Homeownership

Found 81 blog entries about Homeownership.

Tools used in home improvement

By: G. M. Filisko

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.

Trying to decide whether to buy a fixer-upper house? Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

1.  Decide what you can do yourself.

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house.

  • Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy.
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Kitec Plumbing System; Credit: Kitecsettlement.com

Photo Credit: Kitecsettlement.com

During the housing boom from 1995 to the downturn in 2007, thousands of homes were built in Rio Rancho and Albuquerque’s west side.  Many of those new homes installed Kitec plumbing fixtures.

Even though Kitec was recalled in the late 1990’s, some New Mexico builders continued to use the product. This has left many Albuquerque and Rio Rancho homeowners at risk of structural damage and massive flooding. Because of the type of damage it can cause, Kitec repairs can range upward of $20,000.

In this multi-part series, we will provide you with information you can pass on to your clients and information you need to know as a REALTOR® about disclosure requirements for legal cases like Kitec Plumbing

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Pile of money

By: Donna Fuscaldo
Source: HouseLogic

Energy tax credits on select improvements available through the end of tax year 2016.

If you upgraded one or more of the following systems last year, you may be eligible to take a tax credit -- up to $500 -- on your return.

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

The energy tax credits are small, but at least a credit is better than a deduction:

  • Deductions just reduce your taxable income.
  • With a credit, you get a dollar-for-dollar reduction in your tax liability: If you get the $500 credit, you pay $500 less in taxes.

Limits on IRS energy tax credits besides

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Green homes

Whether you’re building the home of your dreams or looking for an existing unit, there’s a lot of data involved in finding the right environmentally friendly dwelling. Here’s a breakdown of the different certification systems for energy-efficient homes.

RESNET

The Residential Energy Services Network is a not-for-profit corporation that develops industry-wide standards and rules for energy efficiency ratings and certification systems for buildings. In addition to overseeing the HERS index (see below), RESNET certifies contractors of all types, including builders, roofing and siding professionals, and remodeling contractors.

HERS index

The Home Energy Rating System is an index measuring a home’s energy efficiency. An average home built to

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Row of lightbulbs

Q: I recently purchased a home. Are there any programs available to help me save energy and maybe a few dollars while I'm at it?

PNM offers a number of rebates and discounts that can help you to save some money while reducing energy use. They range from rebates on evaporative and refrigerated air conditioning to discounts on home lighting. They also offer a home energy checkup that can help to identify opportunities to reduce electricity waste and may qualify you for rebates on select ENERGY STAR appliances and efficient cooling equipment.  Visit PNM’s website for more information.
Additionally, these energy improvements may increase your chances to sell your home when the time comes.

Talk to your REALTOR® today.

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Couple standing in front of house

The tax deductions you’re eligible to take for mortgage interest* and property taxes greatly increase the financial benefits of home ownership. Let’s work through a hypothetical situation to see how it works.

If we assume the following:

$9,877 Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
+$2,700  Property taxes (at 1.5 percent on $180,000 assessed value)
=$12,577 Total deduction

Then, multiply your total deduction by your tax rate.**

For example, at a 28 percent tax rate: $12,577 x 0.28 = $3,521.56

$3,521.56 = Amount by which you have lowered your federal income tax

*Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total

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Asbestos removal

Radon

A colorless, odorless gas that can seep into your home from the ground, radon is often referred to as the second most common cause of lung cancer behind smoking.

What to look for: Basements or any area with protrusions into the ground offer entry points for radon. The Environmental Protection Agency publishes a map of high-prevalence areas. A radon test can determine if high levels are present.

Asbestos

A fibrous material once popular as fire-resistant insulation, asbestos was banned in 1985. However, it’s often found in the building materials, floor tiles, roof coverings, and siding of older. If disturbed or damaged, it can enter the air and cause severe illness.

What to look for: Homes built prior to 1985 are at risk of having

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Meeting with the condo board

Before you purchase a condo, you should have an attorney review property documents for you. However, you should contact the board yourself ahead of time. You’ll learn how responsive and organized its members are and be alerted to potential problems.

How many units are owner-occupied?

Generally, the higher the percentage of owner-occupied units, the easier the condo will be to resell.

What covenants, bylaws, and restrictions govern the property?

Carefully read the bylaws to determine if you can abide by them. Also, find out if there are grandfather provisions that allow current owners more rights than you would have as a new owner, such as the ability to rent out your unit.

How much does the association keep in reserve?

Ask how the

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Money changing hands

Term.

Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, shorter terms mean you pay less interest over the life of the loan.

Fixed vs. adjustable interest rates.

A fixed rate allows you to lock in a low interest rate as long as you hold the mortgage and, in general, is a good choice if interest rates are low. An adjustable-rate mortgage (ARM) usually offers a lower rate that will rise as market rates increase. ARMs usually have a limit as to how much and how frequently the interest rate can be increased. These types of mortgages are a good choice when fixed interest rates are high or if you expect your income to grow significantly in the coming years.

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Appraiser inspecting a property

Once you are under contract, your lender will send out an appraiser to make sure the purchase price is in line with the property’s value.

Appraisals help guide mortgage terms.

The appraised value of a home is an important factor in the loan underwriting process. Although lenders may use the sale price to determine the amount of the mortgage they will offer, they generally only do so when the property is sold for less than the appraisal amount. Also, the loan-to-value ratio is based on the appraised value and helps lenders figure out how much money may be borrowed to purchase the property and under what terms. If the LTV is high, the lender is more likely to require the borrower to purchase private mortgage insurance.

Appraised value is not a

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