Michael J Eiden MLO-165229, Sr. Mortgage Banker/Broker » Mortgage Planning

Helpful Tax Reminder… Don’t Miss Out On These Deductions

Michael — Sun, 15 Jan 2012 17:47:31 +0000

Many homeowners I work with overlook some of the tax benefits and implications of their recent purchase, sale or refinance of a home. I thought I’d share with you a handy bit of information I found on H&R Block which outlines some of essential tax information for homeowners.

As you probably know, you are entitled to many excellent tax benefits in terms of home loan interest, property taxes, and other real estate-related issues. A few finer points to consider:

You can fully deduct most interest paid on home mortgages, but you first must distinguish qualified mortgage interest.

You might be able to deduct points, also known as loan origination fees, maximum loan charges, or loan discounts.

If you have a vacation home and you didn’t rent it out, you can fully deduct the mortgage interest.

For a deeper dive into any of these issues, you might want to check out the link to article I’ve included below (as well as consult with your tax professional on any of these issues if you have further questions).

Click this link: Homeowner Tax Tips

Reverse Mortgages Myths Debunked

Michael — Fri, 08 Oct 2010 18:10:05 +0000

I am sure you’ve heard quite a lot about Reverse Mortgages. Some good, some bad. Hopefully I can shed a little light on the subject for you. You’ve worked hard to build equity in your home. Isn’t it time to put your home to work for you? If you are 62 years or older, and own your home outright or can pay off the remaining balance with your reverse mortgage proceeds, a Reverse Mortgage enables you to convert a portion of your home equity into tax-free funds. 1Whether you choose to pay bills, pay taxes, or prepare for coming expenses, you have the funds to cover your personal financial needs.

A Reverse Mortgage enables you to stay in your home, without making monthly payments. You do not need to repay the loan as long as you or one of the borrowers continues to live in the house, keep the taxes and insurance current, and maintain the property to FHA standards.

Important Things To Know About Reverse Mortgages

Independence - You continue to own and live in your home
Freedom - Receive payments instead of making them
Ownership - Any remaining home equity belongs to you or your heirs – none of your other assets will be affected by the reverse mortgage
Simplicity - No income, credit, or employment requirements needed to qualify
Choice - You may receive funds as a lump sum, in monthly installments, as a line of credit, or as an upfront sum plus a monthly allotment
Security - Does not affect Social Security Benefits
Flexibility - Use the fund to pay off existing mortgage, supplement your retirement income, cover health care expenses, reduce credit card debt, and much more. Literally anything you want to.

Choose a reverse mortgage to help you enjoy a more comfortable retirement in your own home. Contact me for excellent service, and the ability to develop a solution to help you manage your home as part of your total financial plan. Seniors also have the choice whether they want to have closing fees or not too. So…

GET STARTED TODAY

Have You Looked at the Spread Lately Between 30 and 15 Year Fixed Loans?

Michael — Fri, 12 Feb 2010 19:19:13 +0000

IT’S HUGE!

It’s a good time to look at the 15-year fixed rate mortgages.

As compared to 30-year fixed rates, the relative discount for “going 15″ is big. Interest rate spreads between the benchmark borrowing products haven’t been this high since 2004.

But there’s more to it than just the rates. The 15-year and 30-year fixed rate mortgages each have their benefits and, because of that, interest rates can be sometimes irrelevant.

For example, assuming a $250,000 mortgage at today’s rates, the lifetime interest costs on a 15-year mortgage are $142,000* less than a comparable 30-year fixed rate mortgage. That’s pretty significant, but is that the whole story?

The associated 15-year fixed mortgage’s monthly payment registers 41 percent higher than the same 30-year’s. Big payments like that can break a family’s budget — no matter how low the rate. Of course, the bigger the loan, the bigger the difference.

Furthermore, low rates don’t matter much with respect to mortgage planning. There’s a few sounds reasons you may want to pass over the 15-year in favor of a 30:

The 15-year mortgage’s tax benefits are relatively tiny
There’s opportunity cost in rapidly converting liquid cash into illiquid home equity (opportunity would be, could you earn more on the money than it costs you in interest)
In the event of an emergency, you still have to make the larger, 15-year payment (probably one of the biggest drawbacks)

Low rates are tempting, though, and when the spread between the 15-year fixed and 30-year fixed is as big as it is today, the arguments made above lose their weight. The ultimate test is a gut check. Does having your mortgage paid off sooner with less interest ‘sit right’ with you? If it does, no amount of number crunching it going to deter you.

One thing to remember is that mortgage rates change everyday and the delta from product-to-product is far from linear. The chart at top proves it. So, if you’re not buying a home for another few months, don’t settle in on a strategy just yet.

Know your options, until you are ready to buy that new home.

For help with your mortgage planning needs, feel free to call or send me an email.

*Based on $250,000 borrowed at 5% over 30 years compared to $250,000 at 4.375% over 15 years.