Probably only one or two names are listed in the Named Insured section of your auto insurance policy, possibly you and your spouse. But other people are allowed to drive your car, including those outside of your family. Generally, auto insurance coverage is attached to the vehicle, not to the driver. So, if your car is involved in an accident, the damage will typically be fully covered by your auto insurance policy, even if the driver was someone not named on the policy.

Other than yourself, your auto policy covers your car if it is driven by any of the following:

• Your spouse, as long as he or she lives in your household
• Other family members who are related to you by blood, marriage, or adoption
• A foster child who lives in your household
• A child who is away at college but still considers the address listed on your policy as his or her permanent address
• Anyone to whom you lend your car

The person who borrows your car must be a licensed driver. Also, most insurance companies require that anyone driving your car receives your permission. Conditions can vary, so check your policy carefully and make sure that you understand any policy limitations. Keep in mind that most insurance companies require you to list all of the principal and secondary drivers of every insured vehicle. If you have a teen driver at home, he or she should be listed on your insurance policy even though your insurance rates may increase substantially. If the teen driver has an accident, damages to your car will still be covered, but your insurer could charge you additional premiums retroactively from the date the teen became a licensed driver.

It depends on exactly what was damaged. Any damage to your bathroom itself (e.g., the walls, ceiling, floor, bathtub, toilet, or sink) is probably covered by your homeowners insurance once you've satisfied your deductible. That's because most policies provide all-risk coverage when there's structural or other damage to your home itself. This means that it doesn't matter who or what is responsible for the damage--the fact that a plumber caused the damage doesn't affect your coverage.

But what if you had personal property (e.g., valuable knickknacks) in your bathroom that was damaged by the plumber? Unfortunately, you're probably not covered for those losses, unless your policy provides all-risk coverage for the contents of your home as well as for your home itself. Under most policies, coverage for the personal property inside your home is on a named perils basis. This means that you're covered only if the damage to your personal property is caused by one of the perils or events specifically named in the policy (e.g., fire, theft, windstorm). The negligence of a plumber or other repair person in your home is not a named peril.

However, you may be able to work it out with the plumber to recover any damages to your personal property. Perhaps he or she has insurance that will cover your losses. As a last resort, you might consider taking legal action against the plumber.

You're probably not covered for the damage that a squirrel caused to your home, because standard homeowners insurance policies do not cover damage caused by rodents, birds, insects and vermin. Rodents are described as gnawing or nibbling animals, including mice, rats, squirrels, beavers, and in some cases, porcupines.

However, your policy does cover you for losses that result from excluded events (as long as the loss is not itself excluded from coverage). If, for example, the squirrel gnawed through some wires in your home, you're not covered for damage to the wires, but you are covered for any damage resulting from a subsequent electrical fire.

No longer the little tin trailers you can hitch to your car and pull from place to place, manufactured homes are dramatically safer since Congress passed legislation authorizing the Department of Housing and Urban Development to regulate their design and construction. If a manufactured home has been built since June 15, 1976, it must meet the specifications of the National Manufactured Home Construction and Safety Standards. These standards are designed to improve the overall quality of manufactured homes and to reduce personal injuries and property damages. They require, among other things, that the homes be built of fire-resistant materials and be capable of withstanding certain wind speeds.

Like any homeowners insurance, policies for manufactured homes address three areas of risk: damage to your home, damage to or theft of your personal property, and your legal liability for injuries to others or damage to their property. Unfortunately, though manufactured homes are much safer than they used to be, they're still less safe than conventional dwellings. This heightened risk is reflected in the cost of homeowners insurance for these homes.

Though manufactured homes are not more likely to catch fire than conventional dwellings, they often suffer more extensive damage when they do. In addition, because the walls in manufactured homes are often not as well insulated as those in conventional homes, water pipes may be more likely to freeze. Manufactured homes are also more vulnerable to storm damage, because they are lighter than site-built homes and more likely to tip over in high winds. For this reason, many states and insurance companies require manufactured homes to have a permanent foundation or to be secured with ground anchors to reduce the risk of damage during a tornado or other severe storm.

These factors, among others, make the homeowners premium for manufactured homes more expensive than for conventional homes. When purchasing your coverage, shop around and look for a reputable company that specializes in these policies.

Believe it or not, there is financial life after bankruptcy. It will take some effort on your part, but you can rebuild your credit with careful budgeting and record keeping.

A bankruptcy is a red flag that makes lenders leery, and it will stay on your credit report for 10 years. If you have a history of bad credit (e.g., a bankruptcy and numerous late payments) and don't take steps to repair it, most lenders won't take on the risk of giving you credit. If you find a lender willing to give you credit, you can expect a high interest rate (e.g., twice the going market rate). However, if you work to improve your credit rating by obtaining a line of credit and making all of your payments on time, for example, you may be able to obtain the financing you need to buy a home.

Remember that lenders want to see good credit histories. Therefore, it's important to begin establishing good credit as soon as possible. Many people believe that the way to fix a bad credit problem is to pay for everything in cash. Although this is a good way to get out of debt and control your spending, it won't help you get a mortgage. When you pay cash, you're not establishing credit. Thus, lenders have no way of gauging whether you're a good or bad credit risk.

Consider beginning your journey back to creditworthiness by obtaining a low-interest credit card. Be sure to make your payments on time, every month. If you can't get a traditional credit card, ask about a secured credit card that operates much like an ATM debit card. Here, your credit limit is based on the amount you deposit in your account. For example, if you deposit $500 in the account, you'll have a credit limit of $500. If high credit limits are what landed you in your current financial troubles, a secured card can help you stay on track by keeping you on a short leash. In a short time, you may be able to prove to lenders that you're creditworthy.

For more information, contact your local consumer credit counselor.

Typically, lenders require a down payment of 20 percent of the home's purchase price. However, some special mortgage programs allow you to purchase a home with no down payment, such as Veterans Administration (VA) mortgages (if you are a qualified veteran) and no-down-payment or 100 percent financing mortgage programs. VA mortgage terms are generally favorable when compared with other types of mortgages. However, some variations in terms may exist from lender to lender. As for no-down-payment or 100 percent financing mortgage programs, you will generally pay higher interest rates and closing costs on these loans, and there may be additional qualification requirements.

Besides special mortgage programs, you may be able to qualify for a conventional mortgage with no money down if you purchase private mortgage insurance (PMI). Typically, monthly PMI premiums are $45 to $65 per $100,000 borrowed. The cost of PMI depends on several factors, such as the amount of your down payment, your type of mortgage, and whether you pay premiums on a monthly basis or in a lump sum at closing. PMI premiums can significantly increase your monthly housing cost. Without PMI, however, you may be unable to qualify for a mortgage if you have no down payment.

Generally speaking, you can deduct neither the cost of improvements nor the cost of repairs you've made to your principal residence. (However, improvements to your home for necessary medical care may be deducted as a medical expense, if all requirements are met.) Although the improvements cannot be deducted, they do increase the basis of your home.

Home improvements add to the value of your home, prolong its useful life, or adapt it to new uses. Examples of improvements include the following:

• Paving a driveway
• Paneling a den
• Putting up a fence
• Adding a bathroom

You should add the cost of improvements to the basis of your property. Your initial basis is usually the cost of your property (what you paid for it originally). Improvements increase your basis. If you sell your home in the future, improvements could lower your tax bite because any gain realized is reduced by additions to the basis of your property.

Repairs are different from improvements; repairs keep your home in good operating condition. They do not materially add to its value or substantially prolong its life, and you do not add their cost to the basis of your property. Examples of repairs include the following:

• Repainting your house (inside or out)
• Fixing your gutters
• Replacing broken window panes

Note: An entire repair job may be considered an improvement if items that would otherwise be considered repairs are done as part of extensive remodeling or restoration of your home.

If you want to refinance your VA home loan to lower your interest rate (and thus your mortgage payment), one option to consider is the VA Interest Rate Reduction Refinance Loan (IRRRL). The IRRRL is also known as the VA Streamline Refinance Loan because it typically offers a streamlined approval and underwriting process with minimal documentation required.

An IRRRL can be used to refinance an existing VA fixed-rate mortgage to reduce the interest rate, or to refinance an adjustable-rate mortgage (ARM) into a fixed-rate mortgage. In order to qualify for an IRRRL, your current loan must have been guaranteed using your VA entitlement.

Under the IRRRL program you can't receive any cash from the loan proceeds at closing, but you may finance up to $6,000 of energy-efficient improvements (ask your lender for details). You can also opt to roll all fees and closing costs into the amount financed if you want to avoid out-of-pocket costs, although doing so will slightly increase your monthly mortgage payment. The only fee required by the VA is a funding fee of 0.5% of the loan amount (some borrowers will be exempt from paying the fee), but individual lenders may charge other fees and loan costs, subject to VA limits.

You may be able to refinance your home loan with your existing lender, but you're not required to do so. In fact, because loan terms vary, the VA recommends that you research several lenders before choosing one.

For more information about the IRRRL and other refinancing options, visit the website of the U.S. Department of Veterans Affairs at www.benefits.va.gov.

Yes. Most home insurers offer discounts to policyowners who protect their homes with an alarm or other security system. Home security discounts can range between 5 and 20 percent. The size of this discount varies from insurer to insurer and is based on the complexity of the system you choose (e.g., dead bolts versus a fully loaded monitoring system). Other discounts may be available if you have certain safety devices (e.g., smoke detectors, sprinkler systems) installed in your home. Check with your insurer to see what other discounts it may offer.

If your down payment is less than 20% of the purchase amount when you buy a house, the lender will likely require that you buy PMI to ensure repayment of the loan. To avoid paying monthly PMI premiums, you may want to consider getting a piggyback mortgage, sometimes called an 80-10-10 mortgage. In a piggyback transaction, a bank or other finance company traditionally lends 80% of the purchase price, and the buyer makes a down payment of 10%. The remaining 10% is financed with a second mortgage (typically a home equity line of credit). The interest rate for the second mortgage is usually significantly higher than for the primary loan.

Generally, your mortgage lender can require you to have an escrow account if you borrowed more than 80 percent of the value of the property you bought. (The percentage you borrow against the valuation of the property is known as the loan-to-value ratio.) Each month, in addition to your mortgage payment, the lender collects a prorated amount to be held in escrow. Your lender applies this amount to your annual private mortgage insurance premiums, homeowners insurance premiums, and property taxes.

Private mortgage insurance protects the lender from loss in case it must foreclose on your property. You may petition to have this insurance coverage canceled once you can establish that your loan-to-value ratio is less than 80 percent. However, you'll still have to carry enough homeowners insurance to cover the replacement costs of the dwelling. Also, your property taxes may fluctuate from year to year, depending on the increase or decrease in your local property tax bill. Thus, the amount you may be required to keep in escrow may vary with changes in the valuation of your property. In addition to collecting the amounts necessary to meet these expenses, lenders typically hold a two-month surplus in escrow.

Only a handful of states have passed laws requiring lenders to pay you interest on the funds held in escrow accounts. In some states, you, the buyer, are allowed to set up your own separate account (known as a pledge account) for escrowing these funds. You are also responsible for making the property tax and insurance premium payments yourself. Under these circumstances, you earn interest on the funds in the pledge account.

If your loan-to-value ratio is less than 80 percent, you may be able to waive the need for an escrow account. To do so, let your lender or mortgage broker know up front in the lending process, because canceling an escrow account can be difficult once it's established. Your lender may require you to pay a one-time escrow waiver fee equivalent to one-quarter of one point. For example, if your mortgage is for $100,000, the fee would be $250.

Because you live so close to the water, it may be a good idea to buy flood insurance, especially if you live in an area that's prone to coastal flooding (e.g., southern Florida). And don't assume that you're safe from flooding just because you live on the third floor of your condo building. If a severe flood wipes out the ground floor of your building, all of the other units in the building (including your own) may become uninhabitable as well.

Unfortunately, your condo owners insurance doesn't protect you against flood damage. Although the flood insurance carried by your condo association provides some protection for the building, the common areas, and your condo unit itself, these master flood policies generally don't cover the personal property in your condo unit (e.g., furniture, jewelry, clothing).

To get the complete coverage you need, you'll have to purchase flood insurance. This type of insurance protects your personal property against flood damage and may also supplement the building/unit coverage provided by your condo association's policy. To buy flood insurance, you must live in a community that takes part in the National Flood Insurance Program (NFIP); most high-risk communities have joined this program. The NFIP offers flood insurance through private insurance companies and agents, though the policy you buy is backed by the federal government. You can locate a company that sells flood insurance in your area by contacting the NFIP at (800) 621-3362.

You might consider purchasing flood insurance even if you don't live in a high-risk area for floods. Storms, inadequate drainage, melting snow, and hurricanes can all cause serious flooding. And if you're purchasing a home in a designated flood zone, your mortgage lender will require you to purchase flood insurance before granting you a mortgage.

Despite what you may think, your homeowners insurance policy doesn't cover damage from flooding. To complicate matters further, you can't simply buy flood insurance as an endorsement to your current policy. Instead, if you are eligible, you must purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program (NFIP). A few insurance companies also offer excess flood insurance policies that can supplement NFIP coverage.

A flood insurance policy offers flood protection for both your home and its contents. You can purchase up to $250,000 worth of coverage for the building itself, and up to $100,000 worth of coverage for the contents. But don't view the policy as a catchall. Flood insurance offers some degree of protection for flood-related basement damage, but it doesn't cover all types of damage. It also doesn't cover events such as sewer backups unless they are directly related to a flood.

The cost of flood insurance depends on many factors, including the type of occupancy (e.g., single family, nonresidential), the amount of coverage, the deductibles you choose, and the location, design, and age of the building. Your insurance company or representative can give you a quote that accurately reflects your circumstances.

Your title to any real estate, including a condominium, is proof of your interest in that property. But what if your title were faulty? It could be a forgery, or it might have been recorded improperly. The property could be subject to unpaid tax liens or other assessments. If any of these were the case, you could lose the condominium and still be required to repay any money you borrowed to purchase it!

If you take out a mortgage to buy the condominium, you'll probably have to get a lenders title insurance policy. This covers only the mortgage lender's interest in the condominium for the life of the loan. You'll want to get an owners title insurance policy, which protects your interest in the condominium for as long as you own it. If any questions arise about the legitimacy of your title, your title insurance company will defend your rights in court. If you suffer a title-related loss, the insurance company will pay for this in accordance with the policy terms.

When you buy title insurance on a condominium, you'll be issued an American Land Title Association condominium endorsement. Some title issues (e.g., document defects that invalidate the property's classification as a condominium, or unpaid assessments associated with the unit you buy) are unique to condominiums. The condominium endorsement form certifies that your title is free of such defects or encumbrances.

There are several ways to insure your possessions while you're moving. Perhaps your current homeowners policy includes coverage for your personal property during a move. The policy may cover your possessions at the new location for a limited time, also. The same coverages, exclusions, and deductibles apply while you're moving as they would for a regular homeowners claim.

If your homeowners policy doesn't include this coverage, you can purchase a policy that's specifically designed to insure possessions during a move. It's known as a floater and is effective only during your move. Or, you can add a floater to the coverage already provided by your homeowners policy.

A third alternative is to rely on the insurance offered by the moving company. You'll want to see its policy before you hire a moving company so you'll know what's covered and what isn't. Also, pay attention to insurance limits. If the company's insurance is not up to your standards, purchase a floater.

If you have a loss during a move, the mover's insurance is primary. That is, the mover's insurance company will pay first. Your insurance pays only after the mover's insurance limits have been depleted. For example, the mover's policy has limits of $10,000 and your floater has limits of $25,000. If you have a $15,000 loss and the movers are at fault, the mover's policy will pay $10,000 and your policy will pay $5,000.

As you review the combined mover's insurance and your own, pay attention to what they cover and how much. Know what the exclusions are and what the deductible is. Your insurance agent can help you be sure your possessions are adequately covered.

There are many ways you can save on the cost of your homeowners insurance premium, with some possibilities existing within the policy itself. Most insurance companies offer several different credits for certain characteristics and circumstances. Your state may offer discounts, as well.

Insurance rates will vary depending on the home construction and location. The more fire-resistant the building materials, the lower the rates will be. Brick homes have lower rates than wood-frame homes. Rates are also affected by how close your home is to a fire hydrant. The town in which you live affects the rates, with each town being graded by the state or the insurance company. The grades reflect proximity to the closest fire department, road accessibility, congestion, and other characteristics that would affect the fire department's ability to get to a house fire quickly.

Insurance companies will often issue credits to their customers for the following:

• Having protective devices, such as smoke and burglar alarms
• Homes that are less than 15 years old
• All occupants in the home are nonsmokers
• Insuring both your auto and home with the same company for a multiple-policy discount
• Renewing the policy with the same company

Selecting a higher deductible and reducing or omitting coverages can also help you save money. Check your policy to be sure you're not being charged for insurance coverage you don't need. Some states offer credits in partnership with insurance companies and businesses. For example, you could attend a state-sponsored home safety workshop and receive a credit on your homeowners premium or a discount at participating home supply stores. Ask your insurance agent or insurance company for further information.

Renters insurance typically provides coverage for losses to your personal property, along with some level of liability protection. Most insurance companies have minimum policy amounts for personal property (e.g., $15,000, $30,000), so if you have relatively few possessions or if you don't own many expensive items, that may just be enough coverage for you. To be sure, though, you should take an inventory of your personal property--things can really add up. Estimate how much it would cost if you had to replace everything you owned in your apartment all at once.

As for liability protection, the standard coverage amount is usually around $100,000. The amount of liability coverage you should have depends on the assets you would like to protect (e.g., car, investments). Call your insurance agent for a quote--you'll be surprised at how inexpensive renters insurance can be.

It depends on several factors, including whether the home is your principal residence or takes some other form (such as a vacation home or investment property). If you owned and used the home as your principal residence for a total of two out of the five years before the sale (the two years do not have to be consecutive), you may be able to exclude from federal income tax up to $250,000 (up to $500,000 if you're married and file a joint return) of the capital gain on the sale of your home. You can use this exclusion only once every two years, and this exclusion does not apply to vacation homes and pure investment properties.

For example, Mr. and Mrs. Jones bought a home 20 years ago for $80,000. They have used it as their principal home ever since. This year, they sell the house for $765,000, realizing a capital gain of $613,000 ($765,000 selling price minus a $42,000 broker's fee, minus the original $80,000 purchase price, minus $30,000 worth of capital improvements they've made over the years). The Joneses, who file jointly, can exclude $500,000 of capital gain realized on the sale of their home. Thus, their tax on the sale is only $16,950 ($613,000 gain minus the $500,000 exemption multiplied by their 15 percent long-term capital gains tax rate).

What if you fail to meet the two-out-of-five-years requirement? Or what if you used the capital gain exclusion within the past two years with respect to a different principal residence? You may still qualify for a partial exemption, assuming that your home sale was due to a change in place of employment, health reasons, or certain other unforeseen circumstances.

You should also be aware that special rules might apply in the following cases:

• If you sell vacant land adjacent to your principal residence
• If your principal residence is owned by a trust
• If your principal residence contained a home office or was otherwise used partially for business purposes
• If you rented part of your principal residence to tenants
• If you owned your principal residence jointly with an unmarried taxpayer
• If you sell your principal residence within two years of your spouse's death

Note: Members of the uniformed services and foreign service personnel may elect to suspend the running of the 2-out-of-5-year requirement during any period of qualified official extended duty up to a maximum of 10 years.

Consult a tax professional for more details.

A standard HO-8 homeowners policy is designed to address the needs of people who have older homes with historic value. Although these policies cover the cost of standard repairs, they don't provide replacement cost coverage and--depending on your home--may not always be the best choice.

Several insurance companies specialize in homeowners policies for historic homes. These insurers can write a custom policy to suit your needs. Such a policy can include coverage limits that are greater than those offered by a standard policy. In addition, these policies generally offer the option of guaranteed replacement cost coverage. If you decide to go with an insurer that specializes in historic home coverage, you can expect a residential consultant or appraiser to visit your home and conduct a thorough inspection.

In some cases, historic district associations require that all repairs conform to their criteria for maintaining the historic integrity of your property. For example, you might have to replace the balusters on your damaged widow's walk with exact duplicates of the originals. In making such repairs, you may need the services of suppliers or artisans with special parts or skills. Because insurance companies that offer historic home coverage often have the appropriate contacts, they may be able to put you in touch with the people you'll need.

Historic home coverage policies may also offer features not included in a standard homeowners insurance policy. Often, there's little or no limitation on the additional living expenses they'll cover if you have to vacate your home while repairs are made. In addition, they'll frequently cover occurrences such as sewer backups that standard policies don't, and the coverage limits for personal property (e.g., jewelry or fine art) are sometimes substantially higher than with a standard homeowners policy. Of course, the cost of a specialized policy for a historic home is higher than that of a standard policy.

Years ago, the general rule of thumb was that you could afford a house that cost two and a half times your annual salary. Today, most people finance their home purchases. As a result, determining how much house you can afford generally equates to how large a mortgage you qualify for and how much of a down payment you will make.

To determine how large a mortgage you qualify for, lenders use formulas known as qualifying ratios. Generally, these qualifying ratios are based on your gross monthly income, your housing expenses, and your long-term debt. To qualify for a conventional mortgage, your housing expenses should generally not exceed 28 percent of your gross monthly income. Your monthly housing expenses include mortgage principal, interest, taxes, and insurance (often referred to as PITI). In addition, the Consumer Financial Protection Bureau's mortgage rules suggest that borrowers have a debt-to-income ratio that is less than or equal to 43 percent. That means that you should be spending no more than 43 percent of your gross monthly income on longer-term debt payments.

When shopping around for a mortgage, compare the mortgage rates and terms that various lenders offer, and then get preapproved or prequalified with the lender of your choice. That way, you'll know exactly how much you can afford before you begin searching for a house.

In the past, lenders traditionally required a down payment of at least 20% of the purchase price of a home. Today, many lenders offer loans with lower down payments. In addition, certain private and government entities have low down payment programs.

You may be able to get a Federal Housing Administration (FHA) mortgage with a down payment of as little as 3.5%. Qualification standards for FHA mortgages are sometimes less stringent than traditional mortgage loans and the terms of these mortgages are generally attractive, making them ideal for first-time homebuyers. Keep in mind, however, that FHA loans require borrowers with down payments of less than 20% to pay mortgage insurance premiums.

Department of Veterans Affairs (VA) mortgages are another low down payment option. VA mortgages are available to qualified veterans and their surviving spouses. VA mortgage terms are also generally very attractive, and in many cases, little or no down payment is required.

You may be able to obtain a conventional mortgage with a down payment of less than 20% with the help of private mortgage insurance (PMI). Low down payment mortgages are somewhat risky for lenders, because they believe you are more likely to default on a loan in which you have very little invested. For this reason, lenders generally require PMI if you are borrowing more than 80% of the value of the home you are purchasing (i.e., your down payment is less than 20%).

Points are costs that a lender charges when you take a loan on your home. One point equals 1 percent of the loan amount borrowed. If the points are charged for services that the lender provided in preparing or processing the loan, they are not deductible. However, if the lender charges the points as up-front interest and in return gives you a lower interest rate on your loan, the points may be deductible. It doesn't matter whether your lender calls the charge "points" or an "origination fee." If the charge represents up-front interest, it may be deductible.

Points paid on a refinanced loan in a given year cannot simply be deducted outright on your tax return. Instead, they must be amortized over the life of the loan. However, there is one exception. If part of the loan is used to make improvements to your primary residence, you can deduct that portion of the points allocable to the home improvements made.

For example, you take a cash-out refinance mortgage for $100,000 and pay two points ($2,000) as prepaid interest. Assume $90,000 is used to pay off the principal debt owed on the old mortgage, $4,000 is used to pay off bills, and $6,000 is used to put in a new kitchen. Since 6 percent ($100,000 divided by $6,000) is used for home improvements, $120 (6 percent of $2,000) may be deducted in the year the loan is taken. The remaining $1,880 in points must be deducted pro rata over the life of the loan.

Different rules apply if points were paid on a loan used to buy your primary residence, rather than to refinance it.

If you rent your principal residence to others for fewer than 15 days per year, any rental income you derive is not considered taxable income. However, if you rent your principal residence for fewer than 15 days per year, or if you do not rent your home at all, the only home-related expenses you may deduct are the following:

• Interest on loan(s) secured by the residence (i.e., mortgage interest), subject to certain limitations
• Property taxes
• Casualty losses

Maybe the home you're renting is a second home or vacation residence. If you rent a second residence for fewer than 15 days per year, that home will be considered a second home for tax purposes. As was the case with your principal residence, any rental income you receive will be exempt from federal income tax. Also, you may not deduct expenses related to the renting of the property. However, you will be allowed to deduct casualty losses, mortgage interest, and property taxes you pay on the home during the year, subject to the normal limitations on mortgage interest deductions on primary and second homes.

If you rent a second residence for 15 days or more per year, and your personal use of the property exceeds the greater of 14 days per year or 10 percent of the days rented, your residence will be considered a vacation home for tax purposes. All rental income you receive will be reportable. Along with the usual deductions for casualty losses, property taxes, and mortgage interest, you may be able to deduct expenses for insurance, repairs, utilities, and depreciation (under certain conditions).

Different tax rules will apply if your property is considered to be strictly rental property.

If you are a first-time homebuyer and don't have a lot of money for a down payment on a home, you may want to consider obtaining a mortgage through a government mortgage lending program such as those offered through the Federal Housing Administration (FHA) and the Department of Veterans Affairs, formerly known as the Veterans Administration (VA). Generally, these types of mortgage programs are an excellent choice for first-time homebuyers with moderate incomes, because the interest rates are set below current rates and little or no down payment is required. Consult your mortgage lender to see if you are eligible for either an FHA or VA mortgage.

In addition to government mortgage lending programs, many mortgage lenders offer special programs for first-time homebuyers that require little or no down payment. Shop around and compare the mortgage rates and terms that various lenders offer to find a mortgage that is geared toward first-time homebuyers.

Another option for individuals who have little or no down payment for a home is a rent with option to buy arrangement. A rent with option to buy arrangement allows you to rent a home for a certain period of time (usually three years) while you accumulate a down payment. At the end of the lease term, you have the option to purchase the home for a specified price. While you rent the home, part of each rent payment is credited toward the purchase price of the house, in effect creating a down payment.

You should definitely insure your new home during its construction. If you don't, you're exposing yourself to a great deal of risk if fire, theft, or another event damages or destroys your partially completed home.

One way to cover your new home during construction is by purchasing a standard homeowners policy. This will cover you for any damage to the building as it's being built and may provide some coverage for theft of building supplies (although the contractor's insurance should also cover this). A homeowners policy also provides liability coverage, which may come in handy if one of your friends trips during a tour of your dream house and decides to sue you. However, the policy will not cover your personal property until the building is secure or lockable. After construction reaches this point, you can add on coverage for your personal property.

Another option is to purchase a dwelling and fire policy. This type of policy covers damage to the physical structure but provides no theft coverage. A dwelling and fire policy may be an appropriate choice if you are living in your old house during construction, because the homeowners policy on that house would cover theft of items from the construction site. Dwelling and fire policies also provide liability coverage, just like a standard homeowners policy.

When the building is complete, you should re-evaluate your coverage. If you opted for dwelling and fire coverage, you'll need to purchase a full homeowners policy. If you bought standard homeowners insurance, make sure you have purchased an adequate amount, especially if you've made alterations to the original building plans by adding on a room or upgrading the building.

A reverse mortgage is a loan secured by the equity in your home. With a reverse mortgage, you borrow against the equity you have built up in your home using a mortgage loan. In return, the mortgage lender either gives you a lump sum of cash or pays you a predetermined monthly amount for a fixed number of years or until the house is sold. At the end of that time, you'll owe the mortgage lender the principal and interest due on the house. To repay the loan, you or your estate may have to sell the house or turn it over to the mortgage lender. It's known as a reverse mortgage because unlike a traditional mortgage, the principal balance of the loan gets larger over time, rather than smaller.

Reverse mortgages were developed to assist elderly citizens who own their own homes but need an additional source of income. They work best in situations where homeowners wish to stay in their homes until they die. If you are approaching retirement and are unable to sell your home, a reverse mortgage may be an option for you. However, it can limit your ability to move in the future, because you will need to repay the reverse mortgage from the sale proceeds. In addition, if you are unable to afford or qualify for a refinanced mortgage when the term of the reverse mortgage is up, you may be forced to sell your home. A reverse mortgage also lowers the value of your estate, because it reduces the equity you have built up in your home. This is a disadvantage if you were planning to leave your house as an inheritance for your family.

Typically, an in-law apartment is either attached to or built within your home. Determining how an in-law apartment will affect your homeowners insurance depends largely on your insurance company.

Generally, if the in-law apartment is considered to be a part of your primary dwelling, then your homeowners insurance policy will cover both the apartment structure and its contents. However, if your insurance company considers the apartment to be a separate dwelling, then your homeowners policy will still cover the structure itself but won't cover the contents of the apartment. In this case, the tenant would need to purchase a renters insurance policy to protect the contents of the apartment.

But what criteria does the insurance company use to determine if the apartment is a separate dwelling or a part of your home? That's entirely up to the company. In some cases, the presence of a private entrance marks the apartment as a separate unit. Other insurers are more liberal; the apartment may be considered a separate unit only if it has its own mailing address or utility hookups. Still others base the decision on who resides in the space--if it's a relative, the apartment may be considered part of your home; if not, the apartment is considered a separate dwelling.

Before you frame an outside entrance or install that whirlpool bath or even hire an architect to draw a plan, find out if your local zoning rules allow for in-law apartments. Check with your insurance agent to determine how your addition will be classified. If the apartment will be considered a separate dwelling, make sure the tenant will have renters insurance, even if the tenant's a relative. If the apartment will be considered part of your home, check your policy to make sure it'll cover the additional space and the contents.

Maybe. It depends on how many claims you've filed, and what you've done to reduce the risk of flood damage.

Under a pilot program established by the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004, individuals who own "severe repetitive loss properties" face flood insurance premium increases if they file numerous claims and have not taken steps to reduce flood risk.

A "severe repetitive loss property" is one for which four or more separate flood damage claims exceeding $5,000 have been made (with the cumulative amount of claims exceeding $20,000) or a property for which at least two claims have been made (with the cumulative amount of claims exceeding the value of the policy).

If your property meets this definition, you must accept flood loss mitigation assistance from your state and local governments in order to keep your flood insurance premium from increasing. This flood loss mitigation assistance includes measures such as the elevation of your property or the buy-out of your property. If you do not accept this assistance you could face premium increases as high as 150 percent.

You'll have to purchase a separate homeowners policy for your new home. The reason you can't just transfer your existing policy is that your new home is different from your old home, so your coverage needs will be different, as well. And since it is actually the building that's insured, the construction and age of your new home will affect the premium you pay. In addition, your mortgage lender will require you to carry a certain amount of homeowners insurance coverage on your new home. The required amount may be different from the amount you had to carry under your old policy.

Depending on where you're moving, you may be able to buy homeowners insurance for your new home from the same company that issued your old policy. If you're moving out of state, however, you may have to switch to a different insurance company. Check with your insurance agent if you're not sure. Either way, make sure you cancel the policy on your old home when the house is sold. You'll probably have to send the insurance company a letter stating that you want to cancel the old policy and when. But don't let your old policy lapse by simply not paying your premium. This could show up on your credit report and prevent you from getting affordable insurance (or any at all) on your new home.

If you're renting your home to others rather than living in it yourself, your homeowners policy will no longer offer you all the coverage you'll need. Although you'll still need to protect your home and other physical property, you'll also need liability coverage and protection against the loss of rental income.

Most commercial insurers offer policies specifically designed for rental properties, but variations abound, so you may want to shop around for the best coverage. Here's what to look for:

• Coverage for the physical structure against a wide variety of possible perils (e.g., fire, flood, storm)
• Coverage for any outbuilding, such as a garage or a shed
• Replacement cost coverage (preferable to coverage based on an actual cash value)
• Coverage for your own property (e.g., appliances, lawnmowers, snowblowers) left on the premises
• Liability protection for injuries to others, or damage to their property, that occur on your property
• Coverage for the medical expenses of others injured on your property
• Reimbursement for lost rental income if the loss is the result of a covered occurrence, such as a fire

Finally, be aware that you're generally not liable if something happens to your tenants' personal property (e.g., furniture, jewelry, antiques). Your tenants will need their own renters insurance to protect their property in the event of a fire, theft, or other loss.

Many homeowners policies will pay the cost of so-called additional living expenses, such as food, housing, and utility hookups, while you're waiting for your house to be rebuilt. But check your policy carefully to see if you have this coverage. If your policy contains a clause for additional living expenses, the amount of benefits is limited to a certain percentage of your total homeowners insurance coverage. A time limit may also be imposed on the coverage period for such living expenses. You may want to contact your insurer to find out what specific types of services it will and will not cover.

Different companies have different methods of paying out money to clients for additional living expenses. If you qualify, you may receive an initial payment right away, or you may have to wait for a reimbursement as part of your overall loss claim. Whatever method your insurer uses, be sure to keep all of your receipts. You may be ineligible to receive payment without them.

Yes, in most cases, but the coverage is limited under many homeowners insurance policies. Most policies specify one coverage limit for each item damaged or destroyed, and a separate limit for each incident that occurs on your premises. For example, $250 per item and $1,000 per incident are common coverage limits, though some policies may provide much higher limits. Many insurance companies will let you increase your landscaping coverage limits by buying an optional policy endorsement.

You're probably wondering exactly what landscaping coverage includes. A homeowners policy generally covers your plants, shrubs, trees, and lawns, but not mulch and supplies. And what about covered perils? Standard homeowners landscaping coverage provides protection against fire, lightning, explosion, riot or civil commotion, vandalism, criminal mischief, theft, and damage caused by automobiles or aircraft not owned or used by you. You're generally not covered for damage caused by insects or pests, wind, and other weather conditions, though policy endorsements may be available to fill these gaps in coverage.

In addition, your homeowners policy may cover the cost of removing fallen trees from your property after a storm (up to a specified limit). But this coverage may apply only under certain conditions and may be subject to a deductible.

What it would cost to buy your house and what it would cost to rebuild your house are probably two different figures. Your modest ranch-style home in the suburbs might cost only $175,000 to replace if it burned to the ground, but because of its location close to several high-tech employers, it might have a market value of $225,000. On the other hand, your two-family dwelling in the city might cost $225,000 to replace, but because it's in a neighborhood that's now in decline, the market value has dropped to $150,000.

Your goal with your homeowners insurance should be to provide you with enough funds to rebuild your home. This means that you'd only have to insure the ranch-style home in the suburbs for $175,000, but you'd want to insure the two-family home in the city for $225,000. The level of protection offered by your homeowners insurance should be tied to the replacement cost of the property and not to its market value, which may be affected by factors that have nothing to do with replacement cost. (Keep in mind that all other factors being equal, the market value of your property includes the land the dwelling is on. Since you wouldn't have to replace the land even if you have to rebuild the house, there's no need to insure the land.) Also, if you carry insufficient homeowners coverage, you may not receive the full amount you have your home insured for when you make a claim. For example, if the cost to replace your home is $175,000, yet it's insured for $131,250 (75% of the home's value) you may only receive 75% of the value of your claim, less any applicable deductible. So, you should periodically review the coverage on your home, because the cost to rebuild may increase if the costs of labor and materials rise.

Lenders will sometimes impose a penalty for early payoff or prepayment of a mortgage loan. Others will penalize you only if your payment exceeds a certain amount or occurs within a certain time period. Certain loans (i.e., fixed rate mortgages) are more likely to carry a prepayment penalty than others (i.e., adjustable rate mortgages). Federal credit union, Federal Housing Administration (FHA), and Veterans Administration (VA) mortgage loans can all be prepaid without penalty. Typically, you prepay a mortgage loan (that is, you send in more money than required) to reduce the amount of interest that is paid over the life of the loan, resulting in thousands of dollars in savings. To prepay your mortgage loan, you should read your mortgage contract or talk to your lender to clarify the terms of your mortgage loan and determine whether or not you will suffer a prepayment penalty. If your mortgage lender will not remove the prepayment penalty, you may be better off investing the extra sum elsewhere. It is important to note that if you do prepay your mortgage loan, it does not change your monthly obligation to your lender. Regardless of how much you prepay, you will be in default if you fail to make your minimum monthly payments.

It's likely that your insurance will cover the damage, and you should file a claim with your insurance company. Even though the tree was located on your neighbor's property, your property was affected, so your homeowners insurance should cover the damage.

But depending on the circumstances, that may not be the case. For instance, if the tree in your neighbor's yard has been dead for some time, and you've asked your neighbor before to cut it down, you may have some recourse against your neighbor's insurer. In this case, your neighbor knew about the problem and chose not to address it. Explain the circumstances to your insurer, and have correspondence or other records ready to back up your explanation.

Also, the outcome of a claim might depend on why the tree fell. If the tree fell during an event that is not covered by a standard homeowners policy (e.g., during a flood or an earthquake), the damage may not be covered at all.

Contact your insurance company to file a claim and to get more information.

Considering the potential damage that flooding can do to your home, you should seriously consider flood insurance. Flooding from a river (or any other source, such as melting snow, heavy rains, or inadequate drainage) is not covered under your homeowners insurance policy. To get coverage, you'll need to purchase a separate flood insurance policy.

Start with your insurance agent. Many companies that issue homeowners policies also issue flood insurance policies. Or, you can call the National Flood Insurance Program at (800) 621-3362 for a list of insurers that write these policies.

Keep in mind that if your home is located in a flood zone and you're obtaining a federally backed mortgage, your lender will require you to purchase flood insurance. Whether your property is located in a flood zone will be determined by special flood-zone maps prepared by the Federal Emergency Management Agency. If your property is located in a minimal-risk area, your lender won't require flood insurance, though you can certainly purchase it on your own.

Probably not. In general, taxes charged for local benefits and improvements that increase the value of the property are not deductible as real estate taxes. Examples of betterments include assessments for sidewalks, streets, water mains, sewer lines, and public parking facilities. Although you cannot deduct these betterment assessments on your income tax return, you can increase the basis of your property by the amount of the betterment. With an increased basis, your capital gain (if any) will be decreased, should you later sell your house.

However, if you are assessed a local benefit tax or assessment for a maintenance, repair, or interest charge related to a betterment, you may be able to deduct the repair assessment on your return. For example, if you are assessed a tax to repair an existing sidewalk, you may be able to deduct that amount on your return. If only a portion of the assessment is for maintenance or repair, you can deduct only that portion. Your real estate tax bill may provide a breakdown of the assessment charges.

In most cases, your homeowners insurance policy will cover this type of damage to both your dwelling and your personal property, but you'll have to check your policy to be sure. The answer will depend on what type of perils coverage you have.

There are several different homeowners forms or policies, and each provides different property coverage. An HO-3 form, the most common homeowners policy, provides open perils coverage and insures you against this type of damage. So too will an HO-2, or broad named perils form. Both insure your dwelling and possessions against damage from accidental water discharge from your plumbing or hot-water system. Your washing machine may be considered part of that system. However, if your coverage is provided by an HO-1 form, you'll be on your own. This coverage is limited to six named perils, and what you've experienced isn't one of them.

But just because you're covered for the damage doesn't mean that you won't have to shoulder any of the expense. Your homeowners insurance policy specifies a deductible that you're responsible for. What's more, you'll have to pay out of your own pocket for losses that exceed your policy's coverage limits. Most often, personal property damage is reimbursed at actual cash value, which is the amount needed to replace the property minus any depreciation. This means that what you get in reimbursement may not really be enough to replace the damaged goods at today's prices.

Your homeowners policy doesn't protect you from flooding caused by a backed-up sewer, but you can purchase optional coverage for that. Your policy also won't protect you from exterior floodwater damage or surface water (e.g., snow melt) damage. For that, you'd need separate flood insurance.

Most people face this question at some time in their lives. Buying a home is part of the American dream. It's also one of the biggest financial investments you'll ever make.

One of the main advantages of buying a home is that you build equity in your property. For example, if you paid rent at $1,000 per month for 10 years, you would have spent $120,000 on rent and have nothing to show for it. However, if you had purchased your home and made $1,000-per-month mortgage payments for 10 years, you would have paid off a sizable portion of your mortgage. And if you decided to sell your home, you might make a profit.

Before buying a house, remember that your lending institution will want proof that you have money saved for the down payment and closing costs. If your savings won't cover these costs, you should probably continue to rent for the short term while establishing an ambitious savings plan.

Even though buying allows you to accumulate a valuable asset, renting also has advantages. You may spend less time doing maintenance than if you owned the home, and you could relocate to another home more easily. In addition, you would probably pay less per month for rent than you would for a typical mortgage payment. This would leave you with more money to spend on whatever you choose.

Remember, it's not easy to buy and own a home. Many people continue to rent throughout their lives. But if you decide to buy a home, start saving now so that someday you will own the home of your dreams.

Points are costs that a lender charges you when you take out a loan on your home. One point equals 1 percent of the loan amount borrowed (e.g., 1.5 points on a $100,000 loan would equal $1,500). Generally, the more points that you pay up front, the lower the interest rate you will pay on your mortgage loan. This can save you thousands of dollars in interest over the course of the mortgage loan.

If you pay points up front, you want to make sure that you recover the cost while you are still living in your home. If you move before you recover the costs of the points, you really won't be saving any money. You can determine how many months it will take for you to recover the cost of the points by dividing the amount you pay for points by the amount you save on your mortgage loan. For example, if you pay $1,000 in points up front and you save $40 a month in interest, it will take you 25 months to recover the cost of the points (1,000 divided by 40 equals 25). If you plan on staying in your home for less than 25 months, you will lose money on the points that you paid up front.

Keep in mind that the cost of points is negotiable and is often split between the buyer and seller. Points may also be deductible on your income tax return.

While you should probably consider a variety of loan options to find the one that best accommodates your particular situation, VA home loans offer benefits that generally are not available from conventional lenders. Some of the potential benefits that may be available to qualified borrowers include:

• VA home loans may offer financing of up to 100% of the purchase price with no down payment required. Typically conventional loans require at least 5% of the purchase price as a downpayment.
• Private mortgage insurance is not required (eliminating insurance premiums that would otherwise be added to the monthly mortgage amount).
• Credit and debt ratio guidelines (used to help evaluate a loan application) are generally less stringent compared to typical conventional loan credit requirements.
• VA loan interest rates may be lower than conventional loan rates in the same region.
• VA loans are guaranteed by the federal government and are available through qualifying local banks and mortgage brokers.
• VA loans generally are limited to $417,000, but may be higher in certain regions of the country.
• Most VA loans are subject to a funding fee. The funding fee varies based a number of factors including the amount (if any) applied toward the downpayment and your military status.
• Loan closing costs and administrative charges may be "rolled" into the loan, reducing your up front costs to the borrower
• VA loans have no prepayment penalties and are typically assumable by a qualified buyer of your home.
• The VA offers personal loan servicing and financial counseling.

Finally, keep in mind that lenders act independently on most VA loan applications, so some variations in terms may exist from lender to lender. It may be worth your time to shop around and compare the interest rates, indexes, and closing costs of various lenders.

For more information about VA home loans, visit the U.S. Department of Veterans Affairs website at www.benefits.va.gov.

Mortgage refinancing refers to the process of taking out a new home mortgage and using some or all of the proceeds to pay off an existing mortgage on your home. The main purpose of refinancing is to obtain a lower interest rate or lower your monthly payments by extending the term of your loan. Remember that if you extend the term of the loan, you will reduce your monthly mortgage, but you will end up paying more total interest over the years.

If you do refinance your home mortgage, you want to make sure that your monthly savings from refinancing will pay back the costs that are associated with refinancing while you are still living in your home. If you move before your refinancing has paid for itself, you really won't be saving any money. You can determine how long it will take for you to pay off the refinancing by dividing the cost of refinancing (points, closing costs, and private mortgage insurance) by the amount you will save each month from refinancing. Alternatively, you can eliminate the problem if you can find a no-point, no-closing-cost mortgage.

Generally, there are two types of mortgage refinancing: no cash-out refinancing and cash-out refinancing. No cash-out refinancing occurs when the amount of the new loan does not exceed the mortgage debt that you currently owe. Typically, you can borrow up to 95 percent of your home's appraised value with this type of refinancing.

Cash-out refinancing occurs when you borrow more than you owe on your current mortgage. You are generally limited to borrowing no more than 75 to 80 percent of your home's appraised value with cash-out refinancing. You can use the excess proceeds in any way you wish. Most people use this type of refinancing to pay off other outstanding loans, since the interest rate they pay on the extra cash they borrow will usually be less than the interest rate on the debt that they pay off (e.g., car loans, credit cards). Also, mortgage interest is typically tax deductible, while consumer debt is not. This strategy is useful if you use it to reduce your debt payments and you do not start charging items on your credit card again.

If you are moving and trying to decide whether to rent out or sell your present home, consider two important factors:

• How your choice will affect your cash position
• How willing and able you are to manage a rental property

Are you buying another home? If so, you may need the proceeds from the sale of your present home to fund the purchase of your new one. If you anticipate that the sale might result in a loss, consider whether it would be better to rent out your present home, at least until the real estate market turns around. You may need to accept the loss to currently realize the cash that a sale now would bring. If the sale results in a capital gain, consider whether you will be able to exclude that gain from federal income taxation. (If you meet all of the requirements, you may exclude up to $250,000; up to $500,000 if you're married and file a joint return.) If you aren't able to exclude all or part of the capital gain, you may need to reserve a portion of the proceeds from the sale to cover the taxes due. Or you may need to defer the sale and rent out your home in the interim.

If you decide to rent out your present home, will your rental income cover the ongoing expenses associated with the property? Will it cover mortgage payments, property taxes, and insurance? If not, determine whether you can afford to cover the difference on an ongoing basis. Will the tenants be responsible for all utilities, or will you have to cover some of these expenses? Consider what your anticipated annual maintenance expenses on the property might be. Most importantly, if the property were vacant even for a brief period, think about whether you could cover these expenses without a steady stream of rental income.

If you decide to rent out your present home, you'll be a landlord. You'll have to decide whether to manage the property yourself or hire a local property management service. The decision may hinge on whether you are moving a few miles away or a few states away. Familiarize yourself with the various laws that govern landlord/tenant relations. You'll have to meet health and safety code requirements and perform maintenance and repairs on the property yourself, or hire others for these tasks.

Renting out your home can also have tax implications. For instance, if you rent your home temporarily, you may still qualify for the capital gain exclusion when you later sell your home, but that's not the case if your property is considered permanent rental property. Assuming you rent your home on a temporary basis for more than 15 days during the tax year, you'll have to declare the rent you collect as income. However, you can offset rental income with allowable interest and property tax deductions. To the extent that the rental income exceeds these otherwise allowable deductions, you can also claim rental deductions for maintenance, insurance, and depreciation. These expenses, though, are limited to the amount of rental income. Depreciation deductions, it should be noted, may impact the amount of capital gain that you can exclude from federal income taxation when you sell the property.

If you permanently convert your home to rental property, the tax treatment may be different. Before you make the decision to rent out your home, you may want to consult an accountant or other tax professional. If you have friends or colleagues who have rented out their homes, you might also ask them about their experiences as landlords.

The Tax Cuts and Jobs Act of 2017, suspended from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer's home that secures the loan.

Under the new law, for example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay personal expenses, such as credit card debts or college tuition, is not. As under prior law, the loan must be secured by the taxpayer's main home or second home (known as a qualified residence), not exceed the cost of the home and meet other requirements.

A home equity loan (often referred to as a second mortgage) is a loan for a fixed amount of money that must be repaid over a fixed term. Generally, a home equity loan: advances the full amount you borrow at the beginning of the loan's term, carries a fixed rate of interest, requires equal monthly payments that repay the loan (including the interest) in full over the specified term.

With a home equity line of credit (HELOC), you're approved for revolving credit up to a certain limit. Within the parameters of the loan agreement, you borrow (and pay for) only what you need, only when you need it. Generally, a HELOC: allows you to write a check or use a credit card against the available balance during a fixed time period known as the borrowing period, carries a variable interest rate based on a publicly available economic index plus the lender's margin, requires monthly payments that may vary in amount, based on changes in your outstanding balance and/or the prevailing interest rate.

While a home equity loan is no longer tax deductible unless it is used to buy, build or substantially improve your home, it still might offer some advantages as a way to help pay college tuition. First, home equity loans usually offer more favorable interest rates than traditional loans. In addition, they can serve as a quick/readily available source of funds when you need it.

Keep in mind, however, that because your home serves as collateral for a home equity loan, it puts your home at risk. In addition, home equity loans often require you to pay closing costs, points and other fees. As a result, before taking out a home equity loan to pay for your child's college tuition, you should shop around and compare this option with the cost of borrowing elsewhere (e.g., financial aid loan programs).

Note: Some HELOCs may cap the monthly payment amount that you are required to make, but not the interest adjustment. With these plans, it's important to note that payment caps can result in negative amortization during periods of rising interest rates. If your monthly payment would be less than the interest accrued that month, the unpaid interest would be added to you principal and your outstanding balance would actually increase, even though you continued to make your required monthly payments.

If you want to buy a home with your partner, you may be able to qualify for a larger mortgage than if one partner alone applied for the loan.

However, be aware that unmarried partners have some unique considerations that married couples don't have. The laws dealing with the distribution of property when a couple splits up or a partner dies are few and vague when the couple is not married. So it's crucial for unmarried partners to have a detailed written agreement regarding their respective ownership interests in the property and their intentions for distribution of the property if either partner should die or if the relationship ends. Both partners should also keep thorough and accurate records of their respective contributions.

You and your partner can own the property in one of many ways, including:

• Joint tenants with rights of survivorship
• Tenants in common
• Individually in one of your names
• In trust

Joint tenancy with rights of survivorship means that when one partner dies, the surviving partner automatically owns the entire property, bypassing the probate process. This way of owning property may make it more difficult to sell your share of the property without your partner's consent. However, it may also offer creditor protection because neither partner owns a separate share; instead, both own equal rights in the entire property.

As tenants in common, you and your partner each can leave your portion of the property to whomever you choose in your wills. Creditors of tenants in common may have an easier time attaching the property than if it were owned jointly with rights of survivorship.

You and your partner may decide that only one of you will own the property. However, if you choose individual ownership, beware. The person named on the deed will be able to sell the property without the consent or even the knowledge of the other partner.

You can also choose to own the property in trust, with the trust agreement spelling out the rights and obligations of each partner.

You'll want to get advice from an experienced attorney on all of the ownership options available to you and your partner.

First, look at your condo association's master insurance policy, which may provide a limited amount of coverage for all of the condos and common areas. Or, your neighbor's insurance may cover the damage that occurred in his or her unit. Keep in mind, however, that if these policies don't cover the damages, the owner of the damaged unit will look to your insurer to pick up the tab.

Of course, in the end, if your negligence caused the damage (e.g., you failed to properly maintain the pipes), the other insurers will likely seek repayment from your insurer for some or all of the money paid (a process known as subrogation).

If you took out a mortgage to purchase your home, you probably paid settlement costs in addition to the contract price. These costs generally include points, attorney's fees, recording fees, title search fees, appraisal fees, and other loan or document preparation and processing fees. The only settlement costs you can deduct are home mortgage interest and certain real estate taxes. You deduct them in the year you bought the home if you itemize your deductions. Certain settlement costs can be added to the basis of your home. Other settlement or closing costs, however, cannot be deducted or added to the basis.

If the loan was for the purchase of your primary residence, the points withheld from the loan proceeds will generally be deductible as up-front interest if you paid a down payment, escrow deposit, or earnest money equal to the charge for points. Generally, you can also deduct any points paid by the seller. Real estate taxes are usually divided so that you and the seller each pay taxes for the part of the property tax year that each owned the home. You can deduct the taxes you actually paid during the year. However, you cannot take a present deduction for taxes paid in escrow for a future tax bill.

Other closing costs that you paid are not deductible and must be added to the cost basis of your home. You can include in your basis the settlement fees and closing costs that you paid that are associated with buying your home. You cannot include in your basis the fees and costs associated with getting a mortgage loan.

Your state's Department of Motor Vehicles probably uses some kind of point system to rate its drivers. Each state has its own point system, but typically, numerical values are assigned to different types of driving violations. The more serious the violation, the higher the point value. For example, you might get only one point for a speeding ticket, but three or more points if you're convicted of drunk driving. The bottom line is that, as you accumulate points, your driving record gets worse in the eyes of both your state and the insurance industry. And that can mean higher auto insurance rates for you.

The purpose of these higher rates is not to punish you for an accident or other violation. Believe it or not, insurers want to charge premiums that are fair and appropriate. Since statistics show that people who've committed driving infractions are likely to do so again, it's only reasonable that your premium should go up after an infraction. How much it goes up usually depends on the insurer. An insurance company may use its own point system to calculate rate increases. Your insurer's point system probably resembles your state's point system--both assign you points based on the number and types of violations you commit. Your insurer then uses these points to apply surcharges to your policy, which drives up your rate.

Your insurer gets information on your driving record by checking with your state's Department of Motor Vehicles. There are certain times when you can bet that your insurer will run a check. For example, expect your driving record to be reviewed anytime you want to increase your coverage or make other changes to your policy. Of course, your record will also be checked when you first apply for coverage and when it comes time to renew your policy. Depending on how bad your record is, an insurer could even deny you coverage.

When you buy a home directly from the owner, also known as for sale by owner (FSBO), no real estate agent or seller's agent is involved. Rather, the buyer and the seller deal directly with each other. Generally, the process for buying a house that is FSBO is the same as buying a house with the assistance of a real estate agent. However, many home buyers are intimidated by the thought of going through the home-buying process without a real estate agent to provide forms, suggest financing, write the purchase and sale agreement, or negotiate the deal.

Keep in mind that this lack of broker representation can actually be an advantage for buyers. First, the price of the home is not artificially inflated to cover the cost of the agent's commission. Second, you deal directly with the seller instead of having to make an offer through the seller's agent.

If you are a veteran who served in active duty during or after World War II, you may be eligible for a VA mortgage. Before applying for a VA mortgage, your eligibility must be verified by the Department of Veterans Affairs, formerly known as the Veterans Administration. To obtain a VA certificate of eligibility, complete VA Form 26-1880, titled Request for Determination of Eligibility and Available Loan Entitlement, and submit it to the nearest VA regional office.

In addition to meeting the VA eligibility requirements, you must obtain a VA appraisal on the property you are purchasing. To obtain an appraisal, complete VA Form 26-1805, titled Request for Determination of Reasonable Value, and submit it to the local VA office. Once the appraisal has been completed and the appraiser's fee has been paid, a certificate of reasonable value will be issued.

VA mortgage terms are generally favorable when compared to other types of mortgages. However, some variations in terms may exist from lender to lender. It may be worth your time to shop around and compare the interest rates, indexes, and closing costs of various lenders.

Finally, keep in mind that although lenders act independently on most VA mortgage applications, some applications must be submitted to a VA office for approval. Once you fill out the application, your lender should notify you within 30 days as to whether your application and the amount of your loan have been approved.

If you are applying for a conventional mortgage and have a down payment of less than 20%, your lender may require you to have private mortgage insurance (PMI). Low down payment mortgages are somewhat risky for lenders, because they believe you are more likely to default on a loan in which you have very little invested. For this reason, lenders generally require PMI if you are borrowing more than 80% of the value of the home you are purchasing (i.e., your down payment is less than 20%).

If you are concerned about taking on PMI payments, keep in mind that you may not have to pay PMI forever. For loans originated after July 29, 1999, your lender is obligated to cancel your PMI when the principal balance on your loan is scheduled to reach 78% of the original value of your home or once you have reached the midpoint of your loan's amortization schedule, provided you have a good payment history. Or, you can petition your lender to remove the PMI if you have a good payment history and reach 20% equity in your home.

A home equity loan is a loan that is secured by your home. If you repay the loan as agreed, your lender will discharge the mortgage. If you do not repay the loan as agreed, your lender can foreclose on your home to satisfy the debt. Generally, the amount that you can borrow is limited to 80 percent of the equity in your home, although in some situations this amount may be higher. The actual amount of the loan will also depend on your income, credit history, and the market value of your home. The two distinct types of home equity loans are the home equity line of credit (HELOC) and the closed-end home equity loan, often referred to as a second mortgage.

A HELOC, which is the more popular loan, is structured as a revolving line of credit. You can borrow as much as you need, whenever you need it, by writing a check as long as your total borrowing does not exceed your credit limit. Because it is a line of credit, you make payments only on the amount you have actually borrowed, not the full amount available. Borrowers will usually set up a HELOC so that it is available for unexpected expenses. It may also be beneficial to use your home equity loan to purchase a car or pay your child's college tuition, since the interest is generally tax deductible.

A closed-end home equity loan, or second mortgage, is a loan for a fixed amount of money that must be repaid over a fixed term, just like your original mortgage. Borrowers typically use closed-end home equity loans to pay for a single large expense, such as a major home improvement or college tuition.

A fixed rate mortgage loan is a mortgage loan in which the interest rate remains the same from the day you take out the loan until the day you pay it off. Regardless of fluctuations in market interest rates, your interest rate never changes. Your payments remain steady, as well. The entire debt, including interest, is repaid in equal monthly installments. With an adjustable rate mortgage (ARM), your interest rate is initially lower than a fixed rate but then will be adjusted periodically to keep up with changes in interest rates. As your interest rate changes, the amount necessary to pay off your loan by the end of the term changes. Thus, your monthly payment amount is recalculated with each rate adjustment. There is typically an initial rate guarantee period, plus caps on how much your rate can increase in any year.

If you are conservative by nature, have a fixed income, or believe interest rates are rising, a fixed rate mortgage may be an appropriate mortgage for you. With a fixed rate mortgage, changes in the economy will not affect your loan. Your interest rate and payment amount stay the same until the mortgage is paid off. ARMs are by nature less predictable than fixed rate mortgages because the interest rate and payment amount can rise or fall, sometimes substantially. With an ARM, you trade the predictability of fixed interest and payments for the possibility of lower interest and payments in the future. If you will be staying in the house only for a few years, the lower initial rate of an ARM makes sense.

When you apply for homeowners insurance, an underwriter reviews your application. Part of this review involves examining any losses that have occurred while you have lived in your home. If your dog has bitten someone in the past and an insurance claim was filed, it doesn't necessarily mean you will have a hard time obtaining insurance. It depends on why the incident occurred, how the situation was handled, and what changes have been made to ensure the dog doesn't bite anyone again. Some of the questions an underwriter could ask are:

• What caused the dog to bite someone? Was the dog provoked, or did he or she attack for no reason?
• How serious was the injury?
• What is the breed of the dog?
• How old was the injured person?
• Has the dog bitten people before?
• Is the dog kept on a leash or otherwise secured?
• What steps have you taken to make sure the dog won't bite anyone again?

You should be able to obtain a homeowners policy or renew the one you currently have if the dog has bitten someone only once as a result of being provoked, is not a vicious animal, is not on the insurance company's list of prohibited breeds, and is kept secured in the yard. If your dog has bitten people several times and is not well secured, you will probably have trouble getting insurance.

Your insurance agent can be your advocate in a case like this. He or she has an established relationship with underwriters at several different insurance companies. The agent can answer an underwriter's questions, guide you through any changes you need to make, and then help you obtain the insurance you need.

The master policy that your condo association maintains is designed to cover the common areas you share with other tenants. It may also cover the structure of your individual unit as it was originally built, and perhaps the fixtures within your unit. To cover your personal property and get comprehensive protection, though, you should purchase a special form of homeowners insurance designed to meet the needs of condo and co-op owners. This is known as an HO-6 policy.

An HO-6 policy will cover your personal property in the event of losses caused by certain perils named in the policy. Typically, these perils include fire, smoke, explosion, vandalism, theft, riot, lightning, storm, broken glass, aircraft, and volcanic eruption. To cover additional perils, you may want to purchase separate protection.

Under your condo association's guidelines, certain items may be treated as your insurance responsibility and will not be covered by the master policy. Along with the named perils coverage for your personal property, your HO-6 policy will probably provide insurance protection for additions and other improvements you make to your property, as well as private balconies, private entranceways, and private garages.

Like a standard homeowners policy, your HO-6 policy should also provide liability coverage. So, if you're found liable for bodily injuries to others and/or damage to their property, your HO-6 policy will generally cover you up to certain limits.