Tag Archives: mortgage

How to Shave Thousands of Dollars off Your Mortgage

Buying a Home

Congratulations on purchasing your home. You are now privileged to enjoy the thrills of home repair, maintenance, and occasional renovation. Depending on your mortgage structure, you may be paying off your home for up to thirty years. Luckily Timberwood Bank has some tips and tricks to help you reduce your repayment time. Using these three strategies, we’ll show you how to pay off more of your principal to decrease the term of your loan, and lessen your overall interest costs.

Method 1: Making Additional Payments

In addition to your regularly scheduled payments, making extra installments can help you knock down your principal and associated interest. These additional amounts can be paid on the same day as your scheduled portion, or they can be more frequent throughout the month as funds become available. If you find yourself having a surplus in your budget, a great option would be to use those dollars as an additional mortgage payment.

Method 2: Increasing Your Monthly Payments

As you make your mortgage payments each month, create a plan for how much you can add on top of your regular installments. Similar to method two, these subsequent funds will continue to help you pay down your principal amount, and lessen the amount of interest owed for the life of the loan.

Method 3: Making One Lump Payment

Sometimes if you’re refinancing or purchasing a home, you may be trading an old mortgage for a new one. In this case, we recommend making one large installment after closing. This not only pays off a large portion of your loan but brings your overall interest accumulation down as well.

Owning a home is an exciting and well-earned milestone, however, the additional costs of ownership can raise questions. If you’re curious about the most efficient way to pay down your mortgage, stop in and speak with one of our experienced lenders today.

4 Ways New Homeowners Can Save on Their Taxes

New Homeowners

Becoming a homeowner is an exciting and trying time in your life. Once all the papers are signed, and the keys turned over, it all seems worth it. That is until a pipe bursts, lightning knocks out a tree, or your dog decides to burst through the screen door. Not all hope is lost however. In return for your endless work, and commitment to a never ending to-do list, the U.S. Government has provided four tax-based ways to reward you for your new home ownership. See how to take advantage of these four tax breaks, and make the most of your home purchase:

  • Early IRA Withdrawal: For many new homeowners, securing the initial down payment can be the first hurdle in their real estate journey. If you’re a first-time home buyer and have an IRA, or Roth IRA, the IRS will allow you to withdraw up to $10,000, penalty-free, to aide in the cost of your new dwelling!
  • Valuable Deductions: Between your mortgage interest, mortgage insurance, and real estate taxes, your home deductions could make a big dent in your taxable income. When preparing your taxes as a new homeowner, be sure to bring any mortgage documents, and escrow account information, to your tax professional to gain the full benefit of the deductions.
  • Renewable-Energy Tax Credit: Did you upgrade your home appliances to more efficient and environmentally-friendly options? Did you install a geothermal system in your home? If so, this helpful tax credit may be able to take a portion of that improvement cost out of your deductible income!
  • Tax-Free Profit on Sale: When you go to sell your home, the IRS allows you to avoid the capital gains tax on the profits you generate from the sale. This means that if your home’s value goes up $35,000 in the two or more years you live there, you are then able to retain the additional $35,000 your home is sold for without having to pay any taxes on those funds. One other major stipulation of this benefit is that in order to avoid the capital gains tax, you must purchase a new home as your primary residence within the next two years.

With these key homeowner tax breaks, the next thing to put on your to-do list is to make a plan for those tax refunds! If you have questions on how to best budget for your new home, don’t hesitate to stop in. We’d love to talk taxes, financing, or other improvement ideas you have for your home!

Beginning Spring Renovations with a Home Equity Line of Credit

Home Equity Loan

With warm weather approaching spring is the ideal time to shake off the dust and get your house back into shape! Get started on your next home renovation with a strategic Home Equity Line of Credit from Timberwood Bank. Our custom financing allows you withdraw only the funds you need along the course of your future project. Inspiration can be found everywhere when updating common areas such as the kitchen, bathrooms, basement, or outdoor living area. See what these average home renovations cost with this handy guide courtesy of Timberwood Bank.

Kitchen Remodel: Creating your ideal culinary environment is more than just choosing cabinets and granite. With all the updates and finishing work, a typical Midwestern kitchen remodel can cost around $15,000 to complete. Carefully crafting the heart of your home takes concentrated decision making and long term planning. Consider updating your kitchen appliances to save you time and energy while preparing future meals. You may want to refinish or replace worn out flooring to match the new feel of your fresh remodel.

                Bathroom Remodel: Giving your common space a much needed facelift can help you add value to your home. With updates as simple as new hardware and a tasteful backsplash you can bring some timeless style to a functional space. When undertaking a full renovation, features like a walk-in shower or a double vanity can bring a bold statement to the room. The average bathroom remodel in Wisconsin typically runs under $10,000 for a completely revamped space.

                New Deck: Building a fun outdoor patio or deck can open up the area for countless fun family activities. Costing around $6000 for the average Midwestern deck, you can complete this exciting renovation in time and under budget. Spice up your new construction with added rails to hold beverages or food during grill outs and get-togethers.

                Finishing a Basement: Depending on your foundation and other structural issues, most basement renovations center on adding dry wall, placing new flooring, and waterproofing the entirety of the room. Typically costing under $25,000, a finished basement can serve as additional space for an office or play room, increasing the livable square footage of your home.

There are endless projects to begin your spring to-do list this season. Let Timberwood Bank help you get started on your next home renovation with a tailored Home Equity Line of Credit. Speak with one of our helpful lenders to get started today!

Mortgage Financing 101: Which type of loan is right for you?

Home Financing

A spacious backyard with a white picket fence. A rustic plot in the country just outside of town. A four-bedroom beauty custom designed by you and your spouse. Whatever your vision, home ownership is a unique and fulfilling adventure! At Timberwood Bank, we offer a variety of mortgage options to help you finance your slice of the American dream. Take a peek at just a few of our loan offerings:

Fixed Rate Mortgage Loan – Whether on a 15-year-plan or a 30, a fixed-rate mortgage ensures a consistent monthly payment for the length of your loan. Stable and dependable, frozen rates allow you to plan for the future, and refinancing options are available should your plans change. Timberwood makes it especially easy, offering customizable options to create the loan that works best with your budget.

USDA – Rural Development Loan – High down payments, traditional credit requirements, and steep debt-to-income ratios can be the barrier separating you from homeownership. The USDA-Rural Development loan program, however, helps navigate around these barriers. Helping fund closing costs, legal fees, title services, and other up-front payments, these loans

WHEDA Loan (Wisconsin Housing Economic Development Authority) – Unique financing options have made WHEDA a smart loan choice for Wisconsin residents for more than 40 years. Offering assistance with down payments, special tax credits to qualified borrowers, and preferred fixed interest rates for first-time home buyers, a WHEDA loan may be right for you. Ask your Timberwood Bank lender to help you discover the most effective WHEDA loan for you!

Home Equity Line of Credit (HELOC) – Take full advantage of the equity already sitting in your home with our HELOC option, which offers lower interest rates than many credit cards and consumer loans. Fund a home renovation, a much needed repair, or a home addition with this tax-deductible option that also helps build your credit score.

Lot Loan – You’ve got the land to build the house of your dreams, but perhaps you’re not quite ready to break ground. Our Lot Loans may serve you best! Through this option, you can purchase and secure your lot while you continue to design and plan your dream home. We’ll help you get the ball rolling once you’ve selected your contractor and uncovered your plan to your dream home.

Our experienced loan officers at Timberwood Bank are ready and excited to help you take the next big steps towards home ownership.  Give us a call at (608)372-2265 to set up an appointment today!

Home Buying in a Winter Wonderland

home

Begin the journey of purchasing your new home with Timberwood Bank! We’ll help guide you through the process of securing a new residence for you and your family. Stick with these easy do’s and don’ts and you’ll be on the path to success.

Do:

  • Secure a loan before a home: While the hunt for the first house is exciting, your final decision will depend on the mortgage you can secure. Your first step in the home buying search should take place with a loan officer who can assess whether you qualify for a mortgage, and if so, at what price. This provides a framework guiding the search so you don’t expend time and money on houses outside your means.
  • Take your time: The average homeowner occupies their house for nine years before relocating, so additional time spent thoroughly searching for homes can reap a decade of benefit. Track trends in the housing market to buy during the most cost-effective season. Weigh personal, important factors beyond price listing, such as neighborhood quality, length of commute, and potential for expansion and home improvement.
  • Consult the professionals: The listing agent represents the interests of the seller, not the buyer. As a first-time home buyer, you’ll need as much trusted, unbiased advice as you can garner. Ask friends and family to recommend their real estate agents so you receive counsel from a professional with a track-record of success.

Don’t:

  • Look at homes well over your budget: You set a budget for a reason. Stick to it! Paying more than you designated for a home can financially limit you to update and repair as needed. By spending within your originally determined limit, you’ll avoid heftier mortgages and continue to withhold extra funds for any household incidentals.
  • Empty savings into a down payment: Securing your mortgage requires a down payment. Putting down less than 20% requires you to buy mortgage insurance. To avoid this added expense, some home buyers drain their savings to cover the down payment upfront. Liquidating your account, however, leaves you without a safety net in the event of job loss or medical emergency. The expense of mortgage insurance is worth the financial cushion you can leave in your account, and you can always eliminate the insurance once you’ve paid off 20% and opt to refinance your mortgage.
  • Speed through the closing: The end is in sight, but don’t let the glow of the finish line obscure your view of the paperwork. Review documents with a fine-tooth comb, double check that nothing has been altered in your agreement, and ensure that it describes your understanding of the transaction to a “T”. A day or two of extra analyzing can save you years of headaches!

At Timberwood Bank, we offer a number of mortgage options to make securing your home as feasible as possible. To schedule your first meeting with one of our knowledgeable mortgage bankers, give us a call at (603) 372-2265.