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Home is Worth the Sacrifice

by Stone Realty Services®

house orange.jpgThere are many reasons people want a home with the most frequent responses being a place of their own, to raise their family, share with their friends and feel safe and secure.  These are all strong motivations fueling the American Dream of owning your own home.

The motivation is so dominant that buyers are willing to make sacrifices to have their dream come true.  According to the 2014 National Association of REALTORS® Home Buyers and Sellers Survey, 72% of first-time buyers cut spending on luxury or non-essential items.  They also cut spending on entertainment, clothes and even cancelled vacation plans.

The value of getting their own home is more important than the immediate gratification of things that are considered less important.  While qualifying guidelines were increased last year, there are still more buyers purchasing homes at near record-low mortgage rates.

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Save on Homeowner's Insurance

by Stone Realty Services®

iStock_000029570462-250.jpgInsurance is a way to hedge the risk of a possible loss on an asset that a person or entity cannot afford.  The cost of the coverage is determined by risk and exposure to the insurer and reflected in the premium.

Another way to say it is: don’t buy insurance when you can afford the loss.  If you have a mortgage on your home, you must have insurance.  It is probably prudent for most people to have property insurance but certain coverage might be avoided because you can afford the loss if you were to have an occurrence.

  1. Call your current agent and review your insurance coverage.  Ask if there are any available discounts whether your property qualifies for now or after certain improvements are made.  Monitored alarm systems, dead bolts, smoke detectors, updated electrical, certain types and ages of roofs among other things may be eligible for individual discounts. 
  2. Compare the newly revised coverage and premium with other reputable agencies and insurers.  Shopping can be time consuming but experts agree that the exercise can be valuable and should be considered every few years. 
  3. Deductibles are an easy way to affect the premium based on the initial amount of loss that the insured wants to assume.  The higher the deductible, the lower the premium.  Determine the amount of risk you want to assume and select an appropriate deductible.
  4. Consider bundling your home and auto policies for possible discounts and leverage for better service.
  5. Don’t become a co-insurer.  Most policies stipulate that a building must be insured for at least a certain percentage, usually 80% of its insured value to be able to collect the full amount of a partial loss.  Insured value is not always the same as market value.  The land is not considered in the value but replacement cost of the dwelling is.

It isn’t possible to purchase insurance after a loss; it must be purchased before a loss is incurred.  Premiums are based on careful analysis of insurer’s loss and overhead expense plus a profit.  As a homeowner and an insured, it would be equally wise to analyze coverage, claim service, your risk tolerance and the premium you’ll pay for that coverage. 

Homeowner Tax Tips

by Stone Realty Services®

iStock_000006029471Medium-250.jpgEven if you’re having a professional help you with your income tax return, you need to provide them with information on the money you spent that might be deductible.  Look at the following list to see if any of these things need a little more investigation to determine if they apply to your situation.

  • If you refinanced your home for the second or subsequent time in 2014, there may be points that can be taken as an interest charge.
  • Compare mortgage interest, property taxes and other eligible itemized deductions to your standard deduction to see which will give you a larger deduction.
  • If you’re paying mortgage insurance premiums with your payment, you may be eligible to deduct them.
  • If you purchased a home in 2014, there may be some deductions found on the HUD-1 form you received at closing.
  • If you purchased a home in 2014 and the seller paid points on your behalf in order to get a mortgage, you may be able to deduct them.
  • If you purchased and installed in 2014 qualified residential energy efficiency property or improvements, you may be eligible for tax credits.
  • If you have dedicated, exclusive space in your home for a home office, you may be eligible for a deduction that may include a pro-rata share of insurance, utilities and other things.

For more information, see IRS Publication 936, Home Mortgage Interest Deduction; 2014 Instructions for Schedule A.

If you need another copy of your closing statement for the home you purchased or sold in 2014, contact your real estate professional. 

Displaying blog entries 1-3 of 3

Contact Information

Photo of Stone Wood Team Real Estate
Stone Wood Team
EXP Realty
2165 Jamieson Avenue
Alexandria VA 22314
Office: (703) 739-4663
Office: (703) 739-HOME
Fax: 703-683-9692