Whether you’re buying or selling a home so you can move into a brand new Stateson Homes home, neighbors matter. In fact, they can make or break a sale.
When you’re trying to sell your current home, you make sure everything is in prime condition, inside and out. Curb appeal, as we all know, is vital. If potential buyers don’t like your home from the outside, they aren’t going to bother going inside. But what if you make your home look perfect, and your neighbors aren’t quite so fastidious? Sometimes, it's possible that they tarnish the appeal of your property, negating all your work and making a sale that much harder.
Having and maintaining good relationships with your neighbors is a good idea, in general. But it’s particularly important when you’re trying to sell your home. Issues that arise – like repairs, easements, fences – can derail a sale if your neighbors aren’t amenable. Good neighbor relationships can make selling your home a lot easier, and will eventually make life in your new Stateson Homes home a lot more enjoyable.
Keep your neighbors in the loop when you decide to sell. They may not realize it, but it’s in their best interest that your home shows well and sells for a good price, since it will influence how much their home sells for eventually. You may subtly hint at that to get them on board with beautification efforts.
A close-knit community is also a benefit when you’re buying a new home. Depending on how social you are, making friends with the neighbors may or may not be a priority. But when you’re looking, pay attention to how a neighborhood feels. Do you see neighbors interacting? Are the neighborhood kids playing? Does the neighborhood have a friendly, welcoming vibe? Just keep in mind that in the future, you never know when you might need the help of a friendly neighbor or two.
If these things are important to you, then life in one of our Stateson Homes communities is just right for you and your family! Take a look and visit us today - we know you'll love it.
Buying a new home is usually the largest and most expensive purchase people make in their lifetime. And taking out a mortgage is a huge decision. A little bit of wisdom and a lot of planning can help you avoid these costly mortgage mistakes when it comes time to buying your home with Stateson Homes.
There are many reasons to decide to stop renting and buy a new home with Stateson Homes. One of them is definitely taxes. Or more specifically, the tax deductions that are available to homeowners. Whether you’re a first-time homeowner or just considering buying, it’s good to know what deductions are out there.
Mortgage insurance premiums
Buyers who make a down payment of less than 20 percent of a home's cost usually get stuck paying for mortgage insurance, an extra fee that protects the lender if the borrower fails to repay the loan. For mortgages issued in 2007 or after, home buyers can deduct the premiums. (Unless Congress renews this deduction, 2016 is the last year it can be claimed.)
Home buyers may have to pay "points" to the lender in order to get a mortgage. This charge is usually expressed as a percentage of the loan amount. If the loan is secured by the home, and the amount of points paid is typical for the area, the points are deductible as interest as long as the cash paid at closing via down payment equals the points.
Penalty-free IRA payouts for first-time buyers
As an incentive to home buyers, the normal 10% penalty for pre-age 59½ withdrawals from traditional IRAs does not apply to first-time home buyers who break into their IRAs to come up with the down payment. (This exception to the 10% penalty does not apply to withdrawals from 401(k) plans.) At any age, someone can withdraw up to $10,000 penalty-free from their IRA to help buy or build a first home for themselves, a spouse, kids, grandchildren or parents. However, the $10,000 limit is a lifetime cap, not an annual one. And the money must be used to buy or build a first home within 120 days of the time it's withdrawn.
The downside of this? Although the 10% penalty is waived, the money would still be taxed in the top bracket (except to the extent it was attributable to nondeductible contributions). That means as much as 40% or more of the $10,000 could go to federal and state tax collectors rather than toward a down payment. So, tap your IRA for a down payment only if it is absolutely necessary.
The Roth IRA corollary: You can always withdraw your contributions to a Roth IRA tax-free (and usually penalty-free) at any time for any purpose. And once the account has been open for at least five years, you can also withdraw up to $10,000 of earnings for a qualifying first home purchase without any tax or penalty.
For most homeowners, their biggest tax break comes from deducting mortgage interest. Mortgage lenders send out a Form 1098 in January listing the mortgage interest paid during the previous year. That is the amount deducted on Schedule A. The 1098 should include any interest paid from the date of closing to the end of that month. This amount is listed on the settlement sheet for the home purchase.
Homeowners can start collecting savings right away by adjusting their federal income tax withholding at work, which will boost their take-home pay. Get a W-4 form and its instructions from your employer or go to www.irs.gov.
Real estate taxes
Homeowners can deduct annual local property taxes, regardless of whether the taxes were paid through an escrow account or directly to the municipality. The amount may be shown on a form from the lender if taxes are paid through an escrow account, or on the settlement sheet if taxes were paid directly to the municipality.
Some energy-saving home improvements can earn homeowners an additional tax break in the form of an energy tax credit worth up to $500. A tax credit is more valuable than a tax deduction because a credit reduces the tax bill dollar-for-dollar. Homeowners can get a credit for up to 10% of the cost of qualifying energy-efficient skylights, outside doors and windows, insulation systems, and roofs, as well as qualifying central air conditioners, heat pumps, furnaces, water heaters, and water boilers. There is a separate credit equal to 30% of the cost of more expensive energy-efficient equipment, including solar-powered generators and water heaters.
Save receipts and records for all improvements made to a home, such as landscaping, storm windows, fences, a new energy-efficient furnace, and any additions. Homeowners can't deduct these expenses now, but if/when they sell the home, the cost of the improvements is added to the purchase price of the home to determine the cost basis in the home for tax purposes. Although most home-sale profit is now tax-free, it's possible for the IRS to demand part of the profit when the home is sold. Keeping track of your basis will help limit the potential tax bill.
Tax-free profit on sale
Another benefit of homeownership is that the tax law allows you to shelter a large amount of profit from tax if certain conditions are met, namely that you owned and lived in the house for at least two of the five years before the sale. You can use this exclusion every time you sell a primary home, as long as you owned and lived in it for two of the five years leading up to the sale, and have not used the exclusion for another home in the last two years. A partial exclusion is available if you sell your home "early" because of a change of employment, a change of health, or because of other unforeseen circumstances, such as a divorce or multiple births from a single pregnancy.
Home equity loans
When homeowners build up enough equity in their home, they can borrow against it to finance an addition, buy a car, or help pay college tuition. As a general rule, homeowners can deduct interest on up to $100,000 of home-equity debt as mortgage interest, no matter how they use the money.
Ten years ago, the Federal Reserve responded to the economic downturn by pushing interest rates to record low levels. Those very low interest rates helped the housing market get back on its feet by making it cheaper to own a home. Now that the economy is running on all cylinders, the Fed has announced its first rate hike of 2017, while hinting at additional increases throughout the remainder of the year.
After all these years of low interest rates, what effect does a rate hike have on America’s housing market? As a notoriously conservative group, the Federal Reserve only began to consider raising rates as unemployment fell, and wages began to rise. Taking into account that the housing market is currently robust and that any dip in the housing market will likely be offset by gains in other areas of the economy, a rate hike shouldn’t be an overwhelming blow to the housing industry.
For homebuyers, as interest rates go back up to more normal levels, the cost of buying a house will also rise. But that’s not necessarily a game ender. To see how prices might be hit by rising rates, real estate consultant John Burns ran the numbers, assuming the rate for a 30-year fixed mortgage gradually moves back up to 6 percent – from the current average of just over 4%. For homebuyers who lock in lower rates now, the cost of homeownership is still pretty affordable.
So if current rising rates are still manageable, what’s the motivation to buy now? Purchasing power. Even one percentage point can seriously affect your purchasing power (i.e. how much house you can afford). According to Lawrence Yun, the Chief Economist and Senior Vice President of Research at the National Association of Realtors, a simple mortgage calculation shows a loss of about 12% in purchasing power from a one-percentage point rise in mortgage rates. For example, a person taking out a $200,000 30-year fixed rate mortgage at 3.75% rate would have a $926 monthly payment (just principal and interest). At 4.75%, and with the desire to keep the same monthly payment, the loan amount has to be cut to $177,500. The buyer’s purchasing power has been reduced due to the higher rate.
The bottom line? According to the experts at Freddie Mac, the days of historically low interest rates are over for now. But a reasonable rate hike is not bad for America’s housing market. It reflects strong economic growth, which could make the housing market even more competitive. However, if a new home is in your future plans, you should act now before successive rate hikes put it out of your price range.
Twice a year, many of us go through the process of turning our clocks forward or back. Now that we're officially in a groove, it's time we make sure our home safety and maintenance chores are done at least twice a year, too! Check out these tips to ensure a safe Stateson home to welcome the season: