mortgage interest deduction: Keep Your Current Home as a Rental - 10/24/21 08:18 PM
  Let's assume that you have owned your home for several years.  It has increased in value and the unpaid balance considerably less than you originally borrowed.  In short, you have equity in the home.  You're thinking about buying another home and one of the questions going through your mind is "should we find a replacement property before we put our home on the market?
It is a good question but maybe there is another one you should be asking.  "Should we keep our current home and convert it to a rental when we buy another home?  The answer to the … (0 comments)

mortgage interest deduction: Cutting Your Housing Costs in Half - 11/03/20 08:37 AM
  Cutting the price will generally bring buyers of anything out of the woodwork that were not serious before.  Some renters could easily lower their monthly cost of housing by half or more by purchasing a home with all the financial benefits that come with it.
The most obvious thing in today's market is that the mortgage payment could be less than the rent the tenants are paying.  With mortgage rates hovering around 3%, this is a major factor of the savings.
The two other major contributing factors are appreciation and amortization of the mortgage, neither of which benefit tenants continuing to pay … (2 comments)

mortgage interest deduction: House-Hacking Rental Property - 02/04/20 04:34 PM
  House-hacking refers to buying a multifamily property on an owner-occupied mortgage, living in one unit and renting the others.  If you're thinking about becoming a rental mogul, starting early is an advantage.  Not only will you have longer to accumulate a larger portfolio, you can increase the leverage on the first acquisitions if they are owner-occupied. 
Leverage is the use of other people's money to finance an investment.  The higher the loan-to-value, the greater the leverage which can increase the yield.
A $200,000 rental property with an 80% LTV at 4.5% for 30 years producing a 16.88% before-tax rate of … (0 comments)

mortgage interest deduction: The Tax Difference in Second Homes - 06/22/18 05:46 PM
 
A principal residence and a second home have some similar benefits, but they have some key tax differences. A principal residence is the primary home where you live and a second home is used mainly for personal enjoyment while limiting possible rental activity to a maximum of 14 days per year.
Under the 2017 Tax Cuts and Jobs Act, the Mortgage Interest Deduction allows a taxpayer to deduct the qualified interest on a principal residence and a second home. The interest is reduced from a maximum of $1,000,000 combined acquisition debt to a maximum of $750,000 combined acquisition debt for both the … (15 comments)

mortgage interest deduction: Up-front Points to Lower the Rate - 11/08/17 02:30 PM
Up-front Points to Lower the Rate

When loans are quoted by lenders, most buyers pay attention to the interest rate but not so much to the points that may be charged along with the rate.
A point is one-percent of the mortgage amount and considered pre-paid interest that affects the yield on the loan. Buyers or sellers can pay points but there can be limits based on underwriting guidelines for different types of loans.
A lower note-rate would obviously make the payments less. However, with a little analysis, you can determine how much points paid up-front can save a borrower or whether you'll recapture … (0 comments)

mortgage interest deduction: Easier to Play the Game - 09/30/17 04:16 PM
 
It’s much easier to play a game when you know the rules so you can avoid mistakes that may keep you from winning. Homeownership isn’t a game but there are some rules that will protect your investment and increase your enjoyment.
Most people want a home of their own to raise their family, share with their friends and to feel safe and secure. In most cases, it is also their largest asset. These suggestions can help protect your investment and make homeownership more enjoyable.
Don’t overpay for your home Maintain your home to protect its value Minimize your assessed value to lower … (0 comments)

mortgage interest deduction: Family & Friends Mortgage - 07/13/17 08:05 PM
Anytime a lender and borrower can agree on rates and terms, it can be a good match but IRS has specific rules that govern the transaction especially when the parties are family or friends.
The loan must be done in a business-like manner with a written note specifying the loan amount, interest rate, term and collateral. IRS requires that the mortgage be a recorded lien to allow the interest deduction.
Sometimes, a friends and family situation might have a less than normal interest rate on the mortgage. However, the rate charged in the note is regulated by the minimum applicable federal rate which … (0 comments)

mortgage interest deduction: Six Reason to Consider Rental Homes - 02/19/17 10:48 AM
 Single-family homes offer an investor the ability to borrow large loan-to-value amounts at fixed interest rates for long terms on appreciating assets, tax advantages and reasonable control. Some of these characteristics are not available through other investments.
75-80% loan-to-value mortgages are available on most residential properties up to four units. Comparatively, the stock market allows you to borrow up to 50% on a stock but if the price goes down, they will require additional cash to keep the ratio at or below 50%. If it isn’t available, your stock can be sold to satisfy the loan.
Real estate investors call getting a long-term … (0 comments)

mortgage interest deduction: Mortgage Loans from Relatives - 02/15/17 11:08 AM
 
Mortgage Loans from Relatives
Occasionally, when dealing with close relatives who might also become heirs, signing a note and handling the paperwork properly may seem like a needless effort but it could mean the difference in being able to take a legitimate interest deduction.
Home mortgage interest is deductible only if the loan is a secured debt which involves the buyer signing an instrument like a mortgage or deed of trust that makes the ownership of the home security for the debt. That instrument must then be recorded or otherwise perfected according to state or local law and the home, in case of default, … (0 comments)

mortgage interest deduction: Rent or Buy - You Pay for the House You Occupy - 01/16/17 06:39 PM
The ironic thing about people who think they can’t afford to buy a home for themselves, end up buying the home for their landlord. There are several facts that support this notion.
Mortgages, whether held by an owner-occupant or an investor, are usually amortized so that each payment reduces the principal amount owed so that the loan will be repaid totally over the term. A tenant is inadvertently retiring the landlord’s mortgage with his monthly rent.
In most cases, the mortgage payment including taxes and insurance will be lower than the rent tenants are paying. Some experts are saying that we may never again experience … (2 comments)

mortgage interest deduction: A Cost to Consider - 11/17/16 10:38 AM
Homeownership, part of the American Dream: a home of your own where you can feel safe, raise your family, share with your friends and enjoy life. The benefits are easily recognizable but maintenance is just as real and should be considered.
Property taxes and insurance are two of the largest expenses homeowners have aside from their mortgage interest. But, as any homeowner knows, there will be occasional expenses for repairing toilets, faucets, windows and other things. There are also the significantly larger expenses that arise like replacing a water heater or HVAC unit. And don’t overlook the periodic maintenance like painting or … (0 comments)

mortgage interest deduction: Temporary Buy down - 04/28/16 11:20 AM
Temporary Buy Down 

There is an infrequently-used mortgage program available that could be the solution to a buyer's or seller's problem.
A temporary buydown is fixed rate mortgage that the seller has prepaid interest at closing to lower the payments for a number of years.  The borrower must qualify at the note rate but gets the benefit of lower payments for the early years.
A 2/1 is a common buydown that the first year's payment is calculated at 2% lower than the note rate and the second year's payment is calculated at 1% lower than the note rate.  The third through thirtieth years' payments … (0 comments)

mortgage interest deduction: Daddy...You're the Best! - 12/24/11 04:20 AM
                                      Daddy...You're the Best!A young couple was looking at a home for the third time and had invited their parents to see it.  The dad had quickly assumed his self-appointed role as tire kicker and was talking about how expensive mortgage rates were compared to what a certificate of deposit was paying.The next thing you know, he has the kids cornered and says to them "I have a CD coming due and if you'll pay me what I'll be earning, I'll loan you the money to buy the home.  You'll save quite a … (4 comments)

 
Patty Clark, Helping Families Move with Care (Morningside Homes, LLC 720-231-5200)

Patty Clark

Helping Families Move with Care

Denver, CO

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Morningside Homes, LLC 720-231-5200

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