Apr
10
Posted under
Mortgage ![]()
A fixed rate mortgage has both positive and negative aspects to it, a lot of the decision on whether it is positive or negative will come down to your individual circumstances. Fixed rate mortgages was the original type of mortgage that has been available for many years and was the only type available.
A fixed rate mortgage is where the interest rate of the mortgage is fixed for the term of the loan, so the repayments are the same from the fist repayment you made until the last repayment. Fixed rate mortgages can be mixed with adjustable rate mortgages.
The usual terms are for 15 years or 30 years but you will also find that a mortgage can be negotiated for 10, 20 or 40 years. The cost of the mortgage is divided into equal payments over the term of the mortgage term.
The benefits of a fixed rate is that you always know that you will have the same payment every month which gives you certainty in your financial planning. If interest rates rise you will not be affected as your rate is fixed. As the years pass by the cost of the mortgage from your financial budget is actually reducing as you receive pay increases in your job and reduce spending in household requirements, which is normal when moving into a new house.
Some of the negative points are that if interest rates decrease then your interest rate won’t decrease. When you take out a fixed rate loan they always seem to be higher than the adjustable rate mortgages, so you are behind from the very beginning. Choosing a fixed rate mortgages is about being risk adverse to rising interest rates, if you believe on average over the term of the loan, the adjustable rate mortgages will be higher than a fixed rate would be a sensible option to consider.
Apr
01
Posted under
Taxes Property The municipality that governs your property tax, in most instances this is the county, keeps records on your property. These records include things like lot size, square footage, number of rooms, additions or modifications, and architectural style of the home. Review this information to be certain its correct.
If you file itemized deductions on your income tax return, you are allowed deductions for property taxes. You can deduct these taxes whether it is on your primary residence or any other properties you own. If you own multiple properties this is a good way to lower your tax liability. There is also no ceiling on how much you can claim in deductions. Just be sure you are deducting the amount that your taxes actually cost you and do not inflate the numbers on your return, as these tax figures are easy for the Internal Revenue Service to verify.
If you escrow, then your mortgage payment to your lender includes your property taxes. Your lender is instructed to hold this money for you, in a separate account, and pay it to the tax authority on your behalf when your property taxes come due. When real estate taxes are escrowed in mortgage payments, you can only claim a deduction with the Internal Revenue Service for the tax year in which they were paid. The mortgage company or lender will send you an end of year statement that will include all the pertinent property tax information.
Real Estate Agents very often buy real estate at property tax lien auctions and sales themselves and are wan to give out any information about the spectacular bargains you can get on real estate property at these sales. You do not have to have a real estate license to participate, but the information is usually greedily guarded from the general public. Still, many real estate tycoons have made, and continue to make, their fortunes by purchasing properties at these sales. If you have any way to find out about property tax lien sales, pursue them vigorously, but don’t tell anyone else.
When you own a property, you need to pay taxes on it. These taxes are always deductible if on your tax return.