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Owning a home doesn’t come cheap, but it’s always great to know that some of your expenses are tax deductible. If you want to know how you can minimize the cost of owning a home by maximizing homeownership write-offs, you’ve come to the right place. Please note that the information presented here is based on the 2015 tax year.

1 . Mortgage Interest

When it comes to mortgage interest, there is always room for you to deduct all the mortgage interest payments you make on your home. This applies not only to your home equity line of credit (i.e. on a loan worth up to $100,000) but also to a second mortgage. If you own another home, such as a mobile home or vacation cottage, you can deduct the mortgage interest for it as well, provided you stay there for at least 14 days a year or 10% of the duration it is rented out.

2. Mortgage Points & Insurance

Apart from mortgage interest, you can also deduct the mortgage points for your home in the same year you pay them. These are the points you pay on your mortgage. Additionally, you can also deduct the points you pay for a home equity loan. It is worth noting that points paid to refinance a home mortgage should be amortized based on the length of the loan. You can also deduct premiums you pay for private mortgage insurance on your loan, provided you earned less than $109,000 in 2015.

3. Property Taxes

Although this might seem a little bit strange, you can also deduct taxes on your taxes. The property taxes you pay are a deductible expenses. Therefore, always keep all your property tax bills as well as proof of statements because you never know when you will need them.

4. Home Office

There is a possibility that you qualify for a home office deduction on the taxes you pay if you own a home-based business. However, there are a few conditions that you ought to fulfill in order to qualify for this deduction. Your home should be the primary place you’re doing your business and you should only use the office space for work.

Generally, there’re two ways of calculating your deduction. The simplified option is to deduct $5 per square foot up to a maximum of 300 square feet, and this applies only to your home office area. A more advantageous yet complex method involves dividing your office’s square footage with that of your home, yielding what is known as a “business percentage”. The business percentage is then multiplied by allowable home costs, such as mortgage interest and utilities. The final result is the deductible amount.

5. Energy Credit

Implementing energy-efficient improvements can earn you credit of up to 10% of the cost of improvements you’ve made, up to a maximum of $500. It covers expenses such as new doors and windows, insulation as well as high-efficiency heating & cooling systems. Having renewable energy systems such as solar power can earn you a credit worth 30% of its total cost. State credit could also be available for these items which you can add to you federal credit.

6. Medical Home Improvements

In case you are suffering from a medical condition that requires home improvements, such as air filter for allergies or a stair lift if you have arthritis, you can write off some of the expenses as part of your medical deductions. However, it is only possible to deduct the portion of your medical costs exceeding 10% of your newly adjusted gross income (7.5% for those aged 65 and above).

In most cases, the difference between equipment cost and the increase in home value from the improvement is the only amount you’re allowed to deduct. Some improvements, including widening doorways for them to accommodate a wheelchair don’t add any marketable value to a home but are deductible provided you meet specified income requirements.

7. Home Sales

If you sold your home no more than a year ago, you could be eligible for a certain amount of tax savings from the transaction it self. The title insurance, advertising and cost of real estate agent’s fees are all deductible expenses. Furthermore, you can deduct improvements you made to your home so that you can sell it provided you have a taxable capital profit from the sale.

8. Home Damages

If your home was damaged by fire, weather, theft, or any other disaster, you have suffered a casualty loss, which may be deductible. If your cumulative loss was greater than 10% of your income and wasn’t covered by insurance, you are eligible to deduct the loss. However, you ought to be in a position to document the total value of what was lost.

Owning a rental property poses tax considerations that are more complex than the residential property you live in and will require a more refined tax strategy. Below is the tax information you need to know as well as some top tax tips for owners of rental properties.

Rental Property Tax Considerations

When filling out your tax returns, your rental property is listed in Schedule E, which documents your tax year income and expenses from the property itself. Income covers the rental payments you received while expenses covers your mortgage, repairs and maintenance, utilities, management fees and all other costs associated with the property.

If you pay points on the loan you used to purchase your rental property, you cannot deduct them completely from your taxable income like you can on a property purchased for residence. You must deduct the points over the whole length of your loan.

If the rental income from your property exceeds the expenses that the property incurred itself, remember that income is taxable.

If your property’s expenses are larger than the Schedule E rental income you accrued, you can deduct any losses from your taxable income if your non-property based income is less than $150,000 in the tax year. If you earned less than $100,000 in non-property income, you can deduct up to $25,000 of any losses your rental property incurred and if your non-property income is between $100,000 and $150,000, you can deduct up to $12,500. If you earn a non-property income above $150,000 you are not able to deduct any rental property losses from your taxable income.

If your earnings are above the threshold to deduct any rental property losses, you can amass losses as a counterbalance to capital gains taxes when you sell the property.

Speak to your tax adviser to see whether you can deduct rental losses from your taxable income or whether you can accrue losses against future capital gains taxes.

Tax Considerations When Selling Your Rental Property

When you sell a rental property, you are liable for capital gains taxes on your appreciation. It’s advisable that you seek out a tax adviser to give you an accurate breakdown of your costs and any profits that will be taxable as capital gains. However, there is a simple process available to give you a rough idea of your net profit and estimate of your capital gains taxes. Take your property sale price and deduct the purchase price, the cost of any modifications to improve the property, and all selling costs (including local taxes, agent fees, etc.) The figure you are left with is your capital gain on the property, and based on your non-property income, you will have to pay up to 30% in federal and state taxes on your capital gains. Let’s see an example of how this formula works.

If you bought a rental property 8 years ago for $200,000 and put 20 percent down with a standard 6% fixed rate 30 year mortgage, your current balance would be $140,435. If you made $10,000 in improvements to the property over the 8 years and sold it for $300,000, with no losses to offset you would be left with capital gains of around $69,000, after paying local taxes, agent fees, etc. Of the capital gains accrued you would have to pay somewhere between $17,000 and $21,000 in taxes, leaving around $120,000 from the sale of the property.

How To Minimize Rental Property Capital Gains Taxes

If you intend to buy a new rental property immediately after selling you can defer paying any capital gains taxes. The 1031 Exchange IRS benefit enables you to defer paying any capital gains taxes if you can identify, in writing, a new rental property within 45 days and complete the purchase of the property within 180 days of selling your previous rental property. To defer paying any capital gains taxes your new rental property should be of at least equal value of your sold property and you must invest all of the proceeds from your rental property sale. The 1031 Exchange defers and does not eliminate the taxes on the sale of your rental property. However, the IRS does not prohibit turning your new rental property into a primary residence in the future. Before taking part in a 1031 Exchange you should consult a tax advisor to ensure eligibility and how it relates to your unique tax situation.

The Importance of Curb Appeal and First Impressions

First impressions are important in every aspect of life. We dress to look our best when attending a job interview and some of us spend hours grooming ourselves in front of the mirror before a first date. According to research conducted by psychologists at Princeton University, individuals make up their minds about other people within 1/10th of a second of meeting them for the first time. This research found that the longer the first impression, the more people reaffirmed their initial opinion and only with long exposure and experience can a person overcome their initial preconceptions. When it comes to selling a home, first impressions are crucial and potential buyers don’t stick around long enough to change their initial opinion of a property.

What is Curb Appeal?

The phrase ‘curb appeal’ comes from the yesteryear world of real estate. Before the modern conveniences of the internet and smartphones, potential buyers would form their initial first impression of a property from standing outside in the street or sitting in their car, parked next to the curb. The agent would call or fax the potential buyer the details and address of the newly listed property and they would drive past or walk to the house to decide if they wanted to arrange a formal viewing of the property.

Those selling the property understood that their house had to look appealing enough from the curb to entice potential buyers to arrange a viewing. If the house didn’t look good from the curb potential buyers would move on, so home sellers would spend days planting flowers, painting fences, cutting the lawn and other home improvements. Curb appeal was crucial in preparing a property for going on the market and actually getting potential buyers through the door to get a sale.

Web Appeal is Today’s Curb Appeal

The traditional curb appeal of a property still matters today, but with the prevalence of the internet it is from their laptops and smartphones, and no longer from the street outside, that potential buyers make their first impressions of a home. If they do not like what they see when scrolling through the photos of an online listing they won’t feel inclined to see the property in person.

Internet listings mean buyers can now see the inside and outside of a home before ever setting foot on the property. While the exterior appearance of a home is still very important, and should be high on a seller’s list of priorities, it is at its most valuable when a buyer physically visits or drives by a property. If the internet listing does not appeal to a potential buyer, and makes a good first impression, they may not ever get that far. Web appeal is the new curb appeal, this means that a home’s interior and exterior both need to present the property in a favorable and enticing way to draw in potential buyers. If a seller’s home is not presented well in the photos of the online listing – due to the photos not being taken by a professional, not shown with high resolution images, or without due care and attention to prepare the property before taking photos – the traditional curb appeal of a home is worthless as buyers won’t ever visit the property.

Web Appeal Advice for Those Selling Their Home

Web appeal is crucial in selling a home. Sellers should make sure they have plenty of time to prepare the inside and outside exterior of their home before taking photos. Getting great, professionally taken, images that showcase your home gives potential buyers the best possible first impression of your property. The importance of web appeal means that sellers have to work much harder to prepare their home than they did in previous decades. In today’s age of the internet and smartphones, buyers make their crucial initial first impression of a home almost immediately when viewing the property’s online listing.Sellers only have one opportunity to ensure their home makes a positive first impression on a potential buyer. The property still needs to be attractive when viewed from the curb, but in order to bring potential buyers to visit the property in person, it also needs to look great and make the right first impression when viewed on the web.

Tiny-house storage requires crafty ideas to get the arrangement right. Lofted beds and washer dryer combos can make a small room feel as accommodating as a large one. As a home grows, storage problems tend to plague spaces of all rooms, both large and small. Living in a tiny house means that you must find clever ways of keeping your items accessible yet out of the way. If you plan to take the plunge into building a tiny house, understand that storage will be a major concern. For many, the accumulation encountered can be overwhelmingly distractive. In such settings, clutter and buying new items may not be a harmonious idea. However, we have fantastic and unique storage tricks that you can steal to relieve your tiny house of accumulation and create a larger space.

1. The solution might be more apparent than you think 

Until you decide to take your stuff down, everything you put up stays there: When it comes to making a decision on expanding your tiny house space on a tight budget, most of the time, you have the solution but cannot see it. On your walls for example, be sure to attach several hooks strategically and hang all the items you can. Everything from cooking supplies, hats, coats, and foldable tables and chairs, handbags, headphones, and so forth.

2. Divide and conquer 

Get a free standing cabinet to create a visual separation between your living space and the entry way. That should offer you the ideal combination of storage space and less clutter. It’s high time you considered an attractive piece of furniture that can also facilitate storage. Also, you can have free standing wall units instead of the built-ins if you are on a budget.

3. Get furniture to work 

Consider multipurpose as well in your space saving endeavors. Raincoats and wet rain-soaked umbrellas can stain your rugs and also ruin your hardwood floors by warping it. Get a stopping area close to the door where all entering should leave the weather behind. The entry closet should have layered moldings, shelf panels and should be complete with an open top-shelf. If there is no entry closet, you can get a storage bench to hold all that you need to unload. Also, it can double up as seating space rather than just clunky folding chairs. In your kitchen, fix shelves on the wall. The shelves will give easy access to dishes. In fact, that will save you the time of having to arrange them in a cupboard. Make it simple but organized.

4. Stair storage

If your home has stairs, you have another great opportunity for you to get creative with unique ideas. From shelving (where you can create a small rack for your books), cupboards, and drawers, you can hide so many items. In fact, stairs are the most creative spaces in your tiny-house. When you exhaust the stair space, you will learn that customizable storage options are endless.

5. Hide what you rarely use 

All unused space is a sure bet for storage. Under the bed, make use of drawers on casters to conceal seldom used items. This space can even be used to store toys in your baby’s room as well. To keep dust away from stored linen, use garment bags. There is also the ottoman that can double up as a storage space as well as a seating area or even a footrest. If you wish, you can also use it as a coffee table.

You can also customize your upholstery to fit your décor or needs. Ideally, if you have a couch or other forms of seating, transform them into storage space. In fact, a lot of storage space happens to be under the couch and under the bed.

6. Hidden Washer

Do you have a washing machine? Perhaps you are thinking of reselling it to save space. You’re personal setup certainly boils down to personal feasibility and preference. Depending on the layout you’re working with a washer dryer combination certainly may be plausible.

There are so many creative ways of expanding a small space. Tiny houses come with clever storage. With their multi-functional furniture and well-placed shelves, they certainly highlight creative possibility. It’s easy to maximize the tiniest sliver of space. You just have to think outside the box, steal the predisposed ideas, and go beyond what is offered. View this post as an avenue to exploring new solutions with the sparse space you have available. There are many clever tricks elsewhere as well. Hopefully these 6 house storage tricks have stirred your creativity.

 

 

You can use your tax refund in a variety of different ways really. You can go for a vacation, buy a brand new TV, or some other luxurious ways you might have in mind. However, with a tax refund averaging $3,000, one of the most efficient ways of using it is to reinvest it back into your home. Regardless of the amount, if you are getting a tax refund this year, you can use the following suggestions, to reinvest your refund and make improvements to your home.

Clearing debts 

You might have found yourself in a position where you needed a loan. It might have been to start a business or a home reconstruction. You might also have taken a loan for some other personal projects that needed completion when the funds were not readily available at the time.

You can use your tax refund to pay some of those loans and debts you currently have. This will save you from accumulating further interest on your loan. You may also be able to avoid other repayment methods such as credit cards, which have high interest rates. Once you clear your debts and loans, your will be able to put your financial position on course and enjoy some peace of mind.

Renovations 

There will always be repairs, renovations, or other new ideas going through your mind. However, you may be faced with the obstacle of locating the funds to facilitate your project, since it may not me an immediate priority for you. It could be repairing a broken sink, maintaining the hedge or even repainting a room.

With your tax refund, you can cover the costs involved in such minor projects without the need for any other additional sources of funds. As such, you will be giving your home a new look, adding to its overall value and as well as enhancing your own home environment.

There’s a wide range of projects you could put your refund towards. From security to other basic aesthetic improvements like those mentioned above. Everyone has a number of changes they would like to make to their house. When you finally have the time to do so make sure you have the funds put away to execute your vision.

Flood insurance

The federal government, through the National Flood Insurance program offers insurance coverage at a fee of $700 annually. Considering how massive the problem can be and the damages you could incur, that fee could easily be covered by your refund. It’s only going to take a small portion of your tax refund and prevent you from facing future losses brought by floods.

Floods can occur anytime it rains leaving you with a rather sizable bill on your hands. Moreover, homeowners insurance does not cover floods that occur because of rising water. Instead of taking the chance, use a portion of your tax money to buy flood insurance. You will have given yourself some peace of mind and financial security, knowing that in the case of floods, your losses will be recovered.

Also take into account the usual weather patterns of your neighborhood/city. If you live somewhere in the Pacific Northwest for example where rain is very frequently you may find more use for flood protection than in a desert city.

Energy saving installations

Energy costs consume a large portion of income in most homes and they continue rising every year. From lighting, showering, to air-conditioning and heating systems, all these activities consume energy in terms of water and electricity. Some of them tend to be old and worn out further increasing the energy consumption. There are simple fixtures that you can install and save yourself a significant amount of energy costs in future.

You can install water efficient kitchen faucets and low-flow shower heads or even replace your old lighting system with LED lighting appliances and fixtures. Other affordable options include buying a new energy-efficient refrigerator, purchasing a high-efficiency furnace, sealing air leaks, replacing old water heaters, an energy efficient clothes dryer or even adding insulation.

regardless of the value of your tax refund it should be used in the most appropriate ways. A home improvement plan and paying debts are advisable ways through which you can spend your tax refund. However, always start with the most urgent need.

 

Before you advertise your house, you need to look around for a few things that might be somewhat discouraging to your buyer. They will without a doubt be comparing many houses and will readily push yours aside with the slightest provocation. You need to be aware of some common things that turn off potential buyers.

Things That Turn Off Potential House Buyers

1. Carpet over hardwood floors

Many people really like hardwood floors, they add a wonderful design element to your house. They’re also very easy to clean and don’t retain dirt like carpets do. Many sellers make the mistake of covering up their hardwood floors and opting to display carpet. Ensure you show off your gleaming hardwood floors and leave the buyer to decide if they want then covered or not.

2. Using a bedroom for other purposes

All home buyers are interested in the number of bedrooms the house they intend to buy has. If you converted a bedroom into something like a home office, it is advisable to revert it back before you put the house on sale. The buyer may not find the home office as useful as you found it. Not only does it impact a buyers ability to visualize a living space but office are often a source of clutter.

3. Turning your kid’s room into a miniature theme park

Since children are very creative and free spirited, many parents turn their bedrooms into something that resembles a Disneyland ride. This turns off buyers as they might have teenage kids who do not require all the fantastic decorations. Let the new house owner have the opportunity to decide what to do with each of the bedrooms.

4. Dirty dishes in the sink

House buyers are very sensitive about how you have been taking care of your house before they buy it. They need to see the house at its best so please be sure your kitchen is as clean as it can possibly be. A dirty sink always sends the wrong impression and is surprisingly common. If you are caught up in a dirty kitchen, it is wise to hold off the buyer till you tidy it up.

5. Make buyers take off their shoes

No its not rude to ask buyers to remove their shoes when entering you’re home. Especially if you’ve scheduled a large number of showings in one day, thats a lot of foot traffic. They however might be a little turned off by the idea of it, so be prepared to handle the situation accordingly.

6. Pet toys laying around the house

One common thing thats over looked when readying your house for a showing is your pet. If you have a pet then make sure everything like dog food and pet toys are stored away properly. Having dog toys laying around in random rooms in the house may not be the as appealing to a buyer who isn’t as pet friendly as you are.

7. Having a family room in the garage

Just becuase you decided to use the garage as an extra game/family room doesn’t necessarily mean your buyer wants the same setup. Make sure if you’ve changed your garage set up in any way you revert it back to a basic garage with no clutter so they can visualize what they would like to do with it.

8. An above-ground pool

An above-ground pool in the backyard of the house is not a good idea. If you cannot afford a proper pool and are tempted to set up an above the ground pool, you must dismantle it long before putting your house on sale. If the pool leaves behind a dead spot of grass in the backyard, you will fumble last minute trying to cover it. If you have an above ground pool and you know you’ll be putting your house on the market in the near future then take the pool down well before you put your house up for sale. This will give your yard plenty of time to recover and hopefully keep your grass looking green for the showings.

9. Light fixtures

It is true that a beautiful chandelier can increase the intensity of your room. It can, however, contribute to turning off a potential buyer. If you have a sophisticated light fixture, it is important that you remove it before putting your house on sale and keep it away till you have another house. Again this all goes back to how neutral you’re keeping the house, this way you can keep from clashing stylistically with any potential buyers.

Buying a home at any stage of life poses financial considerations and challenges to overcome. Buyers at the start of their careers tend to lack financial capital, while those more advanced in their careers have retirement savings and other financial demands to consider, and retired buyers have a smaller monthly income than those with regular pay checks. Each phase of life requires its own approach to mortgage strategy and below you can find some home buying and financial planning tips to help you make the correct decisions when it comes to your mortgage.

There are three basic principles to consider when mortgage planning.

Closing Cash

Almost every mortgage requires a down payment that ranges between 3 to 20 percent of the properties price. However, closing costs are also required in any home purchase and usually range between 1 to 3 percent of the home price. These costs include escrow fees, taxes, etc.

Monthly Outgoings

As well as monthly mortgage payments, as a home owner you will have to pay for insurance, property taxes, utilities and maintenance and home repair costs.

Equity

The equity of your home is the percentage of the property’s value that is not financed. Increased property value of your home and paying down mortgage loans increases the equity of your property.

These three factors have differing affects on mortgage planning depending on the stage of the buyer’s life.

First Time Buyers

Buyers early in their careers have less savings and access to funds for a down payment. Putting a 20 percent down payment on a property results in smaller monthly costs, but this is often not an option for many first time buyers. A 3 percent down payment is much more feasible and can be a way to make the first step in home ownership.

A 3 percent down payment on a home that costs $250,000 is $7,500, whereas a 20 percent down payment is $50,000. The difference is in the costs of the monthly payments of the mortgage. A $7,500 down payment on a 3.5 percent 30 year fixed rate mortgage would result in monthly payments of around $1,600, inclusive of mortgage, taxes and insurance. A down payment of $50,000 would result in monthly costs of around $1,203.

A 3 percent down payment has monthly costs that are $397 more expensive but requires $42,500 less in upfront down payment. Remember that closing cost will also need to be considered on top of a down payment, on a $250,000 property they would range from $2,500 to $7,500.

 

Mid-Career Buyers

Monthly costs are often a key consideration for mid-career buyers as saving for retirement and college tuition for their children can add to monthly expenses.

Using the same example of a home that costs £250,000, a mid-career buyer is left with same decision of paying an extra $397 a month and save $42,500 in upfront costs or a $50,000 initial down payment and lower monthly costs.

By going for the lower down payment the buyer would have monthly costs of around $1,600, and after tax deductibles would have a monthly cost of around $1,312. Potential buyers can then compare the monthly cost of $1,312 with the cost of similar rental properties in the area.

By comparing the rent vs. buy scenarios you can evaluate whether buying a property offers the opportunity to conserve cash and increase assets. Financial and mortgage advisers can help you find the right balance between monthly costs and maintaining cash liquidity.

Retiree Buyers

Buyers that are retired or late in their careers have to factor in living on a lower monthly income. Home owners that have equity in their property but a small monthly income from savings or pensions have several options to utilize the value of their home.

A reverse mortgage enables home owners to release equity from their home in to a monthly cash income.

A home equity loan allows the owner to release cash from their property in a similar way to a traditional loan. The cash is released in one lump sum and requires monthly payments.

Selling the property and a buying or renting a cheaper home enables the release of cash.

A home buying or mortgage plan requires preparation and research. Like any other investment plan, home ownership planning is more profitable when started earlier. As a home owner pays off their loan, and as the property value rises, the buyer’s equity of their home increases.

The home buying experience that is usually portrayed in advertisements generally seems to concentrate on families and couples. But nowadays, only 40% of first time home-buyers are married, down from 52% in the late 1980s.

The process of purchasing a home for a sole-owner might be similar to that of anybody else, but there`re several slight differences in how a single home buyer may approach the home buying experience.

Below are 5 ways you can make your solo home hunt a success.

 

Find your real estate agent

Do not choose the first real- estate agent you get in an online search. You should try posting a query on social media so that you can get insights from your family and friends. You should look for positive real estate agent reviews that might comment on buying alone vs. as a couple.

Once you find several real estate agent options, you should meet with all of them. You will want to ask them a lot of questions — do not let them be the ones doing all the talking.

 

Read up on your resources

So you’ve met with several real estate-agents and found the right one for you. Wonderful! But having a great agent doesn’t mean you shouldn’t read everything on your own as well.

Do not depend on your real estate agent alone to explain all the details of the home buying process. The agent probably will, and should, but it is your job to be the informed buyer. Check out online resources or go to the library so that you can learn about the various home buying programs or find out more on your rights as a buyer.

When you are deciding how much you’re willing to spend on a home, you should also take into consideration all the recurring expenses that come with owning a house. You should think beyond closing costs and mortgage payments – include expenses like home repairs and maintenance.

And if you are feeling nervous about the likelihood of you being turned-down for a loan due to the fact that you are purchasing on your own without any help, try not to be. Although, do remember that qualifying for a loan on one income might mean buying a smaller house, it doesn’t mean you cannot buy. In-fact, banks aren’t allowed to treat potential home buyers differently based on their marital status.

Singles purchasing a house on one income can consider getting an FHA loan, since borrowers that have a good credit can qualify for a small down-payment.

 

Select the right kind of home for you

Are you searching for a home you can grow into? Or do you want to buy a small starter house that you can later rent out? Whatever your present and future home requirements, know that you have many options regarding the kind of house you buy.

Purchasing a townhouse or condo might leave you with a lower-mortgage, but you should not forget about the possible storage fees and homeowners association dues. And although a smaller house means that there’s less for you to maintain, your home still needs regular maintenance.

 

House hunt with confidence

Pursuing home ownership on your own does not mean you’ll have to decide everything by yourself. Bring 1 or 2 of your friends who’ve recently bought a house and who you know can give honest feedback.

If you are planning on moving to the suburbs so that you can get more home for your buck, also consider if you would be happy living a reasonable distance away from your favorite spots. Try commuting to-and-from your potential house, favorite restaurants and shops, and even work and your friends’ homes. If you find out that it is a tad-too far for comfort, you should narrow down your home search.

 

Make an informed offer

If you are purchasing as a singleton, you might not have somebody with you to help you determine how to negotiate or what to offer. This is where searching for and getting the best agent for YOU will serve you well. Consider talking to your real estate agent about how the offer might stack-up against the recent sales in the area and the possible concessions you might get from sellers.

Whether you have just began to consider purchasing your first house or you are newly single and it’s the first time you are purchasing on your own, these 5 steps will make sure you are a savvy and smart solo buyer.

In an ideal world, nothing external will influence your home’s value. As long as the market is on your side and you ensure that the place is in spick-and-span condition, you should not have any problem selling above or at the listing price- right?

Just do not forget about your neighbors….

One bad apple can make selling your house a struggle. In reality, there will always be the late-night partiers, the hoarders, the non-stop dog barkers and the just plain lousy, rude neighbors who can easily throw off a sale. According to the Appraisal Institute, they may even cause the value of your home to decrease by as much as 10 percent. If you have a neighbor living next door that fits one of the above descriptions, it could easily put a wrench in the house selling process.

Most neighborly disputes do not have a legal solution. Your best option: a smile, a diplomatic conversation and crossed fingers. At times the remedy, sadly, is decreasing your asking price and getting the heck out of Dodge.

And once in a while, the law does have your back.

Here are 3 common kinds of horrible neighbors-and advice on how you should handle them when your home is for sale.

 

The neighbor who wants your home

If your neighbors want to expand their property, they may have an eye on your home and no fears about shooing-off the competitors. For example, a vindictive neighbor who is desperate to purchase your home, may conveniently make himself/herself available to answer questions every time somebody pulls in to see the house.

How to deal? You can sell your house to the neighbors, but if they are expecting a neighborly discount (or they’ve turned you off with their bad behavior), you should sit them down for an open conversation: They are not getting the home. If they continue to scare potential home buyers, you should consult an attorney. You might have a case to sue them for libel- but you should expect the road to success to be full of twists, turns and unexpected detours.

 

The neighbor with a bad attitude

Maybe your neighbor is just a miserable guy, keen to make you, your family and the entire block equally miserable.

These less than savory attributes can make your house a nightmare to sell. Eventually, you might be forced to sell the house to an out of state buyer who will not know why you’re selling and isn’t bothered to speak to anybody about the neighborhood.

However, hoping that your buyer does not do due diligence might not be an option. You should work with the other residents of the neighborhood to solve the problems – they may be willing to band together and approach your miserable neighbor.

Whatever you do, ensure that you consult your attorney and agent about what you should disclose, particularly if you are dealing with potentially criminal elements. This depends on your state, and your realtor can give you more details.

 

The neighbor who trashes the neighborhood

Not everybody keeps their home perfectly clean, and you would be surprised if you expect as much- even from the good neighbors. But when disheveled becomes unmitigated disaster, selling your house can be quite a nightmare.

For example, you might share a driveway with a neighbor who does not make any effort to make the path look acceptable, has dead, rusting vehicles in their front yard, or a no trespassing sign that states that their house is protected by Smith & Wesson.

However, there is nothing legally-objectionable here. You may have a case with the vehicles or the other junk on the neighbor’s property—take photographs, document the state, and get in touch with the local or municipal authorities. Nonetheless everything else is just bad manners.

Unfortunately, many neighbor disagreements are quite difficult to solve in the legal system. Nearly all lawsuits involve the payment of money damages for tangible harm. Many neighbor disputes aren’t about cash, but trying to correct the behavior.

If you are dealing with a real problem house – such as a home filled with fraternity brothers who like to party 24 /7, or worse, your first step should be talking with the homeowners association and the neighbors, if possible. The association may offer to clean up debris, mow the lawn, or take other essential action under their bylaws.

From when the Federal Reserve increased rates for the first time in nearly a decade, in Dec. 2015 to mid-Feb. 2016 mortgage rates decreased to the lowest level in 3 years. We carefully examined why the mortgage rates would decrease after a Federal increase, and since the downward mortgage-rate trend is continuing, here’s a refinance-reference guide.

 

2016 rate outlook and recap

Rates decrease when economic insecurity causes investors to purchase safer bonds and sell riskier stocks. When the bond prices increase on this particular buy, the bond rates (or yields) decrease.

This is what has been occuring in 2016 as non-United States economic weakness has led to international investors to purchase the safety of United States mortgage and Treasury bonds.

In Dec. 2015, 30 year fixed-rates were approximately 4 percent on conforming loans, 4.125 percent on high balance conforming-loans, and 3.875 percent on jumbo loans. Since then the bonds have rallied, and as result rates on the above loan tiers have decreased by as much as 0.5 percent and that translates to lower monthly-payments as follows: $ 85 lower on a $ 300,000 mortgage, $ 170 lower on a $ 600,000 mortgage, and $ 253 lower on a $ 900,000 mortgage.

The savings alone is strong-rationale for getting a refinance, and the rates could decrease even further within the next several months if non-US weakness continues. However, even in the downward rate trend, the rates increase and decrease along the way.

 

Factors causing a 2016 refi boom

Refinances are not only about rates. They are also about property, income and asset eligibility.

During previous post crisis rate dips, most refinances were derailed due to the fact that people owed more money than their houses were worth, the income was disrupted or down and the lender guidelines were unusually tight.

Now the United States economy is quite supportive of the refinances, with increasing or stable house prices, low-unemployment of 4.9 %, income trending-up, low inflation assisted by a sharp decrease in oil-prices and the lender guidelines are more flexible than in any other post crisis rate dip. The current refinance rates are less than half the historical average of 8.35%.

Reasons to refinance

The most apparent reason why you should refinance is for you to get a lower monthly payment and rate, but there`re several other refinance objectives you should consider:

• Shorten your loan pay-off period. For instance, you could easily go from a thirty-year loan to a fifteen year loan that has higher payments and lower rates because you pay the loan off within half the set time -but when rates decrease, payments on 15-yr loans become more achievable.
• Access cash – A “cash-out” refinance enables you to access the equity of your home for your other financial objectives, like funding home improvements or retirement investing.
• Consolidate debt – If you qualify, you’ll be able to roll non housing debt such as car loans, student loans and credit cards, into a house refinance. By doing this you will be able to improve the credit score, and convert that non tax deductible debt into a tax deductible debt.
• Eliminate a second mortgage or mortgage insurance – If you purchased your house with less than 20% down using a second mortgage or mortgage insurance, and the value of your home has risen to the point you now have 20%-equity, a refinance can get rid off of a second mortgage or mortgage insurance.

 

Credit score impacts of rate shopping

Credit-scoring-models know that people shop around for mortgages, as a result having more than 1 mortgage related credit run will not reduce your credit score. As long as you are able to finish shopping in fourteen days.

 

Select a lender early

A rate-quote is based on the refinance closing in a given number of days- normally 30 to 60 days – and longer-rate-locks have higher interest rates. Hence you should select the lender you would like to work with early enough, and also get them the needed documentation so that they’re able to perform on the shortest (and as a result cheapest) possible-rate lock timeline.

 

Required documentation

Even if you are able to refinance with the lender you have worked with previously, federal laws need them to bring up to date your asset, employment, income, and debt-documentation for a new loan.

 

Your house must qualify

Apart from you qualifying for loan, your house must also qualify. An appraisal report should ascertain that your house is worth enough so that the refinance works, and the lenders may require certain repairs before the loan closing — such as, water related safety or damage issues like loose railings.

If you are the owner of a condo, it will be dependent on certain requirements. You should ask the lender to inform you about the condo requirements well in advance of locking the refinance.

 

Handling your 2nd mortgage

If you have a 2nd mortgage you are planning to leave in place, the 2nd mortgage holder should agree to the refinance terms prior to the closure of the refinance. This is needed even if you’ve a HELOC (Home-Equity-Line-of-Credit) with a zero-balance. This may end up adding time to the mortgage , and, longer-rate locks have higher interest rates.

 

Cost or no cost refinance?

Refinance viability is about how it takes the monthly savings from the refinance to repay the refinance closing costs ($ 2,000 to $ 4,000, depending on the market). However, if you paid so that you can refinance, and then rates decreased more, you would risk losing money.

So when the rates are decreasing, you can decide to do the no -cost refinance. The rates will be a little higher on the no cost refinance, but then you aren’t wasting the closing costs if you decided to refinance again soon after due to the fact that the rates decreased.

Your lender can assist you in determining the best path you should take based on your rate market expectations and profile.

 

When you should lock your rate

Prior to locking a refinance, you should find a suitable lender to pre-approve you using your home value estimate and full documentation so that you can be certain you are being locked on the timeline and program the lender can work with. If your refinance or pre-approval is ready, it is easier to lock-rates low at a moment’s notice- as rates increase and decrease on the trading days.

 

What you should do if rates decrease after you have locked your rate

Rates change every day, and if rates decrease after you have committed to your rate-lock, the lenders have re-negotiation policies which allow you to capture a section of the drop.

For instance, if rates deceased by 0.25% after your rate-lock commitment, the normal lender renegotiation policies will allow you to decrease your locked-rate by 0.125%.