Did You Know?
Making one extra principle and interest payment a year will knock about 7 years off your mortgage and save you thousands of dollars.
"Bi-Weekly" mortgage payment programs charge fees and do for you what you can easily manage. They say they save you an impressive amount of money on your mortgage and reduce the number of years you pay on your mortgage.
This is true, but you don't NEED them to get those savings, and by doing it yourself, you save even more money!
This is how they typically work: The company places your 1/2 mortgage payment in their account every two weeks, then they hold the payment until all of the mortgage payment is collected. During the course of a year 26 deductions will be made from your account. With the extra 2 deductions, the "Service" makes one additional mortgage payment every year. In other words rather than making 12 mortgage payments, 13 payments are made.
The enticement is that they are providing a special service when you don't have the time or discipline to make it happen.
The real story is that there is an easier way to do this - with no payment shock- and your mortgage company will immediately credit the payment to your account. Just deduct your mortgage payment automatically from your account each month with an additional 1/12 of your principle and interest payment applied to the principal balance each month. (Extra money is automatically applied to principle unless you tell your mortgage company to do something else with it.)
New Monthly Payment = Monthly Payment + (Principle & Interest /12) .
At the end of 12 months, you will have made an additional mortgage payment and you won't pay any fees to a servicer nor will you have had your money held in limbo. Now that just makes cents!
Remember me when you are talking homes!
I'm passionate about helping people achieve their home dreams
with the best possible financial options.
Teaching the 3rd Grade
Recently I had the distinct pleasure of participating in Career Day at our local elementary school. I started the lesson with self-employment. I explained, while it is nice being your own boss and having a flexible schedule, your success will directly reflect in your pay check and your reputation within the community.
It is difficult to properly convey the excitement of compound interest when your audience is eight-years-old. I was competing for their attention with police officers, firefighters, and marketing directors (who had lots of gadgets). Totally unfair!! So, instead, I reminded them, that though they may not want to be a loan officer, they may work with one when they want to own a home. They seemed to enjoy looking a house photos and discussing prices. We generally discussed how to buy a home too.
Finally, I explained the LIFE LESSON I wanted them to always remember, long after Career Day was over. (In the photo, that's what is highlighted on the board in yellow.) Maybe you know this lesson?
If your outgo exceeds your intake,
then your upkeep will be your downfall.
I think some of them understood our discussion and all of them wrote it down. I'm hopeful that a seed of financial knowledge has been planted on Career Day. Have a fantastic week! Need help on a mortgage? Grab my app at http://NewThresholdMortgage.com
The Changes for 2018 Taxes
Two lost housing deductions pop
off the new tax bill which you should know about, and I've also included one
reminder of an unchanged deduction.
They are no longer deductible
if you are not active military. Before they were deductible if
you moved over 50 miles for a job. There were more specific terms,
however, now it is simple. You
can't deduct the expense.
HOME EQUITY LINE
This product's interest has
been deductible forever, but no more. This essentially kills the benefits of
the piggy back loans (getting a first and second mortgage combination product),
though they have decrease in popularity over the last five years.
Having that handy equity line
available is still nice due to its low interest rate, but it is no better than
a low interest credit card and potentially worse for you, since it is tied to
real property. This makes it a much more secure bet for the lender and gives you no
added benefit for allowing the lender to hold a piece of your property’s
equity. You can't deduct the
Here's more information: https://www.marketwatch.com/story/most-home-equity-loan-borrowers-dont-understand-how-trumps-tax-code-affects-them-2018-02-02
Having no deduction on the
equity line make mortgage insurance more appetizing. Yes, I never thought I was say that either, but the legislature did
not touch the mortgage insurance deduction.
So, you could go get a fixed
rate second mortgage at 9% or so, or you could have the dream that the mortgage
insurance is going to go away in a few years, and during the life of the
mortgage insurance, it could be entirely tax deductible. Not a bad dream, sort
of, until you get to the “however”. And here it is. However, it’s only tax
deductible up to a point. If your adjusted gross income exceeds $109,000 or $54,500 if
married and filing separately, the IRS prohibits you from deducting mortgage
Here is more
ARE MY CHOICES IF I HAVE AN EQUITY LINE!?!?!?
-Bite the Bullet and Endure
Honestly, it might not
matter. The “might” is the problem, so take the second choice.
- Review your debt allocation and consider whether a refinance will benefit
If you want to look into
rolling the first and equity mortgage together, let’s take a look. Even if you need a bit of mortgage insurance
for a time, it may still be beneficial due to the tax deduction. We can look at your gross adjusted
income, how much you pay in interest with your current mortgage profile, and
what is deductible currently vs. the future, then you can consult your tax advisor too.* Shoot me an email or text for a review.
*As you know, I am a
mortgage broker, not a tax advisor.
Whether you're anticipating a total solar eclipse or a future home, both require preparation to get what you want out of the moment and save yourself from future headaches.
Here are two scenarios where I typically offer advice when given the time (61-90 days) to make the loan happen.
You're self-employed.; Move the money you are using for the purchase of a home to your personal account. If you have down payment in your business account, you can use it; however, the lender will want to "source" the funds in your business account(s). This means if there is anything private, like account numbers or client names in the bank statements, you may be revealing more than you desire. By having the funds transferred to your personal account more than 60 days before you go to underwriting, lenders can stay out of your business.
You're getting a gift for the down payment. If they love you enough to give you the money, perhaps they trust you enough to give that money 61 days ahead of underwriting. Of course, gifts are allowed on many loan programs if the transfer is documented and you have a gift letter; however, if the funds are already in your account for two months, the money is no longer considered a gift. This actually improves your qualifications in underwriting because a loan using your own funds for the down payment is considered a less risky than a loan with gift funds. If it is yours for 60+ days, it is no longer a gift.
As a last tip, I offer Fully Underwritten Loans WITHOUT a contract. In other words, we can turn your offer into the equivalent of a full cash offer pending the appraisal and title work. This is a powerful option at your disposal for those hard to obtain homes. Please let me know if I can help you purchase a home in Georgia.
*Eclipse photo taken near Dillon, GA on August 21,2017 using Canon Rebel T6, 300mm lens.
Typically, I'm good with calling a repairman or heading to the store for new appliance, but a dryer seemed... interesting ...and expensive. So I googled a few videos about dryer heating problems. Once I found my machine, it was clear where the problem was so imitating Wonder Woman, I grabbed my tools and faced the machine.
I discovered the secret of my 12 year old dryer.
You see, being the law abiding citizen that I am, about every 12 months I pulled out the vent tube and cleaned it thinking I had done my civic duty as a person with home insurance. Wrong!! I mean right, but that's not the whole story.
I found lint inside the dryer. Not just "makes you sneeze" lint. I mean piles and layers and floating lint. Handfuls of lint! I think I could have weaved three shirts from all the lint fibers in my dryer. Lint was everywhere inside the dryer. This was such a surprise because I thought the lint went out the vent.
Once I got past the lint, (actually under), I found more screws to remove so I could replace the broken heater. Fox Appliance Repair had the part in stock and ready to go. They even tested another part I brought in for a potential problem, but all good there!
So, after purchasing the new heating element for $90 minus the $4.21 found in the dryer (no whole socks though) and a total of three hours (accounting for drive time and obsessive vacuuming), I have a heating dryer and feel safer from the threat of a decade of lint. I also know how to open my dryer for an annual cleaning scheduled with Siri.
Oh- one last thing. When you plug your dryer back in, give it a minute if your dryer has a brain. Initially it appeared like there was no power, but after 30 seconds, the computer rebooted and things worked great. I hope this information is helpful. Happy house management my mortgaged friends!
From My Dear Client Angela-
I bought a little (1,048 Sq. feet) fixer-upper in Pine
Lake, GA. Closed yesterday with the help of my fantastic Agent and Elizabeth
Washburn (New Threshold Mortgage Company).
These women are not just excellent business professionals, but FRIENDS
who I trusted, felt comfortable with and enjoyed throughout the entire
process. I knew they were looking out
for me and I just never had a worry or an anxious moment. They will both be at the first BIG party at
my little house as soon as I am able to get this little jewel of a house up to
My first day
working at the house I met my new neighbor who has so many things hanging from
his porch (art and things) it is hard to even see the door. I walked over and said, "Hi, I am your
new neighbor!" He shook my hand
looked me in the eye and said HI--then said, "well I don't know what you
think about all this stuff". I
promptly said, "I LOVE it!"
Then, with a big smile on his face he invited me inside to see more
art. He tells me that love and
compassion are the only things that really matter and added I know you get
that! As he is explaining and describing
all of his art, which he mostly found at the thrift store and I am just amazed at his keen eye and just how
much he has in this little apartment! He
bends down at one point and picks up a native American sand drawing and says he
feels compelled to give this to me. I am
touched and thank him profusely. As we
part and I go back to my little house across the street, he says he is happy
that we got to meet at this point in our journeys and then flings his arms open
and says, "Welcome to Pine Lake!"
I'm feeling right at home!
Last Saturday, my husband contributed to the household
maintenance by turning on the oven's self-cleaning mechanism. With no good deed going unpunished, the cycle
cut short and the oven remained locked. The good news is we have a five year
warranty on the oven with six months left, so we called the technician.
This is where it really gets interesting. He explained
(off the record) self-cleaning can destroy ovens. He said the feature is added
due to popular demand by consumers; however, the components and computer board
are so sophisticated now that the self-cleaning oven mechanism can be hazardous
to your oven's computer board health.
He shared examples of shattered glass, fried electronics
and blown fuses. Sometimes it all happened and sometimes just one, but either way, the damage causes complete oven
failure. I was shocked to learn that the ovens really are not
designed for 900° for 2 to 3 hours even though the mechanism is there to do
So, I asked him, how
do I clean the oven safely because I hate the cleaning sprays? He said, first get a aluminum tray and put it in the bottom of
the oven to catch the spills. Do not use foil as a substitute because the foil will melt just
enough to ruin the oven's finish. Second, if you feel so inclined to use you're self-cleaning mechanism after
what he shared (and your warranty is still active), set a timer and turn on the
heat for only an hour. An hour is sufficient to ash anything on the surface, and,
hopefully, the heat will not fry the components.
He suggested this
three step method for the safest results:
1 - Remove the racks
2 - Heat the oven at the lowest setting with a small solution of water and ammonia steaming.
3 - After about 15 minutes, use soap and water on a soft scrub pad (plastic, not
steel) to wipe away the grime. Remember to use care with your hands/arms since the
oven will be around 200°.
If you want more information about this topic, check out this website with
all the details. http://www.thekitchn.com/why-you-should-almost-never-use-the-self-cleaning-function-of-your-oven-175110 I hope this knowledge makes your life a little bit easier.
PS - The oven in the photo is not my oven. It just a good photo for blogs.
It looks pretty awesome with traditional dance, music and a Chinese garden/koi pond to explore. I haven't taken the family to Asia so I am excited to have a piece of this fantastic culture in America. Please share with family and friends. I hope to see you there!
For more information, click on Atlanta Chinatown.
Homestead Exemption Links
Put a quick
reminder on your to-do list. If you moved your residence in 2016, you
need to file for property tax homestead exemption.
This will reduce your property tax burden between 30-40%. Usually the county requires the filing be
postmarked by April Fool’s Day; however, technology makes it so you may not need
a stamp. Below are the links for some
metro counties to make your life a little bit easier.
COBB (By Mail or In Person Only!)
Be a friend to your friends. Share this blog as a reminder
Since the election,
the average mortgage rates have increased. The nine-week rise came to a sudden end today
with rates decreasing during the first week of 2017. The average mortgage rate
for the 30-year note dropped by 12 basis points to 4.20 percent. Rates for the
15-year notes decreased from 3.55 to 3.44 percent. It is still higher than
prior to the election, but a new trend always starts with a first day.
This drop is good news
for last minute refinancers or purchasers seeking a mortgage. If restructuring
your mortgage is rate sensitive, it is likely time to take action since most
experts expect rates to continually climb throughout the year, despite the
Compared with rates in
previous decades, current rates are low for mortgage borrowers. This is set to
change, though, with rates having the potential for a rise to 5%+ during the
coming year. It means that homebuyers, especially first-time buyers, should
attempt to purchase sooner rather than later, or face decreased home price qualifications
in the future.
If you're interested in
refinancing or making the dream of homeownership a reality,
visit www.NewThresholdMortgage.com for more information and achieve your next step.
About this time
every year, your lender is obligated to review your escrow account to keep their
monthly bill in line with the actual insurance and tax costs. When they do this
evaluation, they send you a summary of their review and either a check, or an
opportunity to send them more money. If there is a deficit, they are usually
willing to either increase your monthly payment or allow you to send them a
lump sum. We are either gleeful for a
check for the post-holidays, or grimacing with the new larger house payment. Most of
us stop our evaluation here, however, I encourage you to read further.
What is the Mortgage
Your Mortgage Escrow Account is
established by the lender to pay on-going expenses while their loan is on your home.
These expenses generally include property taxes, home
insurance, and mortgage insurance. When you first established your loan with
the lender, most likely at closing, the lender set up a separate account consisting
of several months of your estimated taxes, a year’s worth of home insurance,
and maybe a month or two of mortgage insurance. Every month after that, you’ve
made on-going contributions with your monthly mortgage payment.
Evaluating your property tax bill
If you’re not already disputing your tax bill, the
next thing you want to check on your county’s website is your homestead
exemption, especially if there was a huge tax jump. Make sure it is in
place, and it is indicated on most tax bills as a percentage reduction in the
home’s taxable value. Is the air
conditioned square footage correct and correlating with your
appraisal? If not, you may be overtaxed.
If you are also eligible for the elderly
exemption, take the time to do it! You
might have to head to the local court house to present your tax returns, but I
have seen thousands of dollars unnecessarily spent because it was “too much of
a hassle.” My belief it that earning
those thousands might be more work than a trip to the local government office!
Evaluating your home insurance
opportunity to crosscheck what your home insurance bill is and what the lender
says it is. Get aware of any increase, or change in deductible, and shop it out
again if needed. I personally have had significant jumps over time and
saved bundles by taking the time to review annually, but it does take
time. Something that can’t be earned
Evaluating Mortgage Insurance
How is the equity on your home? Is it time to
call your favorite Real Estate Agent for their realistic value of your home? If you are encouraged, take the next step and
call the lender to see what items they need for verifying your value and ridding yourself of that old mortgage
insurance payment. Conventional
loans only need 20% equity. Old FHA
loans can get rid of the insurance as well, though you do need more than 20%
equity. Call to find out how much. The
changes in the FHA laws over time make it impossible to determine without
evaluating your exact loan. New FHA
loans have mortgage insurance for the life of the loan. A few phone calls and you will know what the
Examine your Interest Rate
Is your rate
competitive with the current interest rates?
If not, give me a call. We can fix that!
In summary, be
proactive with your bills like you are with your assets. I had one friend who confessed he had been
paying for a boat’s radio for 10 years after he sold the boat because the bill
was grouped in with other vehicles. Being proactive with debt allows you to not
only be aware of where your money goes, but also find the savings that are likely in the escalating bills we all
see every year.
fantastic and fiscally sound New Year!!!
As my client, you are one of the 22% or 40 million people that use this deduction yearly. Based on the article, a lowering of the total deduction to $100,000 would not affect you. The problem lies in it being completely repealed. Get to know about before your legislator votes.
Check out this Article at CNBC Published Today