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Questions
You Should Ask About Property Taxes
Property
taxes are a major expense, one which often
totals thousands of dollars per year. But
property taxes are not the same for like
properties or for every owner.
Property
taxes provide much of the revenue used to
fund local and state governments. As
property values go up, property tax
collections also rise which means additional
dollars are available for more public
services -- and perhaps even for tax
refunds. Alternatively, if property values
decline, then government programs tend to be
squeezed or there is pressure to raise
income and sales taxes to make up for
short-falls.
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How
much you pay for property taxes
depends on the value of your home
and also local tax policies. In the
usual case, a property value is
established by government assessors.
Once a value is
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Use,
Don't Abuse Home Equity
An
increase in quick-qualifier equity loans, low- and
no-down payment purchase loans and generally easier
mortgage money is draining America's home equity and
younger, less experienced home owners are most
vulnerable.
Experts blame a lack
of education and they say marketing designed to lure
those who can afford to borrow is also snaring less
disciplined borrowers who should avoid
over-extending themselves.
Home owners lost an
average $1,500 in home equity in the past decade,
according to "While Home Ownership Rises, Home
Equity Stagnates", U.S. Census Bureau data
deciphered by Freddie Mac housing economist Frank E.
Nothaft for the Consumer Federation of America.
Home owners aged 35
to 54 suffered declines ranging from 7.1 percent to
13.8 percent, but older home owners, those aged 55
and older enjoyed equity jumps from 3.4 percent to
6.5 percent from 1989 to 1999, according to the
study.
Experts are concerned
younger home owners are squandering their equity at
the expense of their retirement needs. Earlier this
year, a Federal Reserve Board survey, "Recent
Changes
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Mortgage
Options: How Much Of A Gambler Are You?
When
it comes to choosing a mortgage, your gambling
instincts (or lack thereof) may surface. Will you
throw caution to the wind with a one-year
adjustable-rate mortgage (ARM) or play it safe with
a set monthly payment over thirty years? Will you go
for more points and less interest, or lower interest
but higher costs up-front? No matter what tack you
take, there's risk and reward, pro and con, factored
into each mortgage choice..
Safe, Yet Costly:
The Johnsons have a moderate income and three young
children so they want to play it safe by keeping
their monthly payments low with a 30-year fixed-rate
loan. They're also growing their savings, so putting
only 5% down seemed the right approach.
But safety comes at a
price. Because of their low down payment, they're
forced to pay private mortgage insurance (PMI) until
they have approximately 20 percent equity in the
home. This equates to thousands of dollars of
additional expense over the life of the loan which
is, unfortunately, not tax deductible. The Johnsons
might improve their position by refinancing when
they have more equity to get a lower the interest
rate and remove the requirement for PMI.
Risky, Yet Cost
Effective: Sam and Monica Chan are financially
savvy baby boomers who have a high-risk threshold
and want to save money on their mortgage whenever
possible. That's why
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Storage
Units:
When Enough Isn't Enough
Those
of us who have never used a storage facility might be
tempted to dismiss them as best-suited for pack rats. After
all, if you own so much "stuff" that you need to
store it away and pay for the privilege, you need to learn
the fine art of throwing things away, don't you?
Actually, a significant
percentage of consumers who rent storage units do so because
they're in between residences, a very common scenario in our
transient society. If you're faced with a temporary job
transfer -- a couple of years, for example -- you may not
want to take every last possession to a transitory
residence. In such situations, a climate-controlled storage
facility is often the wisest solution, enabling you to move
to your temporary home without the burden of excess baggage.
Another very common use for
storage units arises when owners are selling their homes. If
you've ever placed your home on the market and opened it to
a broker and prospective buyers, you know that their first
impressions are often influence whether or not you're going
to make a
Daily
News and Advice
Read about the events shaping the
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how-to articles written by some of the top experts
in Real Estate. Updated each weekday.
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