Spring is a popular time of year for home buying in North Carolina — and beyond. With that popularity comes dozens of questions and concerns that both new and experienced home buyers have. This is in part due to market trends, changing laws, interest rates, terms and general mortgage queries. There are dozens of resources out there, including your friends here at Union Bank, that can be of help. Our hope is that you take away some helpful information. Let’s have a look together at some popular search terms around the topic of mortgages.
Is Mortgage Interest Tax Deductible?
Since we’ve just inched past “tax season,” we thought this might be a good question to approach. Before you know it, 2019 taxes will be due, and it’s always smart to be prepared.
- Taxpayers can deduct the interest paid on first and second mortgages
- The ceiling on the tax deduction is $1M, or $500K if married and filing separately
- Interest paid on first or second mortgages over this amount is not tax deductible
Where Are Mortgage Rates Today?
It’s very wise to know what/where mortgage rates are when you are looking to refinance your mortgage or buy a home. There are many resources that exist that will give you an instant answer; however, many factors go into determining your rate. Call us and speak to a Union Bank mortgage expert to begin your journey into everything mortgage related. Or, click here to fill out an online mortgage application with Union Bank.
What Mortgage Can I Afford on My Salary?
Every single home buyer faces this question, and it is an important one. If you are used to renting, you don’t have to factor in many of the associated costs of home ownership. Simple things like heating and cooling, hot water, plumbing, windows, roofing and repairs can become costly. With that in mind, you’ll want to buy a home that will meet your needs and not leave you cash poor. So, how do you determine what you can afford? Let’s explore some basic points together.
- Financial experts advise that no more than 28% of your gross income should go to a mortgage payment (e.g., $5,000 per month income = $1,400 mortgage ceiling)
- Be sure your pre-purchase inspection is thorough, so you are fully aware of needed repairs/expenses
- Ask for the historical utility bills so you’ll know what to expect in that department
You can also use our calculator resource page to make your own calculations, but feel free to seek our expert advice.
Who Sets Mortgage Interest Rates?
This is a question that gets asked quite a lot, and the answer is a bit complex, so we’ll do our best to keep this short and sweet. Mortgage rates are based on the bond market. What is the bond market, you ask? This market consists of mortgage bonds and mortgage-backed securities. Many consumers falsely assume mortgage rates are based on the 10-year Treasury note. They are not. Here’s how it works:
- Mortgage loans are packaged into bundles of securities and sold in the bond market
- The price is then driven up or down based on national or global news and events that cause ripples throughout the financial sector, and ultimately the consumer
We hope you have taken away some useful information that will help you along your financial journey with your friends here at Union Bank.
Feel free to contact us about a mortgage or anything else we can help you with.