John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance

Mortgage Tips for Young Homebuyers

For some young people, creating a home is the first major post-graduation decision they’ll make. While young adults might have little capital available, research into mortgages can help these homebuyers make the most informed, budget-friendly decisions. Here are a handful of mortgage tips for young homebuyers.

Access to Special Financing

While younger people might not have much of a credit history, there are options that can help them get into houses. If you’ve never bought a house, there are opportunities for first-time home buyers. These sometimes come with relatively low interest rates. They also come with low down payment requirements for the house’s residents. This will allow you to get into a house without having to save a large sum for a down payment.

More Flexibility

Those who are young tend to have more flexibility. They’ve just entered adulthood. Therefore, living with roommates and sharing a kitchen or bathroom is usually not a big deal. Additionally, younger adults who are unmarried and without children can find value in having roommates. By taking on a roommate or two, you could effectively have them pay off a significant portion of your mortgage and help you build wealth. These less structured options provide plenty of flexibility for young people, and something as simple as renting out a room can lead to cost benefits.


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Tips When Buying Your First Home

Buying a home is an exciting, yet stressful process.  You’re making one of the largest purchases you’ll ever make, and you want to ensure you’re going about things the right way.  For first time home buyers, this may seem even more difficult, since you aren’t exactly familiar with the process and everything that comes with it.  Additionally, depending on your state, the buying process may vary, to it’s important to be aware of any local differences. Generally, however, there are a few good tips to consider when buying your first home:

Enquire About Your Mortgage Options

As a first time home buyer, your mortgage options are one of the most important parts of your entire buying process.  Your mortgage loan determines the type of home you can afford (price wise), and how long you’ll be paying for it, depending on the amount of your down payment.  Keep in mind, your downpayment affects how much you need to borrow in your mortgage loan, so the more you have in your down payment, the better. However, for first time home buyers, down payments requirements also differ sometimes from that of someone who’s owned a home before.  Either way, find out what option works best for you, and work on your mortgage from there.

Start Saving Early

To ensure you have a solid down payment, you definitely want to start saving as early as possible.  Whether you’re putting down a “traditional” down payment of 20%, or taking advantage of a first time home buyer program, with a down payment as little as 3%, you will likely need a nice lump sum saved to cover the downpayment and closing costs…



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John J. Bowman Jr. Accountant, personal finance

How to Stop Overpaying for the Basics

Households across America are struggling to make ends meet. High housing costs plague many cities. In others, stagnant wages offer little prospect for relief. Many people try to work multiple jobs and reach for just a few more billable hours, but even the hardest workers only have so much time and energy. This leaves people feeling pinched every month, concerned that paying basic expenses will tips them over the edge and into debt.

Ben Franklin is famous for the adage, “A penny saved is a penny earned.” With budgets so tight, this adage is truer than ever. The best place to start saving is on the recurring expenses that you resign yourself to paying every month.

Rethink Cable

Do you really need cable? If you have an Internet connection, you can save a bundle by cutting the cord and opting for streaming services like Netflix, Roku, and Hulu. Speaking of electronics, are you overpaying for your cell phone? Unlimited service is available for as low as $35/month via certain retailers; if you are paying more than that, shop around for other options.

Be Sustainable

Energy bills can leave you broke, especially if you live hot or cold climates. Every degree you lower the thermostat in winter and raise it in summer can save you up to 3 percent on your bill. If no one’s home all day, why pay to keep the place at 75 degrees? A programmable thermostat can help you adjust temperatures according to your schedule. When you head to work, are buses and trains an option? Many Millennials find they can do without cars and the payments, insurance, and gas that keep many Americans broke.

Eat In

Dining out can serve up an unnecessary burden on your budget. Avoid high costs and calories by learning some quick recipes to prepare at home. Brown bagging your lunch saves you money and calories. Cook a big dish over the weekend and take the leftover to work. For groceries, forget convenience and shop where you get the best value. Warehouse clubs can save you money if you avoid the temptation to buy more than you use. Be especially careful with perishables. Also, get a coffee maker to make your brew at home. If you like gourmet coffee, you’ll need to invest in gourmet maker, but you’ll make up for the expense over time. If you are stopping by the pharmacy, make sure to get the generic equivalents for both prescription and over the counter medications.

Find Low-Cost Entertainment

Unless you’re a monk, you probably need some entertainment now and then. Big movie theatre chains offer discount plans and second-run movie houses provide big savings. There are also great deals for kids.

These strategies can save you hundreds every month. That can be enough to fund an emergency savings account or retirement plan. Establishing a cost-effective lifestyle takes planning and discipline, but it’s better than being broke.


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personal finance

Tax Breaks for First-Time Home Buyers

Buying your first home is an expensive endeavor. Yet there are a number of tax credits that first-time homebuyers can take advantage of. Sometimes congress changes the available tax breaks or adjusts certain aspects of the law. Therefore, you should keep an eye on the tax law when you get ready to file your taxes. Below are some of the most popular tax credits for first-time homebuyers.

Points Deduction

If you paid points when getting your mortgage, you may be eligible for a deduction. In order to take advantage of this deduction, your settlement contract has to make reference to the points. Plus you will have to itemize when filing your taxes instead of using the standard deduction.

Property Tax Deductions

Property taxes can be deducted when you itemize on your tax return. First-time homebuyers should definitely take advantage of this deduction, but it’s not limited to first-time homebuyers. In order to claim this deduction, the property should be your main residence or a vacation home—not a business property.

Mortgage Interest Credit

Claiming a mortgage interest credit can lower the amount of taxes you owe. If you want to take advantage of this credit, you have to make sure you received a Mortgage Credit Certificate. The certificate is usually sent to you by your local government when you first receive your mortgage, and it lists how much interest the credit is worth. If you take advantage of the mortgage interest credit and the mortgage interest deduction, the credit will be reduced based on how much of a deduction you claim.

Mortgage Interest Deduction

A home mortgage interest deduction is one of the most popular tax credits for new homeowners. When it comes time to file your taxes, the bank or loan provider will mail you a tax form called Form 1098. The form details how much you paid in interest for the previous tax year. New homeowners should definitely take advantage of this deduction since mortgage payments have a higher percentage of interest than principal in the beginning. Keep in mind that in order to deduct home mortgage interest, you will have to itemize. For many homeowners, itemized deductions can add up to be larger than the standard deduction.

IRA Withdrawals

Typically when you make withdrawals from your IRA before you are 59 ½ years old you face a 10% penalty. However, when you use the withdrawals for a home purchase this penalty can be waived. The caveat is that you cannot withdraw more than $10,000.

personal finance

Save Money on Home Energy Costs

Summer is right around the corner, and as the heat rises, so will your energy bill. Yet there are a number of simple ways that you can save money on your energy bill. The more steps you take to cut down on energy costs—no matter how small—the more money you save. Keep reading to learn more about some of the best ways to save money on energy costs.

Eliminate Vampire Power

Vampire power is the name for energy draining devices. For example, if your laptop is fully charged, but you leave it plugged in overnight, you are only wasting your money. Similarly, if you leave your TV plugged in and on standby mode, you only waste money. Microwaves, printers, and cell phone chargers not plugged into any phone are other vampire power culprits. Each device that you have plugged in while not in use unnecessarily increases your monthly energy bill. Before you run through the house unplugging everything, think about which devices you use regularly and which ones you don’t. It probably doesn’t make sense to unplug your computer each day, but there’s no reason for leaving the cell phone charger plugged in all day long.

Use Your Dishwasher

Many people rinse their dishes before loading them into the dishwasher. If you rinse your dishes first, though, you use unnecessary water, and the machine might not do as thorough of a job. Dishwashers with sensors can determine how dirty your dishes are, so it’s best to let the machine do its job and determine how long of a cycle it should run. By just using the dishwasher to clean your dishes, you will use less money and save money as a result.

Review Your Water Heater

Do you know how old your water heater is? If your water heater is older than twenty years, then it might be time to upgrade. A new water heater costs a lot up front, but over time it will save you money. Heat-pump models tend to be more energy efficient than electric models.

Take Advantage of Solar Power

Every year it seems that the cost of solar installation becomes cheaper. At the same time, solar panels seem to get better at collecting and storing power. Tesla, the company famous for its electric cars and self-driving experiments, is currently working on solar panel shingles for homes. In the meantime, though, you can purchase solar panels to install on the roof of your home. Not only will solar help you save money on your electric bill and reduce your impact on the environment, you may also be eligible for tax credits. Take a look at this site to learn more.