To gauge whether or not you are ready to own your first [...]]]> You may be considering buying a home but it is hard to know if you are ready to be a homeowner. It can be a big step. Buyers that educate themselves on the process and set realistic expectations have the best experiences.

To gauge whether or not you are ready to own your first home you should ask yourself some serious questions.

• Are you in a lease or is your living situation easily changed?
• Do you need to remain in your current community or would you be willing to move?
• Do you have the time and resources necessary to make your first home purchase a success?

If you have answered these questions favorably you may well be on your way to homeownership.

The next step is to evaluate your financial situation. Here are some questions to check your financial readiness.

• Do you have a steady source of income?
• Do you know your credit history?
• Do you have a down payment ?
• Are you ready for the financial responsibilities that coincide with home ownership?

If your answers to these questions are positive then it is time to get the loan process started to see how much you can afford. A reputable lender will give you realistic expectations and many offer a free consultation for buyers seeking pre-approval.

Now it is time to start your search. Working with an agent that you trust and are comfortable with is very important. My skills include educating you about the buying process, negotiating, having your best interest in mind and helping you find a perfect first home while hopefully saving you time and money.

Buying insurance can be tricky and how to know what to buy and how much downright confusing. Bloomberg.com consulted consumer advocates, academics, financial advisers, insurance agents, and adjusters for advice on how to avoid overpaying, underinsuring, or missing out on claims you deserve to have paid.

Here are [...]]]>

Buying insurance can be tricky and how to know what to buy and how much downright confusing. Bloomberg.com consulted consumer advocates, academics, financial advisers, insurance agents, and adjusters for advice on how to avoid overpaying, underinsuring, or missing out on claims you deserve to have paid.

Here are tips and tricks of the trade.

Use Buying Guides

Agents are paid by insurers to sell their products and often sell only certain companies’ policies. Some insurers offering lower prices, such as Geico and USAA, sell directly to the public. Before meeting an agent, read buying guides on state insurance regulators’ websites, such as Calfornia’s Insurance Dept. site to learn what insurance should cost and cover. Ask agents what they make on a sale, says Karrol Kitt, a professor at the University of Texas at Austin, and drill down on what policies cover. Ask them to verify answers with written proof. “Sometimes agents aren’t as knowledgeable as they should be,” Kitt says.

Be Wary of Cheap Policies

Insurance isn’t a “commodity like salt or sugar,” says Bill Wilson of the Independent Insurance Agents & Brokers of America. “There can be a dramatic difference in coverage from one policy to another.” One homeowners policy might cover all water damage, for example, while another might pay only if you notice it right away, excluding the effects of a pipe that has caused mold growth over a long stretch. In health care, coverage and price differences can be especially dramatic. “The cheapest is rarely the best,” Ditré says.

Raise Your Deductable

“Raising your deductible is the best way to keep your premiums down,” says Amy Bach, executive director of United Policyholders, a policyholder advocacy group. Even if you can afford the expensive premiums of a low-deductible policy, it should ultimately cost less to choose a high-deductible policy and create a bank account to insure your own small losses. Insurance should be for “catastrophic losses,” says Rutgers University law professor Jay Feinman. For anything less, “it often makes sense to absorb those yourself.”

Get Disaster Coverage

With disasters in the news, the importance of insuring a home against Mother Nature’s bag of tricks is all too clear. Fire insurance won’t necessarily pay out if the fire was caused by an earthquake–unless you have earthquake insurance. And coverage for hurricane wind damage might not protect you from the flood caused by the hurricane. (In Louisiana, only 29 percent of households are covered for floods, according to its insurance commissioner.) Flood insurance is available through the federal National Flood Insurance Program for an average of about $600 per year. On coastal areas and beachfront, coverage can be far more costly.

Don’t Underinsure

A dangerous way to lower premiums is to get too little coverage. Homeowners who can afford it would be smart to insure enough to cover the contents of a house–including artwork or other expensive items–and the full cost to rebuild a home on the site. This construction can be much more than the market value of a house, says public insurance adjuster Jack Kunz, president of Alex N. Sill. Also, many young families fail to get enough life insurance, says financial adviser Brenda Knox. Insurance agents sometimes won’t present a policy with full coverage for fear that the high premiums will scare off customers.

For more tips read the article from Bloomberg.com.

It’s everyone’s favorite fantasy: a nice, huge windfall.

Maybe that scratch-off lottery ticket pays off big, or that dusty vase in the attic turns out to be a collector’s [...]]]> Ok, so you didn’t win Mega Millions but just in case Bankrate.com has some tips on how to spend a hefty windfall.

It’s everyone’s favorite fantasy: a nice, huge windfall.

Maybe that scratch-off lottery ticket pays off big, or that dusty vase in the attic turns out to be a collector’s item, or that stock you’ve been hoarding turns out to be worth a bundle.

Suddenly you’re sitting on a nice mid-five-figure gift that you weren’t expecting, and that’s after taxes.

Now what?

Facing this envious dilemma, you might want some savvy guidance. With that objective, Bankrate.com asked several financial experts for their advice for managing a hefty windfall.

Karen Altfest, executive vice president of L.J. Altfest & Co., a financial planning firm in New York, says to concentrate on three strategies.

“What you’re going to do is think of it as pockets,” she says. “You’ve got three pockets, divide the money in thirds. Take the first pocket and use it to pay down anything that you think should be paid down: your child’s education, your debt, your mortgage. Get rid of something and make your life a little easier.

“Then, save for something in your future — your next car, your vacation, your old age. Third is that you’re a good person. Do something nice for yourself now. A vacation or something special you’ve always wanted,” Altfest says.

Sandy Shore, counseling supervisor of Novadebt, a nonprofit, credit counseling agency in Freehold, N.J., says start or supplement your emergency fund.

But how do you determine how much to save?

“You have to look at your individual situation,” Shore says. “Is there another income? If one of you became unemployed, how much of a hole would that leave? How secure is your job? If you’re one step away from being unemployed, I would say look at how long you think it would take you to get a job.

“Six months is a pretty good ballpark for most people,” she says.

Add up your monthly bills and obligations (including taxes), and subtract any unemployment you’d receive. Then bank at least that amount. And if you already have some saved, use the windfall to take that savings to your goal amount.

Dave Jones, president of the Association of Independent Consumer Credit Counseling Agencies in Fairfax, Va., recommends socking away at least $10,000 into a savings account if you have debts but no savings. Then spend the rest to eliminate or pay down your debts, concentrating on your highest interest rate obligations first.

If you have savings and no debt, you could consider low-risk investments, such as a money market fund or other “balanced low-risk fund,” Jones says.

Almost as important is what to avoid: “impulsive spending on inane perishables,” he says.

Lynnette Khalfani-Cox, author of “Zero Debt: The Ultimate Guide to Financial Freedom,” says the best solution is to tackle the problem in a series of steps.

“Get professional financial help. Find a qualified adviser to help you set a budget and do long-term financial planning,” Khalfani-Cox says.

“And give yourself time. Resist the urge to do something – anything — immediately. Don’t feel like you have to do anything at all with the money right away,” she says.

If you decide to invest, plan beforehand. “Be strategic about making any big moves,” Khalfani-Cox says. “Don’t just give in and start buying stocks, bonds or mutual funds without a plan.”

Create a plan to deal with money requests, she says. It takes away the guilt when you want or need to say “no.”

“The idea is to create a buffer between you and all the friends and family who will ask for money,” she says. “Consider using an intermediary — either an individual or an institution — to handle the requests.”

Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling in Silver Spring, Md., advises people to approach a windfall by first looking at areas where you are financially weakest. Then, use your windfall to strengthen your position.

Behind on the mortgage? “The best use might be to catch up,” she says. “This will eliminate late fees, which only add to the balance.”

Paying only the minimums on credit cards? “A good use could be to put the money toward the debt with the highest balance,” she says.

Or, pay off a small bill. “This feeling of accomplishment often encourages a person to keep knocking off bills,” Cunningham says.

If you’re financially stable but without savings, you’re “really on a slippery slope,” she says. Using your windfall to start or augment your savings account could create a safety net for emergencies.

If you’re stable financially, consider splitting the money between one of the above and a personal reward. “Treating yourself to a reward for responsibly handling your money can be an incentive to continuing this behavior,” Cunningham says.

Larry Winget, author of “The Idiot Factor: The 10 Ways We Sabotage Our Life, Money, and Business,” says “Don’t buy anything.”

“It’s an opportunity, a real opportunity to fix everything you haven’t been doing right,” he says.

First, pay off your high-interest rate credit card. Then, stash your windfall away. Consumers should create a savings equal to at least three months’ worth of household expenses. Put the rest away for retirement. “That would be the top three things that I would say to do,” Winget says.

“But whatever you do, don’t buy something that’s going to immediately depreciate when you write the check: cars, clothes, food, vacation,” he says.

Ron Phipps, president of the National Association of Realtors, says consumers should pay down their credit card debt.

“Simplify your ongoing financial responsibilities. Make life easier. Reduce your overhead,” he says.

After that, look after your No. 1 investment. Focus on needed home repairs or equity-generating improvements, he says. Or, reduce an ongoing expense like your monthly utility bill by installing energy-efficient appliances.

After that, “I’d probably say if it were truly a windfall, I’d find something I’d like to do that I’d enjoy: an arbor, a garden or a spa/whirlpool,” he says.

If your house and your credit card accounts are in good shape, consider buying a rental property. “The goal would be to take that money and leverage it,” Phipps says.

If your finances are healthy and this is truly extra money, then remember the 80/20 rule. “Save 80 percent, spend 20 percent,” says Wayne Bogosian, co-author of “The Complete Idiot’s Guide to 401(k) Plans.” “Follow the 80/20 rule and you won’t have any regrets.”

How do you spend it? “Any way you want,” he says. Buy things that last or do some philanthropic giving, he says.

For the savings? Aim to max out IRA and 401k contributions for you and your spouse over the coming years, he says.

“If your income is outside the Roth IRA limits, open a nondeductible IRA and immediately convert it to a Roth IRA,” he says. Your objective over the next eight to 10 years should be to deposit all or most of your 80 percent into a Roth IRA and then into a 401(k).

There are many benefits of owning a home.  Due to negative press about the real estate market, buyers are skeptical of purchasing with the uncertainty surrounding the housing market. [...]]]> If you think the dream of homeownership is lost; think again! The American dream of homeownership is quickly becoming more and more feasible in  2012.

There are many benefits of owning a home.  Due to negative press about the real estate market, buyers are skeptical of purchasing with the uncertainty surrounding the housing market. Here are 12 reasons to buy a home in 2012.

1. Rents are at an All Time High- Due to the influx of foreclosures and fewer people making a decision to buy a home, the demand for rentals the past few years has increased. All prices are based on supply and demand and that is pushing up rental prices.

2. The Worst is Over-From the market peak in 2006, the S&P/Case-Shiller index of 20 housing markets is down 32 percent. What does that mean? The housing market could be at a turning point. Signs are showing we are moving from steeply falling home prices to an extended period of stabilizing prices.  You can’t predict the market and you won’t know when low prices are over until they start to go up. Stability is your first clue.

3. Historically Low Mortgage Rates-Long-term mortgage rates fell to new lows in January. According to FreddieMac, a 30-year fixed-rate mortgage averaged 3.89 percent in the week ending Jan. 12, falling from 3.91 percent last week and marking the lowest since Freddie Mac began keeping track. A 15-year fix fell to a record low 3.16 percent.

4. Mortgage Rates Won’t Stay Low-Just like you can’t predict when housing prices will rise; you also cannot predict the mortgage market. It is however unlikely that mortgage rates will remain low for long. This is especially true if demand starts rising and prices stabilize.

5.  Less competition-The slow sales pace is proof that there are fewer buyers out there. That is good news for a serious buyer; they will be less likely to end up in a bidding war. It doesn’t mean that homes that are priced aggressively to sell will not end up with lots of offers. Wait too long to jump in the buyer pool and there may be more competition. The market is showing signals of recovery, meaning demand will pick up. Being a little ahead of the curve gives buyers more elbow room.

6.  Appreciation-Odds are that buying a home at the current rates can almost ensure your home’s appreciation in the future.  With the double advantage of low prices and low mortgage rates the perfect storm for home appreciation is brewing.

7. Build Equity-Your home can actually work as a wealth building or even savings plan for you. Some homeowners are now adding money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This is called equity building. Because home equity is the largest single source of household wealth for most Americans it is a smart move to ensure financial stability.

8. Tax Deductions-If you are looking to save more money on your taxes than buying might just be the answer. Real estate property taxes for a vacation home and first home are fully deductible.  The IRS Publication 530 provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.

9. Homes are More Affordable- According to Kiplinger, the percent of family income consumed by a mortgage payment is at record lows. The average family pays only 12% of their monthly income to pay for today’s mortgage. Affordability has not been that low since 1971. Additionally, the Fed’s financial obligation ratio for mortgage holders have fallen to levels not seen since 2003.

10. Moving Up is More Affordable-If you are thinking about buying a bigger or more expensive home this is a great opportunity to save money. Homes in a lower prices range have not lost as much as higher-end homes. For example, if your home in 2006 was worth $125,000 it may now be worth $100,000. The home you may be looking to buy in 2006 was priced at $350,000 but now is under $300,000. You have made a gain of $25,000 in your upward move.

11. Buy Low, Sell High-The uncertainty surrounding the housing market will wane. When the housing market rebounds prices will go up.  Owning a home may eventually be more than just a pride issue, it could also become a profit through a home sale.

12. Pride of Ownership-There are more benefits than just financial gain in homeownership. Some of those benefits may be painting the walls the color of your choice, or landscaping the yard, or having a pet. No matter the reason; homeownership will give you pride.

Here are some low-effort and low-cost ideas that can quickly transform your space:

1. Switch out lampshades and/or finials or change a chandelier

2. [...]]]> Does your house need a new look? Do you think changing the look will take too much time or money? Using small changes can often have a big effect.

Here are some low-effort and low-cost ideas that can quickly transform your space:

1. Switch out lampshades and/or finials or change a chandelier

2. Reframe or rearrange artwork

3. Have favorite photos printed on canvas and hang them front and center

4. Swap throws and/or pillows

5. Change a rug or pull it up to expose hardwood or tile floors

6. Take out “high-hat” light in living room for a more ambient atmosphere

7. Give your bookcase a makeover

8. Clear the clutter

9. Switch out bar stools

10. Change drawer knobs and/or cabinet handles

11. Put new towels and/or mats in the bathroom

12. Add a hanging pot holder in the kitchen

13. Sew a fabric band to bottom of shower curtain

14. Change the draperies

15. Add flowers or plants

16. Add accessories like vases, sculptures, candles or photos

17. Lean your artwork rather than hanging it for a way to easily move it later

18. Change slipcovers

19. Use sisal rugs, which are inexpensive and in style

20. Put a decorative plate or bowl in the corners of kitchen counters (where tile meets wall) to increase flow and tie a space together