For decades solar energy use was largely confined to a small fringe of diehard conservationists. Most used a typically “solar thermal” system that stored heat from the sun to warm pools or appliances. Now, solar power is going mainstream in many more homes, helped along by a proliferation of new solar technology like cheaper photovoltaic cells and new high-tech, solar-powered devices.

Photovoltaic cells, most of which are made from silicon, have exploded in use around the country over the past five years as once-prohibitive costs for home use of the technology have declined. Between 2002 and 2006, the number of new photovoltaic systems installed in U.S. homes nearly tripled to 7,446 from 2,805, according to the Interstate Renewable Energy Council in Latham, N.Y. Industry officials say that such installations are expected to top 11,000 this year. (more…)

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The IRS is said to be increasing its audits and enforcement of 1031 exchanges during 2008. If you are considering using this accounting option to minimize the amount of capital gains taxes owed, it will be best to get the best advice possible on how to do it right.

For a little background, when a real estate owner sells piece of investment property, the taxpayer must pay a tax on any profit that is made. If the property was owned for more than one year, it will normally be considered a long-term capital gain and the tax will be based on the seller’s income. Subject to current IRS statutes, the highest tax rate is 15 percent.

However, if the property is “sold” in connection with a 1031 exchange and another investment property worth the same amount is used as swap, there would be no capital gains tax to be paid. Instead, the basis of the old property would be transferred to the new one. The tax on any profit will not be due until the replacement property is sold. (more…)

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Selling a home in this “post-bubble” real estate market calls for serious thought about the techniques necessary to make the sale fast and smooth. Most important in this market is pricing the home at or below market values. Sellers facing slow sales shouldn’t take their houses off the market to place it back on in the spring as is a normal real-estate tactic.

In today’s market, finding a buyer is more difficult for homeowners because of stricter lending policies and because homeowners often need to sell their homes at a price that will allow them to pay off their old mortgage. This puts non-homeowners, renters and those with “cash-in-hand” at a buying advantage. (more…)

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It doesn’t make financial sense to pay for points to buy down the cost of a mortgage only to refinance the mortgage before reaping the advantage of the buy down. Apparently, however, that’s what virtually all home buyers do when they elect to include points to lower their interest rate with plans to save money over time, according to “Do Borrowers Make Rational Choices on Points and Refinancing?” a special mortgage study by Abdullah Yavas, an Elliott Professor of Business Administration at Penn State’s Smeal College of Business and Freddie Mac analyst Yan Chang.

Only a tiny fraction, 1.4 percent, of borrowers who bought points held their loans long enough to make them pay off. Of those who didn’t buy points, only 1.5 percent would have been better off purchasing them, according to the study an examination of 3,785 mortgages originated between 1996 and 2003. Each “point” is 1 percent of the value of the mortgage. That is, if your mortgage is $200,000, one point is $2,000. Some points are called origination points — charged for originating or writing your mortgage. (more…)

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Not since 2005 have mortgage rates slipped well below 6%. As a result, another mortgage refinancing boom is under way. But this time, many homeowners will be watching from the sidelines.

Experts predict that at these levels, about 37% of homeowners could refinance their mortgages and save money on their monthly payment. And, as rates drop further, increasing numbers of consumers will find refinancing their existing mortgage worthwhile.

Unfortunately, many homeowners won’t benefit from the low mortgage interest rates, either because their mortgage is too big or their credit score is too low. In other cases, falling home prices will make it tough for them to refinance. (more…)

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Falling home prices and higher interest rates have made it hard to borrow against home equity. And, doubts about when the market will hit bottom has left many hesitant to spend money they may not recoup. Contractors who once had backlogs of a year or more now find themselves with only a few projects in the pipeline. Subcontractors, facing a slowdown in new-home construction, are looking for remodeling jobs.

Experts say that a typical homeowner should expect to recoup more of the cost of a midrange version of a remodeling project than an upscale version. Rebuilt kitchens and bathrooms show the most promise for good returns.

Most current trends suggest that bigger is better. Remodelers are knocking down walls to replace little-used formal dining rooms and guest rooms with expanded kitchens and bathrooms. (more…)