December 2, 2011 7:36 pm
Redlining. Practice of refusing to make loans in certain neighborhoods. Also applies to insurance companies that refuse to offer policies in certain neighborhoods.
December 2, 2011 7:36 pm
Q: Can I make an all-cash purchase instead of getting a mortgage?
A: That certainly is an option, although not one most people can afford. The national median existing-home price was $217,000 in 2007 and much more than that in many areas of the country (Honolulu, $643,500; San Diego, $588,700; New York $469,700). Unless you’re independently wealthy or have hit the jackpot, it may be difficult to make a “no-mortgage” investment. And an investment is exactly how you should view it because you get to save on mortgage interest that is usually paid over the life of the home loan – interest that could amount to several thousand dollars, conceivably hundreds of thousands of dollars.
With an all-cash deal, you also save by avoiding loan origination fees, an appraisal, some closing costs and other charges imposed by the lender. You enhance your negotiating position with the seller and get to bypass the rather lengthy loan qualification process, which helps to close the deal quickly. But if you want to use the home as your primary residence, forget about taking advantage of the tax breaks available to homeowners with conventional loans. By paying cash, you basically forfeit those tax breaks.
To determine whether a no-mortgage purchase is right for you, compare it to other investments, weighing the risk, return, and liquidity.
December 2, 2011 4:36 pm
About this time every year, I deliver a chilling reminder about freezing pipes. And the problem is growing worse, according to State Farm.
That insurance company reported recently that the number of frozen pipe claims nearly tripled nationally, from 9,000 claims to more than 26,000 claims, between 2008 and 2009 (the last year for which data is available).
The company's top 10 state rankings based on the number of freeze losses in a 10-year period are Kentucky, Alaska, Maine, New Hampshire, Colorado, Michigan, Vermont, Wyoming, Montana and Connecticut.
Focusing on their home state with advice that can be used anywhere, the Professional Insurance Agents of Connecticut Inc. just issued a bulletin aimed at homeowners and business owners on the subject. According to the PIACT report, it does not have to snow and sleet for household pipes to freeze.
Anytime the temperature reaches 32 degrees or below, if pipes are not properly winterized, it could spell disaster. James R. Berliner, CPCU, president of PIACT said that subject to a deductible, most homeowner’s policies cover damage resulting from frozen pipes, including the repair of the pipe.
Berliner said a typical policy covers dwelling damage, and damage to personal property such as furniture and rugs. Tenants can get similar coverage for water damaged personal property by purchasing a renters policy, and business owners can purchase similar coverage for business property.
The PIACT warns, however, that no coverage exists for frozen-pipe damage to an unoccupied home or business, unless heat is maintained in the building or the pipes have been drained.
Remember, an eighth-inch crack in a pipe can spill up to 250 gallons of water a day—equivalent to enough water to fill a small home heating oil tank. That water is quickly capable of destroying equipment and files; wrecking floors and furniture; and costing homeowners and businesses a lot of money.
Even though most homeowner’s policies cover such damage, it’s important to prevent the mess, cost and aggravation of frozen pipes before anything happens. We'll take a good look at those precautions in our next segment.
December 2, 2011 4:36 pm
The recent cold weather has caused people to turn up their furnaces and, for some, be exposed to potential carbon monoxide poisoning. Southern California Gas Co. is urging customers to ensure home heating equipment is operating safely by having their appliances checked by a licensed, qualified professional.
"While carbon monoxide poisoning incidents are rare, we usually see a rise in the number of occurrences when the weather gets really cold," says Bret Lane, vice president of field services for SoCalGas. "Often, the cause of carbon monoxide in a home is due to a faulty furnace, so we're urging customers to be safe and have their furnaces inspected if they have not yet done so."
The utility also warns against using ovens, ranges or outdoor barbecues for home heating. These appliances are not designed for such use and pose a severe and potentially fatal risk of carbon monoxide poisoning if used for space heating.
Carbon monoxide is a colorless, odorless, tasteless gas that is formed when carbon-based fuels, such as kerosene, gasoline, propane, natural gas, oil, charcoal or wood, are burned with inadequate amounts of oxygen, creating a condition known as incomplete combustion. When incomplete combustion occurs, carbon monoxide is produced, and this can potentially lead to carbon monoxide poisoning to a family.
The early stages of carbon monoxide poisoning produce unexplained flu-like symptoms, such as headaches, dizziness, nausea, vomiting, shortness of breath and mental confusion. Since carbon monoxide displaces the oxygen in the blood, prolonged exposure to carbon monoxide can lead to death.
Signs that may indicate the presence of carbon monoxide:
• A yellow, large and unsteady gas appliance burner flame.
• An unusual pungent odor when the appliance is operating. This may indicate the creation of aldehydes, a by-product of incomplete combustion.
• Unexplained nausea, drowsiness and flu-like symptoms.
What to do if someone suspects carbon monoxide is present in their home:
• If safe to do so, immediately turn off the suspected gas appliance.
• Evacuate the premises and call 911.
• Seek medical attention if anyone in the home experiences possible carbon monoxide poisoning symptoms.
• Contact a licensed, qualified professional immediately to have the appliance inspected.
• Don't use the suspected gas appliance until it has been inspected, serviced and determined to be safe by a licensed, qualified professional.
For more information, visit www.socalgas.com.
December 2, 2011 4:36 pm
Holiday shopping for 2011 is in full swing. And though many Americans are saving more throughout the year, the holidays offer that all-too-tempting opportunity to let loose and splurge a little. In fact, if you aren’t careful, in December you can blow all the good saving intentions you held firm to during the rest of the year. Last year, Consumer Reports found that as of October of 2010 14 million Americans were still paying off credit card charges incurred during the 2009 holiday season. This year, reports Gallup, Americans plan to spend an average of $764 on Christmas.
And while that number is down from pre-recession amounts, it still represents a significant chunk of change for many American families. Leslie Greenman says that in order to curb our bad spending habits during the holidays, we must first understand why we let ourselves splurge in the first place.
“We spend a lot during the holidays because we love giving to our friends and family,” says Greenman, a financial advisor and author of the new book Dating Our Money: A Women’s Guide to Confidence with Money & Men. “Watching someone you love open that perfect gift can be really gratifying. The holidays also give us a guilt-free pass to shop ’til we drop. You don’t have to feel bad about spending because you’re not buying things for yourself, or at least you shouldn’t be! And you can justify it by telling yourself, ‘Well, I have to get gifts for everyone or they’ll be disappointed in me!’”
But, Greenman notes, this psychology of gift giving isn’t good for your financial health.
“While it’s nice to give someone something they want, that good feeling will quickly fade when you see how much your holiday spending affected your finances,” says Greenman. “The good news is that with careful planning you can give everyone on your list a special holiday without having to pay for it for months and months to come.”
Read on for Greenman’s tips on how to keep your spending and your sanity in check this holiday season:
Get real with yourself about your financials. Before you even make your gift list, you need to have a heart-to-heart with yourself about your financials. “Look at how much you can realistically spend,” advises Greenman. “Then decide whether or not you really need to spend that amount. If it has you feeling anxious then absolutely create a budget that has you spending less. Think about your long-term financial plans. Don’t allow your holiday spending to negatively affect your bigger plans. When you know what your financial picture really looks like, instead of thinking about it as a black hole, you’ll be more inclined to control your spending.”
Don’t fall back on old holiday spending habits. When you’re making your budget, it’s important to remember that spending during the holidays does not stop with gifts. We allow ourselves a little more leeway when it comes to other discretionary spending as well.
“Holiday incidentals include additional food spending, entertainment costs, clothes buying, wrapping paper, and on and on,” says Greenman. “All of these costs add up, big time, and they often get overlooked during the holidays. They can also be slightly easier to eliminate or reduce than the money you’re spending on gifts. For example, it isn’t necessary to buy a brand new dress for your office party. You could borrow a dress from someone or add an accessory or a great pair of shoes to a dress you already own. In fact, this is actually a great reason to organize your closet. When you can easily see what you have, you can quickly put together a great holiday outfit without spending a dime. As for food costs, if you’re having a holiday party, make it potluck so you don’t carry the food cost burden all by yourself.”
Don’t shop when you’ve got the holiday blues. This time of year can bring a lot of joy, but the hectic nature of the season can also be overwhelming. “Avoid shopping when you’re having a down day,” advises Greenman. “Studies have shown that we are willing to spend more when we are sad. So when you’re suffering from the holiday blues, curl up and watch a holiday movie or go do something fun with your kids instead. Save the shopping for a better mood.”
Remember, ’tis the season for relationships. It’s perfectly natural to want to give back to those who give to you, but it’s quite possible that your friends and family will appreciate an end to spending this holiday season just as much as you. Suggest to those on your gift list that you all spend valuable time with one another rather than purchasing gifts this year. For example, suggest to your best friend an afternoon together meeting for coffee and going to a movie. Or treat your parents to a home-cooked meal and some Christmas carols performed by their grandkids.
“I think you’ll find that people will like the idea of making the holiday about relationships rather than shopping and spending,” says Greenman. “And this plan will start showing dividends early on. While you and your friends and family are enjoying quality time together, you’ll also be avoiding the stressful hustle and bustle that all of the holiday shoppers are suffering through. You can also take this a step further and make it even more gratifying for everyone involved. Suggest to your loved ones that the time you spend together be used to volunteer for a local charity—a great way to enjoy the true spirit of the season!”
Establish an “Operation Holiday” plan. If there is no avoiding holiday shopping for you, once you know what your budget is start mapping out your shopping plan. Make the gift list and then think about where you’ll need to go to purchase each present. “Keep your key goals in mind,” advises Greenman. “For example, are you trying to keep each gift under X amount of dollars? Do you want to be finished by a certain time? Avoid a certain shopping area? Again, if you stick perfectly to your plan, I think it’s okay to reward yourself. Just don’t go overboard. For example, if I meet my goal of buying my gifts and staying on budget, I’ll treat myself to a pedicure.”
Finish your shopping early in the season. Though getting out for those late night/early morning hours on Black Friday might not be your thing, it is best to start your holiday shopping as many shopping days before Christmas as you can.
“As the holiday gets closer and you realize you haven’t even made a dent in your list, you’ll start to get desperate,” explains Greenman. “And when you’re desperate, you won’t have as many misgivings about going over budget in order to get your shopping done. You’ll also have less time to finish your shopping so you’ll think you have to get whatever is available. ‘Shop early and save’ should be your new motto. Another positive to getting all your shopping out of the way early is that it gives you more time to kick back and enjoy all of the fun festivities leading up to the holidays.”
Set a holiday shopping curfew. You don’t have to go tearing through stores pushing innocent shoppers from your path, but setting a time limit on your shopping will help you stay on budget.
“Keeping in mind that you need to be done by your self-imposed shopping curfew will prevent you from lingering in sections of a store that may have caught your eye but don’t contain any items from your list,” notes Greenman. “It will also help prevent you from spending time shopping for yourself. And because holiday shopping should be fun, take a moment to reward yourself if you do finish by your deadline. Buy yourself a cup of hot chocolate, or better yet, make some for yourself and the kids when you get home. Remember, the less time you spend shopping, the more time you’ll have to spend with friends and family.”
Greenman is currently a financial advisor, author, and public speaker. Through her book, Dating Our Money, Leslie’s goal is to make financial planning fun and relatable for all women.
December 2, 2011 4:36 pm
Recording. Entering or recording documents affecting or conveying interests in real estate in the recorder’s office; until recorded a deed or mortgage generally is not effective against subsequent purchases or mortgage liens.
December 2, 2011 4:36 pm
Homeowners can help their families and guests get in the holiday spirit without going through the hassles of hanging outside lights. With easy holiday decorations for the entryway and windows, this is the ideal time of year to show off a home’s exterior.
Experts at Therma-Tru® Corp., a brand of fiberglass and steel exterior door systems, offer tips for creating a warm and inviting entryway during the holidays:
Hanging Seasonal Door Decorations:
• Consider a twig wreath adorned with greens, gourds or berries.
• Design a heart-shaped wreath with miniature pine cones and dye them a brilliant shade of red.
• Mount an evergreen wreath or swag with glass ornaments or silver bells.
• Create a wreath with magnolia leaves and fresh fruit such as pears, apples and pomegranates.
• If you have a rustic style home, consider adding antlers, a cowboy hat or rope to your wreath.
• For a coastal home, consider a wreath of woven sea grass with sea shells or a brightly painted life preserver with lights and decorative glass floats.
• If your door doesn’t merit all the attention, consider wrapping it in bright paper with a large bow or framing it in lights.
• Hang a set of sleigh bells on the door knob, which will give a festive jingle every time guests pass through.
Accessorizing Your Doorway:
• Frame your entryway with a garland and lights – add bows or pine cones for more decorative detail.
• Place pots or urns planted with seasonal greenery, poinsettias and lights on either side of the doorway.
• Put out a welcome mat designed with holiday accents.
• Add new brass or nickel accents such as a kick plate, porch lights and a door knocker to dress up your door. • Hang matching wreaths in all of the windows.
Painting Your Door:
• If it’s not yet too cold to paint outdoors, brighten up your door with a fresh coat of red paint or a strong color that provides contrast to your current color scheme. Made especially to accept paint, Therma-Tru® Classic-Craft® Canvas Collection™ entry doors feature a smooth surface that’s ideal for adding custom color to the home.
Do’s and Don’ts of Decorating Doors:
• When decorating, be careful to protect your door. Avoid putting a nail in the face of the door, as this can lead to damage in the future and could void your door warranty from the original manufacturer.
• Use a door hanger to hang a wreath from the door knocker, or place a tack on the top of the door frame and use clear fishing line to hang a wreath.
• Never put nails or screws in a vinyl window frame to hold up decorative lights or holiday wreathes. Also, do not glue, staple or tape lights to a window frame.
• Do not place lit candles on a window sill, nor the edge or sash.
• Never decorate windows with anything that could impede opening your windows quickly, in case you need to use the window as an escape route during an emergency. For example, don’t wrap garland ropes or artificial pine branches around the window hardware.
• Do not place real pine branches or cones on the window frames or sill. Fresh pine sap can leave nasty stains after the holiday season is over. Realistic, artificial pine is usually available at craft stores around the holidays.
• Although tempting, do not spray “fake snow” from aerosol cans on your windows. The “snow” residue can be hard to remove after the holidays and can hamper the operation of your window if it sticks into the sash or hardware.
Santa-Approved Window Decorating Tips:
• Affix suction cups on the window glass to hang glass ornaments, plastic snowflakes or glass icicles so that light can come through the windows to enhance the decorations.
• Hang small wreaths on the inside of a double or single hung window by using suction cups with hooks. Use clear fishing line to loop the wreath gently over the window hardware.
• Swags of garland or evergreen wreaths outside the home may be put up best by affixing to the siding of the house and not to windows themselves.
• Bay and bow windows are the ideal location to position a Christmas tree for maximum viewing, from both the interior and the exterior of the home.
• Make your curtain rods work during the holidays. Remove the curtains and hang ornaments from the existing rods on different lengths of fishing line or colorful curling ribbon.
• No curtain rods? Just add some inexpensive tension curtain rods to the top or middle section of your windows. Hang decorations from the rods with fishing line or garland. Decorate the rods themselves with holiday ribbon or fabric.
• Encourage children to help decorate the windows with static cling holiday window stickers. The peel-and-stick temporary decorations are ideal for putting your home in the holiday spirit.
For more information, visit http://www.thermatru.com or http://www.fypon.com.
December 2, 2011 4:36 pm
Q: What kind of home insurance should I get?
A: A standard policy will do in most instances. It protects against several natural disasters and catastrophic events. However, it will not guard against earthquakes, floods, war, and nuclear accidents. The policy can be expanded to include these disasters as well as coverage for such things as workers' compensation. In fact, the lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.
You also can increase coverage beyond the depreciated value of personal property such as televisions and furniture by purchasing a replacement-cost endorsement. Home-based business-coverage, once overlooked, is an ever-increasing popular rider. It does not cover liability associated with the business but rather contents such as home office equipment and general liability to cover injuries to clients and employees.
Other considerations: an inflation rider, which increases coverage as the home’s value rises, and getting insurance that is equal to the full replacement value of the home.
Insurance companies usually require an amount equal to at least 80 percent of the full replacement value. Otherwise, only a portion of the loss would be covered.
December 1, 2011 7:36 pm
Money resource Bills.com recently released a consumer-focused evaluation and primer on the recently updated Home Affordability Refinance Program guidelines. Dubbed HARP 2.0, the program aims to make refinancing easier and more widely available to the nation's underwater homeowners.
"This program could serve as a lifeline for many of the 11 million homeowners in the US estimated to owe more than the value of their property," says Ethan Ewing, president of Bills.com. "Of course, there are certain qualifications that borrowers must understand as they begin the process."
The Bills.com HARP 2.0 Report provides a detailed look at the changes to the program guidelines and how each will affect individual borrowers. Highlights include:
• Bills.com predicts that most lenders will not close on refinancings until March 2012 when lenders' automated underwriting systems are updated. Any early closings will be manually underwritten and are not protected against buybacks. This means many borrowers will not see immediate relief from HARP 2.0.
• The provisions most likely to help this program be successful:
o Removing the maximum loan-to-value (LTV) ration for HARP refinances
o Limit on lenders' liability if the borrower later defaults
o Elimination of credit & income guidelines for some borrowers
o Allowance of one late mortgage payment in the last 12 months
o Relaxed standards for bankruptcy or foreclosure
• One of the unheralded changes in HARP 2.0 is the new, less stringent requirement for condo refinancing. By removing the requirement that 80% of condo owners in a complex be current on their HOA dues, HARP 2.0 allows owners to refinance regardless of their neighbors' financial situation.
• In some states, refinancing can remove the consumer protections, called anti-deficiency laws, that insulate an underwater homeowner involved in a foreclosure. Bills.com recommends homeowners learn the anti-deficiency laws in their states, and whether a mortgage refinance changes their recourse loan into a non-recourse loan.
In addition, the report examines the context and motivation behind these changes, provides an at-a-glance review of the overall changes, and breakdowns HARP 2.0 eligibility guidelines.
December 1, 2011 7:36 pm
The nation’s unemployment rate may be inching downward, but the out-of-work figures have remained in the 9.0 to 9.2 percent range since April 2011, according to Bureau of Labor statistics.
An estimated 32,000 job seekers found work in October, but that still leaves 13.9 million reported unemployed, which means a lot of people are competing for the same job.
So how do you stand out in that crowd?
“It used to be that executives could network their way onto the CEO’s schedule, maybe on the golf course or a chance meeting at lunch or a ball game,” says Colleen Aylward, a recruitment strategy expert and author of, From Bedlam to Boardroom: How to Get a Derailed Executive Career Back on Track! (www.devonjames.net/the-book). ”It’s now up to you to gather your data, polish it up and position it where people will find you—and that’s one of the biggest shocks in the executive job seeker’s world right now.”
It’s a message that unemployed execs in their later years may not want to hear, but it’s one they need to get their collective arms around as the economy tries to rebound. The old-school train has left the station—permanently—and if 40- and 50-something prospects want to compete for top-flight executive positions it’ll mean breaking old habits and exiting their comfort zones.
Two words: digital brand.
Aylward says it’s time to become an authority on-line and to create a virtual network of business connections so that you can easily be found.
“Just when they thought their golden years entitled them to being ‘served’ by recruiters, members of that older generation now have to do homework and market themselves,” says Aylward, who interviewed thousands of jobless executives over 20 years.“ They don’t want to hear it, or believe it, but it’s reality.”
According to surveys, 89 percent of employers use a form of social media to identify job candidates, with LinkedIn, Facebook and Twitter the most popular. LinkedIn, with its more than 135 million members, dominates the competition, with 86 percent usage compared to just 50 percent for Facebook and 45 percent for Twitter.
Sounds like a good place to start.
After embracing social media (even building a personal website), Aylward has these tips:
• Streamline your strengths with specific examples. It’s not the interviewer’s job to figure out what your strengths might be; it’s the candidate’s job. The days of clever cover letters opening doors are gone. Those resumes and on-line profiles better be stronger than ever and packed with data and specific accomplishments.
• Don’t waste time with external executive recruiters. They don’t find jobs for people. You need to get in front of the internal corporate recruiters who are searching for you online. So help them do their job by researching companies online yourself, as well as locating jobs yourself, introducing yourself to a prospective employer and conversing directly with hiring managers – online.
• It’s all about them, not you. Get out of the mindset that matching yourself for a job or interviewing for a job is about you. It’s all about what you can do for them. That means defining your strengths and determining specific areas where you can solve their business problems. And be prepared to demonstrate that you have kept up with technology, industry changes and how the economy has affected them.
“Embrace change,” Aylward says. “You are still very valuable and worth money for a long time, but you need to make yourself visible—and viable—to those who need your expertise.”