Ask Laura

 

 

Q. What are points? Is it ever a good idea to pay points? 

A. A point is a one-time fee for your loan that is 1% of the mortgage amount. For example, on a $500,000 loan one point is $5,000. Sometimes, you can get a lower interest rate by paying a point, or a half a point. Some loans require that you pay a point just to get the going rate. It depends on your credit, your loan amount and the going rates on the day you apply for your loan.

Interest rates are still near historic lows, so if you plan to stay in your home for a long time it may make sense to pay a point to lower the rate. You would also want to pay a point if you will break even in a time-period that is less than you think you'll be staying in the home. For instance, if you could pay $2,000 to save .5% interest on a $200,000 loan and you were planning to stay in the house at least five years, you would probably choose to pay the point because you would break even on the $2,000 in a little over three years.

Q. I'm being transferred to a new location because of my work. Is it possible to deduct moving expenses on my income tax?

A. Moving expenses may be tax deductible if you move to a new home because of a new job or a job transfer. To qualify, the distance from your old home to your new job must be a t least 50 miles more than the distance from your old home to your old job. You can deduct the cost of moving household goods, as well as the cost of moving you and your family. Lodging expenses during the move are deductible, but not meals.

Q. Is there a certain type of home that seems to be most popular right now?

A. There are a number of features it seems everybody wants. Here are some of the things I'm frequently hearing my buyers request:

    * An open floor plan and lots of windows
    * A large kitchen
    * A large family room and master bedroom suite
    * At least 2 bathrooms
    * Vaulted ceilings
    * A patio or backyard entertaining area

Q.  When am I able to remove Private Mortgage Insurance from my monthly house payment?

A. Freddie Mac has some pretty specific uidelines for that and it would require a new appraisal. THEN---if the increase in value is due to improvements made to the property, it needs to be 80% of the new appraisal. If the increase is just due to an improved market, it has to be at 75% of the new appraisal. There are also some time restrictions. Using a new appraised value, to use the 80% level you have to be in the loan for 5 or more years (unless it's due to improvements) and to use the 75% level it has to be at least 2 years. On the other hand, if you reach 80% by paying down the balance, there are no time restrictions.

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For more ways to maximize your profits and minimize the work of selling, contact CDM Realty at laura@cdmrealty.com or by calling 949-729-9843.