According to an article in Housingwire, recent research has shown that many Columbia SC homeowners are failing to take advantage of lending programs that could be hugely beneficial to them. It's estimated that around 20% of households who could benefit from refinancing are potentially missing out on savings of over $10,000 each year, simply by failing to take action.
The study was done by the National Bureau of Economic Research and looked at a random sample of mortgages in December 2010 and found that while people are able to take action to buy and finance a property many Columbia SC homeowners are failing to take the next step which is to refinance the loan. While it might seem puzzling that Columbia SC homeowners are willing to miss out on such substantial savings, the National Bureau of Economic Research has identified three reasons why this occurs.
The first is that it is often difficult for borrowers to calculate the type of benefits available through refinancing. This is often due to the complex transactions required combined with the limited experience most borrowers have with this situation. In addition, sometimes the benefits of refinancing the loan aren't immediately apparent but tend to build up over a longer period of time. Some Columbia SC homeowners may be put off by the amount of upfront costs that must be factored in when refinancing a loan and which may include valuing the property and reevaluating their personal financial situation.
Columbia SC Homeowners Could Save $11,500 By Refinancing
According to the study, average Columbia SC homeowners could save around $160 a month for the remaining period of their loan, and the total savings for around 20% of borrowers were approximately $11,500.
The hope is that providing more targeted information could enable greater numbers of people to take advantage of these savings. Apparently Columbia SC homeowners who work with certified housing counseling agencies are far more likely to be able to make money-saving changes to their mortgage, and are around 60% less likely to default on their loan. When necessary these borrowers can also complete short sales more quickly compared to homeowners who don't work with housing counselors.
Fannie Mae recently announced that it is updating its policy concerning the minimum waiting period following a pre-foreclosure sale which should make it easier for these borrowers to purchase another home more quickly.
In the meantime, find more tips and articles regarding financing and mortgages in the Columbia SC Mortgage Info section to your right under our Columbia SC Real Estate Categories.
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Young Columbia SC homeowners, as well as those "wanting to be homeowners" are struggling in the job market, which points to possible bad news for the housing industry.
According to the Bureau of Labor and Employment Statistics, only 74.8% of young adults are working — the lowest number in 12 months and far below normal levels. During the recession, between 73% and 74% of young adults were employed.
In addition to their struggles to find a job, many young adults are buried in a mountain of student debt. In fact, student loans are now the largest component of non-mortgage and home equity debt at $994 million.
So how are these unemployed and indebted young adults supposed to become Columbia SC homeowners and help the liquidity of the housing industry?
Mark Palim, vice president for applied economics and housing research at Fannie Mae, says that lack of job security is the biggest factor keeping young adults out of a home. "If you don't have income and if you don't think you’re going to be living somewhere for awhile because of a lack of job stability, then it makes perfect sense that you're not going to be buying a house," Palim said.
Student debt is inhibiting the ability to come up with a down payment for many young adults to become Columbia SC homeowners. The main idea is that it stretches out the amount of time it takes to pull together enough money. For those who can manage, they are often forced to handle a smaller mortgage.
Many homeowners who were on the verge of retirement, with funds set aside, were forced to spend that money on other things as money got tight during the recession. This translates into more people in the 55-plus-age group still in the labor force.
"They're not leaving the labor force," said Palim. Because many older adults are sticking around in the job market, there is less availability for young adults.
It may be some time before young adults can become Columbia SC homeowners. In the meantime, many are resorting to renting either single-family homes or within the multifamily sector.
According
to a survey by Bankrate.com, 81% of Columbia SC homeowners know that a standard homeowners insurance policy doesn't cover flood damage, but a separate survey by the Insurance Information Institute found that only 13% of Columbia SC homeowners had a flood insurance policy.
The Federal Emergency Management Agency (FEMA) and its National Flood Insurance Program (NFIP) identify flooding as the United States’ No. 1 natural hazard.
Princeton Survey Research Associates International surveyed 1,003 U.S. adults, on behalf of Bankrate.com. The telephone survey was fielded from April 4 to 7, 2013. The survey responses were weighted by gender, age, education, race, Hispanic origin, region, and telephone status. Interviews were conducted by landline and cell phone.
Based on a Researchscape assessment of the questionnaire and methodology, this survey is moderately likely to be representative of U.S. consumers in general. The awareness question is a leading question that may overstate actual understanding that flood insurance is not included in homeowners insurance.
In a prepared statement, Michael Barry, spokesman for the Insurance Information Institute, an industry trade group, said "I was very happy that 4 out of 5 survey respondents understood that standard homeowners insurance does not cover flood. This number is a much higher awareness level than we've seen in the past."
FEMA usually classifies properties as either high flood risks or low-to-moderate flood risks. Bankrate.com asked Columbia SC homeowners whether or not they know the correct classification for their home and only 51% said they know the correct risk category.
Statistics show that recognizing the need for separate flood insurance does not always lead homeowners to purchase it. An Insurance Information Institute poll last year found that the number of American households with flood insurance actually decreased from 17 percent in 2008 to 13 percent in 2012.
Amy Bach, executive director of United Policyholders, a San Francisco-based non-profit advocacy group for insurance consumers, says some homeowners get lured by history into a false sense of security. "People have this notion that if it hasn't flooded in the past, it's not going to flood," she says. "While I can understand that thinking, I wouldn't trust it anymore because of Sandy and all the talk about climate change. If you live near a body of water, it behooves you not to use the past as your only decision point."
Columbia SC homeowners are urged to study their local flood map carefully to make an informed decision. The best place to start? The NFIP's user-friendly consumer site, FloodSmart.gov.
For more information concerning insurance, check out our other articles about Columbia SC Insurance to your right under the Columbia SC Real Estate Categories.
Columbia SC 
homeowners will soon be turning the calendar and looking squarely at April 15, the day income taxes are due. If you haven’t already done your taxes, you should be gathering up your W2s, 1099s, bank statements and receipts. If you’re missing anything, you don’t want to wait until April 14th to figure that out.
A few Congressional scares slipped by the cutting block again, at least for this year. Congress did not modify or repeal your right to deduct the mortgage interest you pay for being a Columbia SC homeowner. There are, however, some limitations for high-income earners. If you are single and earn more than $400,000 (or more than $450,000 if married), personal exemptions will be phased out and itemized deductions will be limited. If you fall in that category, you should discuss your specific situation with your tax or financial advisers.
Congress did not increase the capital gains tax rate for people who are not high-income earners. If you sold your principal house and lived there for at least two of the five years before it sold, you can exclude up to $250,000 of your gain if you are single (or up to $500,000 if you are married and file a joint tax return).
5 Major Tax Tips For All Columbia SC Homeowners This Year
1 – You have to itemize. If you’re looking to get tax deductions for a home you bought, something you did to your home, or something that happened to your home, you’re going to have to itemize your deductions, rather than taking the standard deduction. Fortunately, if you’re filing through TurboTax or another credible online program, you can itemize everything and then see whether or not you’ve topped the standard deduction, saving you a lot of complicated math.
2 – The Interest Deduction. The interest paid on your mortgage for being a Columbia SC homeowner might be good for a tax break. If you paid interest on your mortgage in 2012, it may be deductible. Basically, if you are itemizing deductions and you are filing a 1040, and your home loan qualifies, you can write off some or all of the interest you paid.
If you became a new Columbia SC homeowner in 2012, on a mortgage of up to $1 million, you can deduct the interest you paid at settlement if you itemize your deductions. This amount should be included in the mortgage interest statement provided by your lender.
If you paid points to obtain your mortgage, these fees are included on the income tax deductions list and can be deducted as long as they are associated with the purchase of the home. If you refinanced your home, these points are still deductible, but it must be done over the life of the mortgage.
3 – Property taxes. Property taxes are sort of all over the map in the U.S., but a lot of areas offer tax breaks on property taxes as incentives for homeowners. Property tax exemptions vary not just by state, but by jurisdictions within each state. Research and paperwork might require some time, but the effort could lower your tax bill noticeably if you’re a Columbia SC homeowner.
4 – Home Office. More and more people are working from home these days (unless you work for Yahoo!). If you use a portion of your home exclusively for the purpose of an office for your small business, you may be able to claim a deduction on your taxes for costs related to insurance, repairs and depreciation. You may only claim this deduction if the space within your home is used exclusively and regularly as either your principal place of business or a place where you meet and deal with customers or patients. You may also be able to take advantage of this deduction if a portion of your home routinely is used for storing items (product samples, inventory, etc.) used in your business.
5 – Home Improvements. As a Columbia SC homeowner, if you installed new, energy-efficient appliances, doors, windows, or other systems in your home and haven’t exceeded the consumer energy efficient credit in previous years, you can save up to $500 (or even more), just for going green!
If you’ve taken out a loan to make improvements on your home, you may be able to deduct the interest on this loan. Qualifying loans are those taken out to add “capital improvements” to your home, meaning the improvement must increase your home’s value, adapt it to new uses or extend its life. New carpeting or painting are not considered capital improvements, while adding a garage, installing a water heater or building a deck are all examples of capital improvements.
Obviously there are many more deductions you may qualify for as a Columbia SC homeowner, but these are 5 of the most common. We strongly suggest you consult with an accountant or tax attorney if you’re not familiar with all the laws and changes that may or may not affect you as a Columbia SC homeowner.
For more tax tips, hop over to our Taxes Category under the Columbia SC Real Estate Categories to your right. We have a lot of additional tax tips for you there.