1. HomeWorks - Money Management  Financial Planning  Home Equity and Mortgage Refinancing  Home Insurance  Taxes

2. HomeWorks - Money Management Financial Planning

3. Works Home Financial Responsibility §Keys to success l communication l compromise l commitment §Plan ahead §Use credit wisely Financial Planning

4. Works Home Monthly spending plan §Track spending§Balance Income Expenses Financial Planning

5. Works Home Behind in paying the bills? §Adjust spending plan l _____ Income  _____ Expenses §Use emergency fund Financial Planning

6. Works Home Behind in paying the bills? §Contact creditors before you miss a payment l make an offer l put it in writing l keep your promise l stop using credit Financial Planning

7. Works Home Emergency funds §Advantages §But how? l Direct deposit l Use unexpected $ l Get extra job l Use payments Surprise expenses Financial Planning

8. Works Home Financial Planning What’s in a mortgage payment?

9. Works Home Private mortgage insurance §Required by lenders when the buyer makes a down payment of §Paid l at closing and added to mortgage l as part of monthly payment l annually Financial Planning <20%

10. Works Home Private mortgage insurance §Cost depends on l method of payment l mortgage term l APR l amount of down payment §Stop when equity reaches ________ Financial Planning 20%

11. Works Home Financial Planning Escrow accounts §Money for taxes and insurance §Total divided by 12 = monthly payment §Problems l payments too _____ l sudden increases l late payments

12. Works Home Selling your home §Most keep 1st house years Financial Planning 6 §Decisions affecting the sale l Loans l Home improvements l Regulations §Keep records

13. HomeWorks - Money Management Home Equity and Mortgage Refinancing

14. Works Home How much home do you own? Home Equity and Mortgage Refinancing Equity Down payment Principal repaid Appreciation Improvements

15. Works Home Equity is - Home Equity and Mortgage Refinancing

16. Works Home Equity = Home Equity and Mortgage Refinancing Cash value

17. Works Home After-Purchase Mortgage Options Home Equity and Mortgage Refinancing

18. Works Home Home equity loans §A line of credit Home Equity and Mortgage Refinancing §Low interest rate? §Tax-deductible interest §Home is collateral §Fees Sandra McKinnon: For more information visit the Federal Trade Commission at: http://www.ftc.gov/bcp/conline/pubs/homes/homequt.htm Sandra McKinnon: For more information visit the Federal Trade Commission at: http://www.ftc.gov/bcp/conline/pubs/homes/homequt.htm

19. Works Home The reverse mortgage §A type of home equity ______ Home Equity and Mortgage Refinancing loan §Trade equity for cash §62+ years old §Income is not a factor §Home ownership retained Sandra McKinnon: For more information visit the Federal Trade Commission at: http://www.ftc.gov/bcp/conline/pubs/homes/rms.htm Sandra McKinnon: For more information visit the Federal Trade Commission at: http://www.ftc.gov/bcp/conline/pubs/homes/rms.htm

20. Works Home The reverse mortgage §Closing costs and fees §Public benefits? §Maintenance, taxes and insurance §Home at risk Home Equity and Mortgage Refinancing

21. Works Home Refinancing your mortgage §Should you? §It depends l Costs l How long you plan to stay l Tax bracket Home Equity and Mortgage Refinancing Sandra McKinnon: For more information visit the Federal Trade Commission at: http://www.ftc.gov/bcp/conline/pubs/homes/refinanc.htm or The Mortgage Bankers Association at http://www.mbaa.org/consumer-info/refinance.html Sandra McKinnon: For more information visit the Federal Trade Commission at: http://www.ftc.gov/bcp/conline/pubs/homes/refinanc.htm or The Mortgage Bankers Association at http://www.mbaa.org/consumer-info/refinance.html

22. Works Home Refinancing your mortgage §Consider another type §Shop and compare l Interest and fees l Compare APR Home Equity and Mortgage Refinancing

23. HomeWorks - Money Management Taxes

24. Works Home Property taxes §Local officials determine l revenue required l market value of taxable property l assessment level l tax rate Taxes

25. Works Home Property tax example $50,000 X Assessment Rate of 19% X Tax Rate of $5.09 per $100 assess = $483.55 Taxes

26. Works Home How are values assessed? §New §Remodeled §Other On-site appraisal Reappraisal Market change Taxes

27. Works Home Other info on property taxes §Appeal §Pay through escrow or directly §If you don’t pay l interest and fees can be high l house will be seized Taxes

28. Works Home Income taxes - itemizing :Medical & dental :Taxes you paid :Interest you paid :Charitable gifts Taxes :Casualty and theft losses :Job expenses :Other miscellaneous Total Itemized Deductions

29. Works Home Income taxes - standard deduction §Single §Head of Household §Married Couple §Married Filing Separately Taxes $4,250 $6,250 $7,100 $3,550

30. HomeWorks - Money Management Home Insurance

31. Works Home The Step Check-Up §Investigate your current coverage §Determine what you have to lose §Compare coverage to potential loss §Take steps to lower cost §Comparison shop Home Insurance

32. Works Home Investigate current coverage Review your present policy to determine: l Kind of coverage l Limits Home Insurance

33. Works Home Property coverage §Two Kinds: l Structure l Personal Property Home Insurance

34. Works Home The structure §Perils  Living expenses? §The 80% rule Home Insurance

35. Works Home More about the structure §Deductible §Inflation protection §Changes to structure §Replacement value Home Insurance

36. Works Home Personal property coverage §Normally, maximum is set as a percentage of value of house §Replacement value Home Insurance

37. Works Home Liability coverage Liability insurance covers you when you or someone in your family causes a financial loss to someone else. Home Insurance

38. Works Home Two types of liability coverage §Personal liability §Medical payments liability Home Insurance

39. Works Home What do you have to lose? Home Insurance Do a household inventory

40. Works Home Doing a household inventory §Only what want/need to replace §Organize by room or category §Clump like items together §Store outside home Home Insurance

41. Works Home Compare coverage to loss Home Insurance

42. Works Home Lower your cost §Protect the structure l Smoke alarms l Alarm system l Dead bolts l Fire extinguishers l Sprinkler system Home Insurance

43. Works Home Lower your cost even more §Change your lifestyle l Lock doors l Sandra McKinnon: For tips on how to lower your homeowner’s insurance costs visit: http://www.pueblo.gsa.gov/press/nfcpubs/12ways.txt Sandra McKinnon: For tips on how to lower your homeowner’s insurance costs visit: http://www.pueblo.gsa.gov/press/nfcpubs/12ways.txt Home Insurance l Store valuables elsewhere l Grow older l Check appliances

44. Works Home Comparison shop There can be significant differences in the cost of insurance from one company to another Sandra McKinnon: For tips on how to lower your homeowner’s insurance costs visit: http://www.pueblo.gsa.gov/press/nfcpubs/12ways.txt Sandra McKinnon: For tips on how to lower your homeowner’s insurance costs visit: http://www.pueblo.gsa.gov/press/nfcpubs/12ways.txt Home Insurance

45. Works Home Money Management Contributors §Carole Bozworth l Consumer & Family Economics Specialist University Outreach and Extension §John Merrill l Professor/Extension Housing Specialist School of Human Ecology University of Wisconsin-Madison §Sandra K. McKinnon l Consumer & Family Economics/ Information Technology Specialist University Outreach and Extension