Build up money for a down payment on a home – Orlando Sentinel

Q: I have an employer-matched 401(k) and a personal Roth IRA that I max out each year. However, I am trying to save for a house. Should I focus on my down payment and closing cost savings instead of maximizing my Roth IRA? –JF, Orlando

A: Yes, you should save as much as possible for your down payment. If you have a down payment of 20% or more, you won’t have to pay for private mortgage insurance. It can really save you a lot of money. If you are not going to have 20% down payment, you will need more money to pay closing costs. – Gregory Collier

Q: I recently redeemed my Series EE and Series I bonds. Do I have to pay tax on the interest earned? – No name given

A: If your Series EE bonds are used for higher education expenses, you may be able to exclude the interest from tax. Also, if your total income, including savings bond interest, is less than your standard or itemized deduction for the year, you may not owe any tax on the bonds. –Colby Winslow

Have a question? E-mail [email protected]. Include your name (only your initials will be printed), hometown and phone. Certified financial planners from the Financial Planning Association of Central Florida answer questions. The answers are for educational purposes only; you should also consult a financial professional. Questions and answers may be edited for reasons of space.

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Elaine R. Knight