When it’s hot outside, smart homeowners focus their energies inside on these four tasks.
You know: Like taking advantage of your nice, cool basement.
#1 Organize the Basement
The two most common types of clutter? Old clothes and seasonal items. Just the kind of stuff that winds up in the basement. So this month, face your messy basement head on. Not only will you regain space, but you’ll also save time and could even knock back clutter-related depression. (Yeah, that’s a thing.)
Now that you’ve got it organized, maybe it’s a good time to consider this next project:
#2 Finish the Basement
The solution to a cramped house could be right under your feet. Transforming an unfinished basement into a media room, home office — or even a rentable space — builds equity, upping your home’s resale value. Start this project now, and you can kick back and enjoy your new space all winter long.
#3 Buy Paint on Sale
July. Not really the time of year you think of painting, right? It’s usually too hot and humid. Probably why so many places put paint on sale this month. Stock up now, and you’ll be ready for that painting project on your fall to-do list. (P.S. Latex and acrylic paint can last up to 10 years; oil-based, up to 15.)
#4 Hit Up Recycling Centers
Summer is home improvement season. That also makes it the savvy buyer’s time to seek out deals at recycling centers and home improvement resale stores. Since this is project time — not to mention moving season — lots of folks are ditching their old stuff. Take advantage, and grab it up at super-low prices.
Kelley Waltersis a Southern writer and editor. She focuses on interior design and home improvement at outlets from HGTV to Paintzen. She lives in Italy a month every year, drinking Negronis and writing in internet cafes.
One of the biggest misconceptions of home buying? The 20% down payment. Here’s how to buy with a lot less down.
Buying your first home conjures up all kinds of warm and fuzzy emotions: pride, joy, contentment. But before you get to the good stuff, you’ve got to cobble together a down payment, a daunting sum if you follow the textbook advice to squirrel away 20% of a home’s cost.
Here are five creative ways to build your down-payment nest egg faster than you may have ever imagined.
When sellers want to a get a deal done quickly, they might be willing to assist buyers with the closing costs. Fewer closing costs = more money you can apply toward your deposit.
“They’re called seller concessions,” says Ray Rodriguez, regional mortgage sales manager for the New York metro area at TD Bank. Talk with your real estate agent. She might help you negotiate for something like 2% of the overall sales price in concessions to help with the closing costs.
There are limits on concessions depending on the type of mortgage you get. For FHA mortgages, the cap is 6% of the sale price. For Fannie Mae-guaranteed loans, the caps vary between 3% and 9%, depending on the ratio between how much you put down and the amount you finance. Individual banks have varying caps on concessions.
No matter where they net out, concessions must be part of the purchase contract.
3. Look into Government Options
The U.S. Department of Housing and Urban Development, or HUD, offers a number of homeownership programs, including assistance with down payment and closing costs. These are typically available for people who meet particular income or location requirements. HUD has a list of links by state that direct you to the appropriate page for information about your state.
HUD offers help based on profession as well. If you’re a law enforcement officer, firefighter, teacher, or EMT, you may be eligible under its Good Neighbor Next Door Sales Program for a 50% discount on a house’s HUD-appraised value in “revitalization areas.” Those areas are designated by Congress for homeownership opportunities. And if you qualify for an FHA-insured mortgage under this program, the down payment is only $100; you can even finance the closing costs.
For veterans, the VA will guarantee part of a home loan through commercial lenders. Often, there’s no down payment or private mortgage insurance required, and the program helps borrowers secure a competitive interest rate.
Some cities also offer homeownership help. “The city of Hartford has the HouseHartford Program that gives down payment assistance and closing cost assistance,” says Matthew Carbray, a certified financial planner with Ridgeline Financial Partners and Carbray Staunton Financial Planners in Avon, Conn. The program partners with lenders, real estate attorneys, and homebuyer counseling agencies and has helped 1,200 low-income families.
4. Check with Your Employer
Employer Assisted Housing (EAH) programs help connect low- to moderate-income workers with down payment assistance through their employer. In Pennsylvania, if you work for a participating EAH employer, you can apply for a loan of up to $8,000 for down payment and closing cost assistance. The loan is interest-free and borrowers have 10 years to pay it back.
Washington University in St. Louis offers forgivable loans to qualified employees who want to purchase housing in specific city neighborhoods. University employees receive the lesser of 5% of the purchase price or $6,000 toward down payment or closing costs.
Ask the human resources or benefits personnel at your employer if the company is part of an EAH program.
5. Take Advantage of Special Lender Programs
Finally, many lenders offer programs to help people buy a home with a small down payment. “I would say that the biggest misconception [of homebuying] is that you need 20% for the down payment of a house,” says Rodriguez. “There are a lot of programs out there that need a total of 3% or 3.5% down.”
FHA mortgages, for example, can require as little as 3.5%. But bear in mind that there are both upfront and monthly mortgage insurance payments. “The mortgage insurance could add another $300 to your monthly mortgage payment,” Rodriguez says.
Some lender programs go even further. TD Bank, for example, offers a 3% down payment with no mortgage insurance program, and other banks may have similar offerings. “Check with your regional bank,” Rodriguez says. “Maybe they have their own first-time buyer program.”
Not so daunting after all, is it? There’s actually a lot of help available to many first-time buyers who want to achieve their homeownership dreams. All you need to do is a little research — and start peeking at those home listings!
Erik Shermancovers business, technology, finance, personal finance, and economics for such outlets as CBS MoneyWatch, Inc.com, Fortune.com, and Forbes.com. He’s the author or co-author of 10 books on a variety of subjects. You can follow Erik on Twitter.
Here’s the scoop on what’s tax deductible when buying a house.
Note: In light of COVID-19 crisis, the IRS has extended the income tax payment and filing deadline for individual and business returns from April 15, 2021, until May 17, 2021. This relief does not apply to estimated tax payments for tax year 2021 that are due on April 15, 2021. You don’t need to file additional forms to qualify for this extension.
The answer to whether closing costs are tax deductible — or mortgage interest and property taxes for that matter — is often maddeningly, “It depends.”
Basically, you’ll want to itemize if you have deductions totaling more than the standard deduction, which for 2021 is $12,550 for single people and $25,100 for married couples filing jointly. Every taxpayer gets this deduction, homeowner or not. And most people take it because their actual itemized deductions are less than the standard amount.
But will you have enough deductions to itemize?
To see, you need to know what’s tax deductible when buying or owning a house. Here’s the list of possible deductions:
The one-time home purchase costs that are tax deductible as closing costs are real estate taxes charged to you when you closed, mortgage interest paid when you settled, and some loan origination fees (a.k.a. points) applicable to a mortgage of $750,000 or less.
But you’ll only be able to benefit from them if all your deductions total more than the standard deduction.
Costs of closing on a home that aren’t tax deductible include:
Real estate commissions
Mortgage refi fees
Mortgage interest and property taxes are annual expenses of owning a home that may or may not be deductible. Continue reading to learn more about those.
Yearly, you can write off the interest you pay on up to $750,000 of mortgage debt. Most homeowners don’t have mortgages large enough to hit the cap, says Evan Liddiard, CPA, director of federal tax policy for the NATIONAL ASSOCIATION OF REALTORS®. But people who live in pricey places like San Francisco and Manhattan, or homeowners anywhere with hefty mortgages, will likely reach the maximum mortgage interest deduction.
Note: The $750,000 cap affects loans taken out after Dec. 16, 2017. If you have a loan older than that and you itemize, you can keep deducting your mortgage interest on debt up to $1 million. But if you refi that loan, you can only deduct the interest on the amount up to the balance on the day you refinanced – you can’t take extra cash and deduct the interest on the excess.
Home Equity Loan Interest
You can deduct the interest on a home equity loan or a second mortgage. But — and this is a big but — only if you use the proceeds to substantially improve your house, and only if the loan, combined with your first mortgage, doesn’t add up to more than the magic number of $750,000 (or $1 million if the loans were existing as of Dec. 15, 2017).
If you use a home equity loan to pay medical bills, go to Paris, or for anything but home improvement, you can’t deduct the interest.
State and Local Taxes
You can deduct state and local taxes you paid, including property and income taxes (or sales taxes in states where there is no income tax), up to $10,000. That’s a low cap for people who live in places where state and local taxes are high, says Liddiard. To give you an idea of how low: The average amount New Yorkers have taken in state and local tax deductions in past years is about $22,000.
Loss From a Disaster
You can write off the cost of damage to your home if it’s caused by an event in a federally declared disaster zone, like areas in Florida after Hurricane Michael or Shasta County, Calif., after a rash of wildfires.
This means standard-variety disasters like a busted water pipe while you’re on vacation or a fire caused because you left the toaster on aren’t deductible.
This deduction is also only for some. You can deduct moving expenses if you’re an active member of the armed forces moving to a new station.
And by the way, no matter who you are, if your employer pays your moving expenses, you’ll have to pay taxes on the reimbursement. “This will be a real hardship to many because it’s non-cash income,” says Liddiard. Some employers may gross up the reimbursement amount to provide cash to pay the tax, but many likely will not.
This is a deduction you don’t have to itemize. You can take it on top of the standard deduction, but only if you’re self-employed. If you are an employee and are working from home during the pandemic, you can no longer write off home office expenses. You claim the deduction on Schedule C.
Anyone paying a mortgage and a student loan payment will be happy to hear that the interest on your education loan is tax deductible on top of the standard deduction (no need to itemize). And you can deduct as much as $2,500 in interest per year, depending on your modified adjusted gross income.
Ways to Increase Your Eligible Deductions
There are some other costs that can be itemized not related to being a homeowner that could bump you up over the standard deduction. This might allow you to write off your mortgage interest. Charitable contributions and some medical expenses can be itemized, although medical expenses must exceed 7.5% of your adjusted gross income.
So if you’ve had a hospital stay or are generous, you could be in itemized-deduction land.
Also, if you’re a single homeowner, it could be easier for you to exceed the standard deduction, Liddiard says. The itemized deductions on your house will probably more quickly break the $12,550 standard deduction threshold than a couple’s similar house will break their $25,100 threshold.
Tax-Savvy Home-Buying Ideas
If you’re a prospective homeowner with an eye to making the most efficient use of your tax benefits, here are a few ways to buy smart:
Especially in expensive areas, buy a less expensive home so you don’t hit the cap on mortgage debt and local and property taxes, says Lisa Greene-Lewis, a CPA and tax expert for TurboTax.
If you’re buying a higher price home, make a bigger down payment so your original mortgage doesn’t exceed the $750,000 cap.
How to Decide If You Can Itemize
To see whether you have enough deduction to itemize, plug your numbers into this clever tool from TurboTax, and you’ll get their recommendation in just a few seconds.
Though every homeowner’s tax benefits will be a little different, in the end, you’re building equity, you’ll likely make money when you sell, and you have the freedom to paint your walls any color you want and get a dog.
Leanne Pottsis an Atlanta-based journalist and serial home remodeler. She’s tackled five fixer-uppers and is working on a sixth. She’s written about everything from forest fires to dog-friendly decor and spent a decade leading the digital staff of HGTV.
Even if you think they’ve already started to freeze.
New homeowners may have heard that winterization is important, but in the hubbub of your first year living in a home you own (finally!), it can be easy to overlook the need to prepare for the cold weather ahead. After all, it’s just not something renters deal with; prepping pipes for winter is often the landlord’s job.
Ideally, you should winterize your pipes in the fall, before winter seriously sets in. But if you’ve forgotten and all of a sudden you’re in the middle of a deep freeze, there’s still time to prevent disaster.
If the temperatures have dropped into freezing and intend to stay there, turning on your faucets — both indoors and out — can keep water moving through your system and slow down the freezing process. There’s no need to waste gallons of water: Aim for about five drips per minute.
#2 Open Cabinet Doors
During cold weather, open any cabinet doors covering plumbing in the kitchen and bathroom. This allows the home’s warm air to better circulate, which can help prevent the exposed piping from freezing. While this won’t help much with pipes hidden in walls, ceilings, or under the home, it can keep water moving and limit the dangerous effects of freezing weather.
#3 Wrap Your Pipes
If your pipes are already on their merry way towards freezing, wrapping them with warm towels might do the trick. You can cover them with the towels first and then pour boiling water on top, or use already-wet towels — if your hands can stand the heat (use gloves for this). This should help loosen the ice inside and get your system running again.
#4 Pull Out Your Hairdryer
A hairdryer (or heat gun) can be a godsend when your pipes are freezing. If hot rags aren’t doing the trick, try blowing hot air directly on the pipes. Important note: You don’t want to use a blow torch or anything that produces direct flames, which can damage your pipes and turn a frozen pipe into an even worse disaster. You’re trying to melt the ice — not your pipes.
#5 Shut Off The Water if Pipes Are Frozen
Have your pipes already frozen? Turn off the water immediately. (Hopefully you know where the master shut-off is, but if not, now’s the time to find it!)
Make sure to close off any external water sources, like garden hose hookups. This will prevent more water from filling the system, adding more ice to the pile, and eventually bursting your pipes — the worst-case scenario. This also will help when the water thaws; the last thing you want after finally fixing your frozen pipes is for water to flood the system — and thus, your home.
Jamie Wiebeis a writer and editor with a focus on home improvement and design. Previously, she worked as a web editor for “House Beautiful,” “ELLE Decor,” and “Veranda.”
With THE HOLIDAYS coming at you fast and furious, you want to be sure your home is cozy, but with that fresh-as-spring feel — as opposed to that musty-damp-winter feel.
Here’s how to make that happen (along with a few other timely tips):
#1 Wash Bed Pillows
You love your trusty, old, perfectly-snugged-to-your-head pillow. But guess what’s also snug against your head? Fungus — 4 to 16 species to be precise. Gross!
With fall being the height of guest season, you’ll want your pillows fresh, too. Pop them in the washing machine and dryer for an all-over clean feeling. (But check manufacturer advice, too. Some pillows shouldn’t be washed, but replaced instead.)
#2 Clean the Mattress, Too
Sleeping soundly gets even better when you know you’re lying on a clean and fresh mattress. The yuck factor: Skin cells and sweat get into the mattress, then dust mites show up for a dinner party featuring those tasty skin cell morsels.
You’ll want your mattress to be at it’s freshest. It’s easy to do: Vacuum it and then wipe it down with a cloth dampened with an upholstery shampoo. But be sure to let it dry; otherwise, you’re inviting mold. Also, be sure to rotate it 180 degrees to help keep it lump-free.
(Another option: if you’ve got a flippable mattress, go ahead and flip it. That, too, can help kill the yucky mites.)
#3 Insulate Windows
Bone-chilling drafts seriously detract from the cozy vibe you want. Keep it cozy by hanging drapes as close to your windows as possible to help you keep the heat inside.
You can even add clear Velcro strips or dots to the back of the drape and attach to fasteners on the wall to help insulate. Be sure to cross one drape over the other when you close up for the night. Insulating shades can do the trick, too.
#4 Stock Up on Snow Supplies
If snow is a given where you live and you’re lacking supplies, take advantage of seasonal sales now to make sure you’re not the one rushing to the hardware store at the last minute — only to find out they just sold out of ice melt.
If you have a snow blower, be sure to have it serviced and fueled up before the first winter storm arrives — and with it, price hikes on all the snow stuff.
#5 Trim Tree Branches
The last thing you need is a winter storm loosing the wrath of that mighty tree whose branches are angling over your roof. Long limbs invite pests to explore your roof and allow excess water to seep into cracks in the roof or siding.
Keep limbs and branches at least 3 feet from the house. Plus it’s easier to trim branches after leaves have fallen. (If it’s an evergreen, well, sorry about that. It’ll be a prickly job, but the bonus is you’ll have greenery for the holidays!)
#6 Get a Chimney Sweep to Inspect the Fireplace
It’s time to dust off and sweep the chimney! Best to hire someone who knows wood-burning fireplaces. A professional chimney sweep will ensure your wood-burning fireplace burns more efficiently and will help prevent chimney fires and carbon monoxide poisoning during the winter. So, yeah, it’s pretty important.
Tip: If you don’t already have a chimney cap, this is also the time to add one to stop wild outdoor critters from crawling down it — and (yikes!) into your house.
Stacey Freedwrites about homes, design, remodeling, and construction for online and print national trade and consumer publications, including “Better Homes & Gardens.” Previously, she was a senior editor at “Remodeling” magazine. Follow Stacey on Twitter.
Even before the pandemic, the work-from-home trend was growing in popularity. Improved technology and connectivity are allowing people to be more productive at home as employers have offered greater flexibility. But now that COVID-19 has made working from home even more prevalent—coupled with students learning online—many families are finding themselves crowded around the kitchen table or staking out various nooks to accomplish tasks on their laptops or tablets.
Mary Cook, founder of a Chicago-based commercial interior design firm, Mary Cook Associates, has experienced this challenge firsthand. She took the dining room table for her office in her suburban house; one of her three children claimed the sitting area in the parents’ suite, another picked the furnished basement, and the third chose a table in the family room. Fortunately, Cook’s husband is retired and so doesn’t need to compete for working space.
The finagling has made real estate professionals note the need for more functional, designated work-from-home solutions. This has led to the creation of home offices using two techniques: reconfiguring existing spaces or adding new square footage. These new home office designs vary in size and location—some near the main living space or bedrooms, others in basements or attics. There’s also the trend of outdoor accessory dwelling units if the plot size and local building codes permit them.
In addition, some new homes might soon offer multiple workspace options on different levels, says Jeff Benach, a principal of Lexington Homes, a Chicago-area homebuilder. For years, his firm’s plans have included a flexible space on the main level of their three-story townhome design that some homeowners use as an office.
“With the pandemic, more buyers—maybe 50% more—are interested in that plan because of the potential for having an office or e-learning space,” Benach says. “It’s become a bigger priority, and we’ll include it in more designs and communities.”
The company also offers options in other designs, including a lower-level finished space, a loft near bedrooms on an upper level, and a built-in desk with shelves at the top of a stairway.
Pyatt Builders, based in Carmel, Ind., regularly includes a flexible room in its 2,000-square-foot new homes, which the company is now emphasizing on social media and in its email blasts. “It can work as a home office or remote-learning classroom,” says Todd Pyatt, owner and president. Because of concerns around COVID-19 and more homeowners’ desire for private workspace, the company is considering including both a home office and a space designed with more flexibility in its 2021 construction projects, Pyatt says.
One of the country’s largest homebuilders, Los Angeles–based KB Home, recently redesigned some plans that include a fully outfitted home office.
“It’s the first time we’ve specifically offered a dedicated workspace with a range of options that provide an affordable work-from-home experience,” says Jeffrey Mezger, chairman, president, and CEO. The design features a built-in workstation with cabinet space, open shelving, and an upgraded electrical package. Home buyers can customize the space more with soundproofing, lighting, ceiling fans, window treatments—even with a beverage center, half-bath, and outdoor entry.
“The company will add options to meet clients’ evolving needs,” Mezger says. Two of the company’s California communities will introduce the concept, after which the option will be available nationally.
Recognizing the demand for private conversations, another homebuilder, Toll Brothers, based in Horsham, Penn., is developing matching home offices for couples.
Cook, who designs model homes for the company in several markets, says people tend to speak louder when they are on a call or in an online meeting than they do in person. She also points out that home offices work best with enough counter or desk space to spread out papers and set up equipment. Well-designed offices, she says, should be flexible enough to meet the needs of different family members at different times because most homes aren’t large enough to include a separate office for each person.
However, more important than size is creating a quiet space. Before the pandemic hit, KTGY Architecture + Planning used to design “home management center” desks in high traffic areas. Now the company is brainstorming how to close off those centers. Making a space that could be as small as a phone booth with a door would let residents take a call or have a Zoom meeting in private, says Jonathan Boriack, associate principal in the firm’s Oakland office. “It’s not a place where you’d work all day,” he says. His firm’s other solutions are to steal space from a laundry room, pantry, or hallway. “The challenge is to control noise,” he says.
The good news for homeowners who incorporate almost any variation of a home office is that they may be adding value to their home now and beyond. “Remote work is here to stay,” Boriack says.