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Joanne Foxxe

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Is a home equity loan an option for a project?

by Joanne Foxxe

Here's the scenario: you have a project and need to borrow some money, but you want to do it in the most economic manner.  You've got a low rate on your existing first mortgage and don't want to do a cash-out refinance and pay a higher rate.  Is a home equity loan an option?

Prior to 2018, homeowners could have up to $100,000 of home equity debt and deduct the interest on their personal tax return.  The Tax Cuts and Jobs Act of 2017 eliminated the home equity deduction unless the money is used for capital improvements.

Regardless of the deductibility, lenders will still loan money to owners who have equity in their home and good credit.  The most common reasons people borrow against their home equity are:

  • Consolidate debt with higher interest rates
  • Make improvements on their home
  • Refinance an existing home equity line of credit
  • Down payment for another home or rental investment
  • Creating reserves or available access for potential needs

One available loan is a fixed-rate home equity loan, commonly referred to as a second mortgage.  It is usually funded at one time, with amortized payments for terms that could range from five to fifteen years.

Another option is a home equity line of credit or HELOC, where a homeowner is approved for up to a certain amount at a floating-rate over a ten-year period.  The borrower can draw against the amount as needed and would pay interest every month and eventually, pay down the principal.

The amount of money that can be borrowed is determined by the equity.  Lenders generally will not exceed 80% of the value of the home.  If a home was worth $400,000, the 80% ceiling would be $320,000.  If the homeowner had an unpaid balance on their first loan of $240,000, an amount up to $80,000 would be possible.

The next variable is the borrowers' credit score which will determine the rate of interest that will be charged.  The higher the score, the lower the rate the borrower will pay.  And the converse is true, the lower the score, the higher the rate.

Another common variable considered is the borrowers' total debt to income ratio.  Ideally, the combination of regular monthly debt payments should not exceed 43% of their monthly gross income.

If you have good credit and an adequate amount of equity, your home could be the source of the funds you need.  There is a lot of competition among lenders and shopping around can make a difference.

Call us at (808) 385-2918 for a recommendation of a trusted mortgage professional.  If you have questions about whether the interest on the loan will be deductible, talk to your tax professional.

 

 

 

 

The Benefits of Keeping a Home Inventory

by Joanne Foxxe

Generally speaking, when you need an inventory of your personal belongings, it is too late to make one.  Sure, you can reconstruct it but undoubtedly, you'll forget things and that can cost you money when filing your insurance claim.

Most homeowner's policies have a certain amount of coverage for personal items that can be 40-60% of the value of the home.

Homeowners who have a loss are usually asked by the insurance company for proof of purchase which can come in the form of a receipt or current inventory of their personal belongings.

The most organized people might find it difficult, if not impossible, to find receipts for the valuable things in their home.  Think about when you're rummaging around a drawer or closet looking for something else and you discover something that you had totally forgotten that you had.

An inventory is like insurance for your insurance policy to be certain that you list everything possible if you need to make a claim.  Systematically, make a list of the items by going through the rooms, along with the drawers and closets.  In a clothes closet, you can list the number of shirts, pants, dresses and pairs of shoes but higher cost items should be listed separately.

Photographs and videos can be adequate proof that the items belonged to the insured.  A series of pictures of the different rooms, closets, cabinets and drawers can be very helpful.  When video is used, consider narrating as it is shot and be sure to go slow enough and close enough to see the things clearly.

For more suggestions and an easy to use, interactive form, download a Home Inventory, complete it, and save a copy off premise, either in a safety deposit box or digitally in the cloud if you have server-based storage available like Dropbox.

 

 

The Tax Cuts and Jobs Act of 2017

by Joanne Foxxe

The Tax Cuts and Jobs Act of 2017 increased the standard deduction to $24,000 for married couples.  There will be some instances that homeowners may be better off taking the standard deduction than itemizing their deductions.  In the past, homeowners would most likely be better off itemizing but the $10,000 limit of state and local taxes (SALT) adds one more issue to consider.

Let's look at a hypothetical homeowner to see how a strategy that has been around for years could benefit them now even though they haven't used it in the past.  The strategy is called bunching; by timing the payments in a tax year so that they can be combined to make a larger deduction.

Let's say that the married couple filing jointly has a $285,000 mortgage at 5% for 30 years that has about $14,000 in interest being paid.  The property taxes are $6,000 and they have $4,000 a year in charitable contributions for a total of $24,000 of allowable itemized deductions on Schedule A.


Since that deduction amount is the same as the Standard Deduction, there is no monetary advantage one way or the other.  However, if the taxpayers were to pay their interest because they must make timely house payments but only pay $2,000 of the 2018 property taxes in December of 2018 and the balance of the $4,000 in January, they transfer part of the deduction into 2019.

Additionally, if they make their intended charitable contribution for 2018 in January of 2019, it makes that deductible on the 2019 return.

Since the total deductible amounts paid out in 2018 was $16,000, the taxpayers would have an $8,000 benefit that year from taking the Standard Deduction. 

Assuming they made the same $4,000 charitable contribution in 2019 during the year and paid the house payment and property taxes on time, their total deductions for 2019 would be $32,000 which is $8,000 more than the Standard Deduction.

In this example, the taxpayers in 2018 and 2019, would benefit a total of $16,000 in tax deductions by bunching and electing to take the standard deduction one year and itemizing the next. 

This is only an example but if your situation is similar, it might benefit you to consider an alternative when to take the standard deduction and when to itemize.  This is a conversation you need to have with your tax professional to see if it would work for you.

 

 

 

Realtor® takes steps to help find Alzheimer’s cure

by Joanne Foxxe

In 1901, Dr. Alois Alzheimer, a German psychiatrist and neurologist, examined a patient with a mystifying case of progressive memory loss. He determined that she had a pathological form of dementia—what we now know to be Alzheimer’s disease.
Today, Alzheimer’s is classified as a degenerative disease of the brain and the most common form of dementia (according to the Alzheimer’s Association, it accounts for 60 to 80 percent of all dementia cases). Symptoms develop gradually and worsen over time, eventually becoming so severe that they interfere with daily life. And while the majority of sufferers are 65 and older, it is not a disease reserved solely for the elderly. There are less common forms that appear earlier in adulthood; in fact, the Alzheimer’s Association says up to 5 percent of people with the disease have early onset Alzheimer’s, with many diagnosed in their 40s and 50s. An estimated 5.7 million Americans of all ages have Alzheimer’s, and tragically, the outlook is grim: The Centers for Disease Control and Prevention lists the disease as the nation’s sixth leading cause of death for adults (and the fifth leading cause of death for adults ages 65 years and older). While there are treatments that can temporarily delay the symptoms, there is currently no cure. That may change soon, though, as there is a vigorous effort underway to change the trajectory of the disease.

Joanne Foxxe of Kapalua Realty knows firsthand the destructive nature of Alzheimer’s: two people close to her are grappling with the disease. “If there was a cure now…it surely would give me peace of mind,” she said.
That’s why she took part in this year’s Walk to End Alzheimer’s, the world’s largest event to elevate awareness and raise funds for the Alzheimer’s Association and its mission-related initiatives of care, support and research. The Alzheimer’s Association has chapters nationwide (including the Alzheimer’s Association Aloha Chapter in Hawaii) and actively works to eliminate the disease through advancements in research. The nonprofit organization also aims to reduce the risk of dementia through the promotion of brain-healthy lifestyles, and facilitates workshops, support groups and one-on-one consultations for those diagnosed with Alzheimer’s and their caregivers.
As one of more than 600 events taking place across the country this fall, the Maui Walk to End Alzheimer’s was held on Saturday, Oct. 20. The two-mile walk started at the Boys & Girls Clubs Central Clubhouse in Wailuku and meandered through nearby Keopuolani Park. “It wasn’t a long walk—it was easy, with water and cheering along the way,” Foxxe said. “There was great participation by the schools, which was wonderful to see.” There was also live music and entertainment, an awards ceremony, and a “promise garden” filled with personalized forget-me-not flowers. Most importantly, all of the money raised at this year’s Walk to End Alzheimer’s will further the Alzheimer’s Association’s care, support and research efforts.
Foxxe encourages everyone to consider lacing up their sneakers next year. She’s already gearing up for the 2019 event. “Next year, I am committed to making the event even bigger,” she said. “I want to put my own team together and raise more money than I did this year.” (Foxxe was one of the top individual fundraisers for 2018 and was inducted into the Alzheimer Association’s exclusive Grand Champions Club.)
And if you do take part in next year’s event, every step you take will bring researchers closer to wiping out this terrible disease. “There are 28,000 Hawaii residents affected by this disease and 66,000 caregivers,” Foxxe said. “That’s why I’m motivated to find a cure.”
For more information about the Alzheimer’s Association Aloha Chapter, visit www.alz.org/hawaii or call 591-2771. There’s also a 24/7 helpline that gives callers immediate guidance, emotional support and crisis intervention: 1-800-272-3900. The 2018 walk may be over, but Foxxe is still collecting donations; you can send a check payable to the Alzheimer’s Association to: Joanne Foxxe, c/o Kapalua Realty, 700 Office Rd., Lahaina, HI 96761.


By Sarah Ruppenthal
The Maui News – November 3, 2018

Joanne Featured in the Maui News Regarding Alzheimer's Challenges

by Joanne Foxxe

Joanne Foxxe was featured in the Maui News today regarding the challenges and her response to Alzheimer's.

Full article coming soon...

 

 

11/3/18

 

 

 

Third Quarter Sales Data for Maui

by Joanne Foxxe

 


Here is the Third Quarter Sales Data for Maui in graphical format.

Data Courtesy of Realtors Association of Maui – RAM

 


 

 

Sales Data Infographics courtesy of Fidelity Title of Maui.

Sales Data Infographics courtesy of Fidelity Title of Maui.

 

Retirement Options - Rental Property

by Joanne Foxxe

 

Don't Pat Yourself on the Back Just Yet

 

   


You’ve got $500,000 in liquid assets for your retirement and you’re still 15 years away. All your bills are paid; you have a small mortgage on your home; cars are paid for and great credit. Don’t break your arm patting yourself on the back yet.

People think more about what they’re going to do when they retire than whether they’ll have the funds to do them. Ask anyone who has retired, it takes more money than you thought it did. Let’s look at a hypothetical situation.

To retire with $125,000 income in today’s dollars with a life expectancy of 25 years after retirement, you’ll need to have a net worth of $1.5 million at retirement including what Social Security may provide. Your $500,000 will grow to $1,045,420 in 15 years which will leave you about a half million short. You’ll need to save $24,149 each year for the next 15 years to reach your goal.

Is this surprising? Did you imagine that this example would be that far from its goal? It might seem staggering to save $24,000 each year but there is another way…investing in rentals.

Real estate over the long term has proven to be a solid, predictable investment.  Cash flows, appreciation, equity buildup and tax advantages are the components that contribute to the rate of return. Increasing rents, available financing and solid appreciation make rentals particularly attractive in today’s environment.

Call me at (808) 385-2918 to find out more about how rental homes can help you reach your retirement goals.

 

Weather and condos for sale

by Joanne Foxxe

It is a beautiful day on Maui. The sun is shining. The temperature is in the 70's , just beautiful. 

The island views today are amazing. You can view all of Molokai and all of Lanai. We have had a rainy weekend, so today is a crystal clear treat.  Our weather doesn't vary more than 10 degrees in either direction, which is predictable and lovely.

I drove up to the Ridge villas, of which I have 2 for sale right now. One is 2622, overlooking this fabulous view. It is a one bedroom, 2 bath town home style condo, with 2 lanai areas perfect for watching our gorgeous MAUI sunsets. This unit has never been rented and is easy to show on short notice. It is immaculate with Miele and Sub Zero applicances. $1.285. This can be rented short term upon purchase.

Right next door is Ridge villa 2614. This is a one level 2 bedroom, 3 full bath condo with the same amazing views. It was remodeled one year ago,and is a profitable vacation rental. $1.749.

I also have a selection of golf villas and bay villas for sale.

 

The condos range from $600,000 and up. We have golf course and ocean views available.

All of the condos are close to the Montage Kapalua Bay, and world famous Kapalua Beach.

 

Contact me for more detailed information.

 

 

 

joanne foxxe, kapalua realty co ltd, maui, hawaii, top 100 realtor 2016, 2017

Joanne is honored and humbled to receive this highest accomplishment. She moved to Maui in 2005 and started at Kapalua Realty in 2006. She moved from Santa Cruz County where she has been a Realtor since 1986 and CRS since 1989. She was the President of the Northern Ca CRS Chapter in 2005, then the Maui director since 2006.
Her focus is the Westside of Maui and more specifically the Kapalua Resort; however she does work all over the island by referral. Joanne is blessed to have a wonderful support team and clients.



 

JOANNE FOXXE
CRS, GRI,RSPS, #RS63115
Kapalua Realty
700 Office Road
Lahaina, Hi 96761
808-385-2918
www.joannefoxxe.com

 

Another great reason to own real estate

by Joanne Foxxe

Lower the Rate - Deduct the Interest

Credit card debt in America is back to levels prior to the recession. The average credit card APR is just under 16% according to CreditCards.com Weekly Credit Card Report.  

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Homeowners have an advantage over renters when it comes to getting their arms around debt issues.

 

Basic money management suggests that higher rate debt be replaced with lower rate debt. Credit cards, personal cars, boats, motor vehicles and other personal property, typically have interest rates higher than that of real estate loans.

Borrowing against a person’s home usually provides the lowest rate of financing. Refinancing a home mortgage to take cash out to retire personal debt is one option. Another would be to secure a home equity or HELOC, home equity line of credit.

An alternative advantage of borrowing against one’s home is that the interest may be tax deductible unlike the interest on most personal debt. Qualified mortgage interest includes acquisition debt which can only be used to buy, build or improve a principal residence and up to $100,000 of home equity debt which can be used for any purpose.

Managing money is a critical life skill that people need to master. While the goal may be to become debt-free, paying the least amount of interest possible can be a good first step. Owning a home provides an asset that allows for options not available to tenants. Seek professional advice to determine your best course of action.

 

Displaying blog entries 1-10 of 17

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Joanne Foxxe
Kapalua Realty
700 Office Road
Lahaina HI 96761
(808)665-3761