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Homeownership: How to Achieve Your Financial Goals

Homeownership: How to Achieve Your Financial Goals. Should You Buy or Rent?. Purchasing Mortgage Down payment Points Additional fees Tax deduction. Should You Buy or Rent?. Renting? No mortgage No down payment First and last plus security Set rent No tax deduction.

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Homeownership: How to Achieve Your Financial Goals

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  1. Homeownership: How to Achieve Your Financial Goals

  2. Should You Buy or Rent? • Purchasing • Mortgage • Down payment • Points • Additional fees • Tax deduction

  3. Should You Buy or Rent? • Renting? • No mortgage • No down payment • First and last plus security • Set rent • No tax deduction

  4. Should You Buy or Rent? • Insurance • Homeowner’s or renter’s • Liability • Property taxes

  5. Should You Buy or Rent? • Fees • Assessment • Association • Maintenance • Upkeep and improvements

  6. Should You Buy or Rent? • Time • Job situation • Family status • Age

  7. Can You Afford It? • Housing expenses • Down payment • Recurring debt

  8. Can You Afford It? • Qualifying • Pre-approval • Compare rates

  9. Mortgage 101 • Sources for loans • Types of mortgages • Fixed rate • Adjustable rate • Hybrids

  10. Mortgage 101 • Points • Mortgage payment • Principal • Interest • Taxes • Insurance

  11. Tax Advantages of Owning • Points • Interest • Property taxes • Refinancing write-offs

  12. Tax Advantages of Owning • Interest on equity loan • Losses • Capital gain exclusion

  13. Tax Consequences of Owning • Not deductible • Closing costs • Commissions • Insurance • Dues and fees

  14. Using Equity Wisely • Equity = value minus owe • Banks loan up to 80% • Interest tax deductible • Best for one-time expenses

  15. Using Equity Wisely • Equity loans • Provide lump sum • Fixed term • Locked-in rate • Set monthly payment

  16. Using Equity Wisely • Lines of credit • Offer flexibility • Ideal for irregular expenses • Helpful for higher income families • Use as needed • Variable rate

  17. Using Equity Wisely • Avoid creating new debt • Could lose house • Shop for best rates • Read paperwork carefully

  18. Owning Additional Property • Rental property • Steady cash stream • Profit on sale • Tax deduction • Vacation home

  19. Owning Rental Property • Various kinds • Real estate investment trust • Direct investment

  20. Owning Rental Property • Selection criteria • Location • Property condition • Costs

  21. Owning Rental Property • Other considerations • Tenants • Rent • Lease agreement

  22. Owning Rental Property • Other considerations • Legal restrictions • Insurance coverage • Maintaining occupancy • Housing market

  23. Owning Rental Property • Tax aspects • Property taxes • Income taxes • Expense deduction • Recapture depreciation • Capital gain or loss

  24. Owning a Second Home • Tax aspects • Mortgage interest • Property taxes • Minimal rental • Rental income tax free • Expenses not deductible

  25. Owning a Second Home • Combined use • Income taxable • Deduct expenses • Maximum rental • Qualifies as rental property • Deduct more expenses

  26. Owning a Second Home • Complicated rules • Repair days don’t count • Friends may count • Selling the property • No capital gains exemption (most) • Principal residence (2/5)?

  27. Thank You!

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