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February 2018

 

Whether you are looking to buy or sell, I can offer the highest levels in real estate expertise and professionalism. Don’t hesitate to contact me and allow me to help guide you through that process!

Pam French
Sales Professional
PamFrenchRealtor@gmail.com   |   574-849-3037
http://www.pamfrench.bhhsni.com

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FINANCIAL ADVICE

The Tax Cuts and Jobs Act for Homeowners

While most tax costs that affect homeowners are determined by the taxing authorities in each state, The Tax Cuts and Jobs Act will affect property ownership for everyone.

Unless Congress does some tinkering with the Act after it was signed into law in December 2017, corporations will receive a massive tax cut as individuals and married couples receive higher standard income tax deductions. Taxable rates are cut in all levels of income for individuals, and the standard tax deduction will double to $12,000. Joint filers will receive a deduction of $24,000.

Homeowners are used to deducting state and local income, property and sales taxes from their federal income tax, but those deductions will be capped at $10,000 annually for homes purchased after December 15, 2017. And the mortgage interest deduction will only be available to those with new mortgages under $750,000, according to Curbed.com, and for existing loans up to $1 million. The same deduction remains in place for second homes, says the The Wall Street Journal.

This could affect homeowners in high-cost areas such as California and New York but proponents of the Tax Act say doubled individual deductions should offset some, most or all of the difference.

Experts are unsure at this point whether or not the changes will affect the housing market, but it could have a terrific impact in some areas, if homeowners decide to wait and see what happens, lowering available inventory and causing prices to rise in mid-cost, high-demand areas like Dallas, Las Vegas and others. As always, please ask your tax professional for the best advice.

MORTGAGE ADVICE

The Combustible Adjustable Mortgage

You’ll pay a little more for a fixed rate mortgage for the peace of mind that your principle and interest payment will never increase but that’s not always the most appealing choice for some homebuyers.

The longer you intend to stay in your home,–generally five years or more–the safer you are with a fixed rate. But if you plan to occupy your home for only a short time, the adjustable rate mortgage or A.R.M. might be worth considering. You can buy a more expensive home with a lower interest rate, or you can take the difference in what you’d pay toward a fixed rate and put it into savings, if you’re that disciplined.

On the downside, risk is greater with an A.R.M., depending on its terms–when and by how much the loan adjusts in interest. An A.R.M. isn’t a bargain if you have to come up with several hundred dollars more per month after a short period, or if you have to refinance your A.R.M. into a fixed rate for several thousand dollars a few years later.

A hybrid loan may offer the best of both worlds. A hybrid is fixed for a period of time, such as five, seven or ten years, then adjusts to a new rate when the term ends, giving you plenty of time to sell your home before the first adjustment.

Talk to your lender, share your plans and calculate the differences in a fixed rate and an adjustable rate mortgage.

BUYERS’ ADVICE

Driving the Neighborhood

Whether you’re shopping for a home in a familiar location or a new neighborhood, remember that you’re buying more than a home. You’re also buying the neighborhood, so it helps to become familiar with your favorites, whether you drive them or walk them.

Why is that important? It’s the neighborhood that helps establish home values, which depend largely on location and local amenities (close to high-paying jobs, high-scoring schools, high-starring restaurants, etc.)

Neighborhoods can change over time, so look for signs of transition. Do you see reinvestment or decline? Homeowners reinvest by repainting, making repairs and refreshing their homes with updates. What kinds of stores and services do you see? Dollar stores or boutiques, payday loan shops or investment firms, fast food or upscale restaurants. Are you the right target demographic?

Visit the area at different times of the day and on weekends. What’s traffic like? How long is your commute?

As you drive, check a few home-buying apps. On your Realtor.com app, you can see crime stats and amenities and save your favorites to show your Berkshire Hathaway Home Services network professional.

You’ll be happier if you pick the neighborhood first, then choose the home.

HOME IMPROVEMENT ADVICE

Should You Sell or Remodel Your Home?

Anything that gets as much use as your home shows wear and tear after a few years. Colors and decorative styles look tired and outdated, or you may need more room due to an addition in the family. So do you sell or remodel and stay?

Your Berkshire Hathaway HomeServices network professional can show you homes for sale that have the size, features and finishes you want, as well as create a comparative market analysis of homes like yours so you’ll know what you can reasonably expect to net, and if that is enough to help you qualify for your next home.

You’ll pay about 12% of the sales price and more in closing costs to sell and purchase another home. Moving costs are about $2,300, (4 movers at $200 per hour) for an intrastate move and about 7,400 pounds of household goods, according to the American Moving and Storage Association.

If you decide to remodel, make sure your design will meet your needs for years to come. You’ll need the right contractors, kitchen planners and interior designers to help you put it all together. You’ll also need to talk to your lender to learn how much you can borrow.

Change is an evolution, and will bring some upheaval to your life. You’ll either have to open your home to workers or to buyers. But if you come out on the other side with what you and your household desire, it will all be worth it.

 
 
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