Why You Should Put Job Changes on Hold During a Home Search

When it comes to the matter of job changes, it is best to avoid alterations in your employment status until after a home purchase is complete. Here’s my advice on this kind of situation.

Today I’d like to go over what you need to know about undergoing job changes while trying to obtain a mortgage.

First, what happens if you transfer from a being a W2 employee to being self-employed or to a 1099 status?

Especially when you take on a 1099 status, most lenders are going to want to see two years of your commission before they give you a loan.

I was recently having dinner with someone whose employer informed them that they would be changing positions from a W2 to a 1099 employee. On top of that, this person was in the middle of the home buying process. This presents a major issue.

My advice to this person was to wait until the home purchase was completed to change their job status.

When it comes to other kinds of job changes, like moving within a company to another W2 position, the situation is less critical. Nevertheless, it’s still important to speak to your lender about any such developments.

"Anything that could threaten or change your ability is something your lender needs to know about."

Keeping your lender in the loop on changes in your life is very important to the success of your home purchase. Anything that could threaten or change your ability is something your lender needs to know about.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

How Do the New Tax Laws Affect You When It Comes to Real Estate?

How does The Tax Cuts and Jobs Act impact our local real estate market? I’ll go over a couple of important things that you should know today.

The Tax Cuts and Jobs Act has been signed into law. How do these new tax rules impact our real estate market?

One thing that had very little media presence was capital gains on primary residences. As long as you’ve lived in your home for two out of the last five years, you do not have to pay taxes on the profit of your home sale. There is a cap of $250,000 for single individuals and a $500,000 cap for married couples.

Early versions of the tax reform bill tried to do away with the capital gains exclusion completely. Then, they were going to make it so you had to live in the home for five out of the last eight years.

The good news is that the capital gains exclusion is staying exactly as it was, which is fantastic. If you bought a $200,000 house 20 or 30 years ago, it’s probably worth $400,000 to $450,000. Single people don’t have to pay taxes on $250,000 of the profit, and married couples don’t have to pay taxes on $500,000 of the profit from the home sale.

"The capital gains exclusion remains exactly as it was, which is great news for home sellers."

Investment property taxes are still deductible, as they were before. You can still write off the mortgage interest. Of course, you should verify all of this with your tax accountant, but we just wanted you to know that some of those changes real estate experts were concerned about did not go into effect.  

If you are purchasing a larger or more expensive home and using a mortgage, you should be aware that the mortgage interest deduction cap has been lowered from $1 million to $750,000.

You are also now only allowed to write off up to $10,000 a year on your taxes. Although that will affect 4.1 million people nationwide, it shouldn’t affect too many people in our area.

The main thing to take away from all of this is that the capital gains exclusion is still in place, which is especially great for baby boomers looking to downsize. You will be able to sell your home and take your profit without paying tax on the capital gains.

Again, if you have questions about your specific information, please reach out to your tax accountant.

If you have any other real estate questions, please don’t hesitate to give me a call or send me an email. I would be happy to help you!

A Few Tips for Winterizing Your Vacant Property

There are a few tips and tricks you need to remember if you want to keep your vacant property well-maintained this winter.

If you’re worried about your vacant property this winter, here are a few things you can do to put your mind at ease.

First, keep the heat on and make sure it’s at a minimum of 55 to 60 degrees. If you use oil or propane, make sure you have enough to get through the wintertime. We had some issues with people late last year who discovered at the last minute that their property had no oil and were stuck trying to get some on New Year’s Eve. You can use kerosene or diesel fuel to work through and clean your system, and it will run off of those things as well.

If your property is going to be vacant for a while, you may want to turn the water off. There are many home inspectors who will do that for you, so if you need a good contact for that, don’t hesitate to reach out to us.

"If your property is going to be vacant for a while, you may want to turn the water off."

If you’re worried about break-ins or having your copper pipes or HVAC system stolen and you want to periodically check on the property, you should consider installing a wireless alarm system. You could also ask a neighbor to check on the property once in a while and give them a spare key. Our office also offers a service for our clients where we check in on their properties once a week for them.

If you have any more questions about maintaining your vacant property during the winter or you have any other real estate needs, feel free to call or email us. We’d be glad to help you.