Whether you’re refinancing your current home or buying a new one, something worth considering is a 15 year loan rather than a 30 year term. The payments will be a little higher but you’ll get a lower interest rate and you’ll build equity much faster.

Let’s look at an example of a $200,000 mortgage with the choice of a 30 year term with a 3.75% rate compared to a 15 year term with a 2.875% rate. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.

Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you’d like a recommendation of a trusted lender.

“Anyone may arrange his affairs so that his taxes shall be as low as possible…for nobody owes any public duty to pay more than the law demands.”
– Judge Learned Hand

This opinion refers to federal income tax but the logic and spirit can easily be applied to any tax including property tax. Most property tax is based on a valuation called an assessment placed on the property by a government taxing authority.

When property values rise due to appreciation, the assessments usually rise. However, when values decline as they have done in many areas in the past few years, the assessments should follow accordingly.

If you don’t believe your assessment reflects market value, put together proof to support your position. Recent comparable sales, similar in size, condition and location are very persuasive. Check to see if the square footage on the assessment is accurate. If the home is not in good condition, take pictures to show that.

As your real estate professional, I can supply the comparables and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket.

Some residents of Augusta, Georgia have purchased tickets to the Master’s for years but have never attended the famous golf tournament. It’s because they include the tickets as a bonus to the people who rent their home during the event.

Each year, owners rent their home for a big premium during the Masters and make tax-free income. Homeowners benefit from a little known provision in the tax code that does not require taxpayers to recognize the income derived from renting their home for less than 15 days per year. See Rental of property also used as home on IRS.gov.

Large sporting events like golf and tennis tournaments, championship games and other high attendance events increase the demand for a temporary rental of a private residence. Obviously, there are challenges with personal belongings and damage but getting a premium rental rate with a substantial deposit and not having to recognize the income could be worth it.

You’ll certainly want to discuss this with your tax professional prior to making this decision. You’ll probably also want to get some help from an experienced real estate professional.

Automatic thermostats can lower your monthly utility costs while conveniently regulating your comfort by adjusting temperatures on your heating and cooling systems. These can be particularly effective in homes with zoned systems where you live in one area during the day but sleep in a different zone.

There are programmable thermostats available at home improvement stores that can make the adjustments for specific times during the day and specific days of the week. They’ll allow you to override the setting when needed without tampering with the programming. They’ll even remind you to change your filter.

An exciting development is the Wi-Fi enabled thermostat that allows adjustments from any Internet connection such as computer or Smartphone. Imagine how convenient it can be to change your temperature from the car before you get home.

Reasonably priced under $100 for most models, it makes it easy to recapture the cost of the thermostat quickly. Most of the thermostats are designed for do-it-yourselfers; however, you can always have a heating and cooling professional install it for you.

Personal computers have been around long enough that everyone has experienced or knows someone who has lost their data due to a hard drive crash, accident or burglary. If they had a backup, the loss was inconvenient but not critical.

Do you have a backup for your personal belongings? Not that you need duplicates of all the items but do you have a journal listing of all the items with a description and their approximate values? That record becomes the backup that supports the claim for your insurance.

If a building sustains a total loss, the insurance company will usually pay the face amount of the policy. When it comes to personal property which might be 40% to 50% of the insured value of the dwelling, the insurance company is going to expect an accounting with receipts or at least, a relatively recent inventory.

The better your inventory, the less likely you’ll have difficulty with the claim. Almost everyone has a digital camera that can take stills and probably even videos. The combination of the images as well as a written description will help you replace the belongings and serve as proof to the insurance company.

Once you’ve made the inventory, store it off site for safe keeping. Online storage in the “cloud” might be the best place to insure you’ll always know where it is. Contact me for a free Home Inventory form; it’s my way of helping you be a better homeowner.

Occasionally, you hear about an important recall on a product you have and you take care of it immediately. However, if you were to miss such a notice, it could put you or your family in jeopardy.

You can subscribe to the U.S. government’s service to notify the public when recalls are made on vehicles, tires and child restraints through the National Highway Traffic Safety Administration on their site called SaferCar.gov.

You’ll receive a notification by email when there is a new recall based on the type you selected. You can change your selections or unsubscribe at any time by going back to their website in the “Manage Your Notifications” section.

We’re committed to helping you be a better homeowner by providing information on items that can protect your home’s value, reduce expenses, improve maintenance and increase the enjoyment of your home.

A recent U.S. Tax Court ruling clarified the IRS position that the $1.1 million limit for mortgage interest deduction applies per residence and not per taxpayer as some high-priced homeowners were hoping.

A married homeowner filing jointly can have fully deductible interest on a mortgage of up to $1,000,000 of acquisition debt and up to an additional $100,000 of home equity debt. If the married couple files separately, each party is limited to deducting the interest on half of those maximum amounts.

The court case came about when two unmarried individuals who owned a home together as joint tenants felt that they were entitled to deduct the interest on $1.1 million of debt each. IRS did not agree with their understanding and neither did the Tax Court. The Court ruled that the limits apply per residence, not per taxpayer even if a home is co-owned by unmarried taxpayers.

The result for the taxpayers in this case was that their deduction was cut in half resulting in much more income tax due. While this situation only affects a few taxpayers, homeowners in this position should have a discussion with their tax professional.

Have you ever had a service company to your home to repair something and find out that it really wasn’t “broken”? It probably conjured up ambivalent feelings of joy that it wasn’t something serious and frustration that you had to pay a service call for something so simple.

Before you call the repairman next time, keep these things in mind to see if it is something simple:

• Disposer not working – check to see if the reset button has been thrown. It is usually on the bottom of the disposer. If the disposer is making a humming sound, the blades may be stuck. While the disposer is turned off, use a wooden broom handle as a lever to gently rotate the blades. Remove the broom handle and turn on the disposer to see if it works properly.
• Air conditioner not working – check to see if a breaker has thrown on your electric panel. You might need to flip the breaker completely off and flip it back on.
• Electrical outlets not working – Electrical plugs in bathrooms or outside, especially on a porch or patio, are many times connected to a ground fault interrupter. The GFI will be a wall outlet and it may be located in the garage. Locate the outlet and reset the button that may have tripped.
• Clogged drain – a simple way to correct a slow or clogged drain is to use the water pressure from a garden hose. You’ll need a helper to turn on the water full-blast once you have safely placed the hose in the drain and are holding a hand-towel around the hose to direct the water to the drain. Be prepared to tell your helper to turn off the water when needed.

Whether it’s preparing a home to market or arranging repairs required by the sale, REALTORS® know reputable, reasonable and reliable service contractors. We’re here to share our contacts with you to help make home ownership better.

Obama expands foreclosure prevention program – January 28, 2012 – CNNMoney.com: The Obama administration is taking another swing at improving its main foreclosure prevention program.

In today’s real estate market more people use the internet to shop for homes and in turn sellers have embraced the medium as the primary vehicle for advertising their homes. Buyers like to see lots of photos, which as we all know tell a thousand words. Better still, high definition video can bring the buyer right into the home.

For buyers, the more photos they can see and video they can watch, all the better. This creates a challenge for sellers to provide excellent photos and video which depict the true nature of the home. Poor photos and video are to be avoided. Care should be taken to provide proper lighting and images free from blurring.

The images the seller provides to market their home should give the potential buyer a true and accurate depiction of the property while matching the written description in order to attract the buyer to visit the home. Once there to see it in person, there shouldn’t be any unpleasant surprises, like a room that was made to look larger than it is.

Use the best equipment possible. It is better to use a digital single lens reflex (DSLR) camera than a point and shoot camera. A wide angle lens produces a better shot and soft lighting is better than harsh lighting. To get a distortion free photo, use a tripod or monopod to steady the shot.

Video is fantastic, but it isn’t always possible to produce good video, especially when size is a factor. Some smaller homes can’t always be videoed effectively. Again a wide angle lens is a must, but don’t use video which only shows partial views. Seeing half of the room doesn’t help anyone! Using photos with video editing software can produce a “video like” production which may be a better option if your video camcorder cannot adequately capture the rooms.  

Combining the internet, photos, video, QR codes and mobile websites may make printed brochures a thing of the past. Today, if a listed property has a web brochure available online, a buyer can use their smartphone to scan a QR code or enter the property address in a web browser search and see the online property brochure along with all of the photos and or video right from the comfort of their car or home.

Charles Kraus, GRI Associate Broker – Coldwell Banker Residential Brokerage, Annapolis, MD