If you know anybody who just can’t grasp the stupidity of this so called “debt limit deal”…..try this.
It can’t get much clearer.

Federal Budget:               $ 3,820,000,000,000   (3.82 Trillion)

Income:                           $ 2,170,000,000,000   (2.17 Trillion)

New Debt:                     $ 1,650,000,000,000   (1.65 Trillion)

Amount Cut:                  $       38,500,000,000   (38.5 Billion) –; about 1% of the total budget.

National Debt Total:     $ 14,271,000,000,000 before this years budget.

Let’s Put This In Perspective.

It helps to think about these numbers in terms that we can relate to.

Let’s remove eight zeroes from those numbers and pretend this is a
household budget for the fictitious “Jones” family.

Amount of money the Jones family spent this Year:              $38,200

Total income for the Jones family this Year:                            $21,700

Amount of new debt added to the credit card this Year:        $16,500

Outstanding balance on the credit card:                                    $142,710

New/Total outstanding balance on credit card:                       $159,210

So last week, the Jones family sat down at the kitchen table
and agreed to cut $385 from their yearly budget.

An historic amount?????????

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You might not think too hard about your real estate assessment, the dollar value the local government puts on your house and land. You should. The assessment determines how much you shell out on property taxes.

If you have a mortgage, your home lender is probably paying your property taxes out of an escrow account. Odds are you don’t even know how much gets collected. Devote an hour of your time to becoming better informed. Once you understand your real estate assessment, you’ll understand your property tax bill—and, more importantly, whether you’re paying the right amount.

Homeowners and property taxes

Your local government needs every dime it can collect to pay for all of the services you expect as a resident: schools, libraries, hospitals, and so on. A healthy chunk of that revenue is raised from homeowners via property taxes. In normal times real estate values climb steadily, allowing local governments to take in a little more every year to keep up with inflation and perhaps even add a few services. Property tax bills usually come due once or twice a year.

The situation gets stickier when real estate values are in decline. If that occurs, local governments generate less revenue from property taxes, meaning the tax rate needs to go up, the money needs to come from somewhere else, or spending on services needs to go down. According to a 2009 survey conducted by the National Association of Counties, 62% of counties polled say declining property taxes are a major source of revenue shortfalls. Forty-two percent of counties have cut services, and 11% have raised property taxes.

Assess your real estate assessment

No matter if property values are rising, falling, or stagnant, you need to understand how you’re being taxed. Everything starts with your real estate assessment letter, which reveals what your property is judged by the local government to be worth. The letter will differ, depending where you live, but most will have a legal description of your house and separate values for the land and the structure. Add those two numbers together to get your home’s assessed value.

Some local governments will appraise your home every year, others every two or more years. Tax assessors generally use one of two methods to come up with an assessment value for your home. The most common relies on looking at recent sales of comparable homes. Keep in mind that “recent” is a relative term. To come up with a real estate assessment, assessors may be looking at sales that occurred as long as 18 months prior. Alternatively, especially in the absence of recent sales data, assessors will calculate the cost to rebuild your home, and add that to the estimated worth of your land to come up with a dollar amount.

Break out the calculator

How much you pay in property taxes is based on your real estate assessment. Put simply, your home’s assessed value is multiplied by the local tax rate to come up with a figure. However, it can become more complicated if there are multiple taxing authorities where you live—a city and a county, for example—or if there are special one-time assessments. Qualifying for property tax exemptions, perhaps due to age or disability, will also alter the formula. Some local governments offer online calculators on their websites, or call the tax assessor’s office for help.

If you want to run the numbers for yourself, don’t be intimidated by how your tax rate is expressed. Sometimes it’ll take the form of a percentage, say 1.5%, or perhaps a decimal, 0.015. Both equal the same thing. So the owner of a home that’s assessed at $100,000 would owe $1,500 a year in property taxes. Other times it’ll be expressed as an amount per $100 or $1,000 of home value. In the case of a 1.5% tax rate that would mean $1.50 per $100 or $15 per $1,000. Regardless, the math doesn’t change: Multiply $100,000 by 0.015.

Knowledge is power—and savings

Assessors have a lot of ground to cover. Many rely on valuation formulas that assess whole streets or neighborhoods. Most haven’t seen your house in person, so don’t wait for a knock on your door from an assessor hoping to take a look around. That’s why you need to read your real estate assessment letter carefully, look for errors, and challenge your assessment if it seems too high.

If you find a way to reduce your real estate assessment, whether by contesting it or qualifying for an exemption, the savings can add up. The median annual property tax paid in the U.S. in 2008 was $1,897, or 0.96% of the median home value of $197,600. Trimming just 15% off the median value would result in savings of about $285. Of course, if your home value and local tax rate are higher, then you’re looking at even greater savings.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

Geoff Williams has written about personal finance for numerous publications including Bankrate.com, WalletPop, and Consumer Reports. He’s a columnist at FrontDoor.com, a real estate website.

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There are three elements to a health insurance policy, co-pay, deductible, and co-insurance.

Co-Pay: – fee associated with a service ($15 for Rx, or $20 for Dr.visit)

Deductible: – The amount that you pay for a service. It’s a dollar amount that you must meet before insurance plan begins paying benefits

Co- Insurance: – amount  that you split with the insurance coverage – usually expressed as a percentage – after the deductible is met, you and the insurance company split the cost up to some dollar amount – a typically split 20/80 – capped at some point ($2000, $2500) “back door deductible” comes into play for tests and hospitalization.  Usually associated with hospitalization and tests.

Out of Pocket maximum: – very important number – the maximum amount of money you will be on the hook for in a year, not including premiums.

There are 3 basic types of individual health insurance plans:  HMOs, PPOs, and HSAs.

HMO: characterized by no deductible, or small deductible / no co-insurance / co-pay for various procedures or aspects of the plan.  Major characteristic is getting a referral from family doctor for a specialist.

HSA: – Health Savings Account – high deductible- after deductible is met, plan covers 100% of expenses – Health Savings Account is a feature of the IRS code whereby you can establish an account  that grows tax deferred – in theory the money in the account is intended to cover your deductible expenses.  When you withdraw the money for qualified medical expenses, it is tax-free.  In reality, the money can be used for anything, but if not qualified medical expense, you pay tax on it.  HSAs popular with people who rarely go to the doctor, not worried about out-of pocket cost for 1-2 doctors visits or prescriptions/ yr, but want hospitalization,  ‘Catastrophic coverage”.

PPO: – most popular- characterized by deductible that can range from $500 – $10,000/ also co-insurance of 20-30%.  Dr visits$20 -$50/ RX benefit (w/ deductible for name brand drugs

Which insurance plan is right for you? –

How do you plan to use your insurance?

What is your budget?

Deductibles and premiums have an inverse relationship, the lower the deductible, the higher the premium.

How much exposure are you comfortable with as opposed to the monthly premium?

What is your budget for insurance?

Also, check closely the limits of your coverage.  Do not compare just on the basis of price – check the policy limitations – make sure you’re comparing apples to apples.

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That’s where you come in…

We want your input, comments, advice, opinions on how to make it better. By doing so, you will be entered into our drawing for one of 5 starbucks gift cards worth $5. The deadline is THIS SUNDAY, SEPTEMBER 19th. On Monday, we will pick 5 names from a hat and let you know who won. One entry per person

To get the creative juices flowing, here are a couple questions…

1. What information are you looking for when you come to the site?
2. What would you like to see more of on the site? Maybe specific subjects, or areas….
3. What do you like most about this site?
4. What do you like least?
5. What information would you like to see on the home page? Maybe certain subjects or area’s?

To give us your input, please use the form below.

cforms contact form by delicious:days

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So if you, or someone you know, needs real estate advice, is considering buying or selling real estate or is having trouble selling their home, please let us know. It would be our honor to serve them and apply the techniques and guidance that have helped 21 clients do the same in the last 61 days.

The Chris & Caleb Team focuses on helping clients buy and sell real estate in the Chester County, PA and surrounding areas. Both Chris LaGarde and Caleb Knecht are long time residents of Chester County and before they teamed up sold more than 90 homes prior to teaming up. To view homes for sale in the Chester County area, please check out our property search section of our website. You will have access to all homes for sale in the Chester County Area. If you are wondering what your Chester County home may be worth, just take a second to complete our Home Value form and we will be in touch shortly afterward.

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• Sump Pump Discharge Line – clear the exit area and check for no snow/ice blockage (especially if discharging into downspouts which also may be frozen).
• Pump Electrical outlet – check if fuse may have blown due to pump overheating because the discharge was blocked.  Simply plug in portable lamp to test.
• Outside Basement Door Drains – remove snow/ice blockage which allows water entry under door and causes rotting.  If drain is still blocked – call an outside Waterproofing specialist.
• Base of house – clear and Trench drainage for roof melting/heavy rain run off.  Use caution when working under hanging ice.  Large hanging ice may indicate attic ventilation concerns.
• Window Wells – clear out any snow build up as House heat can cause a fishbowl effect which collects water causing window leaks.  Plastic covers can help prevent this.
• Sill Plate leakage – clear away high snow which allows water to spill over the Sill Plate.  The 3 inch termite barrier (visible wall) should be visible under the siding.
• Brick Veneer Walls – clear high snow blocking the low drainage ports which allows water to drop down on the inside sill plate when heavy winds blow the water into the higher ports.
• Internal Sump Pump – if existing, check to see if operational by manually lifting float device.  Sump Pumps help relieve upward hydrostatic water pressure from flooding the floor.
• Battery Backup systems – should be considered depending on content risk and especially if a finished basement in an area having power outages.  A good system will also increase your existing pump’s normal capacity.
• Consult your Realtor – for any professional help.  They know reliable, state registered, Home Improvement Contractors and it always pays to stay in touch with them.

Bill & Sean Worthington, Brandywine/Springfield Waterproofing – 610-280-7775

www.RealWaterproofer.com

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Victory Brewery -

420 Acorn Lane, Downingtown, PA‎ – (610) 873-0881‎

I HIGHLY recommend this place. It has award winning  beer, and the food is good and getting better all the time. I LOVE the Trice fries, their burgers and the Angry pizza.

Coffee Cup:

117 East Lancaster Avenue, Downingtown, PA‎ – (610) 269-9336‎.
The Coffee Cup is my favorite dinner right now in Chester County. Well priced breakfasts and a really home town feel. I have to be honest, and tell you I’ve never eaten anything but breakfast there, but I am sure it’s good.

The Olive Tree Mediterranean Grill:

379 Downingtown Pike, Downingtown, PA‎ – (610) 873-7911‎
I lOVE this place. It’s a treat for me – fantastic greek food! I love their Greek Tycoon Salad and their Chicken Penelope Sandwich. You can also get coupons for them on Restaurant.com

Primavera Pizza Kitchen:

853 East Lancaster Avenue, Downingtown, PA‎ – (610) 873-6333‎

When my wife and I get out for a date night, this is usually the place we go. We love the atomosphere and the food. They usually have live music on Friday nights. Check their website.

Firecreek:

20 East Lancaster Avenue, Downingtown, PA‎ – (610) 269-6000‎.

Very new restaurant. I haven’t gone yet, but I have heard great things.  The meals are a little more on the expensive side, so make this a special visit.

If I have left any good restaurants out, PLEASE contact me or comment on this post. I would be happy to include them.

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• Minimum Down Payment: It has been 3.5% but is rumored to be jumping to 5%. I don’t know that for sure thought. That means, that if you are purchasing a home at $200,000, TODAY your minimum down payment will be $7000. IF it goes to 5%, that jumps the minimum down payment to $10,000. That’s a difference of $3000. That can be a very big deal for first time home buyers.
• More limitations on Seller’s Assist: A Seller Assist is where, at closing, the Seller gives money back to the Buyer, usually to reduce closing costs. Currently the maximum allowed Seller Assist is 6% for an FHA loan. On a $200,000 purchase, that can be as much as $12,000 of assistance. I have not heard what they will be lowering them to, but I believe it will probably be reduced by 1 to 3%.
• Raising Minimum Credit Scores: Currently, the minimum credit score to qualify for an FHA loan is about 600. I have not read or heard what they may change it to.

Understand, the FHA does not give out loans, but does insure them. And in order to insure them, the loans, those using them and the homes they are buying must qualify for the loan. Many first time home buyers use an FHA loan when they purchase a home for several reasons:

• Credit scores are less of an issue: On a conventional loans, if your credit score is under a 720, then the interest rate that you would qualify for would be higher than what the base rate is. For instance, if the rate currently available is 5.125% and your credit score is 680, the interest rate you may qualify for may be 5.75%, for example. On an FHA loan, the rate is the rate, as long as you have the minimum score or better. So if the available rate is 5.375% (which is what it was yesterday, Jan. 19th) then that is the the rate no matter how close to the minimum score you have.
• Interest rates are generally the most favorable: If you have a less than stellar credit score, the chances that your rate with an FHA loan will be lower than that if you went with a conventional loan are very good.
• The Debt-to-income ratios are more lenient: Debt-to-Income (DTI) limitations for conventional loans are generally in the mid 30′s, meaning that if your overall debt payments (credit cards, auto loans, mortgages) constitute more than 35% of your overall Gross (pre-tax) income, then your “DTI” would be too high to qualify for that loan. On an FHA loan, currently it is in the mid to high 40′s.
• Private Mortgage Insurance is less on a monthly basis: The FHA allows the PMI to be structured in such a way that it can reduce the effect on a monthly payment by as much as 40%. That can equal as much as $100 or more and that is a significant savings for a first time home buyer.

My advice:

When, not if, but when these changes are put in to place and depending on how much of a change it is, this will definitely slow the market down. Less buyers will be able to qualify for a loan which equals less demand. So if you are a buyer or are considering buying between now and the next two years, I highly recommend that you speak with a qualified Buyer Agent today. They can help you determine how these changes will effect you and help you create a plan to put you in the best position possible when you do go to buy. For sellers – If you must seller or are considering selling in the next two years, your best window may be in the next 3 months. Speak with a qualified Realtor who knows your local market and can give you good advice.

Of course, if you live in Chester, Montgomery, Delaware, Lancaster or Berks Counties, I would be more than happy to help you.

Articles referenced in this post:

National Association Of Realtors article

Wall Street Journal Article

HUD Press Release

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On Monday, Oct. 19, at 8:00 p.m., the Easttown Township Board of Supervisors will be presented with information on Earned Income Tax and other Act 511 taxes by the Pennsylvania Economy League. The meeting is to be held at the Beaumont Elementary School, 575 Beaumont Road, Devon, and is open to the public. Easttown Township is facing a budget deficit for 2010, in part due to declining real estate transfer tax revenue, salary increases and an increased pension contribution. An ad-hoc budget committee was created at the Oct. 5 Board of Supervisors meeting with the intent of looking at the budget with an independent set of eyes and varied expertise. The members include a forensic accountant, business consultant, marketing professional, Realtor and tax attorney. The committee is seeking people of other professions to assist in reviewing the budget and proposed changes. Click here for the public meeting notice.

Source: Main Line Suburban Life: 10/14/09

“Community Conversation” event opens encouraging dialogue in West Vincent

At a recent “community conversation” at the West Pikeland Township building, nearly 90 residents came to a consensus with township supervisors to “continue to preserve open space and rural values” along with a renewed sense of community. The event, hosted by Chester County 2020, a nonprofit organization that promotes dialogue about planning and growth throughout the county, encouraged residents to list issues that are important to West Vincent. The list was narrowed down to open space preservation and the protection of rural values. Of great importance to the township supervisors was the attendance and interaction with resident who do not typically attend township meetings. The supervisors were encouraged that their vision was shared by the West Vincent community.

Source: The Daily Local News; 10/14/09

Gay Street Bridge to reopen in Phoenixville

The Gay Street Bridge in Phoenixville has received a facelift and a soon-to-be new name – the Veterans Memorial Gay Street Bridge. The bridge, due to be reopened Oct. 16, has been under construction since April 2008. Both pedestrian and vehicular travel will be restored between downtown Phoenixville and North Side.

Source: The Daily Local News; 10/15/09

Smith Farm agreement approved in West Bradford Township

West Bradford supervisors recently approved an agreement for the Smith Farm development plan. The agreement will allow for a 125-home development and preservation of the existing cattle farm. The approved settlement plan will now be taken to court for approval, which would settle current litigation and allow the land development plan to proceed through the township’s normal approval process. Originally a planned subdivision of two properties, the Gray tract and the Smith Farm, many of the initial objections to the plan have been eliminated with the removal of the Gray tract from the plan.

Source: The Daily Local News; 10/15/09

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