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List & Explanation of Tax deductions for homeowners

Tax season is here! If you own a home you should maximize your tax breaks.

Here are some home-owning related tax breaks to file this year!

Interest on home-improvement loan

If you own a second home, the mortgage interest paid may be deductible as long as you spend at least 14 days or 10% of the fair rental days (whichever is longer) in the home.

Property tax

Property taxes are almost always tax-deductible. Did you know, Military service members can also write off real estate taxes and home mortgage interest even if they receive a housing allowance?

Residential energy-efficient tax credit

If you made efforts to make your home more energy efficient by installing equipment like storm doors, energy-efficient windows, asphalt or metal roofs, insulation, air-conditioning and heating systems, you may be eligible for a tax credit of up to $500.

Renewable-energy tax credit

If you’ve installed “green” equipment that uses renewable sources of energy to help power your home, you may be eligible for the Renewable Energy Efficiency Property Credit. You are eligible for this tax credit up to about 30% of the cost of the equipment, including installation costs!

Home expenses and improvement

Although you can’t write off the cost of home improvement, such as the materials and the labor. You can write off the interest if you took out a home loan to pay the contractor and to purchase the materials.

 

Why is Cash out refinancing right for you?

Purpose Funding offers you many loan options determined by which fits your needs. One of the loan options that we specialize in includes Cash-Out Refinance.

What is a cash-out refinance?

With cash-out refinancing you can refinance your mortgage for more then you currently owe. Meaning, you will take the difference in cash. Cash-out refinance can also be referred to as cash-out refi.

How does it work?

An example would be if you purchased your home a few years ago and have been contributing to your mortgage each month, your increasing the value of your home. You owe less on a home that is now worth more.

Now you have the chance to lower your rate or gain some extra cash to pay for home remodeling or renovations.

In the example provided, you are able to refinance over the $80,000 you currently owe your mortgage. In order to get cash you could refinance an amount over the $80,000, the balance will be the cash you could use for remodeling your home.

Ensure you can qualify for the loan by providing proof that you can afford to keep up with the monthly payments. Proof would include documents such as income, assets and depts.

Why cash-out refinance?

Majority of clients get a cash-out refinance in order to pay for home improvements, as this also improves equity because you are adding to the home’s value. There are also some clients who utilize cash-out refinancing to pay for college tuition.

Is cash-out refinancing right for you?

Getting a cash-out refinance is beneficial in many ways. Take advantage of your equity by eliminating high interest car, credit cards and student loans. Increase your home value with renovations, use the cash to take your family on vacation, or pick up an investment property to increase your income.

Find out if you are eligible by speaking with one of our of team members today, give us a call at (844)427-3863

New Year, New Homeowner Tips

Welcome the new year with a new home! As one of the biggest investments many of us will make is buying a home, mistakes can be costly. In order to help new homeowners here are some useful tips that will help you begin the home buying process.

Determine how much home you can afford and what you would like your payments to be – Before you start looking for a place to call home, strategically think about your price range.

Check your credit – This can determine your interest rate and loan terms, check to see if there are any errors that may be bringing your score down. You can also take a look at what opportunities you have to improve your credit, such as paying any large outstanding debts. You can also avoid opening any new credit accounts during the mortgage process to keep you score up.

Know that there will be closing costs – In addition to saving for a down payment, you should budget for an additional 2% and 5% of your loan amount. These costs can be lowered by negotiating with the seller or your real estate agent’s commission.

Money for after move-in day- Set aside a buffer to pay for what will fill you home; furnishings, appliances, rugs, updated fixtures, new paint amongst other things.

Consider HOA- decide what type of property you are looking to purchase, be sure to research and ask if there are any homeowners associate fees (HOA) on the home.

Pick the right neighborhood- take a look at local safety and crime statistics, proximity of the nearest hospital, pharmacy, grocery store and other amenities you will frequently use. It is recommended to also research local schools, even if you don’t have kids as this affects the home’s value. You may also drive through the neighborhood on various days at different time to see how traffic, noise and activity levels are.

Be prepared to compromise- nothing is perfect, think carefully as to what you are willing to compromise and what you wouldn’t.

Schedule your Purpose Funding consultation- take some time to speak with one of our mortgage experts and learn about the different options that fit your needs. Our Mortgage Experts can look at your situation and structure the loan to your specific needs and situation.

How Are Mortgage Rates Determined?

Have you ever wondered how mortgage rates are determined?

Mortgage rates are largely dependent on the changes in the market and economy. As common with stock markets, interest rates tend to fluctuate each day and this also applies to the mortgage market. Mortgage rates tend to rise when the economy is strong and drops when the economy falls.

Other factors that can also affect Mortgage interest rates include;
• The length of the mortgage loan: Mortgage rate for 15 years loans is quite lower than the 30-year loan. This is definitely one of the factors that tend to determine how high or low your mortgage rate may be.
• The type of mortgage loan: There are two major types of mortgage rates; fixed rate or adjustable. Depending on any of the types, mortgage rates tend to peculiar to that particular type.
• The amount of the loan. This is because it presents a higher risk and most lenders tend to base their mortgage rates based on the amount of risk the lender feel is associated with the loan.
• The amount of your loan vs. the value of the house ( known as LTV). The lower the loan, compared to the value of the home will generally yield a lower interest rate.
• Your credit score: Individuals with great credit score tend to receive mortgage loans at a lower mortgage rate than others.

Every client is different and we look forward to discussing your needs and finding the best loan possible, for your individual situation. Get your free mortgage rate quote today, Purpose Funding can help! Give us a call or fill out our online form now.

Toll-Free (844) 427-3863

The Differences Between the 15-year Fixed Rate VS. 30-year Fixed Rate

When it comes to Mortgage loans, rates, and terms, there are many options. Today, we will discuss the two most common loan options; The 15-year fixed rate and the 30-year fixed rate.

In the United States, the 30- year fixed rate is usually the most preferred type of mortgage loan. According to a report by the Mortgage Bankers Association, most people that seek mortgage loans tend to apply for the 30- year fixed rate over the 15-year term loan because of the difference in the monthly payment amount. The 15 year will yield a higher monthly payment, which makes it seem less affordable on a monthly basis and thus, is less preferred.

When it comes to discussing which of these two mortgage loan options are better, it is of great importance to fully have a grasp of the differences between these two and understanding the stability of your income. While the monthly payment amount may be one significant difference, there are other considerations which highlight their differences from another perspective.

Although the monthly payment on a 30-year term loan is considerably less as compared to a 15 year, in actuality, the shorter term of a 15-year makes the loan cheaper on several fronts.  Over the full life of a loan, a 30-year-mortgage will end up costing more than double the 15-year option. Generally speaking, interest rates are also lower on 15-year term loans. So, the savings are compounded – lower interest rate over a shorter period. When it comes to the payment plan for a 15-year fixed rate, the mortgage isn’t “stretched out” in comparison to the 30-year mortgage. With a 15-year fixed rate mortgage, loan payments are heavy on principle, light on interest, and finished in 180 months. Overall, a 15-year is a great option for clients with higher, and more stable income.

The 30 year fixed rate is a mortgage payment option that allows an individual to spread the payment over a 30 year period. This loan allows the client to pay a lower monthly fee but comes at a higher interest rate, over a longer period of time. This option will help you maximize your home purchasing budget.

While we may not choose one mortgage term over the other, it is important for you to weigh the options carefully and discuss it with a mortgage expert before deciding on which to opt in for. If you’re in the market for a home loan or are interested in seeing if you can refinance to a lower rate, please reach out via our contact form below, or call to speak with one of our mortgage experts now (877) 922-3863.