products has taken some of the extra steps out of the cabinet refinishing process. Although more expensive than the paint and primer method, Rust-Oleum makes a Cabinet Transformation kit that gives you all the products you need to get that smooth finish. They claim it is easy to use, does not require special skills and lets you skip the stripping, sanding and priming steps (but you still have to clean first).

When renovating your kitchen on a shoestring, you can get impressive results if you take your time, use the right products, and follow instructions closely. When done correctly, freshly painted kitchen cabinets can boost your home’s value and up its appeal to homebuyers.

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New Gadgets for Your Wish List

New Gadgets for Your Wish ListAs you think about gift-giving this season, don’t forget to give your new home a gift of its own. Advancements in technology mean that your home can be smarter, cleaner, cooler or the hottest thing on the market. Here are some ideas for you that are available now or may be coming on the market in the future. Get them on your wish list early.

Here are some ideas for you.

  • Floor plan light switch: This ingenious little device allows you to control the lighting for your entire homes from a single switch. The floor plan light switch designed by TaeWon Hwang for Yanko Design creates a floor plan of your home on a single panel, allowing you to choose from one location which rooms to light up and which to leave in the dark.
  • Transparent television: Have you ever wished that the television didn’t dominate the décor? Well, now you can have a television that doesn’t upstage the house. Designed by Michael Friebe for German television maker Loewe, and using technology that combines LCD and TOLED displays, the Invisio television is virtually clear when not in use, but offers full color viewing when activated.
  • Solar-powered media player: Named the Eclipse by maker Sony, this attractive gadget may block some of the light from your living room window, but that’s because it’s harnessing all that solar power to operate a wireless, environmentally friendly multi-media player. You can stream music, play podcasts, sync to your smartphone and other Bluetooth devices, all without using electricity.
  • Concerned about security? The iTouchless Bio-Matic Fingerprint Door Lock uses your fingerprint to lock and unlock your deadbolt. This system is perfect for single or multiple users with up to 150 unique fingerprints encoded. As a backup system, you can use a passcode too, and during power failures there are backup keys. These door locks are available now for both right-hand and left-hand doors.
  • If getting in shape is on your list, check out this elliptical-machine office desk: Paring an adjustable-height office desk with a semi-recumbent elliptical trainer, you can exercise and pay bills at the same time in your home office. The desk adjusts from 27″ to 47″ just by pressing a button, so you can switch from the trainer to your favorite office chair with ease. Average users could burn up to 4000 calories during the workweek and not skip a beat.
  • Want music to sing to in the shower? Check out the Kohler Moxie showerhead with wireless speaker. It can stream your playlists, news and other audios into your shower via Bluetooth. The water-resistant speaker is easily removable from the showerhead for recharging.

Need a house to be home to your tech gadgets?

We can help you find a home that is perfect for your level of techy-ness. Give us a call and we’ll help you find a home for the New Year.

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