The “Not-So-Obvious” Benefits of Buying New

Article courtesy of the National Association of Home Builders

Prospective home buyers have the choice of two types of houses on the market: resale or new.

Home buyers planning to buy a brand-new house or condominium often cite energy-efficiency, open layout, a warranty, and being able to select appliances, flooring, paint colors and other design elements as factors driving their choice.

But builders say that buyers can be drawn to a new house for reasons that aren’t so obvious. Below are a few more benefits of a brand-new home that you may not see in the sales brochure.

Building a Community Together

A brand-new community is one of the built-in benefits of many new homes. When families move in to a subdivision at the same time, often lasting bonds of friendship and neighborliness are formed right away. Nobody is the “new kid on the block,” and many home builders host community block parties in new developments to help owners meet and connect. Popular amenities like pools, walking trails and courts for tennis and basketball offer additional opportunities for interaction among neighbors of all ages. Often new communities are comprised of home owners in the same stage of life, such as young families or active retirees, so neighbors can get to know each other through carpools, PTA meetings, tennis matches or golf games.

Entertaining

Throwing a party in an older home can be a challenge because smaller, distinct rooms make it difficult to entertain guests in one large space. Builders are responding to today’s home buyer preferences with layouts featuring more open spaces and rooms that flow into each other more easily, like the popular great room. While you are in the kitchen preparing dinner, you can still interact with guests enjoying conversation in the family room without feeling closed off. The feeling of spaciousness in today’s new-home layouts often is enhanced the higher ceilings and additional windows that bringing in more light than you would find in an older home.

A Clean Slate

For some buyers, parking the car in a sparkling-clean garage or being the first to cook a dinner in a brand-new kitchen is part of the appeal of new construction. In addition, you won’t have to spend time stripping dated wallpaper or repainting to suit your own sense of style. You can create your own home décor from the get-go!

The advantages of being the first owner of a home extend to the outdoors. Instead of inheriting inconveniently or precariously placed trees, or having to tear up overgrown shrubs, you can design and plant the lawn and garden you want.

Outlets, Outlets Everywhere!

Homes built in the 1960’s and earlier were wired much differently than houses today. Builders had no way of anticipating the invention of high-definition televisions, DVRs and computers that we enjoy today—and the very different electrical requirements they would introduce. New homes can accommodate advanced technologies like structured wiring, security systems and sophisticated lighting plans, and can be tailored to meet the individual home owner’s needs.

Anyone who has ever lived in an older home can also attest to the fact that there are never enough outlets, inside or out! New-home builders plan for the increased number and type of electronics and appliances used by today’s families, so you can safely operate a wine cooler, Christmas lights or your computer.

For more information on the benefits of a new home, contact one of Hartland Homes’ new home specialists at 402-477-6668 or visit the National Association of Home Builders online at www.nahb.org/forconsumers.

The Tax Advantages of Homeownership

Article courtesy of National Association of Home Builders (NAHB)

Owning your own home can be a very rewarding experience — especially when tax time rolls around. Three tax items in particular — the mortgage interest deduction, the property tax deduction and the capital gains exclusion — can provide significant financial benefits to home owners when the time comes to settle up with Uncle Sam.

Mortgage Interest Deduction

The interest you pay as part of your mortgage payment is deductible on your federal tax return and may also be on your state income tax return depending on where you live.

This deduction applies to first and second mortgages, up $1 million of mortgage debt. Your lender should provide you with one or more IRS Form 1098s, which will provide the amount you may claim on your tax return. To benefit from this deduction you must itemize your deductions using a Schedule A Form.

You may also deduct the interest on money you borrow against your home to finance housing or non housing-related expenses. An example is a home equity loan, which many home owners use to remodel their home, pay off credit card bills, buy a car, finance a vacation or pay for educational expenses.

Property Tax Deduction

State and local taxes paid on the assessed value of the home are also deductible on your federal return. Like the mortgage interest deduction, itemizing is necessary if you wish to deduct property tax payments.

Notably, for many home owners the combined deductions for mortgage interest and property taxes exceed the standard deduction — currently between $5,700 and $11,400, depending on filing status. When this is the case, home owners are able to deduct or “write-off” many other items including charitable contributions, state income or sales taxes, medical and dental expenses, tax preparation fees and other miscellaneous allowable deductions, which collectively can reduce your federal and state income tax liabilities dramatically. Research by economists at the National Association of Home Builders indicates that for the typical home owner, these savings can exceed $5,000 in the first year of homeownership.

Capital Gains Exclusion

Perhaps the biggest advantage to owning a home is the ability to avoid paying capital gains when it is sold. Under current law, married home owners filing jointly may exclude up to $500,000 of capital gains and single tax filers may exclude $250,000 from taxation. This exclusion applies only if you have lived in your primary residence for two years or more. But the exemption may be used repeatedly as long as the residency rules are met.

The tax benefits conferred on home owners by the federal government are substantial. Annual benefits, such as the mortgage interest deduction and the property tax deduction, along with the less frequently used benefit of the capital gains exclusion, make homeownership more tax advantageous than almost any other investment. Take advantage of it!

Be sure to consult your tax advisor about the deductions you may be eligible to claim.

To see the many more reasons homeownership benefits you, visit www.nahb.org/forconsumers.

Positive Reasons to Buy a Home NOW

The economic recession has helped to create the best buyer’s market we have seen ever!  There are many factors that are contributing to make this not only a great time to buy, but one of the best in history.

 

1)  LOW interest rates.  The last recession was in the 80’s but the interest rates were between 14% and 21%!!!!  Can you imagine?  Today the rates are fluctuating between 4.5% and 6%.    This makes owning a home incredibly affordable.

Example:

$150,000 home, 3.5% down payment

Principal and Interest at 14% $1745.  Income to qualify for this loan would be approximately $81,000.

Principal and interest at 5.5%  $836.   Income to qualify for this loan would be approximately $46,000.

That is a difference of over $900 in monthly payment and $35,000 in annual income for the same price home!! 

All indications are that these LOW interest rates can not last.  You may never be able to purchase a home so cheaply in your lifetime.

2)  Do you really need more reasons??  If so, this one will soon be gone so act fast.  $8,000 new homebuyer tax credit or the $6,500 repeat buyer tax credit.  You must enter into a contract to purchase this home by April 30th, 2010 and close by June 30th, 2010.  (If you want to build, you must purchase your home  from Hartland Homes by March 15th!  Other builders are not able to build and close by June 30th!  )

All sources indicate this will NOT be extended. 

3)  The last few years the housing market has been going through a market correction.  What this means to you is that home prices are the lowest they have been in years.  Once demand picks up, these prices will rise quickly.  Once again, you may never be able to purchase a home at these prices in your lifetime.