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How Does an Extra Payment Impact My Mortgage?

Why Make an Extra Mortgage Payment?
Considering the current state of the economy, many people are trying to pay down debt to unburden themselves financially. Have you considered paying down your home loan? Your mortgage is probably the biggest debt you will have in your lifetime; paying it off early will save you potentially thousands of dollars that you’ll keep in your pocket, to spend on vacations or college tuition, or to save for a rainy day.

If you’re interested in paying down your mortgage faster, you can make just one extra payment per month — or even just one extra payment over the life of the loan. You’ll be surprised at how much you can save!

Making a Difference
Here’s an example. Say you have a mortgage for $210,000. Your interest rate is 4% and your original monthly payments are about $1,003. If you make just one extra payment of $1,000 on your loan, just once, you’ll pay off your loan up to three months earlier, saving you all the interest you would have paid during that time.

Now here’s a more exciting example. Using the same loan parameters above, if you add $50 to every monthly payment, you’ll pay off your loan nearly two years ahead of schedule. Take a look at your loan statement; how much interest will you save now?

And another interesting tip: A single large payment early in the life of the loan will shorten your term and reduce your interest payments more than a contribution made later on, although any additional payment will show benefits.

Finding the Cash
If you get paid every two weeks, twice a year you’ll get an “extra” check. Consider putting those two checks directly toward your mortgage. Even taking half of them and paying down your loan will help reduce your loan term and the amount you owe.

If you decide to make just one extra payment a year, consider budgeting for it every month. An extra payment of $1,003 is $83.58 per month, or $19.29 per week. Committing to setting aside the cash on a regular basis can make it seem more manageable, especially if it means just skipping a couple of coffees and lunch out one day each week.

Is This the Right Choice for You?
Remember, however, that paying off a home mortgage loan may not be the best choice for everyone. If you have other loans, especially ones with higher interest rates than your mortgage, then they should probably be your priority to pay off. Credit cards and car loans usually have higher rates than home loans.

In addition, the government currently allows homeowners to write off mortgage interest payments on their taxes.* if you are seeing significant benefits from this credit on your tax returns, you may not want to pay off your home loan at this time.

Making a Decision
Paying off your mortgage, as you can see, is not a decision to be taken lightly. Be sure to review all your debts and the interest you’re paying.

* I am not a tax advisory firm. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions and regulations.

 
 

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Win a Basketball Home Court Makeover Celtics style!

RE/MAX Home Court How cool would it be to have your very own Boston Celtics branded home basketball court!?  The Boston Celtics and RE/MAX of New England are teaming up to bring you the Home Court program!   One lucky winner will have a chance to win the amazing prize of having their driveway made over into a Celtics branded basketball court, a visit by a Celtics player and Legend, equipment and more!  The contest ends on May 1st, 2013 so you only have less than a month left to enter! Contact me for more details anthonygiglio@remax.net

All you need to do is complete the RE/MAX Home Court Entry Form  which will include writing a short essay on why you deserve to have your driveway made over into a Celtics branded basketball court!

RE/MAX of New England and the Boston Celtics are giving you the chance to have your home driveway and bedroom made over Celtics style! Three winners will receive their very own Celtics branded home court which includes a newly paved driveway, a new basketball stanchion, basketballs, equipment and more. The RE/MAX Home Court Program will help you show off your Celtics Pride! The winner will also participate in a basketball clinic in their hometown, hosted by a Celtics Player and Legend. Read more about the program and official rules !

 
 

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Getting the Most from Your Mortgage at Tax Time

It’s that time of year again: get ready to gather up the paperwork and settle in to get your tax forms completed. Whether you use a commercial software, stick it out on your own, or hire a professional, there are some documents you’ll need to be sure you have to hand when you’re maximizing the write-offs you can get by having a home mortgage.
Staying Organized Hopefully you’ve been keeping all your paperwork organized throughout the year. If you haven’t there is no better time than right now to start: Set up folders in your file drawers for 2013 and start putting the papers where they belong! When it comes to your home, you’ll want to hang on to your mortgage bills and your year-end mortgage statement; any receipts for home improvements that increased the energy efficiency of your home; and any receipts for upgraded and energy-efficient appliances you have purchased. These documents are extremely important because itemizing your taxes is going to be the best way to maximize your deductions.
Mortgage Interest and Insurance In general, the interest you pay on your home loan, whether it is a standard loan, a line of credit, or a construction loan, is tax deductible. Many people have refinanced recently and may be eligible to deduct the interest associated with the refinance as well. Specific restrictions do apply to the amount you can deduct and the types and numbers of properties that are eligible. In general you may deduct interest on your primary home and on one additional residential property. You may also be restricted by the type of loan you have; a home equity line of credit has different limits than a straightforward mortgage. At the end of the year you’ll receive a Form 1098 from your lender which will clearly show your payments for the year and simplify taking the deduction on your tax forms. If you are a fairly new homeowner or if your home is underwater and your loan-to-value ratio is 80% or greater, you will have private mortgage insurance on your home. These payments are also tax deductible, depending on your adjusted gross income. As your AGI increases, the amount you can deduct decreases.

Energy Efficiency Deductions According to the Energy Star website, you can get a tax credit of either 10% or 30% of the cost of a number of home energy efficiency improvements. These include:

  • Heating, air conditioning, and ventilation (HVAC)
  • Insulation
  • Certain types of roofing
  • Water heaters
  • Windows and doors
  • Solar energy systems
  • Geothermal heat pumps
  • Small wind turbines
  • Fuel cells

Check the website carefully as some credits apply only to primary homes, while others may be used on secondary homes as well, and some apply only to existing homes and not new construction. You must be certain to save your receipts and the Manufacturer’s Certification Statement for your records.

Points, Taxes, and Other Deductions Points are fees you pay when securing your mortgage. They will be clearly stated on your HUD-1 closing statement and on your end-of-year Form 1098. Points are deducted differently for first-time loans versus refinance loans so if you’re doing your taxes on your own you’ll need to read the instructions carefully. If you bought or sold a property in the past year, a portion of the real estate taxes you paid are eligible for deduction. State and local property taxes are generally eligible as well. If you own investment properties, numerous breaks may be available to you, for things such as the property’s mortgage, costs of repairs and maintenance, and depreciation. Consult a tax advisor for more information.

Real Estate: A Great Investment Despite the recent ups and downs in the market, owning a home is still a great investment and can give you substantial breaks when it comes to your taxes. If you have further questions about home ownership, I’m happy to sit down with you for a no-cost and no-obligation discussion about advantages and options. Call me today to learn more!

 
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Posted by on March 21, 2013 in Home Buying, Home Taxes

 

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Planting Season is Around the Corner!

In Massachusetts, spring has arrived. For me, this means the start of gardening season!  I am big tomato grower but whatever you plant in your garden, now is the time to begin planning your spring garden and get ready to plant for the coming year.

Prepare Your Tools. It’s time to check over your gardening tools and prepare them for work. You should wipe them over and check their edges; if you’ve used them a lot, the secateurs should be sharpened. Rub off any rust with a steel wool pad or piece of sandpaper. Wash them off in soapy water to remove any spores or bacteria that could be transferred to your new delicate plants. Wipe any moving parts with a thin oil like sewing machine oil or vegetable oil so they work smoothly.

Take Care of the Soil. If the ground has been thawed out for at least two weeks and no more freezes are forecast [or you're lucky enough to live in an area where spring has already made herself known], you’re ready to prep your garden areas for planting. You should notice your perennials starting to sprout a bit and your daffodil and tulip bulbs popping up as well.

Turning the soil over is a great way to get oxygen into the ground, check the quality of the soil, and soften up the area in readiness for seeds or plants. Dig up any large rocks and toss them to the side — or better yet, use them to outline different areas or plants.

If your soil seems thin or very light-colored, consider adding some kind of food — not just fertilizer. You can use a store-bought concoction, compost material from your kitchen, or manure purchased from a nearby farm or stable.

Be sure to loosen the soil around your perennials and bulbs and give them some breathing room as well. Gently dig up and replant any bulbs that you see are sprouting too close together so they don’t choke each other and end up competing for water, nutrients, sunlight, and space.

Plan Your Plot. Where you are located will of course influence the types of plants you select and how you plant them. You should also consider how your garden will look for the entire season, spring through fall. Different plants of course bloom at different times, so having a good mixture will ensure you are in bloom for many months.

All new plants, perennial and annuals, can be planted in the spring. However, to ensure your annuals survive to bloom into spring, you must be sure your frost season is finished for the year. Perennials can go in as soon as the soil is workable — in fact, they can go in any time of year as they are usually not prone to frost damage. Perennials include chrysanthemums, asters, and dianthus, and shrubs such as azaleas and hydrangeas. Your local garden center will direct you to the plants that do well in your area.

A Special Planting Tip. When you are digging in your well-prepared garden plot, ready to plant your new colorful acquisitions, shake a bit of bone meal into each hole. Bone meal can be purchased at any garden center at a reasonable price and it helps ensure your plants will grow strong and root properly.

Finally spread mulch around your new plants to protect them from the summer sun and help the soil retain water, so you don’t have to water as much. But be sure to water regularly that first month if you don’t get much rain.

A beautiful garden may seem intimidating to people who didn’t grow up gardening with grandma. But these simple steps are a great way for anyone to cultivate a lovely colorful flowerbed to enhance the beauty of your home.

 
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Posted by on March 14, 2013 in Home and Garden

 

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Is It Old or Is It MOLD!

Is It Old or Is It MOLD! There are few things that scare a buyer of real estate more than the presence of MOLD found in their potential new home. Learn more about mold from my discussion with Larry Green of Servpro in Burlington/Woburn during the Let’s Talk Real Estate Show. Larry and I discuss the various types of mold, the proper way of testing and the best way to remediate mold.

 

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Spacious 3 Bedroom Steps to Historic Downtown Salem!

Kitchen1living 1

MLS# 71478734
List Price: $189,000
Address: 41 Harbor Street – Unit 4, Salem, MA 01970

Sunny and spacious 3 bedroom steps from historic downtown Salem. This penthouse unit boasts views of the waterfront and showcases an amazing eat in kitchen complete with granite, s/s appliances, pantry cabinet and hardwood floors. This sun-filled unit also features a large living area/room, hardwood floors throughout, ample closets, personal in-unit laundry room, two exclusive decks, and security system. Walking distance to thriving downtown, Pickering wharf, the marina and the commuter rail! Check out the Virtual Tour or View the Listing Sheet

 
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Posted by on February 12, 2013 in Home Buying, Homes for Sale

 

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IHOP National Pancake Day is Tomorrow!


Tomorrow is National Pancake Day at IHOP!

IHOP is having their annual FREE pancake day tomorrow (February 5th) Find the nearest IHOP to you

Learn more on the IHOP National Pancake Day website

Since beginning its National Pancake Day celebration in 2006, IHOP has raised more than $10 million to support charities in the communities in which it operates. On February 5, 2013, guests from around the country will once again celebrate National Pancake Day at IHOP and enjoy a free short stack of Buttermilk pancakes*. In return for the free pancakes, guests will be asked to consider leaving a donation for Children’s Miracle Network Hospitals© or other designated local charities

 
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Posted by on February 4, 2013 in Community Info

 

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