Turning a homeownership goal into reality takes time, money and significant planning — you don’t just wake up one morning and decide to go out and buy a house.

Nearly one-third (32%) of Americans plan on purchasing a home in the next five years, according to the 2018 NerdWallet Home Buyer Report, and the costs associated with buying are among their top concerns. By knowing exactly what to expect in those costs and starting your savings plan well in advance, you can ensure you’re well-prepared for the homebuying process.

5 years out: Make a plan and start saving

Chart your course and get started.

• Calculate how much house you can afford given your current income. Use a home affordability calculator to help determine a target price.
• Determine a down payment savings goal and how much you’ll have to set aside each month to get there
• Automate your savings by having a certain portion of each paycheck earmarked and deposited into a savings account set up specifically for this purpose

If you haven’t already begun saving for your home, now’s the time to start. The more you’re able to put down on a home, the lower your monthly payments will be.

A 20% down payment on a $250,000 home, for example, would require you save approximately $830 per month for the next five years, an amount that could be tough to stash away. A 20% down payment is not required, but anything less could leave you with a higher interest rate and mortgage insurance tacked onto your monthly bill.

4 years out: Clean up your credit

If your credit history is less than stellar, lenders will know it, and bad credit could mean a higher interest rate or even denial of your home-loan application. It takes seven years for marks like chargeoffs, collection accounts and even late payments to fall off your report, and it can take months or even years for your credit score to recover. You can’t speed up this process, but you can take steps to ensure the most recent years on your report are spick-and-span.

From here on out:

3 years out: Reassess and stay the course

A lot can happen in a few years’ time — you may have added a family member or gotten a promotion. If everything’s consistent, stay the course with your monthly savings goals. If your anticipated home budget needs to be adjusted either up or down, revisit how much you’re setting aside each month to stay on track.

“By reassessing your goals three years out, you’ve given yourself ample time to adjust your savings, or rethink the type of home you need,” says Tim Manni, NerdWallet mortgage expert. “If you’re planning to purchase a home with a partner, be sure they’re saving and being responsible with their credit. Lenders always judge couples on their lowest credit score.”

2 years out: Narrow the focus

Your vision of homeownership has thus far been only that: a vision. Now it’s time to begin narrowing your focus, creating your list of wants and needs in a home, looking at potential neighborhoods and talking with friends and family about their experiences with local real estate agents.

The closer you get to homebuying time, the more important it is you understand the extent of your upcoming expenses. Not only will you need your down payment, you’ll also need closing and moving costs. Get quotes from local movers now so the cost doesn’t surprise you when it’s time to pack up. At this point, you may need to further tighten your purse strings to reach your savings goals.

1 year out: Get ready to shop

You have many things to do this year, culminating with the purchase of your home:

You don’t need to begin actively looking for your home until you’re completely ready to find the right place and make an offer, with a preapproval and agent in place. Single-family existing homes were on the market for an average of just 40 days in December, according to the National Association of Realtors, a time span that typically shortens in warmer months and could be much, much shorter in areas with low inventory.

Buying a home is a long process, and stretching it to five years may make it even longer than you anticipated. You could fast-track your homebuying venture, but stretching out how much time you have to save up and improve your credit beforehand can save you time, money and headaches in the long run.

The article Your 5-Year Countdown to Homeownership originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

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Love and marriage don’t always go together, no matter what Sinatra says. If you’re in a committed relationship but nuptials are on the back burner, just know your dream of buying a home doesn’t have to be.

Sixteen percent of all first-time home buyers in 2017 were unmarried couples, an annual National Association of Realtors report found, the highest share the organization has recorded since 1981, says Jessica Lautz, managing director of survey research and communication for NAR.

But many couples don’t realize how risky buying a home with an unmarried partner can be. Here’s how to overcome these risks with some planning, a good lawyer and a slightly awkward conversation or two.

» MORE: The ultimate home buying checklist

1. Sign a prenup… for the house

No couple wants to talk about breaking up, but if you’re going to be co-homeowners, it’s a must, says Renee Bergmann, a real estate attorney and owner of Bergmann Law LLC in Westmont, New Jersey. She recommends unmarried couples create a co-ownership contract with the help of a legal professional before closing day.

The agreement should answer basic questions like: What happens to the property if you split? What if one of you becomes disabled or dies? Who pays utility bills or for major repairs?
Don’t just “wait and see what happens,” Bergmann says, because without a written agreement “things could get messy very quickly.”

2. Choose the right type of title

Turns out there’s more than one way to own a house, and taking title the right way is especially important for unmarried couples. Options vary from state to state but generally include:

Sole ownership. Only one name is recorded on the deed, and that person has all the rights and responsibilities of ownership.

• Pros: Sole ownership may yield tax savings if your incomes are drastically different. And, if your partner has bad credit, applying for a home loan in your name only may help with approval. Remember, however, that ownership rights are determined by names on the deed, not the mortgage, Anna Fabian, vice president of product at SoFi, said in an email.
• Con: If the relationship ends and you’re not on the title, you’ll risk walking away with nothing, even if you contributed money to the purchase or mortgage payments.

» MORE: Down payment strategies for first-time home buyers

Joint tenancy. Each person owns 50% of the property. If a tenant dies, their share automatically transfers to the other joint tenant.

• Pro: Joint tenants enjoy right of survivorship, so you won’t have to worry about fighting estates or relatives for the house in the event of your partner’s death.
• Con: An unfriendly breakup could spell trouble, especially if one partner can’t or won’t buy the other out.

Tenants in common. Allows unequal ownership, so you could own a 75% stake while your partner owns 25%.

• Pro: Ownership shares can be tailored to match financial contributions; if you paid more toward the down payment, for example, you can own a larger percentage.
• Con: If one tenant dies, the other has no automatic rights to that person’s share of the property unless named in a will or living trust.

No matter which approach you choose, if you tie the knot after buying, consider revising the deed to reflect your new legal status with something called a “quitclaim deed,” Bergmann says.

» MORE: Why you probably need title insurance

3. Leave your parents at home

Buying a home is a stressful decision, so younger unmarried couples often involve their parents, but sometimes this only makes things more confusing, says Danielle Moy, an agent with Coldwell Banker residential brokerage in Orland Park, Illinois.

“I can tell the parents are unsure of the situation, and it causes a bit of an emotional roller coaster when they’re looking at homes,” Moy says.

Parents may mean well, but ultimately it’s your house and your decision, Moy says, so make sure you and your partner agree about what you want — no matter what Mom and Dad think.

This article was written by NerdWallet and was originally published by The Associated Press. 

The article Buying a Home as an Unmarried Couple? Do These 3 Things originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

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The average rate on a 30-year fixed-rate mortgage dropped two basis points, the rate for the 15-year fixed fell one basis point and the 5/1 ARM was unchanged, according to a NerdWallet survey of daily mortgage rates published Friday by national lenders.

The average rate on the 30-year fixed has risen four basis points in one week. The rate is 12 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

Rates trend upward in 2018

Mortgage rates have been rising steadily so far in 2018, especially in the first two weeks of the year. The 30-year fixed averaged 4.09% on Jan. 2, and now it’s up to 4.34% today — exactly a quarter of a percentage point.

“The economy’s picking up, and rates are going to have to go up,” says Michael Moskowitz, president of Equity Now, a mortgage lender in New York City. “The stock market went up so much that I think this time it’s for real, because the wealth effect from the stock market is going to spill out into the economy.” Higher economic growth “is going to necessitate higher rates,” he adds.

Meanwhile, the Federal Reserve is expected to keep raising short-term interest rates this year. Now, long-term mortgage rates don’t exactly track the overnight rates that the Fed controls. Sometimes short-term rates and long-term rates move in opposite directions. But Moskowitz and other observers expect short- and long-term rates to be in sync this year.

Not a lot of homes for sale

This week provided data on home sales in December and for all of 2017.

Home prices continued to rise, and there’s still a tight supply of homes for sale. That’s especially true for existing homes that are on the market for resale.

According to the National Association of Realtors, 5.51 million existing homes were resold in 2017, a 1.1% increase over 2016 sales. Meanwhile, half of resold homes cost $247,300 or more in 2017, a 5.8% increase over the comparable median price for 2016. Meanwhile, fewer than 1.5 million existing homes were on the market at the end of December — just a 3.2-month supply. That’s a terrible buyer’s market.

“The lack of supply over the past year has been eye-opening and is why, even with strong job creation pushing wages higher, home price gains — at 5.8% nationally in 2017 — doubled the pace of income growth and were even swifter in several markets,” said Lawrence Yun, chief economist for the National Association of Realtors, in a news release.

Why is inventory so low?

One reason boils down to psychology. When homeowners ponder selling, they are prone to think: “If it’s going up in price, I don’t want to sell it yet. If I can hold it for one more year, I can get 6%” more, says Ruben Gonzalez, staff economist for Keller Williams Realty.

Another reason is there are not enough affordable new homes for sale. According to the Census Bureau, despite more new homes being sold in 2017 than the year before, half of new homes cost $321,100 or more in 2017 — a 4.3% increase over the comparable median price in 2016. In December, one-quarter of newly built houses sold for $500,000 or more, according to the Census stats. Just 17% of newly built homes cost less than $200,000.

Still, Gonzalez sees builders slowly moving toward making more entry-level houses. “Post-crisis, they mostly focused on the higher-end stuff, based on the lots they were already holding, and could get better margins out of a higher-end product, and their customers were likely to qualify for mortgages coming out of the crisis in that higher-end product range than in the entry-level range,” he says. “But I think we’re starting to see that change now, in the last year or two.”

MORTGAGE RATES TODAY, FRIDAY, JAN. 26:

(Change from 01/25)
30-year fixed: 4.34% APR (-0.02)
15-year fixed: 3.96% APR (-0.01)
5/1 ARM: 4.42% APR (NC)

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

The article Mortgage Rates Friday: Down, With Tight Inventory originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

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The average rate on a 30-year fixed-rate mortgage slipped a notch while the rate for the 15-year fixed was unchanged and the 5/1 ARM rose incrementally, according to a NerdWallet survey of daily mortgage rates published by national lenders Friday.

While rates were tame today, 30-year mortgage rates are six basis points higher than one week ago but still 11 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

Rates have been trending up for a month, on the back of continuing strong national economic news. And it’s that strong economic news that has market observers like Scott Anderson, chief economist for Bank of the West, predicting that the Fed will raise short-term interest rates at a steady pace next year.

“U.S. growth will be sufficiently strong to keep the Fed on track to raise the fed funds rate three more times in 2018,” Anderson said in an analysis.

10% fewer homes on the market

If you’re thinking about buying a house, you may want to jump in sooner rather than later. As mortgage rates steadily climb higher, home inventory continues to tighten.

There were 10% fewer homes for sale across the nation in December, compared with the same month in 2016, according to Zillow research. That continues a year-over-year trend that has been falling for the past 35 months.

“[That] means the often heated competition among home buyers and sometimes rapid increases in home values that tend to follow are unlikely to change this year,” Aaron Terrazas, senior economist for Zillow, said in a report. “This limited and dwindling supply, coupled with high demand from home buyers driven by a good economy… means home values themselves continue to soar.”

The national median home value was up 6.5% year-over-year in December, Terrazas said.

And new home construction has yet to fill the inventory gap.

“The December new construction report shows home building is inching along, with permits up slightly, starts slipping and housing completions up, but construction overall remains woefully behind the levels necessary to quench buyer demand,” Joseph Kirchner, senior economist for Realtor.com, said in an email.

Kirchner notes that 1.2 million new homes were started last month, but “the U.S. still needs 893,000 additional housing starts to get us back to normal levels.”

MORTGAGE RATES TODAY, FRIDAY, JAN. 19:

(Change from 01/18)
30-year fixed: 4.30% APR (-0.01)
15-year fixed: 3.94% APR (NC)
5/1 ARM: 4.42% APR (+0.01)

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

The article Mortgage Rates Friday: Rising and There Are Fewer Homes to Buy originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

Powered by WPeMatico

The average rate on a 30-year fixed-rate mortgage went up two basis points, the rate for the 15-year fixed also rose two basis points and the 5/1 ARM went up by one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Friday.

The average rate on the 30-year fixed is 14 basis points higher than one week ago and two basis points lower than one year ago. A basis point is one one-hundredth of one percent.

The week’s sharp jump in mortgage rates — the 30-year fixed started the week at 4.11% — was capped off by a strong increase in the core consumer inflation rate. The core Consumer Price Index, accounting for all items except food and energy, went up 0.3% in December, according to the Bureau of Labor Statistics. That was the largest increase since January 2017, the BLS said. Core inflation rose 1.8% in 2017, which is below the Federal Reserve’s target of 2%.

Rents rise

In unwelcome news for people who aspire to be homeowners someday, the inflation index for rent went up 0.4% in December, the BLS reported. Rental inflation was up 3.7% in 2017.

However, even as rents rise, it’s still more affordable to rent than to buy in 76% of counties with populations of 1 million or more, according to ATTOM Data Solutions, a property database company. Renting a three-bedroom property is more affordable than buying a median-priced home in the 14 most-populated counties. Renting is cheaper than buying in 30 of the 39 counties with populations of 1 million or more, ATTOM  said.

“And when broken down by population rather than number of markets, this data shows that the majority of the U.S. population — 64% — live in markets that are more affordable to rent than to buy,” Daren Blomquist, vice president of ATTOM Data solutions, said in a news release.

MORTGAGE RATES TODAY, FRIDAY, JAN. 12:

(Change from 01/11)
30-year fixed: 4.24% APR (+0.02)
15-year fixed: 3.87% APR (+0.02)
5/1 ARM: 4.34% APR (+0.01)

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

The article Mortgage Rates Friday: Up, Along With Rents originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

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The first three months of the year tend to be slow for home buyers and sellers. But there’s plenty to do — or at least pay attention to — if you plan to buy or sell a home later in the year. Here are three housing and mortgage trends to heed in the first quarter of 2018:

• Peak buying season, traditionally, is later in the year, but the best-prepared buyers are laying the groundwork for success by tidying up their personal finances now
• Mortgage rates are predicted to rise, but not by a lot
• The new tax law will increase take-home pay for many wage earners, which might invigorate sales of moderately priced homes

Prepare now to buy later

More people buy homes in spring and summer than in fall and winter. If you want to join the warm-weather homebuying crowd, start getting ready now because you are likely to face fierce competition during peak homebuying months. As more buyers vie to buy despite a tight supply, the successful bidders will be those who got their financial houses in order while everyone else was perfecting guacamole recipes for Super Bowl parties.

“I think it’s wise to look into your ability to buy a home a good three to six months prior to shopping for that home,” says Michael Becker, branch manager for Sierra Pacific Mortgage in White Marsh, Maryland. This gives you time to correct any errors on your credit report and to improve your credit score so you can get the best possible rate, he says.

Here are four financial steps you should take now to keep your spring or summer homebuying plans intact:

1. Check your credit report for accuracy. Inaccurate information can cause your credit score to drop.

2. Clear up any problems you find. “If there are errors or some negative items on your credit report, you can spend the next couple months trying to clear them up,” Becker says. Here’s a guide to disputing credit reporting errors.
3. Get debt under control. At the same time, make sure you have enough in savings. This isn’t easy, especially if you overspent during the holiday season. “You want your credit score to be at its best so you can qualify for the best rates,” says Rick Sharga, chief marketing officer for Ten-X, an online real estate marketplace in Irvine, California. Paying down debts is an important factor in raising your credit score, he says.
4. Talk with a mortgage professional before working with a real estate agent. A mortgage officer will help you figure out how much house you can afford, so you can be realistic when you go house hunting over the next few months. “There’s nothing worse than falling in love with a home only to find out you can’t afford it,” Becker says.

Watch mortgage rates

Mortgage rates were fairly steady during most of the fourth quarter of 2017, but housing economists expect rates to move upward in the first three months of 2018. Forecasters from Fannie Mae, Freddie Mac, the Mortgage Bankers Association and the National Association of Realtors project a median rise of 0.2% by the end of March. The 30-year fixed began the year averaging 4.09%, so it would be roughly 4.3% at the end of the first quarter, if the forecasts are right.

“Mortgage rates are bound to go up at some point,” Sharga says. “I really believe 2018 is probably the year we’re going to see the numbers start to move back up, and part of that is tied into this tax reform bill that was passed.”

The president and Congressional Republicans have promised that many wage earners will see an increase in their take-home pay as tax cuts are reflected in reduced tax withholding. If they spend the additional money in their pockets, the economy will heat up, stoking inflation, according to basic economic theory.

“Inflation is the real reason bond yields and mortgage rates rise,” Becker says.

Know how the tax law affects homeownership

The new tax law sets a few things in motion:

• Many wage earners will see increases in take-home pay this winter after the IRS updates its tax withholding tables
• The standard deduction is almost doubled beginning in tax year 2018, so fewer homeowners will take tax deductions for mortgage interest and state and local taxes
• For some homeowners who do itemize deductions, the tax break on property taxes and state and local taxes will be reduced

Outside of high-tax states with expensive homes, “we might actually see some positive effects,” Sharga says. The higher standard deduction might result in taxpayers “with a little more cash to use, and we might actually see more of the low- to mid-priced range properties sell because of that.”

But that’s all theory, Sharga says. We won’t know for sure how the tax law shakes out for another year or more.

The article 3 Months, 3 Housing Trends: Buyer Prep, Loan Rates, Taxes originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

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The average rate on a 30-year fixed-rate mortgage declined two basis points, the rate for the 15-year fell one basis point and the 5/1 ARM dropped by one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Friday.

The average rate on the 30-year fixed is 24 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

Mortgage rates held relatively steady all week, with the 30-year fixed remaining in a range of 4.09% to 4.12%. Friday’s release of the December employment report did little to kick mortgage rates either higher or lower. The unemployment rate remained at 4.1%, and the economy added a net 148,000 jobs.

“The job market continues to improve, but at a decelerating pace,” Lawrence Yun, chief economist for the National Association of Realtors, said in a news release. “The year 2017 ended with 2.1 million net new job additions, a very solid rate. However, the gains had been 2.6 million, 2.9 million and 2.5 million in the three preceding years.”

Curt Long, chief economist for the National Association of Federally Insured Credit Unions, pronounced the December employment report “modestly positive,” because job gains were less than expected, but were strong enough to keep the unemployment rate steady.

In terms of affecting mortgage rates, the December jobs report was the most important economic release this week. Next week’s highlight is the Consumer Price Index for December. That report is scheduled for release Friday morning and could move rates if it shows a sharp increase in inflation.

MORTGAGE RATES TODAY, FRIDAY, JAN. 5:

(Change from 01/04)
30-year fixed: 4.10% APR (-0.02)
15-year fixed: 3.73% APR (-0.01)
5/1 ARM: 4.31% APR (-0.01)

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

The article Mortgage Rates Friday: Calm First Week originally appeared on NerdWallet.

Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

Powered by WPeMatico

Will the new tax law save you money or cost you money? The answer depends on a complex array of factors that touch on just about every aspect of your financial life. This article is about a subset of your finances: How the tax law will affect homeownership and mortgages.

Among other things, the tax law changes whether and how homeowners deduct mortgage interest and property taxes. Many of these revisions for individuals and families are set to expire at the end of 2025.

Here are five elements of the tax law that could affect homeownership, home selling and moving.

1. Mortgage interest deduction

The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay. Beginning in 2018, the deduction is scaled back to interest on debt up to $750,000, instead of $1 million, for people who buy homes on or after Dec. 15, 2017.

The law carves out an exception for people who were under contract to buy a home before Dec. 15, 2017, as long as they were scheduled to close by Jan. 1, 2018.

Another exception: When you refinance a mortgage, the compromise bill treats the new loan as if it were originated on the old loan’s date. That means the old limit of $1 million would apply.

Use NerdWallet’s mortgage interest deduction calculator to find out what this means for your next mortgage.

2. Property tax deduction

The former tax law eased the pain of paying property taxes by allowing qualifying taxpayers to reduce their taxable income by the total amount of property taxes they paid. Beginning in 2018, the deduction is limited to a total of $10,000 for the cost of property taxes, and state and local income taxes or sales taxes.

3. Home equity deduction

On top of the mortgage interest deduction, the former tax law added a deduction for interest paid on home equity debt “for reasons other than to buy, build, or substantially improve your home.” So, for example, if you borrowed from a home equity line of credit to pay tuition, the interest you paid was tax-deductible.

Starting in 2018, the deduction is eliminated for interest paid on home equity debt.

4. Mortgage interest deduction for second homes

You may deduct interest on mortgage debt on your primary home and a second home. The new law keeps this part of the former tax law in place, although it reduces the amount of eligible mortgage debt, as seen in item No. 1 above.

5. Moving expenses

Under the former tax law, you could deduct some moving expenses when you moved for a new job. You had to meet complex criteria involving distance and timing of the move.

Beginning in 2018, only active-duty members of the armed forces will be allowed to deduct moving expenses.

Capital gain rule unchanged

When you sell a house, the capital gain is the difference between the price you paid for it and the price you sold it for. This capital gain is treated as taxable income. If you owned the house long enough, you’re allowed to exclude up to $500,000 of this capital gain as income so you don’t have to pay federal income tax on it. (The exclusion is capped at $250,000 for married taxpayers filing separately.)

The new tax law doesn’t alter the capital gain exclusion for homes. The House and Senate had voted to limit the exclusion, but they struck that language from the final bill.

Fewer taxpayers would itemize

The nonpartisan Tax Policy Center estimates that the number of itemizers will fall from about 49 million to 10 million under the new tax law.

The upshot: Under the tax law through 2017, if you’re married filing jointly and you paid $15,000 in mortgage interest and property taxes in 2017, you would itemize those deductions because they exceed the standard deduction of $12,700.

Beginning in 2018, the standard deduction for married filing jointly rises to $24,000. If you’re like the hypothetical family above, your $15,000 in mortgage interest and property taxes is less than the standard deduction. So you won’t itemize. You will use the standard deduction.

Whether you end up paying less tax or more tax depends on a wide range of factors beyond the homeownership-related deductions and exclusions discussed here. Every taxpayer is different.

Realtors raise a ruckus

The National Association of Realtors opposed increasing the standard deduction on the grounds that it “would destroy or at least cripple the incentive value of the mortgage interest deduction (MID) for the great majority of current and prospective homebuyers, and sap the incentive value of the property tax deduction for millions more.”

NAR argued that the de-emphasis on itemized deductions would result in “a plunge in home values across America in excess of 10%, and likely more in higher cost areas.”

Skeptics challenged the Realtors’ assertion that giving taxpayers a bigger standard deduction would cause home prices to nosedive. Logan Mohtashami, senior loan officer for AMC Lending Group in Irvine, California, says in an interview that there are always “spreadsheet people” who decide whether to rent or buy a home based on tax advantages. “But, in general, people buy homes because they want to raise their family, they want to own something, forced savings” — and not have to deal with a landlord, he says.

The article 5 Homeownership Changes Coming Under New Tax Law originally appeared on NerdWallet.

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