New tiny houses – the two bedroom models – can be built for just over $50,000.  Or if you’re talking a 30-year mortgage at today’s rates … $250 p/month for a house payment. Sounds tempting, doesn’t it?  Here’s a house that was built for about $10,000!

“I sold my big house and got rid of most of my stuff, limiting myself to about 300 things — that was everything from heels and a toothbrush, to a couple of dinner plates and a two-ton jack. I then bought a set of plans from Tumbleweed. Four months later I had my tiny dream house.”

Some caveats.

1.  It’s hard to limit yourself to just 300 items when you’re used to living in a McMansion.
2.  Many lenders won’t bend over backwards on loans for $10,000 to $60,000.  They make more money on the $120,000 and up loans so will do just what they need to do. Don’t expect any concessions on closing costs.

But for $250 p/month (or less!) – and if you’re not claustrophobic – this could be ideal in today’s economic climate.

Photo by Tumbleweed Tiny House Company.

Photo by Gee Jay via flickr creative commons.

I do not prepare the taxes in my household.  I fear if I did we could say hello to a regular audit.  My expert advice is to find a professional to help you if your taxes are complicated. However if you’re determined to do it on your own, read the following tips… 10 Common Errors Home Owners Make When Filing Taxes. For example, one mistake is confusing the escrow amount for actual taxes paid:

If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

The advice from attorney G.M. Filisko is good.  The entire article is an excellent read if you’re getting ready to meet your April 15 deadline.

Photo by JD Hancock via flickr creative commons.

The White House is looking at ending the reign of Fannie Mae and Freddie Mac following the “financial quagmire” caused by the mortgage agencies.  According to MSNBC.com, reform proposals include:

• Shrinking the size of the portfolio of mortgages held by government housing finance agencies by at least 10 percent a year.
• Creating an insurance fund for mortgages much like bank deposit insurance, supported by premiums paid by lenders.
• Winding down government subsidies of mortgages by raising the fees charged to cover the risk of default.
• Limiting the government’s role in housing finance to Federal Housing Administration backing of mortgages, turning most of the market over to the private sector.
• Phasing in a 10 percent down payment requirement for government guaranteed loans.

The new down payment requirements hearken back to the years before the 2000′s when buyers saved for years to be able to get into a home.  Like the years it took for buyers to save, it will also take years to shrink the portfolios of Fannie and Freddie.

There’s a fine line for first tie buyers doing their homework. Don’t do so much that it scares you off, but do enough so you will not get taken advantage of by an unscrupulous builder or lender.  Here’s a good video to start with,

Women accounted for 21 percent of all homes purchased in the U.S. in 2010.  That amazing number should get the attention of home owners as they stage their houses, as well as lenders and real estate agents as they plan their marketing strategies for 2011.

Meanwhile, Marilyn Kennedy Melia write tips for the single female home buyer on bankrate.com.  She says,

… owning a home can help women enter a more secure retirement if they pay down their loan balance over time.  “You shouldn’t think of a home as an investment that will make you rich,” Aiken says. “But if you buy a home that you can afford to pay off, maintain and live in over a long period of time, you’ll have a low-cost place to live in retirement.”

Melia also stresses that a female buyer should shop aggressively for a home loan and also expect the seller to pitch in to help with closing costs and any allowable down payment assistance.

Photo by Nina Matthews Photography via Flickr Creative Commons.

I helped a buyer close on a house a couple of weeks ago and while we did our final walk-through, she told me about her great buy on a refrigerator, washer, and clothes dryer.  I probably looked like a deer in the head lights when I stammered, “NO!  STOP!”  I suggested that the buyer not buy any more big ticket items and that she should wait until after she closes before spending more money on furniture, blinds, and other new house items.

There are some very specific do’s and don’ts when in the middle of purchasing a house.  Realtor Charles Dailey of Minneapolis, Minnesota helps us to break it down.  Here are a couple that really resonate,

DO NOT charge any new items on your charge cards (higher balances will lower credit scores).
DO NOT change employment may result in loan denial.
DO continue to make all payments on time.

All good advice.  Take it seriously.

Photo by jim212jim via flickr creative commons.

It may be a difficult battle you face when you negotiate with your lender to reduce their closing costs.  Previously I had thought it was just almost impossible, but after reading this article in REALTOR magazine, I’m thinking otherwise,

Simply ask the lender which fees are negotiable and which are fixed to find out where there’s wiggle room. Questions such as “Who is getting paid this fee, and why am I being asked to pay it?” can start the conversation, experts say.

“It’s not a time to be polite,” says Kathleen Day, a spokeswoman for the Center for Responsible Lending. “You have to have a strong stomach and a stiff spine and not bow to pressure from the other side of the table to close the deal.”

I maintain that having a stiff spine would be extremely important and that it will not at all be simple.  It will be like finding water in a desert.  If you are able to negotiate with your lender to knock some of their fees off the closing costs, please share your story with us.

Photo by Alex Proimos via flickr creative commons.

The horrible story about a foreclosed home in the state of Washington reminds us to become a Mrs. Gladys Kravitz every now and then.  According to foreclosure.com, a financially distressed hoarder stopped feeding the animals she lived with.  When the home was finally foreclosed upon, the person changing the lock knew something was wrong based on the smell.

The owner had actually lived with the dead animals before eviction,

She tries to explain:

“I just shut down. I didn’t see it, I didn’t want to deal with it…. I spent as much money as I could feeding them, taking care of them, but there wasn’t enough money to go around.”

Shelters apparently would not take the animals, which is an excuse that doesn’t appear to be flying with the local police department. In fact, the owner — who has breast cancer — and her son have been slapped with 31 counts of animal cruelty.

This definitely serves as a reminder to keep your eyes open to see if your neighbor has pets while they are living next door to you.  If they do and they lose their home, it’s okay to do some tentative snooping to be sure the pets have not been abandoned.