Vermont Interest Rate Update
It’s time to check out interest rates, as I haven’t reported on them recently. Historically, interest rates go up in the spring, but we haven’t seen much movement this spring which is good news for Vermont home buyers.
Freddie Mac’s weekly Primary Market Mortgage Survey reports a slight increase in rates this past week due to economic growth outside of the housing market, with a healthy consumer sector and improving business spending.
Interest rates this past week on a 30-year fixed-rate mortgage averaged 6.42 percent compared to the previous week’s rate of 6.37 percent. This time last year, a 30-year fixed-rate mortgage averaged 6.67 percent.
Are you shopping for a mortgage for your Vermont home? This can be a daunting process, but I am glad to refer you to a reputable, knowledgeable and competitive mortgage lender who will take the time to explain your loan options to you. This will allow you to make an educated decision about which home loan is best for you. Just give me a call at 800-659-1819 #103. I’m here to help.
Be sure to visit my website to learn more about mortgages and the home buying process.
Second Home Tax Rules
Vermont has seen an influx of second home buyers in the past few years. Here are some second-home tax rules to keep in mind.
Mortgage interest.
The mortgage interest you pay on your second home is tax deductible just as the interest on the mortgage on your first home is.
You can write off 100% of the interest you pay on up to $1 million of debt secured by your first and second homes and used to acquire or improve the properties. (That’s a total of $1 million of debt, not $1 million on each home.)
However, if you rent your second home for more than 14 days a year different rules apply. See below.
Property taxes.
You can deduct property taxes on your second home, too. In fact, you can deduct property taxes paid on any number of homes you own.
Renting.
If you rent your second home out for 14 or fewer days during the year, you can pocket the cash tax-free. The house is considered a personal residence, so you deduct mortgage interest and property taxes just as you do for your principal home.
If you rent for more than 14 days, though, and you must report all rental income. You also get to deduct rental expenses, and that gets complicated because you need to allocate costs between the time the property is used for personal purposes and the time it is rented. Taxes are based on the amount of time the house is rented and it is a good idea to talk with your accountant concerning details.
Tax-free profit.
You are allowed to take up to $500,000 of profit tax free when selling your principal residence. However if you make your second home your principal residence, you can extend this deduction.
Some retirees, for example, are selling the big family home and moving full time into what had been their vacation home. Once you live in that home for two years, up to $500,000 of profit can be tax free. (Any profit attributable to depreciation while you rented the place, though, would be taxable. Depreciation reduces your tax basis in the property and therefore increase profit dollar for dollar.)
Are you thinking of buying a second home in Vermont? Visit my website to view all Vermont real estate or give me a call at800-659-1819 #103. I’m glad to help you find your Vermont vacation home!
Vermont Interest Rates Decline
Freddie Mac has released the results of its Primary Mortgage Market Survey®. Rates have decline for the first time in six weeks due to signs of moderating inflation.
The rate for a 30-year fixed-rate mortgage averaged 6.17 percent, down from last week when it averaged 6.22 percent. Last year at this time, the 30-year averaged 6.53 percent.
This is great news for Ludlow home buyers. Historically rates inch up during the spring buying season. Now is when the most homes are available for sale and to have rates low is having your cake and eating it too.
Thinking of buying Ludlow real estate? Visit my website to view all Vermont real estate listings or give me a call at 800-659-1819 #103.
Saving The Down Payment For Your Vermont Home
Foreclosures are on the rise. Lenders are tightening their belts and their lending practices. No money down loan programs are becoming harder to find, which means Vermont home buyers need to have money available for a down payment. Here are some tips on how to come up with the down payment.
1. Ask for help.
Ask relatives if they would be willing to contribute to your down payment or give you a no interest loan with no repayment time frame.
2. Borrow from your life insurance.
If your life insurance has built up value, you can borrow against it. this does not count as a debt because you are borrowing from yourself.
3. Borrow from your IRA.
First-time home buyers can take $10,000 for an IRA to put toward a home purchase, penalty free.
4. Increase your income.
Get a second job and stash or do free lance work.
5. Change your withholding taxes.
This will give you more take-home pay, which you can start saving!
6. Consider government backed loans.
VA and FHA loans require lower down payments and there are many state loan programs available.
For more information on how to save your down payment and the Vermont home buying process, visit my website or give me a call at 800-659-1819 #103 for more personal service.
Tax Deduction For Prepaid Interest
Tax Day is only a couple of weeks away. Don’t forget to claim the deduction for the mortgage interest you paid at closing when you bought your home.
All mortgage interest is tax deductible. You should have received a year-end statement from your lender showing how much interest you paid for 2006. However, this statement does not include the interest paid at closing. You will need to pull out your settlement statement or HUD-1 to determine how much interest was paid at closing. This amount can then be added to the number on your lender’s statement. If in doubt, provide your HUD-1 to your accountant or tax preparer.
For information about buying a home in the Ludlow, VT area, visit my website or give me a call at 800-659-1819 #103.
Ludlow Home Buyers Can Now Finance Repairs
Vermont Housing Finance Agency (VHFA) has made it easier for home buyers purchasing a rehab to borrow the money for needed repairs.
For mortgage loans that close on or after Feb. 1, 2007, VHFA will now allow the total cost of repairs to be included in the mortgage loan as long as those costs do not exceed the lesser of $25,000 or 25 percent of the purchase price which must include a 10 percent contingency. For loans that meet specific requirements, VHFA will purchase loans from lenders with an outstanding escrow for those repairs.
Eligible repair items include: items to complete the property, increase living space, construct a garage (maximum two-car), correct structural issues, bring property up to building codes or standards, correct or add needed safety features, repair or modernize mechanical and/or plumbing systems or fixtures and to repair or improve internal or external surfaces.
Contact me for more information on this program at 800-659-1819 #103
Interest Rates Drop Again
The results of FreddieMac.com’s Primary Mortgage Market Survey show a lowering of interest rates for the second week in a row. The average rate for a 30-year fixed-rate mortgage was 6.18% last week, down from the previous week’s 6.24%.
“Mortgage rates drifted lower this week largely on the basis of new economic information suggesting a slower economy and lower inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist.
This drop in rates reinforces last week’s post that it is an excellent time to buy Ludlow real estate. Are you in the market to buy a home? Visit my website to view all Ludlow real estate listings. Or for more personalized service, give me a call, 800-659-1819 #103.
FEDs Leave Rates Alone
The Federal Reserve Board announced this week that it would keep the the federal funds rate at 5-1/4 percent.
What does this mean for Ludlow home buyers? Mortgage interest rates should remain stable. There was a slight increase in rates in anticipation of the FED announcement, but that slight increase should settle back down again.
If you are in the market to purchase Ludlow real estate and are wondering how much home you can buy at the current interest rates, give me a call. I am glad to talk with you!
FreddieMac.com Reports Higher Mortgage Rates
Mortgage Rates inched higher this week according to FreddieMac.com’s weekly Primary Market Mortgage Survey. The average rate for a 30-year fixed-rate mortgage is 6.18 percent compared to last week’s 6.13 percent.
Rates were effected by increased consumer spending in November along with a increased new home sales causing concern over inflation. Read the full story…
BankRate.com 2007 Mortgage Tips
BankRate.com recommends 7 smart moves in 2007 for those with a mortgage or thinking about getting one.
If you would like to talk with a reputable lender about how much of a home you quailify for, please contact me. I am glad to put you in touch with a person who will provide you with excellent service and products. Also, visit my website for Ludlow, VT real estate.