Tax Season Secrets for Homeowners: Property Tax, Escrow, & Deductions

Tax season comes with a few extra steps for homeowners. Between your escrow payments, property taxes, and forms specific to homeowners like Form 1098, there are a few things for homeowners to consider as they file taxes themselves or pass off necessary documents to a tax professional. Below is everything you need to know to properly file your taxes and maximize your possible deductions this year. Understanding Your Escrow Account If you’ve ever wondered why your monthly mortgage payment includes more than just your loan’s principal and interest, your escrow account is the answer. This account is set up by your lender to cover property taxes and homeowners’ insurance, ensuring these essential expenses are paid on time and in full. During tax season, your escrow account plays a crucial role. Here’s how: Property Tax Payments: Your lender uses the funds in your escrow account to pay your property taxes on your behalf. You’ll receive a statement from your lender detailing these payments, which can be helpful when filing your taxes. Record Keeping: Keep track of your escrow account’s annual statement to ensure your property taxes are paid correctly. If you notice any discrepancies, reach out to your lender immediately. What To Do With Your Property Tax Bill As you’re preparing to file your taxes, you’ll receive a property tax bill in the mail. You might be confused about whether you need to pay this bill yourself or if it’ll be handled by your escrow account. Here’s what you need to know: If You’re Escrowed: Your loan servicer will pay your property taxes using funds from your escrow account. The bill you receive in the mail is just for record-keeping purposes. If You’re Not Escrowed: Make sure you pay your bill as soon as possible to avoid late fees, penalties, or even a tax lien. If You’re Not Sure: Double check your January and December mortgage statements to confirm that your property taxes are covered by an escrow account. Escrow accounts simplify property tax payments by breaking the payments into smaller monthly increments to help you avoid large, unexpected bills. Deducting Interest Paid on Your Mortgage One of the most significant tax benefits of homeownership is the ability to deduct interest paid on your mortgage. This deduction can save you thousands of dollars, especially in the early years of your loan when interest payments are highest. Follow these steps to claim your mortgage interest deduction: Form 1098: Each year, your lender will send you IRS Form 1098, which details the total amount of mortgage interest you paid. This form is essential for claiming your deduction. Eligible Loans: The deduction applies to mortgages on your primary or secondary home, up to $750,000 in loan principal for loans originated after December 15, 2017. For older loans, the limit is $1 million. Itemize Deductions: To take advantage of this benefit, you’ll need to itemize deductions on your tax return instead of taking the standard deduction. Pro Tip: If you refinanced your mortgage using prepaid interest or points paid at closing, these may also be deductible. Tax season doesn’t have to be overwhelming for homeowners. By understanding how escrow accounts, property taxes, and mortgage interest deductions work, you can maximize your savings and approach tax filing with confidence. If you have any questions about escrow, property taxes, or tax season tips for homeowners, make sure to contact your UMortgage Loan Originator for some insider info!

If you're planning to buy a home in 2025, there are several important factors to consider and steps to take that will help ensure your success. Various trends will influence home affordability and your ability to purchase the home you want without stretching your budget. So, what can we expect regarding mortgage rates? Will there be an increase in available homes on the market next year? Additionally, there are specific actions every homebuyer should start taking now to prepare for 2025. Let’s break it down to help you navigate this market with confidence. Will Mortgage Rates Drop in 2025? The questions asked by homebuyer and real estate agent is where mortgage rates are heading in 2025. Although nobody has a crystal ball, many reliable experts predict them to drop over the course of the year. If you're planning to buy a home in 2025, there are several important factors to consider and steps to take that will help ensure your success. Various trends will influence home affordability and your ability to purchase the home you desire without stretching your budget. How much mortgage rates drop will depend on ever-shifting market factors such as inflation, unemployment, wage growth, economic growth, and the possibility of a recession. Sourcing data from reputable sources such as Fannie Mae, the Mortgage Bankers Association (MBA), HousingWire, and MBS Highway, it’s expected that rates will drop slightly next year but remain in a range between 5.75% and 7.25%. These figures are dependent on the economic factors previously mentioned, and it could take until the second half of the year to see rates in the low end of that range. Mortgage rates can directly impact your overall budget; check out this home affordability calculator to learn more. If you want to buy in 2025, it’s important to connect with a UMortgage Loan Originator as early as possible to take advantage when market opportunities arise. More Homes and More Buyers on the Market in 2025 Housing inventory, specifically a lack thereof, has been one of the main drivers of the housing market these last 3 years. Throughout the year, we’ve seen inventory numbers steadily rise to highs not seen since the summer of 2020. As of the end of November, we have 27% higher single-family housing inventory than this time last year. This rise is expected to continue to increase in 2025, and it’s partly due to the forecast that rates will drop slightly across the year. According to Mike Fratatoni, Chief Economist and SVP for Research and Business Development at the MBA, “mortgage rates at this level should support homebuyer demand and gradually reduce the lock-in effect, thereby increasing the inventory of existing homes and supporting higher purchase origination volume in 2025.” More sustainable inventory is great news for homebuyers. Not only does this mean more options to shop from, but it also gives more negotiation power for many homebuyers to get an asking price that works for their financial picture. How to Prepare to Buy a Home in 2025 Buying a home is a big commitment, but there are plenty of things you can start doing now to put yourself in the driver’s seat when it comes time to buy in 2025. Below are a few strategies that will help you be one of the strongest buyers on the market next year. Start Saving for a Down Payment: A higher down payment will help you secure the lowest possible mortgage rate and can significantly lower your monthly mortgage payment. It’s possible to buy with as little as 3% down for conventional loans (and 0% down for a VA loan), but a higher down payment will open up more possibilities. Build and Maintain a High Credit Score: Like with a higher down payment, a higher credit score will be key to getting you the lowest possible mortgage rate. Building credit is easier than you might think: make sure you pay all of your monthly debts on time and, if possible, keep balances as close to $0 as possible. Read this guide for more credit-building tips. Get a Mortgage Pre-Approval: Your golden ticket in the homebuying process is a mortgage pre-approval. This will give you an accurate estimate of your buying power and will show sellers and listing agents that you’re a serious buyer. Fill out this form to start your free pre-approval today! The Importance of Working With a Local Expert It’s looking like the 2025 housing market will bring some balance that should make affordable homeownership more accessible. However, the best way to ensure a sensible home purchase in 2025 is to work with local mortgage and real estate experts who can help you navigate the ebbs and flows of the market. A knowledgeable real estate agent in your area will understand home prices by neighborhood and the areas where home prices appreciate the most. This expert guidance will help you spot deals, avoid overpaying for a property, and ensure that your home is an investment that grows your financial power over time. When you work with a UMortgage Loan Originator, you’ll gain a partner who will help you maximize the wealth-building benefits of homeownership. Throughout your homebuying process, your LO will learn more about you to make sure your mortgage matches your short- and long-term financial goals. Even after you’ve closed your loan, your LO will stay in touch to share refinance opportunities that will ensure you have the lowest possible mortgage payment and can use the equity you’ve earned to grow your financial portfolio. If you’re ready to start preparing to buy a home and unlock financial freedom through homeownership, follow this link to get connected with a UMortgage LO today!

In today’s fast-paced real estate environment, adapting to change is essential. We’ve seen first-hand that the market can be unpredictable. However, with the right strategy and the right team in your corner, there’s plenty of opportunity for you to thrive. Here's how you can collaborate with UMortgage to navigate these challenges and find success. Work With a Local Expert One of the biggest advantages you can get in any housing market, let alone one that changes quickly, is local expertise. National headlines paint a broad picture, but every neighborhood has its own dynamics. By partnering with one of UMortgage’s local mortgage experts, you can dive deeper into the market conditions affecting your area to make informed decisions while you shop for your home. UMortgage is proud to have Loan Originators who are rooted in their local communities and can offer in-depth expertise on the market dynamics of specific neighborhoods. When you choose to work with a UMortgage LO, you’ll get inside knowledge on regional trends, mortgage rate movements, and inventory fluctuations to help you shop with confidence. With the right information in your toolbelt, you can ensure you're acting at the best time to buy or own your home without unneeded financial strain. Understand the Economics Behind the Market A changing market can feel daunting, but it’s important to remember that real estate is driven by fundamental economics. Your LO can break down these key drivers—such as interest rates, inflation, housing supply, and demand—so you understand not just what’s happening, but why. This insight is especially helpful for homebuyers who may feel unsure about jumping into the market during periods of fluctuation. If you're a real estate agent, having a solid narrative behind these changes can set you apart when trying to win over a prospective buyer. Being able to clearly explain why certain trends are happening will build trust and reassure your clients that you're the go-to person for real estate advice. With UMortgage’s help, you’ll always have up-to-date market insights to share. We publish a weekly blog every Monday at noon sharing digestible insight into recent mortgage rate movements and a forecast of market-impacting events on the horizon. Check it out here every week to see the different pieces of economic data that will make mortgage rates shift to stay ahead of the curve. Find Your Niche and Strengthen Your Knowledge In a diverse market, it’s important to find a niche where you can specialize. As a real estate agent, honing in on a specific area—whether it's first-time homebuyers, military homebuyers, or investment properties—can set you apart. With UMortgage, we offer a wide range of loan products to tailor a mortgage to a client’s specific financial goals. When you specialize, you can provide better service, and we can match you with the right mortgage product to strengthen those client relationships. Homebuyers can also benefit from this strategy by working with a LO who understands their unique circumstances. Whether you're a veteran using a VA loan or a self-employed borrower with a more complex financial picture, finding the right loan product will make all the difference when your loan reaches underwriting. Managing the Emotions of the Homebuying Experience Finally, it’s crucial to manage the emotional rollercoaster of real estate transactions. Buying a home can be stressful, and market changes can add to that pressure. But don’t worry—we’ve seen it all. Your UMortgage LO is here to guide you with clear, rational advice that helps you stay focused on your long-term goals. By working closely with your UMortgage LO, you'll have the right combination of local knowledge, market insight, and emotional support to stay resilient through the ups and downs. The real estate market may be ever-changing, but that doesn’t mean it’s impossible to succeed. With the right LO by your side, you can navigate these shifts confidently. At UMortgage, we’re committed to helping you find the best path forward, no matter what the market throws your way.