There's no place like home to save on the cost of living.
Home is, after all, also where many cost of living expenses have risen, according to the Center for Housing Policy, the research affiliate of the National Housing Conference (NHC).
While incomes have risen only 30 to 35 percent in the ten years ending in 2006, some home-related costs are up by more than 80 percent, according to the Center's "Stretched Thin: The Impact of Rising Housing Expenses on America's Owners and Renters."
Here's how not to be stretched so thin while preparing yourself for your next home purchase.
Create or update your household budget and balance it. Account for every penny you earn, every penny you save and every penny you spend to reveal your spending habits. Your spending habits will show you where you can cut back. Get an online assist from Consumer Reports' recommendations: Buxfer.com, Geezeo.com and Yodlee.com.
Move down. The average monthly mortgage payment rose 46 percent during the ten years ending in 2006. Don't wait to be an empty-nester or to fund your retirement. Cash in on a smaller home now. Factor in selling costs, the potential for a capital gains tax hit and higher property taxes, but with enough long time equity, a smaller home could come mortgage free.
Sell out, simplify and organize. Sell all that stuff that won't fit into a smaller home. Sell all that stuff you'll never use. An organized home is a time-saving home. A time-saving home is a money-saving home, says the National Association of Professional Organizers.
CraigsList.com and Ebay.com (Ebay trading assistants will do the work for you) are the usual suspects, but you can open your own cool store on Amazon.comand sell newer, less obscure items for much more than you'd get at a garage sale.
Also, give stuff away to charity for a small tax deduction.
Shop around for homeowners insurance. Insurance premiums rose 83 percent in ten years ending in 2006, but rates still vary. Comparison shop direct among various companies. Use anIndependent Insurance Agent to shop around. Comparison shop online with Insure.com, Geico.com, Progressive.com, Esurance.com and others.
Raise deductibles to cut costs more. Save with discounts for home fire safety and security systems, for buying multiple policies (auto, life, health, etc.) from one company, and for avoiding unnecessary claims.
Appeal your property tax assessment. In most jurisdictions property taxes are assessed based on a home's price. But in areas where home prices have tanked -- especially if you purchased your home in a bidding war, during the peak of the market -- you could get a tax break.
See your assessor or other tax collector for the appeal process for your jurisdiction. Be prepared to prove the value of your home with an appraisal or comparative market analysis of recently sold properties that are as identical as possible to your home.
Green up. The cost of energy rose 43 percent from 1996 to 2006, and even more since then, according to the Center. Your home abounds with energy saving possibilities. Check with your local utility and state energy agency. The Residential Energy Services Network offers referrals to energy auditors who can help you uncover energy leaks. Also the U.S. Department of Energy's (DOE) "Energy Savings" page offers a host of additional tips.
Get help. Don't hesitate to reach out for financial help. Always contact creditors at the first sign of trouble. That's when more opportunities for relief are available. You may be eligible for mortgage modification, special refinance loans or other assistance that can reduce your monthly mortgage.
Don't squander your savings. Bank some money saved to save for a downpayment and pad or start an emergency slush fund. Also used saved money to pay down debt and slay the revolving credit interest rate monster.
Author: Broderick Perkins
Copyright © 2008 Realty Times. All Rights Reserved.
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First Time Homebuyers Credit
The first-time homebuyer credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.
The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.
The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more ($80,000 if purchased after Dec. 31, 2008, and before Dec. 1, 2009).
If you meet all first-time homebuyer eligibility requirements, see Form 5405, for more details:
Form 5405
For further detail visit:
http://www.irs.gov/