Home Loan Focus

Archive for the ‘Saving Money’ Category

Saving money during a move is as simple as how involved you can be. If you make yourself available, you can save hundreds of dollars on even the simplest of relocations. One of the best things you can do is pack your belongings yourself, utilizing local businesses (liquor stores and produce depts.) boxes and old newspapers. Another great option is borrowing tools instead of buying them. For example, why purchase a tape dispenser when you’re probably only ever going to use it once.

One of the more important things you can do to help the affordability of your move is to be decisive on what needs to be moved to the new location versus the garbage, I mean do you really need ten different boxes full of different types of the best acne treatments?. In my own opinion, the best way to avoid this fiasco is to do as much of the moving yourself. You are far less likely to transport something you don’t necessarily need if you are doing the lifting and carrying yourself.

Source: Movinghints.com

Are you considering possible relocation in the near future? Are you beginning to stress out about packing and staying organized? Well, as long as you didn’t just buy the moon, the process of relocating shouldn’t be that difficult. Lets just take a second, gather up our composure and run down a quick list of supplies that will ensure a smooth, stress free, transition for your belongings.

First, you need to think boxes. Bigger is NOT better when it comes to packing boxes. Sure it may take fewer boxes to move everything, but you are going to have a heck of a time moving them. I recommend visiting the liquor store or local produce dept. They usually have a plethora of manageable boxes that are just the right size. Second, go out and buy some packing tape. Get more than you think you will need. If you are thinking two rolls, buy 3 or 4 (trust me). Lastly, be sure to label all your boxes with a bright, easy to read magic marker. That way, you or your moving company will know what is inside and where to put it. This will save you time and energy near the end of the day.

Oh, don’t forget to save up old newspapers to pack your glassware. I almost forgot it in my post, so you could too!

Source: flylady.net

This week I am preparing to list my own home on the market.  That preparation is starting by emptying my house of my belongings and furniture.

It also involves finishing one of the home improvement projects that never happened while I lived in the home. 

New Carpet Installation

While we lived in the house we installed thousands of square feet of ceramic tile.  OK, it was more like ‘a thousand’ but felt like ‘thousands’.  That left about 1500 square feet of floor space with twenty year old dingy carpet left to be replaced.  Plus, that carpet was stained from the home improvement projects and cut up a bit from ripping into floors for plumbing upgrades and installing that great looking tile.

So when we went to make the purchase to install the carpet, we had a different perspective than we thought we might have.  Instead of choosing between wood floors and something fancier, we were trying to choose the carpet that would look good enough to sell our house yet still possibly hold up under the strains of renters, should we need to rent the place out in the advent that it did not sell.

Now, our house is literally a mess as we are packing, and we need to have the furniture out of the house by tomorrow morning (or at least pushed to the side or possibly out of some of the rooms so the carpet guys have a place to start).

All in all, our carpet installation cost $2400, which should include tax.  We picked it up on a special 18 month no interest no payment deal.  We could have paid for the carpet but free interest is free interest and the way the economy is going, $2400 will likely only be worth $1900 in today’s dollars 18 months down the road anyway.  So we’ll put the more valuable money today into something else and pay the loan back tomorrow with devalued US dollars.  (Note if we are wrong about that, the economy will be better and we will be better off anyway, so it is a win win no matter what happens.)

We opted for a fairly bright looking carpet color that has a pattern that should not show dirt very well.  The idea is that it will look good for prospective home buyers, but will be durable enough for renters should we turn down that alley way.  So that is it for now.  I won’t have any spare money for Titleist golf balls, but at least we are one step closer to moving this house, and my packing break is now over too!

So you have told your company, “Yes, I’ll relocate” having decided that it was your best course of action.  How do you keep yourself working efficiently and productively without spending all your extra money after hours on things you don’t need because you are not used to living away from your family in corporate housing?

Its easy to do but difficult to execute on.  You have to plan ways to keep yourself busy. 

Pack away some DVDs, pack up a Wii, or buy a Nintendo DS for the airport.  Get some audio books as well.  These are all great things to give you some peace and relaxation while keeping your mind off what every you are missing.  Games, audio books and movies can be a Swiss Army knife of mental engagement and help you keep your sanity through some long hours at night.

You need to try and focus on things that will not make you go out and about.  For example, take some DVDs with you to help avoid a trip to the video store where you might then proceed to go shopping and waste some money. 

Better yet get a Netflix account and have them deliver the movies to you, or try Movielink where you can download and watch movies on your laptop.

Odds are during a relocation when you are separated from your family, you will work more hours.  Try and dedicate some of that extra time to long term projects that you can bank or sand bag for a rainy day a few months down the road.  You might work like crazy the first month or two because you have nothing better do do.  But 3 months later when your family joins up with you, you’ll have no spare time and that hard working example you made in the early days might be tarnished by a severe slow down in month 3. 

When that time comes, pull out some of those projects that you completed, but banked and roll them out precooked to your team or company!  This is good for you and your career.  Plus, some of your employees or coworkers may not be able to keep up with you during the first 2 months.  This will enable you to appear to work more at their pace, but still be extra efficient and productive for a longer period of time, matching your pace to theirs through your peak and your valleys.

I don’t recommend it all the time, however there are certain situations where you will benefit from taking everything you own when you move. If your company is footing the bill for your corporate relocation, and your budget and the success of your company are not tied to the amount spent on your relocation, then you should definitely consider taking everything you own when you move as opposed to selling it or donate in it or just giving away.

When you get rid of your stuff during a move and arrive at the new destination and move in, you will be tempted to buy more stuff. That’s going to cost you a lot of money as you work to outfit a new household. That means that you be spending a lot of money that you would’ve not spent otherwise and your move will suddenly become that much more expensive.

If your stuff was so bad already you would’ve gotten rid of its and bought something new. There’s no reason to get something new when you move just because you’re moving, unless you have to pay for the shipping or freight of your stuff and that cost is more than what it would cost to buy something new.

Gas prices are higher and freight is higher as well, but it is still often times cheaper to keep what you have than it is to buy something new. So don’t feel afraid to call someone to shlepp your stuff and tell them to ‘Move It All’, whether you are moving east, south, west or even directing your movers New York to, you will probably save money by keeping your stuff.

For many people in the corporate world, at some point or another your company is going to ask you to relocate somewhere around the country and offer to foot the bill. This may sound like a great deal because they’re offering to pay for you to move, but the reality is there are thousands of dollars of hidden expenses involved in this process.

When your company offers you a chance to move, you need to make sure that they’re also offering you a major payraise. If you’re not going to see a payraise of at least $15-$20000, odds are this move is going to take many years to pay off or for you to at least break even. I realize were going through a recession right now and so many people will be tempted to take what they can get and keep what they have, but with inflation increasing you definitely don’t want to move across the country for the same amount money that you received today.

You have to also watch out for all of those third-party contract companies that are there to assist you with your move. They are probably working on a very cozy contract with your company and they don’t necessarily have your best interests in mind and maybe not even the best interest of your company. Even though your company is paying for some of their services make sure that you give them a critical look at every decision they make on your behalf. They might offer to put you in corporate housing for a month for example, charging your company $4000 a month for your rent. That’s a lot of money and if you don’t get out of corporate housing on time you may have to pay that $4000 a month rent bill. So before you move in a corporate housing make sure you can get out on time!

You have to be careful when it comes to storing your stuff as well. Your company might offer to store your valuable possessions for that month while you’re in corporate housing. However if you are unable to close a deal on a house for example within 30 days you could be stuck paying the bill for corporate housing as well is paying the bill for additional storage of your stuff.

So where possible don’t sell your original house until the last minute if you can. Keep your stuff in a place where it’s cheaper free as long as you can. You might even consider trying to avoid corporate housing even if you have to pay the bill. It might not be bad for a week or two while your house hunting, try and stay away from it as long as possible.

Consider also that your company is footing the bill and that money is coming out of their budget. If your bonuses tied to the budget of the new department that you’re moving to and you are inflating the cost of that department your chances of receiving a bonus which could be worth a lot more than a couple thousand dollars could be jeopardized by your own actions.

There are many other areas where relocations can cost you some serious money so make sure you keep a critical eye open to everything that’s going on and try not to get rushed in your decisions while you’re moving. Sometimes the best move is not to move at all.  You might be better off looking for a different job, even one that pays slightly less in the location you live in now.  A move can cost you a great deal of money in the first few years following the move.  Taking a couple thousand dollar pay cut with the option of staying put, could actually enable you to move financially ahead.  Then you can use some of that money that you saved from staying put, to take the family on a couple Disney cruises or invest some money in solar panels for the house or a better telecommuting setup so that next time around, you will be prepared to not move and to work from home permanently!

US News and World Report offers up a good list to help reduce your borrowing cost that we have paraphrased below.

1) Borrow as little as possible.

2) Check your future salary to see what you can afford in the future.

3) Shop around for the lowest rates.

4) Fill out the FAFSA to qualify for low-cost federal student loans.

5) Don’t charge tuition or other school expenses to your credit card.

6) Consider nonprofits offering access to loans such as MOHELA and NHHEAF have offered lower-cost loans. Graduate Leverage, a cooperative, is also offering competitive terms.

7) See if you can qualify for one of the many loan repayment or loan forgiveness programs, so your employer—not you—pays off your student debts. 

How to Reduce Your Borrowing Costs – US News and World Report

In addition to these tips, its also very wise to do some paid work while you are in school.  It generates income to help keep your debt and borrowing down while building up your experience.  Many companies are having a very difficult time finding students to work for paid coops these days.  The work may not always be glamorous (that’s why its called work) but it can save you a fortune in interest and give you some great work and life experience rather than wasting money on funny t-shirts and concerts.

Gold hit $1009 an ounce this week.  Right now the dollar is dropping in value around the world and the dollar value of gold is going up.  If you are trying to buy a house right now, inflation could begin to be an issue on two levels. 

The first level is that a house is a real physical thing.  It is ‘real’ estate or ‘real’ property.  Money, cash is just an item with a perceived value.  When you try to buy real stuff with something of diminishing perceived value, you have to spend more and more of the money to actually buy something.

That takes a toll on banks as well.  Interest rates are set according to a banks need to make a profit on loans, to cover risk on loans and to fight inflation.  If inflation increases (as the value of the dollar decreases) then banks will have no choice but to increase mortgage interest rates.  Otherwise when you repay a loan to a bank, you are essentially paying them less in real money than what you borrowed because the money they gave you at the origination was worth something and that same amount of money when repaid is worth less.

There is however something that you might have that may be worth more in cash now than when you originally bought it.  That something is gold.  If you bought a gold ring a few years ago when gold was selling for $380 an ounce, that ring could be worth three times as much now.  If you bought it a couple years ago when gold was worth about $600 an ounce it could be worth twice as much very soon.

If you are looking to buy a home, (something real and useful) you might be able to come up with the down payment by selling some gold, possibly jewelry or other items.  Similarly, you could use your jewelry to pay off your existing debt, or buy anything that is something real whether you are upgrading your home with a small business phone system or something else that you might be able to use earn more money, to earn a living or to survive a recession while inflation attacks your cash.

Bloomberg.com: Canada

We previously tried adding some credit and finance calculation tools a couple weeks back.  The tools were sponsored by credit companies, and they did not deliver what we were looking for.  You’ve probably seen teaser calculation tools in the past.  They ask you for some information to calculate a new payment or what if scenario on your finances and before you know it, you have no answer and they are sending your personal information off like a loan application.  Well, we think that is bogus. 

If you want to check out our sponsors, more power to you, but we want you to do that with your eyes wide open and preferably when you have all the facts in front of you and all your ducks in a row.  When you negotiate a new mortgage or even a refinance, you need to have everything in your finances straight and tight if you are going to actually get the highest rate possible.

With  that in mind we have established several tools to help you with this without having to send any information at all to a sponsor.  If you have ideas about additional tools that we should add, please let us know and we will try and develop it.  The bottom line is that we want you prepared to get the best deal no matter if you are financing a jumbo mortgage in San Francisco, looking into the real estate Branson market for a possible relocation, or refinancing credit cards into a home equity loan (not a good time to do that in general.)

For many people their home is their largest investment.  Second to that investment many people often times have life insurance.  These days most people that have life insurance have it in the form of Term insurance.  This means they pay a monthly, quarterly or yearly rate for life insurance.  If they pass away, a sum will be paid to their heirs.  However, there is no cash value to this policy.  If they stop paying the coverage stops and they are out all the money they paid in over the years.

There are several other forms of life insurance such as whole life insurance that essentially builds up a cash value to the policy.  These policies can be borrowed against.  As many Americans are facing foreclosure, some people are turning to life insurance like IRAs and 401ks as a source of money to pay their mortgage.  This can serve to protect their largest investment (their home) in the short run, but if there is no end in sight then it could be a bad move.  Depending on your state, your life insurance, even your retirement could be protected under bankruptcy laws (consider OJ protected his retirement from his former in-laws through Florida’s protective bankruptcy legislation).  However, if you borrow on your life insurance to pay your mortgage payments and still go bankrupt then you could end up with out a house and without life insurance too!

The same thing goes for IRA’s or 401ks.  It can also apply to people considering the possibility of tapping their savings or life insurance to come up with a down payment.  This is just as risky, but these people are presumably not so close to bankruptcy and buying into a market at current levels could make a good return on their money . . . IF the market has bottomed out!