Monday, February 28, 2011

7 Homeowner Tax Advantages

When you’re evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership.

1. Homebuyer tax credits

If you purchase your first home before April 30, 2010, you’re entitled to a tax credit of up to $8,000. If you currently own a home, but sell it to purchase another home before April 30, 2010, you’re eligible for a federal tax credit of up to $6,500.

2. Deductions for loan fees

Typically, you can deduct the “prepaid interest” you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.

However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.

3. Property tax deductions

In the year you purchase your home, you’re entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.

4. The mortgage interest deduction

Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you’re required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.

5. Home office expenses

If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you’re entitled to the deductions before claiming them.

6. The costs of selling your home

In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.

7. The gain on your home

If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn’t available on rental or second homes.

The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.

This article includes general information about tax laws and consequences, but is not intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws vary by jurisdiction.

Other web resources

By G.M. Filisko

7 Tips for Improving Your Credit

Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.

1. Know your credit score

Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You’ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms. 
You’re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, EquifaxExperian, and TransUnion. Access all three versions of your credit report at Review them to ensure the information is accurate.

2. Correct errors on your credit report

If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there’s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.

3. Pay every bill on time

You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You’ll also save money because you’ll keep the money you’ve been spending on late fees. Credit card or mortgage companies probably won’t report minor late payments, those less than 30 days overdue, but you’ll still have to pay late fees.

4. Use credit carefully

Another good way to boost your credit score is to pay your credit card bills in full every month. If you can’t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.

5. Take care with the length of your credit

Credit rating agencies also consider the length of your credit history. If you’ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you’re not using them.

6. Don’t use all the credit you’re offered

Credit scores are also based on how much credit you use compared with how much you’re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.

7. Be patient

It can take time for your credit score to climb once you’ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you’ll do to your credit score.

Other web resources

Tuesday, February 22, 2011

6 Ways to Increase Your Home's Value

While you can't protect yourself against market ups, downs, and corrections, you can take small steps to help increase your home's value and make it more marketable. The following tips are meant to inspire and motivate you to treat your home like the investment it was meant to be!

1. Make Repairs: Homes require regular maintenance and repairs are a necessary component of homeownership. Procrastination gets you nowhere when it comes to home value. Stay on top of repairs as they are needed. And be sure to address large projects before placing your home on the market. For example, roofs are expensive to replace or repair. Many buyers will pass up your otherwise wonderful home when faced with roof issues.

2. Curb Appeal: Curb appeal is about first impressions. It is also about neighborhood values. Drive down a street lined with manicured lawns and well-maintained homes and the values are sure to reflect the care their owners take. On the other hand, streets with overgrown trees, junky yards, and chipped and faded paint are fighting an uphill battle in the values game.

3. Update Your Kitchen: Kitchens are a real selling point. Outdated cabinets, counters, and appliances will stick out like a sore thumb to buyers. Be sure, however, that you research your comparables before beginning a remodel. You don't want to price yourself out of the running. This means if while you love granite and travertine, other homes in your area are selling with laminate, you will probably not be able to ask for a drastically higher price that covers the price of the granite.
(Updated kitchen can increase your home's value by 5%-10%!)

4. Update Your Bathrooms: Bathrooms also hold much of a home's value. New low-flush toilets cost as little as $100. And tubs and showers can be easily replaced or resurfaced. Be sure, above all else, that your bathrooms are clean for showings.

5. Energy Savers: Buyers are looking for homes that are energy efficient. Low-flush toilets, solar panels, water filtrations systems, and insulated windows are all inexpensive fixes for energy zappers.
Consider these simple tips and decide for yourself what may help your home retain its value.

6. Community Involvement: The classic quote from Chinese philosopher Lao-tzu says, "A journey of a thousand miles begins with a single step." This is especially true for improving the health and wealth of a community. Change starts with yourself. By becoming an active member of your community, you can inspire the change you desire. Family, friends, and neighbors will follow your lead of civic duty. How can you get involved? Run for city council, join the PTA, volunteer, and help organize fund raisers and events that inspire community togetherness.

Realty Times
Published: February 9, 2011

And to add 2 more ways to dramatically increase your home's value:
1 - Finish your unfinished basement! Finished basements don't have to be expensive. Some drywall (drywall doesn't cost much), carpet and paint, and you have more living square footage for yourself or any potential buyers out there, beating out your competition.
2 - Add bedrooms and/or bathrooms. This could most easily be done by finishing an unfinished basement, or getting creative in the rest of the house - dividing up a huge room, for example. Just make sure you don't make it too crowded, or else it may defeat the purpose.
A rough rule of thumb is that adding a bedroom increases the value by around $10,000, and adding a bathroom increases it by about $5000!

The Best Home Buyer App for Your Smartphone

All the reviews are saying that the App for Android and iPhones is THE BEST app for home buyers to use: you can search and find houses by area on the map, plus it has a gesture highlight feature with sharing options via email and social media. However the Android version exceeds with the capability to display listings on the home screen via a widget, voice entry, and view property surroundings on Google Maps with Google’s StreetView. Check it out's free!

To get this app for any smartphone click here!

Tuesday, February 15, 2011

2011 Denver Metro Trends

As a quick recap, last month (January 2011) total combined MLS Residential Statistics in the metro area (from the mountains to Aurora, and Fort Lupton to Lone Tree) had the following changes compared to January of 2010:

  • Decrease in the Number of Closed Sales to 1,724 (down 6.4%)
  • Average Days on Market increased to 120 days
  • Number of Active Listings increased 5.2% to 13,714
  • Absorption Rate increased to 8.1 months (up 21.4%)
  • Average Sold Price increased (up 6.7 % from $260,530 to $277,922)

Beware though, that each price range differs dramatically. Here are the Months of Inventory stats (months of inventory are the number of months it would take for all the properties on sale right now to be sold at the current rate they're selling at right now). Below 6 months is considered a "Seller's market", and we're seeing that houses are selling at almost lightning speeds under $210,000, and average up to $315,000. Colorado is different than the rest of the nation! 

$0-$85,000            1 month of inventory
$85k-$135k          2.4 month of inventory
$135-$210           2.6 month of inventory
$210-$315           6 month of inventory
$315-$460           6.9 month of inventory
$460,000+           15 month of inventory

And if you take short sales (which are very long sales) out of the mix, the month of inventory are even LESS. 

Make Your Shower Tile Like New


General Information: One of the problems with tile is the buildup of soap scum. A small amount of white vinegar or lemon juice on a cloth will solve the problem.

A Poor Settlement: When grout cracks appear between the tiles it is usually casued by settlement or shrinkage and can only be fixed by removing the old grout and re-grouting.

Here Ye, Here Ye, Soap Stains Grout: Grout stains are usually caused by moisture and soap stains. Could be stopped by wiping down tile after bathing or turning on an exhaust fan.

How Loose I Am…..: If the soap dish loosens up there is no way to tighten it without removing it and re-installing it. Make sure you caulk it well !!

Thursday, February 3, 2011

Maintain Your Home in Any Season: Home Maintenance Tips & Schedule

A key to protecting the investment you’ve made in your home is by following a
regular maintenance schedule. By performing preventative maintenance on an on-going
basis, you’ll avoid many of the big ticket repair items that can lower the value of your home.
Here are helpful checklists for monthly and fall maintenance.

Test your smoke alarm and carbon monoxide detector.
Check the filters on your heating and cooling systems.  Be sure to clean and
change according to the manufacturer’s schedule.
If you have a humidifier or an electronic air filter, check these as well. 
Check faucets for drips.  Check plumbing for leaks.

Check furnace air filters each month during the heating season.  Clean or replace as necessary.
Consult your owner’s manual for your hot water heater.  Most recommend draining a dishpan full of water from the clean-out valve at the bottom of your hot water tank to control sediment build-up to maintain its efficiency.
Check all fire extinguishers. Recharge or replace as necessary.
Review family’s escape and preparedness plans for fire and natural disaster. 
Check locks on doors and windows to ensure they are functioning properly.
Make sure the basement floor drain’s trap contains water.  Refill as necessary.
Throughout the winter, watch for excessive moisture build-up.  Take necessary action whenever excessive build-up exists to prevent future maintenance and health problems.  (For example, excessive condensation on windows.)
Test all faucets and monitor for signs of dripping.  Change washers as needed.  (If a faucet leak persists, it may need replacement.)
Check and clean drains in sinks, bathtubs, shower stalls and dishwasher.
Test all plumbing shut-off valves to ensure they are in proper working order.
Monitor windows and doors for cold air leaks or ice accumulation. Note any problems for  repair or replacement in the spring.
Check attic for frost accumulation.  If there is excessive accumulation, it may require repair. 
Before installing indoor or outdoor seasonal lights, check all electrical cords, plugs and outlets for signs of wear.  Test cords and plugs, if they feel warm to the touch or show any signs of wear, replace immediately.
Test all outside lights and timers to make sure they are functioning properly.
Before installing indoor or outdoor seasonal lights, check all electrical cords, plugs and outlets for signs of wear.  Test cords and plugs, if they feel warm to the touch or show any signs of wear, replace immediately.
Check roof for ice dams or icicles.  If there is excessive staining or frost on the roof’s underside or excessive ice accumulation on the roof itself, it may require repair. 

Wednesday, February 2, 2011

Colorado Ranking High Again as Technology and Education State

Colorado ranked No. 3 in the Milken Institute's 2010 State Technology and Science Index, released Tuesday. The index, published every two years, evaluates states based on their ability to leverage their tech and science assets to attract companies and high-paying jobs.

Colorado ranked second in the percentage of its adult population with a bachelor's degree or better, even though it was 47th in state appropriations for higher education per capita.
The state was sixth in terms of Inc. 500 companies per 10,000 business establishments.
Colorado maintained its No. 3 ranking, behind Massachusetts and Maryland. The study specifically noted former Gov. Bill Ritter's work with the "New Energy Economy" and the creation of a "Jobs Cabinet."
Colorado ranked 6th in "risk capital and entrepreneurial infrastructure," which measures venture capital resources, patenting activity, new businesses formed and initial public offerings.  

The Denver Post

How they rank

1. Massachusetts
2. Maryland
3. Colorado
4. California
5. Utah
6. Washington
7. New Hampshire
8. Virginia
9. Connecticut
10. Delaware
Source: Milken Institute