Home Buying 101 Archive


What is a condominium?

Wednesday, November 28th, 2007
Condominiums are buildings in which individuals separately own the air space inside the interior walls, floors and ceilings of their unit, but they jointly own an interest in the common areas that they share---such as the land, lobby, hallways, swimming pool, and parking lot. ...
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Are property taxes deductible?

Wednesday, November 28th, 2007
Yes. Like the mortgage interest paid on a home loan, property taxes are fully deductible from your income. You may deduct them every year on your primary residence, second home and other investment properties. ...
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Are impound accounts required for all mortgage loans?

Wednesday, November 28th, 2007
They can typically be waived on a conventional loan if the loan amount is 80 percent or less of the purchase price. But the lender might charge you an additional 1/4 point for this option to waive the escrow. ...
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What is an impound account?

Wednesday, November 28th, 2007
It is a special bank account held by the lender to collect monthly payments from the borrower to pay property taxes, mortgage insurance, and hazard insurance. These accounts also are called escrow or reserve accounts. ...
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Can I contest my property taxes?

Wednesday, November 28th, 2007
Many people do, mainly because determining value can often be tricky. This is especially true in a changing market when local prices either take off dramatically or plunge precipitously, like during the Texas oil bust of the 1980s. ...
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How are individual tax bills figured?

Wednesday, November 28th, 2007
Unlike the income tax and the sales tax you pay, the property tax is not based on how much money you earn or how much you spend. It is based solely on how much the property you own is worth. ...
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Why do homeowners have to pay property taxes?

Wednesday, November 28th, 2007
Property taxes are assessed by city and county governments to generate the bulk of their operating revenues. The taxes help pay for such public services as schools, libraries, roads, and police protection. ...
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Are there tax credits for first-time homebuyers?

Wednesday, November 28th, 2007
Yes, thanks to the many city and county governments that offer Mortgage Credit Certificate (MCC) programs, which allow first-time homebuyers to take advantage of a special federal income tax write-off. The credit reduces the amount of federal taxes paid by the buyer each year, if he keeps the same loan ...
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Are fees and assessments owed a homeowner’s association deductible?

Wednesday, November 28th, 2007
Generally not because they are considered personal living expenses. But if an association has a special assessment to make capital improvements, condo owners may be able to add the expense to their cost basis when the property is sold. Another exception may apply if you rent your condo---the monthly condo ...
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Are up-front fees and closing costs deductible?

Wednesday, November 28th, 2007
Many of the costs paid at closing are not immediately deductible. ...
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