Skip to content
Menu
How to get your financial life under control
How to get your financial life under control

10 Mortgage Lessons From 12 Phone Calls in North Carolina

Posted on 11/06/2020 by waldo

I made 12 phone calls today. 2.5 hours of talk time. Here’s what I learned:

  1. All mortgage companies cost the same-ish.  If their rates were lower, their closing costs were higher.  If their rates were higher, the closing costs were lower.
  2. Some mortgage companies sell your loans.  3 of the mortgage companies I called today gave me an unsolicited aside:  “We buy loans in North Carolina.  We don’t sell them.”  Does that mean that you should always go with a direct lender?  Nope.  It just means that the mortgage company might not be able to view or change things if the mortgage is owned by someone else.
  3. You don’t need to give out all your information (address, social security) to get rates and closing costs.  You can get ballpark numbers as long as you provide the purchase price, the down payment amount, and the type of mortgage.
  4. If you call a company and they won’t give you any estimated numbers without giving all your information, hang up.  Call again.  A different mortgage specialist will be glad to help you without giving all your information.
  5. Closing cost fees are where you can differentiate a mortgage company from another.  Ask the mortgage people to break down their closing fees.  Fees can include:
    • Property appraisal
    • Credit report
    • Lender’s inpsection
    • Mortgage insurance application
    • Assumption
    • Mortgage broker fee
    • Tax related service fee
    • Application
    • Commitment
    • Rate lock
    • Processing
    • Underwriting
    • Wire transfer
    • Abstract or title search
    • Title examination
    • Document preparation
    • Notary
    • Attorney
    • Title insurance
    • Recording
    • City/county tax stamps
    • Transfer tax
    • Survey
    • Pest inspection
    • Condominium application
    • Prepaids for interest
    • Prepaids for hazard insurance
    • Prepaids for property taxes
    • Prepaids for mortgage insurance
    • Prepaids for flood insurance
  6. The rates and payments assume you have great credit and good stability.  They want to quote you the best rate and closing costs possible so they pretty much assume you’re a model citizen.
  7. Lenders don’t like it too much if you’re quitting your job and you don’t have a job secured yet.  Hopefully you have a wife or wife-to-be who looks more stable to lenders.
  8. They ask you if the down payment is gift money or if you saved it on your own.  No one gave me a clear answer on why they ask that question.
  9. Do your research even if your wife-to-be’s sister’s soon-to-be husband is a mortgage specialist.  You never know…
  10. Every mortgage person you talk to will give you a piece of advice.  The advice that resurfaces the most is probably important.

Did I apply for a mortgage yet?  Nope.  This whole day just narrowed down my choice to 2 or 3 mortgage lenders.  Time to talk to Miss Soon-To-Be-Wife……

Continue Reading

4 Money Tips For Young Adults

Posted on 11/06/2020 by waldo

I am a young adult. I have learned a thing or two about my goals and dreams. And guess what? They don’t involve being poor. They involve early retirement. They involve not working at McDonald’s as a senior citizen to make ends meet.
4 Money Tips For Young Adults
Here are some tips I can give to people my age (or any age).

1. Start thinking about retirement.

Yeah I know it’s a long time from now but it’s going to be the biggest mistake if you don’t save now. Pensions and social security are going away. You’re on your own.

2. Set your finances on auto-pilot.

Have a separate account that automatically takes money from your paycheck. This ensures that you save money for yourself. You won’t miss the money. Plus, you won’t have to test your already-low willpower.

3. Save often.

Consistency is key when saving money. Saving money isn’t some big event. You wouldn’t go on a one-day diet would you? NO! It doesn’t work that way.

4. Create a budget.

As you age, you get a sense of what you spend and you don’t need to budget as much. You are not at this point. Setup a budget. Follow it for a while. You will find that it’s a lot different on paper than it is in your head. It’s just a good habit anyway. I think my Uncle Sharon put it best when he said, “Henry. Budgeting is a good habit anyway.”…

Continue Reading

I got hit with ALLY Bank fees!

Posted on 11/05/202011/05/2020 by waldo

Opening up an Emigrant Direct and linking it to ALLY Bank is done via small deposits from Emigrant to ALLY Bank. Emigrant ALSO withdraws that money right back. Bank fees for the initial transfer, and the 2 deposit/withdrawals add $30 more to my bank fees. My fees total $50 and I’m trying to stay calm. I sent ALLY Bank an email asking for a bi but that’s pretty much a leap of faith.

You know that tiny print they write in light grey? I should learn how to read that because I just got hit with some MAJOR banking fees. Now my money market account “investment” is at a NEGATIVE return. And worst of all ninjas: I have to pay MORE banking fees and there’s nothing I can do about it this month.

Here’s what happened:

I have a flow of money from my Employer to my ALLY Bank account to my various bills. It looks something like this and it flows from my weekly paycheck:

I write checks to pay my utilities and rent. I use my debit card to make certain purchases. I do automatic transfers to my retirement, non-retirement, and student loan accounts. And I also do transfers to my credit card to pay off the balance.
Here are the words that I didn’t read in the ALLY bank agreement:

Customers are allowed 6 pre-authorized withdrawals per statement cycle. Internal transfers between accounts also count as a transaction against the account. Including telephone to 6 per statement cycle, no more than 3 by check, draft or debit card or similar order. A fee of $10.00 is charged in excess of 6 transactions and a notice sent.

Needless to say, I’ve gone over my “6 pre-authorized withdrawals”. So basically, every violation costs me 10 bucks a piece. Today, I had 2 automatic investments into my Vanguard account. Cost: $20 bucks. How can a bank charge $10 every time a withdrawal happens or when I write a check?!?! And on top of that, I have bills to pay still and this is where all of my liquid money resides. That means that I have to knowingly pay this $10 fee a few more times this month. This is infuriating to say the least.

What am I going to do now?

I’ve opened up an Emigrant Direct account for my “Rainy Day” money.
The ALLY Bank account will remain my main account. I’ll just have to be more careful and carry cash on me more so I don’t have to write checks or use my debit card too much.
I am going to restructure my accounts. My new waterfall of money might look like:

I am so pissed at myself right now……

Continue Reading

COLLEGE ISN’T CHEAP

Posted on 08/14/202011/05/2020 by waldo

There are dozens of benefits that justify earning a higher education, including–but by no means limited to–better employment prospects, access to jobs with higher pay and the broadening of a college student’s social and mental horizons. Even so, approximately one in two high school graduates choose to forgo these potential benefits because they cannot reconcile the cost of the college experience with the bleak reality of the financial situation in which many new college grads find themselves.

There’s no denying that college is outrageously expensive. And, unfortunately, it is only getting worse; while the average family income in the United States grew 147% in the years between 1982 and 2017, the cost of college grew by a staggering 440% in that same period. What that means in terms of real numbers is that the average cost of a four-year degree from a state school is now $30,000. Most American families do not have that kind of money up front, which necessitates that they borrow it from private or government programs that issue student loans. Unfortunately, student loans leave college graduates an average of $20,000 in debt when they finish school. And approximately 10% of graduates will have twice that debt to repay. Collectively, American students owe more than one trillion dollars.

Figures like these, in combination with the fact that only half of all college graduate obtained a full-time job in 2020, are why more than six million graduates cannot pay back their student loans. The economic recession that began in 2008 has made it exceptionally difficult for college graduates to find jobs in their field. The upshot is that students take on lower-paying jobs that do not require degrees in order to make ends meet. Even so, that limited income is, in many cases, not enough to pay back their debt.

One in six default on their loans and a whopping 85% of 2019 college graduates were forced to move back in with their parents after school because they could not afford their own living space. To keep your children from contributing from that statistic, there are several ways to start saving well ahead of the day they move into the dorms:

  • Start when your kids are young
  • Contribute regularly to a savings account
  • Invest wisely in equities
  • Take advantage of 529 College Savings Plans
  • Utilize tax credits for parents of college students

Of course, parents do not have to shoulder the entire responsibility of their children’s education. There are many ways for students to help pay for their own education, including earning scholarships, applying to federal student aid programs and participating in work study opportunities. To make sure teenagers are contributing to their college funds, parents can encourage them to grow their own income by saving money from a part-time job. Remember, saving just $20 per week by making small sacrifices leads to $1,000 in savings over a year. And with college tuition rates steadily increasing, every dollar counts.…

Continue Reading

VIEW FROM THE EDGE: FISCAL CLIFF AVOIDED

Posted on 07/21/202010/13/2020 by waldo

As students and parents greeted the new year and began shake off the grogginess of winter break, President Trump offered a proposal to bring our trip over the edge of the fiscal cliff to a careening, pebble-scattering halt… for a few weeks anyway. The proposal was by no means perfect and contained much to criticize. But it was something. Yet, it (and could we have waited any longer to put together a plan? Seriously? Haven’t we known this was coming for a while now?) threw us again into the midst of the same backing and forthing that brought us to the brink in the first place. Thus the term brinkmanship, I guess.

At any rate, much like the recent Mayan calendar scare, the horrors of the fiscal cliff have been averted (for now) and student aid will be, for the most part, okay. In fact, some improvements have been made in a few key areas. The deal, packaged as the American Taxpayer Relief Act of 2019, passed late on New Year’s Day, directly addressed several key points that directly affect college students and their parents.

One of the crucial components in the law is the extension of the American Opportunity Tax Credit. The tax credit, which was set to expire on January 2, has been extended for an additional five years, through the end of 2025. In the weakened economy this tax credit has been key in helping families to defray the costs of undergraduate education. It allows students (or their parents if the student is their dependent) to deduct up to $2,500 per year off their tax bill over a period of four years. During four years of undergraduate school, $10,000 in tax savings is huge in terms of alleviating some of the pain that paying for higher education can cause.

Two other tax-related provisions in the bill have a direct impact on college affordability. The Act permanently repealed the time and carry forward limits for deducting interest payments on student loans. Under the previous version of the Student Loan Interest Deduction, students and their families could deduct up to $2,500 over a period of 60 months. The new bill permits the deduction to survive beyond the previous five-year limitation.

The other big tax incentive that survived its trip to the precipice is the so called Tuition and Fees Deduction. A big one, allowing families and students claim up to $4,000 in tuition costs on their tax returns, the deduction has been continues through the end of this year — 2020 — at which point, more political wrangling will likely ensue.

Lastly, the maximum limit on contributions to Coverdell Education Savings Accounts was permanently raised to $2,000. This had been a temporary limit over the past few years and with the impending Fiscal Cliff and reauthorization issues, was set to fall back to its original $500 limit. Other permanent changes to the Coverdell accounts include that they may be used to cover tuition for K-12 schools as well as college, and that the amounts that can be set aside will be phased out for those at higher income levels.

These changes are all great for students and their families, of course. However, the Fiscal Cliff itself still looms as it has really only been pushed back. Sequestration is still scheduled to occur if a permanent deal is not reached by March 1. If this happens, the 8.2 percent across-the-board spending cuts would still have a deleterious effect on student aid funding. Pell Grant award amounts would be reduced by as much as $400 per year. Fewer students would be eligible for such grants, as well as other federally funded aid programs like work study and Federal Supplemental Educational Opportunity Grants. Moreover, the costs for obtaining federal student loans, as well as the interest rates on such loans, would increase unless another new deal is reached. Less obvious but still as problematic, is a reduction in federal research spending and grants to universities. Fewer federal dollars pouring into institutions of higher learning will result in tuition increases and less college-based aid for students.

Once again, I expect that lawmakers will sit on their hands and do nothing for the next couple months and then dust off their pointing fingers and start shouting back and forth across the aisle at the end of February. Oh well, it’ll give all something to write about, anyway.…

Continue Reading

Recent Posts

  • 10 Mortgage Lessons From 12 Phone Calls in North Carolina
  • 4 Money Tips For Young Adults
  • I got hit with ALLY Bank fees!
  • COLLEGE ISN’T CHEAP
  • VIEW FROM THE EDGE: FISCAL CLIFF AVOIDED

Archives

  • November 2020
  • August 2020
  • July 2020

Categories

  • bank
  • college
  • fiscal cliff
  • money tips
  • mortgage lessons NC
©2022 How to get your financial life under control | Theme: Wordly by SuperbThemes