INVEST YOUR RENT: Why Pay Your Landlord’s Mortgage?

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The only one who benefits from a rent check is the landlord. Renters never see that money again, while homeowners usually profit when they sell. In addition, renters can’t use any of their rent payment as a tax deduction, like homeowners can. If you or someone you know is renting, it’s time to put that rent check to better use!e mortgage-interest deduction is probably the best financial argument for buying rather than renting. Consider this example:If you can afford a mortgage payment of $1,000 (principal and interest only), you can buy a house for $151,426 if you put 10% down on a 30-year mortgage at 8% interest ( current rate for great credit is 4%) . If your payments started in January, you would pay $10,862 in interest for the first year in the home. That entire amount is deductible on your federal income tax return! Assuming you are in the 27.5% tax bracket, you would save $2,989 in taxes, or $249 per month. So your $1,000 payment is really only $751 when you factor in the homeowner’s tax advantage.

Can A Renter Really Afford To Buy?

shells5The real question is whether renters can afford not to buy. The tax savings alone make the purchase of a home a wise financial decision. But let’s go a step further.

Using the same example, a 10% down payment would create an immediate equity of $15,142. Assuming the $151,426 house grows in value by just 3% a year, in five years it would be worth $175,544. The original loan amount would then be down to $129,565, yielding an equity of $45,980. In addition, remember the nearly $3,000 tax savings every year. The total value of your equity and tax savings would be almost $61,000 after five years.

Pick A Loan

To take advantage of the financial benefits of homeownership, renters must first find out how much buying power they have. We can help. Call us for information about the whole range of mortgage options now available, including low- and no-down-payment loans, and programs that allow buyers wrap home-improvement costs and closing costs into the mortgage.

Plan Ahead

Although some lenders allow buyers to use up to 41% of monthly income to purchase a house, beware of becoming “house rich and cash poor.” Be sure to budget for homeownership costs beyond the mortgage, including expenses for:

moving
decorating and furnishing
homeowners insurance
property taxes
homeowners association fees (if any)
utilities-power, water, sewer, cable, trash pick-up
yard tools, supplies and general upkeep
home repairs, supplies, cleaning and upgrades.

Today, homeownership is a wonderful dream-come-true for more people than ever before. Let us help turn those dreams into a home to be proud of.

Check out www.cbbaker.com for more information and helpful tips.  kaybakerassociates@ec.rr.com

Categories: Buying Wilmington NC real estate, mortgage interest deductions, tax advantage, tax advantages to buying real estate, tax exemptions, why pay your landlords mortgage, Wilmington NC Neighborhoods, Wilmington NC real esatate

Do You Know How You Can Profit Using “OPM” and Leverage?

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Home ownership remains an important investment for most people, thanks in large part to the use of OPM (“Other People’s Money”) to gain “leverage.” Here’s how leverage works.

  • Assume that a family bought a home five years ago for $80,000. They put up 20% of the purchase price ($16,000) and borrowed the 80% ($64,000) balance. Now, they manage to sell the house for $120,000. Their relatively small cash investment has reaped the benefit of the increase in value of the entire property. The $16,000 cash investment has resulted in a profit of $40,000.
  • Compare this with an investment in common stocks. Federal regulations require that an investor put up at least 50% in cash. Therefore, the leverage is not as high as for the home buyer. If the investor put up $40,000 to buy $80,000 in securities and sold the stocks five years later for $120,000, the return would have been less substantial.
  • Taxes, selling costs and other factors would change these figures in the “real” world, but the principle of leverage would remain the same. If you want to increase the return on your home investment as much as possible, let OPM go to work for you.

If you want to increase the value of your house hunting time and energy, let us go to work for you. We can help steer you through the complexities of contracting, financing and closing.

Visit www.cbbaker.com for more information.

Categories: OPM, Uncategorized

Masonboro Island Wilmington NC

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Masonboro Island NC

Masonboro Island is an 8 mile long uninhabited island on the southern North Carolina coast between Wrightsville Beach and Carolina Beach and is part of the National Estuarine Research Reserve. Masonboro Island, only accessible by boat, is enjoyed by campers, surfers, anglers, and bird-watchers alike. The reserve consists of about 5000 acres, which about 4400 acres are tidal marsh and mud flats. The most northern end at Masonboro Inlet is the most popular area with its sandy beaches and protected waters. Any summer weekend you will see many boaters and campers prepared for a few days on the beach with tents, grills and water toys in tow. Read the rest of this entry

Categories: Buying Wilmington NC real estate, Uncategorized, Wilmington NC Neighborhoods

HEALTHY HOME: The Top 10 House Maladies To Avoid

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babyhandWhether you’re selling a home or looking to purchase one, you’ll want to make certain the home in question is in good physical condition. Check out the following list of the 10 most common home “health” problems identified by members of the American Society of Home Inspectors in a recent survey.

1. Improper surface grading and drainage.

Inspectors rated this problem the most troublesome, with 35.8% of those surveyed listing it as their top issue. Responsible for household maladies, such as leaky basements or crawl spaces, grading and drainage problems can be fixed either by regrading the ground away from the house or replacing gutters and down spouts.

2. Improper electrical wiring.

This was rated the most common problem by 20% of the inspectors surveyed. Some inspectors reported that 70% to 80% of electrical wiring in homes is installed incorrectly — mostly by do-it-yourselfers. Noted problems included insufficient electrical service, inadequate overload protection and amateur (sometimes dangerous) wiring connections.{short description of image}

3. Roof damage.

Leaking roofs ranked third in the survey, resulting most often from old or damaged shingles or improper flashing and drainage. Asphalt shingles, the most commonly used shingle type, last between 20 and 30 years — about the same life span as wooden shake shingles. For longevity, try slate shingles, which can last 100-plus years!

4. Heating systems.

Most sales contracts require that heating systems be in working order, so it’s an item that must be dealt with if it fails the home inspection — which often happens, according to the ASHI survey. Problems include broken or malfunctioning controls, blocked chimneys and unsafe exhaust disposal. Don’t overlook heating system problems — they can be dangerous if left unattended.

5. Poor overall maintenance.

Although the survey found this problem common, it is truly avoidable. Signs of poor maintenance include: cracked, peeling or dirty painted surfaces; crumbling masonry; makeshift wiring or plumbing; and broken fixtures and appliances.

6. Structural problems.

This category includes damage to structural components such as foundation walls, floor joists, rafters and window/door headers — often caused by some of the five problems already listed.

7. Plumbing.

Common problems include faulty fixtures and waste lines and the existence of old or incompatible piping materials.

8. Exteriors.

While exterior flaws may not have structural significance, defects in windows, doors and wall surfaces can cause discomfort to residents via moisture and air penetration. The most common exterior problems are inadequate caulking and/or weatherstripping.

9. Poor ventilation.

It is possible to “overseal” a home, resulting in excessive interior moisture, which can lead to rotting and failure of structural and non-structural elements.

10. Miscellaneous.

Included here were interior elements — usually cosmetic. They were mentioned so infrequently by respondents that they did not rank individually in the survey.Fortunately, many of the most common problems in homes are far from fatal — they can often be fixed quickly and inexpensively! The point is to fix them early, before they cause significant damage to your home.

Call us 910-202-3607 for more information and tips. Or visit www.cbbaker.com

 

 

Categories: #selling homes, #Spring Time To Sell, Healthy Homes, Uncategorized, wilmington nc real estate


Kay Baker Associates | 1001 Military Cutoff | Ste 101 Wilmington, NC 28405 | kaybakerassociates@ec.rr.com | 910-202-3607 | Fax 910-338-2428

Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.