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Archive for October, 2013

Home Prices Are Rising: Yea! But That Also Means Higher Costs

Posted on: October 17th, 2013 by Aimee Crossland No Comments

 

By: Dona DeZube

With improved equity comes higher costs for property taxes and insurance. Here’s how to manage them smartly.

If you’re like most homeowners, rising home prices mean you can finally let out the breath you’ve been holding since the start of the economic downturn — especially if you’re hoping to sell.

Would you mind terribly if I added a little cloud to your silver lining?

Rising home prices might mean higher bills for you in the coming year because:

  • Your property taxes will rise unless your tax rate falls.
  • You’ll need higher limits on your homeowners insurance coverage to compensate for your higher home value.

Fortunately, you can do a few things now to reduce your tax bite, keep your insurance costs as low as possible, and continue your exhale of relief.

Property Tax Appeals

You pay your property taxes based on a formula that generally uses your home’s assessed value multiplied by the tax rate. When you home value rises, if the tax rate doesn’t fall, your taxes rise.

Take, for example, a property tax rate of $1 per $1,000 of home value:

  • You owe $100 when your home is worth $100,000.
  • You owe $110 when your home value rises to $110,000.
  • To keep your tax bill at $100 when you home value rises to $110,000, the tax rate has to fall to about 90 cents per $1,000.

Given the sorry state of most local and state government budgets, I wouldn’t count on the tax rate going down. Instead, work to get your home value assessed as low as possible by filing a property tax appeal arguing the taxing authority has over-stated your home’s value.

Here’s how you do it: When your home’s tax assessment arrives in the mail, contact your REALTOR®, tell her you want to appeal your assessment, and ask her to pull the last three comparable home sales for you. If those sales were lower than your home’s assessed value, you use those comparable sales as evidence that your home is worth less than the tax man says it is.

Also ask your REALTOR® if she knows of any tax discounts (some jurisdictions offer discounts to owner occupants or senior citizens).

Homeowners Insurance Discounts

When your homeowners insurance renewal comes in the mail, call your insurance agent and ask if you can earn a discount for:

  • Increasing your deductible.
  • Installing a security system.
  • Membership in an affinity group like AARP or because of where you work.
  • Adding features that protect your home during natural disasters (like hurricane-proofing your roof).

Focus on the Silver Lining

If those cost-cutting measures don’t work, focus on the silver lining. An extra couple hundred a year in property taxes and insurance isn’t much compared with gaining thousands in home equity that you can use to finance your child’s education, start a business, fund your retirement, or just put in your pocket when you sell.

 

Fed Shutdown Won’t Throw Big Wrench in Your Refi or Home Loan Plans

Posted on: October 7th, 2013 by Aimee Crossland No Comments

 

By: Dona DeZube

Published: October 1, 2013

USDA rural loans, FHA reverse mortgages, and Title 1 home improvement loans are another story.

If you’re worried about the federal government shutdown because you’re refinancing your mortgage or buying a home with help from an FHA, VA, or Fannie Mae or Freddie Mac loan program, or you need federal flood insurance, relax. The shutdown isn’t likely to cause many problems for you — other than slower service.

But if you’re planning to use the U.S. Department of Agriculture 502 rural housing loan program, which helps folks buy homes in rural areas, you’re toast until Congress agrees to fund the federal government again.

USDA’s rural housing loan program typically runs out of money at the end of the fiscal year (Sept. 30), if not sooner, and then starts making loans again when the next fiscal year starts Oct. 1. This year, there’s no FY 2014 budget agreement so that means no more USDA home loans until Congress funds a budget. However, if your lender got a conditional approval before the shutdown, the lender can move forward on your loan.

Here’s the rundown on the homeownership programs that will (mostly) stay open even while the federal government is shuttered:

FHA will continue to insure most loans because its guarantees support the health and stability of the U.S. mortgage market. Expect some delays because of staffing shortages.

Two FHA exceptions: You won’t be able to get an FHA reverse mortgage (Home Equity Conversion Mortgage) or a Title I home improvement loan until the agency reopens.

The VA’s loan program will go on because it’s funded by veterans’ loan fees. As with FHA, expect some delays related to staffing.

Fannie Mae and Freddie Mac loan programs will be up and running because they aren’t federal agencies (although they’re under federal conservatorship).

FEMA will continue to sell and service flood insurance policies and fund disaster relief for homeowners, since the program is funded by premiums and not taxes. The shutdown won’t affect the flood insurance program rate changes set to kick in on Oct. 1, 2013.

C McEntire

Posted on: October 1st, 2013 by Aimee Crossland No Comments

Very good service-worked hard, I had to close by long distance-Connie represented me for walk through and closing, good follow through.

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