Are you missing out on these tax breaks?

Are you maximizing all the tax benefits available to you as a homeowner?

Staying up-to-date on the latest tax rules is a smart move if you’re interested in keeping more money in your pocket, but with the recent changes from the Tax Cuts and Jobs Act, you might be a little fuzzy on exactly which credits and deductions you can take advantage of. Whether you’re a long-time homeowner or just bought your very first home, it helps to have a refresher. Let’s brush up on some of the key tax perks of homeownership, so you can make the most of your benefits this tax season.

Mortgage Interest Deduction
If you took out your mortgage after Dec. 15, 2017, the interest you pay on your first or second mortgage is generally tax deductible on home loans up to $750,000 (or $375,000 if married filing separately). For mortgages taken out on or before Dec. 15, 2017, the deduction applies to home loans up to $1 million (or $500,000 if married filing separately). If you took out a home equity loan or line of credit, the interest is only tax deductible if the loan was used to buy, build, or substantially improve the home that secures the loan. Exceptions, limitations, and restrictions apply, so talk to your tax advisor to see if you’re eligible for the mortgage interest deduction.2Mortgage Interest Credit
This helps low- to moderate-income people afford homeownership by providing a credit of up to $2,000 on mortgage interest paid in a calendar year. Eligible taxpayers must obtain a Mortgage Credit Certificate (MCC) prior to purchasing their home. The MCC must be issued by a state or local governmental unit or agency under a qualified mortgage credit certificate program.3Mortgage Discount Points Deduction
Mortgage Discount Points are something you can purchase to lower your interest rate when you buy your home; one point is typically equal to 1% of the loan amount. If you purchased discount points when you bought your home, you may be able to deduct them on your income tax return. Of course, the IRS has eligibility requirements for deducting points, so talk to your tax advisor to see if you qualify for this deduction.4

Property Tax Deduction
State and local property taxes that you pay for any real estate you own are deductible up to $10,000 (or $5,000 if married, filing separately). Keep in mind the deduction limit is applied to your overall property tax payments, even if you own more than one property. For instance, if you own two or more properties and your total combined property tax bill was $15,000, you will only be allowed to deduct $10,000 total from your income taxes.2

Capital Gains Tax Exemption
If you sell certain types of assets for more than their original cost, you may have a capital gain. Capital gains are normally taxable. However, an exception is made if you sell your home for more than the amount you paid (in other words, if you make a profit). The capital gains you get from selling your home are tax-free up to $250,000 (or $500,000 if married filing jointly). The caveat is that you must have lived in that property as your primary residence for two out of the past five years. This tax perk helps you keep more of the equity that you worked to build over the years — yet another example of just how powerful equity can be for growing your wealth.5

Energy Tax Credits
Interested in making your home more energy-efficient? The federal government offers the residential energy efficient property credit for installing alternative-energy equipment in your primary or secondary residence. This includes qualified solar electricity and water heating, small wind energy, fuel cell, and geothermal heat pump systems. The credit is up to 30% of the cost for purchasing and installing these systems in 2018.6

Being a homeowner comes with some pretty fantastic advantages, and tax breaks are one of the benefits you don’t want to miss out on. Talk to your tax advisor to learn more about how you can max out your tax savings and get the most from your real estate investment.
Want to learn more about the benefits of owning a home?
Let’s set up a time to talk!

*This information is not intended to be a comprehensive or exhaustive list, nor is it intended to be a substitute for expert advice from a professional tax advisor or preparer, or the Internal Revenue Service (IRS). Centier Bank and its loan officers are not tax preparers or advisors. Consult a tax professional for more information.

[1], “Credits and Deductions for Individuals,” November 2018.
[2] IRS Publication 5307, “Tax Reform Basics for Individuals and Families,” Tax Year 2018.
[3] IRS Form 8396, “Mortgage Interest Credit,” 2018.
[4] IRS Topic Number 504 – Home Mortgage Points, January 2018.
[5] IRS Topic Number 701 – Sale of Your Home, February 2018.
[6] IRS 2018 Instructions for Form 5695.

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Jason Harris Photo Jason Harris
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Centier Bank
600 E 84th Avenue
Merrillville, IN 46410
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We all like having additional peace of mind when it comes to the systems and appliances in our homes. Things inevitably break down over time, but most of us don’t plan for the furnace to die mid-winter or for the dishwasher to suddenly implode. A home warranty can offer some financial protection for those unexpected occurrences. February 10 is National Home Warranty Day, which means it’s the perfect time to explore whether a home warranty is right for you. The answer depends on the state of your appliances and system components, how much you’re willing or able to pay out of pocket for repairs or replacements, and how much reassurance you’ll get from having this coverage.

What is a Home Warranty?

A home warranty is a policy that covers repair and replacement of certain features and systems in your home. A warranty will cover damage due to normal wear and tear on major appliances, HVAC systems, and more (or less), depending on the coverage you choose. According to®, a one-year warranty can run anywhere from $300 to $600 and up, based on the items you choose to cover.

The Pros & Cons of a Home Warranty


Like any form of insurance, when you have it and you don’t need it, it’s frustrating, but when you need it and you don’t have it, it’s even worse. If you have appliances nearing the end of their lifespans, do a little research and determine how much it would cost you to repair each piece, and how much it would cost to replace with a new item. If replacing your 30-year-old HVAC system would cost you $6,000, and your home warranty is $350 per year with $40 service calls, it may be worth your while to purchase that warranty, especially if you’re coming to distrust the reliability of the HVAC you have. Alternatively, you could take the money you would have spent on a home warranty and put it in a rainy-day fund dedicated solely to the repair and replacement costs of your appliances and systems.

One of the best things a home warranty can provide for you is peace of mind. New homeowners and long-time homeowners alike can take comfort in the fact that surprise breakdowns could be taken care of with just a small cash outlay and a lot less hassle than hunting up a repair or replacement provider on your own.

If you’re looking for a new place to call home, let’s sit down together and review your options!

Content courtesy of Centier Bank is not an insurance company. Consult your insurance agent for information about your insurance policy.


We’re well into the fall season and winter is right around the corner. This is the time of year when it’s especially important to make sure your home is properly sealed. Air leaks can make it difficult to keep your home properly heated and can lead to high utility bills. Here’s quick guide to checking your home for air leaks.
Do an air pressure test. You can quickly check for air leaks with a simple test using household items. Seal your home by completely closing all doors, windows, and vents and turning off exhaust fans. Then pass a burning incense stick along the edges of all doors, windows, and other openings to the outside. If the smoke is forced into or away from an opening, you’ve found a leak.
Inspect doors and windows. To check for leaks near your windows, attempt to rattle the frame. This will reveal whether there are gaps along the edges. Also check for cracks in the frame, loose screws in locks, or gaps anywhere in the window.
Door hinges and thresholds are common places for air leaks. Deteriorated weather stripping can also lead to leaks and the door itself can develop cracks that allow air to pass through.
Skylights are a little trickier to test and examine, but you can still do it yourself. Check for water stains near your skylights, which is a dead giveaway of a leak. If you suspect there is one, you’ll have to get on the roof for a closer inspection. Look for loose shingles, cracked roofing cement, and debris.

Mortgage Pre-Approval


Getting your hopes set on the perfect home and then finding out that you are unable to afford it can be devastating. To avoid this from happening, only look at homes that are within your budget. One of the best ways to determine this is to obtain a mortgage pre-approval.

When you speak with a lender about a pre-approval, it is important to know your options. There are two types of rates and a few different options for loan terms.

You could opt for an adjustable or a fixed rate loan. Most adjustable rate mortgages (ARM) start with a period of one to ten years at a fixed-rate which is followed by a period of adjustable interest rates. The initial period has a lower interest rate than a fixed-rate loan. However, once this period is completed you may incur higher payments if the mortgage interest rate has risen. There is a cap on the amount the interest rate can increase and how often it may be adjusted.

The other option is a fixed rate mortgage. For the entire length of the loan, the interest rate will remain the same. With this option, you will be secure from rising interest rates; however, you will not be able to take advantage of lower interest rates unless you refinance your mortgage down the road.

Finally consider the loan terms. Generally, you will receive a lower interest rate for a shorter term loan. Similarly, the longer the term of the loan, the higher the interest rate is likely to be. What you want to keep in mind is that the longer period loans will decrease your monthly payments because you have a longer period to pay off the loan. Your lender can review these options with you so you can make an educated decision.

Downsizing your garage


Downsizing your closet may be a difficult task because you can easily persuade yourself that you will need one article of clothing in the future even though you haven’t worn it in a year or more. Depending on your situation, you may find downsizing your garage easier.

The first step with downsizing any portion of your house is to decide what things you use and need and what items you can do without. However, keep in mind the change in space between your current home and your future home. Are you going from a three-car garage to a two-car garage? Will you still have a garage, but you are moving to a community where the outdoor maintenance is taken care of for you?

These are important things to consider as you rummage through your garage and decide what to discard. If you will no longer have outdoor maintenance, you can likely get rid of your lawnmower, shovels, rakes and other similar tools.

Also consider where you are moving. For example, if you live in the north now, but are making a move to the south, you will have items you can sell or donate. Thinking through future needs for the tools, equipment and storage items in your garage will help you pare down your stuff.

The inside of your house is ready to show


The inside of your house is ready to show, but let’s not forget the first impression homebuyers have of your home. Now is the time to focus on the outside areas.

Tip #3: Curb Appeal

As with the interior of the home, it is important to remove clutter. For the outdoor areas of your home, that would include trimming bushes and flowers, and pulling weeds.

Use a pressure washer to clean decks, and dirty siding as well as driveways and sidewalks. Removing the dirt will brighten up the whole area.

Ensure all outside light fixtures are working. If these lights do not automatically turn on, ensure you turn them on before a potential buyer arrives for a showing. You can also highlight walkways and landscaping by adding solar light fixtures. These will be especially helpful for potential buyers who arrive in the evening after the sun goes down.

Take a good look at your home at different times of the day. Make a list of any repairs that should be completed. If you do not have a welcome mat or yours is worn, buy a new one. This is an inexpensive way to make your home inviting.

A bright and welcoming outside will set a positive tone for potential buyers as they enter your home.

When searching for your next home…


When searching for your next home, it is important to understand exactly what you need versus what you want.

For instance, you may want a four bedroom, three bathroom home, with a large kitchen with granite countertops, a basement, and a three car garage near your place of employment and the park you enjoy. We will certainly look for your ideal home, but understand that your budget constraints may not allow you to have all of your wants. So, it is important to know exactly what you need and what you may be able to live without.

It may be helpful to make a list of everything you want in your next home. Then go back through your list to determine exactly what you need and prioritize your want. With any home search, there is always compromise. Together, we will find a place you will be happy to call home

Get your credit in check

One of the most important steps to buying a house is ensuring you have your credit in order. Before you even start looking for homes, it is a good idea to know your credit history. If you have a good history of credit, maintain it, if you have a questionable history of credit, take the time to make it better before diving into the home buying process.

The first step is checking your credit. There are numerous web sites who claim to provide you with your credit report for free, but it is important that you receive a report from all three credit bureaus, Experian, TransUnion and Equifax. You can download a free copy of all three reports from once a year. These reports will show you current lines of credit you have open, your payment history and debt balances.

Once you have these reports, review them for any inaccuracies. If your credit is in good shape, maintain it. Do not open new lines of credit. Do not make any large purchases, such as a car. Continue to pay all of your bills on time every month.

You can also take steps to increase your credit. If you noticed any inaccuracies on your credit reports, contact the credit bureaus to have them verify the information. They can work with the credit company or companies in question to make appropriate updates.

If you have any unpaid bills that are with collections, work to pay those off first. Pay off debts that are close to the credit limit. It will take time to increase your credit score, but it will pay off in the long run.

Downsizing your closet

In a previous message, we discussed some general tips on downsizing. This time let’s take a deep dive into a specific area of your home: the closet.

One item many homebuyers are looking for in a new home is storage space. One of the best storage spaces in a home is the closet. Because closets are out of sight and behind closed doors, many items can be stored in these spaces.

Whether it is the coat closet, the linen closet or the bedroom closet, there are likely items in these storage spaces that you can purge. Every day or week, take time to decide what to keep and what to discard. During your scheduled time to declutter, pick a specific space to work on to avoid being sidetracked. Try to tackle an entire closet at once or at least commit to a section of a larger closet.

The first thing to do in a closet is to remove everything from it. Then sort the items into three piles. There should be a keep pile, a discard pile and a donate pile. For instance, when cleaning out your bedroom closet, place items you wear on a regular basis in one pile and items that you haven’t touched for years into either the discard or donate pile. Once you decide what you need to get rid of, complete the process. Take boxes to the trash or to where you plan to donate. Don’t hold on to them.

Staging and Depersonalization…

You have removed the clutter and your space is taking shape. Your next step is to look at what is left in your home and think like the buyer. You want all potential home buyers to see themselves in your home and this means removing objects that are personal to you and organizing furniture to display the highlights of the house.

Tip #2: Staging and Depersonalization

Remove pictures of you and your family especially in the main rooms of the home like the family room, kitchen and bathrooms.

When a potential buyer walks into a room, they should know the purpose. Using your extra bedroom as a storage room may have worked for you, but makes the buyer think there is no storage in the house. Set this room up as a bedroom or an office. Give it a purpose. The same idea will work for a bonus room.

Rearrange furniture to highlight exceptional features like a fireplace or amazing view. You want these features to be impressive and outweigh any minor issues with the home.

Light is important whether natural or artificial. A well-lit home will allow the potential buyer to see the space, especially if they are touring the house in the evening.

Your potential home buyer doesn’t want to imagine you living in this home, they want to envision their family living in this home. Depersonalization and staging will help this process.