How to budget for your closing costs
Here are three of the week's top pieces of financial advice, gathered from around the web:
Budgeting for closing costs
"Closing costs are to home sales what fruitcakes are to Christmas: spoilers of an otherwise good time," said Ann Brenoff at HuffPost. The unavoidable expenses sustained in the buying or selling of a house will add between 3 to 6 percent to the sale price. Closely examine your closing disclosure statement, which specifies the "who-pays-for-what" details. Some typical inclusions are home appraisals and inspections; local, county, and state government fees; escrow fees; bank transfer fees; taxes; and insurance premiums. There can also be unexpected costs. As a buyer, you may need to reimburse the seller a prorated amount for the portion of the year for which they have prepaid property taxes. Also budget for some legal fees: Roughly 20 states require a lawyer to close a real estate sale.
Prenups hit by tax overhaul
"President Trump's tax overhaul could wreak havoc on prenuptial agreements across the country — and maybe even his own," said Ben Steverman at Bloomberg. Starting next year, thanks to the tax bill, "payers will no longer be able to deduct their alimony payments." For those in the highest tax bracket, the change could be significant, effectively doubling their post-tax costs in comparison with what they previously agreed to in their prenups. "Divorce lawyers are in an awkward position and weighing whether to alert happily married clients with decades-old prenups." Deducting alimony payments from taxable income was a "big saving," because each alimony dollar paid reduced the payer's taxable income by the same amount.
Misconceptions about insurance
It's a significant worry for college graduates and young adults alike: "what's going to happen to your health insurance now that you're on your own," said Darla Mercado at CNBC. Twenty-somethings under their parent's insurance plan must sign up for their own individual policy when they turn 26. Young adults commonly have several misconceptions about health insurance, according to a recent survey from the online insurance broker eHealth. Price is the biggest one: Although eHealth's average monthly premium for individuals during the last open enrollment period was $440, "close to half" of respondents ages 18 to 34 deemed $100 a month or less to be a fair price for insurance. And although nearly seven out of 10 surveyed said "all health-care plans should cover maternity care," just 38 percent said they were willing to pay more for it.