Smart Living in Denver

If you invest in a savings account, you’ll make less than 1% and will have to pay income tax on the earnings. On the other hand, contribute something extra to your house payment on a regular basis and you’ll essentially, earn at the mortgage interest rate which is certain to be more than you’re earning in the bank.

Making additional principal contributions on your mortgage will save interest, retire debt and build equity. An extra $100 a month in the example shown will save thousands in interest and short the term of the mortgage as well.

Reducing your cost of housing is another way to improve the investment in your home. Becoming debt-free is a worthy goal that is achieved with discipline and good decisions. Suggestions like this are part of my commitment to help people be better homeowners when they buy, sell and all the years in between.

Please feel free to contact me if I can be of any help to you regarding real estate issues.  Marilyn Van Steenberg, buyersbestchoice@comcast.net

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The Mortgage Forgiveness Relief Act of 2007 was passed by Congress to avoid additional financial hardship that some homeowners might experience due to a foreclosure or short sale. The law affects mortgage relief that occurs from January 1, 2007 to December 31, 2012.

Normally, IRS considers partial or total debt forgiven by a lender to be treated as ordinary income. This not only affects foreclosures but even short sales where only part of the debt is forgiven would trigger additional taxes for the homeowner. There are exceptions that apply such as bankruptcy and insolvency.

The forgiveness is only applicable to taxpayers’ principal residence and only acquisition debt used to buy, build or improve the home. The additional cash taken out when refinancing a home will not be eligible for the relief unless it is used for capital improvements.

The lender is required to submit a 1099 form to IRS and provide the homeowner a copy who will file the forgiven amount on Form 982 as part of their 1040 tax return. How this affects your individual situation may differ due to other circumstances and advice from a tax professional is recommended.

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The Housing Affordability Index was developed over thirty years ago to help consumers determine when it is a good time to buy a home. It’s considered advantageous to the buyer when the index is over 100 because a median income family can qualify for a median price home.

Recent figures released by the National Association of REALTORS’ economic department show that the 2011 index of 184.5 is the highest annual average since it has been calculated. The most recent month released, December 2011, was 194.9. The index is also broken down into four regions of the country.

The two major components that contribute to the index are home prices and mortgage interest rates which are lower than they’ve been in the last five years which account for the dramatic rise in the index since 2006.

The Housing Affordability Index is another indication that this is a good time to buy a home for people who have good credit, a down payment and want a home. It may be the best time we’ll see in our lifetimes.

To see Denver area real estate for sale, contact Marilyn Van Steenberg, Owner/Broker, Buyer’s Best Choice Real Estate, email buyersbestchoice@comcast.net

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Rental homes can be the IDEAL investment in today’s market because they offer a much higher rate of return than alternatives without the volatility of ups and downs in the stock market.

IDEAL serves as an acronym to identify the advantages of rental properties:

• Income from the monthly rent contributes to paying the expenses and a return on the investment
• Depreciation is a non-cash deduction that contributes a tax shelter
• Equity grows monthly as the mortgage amortizes due to some of each payment being applied to the principal
• Appreciation is achieved as the value of the property goes up
• Leverage can increase the return on investment by using borrowed funds to control a larger asset

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Have you ever had a service company to your home to repair something and find out that it really wasn’t “broken”? It probably conjured up ambivalent feelings of joy that it wasn’t something serious and frustration that you had to pay a service call for something so simple.

Before you call the repairman next time, keep these things in mind to see if it is something simple:

• Disposer not working – check to see if the reset button has been thrown. It is usually on the bottom of the disposer. If the disposer is making a humming sound, the blades may be stuck. While the disposer is turned off, use a wooden broom handle as a lever to gently rotate the blades. Remove the broom handle and turn on the disposer to see if it works properly.
• Air conditioner not working – check to see if a breaker has thrown on your electric panel. You might need to flip the breaker completely off and flip it back on.
• Electrical outlets not working – Electrical plugs in bathrooms or outside, especially on a porch or patio, are many times connected to a ground fault interrupter. The GFI will be a wall outlet and it may be located in the garage. Locate the outlet and reset the button that may have tripped.
• Clogged drain – a simple way to correct a slow or clogged drain is to use the water pressure from a garden hose. You’ll need a helper to turn on the water full-blast once you have safely placed the hose in the drain and are holding a hand-towel around the hose to direct the water to the drain. Be prepared to tell your helper to turn off the water when needed.

Whether it’s preparing a home to market or arranging repairs required by the sale, I know reputable, reasonable and reliable service contractors. I’m here to share my contacts with you to help make home ownership better.

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Green Homes and the Way of the Future

By Andrew Hill with Huntsville New Homes www.NewHomeSource.com – Guest Contributor

 
Going green. It’s a phrase that many people recognize and most have an opinion on, but its scope and application is often limited. It’s a phrase applied to hybrid cars, using reusable grocery bags, and recycling plastic bottles, but the truth is, going green is so much more. It is a necessity due to our energy dependency and an important part of sustaining our world. What’s more, going green can also help you save money. And what better place to start going green than in your home?
The best thing about going green in your home is there is no limit to how much or little green you can incorporate. Although I would suggest retrofitting everything you can afford, sometimes that just isn’t feasible and in those cases making even the most minor of adjustments will still aid in preserving the planet and padding your wallet. The following are a few examples of how you can go green.
 

Big picture ideas: These are the highly visible options such as photovoltaic cells on your roof and wind turbines in the yard. These come in a variety of shapes, sizes and styles and have the potential to produce a vast amount of energy, depending upon the region in which you live. You can also incorporate “green” building and insulation materials. These will often be longer lasting or better made for recycling. In many cases green materials are built to better withstand weathering and general usage, in order to reduce the amount of new materials required for repairs.

 
Middle of the way: These ideas include replacing certain fixtures in your home. For example, switching from incandescent lighting to CFLs is a great way to reduce your energy consumption. Not only are these bulbs made to have a longer lifetime but their reduced energy output helps to reduce your energy bill. Another great middle of the road option is to replace your faucet and shower heads with low-flow alternatives. This too will help conserve our natural resources and help lower utility bills!

 
Small ideas (that add up over time): These include setting your thermostat at an appropriate level when you’re out of the home or simply adjusting your wardrobe before touching the thermostat. Set the temperature to less strict settings if you will be gone for a little while and opt to put on a sweater before turning on the heater. Opening the blinds to let the sun in on cold days is another idea. These may seem like no-brainers, but they are great ways to use natural energy to our advantage!
These ideas are only the tip of the iceberg. For more information on how to go green in your home, be sure to contact Marilyn Van Steenberg!

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Emphasis today is on efficient, economical and sustainable products.  Many products on the market in Denver, Colorado today boast the ENERGY STAR label.  We all know it’s the right thing to buy, but why?  What does it actually mean?

The Environmental Protection Agency (EPA) and the U. S. Department of Energy created this program to educate and help consumers identify energy-efficient products and understand what a “green” home is. The Energy Star label is used to help consumers easily identify those products that help conserve energy and therefore, money.

Products with this label mean they meet or exceed the energy-efficiency standards set forth by the EPA and DOE.

 In order for an appliance, lighting, home or office building to be awarded this label, the product must: 1) have minimal greenhouse gas emissions and other pollutants, 2) offer significant world-wide energy savings, 3) have features that consumers want, 4) offer a reasonable return on investment  5) have a measurable energy usage and 6) be regularly available to consumers.

Some Energy Star products can be, and usually are somewhat more expensive; however, the energy savings can be realized in a relatively short period of time.

You can start with small investments in items such a light bulbs or cordless phones.  You may also be eligible for a tax credit or other incentive when purchasing larger items such as hot water heaters, furnaces, washers and dryers.  Check with the State of Colorado, the City of Denver (and surrounding cities) and the Federal Energy Star program to see which items may qualify. 

These programs tend to come and go depending on funding, so make sure to check the pertinent websites before making a purchase. Below are links you can use to search for rebates.

http://www.energystar.gov/index.cfm?fuseaction=rebate.rebate_locator

http://www.xcelenergy.com/Save_Money_&_Energy/Find_a_Rebate

http://www.denverenergy.gov

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Regardless of what a lender quotes on mortgage rates, the actual rate paid by a borrower is based on a number of variables. Lenders determine whether to loan money and at what rate based on the risk involved with the transaction.

Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved.

• Loan amounts – conventional loans for more than the conforming limits set by Fannie Mae are considered jumbo loans and generally have a higher interest rate.
• FICO score – the lowest interest rate is reserved for the highest credit scores; the lower the score, the higher the rate borrower will pay.
• Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
• Loan purpose – purchase transactions generally have the lowest interest rate while refinancing a home is generally higher.
• Debt-to-Income ratio – a borrower’s monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower’s ability to repay the mortgage.
• Loan-to-Value ratio – the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.

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The Denver Energy Challenge, unfortunately,  is not for everyone. Only residents of Denver can participate, but if you are in Denver, and doing some remodeling or updating in your home, it’s worth checking out.

This is a program sponsored by the city and county of Denver encouraging residents to converse energy but making changes from old appliances to new energy efficient ones, insulating attics, adding new windows, etc.  Projects designed to save you money and energy.  This is part of the Denver Climate Action Plan.

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