House Hunting Tips for Busy Parents

After several nights of weighing the pros and cons of buying a house one thing we realized is that we simply didn’t have enough information to make a good decision. We haven’t been in the real estate market for years now so we don’t really know what our house will sell for or what we should expect to pay for the kind of home we’re looking for.

We’ve started doing some research and talking with our friends in the industry, realtors and appraisers, about the market and about our house. We also decided to start looking at a few homes to get a feel for various neighborhoods and price ranges.

Last time we were house hunting we had no house of our own to sell and no kids so it was a different experience. We spent yesterday afternoon trying to see a few houses and learned a thing or to about house hunting as parents.

Screen Houses Thoroughly Online

We don’t have a lot of free time so we have to be pickier about the houses we look at. In the past, if we saw a house online that had a few things we weren’t crazy about we might check it out anyway just to see if we liked it. We had time to visit them so there was nothing to lose if we checked out a few houses that didn’t meet our criteira.

Now we can only see so many in a day so we’re only going to look at a house if it meets all of our major criteria.

Leave the Family Behind

After dragging our kids out of their beds from their naps and lugging them around all afternoon we quickly realized that the initial stages of house hunting were not going to be a family affair.

We could move much faster if there was only one of us driving to see homes. Not only could we cover more ground in a shorter amount of time, the kids didn’t want to be cooped up in their car seats driving around all day.

From now on, one of us will check out a house that we’re interested in. If we find any in our “scouting” that look good, then we corral the kids and bore them to death with a house visit.

Have a Quick Trigger

If you’re in the middle of checking out a house and you find something that’s a deal breaker, don’t be afraid to bail immediately. Time is limited and there are more potential homes out there, waiting for you to find them.

We’re generally pretty polite so typically we would feel bad cutting a realtor’s tour short and saying adios. Plus in the past we might have decided to keep looking around just to see if the rest of the place was awesome and might make up for the major shortcoming.

However, now our time for visiting homes is precious so if we’re in one and see something that is a red flag, we’re out the door.

Make Backup Plans

At the first house we were standing in the rain, car seats in hand, on the front door step of a home that we were scheduled to visit. The glass storm door was locked and no one was coming to answer it. The real estate agent was very apologetic but that didn’t do us much good.

We were all dressed up with no place to go. We had interrupted the kids naps, driven out to this area, and now knew nothing else to look at. Luckily we called some friends in the area and they pointed us to some homes for sale that we could checkout.

From now on we will have a few backups in place around the area of the houses we’re scheduled to see. In case you haven’t noticed a trend, our lessons learned had to do with seeing more of the right houses more quickly. Having a few alternate houses in mind helps to keep from wasting your time when a house appointment falls through.

Posted on November 16th, 2009 in Home Owner, Mortgage | 5 Comments

Written by Ben Edwards · Filed Under Home Owner, Mortgage 

Weekend Deals – Discounts & Cash Bonuses

Deals and promotions keep popping up lately, I’m guessing partly because it’s close to the end of the year and businesses are making a push to meet or exceed their goals for the year. I’m sure part of it has to do with Christmas deals for the upcoming shopping rush.  Here are some of the promotions going on that you might be interested in.

Angies List Promotion

Angie’s List gift memberships are 50 percent off through the end of the month.  Since it’s a gift, they’re waiving the activation fee so you don’t even need an angies list promo code.

TradeKing Bonus

The TradeKing promotion where you earn a $50 bonus for opening an account and making a trade was extended through the end of the month.  Here’s a TradeKing review for more detail on their service.

ING Direct Bonus

If you open an ING Electric Orange account by November 30 and set up Direct Deposit you’ll be eligible for a $25 bonus. You have to enter Reference Code EM382DD to be qualify for the $25 bonus. After two Direct Deposits are made within the first two months (60 days) of account opening, the bonus will be automatically applied to your account on day 60.

American Express Gift Cards

American Express gift cards have always come with fees that eat into the amount of money you’re giving away.  They recently removed the monthly fees so the recipient no longer has to worry about the balance depleting until it’s used.  American Express is also running a promotion through the end of the year where they’ll waive the purchase fee so it doesn’t cost you anything to give the card.

You can use the American Express promotion code of EMC11A to get 100% off the purchase fees through the end of December. – click here

Posted on November 14th, 2009 in Deals | Comments Off on Weekend Deals – Discounts & Cash Bonuses

Written by Ben Edwards · Filed Under Deals 

Home Buyer Tax Credits Are Working??!!

The first time home buyer tax credits in 2009 didn’t really interest us that much since we’ve owned our home for just under ten years now.  However, the latest version of the bill now includes a tax credit through 2010 for homeowners who have lived in the same place for five of the last eight years consecutively.

This new home buyer tax credit will give you a credit up to 10% of the cost of your new home, with a cap of $6500.  I’ve had a busy week and hadn’t given much thought to new bill yet until my wife called me up at work yesterday.

New House Fever

My wife’s been wanting to move into a new house for a few years now and has been contributing to a “moving fund”.  The issue is that she has her eye on a bigger house but I don’t want our house payments to increase any. The planner that she is, my wife opened a separate account and has been putting away money to fund an eventual purchase of a house upsizing.  Our family has grown since we bought our house and future plans project additional growth so we may need the space someday.

Based on home sales in our area and the estimated cost of a new home, she had in mind about how much she needed to put away before we could start looking at houses.  A tax credit of $6,500 would accelerate her schedule by almost a year so she was pretty excited when she heard about the new law.

Since the home buyer tax credit is a dollar for dollar reduction of taxes and is refundable, you could look at it as knocking $6,500 off the purchase price of a home we would buy.  We would still be short of the total figure she was trying to save up but the “free” $6,500 is rather enticing.

Home Purchase Timing

The latest version of the law says that we would need a contract on a house before May 1st of next year and that the sale would have to close before July 1st.  While Obama did extend the first time home buyers tax credit with this bill, the general consensus is that there won’t likely be another extension.

That means we’d have to find a house by May of 2010, which gives us about 6 months of searching, planning, and maneuvering our finances before we’d have to pull the trigger. According to the bill we could file an amended tax return for 2009, claiming the tax return for 2009 so we would potentially “see the money” sometime in 2010.

Are the Home Buyer Tax Credits Working?

In one night, our family went from talking about buying a house two years down the road to suddenly considering purchasing a home by next May so I’d say that the home buyer tax credits are having an impact.

Of course at this point it’s just talk so we don’t know if we’ll actually go through with it but my wife signed up for new home alerts from several real estate websites last night and we we spent about an hour talking through some of the details so momentum is building.

I’m not a big fan of moving, it takes time and money and the whole process of home searching and buying can be quite stressful.  Plus I really like where we live now so I’m not really jumping up and down about buying a new house.  But life has a way of shifting when you least expect it to.  Thanks a lot Obama for signing the bill and pulling the rug out from under me, you’re going to give me a ulcer : )

Posted on November 12th, 2009 in Home Owner, Real Estate, Taxes | 7 Comments

Written by Ben Edwards · Filed Under Home Owner, Real Estate, Taxes 

Reverse Mortgages for Seniors

Reverse Mortgages

If you or your parents have lived in your home for many years and have built up a lot of equity in the property you may have heard about or considered a reverse mortgage as a potential source of income during retirement. There seems to be a wide divide in opinions on whether reverse mortgages are a wise way to leverage equity in a home or a detrimental financial move for living out the golden years.

According to financial advisor Paul Escobar of U.S. Wealth Management, when it comes to reverse mortgages, “Seniors and their advisors should consider them, especially when their sole income and asset is their house.” Today we’ll take a look at how a reverse mortgage works and the benefits they have to offer retirees and seniors.

What is a Reverse Mortgage

A reverse mortgage is the direct opposite of a traditional mortgage because the mortgage lender makes monthly payments to the homeowner. A reverse mortgage is an option available to homeowners that are 62-years of age or older that own a primary residence free and clear of any mortgages or liens. The home also has to have a sufficient amount of equity-what is deemed as sufficient varies by the lender.

There may be other requirements from the lender but credit does not play a role in the qualification process. When homeowners qualify, the mortgage payments can be taken as a lump sum or in monthly installments. Since the amount of the reverse mortgage is based on the amount of equity, interest rate and the borrower’s age, the amount of the mortgage can vary.

Reverse Mortgage Benefits

While all reverse mortgage holders have their own reasons, there are some popular reasons that seniors opt for a reverse mortgage. Jason Roberts of Frost Lending Group points out that the fees for a reverse mortgage are similar to a conventional loan and the interest rates for reverse mortgages are generally lower. He’s helped a range of clients with reverse mortgages-some couldn’t pay for their basic needs, while others had a decent amount of savings but wanted to eliminate their mortgage payment.

Retirement

As people approach retirement, often their mortgage is paid off or getting close to the end. No matter how much income you have from other sources, a reverse mortgage can provide retirees with additional income. The additional income from a reverse mortgage may help to boost the lifestyle of the retiree or provide funds to cover the extra costs of medical expenses that aging typically brings.

Medical Expenses

Increased cost of living, rising healthcare costs and a decreasing income do not necessarily work in harmony, but is the situation that leads many retirees to a reverse mortgage. Rather than forcing retirees to choose between paying their living expenses and paying for medicine and healthcare, the extra money that reverse mortgage provide allow seniors to pay for all of their needs – medical and daily living.

Home Accommodations

Some retirees use the money from reverse mortgages to make necessary modifications to their home. It may be widening doorways to accommodate the use of a walker or wheelchair or building a ramp to get up and down the stairs. Reverse mortgage payments can cover these costs.

Extra Money

With more time to travel and participate in leisurely activities, money from a reverse mortgage can provide extra spending money. It pays for trips, vacations or activities such as golf and days at the spa. It is an added bonus that allows them to enjoy some of the luxuries in life.

Go Debt Free

With another source of income for normal living expenses, many retirees use reverse mortgages to reduce or deplete debt. Without debt, the reverse mortgage money becomes additional cash flow that can be applied to other expenses.

After a discussion in her own mind and with her daughters, 77-year-old Francine Trevins opted for a reverse mortgage on her Manhattan loft. Francine says she has a wonderful life now because she is relieved of the “burden of a mortgage.” Her only concern is outliving the mortgage amount.

When it’s Right

Whether a reverse mortgage is right is different for each person. Talk with your financial advisor, tax consultant and estate attorney to go over the specifics of your situation. Don’t make a decision on what someone else has done because situation-specific reasons why reverse mortgages work or not vary too much.

Some of the questions you want to answer:

  • Is there family you want to leave the home to?
  • Do you have sufficient income to live out your retirement years?
  • What plans do you have for retirement? Continue to work part-time? Travel?
  • How old are you?
  • Is there equity in the home? Is your home paid off?
  • Do you have other sources of income?

Reverse Mortgage Dangers

Even the experts agree that there are drawbacks to reverse mortgages in some situations. In this article on reverse mortgage disadvantages we take a look at the potential dangers of reverse mortgages and what to look out for.

You can also check out a report by Quicken Loans, a branch of Intuit (the companies that creates the software products TurboTax, Quicken, and QuickBooks), that goes into much more depth about reverse mortgages.

The free guide answers covers topics and questions such as who qualifies for a reverse mortgage, the different types of reverse mortgage options, how a reverse mortgage works, and how much money you can get. Get the free report

Reverse Mortgages
Posted on November 11th, 2009 in Mortgage, Real Estate, Retirement | 2 Comments

Written by Kristie · Filed Under Mortgage, Real Estate, Retirement 

PTMoney – Personal Finance by Phil Taylor

This week I recommend you check out PT Money, written by Phil Taylor (PT). His blog focuses on his own experiences managing money and he has help from his super frugal wife, too!

I first ran across Phil when he was part of the FNBO Direct Pay Yourself First money challenge, here’s his video entry where you can see him rapping about money:

I like Phil’s site because he shares specific and real financial information from his own experiences, I really enjoyed reading about his family’s travels to Ireland.  One thing Phil’s site is well know for is his popular collection of 52 ways to make extra money which he’s recently expanded on in a new eBook, 52 Ways to Make Extra Money.

About PT

Phil and his wife have recently welcomed a daughter into their family.

In addition to his own blog, PT’s writing appears on a number of other financial sites around the web, including MSN Smart Money Blog and The Wall Street Journal online.  You can also learn more about Phil in this interview with My Two Dollars.

Phil’s also become quite blog savvy while running his own site and if you’re interested in getting your own blog up and running he can help you out.

Recent Articles

Here are a number of other links from around the personal finance blogosphere!

Investing

Credit Cards

Budgeting

Economy

Other Finance

Posted on November 8th, 2009 in Personal Finance | 3 Comments

Written by Ben Edwards · Filed Under Personal Finance 

Open Enrollment Deadlines

Open enrollment deadlines are one date you don’t want to miss.  Choosing the best insurance options and benefits at your job is an important part of your personal finances.

Open Enrollment Window

October and November are the time when many companies have open enrollment, a time period during which you can make changes to your benefits for the coming year.  Open enrollment is often the only time during the year you can make changes to your health insurance and flexible spending plans unless you have a qualifying change in status during the year such as a marriage or new baby.

In many cases if you do nothing during the open enrollment period, your insurance coverage and benefits will remain the same as previous year, one common exception are flexible spending plans. Due to federal laws, if you want to continue your health care or dependent day care flex spending contribution, you have to re-enroll each year.

Benefit Changes

Typically when you go through the enrollment process you’ll elect or decline coverage for benefits such as medical, dental, flexible spending accounts, dependent day care, and vision. Take care to add and update your dependent and beneficiary information so that your family members have sufficient coverage.

Open Enrollment Deadlines

Most companies are pretty strict about enforcing their open enrollment deadlines.  Any changes you try and make after the deadline passes will typically be denied.  You can always work with your human resources department to get an exception but it’s much easier to take the time and finish your open enrollment before it becomes a huge hassle or is too late. So stop procrastinating and enroll now if you haven’t already!

Posted on November 6th, 2009 in Insurance, Personal Finance | 3 Comments

Written by Ben Edwards · Filed Under Insurance, Personal Finance 

College Savings Accounts for a Bad Economy

Many parents and students see college as the bridge between this life and a better one. While more and more kids are heading off to college, many are struggling with how they’re going to pay for it. While a recent study conducted by Fidelity Investments in California indicates that more parents have started some type of a college savings or investment account, many have experienced a decline in the value of the account because of the declining economy. The results reveal that this loss is in the neighborhood of 27%.

Many parents are wondering what types of accounts are available to save for college and which one may the best one for them. Some financial and college aid experts chimed in on a few of the popular ways that parents have paid for or plan to pay for college – even in a faltering economy.

Types of Savings

529 Plans. Many parents have invested in the 529 plan, which is an account specifically earmarked for paying for college. Many parents and grandparents have come to depend on these accounts to cover college expenses because withdrawals made from 529 accounts to pay for college expenses happen tax-free.

There are two types of 529 plans, prep-paid and savings. Thirteen states offer pre-paid tuition 529 plans. Most states, however, offer a savings 529 plan, which is similar to investing in an investment portfolio, so there can be a fluctuation in the account value.

Financial experts seem to have opposing feelings about these types of accounts. Gene H. Harrison, VP and Director of Financial Planning for D.A. Davidson & Co. says, “Most 529 plans offer a variety of age-based options that provide for a shift in the asset allocation from more aggressive to more conservative as the child nears college age. In other words, if you used one of the age-based approaches offered and your child was within a couple of years of entering college, the account should theoretically be in a conservative asset allocation.”

Stan Ezekiel of College Planning Group Inc. has a slightly different view, “Unfortunately, the only benefit of a 529 plan is that the gain is not taxable if it is used for qualified higher education expenses. If a family has an opportunity to put money away on a monthly basis, they would be better served investing in a whole life insurance policy.”

UGMA/UTMA accounts. Michael Lopata of College Plan 101 suggests UGMA/UTMA accounts, which are another popular type of account with parents and grandparents. The UGMA/UTMA college savings options can also provide tax-free savings without the higher expenses associated with maintaining a 529 plan.

Account holders have a significant amount of control over the types of investments made during the savings phase and on how the distributions are made. It’s one more financial management tool for earning tax-free income. There is also some flexibility built into these accounts because the money doesn’t have to be used for college expenses, so if your child decides not to go to college, your savings can be applied elsewhere.

Real estate. Real estate investments, especially as a long-term investment strategy, are another way parents have invested money and turned it into a college savings account. Take, for example, a small business owner in Florida bought an investment home for each of his three children when they were first born.

He rented out the single-family homes over the 17 to 18 years of each child’s life. The rental amounts typically more than covered the home’s expenses, so not only did he enjoy the increasing value of the properties over the years, but he was also able to turn a profit from the rent. A few years out from each child reaching college age, he sold the home and used the profit from the sale and the money he had saved over the years from the rent to pay for college tuition, room and board for the child.

If you have a young child, now may be the time to consider this type of investment. Real estate prices are affordable and expected to increase again over time. Now may be the time to buy a home or piece of real estate at a deep discount, rent it out and sell it later for more than you paid for it. With somewhat of an unstable real estate market, this is probably not the right investment for parents with older children that have less time before the kids reach college age.

Tough Times Mean Alternative Methods

In previous times, parents may have carried the burden of paying for college alone. In modern times, students expect to pay for at least some of their college education expenses – be it from a part-time job or using gift money saved over the years. This, however, may not be enough to make up the shortfall, and with some families worrying about how they’re going to pay for necessities, college savings is something they’ve had to push aside.

According to Upromise, more families do not have to sacrifice saving for college to pay the bills. By registering with Upromise.com, parents earn one to 25% in rewards when they shop online, dine out or buy groceries and gas. The rewards can be allocated to a 529 college savings plan. To date, Upromise has more than ten million members and has contributed more than $500 million in member rewards.

High school and college aged kids are also approaching paying for their college education with their eyes wide open. This means some kids are attending nearby community colleges or universities rather than going away to school. It’s saving parents on having to pay additional money for room and board and only requires covering tuition and book expenses.

Times have changed and money set aside for college may fluctuate. Recent economic hard times are not stopping parents and students from using old tried and true ways along with innovative ways to pay expenses and save money for future college expenses simultaneously.

No matter what type of investment or account you choose as your college savings account, there is some risk involved. The key is to create a plan and start saving for college as soon as possible. Second, find an account that matches the amount of risk you’re willing and able to make. Once you have a college savings plan in place, all that’s left to worry about is getting your child into and sending them off to the college of their dreams.

Posted on November 5th, 2009 in College, College Money Guide | 9 Comments

Written by Kristie · Filed Under College, College Money Guide 

Investing and College Savings – October Review

Investing was the main topic covered here on Money Smart Life in October with an emphasis on bonds.  We haven’t talked all that much about how bonds fit into an investment portfolio so I decided to take spend a few days covering bonds.

Investing Topics

Victor started out the the basics of investing in bonds and followed it up with a look at some of the common bond market terms.  Then we talked about a few different bond investing strategies and then wrapped it up with a post on bond funds.

The next investing topic was that of annuities and what types of investors are putting money into them.  They’re not for everyone, we look at how fixed annuities and variable annuities work and point you to some resources debating their usefulness in a portfolio.

College Savings

Since many college students were heading off to school last month we took a look at the Coverdell ESA and the 529 college savings plan.  We’re still moving on this one with another post on college savings in a rough economy later this week.

Money Topics

Some of the other personal finance areas we wrote about last month were setting goals to get what you want, paying medical bills, and some job hunting tips.

As I mentiond earlier, in the weeks to come we’re going to cover more in the college savings account arena.  We’re also going to take a look at something not covered much previously, real estate investing.  Hopefully you found something useful here last month, if you want to keep up with the new articles coming out in November you can get free updates.  Thanks for reading!

Posted on November 3rd, 2009 in Personal Finance | 1 Comment

Written by Ben Edwards · Filed Under Personal Finance 

TradeKing Promotion Extended

The TradeKing promotion has been extended through the end of this month. For some reason, TradeKing likes to run thier promotions in the fall of each year.  Last October Tradeking ran a $50 bonus promotion and despite the turmoil of the stock market had a lot of people sign up to try out their online brokerage.

This year the market has a lot more positive momentum than it did last fall and some of the people that were sitting on the sidelines are getting back in.  TradeKing is offering a $50 bonus if you open a new account and try out their stock trading platform.  You can read more about pros and cons of the online brokerage in this TradeKing review.

I had forgotten that they extended the promotion by a month last year until I recently got an email from TradeKing announcing they were pushing the deadline out a month.  They didn’t push it any further last year so if that’s any indication then this month will likely be the last chance for the bonus in 2009.

There is no TradeKing promo code necessary simply signup here and you get your $50 bonus after you fund your account with at least $2,500 and make your first trade.

Posted on November 2nd, 2009 in Investing, Stocks, tradeking | 1 Comment

Written by Ben Edwards · Filed Under Investing, Stocks, tradeking 

Mobile Money Guide – Banking, Shopping, & Coupons

Mobile banking and shopping are becoming more and more popular thanks to smart phones like the iPhone and Palm Pre.  A year ago we ran a series of articles on what the mobile web could do for your money.

Today, I’m revisiting the mobile money guide because the options for banking, shopping, and managing your money with your phone keep getting better and growing in number, Quicken Online mobile is just one example.

We did research on your mobile options and I interviewed an expert on using mobile technology to connect consumers with merchants and deals, Kim Dushinski.  Here’s a list of the mobile money articles, check them out and let us know what new and exciting developments have come up since then. I’m sure there are a slew of iPhone apps that have popped up for managing your money from your phone.

 

Posted on October 30th, 2009 in Mobile Money, Mobile Money Guide | Comments Off on Mobile Money Guide – Banking, Shopping, & Coupons

Written by Ben Edwards · Filed Under Mobile Money, Mobile Money Guide 


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