If you're a first-time home buyer, the big challenge is saving up enough money for the down payment. Financial experts tell us you need to take aggressive steps to cut spending, add income, or do both. Here's how to proceed.

1. Set a goal and timeline.Find out the price range of the type of home you want in the area you like. Then talk to mortgage professionals like us to get an idea of the down payment you'll need, which could be up to 20% of the purchase price. Then set a timeline and figure your monthly savings goal. For example, if you need to save $20,000 in two years, you'll have to put away $833 each month.

2. Open a separate down payment savings account. This keeps the money separate and makes it easy to track progress. The experts say that when you're saving for a short-term goal, put the money in a low-risk investment such as a savings account or a CD. Shop around for the best interest rate, and make sure the money will be available when you need it.

3. Small steps to big savings. Put together a budget based on what you're spending, and then look at the following to make cuts:

  • New clothes and impulse purchases; daily costs like a specialty coffee; monthly subscriptions; car costs you can reduce by carpooling. Always ask before spending, "Do I really need this, or do I just want it?"
  • Shop in physical stores, not online, and use cash, not credit cards.
  • Make cuts in gym memberships, vacations, and entertainment.

4. Big steps to bigger savings.If you can handle some lifestyle changes, consider these options:

  • Move in with family for a specified period of time.
  • If you have the space, take in a roommate.
  • Move to a smaller apartment: the rent can be substantially lower.
  • Add income by working overtime if possible, or take on another job (a part-time job at a home improvement store can even help you learn more about maintaining the home you'll buy).
  • Sell your car and trade down to a lower-cost vehicle.

5. Look at retirement accounts.If you have a 401(k) and contribute more than your employer will match, think about putting that extra money into your down payment savings account. If you have an IRA, you may be able withdraw funds without penalty to buy a first home, although you might have to pay income taxes.As with all tax matters, check first with a tax professional.

Whether you're buying your first home, moving up, or downsizing, we can help with the financing. We're happy to answer any questions, whenever you're ready to take advantage of today's attractive housing market. We can also help with refinancing your existing home or funding home improvements. Please call or email us any time. We're always here for you.... Have a great day!

P.S.: Mortgage rates have edged up a little, but remain at historically attractive levels. When buying or refinancing, it's smart to start the process early. Please call or email us to explore the appealing options available now.

INFO THAT HITS US WHERE WE LIVE... Following the Socratic teaching, let's examine life in the housing market. A research firm serving the mortgage industry reported that national home prices are growing slowly but staying in line with inflation adjusted long-run averages. They say this shows prices have normalized and future growth rates will look like historical ones, up between 3% and 5% per year. The firm's vp of research and analytics added, "Nationally, we don't see evidence of a price bubble forming again. Double digit gains over the last year, while similar to rates of growth in the run-up to the bubble, are off a much lower price floor." Good point. Low inventory has been a challenge in some markets, so it was encouraging to see a national real estate site report inventory up in 22 of its 35 largest metros. The National Association of Realtors (NAR) put inventory up 7.6% year-over-year in January. All this is the result of higher home prices, yet more inventory should mean slower price increases. Finally, revealed its number of for-sale listings was up 3.1% year-over-year in January. The site's president commented, "this early rise in inventory is a welcome trend." Basically, analysts expect less-frenzied conditions for buyers and higher sales volumes in the months ahead.


The IRS is nice to homeowners, no kidding. Here are the some of the tax breaks available.

  • Purchase Costs Deduction. In most cases, any loan discount points and origination fees are tax deductible for the buyer, no matter who pays for them. Any "daily interest" paid on the mortgage at closing is also deductible. Keep your HUD settlement statement, which contains all this information, to use in preparing your return.
  • Mortgage Interest Deduction. Each year the interest paid on your mortgage is tax deductible up to $1 million in mortgage debt on a first or second home, if you're married filing jointly. In certain cases, if the lender requires you to buy PMI (private mortgage insurance), that may be tax deductible for mortgages written from 2007 through 2010, with certain income limits.
  • Property Tax Deduction. All real estate taxes are fully deductible.
  • Home Office Expense Deduction. If your business requires you to use a portion of your home exclusively for those purposes, you may be able to deduct the percentage of your home costs related to that portion. Go to and consult with a tax professional on this one.
  • Home Equity Loan Interest Deduction. The interest you pay on a home equity loan or line of credit may be deductible, up to certain limits specified by the IRS.
  • Home Improvement Loan Interest Deduction. If you take out a loan for a big home improvement, you can deduct the interest with no dollar limit. But the work must be a "capital improvement," not just ordinary repairs. Check with and a tax professional for the improvements that qualify.
  • Capital Gains Exclusion. Married taxpayers who file jointly can keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence two out of the prior five years. Single and married filing separately can keep up to $250,000 each tax free.
  • Mortgage Insurance Deduction. The premiums you pay for mortgage insurance may be deductible up to certain income limit specified by the IRS.
  • Selling Costs Deduction. If you do wind up with a capital gain above the exclusion (lucky you!), you can reduce it by the amount of your selling costs, including broker's commissions, title insurance, and legal fees, among others. You can also deduct decorating and repairs you do to make the home more saleable.

All tax matters should of course be reviewed with a tax professional. But if we can help with any questions about home financing or re-financing, please call or reply to this email...and best wishes in this and all your endeavors!

This holiday season, hackers stole over 40 million credit and debit card numbers from Target's retail system. This makes all of us extra cautious about protecting our own computer systems. Here's how to hold off those hackers:

1. "ABC" online."Always Be Careful" when checking emails and surfing the Web. Hackers use these online connections to get malware onto your system that gives them access to personal information and passwords.

  • Watch for bad links:  Check a link by resting your cursor on it, without clicking, to see the web address. If you want "" but you see "," don't click on it. 
  • Avoid questionable websites:  Places that push the norms of taste and morality are notorious sources of malware. 
  • Don't fall for phishing scams:  Wiring money to someone you don't know is never a good idea. But also watch for scams that pose as your bank, email provider, social media, or even the IRS. Banks don't ask to reset your password by email and the IRS never emails taxpayers. 
  • Don't download from an unknown source:  Only get files or apps from websites you trust.

2. Use different passwords for different sites and accounts. That way, if one account is hacked, only one is compromised. Write passwords down and keep in a secure place, or use a secure online password manager. 

3. Make passwords hard to hack and change them often."Password" and "123456" are easy to hack. So are your birthdate and your child's name, which can be found online. Experts suggest using a long sentence with numbers and symbols, such as "PumpkinsClimbIntoHurricanes%82&." Or make up an even longer sentence, such as "I came to Dallas in 2011 after living in Atlanta for 4 years", but just use the first letter of each word: "IctDi2011aliAf4y." And change passwords every six months.

4. Watch what gets stored.  Never email your Social Security Number, because it stays in your archives. Delete old messages with bank account info or credit card numbers. Never put your master list of passwords on your computer.

5. Use protection tools: 

  • Antivirus software:  Scans for known computer viruses and some can detect phishing scams and other schemes. 
  • Secure connections:  If a website uses your personal info, make sure you're on a secure, encrypted connection. Instead of "http," the web page URL should start with "https"–the "s" stands for "secure."
  • Two-factor authentication:  This makes sure no one can pose as you. Once you set it up, every login needs two steps. First, enter user name and password. Then you'll get a third, one-time password sent to your phone or other device. This option is offered by Amazon, Facebook, Google, Twitter, and others.

What to do if you've been hacked.Take these steps immediately:

  • 1) Destroy the computer virus:  Run antivirus software to find and remove the virus.
  • 2) Update all software:  Download the latest versions of all programs, including operating system, Internet browsers (Chrome, Firefox, Internet Explorer, Safari, etc.), Office, and Adobe programs. 
  • 3) Change all passwords:  Make sure to do this on a different computer from the one that got infected. If the virus had keylogging software, hackers might find the new passwords.


No matter what's happening around you, it's important to stay calm. You'll be happier–and healthier–if you take these approaches:

1. Focus on the big picture.  If a complex project is getting you down, keep reminding yourself of the end goal. This keeps you motivated and prevents you from getting bogged down in the details. 

2. Just relax.  When faced with a challenge, the initial reaction is often to act immediately. This can lead to impulsive decisions that create more challenges and even undermine long-term goals. Instead, when a difficulty arises, don't react. Stop for a moment, and then calmly consider the best next step to take.

3. Do a little exercise.  When it comes to dealing with stress, researchers say short bouts of moderately intense exercise will keep you on an even keel. You don't need to take up a full exercise program; just plan to include a short burst of exercise in your daily routine. As always, check with your doctor first before starting any exercise program.

If you're thinking about buying a home, don't get stressed out over the financing. We can answer any questions, whenever you're ready to take advantage of today's attractive housing market. We can also help with refinancing your existing home or funding home improvements. Please call or email us any time. We're always here for you.... Have a great day!


FHA, VA, and RHS mortgages are government loans.
All other mortgages are conventional loans.

FHA loans are administered by the Federal Housing Administration (FHA), part of the U.S. Dept. of Housing and Urban Development (HUD). FHA administers mortgage loan programs with lower down payment requirements that are easier to qualify for than conventional loans. FHA loans can't exceed the statutory limit. The loans are made by private lenders and insured by FHA. FHA loans are attractive to first-time home buyers, lower-income borrowers, and those with limited down payments.

VA loans are also made by private lenders, but are guaranteed by the U.S. Dept. of Veterans Affairs (VA). This guarantee allows veterans and service personnel to obtain a home loan with favorable terms and usually without a down payment. It's easier to qualify for a VA loan than a conventional one, but lenders generally limit the maximum amount. The VA determines your eligibility, but you still apply to private lending institutions.

RHS loans are guaranteed by the U.S. Dept. of Agriculture for rural properties. Let us help you determine if you qualify.

Conventional loans are either conforming or non-conforming. Conforming mortgages offer a lower rate, but must conform to certain maximum limits and guidelines. Non-conforming,
jumbo mortgages are for amounts above the conforming loan limits and have a higher interest rate.

If you'd like more information about any of these loans for your home purchase or refinance, please call us or reply to this email. We're happy to put together the perfect solution for your special situation...and best wishes in this and all your endeavors!

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