Monthly Archives: November 2014

Verify Your Property Taxes

Taxes“Do you ‘know’ when your mortgage company paid your Property Taxes?  Almost everyone who has a mortgage on their home pays their Property Taxes each month into an escrow account, expecting the mortgage company to pay them.  Be aware of when your lender is paying taxes each year.”

Denise Buck & Ed Johnson – DC Metro Realty Team

 

If you have a mortgage with an escrow account to pay your property taxes and insurance, you expect the company servicing your loan to pay this year’s taxes this year so that you can deduct them on your 2014 income tax return. After all, your monthly payment includes 1/12 the annual amount so there will be money available for them to be paid on time.

IRS requires that expenses must actually be paid in the year that a deduction is to be taken.

The predicament occurs when you’ve made your payments but the mortgage company didn’t pay the taxing authority in the tax year they were due. If they paid your 2014 taxes in January of 2015, they wouldn’t be deductible for you until you file your 2015 income tax return.

Verify with your lender after you make the December payment that they did indeed pay your property taxes. The question for your lender’s customer service is: “Have you or will you pay the 2014 property taxes this year so I’m eligible to deduct them on my 2014 income tax return?”

Consider an Adjustable Rate

Adjustable Rates“Adjustable Rate Mortgages can be the right answer for some buyers.  In the past, there were buyers who used them, that shouldn’t have.  But there is a time and place for everything.  If you are not going to be in the home you are preparing to buy for very long, an Adjustable Rate Mortgage might just save you money.  Talk to a Lending professional to find out what is right for you.”

Denise Buck & Ed Johnson – DC Metro Realty Team

 

With fixed rate mortgages as low as they are, most purchasers or owners wanting to refinance might not even consider an adjustable rate loan. The determining factor should be how long the person plans to be in the home and which mortgage will provide the cheapest cost of housing.

For instance, if you compare a $300,000, 30 year term mortgage with a 4.125% rate on the fixed and a 3.25% on the 5/1 adjustable, the breakeven point would be almost seven years assuming the rates adjusted the maximum that they could in each year.

2014-11-17_7-30-39.png

Therefore, if a person is going to stay in the house less than 7 years, the ARM would provide the cheapest cost of housing. This example shows that at the end of five years, the ARM would generate almost $13,000 savings over the fixed-rate.

On the other hand, this could be a good time for homeowners with an existing adjustable rate mortgage to consider refinancing into a fixed-rate mortgage. The longer that they intend to stay in their home, the more advantageous it might be for them to convert their mortgage to lock-in their payment and fix their housing costs.

A trusted mortgage professional can analyze the alternatives to provide you with the information necessary to make a good decision. You can try the Adjustable Rate Comparison with your own numbers to see the effect.

Realize Tax Savings Sooner

W4 Allowances“Taking extra allowances on my W-4 is something I have practiced for about 30 years now.  At first it was just a way to get a little more money during the year.  But then I realized that I could take a little more, and then afford to ‘save’ more all during the year and earn ‘interest’ all year long!  It’s a balancing act that takes a little practice and tweaking, but it can really pay off once you get it in place.  Most years I only get about $200-$300 back at the end because I’ve already received the rest and invested it.”

Ed Johnson – DC Metro Realty Team

A homeowner’s tax saving benefit is generally realized when they file their federal income tax return after the money has been spent for the interest and property taxes. Some people look forward to the refund as a means of forced savings but some people need to realize the savings during the year.

It is possible to adjust the deductions being withheld from the homeowner’s salary so they realize the benefit of the savings prior to filing their tax returns in the form of more money in their pay checks. Employees would talk to their employers about increasing their deductions stated on their W-4 form.

By increasing the exemptions or deductions, less is taken out of the check and the employee will receive more in each pay check. If a person over-estimates their exemptions and therefore, underpays their income tax, they might incur interest and would have additional tax to pay when they filed their tax return.

Buyers considering this strategy should seek tax advice and discuss it with their human relations department at work. Additional information is available on the Internal Revenue Service website about Completing Form w-4 and Worksheets.

What’s that Creepy Sound in my Home?

Nightmare on Elm Street“All homes make sounds.  Some different than others.  We get used to them and they become part of our everyday life.  But sometimes you start to hear a new or different noise.  Learn about the one’s to really pay attention to.”

Denise Buck & Ed Johnson – DC Metro Realty Team

Homes make strange noises. They’re built from many different materials — glass, concrete, wood — that expand and contract at different rates.

“[But] the most noise your house should make is a popping sound, like your knuckles cracking, and only once in a while,” said Bill Richardson, former president of the American Society of Home Inspectors and owner of Responsive Inspections in Bosque Farms, N.M.

If your home is making noises that rival the best of Metallica, then it may be sending you signals that there’s a problem. We asked the experts to catalogue some of the more worrisome pops, hisses, groans, creaks and knocks, and tell us what they mean and how they can be remedied.

Here are the top seven problem noises and how they can be solved.

1. What is that clanking sound when I turn on the heat?

The problem: When most homeowners first turn on their heating system in the fall, they hear a little moaning and groaning as the heating system expands and rubs against the frame of the house, says Mike Kuhn, the New Jersey owner of HouseMaster inspection service and coauthor of “The Pocket Idiot’s Guide to Home Inspections.” With a baseboard hot-water system, you can also expect “normal clinking and knocking,” says Kuhn. The circulator pump or pumps to the system, however, “should be silent when they run,” says Kuhn. If you hear knocking or clanking, typically located at the boiler itself, it might be a sign of impending failure of the circulator pump, he says.

The solution: Get a repairman out to check on it, pronto.

2. There’s a strange scratching sound coming from behind the walls.

The problem: If you hear strange noises like scratching and possibly chittering coming from places where no one lives in the house, you could have mice, squirrels, raccoons or even bats sharing your quarters, says Richardson. “Any kind of wild critter could be up in the attic,” he says. And these freeloaders aren’t just a nuisance; bats can carry deadly rabies. In the Southwest, the droppings of mice can spread hantavirus. Some animals will tear up insulation to nest or chew through siding and even electrical wires, causing fires.

The solution: As soon as you suspect an intruder, get on it: Set traps. (Call in a pro if the animal is stubborn or large.) Finally, prevent the problem from reoccurring by sealing up the entrances to your house with steel wool, metal sheeting, caulk and/or hardware cloth.

To keep raccoons away, put garbage in sealed, secure metal cans that can’t be tipped. Bring pet food inside. After pests have been removed, make sure vents and chimneys are securely covered with mesh or a grille, so those spaces can still breathe.

3. There’s no one in the house and I can still hear running water. How can that be?

The problem: “You definitely don’t want to hear water running if nobody’s using anything,” says Richardson. The sound could indicate many things — a busted pipe in a wall, under the floor or even in the irrigation system.

The solution: If you hear running water when you shouldn’t, shut the main off and see if the noise goes away, says Richardson. If it does, you’ve got a leak somewhere — and a problem in need of fixing. Unless you’re really handy and ready to do surgery on your home, call in a plumber.

4. I hear a bubbling (or cracking) sound coming from the water heater. Is that normal?

The problem: A gas-fired hot-water heater works pretty much like boiling a pot of water: A fire is lit and the water inside is heated until it’s ready for use. “A lot of sediment builds up at the bottom of ahot water tank, and that sediment works like an insulator,” forcing the burner to work harder, Kuhn says. The strange noise you hear is the bubbling sediment — and a sign that the tank is probably experiencing fatigue and may be facing premature failure, he says.

The solution: Ideally, you should flush out your hot water tank every few months, using the drain valve near the bottom of the floor. “However, nobody does it,” says Kuhn, because it can be a pain to do. If your water heater is already making these noises, draining it might help. “It could (work) a little bit longer, [and] it could go a lot longer,” but the damage is probably done, says Kuhn.

5. My furnace is making a whistling (sucking) sound that it’s never made before. Is it going to need to be replaced?

The problem: “What that can connote is that your filter hasn’t been changed,” says Richardson. “And your furnace is trying to pull in air from around it.” That’s not good, he explains, because it means the furnace is working too hard. “What it will do is start sucking exhaust gasses from the furnace into the house.”

The solution: Install clean filters regularly — “anywhere from three months to monthly, depending on atmospheric conditions,” says Richardson.

6. I hear a switch turning on and off regularly but can’t seem to isolate where it’s coming from.

The problem: If you have a well for your water, you’ve got a well pump — either in the house or above the well in your yard. “If you are sitting in your house and hearing the pump-switch click on and off, you may have a problem,” says Kuhn. The pump pulls water from the well and into a holding tank, where it’s stored for your use. If you’re hearing it when you, say, turn on the faucet, something may be wrong. The pump “should not operate every time there is a call for water. The wear and tear would cause the pump to fail prematurely,” he says. It’s likely that you have a leak in the system. “The leak is either going to be in the well equipment itself, or in a fixture,” says Kuhn.” For example, aleaky toilet fixture could be causing the holding tank to drain.

The solution: First, check your fixtures for leaks. Then, if needed, call a plumber familiar with well systems.

7. What’s that hissing sound?

The problem: If your home has gas, a strange noise that sounds like hissing could indicate a gas leak, says Richardson. Sometimes you can hear a hissing outside at the gas meter, or at a home’s outdoor gas light post — places where the line could have corroded, he says. “You should be able to smell it, but you never know.”

The solution: If you you smell gas around the gas main, don’t mess with the gas shutoff unless you absolutely know what you’re doing because any mishandling or spark could make things much worse, Richardson explains. If you hear the noise and smell the gas, immediately evacuate the house and call the gas company.

By Bob Villa, as published by Zillow

Best Countertops for Busy Kitchens

CountertopChoices“Thinking about replacing your kitchen countertops?  There are several options to consider, but which one is right for your kitchen?  It all depends on how you use it, and what your budget it.  Is it only for cooking, or is it where every member of the family works on projects?  Know the Pros and Cons of each type of countertop.”

Denise Buck & Ed Johnson – DC Metro Realty Team 

Replacing a scratched, scorched, stained, or just plain unattractive countertop can transform any kitchen. Happily, there are lots of options in a wide range of prices. A new laminate countertop can cost as little as $10 per square foot. Or you could easily spend 10 times that on quartz, granite, or recycled glass. Consumer Reports tested more than a dozen popular types of countertops to see how well they resisted stains, heat damage, cuts, abrasion, and impact, and found seven that passed muster. Here are the details.

In our countertop tests, performance varied from one material to the next but there was little difference among competing brands of each type, so be sure to shop around for the best deal on your countertop of choice. The prices below are for a typical kitchen with 56 square feet of counters and include installation. For the pros and cons of each type, see the numbered entries below.

1. Quartz
Cost. $2,240 to $5,600
Pros. It mimics the look of stone yet needs less maintenance. Hot pots, serrated knives, abrasive pads, and most stains were no match for quartz, which is a combination of mineral, color, and resin. It comes in vibrant colors in addition to patterns that look like granite and marble.
Cons. Edges and corners can chip, and you’ll need a pro to repair them. Rounded edges help.

2. Granite
Cost. $2,240 to $5,600
Pros. Each slab of this natural material is unique; rare colors and veining cost more. Heat, cuts, and scratches didn’t harm granite in our tests. Polished and matte finishes resisted most stains when properly sealed, so pick the look you prefer.
Cons. Periodic resealing is needed to fend off stains. Like quartz, edges and corners can chip and must be professionally repaired.

3. Soapstone, limestone, and marble
Cost. $2,800 to $5,600 (soapstone or limestone), $2,800 to $8,400 (marble)
Pros. Soapstone isn’t as common as granite, and it’s superb at resisting heat damage. Small scratches can be repaired by sanding finely and applying mineral oil. Limestone (pictured) and marble are classic materials.  Limestone also has a natural-stone look without heavy veining or graining and it resists heat.
Cons. Soapstone nicks, cuts, and scratches easily, and some stains are too tough to be washed away. Limestone and marble also have those drawbacks, and heat damaged our marble.

4. Laminate
Cost. $560 to $2,240
Pros. Inexpensive, easy to install, and so much better-looking than you probably remember, thanks to new printing technology and decorative edges. Stains and heat didn’t damage the laminates we tested.
Cons. Cutting directly on it easily and permanently damages laminate, so use a cutting board.

5. Solid surfacing
Cost. $1,960 to $5,600
Pros. Available in a variety of colors and patterns, it can be used for counters, sink, and backsplash, creating a seamless look because joints are almost invisible. And like quartz, its color won’t vary much from the store sample. Solid surfacing is resistant to most stains, and small nicks and scratches can be repaired.
Cons. It scratches and cuts easily, so a cutting board is a must.

6. Recycled glass
Cost. $3,360 to $6,720
Pros. Large shards give it a fun, contemporary look; finely ground glass makes it less busy. Most glass counters we tested resisted stains, cuts, scratches, and heat.
Cons. It’s the only material for which we found a difference among brands. Cosentino’s Eco counters were the only ones that developed a thin crack during our heat tests.

7. Butcher block
Cost. $2,240 to $5,600
Pros. It adds warmth and is easy to install and repair, but the finish makes a difference. Varnish improved stain resistance, but penetrating oils diminished it.
Cons. Nicks and scratches can easily happen, though they can be sanded out.

—Adapted from Consumer Reports Kitchen Planning & Buying Guide