Ways to Lower the Ongoing Costs of Home Ownership

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Owning a home is expensive--it's probably your biggest monthly cost, especially if you factor in not just your mortgage payment, but also your property taxes, insurance, electric, gas, trash and water bills. To reduce some of your ongoing home ownership expenses and make your budget more manageable, consider the following possibilities.


1. Challenge your property tax assessment.
Homeowners who think their property tax bill does not accurately reflect their property’s value can challenge the assessment. For example, if you recently had your home appraised for a refinance and it shows your home’s value is $150,000, and similar homes in your neighborhood have been selling in the $145,000 to $155,000 range, but your property tax bill places your home’s value at $175,000, you may be able to use your evidence to successfully argue for a reduction in your property tax bill based on a taxable value of $150,000.

2. Take advantage of every tax deduction you qualify for.
Because of the way the standard deduction works on your income tax return, the mortgage interest tax deduction isn't always as valuable as people think.

However, for homeowners who have significant itemizable expenses in addition to mortgage interest, home ownership typically has ongoing tax benefits. Home-ownership-related tax deductions allow people to take advantage of other deductions they otherwise wouldn't qualify for because they wouldn't itemize. These include property taxes, state income taxes and charitable donations.

For example, if you normally donate $1,000 a year, if you don't itemize, you won't see any tax benefit from your donation even if it's made to a tax-exempt nonprofit. But if you itemize, the same donation costs you less. If you're in the 25% federal tax bracket, your $1,000 donation will save you $250 on your tax bill. You'll achieve the same rate of tax savings on your itemized state income taxes and property taxes.

Here are some other areas where you might be able to reduce your tax bill by itemizing expenses:
-Donating gently used clothes, household items and furniture to charity
-Personal property taxes
-Gambling losses not in excess of gambling winnings
-Interest on money you borrowed to fund investments


3. Refinance.
Even if you have a fixed-rate mortgage, it makes sense to keep an eye on mortgage rates. You never know when they might drop far enough to suddenly make refinancing a smart idea. If you have an FHA loan, you can do an FHA Streamline refinance even if you're underwater. VA loans also have a streamline option, which you can learn more about at VA mortgage options. Refinancing is a great opportunity to increase your monthly cash flow and your long-term net worth by reducing the amount of interest you pay on your mortgage.

Put these savings in your emergency fund and you won't have to borrow money to make home repairs or upgrades. The ability to pay cash will give you even greater savings since you won't have to spend anything on interest payments. Make sure to ask yourself these six questions before you refinance.

4. Don't buy a home warranty.
This advice probably sounds counterintuitive. Wouldn't a home warranty, which provides coverage to repair or replace many of the major systems and appliances in your home for just a few hundred dollars a year, be a great way to keep maintenance costs to a minimum? Unfortunately, home warranty companies have poor reputations when it comes to customer satisfaction, and the contracts contain lots of fine print that lets home warranty companies get out of paying almost any claim at their discretion. You're better off putting the money into a rainy day house fund for handling unforeseen repairs.

A settlement company helps protect your interests at closing

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When you buy or sell a home, escrow is the process that transfers the home from the seller to the buyer. A neutral third party oversees this process.

That third party can be an escrow company, a title company or a real estate attorney. They work with all the parties involved in the transaction to collect all the paperwork and funds necessary to close the deal.

Learn about the key functions of these settlement firms in my Mortgage-Calc.com article, A settlement company helps protect your interests at closing.

What To Do If You Filed Your Taxes Late

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This year, your federal income tax return was due on Tuesday, April 17. That's because the usual deadline, April 15, fell on a Sunday, and a federal holiday, Emancipation Day, fell on April 16.

If you didn't file your return on time despite the extra two days, find out what you should do in my article, What To Do If You Filed Your Taxes Late.

The Best Time for Young People to Get a Credit Card



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It may not seem like it, but it is possible go to through life without using a credit card.

That being said, when used responsibly, credit cards offer numerous advantages over other payment methods.

They're convenient, they protect you against fraud and theft, and they offer cash back and other rewards.

They can also help you build the credit history you'll need if you want to borrow money to buy a house or a car.

If you think paying with plastic might be the way to go, I have some points to consider in deciding when to get that first card and why. Read more in my Investopedia article, The Best Time for Young People to Get a Credit Card.

A charge card that charges interest? Stay away

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American Express wants to reward you for learning a bad habit. It's dangling reward points for its existing charge card customers who enroll by June 30 in a program that essentially transforms their plastic into a credit card.

This is a bad idea. Find out why in my Interest.com article, A charge card that charges interest? Stay away.

The Most Common Types of Consumer Fraud

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"Although consumers are protected by a number of consumer protection laws, including the Consumer Credit Protection Act, there are still many opportunities for people to be taken advantage of by unethical professionals and corporations," says Steven Wolf, Executive Director and Forensic Accountant in the Washington, D.C., office of Capstone Advisory Group.

If you can't rely on government agencies for protection, what can you do?

"An educated consumer is the con-man's worst enemy," says financial coach Todd R. Tresidder, founder of FinancialMentor.com.

Become that educated consumer by learning about some of the most common frauds victimizing consumers right now in my article, Most Common Types of Consumer Fraud.

5 Reasons to Use a Real Estate Agent in a Down Market

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Some people think that in a down market, the last thing they should be doing is paying a 6% commission to sell their homes.

But going it alone and doing a "for sale by owner" isn't a good idea right now.

Find out why in 5 Reasons to Use a Real Estate Agent in a Down Market.

Buy from Enterprise, score a 1.49% auto loan from PenFed

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Pentagon Federal Credit Union is offering a phenomenal interest rate on used-car loans to purchase Enterprise Car Sales vehicles.

Through May 31, you can borrow as much as $70,000 at this low rate for up to 60 months as long as you apply online.

This 1.49% rate is even lower than PenFed’s usual great rate of 1.99% on new- and used-car loans.

Find out all the details in my Interest.com article, Buy from Enterprise, score a 1.49% auto loan from PenFed.

Three days to swap car loans?


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CarMax is the nation’s leading retailer in used-vehicle sales, and it offers a substantially better buying experience than you’ll get at many new-car dealerships.

But you shouldn’t assume CarMax’s 100 stores offer the best auto loans.

Find out more about how to get the best auto loan and CarMax's Three-Day Payoff in my Interest.com article, Three days to swap car loans?

Have Housing Prices Bottomed Out?


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Are we finally starting to recover from the housing crisis?

Everyone seems to have an opinion, but the facts present a mixed picture.

Find out what the official housing data say and how that information jives with what real estate professionals are saying in my Investopedia article, Have Housing Prices Bottomed Out?

For the greatest college savings, skip this insurance plan

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I don’t know about you, but when I see a company use words like “guaranteed return” and “risk free” to refer to an investment product, red flags go up. The only investment I can think of that meets these criteria is an FDIC-insured certificate of deposit.

The Gerber Life College Fund makes these claims. That made me wonder if they were misleading consumers with promises that were too good to be true.

If the claims were true, I wondered, can the Gerber Life College Fund help you save enough to pay for your child to go to college, and will it provide enough life insurance coverage if you die unexpectedly?

See what I found out in my Interest.com article, For the greatest college savings, skip this insurance plan.

I also learned something about options for college savings.

A major advantage of the Gerber Life College Plan over other college savings plans is that the money in this plan isn’t considered in calculating a student’s college financial need. Better-known college savings plans like 529 plans count against a student’s financial aid eligibility. But that doesn't make them an inferior option. In fact, they're better even after the financial aid eligibility hit.

Andrew Schrage, co-owner of the Money Crashers Personal Finance website, says 529 plans are the best college savings plan. He suggests Illinois’ Bright Start College Savings Plan and Utah’s 529 plans for their low fees, Ohio’s plan for “stellar investment options,” and Michigan’s program if you’re risk-averse.

That being said, you can use the money from the Gerber Life College Fund for anything; a downside of 529 plans is that the money must go toward college expenses.

“This can pose an issue if, for some reason, your beneficiary doesn't want or need to attend college,” Schrage says.

However, the 529 account can be transferred to another family member, or you can withdraw the money and pay a 10% penalty on the account’s earnings. Personally, I would take the chance and put my money in a 529 plan.

Bank Account Tips for Young People



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Choosing the right bank account is important.

As the hub for all your cash inflows and outflows, you want it to be easy to use and not charge you any ridiculous fees that needlessly eat away at your balance.

If you're just getting started with managing your own bank account, the tips in my Investopedia article, Bank Account Tips for Young People, will show you how to do it right.