A Financial Education Event
 

Receive Extra $$ Rewards & Grants as a Hero When You Buy, Sell, or Refinance

This week, to kick off our new podcast season on The Money Millhouse, we have a special interview with Joseph Kelly from Heroes Come First that share how heroes of all kinds can enjoy rewards and grants from a program that benefits Heroes at Home.

Enjoy this great information and be sure to share the following blog from our guest writer, Joseph Kelly, with a hero that you know.

Ellie Kay, Founder and CEO

 

You may or may not feel like it, but as a military veteran, active duty or reserve you are designated an American Hero, and that means you qualify for significant rewards you probably are not aware of when you take out a mortgage or buy or sell a house.

Most are aware that they have VA Benefits that include mortgage benefits.  And that program has some wonderful advantages.  But few are aware that there are additional benefits available that can give you an extra $2,000 to the $7,000 or more without any cost or added paperwork!

A national program called Heroes Come First defines heroes as people who serve their community. This includes active duty military personnel, veterans as well as  all current and former medical professionals (nurses, doctors, dentists, EMS, etc.), police officers, firefighters, first responders, teachers, and clergy.

Before I tell you how this reward program works please allow me to offer two key pieces of advice if you are considering buying a home in the next year that will save you from added stress and confusion.

1st Key– BEFORE you find of call a realtor and start looking at homes GET PRE-APPROVED from a trusted, reputable, recommended lender. (if you desire we offer this in all 50 states). Get your questions answered on your qualifications, credit, savings, options, etc. BEFORE starting to look at properties.  This will allow you to make adjustments if needed and be prepared to speak to real estate professionals who will have confidence in working with you.

2nd Key– Using sites like Zillow, Realtor.com, etc. are great tools to see what properties are out there however I encourage you to be VERY CAREFUL before entering your contact information on these sites.  Read the “fine print” at the bottom of the website.  These companies will sell your information to multiple lenders and realtors who then will call you and email you for months!  While some of these companies be ones you wish to consider it can be overwhelming and confusing as lenders buy your information as a “lead.” (FYI the program we are about to discuss does NOT sell or provide any information to other companies)

How the rewards work …

Buying a Home

There are several ways that the Heroes Come First program saves you time and money when you purchase a primary or second home or an investment property and get a mortgage to finance the purchase.

If you, or another hero you know, is thinking of buying in the next 12 months the most important first step is speaking to a pro-hero lender and getting “pre-approved” for your financing. The Heroes Come First team can introduce you to a participating lender who focus on heroes with both financial and added service rewards to get you on the right track for your purchase.

Benefits include:

  • You get a Lender Hero Reward of a minimum of $500 – $1000 toward closing costs.
  • Work with a pro-hero realtorand receive a portion of the realtor’s commission. For example receive $700 for every $100,000 in the sales price, which is a rebate of a quarter of the realtor’s commission. So if you were to buy a home worth $300,000, you would get a check for $2,100; if the home you buy costs $600,000, you receive $4,200.
  • You can earn a discount over usual title fees, averaging about $350, from the title companies that participate in the program.
  • You may qualify for a Purchase Grantof up to $10,000, to be used toward the down payment on a home or closing costs. This grant does not have to be repaid. 

Selling Your Home

When you sell your home, you get a break on all of the real estate fees that are usually part of the closing. The average reduction is $2,000, but it could be more for a high-priced home. The participating realtor that handles your listing rebates one quarter of their commission to you at the closing, which could amount to several thousand dollars more, depending on the price of the home.

Refinancing Your Mortgage

When you refinance your existing mortgage to get a lower rate and payment, you qualify for a Lender Hero Reward between $500 and $1,000, which is applied toward your closing costs. The lenders who participate in this program offer competitive interest rates in all 50 states, so you don’t have to compromise on settling for a higher mortgage rate to get these discounts. The participating title companies also offer discounts of up to $350 for title searches that are needed when you refinance your mortgage.

Example of Heroes Come First Savings

Real Estate Transactions:

  • Sell your home for $300,000
  • Purchase a new home for $450,000
  • Take out a $360,000 mortgage on the new home

Costs and Discounts:

Realtor’s rebate of selling commission:                                         $2,250

(25% of standard 3% commission)
Pro-Hero Realtor reward on purchase of new home:                  $3,150

(up to$700 per $100,000)

Lender discount on $360,000 mortgage:                                      $1.000

Title company discount for title settlement costs:                           $350

Total Savings: $6,750

  

Find out more

It really is simple to get started with the Heroes Come First program when you are in the market to buy or sell your home or refinance your mortgage. There are no restrictions, paperwork, fees, or fine print to read in order to qualify. Start the process by registering at www.HeroesComeFirst.com or call them at 800.272.5626 and they will refer you to a participating lender, title insurance companies, and realtors who serve where you live.

Know other heroes? Help them too!

The Heroes Come First program can help not only you but also other heroes you know. And if you tell other heroes in your life—like your children’s teachers, your local firefighters and police officers, or any veterans or active duty military you can be a hero to them by saving them a significant amount of money on their home transactions.

Since 1989 Joseph Kelly has brought a unique blend of technical, marketing, sales and leadership experience to the mortgage industry. As a graduate of the University of Virginia with a degree in Aerospace Engineering (yes….a rocket scientist), he realized that the mortgage industry was lacking a critical component – consumer education and programs to help increase savings and reduce debt through mortgage management.

Joseph Kelly is very proud of having three sons who are veterans.  Two Army and one Navy.  Their service inspired the development of a national financial program to help all military (active, reserve and veterans) receive mortgage financing advice focused on their long term benefit, not a one time “sale” for a mortgage company.

Heroes Come First was launched to include all of our nations heroes; Military (active, reserve and veterans), current & former Firefighters, Law Enforcement, Medical & Educational professionals and is dedicated to saying “Thank You”  in a practical & financial way when they Buy, Sell or Refinance a Home. 

Five Savvy Ideas to Improve Your Home and Hearth

It’s good news that housing is on the rebound and you can improve your home’s value even more! Luckily for you, you don’t have to put thousands of dollars into remodeling to boost your home back up to the value it was in 2007. Whether you are looking to sell now or well into the future, there are a few things you can do that can easily improve the value of your home.

1.    Slapping on Paint: This is the number one home-improvement project homeowners will try themselves. There are two keys to a good paint job: choosing the paint and prepping the surfaces. Splurge on quality paint, as well as brushes and rollers. If you’re not sure of the color you want, rent a sample (yes, most full-service hardware stores will let you do this). Prep the surface by cleaning the walls, sanding them, and patching holes. This accounts for the majority of the work and will make your house show better (improving its value).

2.    Finish the Basement: A family can add as much as a third more space to a two-story house for a moderate cost (only a fraction of what it would cost to build a third onto a home) and recoup as much as 80 percent of the investment upon selling. Determine the basement’s condition, including waterproofing, a sump pump, and making sure there is adequate heating and cooling that doesn’t drain the other units.

3.    Lose the Kitchen Wall: Many older homes have a wall that separates the dining room and kitchen. By knocking down that wall, the space is opened up and voila! A new look that can allow you to recover 70 to 80 percent of the cost of the renovation. The rest of the kitchen may need to be updated with wood cabinets, non-laminate countertops, and non-vinyl flooring.

4.    Try a Little Bathroom Remodel: Keep up with today’s amenities by updating your bathroom with double sinks, brushed nickel fixtures, powerful multi-head showers, and toilets in their own alcoves. Rather than spending $30,000 on a complete overhaul, you could purchase a new toilet, sink, and fixtures for a fraction of the cost.

5.    Window Treatments: When we purchased our current home, one of the main features the real estate broker, the seller, and the neighbors kept talking about were the windows. They were double-paned Pella windows, which was as nice an accessory to a home as Prada handbag is to a fashion maven. According to Remodeling magazine, this investment could be as much as a 75-percent recoup upon selling.

6.    Do the Little Things: While living in your home, there are projects along the way that will add value. First, have your carpets cleaned annually to improve the chances that the next homeowner will be able to live with them. In between cleanings, vacuum regularly and clean up any spills with a stain-remover. Another small step is taking care of your yard. Obviously, manicured grass, living plants and a groomed landscape make a home look better, raising its value. My husband was constantly enlisting the help of our sons to keep both our front and back yards clean and beautiful, and we get to enjoy them well before we sell our home.

What are ways that YOU improve the value of your home?

Ellie Kay

America’s Family Financial Expert (R)  

 

Plan for the Worse, Hope for the Best

Are you ready for a natural disaster?

When we were living at Columbus Air Force Base in Mississippi during the mid-1990s, I had to survive my share of “natural” disasters. They ranged from toddler Jonathan “naturally” trying to stick a knife in the toaster oven, to little girl Bethany going “au-natural” while guests were over, to a full-blown natural disaster in the form of a massive tornado.

For the latter, it happened when the kids and I were all on the road. I remember nearing the exit of the base, when I saw a neighbor’s flag still up and decided to take it down for them. Low and behold, the tornado passed by us from the direction of the exit! Our guardian angels were definitely clocked in that day, but it reminded us to be better prepared for the next disaster.

According to a survey by Harvard University, 40.4 percent of American citizens are at average or higher risk of being a fatality. And with recent tragedies like the Oklahoma tornados and Colorado fires, it puts it in perspective. Here are a few ways you can get prepared for a flood, fire, storm or other disaster:

  • Stockpile supplies: You don’t have to be paranoid to be ready for an emergency. Stockpiling an adequate supply of non-perishable food and medications can be vital if you’re trapped for any length of time due to a hurricane, winter storm or other long-term disaster. Create a budget for emergencies and shop smart to save big on duplicate items you’ll need.
  • Get tech-savvy: True, you may not be able to connect to the Internet during a disaster, but your computer or smartphone can actually help. USAA has a great list of apps for situations like this, such as a CPR instruction app and a flashlight app. You can also sign up for weather text alerts, plus you can back-up files and insurance documents on your computer via sites like Dropbox and Google Drive.
  • Invest in a shelter: If you’re one of the six percent of the population living in a high-risk area, you should especially consider a shelter or safe house. Even if you don’t, now might be a good time to take the extra precaution, as some counties offer rebates up to $3,000. Do some research and see if you qualify before you decide.
  • Have your insurance in order: Are you covered for a fire? How about a flood? An earthquake? You don’t want to wait until you file a claim to see if your insurance will pay for your loss. USAA, Allstate and State Farm are among the most popular and highest-rated by customers for homeowner’s insurance, so it might be wise to check them out.
  • Know the facts: You probably know you shouldn’t drive during a tornado or wait out a hurricane, but what about other disasters? Knowing the steps for preparation and recovery can save you money and possibly your life. USAA is also a great resource for doing research on this.

Don’t let disaster catch you unawares; it’s better to hope for the best, but plan for the worse. If there’s one thing I’ve learned, it’s that when you trust your intuition and do your research, you’ll be prepared when the storm hits.

What are YOU doing to prepare?

Ellie Kay

www.elliekay.com

Spring Savings – Five Ways to Save $500 or More

When I was a gangly seven year old with braids that were too tight and freckles that looked better on a cheetah, I used to dislike the spring. In my Latino family, spring meant two things: 1) my mom would dress us in flamenco dresses to go to the fair and 2) I would have to participate in spring cleaning.

My Spanish mother and my Abuela would put on their work clothes, tie their hair in a scarf and attack the house with a vengeance that would make the mighty 300 run in sheer panic all the way back to Sparta. Never get between a Latina woman and her spring cleaning. I was conscripted into forced servitude while all my freckleless girlfriends got to go play kick the can in our street circle.

Now that I’m an adult, every spring, I engage in a different type of practice that gets our finances in tip top shape. Instead of a broom, I use a smart phone. Instead of a vacuum cleaner, I have a computer. I like to engage in spring savings. The bonus for this formerly freckled girl is that I usually save more than enough money to hire someone else to do my spring cleaning.  Here are some ways that you can get out of spring cleaning and into spring savings:

Property Tax Challenge – As many as 30% of homeowners may be overtaxed, according to the National Taxpayers Union. First, study your property card for errors in your home’s specs. Next, compare your home’s value and taxes with other nearby homes (go to Valueappeal.com). Third, go to ntu.org/tax-basics to learn how to build your case before the tax assessor. Fourth, challenge the amount and win and save hundreds or even thousands of dollars!

Prepare for Warm Weather – Invest in a thermal leak detector to find and fix drafts around windows, outlets and walls to save as much as 20% on cooling bills. Also invest in a programmable thermostat to adjust your home about 10 degrees while you’re at work and at night to save another 15%.


Pull the Plug on Entertainment
– There’s no need to pay for pricey cable or satellite when you have less expensive options. Before we had Apple TV, we invested in a streaming player called Roku that cost about $100 and connected the internet to our TV. We currently use Netflix ($8/month) for movies and TV shows and then Hulu Plus ($8/month) for new TV episodes that we can watch right after they’ve aired. Plus, I’m a Prime member on Amazon, so I get to watch scores of shows for free on Amazon Instant Video. I’ve discovered all kinds of Downton-like British TV shows that are delightful (I’m currently hooked on Lark Rise to Candleford).  These options save $750 a year over cable.

Put off the Oil Change – My girlfriend Audrey has a fairly new Lincoln and the dealership told her to only go 3000 miles between oil changes. But her car light comes on at 7800 miles, so she listens to the car instead. Actually, the newest studies indicate that my girlfriend is right! The quality of oil has improved dramatically over the last 25 years. Follow the owners manual and the car’s oil-life-monitoring system instead of the dealer who wants that extra service fee. I change the oil in my car once a year!

Put it on Ice – To save on food and spoilage, freeze hard cheeses, most fruits and vegetables, meat, poultry, bread and other baked goods. You can use ice trays to freeze baby food, sauce or stock, and chopped fresh herbs in water. Not only will you never have to dig a moldy hunk of something you don’t recognize out of the back of the fridge, you’ll also find dinner prep is quicker and easier by using these kinds of frozen items.

Once you’ve finished your spring savings, then sit back, pour a cool glass of tea (with mint infused ice cubes) and watch Lark Rise to Candleford—you deserve the rest!

Ellie Kay

America’s Family Financial Expert (R) 

Ellie Kay at MCRD – San Diego Booksigning + Military Families – Should You Rent or Buy? –

First of all – I’m going to be signing “Heroes at Home” at MCRD (Marine Corp Recruiting Depot) in San Diego at the MCS from 2:00 to 4:00 on January 31, 2013. So please come by and say hello and I’ll be happy to answer any military family finance questions you may have!

We lived in eleven different military houses in the first thirteen years of marriage. We weren’t exactly thinking about the American dream of owning our own home, we were just satisfied if the carpet came with the house and we could get enough bedrooms to have the kids only sleep two to a room! But, eventually, we slowed down our military moves long enough to buy a home and it was worth the wait.

Whether you are a reservist, guard or active duty, you may be in a position to ask a very common question in today’s economy—is now a good time to invest in a home or should you rent? Here are some ideas to help you determine the housing climate for your situation.

Sunny Skies for a $5,000 Grant for YOU

The “Dream Makers” program from the PenFed Foundation offers grants up for $5,000 to first time homebuyers of modest means who work in the service of our country’s defense. So go to this site to see if you qualify to be one of those who make home ownership a dream come true!

Dark Clouds Dissipating

Is the housing market finally starting to recover? Larry Shover, author of Trading Options in Turbulent Markets and a regular expert on Fox News says, “The sheer fact that median rental yields are more than 1.5% higher than the average 30-yr fixed rate mortgage should help support property prices.” People are starting to invest in housing again, whether they are buying it for a family home or as investment property to rent. So now can be a very good time to buy if you plan on keep the home at least three years or if you live in an area where you have the potential to rent out the home when you PCS.

Christine Francis, military spouse of a retired Marine and a current realtor in the Camp Pendleton area says, “ Now is definitely the time to buy because the interest rates are at an all time low. Sometimes military families can get into a home for only a $500 deposit. My agency has been able to get that $500 back by using a VA loan and financing the total amount. When the sellers are paying closing costs, many of my military clients are getting into their new homes for zero down.”

The Perfect Storm : Unemployment and Underemployment

The primary problem that could potentially ruin your sunny days is unemployment, which is expected to remain well above 8% for the rest of the year. If you are active military and plan on staying in the military, then this would not have a great impact unless you depend on the spousal employment to meet the mortgage obligation. However, if you are a Guard or Reserve family or if you are active and plan to separate and find a new job near the house you just purchased, then unemployment is something to take into consideration. The same is true for underemployment: if you don’t get the salary you need to meet your monthly payments. If either of these conditions are on your horizon, then it becomes a riskier endeavor to take the plunge in the housing market.

Clearing Skies –Interest rates and VA Loans

According to VA data, there are 23.8 million U.S. Veterans and less than 10 percent of them—2.1 million—have VA loans. “A VA loan is very attractive to most mortgage brokers,” says a representative from USAA home mortgages specializing in U.S. Department of VA loans. He adds, “VA loans have looser underwriting standards than conventional and even Federal Housing Administration (FHA) loans. With a VA loan, veterans can get 100 percent financing without private mortgage insurance (PMI) and lower interest rates.” Plus, you can get up to $3100 when you buy and sell your home through MoversAdvantage with USAA.

Christine Francis says her clients have been getting 3.75% interest rates on VA loans. The other advantage is that sellers are allowed to cover all closing costs, prepaid items and discounts. This lets borrowers essentially walk into their new home with no down payment, no closing costs and a 30 year fixed rate with no mortgage insurance.

Sunny Days – Housing Inventories

    In many parts of the country, home prices are so far below their peak that millions of homeowners owe more on their homes than they’re worth. This means that prices are continuing to drop, and may have even bottomed out according to Moody’s Economy.com. Consequently, it continues to be a buyer’s market in terms of value. Christine Francis says, “Without a crystal ball, it’s hard to tell [where house prices are trending], but I do believe that we are at the bottom of housing prices and the only place we can go is up.”

Plus, with values expected to rise even more toward the end of 2013, the home you buy low, is likely to increase in value almost as soon as you close the deal.

See you at the book signing!

Ellie Kay

America’s Family Financial Expert (R)

 

College Debt – Ellie Answers Your Questions!


One of Yahoo’s most popular videos was yours truly on ABC NEWS NOW earlier this month answering your questions about college grads as well as debt!

Here’s the scoop:

Q. Our daughter just graduated from UCLA and we’re very proud of her. But even though she has a prestigious degree, she still hasn’t been able to locate work. Should we allow her to move in with us until she finds employment?

Bill and Carol from Quartz Hills, CA via facebook
Ellie: This is a tough one! As a mom of kids in this age group, I know it’s a fine line between enabling and empowering and it’s definitely one of those individual decisions. What may be right for a particular child may not be right for another one. I think you ought to support her emotionally and psychologically, letting her know you believe in her. You can also offer to help with resumes or job research. But I would make the offer to have her move in with you as a last resort only. Furthermore, if she does move in with you, it’s important to sit down ahead of time, come up with a responsibility/income agreement and have both parties subscribe to the guidelines.

Q. My husband and I have a son who graduated last year and could not find work, so he moved in with us until he could find employment. He found a modest job, and is not making very much money. He decided that continuing to live with us would be a better financial option than paying rent on a limited income. I love my son, and he’s only 23 right now, but I’m afraid of a “Failure to Launch” syndrome and I need to know what you would advise me to do.

Allana from Lancaster, PA via online contact form
ELLIE: OK, the Failure to Launch syndrome, it’s every parent’s nightmare. We finally have an empty nest, then boomerang children come back to inhabit a place where they no longer naturally fit. I think, Allana, that it is imperative that you and your husband develop an comprehensive exit strategy for junior. Make sure this plan requires that he pays room and board with you, that he develop a clear budget and make himself accountable to you (while he’s living at home) and then be clear about D-day. The day he will depart. Be loving but firm. Remember that the decisions you are implementing with him today will be the precedence you set for tomorrow. You and you alone, enable the boomerang effect, yet you also have the power to put a stop to that boomerang before it’s ever launched. Then you won’t have a “Failure to Launch.”
Q: I am a 26 year old single girl with a bachelor’s degree but not yet a Master’s. I am working with children in a library setting currently and am considering various Master’s programs. (Library Science included). I would have to take out loans for the program though, and I am not sure that taking on that debt would be a wise thing, even though it would lead to a professional job. What is your advice for women around my age who eventually want to marry and have a family and do not want the burden of school debt? I have read some of your books and very much appreciate your insights and time.

Jen Crouse submitted via Online Contact Form
Ellie: It’s admirable that you desire to go back to college for a master’s while you are still in your twenties and your work with children sounds very gratifying. Ellie usually recommends no more than 10K in student loan debt for any program (bachelors or masters). Instead, you could look into some of the following:
Step 1
Apply for a scholarship.
There are merit based graduate school scholarships out there so go to www.salliemae.com which lists almost 2 million scholarships. Talk to the admissions office at the college or university at which you’d like to apply. They can give you advice on applying for their own scholarships (if they have them) or point you to the appropriate federal and/or state scholarship programs.
Step 2
Look into a fellowship or assistantship
. Many colleges and universities offer programs that enable you to get a master’s degree while doing research or assisting professors in the department in which you wish to study. This is a viable option that also enhances your hands-on experience in your chosen field.
Step 3
Talk to your employer.
Many employers are willing to foot the bill for a master’s degree, especially an MBA (Master of Business Administration). Talk to someone in your company’s Human Resources department to get more information. Or another option is to talk to a military recruiter to join the guard or reserves. The Army, Air Force and Navy will pay up to $65,000 in student loan debts if you qualify for the program.

Q. My husband and I want to help with our son’s college expenses (he graduates in two years) and we don’t want him to be straddled with huge student loans. Several of our friends and other family members have said, “Just take out a second mortgage or use the equity in your home to pay for college.” What do you think about that?

McKenzie Thomas from Stanford, CA
Ellie: I believe that you should never borrow on your own future to pay for your child’s future. In any discussion of college costs, it’s important to keep priorities straight. Your kid’s education shouldn’t cost you your retirement. This means it’s not a wise idea to take out a home equity loan, an equity line of credit or refinance your mortgage in order to pay for school. This would reduce the amount of equity in your home, increase the risk of possible foreclosure and incur costs in interest charges that may cost more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

.
Q. My son-in-law just graduated with his Masters Degree in Education. They have had a hard time while he’s been in school and don’t have the best credit scores. They’ve asked us to co-sign on a new automobile loan and we are reluctant. What do you think about co-signing for loans?

Amanda from Wichita, KS via Ellie Kay’s blog
Ellie: Since you son-in-law needs a co-signer, it means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Daniel, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Ellie Kay

America’s Family Financial Expert (R)

ABC NEWS – I’m Answering YOUR Questions

Here are some of your questions that I answered recently on ABC NEWS “Good Money” regarding the blog I wrote called “The Road to Financial Heckie Fire.”

Q. I’m in my mid thirties and I haven’t had the problem of friends and family asking me to co-sign on a loan before. But in the last year, I’ve had three requests for this. What’s your advice on co-signing a loan?
Jill, from Bradenton, FL via facebook

Ellie: If you have a friend or relative who needs a co-signer, then that means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? The answer is that you should not! Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Jennifer, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Q. We are boomers in our early sixties and we were thinking of getting a reverse mortgage. Is this a good move for people our age?
Allison from Granbury, TX via online contact form

Ellie: Recently, you’ll see older actors on commercials offering these kinds of mortgages to seniors who are house rich and cash poor. They are portrayed as a viable means of getting a steady stream of income that is easy to obtain. But the fees and other costs associated with reverse mortgages can sometimes be considerably higher than on other loans. This is a bad money move unless you have no other income than social security and because of the high cost fees, it should be a last resort not a first resort. The better option would be a home equity loan. You could sell your home and move into a smaller, less expensive house. Or, you could sell the home to your kids and have a multigenerational family under one roof—this is a recent trend I’ve seen emerging. Your kids can use the inheritance to pay down the mortgage.

Q. I have $10,000 in Stafford Student Loans, an $8800 car loan at 9.99% and two consumer loans at $3500 and $3700, both at 12%. All my loans are current and I have $1000 to put toward one of these loans—which one should I choose?
Viviene via Ellie Kay’s blog

Ellie: It’s great that you are current with your payments and even better that you have an extra $1000 to put toward your debts. I recommend that you put the $1000 toward the $3700 loan at 12% in order to retire the loan. Then once you’ve paid off that debt, double up the payments on the $3500 loan. You will feel motivated by the fact that you’re paying off debts and you will also experience the “snowball effect” where you gain momentum in paying these debts and as you pay off one bill, you can put those monies toward the next bill. Before you know it, you’ll have all your debt retired!
Q. Last year, my teenage daughter couldn’t find a summer job and ended up kind of wasting those months. She tried hard, but there just isn’t much work where we live. Do you have some ideas that maybe we haven’t thought of in terms of summers for this age group?
Stephanie Corlew from Branson, Missouri
Ellie: Summer camps are a great place for kids like your daughter to plug into a summer job. My daughter, Bethany, found a job through the American Camping Association by going to www.acacamps.org/jobs (or just google “American Camping Association” and “jobs.”) She’s making enough for her college spending money and gaining the opportunity to impact the lives of young campers as well.
Another way to broaden a resume for this age group is to go to the local, state or federal political representative from your district and offer to intern in the office. My son, Jonathan, did this last summer as a high school sophomore and this summer as a junior as well. He only volunteered a few hours a week at Congressman Buck McKeon’s office (California) and it made such an impression on his resume that it helped him get into an exclusive summer leadership seminar at USAFA (United States Air Force Academy). His summer internship contributed to the community and it also has contributed to his future as he applies for college scholarships.

Q. My grandchildren are teenagers and are coming to live with me for the summer. I wanted to know if you know of some jobs they can do where they could make some extra money, but still have time for fun, too.
Connie Green from Tehachapi, CA

Ellie: Connie, if you email assistant@elliekay.com, we can send you a file that includes 30 different jobs your grandchildren can do locally and make good money as well. Just ask for the “Kids Jobs” file. There’s also a list of safety items you should check out before they work for someone they do not know. For example, there’s job’s like Rent-A-Kid where there may be people in your church or neighborhood who need odd jobs done. There are also jobs like window washing, Garage Cleaning Service, Babysitting Services for summer groups that meet, Mail Checkers (for those who travel out of town), and even Pet Minders.

Q. Ever since I was a teenager, it’s been a dream of mine to go visit Israel
Is going on a tour with a large group the least expensive way to go to big tourist destinations? How can I save money on this trip?
Pamela from Acton, CA

Ellie: Tour groups with your church or community may not be the cheapest route to go since someone usually gets a free trip or two by booking a large group. In some cases, you actually pay more money to go to Israel with a reknown author or professor than you would if you go on your own. To help save money, go to the website GoIsrael.com and do as much planning as possible. Stay in a hostel, guest house, or a kibbutz, which comes with a free breakfast. Buy a pass for all national parks in order to save as much as 35% on the most popular attractions.

Q: Our company downsized and I laid off work. I’m thinking of launching my own homebased business, but there’s so much out there, I’m not sure what I should do. How do you know it’s a good business to get into and what should I keep in mind as I make my decision?
Nicole, Albany, NY
Ellie: One area of our economy that is thriving is direct sales companies (DSC) as people explore new ways to make money. As you are searching for the best fit for you in your homebased business start with following your passion. Do you love to cook? Then Pampered Chef may be a good option. Do you enjoy wearing the latest styles in jewelry, then try Premier Designs. If you follow your passion you are far more likely to succeed. But all DSCs are not created equal. Before you decide, find out what kind of inventory you have to stock. I know far too many people who went into debt to buy their inventory and then quit the business within a year—but kept the debt! Also find out the percentage you make on sales as well as the hostess plan that the company offers. Does the company take care of filing sales tax for you or do you have that job, too? For more information, email assistant@elliekay.com and ask for the “Homemade Business” file. Have fun pursuing your passion!
Please ask me YOUR questions!
Ellie Kay
America’s Family Financial Expert (R)

Buying a Home: It’s Easy to SAVE BIG on Closing Costs

I remember when we sold our home in New Mexico and relocated to California!

We learned to save a lot more on closing costs than we ever thought possible.

If you are considering buying a home, shop carefully for lenders and be sure that you negotiate, negotiate, negotiate with the LENDER as well as the SELLER. When discussing closing costs and fees, make sure that you don’t over pay. Here are some key “dos” and “don’ts” to keep in mind when negotiating fees and costs with your lender:

Do Ask for a Good Faith Estimate — Within three days of applying for a mortgage loan, lenders are required to give you a good faith estimate (GFE) on costs. Look at GFE sections 800 and 1100 for the following fees and be prepared to haggle lightly for reductions.

Don’t Pay for Inflated Credit-Report and Courier Fees – Some lenders are charging up to $65 for pulling your credit report. That is unusually high, considering the fact that credit reporting bureaus only charge $6 to $18 per report. Using the same tactics, some lenders charge courier fees for shipping your closing documents for as much as $100, while the majority of overnight express services only charge $22. Tell your lender, up front, that you refuse to pay any more than the going rate for these services.

Don’t Pay for Document Prep and Administration Fees – The origination fee should include these services, so don’t pay them! Ask your lender to waive these fees.

Don’t Pay for Yield Spread Premiums – Lenders increase your interest rate slightly to include origination and other fees so you don’t have to pay them out-of-pocket at closing but some lenders and mortgage brokers are double dipping—by charging both the fees and the higher interest rate. If they advertise “pay no closing costs” then this is what they really mean. Ask your broker directly if a firm charges you a yield spread premium. If so, you shouldn’t pay any additional fees.

Don’t Pay for Padded Title Insurance Fees – When you are shopping for lenders, look for all the above, plus look out for those who don’t tack on a lot of extra charges for services such as title search and document preparation. Theses can add hundreds of dollars to your closing costs and they really should be included in the price of title insurance, which depending on where you live, can be as high as $6,000.

Do Ask for your HUD-1 A Day Early – Federal law requires lenders to give mortgage applicants a copy of their settlement form at least one day before closing, but many won’t give it unless you ask for it. Compare the HUD-1 with your GFE (good faith estimate) and bring any errors to your lender’s attention.

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com

Ellie on MSNBC – Should You Rent or Buy?

I was on MSNBC a little while back and several of you have written me for the link. I did the show live from the west coast NBC Bureau. It was a CRAZY day, but it worked out. We got the notice that I needed to leave (and be camera ready) in 1.5 hours. Then the car service did not arrive and when I called them, they had the wrong time (east coast instead of west coast). This meant I had to hop in my roadster (good thing it’s fast) and just start driving, getting directions (via my cel) while in the car. They bumped the segment to the bottom of the half hour in order for me to arrive at the studio in time. I walked in, did the show and then left right after. I’m always amazed by the stats involved in media –2.5 million viewers, the equivalent of $150K in advertising for the 5 minutes I’m on the show–really wild. But I also got 6 really quick and easy tips into the segment to help consumers.

One of the things I’ve been talking about in the media is the entire question of “do I rent or do I buy?” Well, I’ve got a handy dandy rent vs. buying tool on my website (along with a ton of other cool calculators) that can help you crunch the numbers. Generally speaking, if you are going to stay in your house for 5 years or longer, then it is a fantastic time to buy. But you also need to know what kind of mortgage rate you will get, if you have ample downpayment and if your job looks secure enough in the future to be able to take on the responsibility of a home (not to mention all the associated costs like upkeep, utilities, taxes, insurance, etc). Long gone are the days of mortgage lenders overlooking debt versus income ratios and not following up on applications that could include falsified information.

So if you know someone who is considering taking this big step, direct them to this tool and it could save them a huge headache!

Ellie Kay
America’s Family Financial Expert (R)

Homes – To Buy or Not to Buy?

My husband, Bob and I lived on military bases for the first dozen years of our marriage. When you move eleven times in thirteen years it doesn’t make sense to buy! When we finally settled one place long enough to purchase our first home, we were thrilled and had “imposter syndrome” for the first month or so. We kept waiting for the “real” owners to show up and kick us out of the house! Alas, it was a dream come true and we truly enjoyed that home. Now…I know what some of you are thinking–is that a picture of my house? No, it’s not, it’s just one of the many, many gorgeous homes that are on the market in America. We sold that first home and the next year property values plummeted in the area. Not all Americans are having such good timing in buying and selling.

Last week the average fixed rate mortgage was at its highest since last October , 2007, with a 30 year averaging 6.32%, up from 6.09% but still below last year’s rate of 6.74%. It appears that the rate will continue to creep upward, so if you were thinking of buying a home, now would probably be a good time. It can turn from a buyers market to a sellers market in a relatively short amount of time as those extra properties are purchased and taken off the market.

If you are considering buying a home, shop carefully for lenders and be sure that you negotiate, negotiate, negotiate with the LENDER as well as the SELLER. When discussing closing costs and fees, make sure that you don’t over pay. Here are four key areas to keep in mind when negotiating fees and costs with your lender:

Don’t Pay for Inflated Credit-Report and Courier Fees – Some lenders are charging up to $65 for pulling your credit report. That is unusually high, considering the fact that credit reporting bureaus only charge $6 to $18 per report. Using the same tactics, some lenders charge courier fees for shipping your closing documents for as much as $100, while the majority of overnight express services only charge $22. Tell your lender, up front, that you refuse to pay any more than the going rate for these services.

Don’t Pay for Document Prep and Administration Fees – The origination fee should include these services, so don’t pay them! Ask your lender to waive these fees.

When You Buy A Home: Don’t Pay for Yield Spread Premiums – Lenders increase your interest rate slightly to include origination and other fees so you don’t have to pay them out-of-pocket at closing but some lenders and mortgage brokers are double dipping—by charging both the fees and the higher interest rate. Ask your broker directly if a firm charges you a yield spread premium. If so, you shouldn’t pay any additional fees.

Don’t Pay for Padded Title Insurance Fees – When you are shopping for lenders, look for all the above, plus look out for those who don’t tack on a lot of extra charges for services such as title search and document preparation. Theses can add hundreds of dollars to your closing costs and they really should be included in the price of title insurance, which depending on where you live, can be as high as $6,000.

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com