Facts About Morrison Real Estate / Buy and Sell Wisely
Building Morrison Home Equity
As a Morrison homeowner you have the right to pay more towards the principle loan amount each month. Let’s say your monthly payment is $700.00 a month and $100.00 a month is being applied to the principle. If you choose to pay $900.00 instead of $700.00, the $200.00 overage will be applied entirely to the principle. Thus, instead of gaining $1,200.00 a year in Morrison home equity, you gain $3,600.00.
The only factor being considered here is Home Equity. In individual cases it may be wiser to invest than to pre-pay your home loan. It also may be wiser to pay off high-interest, non-deductible loans before considering your Morrison home equity building options. Your financial advisor is the one to consult for these matters. If you would like up-to-the-minute information about Morrison home appreciation values in your area, please call or E-mail me today.
Rent or Buy Morrison
In the early years of your Morrison mortgage, nearly all of every monthly payment is interest. This means you are only paying off a tiny bit of the loan principal, but it is good news in terms of tax savings.
The monthly payment for a $100,000, 30-year, 8% mortgage on your Morrison would be about $734. In the first year of your mortgage, $7,970 of your $8,805 payment or 91% would be deductible as mortgage interest. Even in the tenth year, almost 81% of your payments would be deductible. What this is worth to you depends on your tax bracket but this tax savings built into the home-buying equation is why you can afford to make higher mortgage payments than your current rent payments without squeezing your budget. There is no similar tax subsidy for renters.
Taking Title to Your Morrison
There are so many details to consider when purchasing your Morrison and mounds of legal paperwork to read that sometimes it seems overwhelming. Some important decision can be made ahead of time so you know what is in your best interests when the time comes. For example, right at the end when the paperwork is being signed you may be asked how you want to take title. This is an important decision that should not be rushed but often is. Knowing some of the common forms of Morrison ownership ahead of time is one way to protect yourself.
A single Morrison buyer will usually want to take title in his/her name alone. Husbands and wives usually own property through a form of joint ownership such as joint tenancy. Unrelated individuals can take title in a limited partnership arrangement.
The Benefits of Selling Morrison
If your Morrison holdings consist of both a personal residence and a rental, you can sell your personal residence and exclude up to $250,000 ($500,000 for a married couple) on the gain. Then you move into your rental, live in it as your personal residence for two years and then sell it, again benefiting from the $250,000 or $500,000 exclusion. This is true even though most or all of the increase in value occurred before you converted the property to your personal residence.
Morrison DEDUCTIONS
One of the advantages of home ownership is that while most other types of interest are not tax deductible, the interest you pay on your Morrison loan is deductible on your Federal and State income tax. This fact alone gives homeowners a distinct advantage over renters.
Morrison INVESTMENT
Investing in Morrison as a second home or as a rental has many advantages. But before you invest, it is a good idea to acquaint yourself with the actual sales price of similar properties and to get a picture of the Morrison market in general. Please contact this office for detailed information on Morrison market
|
|