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July 2009

Maintain your brain

 This article is written with input from  Centers for Disease Control, the Alzheimer's Association, and the AARP.

Many of us think of healthy aging as changes we make to our lifestyle in hopes of keeping our physical health in check. While this sentiment may be true, reality dictates that it is only partly true. The other half of the equation has to do with our cognitive health. Read along as we share some tips for maintaining a healthy and powerful brain.

The Importance of Maintaining Cognitive Health
According to the CDC, as many as 5-million Americans suffer from Alzheimer's disease. Early onset of the disease is rare, but things change after we turn 60. It is estimated that 5 percent of Americans between the ages of 65 and 74, and nearly 50 percent of people 85 and older are afflicted with the disease.

Alzheimer's disease may be a worst-case scenario in terms cognitive degeneration, but it is not uncommon for most of us to experience that occasional "senior moment". Temporarily forgetting one's own telephone number, or how to spell a word are examples of lapses that can occur more frequently the older we get.

When it comes to cognitive degeneration, factors such as family history and age are completely out of our control. However, both the CDC and the Alzheimer's Association claim there is a lot we can do. By making simple changes to our lifestyle, especially at earlier ages, we not only can improve our brain health, but our overall quality of life as well.

Use Your Brain
Maybe more than anything else, increasing your mental activity will keep your brain functioning sharply. The real question is how do you increase your mental activity?

Generally speaking, it means minimizing any passive activities and behaviors. Watching TV is a common example of a passive activity. Make no mistake - no one is saying that occasional TV watching or lying around doing nothing is a bad thing. The issue is the frequency of which they're done.

If free time is something you have, use the majority of it to stimulate your brain in a way that you enjoy. The following are examples of activities that can strengthen neuropathways and even generate the production of new brain cells:

• Reading
• Writing
• Playing thinking games such as crossword puzzles, chess and card games
• Learning a language
• Taking up a new hobby
• Attending lectures
• Learning a musical instrument
• Engaging in conversation
• Meditation

Move Your Body
Physical exercise is an incredible means for maintaining mental sharpness. Before we go any further, however, we'd like to state that if you have any diagnosed health issues you should consult your physician first.

Exercise is important because it increases blood flow within the body. In turn, increased blood flow means that more oxygenated blood will reach the brain, as well as every other organ and muscle. Not only does this result in the nourishing of brain cells, but it also helps to protect against other diseases such as stroke, heart attack and diabetes. All of which have been labeled as risk factors for developing Alzheimer's disease.

It is even more beneficial when you combine physical exercise along with mental activity. The following are examples of exercises that feature the best of both worlds:

• Dance
• Martial arts
• Tennis, racquetball, squash, badminton and ping-pong
• Yoga
• Aerobics and step-aerobics
• Golf

Sleep Like a Baby
It's no secret that good sleep is crucial to overall brain function, but some scientists actually believe that it is imperative for both memory consolidation and information processing.

A common misperception is that as we age we need less sleep. The truth is that adults in general require 7 to 8 hours of quality sleep every night. For many of us, the inability to sleep has more to do with stress, physical issues, or sleep disorders such as insomnia or sleep apnea. If there is a chronic issue keeping you from getting a good night's sleep, you need to address it.

It is important to note that many of the keys to keeping your mind sharp are intertwined with each other. Case in point, the more you exercise your brain and body, the better you will sleep. In turn, better sleep will lead to increased mental sharpness and physical energy.

Have a Social Life
Many studies have shown that socially active people are not only mentally sharper, but they are also healthier and happier than people who are disconnected. Social activities are a fun way to stay engaged and they provide much needed emotional support. They can range from the simple to the sublime. Here are a few examples:

• Getting together with friends and family
• Participating in social clubs
• Volunteering for a charity
• Taking an adult education or college class
• Mentoring
• Traveling

The point here is to interact with people who have similar interests as you. Ironically, this type of interaction and bonding has been shown to have a beneficial effect on maintaining your independence in later years.

Eat Brain Food
It sounds obvious to say that eating a healthy and balanced diet is good for you, but did you know that it also has a profound effect on your brain health? According to the Alzheimer's Association, a long-term study showed that obese middle-aged adults were twice as likely to develop dementia later on in life. Those who had high cholesterol and high blood pressure were six times as likely to develop dementia.

In general, protect your brain health by eating a diet consisting mainly of whole foods such as fresh fruits and vegetables, whole grains, lean meats and fish. It is especially important to eat foods that are rich in antioxidants and omega-3 fatty acids, as they can reduce the risk of heart disease, stroke and cancer. They have also been shown to protect brain cells.

The following are examples of foods that are rich in antioxidants:

• Dark-skinned fruits such as berries, plums, grapes and cherries
• Green leafy vegetables
• Brussels sprouts
• Broccoli
• Beets
• Red bell pepper
• Onions
• Corn
• Alfalfa sprouts
• Eggplant
• Nuts such as almonds, pecans and walnuts

Here are some foods that are good sources of omega-3 fatty acids:

• Cold water fish (i.e. salmon, halibut, mackerel, herring, sardines, anchovies, tuna, whitefish and trout)
• Flax seeds
• Walnuts
• Soybeans
• Cauliflower
• Cabbage

9:53 AM - Jul. 31, 2009 - comments {2} - post comment

Common household problems

This list was put together by ou friends at Front Range Inspection.

In a recent survey the most common home problems identified were as follows. It is interesting to note that four of the top ten problems involved water.

1. Improper Surface Grading and Drainage - By far the most frequent problem, it is responsible for the most common household aggravations, including water penetration into the basement or crawlspace and most basements eventually leak.

2. Improper Electrical Wiring - A number of respondents found this to be a significant defect. This includes such situations as insufficient electrical service, inadequate overload protection, and amateur (often dangerous) wiring connections.

3. Roof Damage - Leaking roofs are a frequent problem. Old or damaged shingles or improper flashing and drainage will cause this.

4. Heating Systems - Defect items in this category include broken or malfunctioning controls, blocked chimneys and unsafe exhaust venting.

5. Poor Overall Maintenance - A common problem with a number of homes. Signs of poor maintenance include cracked, peeling or dirty painted surfaces; crumbling masonry; makeshift wiring or plumbing; and broken fixtures and appliances.

6. Structurally Related Problems - As a result of problems in one or more other categories, damage is sustained by such structural components as foundation walls, floor joists, rafters and window and door headers.

7. Plumbing - Plumbing defects include the existence of old or incompatible piping materials, as well as faulty fixtures.

8. Exteriors - Flaws in this category, such as windows, doors and wall surfaces, rarely have structural significance but may pose discomfort to the occupants due to water and air penetration. The most common culprits are inadequate caulking and/ or weather-stripping.

9. Poor Ventilation - In an effort to save energy, many homeowners have "over sealed" their homes, resulting in excessive interior moisture. Significant moisture can lead to rotting and failure of both the structural and non-structural elements.

10. Miscellaneous - This category includes walkways, decks, patios, bushes and trees

9:27 AM - Jul. 29, 2009 - comments {0} - post comment

Prepare for disaster before it strikes

This information is from the SBA.  For more preparedness tips for businesses, homeowners and renters, visit www.sba.gov/disasterassistance.


 

As those living near the Gulf of Mexico and along the Eastern Seaboard prepare for another Atlantic Hurricane season, which began June 1 and runs through November 30, the U.S. Small Business Administration is reminding small businesses, homeowners and renters nationwide to write down their emergency preparedness plan before disaster hits.

Regardless of where you live, it’s a good idea to be ready for any kind of crisis.

“Every threat, from wind storms, floods and wildfires, to power outages and computer system failures, reminds us to be proactive when it comes to building strategies to survive a disaster and recover quickly,” said SBA Administrator Karen G. Mills. “The catastrophic events of the last few years demonstrate the need for preparedness at the individual level, to diminish the risk to life and property.”

In the aftermath of last year’s Midwest Floods, and Hurricanes Gustav and Ike-which pounded parts of Louisiana, Mississippi and Texas last summer-the SBA approved more than 23,000 disaster loans for a total of $1.2 billion.

Disaster preparedness for homes and businesses should include:

- A solid emergency response plan. Find evacuation routes from your home or business and establish meeting places. Make sure everyone understands the plan beforehand. Keep emergency phone numbers handy. Business owners should designate a contact person to communicate with other employees, customers and vendors. Ask an out-of-state friend or family member to be your “post-disaster” point of contact-a person to call to provide information on your safety and whereabouts.
- Adequate insurance. Disaster preparedness begins with having adequate insurance coverage-at least enough to rebuild your home or business. Homeowners and business owners should review their policies to see what is not covered. Businesses should consider “business interruption insurance,” which helps cover operating costs during the post-disaster shutdown period. Flood insurance is essential. To find out more about the National Flood Insurance Program, visit www.floodsmart.gov.
- Making copies of important records. It’s a good idea to back up vital records and information saved on computer hard drives, and store those items at a distant offsite location. Computer data should be backed up routinely. Copies of important documents and CDs should be kept in fire-proof safe deposit boxes.
- A “Disaster Survival Kit.” The kit should include a flashlight, a portable radio, extra batteries, a first-aid kit, non-perishable packaged and canned food, bottled water, a basic tool kit, plastic bags, cash, and a disposable camera to take pictures of the property damage after the storm.

9:34 AM - Jul. 27, 2009 - comments {0} - post comment

Get prepared before thinking of buying a home

This article is from www.rismedia.com

Consumers need to get informed as they prepare to buy a home. Today, there are a growing number of obstacles for home buyers, including a higher credit score standard and more restrictions on credit. Despite current challenges in the secondary mortgage market, home loans are available to credit-worthy buyers and Oregon banks stand ready to assist prospective home buyers.

It's crucial that you have a thorough understanding of the changing market when shopping for a mortgage. Here are seven tips to help you do exactly that:

1. Learn about first-time home buyer programs. Consider taking a first-time home buyers course or visit with your local banker to find out about programs available to you, such as the new federal $8,000 first-time home buyer credit for 2009 home purchases.

2. Get pre-approved. Know the difference between “pre-qualified” and “pre-approved.” Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is pre-approved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home.

3. Be honest with the lender and yourself. You don’t want to borrow more than you can afford. Your bank can provide a calculator to determine if you can afford to borrow and if so, how much. The American Bankers Association has several home financing calculators available at www.aba.com/aba/static/calculators.htm.

4. Look at the basics of the loan. Don’t get distracted by all the bells and whistles. Choose the type of loan that makes the most sense for you.

5. Know your credit situation. Obtain a copy of your credit report and FICO score or VantageScore at least six months before you apply for a mortgage. This should give you enough time to challenge and remove any errors on your credit report and take care of anything that’s hurting your credit score. To obtain a free copy of your credit report, visit www.annualcreditreport.com.

6. Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, and taxes. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs - there won’t be a landlord to call.

7. Organize your finances before you go to the bank. While each bank may require different documentation, at a minimum you will need:

- Pay stubs.
- Tax returns.
- Financial statements (one that is less than 60 days old).
- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.
- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.

9:16 AM - Jul. 25, 2009 - comments {0} - post comment

Plan for your yard sale to be successful

Summer is one of the most popular seasons for holding a yard sale. But simply holding a yard sale doesn't necessarily mean you'll end the day with lots of extra money in your pocket. If you're planning on clearing out your clutter this summer, here are ten tips to help make your yard sale a success:

1. Start your yard sale earlier than other yard sales in your area so shoppers will start their shopping day with you.
2. Don't schedule your yard sale on a holiday weekend or during a big event in your area (like a sporting event or festival).
3. If it rains, take down your signs and reschedule your sale so you can maximize traffic on the day of your sale.
4. Before your own yard sale, visit other sales in your neighborhood to get an idea of typical prices.
5. Place all of your items (except for large items) on tables so shoppers don't have to bend.
6. If you plan to sell electrical items, have an outlet and extension cord handy so you can show shoppers that the items work.
7. If you want to sell larger ticket items, look for those items in a local circular and then attach the ad to your item so shoppers can see that they are getting a great deal.
8. If you have a variety of items that men would like, place them on their own table. If married couples stop by your sale, both parties will enjoy looking.
9. Advertise your sale ahead of time in your local newspaper classified section, on community boards at your local food stores, and online at places like www.Craigslist.org.
10. Wait until the morning of your garage sale to hang signs in your neighborhood, and make sure you take them down that day to avoid any fines from your homeowner's association or your town. You don't want to have to use all the cash you earn to pay a fine!

9:07 AM - Jul. 23, 2009 - comments {0} - post comment

Discretionary spending

In a tough economic climate, tighter budgets mean cutting back on discretionary spending. A recent survey from the National Retail Federation (NRF), however, offers some fascinating insights as to what that really means.

Internet Service – Six or seven years ago, spending on the Worldwide Web may have suffered significantly in a tougher economy. Not anymore - 81% of respondents of the NRF survey said they are willingly trapped in the Net.

Cell Phone Service – Cell phone service plus extras, like text messaging, music, ringtones, and software applications, can really start to add up. Nonetheless, 64% of respondents of the survey won't be hanging them up.

Cable TV – Bundling services like cable, Internet, and phone can save a little money each month. Maybe that's why 61% of survey respondents said they won't cut the cord on cable any time soon.

Hair Care – Looking our best apparently outweighs the expense. This means shaving the hair-care budget won't be happening for a solid 40% of survey respondents.

Dining Out – Whether it's fast-food or sit-down dining, going out for your meals can really eat away at your budget. But according to the NRF's survey, 37% of respondents still have a super-sized appetite for fast-food and one-third has no reservations against sit-down dining

3:40 PM - Jul. 21, 2009 - comments {0} - post comment

Down payment questions and answers

With today's combination of lower home prices, some of the lowest interest rates the industry has ever offered, and the $8000 tax incentive for first-time buyers, buying a home has never been so attractive. The only real hurdle left for many Americans is coming up with a down payment. With this in mind, we've put together some of the most frequently asked questions we get about down payments in today's market.

Q. Are there any no-down payment programs left?

Yes. While it's true that most of the popular no-down payment programs disappeared in the wake of the subprime mortgage collapse, there are still two longstanding government-backed programs that offer mortgages with no down payment: the USDA Rural Development Program and the VA Loan Program.

A USDA Guaranteed Loan is a government-insured, 100% purchase loan. This means there is no down payment required if you – and the house you intend to buy – qualify for the program. Not all areas qualify, but you'd be surprised at how many neighborhoods in your area do. There are income and other limitations, but if coming up with a down payment is challenging, you might want to consider this program.

If you or your spouse is a military veteran, you may qualify for a 100% financed loan from the US Department of Veterans Affairs. More than 29 million veterans and service personnel qualify for this service benefit. Give us a call to find out if you're one of them.

Q. Are there any other government-insured programs that can help someone struggling with a down payment?

Yes. In 1965, the federal government created the FHA loan programs to encourage homeownership throughout the country. FHA-insured mortgages offer many benefits, including a minimum down payment of 3.5%. FHA-insured loans have grown in popularity recently due to the seller's ability to pay closing costs up to 6% and a temporary increase in loan limits up to $729,750 in certain high-cost areas, which allows more potential buyers to utilize this program.

Q. May I use a gift from family members as part of my down payment?

Yes. In many cases, immediate family can provide monetary gifts to be used as a down payment. There are restrictions of course, and strict documentation will be required, but we will gladly walk you through the finer details of this process. Be sure to mention this option when you're filling out an application with us.

Q. May I use funds from my IRA for my down payment?

Yes. First-time home buyers can use funds from an IRA under certain circumstances for a down payment. The rules regarding this option, however, can be complicated, especially with a Roth IRA, and it's important to understand any and all tax implications before tapping into these accounts. Please talk to your tax professional before making any decisions. If you don't have one, we'll gladly refer you to one we work with on a regular basis.

Q. May I use the $8,000 tax credit as my down payment?

No. At the time of the writing of this article, qualified first-time home buyers do not have direct access to the $8,000 credit to use as a down payment. In May, HUD officials made an announcement to the contrary, but statements backing the announcement were quickly withdrawn from the HUD website. This doesn't mean that HUD and lawmakers will not allow this in the future. We're following this issue closely and will let you know if anything changes. Just keep reading our newsletters and other materials we send to you or give us a call and we'll let you know if any progress has been made.

3:35 PM - Jul. 19, 2009 - comments {0} - post comment

Now is the time for commercial tenants to buy

This article is by George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts.  He is currently the founder and president of The Associates Financial Group, a real estate consulting firm.


In most communities, there is a high vacancy rate in the commercial sector. Not only have lease rates fallen dramatically, but there are also a number of unique ownership opportunities that have resulted from the economy and as a result of new urban planning. Many businesses have contracted leaving an abundance of available space including office, retail, industrial, and warehouse space competing for tenants at the very same time that jobs are contracting. This has impacted landlords as well as sellers creating better deals for businesses that continue to do well.

Factor in the looming possibility of commercial mortgages resetting to much higher rates forcing more owners to sell or abandon their commercial property.

Business owners who are confident in the future of their own enterprises may be wondering, “Should I expand my space, renegotiate my lease or is there a way I could stop paying rent and use my business revenue to buy my own facility”?

This could be the best time in decades to take a business to the next level. The financial shift from paying rent to building equity could be the most profitable decision a business could make.

Consider the case of my friend Max. Recently, he retired after 30 years as a neighborhood Veterinarian. Twenty-eight years ago, the strip mall that housed his office and other commercial operations came up for sale. After some agonizing, Max decided to buy the center just to have more control over it’s management. He located tenants, paid the mortgage, saw to the maintenance, and collected the rent. He viewed the situation as a chore related to his business and went about treating pets.

One of the tasks associated with his retirement was the sale of the strip mall. As he told me the story, his eyes grew wide with genuine astonishment as he said, “I made more money on the real estate than I did in thirty years of running my practice.”

Then he winked, leaned in close and said, “Turns out that the best reason for being a Vet was buying my building.”

Had Max leased the space from someone else, they would be the ones getting the primary benefit of his being in business; the tax benefits and the appreciation.

There are many reasons why business owners choose to lease rather than purchase. Among these are financial limitations or they may be anticipating changes in either the scope or the volume of the work, and they want to remain flexible. Perhaps there is no suitable space for sale in their desired location.

In some businesses, particularly larger enterprises, there is no long term incentive for management to want to capitalize real estate. If you are a fortune 500 CEO, you’d rather retain cash for your bonus than to put it to work for the benefit of the stock holder’s decades from now.

Small to mid-size businesses have the greatest incentive to pay rent to themselves. Given the current state of the economy and a shift toward more mixed use development, there are now greater opportunities for smaller business owners than had previously existed for them.

More options for ownership

Up until a few years ago, owning your own space meant having to buy an entire building or center. Class A office space, for example, is usually found in much larger, often multi-story buildings rarely within the means of most users.

Commercial Condominium Ownership

For the past several years, we have been witness to the growth of office and manufacturing condos allowing businesses to buy only the space they need. Now, the concept is moving to mixed use, adding the option of ownership to small retailers, as well

Live/Work

Live/work zoning can make a simple loft commercial, residential, or both. A typical live/work home might have a large open space on the ground floor adaptable to almost any purpose and residential quarters above.

Features and Benefits of Live/Work ownership

Generally, the largest category of cost for a business is the expense associated with operating physical premises. Many professions have given up bricks and mortar in favor of working from a home office. According to the U.S. Census Bureau, half of all businesses are home based so the principal is well established. But, not every business can operate from a strictly residential home. Live/work ownership provides an alternative, and a host of financial as well as time saving benefits such as:

-A single mortgage payment to make.
-A single utility bill.
-A single cable and phone payment.
-A single insurance payment.
-No commute.
-Residential rather than commercial mortgage.
-Favorable tax advantages.

Just eliminating the mileage associated with commuting will save on gas, oil, maintenance, wear and tear, and parking. Not going out for coffee or lunches could also result in significant savings. Factor in the additional time you could spend on business when you aren’t commuting, and you can understand why a report by the Small Business Administration found that home-based businesses have higher net incomes than those that are office-based.

Convenient, greener, and you make more money. Throw in the benefits of ownership, and it’s clear that the timing is right for live/work. And with other ownership opportunities such as office condos offering prices below cost, there may never be a better time for commercial tenants to move to ownership.

3:16 PM - Jul. 17, 2009 - comments {0} - post comment

Now it's commercial real estate's turn

This article is from realtor.org.

The general economic downturn, complicated by a severe credit crunch in commercial real estate, is dampening commercial real estate activity. In addition, a forward-looking index shows the forecast for commercial real estate sectors will remain weak for the remainder of the year, according to the National Association of Realtors (NAR). Lawrence Yun, NAR chief economist, said commercial real estate has been hit by a double whammy. “Significant job losses have reduced the demand for commercial space, while a lack of credit has stalled transactions and refinancing activity,” he said. “It is critical for the Federal Reserve to increase liquidity by purchasing commercial mortgage-backed securities. Because commercial real estate always lags an overall economic recovery, it will take some time for the commercial real estate market to rebound.”

The Commercial Leading Indicator for Brokerage Activity fell 4.8% to an index of 103.5 in the first quarter from a downwardly revised reading of 108.7 in the fourth quarter, and is 12.9% below the 118.8 recorded in the first quarter of 2008. NAR’s track of the commercial leading indicator dates back to 1990.

The weakening index means commercial real estate activity, as measured by net absorption and the completion of new commercial buildings, can be expected to decline over the next six to nine months.

The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 600 local market experts, also indicates a lower level of business activity in upcoming quarters. More than 90% of respondents believe it is a tenant’s market, with many tenants benefiting from moderate to deep discounts in office and industrial rental rates, as well as landlord concessions.

The SIOR index has declined for nine straight quarters and stood at 42.3 in the first quarter, well below the 100 point criteria that represents a balanced marketplace.

Realtors Commercial Alliance Committee chair Robert Toothaker said data for commercial mortgage-backed securities are very telling. “We went from $230 billion in CMBS issued in 2007 to only $12 billion in 2008,” he said. “Thus far in 2009 the number is essentially zero- liquidity in commercial credit is crucial to prevent damage to the broader economy. We need better policies and progress in accounting rules to facilitate lending.”

Overall, commercial vacancy rates are rising and rents are softening, according to NAR’s latest Commercial Real Estate Outlook. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.

The gross domestic product is expected to contract 2.9% this year, then grow 1.4% in 2010. Similarly, the consumer price index is forecast to decline 0.8% in 2009 before rising 1.7% next year.

The unemployment rate is projected to average 9.5% this year and 10.2% in 2010. Inflation-adjusted disposable income is likely to grow 1.3% in 2009 and 1.1%.

“Although we expect the economy to begin to stabilize later this year, unemployment will probably peak at about 10.5 percent around the end of 2009,” Yun said. “The job picture should gradually improve as 2010 progresses, but the fundamentals in commercial real estate won’t stabilize until somewhat later and will depend on the Fed’s actions.”

Multifamily Market
The apartment rental market-multifamily housing-has been doing better than other commercial sectors, but a gain in home sales during the second half of this year will modify demand. Multifamily vacancy rates are forecast to rise to 6.8% in 2009 and 6.7% next year from 5.7% in 2008.

Average rent should grow 1.5% this year and 2.5% in 2010, following a 2.9% gain in 2008. Multifamily net absorption is projected at 133,000 units in 59 tracked metro areas in 2009 and 89,700 next year.

3:10 PM - Jul. 15, 2009 - comments {0} - post comment

What does a trillion look like?

3:06 PM - Jul. 13, 2009 - comments {0} - post comment

Things NOT to do before purchasing a home

This list is put together by Todd Little, President of America's Housing Educators

No Major Purchase of Any Kind

Do not become involved or create debt of any kind.  This includes furniture, appliances, electronic equipment, jewelry, vacations, expensive weddings, and most importantly, automobiles…

Don’t Move Money Around   When a lender reviews your loan package for approval, one of the things they are concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts.
If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them.
The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. You may be required to produce cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious.

Perhaps you become exasperated at your lender, but they are only doing their job correctly. To ensure quality control and eliminate potential fraud, it is a requirement on most loans to completely document the source of all funds. Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document.

So leave your money where it is until you talk to a loan officer.

2:41 PM - Jul. 11, 2009 - comments {0} - post comment

Homes of tomorrow - back to the future

This article is by George W. Mantor, The Real Estate Professor and the founder and president of The Associates Financial Group.

 

Growing up in the fifties, we were fascinated with the future and the great prospects that beckoned from the road ahead.

In particular, I recall the “The Home of Tomorrow.” Living in an apartment, the first thing I noticed was that it was spacious, it was light it was bright, and it had an island kitchen with the cook-top right in the middle. Imagine that! But, it was the fifties version of the future; cars had fins, women wore beehives, and the “Home of Tomorrow” had a robot vacuuming the floor.

The reality of the moment was that new homes were less than 1,000 square feet, had one bathroom, and few frills.

So, here we are in the future we once imagined. No robot vacuuming the floor, our SUVs are bigger than a 1960 Lincoln Continental Mark V, and our homes have earned the title, “McMansions” by swelling from an average of 950 square feet to about 2,400. And, in many moderate wage communities, homes of 6,000 to 7,000 square feet are common. Why?

Well, because we wanted them, for one thing. They were the ultimate status symbol and maybe always will be. If a man’s home is his castle, it darn well better feel like one.

As much as a castle-sized home is a status symbol, it is also a symbol of wretched excess and the general contempt of its owner for those of us being crushed under the boot-heels of his enormous carbon footprint. Free market economy or not, no one is entitled to such a gluttonous amount of the planet’s limited resources.

Most of the homes built in the last 20 years are bigger than they really need to be. They consume too many resources to create the materials, the building process has too much negative impact on the surrounding environment, they require too much energy to occupy and they do not guarantee happiness.

One wonders if families weren’t closer when homes were smaller. How do you keep track of a kid in 7,000 square feet?

Homes of such volume signal the end of an era as we face the new reality of our carbon footprints and the limitations on developable land.

There is already a shift away from building single family suburban homes in favor of multifamily housing as land around large metropolitan areas disappears and the limitations on energy discourage commutes longer than drivers in many metropolitan areas are now making. Today’s long commutes are the result of moving business parks far from urban centers and the desire for ever larger homes.

Coupled with the movement toward sustainability, a desire to reuse existing structures and a search for greener building alternatives, many communities are rethinking planning, zoning, and special use permits.

In an effort to create more pedestrian friendly communities, more thought is being given to bringing lifestyle-elements such as jobs, services, and recreational opportunities to the residents, rather than have them drive elsewhere.

Among the tools employed to achieve these results are adaptive reuse, live/work zoning and mixed use zoning.

In downtown Los Angeles, they have been converting unused office buildings into residential use.

Home is a chunk of air in the sky, but because live/work zoning allows qualifying businesses to use a portion of the space for work, it might also be your office downtown. With retail shops on the ground floor, mixed use zoning allows residents quick access to their morning latte or smoothie.

There is also an effort to incorporate more of a village atmosphere.

Over 25 years ago, Seaside, Florida pioneered a new model for an urban community. Seaside is a remarkable example of going back in time to find a better way of integrating the elements of life into a pedestrian oriented community.

Seaside is comprised of 80 acres with 489 residences and 76 commercial shops. The community is laid out so that most of life’s daily needs are available within a short walk or bike ride. Three large public greens offer space for social activities and events. All public spaces are linked to a thriving town center that serves not only Seaside, but the surrounding communities, as well. Dozens of shopping and dining options are located in or adjacent to the town center.

As an environmentally conscientious community, the precious coastal dune system remains intact on the Gulf side of town, and preservation of the indigenous vegetation is a priority. The only lawns are public greens.

The success of this type of community has spawned other similar developments in places as unlikely as North San Diego County where three decades of bigger and bigger boxes is giving way to more diverse housing alternatives

Take the case of San Elijo Hills, a master planned community tucked away in the remote hills of San Marcos, CA. Slated for 3,400 homes and 10,000 residents, the project inched forward for more than a decade before becoming a reality in 2002. When completed, the community is expected to have 10,000 residents on 1,920 acres, yet maintain 1,115 acres of permanent open space.

Its core is a 70 acre, mixed use town center reminiscent of old California towns and neighborhoods. Architectural diversity, walkability, and nearby services have been incorporated into the town center.

“People love the small town feel and the convenience; I often hear the word Mayberry”, said Diane Eiler, a sales representative at Luminara, a Richmond American Community.

Exactly 10 miles due west, the coastal city of Carlsbad had for many years attempted to segregate residential and commercial development, requiring almost everyone to drive to almost everything. But, in recent years, there have been concessions to allow for development of unique properties that lend themselves to transit orientation, multiple uses, or better use of resources.

Here, builder Trammell Crow is the force behind a unique transit oriented, live/work, mixed use development called Bluwater Crossing. Located adjacent to the Coaster Station, the development offers live/work, as well as, segregated retail opportunities for businesses such as restaurants.

Harkening back to a time when shopkeepers lived above their establishments, the live/work lofts feature professional space downstairs with living space above. While there are some obvious limitations on the types of businesses which would be compatible with the residential aspect, the list of permitted uses includes gallery, studio, business professional, floral, or retail.

The ground level features a large open space with 18 foot ceiling heights and a Clopay roll up door that, not only looks great, but easily allows for receiving goods, displaying merchandise, or allowing a large opening for a bicycle shop, perhaps.

According to John Melka, a sales associate, “Our visitors to the project have been amazed at the possibilities, and seem genuinely pleased that we offer a lifestyle not dominated by automobiles and commuting.”

The home of tomorrow could be a lot of different things, but it won’t be larger. It’s more likely to be a Mongolian Yurt than a McMansion. It will doubtless be smaller. As the “age of stuff” draws to a close, we won’t need as much space, and to be greener, it will need to be smaller. Here, less really is more.

It will be greener. The global pressure for building materials obviously poses a threat to our environment. We are altering our planet through the destruction of natural resources. Processing methods are sources of pollution and the use of chemicals poses a lingering health threat for end users. We won’t be buying Chinese drywall anytime soon.

It will be energy efficient. To make “Green” more than a marketing gimmick, the end use of the product must be as energy efficient as possible. This, again, argues in favor of smaller.

It will be largely constructed off-site and shipped for assembly at the location.

It will be transit oriented. And, unless your android is solar powered, you’ll still be vacuuming your own floor.
 

2:10 PM - Jul. 9, 2009 - comments {0} - post comment

Reasons you may not be able to re-finance

This article is by Suzanne Leedy, broker in Northern Virginia.

With rates being the lowest they have been in nearly half a century, customers are anxious to refinance. Here are three things that might prevent them from being able to do so. 

Negative Equity.
If you bought your home a few years ago and didn't put any money down, chances are your loan is now "underwater". If your loan is underwater, you owe more on the home than it is worth. If you owe $400,000 and the home is worth $300,000 you will be hard pressed to find a bank that will allow you to refinance. 

If you purchased the home using an FHA mortgage, FHA allows something called a streamline refinance. With a streamline refinance, no appraisal is necessary so this would enable you to refinance even if you owe more on the home than it is worth. 

President Obama also has a plan which would allow you to refinance if you owe 105% on the first mortgage. His plan would allow you to keep an existing 2nd mortgage in place provided the 2nd trust lender agreed to stay in second position (i.e. agrees to re-subordinate). 

Another solution to the problem of negative equity is to pay down the balance on your mortgage. You can do it with a lump sum payment (by taking money from a retirement account or savings) or do it gradually buy adding principal to the amount you pay each month. That will make your overall financial situation better in the future.

High Debt To Income Ratios.
Lenders look at two ratios when they consider your loan. The first ratio they look at is the ratio of just the mortgage payment compared to your income. The second ratio is the mortgage payment + all your other monthly expenses that show up on your credit report. 

Loan programs vary on their ratio requirements but lenders typically like the 2nd ratio to be no more than 39% (some loans do allow higher ratios). The solution to this to either to pay down your debt so your ratios improve or make more money. Sometimes getting a job with more income can help you qualify for the loan. 

Poor Credit Score. 
The lower your score, the higher your interest rate. As a minimum, lenders want at least a 620 score for FHA loans. Conventional loans have add ons if your score is below a 740. If your score needs improvement, it can improve over time. The easiest part of your score to manipulate is by paying down your credit card balances. Dispute any information on your report that you don't believe is true.

If You Can Save a Point in Your Interest Rate, It Might Pay to Refinance

With the flurry of news reports showing interest rates are dropping, it can be tempting to refinance. How do you know if refinancing makes sense or not? The typical rule of thumb is that if you are going from a fixed rate loan to a new fixed rate loan, you should save about 1 point in the rate in order for it to make sense. So if your current rate is 6% and you can get a rate of 5%, it would make sense to refinance.

Many people with Adjustable Rate Mortgages are interested in switching over their loans to a fixed rate mortgage. A wise thing to do if you have an adjustable rate mortgage is to pull out a copy of your adjustable rate rider. This document will tell you what index your rate will be based upon as well as the margin that is added to the rate. That will let you know what your payment will adjust to. Keep in mind that many people who have ARMS have rates that will adjust to 3 or 4%. Here is how you would figure out what your rate would adjust to. If it tells you that the index is the London Interbank Offered Rate (LIBOR) and your margin is 2.25, you'd look up the rate for the LIBOR which today is 1.92 + 2.25 your margin for a total of 4.17%.

Some ARMS don't adjust all that badly and can actually have better rates that what is currently available for fixed rates. If you like the security of having a payment that won't increase, it still might make sense to switch to a fixed rate. Another important factor that most people don't consider when refinancing is their timeframe to stay in the home. If you only plan on being in your home a few years, refinancing probably doesn't make sense. It takes some time to recoup the cost of refinancing.

2:04 PM - Jul. 7, 2009 - comments {0} - post comment

Financial health can be yours

This article is by Ethan Ewing of bills.com

The first step to financial health is to create healthy savings and budget habits, according to the money experts at Bills.com, a free online personal finance portal and a subsidiary of the debt settlement firm Freedom Financial Network LLC. The good news: finding savings really can be simple.

“Money is tight these days, and so is time,” said Bills.com president Ethan Ewing. “If you like the idea of trimming the fat from your budget, but not the idea of spending hours clipping and organizing coupons, we’ve put together a list of 12 ways to save money effortlessly.”

Ewing’s tips include:People spend more when using credit than when they use cash. Tracking expenses in detail also helps; learn to develop and use a simple budget.
2. Keep the change. After paying in cash, save the change. Once your jar is full, deposit the amount in savings, or postpone a splurge until savings will cover it.
3. Cut prescription costs. Ask your doctor if a less expensive, generic medication will meet your needs. Check with a pharmacist about other discount options for which you might qualify, from AAA programs to $4 prescription promotions to state-sponsored discounts.
4. Buy store brands. A recent exercise by a Consumer Reports writer found that purchasing store brands instead of brand names saved almost 50%. It also saved more money and time than savvy coupon-clipping.
5. Skip the shopping cart. People buy 30% more if they use a large shopping cart. Leave the kids at home, too, if possible. Shoppers who have children with them buy 40% more than those who do not.
6. Unplug unused appliances. Today, many electronics use power even when turned off. Connect the TV or computer to a power strip and turn off the electricity when not in use. Unplug appliances such as a toaster, coffee maker or spare refrigerator when not in use.
7. Chill hot water heating costs. Water heating accounts for 12% of home utility costs. Wrap the water heater in an insulating blanket and lower its thermostat setting to 120 degrees from the typical 140 degrees Fahrenheit. For every 10 degrees the temperature is lowered, energy costs can drop 5%, or approximately $5 per month.
8. Bring your own. Brew coffee at home and bring it to work in a reusable cup. Those who prefer strong coffee can invest in an espresso maker to brew up lasting savings. Or buy soda pop at the grocery store or warehouse club for 20 cents a can instead of from a vending machine for a dollar or more.
9. Review bills for errors. Instead of writing checks on autopilot, carefully review credit card, utility and other bills to be sure charges are accurate. If you suspect a problem, contact the provider. Be especially wary of ongoing charges that might have been incorrect from the beginning.
10. Keep pets small. Love has no price, but when choosing a new dog, opt for the smaller canine. Its annual upkeep costs will average $700 less per year. Or choose a cat for another $60 in savings.
11. Eliminate catalogs. We will not covet what we do not see. Free services such as catalogchoice.com can help eliminate junk mail.
12. Wait before buying. For any impulse buy, wait 48 hours. If you still want the item and can afford it, return to buy it. Many purchases lose their appeal after even a short cooling-off period.

1. Use cash instead of credit.

6:31 PM - Jul. 5, 2009 - comments {0} - post comment

Moving CAN be stress free

This article is by HGTV’s FrontDoor.com

When it comes to moving, a little preparation goes a long way. Tons of time and energy can be saved by planning ahead, staying organized and focusing on details.

1. Make a moving schedule. Starting 60 days before the move, use a week-by-week checklist to keep the process on track. The tasks to accomplish further from moving day might seem trivial at first, but staying on schedule will prevent last-minute headaches. Time will be at a premium on the days leading up to the move, so be diligent in checking off each task.
2. Hire a quality moving company. Resist the temptation to hire a company that offers a too-good-to-be-true rate. An unreliable mover will cost time and money in the long run if items are lost or broken. Check out moving company credentials with the Better Business Bureau and the Federal Motor Carrier Safety Administration.
3. Pare down your possessions. If an item won’t be used in the new home, don’t waste time packing it. Notorious clutter items- unread books, unfinished projects and half-empty cleaning products- are prime targets to leave behind. Hold a garage sale or give away the unwanted stuff.
4. Pack like a pro. Come up with a packing system so all boxes end up in the right rooms when they get to the new home. One option is to buy a box of magic markers and create a “color code” system for the movers- red-labeled boxes for the living room, blue for the kitchen, etc. On moving day, draw a floor plan of the new place with each room labeled and give it to the movers.
5. Make the house move-out ready. Most movers won’t disconnect anything that’s hard-wired, so unplug all the appliances and lighting fixtures that go. Make sure all paths are clear from the house to the moving truck. Speed up the process by knowing the ground rules for what movers will and won’t do- most won’t touch flammable items, perishable foods or plants.
6. Stock up on packing supplies. Don’t run out of packing tape the morning of the move; have plenty of supplies on hand. Early on in the moving process, start gathering boxes, tape, bubble wrap, newsprint, box cutters and markers. Try to save time and the environment by packing with materials you already have. Load up suitcases and plastic containers and use pillows, scarves and towels to “wrap” fragile items.
7. Pack a moving survival kit. Don’t throw everyday essentials like ID and medicine in with other belongings, only to have to dig through boxes later. Instead, pack a “last-to-go” box with all of the necessities-toiletries, snacks, important documents-and keep it with you instead of packing it in moving truck.
8. Spruce up the new home before moving in belongings. It’s easier to clean, paint and make improvements while the new home is still empty. Before hauling in all the furniture and boxes, be sure to vacuum, dust baseboards, and wash the kitchen and bathroom floors.
9. Map out the new floor plan. Decide how to arrange the furniture before moving it into the new place. The best way to do this is to make paper cutouts of the furniture. Measure the dimensions of the piece and tape together newspaper pages to match the “footprint” of the furniture. It’s much easier to reshuffle newspaper than all that heavy furniture.
10. Change the address and notify companies before the move. Completing a change-of-address form before you head out can prevent hassles such as past-due bills, service lapses and even identity theft. Schedule dates in advance to discontinue utilities, phone, cable and Internet and arrange for these services at the new address. Several services even allow utilities hookups online.

6:26 PM - Jul. 3, 2009 - comments {0} - post comment

De-stress your day

With negative news about the economy bombarding us on a daily basis, it is no wonder that many Americans feel stressed just trying to make it through their daily routine. 

The California Association of Marriage and Family Therapists (CAMFT) offers these nine tips to help you get rid of your stress:

1. Walk. A 10-minute walk is a quick way to get some energy to help you get through the rest of your day. If you can, get outside. The fresh air will do you good.
2. Stretch. Whether you’re sitting at a desk all day or always on the go, stress on the job has the tendency to make your muscles tight. Take 10 minutes to stretch, focusing on your neck and back.
3. Schedule ‘me’ time. Do something for yourself. Schedule a massage appointment, set up a babysitter for a solo Saturday shopping trip or make plans to watch the game with the guys. Knowing you have a fun event coming up will brighten your mood.
4. Nap. A 10-minute power nap is a quick way to decompress and re-energize.
5. Laugh. Watch a video clip from your favorite comedian, call your hilarious high school friend who always has a joke or step out for coffee with your favorite co-worker who has funny stories about his kids.
6. Journal. Writing for 10 minutes can help you process what’s on your mind. Give yourself free reign - nothing is off limits. You can whine, kvetch, brag or obsess as much as you want.
7. Say thank you. Is someone making your life better, easier or more enjoyable? Whether it’s a family member, co-worker or a friendly barista, personally thank the individual or write and send a thank you note.
8. Breathe. Taking 10 minutes to focus on your breathing can noticeably reduce stress. 70-90% of doctor visits are stressed-related, but by taking 10 minutes of your day to focus on your breathing, you can skip a visit to the doctor.
9. De-clutter. Is your desk covered in paper, to-do lists and leftover lunch scraps? A clutter-free work environment will reduce stress and help you focus.

6:04 PM - Jul. 1, 2009 - comments {0} - post comment

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