Money Saving Tips

Are you one of those people that just can’t seem to save money? You go to work every day, earn a decent income and just can’t figure out where your money is going?  Here’s a few tips to manage your money outgo.

1.      Know your income and expenses: You must start here. How much do you bring home (net income) and what are you required expenses (housing, car payment, utilities, etc)? Make a complete list of all your monthly expenses, go back three months, so you can find everything and avoid the anomalies.

2.      Separate the “desires from requires”: Umm hmm, this is the toughest step, we tend to blur the lines of what we want vs what we need. This step is easy to do when you don’t have any money but add money and the whole picture changes. Try the “last dollar test”, if this was my last dollar, would I spend it on this? This will help you while prioritizing spending decisions.

3.      Stop competing: Stay off social media if you struggle with this step. It will keep you spending money that you really don’t have. Watching friends and acquaintances on these sites can cause you to feel inferior, it appears that everyone is winning on social media; new cars, great trips, high end restaurants. Keeping up with the Joneses will keep you broke.

4.      Pay yourself first: Come hell or high water, the moment you receive a pay check, take at least ten percent up front and put it away for savings. This is in addition to the funds that are allocated for retirement (401k). Once you become more disciplined you can increase the percentage of savings. If you don’t have the discipline to do this on your own, use a direct deposit from your employer to a separate account. I suggest a credit union or financial institution that provides a no fee account.  Don’t get an ATM card and don’t get online banking. This will keep you from frivolously accessing the account.

5.      Pay Cash When Possible: See Step 2 (above) for why. I am a huge fan of credit, I’ve written many articles about it.  However, paying for items in cash will help you stay within your budget. It also saves you money. Spending cash is interest free, no annual or late charges on cash, and when its gone, its gone.

Saving money is a lot like working out. We all know we need to do it, we actually know how, but we simply lack the discipline to get started and/or stay the course. Mastering ones spending is the first step to financial freedom for you and your family.

How To Protect Your Real Estate Investment

Protecting Your Real Estate Investment

How can you better protect your Real Estate Investment?  Here are a few steps I strongly suggest.

1. Homestead

When you record a Declaration of Homestead, Nevada law protects the equity in your home up to $550,000 from general creditor claims (unpaid medical bills, bankruptcy, charge card debts, business/personal loans, accidents) but would not preclude a seizure or forced sale of your residence from general creditors if your equity exceeds the $550,000.

The Homestead law does not protect you against debts secured by a mortgage or deed of trust, payment of taxes, IRS lien, mechanic's lien, child support or alimony payments.

2. Homeowners Insurance

Typical homeowner’s insurance policies offer coverage for damage caused by fires, lightning strikes, windstorms and hail. In addition they cover losses/damage due to theft and accidents that occur on your property. However, it's important to know that not all natural disasters are covered by homeowners insurance. For example, damage caused by earthquakes and floods are not typically covered by homeowners insurance. Verify your coverage with your insurance agent and we suggest doing this annually.

3. Home Warranty

A home warranty is a one-year, renewable service contract that covers repairs and replacements of most major home appliances and system components due to failure, standard usage and other problems that happen due to age.

What does it cover?  A home warranty will typically cover most major components of large home systems, such as your HVAC (central heating ventilation air condition), hot water heaters, plumbing, electrical and more. It may also cover regular appliances such as washers, dryers, refrigerators and stoves. Some plans allow you to purchase optional add-on coverage for your spa, second refrigerator, swimming pool, pumps and more. Always ask about roof coverage, as some warranties do not include this as a standard item.

4. Credit Protection / Life Insurance

Mortgage Payment Protection typically covers your loan payments if you lose your job or become disabled, and/or it pays off your mortgage when you die. These products are often times frowned upon and not as easy to obtain as they once were sold with the mortgage, but with a little research, you can usually find a reputable agent to explain the pros and cons.  I am a fan of insurance and have seen many homeowners stay in their homes when they were disabled due this type of coverage.

To Buy or Not to Buy (that is the question) 2018

If I had a dollar for everyone that asked me if this is a good time to buy, I could retire early or at least take a nice vacation.  All jokes aside, here are the facts. 

1. Prices across the board are still affordable
2. Interest rates are still low
3. Down payments are minimal
4. Inventory is dwindling

So YES, it’s TIME to BUY a piece of property.  Many experts are saying prices will continue to rise, rents will increase, and interest rates will certainly rise over the next 12 months.  Maybe they are right and maybe NOT, but WHO CARES.  Clearly, we all want a deal and bragging rights because we bought for the lowest price and sold for the highest profit.  However, prices are rising and now is the time to pull the trigger, worrying about someone down the street who pays a few dollars less than you doesn’t make much sense.  My dad always said, “study long, study wrong” don’t miss a great opportunity fishing at the bottom, because you might end up with a hand full of sand.

There are truly only two types of buyers, owners and investors.  An owner is buying to live in the property and occupy it as their primary residence or vacation home.  Investors on the other hand are buying with the sole intention of selling or renting. If you are buying with the intention of selling (flipping the property), you want to pick the property up for the absolute lowest price, so you can maximize your profits.  With prices rising those opportunities are not as plentiful, but still exist. Investors buying to hold (rent) properties are not quite as cost sensitive. Every economic indicator says that rents will dramatically increase over the next decade and renting will be in high demand. Investors that play in this field, simply look at the ROI return on investment. If they can cash flow monthly and have an asset that is appreciating they are happy.

So what about YOU, the end user. Why should you BUY?  Simply because you must live somewhere and pay someone.  Why not pay your own mortgage vs paying someone else’s. Currently you can still write off mortgage interest and with modest appreciation and this low interest rate environment you can still buy at a great price and payment. 

Don’t be that person fifteen years from now, talking about the great four-plex that you missed out on.  That perfect dirt lot, that a shopping mall ends up being built on, or just simply in a home that could have over six figures of equity all because you had a failure to launch.

BUY NOW!!!

Goal Setting for the New Year

Soooo… What are you going to do different this year, than you did last year?  If you’re like the majority of people, every year you make resolutions that you never resolve, right? Join me by yelling at the top of your lungs, NOT THIS YEAR!  This year will be different, this year; you will achieve your financial goals!  But the question is HOW?  First, write them down and second, revisit them daily, weekly and monthly.  We all know the age-old adage, “That which gets measured, gets done.” 

1. Define the Goal
2. Make it Realistic
3. Execute

DEFINE your actual GOAL?  And no, it can’t just be “I want to buy a house”.  Is your credit score up to par, do you have money saved, have you applied with a mortgage professional, and finally, how much house can you comfortably afford?  These are the questions you have to ask yourself.  Always ask yourself the TOUGH QUESTIONS.

Make it REALISTIC.  One of the biggest pitfalls of goal setting is planning goals that you’ll never be able to achieve.  The most common New Year’s resolutions from my clients and friends…  I’m going to lose weight and/or save more money.  The next questions are… how much weight and how much money?  If you’ve never saved any money, don’t expect to save half of your yearly income in one year. Start with small increments and work your way up.  A great rule of thumb is to try and save 10 percent of what you bring home after all taxes and deductions, also known as your net income.  To get started work on 5 percent.  Heck, start with $100 a month, whatever it takes, just get started!

Lastly, EXECUTE!  Quit putting off until tomorrow what you can start today. The first step is to cut your expenses.  Review all 12 months of your 2017 bank and credit card statements. Find out where your money actually goes. You may be surprised to see how much money is spent on ATM fees to access your money. Use the ATM at your bank.  A few suggestions: limit your eating out, unnecessary cable channels, limit monthly subscriptions and memberships that you rarely use.  Go to the library instead of buying books for leisure reading (how often do you actually re-read a book)?  Pack a lunch a few days a week, make coffee at home or work instead of daily Starbucks. Instead of nightly movies every weekend, try some matinees.  Lastly, buy in bulk for toiletries, dry goods and items you have to buy regularly. 

Now to start saving the extra money you just discovered, open an interest-bearing account specifically for your savings.  I recommend that you do not link the account to your daily account nor have an ATM card.  I would even go so far as to suggest a completely different financial institution. The reason for the separation is to curb your temptations.  How hard is it to lose weight if you have a refrigerator full of ice cream and cabinet full of cookies, pretty hard, huh?  So don’t temp yourself.  Good luck and Happy New YOU!

Alicia Taylor is a licensed Mortgage Banker and Real Estate broker with over twenty five years in the finance and lending industry.  If you are looking to purchase, refinance or sell your current property. Please all Mortgage Solutions, LLC 702-368-0059. 

Help for Underwater Home Owners- HARP 2.0

I know many people have been hearing about the HARP and HARP 2.0 loan (Home Affordable Refinance Program), but still have no idea exactly what it is.  Well here it is in a nut shell.  This is a refinance loan for homeowners that are upside down on their mortgage (owe more on their home than it is currently worth).  It doesn't matter how upside down you are, you may still qualify.  If you're not behind on your mortgage payments but have been unable to obtain traditional refinancing because the value of your home has declined, you may be eligible to refinance.  If you applied for this loan in 2010 or 2011 and were declined, try again, it really does not matter how underwater you are, it could be 300% and you can still qualify, it is worth looking into again.  So what is the catch?  Surprisingly enough, there aren't too many, it appears that this time the government got it right, or as close to right as they could. 

Qualifications:

• Your loan must have closed on or before May 31, 2009
• You must be current on the loan at the time of submission
• There is NO minimum credit score required
• Not available for Government loans (FHA or VA)*
• No more than 30 days late on your mortgage in the previous 12 months
• Bankruptcy, Foreclosure and Short sales are allowable, less than 3yrs (case by case basis)
• Your loan must be owned by either Fannie Mae or Freddie Mac** (see below).
• You do NOT have to live in the home, rentals and vacation homes are OK
• You do NOT have to go to your original lender
• Most cases do NOT require an appraisal
• Can be a single family, townhouse, condo, 1-4 units, manufactured home
• Proof of income by either pay stub or self employed borrowers 1 year tax returns
• You must benefit from the refinance (lower payment, lower the term of your mortgage or switch from an adjustable or interest only mortgage to a fixed loan).

Now, what is the first step?  You need to find out if **Fannie Mae or Freddie Mac owns your existing mortgage. Click on http://www.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/corporate/ if you find that your mortgage IS owned by one of these agencies and your mortgage closed prior to June 1, 2009, you may be eligible to refinance and lower your rate.  Contact Mortgage Solutions LLC at 702-368-0059 or any qualified lender to start the process. 

Unfortunately, if your mortgage IS NOT owned/backed by either Freddie Mac or Fannie Mae, this loan is NOT available to you at this time.  But keep your eyes and ears open, because the government has rumored a HARP 3.0 in the future for clients without Freddie or Fannie loans.

If you have an *FHA or VA loan, still contact Mortgage Solutions or any qualified lender, because there are programs available to government borrowers as well and they are generally easy to qualify for with very little paperwork needed.

Apply online now: www.mortgagesolutionsnv.com

Five (5) Things You Can Do To Improve Your Credit Score

First you have to know how your credit score is compiled, as knowing the rules makes playing the game a lot easier.

FICO scores range from 300 to 850.  Five major components make up your score.

• 35%     Paying on time
• 30%     Amount and type of debt
• 15%     The length of time you’ve had credit
• 10%     The variety of accounts
• 10%     The number/types of accounts recently opened (6mos)

           

1. Bring all of your open accounts current and pay on time.

Making sure you don’t have anything late (30 days or more) will improve your score.  Your payment history makes up 35% of your credit score.

2. Pay off or pay down your revolving debt.

When your revolving debt (credit card) balances are less than 50% of your available credit lines, your score increases.

3. Don’t apply for or open any new accounts.

Opening new accounts lowers your credit score, especially credit cards.

4. Don’t close out credit cards.

Keep your accounts open even when you’re not using them.  Closing down accounts lowers your score.  It doesn’t matter whether you or the creditor close them out, it still negatively impacts your credit score.

    

5. Choose to stop receiving pre-approved credit cards.

Most people don’t know that you can opt out of receiving pre-approvals in the mail.  But more importantly, in doing this you will receive a slight improvement in your score.  There are several websites you can visit; I’ve seen positive results with www.optoutprescreen.com.

The Business of Marriage

Money and marriage go hand in hand; so much so, the vows should end with, “till death or finances do us part.”  The truth is many marriages end in divorce, I won’t qoute the over used statistic that boasts 50% of all marriages end in divorce.  As that may or may not be true, it is a fact, that far too many marriages end in divorce and a large number of those unravel due to money. 

Knowing that odds are stacked against you before you get married or even while your marriage is still intact, what conversations should you have?  Here are few topics to start with and why:

Money Management- Will you have joint checking accounts, separate or both?  It is important to know where your money is going to be saved and who will be in control of bill paying.  The person with the best money management skills should be in charge of paying the bills.  Just because you make the most money doesn’t make you the best at handling it.  Pick the right person for the job!

Family Size – How many children do we want, can we afford them?  What kind of education do we want for our children, how much will it cost and how will we save for it?

Career/Location – obviously, this is extremely important, what do you want to do for a living and where do you want to live (neighborhood/state/region, etc.).  All couples should discuss these topics at length, and agree before you start your family and incur debt together.  Disagreeing on this subject down the road is a quick way to put a major strain on any relationship. 

It’s never too late to have a financial tune-up in your relationship.  It is ok to change your course if you find that you’re traveling in the wrong direction.  I know this may sound sterile and impersonal, but this simple conversation could set you on the way to a successful marriage and turn your dream union into a reality.