Tax Credits Not to Miss

Tax year 2006 is the first for which you can get a tax break for making your home more energy efficient.

You can take a 30 percent credit up to $2,000 for the cost of solar water heating or photovoltaic equipment in your home. You can get a 10 percent credit up to $500 for insulation and heat-reducing metal roofs, and up to $200 for energy-efficient windows. Labor costs, though, don't count.

(For more information, see IRS Form 5695. The credit is entered on line 52 on the your form 1040.)

If you bought property and reimbursed the seller for the portion of property taxes he paid for the year, you may deduct that amount on your return, unless you're subject to AMT, which disallows property tax deductions.

(This deduction is entered on your 1040 form Schedule A)

For more tax advice, we suggest you consult a tax professional.  If you have questions, please post a comment here.

Homeowners - Beware of This Scam

You could be victimized by a scam where someone tries to lure you into applying for a loan secured by your home.

The Federal Reserve put out that warning recently in response to questions and complaints from people about direct-mail solicitation scams that describe a "Community Reinvestment Act Program" that entitles certain homeowners to cash grants or equity payments.

"Some of these solicitations may be read to indicate that the Federal Reserve endorses or supports the offers they contain," the Fed said.

"These solicitations appear to be a deceptive effort to encourage consumers to apply for a mortgage loan secured by the consumer's home."

In a prepared statement, "The Federal Reserve cautions the public about loan solicitations or other offers from lenders or mortgage brokers that offer consumer cash grants or equity disbursements as part of a 'CRA Program."

There is a 1977 federal law called the Community Reinvestment Act.  But that law does not entitle people to grants or loans.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.

Homebuying Tip: Get a Home Inspection

In our continuing effort to help you be as informed and knowledgable as possible about the home buying process, we offer this important advice.

Get a Home Inspection.

The last thing you want to discover after you have bought a home is that you have purchased a "money pit".  By "money pit", we are referring to a home that is full of major defects not readily seen which could end up draining you of all available financial resources.

Save yourself time in possible future litigation and renovation by hiring a licensed, professional home inspector to inspect the home before you buy it.  If any major problems are found, it will steer you away from a bad decision and/or it could help you negotiate a better price for the home.

Better to know up front if the heating and cooling system is not working efficiently, or the water heater has a leak, than to find out after the movers have already pulled out of the driveway.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.

Homebuying Tip: Keep a House Hunting Scorecard

In our continuing effort to help you be as informed and knowledgable as possible about the home buying process, we offer this important advice.

Keep a House Hunting Scorecard

When you are looking at real estate, nothing can be more frustrating than trying to think back to which house had which feature that you liked or didn't like.

Keep score of the houses you tour after inspecting each home.  Record its positive and negative aspects and write down your overall impressions.  Eliminate those homes which don't measure up to your satisfaction.  Review your "nice-to-have" list to see how many additional positive points each property may possess, and keep tabs on those "Must Have" items each home has.  These scorecards will be very helpful in narrowing down the field for your final selection.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.

Homebuying Tip: Buy or Sell - Which Comes First?

In our continuing effort to help you be as informed and knowledgable as possible about the home buying process, we offer this important advice.

Buy or Sell… Which Comes First?

If you're looking to move up or down in the real estate market, this is a major concern.  Do you try to sell your current home before you purchase, or should you buy a new home and then sell your current one?  After all, you don't want to be without a place to live, should your present home sell before you find a replacement house.

Research short-term rental and storage options (family, friends, storage facilities, containers).  Talk to school officials in your new neighborhood.  They may allow your children to start the next semester in what will be their new school, if you have an offer pending in the neighborhood.

Finding a new home while you still own your present home could also present some financing issues.  One of those issues could be helped with the use of what is know as "Bridge Financing."

Bridge financing is a loan for the down payment on a new home backed by the equity in your old house, typically at prime plus two percentage points.  While helpful in certain circumstances, bridge financing can be expensive.  If you have good credit but your income isn't high enough for you to qualify to carry a bridge loan plus both mortgage payments, consider a no-ratio mortgage, which doesn't take into account your debt-to-income ratio.  Rates are higher but you can refinance later.

Another alternative would be to draw on a home equity line of credit on your old home.  Rates are often more than a point lower than on bridge loans.  But be careful, you might have to pay a penalty fee if you sell the house less than a year after taking out the line of credit.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.