Mortgage Prepayment Programs: Beware of Fees

We all know the world is full of people trying to convince us to pay for things we shouldn't. For example, programs that promise to help you pay off your mortgage ahead of schedule. Worth the money? Not according to money reporter Stacy Johnson.

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Weak Demand for Home Ownership Feared

The percentage of U.S. homes that are vacant and for sale remained at elevated levels during the third quarter, and the percentage of people who own their homes continued to decline, according to a Census Department report.  These are the starkest signs yet of the severity of the damage in the housing market caused by speculation, overbuilding and rising foreclosures.

The homeowner-vacancy rate, which measures the number of vacant homes for sale, rose to 2.7% — which translates into about 2.1 million houses — in the third quarter from 2.6% in the previous quarter.  Such vacancies hit a high of 2.8% in the first quarter.  Before 2006, the number hadn't risen above 2% since the government began keeping such records in 1965.

Economists say the rising supply of vacant homes means construction activity will likely have to fall further, while buyers slowly absorb these vacant homes, creating an even greater drag on prices and on economic growth.  Housing starts fell 10% in September from August.  In previous housing downturns of the early 1980s and early 1990s, annual starts fell below one million; in September, annual housing starts were at 1.19 million.  But, according to some economists, further declines are likely if the vacant inventory continues to rise.

The latest decline in the homeownership rates indicates that this year, as many as 900,000 households moved from owning homes to renting them, which implies a very low level of housing demand over the next several years.

Heating Costs To Be Even Higher

Winter heating bills will be even worse than initially thought this year as surging oil prices are pushing up costs for a variety of heating sources.

The average U.S. household will pay $986 in heating costs this winter, up 10.9% from the 2006-07 season and $9 higher than the original forecast made a month ago, according to the Energy Information Administration, the analytical arm of the Energy Department.

For heating oil customers, a bad situation got even worse.  Those who heat with heating oil are expected to pay a record $1,841 on average from now through March, up 25.6% from last year and $56 more than originally forecast.  Heating oil bills are expected to be more than double those seen four years ago.

Will the higher costs to heat your home cause you to turn your thermostat back this winter to save money or energy, or do you plan to not make any changes in how you stay warm this winter?  Leave us your comment on this below by clicking on the "Comments" link.  Your email address (although needed to post a comment) will NOT be displayed or otherwise shared with anyone.  We look forward to hearing from you.

Home Inspections: Why You Need One

Home inspections provide detailed information about the overall condition of the house one is planning to buy. A standard home inspection provides a visual examination of the physical structure and major interior systems of a residential building. An important point to be noted is that a home inspection is not to be confused with an appraisal or a building code inspection. In a home inspection, a qualified inspector takes an in-depth, unbiased look at the home to evaluate the physical condition of the house and its systems. He identifies the items that need to be repaired or replaced and also estimates the useful life of the major systems, equipment, and structure of the house.

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Should You Insure Your Landscaping?

You've bought a house and insured the structure, the furniture and your most prized possessions.  Should you also insure your trees and shrubs?

Check your homeowner's policy.  You'll probably find that coverage for your landscape is quite limited.  Most basic homeowner's policies pay a certain percentage, say 5%, of the total coverage limit of the home for damaged landscaping, with payouts for any one tree, shrub or other plant capped at $5,000.

Homeowners' policies typically only cover losses in certain situations — like fire, lightning, explosions, theft, riot and civil commotion or damage from passing cars. If a tree falls on an insured structure during a wind, ice, snow or hailstorm, policies will pay to remove the tree and to repair the structure. But they usually won't pay to replace a tree felled by a storm.

Since weather-watchers have predicted more severe storms in the coming years, many homeowners are looking to add wind riders to their policies, but check with your carrier, since not every insurance company offers such policies or riders.

Even if you can't get or don't have insurance on your trees and incur a loss, you still may be able to claim a deduction for such a casualty loss on your federal income tax.  The Internal Revenue Service defines such a loss as "resulting from an identifiable event of sudden, unexpected, or unusual nature," and includes the usual incidents that most insurance companies cover, as well as storms, floods, vandalism and soil and air pollution.