Tax Breaks for Homeowners


Top Four Tax Breaks for Homeowners
As tax time rolls around, it’s good to know that some of your largest home-related expenses are often tax-deductible – which is great news! Here are the tax breaks you may be able to take advantage of as a homeowner.
This is usually the most significant tax break you’ll receive, since a big chunk of your monthly mortgage payment goes towards paying off interest for a while after your purchase. All of the interest you pay during the tax year will be deductible.
Own a second home? Your interest for that mortgage is also deductible. If you rent out your property part of the year and live in it the other part, you may be eligible to deduct that interest. Just beware, if you live or vacation there less than 14 days out of the year or less than 10% of the number of days you rent it out, the IRS may consider it a residential rental property, eliminating your ability to take an interest deduction.
When you buy a home, you have the ability to pay “points” to your mortgage lender in order to lower your interest rate. Typically, a point is 1% of the loan price – so if you bought or built a new home that costs $250,000 and you paid your lender for one origination point, you should be able to deduct the $2,500 in closing costs paid, from your taxes the year of the home purchase. Let’s say your lender asks for 1.5%; this would mean you can deduct $3,750 from your taxes the year of the home purchase. Generally, you can also deduct points on the year’s taxes if you took a home equity line of credit in order to make home improvements.
If you refinanced or took out a home equity loan for something other than home improvements, you might have the ability to deduct points as well. However, it usually must be spread over the life of the loan instead of in a single year’s tax return. While it may not provide as big of a tax break, the savings will still add up over time.
You’ll also have another big deduction to take on your tax return – property taxes. No matter where your home is located, you’ll pay some form of real estate tax. If you have an escrow account(most mortgages do), it means you’ve been paying a portion of your total property tax bill for the year as part of your monthly mortgage payment. But don’t fret, you don’t have to keep up with the dollars and cents in order to take this deduction. Your lender will send you an annual statement, which will break down what you’ve paid in taxes and interest and what portion went to your escrow account to be used towards taxes. You can only deduct the amount your lender paid from your escrow towards taxes.
In addition to saving you money on energy costs, making improvements to the efficiency of your home may qualify you for a tax credit. Tax credits are actually somewhat superior to deductions, since they are dollar-for-dollar savings no matter what tax bracket you fall into.
Upgrading your home’s windows, roofing, appliances and more with energy efficient equipment will generally count toward a tax credit of this nature, but it’s important to check with the IRS to be sure, as things can change from year to year.
You may be wondering if there are any home expenses that are off-limits when it comes to lowering your tax bill – and the answer is yes. Here are just a few things you unfortunately cannot deduct from your tax return:
  • Insurance premiums, such as comprehensive, fire, or title insurance
  • Principal paid on your mortgage
  • Home utilities, such as water, gas, or electricity
  • HOA dues
Even though not every home expense qualifies you for a deduction, taking advantage of the big-ticket items like interest and property tax deductions can help you save a pretty penny come tax time.


For more information about this loan program or to discuss which loan option is best for you, give me a call… Bill Duggan, Atlantic Bay Mortgage Group,  757-615-5172 or

Looking To Renovate?

Atlantic Bay Mortgage group is excited to announce a VA Renovation Loan.  This VA renovation loan may be the right loan option for qualified veterans looking to make home renovations. This loan allows active duty and retired service members to bundle renovation costs into a new or existing VA home loan. With a VA Renovation Loan, borrowers can make the changes they want, with one loan, one rate, and one monthly payment. The VA Renovation Loan allows borrowers to make home renovations, repairs, or improvements totaling up to $35,000. Your loan amount will be based on the appraised value of your home after improvements have been made. Repairs must start within 30 days of closing and take no more than 3 months to complete. The loan product is not applicable for major renovations, but rather intended for upgrades to your new or existing home.

* Minimum credit score: 640 (purchase) 660 (refinance)
* No monthly mortgage insurance needed
* No down payment required
* Renovations up to $35,000 with a $5,000 minimum repair amount
* Must be primary, owner-occupied residence
* For purchase or refinance (no streamline)
* Renovation costs are financed into your VA loan
* Borrower must use a licensed general contractor
For more information about this loan program or to discuss which loan option is best for you, give me a call… Bill Duggan, Atlantic Bay Mortgage Group,  757-615-5172 or







A new year brings new goals!  If home-ownership is one of your aspirations in 2018, below are the top six mistakes you should avoid when getting a mortgage.


There are so many things that that rank high in terms of importance, but realistically, having good credit is a big factor to obtaining a mortgage. Start by first educating carefully reviewing your credit report – you can get one free from each credit reporting agency annually. If your credit needs work, it’s best to take some time to whip it into shape so you’ll qualify for the lowest interest rate – which can save you a lot of dough over the life of your mortgage loan!


When it comes to obtaining a mortgage, not all lenders are created equal. Each lender has different mortgage rates, so shopping around for the best deal can save you a big chunk of change. Also, you’ll have several different loan types to choose from – these vary widely and have a huge impact on the size of your monthly mortgage payment. I’m happy to discuss the various options that will work best for you.


It’s so easy to find yourself casually browsing Zillow and falling in love with the “perfect” home. One of the biggest disservices you can do to yourself is to become attached to a home, only to realize during the mortgage application process that you can’t afford it. One of the smartest things you can do as a new homebuyer is to meet with mortgage lender first to see how much you can afford. Taking this step as a buyer paints a detailed picture of your finances, allowing your lender to tell you the specific amount you’re approved for and giving the seller peace of mind that you’ll be able to move forward with an offer.


Perhaps your lender said you qualify for a $200,000 home, so you begin looking at homes right around that amount – but don’t forget to consider the down payment that you’ll need to have at closing. At a minimum, for a $200,000 FHA loan (with 3.5% down), you would need to bring $7,000 plus additional closing costs and fees in cash to the table in order to close on the home. If you don’t have that amount of money stashed away, take some time to build up your savings before you start your home search.  One way to plan savings for a down payment is to automatically deposit into your savings account- start by putting 20% of your paycheck into savings for a few months.


In addition to the cash you’ll need for a down payment, there are other fees you’ll be responsible for in order to close on your new home. Some of these fees may be negotiable, but many are fixed. Be prepared to shell out cash for the appraisal, title, insurance, up-front real estate taxes, lender fees, and more. Several days before closing, you’ll receive a closing disclosure, which breaks down the terms of your loan, all final costs expected at closing and the details of who pays and who receives money at closing.


You’re probably so excited about moving and planning how you’re going to decorate your new home – but before you go on a spending spree, put that credit card away!  Your finances will be thoroughly analyzed during the underwriting process, and your lender will expect your financial situation to remain largely the same until closing day. As hard as it may be, avoid spending money on things outside of your necessities (groceries, gas, utilities, etc.) until you’ve closed on your new home.

If you can avoid these big mistakes when buying a home, the mortgage process should be smooth sailing! Be sure to contact me to discuss your mortgage options-

Bill Duggan, Sr. Mortgage Banker, Atlantic Bay Mortgage Group  757-615-5172 email:

Benefits and Drawbacks of Homeowners Associations

Talk to 10 different people about homeowners associations (HOAs), and you’ll likely get 10 different opinions. Some people love living in a development with an HOA, while others find it too restrictive. Depending on your lifestyle and needs, it can be a great experience or one that feels too intrusive. Today about one in five Americans live in a house with home-owner or condo fees.

HOAs began in the mid-19th century but didn’t really gain in popularity until the early 1960s, as an outgrowth of the postwar housing boom and the growth of the middle class. Typically, an HOA is incorporated by the developer during the development and sales process, and gradually control and ownership are transferred to the home purchasers upon completion of the project. The original owner/developer quits membership in the association and has nothing more to do with it. Anyone purchasing a home in an existing housing development with an HOA must become a member. There is no other option. The overall purpose of the HOA is to represent the residents. Depending on how active these associations are, they can be quite effective in providing forums for common home-owner representation and needs.

HOAs Are Like Small Towns

A homeowners association governs the development like a small town. The HOA’s powers include imposing fines, organizing activities and providing certain services. It can also levy assessments and force home owners to pay them. Many HOAs have yearly dues, and a homeowners association can legally impose monetary fines to enforce its decisions. The groups usually appoint a board of directors, which may then elect an association president and other officers. Meetings are typically monthly but can be quarterly, depending on the size of the group.

If the HOA is larger, it will likely be broken down into committees. Committees are also appointed for various activities: maintenance, membership dues and neighborhood representation. An accounting committee or, in smaller HOAs, an individual is assigned to present the annual budget and monitor expenses and funds collected. During the foreclosure crisis, some HOA’s began to lose revenue as people living in homes facing foreclosure stopped paying their fees.

HOAs Can Promote Neighborhood Harmony and Uniformity

HOAs offer many benefits to the home owner. According to the bylaws of the association, it can collectively represent the group for whatever purposes assigned. For example, to maintain a certain degree of conformity, the association can stipulate which changes are permitted for the exterior of the buildings. Sometimes the HOA can determine acceptable noise levels. If there are common areas, such as gardens and pools, the members can appoint an internal management committee or elect to bring in an outside maintenance company. On snowy days, a snow-removal company may need to be called in, and this service will be paid for out of the association’s funds. For condos or groups with shared structures or parking lots, fees can go to upkeep.

HOAs Can Be Restrictive and a Financial Drain

If you want to change the color of your house or even add a new tree, you may run afoul of your local organization. Also, if your HOA decides to undertake a major capital improvement project and the governing group approves it, you may be left with no choice but to pay your share. If you fail to pay your dues or you go against the HOA rules, you could be assessed fees and late charges. If you disagree with some of the rules, it can be very hard to get them changed.

Overall, most people see an HOA as a positive. According to the Foundation for Community Association Research (FCAR), 70 percent of residents in common-interest communities say they are satisfied with their community-association experience. The FCAR’s research also found that 76 percent believe their own community-association rules “protect and enhance” property values.

Should You Buy a Home That Has Been a Rental?

Most homes on the market are owner-occupied, but that’s not always the case. In recent years, many home owners ended up renting out their homes when they could not sell but needed to move elsewhere. Now that the market is shifting, many of those accidental landlords are looking to sell. At first glance, buying a home that’s been rented out by the current owner may not appear different from buying any other home, but there are some potential issues to keep in mind.

1) Check the overall condition.
Some rental homes are in terrific shape: The renters have kept up with maintenance and have even made improvements such as fresh paint. In other cases, the rental hasn’t received much love. Because the home isn’t truly their own, some renters can be rough on a rental. Also, renters may not notice or report some of the maintenance issues that an owner would readily pick up on and address. A rented home may have additional wear and tear, especially if it has been used as a rental for many years and through multiple tenancies. Ask your insurance agent to check the history of past insurance claims on the property

2) How’s the neighborhood?
Factor in the neighborhood: Are the surrounding homes mostly rentals? Is the neighborhood mostly single-family homes or a mix of multi-rental units along with other homes? Owner-occupied neighborhoods can be better protected against possible market-value fluctuations. Also look at the appearance of other homes on the street. Do they have well-tended yards? How does the condition of the home you are looking at compare? If the home you are interested in compares poorly with others in the area, that may help you strike a better deal.

3) Is it occupied?
If there are tenants, tour while they aren’t home. While a tenant can be a source of information about a home, they may not want to move and may try to prevent the sale by complaining about the property. Look for signs of obvious damage, holes in the walls, stained or ripped carpeting, damaged flooring, leaky faucets, and mold. Be sure to check  out all rooms and the basement, garage, or attic. You can tell a lot about how the home has been maintained by looking at how the tenants are living in the property

4) Is it unoccupied?
If a home has been unoccupied for a while, find out for how long. Sometimes — although less common lately — these homes are listed at a reduced price. Unoccupied homes may have lacked attention and may need repairs or basic maintenance. If the home was unoccupied and the utilities have been turned off, that may prevent a prospective purchaser from doing a thorough home inspection. Depending on the area, sometimes utilities can be turned on temporarily, but it often requires putting the utilities in the prospective buyer’s name. Vacant homes can also have broken pipes, leaky roofs, mold or damage from pests, so a thorough inspection is vital.

Check the HVAC and get a home warranty. Being a rental sometimes the air conditioning filter was probably not changed, and that is the worst thing for the system. Your home inspection will alert you to any repairs the home may need before you move in, and it can give you bargaining power if there are potential issues.

Top Architecture Trends For 2014

New home construction has seen consistent growth in the last three years and sales of new homes are expected to increase by about 16 percent, or 580,000 homes, in 2014, according to Kiplinger’s Economic Outlooks and as more homes are built, new architecture trends will begin to appear — slowly.

“Building is not an industry where big changes happen really fast,” said Amy Albert, editor of Custom Home Online. ”Things happen over time.”

Still, Albert named five home-design elements she expects to see more often in 2014:

1. Tranquility

More homeowners are seeing their homes as a place to get away from it all and relax, especially in certain rooms — particularly the bathroom. “The spa bathroom is really big as a result of more people traveling to nice hotels,”  Albert said. In 2014, we’re likely to see bathrooms with walk-in showers, roomy bathtubs and tranquil designs become a big trend for homeowners.


2. Mission Control

In the past the kitchen was often built at the back of the house, attached to the garage, and away from high traffic areas, but that tradition is changing. In 2014 we’ll see the kitchen as a focal point of the house, often placed in the center of an open floor plan, especially as more homeowners start to use their kitchen space as a multitasking room, or as Albert calls it, “mission control.” By having the kitchen centered and open, parents can help children with homework, talk or pay bills — all while making meals.

3. Traditional Design

While “midcentury modern design is thriving” and will continue to do so in 2014, more homeowners are looking at traditional home styles, Albert said. For example, Craftsman homes with large porches, front columns and detailed gables will make a comeback in 2014. Queen Anne-style homes with asymmetrical facades and detailed gables may also see a resurgence. However, attention to detail will be important as homeowners look for exact replicas of the original styles.


4. Passive Homes

More U.S.-based architects are expected to include passive-house elements in their 2014 designs. Originally a European design, a passive house is built to work with the climate. For example, its roof may be pitched to make use of wind power, or it could have large windows installed to attract sunlight that heats the home. A passive-house design can slash energy consumption by up to 90 percent, according to Passive House Institute U.S.

5. Flex Rooms

Between the recession and the growing number of senior citizens in the United States, more households are becoming multigenerational. That change is leading to a developing trend in home building – flex rooms. Typically bedrooms, flex rooms are designed to give more privacy to larger families and usually include a separate space such as a reading area or study off the main bedroom area. These rooms may also be built with a change in mind. “Many flex spaces include a private entrance, which could later become a rental unit,” Albert said

Specializing in properties in South Hampton Roads, Virginia.

Font Resize