Time is running out to boost to your 2011 federal tax refund. All you have to do is make your January 2012 mortgage payment while it’s still December.
It’s a simple tax strategy that works because of how mortgage interest is paid, and of how the U.S. tax code is written.
Different from rent which is paid for the month ahead (i.e. “you’re paying January’s rent”), mortgage payments are made only after mortgage interest has accrued (i.e. “you’re paying for money you’ve already borrowed from the bank”).
This is called “paying interest in arrears” and U.S. tax code states that the mortgage interest is tax-deductible in its year paid, subject to limitations.
By making the January 2012 mortgage payment in December 2011, therefore, homeowners who itemize their on their tax returns can apply their January mortgage payment’s interest portion to their 2011′s tax returns.
The alternative is to pay the mortgage on schedule, and wait for April 15, 2013 to claim the credit.
If you choose to pre-pay your mortgage and typically send your payment via USPS, give your check ample time to be delivered to your lender, and processed. Mail your check no later than Saturday, December 24.
For Carefree homeowners that pay electronically, the process is simpler. Edit your online bill pay program to have your mortgage payment post no later than Thursday, December 29.
Make note, however. Not all mortgage interest is eligible for tax-deductibility, and not all homeowners throughout the state of AZ who pay mortgage interest should itemize said interest on their tax returns.
Before prepaying on your mortgage, ask your tax professional for advice.
Home resales moved to a 10-month high in November, the latest in a series of strong showings from the housing sector.
According to the National Association of REALTORS®, November’s Existing Home Sales rose to a seasonally-adjusted, annualized 4.42 million units nationwide — a 4 percent climb from October 2011.
An “existing home” is a home that has been previously occupied and cannot be categorized as new construction.
Home buyers and sellers throughout Phoenix should take note of November’s numbers because — behind the headlines — there’s a series of statistics that foretell higher home prices ahead.
First, the total number of homes for sale nationwide dipped to 2.58 million, an 18% reduction from November 2010 and represents the fewest number of homes for sale since February 2007.
At the current sales pace, the complete home resale inventory would be sold in 7.0 months.
And, second, the real estate trade group reports that 33% of all homes under contract “failed” for some reason last month.
Contract failures can occur because of mortgage denials in underwriting; home inspection issues; and homes appraising for less than their respective purchase prices.
In other words, despite a reduction in the number of homes for sale, and a rash of failed contracts, Existing Home Sales volume is still on the rise.
Broken-down by buyer-type, here’s to whom home sellers were selling in November :
Given high demand for home resales and shrinking home supplies, we should expect that home prices will rise through December 2011 and into early-2012, at least. Recent Housing Starts data supports this notion.
Thankfully, mortgage rates remain low. Low mortgage rates help keep homes affordable.
The new construction housing market continues to show strength across the country.
According to the U.S. Census Bureau, Single-Family Housing Starts rose to 447,000 units on a seasonally-adjusted, annualized basis in November — a 2 percent increase from October.
A “Housing Start” is defined as breaking ground on new home construction.
November’s figures mark the third straight month of Single-Family Housing Starts gains. The new construction metric is now 15 percent above its all-time low, set in February of this year.
None of this should be a surprise to new home buyers in Carefree.
Housing data has been trending better since September with sales volumes rising and home inventories falling. Basic economics tells us that home prices should soon rise.
The good news is that low mortgage rates should keep homes affordable.
Since mid-November, the average, conventional 30-year fixed rate mortgage has hovered near 4.000% nationwide with an accompanying 0.7 discount points plus closing costs. 1 discount point equals one percent of your loan size. This is down from near 4.500% six months ago, and the drop has made a big impact on home affordability.
This represents $700 in savings per year. It’s no wonder home builders report the highest buyer foot traffic in 3 years.
Meanwhile, the market shows little signs of slowing down. Building Permits are on the rise, too.
Permits for single-family homes rose to their highest levels of year in November and 89 percent of those homes will start construction within 60 days. This means that Single-Family Housing Starts should stay strong through the early part of 2012, and into the spring.
If you’re planning to buy new construction in AZ , therefore, talk to your real estate agent soon and consider moving up your time frame. With mortgage rates low and next year’s buying season approaching, you may find that the best “deals” will come within the next few weeks only.
Your dishwasher is a breeding ground for mold and mildew. It’s warm, it’s dark, and there is a bevy of decaying, organic material in the form of both food particles and soap.
Therefore, you’ll want to periodically scrub and disinfect your dishwasher so that it remains it clean and healthy, and so that your dishes stay that way, too.
Here’s how to clean your dishwasher :
Then, after performing these steps, you find that your dishwasher still has an “odor”, or if mold or mildew remnants remain, immediately pour 1 cup of baking soda on the floor of your dishwasher, and run the cycle a second time at the highest temperature setting available.
If your mold/mildew problem persists, you should check the dishwasher’s drain line. If it’s kinked, water may be unable to drain and will pool at the bottom of your dishwasher — a mold-breeding situation.
You should also check the food trap at the base of the dishwasher for too-large-to-drain pieces of food.
A good dishwasher will last years with proper care and maintenance. Keep yours mold- and mildew-free.
In another good sign for the housing market, today’s home builders believe that the housing market has turned a corner.
For the third straight month, the Housing Market Index — a home builder confidence survey from the National Association of Homebuilders — reported strong monthly gains.
December’s Housing Market Index climbed 2 points to 21 in December after a downward revision to last month’s results. The index is now up seven points since September 2011, and sits at a 19-month high.
When home builder confidence reads 50 or better, it reflects favorable conditions in the single-family new home market. Readings below 50 reflect unfavorable conditions.
The Housing Market Index has not crossed 50 since April 2006.
The HMI itself is actually a composite reading; the result of three related home builder surveys. The National Association of Homebuilders asks its members about their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and their current buyer “foot traffic”.
The results are compiled into the single Housing Market Index tally.
In December, builder survey responses showed strength across all 3 questions :
These results support the recent New Home Sales and Housing Starts data, both of which show an increase in single-family sales, and a decrease in new home housing supply.
When demand rises and supplies fall, home prices climb.
It’s also noteworthy that the Housing Market Index put buyer foot traffic at newly-built homes at its highest level since May 2008. With even more buyers expected to enter the market, new home prices are expected to rise across Phoenix in 2012 — especially in the face of shrinking home supplies.
For now, though, with home prices stable and mortgage rates low, buyers can grab “a deal”. 60 days forward, though, may be too late.
The Spring Buying Season unofficially starts February 6, 2012.
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