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Tips on Buying a New Home

- Tuesday, February 28, 2023
Lallis & Higgins Insurance

Once you first begin considering when and how to buy a house, you’ll likely get all sorts of advice — some helpful, some not so much. And while it can be a long process, buying a home is exhilarating, rewarding and a big commitment. Before taking the plunge, use this checklist as a guide to buy a house — and ensure you’re prepared for the various steps in the home buying process.

1. Understand what you can afford.

How much money do you need to buy a house? That’s the first question you’ll want to consider, especially if you’re buying a home for the first time. Before you start house hunting, you need to determine how much you can afford. Consider your income and existing monthly expenses.

There are several home mortgage calculators online that can help you figure out what you might be able to afford. Keep in mind that you will want to budget for not only the mortgage but also for new budget items that go along with owning a home, such as insurance, possible homeowner association (HOA) fees, taxes, landscaping and yardwork costs, utilities, repair costs, etc.

2. Find an agent that fits your personality.

You might think of this as an optional step on your buying a house checklist, but obtaining professional help can make the process of buying your home much easier. A real estate agent will be able to answer questions you may have, point out things to look for in the homes, help you make an offer and negotiate with the sellers on a price.

In addition, real estate agents are often more knowledgeable about the market value of other homes in the neighborhood and are aware of certain properties that may not be advertised to the public. If a bank or financial institution lists a new home, real estate agents are often the first to be informed, which can give you an advantage when finding a property before other buyers are aware that it's on the market.

3. Be picky but realistic.

No house is perfect. Focus on the things that are most important to you, and let the minor ones go. Try to visualize yourself in the home for the long haul.

When you begin shopping around for a home, the furniture, beautiful artwork and fresh towels in a home can easily make you fall in love with the style of the place or current owners. Try to look beyond this and focus on what is most important: the bare bones of the home itself. Try to envision the rooms without furniture to determine how spacious (or lacking in space) the property is. Examine the countertops, floors and walls for defects that staging may have camouflaged.

4. Factor in all your costs.

Your mortgage payment is only the beginning. You also need to factor in closing costs, property tax, and Home Owners Association (HOA) and homeowner's insurance. Not to mention basic upkeep.

If you are a first-time home buyer, there are a number of grants and programs available to help you find the right funding to purchase a home. Each state has different programs and first-time home buyer incentives to assist you with the buying process. Incentives can include qualifying for reduced interest rates if you meet income and property limits, assistance with down payment and closing costs, and a reduction in potential federal income tax liability.

You may also want to consider applying for an FHA loan, which is easier to qualify for if you have a lower credit score. An FHA loan generally requires a smaller down payment of 3.5 percent to obtain maximum financing.

5. Leave emotions at the door (and try to improve your credit score).

Don't get discouraged if you lose out on the first or second house, or if the seller won't come down in price.

Your credit score will influence whether you're approved for a home loan and how much you'll end up paying in interest. This is one of the steps to buying a house that can save you thousands of dollars over the years. You want a score of at least 700.

6. Practice your poker face and get pre-approved for a home loan.

Don't show the seller's agent all your cards if you've fallen in love with a house. Hang back and prepare to negotiate.

One of the many mistakes that home buyers make is failing to get approved for a home loan before shopping around. This can make it easy to fall in love with a property that you may not be able to afford. Most sellers are leery of accepting an offer if a buyer isn’t pre-approved. They also may not want to wait for the buyer to get approved for the loan and can end up accepting someone else's offer in the process. To avoid this, meet with a lender before you start looking to get your financial questions answered and get the pre-approval documentation all lined up.

Your mortgage interest rate will have a major impact on the total price you pay for your home, so it's important to shop around for the right mortgage lender. Different lenders will have different offers on loan terms, interest rates and fees. Talk with several before you start looking for a home so you can get the best deal.

7. Get an inspection.

You'll want to hire your own inspector if you're considering purchasing a home and making an offer. Although the seller may hire an inspector to look at the electrical components and the structure of the home, the results of the inspection can still be influenced by the fact that the inspector is working for the seller.

This makes it important for you to hire your own inspector to ensure that nothing is overlooked during the process. If the results include mold that was discovered in the basement or a roof that needs to be replaced, for example, this may impact your negotiations with the seller on price.

8. Think long-term.

Is this your starter or forever home? Asking these questions can dictate the type of property you purchase, as well as the mortgage terms that suit you best.

One of the most important tips for buying a house is to research neighborhoods before you buy. You may fall in love with a home that has all of the features that you're looking for, but the location can detract from the value and pose a future problem. Research the crime rate in the area. Visit the neighborhood at various times of the day to determine how safe it is and how comfortable you feel at night.

When visiting, listen to how much noise is in the area. The property may be in a location that is loud only during the day but is quieter at night. Check to see whether the homes in the neighborhood are well-maintained, because those other homes will impact the value of your house over time.

Determine how close nearby schools, banks and grocery stores are, as this will influence how much time you spend on the road commuting or running errands throughout the week. Check into the value of the homes in the neighborhood and their recent sale prices. Look for properties that are similar in size and condition to the one that you're interested in purchasing to compare the value.

Source: araglegal

What to Know About Property Tax

- Friday, February 24, 2023
Lallis & Higgins Insurance - Property Tax

With the housing market booming, you may have recently purchased your first home and are curious about what you should know about property taxes.

What is property tax?

Property tax is a tax paid on real estate or other types of properties you own. It’s also a type of ad valorem tax, meaning this tax is based on the assessed value of the property. Generally, property tax is based on the location of the property and assessed value of the property.

Property tax is typically assessed and collected by state and local governments on an annual basis. They can vary significantly within a state and even between neighboring counties.

Key Takeaways

How is property tax calculated? Property tax is determined by multiplying the assessed value of your property by the basic levy rate, which is a percentage set by the municipal tax authority. In some cases special assessments are also included in the total property taxes assessed.

Why do we have property taxes? Property taxes are local taxes that fund local government programs and help pay for services and projects that benefit your community.

What is the difference between property taxes and. real estate taxes? Used interchangeably but they aren’t the same. Real estate tax is a type of property tax – not all property taxes are real estate taxes. Real estate taxes are assessed on real property like your home and other property taxes like personal property taxes are assessed on tangible and movable property you own like vehicles.

How is Property Tax Calculated?

Property tax is typically calculated by multiplying the value of the property by the basic levy rate:

Assessed Value x Levy Rate = Property Tax

For example, if the assessed value of your home is $200,000 and your county levy rate is 2% then your property tax would be $4,000 ($200,000 x .02 = $4,000). Your property tax bill is typically paid annually to your tax assessor or it can be split monthly and paid with your mortgage payment. Your lender will then send the property tax you paid with your mortgage payment to your tax collector.

What is the Assessed Value of Property?

The assessed value of your property is not to be confused with the price you paid for your home or the price you could sell it for – those are considered the “appraised value” or “market value”. The assessed value of your property is given by the local government’s tax or property tax assessor. This assessed value is typically lower than the market value of the property. This works in your favor since your property tax will then be based on that lower value.

Finding out the assessed value of your property is fairly straightforward. It should be stated on your most recent property tax bill or you can perform a quick search for your property on your property tax collector or tax assessor website.

What is a Levy or Tax Rate?

The levy or tax rates are set by local governments and authorities and will vary depending on where the property is located. Property tax rates can vary significantly within a state and between neighboring towns can be subject to different rates.

It’s possible that your levy or tax rate is expressed as a “millage rate” instead of being expressed as a percentage. Simply stated one “mill” is equal to one-thousandth of a dollar. So if your local property tax rate is 10 mills then you would pay $10 for every $1,000 of the property’s assessed value. So if your home has an assessed value of $200,000 at 10 mills, you would be taxed $2,000 ($200,000 x .010 = $2,000). Sometimes taxing authorities only tax a portion of the assessed value rather than the whole thing to help reduce the tax bill.

It’s important to note that these property tax rates are not permanent and can change. Keep up to date on your county or city’s property tax rate and assessments to avoid a surprising tax bill.

Why Do We Have Property Taxes?

Property taxes are used to fund many services and initiatives that impact everyday life. Property taxes finance local government programs such as police officers, fire fighters, libraries, road maintenance, community pools, and community activities. These services and projects provided by property taxes benefit the community where you live.

What is the difference Between Personal Property Tax and Real Estate Tax?

The terms property taxes and real estate taxes are often used interchangeably. However, while it is true that real estate tax is a type of property tax – not all property taxes are real estate taxes.

Real estate taxes are only on real property like your home or rental property but personal property taxes are levied on movable personal property like vehicles. Businesses are also required to pay property taxes on personal property they own or lease like machinery, fixtures, office furniture, and equipment.

How Do I Pay Property Taxes?

There are typically two ways that people pay their property tax bill:

Once the tax bill arrives (annually or every 6 months) you go online and make a payment or pay via check.

Monthly when paying your mortgage, if you have an impound account and your lender sets aside the money you pay for property taxes in an escrow account to pay the property tax bill. Think of the escrow account as a savings for when the property tax bill arrives.

What if I Don’t Pay My Property Taxes?

Not paying your property taxes can result in the taxing authority placing a tax lien against your property. A tax lien is a legal claim against the property or other financial assets that you own. A tax lien does not take possession of your property but if you were to sell the property, the local government could be entitled to some or all of the proceeds from the sale of the property or asset to cover unpaid property taxes

How Do I Deduct Property Taxes on My Tax Return?

If you can itemize your deductions (instead of taking a standard deduction) you can deduct up to $10,000 ($5,000 if you are married filing separately) in combined property taxes and either state and local income taxes or sales taxes on your tax return.

Prevent Carbon Monoxide Exposure

- Monday, February 13, 2023
  • Do have your heating system, water heater and any other gas, oil, or coal burning appliances serviced by a qualified technician every year.
  • Do install a battery-operated or battery back-up CO detector in your home. Check or replace the battery when you change the time on your clocks each spring and fall. If the detector sounds, leave your home immediately and call 911.
  • Do seek prompt medical help if you suspect CO poisoning and are feeling dizzy, light-headed, or nauseated.
  • Don’t use a generator, charcoal grill, camp stove, or other gasoline or charcoal-burning device inside your home, basement, or garage or near a window.
  • Don’t run a car or truck inside a garage attached to your house, even if you leave the door open.
  • Don’t burn anything in a stove or fireplace that isn’t vented.
  • Don’t heat your house with a gas oven.
  • Don’t use a generator, pressure washer, or any gasoline-powered engine less than 20 feet from any window, door, or vent. Use an extension cord that is more than 20 feet long to keep the generator at a safe distance.

Fireplace Safety Tips

- Tuesday, February 07, 2023
Lallis and Higgins Insurance

Nothing quite creates a winter holiday ambiance as well as a log in the fireplace and family gathered around to bask in its warmth and glow. Of course, playing with or near fire is dangerous for children, so please remember these tips from the AAP before you light your hearth.

  • If possible, keep a window cracked open while the fire is burning.
  • Be certain the damper or flue is open before starting a fire. Keeping the damper or flue open until the fire is out will draw smoke out of the house. The damper can be checked by looking up into the chimney with a flashlight or mirror. Do not close the damper until the embers have completely stopped burning.
  • Use dry and well-aged wood. Wet or green wood causes more smoke and contributes to soot buildup in the chimney. Dried wood burns with less smoke and burns more evenly,
  • Smaller pieces of wood placed on a grate burn faster and produce less smoke.
  • Clean out ashes from previous fires. Levels of ash at the base of the fireplace should be kept to 1 inch or less because a thicker layer restricts the air supply to logs, resulting in more smoke.
  • The chimney should be checked annually by a professional.
  • Even if the chimney is not due for cleaning, it is important to check for animal nests or other blockages that could prevent smoke from escaping.
  • Minimize your child's chance of burns from the hot glass front of some fireplaces, including gas fireplaces. Safety screens can be installed to reduce the risk of burns.
  • Make sure the area around the fireplace is clear of anything that is potentially flammable (ie: furniture, drapes, newspapers, books, etc.). If these items get too close to the fireplace, they could catch fire.
  • Never leave a fire in the fireplace unattended. Make sure it is completely out before going to bed or leaving the house. If you leave the room while the fire is burning or the fireplace is still hot, take your small child with you.
  • Put fireplace tools and accessories out of a young child's reach. Also, remove any lighters and matches.
  • Install both smoke and carbon monoxide detectors. Test them monthly and change the batteries at least once a year.
  • Keep a fire extinguisher on hand.
  • Talk with children as early as possible the dangers of fires and the heat coming from them.


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