Real Estate & Investing

Buying a home is a dream for most people. They want to put down roots and secure a place for their family to grow and thrive. Investing in a house is also a risk. In most cases, the buyer is betting that they will be able to make regular payments on the property for twenty or thirty years and that the value of the home will remain stable or increase over that time. Otherwise they end up paying more for the house than they can later sell it for or they end up losing the house in foreclosure when they are unable to afford the payments.

This latter situation is at the root of the recent economic recession. Lenders took heavy risks during the real estate boom market and ended up with homeowners who could no longer afford their mortgage payments. The result is that most lenders now have much stricter guidelines for mortgage loans, including better Debt To Income Ratio s and higher minimum credit ratings in order to qualify for the best mortgage rates.

Any loan is going to take into account an individual’s debt to income ratio. This tells the lender how much debt the person will have (including the new loan) in relation to how much income they receive. A good guideline for calculating debt to income for a mortgage is that the costs associated with home ownership should be 28% or less of the gross income of the household and the total debt of a household should be less than 36% — including the mortgage, car loans, credit cards, and other forms of debt.

Using debt to income calculations along with mortgage interest rates and mortgage payment calculators, a potential homeowner will be able to see exactly how expensive of a home loan they can easily afford as well as how much of a loan a lender is likely to grant them.

The habit of putting off doing your taxes because it’s so labor intensive is outdated. You need to enter the digital age and recognize how easy it is to prepare and file taxes in 2011. There is a caveat that if you have particularly complicated taxes due to deductions, self employment, or significant investments, it is probably still a good idea to get professional help in completing your returns.

For do it yourselfers, the job has become quite easy.

If you insist on doing your taxes by hand, you can find tax forms online that you can print out and hand fill. This saves you having to trek to the library or post office to pick up forms and it also saves on the printing costs of instruction books and schedules that you don’t need to use. You simply find the forms you need, print them, and go.

For those who are more comfortable with the internet age, it is possible to use online tax services to complete the necessary forms and efile your return. Most services walk you through a series of questions to enter your income and identify deductions and then fill out all the necessary forms for you. You are still responsible for verifying the accuracy of the information, but the returns are sent electronically to the IRS and your state, saving time, paperwork, and postage. Refunds can be direct deposited into your bank account in less than two weeks, again saving printing and postage.

If you use home accounting software to keep your household finances in order, it may even be possible to upload that data to the tax site so that it can find your deductions more easily.