If you are going to be in your house long term, or forever, prepaying your mortgage is a great idea if you can afford to pay extra. The best way to save money on debt is to not have it! But many people do not realize that prepaying a fixed rate loan does not reduce the monthly payment. Prepaying a loan simply shortens the term. So prepayment builds equity faster, and ends the loan sooner, so you save money by having the loan for a lesser amount of time. Read the rest of this entry »
Do you feel this graphic is how the office of your local tax assessor works? Many of us feel that property taxes have not mimicked the course of real estate values. According to an April study by the National Association of Home Builders, the most recent available, property taxes across the U.S. have increased by nearly 20% from 2005 to 2009. But wasn't 2005 when the real estate bubble burst? How could property taxes have gone up from 2005 to 2009? And over the same period, home prices in major urban markets decreased 31% Read the rest of this entry »
For quite a while I have heard rumors that so-called “Obamacare” was partly being paid for by a 3.8% increase in the capital gains tax on real estate. This is mostly not true. If you dig deep into the issue you will find it will not apply to most people. However, in principle, there is an increase in the capital gains tax on real estate for some wealthier folks. Read the rest of this entry »
Is it a good idea to borrow against your 401(k) to get the down payment to buy a home? If your employer allows you to borrow from your 401(k) plan, and most do, you can take the lesser of 50% of your vested balance or $50,000. The typical repayment Read the rest of this entry »
The tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence has been extended through April 30, 2010. There is also a new tax credit of up to $6,500 for qualified repeat home buyers.
First-time home buyers purchasing a new construction or resale home are eligible for the 1st time home buyers tax credit. To qualify for this tax credit the settlement must occur on or after January 1, 2009 and on or before April 30, 2010. The date when closing occurs is the important date, not the "contract" date.
A “first-time home buyer” is defined as a buyer who has not owned a principal residence during the 3 year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse. Read the rest of this entry »
The Homebuyer Tax Credit was passed earlier this year as part of the government stimulus package. Credit for those purchasing a home as their primary residence is worth 10% of the purchase price, up to $8,000. This credit is only available to those who have not owned a home for the previous three years. It can be claimed on your 2009 tax return. If the credit exceeds your tax liability, you will be refunded the difference.
If you move out of the residence within 36 months or cease using it as your primary residence, you have to repay the credit in full on your tax return for the year you move out.
The purchase of your home must be completed by November 30, 2009 when the Homebuyer Tax Credit will expire.
Many analysts fear that with the end of the tax credit, any resurgence in the housing market will slow down significantly or come to an end. So, it is worth noting that there is support in Congress and in the industry for an extension of the tax credit through next year. Rep. Johnny Isakson, R-GA, is leading the push in Congress for legislation which would include not only an extension, but also would raise the credit to $15,000, remove income restrictions and include non first time home buyers. Stay tuned to this blog for more.