0% financing has induced car buyers into taking the plunge because it doesn’t cost anything to use someone else’s money.  While mortgage rates are not at zero, they’re close enough that many buyers are applying similar logic.

Qualified mortgage interest is deductible on taxpayers’ returns subject to the maximum acquisition debt of one million dollars.  For the fortunate homeowners who have paid off their mortgage, their acquisition debt was reduced to zero and only the interest on a maximum home equity debt of $100,000 is deductible.

If you have to pay interest, deductible interest is preferable because it reduces your actual cost.

Consider the following example of a taxpayer with a $500,000 debt-free home.  If they did an 80% cash-out refinance of $400,000, $100,000 would be considered home equity debt and the interest on that would be deductible on their income tax.  The other $300,000 of debt is considered personal debt and the interest is not deductible.

However, because the rates are currently so low, the loss of deductibility of the interest doesn’t have as much impact as if the rates were higher.  The key is to have a good purpose for the money that would offset the actual cost of the interest.

Paying off a higher rate debt such as credit cards, student loans, possibly, business debt could all have significantly higher interest rates.  Refinancing a home and eliminating debts like these could be a big savings.

All lenders are not the same.  Call for a recommendation of a trusted mortgage professional.

Originally Posted at: Lafayette Real Estate News

Cut Your Housing Costs in Half

Serious shoppers wait for a 50% off sale to make the decision because of the bargain factor.  Renters who are serious about lowering their monthly cost of housing should consider buying with today’s low mortgage rates.  For an example, let’s assume a person buys a $200,000 home with 3.5% down payment on with a 4.5% FHA mortgage for 30 years.

The total house payment would be approximately $1,508 per month.  However, once you consider the equity build-up due to normal amortization, a monthly appreciation estimated at 2% annually for this example, the tax savings and paying maintenance that a tenant wouldn’t be required to do, the net cost of housing is $772 a month.  This is almost half of the full mortgage payment.

If this person was paying $1,750 a month for rent, it would cost him almost $978 more to rent than to own. In the first year alone, it would accumulate to over $11,000 which is more than the down payment required of $7,000.

Owning a home is the largest investment that most people make and the down payment of $7,000 to purchase this home would grow to $58,837 in equity by estimating a 2% appreciation and normal amortization.

To check out what your real housing costs might look like, go to Rent vs. Own or contact your real estate professional.

Originally Posted at: Lafayette Real Estate News

 

The Reason They’re Called Benefits

The Veterans Administration guarantees home loans for eligible veterans.  It is considered an attractive loan because the veteran can purchase the home with no down payment up to specific loan limits and no mortgage insurance. This makes the monthly payment considerably lower.

Let’s assume a buyer wants to purchase a $200,000 home and can get a 4.5% interest mortgage for 30 years.

A FHA loan would require a $7,000 down payment plus $3,377.50 in up-front MIP which can be rolled into the mortgage. The monthly mortgage insurance premium would be $221 per month for a total payment of $1,215.94.

The VA loan doesn’t require a down payment. There is a 2% VA funding fee that can be rolled into the mortgage which would make the principal and interest payment on $204,400 much less at $1,035.66.

The revised loan limits for 2014 are published by VA and can change each year especially based on high-cost areas. However, a lender can allow a home purchase in excess of these amounts with a 25% down payment on the amount above the limit.

If a purchaser wants to buy a $600,000 home in an area where the VA limit is $417,000, the lender could require a $45,750 down payment and make a $554,250 mortgage. In this example, the purchaser is able to get in for less than 10% down payment and no mortgage insurance.

Veterans with the available funds for a down payment should compare all loan products to consider which will provide the lowest cost of housing. A skilled real estate professional and a trusted mortgage advisor can be valuable resources.

 

 

Originally Posted at: Lafayette Real Estate News

Okay, I will go ahead and predict that a part of the city of Lafayette Louisiana will be shut down from everyday activities on April 22-26th 2015. How do I know this you ask? Because Festival International de Louisiane will be taking the city by storm! It is the largest free festival in the country! And the price isn’t even the biggest attraction! There will be an unbelievable atmosphere, local and international food, arts and crafts, a variety of music and other types of entertainment. Vendors from many countries will be selling items that otherwise would only be available in that country. I really can’t describe this event any better than it’s been described in the social media. You can go to these sites to find more information: http://festivalinternational.org/ . Face book page: https://www.facebook.com/festivalinternational on Instagram you’ll be able to follow it live: https://instagram.com/festivalinternational/ and if you want the Festival International App, you’ll find it in the app store. You name it you can find it here at Festival International! (Well almost). It is a very safe place for your family and friends; Louisiana truly has crowd control down pat, so you can trust the police will be out doing their crowd control thing. Parking is not problem either; you can park at the Cajun Dome on Congress Street and catch the shuttle, for free, from the Dome to the festival. Bring cash; most of the vendors only accept the American dollar. Carry in very little but leave with a lot! You can bring a folding chair and blanket, however, don’t try to bring in your own beverages; organizers encourage you to buy from food and beverages from the local vendors. This is the 29th anniversary for the festival and it gets bigger and bigger every year. Below, in the graphic, is the entertainment line up for this year.

Originally Posted at: Lafayette Real Estate News

 

 

Growing through Google

 

As we all know, Google owns the online world, and we just happen to live in it. As a result of this “ownership”, Google+ is a must. It should be at the top of the list of your online marketing strategy. Most of us have not paid much attention to it in the past and have looked at it as just another social media platform. However, Google+ offers us more than most social media sites can. It has the strengths to segment and target customers through circles, as well as lhosting hangouts, but also offers us search engine optimization. For those non-geeks, better search engine optimization allows you to appear higher on a google search results page! Isn’t that what we all need and want?

 

With many new changes made to Google and Google+, along with the SEO war going on, Google+ is offering us free tools to make our online presence even better. These tools are essential in order to act like an online business directory. For example, Google+ is offering free indexed business pages and custom maps.  This enables us to spend less on marketing and get better return on our investment. It is now wise to have a professional with knowledge of real estate marketing to set us up properly on Google+ in order to promote the best image possible for us. This is a very low cost investment with a high rate of return! 

Originally Posted at: Lafayette Real Estate News