Myth #1: I don’t need to budget because I keep track of what I’m spending.

Keeping track of what you’ve spent is looking backwards. Making a budget is looking forward – it’s planning ahead so you’ll have money later for things you want to do or have.

Looking back at how you’ve spent your money is a good first step in preparing a budget. You can see where you spend the most and where you might exert a little control over your spending in order to save for a vacation, a down payment on a house – or retirement.

Myth #2: I’m too young to be concerned about retirement.

No, if you’re out in the world, working for a living, you are not too young. The truth is, the younger you are when you start, the easier it will be.

Step one: Get out of debt.

Step two: Create an emergency fund of three to six months’ worth of living expenses.

Step three: Look into retirement plans, putting money into IRA’s, etc.

Myth #3: Unless you have extremely wealthy parents who will pay your way, student loans are necessary to go to college.

The truth is, you absolutely can get a college education without going into debt. It’s not easy, but it will be worth the effort to begin your working life without that burden.

Look into college-specific aids and grants or federal and state grants. Work hard and earn scholarships. Get a part-time job during the school year and work full-time during the summer.

Myth #4: Car payments are simply a way of life.

No, they’re not. Driving a new car is a luxury and a status symbol – not a necessity. According to Experian Automotive, the average car payment today is $500 per month – which means $6,000 per year to own an “asset” that loses value each and every month.

For $6,000 you can buy a nice used car – one that will get you where you want to go just as easily as a $40,000 SUV.

A friend of mine told about wanting to trade-in her car that still had a year or two left on the payments. Even though she’d gotten a low interest rate, the car dealers all told her the car would “never be worth what you owe.” She decided to prove them wrong, and kept driving it for a couple of years after it was paid off. It was still worth several thousand dollars.

Myth #5: Debt is a tool.

This is a truth for some people, but a myth for most. Entrepreneurs who use debt to acquire assets that appreciate in value and generate a cash flow do use it as a tool. This is only after doing all the calculations – and sometimes even then they make a mistake.

Myth #6: Credit Cards are always evil.

No, not at all. Credit cards CAN be a tool and can even save you money, IF you use them correctly.

Credit cards can be a tool for bookkeeping, as they keep track of all your expenditures. Some even send you a year-end report categorizing all those expenditures. As long as they are paid in full each month, they’re a good tool.

Get a credit card with a good cash rewards program; use it for everyday expenses such as groceries and gasoline – then pay the bill in full each month. In a few months’ time you’ll have substantial cash coming back – which you can deposit directly into a savings or retirement account.

They can also be a safety net for times when an unexpected but necessary expense comes along – say when the furnace blows up and the temperature outside is ten degrees.

Credit cards are evil when mis-used.

When used for non-necessary expenses and you carry a balance from month to month, they’re a tool of destruction, eroding your income through interest charges.

Thousands of people overspend each Christmas, then make payments throughout the year on the gifts they gave. Go back to Myth #1 and make a budget. Put away enough each month to pay for those gifts as you buy them and you’ll save hundreds of dollars in interest charges each year.

Myth #7: Loaning money to family members is a duty or an obligation – and it shows you care.

The truth is – lending money to family members is a terrible idea. Quite often it doesn’t get paid back, and it does nothing but cause hard feelings.

A friend of mine told about lending her brother-in-law $1,200, which he never repaid. Did she and her husband feel resentful when the brother bought a new car, took an expensive vacation, or wined and dined his girlfriends every Saturday night? You bet they did. That loan caused a permanent rift between the brothers. They haven’t even spoken to each other in twenty years.

If a family member needs help and you can afford to provide it, make the money a gift.

Avoid the money myths and manage your money wisely – your future will thank you!

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 234770

When you offer your home for sale you want the highest selling price possible, right?

National Association of REALTORS surveys show that buyers will pay from 1% to 5% more for a house that’s been staged.

Why would they do that? Most likely because when a home has been  staged they can see its full potential. They can envision their own furnishings in the home and can imagine themselves living there. That’s nearly impossible to do when a house is over-full, cluttered, or overly reflective of the current owner’s individual style and tastes.

In addition, many of today’s buyers want a home that’s move-in-ready. They don’t want to clean, paint, or do any fix-up. Just call New Zealand Van Lines Ltd and move right away.

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What should I do before sell my house fast orlando?

Here are 6 ways you can make your home appeal to the widest variety of home buyers:

One: De-clutter relentlessly. Pack up all your off-season clothing, toys, and tools and put them in storage. Then attack your linen closets, kitchen cupboards, and other storage spaces – both in the home and the garage. Think about the new garage door installation, if required.

Keep only the things you use regularly. Store the things you want to keep for later use and donate the rest. While you’re at it, get rid of all those dried-up cans of paint, empty containers, and anything else that should have been put in the trash long ago.

Do you have too much furniture or furniture you never use? Either donate it or put it in storage.

Organize and put away everything you have left. Follow the old saw “A place for everything and everything in its place.”

Cost: Zero, unless you hire someone to help or have to pay a dump fee.

Two: Clean everything – from the floor to the ceiling. Get that vacuum out and attack the whole house, including the corners, then scrub all the “scrubbable” surfaces. Wash or dry clean the curtains/drapes. Shampoo the carpets and upholstered furniture. Use a good wood cleaner such as Murphy’s Oil Soap on varnished wood furniture.

Thorough cleaning is a huge job, so you might want to invest in help for a day or two. At an estimated $15 per hour for cleaning services, it’s well worth the cost.

Cost: That depends upon the size of your house and how much of the work you’ll do yourself.

Three: Neutralize. Your decorating flair might be a bit too extreme for most buyers, especially if you lean toward dark colors or a different color in every room. Buy light coloured roller blinds for the windows to make the rooms feel larger. Re-paint the rooms in one of this season’s most popular neutrals. While white is making a comeback, soft greys, pale blues, and pale sage are also considered neutral today.

Cost: Of course it depends upon the size of your house and how many rooms need a new coat of paint and new blinds. Roller blinds cost about $30 per window and one gallon, which should cover about 400 square feet, costs from $30 to $40 per gallon. However, if you plan ahead and watch for sales at the major hardware chains, it’s sometimes on sale at two for the price of one. Roller blinds cost about $30 per window

Four: Now that you’ve de-cluttered and repainted, take a long hard look at your spaces. First, re-arrange the furniture you’re keeping in the house. Then reclaim areas of the house that had been turned into toy repositories or catch-all spaces. What’s the “highest and best use” of those newly open spaces? Stage them to suggest those purposes.

Cost: Zero, unless you hire a stager.

Five: Turn the master bedroom into an inviting, relaxing retreat. Move out the exercise equipment. Purchase a new comforter set, curtains, and perhaps matching lamps for the nightstands. Make the master bath look like a spa with huge, fluffy towels, matching bath rugs and shower curtain, and a silk flower arrangement. Switch out your out-dated faucet and drawer/cabinet pulls. Visit the following to more from Shower-Enclosure.org how you can improve your bathing experience.

Cost: This will depend upon your taste and your shopping acumen. But remember, that comforter and those towels, bath rugs, etc. will be going with you to your next home. You should be able to replace the faucet and drawer/cabinet pulls for well under $150.

Six: Wow them with curb appeal. Rent a power washer and clean the whole house. Then repaint the doors and any window/door trim that is cracked or peeling. If your porch light is sadly dated, replace it with one of the new styles.

Invest in a new, cheerful door mat and arrange some pots of brightly colored flowers near the front entry.

Finish the job by mowing the lawn, trimming the hedges, weeding the flower beds, and applying a fresh layer of mulch.

Cost: Rent a power washer for about $60 per day. A gallon of paint is approximately $30. A new porch light should run $40 to $60, and a bag of mulch is about $30.

As you’ve seen, making your house show-ready takes more effort than expense, but you should be able to complete any of these projects in 3 days or less and $300 or less.

Before you decide where you spend your money, consult with your real estate professional. He or she will be able to tell you what today’s buyers are looking for and thus direct you to the most profitable projects.

Read related: Solar Panel Installation From NRG Upgrade.

Most wealthy people invest in real estate – not just homes for themselves and their families, but investment properties, both residential and commercial.

Then, they take advantage of tax strategies that many don’t even know exist. Here are just a few of their money-saving tax strategies.

Nothing is entirely personal.

Smart investors who own vacation properties turn them into rental properties when not in use. This allows them to deduct the ordinary expenses of owing a home: taxes, insurance, repairs, and mortgage interest. Once you need to sell this property quickly, it is possible to look for some local companies, like Coastal House Savers, that can buy it fast and pay the full cost at once. If you’re in the UK, TheAdvisory has a brilliant article on selling your home quickly as well.

They also take advantage of “safe harbors” when it comes to deductions. Under the rules, a capital improvement of more than $2,500 must be added to the cost of the property and depreciated out over the life of the improvement. Therefore, if a roof replacement costs $4,500, only 1/25 could be deducted each year.

According to the guidelines publish by a real estate brokerage Sea Pines, it would appear that under “safe harbor” the owner can instead break that replacement out into its components: labor and materials and deduct up to $2,500 of each. If materials are $2,400 and labor is $2,100, the owner gets to deduct the entire amount as an expense in the year incurred.

Caution: You do need a tax expert helping you with this one, because there are rules to follow if you personally use the property for more than 14 days during the year.

Depreciation.

Just as a trucking company can depreciate the cost of their vehicles over time, investment property owners can depreciate the cost of their real estate holdings. (Buildings only, not land.)

The IRS judges the life of a single family home to be 27.5 years, often providing a deduction that exceeds the rental income. Non-residential rental property is depreciated over 39 years.

Here’s how it works: Say you purchase a rental home for $200,000, and after deducting mortgage payments and other expenses, you realize a cash flow of $12,000. According to the IRS the depreciation deduction should be about $16,000 for the first few years, so you end up showing a tax loss of $4,000 to offset your other income for the year.

Note that depreciation does involve some specific calculations, so you do need your tax accountant.

Also read: The Appeal of the Semi-Custom Home and Seller Lead Hacks.

The interesting thing about depreciation is that as long as you maintain the property, it is only a “paper loss.” The IRS calculates that the property will have no value after 27.5 years, while in truth it will most probably be worth far more than you paid for it.

That could be a problem, were it not for the 1031 exchange.

When it’s time to sell that property, the gains you made through depreciation could come back to bite you through capital gains tax – if not for the 1031 exchange.

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Under this rule, you can sell your investment property at a profit and move the proceeds directly into another property while deferring the tax liability.

The rules for a 1031 exchange are strict, so this is a move that needs to be planned well in advance. After selling your initial property you must leave the proceeds with a qualified intermediary while you identify the replacement property, which must be of equal or greater value. You have 90 days in which to identify the replacement – not 91! Then you must close on that purchase within 180 days.

The benefits lie in following the rules – you don’t personally touch that money from the sale and you absolutely adhere to the deadlines.

Your heirs will benefit.

When you pass away the property you leave will be valued as of the day of your death, not as of the day you purchased it. Thus, your heirs will be able to sell that property for full value without paying capital gains tax.

There are more than one ways to ensure that your heir benefits out of your property. One such way is to repair and replace damaged roof of your house so that your heir do not have to fret over them. Contact a residential roofing company in Aurora CO to get essential roof repairs done at affordable prices.

Need some cash to make a down payment on another investment?

Take out a Home Equity Line of Credit on your appreciated investment property. You pay no income tax on the money you borrow, and you can keep on growing your investment Philippines portfolio.

The Tax Benefits of Purchasing a Home

You know that owning your home gives you freedoms you don’t have as a tenant. You also know that when you make payments on your home you’re building a financial nest egg in the form of equity – and when you pay rent you’re building that nest egg for a landlord.

Did you know that owning your home can also reduce the number of dollars you pay in Federal and State income taxes? It does so by giving you six different Schedule A deductions.

– Read related: How Do I Sell My San Antonio Home Fast?

The first and largest deductions are mortgage interest and interest on a home equity line of credit, if the money was used to make improvements or repairs to your home. Because of the way these loans are amortized, the first few years you’re paying almost all interest, so this deduction is most valuable to you in the first years after your home purchase (or refinance).

Non-homeowners often don’t itemize their income tax deductions, opting instead to take the standard deduction because their other deductible expenses are less. (This year, the standard deduction for a married couple under 65 years of age is $12,600.)

Your end-of-year mortgage statement will tell you how much you paid in interest in 2016. Your Home Equity Line of Credit lender will send a similar statement.

Even if these two together don’t add up to the standard deduction, don’t stop here. There are more deductions…

Your property taxes. These are often paid by your lender through an escrow account, so take another look at that year end statement to see how much was paid in 2016. Add that amount to the interest you paid.

Private mortgage insurance. If you put less than 20% down when you purchased your home, you’re probably paying for private mortgage insurance (PMI). This costs from 0.3% to 1.15 of your mortgage balance, so check that statement yet again. How much will you save? Every situation is a little bit different, but as an example: If you make $100,000 per year and made a 5% down payment on your $200,000 home, you’re paying about $1,500 per year – and this year it’s still deductible. This deduction is set to expire, so unless Congress renews it, 2016 is the last year for this deduction.

Home Improvements to Age in Place or accommodate a handicapped family member. Should you need to install a wheelchair ramp or grab bars, widen a doorway or hall, lower cabinets, install wheelchair accessible fixtures, modify door hardware, or even grade the exterior ground to allow access for yourself, your spouse, or a dependent, you can deduct the amount by which the cost of the improvements exceeds the increase in your home’s value. Consult with your REALTOR® and/or a local appraiser to determine this value.

The apparent “catch” to this deduction is that you must reduce your deduction by 10% of your adjusted gross income (or 7.5% if you’re over 65). However, they don’t stand alone. These expenses are added to those for doctors, dentists, medications, health insurance, and even travel to and from your medical providers.

Energy-efficient upgrades. With the exception of the credit for solar panels, which runs through 2019, this is another deduction that is set to expire with the 2016 tax year. Under the Renewable Energy Efficiency Property Credit, you can claim a credit for up to 30% of the cost of solar panels and wind turbines. You can also claim a tax credit of up to $500 for the installation of new San Diego HVAC systems, energy-efficient windows and storm doors, water heaters, etc. The EZWindowSolutions.com website may be a good solution. This one is an actual credit against the taxes you owe, so read the instructions for IRS form 5695 to see if any improvements you made in 2016 qualify.

Your home office. If you actually do work at home and have a set-aside space in which to do so, you can take a deduction on Schedule C. You can claim up to 300 square feet of your home as office space, as long as you follow the rules. Talk this one over with your tax accountant to be sure you “get it right.”
Schedule C deductions, by the way, are even more fun than itemized deductions on Schedule A. That’s because you’re reducing your business income, and thus reducing the dollars you’ll owe for Self-employment tax.

By the time you add these homeownership deductions to those for medical expenses, charitable contributions, job expenses, and other miscellaneous deductions, owning your home could save you thousands of dollars on April 15.

Mortgage Banker

Just because you missed the rock-bottom interest rates doesn’t mean you shouldn’t consider a refinance. Rates are still historically low, so you can potentially put hundreds of dollars back in your pocket each month.

But… you need to be careful. Responding to an ad in the newspaper, on TV, or in your mailbox could lead you to a refinance rip-off.

First – be skeptical of advertised rates.

No lender can tell you what YOUR rate will be until he or she has checked your credit and verified things such as your employment and your debt to income ratios.

The advertised rates are always best-case scenario – the rates offered to people with excellent credit, breakout trading indicators, a good income, money in the bank, and a nice down payment.

Shop for that loan.

Unless you have absolute faith in your current lender, do shop around. Different lenders have different programs available to them – and different lenders impose different fees.

In fact, some lenders have what are commonly called “junk fees.” These are fees added to pad your closing costs and increase the lender’s profits. They can come wrapped up in “nonrecurring closing costs,” which include processing and underwriting fees, credit reports, title fees, and origination fees.

The bottom line: You need to compare both rates and fees in order to learn the true cost of a refinance. And, unfortunately, you need to check with all your chosen lenders on the same day. This is because rates fluctuate from day to day. If you check with Lender A on Tuesday and don’t apply with Lender B until Friday, you may not be comparing apples to apples.

Has a lender offered you a “No-cost” refinance?

If so, beware. Remember that nothing is really free. Someone has to pay, and in the case of a refinance, that someone will be you.

All it means is that the lender is hiding the fees somewhere else – as in a higher interest rate.

The only way to know which lender is offering you the best deal is to do all the calculations – figure out your total up-front costs, the down payment required, and the monthly payment.

Do explore all your options.

Ask your lender to show you all the programs you qualify for and to show you the merits of each. For instance, if you’re not planning to stay in your home indefinitely, an adjustable rate mortgage might be the best choice because the interest rate will be exceptionally low in the first few years.

And, while a 30-year fixed rate mortgage might be the safest in many ways, if you can afford higher payments, you might save thousands of dollars by choosing a 15-year mortgage. Remember, since a large portion of each payment goes to interest, the payment on a 15-year loan won’t be double the payment on a 30-year loan.

Last but not least – Consider service.

While dollars spent or saved will be your primary concern, service is also important. Choose a lender who will answer all of your questions in detail, return your phone calls promptly, and take the time to help you explore all of your options. Remember that you may need to call the lender with a future issue, so choose someone who is always willing to take time for you and treat you and your money with care and respect.

Don’t ever commit to working with a lender who tries to intimidate you, ignores your calls, brushes aside your questions, or “talks down” to you.

Here at Homewood Mortgage, the Mike Clover Group, we pride ourselves on offering the best rates and terms available in Texas. We enjoy talking with our clients and making sure that you’re fully informed about every detail regarding your mortgage loan. That’s probably why our clients come back again and again – and why real estate agents all over Texas refer clients to us.

So if you’re ready to consider a refinance, get in touch. We’d love to help you explore your options.

Call us at 800-223-7409

If you’re like two-thirds of American homeowners, you got a mortgage loan to finance the purchase of your home. For many, it’s a 30-year commitment. Wouldn’t you love to reduce that to 20 years – or even 15 years?

If there’s any extra money in your budget, there are some simple ways to do just that.

First, remember that every dollar you pay on the principal reduces the amount of interest you pay. That’s why with each payment you make, the amount going to pay down the principal rises slightly while the amount paid in interest decreases slightly. In the early years of a mortgage loan, twice as much will go to interest as to principal. That means making extra payments in the early years will greatly reduce both the interest you pay and the number of years you pay.

Pay a little more now to pay far less later

• Make one extra payment per quarter to pay off your loan in 19 years.
• Make 1/12 of an extra payment per month or pay bi-weekly rather than monthly to add one extra payment per year, and shave four years off your mortgage.
• Look at your statement and see how much of your last payment went to pay down the principal. Can you add that amount to your monthly payment? If so, you’ll effectively be making two payments per month.
• Round up each payment so you’re paying even a few dollars extra per month – it all adds up.
• Make an extra payment or increase your payment any time you get a raise or a bonus.
• Pretend you’ve refinanced. If you’ve got a low interest rate on a 30-year mortgage, ask your mortgage lender to calculate the payment as if you had a 15-year mortgage. Then pay that amount each month.

If you have a $200,000 30-year mortgage at 4%, your principal and interest payments are $954.83. If you decided to pay it off in 15 years instead, the payment would be $1,479.38. If you have the discipline to do it, this is a better option than an actual refinance, because you won’t pay any loan fees – and if you have an emergency that cuts into your finances, you won’t be obligated to make the higher payment.

If you now have a 15-year mortgage, find out what you’d need to pay monthly to cut it down to 10 years.

One caution: Check with your mortgage company to make sure they will accept extra payments – and that they won’t impose a prepayment penalty. Make sure any extra funds you send will be applied to the current principal and not to the next month’s payment.

If your interest rate is a bit high, a refinance is a good idea.

But do check the facts and do the calculations. A refinance does come with loan fees, so if you plan to sell the house in the next 2 or 3 years, it may be of no benefit to you. Check with your lender to learn the costs, along with the new interest rate and payment.

Once you’ve refinanced, keep paying the same payment you’re making now. Depending upon the interest rates involved, it can cut years off your loan.

If you really, really don’t want to make house payments…

Consider downsizing. Sell your larger home and use the profits to buy a smaller, less expensive home. You may be able to pay all cash, or take out a small loan and pay it off quickly by continuing to make the payments you’ve been making on your more expensive home.

Whether you’d like to refinance or just want to know how a larger payment would affect the number of years you’ll be paying for your home, give us a call. We at Homewood Mortgage, the Mike Clover Group, will be happy to help.

Call us at 1-800-223-7409.

Mortgage Banker

Yes, you should consider building a custom home

Nearly every day a would-be homeowner calls with the same complaint: They’re being out-bid on homes already on the ground, display homes for sale aren’t of interest to them and the home builders in the big planned communities charge way too much. And, even with the high prices, they only give buyers a choice between their stock home designs.

These callers want to know if the Mike Clover Group can help them put together a loan that would allow them to work with new home builders in Geelong Victoria. You can also get loans for bad credit this way you can still build the home you want. They’d like to use a small builder so that the floor plan and home design, the finishes, the fixtures, and even the heating and cooling options are to their specifications.

The answer is yes! We’re providing custom home loans to borrowers all over.

Because custom home loans are so popular today, we have the entire process streamlined within our office – and we have a dedicated loan officer to guide you through each step.

To begin the process, I ask 5 questions whose answers let me know whether it makes sense for you to build a custom home:

• Do you already own your land?
• Do you already have a builder in mind?
• Do you know what your custom home will cost to build?
• What is the estimated value of your land and the home together?
• How much money do you have put aside for this project?

Once we have the answers to those questions and know where you plan to build, we can look at the options available to you. (Some loan programs depend on your location.)

Our most popular program allows you to borrow 80% of the value of the entire project, while allowing you to get a builder hold back in place for up to 15% of the appraised value. This allows the builder to put a mechanics lien against the property so he can be assured of being paid off in full when the home is completed. With an 80% loan and a 15% builder hold back, you could have very little money out of pocket, depending upon the cost to value.

Another option, available only to those in the DFW area, Austin, and San Antonio, is for borrowers who already own their land. In this scenario, you can borrow up to 90% of the value of the total project.

More good news is that small custom home builders usually charge less per square foot than do planned community home builders. This isn’t to say that there aren’t some great builders doing planned communities – but those “cookie-cutter” homes aren’t for everyone. When you hire a small custom home builder, you can get exactly the design and features you want – without paying for those you don’t want or need.

Best of all, we’ve found that the final appraisal typically comes in much higher than the appraisal done prior to construction. This gives you plenty of equity even before you move into your new home.

So yes, having a custom home with solar tubes and sun tunnels built requires a few steps that you don’t have to take when you purchase a pre-built home, but our experienced staff makes it easy for you, and the payoff is worth it.

Did you know that foundation problems affect resale value? So when you start a construction, make sure your contractor does his best to make everything in the best way possible.

Call the Mike Clover Group today at 469.621.8484. We’ll be glad to discuss your plans and explain the programs available to you.