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Interest Rates on the Rise?

For the last couple of years, home buyers have benefitted from an affordable combination of lower home prices and lower interest rates. But if you've been on the fence about buying a home, or waiting for even better buying opportunities, now might be the time to give us a call to see if buying today makes sense for your individual goals and needs. Even though the government's popular Home Buyer's Tax Credit expired on April, 30, 2010, this is still a good time to act, as home affordability is likely to get worse before getting better. Ever since the Federal Reserve's program to help lower home loan rates and stabilize the housing sector ended in March, 2010, after purchasing a reported $1.25 Trillion in Mortgage Backed Securities, the mortgage market has been very volatile. And despite fluctuations, rates remain goo d overall; but, as the Federal Reserve sells off some of its huge holdings, supply in the market will increase, and likely lead to higher rates. Don't wait until higher rates force you out of the market. Give us a call today.

   Extended Warranties

If you're thinking about buying a major appliance, you'll likely be offered an option to purchase an extended warranty. Major home appliances often include dishwashers, free-standing ranges, many types of ovens, many types of refrigerators, washing machines and dryers, microwave ovens and many types of televisions and computers. 

Extended warranties are basically repair insurance in case something goes wrong after your manufacturer's warranty expires. Before you decide to purchase this insurance, be sure to research your product with Consumer Reports or similar organizations to see if it makes financial sense for your individual needs. 

Studies by Consumer Reports and JD Power and Associates consistently show that purchasing extended warranties on certain major appliances doesn't make financial sense in many situations, since major appliances generally exhibit strong reliability. There are, of course, exceptions for certain repair-prone brands, which consumer groups define in their specific studies. 

Extended warranties, however, do offer peace of mind which, for many consumers, is worth the extra cost. And for some appliances with complex electronics and potentially high repair costs, purchasing an extended warranty may make more sense. For the best results, however, do your research before you go shopping, and, before you buy an extended warranty, be sure to read the fine print.

  How Long Should You Keep Your Tax Returns?

If you're not sure which tax documents to keep and which ones to drop in the shredder, you're not alone. Even the experts disagree. In fact, there are two basic schools of thought on this, and both seem to relate to the IRS' statute of limitations for auditing your tax returns. One school says keep tax returns and accompanying paperwork, including W-2 forms, 1099 forms, other tax reporting statements and end-of-year bank statements that show interest earned, for 3 years. The other claims that holding onto these documents for up to 10 years is the safest bet. 

For assessment of additional taxes by the IRS, or if you intend to claim additional refunds, the statute of limitations is generally three years from the date you file your return. However, if you fail to report all of your income and the under-reported figure is more than 25% of the gross income provided on your return, the IRS has six years to audit your returns. Additionally, if you claimed a loss on certain securities, the statute of limitations is seven years. Of course, there is no limitation if you filed a fraudulent return or if you didn't file a return at all. With this in mind, consider keeping your tax returns and relevant documents for a minimum of 7 years.

  Rethink Your Refund

According to USA Today, the average 2009 tax refund through March 12 is $3,036. In good economic times tax refunds are often viewed by many Americans as a kind of financial windfall, "extra" or "free" money that leads to splurge purchases like vacations, down payments for cars or big-screen TVs. But, especially in a tougher economy, it's important to remember that your tax refund is not a gift from the government. It's actually your hard-earned salary that you overpaid to the government throughout the year. In other words, this cash is actually "lost" money, not to mention the average $253 dollars a month in lost opportunity cost. After all, think about what this money could've made for you in your employer-matched 401K or other retirement plan. Imagine the interest on credit ca rds or your car payment or even your rent that you could've saved by paying an additional $253 a month. With this in mind, before you go out and splurge on big-ticket items, please give us a call. This money could really help you toward reaching your goal of homeownership this year, and we'll show you how. We'll review your finances and help you determine what makes the most sense for your individual financial goals and needs. If you're not sure which tax documents to keep and which ones to drop in the shredder, you're not alone. Even the experts disagree. In fact, there are two basic schools of thought on this, and both seem to relate to the IRS' statute of limitations for auditing your tax returns. One school says keep tax returns and accompanying paperwork, including W-2 forms, 1099 forms, other tax reporting statements and end-of-year bank statements that show interest earned, for 3 years. The other claims that holding onto these documents for up to 10 years is the safest bet.