Winterizing Your Home

With heating fuel prices generally lower than last year's levels, many homeowners this winter could be in for a pleasant surprise when they open their monthly bills. Those who take steps to improve energy efficiency might even start to recover some of the extra cash they spent keeping warm over the last few years.

On average, the Energy Information Administration, or EIA, reports households heating primarily with natural gas, the most popular source of heating fuel, can expect to spend about $119 (13 percent) less this winter in fuel expenditures. The price of natural gas last year was artificially high, a result of hurricane damage to oil refineries.

Households heating primarily with propane can expect to pay an average of $15 (1 percent) less this winter, according to EIA, while those that heat with electricity will pay out $58 more on average (a 7 percent increase). The relatively small number of heating oil users should expect to pay about $91 (6 percent) more.

If you do have a little extra in your household budget this year because of lower heating bills, and many Americans will, then consider investing some of that money in energy-saving products.

The House of Your Dreams

Before deciding which house to buy, think about your lifestyle, your current and anticipated housing needs, and your budget. Finding the right house involves striking a balance between your wish list and the reality of the housing market.

Your Wish List

When creating your wish list, take a look at your lifestyle.  For example, if you love to cook, you'll want a well-equipped kitchen.  If you love to garden, you'll want a yard.  If you want to work at home, you may want a room for a separate library or home office.  If you have several cars, you may require a garage or parking spaces.

Write down on paper all the things you and your co-purchaser, if there is one, would love to have in your home.  You can let your imagination take over, but realize that you will have to cut the list back later.

As you think about your housing needs, it's important to consider how long you may live in your home.  If you are newly married, you might not be concerned with a school district right now.  But you could be in several years.  Will you move then — or is the house you are looking for now is in a neighborhood where good schools are available?  If you have aging parents, might they need to live with you in the near future?  If so, you may want to look at homes that offer living arrangements for them as well as you.  So, when preparing your wish list, factor in both your current housing needs and what you may anticipate a few years from now.

Buying Home in the U.S. by Foreigners

Recent law changes grant non-permanent resident aliens most of the same purchase and home-financing opportunities that American citizens have.

When buying a house, foreigners don't need to worry anymore about their good employment and credit records becoming lost in translation since many major U.S. lenders now use credit-reporting agencies that have reciprocal agreements with European countries and can use a simple currency conversion table to track your current income and assets.

However, a foreigner needs to come up with a down payment of 20 percent to 25 percent of the purchase price, depending on the rules of the lender, which is a little higher than what most Americans pay. Nevertheless, the home-buying process in the U.S. is relatively simple and less bureaucratic for a foreigner than it would be in most countries and there are hundreds of web sites where you can view American properties online from the comfort of your European home to facilitate your search.

Read more about what foreigner should know when buying a house in the U.S. …

New Home Building Activity Falling

New home-building activity in the U.S. resumed its decline in October, tumbling to its lowest level in six years as builders dealt with bloated inventories of unsold property.

According to the Commerce Department, housing starts decreased by 14.6% to a seasonally adjusted 1.486 million annual rate. Building permits, an indicator of future building activity, fell a ninth consecutive time.

The government also lowered its original estimate for September starts, a number some economists considered a fluke. Construction rose 4.9% to 1.740 million in September, revised from an originally reported 5.9% climb to 1.772 million. Starts fell 5.7% in August, 4% during July, and 6.1% in June. Construction rose 6.6% in May.

Economists had expected a less-severe drop in October. The median estimate of 22 economists surveyed by Dow Jones Newswires was a 5.6% fall to a 1.672 million annual rate. The 14.6% decline was the largest since 16.1% in March 2005, and it carried starts to their lowest since 1.463 million in July 2000.

Get the full story here…

Reducing Income Tax

Because of income tax deductions, the government is basically subsidizing your purchase of a home. All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

For example, assume your initial loan balance is $150,000 with an interest rate of eight percent. During the first year you would pay $9969.27 in interest. If your first payment is January 1st, your taxable income would be almost $10,000 less – due to the IRS interest rate deduction.

Property taxes are deductible, too. Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.