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How does the new tax plan impact me as a homeowner?

Any talk of taxes is sure to anger some and confuse most. But with a new tax plan in place, it’s important to know how the changes associated with the plan impact you as a current, or future, homeowner.

Here is a clear and straightforward breakdown of how the new tax plan affects homeowners in Louisiana.

New (reduced) cap on mortgage-interest deduction

Owning a home is the American Dream. For many reasons. However, one of the perks of owning a home is your ability to deduct mortgage interest from your income. That’s a perk renters don’t benefit from.

With the new tax plan, the cap for deducting mortgage interest is now at $750,000. That’s higher than what the House proposed ($500,000), but still is worthy of being aware of.

However, most homes in the Greater New Orleans area do not exceed $750,000. In fact, the National Low Income Housing Coalition estimates that just 1.9% of mortgages from 2013-2015 exceeded $750,000. California and New York homes make up more than half of those mortgages.

In short, this cap likely doesn’t impact you if you’re in the market for a new home. If you already own a home with a mortgage greater than $750,000, this new law doesn’t apply to you. It only applies to new mortgages.

The cap on mortgage interest reverts back to $1 million in 2026 regardless of when the home was purchased.

Taxes

On top of the changes to the mortgage interest deduction, the new tax plan limits how much of your property and state/local taxes you can deduct – to a combined $10,000.

Again, this doesn’t have a tremendous impact here in Louisiana as it does in the North East, or California, where home prices and property taxes are high.

But it does mean you might face larger tax bills starting this year.

Keep in mind, however, that the new plan doubles the amount of standardized deduction you can take ($12,000 for individuals and $24,000 for joint filers).

In other words, taking the standard deduction will exempt twice as much of your income from federal taxation. And if you currently itemize, it may be worth your while to take the standard deduction, which, in turn, limits how much income is subject to federal taxation.

Home-equity debt

Starting this year, interest paid on home-equity loans will no longer be deductible. And, you won’t be grandfathered in, either. The only exception is if you have a home-equity loan or second mortgage whose funds are used to substantially improve your home. In that case, the interest may still be deductible.

In 2026, the law will go back toward your ability to deduct for interest paid on up to $100,000 of home-equity debt.

Capital gains exclusion

You’ll still be able to exclude up to $500,000 ($250,000 for single filers) from capital gains taxation when you sell your home, as long as you’ve lived there for two of the previous five years.

Does the tax plan hurt or help homeowners?

Unfortunately, that’s not an easy question to answer. It completely depends on your unique situation. Generally speaking, though, homeowners in Louisiana may see some changes in their taxes. But with the increase in standard deductions, it might be worth your while to go that route vs. itemizing.

As always, talk to your financial advisor or accountant to know how the tax plan impacts you, specifically. Still, in the end, it’s clear that owning a home isn’t just the American Dream.

It makes good fiscal sense.

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Title FAQs During the Home Buying Process in Louisiana

Buying a house is an extremely exciting time in your life. Not only are you making an investment toward your future; you’re also creating a home for you and your family.

But as you’ve probably already gathered by now, the home buying process can also be stressful. So many papers to sign. Inspections. Appraisals. Offers and counteroffers.

And what about the title? Who handles the title? What’s title insurance? And do you actually need it?

Here are answers to some of the most common questions buyers ask us during the home-buying process.

Where does a title company fit in the home-buying process?

In simplest terms, here’s what the home-buying process looks like:

  1. You, the buyer, wants to make an offer on a property.
  2. You complete a purchase agreement / sales contract.
  3. You and your agent (or the seller, in some cases) contacts a title company to schedule a closing.
  4. That title company conducts research to ensure the title is clean, and does all the legwork leading up to the closing.
  5. You, the seller, and agents meet with the title company to officially transfer the property title.

As you can see, title companies play a pivotal role in the home-buying process. That’s why you want to make sure you and your agent work with a company that has a proven track record for success.

When, exactly, does a title company start working on my behalf?

Great question. An escrow or sales contract kicks off the process by opening a title order that we then process. All relevant tax information, loan payoffs, surveys, inspections, as well as other legal papers are ordered and reviewed.

What’s involved during a title search?

A title search is an integral part of your home-buying process. During a title search, we search through public records (deeds, mortgages, liens, wills, etc.) and any documents that affect the property’s title. We verify the legal owner of the home and determine any and all debts owed against the property.

Do I need title insurance in Louisiana?

Nearly 100% of the time, your lender will require you to have title insurance. That’s because this coverage gives your lender the ability to sell the mortgage to its investors, which in turn allows them to keep more money to use toward other loans.

Where should I purchase title insurance?

Here in Louisiana, you can purchase title insurance from a title insurance company, or from an agent licensed to sell title insurance. Just make sure you find a company or agent legally able to sell title insurance in Louisiana.

It’s important to note you aren’t required to choose any one specific title insurance company or closing agent. Louisiana grants you the right to shop and choose for your preferred title insurance provider.

When shopping around for title insurance, make sure to ask companies what services and fees are included in the title premium, as well as what fees they separately charge for each of their services.

Is there more than one kind of title insurance policy?

Yes. There are 2 specific types of title insurance policies: owner’s and lenders.

Owners:
This type of title insurance protects you from the full price of your home, plus legal costs if any issues arise after you buy your home.

The policy is based on the cost of your home, and will cover you as long as you own a vested interest in the property.

Note: You are not required to purchase an owner’s policy.

Lenders:
If you borrow money to buy your home, you’ll likely need to purchase a lender’s policy. This type of insurance protects the lender if a title or ownership problem comes up after the property is purchased.

A lender’s policy is issued for the amount of the mortgage, and coverage decreases as you pay down your loan. Once the mortgage is paid off, the lender’s policy ends.

Still have more questions about the title of your property or title insurance? Call our team today and we’ll walk you through each step. With Clean Title, you’re never alone during this exciting, albeit stressful, time of buying a home.

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The Best Gifts Homeowners Can Give Themselves This Christmas

As a smart shopper and practical homeowner, these ‘gift’ suggestions aren’t just for you and your family… they benefit your home and better your investment. From our Best Gifts Homeowners Can Give Themselves This Christmas Greatest Hits List, may we suggest…?

An extra mortgage payment.
Everyone’s budget and circumstances are different. But paying even a few dollars more toward your house debt each month can put you on track to pay off your mortgage early. And that frees up a ton of cash. Never pay more than you can afford to, but never discount the benefits of a fully-paid mortgage!

A renovation.
Or a fresh coat of paint or some landscaping. Over the holiday downtime, plan a few winter projects with your family. A little bit of extra work can go a long way toward improving your property value!

Another home.
If you’re thinking about investing in more real estate, winter is a great time to shop for deals. Whether it’s a rental unit, a home you can flip, or a new home for you and your family, make sure to do your research. Take a look at price-per-square-foot and property values over time. Talk to locals about growth potential in the area of your choice. And as always, never buy on emotion!

A new front door mat.
Or a wreath. Or a pot with some seasonal flowers. If your budget is limited this holiday season, go for something small but big on potential. Nothing boosts your curb appeal and says ‘welcome’ like some well-placed color and accessories to brighten up the entryway.

Don’t forget a little extra for your stocking! Make sure you’ve got a team of real estate and title professionals close at hand who can help make your home-buying and owning experiences the very best they can be. Clean Title, LLC, works to ensure our clients feel confident that when they sign on the dotted line, they’re signing to turn a house into a home.

Don’t miss our popular Title FAQs for tips that will give you the peace of mind only a clean title can!

Come see us on our Facebook page and check out details of our services on our website. Or call 985-277-5095 to speak to one of our title professionals today!

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3 Reasons to Give Thanks for Black Friday House Hunting

1. You have the time to focus. If you’ve strung a few days off together, you should have some extra time to do your research and plan your visits carefully. Who knows? With a three-day weekend, you just might find your dream home!

2.  Everyone else is at the mall. Only serious sellers are putting their homes out there over the holidays and only serious buyers are shopping. You’ll have less competition for the homes you want. (And technically, fewer buyers means more sellers willing to wheel and deal.)

3. There’s more downtime in December. Home buying can be labor intensive. If you find something you love in November and have more time off in December, you can use it for the home-buying process. Sellers love having that same time to pack and move!

Take advantage of the free time and the slower traffic. According to realtor.com, traffic on their website drops considerably Wednesday through Friday of Thanksgiving week.

But that doesn’t mean people are finished home shopping for the winter. The website ranks Dec. 28 as one of the busiest days of the year for real estate searches—even though Dec. 24 was the #1 slowest. New Year’s Day is also a hectic house shopping day… New Year’s resolution anyone?

There’s no place like home for the holidays. So give thanks then get out there and house hunt!

And with a new home, you’ll need a clean title and a good closing! With a blend of personal flavor and professionalism, Clean Title, LLC, works to ensure our clients know exactly what’s happening every step of the way, so that they can feel confident that when they sign on the dotted line, they’re signing to turn a house into a home. We’re proud of the reviews our clients have offered. You’ll see these recommendations on our Facebook page and details of our services on our website. Or call 985-277-5095 for details today!

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4 Nightmares You’ll Avoid Thanks to Title Insurance

You’ve filled the bookcases, fluffed the pillows, and the last photograph is nailed to the wall. You stroll out to your new mailbox to discover devastating news: a lawyer’s letter detailing a property lien against a previous owner, and now that expense is all yours.

Title insurance could be your wake-up call from this homeowner’s nightmare.

Title insurance can protect you against any problems with legal ownership of a home. Any outstanding financial expenses placed as a lien against a home’s value can put your investment at risk.

That’s why you need title insurance, for the lender and for you, the owner. lender’s policy, almost always required, covers the bank’s stake, while an owner’s policy covers you.

title search—as part of the mortgage process—should usually turn up any legal claims or rights attached to the house. So, for most people, that search will prevent these problems.

But no matter how careful, a title search can’t rule out a relative of a seller running a good night’s sleep with paperwork that appears to give them claim to a property. Or maybe the paperwork was filed improperly. That’s why insurance is so important.

Here are 4 (unfortunately) common homeowner’s nightmares where title insurance will save the day:

1.     Cousin Fred stakes a claim

Sometimes a distant relative or an ex-spouse might surface with a claim that they actually own the property.

Typically, a judge will sort out the case and you could be faced with buying that claimant out. That could mean losing your down payment and even all the principal you’ve paid into the house. Not to mention court costs. Other options could be negotiating costs, or even sharing the house

Title insurance covers all that.

2.     Those meddling neighbors

No need to keep up with the Jones’ next door—unless that deck-and-shed combo they built turns out to be on your property!

Title insurance will pay the cost of any legal battle or efforts to settle the matter and have the item removed from property that is legally yours.

3.     The case of the missing mortgage

Paperwork, paperwork…. Just as with liens, it’s possible a title search might not uncover an old mortgage until after closing because it was posted incorrectly with the Parish. That means filing a claim and using title insurance to pay the old mortgage off.

4.     And beware the unpaid taxes

Sometimes a buyer will receive notification of delinquent back taxes after closing. And that bill could be heavy—unless the buyer has owner’s title insurance.

 

Even if the chances are low that past owners or outstanding taxes might turn up, it’s worth it to talk to your title company about title insurance. If, as the owner, you’re on the fence about buying the policy, ask yourself a hard question: how you would handle the loss of equity and possible relocation expenses if you were to suddenly wake up to a title-related nightmare?

With a blend of personal flavor and professionalism, Clean Title, LLC, works to ensure our clients know exactly what’s happening every step of the way, so that they can feel confident that when they sign on the dotted line, they’re signing to turn a house into a home. We’re proud of the reviews our clients have offered. You’ll see these recommendations on our Facebook page and details of our services on our website. Or call 985-277-5095 for details today!

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