Upside Down Mortgage

Posts Tagged ‘insurance’

Mortgage Relief Center

Mortgage interest and real estate taxes are tax deductible and any one with a mortgage can enjoy this tax benefit.

Taxes can be complicated, and it is recommended that you learn about the benefits, the drawbacks and how to file your taxes properly. To enjoy the tax benefits, you can either wait for a big payout after you file your income-tax return, or adjust what is withheld from your paycheck each month.

During the early years of the home mortgage, most of your monthly repayments go towards your interest, with little payment towards the capital. Tax benefits are therefore very useful for first-time home buyers, especially during the early years of acquiring the mortgage.

As you pay more on the amortized home mortgage over a longer time frame, more of each monthly payment goes towards paying the principle, and less towards interest. This means that with time, you lose some of your interest write-off as your equity in the property increases.

It is important for you to note that you can take these tax deductions if you change from standard deduction, which all tax payers are entitled to, to itemized deductions. In the case where your itemize deductions, including home mortgage interest and property taxes, do not exceed the standard deduction amount, it is better for you to take standard deduction.

The following three components of your home mortgage are tax deductible:

1. Interest on your home mortgage

2. Property taxes

3. Loan points for a purchase mortgage fully deductible in the year that they are paid. It is noteworthy that in refinance, the points are written off in increments over the term of a home mortgage.

What five components of your home mortgage or home ownership related costs are not tax deductible?

1. Expenses relating to home improvement

2. Insurance

3. Loan application fees, home inspections

4. Real estate commission paid to real estate or mortgage loan brokers

5. Homeowner and co-op dues and costs relating to home inspections and appraisals, and home loan application fees

Some penalties on a home mortgage can be incurred from IRAs. You are not able to use a conventional IRA account or 401-K plan for a down payment without paying high penalties and taxes on the gains that accrued while the money was in your saving plan. Nonetheless, if you are saving to become a first-time home buyer, it is recommended that you consider a Roth IRA. Roth IRA was created by The Taxpayer Relief Act of 1997 and it allows penalty-free withdrawals for first-time home buyers. It is recommended that you know all the fine details of Roth IRA before you use it for a home mortgage down payment.

What are the two key factors to consider with deductions?

1. It is important that you convert your existing IRA cautiously. Under the tax law, if your adjusted gross income is les than $100,000, then you can convert your existing individual retirement account into a Roth IRA if your. One must wait 5 years to qualify for a Roth IRA, and a distribution must be made five taxable years after the first contribution to the account was made.

2. Contributions to a Roth IRA are not deductible, but no taxes are paid on qualified distributions. So one can deduct income but not contributions. A limit on the contribution of up to $4,000 a year can be contributed to an account, but only by single tax-filers with adjusted gross income of less than $95,000 and joint-filers with a combined income of less than $150,000.

A home mortgage has several tax benefits which you can enjoy if you get a mortgage and own a home.

About the Author:

Dean Shainin is a consultant specializing in home loans. To see a list of recommended loan companies, tools, resources, and free quotes, visit:
http://www.homemortgageloantips.com/Articles/Home_Mortgage.php>Home
Mortgage website.

Article Source: ArticlesBase.com - Home Mortgage - What Are The Tax Advantages Of Buying A Home?

Center for Health and Homeland Security (CHHS) Director on WUSA TV - 4/8/09

If you're new around here, you might want to subscribe to our Upside-Down Mortgage RSS feed. It's quite likely the only feed of it's type on the internet!

Loss Mitigation Insurance

Question: What does the requirement of mitigation mean in an insurance policy?

Does it mean taking action to prevent the same kind of loss from occurring again? Or does it just mean cleaning up and fixing up?

Answer: Mitigation means doing what you can to control or limit the amount of damage you suffer from a covered loss. For instance, if you have a fire start in your kitchen, they want you to try to put it out if you can do so safely so that the insurance would have to replace the kitchen area but not a whole 3 story house. Another example: if you get a broken pipe and water is gushing into your house, turn off the water and rent a wet vac to try to limit how much damage will be caused. The insurance company will reimburse for your expense, but they don't want you to close up the house and leave the water running while you go on vacation and then come back 2 wks later and demand a new house. Hope that helps.

2x4 and the Wall

Mortgage Default Insurance

Question: How can the Stock Market be at all time highs when there is so much uncertainity in the US economy?

mortgage defaults, high heating and gasoline costs, small businesses failing, higher and higher local taxes, higher insurance costs, higher electricity and water bills, incredibly high consumer debt levels, and on and on.....This sure doesn't look like the booming economy that the markets are portraying!

Answer: The problem is you're listening to naysayers.

People have always defaulted on mortgages when interest rates begin to rise. Gas prices have been higher, but given inflation, gas prices are still lower than they were 25 years ago. Taxes are lower for the majority of people than they were when Bush came into office. Consumer debt levels are modest.

Unemployment is near an all time low. The stock market is near an all time high. International economies are booming. The dollar is LOW (this makes US good more attractive in foreign stores)

Private Mortgage Insurance