Tag Archives: Homeowner

Ways To Cut Household Expenses And Save Money Each Month

The key to saving money is knowing where to trim your budget.

Paying bills is never fun, but it’s even less exciting when monthly expenses leave you eating noodles for the last few days before every payday. But you don’t necessarily have to sacrifice the lifestyle you want to live in an apartment or home you love. In fact, eliminating unnecessary household expenses is easier than you think.

Whether you’re living those big-city dreams in a studio apartment in San Francisco, CA, or moving into a single family home in Austin, TX, read on to find out how to eliminate or reduce monthly household expenses like grocery bills, insurance, and cellphone bills without disrupting your life.

7 Ways to Cut Household Expenses

  1. Head to the grocery store. Sure, you can’t eliminate the price of food when you are determining your budget. But do you really need to buy all of your groceries at Whole Foods and buy takeout for lunch every day?  Eating in doesn’t have to mean daily trips to the grocery store either. Research local Community Supported Agriculture (CSA) programs and talk with your neighbors or coworkers about sharing the weekly offerings — buying into a CSA with a group still gives you a variety of fresh fruits and vegetables while easing the stress of having to figure out a way to use every piece of produce delivered.
  2. Have a plan when you shop. Using coupons to cut expenses is easy, but it’s not for everyone. One top alternative for cutting those grocery expenses, sans couponing, is to know the cost of the top 20 things you buy most often (think milk, eggs, and butter). That way, when you see the prices go up (or down!), you’ll know if you’re getting a good deal. Small strategic changes in shopping can help you cut down on expenses over time.
  3. Lay off the landline. Be honest: When is the last time you used your landline? If your phone has followed you from rental to rental or remained unused in your home for years, it may be time to unplug it for good — and cut out that expense. However, if you have a home office and require a landline, it may be worth investing in a product that hooks up to your router and allows you to make voice calls around the country.
  4. Renegotiate your insurance rates. Car, health, rental, and homeowners insurance costs are negotiable. Insurance rates fluctuate often, so you could be missing out on a lower rate if you don’t shop around for new insurance at least once per year. Plus, competition is high among insurance companies, and you may qualify for certain discounts based on your age or risk with a different plan.
  5. Keep your home neat. A cleaning service can tempt even the neatest renter or homeowner, but you may be paying for more than you’re getting, especially if you live in a small apartment rental in NYC. It’s not uncommon to spend $150 or more on each cleaning. If you’re paying for a monthly maid service, that could add up to well over one month’s rent each year. Instead, dedicate 30 to 60 minutes each week to speed clean your place yourself and split the time into five to 10 minutes each day. That way, your space will never get out of control, and you won’t be tempted to dial your cleaning service for a quick fix.
  6. Switch from commuting to carpooling. While it may not seem fair that you have to drive an hour to work or pay for parking at your office, your best bet for trimming your transportation budget is to share the cost with coworkers or skip the parking space altogether. Make a plan to carpool a few days a week with co-workers who live closest to you, or ditch the car entirely and bike or take public transportation to work.
  7. Cut back on unnecessary pet expenses. Fido’s needs come first, of course, but when it comes to dog spas, doggie day care services, and accessories, it’s easy for the extras to pile up. Instead of taking your pooch to doggie daycare every day, find a local dog park to throw the ball and let him run loose with other dogs before you head to work. And instead of spending loads on grooming costs, renters can shop for apartment communities that include dog washes and grooming stations as amenities. Homeowners or renters without grooming stations should look into self-service wash shops that can cost as little as $10 per wash.

Post courtesy of Trulia.com

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6 Financial Perks of Being a First-Time Homebuyer

From mortgage points to PMI, unlock the essential info about how homeownership affects your tax burden.

Hours after we closed on our first house, my husband and I sat in our empty new living room and stared at the walls. He was the first to speak, saying simply, “I thought it was painted.”

We learned a lot about that old house over the next 15 years. While we knew to expect some of the work, other tasks, such as needing to paint the walls, we figured out as we went along. One of the changes we didn’t anticipate was needing to make some adjustments to our tax forms.

The forms you fill out when you buy your house are just the beginning. We quickly understood that first-time homeowners have years of mortgage and insurance paperwork to look forward to. Then, of course, there are the taxes. To help you sort through that pile of paperwork and ensure you’re saving as much money as possible we did some research into tax benefits that can come from buying.

Six Tax Benefits for New Homeowners

1. You can deduct the interest you pay on your mortgage.

The home mortgage interest deduction is probably the best-known tax benefit for homeowners. This deduction allows you to deduct all the interest you pay toward your home mortgage with a few exceptions, including these big ones:

  • Your mortgage can’t be more than $1 million.
  • Your mortgage must be secured by your home (unsecured loans don’t count).
  • Your mortgage must be on a qualified home, meaning your main or second home (vacation homes count too).

Don’t assume that if you are married and file a joint tax return, you have to own your home together to claim the interest. For purposes of the deduction, the home can be owned by you, your spouse, or jointly. The deduction counts the same either way.

And don’t worry about keeping track of how much you’re paying in interest versus principal each month. At the end of the year, your lender should issue you a form 1098, which reports the amount of interest you’ve paid during the year.

Warning: Since, as a first-time homeowner, you pay more interest than principal in the first few years. That number can be fairly sobering.

2. You may be able to deduct points.

Points are essentially prepaid interest that you offer upfront at closing to improve the rate on your mortgage. The more points you pay, the better deal you get.

You can deduct points in the year you pay them if you meet certain criteria. Included in the list (and it’s a long one): Points must be paid on a loan secured by your main home, and that loan must be to purchase or build your main home.

Pro tip: Points that you pay must also be within the range of what’s expected where you live — unusual transactions may cause you to lose the deduction.

3. Depending on the year and your income level, you may be able to deduct PMI.

Private mortgage insurance, or PMI, protects the bank in the event you default. PMI may be required as a condition of a mortgage for first-time homebuyers, especially if they can’t afford a large down payment.

For most years, PMI is not generally deductible, but the specific rules around it change annually. In 2016, if you made less than $109, 000 a year as a household, you could claim a tax deduction for the cost of PMI for both their primary home and any vacation homes. Check to see if the PMI deduction is a possibility as you are working on your taxes.

4. Real estate taxes are deductible.

Real estate taxes are imposed by state or local governments on the value of your property. Most banks or other mortgage lenders will factor the cost of your real estate taxes into your mortgage and put those amounts into an escrow account.

You can’t deduct the amounts paid into the escrow, but you can deduct the amounts paid out of it to cover the taxes (you’ll see this amount on a form 1098 issued by your lender at the end of the year).

If you don’t escrow for real estate taxes, you’ll deduct what you pay out of pocket directly to the tax authority.

And don’t forget about those taxes you paid at settlement. If you reimburse the seller for taxes already paid for the year, you get to deduct those too.

Those amounts won’t show up on a form 1098; you’ll need to check your settlement sheet for the totals.

5. Your other tax deductions may matter more.

To take advantage of these tax benefits, you have to itemize your deductions on your tax return.

For most taxpayers, this is a huge shift: in many cases, you’re moving from a form 1040-EZ to a form 1040 to list expenses on Schedule A.

In addition to interest, points, and taxes, Schedule A is where you would report deductions for charitable donations, medical expenses, and unreimbursed job expenses.

For itemizing deductions to make good financial sense, you generally want to have more total deductions than the standard deduction (for 2015, it’s $6,300 for individuals and $12,600 for married couples). Most taxpayers don’t reach those numbers — unless they’re homeowners.

The home mortgage interest deduction, in particular, tends to tip most homeowners over the standard deduction amount, making those other deductions (such as medical expenses) that might otherwise go unclaimed more valuable.

6. You’ll get capital gains tax relief down the road.

I know you just bought your home, but admit it: Resale value is something you considered when you chose your home. And different from other investments for which you’re taxed on the full value of any gain, you can exclude some of the gain attributable to your home when you sell.

Under current law, you can avoid paying tax on up to $250,000 of gain ($500,000 for married filing jointly) so long as you have owned and lived in the property for two of the last five years (those years of owning and inhabiting don’t have to be consecutive).

Gain over that amount is taxed at capital gains rates, which are generally more favorable than ordinary income tax rates.

 

Post courtesy of trulia.com

10 Easy Decorating Ideas for Fall

Ready to give your home a mini makeover for fall? Here are 10 autumn-inspired home decorating ideas we love.

1. Faux-liage

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Add an autumnal touch to an open bookcase with silk fall leaves, which you can find at your local craft store. Whether they’re pressed inside a picture frame or strategically placed along the shelves, autumn-colored leaves are sure to pump up the fall factor. Design by Layla Palmer

2. Paper Pretties

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Fall decorating doesn’t have to be expensive, especially if your material of choice is paper. Book pages, framed silhouettes, and a colorful pennant banner make an inexpensive impact in this living room. Design by Krista Janos

3. Less Is More

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Create a fresh, fall look with an orange-and-white palette. Here, white furniture and accessories, paired with a few orange accents create a sophisticated balance. Design by Melissa Smith

4. Pedestals and Pennants

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Pumpkins on pedestals and pennant banners made from fall-themed scrapbook paper or fabric will give an open hutch a healthy hint of autumn. Design by Sara Madrigal-Fehling

5. White Pumpkins

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Keep it simple with an elegant display of white, or ghost, pumpkins. For visual interest, stagger the heights by using stacks of old books or vintage scales as pedestals. Design by Beth Hunter

6. Painted Pumpkins

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Faux pumpkins and gourds painted in a monochromatic color scheme add understated elegance to this mantel. Design by Susie Harris

7. Birds of a Feather

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Pinecones, gourds, pheasant feathers and artificial owls add an organic, woodsy touch to this rustic, fall vignette. Design by Laura Putnam

8. Mason Jar Sconces

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Create quick-and-easy wall sconces this fall with a pair a vintage jars and some twine. Suspended from cup hooks in the ceiling and filled with cinnamon sticks and LED candles, these temporary sconces add warmth. Design by Holly Charlesworth

9. Natural Elements

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Weathered wood, antlers, rope and time-worn finishes make for a beautifully rustic, fall mantel display. Design by Catherine Beaver-Hawman

10. Spooky Stuff

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Inexpensive cheese cloth, skulls, a black wreath and decorative moss create one spook-tacular display. Design by Ashlie
Post and photos courtesy of HGTV.com

3 Common Moving Nightmares (and How to Prevent Them)

There’s no other way to put it: Moving is stressful. But it doesn’t have to be a waking nightmare. Here’s how to avoid a move from … you know where.

Nightmares aren’t supposed to take place in broad daylight, but some common life events bring so much tension, uncertainty and anxiety that they can easily rank as “quality nightmares.” Moving house tops the list of stressful experiences that can feel like a bad dream — and it can easily come true unless you take precautionary measures.

Problems can occur at every stage of the relocation process: A violent storm hits just when the moving truck is parking in front of your door. The elevator is out of order when you arrive at your new high-rise building. You lose the keys to your car on the morning of moving day. The list goes on.

However, the most common moving nightmares fall into three main categories. Here’s how they typically play out — and how to avoid them.

Bad movers

Many moving horror stories involve rogue or incompetent movers.

  • The movers are late or don’t show up at all. The agreed-upon time comes and goes, but you see no sign of an approaching moving truck. When you call the moving company to demand an explanation, your relocation nightmare begins. Regardless of the excuses you receive (a traffic jam, a breakdown, a delay on a previous job, a mistaken date, etc.), the inevitable result will be lots of stress and wasted time. Worst of all, you may not be able to reach the moving company at all: fraudulent movers may have taken your deposit money and disappeared with it.
  • The movers are careless or inexperienced. If your movers arrive late, in a smaller moving truck than needed, or lack the required know-how and the proper equipment to handle your items safely and efficiently, your relocation can quickly turn into a nightmarish experience. The amateur movers may drop your plasma TV, break your heirloom china, scratch your antique dresser, dent the floors, or cause other overwhelming emotional and financial damage.
  • The movers are scam artists. In the worst case scenario, you may fall victim to unscrupulous moving scams. Rogue movers will often request much more money than previously negotiated based on some alleged extra services. They may hold your belongings hostage until you pay a considerable extra “fee” as ransom, or steal your more expensive belongings and just discard the rest.

The good news is that there is an easy way to avoid such nightmares. All you need to do is carefully research your movers before hiring them to make sure you are dealing with licensed and experienced professionals you can trust. It’s also a good idea to purchase appropriate insurance for your belongings, just in case.

Traffic problems

Heavy traffic or road accidents can also turn your move into a real nightmare.

  • Traffic jams. The moving truck is delayed and there may not be enough time to proceed with your move as planned. You may have to postpone the relocation to another day, or you may miss your flight.
  • Traffic accidents. if there has been an accident on the road, the moving truck will have to wait until the damaged vehicles are removed and normal traffic is restored. However, the scenario could get much worse: You may lose all your possessions or receive them badly damaged if the moving truck crashes, catches fire, or gets trapped somewhere because of adverse weather conditions like heavy snowfall or torrential rains. It’s even possible that thieves could break into the vehicle and steal your goods.
  • Breakdown. If the moving truck breaks down on the road, you’ll have to wait for the moving company to send another vehicle. What’s more, your items can easily get damaged while being transferred.
  • Parking issues. The moving truck has to circle the neighborhood for hours until an appropriate parking space is vacated, or the movers have to park far away from the entrance to your home. In such cases, you’ll not only lose valuable time, but will also have to pay an extra fee for the delay or an additional long-carry fee.

Of course, there’s nothing you can do to prevent traffic accidents or breakdowns. But you can at least reserve a parking place directly in front of your old and new homes, and choose a moving company that has experienced drivers and several moving vehicles in good condition.

Poor organization

The only way to avoid problems when moving house is to plan each phase of your relocation adventure in meticulous detail and stay one step ahead all the time. Otherwise, you may find yourself facing any of the following all-too-common moving ordeals.

  • Packing chaos. It may turn out that you’ve packed more items than previously discussed with the movers; packed items that can’t be loaded onto the moving truck; haven’t labeled the boxes properly; or forgotten to prepare an “essentials box.” Worst of all, you may not be ready when the movers arrive. All these packing mistakes will result in lost time and money.
  • Furniture troubles. If your large furniture doesn’t fit through the doors, you may be forced to leave some treasured pieces behind, or request hoisting services that will cost you dearly and will delay your move considerably.
  • Paperwork problems. If you forget to transfer the utilities, you won’t have electricity, gas, and water on move-in day. If you forget to change your address, you won’t have your mail delivered to your new home. If you forget to update your driver’s license and car registration in time, you’ll be fined. Not taking proper care of your documents will most certainly get you in trouble.
  • Overspending. If you book your movers at the last moment, require too many extra services, fail to create a realistic moving budget, pack all your items without sorting them out first, or allow any other financial imprudence, you’ll end up paying much more than you expected.
  • Safety issues. Make every effort to prevent injuries and accidents on moving day, as getting hurt is one of the worst things that can happen during your relocation endeavor.

Post courtesy of zillow.com

Homeownership 101: Are You Ready?

Owning your own home is part of the American dream. But it takes more than just dreaming of buying and maintaining a home. Before you take the plunge, here are some things to ask yourself.

Does it make sense to buy?

Buying instead of renting needs to make sense financially. To help you decide, play with Zillow’s Buy vs. Rent calculator to see how many years it will take before the cost of buying equals the cost of renting. It’s called the breakeven horizon, and it varies by area of the country.

If you plan to stay in your home past your breakeven horizon, then buying makes financial sense. If you think you’ll move earlier, then renting may be the way to go.

Are you financially ready?

Buying a house involves raising a down payment and paying a monthly mortgage, which lasts anywhere from 5 to 30 years, depending on the home loan you can afford and are offered. There are other costs as well, but let’s focus on the big money.

Down payment: It’s the lump sum you’ll pay upfront that funds equity in the property and proves to lenders that you’ve got skin in this homeowner game. Down payments vary. In the go-go days that led up to the housing collapse, some lenders dismissed the down payment altogether – and we see how well that ended. Today, 20 percent is preferred and often gets you the best rates, but some loans allow down payments as low as 3 percent. Sometimes parents or friends can offer help with the down payment. If you have a choice, take a gift rather than a loan, not only for obvious reasons, but because lenders will add that debt to other monthly obligations and potential mortgage payments to determine your debt-to-income ratio, which generally can’t top 43 percent to qualify for a home loan.

Monthly mortgage payments: This is what you’ll pay each month. In most cases, a mortgage includes the loan principal and interest (both amortized over the life of the loan) plus homeowners insurance and property taxes (pro-rated). When credit was tight, getting a mortgage at any rate was reserved for only the most credit-worthy borrowers. Things have loosened, but lenders still want to know that you’re a responsible, gainfully employed and credit-worthy candidate.

Are you emotionally ready?

Owning a home is a huge commitment so before jumping in, consider if you are ready to make lots of decisions, from picking an agent to picking paint colors. Are you confident enough to select a neighborhood where you’ll want to stay for a while? And are you up for devoting the time and attention to maintaining a home? Weekends will disappear under chores like pulling weeds, cleaning gutters, shoveling snow, sealing counters and decks, and on and on. Taking care of your biggest investment can be gratifying but only if you’re ready.

Do you have the skills?

Your home will require regular maintenance and repair, and there’s no landlord to call for help. You’ll need some basic handyperson skills so you won’t go broke hiring a repair professional to remedy every odd sound or smell. Here are some things every homeowner should learn how to do:
• Change a toilet flapper
• Shut off the main water valve and outdoor faucets
• Change a furnace filter
• Clean gutters of debris
• Change smoke detector batteries
• Locate and flip breaker switches
• Locate studs to hang shelves
• Paint a room

Post courtesy of zillow.com

How To Add Value To Your Home

Photo credit: Naphat_Jorjee / shutterstock.com

It is common for homeowners to make changes to their houses that increase the comfort level and make their homes look better. These changes may be based on personal taste or they may be to make their home life more convenient. In many cases, these changes add value to the home. This means that when the time comes for the house to be sold, potential buyers will be willing to pay more for the home because of these added improvements. Smart homeowners make their upgrades based on these value-added changes. They prioritize how they are going to improve their homes based on the changes that will make their home worth more. One of the main ways to determine if a change will add value is to consider what room you are improving. Bathroom remodeling adds more value than swapping out bedroom carpet. Improving toilets, showers, tubs, and sinks, or adding new tile to the space attracts buyers to take a second glance at your home. If you are remodeling, these should be some of the first improvements you consider.

The next room you should consider adding upgrades to is the kitchen. Potential buyers know their families are going to be spending a lot of time in their kitchen. This means they are going to want modern appliances, comfortable seating, and plenty of space for cooking and entertaining. Make sure your kitchen is a wide open space that allows you to share family time even when you are cooking or cleaning up.

Another change you can make that will benefit you long before you sell your home is to make energy-efficient upgrades. Trade in old appliances for modern ones that save energy and save you money. If you have drafty old windows, swap them out for ones that seal up the air in your home and block out the sun’s damaging rays. If you are looking to make major investments, consider solar panels for heating.

The outside of your home is one of the major places to add value. There are few places in your home where cosmetic changes make a big difference as they do outside. When buyers pull up to your home or drive by while they are browsing, it is the curb appeal that will catch their eye. Make sure the exterior of your home is in good repair, add some color to the front door and the garden areas, and keep the grass green and trimmed.

Finally, the most important thing you can do to add value to your home is to keep up with the maintenance. As busy homeowners, it is all too easy to let things slide and concentrate on them only when something breaks for is in disrepair. To save yourself a lot of money and ensure your home will retain its value, take care of it. Just as you would change the oils and rotate the tires on a car to extend its life, do the same for your home. Keep up with seasonal maintenance and handle things before they become an expensive problem.

8 Times When It's Smarter to Rent a Home Than to Buy

8 Times When It’s Smarter to Rent a Home Than to Buy

8 Times When It's Smarter to Rent a Home Than to Buy

Photo Credit: Andy Dean Photography/Shutterstock.com

Buying can make financial sense for some people, and home ownership has been the American dream for many families. This dream vanished for many during the housing market crash of 2008. Since then, home prices have increased, and mortgages have become more available with interest rates that haven’t been seen in decades. However, life has changed for many families, and home ownership may not be a good plan for people who fall into one of the following 8 categories.

  1. You Might Not Be Able To Stay In a Home for Five Years

 

Experts say it takes about five years for your investment to earn money, or more importantly, to not decline. The most important factor influencing your decision to buy or rent is how long you believe you will be in the home. Changes in your career path and your personal life should be considered. Make a realistic assessment of your lifestyle preferences. Can the home you buy now fulfill the expectations you have for your life?

  1. If You Can’t Put 20% Down

A small down payment means higher costs. The interest rate will be higher, and you will be charged a mortgage insurance premium to protect the lender should you default. If you have to sell the home soon after you move in, then you will likely have to pay to sell.

  1. If You Have Found a Rental Bargain

If you are renting a lovely home at a low rent payment, then you might consider using this time as an opportunity to save money towards a down payment. You will need to weigh all factors including savings in maintenance and the loss of a tax deduction.

  1. When the Housing Market Is Priced Too High

Carefully consider the price of homes compared to what you can get for the money. A home may be priced too high for your budget, but it may be what the market is selling at.

Equally important is the need to assess your ability to buy a home in this type of market. Know your budget limitations and don’t let someone talk you into purchasing a home that you know you can’t afford. Purchase price is one thing, but taxes and upkeep are a totally different and often expensive part of buying a home.

  1. If Buying Extends Your Commute

If you need to drive a car to your job, then you need to consider commuting time and costs. Sitting in traffic on a freeway gets old quickly. Gas and car insurance costs increase along with the commute. Free time is valuable time.

  1. If Your Credit Isn’t Very Good

Your credit score will determine the interest rate you will pay and even your down payment requirement. Think about the impact of a low credit score over the life of the mortgage. You could be paying a lot more money for many years.

  1. If You Are Not a Person Who Likes To Do Maintenance Chores

There will always be things to do around the home – both inside and outside. The costs of maintenance could be up to 10% of the price of your home each year. You might also have to pay an HOA fee. Some tasks are very foreboding like cleaning gutters and inspecting the roof for leaks.

  1. If You Are New To the Area

It can take up to a year to get to know a new area well enough to know where to buy a home. Let your brain guide you and not your heart. Be sure of the area you select. Even if you don’t have children, the quality of the schools will be essential for sustaining the resale value.