No one ever wants to pay more taxes than necessary, but this year it's even more important to save every penny you can. Here are some tips that can help you get a larger refund:
Property Tax Deduction for Non-Itemizers: Before 2008, only people who itemized their deductions could deduct property taxes. For 2008, individuals who do not itemize can deduct up to $1,000 of property tax on a joint return or $500 on a single return.
Driving Deductions: The IRS increased the cents-per-mile deduction for business-related driving expenses from 50.5 cents to 58.5 cents from July 1, 2008 through December 31, 2008. They also increased the rate for deducting medical and moving driving-related expenses from 19 cents to 27 cents for that same time period.
Disaster Losses: Casualty losses (i.e. like those from storm or fire damage) are normally deductible only to the extent they exceed 10% of AGI. For 2008, casualties in federally declared disaster areas can be deducted without having to abide by the 10%-of-AGI rule, which raises the amount that is deductible.
Capital Losses: Review your portfolio and note all your realized losses for 2008. You can write these off against capital gains and you can have a net loss of up to $3,000 deductible against your salary and other ordinary income. What's more, any excess can be used to offset gains or can be deducted in 2009 or later years.
Retirement Plan Contributions: You can make tax-saving contributions to retirement plans for 2008 through April 15, 2009.
Charitable Donations: Not only can you claim deductions for money and items you donate to a charity, you can also claim deductions for expenses you incur on a charity's behalf (i.e. driving costs, printing costs, long distance phone call costs, etc.).
Make sure you take time to go through your records carefully so you receive the biggest refund possible. And if you are looking for a great tax professional to help you, please let me know and I'll be happy to recommend someone.
Monday, February 16, 2009
Monday, February 2, 2009
Don't Wait a Whole Year to Catch Up With Friends and Family
The holiday season has once again come and gone. And while some of us may be mourning the end of the large holiday feasts and seemingly bottomless platters of treats, many people may also feel a little melancholy about being out of touch with friends and family. After all, one of the best things about the holiday season is spending time with family or reading holiday letters about what your friends did during the past year.
The good news is, you don't have to wait an entire year to reconnect with friends and family members. That's because social networking websites like MySpace.com and Facebook.com as well as sites like Twitter.com and even blogs are ideal for establishing relationships and staying in touch with your friends and family members. The ages of people on these networks range from computer-savvy high school kids to middle-aged professionals. That means there's a good chance you can connect with a number of your friends, family members, and even acquaintances you haven't seen in years!
How to Decide Which Option Best Suits You
With so many ways to connect with people, it's hard to know which option best suits you. The key is to understand some of the basic differences...and to focus on which option(s) will allow you to communicate the way you want to communicate. To help with the decision, the following list breaks down some of the most popular options and how they can help you stay in touch.
Short updates...without the hassle. If you're just looking for a way to share short blurbs about what you're doing, you may feel like a blog or social networking site is too overwhelming or time-intensive for you. The good news is, there's an option that's perfect for you. Social messaging or micro-blogging sites like Twitter.com are designed to deliver short messages or updates. For instance, the longest message you can post on Twitter is only 140 characters long – yes, characters, not words. So there's no pressure to write a long story or upload pictures. You simply type a sentence or two and hit send. You can even send messages via a text message from your cell phone. And when you log into your site to see what friends and family members are doing, you get the same short messages in return. No worries about linking to multiple pages or reading long posts. Just concise blurbs...all posted on one convenient screen for you to read. And best of all, it's free to set up and use!
Show photos, post updates, chat online, or send emails. For a more full-featured way to stay connected, you may want to sign up for a social networking site like Facebook.com or MySpace.com. These sites are free and allow you to write regular updates like a micro-blog site, but they also enable you to post pictures as well as send emails to a special inbox on the site. You can also use the site like an Instant Messaging program, so you can see which friends or family members are online at the same time as you and chat instantly! And, most social networking sites allow you to control some aspect of privacy, so you can set parameters determining who can see your content. Of course, the numerous social networking sites aren't exactly the same. For example, some sites like MySpace offer greater customization, so you can really make your page fit your personality. In addition, you may find that most of the people you want to stay connected with are already signed up on a certain site. So talk to your friends and family members before choosing which site – or sites – you want to use.
Share longer stories and post pictures for the world to see. If you want to share more than a sentence here or there, you may want to start a blog. Blog sites such as Blogger.com and Wordpress.com allow you to set up a blog for free. With these sites, you can write longer articles and even post pictures. The software walks you through the process, so it's easy to do...even if you're new to the whole "online communication" concept. Another nice benefit of blogs is that your friends and family members don't need to be members of a site to read your updates or see your pictures. They just need to know the URL so they can type it into their browser. So, it's convenient for everyone.
Set up your own social network. You may want to have a social network set up just for a specific group. For example, you may want to have one place where all your family can come together to communicate. Or, you may want a special network set up for a work group or class reunion. Regardless of what it's for, setting up your own social network is actually easier than you think when you use sites like Ning.com. With a Ning site, you can invite only the members you want to have access to the site, so it has an added element of privacy. In addition, each member can update their own profile...and you can even include a calendar of events and a discussion forum that everyone can access. With these added benefits, your social network site can truly become the one place that your entire family comes together...just like the dining room table during the holidays, except it's online!
Getting Started
Facebook, MySpace, blogs, and other social networking sites like Ning offer somewhat different services, but they all have similar features. The nice thing is, getting started on a social networking site or blog is easy and can often be done in as little as 15 minutes. Here are some things you'll want to have handy before you begin:
Write a profile. Social networking sites are all about getting to know each other and keeping people up-to-date on what's going on in your life. If you don't have a profile, people can't get to know you. Start by writing a few lines about yourself and what you're interested in.
Pick a profile picture. People like to see who they're talking to. Select a picture that is fun but also somewhat professional. Remember, in addition to your friends and family members, you may end up communicating with co-workers or future employers. So make sure you maintain a public image that works for all situations.
Get some content ready. Start by making a list of items you can add to your page today. You'll want a variety of information: some fun interests and hobbies, along with some insightful details like where you went to school and when you graduated. If you're starting a page on a social networking site, you may even want to get a few pictures of your family or a recent vacation ready so you can share them with friends.
Gather usernames from friends. Many social networking sites have features that allow you to search for former classmates or to check your email address list. But, it's probably a good idea to gather a few usernames of friends so you can connect with them as soon as you set up your page. If you plan on starting a blog, you may want to gather the URLs of your friends' or family members' blogs as well. That way, you can add them as links on your blog for easy access by you and by your blog's visitors who may be interested.
After you get the content ready for one site, you can use that same information to register on other sites if you want. This way, you can manage multiple sites with relatively little work.
Once you have your page up, you may want to take a few minutes to see what other people put on their pages. What ideas can you use on your page? Remember, it's not all or nothing. Your page or blog is an ongoing work in progress. That's part of the fun!
The good news is, you don't have to wait an entire year to reconnect with friends and family members. That's because social networking websites like MySpace.com and Facebook.com as well as sites like Twitter.com and even blogs are ideal for establishing relationships and staying in touch with your friends and family members. The ages of people on these networks range from computer-savvy high school kids to middle-aged professionals. That means there's a good chance you can connect with a number of your friends, family members, and even acquaintances you haven't seen in years!
How to Decide Which Option Best Suits You
With so many ways to connect with people, it's hard to know which option best suits you. The key is to understand some of the basic differences...and to focus on which option(s) will allow you to communicate the way you want to communicate. To help with the decision, the following list breaks down some of the most popular options and how they can help you stay in touch.
Short updates...without the hassle. If you're just looking for a way to share short blurbs about what you're doing, you may feel like a blog or social networking site is too overwhelming or time-intensive for you. The good news is, there's an option that's perfect for you. Social messaging or micro-blogging sites like Twitter.com are designed to deliver short messages or updates. For instance, the longest message you can post on Twitter is only 140 characters long – yes, characters, not words. So there's no pressure to write a long story or upload pictures. You simply type a sentence or two and hit send. You can even send messages via a text message from your cell phone. And when you log into your site to see what friends and family members are doing, you get the same short messages in return. No worries about linking to multiple pages or reading long posts. Just concise blurbs...all posted on one convenient screen for you to read. And best of all, it's free to set up and use!
Show photos, post updates, chat online, or send emails. For a more full-featured way to stay connected, you may want to sign up for a social networking site like Facebook.com or MySpace.com. These sites are free and allow you to write regular updates like a micro-blog site, but they also enable you to post pictures as well as send emails to a special inbox on the site. You can also use the site like an Instant Messaging program, so you can see which friends or family members are online at the same time as you and chat instantly! And, most social networking sites allow you to control some aspect of privacy, so you can set parameters determining who can see your content. Of course, the numerous social networking sites aren't exactly the same. For example, some sites like MySpace offer greater customization, so you can really make your page fit your personality. In addition, you may find that most of the people you want to stay connected with are already signed up on a certain site. So talk to your friends and family members before choosing which site – or sites – you want to use.
Share longer stories and post pictures for the world to see. If you want to share more than a sentence here or there, you may want to start a blog. Blog sites such as Blogger.com and Wordpress.com allow you to set up a blog for free. With these sites, you can write longer articles and even post pictures. The software walks you through the process, so it's easy to do...even if you're new to the whole "online communication" concept. Another nice benefit of blogs is that your friends and family members don't need to be members of a site to read your updates or see your pictures. They just need to know the URL so they can type it into their browser. So, it's convenient for everyone.
Set up your own social network. You may want to have a social network set up just for a specific group. For example, you may want to have one place where all your family can come together to communicate. Or, you may want a special network set up for a work group or class reunion. Regardless of what it's for, setting up your own social network is actually easier than you think when you use sites like Ning.com. With a Ning site, you can invite only the members you want to have access to the site, so it has an added element of privacy. In addition, each member can update their own profile...and you can even include a calendar of events and a discussion forum that everyone can access. With these added benefits, your social network site can truly become the one place that your entire family comes together...just like the dining room table during the holidays, except it's online!
Getting Started
Facebook, MySpace, blogs, and other social networking sites like Ning offer somewhat different services, but they all have similar features. The nice thing is, getting started on a social networking site or blog is easy and can often be done in as little as 15 minutes. Here are some things you'll want to have handy before you begin:
Write a profile. Social networking sites are all about getting to know each other and keeping people up-to-date on what's going on in your life. If you don't have a profile, people can't get to know you. Start by writing a few lines about yourself and what you're interested in.
Pick a profile picture. People like to see who they're talking to. Select a picture that is fun but also somewhat professional. Remember, in addition to your friends and family members, you may end up communicating with co-workers or future employers. So make sure you maintain a public image that works for all situations.
Get some content ready. Start by making a list of items you can add to your page today. You'll want a variety of information: some fun interests and hobbies, along with some insightful details like where you went to school and when you graduated. If you're starting a page on a social networking site, you may even want to get a few pictures of your family or a recent vacation ready so you can share them with friends.
Gather usernames from friends. Many social networking sites have features that allow you to search for former classmates or to check your email address list. But, it's probably a good idea to gather a few usernames of friends so you can connect with them as soon as you set up your page. If you plan on starting a blog, you may want to gather the URLs of your friends' or family members' blogs as well. That way, you can add them as links on your blog for easy access by you and by your blog's visitors who may be interested.
After you get the content ready for one site, you can use that same information to register on other sites if you want. This way, you can manage multiple sites with relatively little work.
Once you have your page up, you may want to take a few minutes to see what other people put on their pages. What ideas can you use on your page? Remember, it's not all or nothing. Your page or blog is an ongoing work in progress. That's part of the fun!
Wednesday, January 28, 2009
A Taxing Time of Year - Tips to Make Your Tax Season Go Smoothly
It's that time again...time to start gathering all of that dreaded documentation to send to good old Uncle Sam! Recent stats say the IRS audited approximately 1 out of every 97 returns last year, so it pays to be careful. And even though this may seem like a very painful process, taking just a few simple steps right now will make your tax filing far easier and more accurate.
Keep it together. Make a quick list of all the documents or statements that were needed to complete your return last year – or call your tax planning professional for a checklist. Use this as a checklist to make sure you have a good start on the documents you may need this year. As you receive tax documents in the mail, grab your checklist, and mark the item as received. Then, keep all of the tax documents together in a large file or envelope marked "2008 TAXES."
Do the math. According to the IRS, the most common mistake on tax returns is bad math – from transposed numbers to downright incorrect data. And with one form leading to another, those errors can make a huge impact. Even if you use tax software, you're not off-the-hook – since it only adds the numbers YOU put in. Double-check entries carefully.
Every last cent. The IRS receives copies of your Form 1099 earnings each tax season. So, they know how much you make in interest and dividend income, and they will use that info to double-check your filing information. Make sure you collect all your earnings statements and document them on your return.
Sign on the line. It sounds almost silly, but forgetting to sign a return is actually a fairly common oversight. And the IRS won't process a return that doesn't have a signature. So, make sure you sign to avoid resubmitting your paperwork and possibly paying late-filing fees.
Remember, there isn't a lot of room for error when you're dealing with the IRS. A slight miscalculation could mean the difference between getting a return and writing a check – or worse, paying a penalty. It pays to work with a tax professional.
Beware of Tax Scams this Time of Year
As tax season rolls around, so do the scam artists. That's right...phishing criminals who want your personal information use this hectic and confusing time of year to prey on unsuspecting individuals.
These unscrupulous scammers send spam emails that appear to be from the IRS. These emails are often written to persuade you to link to a website that will allow you to update your data or receive important information. Remember, these phishing emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, or sometimes, ironically, to protect you from identity theft or loss of privacy.
Although these emails are sophisticated and appear to be genuine, there are some simple steps you can take to avoid falling prey to one of these scams.
Always be suspicious of emails. Remember, the IRS does NOT initiate communication with taxpayers through email, but rather through the regular mail. If you receive an email that says it's from the IRS, you should immediately be suspicious and should forward it in its entirety to the IRS, so that they can take steps to shut down the fraudulent and bogus websites. The IRS requests that you forward all questionable emails to phishing@irs.gov.
Double-check the URL address. Keep in mind that all IRS websites begin with the following web address: http://www.irs.gov/. So, if you ever click a link in an email or visit a website that you believe is related to the IRS, the first thing you should do is confirm that the website begins with the correct URL address. Remember, sometimes it may "look" legitimate, but is actually an imposter site that is phishing for information. So always, always double-check the actual URL address before you type any information in the site.
Exercise extreme caution with attachments. When it comes to questionable emails, the best practice is to never open any attachments. That's because attachments are an extremely common method that hackers use to infect your computer with programs that may harm your computer or steal your personal information – often without you even knowing!
In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will almost NEVER ask you to divulge personal information via email.
If you receive any email asking for personal information of any kind, you should immediately be suspicious. When in doubt, call the customer service lines listed on your statements or documents and discuss the email that you received.
Make Sure You Get Your Money Now...Rather than Waiting for a Refund Next Year
While you're getting your tax information ready for the past year, it's a good time to look ahead to the coming year. For many of us, it's a constant balancing act to make sure we're withholding enough so that we don't have to pay at the end of the year, but getting a return at the end of the year isn't necessarily the best plan either. When you think about it, getting a refund check means that you let the IRS use your money throughout the year without paying you any interest. Wouldn't you rather have that money to use during the year?
Here's how you do it. The IRS allows you to increase the number of dependants on your W-4 withholding form, meaning that less will be withheld for taxes from each paycheck. But don't go overboard. You should only lessen the periodic tax withholding to match the expected refund. This way you are taking your refund as you go...instead of letting the IRS hold on to it.
Believe it or not, the IRS actually makes it easy to calculate! The IRS offers a handy IRS Bean Counter calculator for free, which lets you see how a change in withholding will affect your paycheck. Take advantage of this calculator today to see how changes can impact your take-home pay.
By following the tips above, you can help eliminate some of the frustration from tax season, as well as make sure you're on track for the coming year. Remember, before you make any changes, you want to be sure you are balancing the amounts carefully and correctly, so it's always a good idea to check with your tax professional.
Keep it together. Make a quick list of all the documents or statements that were needed to complete your return last year – or call your tax planning professional for a checklist. Use this as a checklist to make sure you have a good start on the documents you may need this year. As you receive tax documents in the mail, grab your checklist, and mark the item as received. Then, keep all of the tax documents together in a large file or envelope marked "2008 TAXES."
Do the math. According to the IRS, the most common mistake on tax returns is bad math – from transposed numbers to downright incorrect data. And with one form leading to another, those errors can make a huge impact. Even if you use tax software, you're not off-the-hook – since it only adds the numbers YOU put in. Double-check entries carefully.
Every last cent. The IRS receives copies of your Form 1099 earnings each tax season. So, they know how much you make in interest and dividend income, and they will use that info to double-check your filing information. Make sure you collect all your earnings statements and document them on your return.
Sign on the line. It sounds almost silly, but forgetting to sign a return is actually a fairly common oversight. And the IRS won't process a return that doesn't have a signature. So, make sure you sign to avoid resubmitting your paperwork and possibly paying late-filing fees.
Remember, there isn't a lot of room for error when you're dealing with the IRS. A slight miscalculation could mean the difference between getting a return and writing a check – or worse, paying a penalty. It pays to work with a tax professional.
Beware of Tax Scams this Time of Year
As tax season rolls around, so do the scam artists. That's right...phishing criminals who want your personal information use this hectic and confusing time of year to prey on unsuspecting individuals.
These unscrupulous scammers send spam emails that appear to be from the IRS. These emails are often written to persuade you to link to a website that will allow you to update your data or receive important information. Remember, these phishing emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, or sometimes, ironically, to protect you from identity theft or loss of privacy.
Although these emails are sophisticated and appear to be genuine, there are some simple steps you can take to avoid falling prey to one of these scams.
Always be suspicious of emails. Remember, the IRS does NOT initiate communication with taxpayers through email, but rather through the regular mail. If you receive an email that says it's from the IRS, you should immediately be suspicious and should forward it in its entirety to the IRS, so that they can take steps to shut down the fraudulent and bogus websites. The IRS requests that you forward all questionable emails to phishing@irs.gov.
Double-check the URL address. Keep in mind that all IRS websites begin with the following web address: http://www.irs.gov/. So, if you ever click a link in an email or visit a website that you believe is related to the IRS, the first thing you should do is confirm that the website begins with the correct URL address. Remember, sometimes it may "look" legitimate, but is actually an imposter site that is phishing for information. So always, always double-check the actual URL address before you type any information in the site.
Exercise extreme caution with attachments. When it comes to questionable emails, the best practice is to never open any attachments. That's because attachments are an extremely common method that hackers use to infect your computer with programs that may harm your computer or steal your personal information – often without you even knowing!
In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will almost NEVER ask you to divulge personal information via email.
If you receive any email asking for personal information of any kind, you should immediately be suspicious. When in doubt, call the customer service lines listed on your statements or documents and discuss the email that you received.
Make Sure You Get Your Money Now...Rather than Waiting for a Refund Next Year
While you're getting your tax information ready for the past year, it's a good time to look ahead to the coming year. For many of us, it's a constant balancing act to make sure we're withholding enough so that we don't have to pay at the end of the year, but getting a return at the end of the year isn't necessarily the best plan either. When you think about it, getting a refund check means that you let the IRS use your money throughout the year without paying you any interest. Wouldn't you rather have that money to use during the year?
Here's how you do it. The IRS allows you to increase the number of dependants on your W-4 withholding form, meaning that less will be withheld for taxes from each paycheck. But don't go overboard. You should only lessen the periodic tax withholding to match the expected refund. This way you are taking your refund as you go...instead of letting the IRS hold on to it.
Believe it or not, the IRS actually makes it easy to calculate! The IRS offers a handy IRS Bean Counter calculator for free, which lets you see how a change in withholding will affect your paycheck. Take advantage of this calculator today to see how changes can impact your take-home pay.
By following the tips above, you can help eliminate some of the frustration from tax season, as well as make sure you're on track for the coming year. Remember, before you make any changes, you want to be sure you are balancing the amounts carefully and correctly, so it's always a good idea to check with your tax professional.
Wednesday, May 14, 2008
Best Times to Buy
A Conventional wisdom says that you need to stay in a home a minimum of five years to ensure that you recoup your purchasing costs. But with some markets soaring, this advice doesn't always apply.
It's All About the Market
Market conditions play a huge part in any decision about when to buy. Housing market values have varied widely from region to region in recent years. While the Florida market has seen meteoric rises in home values, Ohio has seen its real estate prices go into negative territory in the last year.
Do not buy high and sell low - if your market is softening or has hit its peak and is heading south, you may want to wait on your purchase.
The magazine Smart Money has created a worksheet to compare the costs of renting vs. buying using market appreciation calculations to determine at what point you come out ahead. Plugging in the price, down payment, your income bracket, interest rate, and current market appreciation rates, the worksheet will break out what you will gain.
For example, say you were to buy a $400,000 house in Boulder, Colorado and you estimate the market will soften from the current 11% appreciation to about 9 percent annually. If you stayed in the house three years, you would recover $88,750 in equity at the end of that period; if you stayed five years, you'd realize $120,360.
It's All About You
The top three reasons people file for bankruptcy are change of job status, divorce, and unforeseen health expenses. If you face any of these challenges and don't have a financial cushion, this may negatively impact your ability to pay a mortgage. Big life events dictate your readiness to buy now or to wait for a little more stability.
Signs you should not buy right now:
Will you be moving within the next five years?
Will you be having kids soon?
Will you be making a job change?
Have you recently filed for bankruptcy or is your credit score below 630?
If you answered yes to any of these questions, or you are experiencing other life-changing events like illness, marriage, divorce, or breakup, you may want to wait.
Your Financial Future
Aside from life events contributing to your decision, getting your financial house in order before you begin your home search is key. Even with all the programs available for buyers with a low-or-no down payment, if your debts are growing steadily and you don't foresee an increase in your income, you are putting yourself in greater financial risk by taking on a mortgage.
With only a few exceptions, many loans for people who are still repairing their credit or recovering from bankruptcy carry higher rates than those available once your credit is in better shape. So the question comes down to this: Do you buy now, before prices appreciate higher than you can afford, but do so with an expensive loan? Or do you wait and repair your credit, then get a favorable loan, and pay more for your home?
That's the sort of analysis you need to go over with a financial counselor or mortgage broker before you start hitting open houses.
Ways to Cushion the Blow
On the other hand, if you are willing to buy a home that needs a bit of work and, over time, you can afford to get it done, your home could appreciate faster, strengthening your financial position. If you are willing to take on a roommate or renter, you can also soften the expense of a mortgage, which almost always costs more than rent. Buying a home is a risk, and it's worth asking yourself hard questions about what you're willing to do to protect yourself from getting in over your head.
If you answered "no" the life-change questions, and have the down payment or equity from your current home, you still need to look at interest rates and at how buying affects your taxes. You can't time the stock market, but you can time interest rate hikes, as they are a little easier to predict. If they are going up fast, you can jump in before they rise too far; if they are already high, you will have to calculate how refinancing in the future affects your budget.
What to Do First
If you are anxious to get moving, be patient. You have a few things to do first:
1. Go to open houses - get the lay of the land
2. Talk to a mortgage broker to get pre-approved
3. Interview agents (You may want to find an agent at the same time as you look for a mortgage broker - a good agent can recommend reputable brokers and help you make sense of the terms of the loan)
4. Review credit report and scores with mortgage broker to determine if any repairs are needed
5. Use Zillow.com to find info on neighborhoods that interest you and then use the Home Q and A feature to ask current homeowners
It's All About the Market
Market conditions play a huge part in any decision about when to buy. Housing market values have varied widely from region to region in recent years. While the Florida market has seen meteoric rises in home values, Ohio has seen its real estate prices go into negative territory in the last year.
Do not buy high and sell low - if your market is softening or has hit its peak and is heading south, you may want to wait on your purchase.
The magazine Smart Money has created a worksheet to compare the costs of renting vs. buying using market appreciation calculations to determine at what point you come out ahead. Plugging in the price, down payment, your income bracket, interest rate, and current market appreciation rates, the worksheet will break out what you will gain.
For example, say you were to buy a $400,000 house in Boulder, Colorado and you estimate the market will soften from the current 11% appreciation to about 9 percent annually. If you stayed in the house three years, you would recover $88,750 in equity at the end of that period; if you stayed five years, you'd realize $120,360.
It's All About You
The top three reasons people file for bankruptcy are change of job status, divorce, and unforeseen health expenses. If you face any of these challenges and don't have a financial cushion, this may negatively impact your ability to pay a mortgage. Big life events dictate your readiness to buy now or to wait for a little more stability.
Signs you should not buy right now:
Will you be moving within the next five years?
Will you be having kids soon?
Will you be making a job change?
Have you recently filed for bankruptcy or is your credit score below 630?
If you answered yes to any of these questions, or you are experiencing other life-changing events like illness, marriage, divorce, or breakup, you may want to wait.
Your Financial Future
Aside from life events contributing to your decision, getting your financial house in order before you begin your home search is key. Even with all the programs available for buyers with a low-or-no down payment, if your debts are growing steadily and you don't foresee an increase in your income, you are putting yourself in greater financial risk by taking on a mortgage.
With only a few exceptions, many loans for people who are still repairing their credit or recovering from bankruptcy carry higher rates than those available once your credit is in better shape. So the question comes down to this: Do you buy now, before prices appreciate higher than you can afford, but do so with an expensive loan? Or do you wait and repair your credit, then get a favorable loan, and pay more for your home?
That's the sort of analysis you need to go over with a financial counselor or mortgage broker before you start hitting open houses.
Ways to Cushion the Blow
On the other hand, if you are willing to buy a home that needs a bit of work and, over time, you can afford to get it done, your home could appreciate faster, strengthening your financial position. If you are willing to take on a roommate or renter, you can also soften the expense of a mortgage, which almost always costs more than rent. Buying a home is a risk, and it's worth asking yourself hard questions about what you're willing to do to protect yourself from getting in over your head.
If you answered "no" the life-change questions, and have the down payment or equity from your current home, you still need to look at interest rates and at how buying affects your taxes. You can't time the stock market, but you can time interest rate hikes, as they are a little easier to predict. If they are going up fast, you can jump in before they rise too far; if they are already high, you will have to calculate how refinancing in the future affects your budget.
What to Do First
If you are anxious to get moving, be patient. You have a few things to do first:
1. Go to open houses - get the lay of the land
2. Talk to a mortgage broker to get pre-approved
3. Interview agents (You may want to find an agent at the same time as you look for a mortgage broker - a good agent can recommend reputable brokers and help you make sense of the terms of the loan)
4. Review credit report and scores with mortgage broker to determine if any repairs are needed
5. Use Zillow.com to find info on neighborhoods that interest you and then use the Home Q and A feature to ask current homeowners
Monday, March 31, 2008
REALTOR® Lingo
Contingency -- a provision of an
agreement that keeps the agreement
from being fully legally binding until a
certain condition is met. One example
is a buyer's contractual right to obtain a
professional home inspection before
purchasing the home.
agreement that keeps the agreement
from being fully legally binding until a
certain condition is met. One example
is a buyer's contractual right to obtain a
professional home inspection before
purchasing the home.
Friday, March 28, 2008
The Dothan Market
Up to date statistics for Real Estate sales
for the month of February 2008 according to
the Dothan Multiple Listing Service.
Median Sold Price: $ 125,000
Average Sold Price: $ 142,682
Total Volume: $ 14.41 mil
Average Days on Market: 132
Total Single Family Units Sold: 101
for the month of February 2008 according to
the Dothan Multiple Listing Service.
Median Sold Price: $ 125,000
Average Sold Price: $ 142,682
Total Volume: $ 14.41 mil
Average Days on Market: 132
Total Single Family Units Sold: 101
Thursday, March 27, 2008
Dothan Alabama Housing
Come home to Dothan! Our impressive, yet affordable, homes will capture your attention and convince you that our city is home.
Our housing market offers as many choices as that of a larger city. In fact, you might say that the one thing that all Dothan homes have in common is they are all unique. Urban or rural settings provide a refreshing variety of size and style; brick, frame, single, multi-story, stately, modern, townhouse, or estate.
In the Dothan area, you will find neighborhoods to be quiet, peaceful, and close-knit. Residents take pride in their property by maintaining well-manicured lawns and gardens. Landscapes are lush and are supported by the temperate climate. Quality fire and law enforcement protection keep neighborhoods safe and insurance costs low.
Housing prices vary according to the location, size, and special features you are seeking. Previously owned and new homes to accommodate every taste and budget are available in the Dothan market. In 2004, the average median sales price of a home in Dothan area was $103,929, well below the U.S. median price of $221,000 for the same period.
The rental market is also strong in Dothan. Single-family dwellings, apartments, and townhouses are available for rent in all locations in a variety of sizes and prices. For comparison purposes, the average monthly rent on a two-bedroom apartment is $450. One-, two-, and three-bedroom units are available.
Our area has a variety of housing opportunities for families, single adults, and senior residents. Property taxes are very low: the annual property tax on a home valued at $100,000 is $310. Utility costs are well below the national average at $115 per month. Due to the large variety of housing opportunities, Dothan is certain to have a home that is perfect for you.
Our housing market offers as many choices as that of a larger city. In fact, you might say that the one thing that all Dothan homes have in common is they are all unique. Urban or rural settings provide a refreshing variety of size and style; brick, frame, single, multi-story, stately, modern, townhouse, or estate.
In the Dothan area, you will find neighborhoods to be quiet, peaceful, and close-knit. Residents take pride in their property by maintaining well-manicured lawns and gardens. Landscapes are lush and are supported by the temperate climate. Quality fire and law enforcement protection keep neighborhoods safe and insurance costs low.
Housing prices vary according to the location, size, and special features you are seeking. Previously owned and new homes to accommodate every taste and budget are available in the Dothan market. In 2004, the average median sales price of a home in Dothan area was $103,929, well below the U.S. median price of $221,000 for the same period.
The rental market is also strong in Dothan. Single-family dwellings, apartments, and townhouses are available for rent in all locations in a variety of sizes and prices. For comparison purposes, the average monthly rent on a two-bedroom apartment is $450. One-, two-, and three-bedroom units are available.
Our area has a variety of housing opportunities for families, single adults, and senior residents. Property taxes are very low: the annual property tax on a home valued at $100,000 is $310. Utility costs are well below the national average at $115 per month. Due to the large variety of housing opportunities, Dothan is certain to have a home that is perfect for you.
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