Gunning Daily News

Q: How do growing equity mortgages work?

January 29, 2014 7:00 pm

A: Also called GEMs, these fixed-rate mortgages have monthly payments that increase in increments of 3 percent or more to reduce the principal loan amount. They are often written by the lender at a below market interest rate and have shorter terms.

A GEM lets you pay off the mortgage earlier, save tens of thousands of dollars in interest payments, and build equity quickly. A 30-year GEM, depending on the interest rate, can normally be paid off in 15 to 20 years. 


Is Your Ice Melt Solving One Problem while Causing Another?

January 28, 2014 7:09 pm

Many regions of the country are experiencing unanticipated and unwelcome winter weather conditions, particularly throughout the southeastern regions. I want to relate some important information from the Virginia Cooperative Extension (http://www.anr.ext.vt.edu/) about the most environmentally safe ways to treat icy conditions around the home.

According to a podcast from the Virginia Tech Extension, for safety reasons (both vehicular and pedestrian) in the southeastern region, there is plenty of justification to use chemicals commonly referred to as “ice melt” or “salt” on roads, sidewalks, and hardscapes.

The podcast explains that standard ice melt compounds are usually some form (or combination of) chloride-based salts (calcium chloride, magnesium chloride, potassium chloride, or sodium chloride are typically the most readily available and cheapest ice melt compounds).

The extension podcast points out that it is important to ensure appropriate “ice melt” chemicals are selected so as to minimize possible environmental effects.

Chloride-based salts are generally considered to be some of the most environmentally friendly products available for this use, however, its corrosive qualities can still damage vehicles and/or roadside vegetation.

Other forms of ice melt that get marketed during icy conditions that can and do have serious environmental implications, especially traditional lawn and garden fertilizers containing nitrogen (N) and phosphorus (P), according to the Virginia Tech podcast.

Homeowners may want to consider calcium magnesium acetate (CMA), one of the safest deicing products because it has very low corrosive potential, meaning less damage to cars, vegetation, sidewalks etc.

CMA is biodegradable and its ice melt properties are comparable to most standard salt formulations, but its biggest limitation to use is typically a cost that can be 20-30 times more than traditional rock salt products.

If only needed for relatively small areas around homes, cost may not be an issue.

Mother Nature effectively deals with most recommended salt applications by way of an appreciable diluting effect of these salts due to rainfall etc. Environmental impact from recommended salt sources is typically minimal, consumers should just avoid materials that could do more harm than good to their property and landscaping.


Tips for Juggling Career and Family

January 28, 2014 7:09 pm

Larry Katzen forged an ambitious career as a leader at one of the world’s most prestigious accounting firms.

But he has been equally ambitious with his family life; he’s the father of quadruplets—three sons and a daughter. And he felt it was important to serve his community, sitting on more than 10 boards of directors.

“It was an incredible challenge and I don’t regret one minute of it!” says Katzen, author of “And You Thought Accountants Were Boring - My Life Inside Arthur Andersen,” (Larryrkatzen.com), a look at working in one of the world’s most historically important accounting firms while nurturing bonds with his wife and children.

“The quadruplets were born April 22, 1974, before multiple births became fairly common, so we were front-page news and featured on all the national TV news shows,” Katzen says. “But that also tells you there weren’t many other parents who could give us advice, and certainly no internet forums to turn to!”

At the time, Katzen was also working his way up the ladder and taking on new challenges at Arthur Andersen, one of the “Big 8” accounting firms. How did he and his wife, Susan, manage?

“It comes down to sticking to some basic principles: doing the right thing, for one, and listening to your heart,” Katzen says.

He draws on his 35-year career and family life to offer these tips for working parents with multiple children:

• Cultivate support systems! One of the wonderful things about Arthur Andersen was the people who worked there, including his bosses, Katzen says. “They knew the physical and financial struggles Susan and I faced caring for four babies and, because I never gave less than my all at work, they did what they could to work around my situation,” he says. That included a heftier-than-usual annual pay raise that Katzen learned only years later was approved because the firm’s partners knew he would need the extra money.

Susan reached out to moms of multiples to develop her own support system, and the couple hired a recent high school graduate to help care for their rambunctious brood a couple days a week.

“There’s no glory in not asking for support and help,” Katzen says.

• Combine business and family. Katzen traveled frequently for his job and, when his children were 9 years old, a business friend suggested he bring them along, one at a time, on his trips.

“The first was my daughter, Laurie. We flew to New York on a Friday and spent the weekend shopping, dining, taking in a show. For the first time ever, we were alone together without any disruptions,” Katzen says. “Neither of us ever forgot that weekend.”

• Consider buying a small vacation home. Traveling with four young children was extremely difficult, especially nights in motels, where the family would split up into two rooms – one parent and two children in each.

“When we discovered Sun Valley, Idaho, the children were 6. On our first trip there, they quickly learned to ski, and they clearly loved the snow – we could hardly get them to come inside,” Katzen says.

The family so enjoyed the vacation, they looked into the prices of condos.

“We found a furnished condo at a very affordable price and for the next 13 years, we enjoyed summers and winters in Sun Valley,” Katzen says. “It may sound like a big investment, but when you consider the costs of motels and dining out for a family of six, it works out well – and it’s a lot more comfortable.”


How Health Care Reform Could Impact Your Tax Returns This Year and Next

January 28, 2014 7:09 pm

(BPT)—Several key tax law changes in the Affordable Care Act have been implemented in 2013 and 2014. The impact of those changes on federal tax returns due April 15, 2014 and 2015 hinge mainly on your household's adjusted gross income (AGI) and health insurance situation.

"The impact on this year's federal tax returns is mainly limited to taxpayers in higher income brackets and those with high unreimbursed medical expenses," says TaxACT spokesperson Jessi Dolmage. "The health insurance mandate starts to be enforced on tax returns filed in 2015."

Changes for tax returns due April 15, 2014

Taxpayers with a modified AGI of $200,000 or more in 2013 ($250,000 if filing jointly, or $125,000 if married filing separately) will pay an additional 3.8 percent tax on investment income, such as interest, dividends, capital gains, rental and royalty income. The 3.8 percent tax is in addition to the tax you already pay on investment income.

Your investment income may be reduced by expenses that can be allocated to your investment income, such as investment interest expenses, advisory and brokerage fees, and rental and royalty expenses. The amount may also be reduced by state and local income taxes that can be allocated to investment income items.

Those same taxpayers also started paying an additional 0.9 percent Medicare tax on wages and compensation in excess of $200,000 in 2013. The tax is automatically withheld from employee wages so you'll simply need to report the amount in Boxes 5 and 6 of your Form W-2 on your tax return. The tax for business owners and the self-employed will be calculated using figures on Schedule SE.

Taxpayers who itemize must now meet a higher floor to deduct unreimbursed medical expenses. The threshold has increased to 10 percent of your AGI. If your 2013 AGI is $50,000, for example, you can only deduct medical expenses that exceed $5,000 ($50,000 X 10 percent = $5,000). If you're age 65 or older, the threshold remains at 7.5 percent.

"You can easily and confidently navigate these changes with free online, download or mobile tax solutions," says Dolmage. "The program will guide you through each change and help maximize your credits and deductions."

Health insurance changes for tax returns due next year

If you purchase health insurance through a state or federal marketplace, you may qualify for the advanced premium tax credit. The credit will be paid directly to your insurance company in most cases, resulting in lower monthly premium costs.

If you prefer to pay your entire premium, you can receive the credit as a refund when filing your federal tax return due April 15, 2014. "TaxACT will reconcile the credit with your income after you enter all of your information," says Dolmage. "You may receive a larger credit or have to pay back some or all of the credit if your actual income is more or less than the amount you estimated when purchasing insurance."

If you don't have minimum essential health insurance for three or more consecutive months in 2014, you may pay a penalty on your federal tax return due April 2015. The penalty amount depends on the number of months you're uninsured, household income and the number of uninsured adults and children in the household. The penalty will be 1 percent of your 2014 income or $95 per person, whichever is higher. The penalty for uninsured dependents under the age of 18 is $47.50 per child, up to $285 total per family.

TaxACT provides health-related tax guidance plus HealthWatch, a detailed analysis of the potential impact of the Affordable Care Act on your taxes and health insurance for 2014.

Learn more about tax law changes at www.irs.gov.


Word of the Day

January 28, 2014 7:09 pm

Equity build-up. Term used to refer to the increase of one’s equity in a property due to mortgage balance reduction and price appreciation.


Q: If Faced with Foreclosure, What Are My Options?

January 28, 2014 7:09 pm

A: Talk with your lender immediately. The lender may be able to arrange a repayment plan or the temporary reduction or suspension of your payment, particularly if your income has dropped substantially or expenses have shot up beyond your control.

You also may be able to refinance the debt or extend the term of your mortgage loan. In almost every case, you will likely be able to work out some kind of deal that will avert foreclosure.

If you have mortgage insurance, the insurer may also be interested in helping you. The company can temporarily pay the mortgage until you get back on your feet and are able to repay their “loan.”

If your money problems are long term, the lender may suggest that you sell the property, which will allow you to avoid foreclosure and protect your credit record.

As a last resort, you could consider a deed-in-lieu of foreclosure. This is where you voluntarily “give back” your property to the lender. While this will not save your house, it is not as damaging to your credit rating as a foreclosure.


Stoke Your Home's Heat with the Hottest Fireplace Trends

January 27, 2014 6:45 pm

Over the years, fireplaces have been a familiar feature in many homes, however until very recently, they have undergone very little change from the traditional hearth.

According to Napoleon Fireplaces, 2014 is heating up to be a very different year for the fireplace. Fireplaces are becoming the design focus for many rooms in the house and with new technological advances it’s now possible to do more with the fireplace than ever before.

“We’re seeing some very interesting home designs that incorporate fireplaces in many creative new ways,” says David Coulson, of Napoleon Fireplaces. “While the traditional hearth will be a mainstay for many homes, modern fireplaces with crisp lines and glass frames will continue to rise in popularity with new homes and redesigned rooms. That being says we’re seeing several new trends emerge this season that are really changing the way people are thinking about fireplaces.”

Coulson suggests keeping the following hot trends in mind when looking for a new fireplace this season.

·         Modern: The upcoming season will continue the trend of sleek and modern fireplaces. Look for clean, linear lines with less metal and more glass. People want the full flame and don’t want black or chrome metal frames blocking the view or interfering with the lighting.

·         Gas: Gas fireplaces will continue to rise in popularity this season. The convenience of flicking a switch compared to collecting, piling and lighting firewood is quickly winning out. The younger generation of fireplace buyers want a quick lighting fireplace that is cleaner and easier to maintain.

·         Outdoors: 2014 will be a big year for the outdoor fireplace as people create or expand on their backyard oasis. The idea of turning a backyard into another room of your house is fueling the outdoor fireplace trend and Napoleon has developed several new models to accommodate this demand.

·         Heat rises: Much like HD televisions, consumers are placing their fireplace inserts higher up on the wall. New technology allows for home owners to insert enclosed gas fireplaces almost anywhere in the house and many people are taking inspiration from designers who are playing with the traditional ideas of where you find a fireplace.

·         Unlikely locations: Much like the migration of fireplaces up the wall, more fireplaces are being installed in unlikely rooms, like the kitchen or the bathroom. These fireplaces however are typically used to decorate the room, not to heat them.

Source: www.NapoleonFireplaces.com.


Word of the Day

January 27, 2014 6:45 pm

Contract. A legally enforceable agreement between two or more parties. To be valid, a real estate contract must be dated, in writing, include a consideration, have a description of the property, the place and date of delivery of the deed, and spell out all terms and conditions that were mutually agreed upon. It also must be executed (signed) by the buyer and seller.


Q: What’s the Best Way to Choose a Home Loan?

January 27, 2014 6:45 pm

A: A lot will depend on the length of time you plan to live in the home, other financial obligations, and potential savings gained from comparing the monthly costs of a home against the up-front costs and closing costs involved with a particular loan.

Also, you will need to be comfortable with whatever choice you decide to make. Trust your instincts and do not be pressured into signing for a loan that will not really work for you.


Kick Those Winter Blahs by Hitting the Refresh Button

January 27, 2014 5:42 pm

Nothing chases away the blahs of mid-winter like a good splash. So I checked in with our great resource, Linda Gottlieb, an interior decorator with Decor&You to help you infuse your home with winter energy.

Gottlieb says too many people believe that changing the look and feel of a home is a difficult and expensive task, when there are simple ways to spice up the atmosphere of a home drastically, without breaking the bank.

Gottlieb's tips on how to revive and refresh your home include:

* Color Splash: Paint is one of the most inexpensive and drastic ways to alter the mood of a room. Gottlieb says pick a color that you are drawn to, one that you would love to see every single day. If applying that color to an entire room makes you nervous, apply the paint to one accent wall instead. Hint: blue pigment can make you feel more relaxed and green colors invoke creativity.

* Organize Beautifully: Belongings can make your space look smaller and disorganized. So beat the clutter, while adding style. Gottlieb says using wicker baskets on top of, or below, existing furniture is a perfect storage solution for achieving a fresh look while still hiding items.

* Bring a Room to Life: Not only are plants a beautiful and easy way to make a room look fresh and vibrant, Gottlieb says they also have health benefits. Use this mood-boosting excuse as a reason to treat yourself to fresh flowers every once in a while.

* Mirror Mirror: Small space got you down? Adding mirrors is a quick and easy fix. There are thousands of different styles of mirrors, many with beautiful ornate detail. Gottlieb says all of the options are cheaper than re-constructing the shape of a house, so splurge on one that you really love.

Source: decorandyou.com.