Lower Your Winter Electric Bill

The leaves have fallen off, there's a chill in the air. That's right folks: It's winter
Of course, when winter arrives temperatures start to drop, you can bet your monthly electric bill will start to climb.

No need to panic, though. You can save money without giving up the comforts of a warm and toasty home. I have some tips to keep your electric bills under control this winter — or any other season.

1. KEEP VAMPIRE ELECTRONICS UNDER CONTROL

You probably already know about easy winter fixes like sealing gaps around doors and windows to prevent precious heat from escaping. But did you know your home is filled with dozens of other energy-draining culprits? I call these foes vampire electronics.

TVs, computers and other gadgets are guilty of sucking lots of energy day and night, even when you're not using them. The EPA estimates that these idle gadgets burn through more than 100 billion kilowatt hours of electricity nationwide each year. That's about $10 billion worth of energy.
The easiest way to stop vampire electronics from driving up your electric bill is to unplug them when they're not in use. Of course, sometimes it's hard to give up the convenience of having your gadgets plugged in and ready to go at a moment's notice.

If that's the case, many companies sell affordable power switches that you can plug into wall outlets. The power switches let you control the power to any outlet with a simple flick of a switch. Use these switches on countertop appliances like your coffeemaker and watch savings add up.

Another great option is adapters with built-in timers. If you plan to use space heaters or put up holiday lights this winter, using a built-in timer can shave dollars and cents off your winter electric bill. Timers also offer peace of mind on those hectic days when you can't remember if you turned off your gadgets before leaving the house.

Big-ticket items like your TV and computer are the biggest energy-suckers. Use a smart power strip or surge suppressor for these gadgets. Smart power strips will shut down a power outlet when it senses your gadgets have gone into standby mode.

And did you know that putting your desktop computer in Sleep Mode and Hibernate can save almost as much energy as unplugging it?

Not sure what gadgets are draining the most energy? You can also buy electricity usage monitors that will pinpoint exactly which appliances and electronics are the biggest winter energy culprits.

2. LIMIT USAGE IN 'PEAK HOURS'

You can save money on your electric bill simply by changing the time of day you run the oven, do laundry or run the heater. That's because power companies change electric costs based on the time of day. It can cost 30 to 60 percent more to operate your electronics during peak hours of energy usage.
Peak hours are usually between 6 to 10 a.m. and 3 to 9 p.m. Weekends and holidays tend to be "off-peak." Every company defines peak hours a little bit different, so make sure to check with your provider for exact times.

Doing chores during off-peak hours is a simple way to lower your electric bill. So, save the laundry for the weekend, and turn the heater back a few notches during peak evening hours.

3. SAVE WITH ENERGY-FRIENDLY GADGETS

Energy-saving gadgets like Energy Star appliances can save you serious money in the long run. Did you know these gadgets might score you savings with your power company too?

You might qualify for rebates for purchasing energy-efficient appliances. Even switching to compact fluorescent bulbs or LED bulbs can count. Rebate eligibility will vary depending on your company, but it never hurts to ask.

If you're interested in buying energy-efficient appliances for your home, the Department of Energy has tons of tips about the latest in energy-saving gadgets.

Now that you know how to save money on your electric bill this winter, throw some kindling in the fireplace and kick back with a cup of Hot Coco.

Your Sacramento Realtor with Common mistakes borrowers make that put their credit scores into a tailspin

 

Common mistakes borrowers make that put their credit scores into a tailspin

 By AnnaMaria Andriotis, MarketWatch

 As 2014 kicks off, many Americans are resolving (as they do each year) to get their finances in order. Besides saving more, ...that means not repeating the mistakes that previously hurt their credit scores.

Nationwide, the average FICO score stood at 690 in October 2013, according to new data by FICO. That’s not great, considering that the FICO score — the credit score that’s used in most consumer lending decisions — runs up to 850, and most lenders won’t approve borrowers for a mortgage without a score of at least 720. Worse, almost a quarter of consumers have a FICO score that’s below 600; with most lenders, that’s considered subprime — meaning it’s very difficult to get credit. Those borrowers who do get approved typically pay very high interest rates.

Of course, the importance of a high credit score extends way beyond access to credit. Low scores can make it difficult to rent an apartment. Car and home insurers may choose not to provide coverage to applicants with low scores or to charge them excessively high premiums. Negative information on a credit report (which determines a credit score) can lead hiring managers to reject a job applicant.

To improve their scores, consumers will need to know what hurt them in the first place. Here are five common mistakes consumers make that send credit scores into a downward spiral.

Keeping high balances on credit cards

Nearly one in five consumers believes that carrying credit-card debt from month to month is a responsible way to manage household finances, according to a poll conducted in July by the National Foundation for Credit Counseling, a nonprofit financial counseling organization. Yet keeping a high balance often leads to a low score. Excessive credit-card debt can lower a FICO score by 100 or more points, says John Ulzheimer, consumer credit expert with CreditSesame.com, a credit management site, and a former manager at FICO. Scores drop even more once a cardholder has maxed out his or her credit card. This month, CreditKarma.com, a credit-management site, found that consumers with maxed-out cards have an average credit score of around 560.

Thirty percent of the FICO score is based on the amount a consumer owes on credit cards. The so-called credit-utilization ratio looks at how much debt a person is carrying compared with how much credit they have available overall. Once a consumer reaches a 10% ratio — say, $1,000 of total credit-card debt, with a $10,000 total credit limit — their score starts to drop by a significant amount, says Ulzheimer.

The problem for many consumers is that even a small amount of debt can eat up 10% of their credit line or more. Consumers with low credit limits tend to be hit the hardest. When Thomas Renna, who owns an equities-research firm in Cranford, N.J., checked his credit reports, he was surprised to find notations that he had excessive debt, since he only has one credit card with a $300 limit. But his balance on that card was $311 (due in part to the card’s annual fee), which meant he had a 104% debt-to-credit ratio. As a result, his credit score was lower than it could’ve been.

Closing credit cards

Many consumers shut down their credit cards to avoid taking on more debt. Unfortunately, the tactic often hurts their credit score, mainly because it messes up that credit-utilization ratio.

By shutting down the card, they’re eliminating a line of credit — lowering their total available credit. As a result, the credit-card balance they have on other cards suddenly makes up a greater proportion of their overall credit limit. For instance, someone with $2,000 of credit-card debt on one card and a total credit limit of $10,000 on all cards has a 20% ratio. But should that person shut down a card with a $2,000 credit limit, bringing his or her overall credit limit to $8,000, the credit-utilization ratio jumps to 25% and results in a lower score.

Consumers who are concerned about going into debt if they don’t close their credit cards may want to store those cards in a place where they won’t have easy access to them, like a safe-deposit box.

Making late payments

The fastest way to lower a credit score is to miss a payment, says Ulzheimer. Payment history — specifically whether a person is late with payments or misses them entirely as well as derogatory information like bankruptcy and foreclosures — determines 35% of the FICO scores, according to FICO. Yet just over a quarter of people surveyed said they did not pay their bills on time in 2013, according to an NFCC report.

Missed payments haunt borrowers’ credit scores even after they catch up on their bills. A late payment stays on a credit report for seven years — and just one late payment can decrease a consumer’s credit score, says Ken Lin, founder and CEO of CreditKarma.com. Matt Capristo, an online advertising executive in Alexandria, Va., says he fell behind on his federal student loans and credit cards shortly after graduating college. Capristo, who is now 27, says his income at the time was not large enough to pay those bills but that he caught up early last year. A few weeks ago, his FICO score stood at 666, only slightly higher from a year prior.
To be sure, consumers who fall behind aren’t necessarily doomed. Borrowers who miss payments on a credit card or other type of loan have an additional 30 days after their due date to make a payment before a lender can report them as being late to the credit bureaus.

Not paying medical debts

In recent years, more doctors have been offering financing plans to patients who can’t pay the full cost of a service upfront. Not repaying this debt can send a credit score plummeting. Most doctors’ offices send unpaid accounts to collections agencies. Collection accounts (even if the borrower pays them) remain on credit reports for seven years and hold down the person’s credit score as well.

They account for many consumers’ credit-score woes. Medical debts accounted for 35% of new accounts for debt collectors in 2010, according to the latest data from ACA International, an association of debt-collection agencies.

In some cases, the borrowers impacted are not even aware of the problem until it’s too late. Renna, 45, of Cranford, N.J., found a $230 dental balance on his credit report that was sent to a collections agency. When he inquired about the debt, the dentist’s office said his insurance never covered a portion of the bill and after not hearing back from Renna sent that bill to collections.

Stopping payments and other major mistakes

Credit scores take a dive when consumers make a move that suggests they will never pay back their debts. When borrowers go into foreclosure or file for bankruptcy, their credit score can drop by 150 points or more, says Ulzheimer. The drop is often largest for borrowers who previously had higher credit scores.

To be sure, as the economy improves, fewer consumers are encountering these setbacks. There were just over 1.07 million personal bankruptcy filings for the 12-month period ended Sept. 30, 2013, down 12.2% from the same period a year prior, according to U.S. court records. Separately, borrowers defaulting on their mortgages (the first step toward foreclosure) are down as well: New defaults totaled roughly 470,000 during the first 11 months of last year, compared with nearly 707,000 in all of 2012, according to RealtyTrac.com, which tracks real-estate data.

Still, for consumers, these negative events can make it impossible to get new credit, especially with low interest rates. And like late payments, they’ll remain on consumers’ credit reports for seven years. Some bankruptcies stay on their reports for 10 years. There is a bit of upside though: As each year passes from the date of the negative event, the impact it has on the consumer’s FICO score diminishes. According to FICO, a collection that is five years old will hurt a score less than a new collection.

Your Sacramento Realtor - Bill Seeks to Extend Federal Tax Exemption for Forgiven Mortgage Debt

Bill Seeks to Extend Federal Tax Exemption for Forgiven Mortgage Debt

 

 

Congressman Bill Foster (D-Illinois) introduced the Homeowners Debt Relief Extension Act (H.R. 3856) on Tuesday. The bill would extend the mortgage debt tax exemption that’s been in place since 2007 for another two years.

The Mortgage Debt Relief Act of 2007 makes debt that is reduced or cancelled through a loan modification or debt forgiven through a foreclosure or short sale tax-exempt. Other criteria also apply, such as the indebtedness must be on a principal residence and the maximum amount that can be claimed for the tax break is $2 million.

Since 2007, Congress has extended this tax relief to homeowners so that they are not liable for taxes on the difference between the house’s value and the loan modification or between the house’s value and the amount of a foreclosure sale or short sale. This tax relief expired on December 31, 2013, however, and so far, no extension has been passed by lawmakers, though homeowner advocates are lobbying heavily to reinstate the mortgage debt tax exemption.
Foster’s bill would ensure any qualifying reduction or cancellation of mortgage debt is not considered taxable income by extending this tax relief through January 1, 2016, for debt forgiven after December 31, 2013.
Foster’s proposal calls for the costs of such an extension to be offset by repealing a tax break in the Internal Revenue Code’s Section 199 for oil and gas companies. Foster says the Section 199 deductions are no longer necessary since oil and gas companies are making billions in profits each year.
“With millions of struggling homeowners still underwater on their mortgages, now is not the time to cut off this tax credit,” Rep. Foster said. “We shouldn’t be offering up millions in tax breaks to oil and gas companies, while leaving working families, still struggling to recover from the recession, with a bigger tax bill.”



YourRealtor with Improvements That Pay You Back

Add caption

1.       You can expect to recoup 60%-120% of your investment on a kitchen remodel, as long as you don’t go overboard. You should never make your kitchen fancier than the rest of the house, or the neighborhood.

2.       If your home only has one bathroom, you can recoup a lage chunck of your investment by adding another one. It is estimated that you can recoup 80%-130% of whatever you speed adding a bathroom.

3.       Adding more square footage to your home with a new room can be an incredibly expensive project. However, you can typically recoup between 50%-83% of your initial investment, Just make sure you keep cost under control.

4.       If you make your deck and backyard more appealing, your house will be more appealing to prospective buyers when you decide to sell. Homeowners can recoup 65%-90% of their investment by adding a deck.   

Don't give up on home ownership.

It's been a tough road for some in the last few years. Not knowing whether or not you would have a job or loose your home. Most who have gone through these tough times have started to rebuild and are sitting with the question "How long before I can purchase a home again?"

According to a poll of the former foreclosure demographic, 81 percent had never heard of the "Back to Work" program.

Considering the importance of “Boomerang” buyers, the Federal Housing Administration recently implemented the “Back to Work” program. This program allows the purchase of a new property as soon as twelve months following a foreclosure or short sale provided that the borrower can prove that their prior default was the result of a financial hardship. “Financial hardship” is strictly defined as an employer-driven loss of at least 20 percent in income for six months or more. Although the program is definitely a step in the right direction, it leaves those who were self-employed out in the cold.

Don't give up on home ownership. It is the American dream. 

 For more information. Please contact me directly. Sylviana Montano 916.216.4955