Gunning Daily News

Q: How Long Do Bankruptcies and Foreclosure Stay on a Credit Report?

December 18, 2013 9:54 pm

A: They can remain on your credit record for seven to 10 years.

However, a borrower who has worked hard to reestablish good credit may be shown some leniency by the lender. And the circumstances surrounding the bankruptcy may also influence a lender's decision. For example, if you went bankrupt because you were laid off from your job, the lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, it is unlikely the lender will readily give you a break.


If You're Chillin', Check Your Pipes for Freezin'

December 17, 2013 9:36 pm

Every year around this time, I hear from the Professional Insurance Agents of Connecticut Inc. looking to remind homeowners that it's time to take steps to prevent your pipes from freezing.

Winter can bring extreme, cold temperatures - and it doesn't have to snow or sleet for household pipes to freeze. Anytime the temperature hits 32 degrees or below, pipes not properly winterized could crack, leak or burst spelling disaster for your home.

Augusto Russell, CIC, president of PIACT says after a deductible, most homeowners policies cover damage resulting from frozen pipes, including the repair of the pipe, dwelling damage, and damage to personal property, such as furniture and rugs.

Tenants of a flooded residence can get similar coverage for personal property by purchasing a renters policy. However, PIACT warns, no coverage exists for frozen-pipe damage to an unoccupied home, unless heat is maintained in the building or the pipes have been drained.

Russell says an eighth-inch crack in a pipe can send up to 250 gallons of water flowing in a day, but by taking a few simple precautions you can save yourself the mess, cost and aggravation frozen pipes cause.

Pipes that freeze most often are those exposed to the severe cold, such as those located in unheated interior areas like basements or attics, crawl spaces, garages and kitchen cabinets.

Some measures PIACT suggests for safeguarding pipes and property include:

  • Insulating the pipes in these areas.
  • Make sure to seal leaks that allow cold air inside near pipes.
  • Look for air leaks and use caulk or insulation to keep the cold out and the heat in.
  • Water supply to outside valves (hose bibs) should be shut off inside the house. Shut the inside valve and open the outside valve. If water continues to drip outside, there may be a leak at the inside valve.
  • In crawlspaces and garages, wrap pipes with electrical insulator. These wraps act like heating pads for a pipe to keep fluid from freezing.

If you turn on your faucets and no water comes out, leave the faucet on, turn off the main shut-off valve for your water supply and call a plumber, then make the second call to your independent insurance agent, says Russell.


5 Things That Won’t Hurt Your Credit Score

December 17, 2013 9:36 pm

Plenty of things can help your credit score – such as paying down debt – while other things can hurt it. But not everything is positive or negative, noted credit.com advisor Christine DiGangi. Some financial situations just don’t matter in the financial world.

To clear up some common misconceptions, DiGangi points to five financial situations that will not impact your credit score:
 

  • Using debit instead of credit – Debit cards offer many of the same conveniences as credit cards, like online payments and the ability to shop without carrying cash. For consumers looking to improve their credit scores, debit cards won’t help, while responsible use of a credit card will. But debit cards have their advantages: There’s no bill to pay later and spending is limited to the amount of money in the account. Using a debit card instead of credit now and then will not adversely affect your credit score.
  • A drop in income – A pay cut or job loss may negatively affect your standard of living. But your income is not part of your credit report, and your score won’t suffer as long as you continue to pay your bills. However, lenders do consider your debt-to-income ratio when approving you for certain types of credit. So if you apply for credit soon after a drop in income, this may affect your ability to get approved, even if it doesn’t hurt your credit score itself.
  • Credit rejection – Applying for credit results in a credit inquiry, which can lead to a slight drop in scores. But whether you’re approved or denied has no bearing on your credit score, so while you should avoid unnecessary inquiries, getting denied doesn’t shave extra points off scores. (However, you should find out why you were denied. Ask for a free copy of your credit report in such instances to help you understand what part of your credit profile is hurting you.)
  • Not using your credit card –It’s never a bad idea to put the credit cards away for a bit while you pay down balances and lower your credit utilization rate. A brief hiatus from credit card use won’t ding your scores – and could help if you significantly improve your debt-to-credit ratio. But don’t close accounts or leave them dormant so long that the issuer closes the account for you. That will diminish your available credit and could ding your scores as a result.
  • Getting married – While your future spouse’s credit score is worth noting, marrying him or her isn’t going to hurt your credit score. A spouse’s low score could hurt your chances of getting joint credit in the future, but just the simple act of signing a marriage license isn’t going to harm the credit score you have earned.

Word of the Day

December 17, 2013 9:36 pm

Closing costs. Expenses over and above the price of property that must be paid by buyers and sellers before title is transferred. Also known as settlement costs.

 


Q: Are There Specific Questions I Should Ask a Contractor?

December 17, 2013 9:36 pm

A: According to the National Association of the Remodeling Industry, sometimes it’s not the responses you get that are important, but what you don’t get. So you should trust your instincts and pay attention to the information that is obviously missing. Nevertheless, here are some questions NARI suggest you ask before signing that remodeling contract:

  • How long have you been in business?
  • What is your approach to a project such as this?
  • Who will be working on the project? Are they employees or subcontractors?
  • Who will be assigned as project supervisor for the job?
  • Does your company carry workers’ compensation and liability insurance?
  • How many projects like mine have you completed in the past year?
  • May I have a list of references from those projects?
  • Are you a member of a national trade association?
  • Have you or your employees been certified in remodeling or had any special training or education?
  • It also wouldn’t hurt to inquire about how trash removal and clean up will be handled and the times workers will begin and end work – this is not only for your convenience but also for your neighbors, who have to endure the noise and fewer parking spaces that may result from your project. 

Four Ways to Keep Your Cool as Holidays Heat Up

December 16, 2013 5:33 pm

It’s the time of year when many people find themselves rushing around, shopping, cleaning, and baking for the holidays instead of relaxing by the fire – and to an extent, that’s part of the holiday mystique.

But, points out health blogger Edie Dykeman, if the chores and errands sap your energy and ruin your enjoyment of the season, it’s time to take a second look at how you spend your time.

Dykeman offers four simple ways to help reduce holiday stress:

  • Plan ahead – Being organized is half the solution, so get out your calendar, make a few to-do lists, and set a reasonable gift list and budget. Calendar all the season’s parties, school programs, and other family activities. Then set aside blocks of time for each major chore, such as shopping, wrapping, and cooking – and set aside some “you” time to relax in whatever way you wish.
  • Delegate – Beware of trying to do it all yourself. If you can afford to hire some housecleaning or decorating help, do so. In any case, enlist the help of the family. What chores are the kids old enough to do? Make the fudge? Address holiday cards? Run the vacuum? Old habits die hard, but make the effort to take some pressure off yourself by enlisting the help of others.
  • Celebrate the season – Forget perfection. How beautifully your gifts are wrapped and how many dozens of cookies you bake will not truly affect anyone’s enjoyment. Take the time to enjoy caroling, chatting with friends by the fire, even playing some games with the family. There is no greater obstacle to a happy holiday than exhaustion. Do whatever it takes to avoid it.
  • Look ahead - Keep the lists, recipes and schedules you create and store them away to use again next year. Do some after-holiday bargain shopping and store away gifts for future giving. As you travel around throughout the year, be on the look-out for gifts, stocking stuffers and holiday decor to help you get a jump on next year’s holidays. 

Tips on Lowering Your Home Insurance Costs

December 16, 2013 5:33 pm

According to the Insurance Information Institute, the cost of homeowners insurance can vary by hundreds of dollars, depending on the company you buy from. In the next two segments, your RISMedia Consumer Confidant will explore some of the Institute's most important things to consider - which could save you big bucks - when buying homeowners insurance.

1. Shop Around - Ask your friends, check the web or contact your state insurance department. The National Association of Insurance Commissioners (www.naic.org) has information to help choose an insurer in your state, and on registering complaints.

2. Raise Your Deductible - Today, the Institute says most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent.

3. Don't confuse what you paid for your house with rebuilding costs - The land under your house isn't at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don't include its value in deciding how much homeowners insurance to buy.

4. Buy home and auto policies from the same insurer - Some companies will take 5 to 15 percent off your premium if you buy two or more policies from them. Just be sure the combined price is lower than buying separate coverage from different companies.

5. Make your home more disaster resistant - You may save on premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. In addition, consider modernizing heating, plumbing and electrical systems to reduce the risk of fire and water damage.

6. Improve home security - Does your insurer give discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks? Some companies offer to cut premiums by up to 20 percent if you install a sprinkler system, or a fire/burglar alarm that rings at a central dispatch or monitoring station. Before you buy a system, however, find out what the insurer recommends, how much it would cost and how much you might save on premiums.


Key Tax Law Changes That Could Impact Your Return

December 16, 2013 5:33 pm

(BPT) - The majority of this year's key tax law changes were the result of two acts - the Affordable Care Act of 2010, also known as Obamacare, and the American Taxpayer Relief Act of 2012.

The easiest way to navigate all the tax law changes - and determine if you qualify for hundreds of tax benefits, is to use an online or mobile tax preparation solution. The programs ask easy questions, covering all available credits and deductions to help minimize your tax liability and maximize your refund. Leading solutions, such as-TaxACT also provide guidance for the implications of the Affordable Care Act on your taxes and health insurance situation.

If your modified adjusted gross income (MAGI) is under $200,000 ($250,000 if filing jointly), you may benefit from several tax breaks that have been extended or made permanent.

  • The standard deduction for married taxpayers filing jointly is now permanently increased and expands the 15 percent tax bracket.
  • The child tax credit is $1,000 for each child under age 17 on Dec. 31. The amount decreases at higher income levels. A portion of the credit also remains refundable through 2017. In addition, the maximum amount of expenses for the Child and Dependent Care Credit has been made permanent at $3,000 for one child and $6,000 for two or more children.
  • The American Opportunity Credit tuition deduction, student loan interest deduction, and-$2,000 annual contribution limit to Coverdell Education Savings Accounts are still available for 2013.
  • Elementary and secondary educators can again deduct up to $250 in related job expenses, even if you don't itemize deductions. Unlike most employee expenses, educator expenses are not reduced by 2 percent of your adjusted gross income.
  • If you pay mortgage insurance premiums, also known as private mortgage insurance (PMI), you may be able to deduct premiums as mortgage interest.
  • The Alternative Minimum Tax was created to ensure wealthy taxpayers receiving large tax benefits pay some tax. It will now be adjusted for inflation each year so fewer taxpayers are subject to the tax. The exemption amount rises in 2013 to $51,900 ($80,800 for married couples filing jointly). For married individuals filing separately, the exemption is $40,400.
  • You may qualify for a credit equal to up to $12,970 of your adoption expenses, including fees, court costs, attorney fees, traveling expense and other expenses directly related to and for the principal purpose of the legal adoption of an eligible child. If your employer provides adoption benefits, you may also be able to exclude up to the same amount from your income. Both a credit and exclusion may be claimed for the same adoption, but not for the same expense.
  • For 2013, you can still deduct state and local sales taxes. You can take this deduction or a deduction for state income tax but not both.
  • Qualified dividends will be taxed at preferential capital gains rates rather than those used for ordinary income.
  • If your MAGI-is more than $200,000 ($250,000 if filing jointly), you may pay an additional Medicare surtax on earned income, as well as higher taxes on net investment income, long-term capital gains and qualified dividends. The amount of your personal exemptions and itemized deductions is also less starting this year. The marginal income tax rate for incomes above $400,000 ($450,000 if filing jointly) also increases from 35 percent to 39.6 percent for 2013.
  • One change affecting taxpayers of all income levels is the increased floor for deducting medical expenses. Taxpayers under the age of 65 can now only deduct unreimbursed medical and dental expenses that exceed 10 percent of your adjusted gross income (AGI). The floor remains at 7.5 percent if you're 65 or older.

Learn more about these tax law changes in Publication 17 at www.irs.gov-or visit www.taxact.com/taxinfo. 


Word of the Day

December 16, 2013 5:33 pm

Mortgagor. Party or person that borrows money, giving a lien on the property as security for the loan; the borrower.


Q: Is it possible to refinance following a bankruptcy?

December 16, 2013 5:33 pm

A: It can be difficult to do after a bankruptcy, unless you are willing to pay very high interest rates and fees. However, if you are contemplating bankruptcy, first talk with your lender and explain your situation. If your mortgage payments are current, the lender may be accommodating and refinance your loan, thereby helping to ease your financial burden.