Omaha Mortgage Planner Terry Williams

Six Ways to Enjoy Life As You Know and Stretch Your Dollar in the Process

2012-02-20T07:50:00.000-08:00

Watch on your mobile device >>

Who doesn’t want to save a little extra money? Exactly. So one of the best things you can do is to live life as you normally would but in a way that allows your pockets to fatten up a bit in the process. If you’re someone that HAS to have a $6 gourmet cup of coffee made by the cute blonde at the national coffee chain on the way to work – think again. Join a coffee club, get a coffeemaker (usually free with most clubs you join) and learn to make the perfect cup o’ joe yourself.

Here are six more things you can change in your life so that you can actually enjoy life fuller and longer in the end – with more cash in hand. Doesn’t everybody want to retire in style? And if you’ve got more on your plate (and mind) than retirement, living frugally for a few weeks (months? years?) can definitely pave the way for a great retirement someday.

Free Entertainment

City and county governments are always trying to fill up their calendars with lots of great things to do for their citizens. Enjoy anything from outdoor events like seasonal concerts, holiday parades, and heritage celebration to the local library, community recreation centers or fruit/veggie picking. The possibilities are endless when you factor in each holiday throughout the year (Halloween, St. Pat’s Day, Easter, or National Apple Pie Day to name a few). Most of these events cost little to nothing and are usually free for kids. You can visit parks, see fireworks, enjoy natural beauty in the area, go on a picnic or attend charity-based events while getting in some exercise too.

Use It or Lose It

We’re not talking about exercise here, rather your old stuff. You won’t believe how much you can make (saving with a little discipline) by selling off things you don’t need. This can be anything from old computers and electronics, furniture, magazines and books or toys. If you have an old vehicle you have sitting around thinking you will “get around to fixing it up someday” JUNK it and save hundreds (more?) for a rainy day. So many people are obsessed with owning stuff that they tend to have so much of it that they don’t even need! If you have duplicates of one thing, over and over again – get rid of the extras.

Get Couponing

There is a two-sided message here. 1. Get Couponing and 2. Get Coupons! By “get couponing” we mean that you ought to understand how it works, respect the process and get going on it. The latter is simple – just go out and start grabbing coupons for anything and everything you see that you would normally spend money on. Long before the TV show Extreme Couponing came out, people were clipping coupons to save hundreds upon hundreds of dollars each month. Do it just a little bit to get a feel for it and then dig in! Don’t forget the library has a million of them (at least) on hand.

Plan Meals Ahead – Way Ahead

The whole idea of fast food is not necessarily that food is available fast but also that you didn’t have time (or make time) to plan a meal so now you have to think fast. The amount of money Americans end up wasting on take-out (and dine-in) is astronomical and with just a few simple changes you can be way ahead of the game both food-wise and financially. Put meals on paper, plan them out so that one blends into the other*, shop ahead of time. It’s as simple as that to save hundreds of dollars if not more – each month.

*If you bake a chicken on Monday, make chicken fajitas with the leftovers on Tuesday.

Reduce, Reuse, Recycle

We’re not talking about washing out the empty milk jugs and chucking them in the recycle bin (although in the long run that IS saving the planet some cash) but instead, investing in used furniture pieces and then refurbishing them. It’s amazing how nice an old dresser can look after it’s been sanded and stained. Paint some old dining chairs and you’ve just saved yourself a TON (depending on where you might shop for regular price chairs). This even works great for those really expensive kids’ toys that have been around for generations and will be around for generations more. Why waste if you won’t know the difference once you personalize the secondhand stuff?

Savor the Stuff You Already Have

Too many people buy stuff and then forget they even own it. Savor what you have and forego the next trip out shopping. If you have old books, let go of spending $5, $6 sometimes more on a magazine and go for the classics. In fact, visit your local library (yes, we keep mentioning the library) and enjoy all the freebies there – books, CDs, or DVDs. Depending on where you live, a lot of libraries even offer a ton of activities for kids or enrichment classes for everyone else.
~
Try it for one month – and write back to us. We’ll post it on the blog to share how everyone’s doing. Trust me, it will be a ton of fun!

Eight Reasons Why Mint.com Is a Great Catch

2012-02-01T11:35:00.000-08:00

Watch on your mobile device >>

Anytime a new relationship is on the horizon, who doesn’t want to be absolutely sure that they’ve got a great catch? Well let me tell you, it’s no different when it comes to finding someone (or something) that will manage all of your finances. Mint.com is exactly that – an agent (well, a website) that will handle the most important aspects of your financial life and keep it all organized in one neat little package. But why choose this one as opposed to myriad other options out there? Here’s a list of qualities you’ll absolutely love about this new love in my life and I’m sure that once you explore it a little bit, you’ll feel the same way as I do.

Total Monogamous Relationship

One password, one log in and you get everything you want and need rolled into one, perfect little website. What’s more, it’s not complicated or complex. Once you decide to get involved with Mint, you won’t want to stray in other directions.

Likes To Travel

Mint’s easy mobile connectivity allows you to access all your financial information in one spot, from one spot – your phone – no matter where you are. With optimization for smart phone technology, being a modern player is definitely not lost on this newbie.

Smart AND Organized

All information about what you have to spend, what you’re saving for later, notes for your car and home plus anything (financial) in between – is easily organized and at your fingertips. You’ll get reminders and alerts to make sure you stay in line with your goals and budget.

Team Player

Mint.com is up-to-date and cares about making your life easier. They’ve teamed up with Turbo Tax to make tax time a breeze. The site works with your bank information, mortgage lender and investment firms to streamline everything, making life easier (and wonderful) for you.

Young and Fresh

You’ll see innovative concepts and streamlined processes that clearly make it obvious that this is a young and totally current player in the game. Clean lines, no heavy baggage, simple and easy handling – you’ll wish that all your relationships were as easy as this one. The administrators make sure that everything you do is über-easy and completely user-friendly.

Wants a Future With You

Not only do you get fantastic tools to help you through today, mint.com has the provision of some great budget and planning tools to help you move successfully into the future. As you work toward achieving your goals, the site has ample positive traits that help your success right along, just like you’d expect from any good, devoted partner.

Low-Maintenance

You won’t believe how little it will cost to keep this relationship in a happy place! In fact, becoming friends with Mint is completely free. Not only that, you aren’t paying anything for added safety in security and you know you’re in good hands because you can trust them.

Invested in Your Personal Growth

Browse through the tons of really valuable advice and content that you get through the Mint community page and you’ll realize that there is genuine support toward your personal growth. Since there are so many articles available about personal finance, money and financial topics that will help you get and stay successful, there’s one more reason that this relationship is definitely a keeper!
~
Don’t take my word for it, check it out for yourself. https://www.mint.com/

Lenders Watching Over Borrowers With Big Brother Eyes?

2012-01-16T13:43:00.000-08:00

Watch on your mobile device >>

Even though we have been seeing very low interest rates for some time now, it does not mean that lenders haven’t been putting potential homeowners through hoops of fire. The many hang-ups being reported throughout the country on various tiny little nuances is a list that keeps growing longer. For example, a borrower in Michigan was recently forced to prove his motivation for selling his home and wanting to buy in Florida. The lender was finally satisfied after receiving a photograph of the sub-zero thermostat sent by the borrower, demonstrating the desire to move somewhere warmer.

The point is that just when you think lenders are going to be reasonable again, they raise the bar on the seemingly ridiculous requirements in order to borrow. You cannot really blame them though, given the intense mortgage meltdown crisis that finally brought all “good things” crashing down in 2007. But how far can we expect them to go?

Prying Eyes Provides Lenders With Transparent Access to Almost Everything

You may have heard the company name CoreLogic, its services have traditionally been to provide lenders with a consolidated version of all credit reports from the three main agencies. But there is a new product available through the company that is going to change the face of lending practices across the board. The CoreScore credit report will include a far more detailed glimpse into the lives of those wanting to borrow to purchase a home. Though the company is currently working with FICO to develop the exact formula by which consumers’ data will be measured and quantified for consumers’ sake, it is already available to lenders. Once there is a formula in place consumers will be able to access the report online without any charge. The report is available now by contacting the company directly and sharing proof of identity, including name, social security number, date of birth and addresses.

How This Will Impact Borrowers Looking for a New Mortgage

Most people know that when a credit report is pulled and viewed by a potential lender, the information contained on the report usually includes any lending history – such as previous loans on a home, vehicle loans, credit card accounts and other forms of revolving credit and student loan history as well. In addition to that, bankruptcies and settlements on debt are also included on the report and each time a request is sent to the credit reporting agencies, the inquiry shows up on the report.

With the new CoreScore credit report there will be a wider scope of information available for review. Housing payment history for those who have rented in the past will appear on the report, including any missed payments regardless of whether they are disputed or a matter of tenant negligence. Eviction records, property tax liens and also homeownership fee payment history will be available for lenders to review in detail. All this shares a very broad perspective on the potential lender’s financial responsibility level in things that go beyond the traditional credit report. Any applications for loans that go against paychecks plus child support and other court judgments will also be included on the report. One way that could potentially hurt otherwise viable applicants is the capability for lenders to see the value of real estate property currently owned – providing them an avenue to raise interest rates if values are lower than the borrowed amount.

Since most of this information stems of publicly available records, there is a higher probability of inaccuracy however consumers will be able to provide explanation for items on the report. Still, the information is pulled and ready for lenders review as early as three weeks from the date of a new transaction – as much as two months faster than traditional credit bureau reporting lead times. Boasting a current database of 1 billion records that cover virtually the entire US population, CoreLogic is two steps ahead. It seems this type of credit reporting could become the norm for lending practices as we progress further into the New Year and beyond but it is important for consumers to understand their rights. Here is more information about this product, directly from the company’s website.
~
The main thing to keep in mind is that like with any other negative data on a credit report, the potential for a less-than-optimal interest rate exists. The best way to combat that is to request a copy of the report at regular intervals and periodically review it for any erroneous information. Once corrected on the report itself you should also provide your loan officer with a detailed explanation for any misrepresented items on the report. And now that you know somebody’s watching you, you will surely be careful with every move you make!

Tax Advantages of Homeownership – Popular Tax Incentives

2011-12-30T13:43:00.000-08:00

Watch on your mobile device >>

Have you recently bought a home? Do you know that you have now entered a world of tax advantages exclusive to only homeowners? The feeling is great that Uncle Sam rewards those that choose to purchase their homestead and of course as your Realtor, I want to make sure you know all there is to know about what you stand to gain from this exclusive status of homeowner.

Though the best person to offer advice and consultation would be a CPA or a certified tax consultant, the information below will help you to plan and be prepared for what lies ahead during tax season.

Purchase of a New Home

If you have purchased a new home in 2011 – then this year when you file your taxes you can deduct three things; any mortgage points that were paid as part of the purchase, prepaid mortgage interest and pro-rated property taxes.

There are a few conditions on the mortgage point deduction, like the fact that the points must be for the primary residence of the homeowners. Also, the amount of money spent by the homeowner toward the purchase of the home at closing needs to be greater than the amount that is charged in points. Since lenders sometimes inflate the loan amount to accommodate the points, it is important to be aware before filing taxes since in that scenario the points amount would not be tax deductible.

Depending on what day you close on your home, you will most likely be charged pre-paid interest on your loan and that amount will be deductible. For example, a home that closes on the tenth day of the month will have twenty days of prepaid interest, all deductible when you file your taxes the following year.

In the same way, the amount of property taxes that make up for the time you will be taking possession of the home might have been covered in the previous property tax payment made by the seller. If that happened the amount owed by you would have been charged as part of your closing costs – a deductible amount.

Refinancing An Existing Home

Mortgage debt is broken down into two types; home acquisition debt and home equity debt. As the name suggests, home acquisition debt is the amount you paid to purchase your home. During a refinance, however, your new loan amount that is utilized to pay off your previous mortgage is considered home acquisition debt with anything above and beyond that amount being qualified as home equity debt. Interest accrued in both types of mortgage debt is tax deductible, however home equity debt has a tax deduction ceiling of $100,000.

Yearly Tax Breaks for Homeowners

Each year, until you are paying interest on your home mortgage, you will be eligible for a tax deduction on up to $1,000,000 of mortgage debt. This can be debt you have taken on for the purpose of acquiring a new primary residence, to build or renovate an existing property as well as a second home you may have.

Home Equity Debt Interest Tax Advantage

If you use the debt acquired through your home equity to improve upon your primary residence (no limit) or for any other reason (limit of $100,000) it is possible that the interest on that loan could be tax deductible. This is an ideal scenario for homeowners with some equity to borrow against that equity and pay off high-interest credit cards or vehicle loans – debt that carries interest that cannot be deducted.

Tax Exclusions on Forgiven Debt or Alternatives to Foreclosure

If you are able to secure a mortgage workout for your primary residence or if you are a homeowner who has received debt forgiveness, you may qualify for federal income tax exclusion on that forgiveness.

Energy Conversation Tax Incentives

With a growing emphasis on green living and energy conservation, there are a number of tax incentives offered to homeowners in exchange for demonstrated energy saving measures taken in the home.
~
In terms of buying and selling homes, there is always the opportunity to donate items from your home to charitable organizations – all tax deductible of course. There are myriad tax advantages of homeownership and after additional research, chances are you may find more nuances that could suit your own situation and maybe even provide a greater benefit than the ones listed here.

Five Priceless Holiday Gifts You Can’t Afford Not to Give This Season

2011-12-15T11:02:00.000-08:00

Watch on your mobile device >>

Well folks, we did it! We made it through 2011 and we are on our way to bigger, brighter and better things to come, come 2012! It has been my sincerest of pleasures to have been with you along the way – whether to provide a helping hand in your real estate endeavors, assist you with mortgage and finance planning or just plain be there when you needed me.

To all my friends, colleagues, clients and family – here’s to another wonderful year!

Since the relationships in our lives are among the priceless aspects of our lives – I thought I’d leave you with a list of five priceless holiday gifts this season. Be generous. Liberally give of these gifts. For as they say, what you give will likely come back to you in volumes!

From my family to yours – Wishing You a Very, Merry Christmas and Happy Holiday Season!

The Gift Of Knowledge

There is nothing more precious than providing someone you love or care about with the lifelong ability to get up, stand up and be something. Education allows us to do anything we can set our minds to do and it is the consistent reasons for many of the world’s great people!

The Gift Of Memories

The hustle and bustle of our lives as they get busier by the minute has slowed down the amount of time we actually spend on the relationships that matter. Giving the gift of memories is a lasting pleasure that will always be with us and future generations. Take time to read a book with a child or elderly parent. Walk through the park, hand in hand, and talk about how things are going. Share an ice cream cone in the middle of winter. Anything goes.

The Gift Of Love

We take so much for granted and love is definitely one of those things. To share and express and declare our love, whether through a simple hug or a monumental form of expression – the gift received of knowing you are loved is absolutely one of the most priceless and timeless gifts ever to be given.

The Gift Of Faith

Sharing your belief in someone, their ability to be who they are and offering the strength of knowing that they are surrounding by support and encouragement is second to none. Who doesn’t need to know that they are valued and trusted and revered? And who won’t remember that gift for a lifetime?

The Gift Of Warmth

Unemployment lines, colder winter season, harsher economic times – all are good reasons to be concerned with the warmth of anyone who doesn’t have the peace and comfort of a roof over their head. How about consider donating to homeless shelters? Volunteering to assist those who are having a very difficult time keeping warm this season is one of the most selfless and wonderful acts of giving there is. And you will walk away feeling warm yourself too!

Managing Holiday Finances So Things Stay Within Reason During the Season

2011-12-02T11:03:00.000-08:00

Watch on your mobile device >>

Why is it that ordinary, everyday stuff that we see 11 months of the year and don’t need to have – all of a sudden become THE hot ticket item during the holidays and we now HAVE to have it? Have you noticed how during the holidays that electronics, new gadgets, fancy toys and big-ticket items just seem to beckon us and persuade us that life can’t go on without them? You know the items. Big screen TVs, the latest video game boxes, and smart phones that are smarter than most computers and more. One of this year’s hot ones is the iPad2 (is it because Steve Jobs passed on and now everyone wants a piece of him? Nope.) It’s the holidays.

Unfortunately, for many Americans, this impulse can and is very dangerous because they simply cannot afford these items. Yet they continue to rack up their credit cards, put things on layaway, or spend irresponsibly without considering where the bills will come from the following season.

Here are some tips to help you avoid all that and stay in the black this holiday season. It’s not as hard as it sounds and can be achieved with some basic acts of self-control.

How To Prevent Going Into the Red In the First Place

The single easiest way to prevent heavy indebtedness at the end of year, is to manage your finances throughout the rest of the year. Chipping away at a larger expense is far easier if done in installments and before heading toward the next holidays – you need to make sure that the previous holidays (and anything else outstanding) is paid off or begun to be paid off first.

Pay yourself first each month. After listing all expenses that are unavoidable, including savings, examine if you are left with any room to breathe. Begin a holiday shopping fund and build it throughout the year, but do not take on any more debt and do not deviate from your plan.

If You Are In the Red, What to Do Next

Don’t overdo the gifts this year. Bake cookies, wrap them up nicely and write a beautiful hand-written letter telling the person receiving the gift what you appreciate about him or her. Donate your time to a charity in someone’s honor. Or give to the poor in their name. Make a coupon book for each month of the coming year – in which you offer your services and special treats such as “good for one massage” or “get out of cooking dinner today”.

Ways To Get Through the Holidays and Stay in the Red

The big “B” word usually does it for responsible citizens that don’t go underwater during the holiday season. Budgeting your holiday expenses is a key step in making sure that you don’t overspend. However, unless you set a specific budget and then stick to it, you may as well forget it.

Remember that the ultimate meaning of your gift(s) is not the material itself but rather the thoughtfulness. Grandma was right – it’s the thought that counts, not the number of dollar bills you shelled out at the register.

Using creativity to make gifts that involve your own personal touch is far more endearing than any store-bought item. A handmade item that your loved one will keep close to heart for years will likely cost less money but also shows that your time spent on the gift means you were generous of your own time in the process, something more and more rare these days.

Center the holidays on family, traditions and activities that bring the two together. Your loved ones should be able to remember the gift you gave them and if you bring out a homemade board game that has personalized touches involving the whole family – then they will surely remember that for years.
~
Many Americans tell themselves they won’t overspend past a certain amount, but then when it comes down to the big Black Friday sale or the sales leading up to Christmas or Hanukkah, they break down. With just a bit of careful planning and a lot of self-control – you can and will get through the holidays without swimming in a sea of debt by the time the New Year rolls around.

New Changes to the HARP Loan Program Means More People Getting Much-Needed Help

2011-11-16T14:10:00.000-08:00

Watch on your mobile device >>

The announcement made recently by the Federal Housing Finance Agency about proposed changes to the Home Affordable Refinance Program (HARP) could mean that many more homeowners will get much-needed assistance during this difficult economic time. Homeowners that are underwater have traditionally turned to HARP loans to help them refinance their homes, being able to keep them rather than losing them to foreclosure. Here are the main differences between the old and the new programs and how they will potentially affect homeowners going through times of strife.

No More Glass Ceiling for HARP

With the old program there was a limit to how much borrowers could borrow with respect to the home’s loan to value. This posed a problem for many people that owed far more on the home than it was valued – given the steep decline in housing values during the past two or more years.

New changes to the program will allow homeowners to refinance no matter how foregone the situation is with respect to more money owed on a property than its market value. The elimination of the 125 LTV ceiling for fixed-rate Fannie Mae or Freddie Mac backed mortgages is by far the most impactful proposed change to the program. This change will quite possibly help millions of people avoid undergoing foreclosure.

Fewer Fees or Better Yet, No Fees For Some

As per the current HARP loan process, risk-based fees are assessed and applied to loans to protect the lender. Considering borrowers’ credit profile, the lower the credit scores, the higher loan to value and that translates to greater risk to the lender. Fees that are traditionally associated with this risk are a huge burden for buyers.

With the expected new HARP guidelines there will be no more risk-based fees for homeowners that refinance their home into short-term mortgages and fewer fees for others.

No Longer A Need For a Property Appraisal

The cost of getting an appraisal done on a home can get quite expensive and adds up when you factor in all the other costs of getting into a new home. Most home purchases entail having an appraisal done on the home – at the buyer’s expense.

The changes that are looking to be implemented soon for people seeking assistance through HARP will include eliminating the requirement of a new property appraisal. The only thing that buyers need to be wary of is that there must be a reputable AVM estimate in lieu of the appraisal.

The Absence of Warranties That Put Lenders In a Stronghold
Lenders are at a huge risk when borrowers default on their loans and as a protective measure Fannie Mae and Freddie Mac guarantee those loans but not without a long list of warranties that protect the creditor. At present, refinance loans that have these warranties or stipulations on them cause lenders to comb through each application very carefully before considering an approval.

With the proposed changes taking place, the warranties will be waived, reducing secondary exposure to lenders of buying back the loan in case of default or even indication of default. The change will make it far easier for homeowners to obtain the refinance loan they seek to help get them out from underwater.

More Time For Homeowners to Get Afloat

The HARP loan program began in April of 2009 and after an extension in March of this year (2011) the deadline was extended to June 30, 2012.

According to the list of projected enhancements to the program, the program’s deadline will be extended to December 31, 2013 – giving more homeowners more time to avail this opportunity.

~
There are a few important things to mention regarding the upcoming announcement expected on Tuesday November 15th. First, not only does the HARP loan apply only to homeowners that have a mortgage owned by Freddie Mac or Fannie Mae, the mortgage being refinanced must have been obtained on or before May 31, 2009. Second, this applies only to homeowners who have not previously refinanced their home.

It is also important to note that these are projected changes – and they can change at any time contingent upon policy at Fannie Mae and Freddie Mac.

A Guide to the Smart Divorce: Ensuring Your Finances Are Not Ruined In the Process

2011-10-31T14:49:00.000-07:00

Watch on your mobile device >>

Divorce is probably one of the most difficult experiences to endure – right up there with death and taxes. But it doesn’t have to be that way. In fact, many couples that decide to call it quits make the conscious decision to do it smartly, resulting in better financial health all around.

At a time when everyone involved, especially the couple, is going through the extremely painful experience of splitting up an entire life as they know it – the last thing that may be on their minds is to smartly manage the financial aspect of their lives. But without proper preparation the consequences can be dire, having lasting negative impact on the parties and of course their children.

You Can Never Be Too Prepared

As emotionally draining as divorce is for most people going through it, it is critical to remain as functional as possible and to make decisions with a clear mind. There are hundreds of areas that need attention and often they are overlooked in the painful whirlwind of divorce proceedings, post-divorce emotional downfalls and the obvious re-establishment process.

Couples typically have their eyes on the key aspects of divorce settlement; the house, the car(s), pets, custody of any children and major assets. But when you delve in deeper into each, there are myriad angles through which things must be considered.

Going Through Each Item, One By One

Follow the checklists linked below to help guide you through each item needing to be done. There are lists that guide you as to the steps to take prior to initiating a divorce. Some of the things on this include listing all current debt, identifying the contents in safety deposit boxes or creating your own savings account.

The checklist of items to take care of when initiating a divorce includes things like deciding which parent will take the child tax exemptions and revoking any power of attorney documents that authorize your spouse to legally act on your behalf.

After the divorce is final, it is important to do things like change insurance beneficiary information if applicable, and change your name on all accounts. There are other vital things to take care of, also mentioned here.

We’ve provided a comprehensive list of documents that you need to prepare in connection with the divorce or of things that are affected by your divorce. The obvious ones are birth and marriage certificates plus not-so-common documents are included as well.

Once you have successfully obtained your divorce there will be some other areas where you will need to report your name change. Some of them can involve long processes, such as passports or a will on file with your attorney.

The checklists are linked here.

How You Handle It Now Will Affect Your Finances Later

Make sure to cancel any joint credit accounts and charge cards, remove one party from applicable debts/liabilities unless they are legally dissolved and equally split up plus also sell the house or get any refinancing done prior to divorce. This will ensure a smoother transition in the end when it is often difficult to communicate with your former spouse after divorce proceedings are complete.

All too often couples going through the difficult time of divorce fail to realize the importance of being financially savvy and making decisions that help everyone overall. Any oversights prior, during and after the process only lead to regretful situations that cannot be rectified after the fact. In my experience over the years, I have often dealt with people who neglected to attend to important financial obligations during the divorce. An example of this is failing to separate a car loan. The result can be very damaging if there is one responsible party suffering the irresponsible person’s management of his/her payments.

Another very interesting and little known fact about divorce when it comes to property ownership – is that unless both parties agree, a refinance cannot take place on a home. Because the child support order is a lien on the property, you need the ex-spouse to sign the subordination. As with everything else mentioned here and on the corresponding checklists – preparedness can and does help you avoid some of the financial pitfalls of divorce. You just have to be savvy enough to know what you need to do and do it before it’s too late.

Last but not least – ALWAYS CONSULT WITH AN ATTORNEY!

Read the full eight page document here.

Images from: http://www.freedigitalphotos.net/images/view_photog.php?photogid=2125

11 Reasons Why A Mortgage Application Might Be Rejected

2011-10-19T12:58:00.000-07:00

Watch on your mobile device >>

Credit Scores

With the heavy regulations and guidelines placed on lenders these days, they are extremely careful about approving loans for those people with borderline credit ratings. It is very important for a buyer to know and understand their credit rating prior to applying for a mortgage. The minimum requirement for an FHA loan is a FICO score of at least 620 with the minimum 3.5% down payment for the application to even be accepted by the lender. Conventional loans have an even greater minimum credit score requirement. If your credit suffers from some damage, be sure to actively repair it before applying for a mortgage so that the chances of approval are greater.

Delinquent Credit Obligations

Anytime a borrower has late payments showing up on his or her credit report, where they have paid their bills 30, 60, 90, 120 and sometimes even 150 or more days late, it creates delinquent credit obligations. With a frequent occurrence of delinquent credit obligations the person’s credit scores are severely damaged and mortgage options become highly limited. There is some room if this is something that has occurred in the past. Recent occurrences hurt credit scores the most but even then there may be some lending options for those borrowers. Underwriters are very wary of a pattern of bills being paid in a delinquent manner.

Bankruptcy Previously Filed

Depending on when the bankruptcy was filed, it can hurt a homebuyer in that it is a clear indication of a borrower’s lack of responsibility and ability to manage his or her own finances. Most lenders are not concerned with bankruptcies that occurred five to seven years ago if a borrower has re-established credit..

Previous Foreclosure

For homeowners who have not been able to maintain their mortgage payments on a previously-owned property, the chance of being approved for another loan will not come so easily. Understandably, mortgage consultants are extremely wary of those people who have previously foreclosed on a home. That is not to say that it would be entirely impossible to obtain a new loan. In some cases where there was a demonstrated hardship that has been overcome, borrowers may be able to obtain a loan – however not without proof of financial stability and viability.

Loan To Value – Appraised Value Versus Amount Owed Is Too High

Loan to value is the equation that depicts the amount owed on a home versus the value of the property, the higher the loan-to-value, the greater the risk to the lender. The typical FHA maximum loan-to-value for home purchases is 96.5%. However for a FHA guaranteed refinance, the ratio is either 85% or 97.75%. The typical conventional loan-to-value guideline dictates a value of above 80% and requires mortgage insurance or a 2nd mortgage. Most lenders will not go above 95% loan to value for conventional loans plus the lower the credit score the lower the loan to value restrictions.

Debt ratios – Too Much Debt Versus Income

The amount you earn versus the amount you owe and the corresponding ratio is called the income-to-debt ratio. The standard expectation practiced by banks is that the amount owed should be no more than approximately 45% percent of total gross income. The types of debt they take into consideration in this case are student or personal loans, credit card debt or other monthly financial obligations such as car payments. You can use this calculator to figure out your debt to income ratio and whether you need to work on it prior to applying for a mortgage.

Unstable Work History

Lenders need to be able to verify income that they can count on. If you have an unstable income history that is not verifiable or consists of several short-lived durations, it demonstrates the inability to maintain long-term employment. The mortgage loan officer will be looking for demonstrated reliability when it comes to making payments month after month.

Funds To Close – Not Enough Documented Funds

If an applicant does not have enough funds on hand to close on the property, it raises a red flag for lenders. In addition to a down payment, you will need funds to cover a lending fee, appraisal fee, closing costs, earnest money and documentation and/or processing fees.

Tax Returns – People Have Outside Businesses That Lose Money

In light of the recent tightening of lending practices, increased scrutiny and intense attention to detail during the mortgage application process – lenders are now requiring tax transcripts to be obtained directly through the IRS. This corroborates that the buyer is being truthful and that the tax documents provided are consistent with those obtained from the IRS.

Owning Too Many Properties

The liability of owning one or more properties can lead up to a significant amount of risk for lenders and end up being too close for comfort. Unless there is a sizable amount of income that demonstrates the ability to maintain the properties, most mortgage underwriters would rather avoid dealing with the risks at hand of engaging with multi-property owners.

Insufficient Funds – Overdraft Charges On Bank Statement

It goes without saying that evidence of insufficient funds would turn away a mortgage loan consultant because it clearly shows the lack of responsibility on the part of the applicant. Frequent overdraft charges is yet another serious delinquency that would scare away any creditor, let alone one considering lending such a large amount for a home purchase.

Once-In-a-Lifetime Mortgage Interest Rates You Can’t Afford to Miss!

2011-10-04T12:12:00.000-07:00

Watch on your mobile device >>

First, we need to understand exactly what is happening in the mortgage lending industry – and then we’ll tackle why it is going on. So many real estate professionals, homeowners, investors and business-savvy individuals are dumbfounded at the historically low level of mortgage interest rates available on the market today. We are talking about rates that have not dipped this low since the 1950s!

What’s Going On In the Mortgage Industry?

What types of rates are we seeing in the market today? Well, for starters, the 15-year fixed rate loans that many savvy homeowners of existing homes are tapping into for refinances are yielding incredible rates as low as the low 3’s. Thirty-year fixed rate mortgages are available to qualified buyers at rates that are in the low 4’s. Depending on the amount of money put down on the property, income and credit status plus other factors that lenders are cracking down on, the rates can fluctuate up or down. There is no way to tell whether this decline in rates will continue or whether as we dip into yet another recession we witness even more volatility in the market, but there certainly is speculation.

Why Is All This Happening?

As the economy continues to alarmingly dwindle in both the US market and Europe, US Treasury bond yields remained low resulting in a decline in mortgage rates for two weeks in a row. Regardless of the low rates however, in light of the economic downturn, the number of new home purchases is dismal. The majority of loans being taken out tapping into the historic rates has been refinance applications; as much as one fifth.

Your Last Chance to Refinance

If you are currently in a home, this may be your last chance to refinance while getting such incredible rates on your mortgage. As the mortgage industry continues to tighten its belt and implement stricter guidelines to approve applications, it is essential for you to meet with a mortgage professional to ascertain whether refinancing your existing mortgage is an option for you. It can result in savings as much as about $1,800 each year on extra finance charges.

Potential Homebuyers and Investors Have It Made

This could not be a better time to invest in a new home, whether as your primary residence or as an investment property. With housing prices as low as they are coupled with the unprecedented low interest rates, this is a buyer’s or investors golden opportunity. As anyone in the real estate industry knows, just a few years after such a bust – things usually do stabilize and when they stabilize property values will jump back in the right direction. The best part of this scenario is that the interest rates left behind and locked in will be the incredibly low rates we are seeing today.

Things Are Looking Up

Anyway you look at it, as long as you can endure the sometimes grueling and often difficult mortgage application process these days, it is definitely worth it. There was a 21% increase in new home sales from August 2011 versus August 2010, marking a notable and promising positive trend. Clearly the outlook is slowly going in the right direction.

~
At the end of the day, you have to give something to get something and despite the growing concerns over our economic outlook both in the US and in Europe, home sales are happening and people are able to avail the amazing opportunity that is presenting itself in light of these historically low mortgage interest rates. At the very least, every homeowner should visit a mortgage professional to learn what, if any, options there are in their particular situation with which they can potentially come out on top through this whole episode.

Thanks to http://www.freedigitalphotos.net/images/view_photog.php?photogid=721 for the free digital images.

Self-Employment Second Jobs Are Becoming More and More Mainstream for Many Americans

2011-09-19T07:15:00.000-07:00

Watch on your mobile device >>

Just a few days ago when President Obama addressed Congress with his aggressive $450 billion plan to improve the jobs outlook in America the feeling was upbeat despite bipartisan push and pull that typically occurs on such occasions. Surprisingly, the general consensus is a positive one and that is a good thing for most Americans who are struggling to get by in this economy.

But like so many other proposed bills coming from the White House, no one knows the extent of which the plan, if approved, will be implemented – and how soon. So in the meantime, we will just have to keep on keeping on and get by in any way we can. And one of the age-old traditions of dealing with it when the day job just isn’t cutting it is moonlighting.

Overcoming Financial Hurdles By Moonlighting

There is a new breed of moonlighting these days, though, that looks further into the future for those embarking on new endeavors to stay financially afloat throughout this challenging time. Now more than ever, people are starting up their own businesses, independent consultant work and other entrepreneurial enterprises. In fact, only two days ago if you were to search the word “moonpreneurs” on Google, you would have found nothing – but after this article appeared on DailyFinance.com, there seems to be a lot of buzz about it. Moonlighting entrepreneurs -- or aptly coined “moonpreneurs” are people interesting in pursuing their own long-term interest to pump up the cash flow as a means to supplement their existing jobs.

Freelancing Picks Up Speed

Just ten years ago, though it was very much there, the company Elance was a barely-known enterprise. Now there are over a half-million contractors registered on the site, working for companies and individuals also registered on the site. In the past decade, people looking for avenues of extra income, globally, have found innumerable success through this online project and jobs portal.

Independent consultancy is also picking up in industries ranging from finance to fitness, organizational planning to catering – you name it – cater to a carefully built clientele; one that works well with smaller businesses or individuals.

How Does One Go About Becoming a “Moonpreneur”?

Depending on your talents, there are myriad ways to approach your part-time self-employment. There is a plethora of areas that many people are tapping into ranging from freelance writing, editing and translation to web development and graphic design. Legal consultancy and financial planning are also areas that work well under the freelance model. The benefit of pursuing a business in these disciplines is that they have the potential to grow independent of your day job and they can ultimately provide a fair amount of stand-alone income. Second jobs are not entirely taken on by a lot of people for the sake of financial peace of mind – they are also sometimes a way to practice a hobby or do something that they love. Excellent examples are comedians like Dan Nainan, artists, musicians – and the possibilities are limitless.

~
The concept that touches people from all backgrounds is highlighted in the DailyFinance.com article that mentions engineer-turned-comedian Daniel Nainan who moonlights as a comedian to supplement the income from his day job. Nainan says, "The average American who works full-time watches something like 30 hours of television per week. Cut back on television and partying and you'll find the time to spend on a second job."

With some careful planning, diligence and dedication – and of course a skills set that is marketable, you can succeed at building your own secondary stream of income to help get you through these strained financial times. Who knows where things will lead in the future?

If You Want a Piece of Cake, Go to a Bakery – NOT a Mortgage Lender

2011-08-31T06:41:00.000-07:00

Watch on your mobile device >>

Let’s face it folks, buying a home (however perfect a time it is to be doing that nowadays) is NOT a simple process. In fact, unless you’re completely straight as an arrow and have absolutely nothing spectacular or noteworthy about your life and financial existence, maybe – just maybe – you may be able to get off easily. But for the rest of us, we usually have a fair amount of explaining to do.

Mortgage Consultants Are Paid Well

Well, that’s just a guess really but here’s how I see it: they get paid 10% to do paperwork and 90% to ask questions. Seriously. Maybe the job title ought to have the word “detective” in there somewhere. They will ask you if you were the one who got that teaching degree that you “say” will be your source of income in the coming years. They will want to know why there was a sudden surge of cash deposits in your account (I guess saying you got a cash bonus from the boss lady may not sit too well with them). Your motivation to buy a new home will be questioned. I had one client living in a cold area and wanting to move to a warmer climate who was asked by the mortgage people what his motivation was for moving. He took a picture of his car’s thermometer showing sub-zero temperatures – and they accepted it! You might even be asked for DNA samples.

Ok, so I’m exaggerating a bit here, but you get the idea. The point is that mortgage consultants will review and comb through every little detail that they feel pertains to your ability (or inability) to pay off their loan. And they should! We don’t need more foreclosures bogging down our economy. Let them do all the detective work they need.

Lining Up Your Ducks In a Row Will Ensure You Win the Game

What can you do to head off some of the questions you may get asked? Easy – be prepared for anything and everything and have ample supporting documentation to corroborate what you are stating. Make sure you have all your paperwork ready, down payment funds secured and in one place, where they can easily be traced back to their original (and legitimate) source. Try to anticipate any idiosyncratic questions you may get from the lender, based on your application and/or circumstances. One particular area that causes a lot of grief for applicants of a mortgage is the unexpected outcome of an appraisal that yields a home value far less than the sellers or buyers anticipated. This is especially difficult during refinance application processes. By having a Comparative Market Analysis done in advance, for instance, you can remain on top of the game by knowing what to expect before it occurs.

A Few Important Things to Keep in Mind:

DON’T TAKE IT PERSONALLY – STAY REALISTIC

If you are asked for clarification on something that may seem obvious to you, relax and comply. The lender is looking to loan a huge sum of money and needs to be sure you are credit-worthy in every sense of the word. Be realistic of your expectations of the process.

BE READY TO SHOW STEADY EMPLOYMENT

Nowadays it is imperative to have at least two years of gainful employment demonstrating your ability to pay the mortgage on time and regularly but also the sustainability of your profession and job in particular. Huge variances in income over the course the past two years does not demonstrate the ability to consistently pay on a mortgage.

HAVE TWO YEARS OF TAX RETURNS ON HAND (W2s TOO)

You will need to show that Uncle Sam gets his cut each year – for at least two years. Tax returns are just another way to strengthen your case and support your income as reported on the mortgage application.

ESTABLISH A SOLID TRACK RECORD SHOWING PAST RESIDENCE

Lenders are increasingly finding it important to show a proven residence history where the buyer either rented for at least two years or lived in one location for that long. Someone in the military, for instance, may not be treated the same way as a regular citizen looking to establish long-term residence in a locale.

REMAIN TRANSPARENT AND TRUTHFUL

If you have large deposits that are unaccounted for – you will obviously raise flags. To keep things simple, be prepared to answer questions about your finances. Large balances on revolving credit should be explained if they occurred due to a particularly difficult financial time.
~
Does the thought of all this make you nervous? Are you one of those potential homeowners ready for a mortgage but are scared of the fire you might have to walk on to get to the other side? If you feel you might be a complex case, or even if you just want the good doctor on your side of the table, contact the Mortgage Doctor for some insight on your financial and mortgage health.

Remember, there is nothing more solid and more empowering than buying and owning your own home and nothing more freeing than to be able to refinance and reduce your payments. I’m having fun by exaggerating the process but the point is that as long as you are prepared for whatever comes your way and you realize that it’s all just a process, most of you WILL come out on top and succeed.

How to Cook Grilled Tuna

2011-08-11T12:02:00.000-07:00

Watch on your mobile device >>

The best way to serve Fresh Tuna is as rare as you can stand it! Ever wonder why there are so many sushi bars across America now?

Being Mid-westerners, we are more comfortable with seared tuna. So sear it in a pan, or on a grill – just don’t cook fresh tuna past the ‘medium’ mark – just like Nebraska ribeye steak.

The method is simple: Season, Lubricate, and then Sear.

Seasoning: simply use salt & pepper, or go where you heart takes you. Got a favorite seasoning salt? It will do just fine. Kick it up with some red pepper, and add some garlic and onion – chopped, powdered – whatever. Just be reasonable.

Marinades are excellent, too; think Teriyaki, or with chopped onion and garlic (and herbs, if you like) in olive oil.

Just remember, that using seasonings or marinades that you already have in the kitchen simply makes life easier.

Lubricate: the easiest way is to spray with Pam, or similar. It’s great to brush with olive oil, but do that before seasoning – that way the spices will stay on the fish.

Sear: Pre-heat your grill or sauté pan. You want it HOT – but only cook for 1-2 minutes per side.

Always an option: a Teriyaki marinade, with a side of soy sauce and Wasabi (Japanese horseradish) is a great way to eat fresh grilled tuna – sliced is nice.
--- ---- -- -- - ---

Stop in at either fish market: 18th & Leavenworth, plus 119th & Pacific.

Also, we’d love to see you at both of our restaurants: Shucks (inside the west Omaha fish market)

NEW additional SHUCKS Fish House location: 168th & Center (Shops of Legacy)

Plus try Bailey’s Breakfast & Lunch; next to Bronco’s, 120th & Pacific.

Five Hot Investments To Consider That Would Yield High Returns Despite a Government Default

2011-07-29T11:09:00.000-07:00

Watch on your mobile device >>

It could happen. The US could default on its debts. Don’t laugh, because it could very well become a reality – something that more and more financial experts are starting to speculate on. As we approach the new deadline of August 2nd set by U.S. Secretary Tim Geithner to raise the debt ceiling, in case of a default the Uncle Sam would most likely be handled like any other bad boy on the debt block. They’d suffer the same reduced credit ratings as the average consumer but of course on a major, major scale. But the bigger question that looms in the air is what happens to the rest of us if the country’s financial outlook ends up hanging really low in the shadow of a US default.

We’ve all seen what happened with the bailout and how that maneuver backfired – but what about this: what if, just what if the US does end up defaulting on its debts the way a large part of the Auto Industry did? Well, I’ve got a few suggestions. Here are some ways to invest where you could still manage to yield decent returns. Government default or not. Here they are, in no particular order:

Silver

Tried and true, you can’t go wrong with good old silver. The main reason that silver is a safe investment choice for many is that there is a reasonably high demand for the precious metal and it is fairly easy to obtain, being relatively affordable. Ounce for ounce, silver is significantly more affordable than gold at about forty dollars each ounce but since trading generally takes place on a smaller scale, it’s doable.

Gold

For millennia gold has been a solid investment, anyway you look at it. For the sheer reason that its price continuously rises year over year. One of the reasons that gold is a good investment choice is because we simply don’t have endless supply of the in-demand precious metal. That alone is reason enough for its price to continue to spike – even double in a reasonably short time.

Foreign Currency

Investing in a foreign currency fund is one way to earn good money and fast. The protection received from operating within the boundaries of a fund are insurmountable since they offer the knowledge and expertise of those managing the fund while also significantly reducing the risks involved if one is not well-versed in this market. Since the foreign currency market is so fast-paced, it’s wise to also collaborate with a broker so you can get real time and up-to-date information.

Funds from Canada

Staying in North America but investing in another country is not such a bad idea when you consider the alternatives. With a bustling economy that is expected to rise, any investment made into Canada is likely to yield solid returns.

High Dividend Stocks

Companies with very solid earnings work well for private investors because they almost always end up paying high dividends. Knowing that these companies will mostly likely not default, gives investors peace of mind and protection. With strong returns as high as over five and a half percent (AT&T), it’s a safe bet that these companies will maintain their obligations.
~
Keep in mind that the suggestions above do not promise huge returns and I wouldn’t expect them to be super cheap either but the main thing is that they will most likely hold their value. The nice thing about these investments is that anyone can tap into them. With more and more investors unwilling to maintain the status quo as far as their portfolios, there’s good cause for concern and preparation in case the US debt ceiling is reached come August 2nd. This wouldn’t be the first time but when it happened in 1995, no specific measures were taken to adjust the debt ceiling until the following season the next year. If history repeats itself this year, who knows if we can rely on the same actions by Congress or whether we’ll actually need to resort to buying silver, gold or foreign currency.

Five Ways To Spend Less, Get More For Your Buck And Do It In Less Time

2011-07-14T15:04:00.000-07:00

Watch on your mobile device >>

Tax Appeals – What Do You Have To Lose?

Think you may be paying too much property tax? Chances are that if you feel your property taxes are way too high, in fact higher than they should be, you can get it rectified. Here’s what you need to do: file a tax appeal. Once the county assessor makes a determination that your home has been over valued according to other homes in the area, he or she will reduce the assessment significantly. You can expect to see as much as almost a twenty percent reduction in your property taxes.

Want To Rent Jet Skies Rather Than Pay Exorbitant Rates On Vacation Accommodations?

A great way to beef up your wallet while you’re on vacation is to carefully plan your accommodations well in advance. Many families opt to stay in rental properties that are privately owned and rented out during most months of the year. Though it can be vastly more expensive to rent furnished homes or condos in some areas like coastal regions, especially during peak summer months – the real savings surface with just a little savvy and time-sensitive tweaks.

If You Know What You’re Doing – Do It Yourself!

Why hire expensive contractors to do the work around your house (and outside) if you can manage it yourself? The amount of money saved can add up to more than enough to go on a vacation to rest those tired, achy muscles. But the charm in doing something to your own home is unparalleled. The key is to be sure that you are qualified to do the job you’re taking on. If that’s set, YOU’RE all set.

Some Pay Way, Way Less (Car Insurance)

One of those regular expenses we will always have to pay is car insurance and nothing hurts more than to dish out more cash than you need to. All it takes is a phone call, some investigative work and a close look at your circumstances. Surprisingly, some areas of the country – and even some areas within a particular region or state have hugely varying rates. If you are spending time in two or more different places during the year, have crossed a certain age, or if your travel mileage and usage has significantly reduced – you may be eligible for deep discounts or reductions in premium. It doesn’t hurt to ask.

Ask And You Shall Receive

It’s a novel concept but it DOES work. Just think of the myriad discounts you can get when you ask if they have any promotions, discounts, specials or affiliation advantages? Another great way to save some extra cash is to negotiate with your cell phone company. Again, you’ll never know what that salesperson may or may not be able to do unless you ask them. Online stock trading can be done with less if you call and ask them for a discount. Hotels can upgrade you to a better room, just for being a frequent flyer member of a partner airline. The possibilities (and savings) are endless!
~
All it takes is a little innovation, some drive and the ability to get up and do what needs to be done when it needs doing – and you can easily walk away with thousands (or more) of savings every year. Do you have any great money saving tips? Post a comment below. We’d love to get in on the fun.

Seven Ways A Home Remodeling Job Can Take a Turn For the Worst

2011-06-30T14:56:00.000-07:00

Watch on your mobile device >>

Unless you’re a “Do-It-Yourself” guru chances are that, like most people, when it comes to a remodeling project for your home you are going to have to rely on the services of a professional. We’re here to tell you that it is not as simple as picking up the phone, inviting someone over to do the work and “voila!” everything’s perfect. In fact, if you are not careful there are major repercussions of a bad remodeling job that can take years and thousands of dollars to recuperate. Here are seven things that wreak havoc – and if avoided can mean a successful renovation project in your home.

Choosing the Wrong General Contractor

This is the single biggest mistake committed by those looking to save some money, want to speed up the process or simply don’t know any better. Ill-informed homeowners who are hasty in selecting a GC run the risk and often suffer major consequences after having chosen someone who isn’t properly licensed, has a bad history of performance, lacks experience or is unscrupulous.

Before hiring a GC make sure you check them out, trust them and feel comfortable with them.

Not Being Precise in Specifications

Unless the job is extremely simple, there will be intricate details to iron out before beginning the project. For the GC to provide an accurate quote on their services, they will need a clear picture of exactly what is expected of them. A common mistake made by property owners is to allow the contract to be written in basic terms. This leaves a lot of guesswork and gray area – plus consequently a lot of leeway for the contractor to decide what and how the work will be performed.

Account for every last detail on the contract, in advance.

Revolving Door Plans
Unless plans are outlined in advance in a clear-cut manner that leaves no room for major blunders, there is always the potential of major mess-ups. One surefire way to confuse the GC and cause a lot of damage (both monetary, time and the relationship with the contractor) is to constantly change plans.

Carefully consider what you want done, plan it thoroughly in advance and stick to the plan.

Underestimating the Costs

One of the easiest ways to ensure a renovation project “goes under” is to miscalculate the amount of money it will cost to have everything in the plan completed. Underestimating costs leads to an unending cycle of trying to keep up and it can ultimately end up in total project breakdown. If there is not enough money to complete a job for which the costs were not accurately assessed, it can mean unfinished projects that sit there for weeks or months till funds can be generated.

Thoroughly research how much everything will cost; get multiple quotes on service, materials and labor.

Losing Focus

Not keeping your eye on the tasks at hand that were established to begin with is one of the best ways to let things wander out of control and end up in a whirlwind of unfinished projects that have little to no direction. An example of losing focus is if the original project is to replace kitchen appliances and install backsplash tiling and halfway through the project the homeowner decides to change the countertops too. Had this been determined in advance, the GC would most likely have removed the old counter tops, made new assessments and measurements regarding the backsplash and then proceed. The wasted time, money and energy that would go into changing plans in the middle would be significant.

Know what you want to have renovated, plan it in advance and don’t deviate from the project.

Forgoing Quality for Savings

To put it simply, if you are cheap you will end up with cheap results. A lot of homeowners make the mistake of skimping out on quality to save a few dollars but in the long run it ends up costing them a lot more. Whether it means having to redo the same renovations later after they don’t last long enough or less-than-perfect results, using cheap materials or a bad contractor is a major mistake that many people make when remodeling their home.

Check with your GC, research the varying levels of quality available for materials – and buy the best quality you can afford.

Ignoring Things Below the Surface

Cosmetics and aesthetics are indeed a huge part of renovations but too often that is the only thing that property owners and bad contractors worry about. By not looking beyond what is visible and ignoring the important foundations of the project, the risk of breakdown are imminent. Not only does this translate to a huge waste of money if and when the project needs to be repaired or redone, but also the functionality of the remodel is impaired.

Ensure that all aspects of the project are performed using top quality workmanship, materials and specs.
~
There is a lot of information on the Internet, in home improvement department stores and through quality contractors. A great way to avoid a lot of mishaps is to use known vendors that have long-standing relationships with your local Realtor.

How NOT To Save Your Hard-Earned Money, By Wasting It Away on Useless Stuff

2011-06-09T12:38:00.000-07:00

Watch on your mobile device >>

It’s typical to hear of all the ways one can save. Let’s have some fun this time and look at some ways NOT to save. Yes, with our economy the way it has been lately, maybe this isn’t the smartest of approaches to dealing with our current financial woes – but hey, there is something to be said about having a good time, right? So if you can ignore the potential negative and long-term impact of constantly and regularly socking away unnecessary expenditures on things that you can do without, have fun!

Contribute to the View That America’s the World’s Fattest Nation

That’s right. The rest of the world looks at us, wide with wonder, at just how BIG we are. And why should we stop there? By constantly eating out, not only will you be able to throw away all that extra cash of yours for no reason at all, but you’d also be upholding the supersize reputation that we as a nation have worked so hard to build.
Amount Wasted Each Year: About $2500

Put Up a Health Front – So What If It’s Not Real?

So if you eat out, you have to at least pretend that you work out, right? What better way to throw away perfectly good large bills than to get a gym membership that you don’t plan on using? The monthly fees will automatically be deducted so you can sit back and worry not about your cash going to the “right” hands.
Amount Drained: As much as $900 each year

Spend Lots on Lotteries – Wishing For Those Pipe Dreams to Come True

If Bob from upstate won $360 million on the Super Lotto, you can too. Never mind the months and years of lottery tickets you’ll need to buy for half a chance at even winning a thousand bucks, let alone a cool million. The point is, why not blow several hundreds bucks each year on this endeavor so at least people know you have pipe dreams? What’s the most that can happen? By the time you’re balding and can barely drive you just might be able to afford that Porsche after all. Not too bad.
Total Frivolous Spending: $500-$1000 a year

Worry More About Social Symbolism Rather Than Actual Social Status

Go ahead and smoke cigarettes like a chimney – they’re cool right? And do it while sipping on the most expensive of gourmet coffees that cost more than most people’s lunch costs. Though some people will be able to see through the superficial-ness of the whole thing, the rest will think you’re a cool cat.
Money That You Don’t End Up Saving: A whole HECK of a lot

Convenience is Cool But [Spending] Cash Is King

Why bother driving down two extra blocks when you can access your bank account through some other, out-of-state bank and be done with it in ten minutes less? Another great way to sock away those unnecessary fees is by using ATMs that are not of your own bank or the ones that are set up in a way that make you spend $5 for each transaction, within the transaction.
How This Stacks Up: $500 per year

Pay For More Than What You Need

There are couples with no kids who have bought mini-vans, couch potatoes with memberships at the ‘Y’ and non-sports junkies who hold season tickets for the best seats in the house. Bundled communication packages are the same too where you pay for your Internet, cable TV and phone all in one but you don’t really need all that they give you. Why not join the bandwagon, go ahead and purchase those all-important but totally useless packages that yield you a whole lot more bang for your buck but for stuff that you just have no need for.
If you go for the communication package, Expected Out-of-Pocket: Over $1200 or more annually

Find Stuff To Fill Up Your Storage Space With

Having a ton of stuff is a good thing. No one likes to see empty storage spaces – those look best with boxes and boxes of piled up stuff that you’ve bought on impulse and used maybe once or twice in this lifetime. What kind of stuff are we talking about here? That super duper blender that looked five times bigger on TV than in real life but once you got it at home you realized all you can really blend in it is maybe a HALF a smoothie. The pair of must-have shoes that “instantly” make you 6-feet tall without looking like you’re wearing heels. The magic piece of cloth that fixes everything and anything and absorbs 20 gallons of water in 20 seconds. (Okay, slight exaggeration there). ALL home-based exercise equipment. But the point is that if you really want to waste good money, this is the best way to do it. Engage in a phone call with one of those “operators standing by”, rattle off your credit card number and they’ll even charge you for shipping and handling too.
Total Amount In the Hole: Limitless
~
So, while most people who make the effort NOT to waste extra cash here and there are able to manage summer vacations, buying that second car or extra computer, or putting a way a chunk of funds for their kids’ college, you will be the better for it – because you had a good time. Never mind that you wasted thousands in the process. It goes with the territory, right?

Now, seriously though, for tips on how to not waste money and beat inflation, look for future blog posts where I’ll tackle the subject again and provide some great (realistic) ideas on how to be more consumer-savvy and cost-conscious.

Classic Marinated Grilled Salmon

2011-06-01T06:42:00.000-07:00

Watch on your mobile device >>

Don't worry mortgage rates are still attractive. But it is summer and I wanted to have some fun. This week I met up with Greg Lindberg the owner and a great chef at Absolutely Fresh Seafood Company and Shucks Fish House Oyster Bar and we did a cooking video and posted the instructions below so you can enjoy it this summer. Check out the video if you want to know how a pro grills salmon.

Classic Marinated Grilled Salmon
by Greg Lindberg

4 fresh salmon fillets
SPTT (salt & pepper to taste)
Spray oil (Pam, or similar brand)

PRE-HEAT GRILL, and clean that bad boy!

Spray salmon fillets liberally with oil. Sprinkle on salt and pepper.
Place on hot grill, and cook for about 4 minutes per side. If the salmon has skin on it, it’s easiest to place the skin side UP first; when you flip it, the skin will stick to the grill, and come right off the fish for you automatically.

Enjoy with a Pinot Noir, rice and vegetable.

Stop in at either fish market: 18th & Leavenworth 345-5057, plus 119th & Pacific 827-4376.

Also, we’d love to see you at both of our seafood restaurants: Shucks (inside the west Omaha fish market) 827-4376. Shucks Fish House & Oyster Bar is open 7 days a week. 11-9 Mon-Thurs, and 11-10 Fri/Sat. Sunday is 12:00 – 8:00

NEW additional SHUCKS Fish House location:
168th & Center (Shops of Legacy)

and Bailey’s Breakfast & Lunch; next to Bronco’s, 120th & Pacific 932-5577. Open 7 days a week, 7:00 a.m. to 2:00 p.m. Breakfast all day.

Four Important [New] Guidelines That Mean Stricter Criteria For Mortgage Applicants

2011-05-16T11:58:00.000-07:00

Watch On Your Mobile Device >>

At a time when almost everyone is trying to stay afloat in the sea of homeownership, there are a lot of factors that continue to anchor these consumers to a place that hinders their progression forward. In some cases, people have lost their homes because of a job relocation, or worse, being laid off. In others, the value of the home they may have purchased several years ago, has dropped considerably. No matter what the reasons are, despite a difficult period for the real estate industry in general, potential and existing homeowners are still in the market to buy or move up to a better home.

Getting a mortgage is simply not as easy as it was just a few years ago. Now, Fannie Mae and Freddie Mac, the two main organizations that back mortgages issued by banks, have tightened the belt on some mortgage-application guidelines.

The Number Of Unsold Condos Can’t Exceed One-Third

No matter how well qualified you may be for a loan, until and unless seventy percent of the condominiums in the community you are considering to make your own are sold, the banks simply will not issue a mortgage. This wasn’t always the case; prior to the housing bust, in 2009 the same maximum was more like fifty percent. The reason for this is that banks do not want to assume the risk of properties in communities where a sizable number of units have not yet sold and still belong to the developer or building community.

Income-Debt Ratio Can’t Be Too High

At one point, there was a lot more leniency with this aspect of the mortgage qualifying application. Before things got out of control in the real estate industry, the total debt payments relative to income was fifty-five percent or less, in order to still be considered a worthwhile investment. Now, Fannie Mae and Freddie Mac consider the same ratio with a maximum figure of forty-five percent.

Since buying a home and consequently, qualifying for one is not black and white, this rule makes it very difficult for some potential home buyers who are operating on multi-incomes yet are able to comfortably sustain their income to debt ratio.

Rebuilding Your Financial Health Takes Time

Distress sales have been on the rise, particularly for the past several years since the real estate bubble burst with such a bang. Until as late as the first quarter of 2010, homeowners who succumbed to foreclosures were given five years before they are able to finance a new home. The time frame allotted now, is a far more substantial seven years. For individuals and families who strive and successfully achieve a strong financial rebuild soon after the financial derailment caused by a foreclosure, this is bad news.

Missed Payments Mean Missed Mortgage Opportunities

Like everything else, the belt keeps getting tightened even more on the rules and regulations to follow when signing up for a new mortgage. Back in the day, just a few years ago, it used to be that consumers could afford to miss a payment here or there, as long as it was not a regular occurrence and as long as it was not a significant sized loan. Now, however, even one missed payment is bad news because the bank will automatically tack on an extra five percent of the balance to the debt-to-income ratio, instantly rendering the perceived ability to pay back the money owed as less-than-optimal.
~
Regardless of homeowners’ individual circumstances, more and more often the criteria followed by banks seeking approval from Fannie Mae and Freddie Mac, is putting a major crunch on potential homeownership. By keeping these guidelines in mind, it may be possible to avoid being rejected for a mortgage – and slowly but surely the real estate industry can creep back up to where it was just a short while ago.

A Home Renovation Loan: Is It For You?

2011-05-03T11:58:00.000-07:00

Watch on your mobile device >>

Thinking of buying a home that isn’t quite your dream home? Or do you want to remodel your existing home but need attractive financing to do so? Did you know there are home loan programs in place to give you the financing you need and get your home, new or existing where you want it to be?

What are the Benefits of Remodeling a Newly Purchased Home?

It might seem rather counter-productive to purchase a new home, only to remodel it immediately. There are some distinct advantages to this approach of home buying, however, if you are up for a bit of a challenge, with a bit of creativity thrown in.

Here are some distinct benefits it offers:

• Offers a low down payment and flexible mortgage terms (either fixed- rate or adjustable-rate).
• Low down payment as little as 3%.
• Renovation amount is based on completed value as determined by a “what if” value appraisal with renovations completed.
• Depending on the program and loan to value, mortgage insurance may be required
• Renovations are available for primary residences, as well as second homes and investment properties.

Buying a property that needs a little work can be a great way to get something at a great price and custom make it to fit your unique needs. Having a loan to help you with this task makes it easier to make your new home a "Dream Home."

Home Loan for Renovations on Property You Already Own

You may currently own property that could use some remodeling or updating. Sometimes it’s easier to fix up what you already have than to start completely from scratch with a new property.

This type of renovation loan is based on the completed “what if” value of the property. You will also be able to improve your home utilizing a lower first mortgage interest rate. In addition, you can finance mortgage payments for up to 6 months to cover non-occupancy costs during construction.

There are a few things to keep in mind when you take out a home renovation loan on property you currently own:

• It permits you to do nearly any type of repair you need or wish to do.
• Renovation loan amounts up to 50% of the “what if” completed value of the property.
• Maximum loan amount may not exceed Fannie Mae's conforming loan limits.

• Loans are fixed-rate mortgages, fully amortizing with terms between 15 and 30 years.

This type of loan is available to primary residences, second homes and investment property types.

Remodeling Homes Equals a Healthier Housing Market

It might appear on the surface that home remodeling is nothing more than some spackling and paint brushes, but it actually symbolizes much more. During the past few years when the economy dipped, so did home renovations. This was due partly to negative equity, partly to a lack of home buying, and just an overall lack of confidence in investing in housing in general.

The fact that home remodeling is making a resurgence is a positive sign for the housing market, and is a positive sign overall for the economy in general.

10 Websites to Determine Your Home Value

2011-04-11T10:09:00.000-07:00

Watch on your mobile device >>

There are a number of online tools to determine your home’s value. This can be great information, even during a less than wonderful housing market. The most recognized among these is Zillow.com, but there are also several alternatives online that may offer a more accurate value than Zillow.

1.) Zillow.com. This is the most recognized home value online estimator out there. It has a relative easy user interface and is fairly accurate on its estimates.

2.) Real Estate ABC is a good alternative to Zillow, and in some cases provides an even better home value estimate. One unique feature is that it offers a list of possibly comparable homes for you to select from to be included in the valuation. The thought behind this feature is the fact you know what homes in your neighborhood are comparable to your own.

3.) Eppraisal This site provides home values as well as demographic data about the neighborhood, including education, finances, and employment of the home it is appraising.

4.) Reply has a simple user interface and provides a confidence rating for each appraisal it provides, based on the factors to generate the appraisal. These are based on features from comparable homes.

5.) Yahoo! Most people don’t realize that the popular search engine also has a good home value appraisal component to its website. It generates its home values by using Zillow, Eppraisal and Reply. This makes is easy to see and compare the 3 different appraisals of your home.

6.) HomeGain provides both market and census data in addition to the home value it offers.

7.) CyberHomes is very similar to many of the other home appraisal websites already listed. The values it provides are relatively accurate.

8.) Property Shark’s is not one of the best home value tools out there. The database is very limited.

9.) HouseFront is another alternative with what appears to be reasonably accurate home values.

10.) Rentometer doesn’t provide the actual value of the home, instead it provides the estimated rent you would pay if you were to rent the home. This can be valuable information to have, as it can contrast with other sites how much you would actually be investing in a new home, rather than just spending it on rent each month that offers no return on your investment.

In addition to the above free options to appraise your home, there are also many websites that charge a fee for the information or require you to enter your personal information so a local real estate agent can contact you.

Keeping an eye on the value of your home can be important, even during these tougher economic times. There are still fluctuations in the market but there still remain certain times that are better selling times than others.

Why Do Mortgage Rates Fluctuate?

2011-03-30T08:41:00.000-07:00

Have you ever wondered why mortgage rates change from time to time? You check one day and get one rate and check the next and get a slightly different rate. Mortgage companies and borrowers are subject to potential daily and even hourly shifts in the market. Mortgage rates fluctuate on the simple principal of supply and demand. So why does this happen?

Interest Rates

Interest rates have a dramatic impact on mortgage rates. The higher the interest rate on a home loan, the higher the monthly payments will be. This is why it’s important for home buyers to be certain that their mortgage broker is working with them to receive the lowest interest rate possible on their loan.
In addition, adjustable interest rates can have a devastating effect on one’s mortgage payments. While the interest rate and monthly payments may initially be low, once the interest rate begins to increase, the monthly payments will as well. This can leave homeowners overwhelmed and unable to make their monthly mortgage payments.

Inflation

A major factor that influences mortgage interest rates is inflation. A higher inflation rates is often related to a growing economy. When the economy grows, the Federal Reserve increases the interest rates to slow down the economy and reduce inflation. Inflation is seen during an upward price change of goods and services. In a strong economy, there is higher demand for them, so producers of the goods and services people want, can raise prices. A stronger economy therefore results in increased mortgage rates.

Changes in Treasury Bonds

In order for the nation to pay its debt, the U.S. federal government will sell notes called treasury bonds. They will sell these in an auction style, thus the going rates of treasury bonds largely depend on supply and demand. Treasury bonds are a popular investment choice since the U.S. Government guarantees it. On the downside, the returns of this type of investment are also very low.

Treasury bonds directly affect mortgage rates since investors usually invest their money in a fixed rate treasury bond, and lend you money on a slightly higher rate. The investor’s profit comes from the difference between treasury bond rates and the interest rate they’re giving to you. If the treasury bond rates are higher, they offer you a higher mortgage rate and vice versa.

Economic Conditions

Even in the worst of times, the federal government is still highly unlikely to even consider defaulting on its loans. However, when the economy is in a depression, individuals are at a much greater risk to lose a job and not be able to repay their mortgage. As a result, the mortgage rates will rise much more than the price of other securities because the risk involved in a mortgage has increased.

In addition, interest rates are what controls money flow in the economy. Higher interest rates may curb inflation, but they also slow the economy. Lower interest rates tend to stimulate the economy, but could eventually lead to inflation. There is a delicate balance between decreasing interest rates to stimulate the economy and increasing them to prevent inflation.

There are a number of factors that go into mortgage rates. Each of them plays their own part in the raising or lowering of the rates. Watching, as an informed consumer, and acting at a time when the rates are lowest, is the best way to make a good, informed decision.

Investing During Tough Economic Times

2011-03-11T12:23:00.000-08:00

The recent economic issues our country has faced have left many scratching their heads about whether or not investing their money is the right thing to do. Or, should it just be buried away somewhere until the financial storm blows over?

Here are a few things to consider when investing during hard economic times. And, you will note that there are still ways to invest smartly, just remember research and a thorough understanding of what you are getting yourself into is now more important than ever.

A Look at the Past for Hope in the Future

It is easy to get so focused on what is happening today with the economy and forget many of the financial storms the US economy has weathered, even in the last 100 years.

For a review, here is what our economy has pulled through and become much stronger as a result in the last 100 years:

• Great Depression of the 1930’s
• World War I & World War II
• Rapid inflation of the 1980’s

Despite all of these incredible challenges of the 20th century, the standard of living dramatically increased for Americans during this same time span. Also, the DOW Jones Industrial, the most widely followed stock market index in the world, rose from 66 to 11,497 during this same time span. It was actually during the tough economic times the great fortunes were made.

Recessions Provide a Time to Invest Inexpensively

Many experts say a recession can be the best time possible to begin investing because asset prices are at rock bottom lows. You can buy stocks, bonds, mutual funds, real estate, or other types of investments for pennies on the dollar from what you could just a few years back. Many investors are forced to dump their assets. This allows you, the new investor, to pick up some great deals you might not be able to afford during normal economic times.

As with any type of investing, this takes courage. Many times your portfolio will fall even lower after the investment is made. To avoid a financial disaster, experts recommend you go into the market through a “dollar cost averaging,” a technique designed to reduce market risk, and not put all of your money in at once.

Build a Healthy Overall Portfolio

It is more important than ever to build a strong overall portfolio to maximize your gains and minimize your risks. This can take years and should be done with ample research.

Although volumes could be written about this, to get your portfolio as healthy and diverse as possible you should follow these basic steps:

• Contribute the maximum amount to your employer’s 401k
• Pay off (or greatly reduce ) your high interest debts
• Fund a ROTH IRA

• Buy a home
• Build a 6 month emergency fund
• Pursue several investment options (stocks, bonds, mutual funds, CDs, etc)
• Invest in yourself (education, develop skills, start a new business)
• Save for your child’s education.

Stay the Course

Ask any boat captain and they will tell you they’ve had to weather many a storm. The best they can do is just to head in the direction they want to go and wait for the storm to die down. The same is true when it comes to investing. When you have a plan in place, follow it.

If you already have a plan in place for your investments from several years back, continue to follow it. Wealth is not built in a day. If you are just now beginning to invest, don’t let any financial woes our country is experiencing deter you from your goals. Start with a good plan in place and know the great economic times of the past will eventually return and we will be financially stronger as a result of the hard times.

Study the Habits of the Rich

2011-03-01T07:35:00.000-08:00

Habits make up 90% of what we do every day. It only makes sense that good habits lead to good things and bad habits lead to less than desirable outcomes. The habits the wealthy establish in their financial practices not only help them acquire wealth, but also allow them to keep the wealth they have. They have a few habits in common that keep them in the upper elite when it comes to money.

Habit #1: Pay Yourself First & Save/Invest The Money

Those who have a considerable amount of money know they are the reason they have the money in the first place. As a result, they make sure they are taken care of in the long run so they can continue to earn more money.

It may seem there is never quite enough money to allot some for yourself. However, by taking money out first and investing it in a place where it can earn passive income for you (in the form of interest, real estate, or whatever else you choose), you are ultimately making more money for yourself for years to come. The best strategy is to take 10% off the top of your earnings and reinvest it into something that allows the money to grow even more.

Saving money is not as much about accumulating a large amount of money quickly, it is more about getting into the habit of saving money and watching it build over time.

Habit #2: Become Frugal

We often associate the term “frugal” with people who deny themselves anything and everything to save money. This doesn’t have to be the case, though. Those who are smart with their frugality simply cut costs in areas that aren’t as important as other areas.

For example, maybe buying the name brand of every food product is not as important to you as taking an annual family vacation. Therefore, you should buy the cheaper brands of food so you can spend your money on something that’s really important to you: the family vacation.

Frugality is a matter of prioritizing your expenses. Analyze each expense and make sure you are spending your hard earned money on the things that are truly important and help you reach your long term goals.

Habit #3: Look After Your Business

Recognize your business is the way you make money. Treat it with respect. Even if you don’t like your job, you should recognize the fact it pays your bills and allows you to save for the future.

Make sure you have a vision for where you want your business to go. This gives you the momentum to move further along to your ultimate goals. Having these anticipated milestones gives you a target to aim for and reminds you of exactly what you are doing with your business each day.

Habit #4: Take Educated Risks

Making money can be a risky business, but the wealthy recognize the risk factors that are involved to achieve their financial objectives. The difference between someone who is just a risk taker and someone who takes educated risks is the ability to recognize opportunities that have an upside potential that far outweighs the potential loss.

Learning to take educated risks comes as a result of studying situations closely and then having confidence in your ability to judge correctly. Do as much research as possible to understand the exact risks, as well as the large potential for payoff. Then take the risk.

Habit #5: Give Back

One great thing about money is the ability to help others with it. In addition, giving back follows the principle: the more you give, the more you receive. How is this possible? Most believe the more we give away the less we have. Instead, giving back creates a bit of a paradoxical effect.

Wealthy businessman Junior Murchison once said, “Money is like manure, if you spread it around it does a lot of good. But if you pile it up in one place, it stinks.” Giving money away creates a bit of good karma. It also reminds your subconscious there is enough money for everything. A poverty mindset seeks to hold on to every bit of money possible, a wealthy mindset seeks to give it away and reap those unique rewards.

Habit #6: Invest in Yourself

Millionaires make investments on themselves. Why? They recognize the fact that by making themselves better they increase their potential for income. They often seek out opportunities to learn and grow as a human and as a businessman.

When you are open to learning new information in this rapidly changing economy, you understand someone is doing things better than you. This leaves plenty of room for growth. This can also be applied in your network of peers. If you see someone who does something better than you, ask them to teach you. The potential of this investment is multiplied many times over.

While the wealthy may not “have it all figured out,” we can learn a considerable amount simply by studying the habits they use when it comes to their money. By utilizing these habits in our own life, we can also potentially find a path to great financial wealth.

Saving for Retirement – 21st Century Style

2011-02-11T14:31:00.000-08:00

As with many things in society today, the concept of retirement planning is changing dramatically from what it was just 20 years ago. With the potential demise of social security in the future and other retirement options not as practical as they once were, there are countless questions about what is the best way to plan for retirement today.

Retirement Planning – Then & Now

In the not so distant past, financial advisors told us to rely on the “3 legged stool” when looking to retirement planning. This included:

• Defined Benefit Pension

• Personal Savings
• Social Security

You were encouraged never to rely too heavily on one of these 3 legs. But, today two of these three legs, social security and pensions, are not what they once were. And the third leg, savings, is more difficult than ever before. It’s widely reported that the social security may well be in trouble. Pensions have also sharply declined for many people. This require us to re-think how we will plan for retirement.

Retirement Planning Today: What are Your Demographics and Lifestyle?

There is no longer a “one size fits all” approach to retirement planning. How you plan is greatly determined by who you are and how you want to live during retirement.

While life expectancies continue to rise, so do early retirements. These early out’s may be due to health or layoffs. This means you may have a shorter working career and live longer.

Couple that with a generation that doesn’t want to go without much. In years past, retirement frequently equaled a lower income and less ability to live how they had during the working years. Our society has changed so dramatically, many worry they will be unable to maintain their current lifestyle. This can lead to other complicated issues like massive debt if a retiree is not careful.

While social security and pension plans should still be considered an important part of retirement planning, more emphasis should be placed on personal savings and ROTH IRAs.

Save, Save, Save!

Saving for retirement is about much more than just putting money in the bank and leaving it there for retirement. Saving must be strategically done to maximize the benefits. This can be done through regular IRAs, 401(k) plans, 403(b) plans, SEP-IRA, or any other means possible to make sure the money you save is making as much back as possible. When you get a raise in your income, raise your giving to your savings plan, as well. You should also put in as much as possible into ROTH IRAs since the amount is not taxed. Saving money in the most intelligent way possible is the key to saving for retirement.

Consider Tomorrow Today

There is a saying that demonstrates the importance of never forgetting your retirement goals, even today. “If you’re willing to what others won’t for a year, you can do for a lifetime what others can’t.”

What does this saying have to do with saving for your retirement savings? A lot. If you are willing to give up some luxuries today and invest that money in your future, you can live better than others later for the price of your sacrifice. Giving up something today for something better tomorrow can be applied to many areas of your life, but it also applies to your retirement.

There is not one approach to save for retirement. It’s important to note, however, that some of the traditional methods of saving for tomorrow are not as sufficient as they once were. By taking a creative approach and looking at saving what you can today, tomorrow will be a much brighter day.

Planning a Great Future for Your Kids: How to Save for College Today

2011-01-28T10:14:00.000-08:00

Do you have a child you want to send to college? Saving for college, even if it’s not for your own child, can be a big responsibility. It is something that should start while the child is young so it doesn’t become too big of a burden several years down the road.

Here are a few tips to help make saving money for college a little easier:

1. Start Early. It’s no secret that college comes right after high school, so it is an expense that can be planned for well in advance. Many people start saving for college soon after a child is born. The earlier you start the better.

2. Open a Tax-Free Account. If you know you will be able to contribute monthly to a college fund, open a tax-free 529 college savings account. Any interest is tax free. In addition, any money you withdraw for school expenses, such textbooks or tuition, will not be charged a penalty. The only requirement for this type of account is a monthly deposit. This can be as low as $50 a month.

3. Open a UPromise Account. This is a painless and free way to save to save for college. Sign up for a UPromise account and receive cash back on many purchases, including online shopping, restaurants, and even trips to your local grocery store. You simply register one or more credit cards with the program and when you use that credit card on qualifying purchases, they credit a percentage of your purchase to your child’s college account.

4. Ask for the Gift that Keeps on Giving. Do relatives and frienda constantly ask what to get your child for birthdays and Christmas? If so, why not ask them to put some money towards the child’s college education? Not many people will turn their nose up at that worthy contribution. This money can add up quickly and can earn interest or other benefits over time, which make it go even further.

5. Pre-Pay When You Can. Some states, like Nebraska, offer residents an education trust account. You must have an initial deposit and make minimum monthly deposits (like the 529 account), but the interest is tax free and you are able to use the money at any state college or university. You also get to lock in the current tuition rate when you sign up. That alone can save you thousands of dollars!

6. Make Targeted Investments. In line with a savings account for college, you can also make targeted investments. This is best done with expert help from an investment firm or a bank. Investments will frequently pay higher interest rates than a savings account. Just periodically place money into the investment fund and watch them multiply over the years. If done early enough and with frequent contributions, the amount can be sizeable once college comes around.

The key to saving money for college is to start saving early and as wisely as possible. With enough future planning and regular contributions to the college fund, there should be a fairly large amount of money readily available when college looms on the horizon of your high school student in the coming years.

How to Rebuild Your Credit

2011-01-14T10:08:00.000-08:00

Good credit is invaluable today. When your credit score has taken a hit, it can seem impossible to ever repair it to a decent level. Starting to rebuild your credit is often the hardest part. Once you’ve started the process, however, momentum begins to develop and you can begin to rebuild your credit over time.

Get New Credit

It might seem contradictory when your credit is struggling to recommend getting even more credit. However, if your bad credit woes have left you without any credit cards, you need to get a few to rebuild your credit.

If your credit score took a nosedive, most major credit institutions won’t give you a credit card right away. Luckily there are a few places where you can get credit cards a bit easier to rebuild your credit score.

Consider applying for credit cards from these places:

• Gas station
• Local bank
• Department stores
• Secured credit card institutions

It’s important to note to only select a couple of places to apply for a credit card. The more applications you put other there, the lower your credit score will get. This will make it hard to get a credit card and will start a negative spiral as you try to rebuild your credit. Also, avoid any credit card companies who prey on people trying to rebuild their credit. They will charge a high interest rate and high fees for their cards.

Establish New Credit Habits

It is critically important when you try to rebuild your credit that you establish new practices. If not, you will be right back where you started but possibly with nearly irreparable credit.

When trying to rebuild your credit, you must avoid:

• Paying credit card bills late
• Not paying credit card bills at all
• Having your account sent to collections
• Defaulting on a loan
• Filing for bankruptcy
• Getting a judgment against you
• Foreclosure on your home
• Having a high balance or maxed out credit cards

Part of establishing new, beneficial credit habits should include paying your bills on time and paying well above the minimum balance. The minimum amount owed to a credit card company is not set based on how to get you out of debt. Instead, it is there to try to get you to pay off the loan over a long period of time. After all, credit card companies make their money by the interest you pay them each month you carry a balance.
Make a plan to avoid many of the pitfalls that allowed your credit to get in disrepair and avoid making the same mistakes again.

Replace Bad Credit with Good Credit

The only way to ultimately repair your credit is to show creditors over a long period of time you will be responsible with their money. There is no quick way to do this. It’s a trust that must be built over time and can’t be rushed.

Make sure you follow good credit habits. Charge only what you can afford and pay your bills on time each and every month. Also, only have a small number of credit cards you know you can easily handle. This will, over time, replace bad credit with good credit.

While it might seem impossible to rebuild a bad credit score, it can be done over time. With persistence and good credit habits getting established, you can repair bad credit. In the end, it takes time, patience, and a willingness to do things differently than before.

Developing a Plan to Get Out of Debt Once and For All

2010-12-29T14:27:00.000-08:00

Debt is one of the biggest problems facing Americans today. One reason it is so difficult is because it can be challenging to get out of debt once you find yourself buried in it. It is often paralyzing and prevents you from ever recovering. But, by developing a solid plan to get of debt, you will have a road map out of financial impairment and be well on your way to recovering from the possible financial devastation.

Calculate Your Total Debt

The most important aspect of getting out of debt is to fully understand exactly how much debt you are in. To do this, you need to add up the total amount you owe to each creditor so you have a tangible number to work with.

One easy way to summarize your total debt is to get a copy of your credit report. It will contain a list of your financial obligations to institutions who report to the major credit bureaus. There are a number of websites who offer free credit reports and make this a pretty simple process. To double check that all of your obligations are on the report, examine recent statements from your creditors to make sure your list is accurate. Also take into consideration any informal debts you might have, such as to friends or relatives, and add it to your total, as well.

Prioritize Your Debts

All debts are not created equal. For example, the mortgage you owe on your home is certainly not the same as the credit card debt you ran up over the holidays. When trying to determine which debts to pay off first, choose the one with the highest interest rate.

Or, another alternative to eliminate the sheer number of debts you have weighing you down is to pay the smallest debt off first. If your higher interest debts also have high balances, it can take years to pay one debt off. Smaller debts are repaid quicker and might be preferable to pay off first. Ultimately, however, you need to examine your unique debt situation and determine what is right for you.

Determine How Much You Can Pay

A thorough examination of your income is crucial to determine how much you can pay on your debt. This is not a situation where you want to find a few extra dollars. In fact, you will need to make some hard decisions to really work to pay down your debt. (Check out my last blog post, “Living Below Your Means- Can It Be Done?” for excellent ideas.)

Add up your earnings from your regular income. Subtract any essential money you must spend each month, including your mortgage or rent, utilities, food, medical expenses, as well as any current debt payments. The amount that is left is your disposable income, and a vast majority of it should go to pay down your debt obligations.

Create a Manageable Plan

Put all of the money you have allocated for debt reduction toward your highest priority debt, whether it is the largest interest rate or lowest debt. Don’t neglect any minimum payments on other debts, however. These should be considered more financial obligations, rather than debt reduction since the small amount does little to reduce the overall debt.

Once the first debt you targeted is paid off, move to the next one on your list. Use the extra amount you’ve allocated for the first debt and transfer it to that second debt. Continue with this cycle until each debt is paid off. This process can take years in many cases, but the benefits far outweighs the sacrifice of a few years.

It’s difficult to take any journey without an adequate road map. The same can be said for paying off debt. Without a full understanding of the problem and a way to alleviate the issue, it can seem nearly impossible to ever be in the black again. With some forethought and planning, however, getting out of debt truly is truly achievable with a great deal of persistence and patience.

Living Below Your Means - Can It Be Done?

2010-12-14T15:38:00.000-08:00

We often hear about people living above their means, but did you know one of the quickest ways to get ahead financially is to seek to live below your means each month? This means spending less than you make with each paycheck. By saving the extra money, you will have a nice savings account, and over time, a substantial nest egg that can sustain you for years to come.

Spending less than you earn is really the only way to get ahead with money. During an economic time when it seems like it is nearly impossible to only spend what you make each month, how do you actually live below your means?

Save Money on Food

It might seem like food is one area you cannot cut back on when you spend money. In fact, this one area you can save you a tremendous amount of money each month if you are wise with how you spend your money on food. There are a number of things you can do to cut back when it comes to food but it is not a one size fits all approach. What works for one person may not work for another. The goal is to find a way you can can accomplish cutting back on food costs that you can stick with.

A few areas you can look at trimming your food budget are:

Buy Generic. Many times the store brands are the same quality as the name brand and they can save a tremendous amount a money.

Avoid Prepared Food. Buying food, such as frozen dinners and other store bought food that is already prepared can be a needless waste of money. They are overpriced and less healthy. Sticking to a simple meal, such as meat, salad, and bread is nearly as easy and substantially cheaper than their inferior overpriced counterpart.

Don't Eat Out Often. Many people eat out multiple times per week. While completely cutting the restaurant experience may be unreasonable. significantly cutting back can make a big difference in saving money.

Keep Your Car

While there certainly is truth to the fact that cars dramatically lose value over time, keeping a car for a long period of time can greatly lead to excellent financial health. When you are without a car payment, living below your means becomes much easier. Instead of finding a new car and creating a new car payment, save the money you would have put toward a car. This is a great way to regularly use less money than you earn each month.

Make Hard Cuts in Your Budget

There are certainly some areas of your budget that are easier than others to make cuts. Cut out the easy things but also take a hard look at things that may not be so easy. Are there areas of your budget that are more of a want than a need? Are you willing to give it up in order to accomplish your financial goals? A hard look at your budget today with tough cuts will pay great dividends tomorrow.

Limit Credit Card Spending

Credit cards almost make money seem like a fantasy. There is nothing physical that permanently leaves your presence. Using cash and greatly limiting your credit card use does two things: it reminds you of just how much you are spending each week and it forces you to live at a level that is congruent to your income. Ultimately, the goal would be to surpass the amount of your income versus your spending.

Clarify Your Purpose

Anyone who sees the value of living below your means has a reason behind it. Whether you are saving up for a big purchase or just pursuing a comfortable retirement, reminding yourself regularly of why you are doing it can be a very powerful motivator to help you accomplish your goals.

There are a number of ways you can save money to live below your means. Get creative in how your strive to decrease your spending each month so you have money to put away to save towards your future goals. When you spend less than your bring in each month, you are well on your way to great financial health.

The Steps to Building an Emergency Fund

2010-11-30T11:48:00.000-08:00

Building an emergency fund is one of the most important things you can do for your finances. It can literally mean the difference between complete financial devastation and being prepared with a workable plan to build a sustainable bridge for your household budget.

Financial experts often tell consumers to have an emergency fund but few tell you exactly how to create and maintain one. However, next to getting out of debt, nothing is more valuable for your financial future. Here a few steps you need to consider as you look to build an emergency fund for your household.

Start Small

Building an emergency fund can seem like an insurmountable mountain to climb. It is doable, however, even on an extremely small budget. The key is to start small. If you are only able to put aside $10 a week, do it. In fact, that $10 will build up to $520 in a year’s time. What looked like measly pocket change can turn into a big chunk of change in a short time.

The goal early on in this process is not as much the amount, as it is to just start the process and develop the habit. As you make other cuts in other areas or raises roll in from work, you can increase this amount later. At this point, sit down and figure out what you can reasonably afford each week at this point in time.

Automatic Deduction

Let’s face it: even the most self-disciplined person in the world would be tempted by unused cash sitting in their bank account. That’s why it’s important for the amount you determine, big or small, that goes towards your emergency fund be taken out each week without question. Do it before you pay your bills or go grocery shopping. Even better, set up a payroll deduction that automatically goes into a savings account for your emergency fund. You will not miss the money, but it will be waiting for you when you need it.

Reduce Expenses and Save the Extras

Do a thorough examination of your budget. Chances are, if you look very hard at each place you spend money each week, you will find one or several places you can eliminate or greatly reduce your expenses. Don’t just let that money slip into a budget black hole. Take the extra money and apply it to your emergency fund.

Pay Your Debt…Even After It Is Paid Off

Getting out of debt is an important part of good financial health. While putting a small amount towards an emergency fund is still important, you should focus most of your financial effort on getting out of debt. When your focus is there, it will be reduced much more quickly.

When the debt is finally is paid off, don’t stop! If you were spending $300 a month towards debt, transfer that same amount to your emergency fund once your debt is completely paid off. It is all too easy to funnel that money into another expense once the debt is gone. Resist that temptation and focus your efforts on your emergency fund until you get it at a level you wish.

Set a Lofty, Achievable Goal

You will get as many suggestions of what an ideal amount for an emergency fund should be as people you ask. But the general rule of thumb for your long term goal for the fund should be at least 3 months worth of your income. Even better would be 6 months or 12 months of your income. However, in the beginning a small goal is best. Once all of your debts are paid off, a loftier goal is in order.

Setting up an emergency fund can be done even on the smallest of incomes and budgets. With a little dedication, even in the midst of debt, an emergency fund can be set up and easily maintained. By setting small goals and gradually increasing them, an emergency fund is achievable.

Biggest Budget Blunders: Keeping the Pulse on Your Financial Goals

2010-11-15T11:11:00.000-08:00

Setting up a budget can be a bit of a complicated process when you don’t follow the correct steps. Last time we talked about the proper steps to set up a budget that works best for you and your household. Now, we will examine a few pitfalls you want to avoid. By eliminating these common budget blunders, your budget will give you the financial boost you need.

Not Practicing Your Budget Faithfully

While this principle might seem obvious, it is also one that is sure to sabotage your budget. A few dollars here and a few dollars there which are not budgeted for add up to a great deal of money over time. This is money you should have a designated spot for in your budget that you are neglecting. This will spell trouble in the long term for your budgeting goals. Make a plan for each and every dollar that enters and leaves your home and follow it religiously.

Not Putting Money Aside for Emergencies

It might seem impossible to have income each month that does nothing but sit in the bank, but it is an integral part of any personal budget. If you don’t have it, you are just one job loss or illness away from complete financial ruin.

Most financial experts agree you should attempt to save between three and six months’ worth of living expenses in a savings account to which you have immediate access. For the self-employed or those who work in a high turnover industry, you emergency fund should be closer to a year’s worth of expenses.

Buying on Impulse Instead of Checking the Pulse of Your Budget

Impulse buying is one sure way to destroy any progress you’ve made on your financial goals. Yet, this type of buying can be difficult to cut out until you figure out what impulse buying is and what buying purely based on need is. Instead, make a rule that you will only buy things that are on your list before you enter a store. Or, you will only purchase an item online after you have given yourself 24 hours to think about it and examine your budget .

While impulse buying might seem to only apply to the larger items in your life, the same principle applies to small items like buying a coffee every morning before work or a shopping spree at your favorite mall after a bad day at work. The simple way to stop impulse buying is to never buy anything that is not budgeted for.

Cut Out All Fun Things

If your budget does not allow for anything “fun,” it will almost certainly fail. Why? No one can adhere to something that does not allow for entertainment and fun. That’s why it’s important, both financially and mentally, to have some space in your budget focused purely on your enjoyment. Even if the amount is small, it will go a long way to help maintain your budget.

Pay Only the Minimum on Credit Cards

While completely paying off your credit cards may not be a reality for years to come, gradually paying down your debt is a goal you can achieve each and every month. That will not happen, however, if you only pay the minimum payments on your credit cards. In fact, making only the minimum monthly payments will cost you thousands in interest fees that could otherwise be applied toward savings or something else your family wants or needs.

Budgets are a valuable tool to help you reach your financial goal. There are, however, several obstacles that can completely derail your budget if you are not careful. Be mindful of your budget in all of your purchases and you will be well on your way to budgeting success.

6 Steps to Creating a Budget

2010-11-01T08:03:00.000-07:00

The word “budget” is often met with resistance and avoidance. However, a budget can be the single best tool to make the most impact on reducing your spending and stretching your dollar further than you thought possible. With a budget in place, your money has a purpose and gives you boundaries when it comes to your spending.

There are several steps to follow when building a budget that works for you and your family.

Step One: Gather All Financial Statements for X-ray Analysis

The more financial information you have on your past spending history, the better. This includes bank statements, investment accounts, utility bills, credit card statements, and any other information that helps you get a clear picture of how much you spend each month.

Step Two: Examine All Income Sources

Closely examine all of your forms of income over the previous year expected to be recurring and record those. Be sure to include extra income other than just your regular paycheck. This would include interest payments and any other outside income. If you have a year’s worth of these records, you are able to get a full picture of your annual income. Divide this amount by twelve for your average monthly income.

Step Three: Prescribe a List of Monthly Expenses

Create a list of all the expenses you anticipate each month. These would include items like mortgage payments, car payments, auto insurance, groceries, utilities, retirement savings, and anything else you spend money on regularly. For assistance and a clear idea of what you spend each month, refer to the financial statements gathered in step one.

Step Four: Extract Expenses into Two Categories: Fixed and Variable

Your fixed costs are expenses that stay relatively the same from month to month. These would include house payments, car payments, utilities, and anything else that is a recurring regular expense. These expenses are essential and are not an optional expense.

Variable expenses are things that change from month to month. These can be things like food, gas, eating out, entertainment, and gift giving. Some of these items are optional (like entertainment) and others are not (like food). These are the items will allow you to make adjustments in your budget.

Step Five: Diagnose Monthly Expenses: Income or Monthly Expenses

Figuring out exactly how much you are earning each month, as well as how much you are spending will give you a clear picture of your financial situation. If you are spending more each month than your income, drastic cuts in nonessential areas are in order for a successful budget.

If, however, your monthly income is greater than your expenditures, you are off to a great start. You will then determine which area of your budget is the biggest priority, such as credit card debt, retirement savings, or a building up an emergency fund. This is where you will funnel your excess money each month. The ultimate goal in this exercise is to make your income and expenses equal each month.

Step Six: Give Your Budget a Regular Checkup

A budget is a process and not an ending point. As your life changes, so will your expenses and income. It is important to review your budget regularly to make sure the income/expenditure areas are still equal. If one area of your budget seems to exceed your allotted amount, make an adjustment. This means allowing more money in one area while taking money out of another area. Particularly with a new budget, even a monthly review is crucial to build a successful budget.

Creating a budget does not have to be a difficult process. With a thorough examination of your financial situation, both what you are bringing in each month, as well as spending, you can set up a budget that works for you and your family.

FHA Loans: What They Are and What’s Changing

2010-10-07T13:38:00.000-07:00

If you are purchasing your first home or considering a refinancing of your current home mortgage, an FHA loan may be the best type of home loan for you. It offers some unique features that other home loans do not. There are, however, a few changes coming that should be noted by those who are considering this type of loan.

What is an FHA Loan?

An FHA loan is a home loan that is insured by the U.S. Federal Housing Administration. The goal of this loan is to help potential homeowners who are purchasing a home for the first time or another set of unique circumstances, such as a lower income.
FHA loans are not just for those purchasing a new home, however. They can also be used for certain repairs on your home. In fact, the cost of acquisition and the cost of repairs can all be compiled into one FHA loan.

Eligibility requirements

FHA loans are one of the easiest types of home mortgage loan for which to qualify. The FHA guidelines for loan qualifications are extremely flexible. There are a few basic FHA loan qualification guidelines that you need to keep in mind if you are considering applying for one of these types of loans.

• Two years of consistent employment
• Last two years of income should be the same or rising.
• If you’ve had a bankruptcy, it should be at least 2 years old and with excellent credit since filing
• Foreclosure should be at least 3 years old with perfect credit since filing
• Your new mortgage payment should be approximately 30% of your gross income and your total debt ratio should not exceed 45% of your gross income

How Does an FHA Loan Work?

An FHA loan guarantees a payment to the lenders if the borrower defaults on the loan. To provide the funds for this type of loan, the FHA charges the borrower a fee. Home buyers who use FHA loans pay an upfront mortgage insurance premium (MIP). In addition, the borrower also pays a regular monthly mortgage insurance fee with each payment.

Advantages of FHA Loans

• In a purchase transaction, most closing costs, prepaids & escrow fees included in the loan can be paid by the seller
• Certain borrowers who do not qualify for a conventional loan will qualify for an FHA loan
• Available for refinance of fixed and adjustable-rate mortgages
• Easier to use gifts for down payment and closing costs

Coming Changes in FHA Loans

Although FHA loans will still be an excellent option for many home buyers, the federal government is making some changes to this unique loan. Here are a few things you can expect to see that differ from previous FHA loans:

• Many lenders have increased their minimum credit score of 620, now requiring a minimum 640 credit score. FHA has lower credit score limits but lenders have implemented stricter guidelines
• Upfront Mortgage Insurance Premiums (MIPs) will decrease from 2.25% to 1%
• Monthly Mortgage Insurance Premiums (MIPs) will increase from a .55% factor to .9% factor depending on down payment and loan program

The new FHA loan rules will decrease closing costs but may increase your monthly payment. This amount may be about $30 to $50 extra a month. The decreasing upfront premiums may offset some of the increased monthly payment amounts, however.

A FHA loan is a perfect solution for many home buyers, particularly first time home buyers. They offer much more lenient rules for home loans than traditional home loans. There are a few changes that the federal government is making that should be noted. Only time will tell the impact of these rule changes. Most likely, this type of loan will still be an excellent choice for the consumer.

Debt Do’s and Don’ts

2010-10-01T15:13:00.000-07:00

With the economic woes of recent days, it’s nearly impossible for many consumers to live completely debt free. There are, however, different types of debt. Some will benefit you in the long term, while others will do nothing but harm you for years to come.

The average U.S. household with at least one credit card carries nearly a $10,700 balance, according to CardWeb.com. This leaves the question of whether debt is a good or bad. The answer is it depends.

Good Debt

There are times when a debt can actually be a good thing. Good debt improves your life in the long run. While bad debts can improve your life only for a short time, good debt can actually improve it for years to come.

Example of good debt:

* Your home. The key to a home being a good debt is that it is a home you can actually afford. In many cases this simply isn’t the case. When you can afford the monthly mortgage payments, taxes, insurance, and other fees that go along with owning a home, an affordable home is a good investment.

* Education. The value of a college education cannot be stressed enough. This investment will pay for itself tenfold. Accruing debt to get an education is worth it. This investment will pay for itself over time and, if you manage your money properly, will permit you to pay back the debt rather quickly.

* Rental or investment real estate. Real estate has always been a sound investment and probably always will be. If you wisely purchase real estate and charge more in rent than your payments are, your investment will paid back quickly and you will then reap a profit.

* A car. Some mistakenly believe since a car depreciates quickly in value that it’s not a sound investment. This simply is not true. Cars are essential in our society today and can be a wise investment, provided you purchase a car you can easily afford. Owning a car allows for you to get a job, go to school, and do other things that permit you to make more money than the car’s lost value.

Bad Debt

While there are some debts that are not a bad idea, there is a type of debt that can leave you strapped for cash and financially devastated in the long term. These types of debt leave you little or no return of your investment in the future. In simple terms, a bad debt is anything you consume or loses value over time.

Some examples of bad debt include:

* Vacation. While a vacation is certainly nice for refreshment, it does nothing for you in the coming years. It is not wise to go into debt for something that is really more of a luxury than a necessity. Vacations, particularly costly ones, are appropriate for those who can afford to pay for them immediately.

* Food. Eating is a vital component of life, however, it is not wise to accrue debt for. The simple reason is that food is immediately consumed and offers nothing for you or your money in the future.

*Toys. Items used for play are not just for kids! Anything purchased for sheer amusement is not a wise purchase to go into debt for. These items offer no long term value and can cause problems in the long run. This includes items like TV’s and video games. Not only do these items not accumulate value, they also frequently lead to even more entertainment purchases. For example, a new video game player requires video games.

Debt is a common phenomenon in society today. In fact, in many cases it’s inevitable. There are some things that offer a long term investment and return on your money that make them a much better debt option. Items that lose value and don’t offer any potential return on your money simply are debts that should be avoided.

Rising Mortgage Rates: Is Now the Time to Buy Your Next Home?

2010-09-15T14:56:00.000-07:00

If the last couple of weeks are any prediction, the housing market could be on the verge of making some dramatic changes. With all of the news of the shifting prices of stocks and bonds, it’s hard to know exactly how this affects the housing market and you. However, there are a few things to take note of so you are prepared for what might possibly lie ahead, particularly if you are in the market for a new home.

What’s Happening in the Markets and How Does it Affect Me?

In recent months, the bond market has been strong, which led to record low mortgage rates. Recently, however, money started shifting more in the direction of the stock market. This is due, at least in part, to financial reports that were better than expected. These reports include the jobs report for the month of August, as well as a report on consumer confidence.

This is great news, right? It depends on where you choose to invest your money today. Good financial reports often lead investors to move their money out of the more secure bonds and put it in the less predictable stock market to take advantage of any possible gains. This shift leads to a lower demand for bonds and a subsequent decrease in price.

Are Home Mortgage Rates Going Up?

What do bond prices have to do with home mortgage rates? When bond prices go down, home mortgage loan rates go up. Improvements like this to the overall economy greatly impact home loan rates. They begin to increase in anticipation of increased consumer spending. Consequently, when home loans start to increase, they usually do so dramatically. The falling prices of bonds and rising prices of stock could mean a rebound in the housing market and an end to the low rates we have enjoyed for the last several months.

How Can I Determine How Much House Payment I Can Afford?

When you buy a new home the amount of the monthly payment is certainly one of the most important factors to consider. Experts say you should allocate no more than 30% of your gross income towards a house payment.

Interest rates are the riskiest aspect of home affordability today. Home loan rates are the lowest they have ever been but will not stay low forever. Some believe home loan rates are lower than they should be. What this means for the home buyer is you can purchase more home than you may recognize. Do the proper amount of research to see just how much of a home loan you may qualify for before the rates go up and you miss out on some great home deals.

Is There a Simple Formula to Help Me Know How Much I Qualify For?

The only way to know for sure how much of a home loan you can receive is to consult a lending institution or a mortgage broker. Once you are qualified, you can watch the interest rates and adjust your amount accordingly.

For every 1% increase in home loan rates reduces your buying power by 10% in your home price. Simply, this means that if you qualify for a home priced at $200,000 today and home loan rates go up by just 1%, the loan amount you are eligible to receive drops to $180,000 to keep the same payment amount.

The housing market is an exciting place to be today. But, it’s important to understand exactly how much home you can afford so you don’t buy more or less house than you need. While interest rates are at an all time low, there are predictions it won’t stay that way for long.

Avoid a Debt Settlement Scam

2010-08-27T13:43:00.000-07:00

Frauds and scams are increasing at an alarming rate in the financial sector today. When your finances are in disrepair, it’s easier to fall victim to scams that target people who want to restore your debt to a manageable level.

There are several firms to help you settle your debts. However, in some cases, these companies turn out to be frauds. As a result, it is crucial that you make an educated decision to make sure the company you choose provides you with ethical services. Many companies advertise themselves, claiming to be non-profit; but do not get mislead by that tag, as it can be deceiving, as well.

How Debt Settlement Companies Work

Debt settlement is a process where you negotiate with your creditors to pay off (or settle) all of your credit card bills at a reduced amount, often at a savings of 40 to 60% from your original balance.

The settlement company will generally require you to sign a limited power of attorney, so they can negotiate the debts on your behalf. You will then need to set aside money to build up a settlement fund. Once you have saved enough money to make a reasonable settlement offer, the debt negotiator will negotiate with the creditor for a reduced payoff amount. This amount is typically between 25% and 50% of the outstanding balance.

Once the creditor agrees to the settlement amount, you make payment until the account is paid off. You then continue putting money into the settlement fund to accrue enough money for negotiating the next settlement. Basically, the process is a cycle of saving up and setting aside money, negotiating a settlement and paying the settlement until all of your accounts and settled and paid off.

Steps to Avoid a Debt Settlement Scam

Debt settlement scams are commonplace today. Here are a few tips to make sure the company you choose is a legitimate company to help you settle your debts.

• Ask for references. Check references on any potential debt settlement company. By talking with previous clients, you can help determine if the company is legitimate or not and if they have your best interests at heart.

• Read all the fine print. Often, the details will contain the questionable elements of a debt settlement scam. Read everything to make sure you fully understand the program before you sign anything.

• Ask lots of questions. In an effort to fully understand how the company works, ask a lot of questions. If a company does not want to reveal all of the answers, it is best to stay away from that particular company.

• Check with the Better Business Bureau. The BBB strives to keep consumers safe from fraudulent business practices. Check with them to make sure you go with a legitimate debt settlement business.

• Remember the old saying: “If it’s too good to be true, it probably is.” This ancient piece of advice holds true throughout the generations. Remember a company is always seeking a profit. That’s the point of business, isn’t it? If someone tries to convey a practice that does not benefit them in some way, they are likely trying to trick you. It’s best to stick with companies that appear legitimate.

Debt Settlement Scam Example

To fully understand how complex and deceiving a debt settlement scam can be, here is an example of a common scam in action:

A company claims that they can make your debt go away overnight. They then ask you to pay high fees, perhaps $3000 to $5000, or higher, depending on the size of your debt. This fee is for their "services" and after you pay them, they will do nothing but offer you advice to “not to pay your bills.” They claim this is the right way to go. They always have convincing explanations about the federal law and they appear to know everything about legal matters. They are, however, deceiving you.

The end result of this scam is your debts will continue to accrue until the creditors sue you and you have no option but to hire an attorney to defend you. You will have a legal battle with your creditors while the company who promised you to clean-up your debts has disappeared with your $3000 to $5000 fee.

To avoid a debt settlement scam, the first step is to completely understand what a debt settlement is and how it works. Then, it is wise to make sure that you stick with a company you have researched and find to be a legitimate means to settle your financial situation.

Understanding Deflation

2010-08-16T14:59:00.000-07:00

The term “inflation” is something that we commonly hear in the news. We often hear of the woes it creates. But did you know that there is something that is actually worse than inflation? “Deflation” is not something we frequently hear about but it is something we should all be concerned with, particularly if we are in the market for a new house.

What is Deflation?

Deflation is a decrease in the general price level of goods and services over time. In fact, deflation is the opposite of inflation. When the inflation rate is negative, the economy is experiencing a deflationary period. Deflation often has the side effect of increasing unemployment and other economic woes in an economy, since the process often leads to a lower level of demand in the economy.

What Causes Deflation?

While the concept of deflation can seem rather complicated, when broken down, deflation occurs as a direct result of one or more of the following four factors:

• The supply of money goes down
• The supply of other goods goes up
• Demand for money goes up
• Demand for other goods goes down

Deflation usually occurs when the supply of goods rises faster than the supply of money. This is consistent with these four factors mentioned above. These factors clarify why the price of some goods increase over time while others decline.

Deflation is a result of complex economic forces. Ultimately, deflation is a result of the reduction in the supply of money or credit. It is can also be caused by direct contractions in spending, either in the form of a reduction in government spending, personal spending, or investment spending.

Why Deflation is Worse Than Inflation

Since deflation is partly triggered by prices decreasing due to a lack of demand, it might initially seem like a good thing. However, when the price of everything falls it can harm everybody and the economy as a whole.

Falling prices means lower revenue and profit margins for companies. This leads to layoffs, less hiring, stagnant wages, and outright pay cuts. The consumers with lower incomes have less money to spend. This starts a vicious cycle of: sales being down and cutting prices to get more business. Once this occurs, everybody realizes that prices are falling and nobody wants to buy something today if it will be cheaper tomorrow. As a result, they stop spending even more. Thus, a vicious cycle becomes even worse.

Inflation, in moderation, is a natural part of a healthy economy. It can actually ease the burden of debt over time because the real value of fixed debt goes down. Deflation wreaks havoc with this normal economic cycle and causes even more problems. It’s almost as if the cycle of supply and demand goes in reverse.

The complexity of dangers deflation presents run deep. One risk comes from a rush to keep interest rates low to increase consumer spending. Initially this might seem like a foolproof method to curb deflation. However, this creates even more problems.

One such problem is called “hyperinflation.” The danger of hyperinflation lies in a dramatic increase in the velocity of money due to a loss of confidence. In this case, money increases in value so rapidly that the currency actually loses its value. This problem would usher in new and even possibly worse problems than the deflation that triggered it.

What Deflation Does to Mortgages

Deflation can have a negative impact on your mortgage. It can actually increase the burden of your mortgage debt over time. In the normal life span of a mortgage, inflation will progressively reduce the real value of your mortgage interest payments. High inflation thus makes a mortgage more attractive. Over time, it increases the disposable income of mortgage owners.

However, with deflation, your mortgage payment becomes a larger percentage of your disposable income. Debt becomes an increasing burden, reducing spending and economic growth.

Economic problems can vary greatly and create more complex problems over time. Deflation, the opposite of inflation, creates an economic condition that devalues money over time. It can be a tricky event to reverse as other problems like hyperinflation threaten to have a strong backlash that creates even worse problems.

These economic conditions can all have a direct impact on your mortgage. By staying on top of current economic trends, you will be in a much position to understand how the current economy is directly impacting you and your mortgage.

Benefits of Using a Local Lender for Your Home Loan Needs

2010-07-13T08:17:00.000-07:00

If you are looking to purchase a new home or refinancing your current home loan, finding a mortgage banker that has your needs as their top priority can be a daunting task. Large mortgage companies with slick ads can be tempting. However, local lenders frequently offer a personalized service based on your specific needs that the larger lending institutions simply cannot offer.

Unique Needs – Unique Perspective

All lenders are not created equal. Your local lender brings a common sense approach to lending that the larger lending institutions don’t offer. A mortgage loan officer that works and lives within your community knows your unique circumstances and bases their recommendations on that.

Since you are dealing with a “real person,” rather than a large institution when you approach your local lender about a possible real estate investment, their customized approach to underwriting gives you exactly what you need for making a well-informed decision.

When looking to underwrite a conventional, FHA, or VA loan, a local lender is able to help you examine all factors pertaining to your loan, such as the appraised value, credit scores, debt ratios, assets, among other important loan related factors.

Different Loan Parameters

Local lenders are allowed to use their own “common sense” underwriting guidelines and are not restricted by the government regulated Fannie Mae and Freddie Mac institutions. This opens up more options and competitive rates that large lenders simply cannot compete with in the current “Square Peg Square Hole” lending environment.. In the new housing economy, this is where a local lender makes all the difference. Competitive interest rates and in-house underwriting are more important than ever.

“Hands On” Involvement

The active participation of the local mortgage banker allows them to be intricately involved in each aspect of your lending experience. Make sure your local lender prepares their own closing documents and funds their own loans. The fact that they fund their own loans allows them to secure the most competitive interest rate possible.

They also offer superior customer service that cannot be matched by a large, faceless firm. Phone calls can quickly be returned, as well as email answered quickly, by the local lender. In addition, they aren’t confined by local business hours. If you have a question after business hours, you can get in contact with a real person who is as flexible as you need them to be.

Customized Approach

Local mortgage lenders give each customer a customized approach. What may be right for one customer may not be right for the other. A local mortgage banker recognizes this fact and presents information according to the customer’s needs, not based on what is best for the larger institution.

Once you decide you are ready to buy, who wants to get bogged down in lengthy paper work and other corporate red tape? Keeping your entire real estate investment with a local firm offers timely processing of your loan. From application to closing time, the time investment is typically 3 weeks or less.

Consider using a local lender on your next home loan, the largest liability and asset you have, is a wise choice. A local mortgage banker will provide you with the best service to help you meet your long term financial goals.

How to Take a Luxury Vacation on a Budget

2010-07-01T04:44:00.000-07:00

With the current crunch of the economy, taking a luxury vacation might seem impossible. But, this is just not true! No matter what your financial constraints are, there are a few things that you can do to create a vacation that your family will not soon forget.

A “luxury vacation” is really more about what it means to you than each detail of the trip. There are ways you can cut a few corners to give you and your family the vacation they want without an exorbitant price tag.

Focus on What’s Important

Everyone has their own idea of what true “luxury” is. Determine what part of your vacation is the most important to you and focus your time and money in that area. Ask each family member what their idea of a “perfect vacation” is and make sure you allot a certain amount of money for that particular aspect of your trip.

Just as you focus on particular areas, you should determine what areas are simply not all that important to you and your family. These are the areas that you can easily cut back on or completely eliminate and save a bundle of money.

A few key areas that you can focus on focusing on or eliminating:

- Food. Is gourmet or specially prepared cuisine at the top of your list of great things? If not, focus on low cost meal or renting sleeping quarters with a kitchen to prepare the food yourself.

- Transportation. If you are renting a car, rent a smaller car. You can also call your credit card company and ask if they offer “loss and damage” coverage. If so, you can waive your car rental insurance fees and save $10-$15 a day.

- Hotel. If you plan to just sleep in your hotel, this is an easy area to cut back on since you won’t be using it much. Also, consider renting a home from a local, it is usually cheaper than a hotel.

- Activities. Spend money on the places that really are important and cross the other “non essentials” from your list. Spend time where you know you will make the best memories.

- Travel. Buying discounted plane tickets is a great way to save money but the airline’s ability to bump your flight time also increases with this “deal.” Determine if time or price is more important and make your reservations accordingly.

Start Saving Today

The time to start financing your family’s dream vacation starts long before you ever take it. Make a habit of regularly saving for your family vacation. Work a fixed amount into your monthly budget and continually add to it so there is money available when the time rolls around.

Do not fall into the trap of using credit to finance your trip. While this might seem like an easy fix initially, it becomes difficult to pay it off. Then you quickly watch your “dream vacation” turn into a financial nightmare. Now, you are not only paying for the trip itself, but also related financing fees. Suddenly traveling on a budget flies out the window and you are faced with debt.

Not only is saving today a great idea to avoid the credit trap, you can also make easy changes all year round that creates more money for vacations down the road. For example, if you eat out every day at lunch, take your lunch two days a week and put that lunch money towards your future vacation.

Reconsider the Destination

While vacations like Disney World or a Caribbean cruise are popular family vacations, they also come with a hefty price tag. Their popularity gives them the ability to charge outrageous prices on the simplest of conveniences.

Consider visiting a destination that most people don’t think of when they dream up a great vacation. Visit state websites in the travel section and see what suggestions they offer. These type of hidden vacation gems offer more affordable luxurious options at a dramatically reduced price. While you might not be able to afford the “finer things” on a higher end vacation, those same things may be well within your reach off the beaten path.

Visit During the Off Season

Prices reflect the demand of luxury vacation spots. During times like summer and Christmas vacation, you can expect your ideal vacation spot to be willing and ready to charge you a much higher fee because they know that many will pay it for the convenience of this time slot.

Consider taking a vacation during a non-peak time. Times like Easter or Thanksgiving might give your family a special time to get away without breaking the bank.

Vacations are an important part of life and family traditions. A luxury vacation is not completely out of your reach if you cut a few corners to spend your money and efforts on the things that are truly important and you will create a vacation that you will not soon forget.

4 Ways to Sabotage Your Personal Savings

2010-06-07T10:08:00.000-07:00

Has a personal savings account has lost its appeal in an age of credit cards and second mortgages? In a culture where instant gratification is king, setting aside a chunk of money for the future is not the “cool” thing to do. Yet, this one thing alone can determine your financial success or failure health in the future.

If fiscal fitness is not important to you, here are a few rules to follow that are certain to lead to the end of any financial security:

Rule #1: Do Not Have an Emergency Fund

Sadly, most Americans today do not see the importance of a set amount of money in the bank simply waiting for something that may never happen. A sudden illness. A job loss. A flood that leaves your home as nothing but your life preserver.

Sure, you never plan these things. They just happen. They are a little something called “life” and they are just lurking around the corner, threatening to steal your economic freedom.

Here are a few simple guidelines to help you set up an emergency fund:

- Save 3-6 months worth of living expenses. This amount will not only help you in a personal crisis, it also serves as insurance if you unexpectedly lose your job.

- Create up a separate account to isolate this money so that it is not easily used the next time you impulse buy with your debit card.

- Make automatic deposits into your emergency fund so the temptation to “forget” saving each month vanishes.

Rule #2 Nix the Budget

Few things guarantee a poor savings account. A lack of a budget, however, pretty much promises that your saving account will never reach its full potential. The act of using a budget forces you to live within your means and creates an automatic habit of saving monthly.

Tips to creating a budget include:

- Track your monthly expenditures for 6 months. This gives you a clear picture of how much you need to allot to each category in your budget. It also shows you how much surplus you really have that you can put towards your savings.

- Record all sources of income. It’s easy to just think about your weekly pay check your employer gives you, but what about that $20 Grandma gives you when you see her each month? Look over each amount of income you have during the course of a year and figure it into your budget.

- Make a list of monthly expenses. Break them down into fixed, non-negotiable expenses (mortgage, car payment, etc) and variable expenses (occasional doctor visits, car repair, etc) and set your monthly budget up to reflect these expenses.

Rule #3: Ignore the Habits of the Wealthy

Studying the habits of the well to do actually can teach you a thing or two about how to get where they are. One common denominator that many of the wealthy have is a stash of cash in a bank account. In reality, it does not matter how much you earn that makes you wealthy, it’s how much you have in your bank account.
If you spend untold amounts on disposable items such as fancy dinners and clothes that have no lasting value, you are not truly “rich.” If you spend time setting aside money for things like investing in real estate or stocks, wealth takes on a whole new dimension.

Here are a few common traits of the wealthy:

- They invest or build a business. This grows their money exponentially.

- Being innovative is the name of the game of for the elite. They are always looking for a way to increase what they already have.

- They give back. The rich recognize the concept of the more you give, the more you receive. Of course this is difficult if you do not have anything to give!

Rule #4: Don’t Let Your Money Work for You

The fact of the matter is having money sitting a savings account can actually make you more money. But, how is that possible? The most obvious answer is interest. If you find a good savings account with a stellar interest rate, your money will actually work for you. You do absolutely nothing while your money works away multiplying itself.

Some other ways to make your money work for you:

- Invest in things like stocks and bonds with considerable research beforehand and watch your money multiply.

- Take a leap into real estate by investing property. If done right, this investment can take a small amount of money and turn it into an insane amount more in a short time.

- Research money market accounts and CD and maximize your interest rate.

Maybe a secure financial future is not bad of an idea, right? There are a few simple pitfalls to avoid and be among the economically secure rather than the fiscally devastated. A little help from someone who knows how to help you stay as fiscally healthy as possible is not a bad idea either. Contact me at terry@terrywilliams.com if you have any questions.

Refinancing - No, Low and Full Closing Costs

2010-06-03T07:22:00.000-07:00

Tough economic times deeply affect all market areas, one of which is real estate. Luckily, I, the “Mortgage Doctor,” am here to work with you while you regain control of your finances, especially when it comes to your home.

Most people may feel lost when it comes to finding functional and affordable solutions to their home ownership, but I am here to offer direction and guidance in an effort to get you the best deal when it comes to closing costs.

With interest rates at historic lows, many homeowners are considering refinancing. One question that seems to come up often is, should I pay closing costs or not? Here is a list of options to consider when looking at refinancing. Each option has its benefits, so there's no one size fits all answer.

1. No Closing Cost Refinance

Like the title says, it means you the borrower do not pay closing costs. The next question is who is paying them? Indirectly you are. By taking an interest rate slightly higher than the market rate, the broker can use the "Premium" in the interest rate to pay all your costs. For the purposes of this example, let's take a look at how this “no cost refinance” works.

For this example only, let’s use 4.875% as lowest rate 30 Year Fixed Rate Loan available today and 5.125% as lowest 30 Year Fixed Rate Loan offered with no closing costs and a loan amount of $400,000. The lower rate will include $2,400 in closing costs. The higher rate will allow me the broker, to pay all your closing costs of approximately $2,400 in addition to leaving enough gross revenue to cover office expenses and overhead.

2. Low Closing Cost

This is a combination of the “No Closing Cost” & “Full Closing Cost” options. By taking an interest rate slightly higher than the market rate, the lender or broker can use the "Premium" in the interest rate to pay a “portion” of your closing costs.

For this example only, lets use 4.875% as lowest 30 Year Fixed Rate Loan available today and 5.0% 30 Year Fixed Rate offered with low closing costs of $1,000 and a loan amount of $400,000. The lower rate will include $2,400 in closing costs. The higher rate will allow me the lender, to pay a “portion” of your closing costs of approximately $1,400 in addition to leaving enough gross revenue to cover office expenses and overhead.

3. Full Closing Costs

Like the title says, it means you the borrower pay closing costs of approximately $2,400. For this example only, let’s use 4.875% as lowest 30 Year Fixed Rate loan available today and you the borrower will pay the $2,400 in closing costs.

Now look at the monthly payments:

$400,000 Loan Amount * payments exclude taxes and insurance

30 year fixed rate loan program (same criteria works for 15 & 20 year fixed rate programs)

4.875% = $2,117 monthly P&I

5.0% = $2,147 monthly P&I

5.125% = $2,178 monthly P&I

Compare: 4.875% v 5.125% (No Closing Costs)

monthly savings: - $2,117 – 2,178 = $61 lower payment by selecting the 4.875% rate.

Now look at the total costs divided by the savings: $2,400/$61 = 39.3 months or 3.28 years to break even. That means after 3.28 years, the lower rate and paying the closing cost would have paid off.

Compare 4.875% v 5.0% (Low Closing Costs)

Monthly savings: $2,117 – $2,147 = $30 lower payment by selecting the 4.875% rate.

Now look at the total costs divided by the savings: $1,400/$30 = 46.7 months or or 3.88 years to break even. That means after 3.88 years, the lower rate and paying a “portion” of the closing cost would have paid off.

Another factor to take into consideration is the loan to value ratio of the new loan to your home's value. If for example, adding closing costs to your loan puts you into a higher loan to value bracket, you may opt to go with the lower closing cost or no cost option. Or if you have to pay private mortgage insurance by adding in closings cost, you may opt to go with the low or no closing cost option.

After all is said and done, you don’t want to walk away from a closing and regret your decision, or fear that it will negatively impact your pocketbook in the long run. Therefore, precautions and future planning must be executed to ensure you receive the best deal possible.

Not everyone grasps the “closing costs” concept very well, and there are lots of other elements of your home financing that can add up quickly, but I am here to help. If you have any questions about your home or are looking to purchase in the near future, contact me at 402.301.4500 or email me anytime at terry@terrywilliams.com.

How to Raise Your Credit Score

2010-05-13T08:05:00.000-07:00

Register to be entered to win one of three amazing College World Series ticket packages. Fill out form in box to the right. Your email address, first name and last name are required fields.

Once you learn how to improve your credit score, you will begin down a road that will give you a lifetime of opportunities to create wealth and build a healthy nest for you and your family. In our FREE TELESEMINAR, we’ll show you how to save up to $1200 a month by taking the steps to learn how to build credit.

Do you feel trapped? Are you just scraping by, living paycheck to paycheck?

You aren’t alone. About 80 percent of the population is getting more and more into debt each month, feeling captive because they do not know how to build credit so they can start creating wealth. Some of them do not understand the rules of credit and wealth creation. Others have an artificially low credit score due to errors or a history of derogatory items. Still others need to learn the bankruptcy facts so that they can establish credit repair after bankruptcy. And others need help with their “credit card score,” a tool I created to help people leverage their credit cards to improve their credit score.

One way or another, if you learn how to improve your credit score, you:

- Master the rules of how to build credit
- Discover how to apply these rules, and finally
- Create wealth and peace of mind

Once you learn how to improve your credit score, you can:

- Save money each month
- Afford to send your children to college
- Pay your bills without feeling financially strapped
- See your savings grow each money as your debt is wiped away
- Stop worrying about whether you will survive as you wait for your next paycheck to arrive

Perhaps more importantly, if you learn how to improve your credit score, you can stop the creditors from charging you higher interest rates!

Creditors, banks, and lenders across the country charge consumers higher rates based on the convoluted credit system, taking advantage of their artificially lowered credit score to increase fees and interest charges.

If you have a history of making late payments, creditors might not tell you how to improve your credit score. But they will gladly sit by and watch you struggle to pay high interest rates

SIGN UP FOR OUR FREE TELESEMINAR and learn how to improve your credit score and start saving hundreds of dollars each month!

Let’s Get or Keep Your Credit Score High!

2010-04-30T08:24:00.000-07:00

You know, I’ve always had one question: How do credit bureaus figure out credit ratings and how are those scores affected by late mortgage payments, foreclosure, etc.?

I’ll bet you had the same question as well! Part of the reason the question arose was because the bureaus seemed so secretive about the process.

Well, as it turns out, another part of the reason was because it’s difficult for Fair Isaac and other credit reporting agencies to explain the rating process because they have to consider so many variables!

That is, the ratings all depend on factors like:

• Length of credit history
• Payment history
• Number of credit card accounts open
• Number of negative reports on credit card accounts, etc.

Generally speaking, negatives in any of the above areas will drop your credit score to one degree or another, depending on your history! However, it’s when your mortgage payments start getting past the 90-day due mark, that your score really falls.

The reason for the drop is that the bureaus know people are much less likely to pay their overdue mortgage obligations after the three month period! That’s when it’s possible to be heading into foreclosure and bankruptcy territory.

The, result, as you can see in the list below, is a big drop in a credit score:

• 30 days late: 40 - 110 points*
• 90 days late: 70 - 135 points
• Foreclosure, short sale or deed-in-lieu: 85 - 160

• Bankruptcy: 130 - 240

*Source: Fair Isaac

Now, how much your credit score drops depends on your particular situation.

For example, if you have a long, solid credit history with no really serious blemishes on it, then you’ll probably take a smaller hit because lenders see you as, overall, a reliable borrower.

However, if you have a short credit history with a few blemishes, then you’ll take a bigger hit since they see you as a bigger risk.

Conversely, those individuals who have very high credit scores have more to lose than borrowers with low scores.

For example, one black mark on the record of a person with an 800 score has a greater impact than that of an individual with a score in the 500 area. In other words, high-credit-score individuals have farther to fall than low-credit-score borrowers.

So, here’s my question: how much credit do you have and how well do you manage it?

If you’re a person with credit challenges, then I can help you improve that score with proven methods. And I’ll be able to do that through a highly effective credit-education program called 720score.com that I’ll be bringing to the Omaha market very soon!

Hey, if you’d like to talk about methods of improving your credit score or on any topic related to real estate, call me today at 402.301.4500 or contact me at terry@terrywilliams.com.

Get Your Mortgage Approved!

2010-04-15T07:46:00.000-07:00

Of course, I’m all about mortgages – I’ve been doing them for a long time – and I absolutely know the things that can hinder you from getting the home mortgage you deserve!

So, below, I’ve listed 8 “Do not” rules that are a result of the tightening of guidelines in the market. Follow these rules, and you’ll get that mortgage (or get one refinanced) when you expect to! Here we go…

“Do Not” Rule 1:

Don’t go out and buy big-ticket items (cars, boats, etc.) that will affect your credit score. Lenders frown on too much debt since it makes you look like a greater credit risk in their eyes.

“Do Not” Rule 2:

Don’t quit your job or change to a new industry or become self-employed. Again, this says “big credit risk,” to lenders because it won’t look like you have job stability in your life.

So, for example, if you switch from, say, being a nurse to outside sales, you can bet an underwriter will frown on it.

“Do Not” Rule 3:

Don’t switch from a salaried job to a commissioned job. Again, for lenders, this is an issue of risk.

By nature, commissioned jobs are less reliable in producing income than salaried positions. Lenders will want to a minimum two-year history of success in a commissioned position.

“Do Not” Rule 4:

Don’t transfer large amounts of money between bank accounts. This can raise suspicions as to where the money originated.

If you have to do transfers, have a complete history of how they were transacted; that is, deposit slips…canceled checks…wire transfers… and two months’ documented history of how the money came to be in the account.

“Do Not” Rule 5:
Don’t forget to pay your bills! This may sound like an obvious rule, but people often forget or are late in making payments due to various factors in their lives. Lenders don’t like a history of non-payments or late payments.
And, even if you have a dispute with a company’s bill, I recommend you pay it and then resolve the problem after the fact so no history of non-payment shows up on your credit report.

“Do Not” Rule 6:
Definitely, definitely, don’t open new credit cards! This action will likely drop your credit score because it means you’re adding more debt – something that lenders really frown on in terms of granting mortgages.

“Do Not” Rule 7:
When you get a gift from a relative, document the deposit and don’t co-mingle that gift with other funds. If a parent or other relative wants to contribute gift money for a down payment, then you must be prepared to show where that money is coming from.

You must include the provision of investment account or bank statements. And gifts above $13,000 are taxable, according to Internal Revenue Service rules for 2010.

“Do Not” Rule 8:
Don’t make random, untrackable deposits that could be seller-induced expenses. So, be sure to document every deposit you make!

So, there you have it – eight “Do Not” rules to follow when applying for a mortgage. Of course, I can’t guarantee that you’ll get a mortgage; however, I can guarantee that the whole process will be made a whole lot easier and smoother than if you didn’t follow the rules!

If you want to learn more about today’s mortgage process (and I know you do), give me a call today at 402-301-4500 or contact me at terry@terrywilliams.com

P.S. It’s April 15th – get those taxes filed now!!!!!!

3 Great Things to Do with Your Tax Refund!

2010-03-31T13:44:00.000-07:00

I’ve got three financially-sound ideas for making the most of your tax refund!

First, I wanted to let you know about an item related to the home mortgage market. FHA upfront mortgage insurance premiums are rising from 1.75% to 2.25%.

That means, for example if you’re buying a $100,000 home, you’ll be paying an extra $500. You have until April 5 to get the contract submitted, so get cracking!

Now about that tax refund and the three financially- sound strategies for using it! Hopefully, you’ll get that average $2,800 refund or even higher!

First, if the recession has depleted your savings, then it’s time to use that tax refund money to rebuild your emergency fund! Remember, you should always have enough money in savings to pay all your bills for six months in the event of an emergency, layoffs, etc.

Now, this is money you may need to get at quickly, so you don't want to take any risks with it. Therefore, you want to stay with highly-stable investments. This includes insured savings accounts, short-term CDs, or high-quality money market funds.

Second, high-interest credit card debt sucks the life out of your financial well-being, so you want to make paying that debt off a very high priority.

Let me make this point clear. Remember that average $2,800 refund I mentioned above? Well, for the sake of an example, let’s assume you have that same amount on a credit card.

And you’re paying 16% interest on a yearly basis. The card requires a minimum payment of 4% of the balance. If you make that minimum payment, do you know how long it will take you to pay off the debt? 105 months!

But if you applied your $2,800 tax refund to the account, it would eliminate the balance right away and save you $1,297 in interest. You could then invest that money to…make more money!

The best way to eliminate high-interest credit card balances is to take your lowest debt and pay it off. Then, take the savings from paying off that debt and apply it to the next smallest debt…and so forth. Psychologically, this is easier to do, and it makes the whole process less painful.

Now, here’s the third thing you can do with your tax refund – invest it! You need to look to the future as well as the past in order to create financial security for you and your family.

The wisest strategy is to create a mix of investments (“diversified portfolio”) so you spread risk around. This usually includes stocks, bonds, or mutual funds. And, if you don’t have a diversified investment portfolio yet, then it’s time to begin one with your tax refund!

In other words, use a wise investing method to plan for the future and build your net worth! Use money to make money! Remember, if you don’t measure and track your income, how can you be successful?

I hope you enjoyed – and will implement – these three methods of using your tax refund wisely.

If you’d like to talk more on this topic or on any topic related to real estate, call me today at 402.301.4500 or contact me at terry@terrywilliams.com.

Tax Credits and Refinancing Options

2010-03-14T21:51:00.000-07:00

I want to help you out in two ways with this message – with the home tax credit and refinancing options. But, the only way to do that is by diagnosing the conditions first.

Tax Credit Program – The Deadline’s Drawing Near!

As I’m sure you’re aware, the government has a wonderful program whereby new home buyers can get an $8,000 tax credit and qualified current owners can get a $6,500 tax credit when they purchase another home.Well, if you want to take advantage of this program (and who wouldn’t?), it’s time to “get your rear in gear!”

That’s because you have to have a contract signed by April 30 and close by June 30! So, stop messing around! Get out there and find a house and a realtor!

Is Refinancing Right for You?

Recently, because interest rates are at historic low, I’ve had many people asking, “Terry, is refinancing a good option for me?” Well, I’m like a doctor in some ways. That is, a doctor can’t make a diagnosis without knowing your current and past health record.In the same way, I can’t make a diagnosis without knowing your current and past financial situation. Everybody’s different!

Topics to address in order to make a proper recommendation :

1.Your credit status
2.The amount of the loan
3.Your overall financial position

4.Current interest rate
5.Private mortgage insurance

(Is it an FHA – can we do a streamline, etc.)

All I need is 10 minutes of your time to make the right “diagnosis” for your situation. And, depending on that situation, there can be several options.For example, if I can lower your rate or your term, it may be beneficial for you to incur closing costs.

Or, on the other hand, if the loan amount is the right size, it may be beneficial to do a low-cost or no-cost refinance. That’s right – you can do a low-cost or no-cost refinance if the situation is right. I do them all the time!

What I’m saying is that there’s no “one size fits all” answer! You have to come in so I can give you a proper recommendation.Whatever your mortgage situation, you still need to follow the Four Laws of Debt Free Prosperity I’ve described before:

Law 1: Track your expenditures.
Law 2: Set new target goals.
Law 3: Trim your budget/live within your means.
Law 4: Train yourself to live within your means.

So, what are you waiting for? Because mortgage guidelines are stricter than ever, it’s important for you to come in to see me right now so we can get you the tax credit or refinancing you need!

Call me today at (402) 301-4500 - Dr. Mortgage is ready to diagnose and treat your tax and refinancing problems.

Want to Get a Mortgage Faster? Obey My Four Laws of Debt Free Prosperity!

2010-03-01T17:31:00.000-08:00

I want to help you clear the hurdles of obtaining a new mortgage in a market where rules are stricter and it’s more difficult to qualify for the home of your dreams! What if I told you, all you have to do is follow the “laws” laid out in the book, The Four Laws of Debt Free Prosperity by Blaine Harris and Charles Coonradt with Lee Nelson.

These financial laws are great because they’re so simple, direct, proven…and effective!

They’ll help you reduce or eliminate debt, save money, and remove stress from your life because they’ll help you eventually qualify for the mortgage you want and deserve!

All right, enough talk. Let’s get right to those laws so you can start implementing them today!

Law #1: Tracking

This basic law says, “If you don’t know where your income is going, then you have no way of telling how well (or poorly) you’re doing financially.” Simply put, tracking means you need to keep regular records on your expenditures – every single one of them. That way, you can see where money is being wasted – and then eliminate that waste!

Law #2: Targeting

Okay, once you’ve got a handle on your expenses, you can then set targets or goals like “This month, I’m only going to spend $300 on gas…only $500 on groceries, etc.” In other words, your ultimate objective is to live within your means.

Key Point: Goals must always be written out! The “Four Goals…” authors say that “Goals not written down are wishes.”

Also, your goals must be specific, measurable, realistic, and have a specific deadline (“time-sensitive”). This is often called the S.M.A.R.T. system of setting goals, and you can find lots of information about it by googling “SMART goals” on the Internet.

Law #3: Trimming!

Law 3 is common sense advice - live within your means! In other words, live on less than you earn so you can have money to pay off your debts and then save for that mortgage!

Key Point: Always pay yourself first. The authors suggest you do this by using 10% of your income to pay off debts or invest and living on the remaining 90%.

Law #4: Training!

This law is also common sense - train yourself to live within your means! Get financially educated and realize that your money must be invested in assets that generate wealth (real estate, stocks, CDs, etc.) and not wasted on items that simply eat up your money.

So, there you have it – four simple laws that can give you a whole new life financially. By following them, you’ll get that mortgage sooner than you think and, at the same time, eliminate stress and worry from your life.

Call me today at (402) 301-4500 or contact me immediately at terry@terrywilliams.com and we can talk specifics about getting you qualified for that mortgage!

What's the difference between a short sale and foreclosure - what's the best option for me?

2010-02-16T11:40:00.000-08:00

Recently, I talked with Tom Friehe of Zoom Marketing Associates, a specialist in short sales. As a result of our discussion, we decided we wanted to outline several options for you if you’re facing foreclosure or the prospect of it.

With options, you have choices, and choices give you power over your financial situation!

Naturally, we think short sales are one good solution to a pre-foreclosure situation. However, we want you to be fully informed so you can make the best choice for your specific situation!

To that end, we’ve provided all the basic information you need below. Read on and arm yourself with some very useful guidelines!

What Is a Short Sale?

Simply put, a short sale can occur when the debt on a home is greater than the amount for which the property can be sold. Here’s a basic example:

Assume a homeowner has an unpaid loan balance of $150,000, but the property will sell for only $125,000. The lender agrees to sell the house for the $125,000 amount, which, of course, leaves it “short” of the full amount. Thus, the name “short sale!”

How Do You Qualify for a Short Sale?

In order to qualify for a short sale, you need to prove some kind of hardship. That hardship can include…medical emergencies, divorce, loss of a job, financial hardship, long-term military call-ups, etc.

So, as you can see, many good, hard working, bill-paying people can qualify for a short sale under the right circumstances.

Why Would I Want to Do a Short Sale Rather than a Foreclosure?

A short sale has several advantages over a foreclosure.

First of all, the effects on your credit score can be much less with a short sale. Yes, your credit score will take a hit (a drop of 100-200 pts.), and you won’t be able to get a loan for two to three years.

But, a foreclosure has much deeper effects! Your credit score will also drop (200-300 points), but the damage will last longer – 3-5 years – and affect a broader range of credit-related items – car loans, home ownership loans, etc. In other words, you’ll have a harder time getting credit, and you’ll definitely pay more for it!

Second, short sales are private affairs compared to foreclosures. You’ll have the debt burden lifted off your shoulders without all your friends, family and neighbors knowing about it!

Third, think of short sales as being elective surgery rather than emergency surgery! With elective surgery, you know what’s going to happen and when it’s going to take place, so the stress and expense are much less!

Foreclosure is more like emergency surgery – costly and much, much harder on the emotional state of you and your family!

Finally, short sales are good for Omaha’s – and America’s economy. They don’t impact neighborhoods home values like foreclosures do, and that’s good for everyone involved!

If I’m Facing Foreclosure, What Are My Options?

There are several options you can pursue. The first option is to simply start making payments on the home again if at all possible. This can sometimes be done by getting a loan from family members or friends.

A second option is called “Deed in Lieu of Foreclosure.” This is a situation where you go to the bank and negotiate with them to take the deed in order to avoid foreclosure. However, this is a rare situation, and the deed may still show up on your credit report.

In a situation that’s temporary, a third option is to work out a payment plan with the lender or refinance the loan.

After that, a short sale is your best option.

What Are the Steps Involved in a Short Sale?

Although the steps are simple, I don’t have enough room in this message to explain them thoroughly for you.

That’s why I’d like the opportunity to do just that by asking you to go right now to support@midwestlossmitigation.com or call me immediately at 402.301.4500. I’ll help you understand your rights and responsibilities and show you that a short sale can be the best solution to a difficult situation.

Tom and I are here to rid you of foreclosure stress and set you free of the financial burden that’s weighing you down!

2 Dramatic FHA Mortgage Changes and the NEW Good Faith Estimate 2010

2010-02-01T09:18:00.000-08:00

Expect Fun and Excitement On My Blog In The Coming Weeks!

You know I love mortgages, it's one of the biggest financial decisions you'll make in your life. However, I'm more concerned with your preparation for a mortgage so you're well qualified when it's time to buy. Plus, I want to make my videos fun, interesting, and exciting! In the coming weeks, I'll be inviting local business owners on my blog to help you make better financial decisions and live a financially responsible life so you can own the beautiful home of your dreams. Stay tuned - I'm very excited for what's to come.

Now, on to business....

2 Dramatic Changes to FHA Mortgages You Must Know

We have some very important FHA mortgage changes in the late spring / early summer. They have decided to increase the upfront mortgage insurance premium from 1.75% to 2.25%, which means it's going to cost you or your client more to purchase or refinance a home.

The second big change, seller concessions, will reduce from 6% to 3% leaving the seller less flexibility to help you buy their home. What does that mean? It's time to buy the house you've been waiting to get a deal on - or you are going to pay more for your FHA mortgage if you wait.

How to Read the New Good Faith Estimate (Jan 2010)

Also, the new Good Faith Estimate went effective Jan 1st, 2010. It now guarantees the interest rate and closing costs so there are absolutely no surprises at the closing table. I put together a video that outlines the new Good Faith Estimate so you know what to expect (and how not to get taken advantage of). Believe me, it's complicated, but I'll break it down for you so you can understand where every penny of your money is going when buy a mortgage. Remember, there are many tricks shady mortgage companies can use to hire their true compensation - watch my video so you're the smartest person in the room. ===>

Alex Schutzenhofer Omaha Personal Trainer Interview - "Fitness Makes Financial Sense"

2010-01-17T11:23:00.000-08:00

A special thanks to Alex Schutzenhofer, an in-home Personal Fitness Trainer in Omaha, NE. You may reach him at alex@thefinalrep.com or on his cell phone 402.880.3909 for a free private consultation just for readers of Terry Williams! (visit Alex's fitness and nutrition blog)

"Does Fitness Make Financial Sense?"

Of course it does!! The heather you are the longer you'll have to enjoy all the benefits of your hard work! Why buy a house with Terry only to let health issues limit your ultimate happiness? Here are very 4 simple tips to get you back on the bandwagon a few weeks your new year's resolution to get fit. It's my profession to personalize these tips to your specific goals, but it all starts with your motivation to succeed - here's how to start:

1. GET MOVING!

Exercise is the easiest (for most people) to get started with on their journey for a healthy lifestyle. There are two forms of exercise – Anaerobic training (Lifting weights, Weight machines, etc…) and Aerobic training (Running, Bike riding, etc...). The amount of each of these to do is debatable. But know this, to physically change yourself you will need to put demands on your body that require it to adapt to the demand. That reaction accompanied with good nutrition will result in physical change.

2. THE “N” WORD – “NUTRITION”

This is the most important part of a healthy lifestyle. But it is the hardest to master. The best way to start changing your diet is with small manageable steps. Don’t go head on into a calorie counting low carb nutrition program if you have never participated in a program. This is setting yourself up for failure. Nutrition tends to be an “I CANT” mind set. “I can’t eat this, I can’t eat that….” Because of this you will need to make small changes and build upon them daily/weekly/monthly. By taking a long term approach you are more likely to stick with it for a lifetime versus just a short period of time.

3. DON’T BEAT YOURSELF UP!

You will fail! I know I know be positive right? But it is true, there are not many people out there that quit cold turkey and become 5 day a week exercisers and 100% compliant on their nutrition. So know this ahead a time and give yourself some built in rewards. Not all you can eat buffets or gallons of ice cream. Be reasonable, go out to eat one day on the weekend or have a desert one night. Notice I said “one” in both examples. NOT all weekend or every other night.

4. EDUCATE YOURSELF NOW...

I highly recommend you read Precision Nutrition Strategies for Success. I give this 48 pages document of nutrition awesomeness to all my clients - the practical nutrition knowledge it contains for busy professional will take your results to the highest level.

FOR YOUR FREE EBOOK, simply email me at alex@thefinalrep.com and I'll send the e-book your way - no strings attached. Now go get on that treadmill and start working out today!

Have a fitness, nutrition, exercise, or workout question? Leave a comment below and I'll answer if for you - free of charge...

4 Essential Steps to a Rewarding Financial Lifestyle

2010-01-04T17:19:00.000-08:00

* A special thanks for David Carter for his time in our interview - visit his website at http://www.cartercounseling.org/

4 Essential Steps to a Rewarding Financial Lifestyle

David J. Carter and Patricia L. Carter

Imagine being able to approach your finances with a sense of optimism, clarity, and openness, instead of dread. Many avoid facing financial issues until they are at breaking point. Then there is often a sense of dread, hopelessness and helplessness. How does it get to this point? Regardless of the current financial stressor, we have found that individuals fail to manage their finances for one of three reasons:

1. They don’t know how.
2. They’re prevented from doing so in some way.
3. They lack incentive.

That’s where we ask the following key questions:

• What are the symptom’s that signify the existence of a financial problem?
• What is the relative value of solving your financial problem?
• What is your money management history and resulting financial deficiencies?

Once we have this information, we are able to help clients develop four steps to a healthier financial lifestyle: awareness, knowledge, skills and ownership.

Step One: Awareness

The hardest part of the financial process is accepting the existence of a problem. When we are forced to look at something uncomfortable we feel responsible and powerless. We try to avoid the experience by blaming others, external circumstances, or society. We can choose, however, to accept financial mismanagement as a behavior that is separate from who we are, as a caring and loving person. Once we begin to accept our behavior as something that is not a reflection of our identity as good or bad, but rather a behavior that we can change, we can open our minds to the possibility of financial success.

Step Two: Knowledge

We have to spend some time examining our relationship with money as well as how this relationship evolved. If your relationship with money were a personal one, how would you describe it? Do you love, hate, fear, depend upon, or feel generous with money? Most of us learned from observing our parents or other adult models, as we grew up. If we earned an allowance and learned to put the money away for something we needed versus wanted at the moment, then we started to increase our knowledge of valuing money as a means to attaining long-term goals, versus, satisfying immediate urges.

Step Three: Skills

Financial success favors the activist; however utilizing the appropriate financial management skills is required for achieving financial success. This is where assistance from a financial consultant provides an opportunity to communicate honestly about your personal financial situation, discuss financial goals, explore your feelings about money, discuss steps toward financial responsibility, and develop a plan for realizing your financial goals.

Step Four: Ownership

Once you take responsibility for your current financial situation, you will take ownership over meeting your future financial goals. Ownership provides motivation for change! Appropriate money management and financial assistance are the vehicles for that change. Many people view their money as a means to an end instead of as a key member of the family, to be taken care of and helped to grow into maturity. Ownership evokes reconciliation in your relationship with money, allowing you to view money as an investment in your future.

If you have any questions please call me at 402.301.4500 or email me twilliams@dundeebanking.com. You can also get a hold of David with Carter Counseling at www.cartercounseling.org.

What's Next In The Mortgage Market for 2010?

2009-12-17T10:36:00.000-08:00

Happy Holidays to You!

As we approach the end of 2009, it’s time to thank the people that have helped us become what we are here at Dundee Mortgage. To all of our loan clients this past year, we offer you our sincere thanks for putting your trust in us to handle your home lending transactions. They say in our business that you’re only as good as the people you work for think you are, and we try very hard to be the best at what we do.

To our business partners, we also say thanks. Building a new mortgage company from the ground up takes strong partners that you can trust to do things the same way we do. So to Missouri River Title, DRI Title, Residential Appraisals, and everybody we rely on to help us get things done, we say thank you as well.

2010 is going to be interesting.

In coming weeks, you’re going to see information here about the changes coming to our industry. We touched on it earlier, and we are going to expand the information we give out to help you understand the lending environment we live in going forward. Not since 1972 ushered in the era of regulated home lending have we seen changes like this, and we’re going to be your source for everything you need to know. But first, a little about what Terry and I think the market is going to look like next year.

I’ve had conversations lately with realtors, lawyers, bankers, and all kinds of industry watchers that think the real estate market is in for a banner year. There is a lot of pent up demand with the home buying public, and it’s only a matter of time before that demand hits the streets. Interest rates started 2009 in the low 5% range, and they’re still there today with no real indication that they are going to rise sharply any time soon.

Couple that with people that have been waiting for their economic outlook to improve before they decide to consider a move up in home price or a first-time home purchase, and we think things are going to really start heating up. There is still a ton of inventory available in the Omaha market, and we think that it will be the best time to buy and sell a home since 2007.

Stay tuned for our next update on what you can expect when you apply for that home loan in 2010.

Welcome to My NEW HD Video Blog! - The New Mortgage Market - What You Should Know!

2009-11-28T12:31:00.000-08:00

Welcome to my NEW HD Video Blog!

For those of us that have been in the mortgage origination business as long as we have here at Dundee Mortgage Services, the changes that have come to our industry over the last year have truly amazed us. No longer can you show up at the doorstep of a mortgage lender and simply sign an application and be approved for a mortgage. No longer can you make the assumption that if you have a stable job and a reasonable credit history that there will be a financing vehicle available to you for the home you currently own or would like to purchase. Those were assumptions that our industry made until very recently.

Now more than ever, consumers in the market for a mortgage need a company that understands this. The upheaval that this economy has endured due in large part to the collapse of the mortgage financing industry has caused our business to entirely remake itself, and the changes have been dramatic. Now more than ever, consumers need the experience, integrity and organizational skill that very few companies can offer. We saw the need to change the way a mortgage is delivered to the marketplace, and almost two years ago, Dundee Mortgage Services was created to address the new process of what originating mortgages has become – just as we predicted.

Why us? What makes us different?

Plenty. Let’s start with our ability to offer every loan program on the market today. FHA, VA, Conforming Conventional and USDA Rural Development loans are all here, and we have the ability to shop multiple lenders for each product. Larger institutions generally offer these products with their own set of underwriting guidelines and do not choose to offer the same products with competing lenders. We can look at many sources for the same loan product, and in today’s restrictive lending environment, this can prove to be an invaluable asset for you and your mortgage originator to have.

Secondly, we have a loan program that is unique in the Conventional Conforming loan world today. This product is offered exclusively by Dundee Mortgage Services in the Omaha market, and what we like about it most is our ability to underwrite the file right here with our own people. This takes mortgage lending back to what it was during the days of stable lending practices – a manual process that takes into account all factors important in making a sound lending decision – not simply what the borrower’s credit score happens to be that day. This approach to lending is good for both the lending institution and the borrower. We offer competitive interest rates, low fees and the ability to make your mortgage payment right here. If there is a question about anything at all that has to do with the mortgage, you can get your answers from the people that originated it since we do not sell the servicing of these particular loans.

Third and possibly most important is the experience and integrity that our team brings to the process. Taken collectively, we have over sixty-five years of experience originating mortgages of all types, an asset that is very hard to duplicate in any company dedicated exclusively to originating mortgage loans. This proved to be of the utmost importance as our industry changed drastically over the last two years because it gave us the knowledge base to fall back on as we re-created the company and positioned it for the future. No where in the market will you find a group of individuals that keep the interests of the borrower more front and center than here at Dundee Mortgage.

The next time you’re in the market for a real estate loan of any kind, you owe it to yourself to contact us at 402.301.4500 or twilliams@dundeebanking.com and experience the way we do business. We guarantee you’ll be impressed.