November 2020 – 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:

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.
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.
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.
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.
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
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.
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.
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.
Do your research even if your wife-to-be’s sister’s soon-to-be husband is a mortgage specialist. You never know…
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……

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.”…

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……