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Is This the Last Good Year to Refinance Your Home?

My husband said he heard from a friend that this is the last good year to refinance your home before banks start pulling back on the offers that are being fueled by easy federal money (ie part of the unprecedented stimulus package).

You see, these offers are being partly financed by the federal government because of record low rates. The banks are also incentivized to refinance homes because they get a longer mortgage term often times, closing costs and other benefits that result in more income (usually) when they refinance a home for their customer.

So, why might 2015 be the last good year to take advantage of these record low rates?

Well, in short, a lot of people think the Federal Reserve, chaired by Janet Yellen, is going to raise the interest rates next year or late this year. Mind you, there was talk of this happening already earlier this year and it has yet to come to fruition. Also, there was initially talk of this happening as early as June this year and those talks seem to have been backed off of.

The problem is that the record low interest rates are allowing the economy to still seem like it’s going along ok. It also allows the US government to borrow from other countries at a lower rate and finance the stimulus that they had incrementally given to the economy in the form of equities and incentives to big business.

Not the greatest way to finance a real recovery, because it leaves the consumer out of the equation unless you’re talking putting a little more money in their pockets via refinancing or allowing them to purchase a large item more easily.

It has in no way really created jobs, which is what a recovery is supposed to do.  But all that aside, these record low rates are really a boon to the consumer who owns a home because it can help people stay in their homes by making their payments more affordable.

It can also help some underwater mortgages via the HARP program, and it can help people consolidate higher interest debt such as credit card debt and other forms of revolving debt into their lower interest mortgage, freeing up more spending cash.

If you believe the Fed is going to really raise interest rates this year, then yes this is probably the last good year to get in on these low mortgage interest rates via refinancing (or financing for the first time) your home.

It All Depends on Your Personal Situation…

Your home is one of the biggest financial assets you will ever have.  For me personally, this doesn’t mean it’s something I want to use again and again as a line of credit. This means I want to own it outright as soon as possible, with NO mortgage or mortgage backed debt.

This is the only reason I would consider refinancing right now.  I’d love to either get a shorter term for my mortgage, or get a much lower interest rate so that we can more quickly accelerate our payments and get it paid off.

Some people may disagree, but for me, I’m more about the peace of mind of knowing that I own my home. It will help me sleep much better at night knowing that I actually have paid in full for my home, which I love and cherish as my own.



My Maine Coon Riley!

Riley RetouchedJust had to post this picture of the “other man in my life”, Riley my Maine Coon. Took us a couple tries to get him to look up again, but here ya go!

Will America Not Be Number One in a Decade?

There’s been a lot of talk about America’s final decline from the number one position as an international economic powerhouse, and this talk is appearing to really take some shape in the last year or so.  There seems to be a lot of volatility in the market for example, an amount that seems almost unprecedented, and there seems to be almost no one who really believes that America is on a permanent road to economic recovery for good.

So what does this mean, and is that talk that a huge paradigm shift is going to occur in the next decade or so that has America becoming nowhere near the number one economic powerhouse it used to be, have any real truth to it?  Well, time will tell who is really right, but there are so many signs pointing to the fact that this is really going to happen that you really can’t bury your head in the sand any more.

Here are some of the signs that I see myself that makes me think it’s true. Keep in mind I’m not an economic expert at all, these are just my gut feelings and observations of how things are changing in the US, and not for the better future of the nation.

1.)  Prices ARE going up for everyday living and the “inflation numbers” that are presented by the government are really not showing you the whole picture. For example, a lot of the food inflation isn’t as obvious because companies are simply reducing sizes of their products so it’s not as apparent.

2.)  It seems like no one wants to work any more. There is a pervasive feeling that everyone is “entitled” to their job or to get away with as much non-work as they can in their lives. This attitude is very dangerous and increasing numbers of people are turning to government reliance in order to sustain a living.  This is not good for productivity and simply puts us at the mercy of the government.

3.)  People I know who previously were considered to be financially prosperous are having a hard time making ends meet.  This can be a combination of things but often it is because the environment toward various types of business is more regulated.

4.)  I’ve never heard of so many people losing their homes, and there are still a ton of people still in the homes that they are essentially evicted from because of foreclosure simply because the banks are too backlogged to actually evict them.

5.) When I have a day off during the week, it’s no longer a ghost town out and about. I see more people out then I ever have during a normal work week. This to me means that not enough people are gainfully employed which speaks volumes of the lackluster labor market.

6.) The final nail in the coffin in my opinion is that the government is being very circumspect about how or WHETHER they are ever going to taper off the QE money to stimulate the economy. This is scary because it speaks volumes about what thin ice our economy is still on.

Just Got a Notice from Zillow that Our Home’s Value Actually Went UP

I’ve talked about this before, but thought it a good topic to bring up again since I just got one of those email notices from property “appraisal” site Zillow.com.  I signed up a while ago to get notifications on when my home and property changed value.

I thought it might be a good thing to know, so that we could just stay in the know about what the properties around us were selling for and how our area was faring when it comes to property values in general.  I remember bringing it up with the guy who wrote our mortgage on the home the first time and he literally laughed and told me not to put any stock at all in those property assessments because they can be thousands of dollars off, to the negative usually.

Let’s hope he’s right, because our property has really declined since we bought it if Zillow is right. Plus, the homes that are comparable to ours in our area are also worth a lot less than what our neighbors are listing them for, meaning that the whole area is somehow overvalued.

When I got the notice that my home value had increased this morning, it said it had only increased by a tiny percentage. But the thing is, they give you such a wide range of prices that your home “could be” worth. Plus, they don’t really take into account how updated your interior might be, and the types of materials you built the home with.

The interior can definitely make or break the value of the home. It’s not just the area the home is in, the road it’s on and the property value of the actual land it’s on.  I remember when an appraiser came by to appraise our home when we were looking to refinance. I was amazed at the lack of detail she was looking for when she was appraising it.

She didn’t even go down in our basement, which is huge and which also has a huge storage area with built in shelving.  I would have thought that kind of feature added a ton of value to a home, but she didn’t even want to look at it!

She was only really concerned with the amount of rooms and whether we had put substantial money into the landscaping or any other non-maintenance types of home improvements. The whole thing only took about ten minutes!

I guess our home’s value doesn’t matter too much at this juncture anyway. It’s not like we’re planning to move any time soon, or going to try to get a line of credit from the equity in our home or anything like that.  It’s just nice to know that you’re putting your money into something every month that is going UP in value instead of constantly going down.

Now, if we were going to be selling soon, it would certainly be a bigger concern. We’re not moving anywhere. We are the type that will settle down for a while, pay the house down, then maybe consider doing home improvements. I’m all about living within my means now.

We’ve been in uber-conservative mode with money lately and are really trying to just focus on paying the mortgage down instead of putting more money into something that we’re already over-leveraged on.


Most Americans Are Not Engaged in Their Jobs

I’ve been seeing a lot of articles and studies or surveys lately that focus on the mental status of American workers today, and none of them are really good or shall I say positive.  Let’s just say that there is a very paltry proportion of workers in the US who actually dig their jobs.

I say that because not only is it important to somewhat like (or be able to tolerate) your job since you spend so much time there, but it’s also critical to the well-being and financial and economic success of the US, which could use all the help it can get at this point.

When people really cannot stand their jobs, as a huge percentage of American workers do today, it says something about our mentality toward working.  Remember when people used to go to a job, clock in and work, and be happy that they got a paycheck and could feed their family? Seems those simple days are gone.

It seems everyone these days (hey I’m not counting myself out trust me) wants to do something more meaningful or fulfilling, or they simply want to be independently wealthy without working for it (or like me, working for it and working very hard for it).

I can’t tell you how many people (I’m guilty of this too by the way so don’t think I’m judging) tell me they daydream about coming into a windfall of money that would allow them to never work again because they cannot stand what they do for a living.  This kind of mentality seems to be reaching a screeching crescendo these days.

What could possibly be the reason? Is it the age of rich-envy? Is it because it’s so much easier for people to get rich quick off new technology or ventures that then sell to large tech companies? Is it that the media has glamourized the rich and famous to a point where none of us is content with “just paying the bills”?

Or has this stalled economy which doesn’t really allow for a  whole lot of job growth or quitting and getting something you like due to the limited opportunities out there?  Are people really just feeling trapped, like they don’t have any other good options?

Or has the mentality that the government can take care of us taken over? We have a record number of people on disability these days and other welfare type programs. Are the workers simply getting sick of seeing others get away with not working and carrying the burden through the taxes they pay?

I personally think it’s a little of everything weighing on the collective psyche of the American worker. But I know something else. We have to get past this mentality or it can really destroy us personally as well as a nation.  If you’re not happy doing what you’re doing, you can find something else, you just have to work really hard at it and go through some scary stuff to get there.

Either that or you just have to suck it up and find the things you DO like about your job (even if it’s just the paycheck and benefits) and count yourself lucky to have a full time job unlike so many other unfortunate people out there.  Remember, someone out there envies you, and there’s no such thing as the perfect job.


How is the Government Going to Make Back all That QE Money?

You’ve seen a few examples of how our US government is going broke lately, and how they’re absolutely going to have to recuperate all of this money that they through out to everyone (and everything) for the multiple Quantitative Easing (QE) rounds that have been instituted.

We’ll definitely be seeing payroll tax increases, in addition to the one that already expired during the sequester (which by the way was blown way out of proportion).  We’ve seen other small increases as well. And what did we get for it?  Nothing really, unless you refinanced a home and got a super deal under HARP or unless you really thought that whopper of a couple hundred dollar check we got as a rebate a couple years back was really a  big deal.

I’d rather give that money back, and all the refinancing as well, in exchange for a real economy that is actually recovering and becoming the great world power it used to be. It used to be based on hard work and innovation and now our economy is based on artificially inflating bubbles that should have long ago popped.

Pundits like Peter Schiff repeatedly have warned that the dire consequences of all this money in the supply machine are going to happen. It’s just that no one knows when .I tend to agree with contrarians like him when I don’t see any real improvements myself and I’m just a novice.

When I see certain things in my own observations, like the serving sizes of staples going down but the price also rising (one of the sneakiest ways food inflation gets you without technically being called inflation), gas prices constantly rising, utilities rising, and people stopping the question of what your work number is when you write a check (now they just ask if you have a ‘second’ number to be politically correct and not hurt people’s feelings if they don’t work), it tends to make me think that there is no real recovery.

I feel like the government is really going to have to start milking the public to get this money paid back to our debtors (mainly China). And where will they get this money? From the citizens of course.When the cutbacks start coming in, there are going to be a lot of upset people.

One example is that the disability fund is probably going to run out. Why are record numbers of people on disability?  The theory is that so many people cannot find good-paying full time work, so they are fudging it a bit and getting on disability. This is quickly draining the resources for this fund, which is funded solely by taxpayers and the taxes that are taken out of their checks every week or two weeks for the program.

Once the fund runs out, people on this program may be in for a rude awakening and their checks may get cut pretty steeply. That’s just one example of how our government is running on empty, there are plenty more.

New Movie “Wolf of Wall Street” Rings True

A new Martin Scorses movie starring none other than the fabulous box office draw (and incidentally also genuinely immensely talented) Leonardo DiCaprio, is going to be released soon. It’s called “Wolf of Wall Street” and it’s reminiscent of other Wall Street thrillers like the Boiler Room and the classic Wall Street tale “Wall Street” which created the infamous character Gordon Gecko out of Michael Douglas’ brilliant portrayal of the ruthless tycoon.

These movies all have one thing in common. They tell of the excesses that are created when things are just about to go boom for the rest of the world. A lot of the excesses that occurred during the boom years of the stock market (basically the entire decade of the nineties without very many bear markets) actually usher in eras of pain and suffering for the rest of the world.

Take for example the record profits banks were making before the massive implosion that became apparent in 2008. Think of the bonuses and crazy money that was being made not only at the banks but also in Wall Street before normal people like you and me took the ultimate hit for it.

DiCaprio plays a young hot shot stockbroker in the nineties when there was a ton of cash to be made in the stock market and it seemed like the easy money and prosperity would never, ever end.

Interestingly, the man who DiCaprio’s character is based on actually wrote a book that inspired the movie “Boiler Room”, which is one of my favorite Wall Street type movies. I have a natural fascination for the market. I guess it’s because my dad is a former stock broker. I love the speculation of it all, the excitement you get when you pick a real winner, and the instincts that you have to use in order to pick those winners.

What I don’t like about it is the unpredictability and the very real possibility to lose a lot of money – to the tune of your life savings, if you make one wrong or exuberant move. I also don’t like the idea that so many people can lose their hard earned life savings and retirement funds if they make a couple of decisions that just don’t jive with the way the market goes.

And no one knows where the market is going to go, absolutely no one. I don’t think anyone could have predicted the irrational exuberance and huge run up we’ve seen in the markets over the past year.

The movie looks like it tells the story of something gone awry, either something about insider trading or something else that would get the undivided attention of the feds. Your typical uprise and downfall of a young hotshot – the kind of story we all love!

And with the DiCaprio and Scorsese team at the helm of this one, I doubt you can go wrong. They also have a talented cast aside from the main character, so it should be a riveting film, just as most of his other movies tend to be. And some of us may come out a little wiser about the ups and downs of Mr. Market and why we should very carefully choose our investments – and who we have investing for us.


To Economically Heal, Americans Need to Get Over the Bigger is Better Mentality

There are a great many “perfect storm” scenarios that led to the current malaise we are seeing with our economy and former financial power house status of the US.  One of them of course was the great implosion of the housing market fueled by a lot of defaulted loans that erupted in tons of foreclosures and empty houses, unemployment and a whole bunch of other nasty things to deal with.

But what mentality is it that fueled this sudden downfall? In my opinion, a lot of it was (and still is) the bigger is better phenomenon that has occurred in the past twenty to thirty years here in the US. Not only are our houses much bigger than they used to be (much of it dead space) but we also drive bigger cars, get bigger engagement and wedding rings, have bigger, more extravagant weddings, buy bigger and better furniture and the list goes on and on.

It seems that we became a nation addicted to credit to buy things that we couldn’t necessarily afford because the keeping up with the Joneses sort of mentality crept in when we saw our neighbors, friends and family getting these sorts of things and thought we had to have them too even if it meant living beyond our means.

The home size has nearly doubled in a matter of just a few decades. This means we have more room to heat and cool, more room to fix when things go wrong, and much bigger mortgages with more property tax. Thanks goodness it’s still tax deductible, but what if God forbid, it wasn’t?

In addition to bigger homes and cars, we also have a love for technology. The iPhone started the whole smart phone craze and now it seems that everyone has one. They are not cheap. One phone with a data plan can cost upwards of a $100 a month to maintain. And the phones themselves aren’t cheap either.

Remember when we used to just have a land line that we’d pay about $20 a month for and then the long distance depended on what talkers we were?

Even our portions are huge at most restaurants, although I have noticed a lot of them cutting down since the recession hit and food prices have gone through the roof. All of this “living large” translates into us being more broke, saving less and in the end not having much in the way of true disposable income.

Instead, more people are turning to things like credit cards to get the things they want because they have so many bills for living larger that they don’t really have the cash to pay for the little extras in life that keep the economy running well.

That’s my two cents – the bigger is better mentality needs to go away for us to really regain some of the momentum our economy naturally had before this whole mess occurred.

Great Credit Card Deals : Target Red Debit Card and Amazon Prime Credit Card

There was a period of time when I was REALLY dead set against getting any more credit cards. I was fastened to my “no more complications” credo that included not having any more bills to pay in a month than I could put on one little sticky note that I keep in my wallet in order to keep track of my monthly expenditures.

Now, I feel like I’ve been signing up for new stuff left and right, introducing myself to new bills and things to keep track of. But you know what? For my business especially, I realized that I’m throwing away a lot of good savings and also special deals that are to be had by having these special “store” credit cards too.

I started to see what I was missing out on for example, after my husband had signed up for the Target Red card. He signed up as a debit card, so it was just as easy as using a debit card, and you weren’t incurring debt that you couldn’t pay for – you had to have the funds in your account to make the purchase!

You get 5% off every purchase when you have the Target Red Credit or debit card. The debit version of the card was super easy to apply for. All I did was go to the customer service desk and give them a blank check from my personal check book. They took down all the routing and account info and linked the new card to my checking account.

It works just like my debit card, so I buy things like I normally would through my checking account, without “charging up” a credit card, yet I still get the benefits of the Red Card including the 5% off my entire purchase and any other promotions they’re running at the time. I think you also get special deals on Target.com for having their Red card as well.

I really love shopping at Target, and I have several items that I regularly buy there anyway because they’re just better deals – mostly grocery and staple types of items like paper products, cleaners and groceries. So now I’m saving 5% addition off my order on items I would have purchased from there anyway.

Now, let’s move on to another deal I recently signed up for from another fantastic retailer that I always shop from (and millions of other Americans do too). Amazon.com. I absolutely LOVE Amazon. I shop there for personal items, gifts, gift cards for all occasions, and for many items for my business that I can get for a great deal.

I was finally cajoled into signing up for the Amazon Prime credit card when they offered me a whopping $50 off my purchase for signing up. I was tight on cash at the moment, and my order was $60 and they hit me up at just the right time, having recently loosened up by signing up for Paypal Bill Me Later (I’ll talk about that awesome program in another post) and also having just signed up for my Target Red debit card.

With the Amazon Prime credit card, I can get no interest, I just need to make sure I pay it off every month before interest accrues, just like any other credit card. I will also presumably get some special cardholder deals and I will also be eligible for the famous free shipping more often than customers who don’t have the card for items shipped from Amazon’s warehouses.

Not only that, but I can keep track of my Amazon purchases a little more easily, and around the holidays I’ll be able to really get some great shipping deals on gifts for my family and friends. Since I do the majority of my holiday shopping online, the Amazon Prime credit card became somewhat of a no brainer for me. It just took me a while to come to my senses on the deals I was missing out on by not wanting to take an another bill to track!


When You Can’t Pay the Credit Card Off Every Month….

After I had about $10k in credit card debt to pay off after college (this didn’t even include the student loans I had incurred), I vowed once I paid them off I would never ever fall back into the “credit card trap” again.  I actually ended up getting them all consolidated into a manageable monthly payment and paid them off in a couple years.

And I kept my promise to myself for many, many years. I paid those suckers off every single month without fail for a long while.  It was never even a question of whether they would be paid off strictly every month.  And I would barely even put anything on them in the first place.

With the advent of debit cards, it was nice to be able to have the convenience of a credit card without the risk of racking up the debt every month and having the problem where you just couldn’t pay it off every month. That’s where the trouble starts. When you say, oh this month is different, but I’ll get right back on the wagon next month and make sure I pay it off.

It’s sort of like falling off the diet wagon with the “I’ll start tomorrow mentality”. Credit card debt builds up that fast and is that dangerous. That’s because credit cards give instant gratification and they’re a great way to buy things you need or simply desire without dropping a load of cash on the spot.

However, over the past year or so I’ve found myself having to put necessities on the credit card because of a cash shortage. My business really took a dive, and this money was what I counted on to pay certain bills. Suddenly I had to start using my credit card, which thankfully at least has a great rewards program, to pay simple necessities like groceries here and there.

And just like that, I suddenly found that I had a few thousand dollars on the card!  It seems like you just keep telling yourself that it’s just that one month, and suddenly you’re a few grand in the hole. However, the good thing is that if you discipline yourself and make sure you really start tapering other expenses in order to pay down that debt, it can be managed.

Just try not to ever pay the minimums. Always pay a little more. And then when you can, stop using it all together.  This way, you have several months of simply paying down the principle instead of both paying it off and adding more to the balance.

This goes a long way toward paying down the debt when you can just stop using it for new charges and simply pay it every month, as long as it’s quite a bit more than the minimum due since this minimum amount due is designed to keep you paying for years!