9 Facts About Mortgages

Just a quickie today...read an interesting article on The Motley Fool that discusses some basic facts about mortgages that are often overlooked. thought I'd pass it along...

9 Facts About Mortgages

40 million credit cards stolen!

I don't get much work done on my site or blog on weekends. I prefer to spend time with my little girl instead of sitting in front of my computer screen.

But there was a major story that broke over the weekend that I wanted to mention. Hackers managed to rip off the credit card numbers of about 40 million consumers by breaking into a third-party computer system that stored the information.

They can use the account informtaion to make purchases or commit identity theft. It's a good idea to call the financial institution that issued your credit card to find out if you may be at risk.

At the very least, keep an extra vigilant eye on your monthly statements. Even better, sign up for online access so you can view your account information at any time. This will help you find unauthorized purchases even more quickly.

What do you do if your account has been hijacked?? Call the bank immediately to inform them of the fraud and have the card canceled. Federal law limits the amount that you can be held liable to only $50. However, many financial institutions will not charge you anything at all.

lower your energy bill with a programmable thermostat

One of the most effective ways to save money on your energy bill is to install a programmable thermostat. They are a piece of cake to install and they can cut your bills dramatically.

When we bought our house 2 years ago, this was one of the first things we did...before we even moved in!

During the winter we have the thermostat set to 62 during the night, then it shoots up to 69 ten minutes before my alarm clock goes off. This way its nice and warm while we shower and get dressed. A few minutes before we leave, the temperature drops to 55. Fifteen minutes before we get home, the furnace kicks in and warms it up to 68.

We almost never have to adjust the temperature manually. We just let the thermostat do its job and we know that no energy is being wasted when we aren't home. The thermostat only cost $39.99, and it paid for itself in the first month or two.

For more money-saving tips, check out my eBook Saving 101

saving money with coupon books

Have you ever heard of the Entertainment Book coupons? They are offered online and I've seen them in a few stores too. They are paperback books that are loaded with coupons, and they are regional. You order the book for your area and the coupons are geared specifically for merchants in your area.

They contain coupons to movie theaters, restaurants, fast food places, amusement parks, dry cleaners, etc. Pretty much anything you can think of.

The website even lets you search by zip so you can see which vendors in your area participate.

We get a copy of the book every years and we save hundreds of dollars using the coupons. It is one of the best tips I have heard for saving money.

Get your Entertainment Book coupons here

pay off credit card debt with home equity

If you have a lot of outstanding credit card debt and you have significant equity in your home, you may want to consider taking out a home equity loan to pay off the credit card balances.

My friend's parents recently did this and it saved them a bundle in interest charges. They owned their home outright and took out a $30,000 home-equity loan at about 5% over 10 years. They used the money to pay off their credit cards and do some neccessary repairs on their house. Their monthly payment is only a little over $300.

You can do the same. Just do the math. If you are paying 10%, 15%, 20%, or more...you can easily save hundreds or even thousands of dollars by taking out a home equity loan.

Plus, the interest on a home equity loan is usually tax-deductible, so you will save money at tax time.

I would suggest checking out a few banks and compare rates and fees before taking out the loan.

consolidate student loans and save money

Interest rates for student loans are expected to rise by as much as 2 percentage points on July 1st. It's not too late to consolidate your loans and lock in a low rate.

Think of it like refinancing a house. You can cut your monthly bill or cut the term of the loan by consolidating.

Even if you are a current student, you can still lock in a low rate.

Check with your lender or http://www.smartloan.com for more info.

rising property taxes

Living in New Jersey, I'm used to hearing debates about the rising cost of property taxes.

NJ residents pay the highest property taxes in the country, and many have a hard time keeping up. Many senior citizens have been forced to sell their homes because they can no longer afford to pay their property taxes.

And many other residents are moving out-of-state to find cheaper places to live. But the problem is not only faced by NJ. Many other states face skyrocketing property taxes.

The question is...what is a fair amount to pay for property taxes? The value of a home has no connection with the owner's income. This is why many seniors are being forced out. Their income is limited, but the value of their home has increased so much that the taxes are now beyond what they can afford.

Everyone wants to pay less, but if you cut too much then schools and services will suffer. There's no easy answer. And I doubt that politicians will do anything about it. They can use smoke and mirrors to present a 'plan' to lower taxes, but I will believe it when I see it.

Budgeting for Baby

If you are expecting an addition to your family, or just planning on having a baby in the future, you need to start thinking about how you are going to budget for your little one.

Many first-time parents are shocked when they realize how much having a baby can cost. And I am not just talking about the doctor bills. It's all the little things, such as diapers, clothes, formula, baby food, and toys, that add up to cost big bucks!

When my wife and I had our first child, we learned a lot about what we really needed and what was a waste of money. So now that we are seasoned veterans and expecting our second baby, we feel confident that we can avoid the same wasteful mistakes we made the first time around.

Here is a list of 6 things that your baby can live without, followed by 4 things that we could not have lived without:

Baby Wipe Warmer - An unnecessary waste. My daughter never fussed when we used baby wipes that were room temperature. Baby wipe warmers are just an attempt to get parents to spend more money on something they really do not need.

Expensive Clothes - You are going to find that your little one will grow out of his or her clothes incredibly fast. It's one thing to spend a little extra for a nice dress or outfit for a holiday or special occasion. But it doesn't make sense to spend a fortune on clothes that will be worn only once or twice. Instead, choose the lower priced items (as long as the quality is satisfactory), especially for little onesies and sleepers.

Another tip: don't remove the tags from baby’s clothes until they are ready to be worn. We have outfits that my daughter grew out of before she even had a chance to wear them. Since we had already removed the tags we were not able to exchange them for a bigger size.

Brand Name Goods - Using generic items instead of brand names can save you hundreds of dollars per month. We used the brand name baby formulas for the first few months and then switched to the generic brand after we realized it cost 60% less. Not only did our little girl not mind the change, she actually seemed to prefer it. The generic brand seemed to give her less gas.

Toddler Foods - When our baby was first learning to eat solid foods, we tried dozens of different flavors of baby food. We thought it was important for her to adjust to the new foods and to try a variety of flavors.

But as soon as she got used to the new texture, we started making our own baby food. Carrots and sweet potatoes worked especially well when mixed in the food processor.

And we never even bothered with the 'toddler foods'. They are an expensive waste. Look on the supermarket shelf and you will see the jars of diced fruits and vegetables 'just for baby'. But you know what? You can cut up a pear or a green bean yourself. It will save you money and you will know that the food is fresh.

Large and Expensive Toys - When my daughter was born we spent several hundred dollars on toys for her to play with, plus we received many more as gifts. We got her all sorts of giant stuffed animals and high tech toys that danced or played music.

Do you know what her favorite toy is? A squeaky bath toy shaped like a crab. It cost $1.49. She regularly pushes aside all of the fantastic toys we bought her for that inexpensive little crab.

Now I'm certainly not telling you not to buy your little one anything expensive or fancy. Just keep in mind that she may just push it out of her way so she can play with the box.

Baby Walkers - You hardly see these in stores anymore, but they can be found. Skip it. They are dangerous. Stick a baby in one of these and they can wheel themselves into trouble before you know it. There have been horrible incidents of children rolling down a flight of stairs or running into a table and knocking something down on top of themselves.

The 4 BEST purchases we made.
An ExerSaucer - An exersaucer looks very similar to a walker with one major difference...it doesn't move. The exersaucer stays firmly planted on the ground and allows the baby to 'stand' and play with all sorts of toys that are attached to it, plus any other toys you give to him.

My daughter absolutely loved being in her exersaucer and it gave us a chance to get something done around the house while she was occupied. We knew she couldn't get into any trouble and we constantly changed the toys so she would not get bored.

But be warned. Once baby becomes mobile he likely won't want to use it anymore. He can have a lot more fun crawling around getting into all sorts of trouble!

The Best Car Seat You Can Afford - Keeping your baby safe is no joke. Having a quality car seat is vital in case you get into an accident. Be sure you read the manual and secure baby tightly each time you take her out.

Also, contact your local police station and ask them if they offer free car seat installations and inspections. Most towns have a few officers who have received special training on installing car seats. If your town doesn't offer this service they can get you in touch with a neighboring town that does. Even the best car seat is useless if it is not installed correctly.

Bundle Me - Unless you live in a climate that is warm all year-round, a Bundle Me is a great timesaver. It is basically a cozy blanket that fits into a car seat or stroller. Rather than bundling baby up in a snowsuit and blankets, just place her in the car seat and zip it up. You'll be surprised how warm she stays.

It is especially handy when you have the type of car seat in which the base stays in the car and the seat pops out so you can carry it around. You can have baby all snuggled up inside rather than struggling to do it in the cold.

Shopping Cart Cover - You've probably seen them in the supermarket. It's just a cloth or vinyl cover that goes over the top section of a shopping cart. The baby sits in it and it prevents her from touching the shopping cart with her hands or mouth.

Many people will argue that this is unnecessary, but I see it as a valuable safety device. Countless numbers of hands have touched those shopping carts and who knows what kinds of germs they left behind. Keeping my little girl healthy is more than worth the $20 expense.

For more tips on saving money, check out my website:
Saving Money and Living Debt Free

Interest-only mortgages

With the real estate market continuing to soar and the prices of homes escalating each day, many are taking out interest-only mortgages just to afford a house.

How do they work?
For the first few years (usually around 5 or 7) of the mortgage you pay only interest. This can significantly lower your payments and allow you to buy more house than you could otherwise afford. The downside is that you will not be paying off any of the principal, so after the first few years your monthly obligation can skyrocket.

It is a good option for people who know they will not stay in the home more than a few years since they can sell it for a profit before the mortgage payment increases. The are able to save money without ever paying off any principal.

Interest only mortgages are not without risk though. If the housing market were to fall (it could happen you know) or even stay stagnant, you would have no equity in your home when the payments increase. You would not be able to make a profit on the home when you sold it and may not even break even.

Also, what if you decide not to move? Unless your income has increased significantly you'll never be able to afford the higher mortgage. You could be forced to sell your home at a disadvantageous time.

Like most things, interest-only mortgages are great for some people and terrible for others. You can use them to save tens of thousands of dollars. But if you miscalculate or the real estate market nosedives, you could be financially ruined.

Learn more about saving money.

check your bills, and eliminate bells and whistles

Have you inspected your bills lately to see if there is anything you can cut back on or eliminate altogether?

I just checked our phone bill and found two things we can adjust that will save us a few bucks each month (this doesn't even include the Inside Wire Maintenance charges we eliminated last summer).

Here's what I did that should save us around $20-$25 each month:

1. I changed long distance plans. We were paying 10 cents per-minute with no monthly fee. Most of the long distance calls are between my wife and her girlfriend who lives in Manhattan. This month they talked for 357 minutes, which cost us $35.70 on top of the regular bill.

So I switched to a different plan that has a $2 monthly fee, but charges only 5 cents per minute. If we had that plan in place last month it would have cost only $19.85. That's a savings of $15.85.

2. The local/regional package we had was costing us $44.95 per month and it was full of all sorts of bells and whistles that sounded nice when we signed up, but we now find unnecessary or useless. Call Forwarding, Three-Way Calling, Voicemail...etc.

We picked up a cheap answering machine to replace the voicemail and chose a less expensive package that eliminates most of the 'extras' (though we still get Caller ID and a few others). The new package costs only $34.95, a savings of $10/month.

So we would have saved $25.85 last month if I had acted sooner. The savings will vary depending on how many minutes my wife talks to her girlfriend, but we're guaranteed to save at least $10, with potential to save up to $30 every month.

computers!! ARRRGGH!!

ok...I'm back. My PC blew up the other day and I've been busy trying to save the data and get it back up and running. Must have been hit with a nasty worm or virus, but I'm now back and will continue to update this blog with financial tidbits and tips on saving money.

My experience made me appreciate the need to back up files and protect your PC from malware that wants to hurt your computer. Fortunately I back up my data fairly often, so the loss was minimal. But if you are not doing the same you could be in big trouble if your PC goes kablooie.

Investing in virus protection and maybe a firewall is well worth the cost. If you lose passwords, personal files, digital pictures, or financial information, you'll lose a lot more than the cost of the protection.