Last week the Federal Reserve announced it was raising the Federal Fund rate by a quarter percentage point rate, the first rate increase in three years. You are probably wondering what that actually means for homeowners.
Although not officially connected this normally means mortgage rates go up, and rates have increased recently. The Fed has also indicated that it will increase rates even more in the coming months as inflation is one of their top priorities.
If you are currently on a fixed interest rate mortgage the won’t affect your rate or your mortgage payments. If you have an ARM variable rate mortgage then it will be affected affected and you may want to consider locking into a fixed rate mortgage before rates go higher. If you are under contract on a new loan, you may want to consider locking in your rate to avoid further rate increases. Everyone has a unique situation so schedule an analysis on our website and we can see what if any course of action best fits your needs!

As we enter tax season, let’s review how owning a home can help lower your tax bill.
First, lets clarify that you’ll need to do an itemized return to take advantage of the deductions.
Second the deductions are just that deductions from the income that is subject to tax, not just taking an amount straight off your tax bill.
Onto the benefits! The biggest one, you may already be familiar with – the interest deduction. The money you pay in interest over the year on your loan is fully deductible on the first $750,000 of your loan or up to $1 million if your loan was originated before December 15, 2017. The other biggie is deducting property taxes. You can deduct up to $10,000 in state and local taxes including property taxes. Another deductible is if you paid points to lower your interest rate – this payment is tax deductible. Finally another popular deduction is one many of came to know last couple of years – the home office. However even though many of us have one now – the deduction is meant only for the self employed – if you work full time for a company it may not qualify. Of course talk a certified tax professional regarding your particular situation and if you want to see how much you can qualify for please fill out our quick qual analyzer on our website!

If you bought your home with less than 20% down, you are most likely paying private mortgage insurance (PMI). Most borrowers can’t wait to get to 22% equity when their PMI will be cancelled.
One way to stop paying PMI is through refinancing your home. Now this likely won’t be an inexpensive way to avoid PMI in terms of closing costs involved with refinancing. So you may want to have other reasons to refinance such as a lower monthly payment or getting cash-out as well. If you’re equity has increased a good deal recently so that you have more than 20% equity then you could avoid PMI through this route as well – you’ll still have to pay for an appraisal but that will be a lot less than the closing costs.