A Home's Value
What's the difference between an appraisal and a comparative market analysis? An appraisal is a certified appraiser's calculation of the value of your home at a given point in time. It takes into consideration such things as:
* Your home's square footage
* Construction quality
* Home design
* Your home's floor plan
* The neighborhood your home is located in
* Availability of transportation, shopping and schools
* Lot size, topography, view and landscaping
A comparative market analysis is more of an informal estimate of your home's market value. A real estate agent makes an analysis based primarily on sales of comparable homes in the neighborhood. Compared to home appraisals, which typically cost between $200 and $300, a comparative market analysis may be obtained at no cost.
What's the difference between a home's “estimated value” and its “worth”?
While a home's “estimated value” is most commonly determined by either an appraisal or a comparative market analysis, its “worth” is ultimately established by what prospective buyers are willing to pay for it.
Can I find the value of my home through the Internet?
There are a number of other web sites and services that can crunch the numbers and calculate your home's estimated value.
While these calculators rely on recent home sales and refinance transactions in your area to produce a value estimate, an appraisal or comparative market analysis may still provide you with the most accurate assessment.
http://www.rockfinancial.com/refinance/refinancing/home-value.html?lid=1336
Friday, April 27, 2007
Homeowner Tax Tips
Deducting Mortgage Interest. Mortgage interest on a primary residence is usually fully tax-deductible, unless your mortgage balance exceeds $1 million or you took out a mortgage for reasons other than buying, building or improving a home.
To claim this deduction, you should fill out Schedule A, labeled “itemized deductions.” Your lender should send you a “Form 1098” that tells you how much mortgage interest you paid for the year. You should record your interest deduction on line 10.
Late payment charges also may be deducted as home mortgage interest if not for a specific service received in connection with your home loan. The same is true for mortgage prepayment penalties - if you pay off your mortgage early and incur a prepayment penalty, you can deduct that penalty as home mortgage interest (subject to the same requirements for late payments).
Deducting Real Estate Taxes. Real estate taxes, which are annual taxes based on the assessed value of a property, also are tax deductible. Your mortgage interest statement may list the amount of real estate taxes you paid if your taxes and homeowners' insurance were placed in an escrow account when you closed on your mortgage. If real estate taxes aren't included, you could review your cancelled checks to determine your total real estate tax deduction.
Deducting Loan Points Paid on a Purchase. The points you pay on a purchase mortgage are deductible the year you made the purchase. You can deduct any points you paid — and that a seller paid on your behalf* — if you meet the following criteria:
* The loan is secured by your primary residence and the loan was used to buy, improve or build the home.
* Paying points (and the amount of points paid) is not an irregular practice in the seller's geographic area;
* The points are computed as a percentage of the loan principal;
* The points are clearly delineated on the buyer's settlement statement; and
* You put cash into your home purchase in an amount at least equal to the points you were charged.
*Seller Paid Points are Deductible by the Buyer. When a seller pays points for the buyer (or in other words, buys the mortgage rate down) the buyer gets a lower mortgage rate.
Deducting Loan Points Paid on a Refinance. If you refinanced last year, you may be able to write-off any points you paid to buy down the mortgage rate. To do so, you deduct the points proportionately over the life of the new loan. For example, if you took out a 30-year loan, you would deduct 1/30th of the points you paid each year.
Have you refinanced more than once in recent years? Many homeowners have and may have overlooked an important opportunity. Say, for example, you refinanced in 2001 and paid points. You can deduct 1/30th of those points in that tax year. However, rates continued to drop, so you refinanced again in 2003, paying off that 2001 loan. The remaining points from the 2001 refinance — that is, those that haven't yet been deducted — can now be deducted in full since that loan has been paid off.
Deducting Interest on a Home Equity Loan. The interest on a home equity loan may be tax deductible up to $100,000. However, if your home equity loan when combined with your first mortgage amount, increases the debt on your home to an amount more than the property's actual value, there may be deductibility limits. Usually, you can deduct the smaller of interest on a $100,000 loan or your home's value less the amount of your existing mortgage.
As always, you should check with your tax advisor to determine which of these deductions apply to you!
http://www.rockfinancial.com/refinance/refinancing/tax-deductions.html?lid=1337
To claim this deduction, you should fill out Schedule A, labeled “itemized deductions.” Your lender should send you a “Form 1098” that tells you how much mortgage interest you paid for the year. You should record your interest deduction on line 10.
Late payment charges also may be deducted as home mortgage interest if not for a specific service received in connection with your home loan. The same is true for mortgage prepayment penalties - if you pay off your mortgage early and incur a prepayment penalty, you can deduct that penalty as home mortgage interest (subject to the same requirements for late payments).
Deducting Real Estate Taxes. Real estate taxes, which are annual taxes based on the assessed value of a property, also are tax deductible. Your mortgage interest statement may list the amount of real estate taxes you paid if your taxes and homeowners' insurance were placed in an escrow account when you closed on your mortgage. If real estate taxes aren't included, you could review your cancelled checks to determine your total real estate tax deduction.
Deducting Loan Points Paid on a Purchase. The points you pay on a purchase mortgage are deductible the year you made the purchase. You can deduct any points you paid — and that a seller paid on your behalf* — if you meet the following criteria:
* The loan is secured by your primary residence and the loan was used to buy, improve or build the home.
* Paying points (and the amount of points paid) is not an irregular practice in the seller's geographic area;
* The points are computed as a percentage of the loan principal;
* The points are clearly delineated on the buyer's settlement statement; and
* You put cash into your home purchase in an amount at least equal to the points you were charged.
*Seller Paid Points are Deductible by the Buyer. When a seller pays points for the buyer (or in other words, buys the mortgage rate down) the buyer gets a lower mortgage rate.
Deducting Loan Points Paid on a Refinance. If you refinanced last year, you may be able to write-off any points you paid to buy down the mortgage rate. To do so, you deduct the points proportionately over the life of the new loan. For example, if you took out a 30-year loan, you would deduct 1/30th of the points you paid each year.
Have you refinanced more than once in recent years? Many homeowners have and may have overlooked an important opportunity. Say, for example, you refinanced in 2001 and paid points. You can deduct 1/30th of those points in that tax year. However, rates continued to drop, so you refinanced again in 2003, paying off that 2001 loan. The remaining points from the 2001 refinance — that is, those that haven't yet been deducted — can now be deducted in full since that loan has been paid off.
Deducting Interest on a Home Equity Loan. The interest on a home equity loan may be tax deductible up to $100,000. However, if your home equity loan when combined with your first mortgage amount, increases the debt on your home to an amount more than the property's actual value, there may be deductibility limits. Usually, you can deduct the smaller of interest on a $100,000 loan or your home's value less the amount of your existing mortgage.
As always, you should check with your tax advisor to determine which of these deductions apply to you!
http://www.rockfinancial.com/refinance/refinancing/tax-deductions.html?lid=1337
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