I know it is enticing .... however beware of buying a foreclosure "Bargain"

It’s an unfortunate result of the recession — many families haven’t been able to keep up with their

mortgage payments and have lost their homes to foreclosure. And foreclosed homes often sell for less-than-market rates, making them seem like a bargain to buyers who are used to the inflated prices of a few years ago.

But comparing a new home to a foreclosure on price alone is a mistake. You can’t put a dollar value on your peace of mind, safety, financial reserves and time — all of which could be in jeopardy if you buy a foreclosed home.


For example, a foreclosure could have legal issues. Before buying a foreclosed home you will have to do thorough research — or hire a title company or lawyer — to make sure there aren’t any additional financial or legal liabilities attached to the home. There may be liens on the property for unpaid taxes, home owners’ association dues, or the home may have been put up as collateral on other loans that weren’t paid. You could become liable for thousands of dollars of debt you weren’t aware were attached to the foreclosed home.

As soon as you take ownership of a foreclosed home, anything that breaks or any problems that arise are your responsibility. This could cost you lots of time and money that you may not have budgeted for.

With a new home, maintenance won’t be an issue for a while with the brand-new appliances and systems. And if something does go wrong in the first year, there is often a new home warranty that guarantees repair or replacement.  

Foreclosed homes also often haven’t been taken care of by former owners who knew they were going to lose the home. In some cases vandals, thieves or even the owners have damaged the home, removed appliances or torn apart walls to remove copper pipes that are valuable as scrap metal.

A foreclosed home could have been sitting vacant for months or years, and if it wasn’t properly secured, there could be significant damage from water, mold, weather or pest infestations. It could cost you thousands of dollars and a lot of time to bring a home that was allowed to deteriorate back to a livable condition.

You also don’t have to spend time or money changing someone else’s design preferences with a new home. No tearing down wood paneling, repainting walls, or replacing outdated flooring. Your preferences are included as the home is built, and they are there waiting for you the day you unpack your boxes.

Finally — and most importantly — don’t forget safety.
New homes have been constructed under a strict set of codes and standards, and have to be thoroughly inspected before the certificate of occupancy is issued and you are allowed to close the sale and move in.

With a foreclosure, you don’t know how many renovations or repairs have been made over the years, or who made them. There could be faulty wiring, weakened structures or other conditions that could be dangerous and costly to bring up to safe and modern standards.

When you are looking for a place to keep your family safe and to build a lifetime of memories, it may be well worth paying a higher upfront cost to get convenience, modern features and peace of mind — and avoid the potential pitfalls of a foreclosure that could turn your dreams of homeownership into a
nightmare.

Home Buyer Tax Credit Repayment Begins for 2008 Buyers

Most home buyers who claimed the federal tax credit of up to $7,500 for buying their first home in 2008 are required to start repaying the credit in 15 annual installments, beginning with their 2010 tax returns.

The credit—some form of which was offered for qualified home purchases in 2008, 2009 and 2010—has different repayment rules depending on when and under what circumstances the home was purchased. As tax season approaches, this may cause confusion among home buyers who received the tax credit.

"It is important that home buyers consult a qualified tax professional to make sure they are receiving all the tax benefits as well as fulfilling the obligations of their home purchase," said Bob Nielsen, chairman of the National Association of Home Builders and a home builder from Reno, Nev. "Homeownership tax incentives such as the home buyer tax credit and the mortgage interest deduction have helped millions of American families achieve their dream of homeownership."

The Internal Revenue Service is sending a letter to taxpayers who claimed the credit that explains if, when and how they have to repay it. There are different IRS letters for different situations, including a purchase of a home in 2008, 2009 or 2010; a sale of a main home; or a change in the use of the main home.

For example, a taxpayer who claimed the full $7,500 first-time home buyer credit on their 2008 tax return will repay $500 as an additional tax on their returns each year from 2010 to 2025, or until the home is sold or is no longer used as the owner's principal residence.

The credit for homes purchased in 2009 and 2010 does not have a repayment requirement unless the home ceases to be used as the taxpayer's principal residence within three years of the purchase.

The home buyer tax credit program expired for the majority of Americans in 2010. However, the eligibility period was extended to April 30, 2011, for qualified service members who served official extended duty outside the United States between Dec. 31, 2008, and May 1, 2010.

The IRS website at www.irs.gov contains detailed information about repayment requirements for the federal home buyer tax credit. For information about the tax benefits of homeownership, go to NAHB's website http://www.savemymortgageinterestdeduction.com/.

EDITOR'S NOTE: NAHB is providing this information for general guidance only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information in this release is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

I know its football season -- but ....Don't Ignore Home Maintenance Chores This Fall

The crisp weather of fall is upon us and football season is well underway. While the prospect of relaxing into a lazy Sunday schedule calls to many home owners weary from the routine of weekend lawn mowing, don’t sleep on essential lawn care and home maintenance tasks that will see you through the winter.

Autumn Lawn Care Basics      

• Fall is a great time for new grass seed to take root, so consider reseeding in selected areas. Reseeding also eliminates areas for weeds to grow in the spring. Fertilize your lawn one more time with a high nitrogen fertilizer to encourage root growth. Look for a lawn fertilizer labeled “winterizing.”
• It’s also a good idea to rake leaves and debris off your lawn in the fall. Put some muscle into it and rake out any areas where heavy thatch has built up.
• Cut your lawn one last time after it has stopped growing, but before the first snow. Adjust your mower setting to cut your lawn to about one inch. Lawn care experts suggest doing the final mowing with a bagger to pick up cut grass, stray leaves and other debris. It also leaves fewer places for Snowmold to develop.

Fight Snowmold

• According to gardenersnet.com, snowmold is one of the most common lawn diseases and typically it shows up in the spring. As the snow melts, it uncovers a lawn that has spent several months hidden under a cold blanket of white, with little air and no sun. In its cold, wet, and dark environment, Snowmold slowly forms, leaving blades of grass dead and brown. New grasses will sprout up behind it, but unless you vigorously rake it away, the new growth will be slow and thin — so it’s a good idea to overseed.

Consider Aerating

• It also may be wise to aerate your lawn. According to Homestore.com, aerating your lawn is a great way to reduce thatch, loosen up compacted soils and pave the way for water and nutrients to reach the roots of your grass.
• Even with meticulous care, lawns can thin out and lose color due to excessive thatch buildup, hard or compacted soils, or periods of high temperature, high humidity, or drought. According to The Lawn Institute, more than two-thirds of American lawns are growing on compacted soils. These soils slowly reduce the amount of oxygen contained in the soil, thus retarding the penetration of both water and nutrients. Aerating and overseeding is recognized by experts as the best treatment to control thatch, reduce compaction, fill-in bare spots and revitalize growth.

Here are a few tips from lawnboy.com to help you determine if you should aerate annually:


 •If your lawn is more than seven years old, and rests on mostly clay soil.

•If your lawn is moderately to heavily used (walked or played on).

•If water collects on your lawn.

While lawn care is a hot maintenance item for home owners who value “curb appeal” or just want to escape the ire of neighborhood community associations, don’t forget there are plenty of other maintenance chores. Here’s a checklist of items you should address before the winter holiday season.

Exterior Tasks

1.Maintain your gutters.
Remove all debris from your gutters so water can properly drain. This minimizes standing water and slows the freeze/thaw expansion process that occurs in cold weather. Clogged gutters can cause landscaping, lawn and shrubbery, walls, foundation, basement, crawl spaces and existing gutter system damage. Consider installing “gutter guards,” which will prevent debris from entering the gutter and direct the flow of water away from the house and into the ground.

2.Trim your trees and remove dead branches.
Inclement weather can cause weak trees or branches to break and damage your home, car, utility lines or someone walking on your property. Keep an eye out for large dead branches in trees; detached branches hanging in trees; cavities or rotten wood along trunks or major branches; mushrooms at the base of trees; cracks or splits in trunks; leaves that prematurely develop unusual color or size; and trees that were previously topped or heavily pruned. If you see any signs of hazards, call a professional tree service.

3.Maintain your steps and handrails.
Repair broken stairs and banisters to prevent falls and injury.

4.Inspect your roof.
Be proactive and prevent emergency and expensive repairs. Things to look for include damaged or loose shingles; gaps in the flashing where the roofing and siding meet vents and flues; and damaged mortar around the chimney (especially at the joints, caps and washes). If you see any signs of damage, call a professional to repair the damage.

5.Inspect your home’s exterior walls.
Look for possible weather-related damage, like cracks and loose or crumbling mortar. Wood trim and siding can suffer from deteriorating paint or become loose. Windowsills may be cracked, split or decayed.

Indoor Chores

1.Check your home’s insulation.
Your attic should be five to 10 degrees warmer than the outside air, otherwise too much heat escapes and causes frozen water to melt and refreeze which can result in a collapsed roof. Don’t neglect your basement and crawl spaces, and well insulate pipes in those spaces to protect against freezing.

2.Maintain your pipes.
Wrap your pipes with heating tape every winter and insulate unfinished rooms such as garages, if they contain exposed pipes. Check pipes for cracks and leaks and have any damage repaired immediately to prevent costlier repairs later. Keep your house warm — at least 65 degrees.

3.Check your heating systems.
Be sure to maintain your furnace, fireplace, boiler, water heater, space heater and wood-burning stove and have your heating system serviced every year. Check smoke and fire alarms and carbon monoxide detectors and change your heating and air conditioning filters regularly.

4.Know your plumbing.
Learn the location of your pipes and how to shut the water off. If your pipes freeze, the quicker you shut off the water, the better chance you have of preventing pipe bursts. Check weather stripping and caulking around windows and doors and replace or repair as needed. Caulking helps keep your house weather-tight, lowers your heating and cooling bills, and can also help keep insects and rodents out of your house. Also look for chipped or peeling paint around window frames and trim. Repair broken glass and loose or missing putty. When needed, use a modern glazing compound instead of putty for a waterproof seal.

5.Clean and vacuum dust from vents, baseboard heaters and cold-air returns.
Dust build-up in ducts is a major cause of indoor pollutants and can increase incidences of cold-weather illnesses. Check all your faucets for leaks and repair any you find. Replace washers if necessary.

By setting aside a few weekend days now, you’ll save yourself from a lot of hassle later. Once your home passes your fall inspection, you and your family can relax and enjoy the coming holidays free from worry about potential home maintenance catastrophes.

Article Courtsey if NAHB http://www.nahb.org/generic.aspx?sectionID=124&genericContentID=125909

How do you get through college and get out with little and/or no debt?

College graduates are drowning in debt. The Federal Reserve recently released data that shows the amount of outstanding student loan debt has now passed the amount of outstanding credit card debt- $829.785 billion versus $826.5 billion.

Howard Dvorkin, founder of Consolidated Credit Counseling Services, Inc. advises consumers how to budget and use credit wisely, but with recent statistics proving that student loan debt is becoming an epidemic for millions of young college graduates, Dvorkin and his team of financial experts are focusing on this pressing issue and providing young consumers with tips to avoiding getting deep into student debt.

The higher education platform in the U.S. is comprised of a wide range of institutions with various and vast programs. Students and parents typically choose colleges based on fluffy rankings via top 100 lists of best colleges and universities. "Although there is merit to those rankings, I warn people not to be so concerned with where schools fall on the top 100 best lists, but to be more concerned and scrutinize the price tag of the college education," says Dvorkin, who is also the author of Credit Hell: How to Dig Out of Debt(John Wiley & Sons).

Helpful tips for getting through college with less student debt:

• Graduate on time: Not many students graduate on time due to class schedule complications, working full-time in conjunction with school, or having to retake a class, many students end-up graduating in four and a half years to as many as six years. Staying in college longer than the estimated equates to needing more money for room and board, books and other living expenses. Students should take classes throughout the summer to have a better chance of graduating on time and with less student debt.
• Get a part-time job: Students should get a part-time job on campus or at a company that is willing to work with their school schedule. This will allow the student to earn extra money for additional living costs and school events without significantly increasing their student debt load. Although small loans of $5,000 here, and $3,000 there, don''t seem like much, they add up quickly. Add interest on unsubsidized loans, and those small $5,000 loans can turn into a whopping $10,000 in no time.
• Use a debit card to monitor spending: Monitor and analyze spending on a monthly basis. With free online banking, students can see where they are spending, which allows them to create a realistic budget for their lifestyle.
• Be realistic about money: If the student''s room, board, and college credit hours only cost $8,000 a semester, don''t take out a $20,000 loan. Thinking rationally and responsibly is an important ingredient to not having a future full of debt. Students need to remind themselves that they will have to pay back the money WITH interest.
• Find grants and scholarships: Students should look for grants because it is money that they DON''T have to pay back. Grants and scholarships are based on various factors including what field study, GPA, race, gender, or type of degree that is being sought. Thanks to the Internet they are much easier to find and they can reduce the total amount of student loans that are needed to survive college. Parents and students should check the Student Aid Wizard from the US Federal Government Department of Education.
• Max out federal loans first: These loans offer low fixed interest rates and better repayment options. Try to avoid private loans, which usually charge much higher interest rates. Private loans typically charge 18 to 25 percent in interest, where as federal student loans offer interest rates not exceeding 8 percent.

Not taking debt seriously, whether its credit card debt or student loan debt, can impair a student''s financial life long after they have walked across the graduation stage. Spend wisely and live within your means and only take out student loans for college credit hours, books, room and board to save financial stress in the future.
Article Courtesy of
About Consolidated Credit Counseling Services, Inc.: Incorporated in 1993, Consolidated Credit provides personal finance educational assistance, financial wellness programs, budgeting assistance, and debt management plans throughout the United States. Consolidated Credit is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA ), is a member of the Better Business Bureau and it ISO 9001 registered and accepted worldwide. For more information about Consolidated Credit Counseling Services, Inc., go to www.ConsolidatedCredit.org.

Should you leave the money to the kids? -- The Downside of Inherited Wealth

Handing down wealth to kids is often a no-win situation.

Parents work hard to make money to leave their kids. Then they have to work to offset the impact of money on their kids’ lives. Even then, the results aren’t always successful (how many Kardashian sisters are there now?).

A new study from Los Angeles-based Bel Air Investment Advisors, surveying wealthy kids and families attending a “next generation” seminar, shows that families are well aware of the the pitfalls of inherited wealth –- yet they keep on passing it down.

The survey found that 60% of the wealthy – or soon-to-be-wealthy – kids identified with the statement that “wealth created discomfort in the family.”

More than half agreed that “wealth has made it hard to live up to the success of parents or previous generations.”

Even if they get the money, the money is a cause for more worry. Nearly two out of three respondents are “very concerned” about growing their wealth.

So what’s the right strategy for money and kids? It depends on the kid, of course. But I have yet to hear a good overall answer. Leaving no money to kids creates its ownresentments (even Warren Buffett of “lucky sperm club” fame has left millions to his kids).

And leaving entire fortunes to kids can wreak havoc on their lives.

Is there a “right” amount of money to leave to kids?

Article Courtesy of
http://blogs.wsj.com/wealth/2010/05/06/the-downside-of-inherited-wealth/

Women's History Month (March 2010) - Financial Secrets from Mellody Hobson ... and it includes buying shoes ....

Her Secrets
Act like a Depression Baby: When the household bills arrive, like her phone or cable, Hobson pays more than what's due, so she won't get another bill for a while. "It may be ridiculous, but I sleep better if I'm prepared for the worst-case scenario," she says.

Aspire to ownership: Hobson takes part of her pay in company stock and saves more with each raise. "I know these days there's a big move to diversify your investments — but if you think you work for a good business that has wonderful prospects, put some of your money there," she advises. "The wealthiest families didn't get there on paychecks alone, but by owning all or part of their companies."

Splurge on something practical: Hobson admits she has too many leather blazers. But in the "very tailored" banking world, she explains, it's how she shows her personality yet stays "acceptable."

Get your $$$ worth: Hobson won't spend on "consumables." This means she avoids pricey restaurants but will splurge on her home and clothes. "I'd rather be sitting on it or wearing it than eating it

As president of Ariel Investments, Mellody is responsible for firm-wide management and strategic planning, overseeing all operations of Ariel’s business outside of research and portfolio management. Additionally, she serves as chairman of the board of trustees for Ariel Investment Trust. Mellody has become a nationally recognized voice on financial literacy and investor education. She is a regular financial contributor on ABC’s Good Morning America, a featured columnist in Black Enterprise magazine as well as a spokesperson for both the annual Ariel/Schwab Black Investor Survey and the 2009 Ariel/Hewitt study, “401(k) Plans in Living Color.” Beyond her work at Ariel, Mellody is a director of three public companies: DreamWorks Animation SKG, Inc.; The Estée Lauder Companies Inc. and Starbucks Corporation. She also serves on the Investment Company Institute’s board of governors and the SEC Investor Advisory Committee, and is a director of various professional and civic organizations. Mellody earned her undergraduate degree from Princeton’s Woodrow Wilson School of International Relations and Public Policy and is a former trustee of the University.

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