What You Need to Know About Home Taxes

Real Estate ConceptI recently came across an article presenting some myths and facts about home taxes. As an experienced lender in the Kansas City area, I have received many of these same questions. While it’s always important to consult your own tax adviser about these issues, here are a few points of the article that I thought may be helpful to those beginning to navigate home taxes.

Will I get a huge tax credit as soon as I buy a house?

While there is a home ownership tax benefit, it is not a credit. The tax benefit lets you include your home real estate tax and interest in itemized expenses. Because these items are usually quite a bit of money, it may be more beneficial to itemize instead of claiming a standard deduction. If you purchased your home late in the year, you may need to wait until you have a full-year expenses to benefit from itemizing. Be sure to work with your tax adviser to calculate your best move in this situation.

tax frsCan I write off my property tax if I work from home?

If you have a home business, you may be familiar with filing a business Schedule C or other “Business Use of Home” form, which allows you to write off or reduce you income for some of your expenses. The article uses the following example:
If you have ten rooms and you use one for your office, you may be able to claim 10% of your property tax and other home expenses as part of business expense. This reduces your earnings from the business, making your overall adjusted gross income lower, so your income taxes may be lower.

Will I have to pay property tax when I buy my house or will I get a bill at the end of the year?

property taxThe bill you will probably receive at the end of the year will be for the following year’s taxes. You will most likely have to pay property tax for the portion of the current year that you will own the home at closing.

Again, a tax adviser will help you through these and other questions surrounding home taxes. If you need a reference for a qualified tax adviser in the Kansas City area, or have questions about the lending process, please don’t hesitate to contact me.


A Vacation Home Check List

Forbes.com recently published a great article about things to consider before buying a vacation home. Here’s a helpful checklist based on their suggestions!

  • Spend Time in the Area

Be sure to spend a good amount of time in the area in which you are considering purchasing. Make sure you absolutely love the area, it’s people, and it’s nearby amenities like grocery stores, restaurants and shops.

vacation home area

  • Think About Travel Time and Accessibility

What is the longest amount of time you’d consider traveling to your vacation home? If you’re thinking about renting the home while you’re away, consider access to airports, public transportation, and car rental companies.

  • Find a Local Property Manager

Since you won’t be able to spend all of your time at your vacation home, you’ll need to invest in a local property manager to maintain your home while you’re away. This individual can check in on frozen pipes, storm damage, and other concerns that need to be taken care of in a timely manner. Be sure to include this in your total list of costs.

  • Tally your Costs

Gather the total price of ownership including property taxes, insurance, and other costs. Don’t forget that you’ll still be charged monthly fees for water, gas, trash, electricity, and maintenance services, even when you’re not there.

vacation home

  • Consider a Rental Option

For a long-term investment, rental income may let you build equity and eventually pay off your property. Do some research online to see who is renting, who much they are looking to spend, and how often they are renting.

  • Invest in a Security System

If you’re planning on leaving the home unoccupied for long periods of time, invest in security and alarm monitoring systems. You can even check crime stats in the area through Trulia’s website.

If you’re ready to start the process of investing in a vacation home, contact me for questions regarding pre-approval. I look forward to hearing from you!

Calling all Realtors: Social Media is where it’s at…

We love our realtor friends and are amazed at the relationships you all build in the offline, person-to-person world. It’s difficult, though, when you’re jumping from house to house and answering the constantly ringing cell phone to find time to act on your social media goals. Here are some ideas to get you started :

1. Post about the events and unique features in the neighborhood where you’re selling your home (and don’t forget to tag them).
2. Remember the day! On the day you’re clients close, post a public, anonymous message to them… something like: “JUST SOLD! Congratulations to our Buyers, you’ll love living in Vancouver.” This example post came from this FB page: https://www.facebook.com/MarniandShannon
3. Follow the 80/20 rule when posting your listings: 80% percent engaging content, 20% about what you are selling.
4. Use Geo-targeted Ads and Promoted Posts to hit your specific market
5. Use Twitter, but remember the 80/20 rule like this realtor: Olga Marquez
6. Use #hashtags. Once a fun tactic on Facebook used to mimic Twitter feeds- these are now one way to be searchable via the Facebook graph feature. Remember to only use hashtags for words you’d like to be found on in a search.
7. Youtube videos: Make a page and post videos of your listings. One hint when making videos: wear a lanyard mic to narrate and discuss certain features of the home. They are cheap, but will up the sound quality of your video immensely.
8. Blog—content is king and some guerilla marketing like this can be cost-effective and draw clients to you.

Source: Yahoo Business

Are you in need of fast answers and reliable service related to a mortgage? Call us today: 913.317.5626.

Taper Timing

It was a volatile week for mortgage rates. The FOMC Minutes suggested that the Fed will begin to taper its bond purchases in the near future as expected, but a surprising decline in the New Home Sales data made that outcome less certain. After the offsetting influences, mortgage rates ended the week with little change.

The FOMC Minutes from the July 31 Fed meeting were released on Wednesday, but they did little to remove the uncertainty about when the Fed will begin to scale back its bond purchase program. The main takeaway from the Minutes is that Fed officials were split at the meeting about the timing for the taper to begin. Fed officials agree that the decision should be based on the performance of the economy, but they diverge on what constitutes sufficient strength. Bottom line, though, is that there was nothing in the Minutes to contradict investor expectations that the Fed will begin to taper in September or October, and mortgage rates rose after the release of the Minutes.

Friday’s New Home Sales report caught investors by surprise. Data released earlier in the week showed that July Existing Home Sales increased 7% from June and were 17% higher than one year. This lead investors to believe that the solid improvement seen in the housing sector this year would continue. However, July New Home Sales showed a decline of 13% from June. Existing Home Sales, which cover roughly 90% of home sales, are based on closings, while New Home Sales measure signed contracts. As such, New Home Sales reflect more current economic conditions than Existing Home Sales. Several Fed officials have expressed concerns that rising rates would slow the pace of economic growth. The decline in New Home Sales provides clear support that these concerns are justified. The question is whether the data will be enough to cause the Fed to hold off longer before tapering its bond purchases. The reaction from investors reflected the belief that tapering may be farther away, as mortgage rates improved after the release of the report.