Tuesday, March 25, 2014

What's the Point?

Prepaid interest, sometimes called “points”, is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence.  When points are paid on a refinance, they are not a current deduction but have to be taken prorata over the life of the mortgage.DEDUCTIBILITY.png

For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, a deduction of $100 per year is allowed.  When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.

Your tax professional needs to be made aware of any of these situations so that he or she can accurately reflect the deductions in your return.  Currently, the most common situation is homeowners may be refinancing their home for the second, third or even, fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.

For more information, see points in IRS Publication 936; there is a section on Refinancing in this publication. For advice considering your specific situation, contact your tax professional.

Friday, March 21, 2014

Break Out of Winter: Weekend Events in the Tri-Cities

The snow is FINALLY starting to melt and the action is picking up around town. If you're tired of being cooped up inside then check out this short list of fun things happening around the tri-cities this weekend!

Les Misérables is opening at the Midland Center for the Arts! The show tonight begins at 7:30pm- as will Saturday night's performance. Sunday's show is a matinee beginning at 3pm. The production will conclude next weekend with two final performances on Friday the 28th at 7:30pm and Saturday the 29th at 7:30pm. While tickets are becoming scarce, there are still some available for all three shows this weekend.

If the theater isn't your style, then maybe you're up for a little shopping. Downtown Midland is hosting a Meet Your Merchant day on Saturday from 11am-4pm.  Pop in to the unique array of local stores for a chance to win prizes, pick up some great items- many at special discounts- and meet the owners of these fabulous stores! If you're up for more, you can also visit downtown Bay City where the Welcome Spring Open House is happening Friday and Saturday. Restaurants and stores alike are offering discounts, prizes, and new spring items.

If you're searching for a bit of inspiration head over to the Ryder Center at SVSU for the 53rd annual Home & Garden Show.  Vendors include everyone from builders & remodelers to lanscapers and gardening specialist. Tickets are just $5 for adults- kids under 17 are free- and $1 off coupons are available online. Seminars will be going on all weekend long. Topics like Water Features in Your Landscape, How To Hire Contractors, and Fruit Tree Pruning and Care are just a few of those being featured this weekend.

Head on out and enjoy the weekend!

Tuesday, March 18, 2014

How's Your IQ on the QM?

Qualifying Guidelines.pngThe Qualified Mortgage Rule came into effect on January 14, 2014 as one of the results to the Dodd Frank Reform Act to protect consumers from predatory lending practices.  This will affect the underwriting standards that the majority of lenders will use to qualify borrowers.

The ability to repay rule states that financial information must be supplied by the borrower and verified by the lender.  The borrower must have sufficient assets or income to pay back the loan which limits the maximum debt-to-income ratio of 43%.  In an effort to present a more accurate picture of the costs to the borrower, teaser rates can no longer hide a mortgage’s true cost.

A maximum of 3% in upfront points and fees can be paid on behalf of the borrower.  There can be no negative amortization, interest-only or balloon payments and the loan term limit cannot exceed 30 years.

While there are more requirements, most deal with good underwriting practices that are followed by reputable lenders such as considering and verifying things that affect the ability to repay the mortgage like income, assets, employment status, simultaneous loans, debt, alimony, child support and credit history.

Friday, March 14, 2014

Understand Before You Sign: The Seller's Disclosure

There are a lot of documents involved in the buy-sell process, all of which are very important to understand.  As always, we are here to make your experience as smooth as possible; so we'd like to walk you through one of the forms you'll see when you buy or sell a home- the seller's disclosure.

This document is a statement disclosing the condition of, and information concerning a home and its property. It is not a substitute for a home inspection because it is based solely on the seller's knowledge. If a seller is unaware of a problem, he or she is not responsible for disclosing it. This is an opportunity for a seller to be upfront about the condition of the home; and an opportunity for a buyer to obtain important information before entering into a purchase agreement.

The seller's disclosure is available to anyone interested in the property, not just buyers who have signed a contract to purchase the house. It is extremely important to note that the disclosure is a legal document. This means that if a seller knowingly omits information or provides misinformation they may be held accountable in a court of law. It is always best to be completely honest and deal with any issues right away.

Seller's disclosures vary from state to state. The form used by the Midland Board of REALTORS® includes questions regarding the functionality of appliances such as a range/oven, alarm system, ceiling fans, sprinkler systems, central air conditioning, the sump pump, etc. It also covers topics like the type of insulation in the home, the kind of plumbing system and historical presence of water in the basement and pest infestations. Sellers are also asked to disclose information regarding "common areas" on the property- meaning facilities or spaces over which a homeowner's association or other entity may have authority.

If you've gone through a house with your REALTOR® and you'd like more information about the structure, ask for the disclosure. Your agent can walk you through it and answer any questions you may have.

Tuesday, March 11, 2014

Every Homeowner Needs One

water meter key.jpgA water meter key is like insurance; buy it before you need it.
Imagine a pipe has burst and there is water flowing like a river through your home.  There may a cut-off valve to each sink if it works and if that’s where the leak is coming from. Your home may have a master cut-off valve but if you haven't used it before, you might not know where it is. The last resort is to cut off all the water to your house at the meter.
In most cases, you'll need a key to get into the meter.  With water starting to rise in your home, concern over the damage being done may add to your anxieties.  You don’t have time to call a plumber or even go the store to buy a water meter key.
Emergencies are handled much better when you plan for them in advance and practice, even though you hope you’ll never need it.
1. Determine what kind of key you need to open your water meter.
2. Purchase it at the home improvement or hardware store.
3. Practice opening the meter to be able to do it quickly and easily.
4. If your meter key doesn’t have a wrench on one end, you need a wrench to turn the water valve.
5. Practice turning the water off just to see how it works and feels.
6. Put the key in an obvious and conspicuous place.
7. Have the phone number of an emergency plumber, just in case you need it.
While you’re planning for the unexpected, it might be a good idea to show some of the other family members how it works and where you keep the key.

Friday, March 7, 2014

Spotlight Listing: 315 Ireland


This absolutely beautiful, and well maintained, one owner home features over 2,200 square feet of flowing space, three bedrooms and an unofficial fourth bedroom in the finished basement. Two gorgeous fireplaces, a new roof in 2011, stunning 40x20 heated in ground pool, located on a quiet corner lot in Auburn- and yours for $235,000. 

The open concept chef's kitchen (20x20) has amazing Corian counter tops with an integrated sink offering a lovely view of the backyard and pool. With ample cabinets, a large pantry, breakfast bar, and new stainless steel appliances (2013), this kitchen is perfectly suited for a family on the move. Easy to clean, high performance and high style Mannington Adura Luxury vinyl flooring and updated lighting take the space beyond functional to wonderful.

The breakfast nook is full of natural light and offers access to the backyard. This space connects the kitchen to the cozy living room (18x15) which features a beautiful gas fireplace with marble surround and custom mantle. Past the staircase and the custom designed coat closets is the formal dining room. This elegant (13x11) space has oak hardwood floors and several recessed windows making it a wonderful setting for holiday gatherings.

Rounding out the main level is the main floor laundry (10x8), updated half bathroom with granite counter top and storage closet, and custom designed office space (10x10) with high end soft-close oak cabinets, custom coat rack with cubbies, more storage and lots of counter space.

Upstairs, the freshly painted landing area connects the bedrooms and upstairs bathroom. The stunning master bedroom (16x15) features vaulted ceilings and a view of the pool through the large window with window seat. Oversized his and her walk-in closets feature custom built shelving. The attached master bath has a double vanity, double sink, sweeping granite counter top and dual linen closets connected by a seating area perfect for getting ready. There is a jet tub and private standing shower as well. The second (13x11) and third (12x11) bedrooms located upstairs (one with feature window and vaulted ceiling) share a full bath complete with tub/shower combo, more granite counter tops and updated lighting.

The unofficial fourth bedroom (12x10) is located in the basement along with approximately 800 square feet of finished space. Here you’ll also find a half bath, another gas log fireplace and mantle. The sump pump even has an upgraded city-water backup system to protect the house in the event of a temporarily power outage.

The 100x135 corner lot sits on a quiet street with very little traffic, is within walking distance of schools, and near the newly opened TriCity Sports Complex. The owners took great care during the design process to include an extra parking pad for a third vehicle and an extra cement sidewalk and porch space that wraps around the side of the home into the back yard pool area. This house has so much to offer and truly cannot be limited to words.  You must see this home for yourself.  Call Logan Richetti or our office today to schedule your own private showing!

Tuesday, March 4, 2014

Reasonable Expectations

fortune cookie2.pngCoffee should be hot. Beer should be cold. Mexican food should be spicy.  However, if these things are less than the standard that you expect, there are not any lasting consequences.
As the value of the object in question rises, either in price or gravity, the expectations usually increase and decisions become progressively more important.  Marriage, children, health and careers are certainly a few of the more important items that bear careful consideration.
The sale of the largest asset that most people own, their home, also merits having reasonable expectations.  A homeowner should expect to get the market value for their home in a reasonable period of time with as few inconveniences as possible.
According to the latest Home Buyers and Sellers Survey, more homeowners are entrusting the sale of their home to real estate professionals.  Owners can increase the likelihood of a favorable outcome by sharing their expectations with agents prior to listing their home for sale.
Challenge your agent to explain what they intend to do to:
  • Price the home correctly
  • Prepare the home to make a good impression
  • Position the home in the marketplace
It is reasonable for a seller to expect the agent will work hard to sell the home; will tell the truth and represent the client’s interests to the best of their ability.  Agents exemplify remarkable service when they exceed the seller’s expectations.