Home buyers often debate when the closing of their new property should be – at the end of the month or the beginning.  For people who are cash strapped, the end of the month is the best option so they can avoid paying a full month of interest, taxes, and insurance.  However, buying at the beginning month is also has advantages according to Tim Bray of Sotheby’s Real Estate,

Let’s say that you closed on March 2^nd.  In this case, your first payment would not be due until May 1^st or 60 days later. In this case you would be responsible for paying 29 days of PITI.  Yes, closing costs will be a bit more but you will be in your home sooner giving you more time to clean, decorate, and enjoy your new home.

In my own part of the country, you get the month delay before your first house payment only if you wait until after the 10th of the month to close.  In the end, it depends a lot on how much time your lender needs to close the loan and how much of a hurry the buyer is in to occupy the house!

One in four Americans owe more money than they have in their emergency savings account.  That’s what the article published by Life Inc. proclaims.  What is most surprising to me about this statement is that the number isn’t higher.

Those hit hardest when it comes to debt versus savings, are individuals on the low end of the economic ladder and those with less education, according to the study that polled more than 1000 adults earlier this month.

For example,70 percent of those earning $75,000-plus have more in savings than credit card debt vs. 40 percent of those earning less than $30,000 per year.

With people already hit hard – especially lower and middle income families – money is getting tighter. This means more money for everyday expenses like gas, electric, food, and rent prevents people from dropping funds in savings accounts. This could be financially catastrophic if emergencies arise for families.

Remember to always try to pay yourself first, even if it’s just a few dollars every month.

With Fall in full swing in most of the U.S., it’s time to start thinking about how to reduce your heating bill.

Some tips include:

• Make sure that windows and doors are properly caulked.
• Keep the refrigerator door closed unless you have to because that appliance drinks the most energy.
• Change your air filters monthly.
• Wrap your water heater in a blanket or other insulation.
• Invest in a programmable thermostat so the house is heated when you’re actually home.

Hopefully these simple tips will help you save at least a little bit of money as the months turn cold.

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.

While Money Blue Book probably didn’t mean this to be funny, I found humor in the post Dating Tips for the Financially Savvy Person (or 6 Signs Your Date is a Financial Dud).  This can easily be paralleled to people also unable to qualify for a mortgage loan.  For example,

If your date seems overly impressed by their own spending, it may be that they are forgetting an important fact: Eventually they have to pay for it all.

As stated, this is what happened in the mortgage crisis of the 2007-2010 (and now) years. People overspent – they could not afford what they bought.  Of course, not all was their fault.  When the job market took a big hit, job loss caused a huge volume of foreclosures as well.

Here’s another… won’t save for a rainy day,

But a little advance planning can go a long way when trying to pay for a wedding, a vacation or your first house. It takes a little discipline and an ability to go against the crowd. If your date thinks keeping a savings account at a bank is uncool, you know they may not be very adept at long term financial planning.

Forget this person!  They’ll lead you to financial hardship if you stick around long enough!

Photo by Andrew Magill via flickr creative commons.

About 20 years ago, buyers were told to consider their future income when they purchased a house.  For example, if they qualified for a $100,000 loan (a lot of money back then), but wanted to keep the purchase price around $85,000, they were encouraged to go ahead and spent the full $100,000 based on anticipated raises.

Yes, my first Realtor told me that.

However today I advise buyers of the exact opposite.  So how can really tell how much home you can afford?  My advise is you could anticipate what your monthly mortgage payment would be on the house you think you’d eventually like to buy.  Pay your regular rent, but pay yourself the different in a savings account of what that future house payment will be.

You will be able to save ahead for down payment and closing costs this way, while getting a solid reality check on whether you can afford that mortgage payment.

Another rule of thumb… make sure your house payment doesn’t exceed 25 percent of your income.  Okay, perhaps up to 32 percent might be okay but anything above that could be dangerous to your financial health.

Approach your ability to pay with plenty of skepticism, save ahead in case of emergencies, and don’t forget to plan for other expenses that go along with home ownership.  If you’ve already done this, consider buying now so you can take advantage of the $8000 tax credit being offered by the feds.  You must have a home under contract by April 30th and close by June 30th to qualify.

Home maintenance is so much more than changing your furnace filters every month, mowing the lawn, and closing your crawl space vents in the winter and opening them in the summer.  You also need to keep your refrigerator coils clean, clean around the dryer vents, get your chimney inspected, and much more.  CNN Money provides a great article with year-round maintenance tips, including:

Inspect your roof. Grab some binoculars and look for loose shingles, mold, mildew, or cracked chimney mortar. Catch problems early and you may avoid spending $2,000 to $12,000 (and up) for a roof replacement.

Check your attic for holes or thin spots in the insulation, and make sure the caulking around doors and windows doesn’t leak. Keep in mind that your attic should be only 5° to 10° warmer than the outside air; any hotter and you could develop ice dams on your roof, which can cause water leak.

There are dozens of great ideas in this article and if you have tens of thousands of dollars (or hundreds of thousands) invested in your home mortgage, pay attention and do what needs to be done to preserve your asset!

Photo by Collin Anderson via Flickr Creative Commons.

2010 is going to be an interesting year for taxes. There are a number of tax breaks available that haven’t been available before. Here are two home-related tax moves for you to consider in 2010:

1. Buy a Home

The first time home buyer tax credit has been expanded and extended so that you can get the $8,000 first time tax credit until the end of April. Additionally, if you already own, you can get up to $6,500 when you buy. If you are planning to buy in the next couple of years, this might be the year to do.

2. Green Home Improvements

If you are thinking of making your home more energy efficient, 2010 is your year. There are tax credits available for putting in solar home heating systems, replacing your windows, adding insulation, and more.

Plan out the year ahead so that you can do your best to reduce your tax liability. Figure out what you want, and then decide how you can make it work within your budget.

One of the goals many people have, whether it is for this year or for some point in the future, is to buy a home. However, many neglect to save up for a down payment. This is because a couple of years ago, you could buy a home without a down payment. The game has changed, though, and you need to be aware that a down payment is a necessity in the current climate. (In fact, such common sense should never have been abandoned in the first place.)

At any rate, it is wise to plan ahead to save up for a down payment. You should figure out your price range for a home, and then decide on your down payment size. You will need at least 3.5% if you are getting a loan through the FHA. If you want a different loan, though, you may need between 5% and 10% of your home’s purchase price. A mortgage lender or broker can help guide you in some cases.

This means that you will have to save up thousands of dollars. If you are buying a home for $180,000, you will need $6,300 if you go with the FHA loan. For a 10% down payment, it will require $18,000 ($9,000 for 5% down). You can see how planning may be required.

You should save up using some sort of high yield savings account so that you get a little extra in terms of interest. Figure out where you may have to cut back in order to save up a monthly amount of money, depending on your time frame. For instance, if you want to save up a 5% down payment in a year, using our $9,000 scenario, you will need to set aside $750 a month. This can also serve as a good gauge of whether or not you are ready to take on the costs of home ownership.

In the end, buying a home is a big financial commitment. You really should be ready for it.

While the housing market is slowly improving, the fact of the matter is that foreclosures are still very much on the market, and provide a number of interesting opportunities to buy. However, as you move forward with buying foreclosures, it is a good idea to keep some of these considerations, from Real Estate Pro Articles, in mind:

1. Look for a foreclosure in a good location.

2. Research your foreclosure choice, and learn about its back story. Watch out for liens against the home.

3. Keep within your budget, understanding that sometimes even foreclosures can end up out of your price range.

4. If you decide to buy a foreclosure at an auction, make sure that you understand the rules.

5. Know that an auction is not your only choice. You can look for foreclosure listings elsewhere and buy homes from a number of sources.

It is also possible to look into other distressed homes, such as those in pre-foreclosure, or homes that are being sold short, for less than the owner owes.