Tag: Financial tips

Should you rent or buy?Should you rent or buy?


Homeownership is often said to be the better choice when compared to renting. However for certain people, this isn’t always true. Here are 6 types of people that are better off renting than owning a home. 

  1. People with high credit card debt. If you have trouble doing things like saving for a vacation or paying for a car repair, these are signs that you are not ready for home ownership yet. If something super expensive happened related to your home, how would you afford to pay for it? 
  2. You prefer to have predictability in your monthly expenses. You can’t always plan for things that come up suddenly such as a leaky roof or emergency plumbing repair. Renting a home guarantees a fixed expense each month. You don’t have to budget for emergency repairs, increased HOA fees, property taxes, home insurance, etc. 
  3. You don’t have an emergency savings fund. An emergency savings fund is typically 3 to 6 months worth of living expenses. If you don’t have this kind of savings account yet, you may not be financially ready to buy a home.
  4. You love living in big cities. If you prefer living in a big city, you shouldn’t sacrifice that to live in a suburb you don’t like. Rent is usually cheaper than buying a home with a million dollar mortgage in the same area. 
  5. You see homeownership as controlling. Most people choose to buy a home so they can make changes such as paint color, adding additions, and having a sense of control to do what they want with their space. However most of these things require approval and permits. And if you live in a HOA you can’t just paint the door red, there are rules you must follow. 
  6. You’re buying a home to increase your net worth. It can seem appealing to buy a home to build equity and increase your net worth. A mortgage amortization schedule shows how much of your mortgage payments go towards the principal balance versus the interest paid to the lender. If you are paying $3,000 a month, maybe $300 of that is going towards the principal, which goes towards equity. The other $2,700 is going to interest at the bank, the bank basically owns the house more than you do. However if you can buy a home and rent out part of it, which would help pay the mortgage that would be sweet!

Tax Tips for Homeowners!Tax Tips for Homeowners!

Hi!  Working on your taxes?  Here’s some great tips for homeowners.

You can get some federal tax breaks for owning a home IF itemizing deductions on your 2021 tax return.
But that’s a bigger “if” than it used to be.
Although tax deductions for homeowners can add up to thousands of dollars, claiming them is worth the trouble only if all your itemized deductions exceed the IRS standard deduction.
The standard deduction for the 2021 tax year is:
  • $25,100 for married couples filing jointly
  • $12,550 for single filers 
  • $18,800 for heads of households
So what’s deductible?
1. Mortgage Interest
2. Home Office Expenses
3. Mortgage Insurance
4. Property Taxes
5. Home Improvements that are medically necessary: ramps, larger doorways, and handrails.
If you have questions, I am here to help and have several great CPA’s to assist you!

8 Steps to Buying a Home8 Steps to Buying a Home

1.  Find the Right Agent~  Buying a home is one of the largest decisions you will ever make.  It is essential to have an experienced agent in your corner, always looking out for our best interest.  A listing agent has an allegiance to their Sellers’ and their goal is to get top dollar for the home.

A Buyer’s agent main responsibility is to look after your best interests and get you the best deal.  We provide information relating to value. market conditions, obvious defects or red flags with a home.  We negotiate repairs and pricing on your behalf as we use our knowledge and experience to navigate you thru all the real estate paperwork.  A Buyer’s agent should have knowledge of the area where you want to buy, have great Google and Zillow reviews, and have excellent communication skills plus getting back to you in a timely manner.

2.  Prepare your Finances~ Check your credit score.  A mortgage requires a good credit score.  Paying down credit card balances, and regularly paying your bills will help you raise your credit score.  Do not apply for a new credit card or get a car loan while waiting for loan approval.  When applying for a loan, the lender will want pay stubs, and 2 years of tax returns.

3.  Get Pre Approved~  Just guessing how much home you can afford, is not wise.  Pre approval, is when you are pre approved for a certain amount.  Prequalified is not enough.  Also take into consideration that even though you have been pre approved for a certain amount it still may not be in your best interest to spend that kind of money.  What would happen if you got ill, or there was a death?

A down payment is your contribution toward the purchase of the home.  This is different that earnest money.  Earnest money states you earnestly want to buy a home and it is given to listing agent upon presenting the offer, or within 3 days.  The earnest money will go towards the overall purchase price.

Down  payments vary depending on loan and can range from 0% down (VA, first time home buyer) to 20% down.

4. Make an Offer~  When you find the right home your agent will present an offer, with preapproval letter, price, contingencies, earnest money, and closing deadline.  Be prepared that a Seller may counter your offer in which you may accept or counter.

5.  Executed Contract~  Once an offer is accepted and signed by both parties the contract is given to the title company to do a complete search on the property.  This will discover any tax/loan liens, easements, covenants or any document recorded.  The earnest money check will be given to the title company,

6. Order an Inspection~ During the inspection period, this is your time to do your homework.  Hire an inspector, check with utility companies for average utility bills, and learn as much as you can on the home. After a thorough inspection is done, your agent and you will decide if you want to negotiate the offer.  There may be radon, mold, roof or numerous other problems that you want fixed prior to purchasing the home, or money given to you by the Seller to fix.

7.  Schedule your Move~ If renting give 30 day notice, contact moving company,  start packing/decluttering, and keep track of expenses (they may be tax deductible)  You may want to donate to a thrift store or have a garage sale.  Get home insurance on new home, notify utilities of old home and new, forward mail. and notify friends and family.

8.  Closing Day~ Final step in your home buying process.  Before heading to the closing table, do a walk thru of the home, checking to see if inspection issues were fixed if any, and Seller is completely moved out.  We will check with contract to make sure that any agreed upon items were done, ie. cleaning of home, windows, and carpet.

A few days prior to closing, you will receive a settlement statement, showing the exact amount that you need to bring to closing in a cashiers check or wire.  Your driver’s license is needed too.  Be prepared that closing takes about 1 hour and to sign lots of documents.   The keys to your new home will be given to you once the paperwork is recorded.  Congratulations on you new home!

We are here to help!  MancosHomes.com

First Time Home Buyer TipsFirst Time Home Buyer Tips

Thinking about buying a home?

1. Start saving early

Here are the main costs to consider when saving for a home:

  • Down payment: Your down payment will depend on the type of mortgage you choose and the lender. Some conventional loans aimed at first-time home buyers with excellent credit allow as little as 3% down. But even a small down payment can be challenging to save. For example, a 3% down payment on a $300,000 home is $9,000. Set up automatic transfers from checking to savings to get started.  There are also loans with 0% down.  This is different than Earnest Money that shows the seller that you are earnestly proceeding with purchase.  
  • Closing costs: These are the fees and expenses you pay to finalize your mortgage, and they typically range from 2% to 5% of the loan amount. You can ask the seller to pay a portion of your closing costs, and you can save on some expenses, such as home inspections, by shopping around. 

2. Decide how much home you can afford

Figure out how much you can safely spend on a house before starting to shop.  Check out NerdWallet’s home affordability calculator.

3. Check and strengthen your credit

Your credit score will determine whether you qualify for a mortgage and affect the interest rate lenders will offer. Take these steps to strengthen your credit score to buy a house:

 

  • Get free copies of your credit reports from each of the three credit bureaus — Experian, Equifax and TransUnion — and dispute any errors that could hurt your score.

 

  • Pay all your bills on time, and keep credit card balances as low as possible.

 

  • Keep current credit cards open. Closing a card will increase the portion of available credit you use, which can lower your score.

 

4.  Research First Time Buyer Assistance Programs.

5.  Shop around for lenders and compare fees.

  • Not all lenders are the same.  Some lenders are offering free appraisal if home doesn’t appraise.  Appraisal fees are paid out of pocket very soon after getting a home under contract and are about $700.  You want to know exactly what the lender will charge for a loan. Roughly it’s about $5000 and that charge will be built into the loan as well as your property insurance and taxes.

6.  Get prequalifed before looking for a home!

  • Many buyers start looking and they find a home they would like to purchase however it’s already under contract before they can get a prequalification letter.

Protect Your HomeProtect Your Home

“For people living in wildfire-prone areas here in Colorado, mitigation is a proven method to reduce the risk to your home and property,” said Insurance Commissioner Michael Conway. “Now is the time to take what steps you can, before we get any further into this summer’s wildfire season.” 

The Storm Prediction Center issued the first extreme fire danger warning for Western Colorado and Eastern Utah in 15 years. Unfortunately, this serves as a reminder that we are now in the height of wildfire season in Colorado and the West.

Tips for wildfire mitigation

  • Clear a safety zone around your home and remove trees, leaves, brush and pine needles. Create a zone of at least 100 feet, but know that 200 – 500 feet is often recommended. Also remove overhanging tree branches near your home.
  • Be sure propane or fuel tanks are at least 30 feet away from all structures.
  • Keep the smoke detectors and fire extinguishers inside your home working properly.
  • If you do not have access to a community water system or water hydrant, get a water storage tank. Make sure your garden hoses reach all areas of the property, and keep them visible and in accessible areas.
  • Be sure your entrance road is accessible. Inaccessible roads can prevent fire-fighting equipment from reaching your home quickly. The street address should be easily visible from the entrance to the property so emergency responders are not delayed.
  • Use fire-resistant materials in the structure of your home, especially the roof, which is most vulnerable
  • Do not store firewood on your deck or porch.

We have a couple of great companies that can help you be proactive.  Give Carrie Summers a call 970-759-2540. We are here to help!

Should I Renovate Before I Sell?Should I Renovate Before I Sell?

Thinking about selling and unsure if you should renovate?  Will it make your home more appealing to buyers?  Will you recoup the cost?  Renovations might not be for important in the current market.

Homes are currently flying off the market if priced right.  Multiple offers and above asking price is the norm.  Due to the high demand, spending time and money on renovations might not be smart.

Cleaning up the property is still key, and decluttering.  However some repairs might not be necessary.

In today’s market, many buyers are willing to take on home improvement projects, thus they can transform the home to their needs and tastes.

Contact me for how to get top dollar for your home, without doing major repairs.

Tips for First Time Home BuyersTips for First Time Home Buyers

1.   Start saving early

Here are the main costs to consider when saving for a home:

  • Down payment: Your down payment requirement will depend on the type of mortgage you choose and the lender. Some conventional loans aimed at first-time home buyers with excellent credit allow as little as 3% down. But even a small down payment can be challenging to save. For example, a 3% down payment on a $300,000 home is $9,000. Use a down payment calculator to decide a goal, and then set up automatic transfers from checking to savings to get started.

  • Closing costs: These are the fees and expenses you pay to finalize your mortgage, and they typically range from 2% to 5% of the loan amount. You can ask the seller to pay a portion of your closing costs, and you can save on some expenses, such as home inspections, by shopping around.

  • Move-in expenses: You’ll need some cash after the home purchase. Set some money aside for immediate home repairs, upgrades and furnishings.

2. Decide how much home you can afford

Figure out how much you can safely spend on a house before starting to shop. NerdWallet’s home affordability calculator can help with setting a price range based on your income, debt, down payment, credit score and where you plan to live.

3. Check and strengthen your credit

Your credit score will determine whether you qualify for a mortgage and affect the interest rate lenders will offer. Take these steps to strengthen your credit score to buy a house:

  • Get free copies of your credit reports from each of the three credit bureaus — Experian, Equifax and TransUnion — and dispute any errors that could hurt your score.

  • Pay all your bills on time, and keep credit card balances as low as possible.

  • Keep current credit cards open. Closing a card will increase the portion of available credit you use, which can lower your score.

  • Track your credit score. NerdWallet offers a free credit score that updates weekly.