Tag Archives: new home

4 Steps to Buying a Home That Won’t Bust Your Budget

buying a home

It’s that time of year when you’re likely to see ‘for sale’ signs on every block. Maybe you already have your eye on one and go out of your way to drive past it on your way home from work. Before you leap into purchasing a home, be sure to take these four steps before signing the bottom line.

1. Understand Your Monthly Expenses

Alarmingly, many Americans don’t have a true understanding about what money they have coming out each month. This can be a dangerous territory to get into, as it’s likely that there are a significant portion of the expenses that may be unnecessary. Take the time to have an understanding of what each of your monthly expenses are and if any can be cut or lessened. Maybe there’s a subscription you’ve forgotten about or haven’t realized how much money you are putting towards name-brand groceries each month.

2. Know What You Can Afford

Once you have your expenses broken down, you will have more of an idea of what you have coming out. Next, you should understand what you have coming in. Account for each person’s income contribution for the home. Subtract your monthly expenses from the after-tax amount and you will have an idea of what you can afford. You may want to consider meeting with a mortgage specialist to have a robust account of what homes could be in your price range.

3. Understand Home Buying Expenses

Being a homeowner comes with many responsibilities that sometimes can’t be accounted for. From broken pipes or a leak to a busted HVAC, the costs can be overwhelming at a moment’s notice. It’s important to understand the expenses that may come out of home ownership. Even if there isn’t something breaking, you have the responsibility of additional upkeep.

4. Set a Goal

Once you have a complete understanding of where you are and where you might be, you can set a goal. If the house you want is out of your price range, make it a goal to be able to afford a home like this. Take a look at what expenses can be cut in addition to how you can make additional income to get you to your goal within a reasonable time frame.

Don’t strap yourself into a payment that won’t fit your lifestyle. Allow us to help you purchase your dream home with a mortgage from Timberwood Bank!

Three Things to Look for in a Starter Home

Mortgages

If you’re in the market for your first home, congratulations! Becoming a homeowner is an exciting step on your financial journey. At Timberwood Bank, our dedicated mortgage lenders are here to help you find the best financing option for your new home. Remember to stop in and secure a pre-approval letter before you start your home search.

After speaking with a mortgage lender to help determine your family’s ideal price point, it’s time to start viewing potential homes. During this process you’re bound to find a home you’ll fall in love with, and others that may send you running for the hills. As you ride this rollercoaster of an experience, we recommend searching for the following three things in your family’s ideal new house:

  1. Good Bones. Starter homes are a great option to find a great house within an affordable budget. To ensure your investment lasts for the long-term, we recommend taking a hard look at any foundational cracks, leans, or other structural ailments. While the rest of the house could look fantastic, these three issues should be instant red flags signaling you to continue looking at other homes.
  2. Cohesive Neighborhood. The people you surround yourself could be the individuals you see at 6:00 AM taking the trash out, or the partiers you have to ask to turn down the music at 11:00 PM. As you tour properties, don’t be afraid to chat with any potential neighbors and see if there is any information they can give on families you’ll be living alongside.
  3. Suitable Layout. While some renovations are certainly possible when purchasing a starter home, obstacles such as load-bearing walls could limit your expectations. Consider the overall layout of the home at the showing, and see if you could picture yourself the ways it is. If the answer is no, then you may want to find a few backup options should the renovations not be available within your budget.

The perfect home will look different to everyone. If you’re ready to start searching for your family’s new house, our experienced mortgage lenders are here to help. Give us a call or stop by to begin the search for your home 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!