Many of us know about some end-of-the-year financial tips we can use to lower our tax obligations – maxing out our 401(k), funding an IRA, and making charitable donations.
With a quick escrow, you can close before the end of the year, which will mean you can take a nice deduction on your 2015 taxes. “We calculated that a homeowner who took the average for each of four tax benefits would claim $15,871 in home-related deductions (if he or she itemizes),” said houselogic. Those include mortgage interest, points paid on a mortgage, property taxes, and mortgage insurance.
Getting preapproved now can also mean locking in a low interest rate before the predicted rise this month.
“Americans looking to buy a home are facing pressure to act as soon as possible, as the era of rock-bottom mortgage rates that have sustained the nation’s housing market since the recession could be coming to an end,” said the Washington Post. “For years, many home buyers have enjoyed interest rates of under 4 percent, far lower than historic averages. But many analysts say that will change if the Federal Reserve begins pulling back its support for the American economy next month, as is widely expected. An increase in the central bank’s benchmark rate is likely to result in rate raises for all sorts of loans, particularly mortgages.”
The Post noted that mortgage applications were up 20 percent this fall compared to last year – perhaps a reaction to the threat of rising rates.
Best Choice Moving
Quick, before interest rates go up. “The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017,” said the Washington Post. “Rates haven’t been that high since the recession.”
But not everyone is a prime candidate for refinancing. “If you can shave at least 1 percentage point from your current mortgage rate, then refinancing probably makes sense,” said Interest.com. “Let’s say you have a 30-year fixed-rate home loan that’s charging 5.6%.Refinance at current interest rates, and you’ll reduce your monthly payments by about $90 a month for every $100,000 you borrow.
The best deal for most borrowers is the one that offers the lowest interest rate, with no points and lender fees of $2,000 or less.”
Read more on RealtyTimes