Homeowners Ditch Refinancing
As home equity loans and adjustable rate mortgages grow in popularity, it has caused refinanced mortgages to fall. Currently, refinancing makes up a
smaller portion of the mortgage business
than at any time the past two decades. With rising rates, many experts believe this trend will only continue, as fewer homeowners will be eligible to refinance. Mortgage experts are working to figure out how to maintain the growth of refinanced-mortgage investments. They are faced with headwinds, considering most savvy investors took advantage of the very low rates of the past decade with refinanced loans that beat today’s rates.
From a prudent investment point of view, home-equity loans come with higher interest rates and are often used on projects that are designed to increase the value of your home. When evaluating a project, many experts recommend using comparables and speaking with a real estate expert before taking on this financial burden.
Adjustable rate mortgages come in many shapes and sizes so be certain you understand how payments work after a fixed rate period ends, especially now that rates are rising.
The Audit Odds are in your Favor
What else can you do to decrease your chances of getting audited? According to USA Today there are a few things that can help. The first step is to submit accurate and full information – more is more in this instance. Second, they recommend hiring a good accountant if you donate $10,000 or more to charity as these plans receive much higher levels of scrutiny by the IRS. Third, make sure you submit your returns electronically and not via paper. For returns submitted on paper, the IRS reports an error rate of 21% versus 1% for electronic submissions.