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Hurricane season has just begun and will last until the end of November; it is important for homeowners to have an awareness of what their insurance policy covers and what their hurricane deductible is.

This is particularly true for first time home buyers or for homeowners that have relocated to coastal states from non-coastal regions and have not had hurricane coverage in the past. The hurricane deductible will determine the amount of money you must pay out-of-pocket before your coverage kicks in if there is damage to your residence due to a hurricane. Hurricane deductibles are clearly listed in your policy.

Hurricane deductibles are triggered only when certain criteria are met. The hurricane deductible triggers vary by state and insurer and usually apply when the National Weather Service officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane’s intensity. Due to these differences, homeowners should check their policies and speak to their agent or insurance company representative to learn exactly how their coverage works.

For more information on hurricane insurance, please visit the Hurricane Insurance Information Center at http://www.iii.org/

Once a hurricane is in the area, the insurance companies will not write, bind or increase coverage. Therefore, it is critical that you review the values of your home, personal property (contents) and/or your office building and contents to make sure you have adequate coverage.

Remember most homeowner’s insurance policies require that you insure your home for the value of its replacement cost. Make certain that you would be able to rebuild your home or building at today’s construction costs for the amount it is currently insured for.

Also be advised that no homeowner or hazard policy provides coverage for flood damage. You need to purchase a flood insurance policy separately and it usually takes at least 30 days to bind. What your policy should cover is “wind driven rain” providing you first suffer physical damage to your home or building.

All basic homeowners policies have very limited coverage for jewelry, fine arts, guns, coins, currency and other collectibles and there is no coverage for these items under a standard windstorm or flood policy. Therefore, if you have such items, you should contact your insurance agent and ask about a special All Risk Valuable Items Policy.

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AVONDALE, Ariz., June 7, 2013 /PRNewswire-USNewswire/ — The National Association of Exclusive Buyer Agents (NAEBA), the organization of real estate professionals who advocate for buyers, has contacted the National Association of REALTORS (NAR) because NAR has deliberately removed Exclusive Buyer and Exclusive Seller Representation from their publications and materials while still claiming to cover all types of agency relationships available to real estate agents and consumers. 2012-2013 NAEBA President Michael Byrd states, “While we don’t believe this was a deliberate intent to mislead consumers, as the largest real estate association in the world and a recognized authority on real estate agency, NAR’s omission could easily be misinterpreted by consumers that Exclusive Buyer or Seller Representation is no longer available as an option, which simply isn’t the case.” In its letter to Finley Maxson, NAR’s Associate Counsel, NAEBA has requested that NAR reinstate Exclusive Representation as an agency option with an explanation as to how and why Exclusive Buyer Representation is different from simple buyer representation and similarly how Exclusive Seller Representation is different from simple seller representation. The complete letter can be found at http://naeba.org/blog/naragency.

About NAEBA

The National Association of Exclusive Buyer Agents (NAEBA), created in 1995, is an organization of companies dedicated to representing only buyers of real estate. NAEBA member brokerages do not list homes for sale and never represent sellers. This restriction to one side of the real estate transaction avoids conflicts and ensures that the interest of the home buyer is protected at all times from house-hunting and negotiation to inspection, financing and closing.

SOURCE National Association of Exclusive Buyer Agents

/Web site: http://www.naeba.org

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How to be the Most Attractive Homebuyer?

The spring season tends to flood the housing market with buyers, and in markets with low inventory levels, the competition is stiff.

As home prices continue to recover and interest rates remain at near-record lows, some houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the National Association of Realtors, houses sold in 71 days in January, down from 99 days a year ago.

Since markets are moving fast, experts recommend sellers have their loan pre-approved and down payment ready before starting their search. “The market is changing, says Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. “Inventory is low and demand is high a buyer needs to know exactly what their parameters are.

Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. The longer the negotiations, the more chance you could lose out to someone else who made a better offer, says Ameer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

While you have to compete in the current market, maintain your budget. “You don’t want to end up paying more for the house than it’s worth, says Daren Blomquist, vice president at RealtyTrac.

Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property, says Blomquist.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:

Plan Ahead

You have to plan four months before you’re going to buy, says Michael Corbett, Trulia’s real estate expert. Check your credit for accuracy and avoiding making any big purchases or taking on any big debt during this time.

[Debt] brings down your credit score and increases your debt-to-income [ratio] which are two critical things banks look at when qualifying and preapproving you for a loan,” says Corbett.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.

Set Your Home Price

Don’t look at a $300,000 home if all you can afford is $250,000, says Ameer. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete. If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price, she says.

If you do spot a great deal on a house, don’t wait days to make an offer, warns Corbett. Since time isn’t on your side, learn how to spot a great deal by researching an are’s home prices.

Do a little due diligence and go to open houses do your homework, says Corbett. Being educated will help you negotiate and could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.

Know that Cash is King

The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage, says Corbett.

Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal. A buyer can contribute more cash to cover the different between the appraisal and offer price, says Blomquist.

If your appraisal is low, don’t expect the appraiser to come up in value, says Ameer. Appraisers are under scrutiny with the banks and they have to justify everything they do.” They’re required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, as well as lender guidelines.

Appraisers use surrounding properties for comps, says Ameer, and if there are only foreclosures, that’s a bad hand to be dealt. You can always review the appraisal for discrepancies and suggest different comps but don’t expect the value to change.

Get Preapproved before Your Search

Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.

If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.

Getting preapproved will also help you to compete with an all cash buyer, says Walter Molony, spokesperson for the National Association of Realtors.

When you know what you can afford and are preapproved, you won’t be shopping outside of your price range, says Corbett. It makes you a much stronger buyer when you can turn in that preapproval letter with your offer.

Limit Your Contingencies

Experts suggest having as few contingencies as possible to be an alluring buyer. Don’t overcomplicated your offer to the seller, says Ameer. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.

Experts advise making an offer based on a satisfactory home inspection. It gives you the opportunity to walk away if you find in an inspection that there are too many problems with the house, says Corbett.

Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home, says Blomquist. As a seller, you’ll sell that home quickly. Then as a buyer, you’re much more appealing than a buyer contingent on a sale.

Add a Personal Touch

Corbett suggests sending a letter to explain why you want to buy that house. You become a person who really loves and appreciates the home instead of just a number, says Corbett. Sending a letter is just one extra little thing that will help level the playing field.

Be Flexible with Closing Dates

Let the seller know that you would be flexible on the closing timeline, says Corbett. Find out when the seller would ideally like to close on the house and see if you can match it.

Read more: http://www.foxbusiness.com/personal-finance/2013/03/21/how-to-be-most-attractive-homebuyer/#ixzz2Ra0Mnuif

Source: Foxbusiness.com

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Buying a house is the biggest investment you will make in your lifetime, and the complex process can be intimidating. Knowing the right questions to ask and receiving professional advice will help make a sound investment.

Whether you are buying for the first time or moving across country, navigating everything from jargon to home buying basics can be scary and overwhelming.

Before you begin the purchase process, make sure you have answers to these top home buyer questions. Each is a critical component to making an educated and informed decision.

Where do we want to live?

The first step is to help narrow down a location and define the home criteria that are most important to you. Understand that you will never get 100% of what you want unless you have unlimited resources. Define the criteria that are critical for your lifestyle and be prepared to compromise on the rest within your price range.

What factors are most important when it comes to choosing a neighborhood such as schools, commute to work, shopping, entertainment and how quiet or peaceful the neighborhood is versus a hustling and bustling urban area.

How much money do we need for a down payment, closing costs and still have some money in savings?

The mortgage product that you select will assist in determining down payment requirements. This is why it is so important that you pre-qualify with a licensed mortgage representative before getting in the car to shop for a home. By knowing your financial limitations you can focus on the properties that meet your affordability criteria.

There are additional costs associated with a purchase that you should plan for in addition to your mortgage payment, taxes, and insurance.

Make sure you have enough money set aside for closing costs

You will need to prepare for the cost of a property assessment, lender appraisal, and home inspection during the due diligence period.

Don’t forget moving costs including the transfer of all utilities and services such as heat, water, TV

How much you would like to spend monthly?

Unfortunately, many people bite off more than they can chew when purchasing a home because they look at the total purchase price instead of the monthly payments.

Keep in mind that what you qualify for isn’t always the same as what they can afford. A pre-approval letter is something you should get at the front-end to ensure you are looking within the right price range.

A licensed mortgage loan officer can provide a total monthly payment including principal and interest, property taxes, homeowners insurance and monthly mortgage insurance if applicable.

You should also factor into your budget:

• Heating/Gas/Oil
• Electric
• Water
• Homeowners Association Fees
• Landscaping
• Cable/TV
• Sewer
• Pool and yard maintenance
• Set aside money for on-going repairs and maintenance

Why should you work with an Exclusive Buyer’s Agent?

Choosing a real estate professional is one of the first decisions a buyer will make. It is also a very personal decision depending on the qualities most important you.

While traits such as honesty, integrity, knowledge, and experience are all very important; it is also vital that you choose an agent that represents you and only you. A buyer’s agent works as an advocate, providing guidance as well as open lines of communication. Explaining the purchase process and keeping the buyer informed along the way is a way to work together through the buying process.

Any agent that lists properties does not have an exclusive fiduciary responsibility to you as a Buyer. They have an inherent conflict of interest.

Exclusive Buyer’s Agents give buyers their undivided loyalty. Most real estate agents and buyer’s agents work in traditional brokerages that take listings. Because of that, they have an inventory that they must sell. In addition, if that brokerage brings both the buyer and the seller into the transaction, they get to keep the entire commission, making the transaction more profitable. These can be strong incentives to steer a buyer to one of their own listings. It also means that their buyer loses many of the benefits of hiring a real estate agent including negotiating on his behalf as well as the agent’s ability to point out reasons why the buyer might not want to purchase that particular property. Since Exclusive Buyer’s Agents must work in a brokerage that only works with buyers and never takes listings, a buyer can rest assured that the EBA will remain on their side throughout the entire transaction, getting the buyer the lowest price and the best terms possible.

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When a real estate agent sits down with sellers to discuss the value of their home, the conversation inevitably turns to the home;s features extensive decor, a converted garage workspace or perhaps a one-of-a-kind pool or patio.

While those features might be selling points, the truth is potential buyers may not value them nearly as much as the seller. Some buyers will see the garage workspace as a liability and an expense to undo. And while beautiful to the seller, the decor they chose may not appeal to a buyer.

A home may go on the market with what real estate agents call seller pricing, which is based more on the seller’s perceived property value than on actual market conditions. Inevitably, after some time on the market, the price eventually gets reduced.

Here are strategies for Buyer to avoid overpaying for home upgrades.

Don’t get emotionally attached

As the market continues picking up, stories of multiple offers are everywhere, in places such as Indianapolis, Raleigh, Sacramento and South Florida. With such little inventory, buyers are forced to compete for the limited goods. This competition, which we’ve seen before, creates a frenzy, causing some buyers to make an emotional purchase based on their attachment to a potential home, its features or location. This results in a quick increase in home values what some might call a bubble.

Make no mistake: This is a great time to buy, especially if you have a down payment, a stable job and good credit, and you’re committed to the community for the next five years. In most areas, it’s cheaper to buy than rent. Just make sure to always think like a seller, not just a buyer, as you move ahead on a particular property. Weigh the potential market value of its amenities five years down the road, when you may turn around and sell. To achieve the maximum equity, try not to overpay for those features, either for competitive or emotional reasons.

Think like a Seller:

View the property as if you will need to turn around and sell it in a few years time. Do the features of the home still hold as much appeal? Will they be quickly dated or require a significant expense to maintain? Will these features continue to appeal to a broad based market of potential buyers or are they only appealing for your lifestyle?

While an upstairs master bedroom may be great for you at this time in your life while the kids are small, it has limited appeal to empty nesters, retirees, or parents of teenagers. You may love beautiful showers, but if the home is lacking a tub this is a real issue for families with small children. An historic home may be appealing, but are you prepared to invest in the higher utility bills because it does not have thermal paned windows and adequate insulation?

Features that are irreplaceable or provide safety of savings such as a great view or lot, ideal location for commuting, energy efficient features, security features definitely add value to a home over a comparable sale and should be valued accordingly.

Home Improvements that are Valuable:

According to Remodeling Magazine (www.remodelingmagazine.com) you’re less likely to recoup your investment in a major kitchen or bathroom remodel than you are to get back what you spend on basic home maintenance such as new siding, roof, or exterior painting. Siding replacement recouped 92.8 percent of its cost, according to the study. The only home improvement likely to return more at resale was a minor (roughly $15,000) kitchen remodel, which returned 92.9 percent. Replacing roofs and windows were also high on the list, returning 80 percent or more at resale.

Remember that improvements do depreciate. An updated kitchen that was installed 5 years ago will not be valued the same as a newly updated kitchen. Just like a new car, you recover everything you spent on a new feature and Buyers should consider depreciation when they are valuing a home’s features.

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The following chart details the predicted life expectancy of appliances, products, materials, systems and components.

Consumers and inspectors and other professionals advising their clients should note that these life expectancies have been determined through research and testing based on regular recommended maintenance and conditions of normal wear and tear, and not extreme weather (or other) conditions, neglect, over-use or abuse. Therefore, they should be used as guidelines only, and not relied upon as guarantees or warranties.

Surface preparation and paint quality are the most important determinants of a paint’s life expectancy. Ultraviolet (UV) rays via sunshine can shorten life expectancy. Additionally, conditions of high humidity indoors or outdoors can affect the lifespan of these components, which is why they should be inspected and maintained seasonally.

Appliance life expectancy depends to a great extent on the use it receives. Furthermore, consumers often replace appliances long before they become worn out due to changes in styling, technology and consumer preferences.

Modern kitchens today are larger and more elaborate. Together with the family room, they now form the great room.

Walls and ceilings last the full lifespan of the home.

Natural stone counter-tops, which are less expensive than they were just a few years ago, are becoming more popular, and one can expect them to last a lifetime. Cultured marble countertops have a shorter life expectancy, however.

Decks are exposed to a wide range of conditions in different climates, from wind and hail in some areas, to relatively consistent, dry weather in others. See FASTENERS & STEEL section for fasteners.

Exterior fiberglass, steel and wood doors will last as long as the house, while vinyl and screen doors have a shorter life expectancy. The gaskets/weatherstripping of exterior doors may have to be replaced every 5 to 8 years.

Copper-plated wiring, copper-clad aluminum, and bare copper wiring are expected to last a lifetime, whereas electrical accessories and lighting controls, such as dimmer switches, may need to be replaced after 10 years. GFCIs could last 30 years, but much less if tripped regularly.

Remember that faulty, damaged or overloaded electrical circuits or equipment are the leading cause of house fires, so they should be inspected regularly and repaired or updated as needed.

Floor and roof trusses and laminated strand lumber are durable household components, and engineered trim may last 30 years.

Fastener manufacturers do not give lifespans for their products because they vary too much based on where the fasteners are installed in a home, the materials in which they’re installed, and the local climate and environment. However, inspectors can use the guidelines below to make educated judgments about the materials they inspect.

Flooring life is dependent on maintenance and the amount of foot traffic the floor endures.

Concrete and poured-block footings and foundations will last a lifetime, assuming they were properly built. Waterproofing with bituminous coating lasts 10 years, but if it cracks, it is immediately damaged.

Framing and structural systems have extended longevities; poured-concrete systems, timber frame houses and structural insulated panels will all last a lifetime.

The quality and frequency of use will affect the longevity of garage doors and openers.

Home technology systems have diverse life expectancies and may have to be upgraded due to evolution in technology.

* Batteries should be changed at least annually.

Thermostats may last 35 years but they are usually replaced before they fail due to technological improvements.

As long as they are not punctured, cut or burned and are kept dry and away from UV rays, cellulose, fiberglass and foam insulation materials will last a lifetime. This is true regardless of whether they were installed as loose-fill, housewrap or batts/rolls.

Masonry is one of the most enduring household components. Fireplaces, chimneys and brick veneers can last the lifetime of a home.

Custom millwork and stair parts will last a lifetime and are typically only upgraded for aesthetic reasons.

The lifetime of any wood product depends heavily on moisture intrusion.

The quality of plumbing fixtures varies dramatically. The mineral content of water can shorten the life expectancy of water heaters and clog shower-heads. Also, some finishes may require special maintenance with approved cleaning agents per the manufacturers in order to last their expected service lives.

Radon systems have but one moving part: the radon fan.

The life of a roof depends on local weather conditions, building and design, material quality, and adequate maintenance. Hot climates drastically reduce asphalt shingle life. Roofs in areas that experience severe weather, such as hail, tornadoes and/or hurricanes may also experience a shorter-than-normal lifespan overall or may incur isolated damage that requires repair in order to ensure the service life of the surrounding roofing materials.

Outside siding materials typically last a lifetime. Some exterior components may require protection through appropriate paints or sealants, as well as regular maintenance. Also, while well-maintained and undamaged flashing can last a long time, it is their connections that tend to fail, so seasonal inspection and maintenance are strongly recommended.

Site and landscaping elements have life expectancies that vary dramatically.

Swimming pools are comprised of many systems and components, all with varying life expectancies.

Aluminum windows are expected to last between 15 and 20 years, while wooden windows should last nearly 30 years.

Note: Life expectancy varies with usage, weather, installation, maintenance and quality of materials. This list should be used only as a general guideline and not as a guarantee or warranty regarding the performance or life expectancy of any appliance, product, system or component.

From InterNACHI’s Standard Estimated Life Expectancy Chart for Homes InterNACHI http://www.nachi.org/life-expectancy.htm#ixzz2P3r65Oa6

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With home affordability at its highest in years buyers are flooding the housing market and in markets with low inventory levels, the competition is stiff. As home prices continue to recover and interest rates remain at near-record lows, some houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the National Association of Realtors, houses sold in 71 days in January, down from 99 days a year ago.

Since markets are moving fast, experts recommend buyers have their loan pre-approved and down payment ready before starting their search. Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:

Plan Ahead
You have to plan four months before you’re going to buy, says Michael Corbett, Trulia’s real estate expert. Check your credit for accuracy and avoiding making any big purchases or taking on any big debt during this time [Debt] brings down your credit score and increases your debt-to-income [ratio] which are two critical things banks look at when qualifying and preapproving you for a loan, says Corbett.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.

Set Your Home Price
Only look at homes that are comfortably in your price range. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete if you are looking at home at the top end your what you can qualify to buy. Understand how much homes are selling at compared with their asking price and shop accordingly.

Know that Cash is King
The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage. Â Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal.

Get Preapproved before Your Search
Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it. Getting preapproved will also help you to compete with an all cash buyer, says Walter Molony, spokesperson for the National Association of Realtors.

Limit Your Contingencies
Experts suggest having as few contingencies as possible to be an alluring buyer. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer. Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home.

Be Flexible with Closing Dates
Let the seller know that you would be flexible on the closing timeline. Find out when the seller would ideally like to close on the house and see if you can match it.

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Top 10 Reasons to Retire in Western North Carolina

Real Estate Scorecard is an industry leader of online real estate reviews providing in depth information about master planned communities in Florida, Georgia, North Carolina, South Carolina and Tennessee, all in an effort to help buyers determine where to retire in the Southeast.
Asheville, North Carolina (PRWEB) February 27, 2013

After decades of research, Real Estate Scorecard reveals the top 10 reasons why Baby Boomers choose to retire in Western North Carolina:

ARTS, CULTURE AND MUSIC

There are hundreds of artists who live near the best of Asheville NC and they don’t mind welcoming you into their art studios. For example, in downtown Asheville, NC along the French Broad River in the River Arts District, you’ll find 165 year round working artist studios. Thirty minutes to the north in Burnsville NC, the Toe River Studio Tour takes place twice a year where you’ll find 100 more local artists opening their studio doors to the public.

BEST COLLEGE TOWNS MAKE YOU FEEL LIKE A KID AGAIN

A lady said to Real Estate Scorecard recently, If you don’t stay young living in this place, it’s your own darn fault! Science has proven a stimulated mind and body improves the quality of our life, especially as we age. Real Estate Scorecard considers Asheville NC to be ahead of the curve by recognizing how desirable this region has become to retirees and delivering community forums geared towards mature adults. For example, the University of North Carolina Asheville founded the North Carolina Center for Creative Retirement. The NCCCR offers an impressive list of lifelong learning courses for mature adults and cultural entertainment on campus.

EASIEST WAY TO SAVE TAX DOLLARS IN WESTERN NORTH CAROLINA

Do you know by living beyond the city limits of Asheville NC, you can save $665 per $100,000 of your home’s value in real estate taxes per year. On a $300k home, you will save about $2,000 per year or $166 per month. If you are concerned about real estate tax increases, move to a county whose infrastructure is in place and is up to date. Study the hospitals, public school system and roadways in addition to evaluating the best master planned communities. Study the county’s annual budget and future capital improvements. If a county needs to build and expand social services, it would be reasonable to expect property tax increases.

QUICK ACCESS TO METRO CITIES

Getting in and out of Western North Carolina to see your family and friends is quick, easy and is becoming less expensive. Asheville Regional Airport (AVL) currently offers the following non-stop flights from these major cities:

Atlanta – Delta Charlotte – U S Airways Chicago – United Detroit – Delta Houston – Continental Newark – Continental Orlando – Allegiant Philadelphia – U S Airways

FARMERS MARKETS, ORGANIC FOOD AND VEGAN VENUES

From the farm to the dinner table, if eating healthy food is important to you, there is no better place to live than in Western North Carolina. How you’ll wish you had more time to shop at all the Saturday Green Markets and organic health food stores in the area. The city of Asheville appeals to the most demanding taste buds and health conscious obsessions. Ashevillian’s pride themselves on fresh grown mountain produce. Apples, herbs, homemade cheeses, breads, grass fed beef and free range poultry are just a few of the items you can find at the 88 tail gate markets in the Appalachian Mountain range.

MOST POPULAR WESTERN NORTH CAROLINA FESTIVALS

Asheville, NC – Bele Chere Festival
Asheville, NC – Big Band Swing and Dance Weekend
Asheville, NC – Comedy Classic Weekend
Asheville, NC – Festival of Flowers
Asheville, NC – Winter Warmer Beer Festival
Black Mountain, NC – Lake Eden Arts Festival (LEAF)
Brevard, NC – White Squirrel Festival
Hendersonville, NC – North Carolina Apple Festival
Waynesville, NC – Folkmoot USA

THE BLUE RIDGE PARKWAY AND 1 MILLION ACRES OF NATIONAL FOREST

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From the mortgage interest deduction to energy tax credits, here are the tax tips you need to get a jump on your returns.

Mortgage interest deduction:

One of the easiest deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgage interest deduction, your mortgage must be secured by your home – and your home can even be a house trailer or boat, as long as you can sleep in it, cook in it, and it has a toilet.

Interest you pay on a mortgage of up to $1 million – or $500,000 if you’re married filing separately – is deductible when you use the loan to buy, build, or improve your home.

If you take on another mortgage (including a second mortgage, home equity loan, or home equity line of credit) to improve your home or to buy or build a second home, that counts towards the $1 million limit.

If you use loans secured by your home for other things – like sending your kid to college – you can still deduct the interest on loans up $100,000 ($50,000 for married filing separately) because your home secures the loan.

PMI and FHA mortgage insurance premiums:

The government extended the mortgage insurance premium deduction through 2013. You can deduct the cost of private mortgage insurance as mortgage interest on Schedule A – meaning you must itemize your return. The change only applies to loans taken out in 2007 or later.

What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted, so long as your income is less than $100,000 (or $50,000 for married filing separately).

If your adjusted gross income is more than $100,000, your deduction is reduced by 10% for each $1,000 ($500 in the case of a married individual filing a separate return) that your adjusted gross income exceeds $100,000 ($50,000 in the case of a married individual filing a separate return). So, if you make $110,000 or more, you lose 100% of this deduction (10% x 10 = 100%).

Besides private mortgage insurance, there’s government insurance from FHA, VA, and the Rural Housing Service. Some of those premiums are paid at closing and deducting them is complicated. A tax adviser or tax software program can help you calculate this deduction. Also, the rules vary between the agencies.

Prepaid interest deduction:

Prepaid interest (or points) you paid when you took out your mortgage is 100% deductible in the year you paid them along with other mortgage interest.

If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year.

But if you refinance to get a better rate and term or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the term of the loan. Say you refi for a 10-year term and pay $3,000 in points. You can deduct $300 per year for 10 years.

So what happens if you refi again down the road?

Example: Three years after your first refi, you refinance again. Using the $3,000 in points scenario above, you’ll have deducted $900 ($300 x 3 years) so far. That leaves $2,400, which you can deduct in full the year you complete your second refi. If you paid points for the new loan, the process starts again; you can deduct the points over the term of the loan. Â

Home mortgage interest and points are reported on IRS Form 1098. You enter the combined amount on line 10 of Schedule A. If your 1098 form doesn’t indicate the points you paid, you should be able to confirm the amount by consulting your HUD-1 settement sheet. Then you record that amount on line 12 of Schedule A.

Energy tax credits:

The energy tax credit of up to a lifetime $500 had expired in 2011. But the Feds extended it for 2012 and 2013. If you upgraded one of the following systems this year, it’s an opportunity for a dollar-for-dollar reduction in your tax liability: If you get the $500 credit, you pay $500 less in taxes.

• Biomass stoves
• Heating, ventilation, air conditioning
• Insulation
• Roofs (metal and asphalt)
• Water heaters (non-solar)
• Windows, doors, and skylights
• Storm windows and doors
• Varying maximums

Some of the eligible products and systems are capped even lower than $500. New windows are capped at $200 – and not per window, but overall. Read about the fine print in order to claim your energy tax credit.

Determine if the system is eligible. Go to Energy Star’s website for detailed descriptions of what’s covered. And talk to your vendor.
The product or system must have been installed, not just contracted for, in the tax year you’ll be claiming it.
Save system receipts and manufacturer certifications. You’ll need them if the IRS asks for proof.
File IRS Form 5695 with the rest of your tax forms.

Vacation home tax deductions:

The rules on tax deductions for vacation homes are complicated. Do yourself a favor and keep good records about how and when you use your vacation home.

If you’re the only one using your vacation home (you don’t rent it out for more than 14 days a year), you can deduct mortgage interest and real estate taxes on Schedule A.
Rent your vacation home out for more than 14 days and use it yourself fewer than 15 days (or 10% of total rental days, whichever is greater), and it’s treated like a rental property. Those expenses get deducted using Schedule E.
Rent your home for part of the year and use it yourself for more than 14 days and you have to keep track of income, expenses, and divide them proportionate to how often you used and how often you rented the house.
Home buyer tax credit

There were federal first-time home buyer tax credits in 2008, 2009, and 2010.

If you claimed the home buyer tax credit for a purchase made after April 8, 2008, and before Jan. 1, 2009, you must repay 1/15th of the credit over 15 years, with no interest.
If you used the tax credit in 2009 or 2010 and then sold your house or stopped using it as your primary residence, within 36 months of the purchase date, you also have to pay back the credit. Example: If you bought a home in 2010 and sold in 2012, you pay it back with your 2012 taxes.
That repayment rules are less rigorous for uniformed service members, Foreign Service workers, and intelligence community workers who get sent on extended duty at least 50 miles from their principal residence.
Members of the armed forces who served overseas got an extra year to use the first-time home buyer tax credit. If you were abroad for at least 90 days between Jan. 1, 2009, and April 30, 2010, and you bought your home by April 30, 2011, and closed the deal by June 30, 2011, you can claim your first-time home buyer tax credit.

The IRS has a tool you can use to help figure out what you owe.

Property tax deduction:

You can deduct on Schedule A the real estate property taxes you pay. If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement.

If you bought a house in 2012, check your HUD-1 Settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.

Filed under: Blog by Kim Bregman
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