The holidays can put a dent in your savings especially if you're planning to buy a home, but there are several ways to cut costs so your finances aren't in the red by New Year's Day. Consider the following money saving tips:
Yes, you may feel a bit like a bit of a scrooge, but by keeping things low key, those friends and family might be thrilled to join in your summer cookout at your new home in 2019.
Teaching the 3rd Grade
Recently I had the distinct pleasure of participating in Career Day at our local elementary school. I started the lesson with self-employment. I explained, while it is nice being your own boss and having a flexible schedule, your success will directly reflect in your pay check and your reputation within the community.
It is difficult to properly convey the excitement of compound interest when your audience is eight-years-old. I was competing for their attention with police officers, firefighters, and marketing directors (who had lots of gadgets). Totally unfair!! So, instead, I reminded them, that though they may not want to be a loan officer, they may work with one when they want to own a home. They seemed to enjoy looking a house photos and discussing prices. We generally discussed how to buy a home too.
Finally, I explained the LIFE LESSON I wanted them to always remember, long after Career Day was over. (In the photo, that's what is highlighted on the board in yellow.) Maybe you know this lesson?
If your outgo exceeds your intake,
then your upkeep will be your downfall.
I think some of them understood our discussion and all of them wrote it down. I'm hopeful that a seed of financial knowledge has been planted on Career Day. Have a fantastic week! Need help on a mortgage? Grab my app at http://NewThresholdMortgage.com
Elizabeth Washburn
The Changes for 2018 Taxes
Two lost housing deductions pop off the new tax bill which you should know about, and I've also included one reminder of an unchanged deduction.
MOVING EXPENSES
They are no longer deductible if you are not active military. Before they were deductible if you moved over 50 miles for a job. There were more specific terms, however, now it is simple. You can't deduct the expense.
HOME EQUITY LINE
This product's interest has been deductible forever, but no more. This essentially kills the benefits of the piggy back loans (getting a first and second mortgage combination product), though they have decrease in popularity over the last five years.
Having that handy equity line available is still nice due to its low interest rate, but it is no better than a low interest credit card and potentially worse for you, since it is tied to real property. This makes it a much more secure bet for the lender and gives you no added benefit for allowing the lender to hold a piece of your property’s equity. You can't deduct the expense.
Here's more information: https://www.marketwatch.com/story/most-home-equity-loan-borrowers-dont-understand-how-trumps-tax-code-affects-them-2018-02-02
MORTGAGE INSURANCE
Having no deduction on the equity line make mortgage insurance more appetizing. Yes, I never thought I was say that either, but the legislature did not touch the mortgage insurance deduction.
So, you could go get a fixed rate second mortgage at 9% or so, or you could have the dream that the mortgage insurance is going to go away in a few years, and during the life of the mortgage insurance, it could be entirely tax deductible. Not a bad dream, sort of, until you get to the “however”. And here it is. However, it’s only tax deductible up to a point. If your adjusted gross income exceeds $109,000 or $54,500 if married and filing separately, the IRS prohibits you from deducting mortgage interest premiums.
Here is more information: https://investormint.com/tax/property-tax-deduction
WHAT ARE MY CHOICES IF I HAVE AN EQUITY LINE!?!?!?
1 -Bite the Bullet and Endure
Honestly, it might not matter. The “might” is the problem, so take the second choice.
2 - Review your debt allocation and consider whether a refinance will benefit you.
If you want to look into rolling the first and equity mortgage together, let’s take a look. Even if you need a bit of mortgage insurance for a time, it may still be beneficial due to the tax deduction. We can look at your gross adjusted income, how much you pay in interest with your current mortgage profile, and what is deductible currently vs. the future, then you can consult your tax advisor too.* Shoot me an email or text for a review.
*As you know, I am a mortgage broker, not a tax advisor.
PREPARING
Whether you're anticipating a total solar eclipse or a future home, both require preparation to get what you want out of the moment and save yourself from future headaches.
Here are two scenarios where I typically offer advice when given the time (61-90 days) to make the loan happen.
You're self-employed.; Move the money you are using for the purchase of a home to your personal account. If you have down payment in your business account, you can use it; however, the lender will want to "source" the funds in your business account(s). This means if there is anything private, like account numbers or client names in the bank statements, you may be revealing more than you desire. By having the funds transferred to your personal account more than 60 days before you go to underwriting, lenders can stay out of your business.
You're getting a gift for the down payment. If they love you enough to give you the money, perhaps they trust you enough to give that money 61 days ahead of underwriting. Of course, gifts are allowed on many loan programs if the transfer is documented and you have a gift letter; however, if the funds are already in your account for two months, the money is no longer considered a gift. This actually improves your qualifications in underwriting because a loan using your own funds for the down payment is considered a less risky than a loan with gift funds. If it is yours for 60+ days, it is no longer a gift.
As a last tip, I offer Fully Underwritten Loans WITHOUT a contract. In other words, we can turn your offer into the equivalent of a full cash offer pending the appraisal and title work. This is a powerful option at your disposal for those hard to obtain homes. Please let me know if I can help you purchase a home in Georgia.
*Eclipse photo taken near Dillon, GA on August 21,2017 using Canon Rebel T6, 300mm lens.
From My Dear Client Angela-
I bought a little (1,048 Sq. feet) fixer-upper in Pine Lake, GA. Closed yesterday with the help of my fantastic Agent and Elizabeth Washburn (New Threshold Mortgage Company). These women are not just excellent business professionals, but FRIENDS who I trusted, felt comfortable with and enjoyed throughout the entire process. I knew they were looking out for me and I just never had a worry or an anxious moment. They will both be at the first BIG party at my little house as soon as I am able to get this little jewel of a house up to speed.
My first day working at the house I met my new neighbor who has so many things hanging from his porch (art and things) it is hard to even see the door. I walked over and said, "Hi, I am your new neighbor!" He shook my hand looked me in the eye and said HI--then said, "well I don't know what you think about all this stuff". I promptly said, "I LOVE it!" Then, with a big smile on his face he invited me inside to see more art. He tells me that love and compassion are the only things that really matter and added I know you get that! As he is explaining and describing all of his art, which he mostly found at the thrift store and I am just amazed at his keen eye and just how much he has in this little apartment! He bends down at one point and picks up a native American sand drawing and says he feels compelled to give this to me. I am touched and thank him profusely. As we part and I go back to my little house across the street, he says he is happy that we got to meet at this point in our journeys and then flings his arms open and says, "Welcome to Pine Lake!" I'm feeling right at home!