Understanding Your Property Taxes

Local governments and school districts raise a large portion of the money that pays for education, emergency services, transportation and other public goods through property taxes. The amount that individual homeowners pay is determined by the assessed property value and the mill rate. Each of these is calculated through a complex process.

How Property Values Are Assessed

An assessor will determine the value of your home. That value can change over time due to depreciation, improvements you make, and the local economy and housing market. Assessors may use any of three methods to calculate the value of a home. In some cases, they use a combination of two or more methods.

One way to determine the value of your home is by looking at the sales of comparable properties in the area. Those figures are used as a baseline and can be adjusted to account for the location of your property, the amount of land and any upgrades you have made.

Another way to assess the value of your house is to figure out how much it would cost to replace it if it were destroyed. That calculation will include local material and construction costs.

A third method of assessing your property’s value is to calculate how much income you could generate by renting it. The assessor will consider market value and will deduct costs to manage and maintain the property, as well as insurance premiums and taxes.

You should receive a statement showing the assessed value of your property. If you disagree, you can submit relevant information and ask the assessor to review the calculation taking the additional facts into account. If you accept the assessment, you will receive a separate property tax bill.

How Tax Bills Are Calculated

A mill levy is a tax rate used to determine how much property owners must pay. One mill is equal to one-tenth of one cent. County and local governments and school districts set their own mill levies based on the amount of money they need to raise and total property values in the area under their jurisdiction. Property owners then pay a mill rate that can include a total of county, state or town, and school district mill levies.

The mill rate will be multiplied by the assessed value of your property to determine your property tax liability. You may receive a tax bill once a year or once every several years, depending on the government’s policy. If you have any questions about how much you will owe and when, you can visit the assessor’s office or look up the information on its website.

The Benefits of Understanding How Property Taxes Work

Property taxes can vary widely based on where you live, the value of your home, and how much money the local government and school district need to raise. Knowing how your home’s value is assessed and how property taxes are calculated can help you avoid being shocked by the size or timing of the bill.

Just Bought a Home? Here's What Not to Do...

Buying your first home is an exciting milestone, putting you on the path to a smart financial future. There are certain traps you can fall into as a new homeowner, however, that can put your financial well-being at risk. Avoid doing the following too soon:

• Remodeling. Unless there’s something in need of serious repair, hold off on any remodeling projects. This will give you time to assess the cost vs. value of the project, ensuring that the money you put into it actually increases the value of your home. Waiting will also give you time to research and secure the best professionals to work with.

• Furnishing the whole house. You don’t have to have every room perfectly outfitted at once. Take your time and settle in to your new home. This will give you time to make better furniture choices. It will also allow you to budget over time as opposed to a big financial hit all at once.

• Taking out an equity loan. Let your equity serve as a cushion for future needs. As home ownership plays out, there are countless needs and issues that will arise. If you’ve already exhausted your equity, you won’t have that emergency fund at the ready.

• Moving up. You might be on a mission to get to your next bigger and better home as soon as possible, but wait it out a bit. You want to make sure you have the finances to do so comfortably, and you want to make sure you choose the right location. Living in your current home will teach you a lot about your likes and dislikes.

• Making major aesthetic changes. Don’t go crazy with paint, wallpaper or any other bold design statements just yet. You’re still in the getting-to-know-you phase, so feel your new home out for a while before you start changing its look.

If you need more real estate information, feel free to contact me. 

Coming up with the down payment on a home can be hard enough, and one way to make a home more affordable is to spread out the mortgage payments over 30 years.

But 30 years can be daunting, and that time can be cut down with a 15-year mortgage. It’s a lot more expensive in the short-term than a 30-year fixed-rate mortgage, but pays off through greater long-term savings.

Here are some things to consider when weighing a 15-year vs. 30-year mortgage:

Saving Money
It can be difficult to see the long-term benefits when looking at a monthly mortgage bill that will be 50 percent higher over 15 years instead of 30.

Paying a home loan off in half the time requires a larger payment, of course, but it can save you tens of thousands of dollars in interest charges. Why? Not only is more principal paid earlier, but interest rates on 15-year mortgages are usually better than other loans types.

Here’s an example of a $200,000 mortgage at 30 vs. 15 years:

Mortgage type:         30-year          15-year
Interest rate:             4.5 percent    4 percent
Monthly payment:     $1,013           $1,479
Total interest:            $164,813       $66,288

That’s almost a savings of $100,000 by going with a 15-year loan. Divide that savings over 15 years and it’s about $555 saved per month.

Borrowers should make sure they have enough income to afford it, are able to manage their household debt and have money in liquid savings for emergencies.

Building Equity
Repaying a mortgage faster not only saves you money in the long run, but you build equity in your home faster, too. If home prices rise, your equity could grow as well.

This is good for many reasons, including making refinancing easier by lowering your debt-to-income ratio. While it won’t improve your cash flow, it should make it easier to get approved for a home equity loan or home equity line of credit.

An Easier Retirement
Another big advantage…if you plan to retire in the next 10 to 20 years, you won’t have to worry about mortgage payments during your retirement. Instead of a house payment, you can use that money for retirement expenses.

If you continue paying a 30-year mortgage into retirement, you may have to pull money out of your savings to make the payments.

Check Your Credit Report Before Applying for a Mortgage

Applying for a mortgage to buy the house of your dreams can be a daunting process. You have to submit an application, pay stubs, tax returns and other documentation. In addition, the lender will base their decision and how much money to loan you partially on your credit score.

Reasons to Check Your Credit

Before you apply for a mortgage, it’s a good idea to know where your credit currently stands. The best way to find out is to request copies of your credit reports. You’re entitled to receive free copies of your reports from the three credit reporting agencies: Equifax, Experian and TransUnion.

One reason? You can compare your score to your lender’s guidelines to see if you’d have a good shot at being approved for a mortgage. If your score is too low, you can take steps to raise it. You can pay down your credit card balances, consolidate debt to lower your interest rates and pay it off faster. Additionally, be sure to pay all of your bills on time. It may take several months to have an impact, so the sooner you start making changes, the better.

You should also check your credit before applying for a mortgage to find out if your reports contain any errors. Sometimes records get mixed up if people have the same name or a company reports information incorrectly. If you find an error on your report, it could also be due to identify theft. Data breaches happen all the time, and criminals use stolen information to open fraudulent accounts. You might be unaware unless you check your credit report.

Errors on your credit report could prevent you from getting a mortgage for which you actually qualify. If your credit report shows that you have more debt than you really do or that you’re behind on payments when you really aren’t, that could cause the lender to consider you too risky for a mortgage.

If you find that your credit report contains errors or accounts that you didn’t open, you should contact the credit reporting agency to dispute the information. They can investigate to find out what happened and correct errors. If you’ve been a victim of identity theft, contact law enforcement.

Check Your Credit Early

When a lender is deciding whether or not to approve your mortgage application, your credit score is one of the most important pieces of information they’ll consider. Several months before you fill out your mortgage application, request copies of your credit reports. See where your score currently stands and check for errors. Then you can take action to raise your score and correct any mistakes so you can turn your dream of owning a home into a reality.

Precaution: Don’t Leave Home On Vacation Without It

Can’t wait to get out of town for a much-needed vacation? Make sure you don’t ruin your trip by returning to a disaster at home. New York-based T. Webber Plumbing, Heating & Air Conditioning offers the following tips to help prevent an unpleasant homecoming:

Unplug all appliances. Believe it or not, phone chargers, computers, televisions and coffee pots all continue to use energy even when turned off.  Unplugging them before you leave will not only  save energy, but help prevent damage from lightning strikes and power surges.

Raise the thermostat. Air conditioning uses a significant amount of energy, so turn the temperature up 10 degrees higher than it is usually set. Better yet, install a programmable thermostat that will allow you to turn the AC on just before returning home.

Clean the garbage disposal. You don’t want to come home to the unpleasant odor that results from an unused garbage disposal. Before you leave, flush it out with half a cup of white vinegar and hot water while the disposal is turned on.

Change the setting on the water heater. There’s no need to heat water for an empty home. Adjust the water heater to vacation mode. If the water heater does not have a vacation mode, turn the temperature down.

Put lights on a timer. According to the Insurance Information Institute (I.I.I.), there are more than 2.15 million burglaries each year. A dark home is a sure sign that no one is there, so put a couple of lamps on a timer inside the home. Set these to go on and off at different intervals.

Avoid stagnant water. Water left inactive in the toilet can produce a foul odor and a difficult-to-remove ring that forms around the bowl. To prevent this, place half a cup of bleach in the toilet bowl just before leaving home.

Taking these steps will ensure that not only your vacation is relaxing, but your return home as well. 

4 Things NOT to Do When Putting Your Home on the Market

So you've decided to put your home on the market. Congratulations! Hopefully, you've brought a rockin' REALTOR® on board to help you list your spot, and together you've done your due diligence on what to ask for. As you start checking things off your to-do list, it's also important to pay mind of what not to do. Below are a handful of things to get you started.

Don't over-improve.
As you ready your home for sale, you may realize you will get a great return on your investment if you make a couple of changes. Updating the appliances or replacing that cracked cabinet in the bathroom are all great ideas. However, it's important not to over-improve, or make improvements that are hyper-specific to your tastes. For example, not everyone wants a pimped out finished basement equipped with a wet bar and lifted stage for their rock and roll buds to jam out on. (Okay, everyone should want that.) What if your buyers are family oriented and want a basement space for their kids to play in? That rock-and-roll room may look to them like a huge project to un-do. Make any needed fixes to your space, but don't go above and beyond—you may lose money doing so.

Don't over-decorate.
Over-decorating is just as bad as over-improving. You may love the look of lace and lavender, but your potential buyer may enter your home and cringe. When prepping for sale, neutralize your decorating scheme so it's more universally palatable.

Don't hang around.
Your agent calls to let you know they will be bringing buyers by this afternoon. Great! You rally your whole family, Fluffy the dog included, to be waiting at the door with fresh baked cookies and big smiles. Right? Wrong. Buyers want to imagine themselves in your space, not be confronted by you in your space. Trust, it's awkward for them to go about judging your home while you stand in the corner smiling like a maniac. Get out of the house, take the kids with you, and if you can't leave for whatever reason, at least go sit in the backyard. (On the other hand, if you're buying a home and not selling, then making it personal is the way to go, especially when writing your offer letter. Pull those heart strings!)

Don't take things personally.
Real estate is a business, but buying and selling homes is very, very emotional. However, when selling your homes, try your very best not to take things personally. When a buyer lowballs you or says they will need to replace your prized 1970s vintage shag carpet with something “more modern,” try not to raise your hackles.

Editor's Note: This post was originally published on December 29, 2016. Housecall continues to share this piece due to ongoing requests and reader interest.

Posted on Dec 29 2016 - 10:27am by Zoe Eisenberg http://blog.rismedia.com/author/zoe-eisenberg/

Are You Ready to Look for Your First Home?

Buying your first home doesn't need to be overwhelming, and the more prepared you are, the better. Here are a few tips and tools to make first-time home-buying a little easier.

Take a class. Katie Ross, a community education and marketing manager for American Consumer Credit Counseling, says you shouldn’t be at all ashamed to take a first-time homebuyer education course, many of which are offered online. They provide potential homebuyers with detailed information, advice and budgeting tips on how to purchase a home. With a homebuyer certificate, consumers may qualify for loan products that might otherwise be out of their grasp.

Save, save, save. Digital Federal Credit Union (dcu.org) advises prospective homebuyers to save as much as possible toward the purchase price of the house and closing costs. Though minimum down payments start around 5 percent, the greater the down payment, the more favorable the borrowing terms.

Put more down. DCU.org says if you can purchase a home with at least 20 percent down, you probably will save even more because you won't need to buy private mortgage insurance (PMI).

Find an agent. DCU also advises first-timers to find a trusted real estate agent. They say an agent's job is to know how much properties are worth, facilitate the sale process and bring an offer to the seller's agent.

Emily Starbuck Crone at nerdwallet.com reminds first-time prospects that there are a lot of mortgage options out there, each with their own combination of pros and cons. If you’re struggling to come up with a down payment,
Crone says check out:

- Conventional mortgages that conform to standards set by the government-sponsored entities Fannie Mae and Freddie Mac, which require as little as 3 percent down.

- Federal Housing Administration loans, which permit down payments as low as 3.5 percent.

- Veterans Affairs loans, which sometimes require no down payment at all.

Finally, the Consumer Financial Protection Bureau (consumerfinance.gov) says shopping around for a mortgage can lead to real savings. Saving even a quarter of a point in interest saves thousands of dollars over the life of a loan. 

How to Help Your Child Adjust to a New School

Changing schools is a major adjustment for kids. When a child and their classmates graduate and move to a new school together, everyone is in the same boat. When a family moves to a new area and a child must adjust to a new school and group of peers, the transition can be more challenging.

Help Your Child Prepare
Visit the school in advance so your child can find their classroom, the bathrooms and the cafeteria. If there’s an orientation before the beginning of the school year, be sure to attend. If your child is transferring after the academic year has started, ask the school to assign a “buddy” to show them around.

Make sure your child knows how to get to the bus stop or how to walk to school. Walk the route together and be sure they know the names of streets and landmarks to help them navigate. And don’t forget to get a list of supplies your child will need from the teacher—they’ll feel more at ease on the first day with all the necessary materials.

For a few weeks before the beginning of a new academic year, have your child go to bed and get up as if they’re already going to school. This will make the transition less stressful and overwhelming.

Talk to Your Child
Stay positive. If your child and his or her peers are moving to a new school together, talk about the opportunity to see old friends and enjoy new experiences together. If you’re moving to a new area and your child doesn’t know anyone, frame it as a chance to make a new group of friends.

Discuss your child’s concerns. You might think that your child is most nervous about academics, while they may be more focused on making friends, joining the band or earning a spot on a varsity athletic team. Ask your child what’s on their mind and address any specific worries. Remind them of other occasions when they were in an unfamiliar situation and ways they effectively dealt with the changes.

How to Help in the First Days
Eliminate stress as much as possible on the first morning of school. Pack a lunch or give your child lunch money the night before. Have your child pick out clothes to wear and make sure they’re appropriate for the school and the weather.

Encourage your child to explore school activities. Whether they enjoy sports, art, music, theater or other extracurricular or academic activities, the school likely has a group where they can meet like-minded peers.

A Big Adjustment
Switching schools will be stressful for your child, but you can make the transition easier. Be positive, talk about what to expect and discuss any concerns or fears. With some time and support, your child will soon feel at home in their new school.

How to Make Your Home More Energy Efficient

Energy costs are one of the highest monthly expenses for homeowners, aside from a mortgage. Energy used to power your HVAC system, appliances, furnace and TVs can add up to whopping bills every month. Some of these costs are unavoidable, but there are specific ways that you can make your home more energy efficient to lower your utility bills. These changes will require some upfront investments, but you will reap the savings over the years.

Get an Energy Audit
First, start with an energy audit. You can hire a contractor or a representative from your local utility company to come to your home and assess ways that you’re losing or wasting energy. An energy audit can identify problems with the heating and cooling system, insufficient insulation, drafts around windows and doors, and inefficient appliances.

Control the Temperature
An HVAC system can become worn out over time. It may operate less efficiently, causing your home to be excessively warm or cold. Change your furnace’s air filter regularly and have it inspected to see if it’s wasting fuel or not burning as hot as it should. If your furnace is nearing the end of its lifespan, replace it with a more energy-efficient model.

A programmable thermostat can help you regulate the temperature in your home. You can program it to lower the temperature when you’re out and when people are sleeping and to keep your home warmer when you’re home on fall and winter days.

Not having enough insulation can cause your home to be cold in the winter and can allow air-conditioned air to leak out in the summer. Check the insulation in the walls and attic and add more if necessary.

If you have old windows, you could be allowing warm air to leak out in the winter and cold air to get inside. Replace old windows with new, energy-efficient ones. Look for double- or triple-paned windows with argon gas between the panes. This acts as an insulator to prevent drafts and control the temperature in the house.

Upgrade Appliances
Large appliances, such as refrigerators, stoves, washers and dryers, use a lot of energy. If your appliances are old, they could be causing you to have unreasonably high utility bills. You can replace them with appliances that carry the Energy Star label. That means they’re designed to be energy efficient and cost less to operate.

Save Money Every Month
Houses use a lot of energy, and there is no way to avoid utility bills altogether. You can save money by making some changes and upgrades to your home. Some of them will require a significant financial investment, but they will save you money in the long run. Even if you can only make one or two of these changes, you can still make your home more energy efficient and lower your utility bills.

Building Credit Without Credit Cards

A credit card is one of the main ways to build credit. By using a credit card wisely and not running up huge bills and paying them off in full on time, consumers can improve their credit score. A good credit score can make getting a home, car and other loans easier, and at better interest rates.

Some people who have poor credit may have difficulty improving their credit score fast enough, and others may not even want a credit card.

A credit card isn’t the only way to build credit. Here are some other ways:

Get a small loan

Apply for a small loan from your bank or credit union. If you’ve had an account in good standing for a few years, you should be able to get a small loan.

Some banks may only offer secured loans, meaning you’ll have to come up with some collateral such as a car to qualify for the loan. However you get a bank loan, pay it back on time and your credit score should improve.

Monitor student loan payments

You should be working hard to pay all of your loans on time. Repaying student loans on time will help build your credit as much as any other loan. On the opposite side, missing a student loan payment can hurt your credit score.

Ask utility providers for help

Electricity, gas, cable TV, internet and other utility providers report delinquencies to the credit bureaus. Some, however, also report positive payment history, such as on-time payments, to the credit bureaus.

Call your utility providers to see if they report positive payment history, which can improve your credit score. If they don’t, ask if they can give you a letter of reference in support of a credit application.

Report rent payments

Just like utility companies, not all landlords report on-time payments to credit bureaus. Ask your landlord if positive rent history is reported. If not, ask if it can use a third-party website such as Rental Kharma to verify your rent payments each month.

Another way is to sign up with a rent payment service that uses Experian’s RentBureau. Your rent is paid through the service and independent verification that you’ve paid your rent on time isn’t needed.

Become an authorized user

A friend or family member who has excellent credit can add you to their credit card as an authorized user. It allows you to use their credit card and share their credit limit.

As long as the main card holder pays the bill on time every month and keeps the balance low in relation to their credit limit, your credit score may benefit. Check first that the card issuer reports authorized users to the credit bureaus.

You won’t be responsible for paying the bill, so being an authorized user won’t help your credit profile a lot, but it will help some if it’s reported.

Feel free to contact me for other helpful information.

How-to Prep Your Home for Earthquakes

Earthquakes are rarely predictable. However, if you live in a state like California or Hawaii where quaking and shaking is common, there are several things you can do to your house to prepare for such emergencies. Consider the following tips from Brian Vardiman, owner of Best Service.

Secure the water heater – Unsecured water heaters often fall over, rupturing water and gas lines causing fires and flooding. Secure your water heater with two straps that wrap around the top and bottom of the water tank. Ensure the straps are made of heavy-metal gauge strapping. Many water heaters are currently secured with plumbers' tape; the thin metal in this strap is too brittle to be effective. If the homeowner is not sure if the water heater is secured with the proper straps and technique, call a professional to inspect it before the protection is needed.

Add flexible piping – The rigid pipes used to transfer natural gas, air and water into the home are susceptible to damage during an earthquake. Flexible piping is made from materials that will absorb the vibrations created during an earthquake before they can crack or break.

Install vibration isolators – The majority of the damage an HVAC unit sustains during an earthquake comes as a result of the shifting that occurs with seismic activity. Providing a buffer that can absorb the vibrations before they cause the unit to shift is a great way to prevent damage during an earthquake. An expert can retrofit a home's HVAC system with vibration isolators. These spring-type devices can be installed on the bottom of the unit to absorb movement before it affects the HVAC system's positioning.

Source: Best Service, www.callbest.net