Tag Archives: Real Estate Tips

Tax Deductions For Homeowners

When you own your home, you are going to be eligible for some tax deductions. Many of the deductions available will relate to the mortgage you have, but others relate to the use of the property and the reason for buying. It is important that you know what tax deductions you can get so that you can take advantage of them. Luxury properties found in http://www.naplesluxurygolfrealestate.com also has different rates.

Mortgage Interest Deductions

When you take a mortgage to buy a home, you can deduct all of the interest payments. There are some restrictions to these deductions with the first being that the mortgage cannot exceed $1 million. You will also only be able to deduct the interest on the mortgage if you are married and have filed jointly. If you are married, but filing your tax separately then the amount will be limited to $500,000.

The mortgage will also need to be secured by a first or second home. Additionally, if you have paid in full for the property, then you will not be able to take out an equity loan later using the house as collateral and deducting interest from that loan. There are some additional regulations to these deductions that you will be able to find out about on the IRS website.

Interest On Home Improvement Loan

If you have taken out a loan to complete home improvements, then you will be able to deduct the interest from your taxes. It is important that the loan you take out is being used for improvements only and not for repairs to the house as loans for repairs cannot have their interest deducted. To qualify for this deduction the loan needs to be taken out to add capital improvements to the property, adapt it for new users or extend the life of the property.

Property Taxes

Property taxes that you pay can be fully deducted from your income tax when using Form 1040. However, if you have decided to hold your money in escrow to pay the property taxes, then you will not be able to claim the deduction until the money has been taken out of escrow. Additionally, if you have received a partial refund of the property taxes, then the amount that you can deduct will be reduced.

Home Office Deductions

If you are using your home as a home office, then there are certain deductions that you can make. In order to qualify for this deduction part of your home will need to be exclusively and regularly used as your place of business or part of your home needs to be regularly used for storing items that are used in your business such as stock. If your home is being used in this way, you will be able to deduct costs such as insurance, repairs, and depreciation from your taxes.

The Moving Costs

Deducting moving costs are only possible if you have had to move for a job and you meet certain requirements. The new job needs to be at least 50 miles from your previous residence and where your last job was. You will also need to be working full-time for at least 39 weeks of the year before your move. You will also not be able to deduct all of the moving costs, but costs you can deduct will include lodging, transportation, and storage.

There are some tax deductions that you can make as a homeowner, and it is important that you take advantage of this. Most of the deductions will relate to the interest of loans made to purchase or improve your home.

Comments Off on Tax Deductions For Homeowners

Filed under Real Estate

The Biggest Mistakes First Time Home Buyers Make

Are you thinking about buying your first home? Well, the entire process might be exciting and scary at the same time. You are simply looking for a home at the right price that meets all your preferences, and no matter how long it takes, you might be lucky enough to find one. However, when you are doing it, you should beware of the following mistakes.

1. No Idea Of Your Budget
Before buying a home, you need to create a budget. Here you should list your expenses besides rent that you have to deal with every month. Now, with that figure in mind, you can look at homes within the right price range without overstretching yourself to meet your monthly expenses. If you find that most of the homes you are looking it are not within your budget, you can work towards reducing your monthly expenses or look for houses at a lower budget.

2. Not Doing Mortgage Qualification
The amount you can afford for your new home and what the bank might be willing to lend you can be varying considerably. For instance, if you have an unstable income or very poor credit rating, the bank might be unwilling to lend you a lot of money. Therefore, before placing an offer on any home, you need to get a pre-approval at the bank. It would be time-wasting to make an offer for a home only to find that the bank can’t offer you what you need and the only way to get financing is through a mortgage with very unfavorable rates.

3. Failure To Consider Additional Expenses
Besides your monthly payment on the house, there are some additional expenses that you should be aware of. Besides being a homeowner, you are susceptible to property taxes, insurance payments, repairs and also maintenance costs. Therefore, you should account for all these additional expenses to make sure your property value doesn’t go down if you plan to sell your home later. If you concentrate only on the purchasing price, you might stretch your budget considerably when you have to pay for these monthly payments after the first month of being a home owner.

4. Being Very Picky When Choosing A House
Everyone has a picture of the home they hope to buy. Therefore, when you are looking for a dream home, don’t be too picky. Of course, some things might not be up to your expectations, but there is always room to compromise. If you have limited funds to get exactly what you are looking for, you should be flexible enough to find something that serves the same purpose regardless of whether or not it is on your wish-list.

A rule of thumb is that you should not compromise on the important things. If you are planning to have kids in the future, don’t settle for a smaller house just because your budget will not allow it. You can always continue searching until you find a home that meets exactly what you are looking for. Therefore, if you have to compromise, make sure that it is for smaller things that can always be added later.

5. Failure To Inspect
Just like you would when buying a new car, you need to inspect the house you are looking to purchase to make sure it is in a good working condition. Certainly, you don’t want to close to deal only to find out that the house has mold or termite infestation that might cost you a lot of money. Therefore, hiring a professional inspector to look through everything in the house to make sure it is as good as promised.

Comments Off on The Biggest Mistakes First Time Home Buyers Make

Filed under Real Estate