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Question of the Day

February 28, 2012 7:42 pm

Q: How can I finance work needed on a fixer-upper?

A: According to the Millennial Housing Commission, few lenders are willing to administer home improvement loans. Most prefer to make home equity loans or unsecured consumer loans because they are easier to manage. Home improvement loans usually require inspections and irregular draws on the loan amount as work is completed, which requires regional or national lenders to find local partners to provide oversight.

Financing repairs and improvements with home equity is okay for most homeowners, but it is difficult for many first-time buyers. They have lower-incomes, smaller savings, and have made lower down payments on their homes than first-time buyers a decade ago. So they have little equity to borrow against. Unfortunately, it is often lower cost older homes purchased by first-time buyers that need the most work.

Unless you have a cash reserve, you will have to shop around for the best borrowing terms. In addition to the options listed above, you can ask relatives for a loan. Borrow against your whole life insurance policy. Refinance your existing mortgage and take out cash. Get a second mortgage. Contact the government about home improvement programs. And – as a last resort – borrow from a finance agency, which generally charge high rates.

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8 Ways to Scam-Proof Your Next Vacation Home Rental Transaction

February 27, 2012 7:36 pm

It’s wintertime and the living is dreary. If you’re like many people, you’re coping with bone-chilling temperatures and gray skies by daydreaming of sandy beaches, emerald golf courses, and cool drinks sipped on warm, breezy balconies. Yes, it’s vacation planning season again. You’d love to book a charming seaside cottage or rustic mountain cabin for your spring or summer vacation—but recent reports of vacation home scams have you worried.

It’s true: Lately, there’s been a rash of news stories about would-be vacationers who went online, found the perfect house or condo, paid the rental fee—and showed up to find an occupied residence that was never for rent at all. Yet as scary as these stories are, they shouldn’t stop you from going the vacation rental route, says Christine Karpinski.

“There are many wonderful rental properties out there that are completely legitimate—and only a few scammers,” says Karpinski, author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment.

“To reject the whole concept of renting a great home instead of a hotel room because someone else had a bad experience is like deciding not to have children because you saw the movie The Bad Seed.”

Karpinski says the benefits of staying in a vacation rental home far outweigh the minimal risks. These properties are more spacious and often less expensive than hotel rooms. They’re appointed with all the comforts of home (because, of course, they are homes). They’re private. They tend to be kid friendly. Often, they’re pet friendly as well.

Plus, by taking certain precautions, you can make the likelihood of getting scammed almost non-existent, she insists.

That said, here are eight tips to help you safely book your vacation home in today’s environment:
• Beware of super-cheap rates. If it seems too good to be true, it probably is. The most common way scammers work is by enticing a large number of travelers in a short period of time. They do this by low-balling the rental rates.

“If one listing is, say, half the price of all other comparable ones for the same amount of time, beware,” cautions Karpinski. “Put yourself in the owner’s shoes: Why would he or she voluntarily forgo that much income? Five, ten, or maybe even fifteen percent off, perhaps, but fifty percent? No way.”

• Do some digging to make sure the owner really is the owner. Many states make it easy to look up property tax records. Google the property appraiser in the county where the property is located to make sure the person you are renting from actually owns the property. You might also Google the homeowner’s association and look for a phone number on the website. Call the HOA and ask if the owners really are the owners.

“Now, some of the tax records might show that the property is owned by an LLC or trust. But that information actually serves as an extra barrier against being scammed,” says Karpinski. “The rental agreement should mention the LLC or trust. If it doesn’t, call the owner and ask. He or she should be able to tell you the name of this legal entity without hesitation.”

• Cyber-stalk the owner. Do some cross-referencing across various websites: Facebook, Twitter, LinkedIn, and so forth. Make sure the place of residence (where the owner lives—not where the vacation home is located) is the same as the information the owner provided.

“If, for instance, you were renting one of my vacation homes in Florida, you’d see that I always provide my guests with my home and cell phone numbers,” says Karpinski. “My home number is a 512 area code. Now, if you looked me up on LinkedIn, my public profile says that I live in Austin, TX, which would match the info I provided.”

Also, she suggests Googling the phone number listed on the advertisement. Many property owners and managers list their homes on many different websites. If you Google the phone number listed on the ad in this format XXX XXX-XXX (area code, space, first three digits, dash, last four digits) many other websites that the property is listed on should show up in search results.

• Look for clues in the reviews. When you are reading the reviews of the property (either on the vacation rental website or on other sites such as TripAdvisor.com), there are sometimes references to the owners’ names. A review might say something like: “Thanks, Tom and Christine, for allowing us to rent your lovely home…” If the names in the reviews do NOT match the name of the person renting the home to you, it could be a sign that something is not right.

“Also, a lot of times the owner’s name and/or the housekeeper’s name will be in the review,” notes Karpinski. “If you see several reviewers thanking Mary for her wonderful hospitality, and the woman you’re dealing with is named Mary, it’s probably a legitimate listing.”

• Speak with the owner via phone. Sure, it’s possible to be scammed over the phone. However, it’s usually easier to fool someone when you’re communicating via type. If the owner sounds warm and engaging and seems to know her stuff, you’re probably okay. If she sounds guarded or uncertain, you might have reason to worry. Also, says Karpinski, when you get someone on the phone, you can ask specific questions—and listen carefully to the answers.

“Ask about the local area,” she suggests. “Ask about the best restaurants, the most unusual attractions, and so forth. If you get quick, natural answers, it’s probably not a scam. If the owner hesitates, or if you hear the sound of her Googling furiously, you would likely be suspicious.”

• Pay only by credit card. Don’t use PayPal, don’t send a personal check, and NEVER, EVER pay by wire transfer, advises Karpinski.

“Scammers are less likely than legitimate property owners to have a credit card merchant account set up,” she says. “And even if you were to still get scammed, you’d be able to call your credit card’s fraud prevention center and report it.”

• Go with one of the major vacation rental websites. You’re probably safest choosing a site like HomeAway, VRBO, FlipKey, or Airbnb. Of course, a respected name doesn’t guarantee a 100 percent safe transaction—there have been instances of owners having their e-mail accounts hijacked by scammers—but the major websites tend to have better safeguards in place.

• Listen to your gut…it’s often right. Do your research. Call the property owner. Listen carefully to everything he or she has to say. If something just feels “off,” move on to another property, advises Karpinski.

“Scammers usually count on people not paying attention, not heeding their intuition,” she says. “That still, small voice exists for a reason. Listen to it.”

Renting a vacation home is like anything else, insists Karpinski. It’s not risk-free, but when you take these steps to mitigate the risk, you can feel 99.9 percent confident that you’re not getting scammed—and these are pretty good odds.

Christine Karpinski is the author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment and Profit from Your Vacation Home Dream: The Complete Guide to a Savvy Financial and Emotional Investment.

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Tips to Close the Income Inequality Gap

February 27, 2012 7:36 pm

The memes for the current economic recession have been “income inequality” and “the 99 percent versus the 1 percent” as the 106 million Americans earning $45,000 or less each year feel the most pain from job loss, foreclosure, underwater mortgages and inflation.

Some say the solution is for the government to redistribute the wealth, perhaps by taxing the top money-makers at a higher rate. Real estate businessman Trevor Bolin, author of Take Charge and Change Your Life Today, says there’s a better way and it’s one that will make more people happier—and wealthier.

“I went from the bottom 10 percent at age 17 to the top 2 percent at 28 by making some changes in my life,” says Bolin, who owns three realty companies in British Columbia.

“The system is very simple, but not all of the steps are easy. It requires self-discipline and changing bad habits, but it’s all possible if you follow the steps. And I promise, following through on just one will dramatically affect your life.”

Some of Bolin’s strategies:
• Commit. Vow right now that you will follow through 100 percent on every step you take toward changing your life, whether it’s making more money, losing weight or becoming a better parent. Commit to succeeding, not just surviving. Know that luck has nothing to do with it – it’s hard work, attitude and giving back. Committing 100 percent means that, if you decide to read a book on investing, you won’t quit after three chapters. If your goal is to drop 20 pounds, don’t stop after 10.

• Change your attitude. Just as negative thoughts have the power to negatively affect outcomes, so do positive thoughts. Start each day with positive thoughts, and change negative thoughts to positive ones throughout the day. This may be hard at first, but the more you work at it, the easier it gets. Rather than wake up cursing the rainy day, be grateful for it. Water is one of our most valuable natural resources, and rain is cleansing. Remind yourself each morning of all the good things in your life—your health, your home, your spouse. Tell yourself that your meeting today is going to be engaging and productive, or your job interview is going to go well.

• Figure out your “Y.” Your Y is your reason for everything. It’s shaped by the past, formatted for the present and goal-formatted for the future. It’s reflected in every decision you make. If you don’t know your Y, your decisions will be made on the basis of habit, what you learned growing up, and what your immediate needs are. But if you’ve decided your Y is that you want the peace and security of financial success, you’ll be guided by that every time you make a choice.

• Set goals. On a piece of paper write down all of your goals, short-term and long-term. Next, number them 1, 3, 5, 10 or 20 based on how many years it should take to achieve them. Losing 20 pounds? That might be a 1. Buying a new car? That could be a 3. Now, take your top five 1 goals and write down why you want them and how you plan to achieve them. Do the same thing for each set of goals. Having goals is vital and keeping them in front of you will help keep you on track toward achieving them. Most important – be sure to cross each one off as you achieve it. Take it from me, there’s no better feeling.

Paying yourself first—saving a portion of every check—and giving back to society, whether through service or philanthropy, are also key to Bolin’s roadmap for changing your life.

“It’s all about having a plan,” he says. “You can create success as long as you’re putting a plan into motion.”

Trevor Bolin owns three realty companies in British Columbia.

For more information, visit www.bolininternational.com.

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Use Tax Season to Organize for the Future

February 27, 2012 7:36 pm

Tax season is the perfect time to stash all your financial records, making future financial matters much easier. But what records do you keep? Many people are confused about what records they need to keep and for how long. They hold onto tax returns, bank records, brokerage statements and other financial information simply because they don’t know if they’ll need it again.

“Most people are going through their records to get ready to file their return,” says financial planner Rick Rodgers, author of The New Three-Legged Stool: A Tax Efficient Approach To Retirement Planning, “This is the time to get smart about what you need to keep and then set up a system to store it efficiently going forward.”

Rodgers suggests these five steps to help you effectively organize your finances for 2012 and beyond:
1. Out with the old – Discard the records you no longer need: Tax returns older than seven years; bank records and credit card statements that are not related to the tax returns you’re keeping; brokerage statements that aren’t related to purchases of current holdings. Be sure to shred all your old documents before throwing them out.
2. Go digital – Convert the documents you plan to save into digital images that are stored on your hard drive. Invest in a good scanner and scan as you go through your paperwork, shredding and tossing the hard copies as you go. On your computer, file by tax year, so your 2011 folder will contain your tax return for 2011 and all pertinent bank records and receipts. Organize the previous six years the same way. Next year you can delete the oldest folder when you add the 2012 folder.
3. Save a forest – All of the financial institutions you deal with would prefer to send your statements electronically. Stop receiving paper statements. Instead, download your statements electronically and store them in your new filing system. Most banks and credit card companies keep at least a year’s worth of statements available. You need to download these files only once a year to complete the year’s file.
4. Save backups in case of emergency – Make backup copies of your files on a CD. Choose a CD-R (recordable) as opposed to a CD-RW (rewriteable), because CD-R cannot accidentally be overwritten. Depending on your computer operating system, you may be able to continue adding data to a CD-R each year, until the CD is full. However, some operating systems won’t allow that, so you’ll need a new CD for each year.
5. Go paperless – Your new electronic filing system can be expanded to include all your financial records, from car maintenance receipts to pay stubs. Wills and insurance policies can also be scanned and stored but, of course, keep the originals of those in a safe deposit box or fireproof safe.

Gone are the days of saving your financial documents in box and shoving it into the attic. Technology advances have made organizing your personal finances easier with minimal cost. Make 2012 the year you get organized by moving your finances into a 21st century filing system.

Certified Financial Planner Rick Rodgers is president of Rodgers & Associates, “The Retirement Specialists,” in Lancaster, Pa.


For more information, visit www.TheNewThreeLeggedStool.com or www.rodgersspeaks.com.

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8 Ways to Boost Your Metabolism

February 27, 2012 7:36 pm

Whether you want to lose a few pounds or just stay fit, speeding up your metabolism will help you burn calories more efficiently and make the best use of the fuel that goes into your body.

Nutritionist Heather Bauer recommends nine tips for achieving these worthwhile goals:

• Stay hydrated – Even if you’re tired of hearing it, drinking eight glasses of water a day will help your body function best. Steer clear of diet sodas and alcohol, which tend to bog down your metabolism. An acceptable substitute, if you crave some bubbly, is seltzer.
• Snack often – Starving your body can derail diet efforts. Keep hunger in check by snacking often on low-fat cheese, fiber crackers, fruits, veggies, Greek yogurt, and other high fiber, low fat foods. Bonus: if you’re not so hungry, you will eat less at mealtime.
• Keep up calcium and vitamin levels - Obesity research shows that a dip in calcium levels can trigger the hormone that causes the body to hold onto fat. Increase calcium intake with low-fat dairy, cheese, yogurt, salmon, tofu, and oatmeal. Key vitamins are B, found in small amounts of nuts, seeds, lean meats and legumes, and C, which helps the body absorb and make best use of calcium.
• Drink green tea - The polyphenols in green tea have properties that rev up your metabolic rate – but to get greatest benefit, you should drink at least 4 cups a day. Second choice? Oolong tea, recommended by Chinese medicine experts for its calorie-burning properties.
• Avoid high fructose corn syrup – It’s in many prepared foods, so read labels to avoid this culprit, which can make the body insulin-resistant.
• Soak up some sun – Research suggests spending too much time indoors or in darkened circumstances can trigger the same physiological functions as gaining weight or sleeping too much. Taking a brisk walk in the early afternoon is a good way to rev up your heart rate as well as your metabolism.
• Ditch the stress – Stress raises your cortisol level, which tells the body to hang onto fat. Try yoga, meditation, or whatever it takes to reduce your stress level.
• Work out smartly – Weight-bearing exercises and working out in the cold can maximize the benefits of exercise.
• Catch enough ZZZs – Getting seven to eight hours of sleep every night is crucial for a healthy metabolism.

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Word of the Day

February 27, 2012 7:36 pm

Balloon loan. Mortgage loan in which a larger final payment becomes due because the loan amount was not fully amortized.

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Question of the day

February 27, 2012 7:36 pm

Q: What is a bridge loan?

A
: It is a short-term bank loan of the equity in the home you are selling. You may take out a bridge loan, or interim financing, to help with a knotty situation: closing on the home you are buying before you close on the property you are selling. This loan basically enables you to have a place to live after the closing on the old home.

The key to a bridge loan is having a qualified buyer and a signed contract. Usually, the lender issuing the mortgage loan on the new home will write the interim financing as a personal note due at settlement on the property being sold.

If, however, there is no buyer for the property you have up for sale, most lenders will place a lien on the property, thereby making that bridge loan a kind of second mortgage.

Things to consider: interest rates are high, points are high, and there are costs and fees involved on bridge loans. It may be cheaper to borrow from your 401(K). Actually, any secured loan is acceptable to lenders for the down payment. So if you have stocks or bonds or an insurance policy, you can borrow against them as well.

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Money Matters: Nearly 40 Percent of Adults Don't Invest

February 24, 2012 7:34 pm

Even with the stock market soaring, many Americans report they continue they still have reservations about investing in the stock market. Nearly four-in-ten (39 percent) U.S. adults report they don't currently have any types of financial investments, like 401(k)s or IRA retirement accounts, mutual funds or stocks. In addition, 61 percent of U.S. adults said they have reservations about investing in the stock market.

Their concerns include not having enough money to invest (32 percent), not trusting the stock market (26 percent), thinking it's too complicated (17 percent) and being unsure of how to get started (11 percent). This survey was conducted online within the United States by Harris Interactive on behalf of CouponCabin from February 7th-9th, 2012, among 2,339 U.S. adults ages 18 and older.

Even though many U.S. adults report they don't have financial investments, they are still keeping an eye on the market. Fifty-five percent of U.S. adults said they follow the stock market in some capacity, with one-quarter (25 percent) reporting they track its ups and downs at least once a week. When it comes to young adults, there was a significant difference between men and women. Fifty-nine percent of men ages 18-34 said they follow the stock market compared to 30 percent of women ages 18-34.

In addition, Americans aged 18-34 are the highest age group to report that they don't have financial investments. In fact, nearly three-in-four (73 percent) U.S. adults ages 18-34 said they don't currently invest in retirement accounts such as a 401 (k) or IRA, while more than half (55 percent) of those ages 18-34 said they don't have any financial investments at all.

"It's been a challenging few years for Americans of all ages and financial standing," says Jackie Warrick, president and chief savings officer at CouponCabin.com. "As a result, many Americans have shied away from investing in the stock market. Among the reasons is complexity, as 35 percent of people we surveyed said they would be more likely to invest money in the market if it were less complicated."

While some Americans report they are intimidated by the complexity of the market, others said if the economy were more stable they would be more likely to invest.
• 39 percent said they were much or somewhat more likely to invest money in the market if the economy were more stable.
• 46 percent said they weren't any more or less likely to invest if the economy were more stable.
• 15 percent said they were much/somewhat less likely to invest.

Regardless of apprehensions in investing in the stock market, many U.S. adults said they would be open to learning more about the process. Forty-three percent would be at least somewhat likely to consider taking a course or class to learn more about the stock market and investments.

Warrick offers the following tips for beginning investors:
Dig into the basics: What's the difference between a stock and mutual fund? First, you'll want to become familiar with investing terms and language so you're clear on what everything means. That way, you know where your money is going. Hop online and or pick up an investing basics book to get you started.
Join a club: Many communities have stock market clubs and local organizations that bring together different levels of investors, whether you're a novice or an expert. Do a quick Internet search to see if there's a local group that fits your needs.
Speak up: Ask friends, family and colleagues for advice on finding resources to get you started, such as a broker recommendation or online resources they use. Don't forget to ask your HR department if your company has a program or recommendations in place to help beginning investors.

Source: http://www.CouponCabin.com.

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Smartphone Tips for Family Caregivers of Senior Adults

February 24, 2012 7:34 pm

With the boomer aging, there will soon be more elderly adults being cared for by their children. While “there’s an app for that” has become ubiquitous and there are over 1 million smartphone apps available, those tailored to the needs of seniors and their caregivers are a developing market.

“While there are special purpose apps available, focusing on a few key apps may be better,” says to Barry Birkett, Senior Care Corner co-founder. “It’s easier to keep a few apps current so they’re more likely to be used and thus provide greater benefits to senior loved ones.”

Apps for Seniors and Family Caregivers

A recent Senior Care Corner podcast discusses some categories where both real benefits and simplification can be achieved.

Calendar apps let seniors and caregivers share a common calendar, which can be used to track doctor appointments, daily prescription schedules and other events.

List and Document Sharing apps provide seniors and caregivers the ability to share files on the smartphones, computers and other devices of both. Examples include physician and insurance information, prescription lists and scans of labels, shopping lists and trip itineraries, as well as advance medical directives and other documents that might be needed in emergencies.

Navigation apps can be programmed to provide directions to stores, doctors’ offices and other locations. Maybe most important, they can be programmed to show seniors the way home.

Banking and Financial apps let both seniors and caregivers monitor checking, savings and credit card accounts for unusual or fraudulent activity and make sure loan payment deadlines are met.

Pharmacy apps may be the most valuable offered by a retailer because they allow both seniors and caregivers to track prescriptions, order refills and see when a doctor appointment is needed to get the next refill.

“The future will bring many more options for family caregivers to use their smartphones and other devices to improve the lives of their senior loved ones,” says Birkett. “In the meantime, existing apps can provide a lot of benefit without a lot of ongoing effort.”

Source: Senior Care Corner

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Word of the Day

February 24, 2012 7:34 pm

Assumption of mortgage. Taking title to property that has an existing mortgage, and being personally liable for its payment as a condition of the sale.

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