Love your home or Love paying taxes?

28 02 2011

Love paying taxes?  Sure you do, doesn’t everyone?  Most people know that homeownership offers significant tax deductions, but may overlook a few of them as they are preparing their taxes this year.  Here are a few of the most-overlooked home tax deductions.  As always, please consult your qualified tax advisor.

How much of my mortgage interest payment is deductible?

  1. Interest on debt used to buy, build, or improve your home (with some exceptions)
  2. Mortgage Insurance and funding fees for government loans (with some exceptions based on income level)
  3. Property taxes on first and second homes

 I sold my house this year.  Will I owe capital gains tax?

  1. If it was their primary residence for at least 2 of the last 5 years, a married/joint filer could exclude the first $500,000 of profit from paying taxes.
  2. If you made less than the $500,000 profit from the sale, no tax forms are required and no tax is due.
  3. If you sold a vacation home, you may be able to exclude all or some of your gain.

Do I get to deduct money I lost on the sale of my home?

  1. No, but losses on the sale of investment property are deductible.

I bought or refinanced a home this year—which of the closing costs are deductible?

  1. The real estate taxes that you may have paid at closing are deductible.
  2. Prepaid interest is deductible.  You should receive a 1098 from your lender.

Aren’t points deductible?

  1. Yes, based on the following IRS worksheet HERE.
  2. On a purchase, points are deductible on that year’s taxes.
  3. On a refinance, points are prorated over the duration of the loan.  For instance, if you paid $1500 in points on a 15 year refi, you would get to claim  $100 per year.  But if you refi again 2 years later, you could claim the remainder of the original unclaimed points ($1200) plus any applicable prorated points for the new mortgage.

Please consult your tax advisor to see how this information may apply to you.   

Did I forget any other home-related tax deductions?  If so, please share your wisdom with the world below.

Please reach out to me with your questions and concerns about finance and homeownership.  As always, I am here to serve.  Thanks!

Thoughts after Dave Ramsey OKC

21 02 2011

This past Saturday, 10K+ people filled the Cox center for a Total Money Makeover event hosted by Dave Ramsey.  Whether you like or hate his views on debt and credit, it’s hard to ignore them.  Just like it’s hard to argue with simple common sense.

I am a professional debt salesperson.  I sell mortgages, you know, debts designed to last your entire working career.  You’d think that I’d like debts, mortgages, and “creative” financing.  The truth is, I love homes, family, and the financial future that a home can help provide.  But I don’t like debt any more than you do.  In fact, I get happy when I can help my clients kill their mortgage.  There are things way more important than a mortgaged “lifestyle.”

A home really is the biggest step most people will ever take to turbo-charge their financial future, short of starting their own business.  The average homeowner has a net worth of $170,000 compared to the average renter’s net worth of $5,000.

But a home means something different to me now that I am debt-free.  And for many Oklahomans, their concept of a home and debt has changed over the past 2 years, too.  Cash became the #1 financing choice earlier this year.  Credit card debt in the US has decreased every month since late 2008.  The average new home is smaller than the “McMansions” built through most of the 2000s.  And these changes have happened during a time where the costs for owning a home have been at their lowest in history.  The numbers haven’t changed.  Our views on what are acceptable numbers have changed, partly due to Dave Ramsey and his ideas on debt.

This is why I see it as my mission to help as many Oklahomans save as much as possible on their homes—so they can use that money for life.  For their dreams.  For their families.  For their futures.

If you’d like to be a part of the family of clients who saved over $10 million dollars on their homes for the past two years, please reach out to me.  Because your food will taste better and your grass will feel better once you are debt-free.

Thank you,

Wilhelm Koenig



HUD’s Valentine’s Day Present: Another MI premium increase

15 02 2011

HUD’s Mortgagee Letter, released on Valentine’s Day, outlines the new changes that will be affecting all FHA borrowers starting April 18th, 2011.  The MIP annual premium, commonly called “monthly mortgage insurance”, will be increasing from 85 and 90 bps respectively to 110 and 115 bps.  This means that for a couple buying a $175K home with a 30 year FHA mortgage, their monthly payment will go up $33 per month. 

Click on the link HERE for a report showing how much this change will cost you monthly and over time. 

The monthly MI for 15 year FHA loans will also double on April 18th. 

The only way to avoid the MI increase on an FHA loan is to go under contract and have the FHA case number reserved before April 18th, 2011.  This is one instance where your time does equal your money. 

If you need financing designed to save you money or you need a solid realtor who understands the importance of this new FHA change, please reach out to me. 

And I hope that you received a better present yesterday than HUD’s Valentine’s Day “present.”

OK report card: Renting vs. Buying

3 02 2011


Trulia compiled mountains of data comparing the major cities in the US and their jobs, foreclosures, rent and home prices, and put together the following visual report.  It shows how we in Oklahoma stack up against other cities.  And we are doing great when it comes to jobs and a stable housing market.  Click on the link below for our Renting vs. Buying report card.