Real Estate Information Archive

What is the Homeowners' Property Tax Credit Program? The State of Maryland has developed a program which allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income.

How Is "Income" Defined? For purposes of the tax credit program, it is emphasized that applicants must report total income, which means the combined gross income before any deductions are taken. Income information must be reported for the homeowner and spouse and all other occupants of the household unless they are dependents or they are paying rent or room and board. Income from all sources must be reported whether or not the monies received are included as income for Federal and State income tax purposes. Nontaxable retirement benefits such as Social Security and Railroad Retirement must be reported as income for the tax credit program. Generally, eligibility for the tax credit will be based upon all monies received in the applicant's household in a given year.

What Are The Other Requirements? Before your eligibility according to income can be considered, you must meet four basic requirements

• You must own or have a legal interest in the property.

• The dwelling on which you are seeking the tax credit must be your principal residence where you live at least six months of the year, including July 1, unless you are a recent home purchaser or unless you are unable to do so because of your health or need of special care.

• Your net worth, not including the value of the property on which you are seeking the credit or any qualified retirement savings or Individual Retirement Accounts, must be less than $200,000.

• Your combined gross household income cannot exceed $60,000.

How Is The Credit Figured? The tax credit is based upon the amount by which the property taxes exceed a percentage of your income according to the following formula: 0% of the first $8,000 of the combined household income; 4% of the next $4,000 of income; 6.5% of the next $4,000 of income; and 9% of all income above $16,000.

* For each additional $1,000 of income above $30,000, you add $90 to $1,680 to find the tax limit. Your combined gross household income cannot exceed $60,000. Example:If your combined household income is $16,000, you see from the chart that your tax limit is $420. You would be entitled to receive a credit for any taxes above the $420. If your actual property tax bill was $990, you would receive a tax credit in the amount of $570 --- this being the difference between the actual tax bill and the tax limit.

What Other Limitations?

• Only the taxes resulting from the first $300,000 of assessed valuation.

• It does not cover any metropolitan or fixed charges for water and sewer services that may appear on the tax bill.

• If an applicant owns a large tract of land, the credit will be limited to the lot or curtilage on which the dwelling stands and will not include the excess acreage.

• If a portion of your dwelling is used for commercial or business purposes, the credit will be based only upon the taxes for that portion of the dwelling occupied by your own household.

How Does One Receive The Credit? Homeowners have to complete an application and file by May 1 and then will receive the credit directly on their tax bill or as a credit certificate issued at the same time the property tax bill is mailed. Persons who file later up until the September 1 deadline will receive any credit due either in the form of a revised tax bill or a tax credit certificate to be used in payment of the bill. Applicants filing after May 1 are advised not to delay payment of the property tax bill until receipt of the credit if they wish to receive the discount for early payment offered in some subdivisions. A refund check will be issued by the local government if the tax bill was paid before the tax credit was granted.

What Happens If One Is Not Eligible? Whenever homeowners are found not qualified to receive a tax credit, they are informed in writing. The letter gives the reason for denial and what steps to take if further questions remain. The letter also explains how homeowners can appeal the determination of ineligibility to the local Property Tax Assessments Appeals Board. So, when you meet a potential buyer this is a great opportunity to share this information with them.

What buyer would not be interested in a way to reduce their annual tax bill? On the flip side, if you are the listing agent on an appointment for the first time, why not mention this to your sellers? If they are buying another home and can qualify for the tax credit, I am sure they would love to hear about a way to reduce their taxes too.

For more information on buying, selling or renting a home, please call DeHanas Real Estate Services at 301-870-1717.

Undertaking a home renovation is stressful, even with the best contractors. Unfortunately, not all are trustworthy and many homeowners are scammed. In 2016, more than 32,000 scams were reported to the Better Business Bureau (BBB). On average, homeowners lost $1,400 from shady contractors, painters and repairmen, according to the BBB.

1. Verify the contractor’s license, insurance and at least three references. Make sure you ask for the contractor’s license number upfront. With this information, you can verify the license with your state. Also, ask for at least three references. Even a scammer may have had a couple projects go well in the past, so getting many references reduces the likelihood you’re dealing with one.

2. Ensure the contractor is an active member of a reputable industry organization. Vendors who are part of the National Association of the Remodeling Industry (NARI) and/or the National Kitchen and Bath Association (NKBA) must undergo a certain level of scrutiny to join, plus they pledge to uphold a code of ethics. This also demonstrates a level of commitment to their business and the industry as a whole.

3. Check the contractor’s reputation online. Even if you check a contractor out online, don’t be satisfied with a quick Google search. Make sure you look for news articles, read reviews and ask neighbors on sites like Nextdoor.com. Also, search the name of the company, the address, the owner and any other employees you meet.

You might not even realize you are damaging your home with these 4 mistakes:

1. Using glass cleaners on mirrors Spraying can lead to “black edge,” when liquid seeps beneath the reflective backing and stains your mirror. Instead, use a lint-free microfiber cloth dampened with warm water.

2. Using the wrong caulk There are as many caulks as there are glues, and you wouldn’t use a glue stick to fix broken pottery, according to HouseLogic. Similarly, you wouldn’t use silicone caulk on bricks because it’s made for non-porous surfaces. Check online or at a home improvement store to ensure you’re using the right caulk.

3. Over-mulching Mulch is great for your home, but don’t pile it on too thick. No more than 3 inches should do the trick. Otherwise, you may prevent water from reaching roots and suffocate plants.

4. Piling firewood against your exterior wall Firewood against the exterior wall of a house is an invitation for termites. Stack your wood at least 20 feet from your home

The last thing you want if you’re traveling these holidays is to worry about someone burglarizing your home. Use this check list to add some peace of mind while you’re out of town.

• Ask a trusted friend - to pick up mail, newspaper and keep yard picked up to avoid an appearance of being empty.

• Consider discontinuing your mail (USPS Hold Mail Service)

• Don’t post about your trip on Facebook and other social media until you return – some burglars actually look for this type of announcement to schedule their activities.

• Do notify police or neighborhood watch – especially if you’re going to be gone for more than just a few days. Let your monitoring service know when you’ll be gone and if someone will be checking on your home for you.

• Light timers make it look like someone is home – use several sets for different times to better simulate someone being at home.

• Do unplug certain appliances – TV, computers, toaster ovens that use electricity even when they’re off and to protect them from power surges.

• Don’t hide a key – burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your trip.

The purpose of insurance is to shift the risk of loss to a company in exchange for a premium. Most policies have a deductible which reduces the amount of the claim that is paid by having the insured share in the first part of the loss. In the process of managing insurance premiums, policy holders often consider higher deductibles to lower the premium. Lower deductibles mean less money out of pocket if a loss occurs but also results in higher premiums. Higher deductibles result in lower premiums but require that the insured bear a larger part of the loss.

A small fire in a $300,000 home that resulted in $2,500 of damage might not be covered if the policy holder has a 1% deductible. If the homeowner can afford to handle the cost of repairs in exchange for cheaper premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible could be considered. Homes in high-risk flood areas with mortgages from federally regulated or insured lenders require additional flood insurance. However, each homeowner needs to assess the risk of being able to financially sustain a flood loss on their home when flood insurance is not required.

The recent events in south Texas and Louisiana are evidence that the unexpected can happen. It is important to review your deductible and discuss risks with your property insurance agent so that you’re familiar with the amount and make any changes that would be appropriate before a claim is made.  The FEMA website has information and frequently asked questions about flood insurance.

A home equity line of credit, HELOC, is a mortgage loan made to homeowners to be used on an as-needed basis. A lender, such as a bank, will approve a borrower for a specified amount based on the equity in their home and all the necessary paperwork is signed to authorize the loan.

The line of credit amount is available to the borrower and no interest is due until some or all the money is used. When the money is paid back, the line of credit is again available in full to the borrower.

The specifics of the repayment will depend on the HELOC lender. It may require interest only or it may require amortized payments of principal and interest.

The proceeds from a HELOC can be used to make improvements on the home or anything else such as medical expenses, college tuition or unexpected expenses or other liquidity issues. Unlike personal credit card interest, the interest on a HELOC may be tax deductible. Your tax advisor will be able to let you know about your situation.

Rates and fees can vary widely on HELOC loans. Borrowers should shop around, compare and get recommendations before deciding on a lender.

Home is a place you should feel safe and secure. Sometimes, we take it for granted and unfortunately, we do need to remain vigilant about things we do that could compromise our safety. Here are a few tips to consider:

*Everyone loves an inviting home including burglars.

*Make sure it looks occupied and is difficult to break in.

*Always lock outside doors and windows even if you’re only gone for a brief time.

*Lock gates and fences.

*Leave lights on when you leave; consider timers to automatically control the lights.

*Keep your garage door closed even when you’re home; don’t tempt thieves with what you have in your garage.

*Suspend your mail and newspaper delivery when you’re out of town or get a neighbor to pick it up for you.

Posting that you’re out of town or away from home on social networks is like advertising your home is unprotected. Equally dangerous could be allowing certain social network sites to track your location. Don’t leave keys under doormats, in flowerpots or the plastic rocks; thieves know about those hiding places and even more than you can think. Trim the shrubs from around your home; don’t give criminals a place to hide. Use exterior motion detectors and yard lighting. Have an alarm system and use it when you leave home and go to bed. Put 3 ½” deck screws in door plates and door hinges. Have good deadbolts on all exterior doors. Exterior doors should be solid core.

If you or someone you know is looking to buy, sell or rent a home, please call The DeHanas Team at 301-870-1717.

After the mortgage payment, the largest homeowner expense is for utilities and the major component is energy.  Contributing factors include air leaks, insulation, heating and cooling equipment, water heaters and lighting.

Computers, monitors, TVs, cable and satellite boxes, DVRs and power adapters are spinning your electric meter even when they’re not being used. Even though they only represent a small percentage of a home’s total energy consumption, about 3/4 of the electricity is used when the products are turned off.

Unplugging devices can actually make a difference in the size of your electric bill. Plugging several of these offenders into a power strip with a single on/off switch may make the task easier. Most computers have options to put them into sleep mode or even turn when not in use.

The Department of Energy has an Energy Saver Guide and do-it-yourself suggestions.   If you know anyone looking to buy, sell or rent a home call the DeHanas Team at 301-870-1717.

Regardless of the reason to refinance a home, the basic question to ask is: “Do you plan to live in the home long enough to recapture the cost of refinancing?” There are always expenses involved in refinancing which can be paid in cash or rolled into the new mortgage.

From a strictly financial standpoint, the break-even point is achieved when the cost of refinancing has been recaptured by the monthly savings. It would take approximately 23 months to recapture $4,000 of refinance costs with a lower payment of $175 a month.

1. Lower the rate

2. Shorten the term so that the loan will build equity faster and be paid off sooner.

3. Lower your payment to reduce your monthly cost of housing.

4. Convert an ARM to a FRM to stabilize your payment due to concern of rising interest rates.

5. Cash out equity to be able to use the money for another purpose.

6. Combine a first and second mortgage.

7. Consolidate personal debt so the interest is tax deductible.

8. Payoff higher cost debt such as credit cards, student debt, etc.

9. Remove a person from a loan as in the case of a divorce.

Points paid to purchase a principal residence are tax deductible completely in the year paid. However, the points must be spread over the life of the mortgage on a refinance. For that reason, consider getting a “par” value loan with no points. It may have a slightly higher rate but the interest will be fully deductible and it will lower the cost of refinancing.

Determine the break-even point on your situation by using the Refinance Analysis . Call us at 301-870-1717 for a recommendation of a trusted mortgage professional.

Determining how much home you can afford, or what payment you feel comfortable with, can be a trying process. Calling lenders, looking at mortgage loan programs and interest rates can be confusing, to say the least. There is an easy way to get started, and give yourself an idea of where you stand. Image: What Ever Home Buyer Should Know The first step is to find out what mortgage interest rates are at the current time.

You can typically do this with a couple of phone calls to lenders or some quick looking on the internet. Get your rates on conventional fixed rate loans. Now use this handy table to see what your payment would be at different price ranges and interest rates. Payments might be higher or lower than those shown in the chart depending on current interest rates. To obtain a very clear picture of how much home you can actually qualify for, the best idea is to contact a reputable local lender and let them analyze your entire situation. The lender can calculate your income-to-debt ratio, do a quick credit score and give you the information you need.

Typically, lenders like to see a ratio not exceeding about 28%. This does not take into consideration long term monthly debt. As an example, to qualify for a loan, lenders may require ratios of 28% or 36%. This means you can spend up to 28% of your gross monthly income on a motgage payment, and no more than 36% of your gross monthly income on all forms of debt, mortgage included.

We work with a number of loan officers and would be happy to recommend one right for you. Click here to contact us today. We are happy to help!

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Southern Maryland offers a wide variety of new homes and communities to fit every lifestyle. From swim and tennis neighborhoods to over 55 communities, there is something for everyone. Home builders in the region include local builders and nationally known companies. And new construction varies from pre-designed to completely custom-built. Architectural appeal, interior design and luxury features are unique from builder to builder. Finding a reputable builder can be a challenge.

With many local and regional builders like Wilkerson Builders, Lennar, Ryan Homes, Quality Build Homes, DR Horton, Marrick and more, there are a large variety of builders from which to choose. And the communities are just as diverse as the builders building in them.

Selecting the right home building firm to build your home is one of the most important decisions you will make in the home buying process. Our Free report “Ten Things You Need to Know before Selecting a Home Builder”, will help guide you to make the right decision in choosing the new home builder to build your dream home!

Get builder and community information at : CharlesCountyNewHomeBuilders.com

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