I had a client call me earlier today asking if they should pay the most recent tax bill for there new condo. This may sound like a no brainer, but since they just closed on their condo a month ago, there was some confusion on their part. Taxes in Chicago are paid in arrears. In other words, you pay 2005 taxes in 2006. My clients obviously didn't live there in 2005, so the previous owner is responsible for paying the taxes, right? Well, yes and no.
At the closing the attorneys figure out what amount to credit the buyer for the taxes owed up until the date of closing. This amount is credited to the new owner so when the tax bill comes the new owner takes care of it, regardless of whose name appears on the tax bill. In this case the sellers owed the taxes and indirectly paid them by giving the buyer a credit at closing. It was now up to the new owners to actually follow through and pay them when the actual tax bill arrives.
Many times the taxes are put into an escrow and the lender pays them when they are due. It is extremely important to keep tabs on them!!! If you receive the tax bill, as in this case, and the taxes were put in escrow, make sure to contact the lender (it's probably a good idea to call your attorney as well) and make them aware that you have the current tax bill. You can't imagine how many times the lender screws up paying peoples taxes. A great place to check and see if they have been paid is by going to the Cook County Assessor's website. Once there, type in the address or home owners name to pull up the latest tax information. It's all public information so you might as well check and see what your neighbors are paying and compare them to your own. If you feel you are paying way more than they are, then you might have a good case to appeal and get them lowered.
Wednesday, October 25, 2006
Thursday, September 14, 2006
Five suggestions to help rebuild your credit
Here are five suggestions anyone can use to rebuild credit:
1. Get a secured credit card. Secured credit cards report your credit payment history information to the credit bureaus just like a regular credit card. They are "secured" by your money, which you deposit in a FDIC or NCUA insured bank account for this sole purpose. You can get one for free if you look around.
2. Get a department store card. These cards are often easier to qualify for than a general-purpose bankcard. Be aware though, that they may carry a high interest rate. Be sure to pay your charges on time, and in full, each billing cycle to avoid paying interest. You will still accomplish your goal of building positive credit in your name, with the added bonus of staying out of debt.
3. Give yourself a loan. Open a passbook savings account in a bank or credit union. Then take out a low-interest loan using the passbook as security. The bank will report the loan payment experience to the credit bureaus and your credit will improve.
4. Get a copy of your credit report. If you are being turned down for credit you need to be sure the reason is valid. Many credit reports have errors. With over a billion items a month showing up at each bureau, it's no wonder some end up in the wrong credit report. Dispute any inaccuracies you find.
5. Get a credit report from all three bureaus. Each one may have different information and maybe errors in your file. You can't know which bureau's data will be used to evaluate your credit application, so check them all.
One last suggestion: don't apply for every card offer that comes your way. Each one generates an inquiry in your file. Too many inquiries can hurt your credit.
The thing to remember about your credit report is that time is your best friend, as you keep adding positive information to your credit report over time, any negatives will first be diluted and then begin to recede in importance. They won't drop off completely for seven years in most cases, but they do become less important to future creditors evaluating your credit-worthiness.
I also suggest that you develop a workable budget if you don't have one yet to keep surprise expenses from sabotaging your efforts to rebuild your credit. Good luck!
1. Get a secured credit card. Secured credit cards report your credit payment history information to the credit bureaus just like a regular credit card. They are "secured" by your money, which you deposit in a FDIC or NCUA insured bank account for this sole purpose. You can get one for free if you look around.
2. Get a department store card. These cards are often easier to qualify for than a general-purpose bankcard. Be aware though, that they may carry a high interest rate. Be sure to pay your charges on time, and in full, each billing cycle to avoid paying interest. You will still accomplish your goal of building positive credit in your name, with the added bonus of staying out of debt.
3. Give yourself a loan. Open a passbook savings account in a bank or credit union. Then take out a low-interest loan using the passbook as security. The bank will report the loan payment experience to the credit bureaus and your credit will improve.
4. Get a copy of your credit report. If you are being turned down for credit you need to be sure the reason is valid. Many credit reports have errors. With over a billion items a month showing up at each bureau, it's no wonder some end up in the wrong credit report. Dispute any inaccuracies you find.
5. Get a credit report from all three bureaus. Each one may have different information and maybe errors in your file. You can't know which bureau's data will be used to evaluate your credit application, so check them all.
One last suggestion: don't apply for every card offer that comes your way. Each one generates an inquiry in your file. Too many inquiries can hurt your credit.
The thing to remember about your credit report is that time is your best friend, as you keep adding positive information to your credit report over time, any negatives will first be diluted and then begin to recede in importance. They won't drop off completely for seven years in most cases, but they do become less important to future creditors evaluating your credit-worthiness.
I also suggest that you develop a workable budget if you don't have one yet to keep surprise expenses from sabotaging your efforts to rebuild your credit. Good luck!
Tuesday, May 23, 2006
The 10 biggest home-buying mistakes
Not doing your homework: Knowledge is power. Tremendous information is available on the Internet. There is no excuse for entering the market unprepared.
Trying to make a shrewd investment: People need to buy based on what fits their family. Don't try to guess what will happen to the market.
Choosing a poor location: Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window?
Overlooking an inferior floor plan for an attractive exterior: It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home.
Overlooking how the house will function for your family: How do you really live? Do you really need a formal dining room and living room? Would you be happier with an eat-in kitchen and a great room and a den to use as a home office? The house only needs to fit one family -- yours.
Not having the home properly inspected in a resale: This is not the time for surprises. Get an inspection from a qualified, respected professional.
Not checking out the builder's reputation on a new home: Talk to three or four people who live in the builder's homes and see what they have to say. If one builder did all the houses in a neighborhood, talk to the residents and get their input. It's also a great way to see what your neighbors would be like.
Not getting what you want because you're impatient: This is a big decision. You need time. Impatient decisions can lead to mistakes.
Waiting for a better market and interest rates: Warren Buffett says the rear view mirror is always clearer than the windshield.
Not buying at all: If you can afford a home and you don't make that purchase, you'll lose the benefit of tax deductions, building home equity and the appreciation in value.
Trying to make a shrewd investment: People need to buy based on what fits their family. Don't try to guess what will happen to the market.
Choosing a poor location: Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window?
Overlooking an inferior floor plan for an attractive exterior: It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home.
Overlooking how the house will function for your family: How do you really live? Do you really need a formal dining room and living room? Would you be happier with an eat-in kitchen and a great room and a den to use as a home office? The house only needs to fit one family -- yours.
Not having the home properly inspected in a resale: This is not the time for surprises. Get an inspection from a qualified, respected professional.
Not checking out the builder's reputation on a new home: Talk to three or four people who live in the builder's homes and see what they have to say. If one builder did all the houses in a neighborhood, talk to the residents and get their input. It's also a great way to see what your neighbors would be like.
Not getting what you want because you're impatient: This is a big decision. You need time. Impatient decisions can lead to mistakes.
Waiting for a better market and interest rates: Warren Buffett says the rear view mirror is always clearer than the windshield.
Not buying at all: If you can afford a home and you don't make that purchase, you'll lose the benefit of tax deductions, building home equity and the appreciation in value.
Thursday, May 18, 2006
Buying vs Renting
Homeownership Makes Dollars and Sense. There is an old adage that says you have to spend money to make money. And a perfect example of this is homeownership. The typical homeowner has an average net worth of more than $180,000 above the average renter. If that isn't reason enough to buy a home, there is also the added benefit of shelter, memories, and security. Take that, Wall Street!
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