CT Home Buyers

Deborah Laemmerhirt – 203-994-4297 – www.homesinconnnecticutforsale.com

CT Home Buyers Information. Buying a home is an exciting time in one’s life. Making the smart move of choosing a REALTOR® is your first step to ensuring that your new home and community meets your needs. Our services and experience range from helping you select and interview Mortgage Officers to helping you find the CT home that best suits you and your family.

For your convenience, we also provide listings by email. SELECT TO GET LISTINGS EMAILED TO YOU. We pride ourselves on repeat business and hope you’ll come to understand why. As Your Agent, We Will:

• Assure that you see all the properties in the area that meet your criteria.
• Guide you through the entire home buying process, from finding homes to look at, to getting the best financing. 
• Assisting you through the Inspection process.
• Make sure you don’t pay too much for your new home and help you avoid costly mistakes.  Helping you with negociations and to stay within your comfort zone.
• Answer all of your questions about the local market area, including schools, neighborhoods, the local economy, and more.

Before You Start Looking For Your New Home:

• Check your credit rating. Straighten out any errors before its too late.
• Determine a comfortable monthly budget for your new purchase, including down payment and monthly payment.
• Find a loan program that meets your needs and get pre-qualified (preferably pre-approved).  I can assist you with some choices.
• Choose a REALTOR® that you trust and who understands your needs.  I would encourage you to call or email me.  My group has a great deal of experience with buyers and the area.
• Determine what areas and neighborhood best matches your needs.
• Identify important features you need your new home to have.

Closing Costs to Expect:

• Lender fees include charges for loan processing, underwriting, preparation and establishing an escrow account.
• Attorney and Vendor fees include charges for insurance, title search, and other inspections such as septic, radon or insect.
• Government fees include deed recording and state & local mortgage taxes.
• Escrow and interest fees include homeowner’s insurance, loan interest, real estate taxes, and occasionally private mortgage insurance.

I can help you with any home on the market CLICK Below to view:

  Select Town, Price and GO!

CT – Home Insurance Claims – Deborah Laemmerhirt  203-994-4297  homesinconnecticutforsale.com
In some states, making a single homeowner’s insurance claim can raise your annual insurance premium by more than 20%, according to data collected by InsuranceQuotes. So you have to decide it it is worth it to actually make the claim.

Nationally, making a homeowner’s insurance claim leads to an average annual premium increase of 9%.

The states with the highest post-claim increases include:

• Minnesota 21.2%
• Connecticut 20.6%
• Maryland 19.3%
• California 18%
• Oregon 17%
• Arizona 17%
• Alaska 17%

The states with the lowest post-claim increases include:

• Texas (insurers are not allowed to boost premiums after the first claim)
• New York 1.1%
• Florida 1.8%
• Vermont 2%
• Massachusetts 2%

In Connecticut, you really need to think before you file a relatively small claim. An example show’s why. Suppose:

• Your insurance is $500 a year.
• You have a $500 deductible.
• Your premium will rise 20% after your first claim.

If you file a $600 claim, you’d receive $100 from your insurance company ($600 claim minus $500 deductible = $100), but your premium would rise $100 because you filed the claim. You’d break even the first year, but you’d be paying $100 more for insurance every year after that.

By contrast, if you file a $6,000 claim, you’d receive $5,500 from your insurance company and your premium would still rise only $100. 

Deborah Laemmerhirt  203-994-4297  www,homesinconnecticutforsale.com

Adding energy efficiency features like attic insulation or a highly efficient furnace may help you when you’re ready to resell your home.

According to the National Association of Realtors’ Profile of Homebuyers and Sellers, nearly nine out of 10 recent homebuyers said heating and cooling costs were somewhat or very important when considering a home for purchase.

“Going green has proven to be more than a trend,” says NAR President Gary Thomas. “Many people now seek out this way of living and want homes and communities that are more resource efficient and sensitive to the environment.”

Often, the higher a home’s energy efficiency, the more money the homeowner saves in monthly heating and cooling costs.

NAR found 49% of buyers thought a home’s heating and cooling costs were very important when considering a home for purchase, followed by energy-efficient appliances and lighting, each at 24%.

Landscaping for energy conservation and environmentally friendly community features were less important but were still a factor in the minds of homebuyers.

Nearly half of buyers found these features important.

Regionally, buyers in the North and South placed a greater importance on heating and cooling costs, probably due to more extreme temperatures in those areas of the country.

The survey also found buyers who purchased more recently built homes placed greater importance on environmentally friendly features than buyers who purchased older homes.

Nearly 60% of buyers who bought homes built in 2011 said heating and cooling costs were very important, compared to less than 30% of buyers whose homes were built before 1910.

Deborah Laemmerhirt  203-994-4297  homesinconnecticutforsale.com

What are out utilities costs going to be this winter?  Some on this depends on how well insulated our home are and also what our thermostat setting are set at!

Utility costs – Winter utility bills will likely rise for homeowners using natural gas, propane or electricity, and drop for homeowners with fuel oil furnaces, according to the federal government’s Winter Fuels Outlook.

Here’s how much the U.S. Energy Information Administration predicts you’ll pay for fuel this winter:

Natural gas:

• $11.33 per 1,000 cubic feet
• 13% higher than last winter.
• Average bill $679

 Electricity:

• 12 cents per kilowatt-hour
• 2% higher than last winter
• Average bill $909

 Heating oil:

• $3.63 per gallon
• 2% lower than last winter
• Average bill $2,046

Propane:

• Cost per gallon: N/A
• 9% higher than last winter
• Average bill $1,666

About half of U.S. households use natural gas. If you’re among them, a 13% bump in natural gas prices might seem high. But overall, natural gas is still cheaper than it has been over the past five years.

How much you pay to heat your home is heavily influenced by winter temperatures and your home’s insulation.  Another factor is of course your thermostat setting and the types and seals around doors and windows.  We burn wood for most of our heat and also for hot water so our saving on oil is tremendous – although I know most are not able to heat this way.

The Energy Information Administration predicts this winter will be about as cold as last winter, unless you live in the Northeast where it’s going to be 3 percent colder or the West where it’s going to be 3 percent warmer.  I’m not looking to the 3% colder!

Deborah Laemmerhirt  203-994-4297  homesinconnecticutforsale.com

Mortgage Refinancing – If you are tempted to refinance your mortgage in order to get a lower rate or a shorter term, you should know, it’s a complicated process. Not everyone is in a good position to refi, though if you succeed, it can be well worth the effort.

By refinancing at a lower rate you could dramatically decrease your mortgage payment. If you currently have an adjustable mortgage, refinancing could allow you to lock in a long-term low rate. This could offer you much-needed financial relief, freeing up some cash to pay off debts or invest in your retirement accounts.

Then again, many homeowners apply to refinance, only to discover they can’t get approved.  Plus, some mortgages options that once were offered have now disappeared and certain others have cropped up in their places.

In spite of the potential drawbacks, it’s certainly worth checking into your potential for refinancing success. Here are some secrets you should know that will help you determine, or increase, your chances of getting a better loan.

Your credit (or FICO) score will determine whether or not you get the lowest rate on your refinancing loan. Generally, to get the best rates, you’ll need a FICO score of 740 or higher. If yours falls between 620 and 740, you’ll have to pay higher interest rates or fees. And… if your score is below 620 you may not be approved for a loan at all.

To make things more difficult, the three major U.S. credit bureaus (TransUnion, Equifax and Experian) all calculate FICO ratings differently. Typically, a lender will take a look at credit reports from all three bureaus and choose the score that falls in the middle.

While Experian doesn’t make its credit reports available to the public, you can visit MyFico.com to purchase your TransUnion and Equifax FICO reports. Keep in mind that these scores may be different from the ones your lender sees.  However, because all FICO scores are fairly consistent, it will give you a good idea about where you stand.

You should know, it is possible to legitimately raise your credit score, but it takes time. Start months before you plan to refinance. (See right-hand box.)

Before you head down the refinancing road, do your homework and figure out your home’s current value. Don’t assume your house is worth whatever you paid for it. Home values are affected by numerous factors specific to your geographic area as well as to the national economy, so knowing is far preferable to guessing.

A local real-estate agent may be able to provide information  on recent sales of similar homes in your neighborhood. You could pay an appraiser for a professional opinion of your home’s value. The problem with this is, an appraisal will likely cost between $300 and $500 (depending on where you live) and as part of the refi-process you will have to pay again for an appraisal ordered by the bank.

Another point, appraisers often use foreclosure sales, short sales and other distressed home sales in your area to calculate your home’s value. Even if you are not approved for the refinance loan, you’ll still have to pay the appraisal bill. This is all the more reason to do your research and calculate your home’s value on your own.

You are much more likely to be approved for a loan if you have some equity in your home. If your current mortgage is less than 80 percent the value of your home, refinancing shouldn’t be a problem.

However, you may have another refinancing option if your mortgage is for between 80 percent and 105 percent of your home value and your loan was bought by Fannie Mae or Freddie Mac. If you fall into this category and are current on your loan payments, you may be able to refinance under a new government program called “Making Home Affordable.” Visit https://makinghomeaffordable.gov/ to learn more about this program and find out if you qualify.

If you have a second mortgage on the home you’re trying to refinance, you may encounter some additional challenges. These days, some lenders are refusing to stay in second place if you try to refinance your first mortgage.

If your second lender resists, you have a few options. You can pay off your second loan, roll the two loans together if you have enough equity or find a new second lender who will allow you to refinance your first mortgage.

If you are refinancing your mortgage, your goal is to shorten your loan — not make it longer. The only time it may make sense to start over with a 30-year mortgage is if your current mortgage is only one to four years old and the new rate will greatly reduce your payments. For the most part though, try to avoid going backward. Consider a 15 or 20-year mortgage-this will decrease your future interest payments and allow you to pay off your house more quickly.

It’s clear that refinancing a home is no easy task. As you head down the refinancing road, you may be surprised at how much documentation you’ll need to provide. Many lenders are asking for pay stubs, bank statements, brokerage statements and even tax returns to ensure you are a low risk. While it may be a tough process, you will reap the benefits if you are successful.

Deborah Laemmerhirt  203-994-4297  homesinconnecticutforsale.com

Fix your credit.  Don’t believe the hype from fly-by-night companies that claim to be able to raise your credit score magically, especially if they say they can make negative credit information disappear. They can’t. There is no magic, but with diligence and a little time, you can raise your own credit score legitimately. Here are some critical things you need to know.

—The number one rule should be obvious, and cannot be stressed enough… pay bills on time.
–Have credit cards, but use them wisely. A good rule of thumb is, if you don’t have the cash, you cannot afford the purchase.
–Keep your credit balances low in relation to your available credit. This demonstrates that you are not over-relying on credit to get by.
–Keep tabs on your credit score by getting a copy of your credit report at least once a year. 
–Plan ahead. Improving your credit score can take three to six months…. maybe longer. If your score is lower than it should be, you might want to put the application off for a few months.
–Don’t open new accounts, but don’t close existing ones. Opening new accounts too close to refinancing could make you appear overextended. On the other hand, if you close existing accounts, your score could drop. This may sound counter-intuitive, but your credit score is made up of many factors. One factor is the length of time you’ve had credit. Closing your oldest accounts could artificially shorten that time. Another factor is your overall credit balance compared to your available credit. Closing an account doesn’t change your credit balance, but it shrinks your available credit. Even though nothing has really changed, the percentage of available credit you have used appears larger, and that is a definite negative.

The Federal Trade Commission (FTC) warns consumers to be wary of “free credit report” companies. Some of these companies use deceptive advertising to give the impression they issue free credit reports, when in reality, they attempt to lock consumers into paying a monthly fee.  Log onto the FTC Web site to find out how to get your free annual credit report

Deborah Laemmerhirt  203-994-4297  homesinconnecticutforsale.com

Investors – converting your primary resident to rental property!

If you’re having a tough time selling your home in today’s market, one option is to convert it into a rental property. That way, you can hang in there until the local real estate market rebounds. Meanwhile, you can probably shelter most or all of the rental income with tax deductions, including depreciation write-offs.

With any luck, you’ll eventually be able to sell the property for a decent price. However, some confusing tax rules come into play when you convert a personal residence into a rental, and they can lead to unanticipated results when you sell. Below is an explanation of the complex rules, as well as some examples to show how they work.

Tax Basis for Calculating Depreciation Deductions Depends on Market Value

You can depreciate the tax basis of the building part of a residential rental property (not the land ) over 27.5 years. This allows you to shelter some of your rental income with depreciation deductions.

However a “special basis rule” applies to a rental property that was formerly your personal residence. Under this rule, the initial tax basis of the building for purposes of calculating depreciation write-offs equals the lower of:

1. The building’s fair market value (FMV) on the conversion date or

2. The building’s “regular basis” on the conversion date. This generally equals the original price, plus the cost of any improvements (not counting normal repairs and maintenance) minus any depreciation deductions you might have claimed before the property was converted into a rental (for example, because you had a deductible home office).

Key Point: If on the conversion date the building’s FMV is lower than the “regular basis” figure (possible in a bad market), you must use the lower number to calculate depreciation deductions after converting the property into a rental.

Tax Basis for Calculating a Loss Also Depends on Market Value

You can’t claim a deductible tax loss from selling a personal residence. You can only deduct losses from selling business or investment assets. Common question: Can I claim a deductible tax loss if I convert my residence into a rental and later sell it for less than I paid? Not necessarily. The “special basis rule” applies here too, and it may reduce the deductible tax loss when you sell or eliminate it entirely.

Here’s why. When you convert a former personal residence into a rental, the “special basis rule” mandates that your initial tax basis for calculating any later tax loss on sale equals the lesser of:

1. The property’s FMV on the conversion date (counting both the land and the building) or
 
2. The property’s “regular basis” on the conversion date. This generally equals the original cost of both the land and the building plus the cost of any improvements (not counting normal repairs and maintenance) minus any depreciation deductions you might have claimed before the property was converted into a rental. You must then subtract depreciation write-offs for the period after the property is converted into a rental to arrive at the basis on the date of sale. Use that basis figure to determine if you have a deductible tax loss on sale (or not).

Key Point: If on the conversion date your property’s FMV is lower than the “regular basis” (possible in a bad market), you must use the lower FMV figure to determine whether you have a deductible tax loss when the property is eventually sold.

The net effect of the “special basis rule” is to disallow for tax purposes any loss on sale that results from a decline in value that occurred before the date the property was converted into a rental. However, a loss that is attributable to a post-conversion decline in value can result in a deductible tax loss when you sell. Keep in mind that depreciation deductions claimed after the property is converted into a rental reduces the property’s basis under the “special basis rule” and make it that much harder to have a deductible tax loss on sale. All this will be much easier to understand after you check out three examples at the end of this article.

Strategy: Despite the unfavorable impact of the aforementioned “special basis rule” converting a personal residence into a rental property sooner rather than later can result in a deductible tax loss on sale if the property’s value continues to drop after the conversion date. Put another way, converting sooner rather than later could give you a bit of a tax break–in the form of a modest deductible tax loss on sale — while waiting could mean no such tax break at all.

Different Rule: Tax Basis for Calculating Gain Depends on Cost (not Market Value)

If the value of your property recovers after the conversion date and you eventually sell for a profit, your basis for purposes of calculating the tax gain equals the “regular basis” as of the sale date. This amount generally equals the original cost of the land and the building plus the cost of any improvements (not normal repairs and maintenance) minus any depreciation deductions (including after the property was converted into a rental).

The Rules Could Produce Unanticipated Results When Selling

When selling, the tax results might surprise you. Reason: You must use the “special basis rule” to calculate any deductible tax loss, but use the “regular basis rule” for purposes of calculating any taxable gain. If following these two rules results in two different basis numbers, you can potentially wind up in no man’s land where you have neither a tax gain nor a tax loss. That will happen when the sale price falls between the two basis numbers.

Obviously, this is confusing, but here are some examples to help illustrate the tax results that can occur with differing conversion-date FMVs and differing net sale prices.

Kitchen – Is Bigger Better!  Deborah Laemmerhirt  203-994-4297  www.homesinConnecticutForSale.com

For kitchen remodels, bigger is not necessarily better, but open spaces are in high demand, according to the Fall Houzz Kitchen Remodeling Survey of more than 7,500 remodeling homeowners.

Only a third of those renovating a kitchen are increasing the square footage of their space, while three quarters are opening up their kitchens, typically as part of a great room.

Consistent with the open concept approach, three in five respondents are incorporating an island into their new or updated kitchen.

Kitchen style differs by age group, with younger homeowners more likely to describe their future kitchen as contemporary or modern while those over 55 years old favor a traditional look. 

Other Take-Home Messages From The Survey:

Countertops are key to transformation: The vast majority (94 percent) of respondents plan to change their countertops. Granite and quartz are the top picks (86 percent) and many people mix and match materials for their island.

Stainless appliances are still popular: While nearly two thirds of respondents are choosing stainless, many respondents reported combining stainless appliances with appliances integrated into cabinetry for a more subtle look.

Conservative color schemes dominate: “Soft and neutral” is the most popular color scheme choice (75 percent). A much smaller group is going “bright and colorful” (14 percent) or “bold and dramatic” (11 percent).

Kitchen palette and style preferences are clearly linked: Color conservatives are more likely to choose traditional style kitchens, while those who choose more daring colors are more likely to create a contemporary or modern kitchen.

Eco-friendly matters: Nearly half of respondents cite using ecofriendly appliances and materials as important. Those who declared choosing ecofriendly materials and appliances to be “extremely important” are more likely to choose tile flooring, while all other groups favored hardwood.