Tips on the Appraisal Process For Homebuyers

Homebuying can be an overwhelming process with many crucial steps, which you are hopefully guided through by a great Mortgage Lender and Realtor on your side. One of the most important steps in buying a new home is to have an appraisal done to ensure that you are getting out of your future home what you’re putting in! Following these important steps can make getting your home appraised a breeze!



What All Buyers Need To Know About The Home Appraisal Process


Do you know what a home appraisal is, or why it’s so important for you to have? Many people misunderstand this crucial component of the home buying experience.

In a nutshell, an appraisal is a valuation of your home; it’s a way for lenders to ensure that they aren’t providing a mortgage that isn’t worth what the home is worth. Your appraisal must match or exceed the value of your loan, otherwise you’ll run into hiccups.

An appraiser is someone who uses comparable sales in your neighborhood as well as the condition of your home in order to make a sound valuation of your home. They’ll include factors both inside and outside the house.

If an appraisal is lower than the amount you thought the house was worth, there are several options, including renegotiating the deal and paying the difference. If it’s higher, it benefits the buyer. But knowing more about appraisals, whether you’re a homebuyer or seller, can help the whole process go more smoothly.

Article originally appeared on Lighter Side of Real Estate

3 Reasons Homeowners Should Itemize

 Photo: Vladimir Solomyani on Unsplash

While the new standard deduction has recently been increased by the Tax Cuts and Jobs Act ($12,000 and $24,000 for single filers and joint filers, respectively) if you qualify for these 3 tax breaks, it may still be worth it to itemize.


Mortgage Interest
Writing off the interest on a home loan from federal income tax is a major homebuying incentive. While the maximum deduction was capped at $750,000 on mortgage loans taken after December 15, 2017, that still leaves many Americans eligible to take advantage of the tax incentive.

However, did you also know that you can write off your points?  Points refer to one percent of your loan’s total value. While you can’t claim origination points, discount points— or those you pay upfront to reduce your rate—  are very much deductible.

Property Tax
Many major cities have high property taxes and a homeowner's ability to deduct them from
Federal Income tax is a relief to those who live in high property taxed areas. Take as much advantage of your property tax deduction this tax season because in 2018, these property taxes will be capped at $10,000.

If you just bought your home, don’t forget to include the taxes you paid toward the seller for reimbursement. These are the taxes the seller paid before you took ownership.  You can find this amount on your settlement sheet. http://intuit.me/2DOu0rz

Photo: Bernadette Gatsby on Unsplash

Home Equity Loans & Medical Home Improvement
The only way to deduct interest on future home equity loans is if the funds are used to significantly improve the value of your residence. Conversely, Medical Home Improvements are deductible to the extent that they don’t increase the value of your home.

An example from Fool.com:
“For example, if your house was worth $200,000 and adding an elevator cost you $80,000 but increased your home’s value to $250,000, then you could only deduct $30,000 of the expense.”  If it doesn’t change the value of your home, then you can deduct the entire amount. You can also deduct upkeep expenses for medical improvements in future years. 

Photo: LES CUNLIFFE/ISTOCK/THINKSTOCK

While the standard deduction has increased, in the case of being able to claim all of these deductions, itemizing may be your best bet!

Most Americans can still take advantage of the many homeowner incentivizing tax breaks this year and next. Be sure to talk to your local tax expert to make sure you’re getting the maximum allowable deduction!