Category Archives: Uncategorized

Your Insurance Questions Answered

Photo Credit: http://www.aiche.org/resources/member-services/member-only-insurance-plans
Photo Credit: http://www.aiche.org/resources/member-services/member-only-insurance-plans

Insurance is one of those “love ‘em and hate ‘em” expenses in life. It is absolutely necessary to protect your financial future. Remember, the purpose of insurance is not to make you rich in the event of loss. It is to transfer the risk of major loss from you to the insurance company, in exchange for policy premiums.

 

So which types of insurance do you need? Which are a waste of money?

 

MUST HAVE’S

  • Medical Insurance – this is now mandated by our government. And for good reason. Health expenses are the number one cause of foreclosures and bankruptcies in our country. You don’t want to be thinking about financial consequences while you battle cancer. You must protect your health.
  • Home Insurance – your home is often your greatest asset; it must be covered against major loss. Liability insurance is a key ingredient with home insurance, be sure to cover your assets against accidents. Click here to learn more.
  • Auto Insurance – a certain level is required by law. You’ll also want to be sure you have liability coverage (consider “umbrella” coverage with your agent)
  • Life Insurance – how would your family fare financially if you died tonight? If you don’t know the answer to that question, life insurance is your answer. Click here to learn more.
  • Disability Insurance – your ability to earn an income is often your greatest asset. Disability insurance protects your income in the event your employer doesn’t have worker’s comp or a policy in place to cover you. Self-employed people need to pay special attention to this. This is often the most forgotten insurance.

 

NICE-TO-HAVE’S

  • Pet Insurance – recent progress with medicine makes it more likely a pet’s health can be restored with advanced procedures. Pet insurance can help you avoid having to make the very difficult decision of whether to pay for that $5,000 surgery. Click here for more info on different kinds of pet insurance, and what you should consider.
  • Identity Theft Insurance – most people waste money on credit monitoring, but have no plan for how they will recover their identity in the event it is stolen. It has been estimated that 600 hours is the average amount of time spent on recovering from an ID theft occurrence. Most people don’t have that time to waste. Click here for more info on credit monitoring vs. ID theft Insurance.
  • Long-Term Care – this is a tough one. It’s not for everyone and should be assessed on a case-by-case basis. It is expensive, but necessary to receive good care and protect assets. Talk to a trusted agent.

 

DON’T HAVE

  • Mortgage Life Insurance – the only reason to have this is if your health prevents you from acquiring regular life insurance. Otherwise, you will badly overpay for this scheme.
  • Private Mortgage Insurance – there are many home loan options these days to help you avoid private mortgage insurance. Click here to learn more.
  • Insurance on Small Electronics – as mentioned in the opening paragraph of this article, insurance should be acquired to protect major loss. The loss of small electronics like headphones, iPods, etc. would not financially cripple you. This is where a reserve fund is handy. Keep a maintenance savings account to handle these small incidents. Don’t go broke insuring them!

 

This article was not intended to give you an all-inclusive tutorial on insurance, but rather to make you aware of the types you should consider and research further. We hope this helps!

 

What are your thoughts on insurance? What types of coverage do you have? Any that we didn’t include above?

New Credit Scoring Model For Homeowners

Photo Credit: www.mentalhealthy.co.uk
Photo Credit: www.mentalhealthy.co.uk

FICO, the primary credit scoring system used in lending, is releasing a new scoring model at some point this fall. This new 9.0 model has been advertised to contain major changes that are expected to be a big help for consumers. However, there are some things many aren’t considering with the new release.

 

The newest FICO model has revised previous versions to no longer penalize consumers for medical collection issues. This would seem to be big news for millions of consumers who are victim to the imperfect credit reporting systems of the medical industry. Consumers caught in this medical collection web will often find their credit scores are significantly impacted in a negative way.

 

Because of this, some aren’t able to qualify for home loans; and the others who are able to qualify usually take a significant hit to their mortgage rates.

 

So one would think this new model would be of tremendous benefit to consumers, since more would have improved qualifications for home purchases based on their new higher scores.

 

However, what the media hasn’t shared with us is that most mortgage lenders don’t even utilize the most current FICO scoring model in their underwriting process. The fact is Fannie Mae, Freddie Mac and most other lending institutions still use scoring models developed by FICO over 10 years ago. Many creditors haven’t even adopted the most recent FICO model that came out over six years ago. So it’s likely creditors won’t be jumping to this new model any time soon.

 

There are several reasons why lenders don’t leap to adopt new systems. A change in their scoring model results in a significant system overhaul, costing lenders tons of dough. The system changes also have to correlate with all the other government disclosure requirements. So the sheer cost and logistical nightmare likely won’t be worth the benefit of helping a few extra consumers. Because banks have to be profitable, we can assume their agenda would take precedence before the consumers’ needs.

 

SO WHAT DOES THIS MEAN?
Don’t sit on the fence, waiting for this prospective change to revolutionize your credit situation. It likely isn’t going to happen! You might as well do whatever else you can to accomplish your dream of purchasing a new home.

 

We have spent over 10 years analyzing the credit scoring system. We may have other ways to bump up your credit scores to help you through the home buying process. There is a lot of misinformation about credit scoring, including the myths surrounding credit monitoring (click here to learn why this is a waste of your money).

 

Every situation is unique…we’re happy to help!

 

NOTE: This new model is likely to take effect more immediately with consumer & revolving reports. These entities are faster to act with their adoption systems.

5 Tips to a Happy Home during “Homework Hour”

MI (Pic for Oct Post)As the second month of school comes to a close, you may find that your family is still figuring out the perfect balance between after school activities.  When I taught elementary school, I often heard that my students were too exhausted and rundown to concentrate on homework activities.  Unfortunately, finding a balance between after school sports and clubs and homework is sometimes easier said than done.  Here are some things to try if you haven’t yet found that perfect balance.

 

1.  Make it Predictable

Students thrive in predictable situations.  If they know what to expect and what is expected of them, they are much more likely to hit the goal!  Sit down with your child and create an afterschool routine that suits both of you.

 

2.  Start Early

Timing is everything!  Work backwards… what time should your kiddo be in bed?  Make sure he/she has time to wind down before bed.  Students often sleep better if they have a chance to relax their mind before going to sleep instead of completing homework just before lights out!

 

3.  Set a Timer

In early elementary, the idea of completing schoolwork after school could seem unthinkable for a student.  Help your child stay on track (or at least in his/her seat) for a set amount of time by using a timer.  Begin by setting the timer for small increments of time (such as 5 minute intervals) and then build up to 20 mins. or so.  An entire math page may seem daunting at the beginning of the school year, but if you break it down into sections and reward your child with a break when the timer goes off, you will help your child build confidence and concentration!

 

4.  Fuel Up 

Provide your child with a healthy, protein-rich snack before beginning homework activities.  If your child’s physical needs are met, he/she will be able to concentrate more easily on the task at hand.

 

5.  Find a Good Place

All children are able to concentrate better in a quiet, calm environment.  Help your child determine the best place in your house where they can work on school activities.  Be mindful that the kitchen table is usually the hub of all excitement in the evening and needs to be cleared off for dinnertime.  It might not be the best place for your child to unload his/her backpack!

 

Inviting your child to discuss these tips will help them own their decisions regarding homework time.  Setting oneself up for success is half  the challenge of getting there!

What’s Your Secret Weapon?

CB Pic for Oct Post
Source: http://transactionsbybrent.wordpress.com/2012/08/14/services-offered2/

Written by a guest Transaction Coordinator

 

In an earlier post, we talked about the amount of paperwork involved in a Real Estate transaction. Can you imagine being a top producing Agent and having to handle all of the administrative tasks and paperwork flying solo? Think about how valuable your time could be spent with family and growing your business if someone else was crossing your “Ts” and dotting your “Is” to ensure your file was compliant with the DRE and the requirements set by your brokerage.  Well, who should you hire?

 

The person who can assist with processing the Real Estate file to gather and follow up on all the necessary and contractual items would be your definition of a Transaction Coordinator (TC).  Part of their job duty is to ensure that all mandatory disclosures are completed by checking all signatures, initials, and dates.  Important dates and timelines would also be sent as a reminder to all parties involved. The TC will also QC and provide a preliminary audit of the file for the managing broker to review. If all looks perfect, the Agent is worry free because he/she will be paid on time when the escrow closes.
This person can be licensed or unlicensed and will be your secret weapon so that you, as an Agent, can provide a higher level of service to your clients and do what you are meant to do – sell real estate.  A Transaction Coordinator will help you stay organized!

Year-End Tax Planning Strategies

Source: http://www.venturacountycpa.com/tax-planning/

As we quickly approach the last quarter of 2014, we want to give you some tax planning strategies to help decrease your tax liability.**

 

A little planning can go a long way! Here’s an easy-to-read guide:

 

Max Retirement Plan Contributions

  • 401k’s – save up to $17,500 (+ $5,500 additional if over 50 years old)
  • Traditional IRA’s – save up to $5,000 (+ $1,000 additional if over 50 years old)

 

Max Health Savings Account Contributions

  • Single – save up to $3,300 (+ $1,000 additional if over 55 years old)
  • Family – save up to $6,550 (+ $1,000 additional if over 55 years old)
  • Remember contributions reduce your taxable income and account earnings are tax free!

 

“Bunch” Itemized Deductions

  • Prepay your February 2015 property tax installment in December 2014
  • Prepay your January 2015 mortgage payment by December 2014

 

Sell “Loser” Stocks

  • Get rid of those stocks that are worth less now than when you purchased them
  • Losses will offset other capital gains
  • You can deduct up to a $3,000 net loss per year

 

Donate To Charity

  • You’ve likely poured ice on your head for ALS, so why not continue to help out the charity of your choice!
  • If you are a “tither” on income as earned, prepay your 2015 tithes by December 2014

 

Consider Refinancing

  • Points paid on a previous refinance are fully deductible in the tax year of a new refinance
  • Rates are still at all-time lows!

 

Get Deductions For Your Hobby

  • Hobby-related expenses aren’t directly deductible, unless your hobby can be classified as a business
  • Business losses reduce other taxable income
  •  Click here for more info on how to turn your hobby into a business

 

Remember that any reductions in taxable income not only saves you taxes at your top rate bracket, but also helps you avoid phasing out of certain tax credits (i.e. – child tax credit, student loan interest deduction, education credits, etc.).

 

What tax planning strategies have you implemented in the past to lower your tax liability?

 

** Each situation should be analyzed individually. Alternative Minimum Tax rules may negate the impact of the strategies mentioned below. Most strategies mentioned help those who itemize deductions.

“A Penny for your Thoughts” 1 cent and 1 dollar deals for Back to School Shopping

Photo Credit: Matt Douchette
Photo Credit: Matt Douchette

Back to school shopping can be expensive!  Each school year my fellow teachers and I would try to minimize the items on our students’ supply lists as much as possible.  The reality is that there are a lot of materials that are needed at the beginning of the school year.  In an effort to minimize costs, check out these deals… some as low as one-cent!

 

Staples often has one-cent deals at the beginning of the school year.  The one-cent deals are usually items placed in large bins at the front of the store.  Call ahead and see what items are on sale!

 

Everyone knows the dollar bins offer great buys at Target.  Sometimes you can even find items bundled; therefore the cost per item is less than one dollar!  Recently, there were some school materials in the dollar bins.  Again, give a store near you a call to make sure the materials you are looking for are on sale.

 

Office Max is another great store to visit when stocking up on school supplies.  Currently crayons, markers, and colored pencils are all on sale for a dollar!

 

Make sure to search for coupons before heading out on your shopping trip.  Spending a few minutes searching and printing a coupon could help save you money and make sure you get those supplies for as low as one-cent!

Less Space, Less Mess, Go Green!

paper pileEver been a party to Real Estate transaction? Whether you were the Broker, Agent, buyer, or seller, you know the amount of paperwork that is involved. It’s practically a paper intensive industry and never ending, right?  Save time and money with less to print by going paperless!

 

What exactly does going paperless mean? One meaning behind it is to have an online filing system to manage your transactions such as DotLoop, Dropbox, SureClose, or Transaction Point to name a few. These management platforms will help you stay organized and in compliant.  Of course, it’s an expense to go paperless; however, an Agent or Brokerage can save money in the long term with printing, gas, document storage, and cost to fax/copy.  Just think how convenient that would be to have your client’s documents ready for them at a moment’s notice.

 

Another definition to going paperless that I have seen become very popular with Agents is E-signature. This sure saves Agents money and time! Clients have the privilege to sign anywhere and anytime.  Worried you won’t get that last document signed for closing while your client is on vacation? Here’s an example of how well this comes into play.

 

file_climbLet’s reduce the paper waste and start saving. Having these simple tools are definitely beneficial.

 

Content Credit to one of Iseley & Walsh Real Estate Group’s Transaction Coordinator.