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Now that you are a homeowner, treat your home as an investment. Take good care of it and it will provide you with many benefits. To protect your investment, make sure you have enough insurance and keep your home well maintained.
A few tips to remember:
Think twice about including a car payment in a mortgage refinance. Do you want to make payments on your car over 30 years?
Limit your use of consumer credit cards. Avoid high cost purchases. Live within your means
Now that you've become a homeowner, you will be bombarded with credit offers. Choose your credit accounts wisely. Always read the fine print. There is no free money - just clever advertising. Consider a credit card that is tied to your checking account. That way you can't spend money you don't have.
Homeowner's insurance can cover more than home replacement. Consult an insurance specialist about coverage for your home's contents, replacement costs, and liability insurance.
Keep Receipts
Keep all paperwork related to your project in one place. This includes copies of the contract, change orders and correspondence with your home improvement professionals. Keep a log or journal of all phone calls, conversations and activities. You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project - during or after construction.
Capital Gains Taxes
If you sold your main home and made a profit, you may be able to exclude that profit from your taxable income.
Here's how it works:
Individuals can exclude up to $250,000 in profit from the sale of a main home (or $500,000 for a married couple) as long as you have owned the home and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, you need to have lived in the house for at least 24 months in that 5-year period. In other words, the home must have been your principal residence. You can use this 2-out-of-5 year rule to exclude your profits each time you sell or exchange your main home. Generally, you can claim the exclusion only once every two years. Some exceptions do apply
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