Saturday, February 23, 2013

Rejected: Loan Denial

You’re all set to move out of your apartment, your parents’ house, or even the house you’re renting to grab your share of the American dream, your own home. Perhaps you’ve been picking up those free real estate books at the grocery and doing the online mortgage calculator to get a feel for what you can reasonably afford. You’ve talked to your husband, fiancĂ©, or even to your friends about your future home. Everything is coming together, you may have your eye on a Cute Cape Cod or Ranch, but your loan or pre-approval is turned down.

Real estate agents do not want to waste their time showing houses to people who are not pre-approved. Banks used to give loans away to everyone who walked in the door from instant approval to 0% down. The rash of foreclosures and loss of financial integrity are the price the banks paid for their previous freewheeling attitude. Now, they are digging themselves out of a hole, and unfortunately you may be the victim of their sudden reluctance to lend money.

Currently 25% of the people who apply are denied. That is a whole lot of people. Here are some of the reasons, but not all.

1.       Self-employed- you own your own business. It could be a great business, but business revenue can vary. You will need at least two years of previous taxes to show a steady stream of income.


2.       Credit Score. Quicken Money site advises you should have a credit score of 640 to get a loan. That will get you a loan with a hiked up rate, definitely not the low one your bank advertised. You really need one around 750. The higher the better.


3.       No Down Payment- It helps to have at least 5% down payment.  You might think you have five percent, but consider closing costs and taxes.


4.       You’re New to the Housing Market- Some banks and mortgage companies want a rental history first, with rent being in a similar ballpark. Ex: If rent is only $350 and you are moving into a house with $1200 payments, the bank will worry that you never paid this much money per month before. You might not be able to pay the higher mortgage payment.


5.       New Job-just got a great job with a fabulous salary? It’s not the time to try for a home. Wait at least 6-12 months first.


6.       Debt- if 45% of your income is going to debt, then you can’t afford a house. This takes in consideration college loans, credit cards, outstanding loans, and car payments.


7.       Shopping  for the Best Mortgage Lender-if you go through the process of pre-applying with different lenders, then your credit takes a hit as your credit score is ran, which in turn lowers your score. Thinking of buying a house, then don’t take out any new credit cards either.


8.       Too many bills, not enough income.


9.       Recent Big Purchases- a car, boat, or RV would do it. Secure the home loan before making the big purchases.


10.   Wrong Lender-you picked a big name bank who scrutinizes you very carefully. A small home town lender may not be as picky. Often your realtor may recommend someone who works with her. This person is more invested in you getting the loan.


11.   Wrong House-often people want more house than they can reasonably afford. Often young couples want to start out with a home that took their parents 30 years to acquire.


12.   The Fixer-upper Home-Banks don’t want homes on their hands they can’t resell if you default.


In the end, even though you want your own house it may not be the right time for you.

Keep in mind, houses come with immediate expenses. Recently, my family purchased a new residence. We had to come up with money to fix the furnace, stove, and garage door. Everything did pass inspection, but these were items waiting to break down. We thought mistakenly we’d only have to paint. With planning your household budget, make sure you set aside funds for repair and upkeep.

Wednesday, February 13, 2013

How much is that Doggy in the Window?

My children pleaded for a puppy. I used to defer the canine acquisition by saying we couldn’t afford it. How much does it cost to have a puppy?

*Even a shelter pup runs about $60, but this includes puppy shots and neutering, which is a deal.

* You can buy a purebred dog that will run at least hundred dollars, usually more. Registered dogs are for those who expect to breed or show dogs professionally. Read not a pet quality animal.

* Be aware if you buy your dog from a pet shop or puppy mill. It is likely to have various canine diseases, which will result in expensive vet bills, and the possibility of your dog still dying shortly after purchase.

*Equipment such as stainless steel bowls, collar and leash, dog bed, and kennel, and a few chew toys will cost $100-$200 depending on the dog’s adult size. If someone gives you a dog with all the associated supplies, ask questions.

*This brings me to the hidden expense of animal destruction. Yes, housetraining may involve ruined carpets. Teething may put the bite on furniture and electrical cords. My hound ate through five electric blanket cords and one laptop cord.

Read up on the breeds, some breeds never give past the chewing stage. Some are a bit of loners and do not make good pets.

*Long hair breeds, even curly breeds need regular grooming 3-4 times a year at the cost of $40 a visit.


(These may be slightly higher in your area. Remember when I said the shelter pup was a bargain. He already has his first shots, probably wormed, and has a voucher to be neutered.)

Puppy shots (series of 3)
Fecal exam and worming
Rabies (1, then every 3 years)
Spay (one time expense)
Neuter (one time expense)
Heartworm check
Preventative pills
License ( depends on where you live usually                  $2-$10)  

·         Some people make the mistake that their dog doesn’t need shots.  Consequences include not being able to have your dog groomed, kenneled, participate in any type of dog show, or even the Dog Park, and possible expensive bills to treat illnesses.

·         License is another thing most people don’t consider. Consider if the dogcatcher picks up your dog and he has a license he’ll be held for about a week. If not, he can be put down immediately.  Without a license, it is as much as $70 to get your dog back. Think of the horror of not be able to afford to rescue the family pet from certain death.

These are some ways to trim expenses.

·         Large pet stores and Tractor Supply often offer shot clinics and checkups at reduced prices. A large dog can get a five-way shot for about $58.  (Compare this to the $88-$113 at an office visit.)

·         Groom your dog yourself. This is a good reason to go with a shorthair that never needs a haircut.

·         Bargain shop for supplies. You might be able to snag a kennel or dog dishes at a yard sale.

·         Keep your dog healthy, by keeping its vaccinations up to date, fresh water, and dog food.

The cost of owning a dog varies on size and grooming needs expect to pay around $350-$650. ( This does not include the price of the pooch.) 

Suddenly a cat sounds like a better bet. Be aware cat expenses are around $422-$620.

This does not include the price of the cat, but the bulk of the expense is litter. Litter will run as much about $100. More than one cat will cost more.

Before buying or accepting a pet, be sure you have the time and money to take care of it. A older, housebroken dog might be a better bet for your nerves and the carpet.

Sunday, February 3, 2013

Valentines Values


This year Valentine’s Day falls on a weekday. This won’t stop millions of people heading out for a romantic dinner. I am sure many of you are going to do just that. The problem with this besides reservations being hard to get, and waits up to two and half hours along, is the service won’t be great. That wonderful dinner you hoped to experience might turn into a whinefest about the dinner itself. It might be time to rethink this plan.

1.       Possible dinner at home with candles and china.

2.       Dinner out on a different day other than Valentine’s  Day.

So why not roses, most florists hope you’ll think roses. Some florists sell the sought after bouquet for $99. Pro-flowers advertises their roses for 19.99, but it will end up being more like $38 once all the additional charges are added on. Sometimes the flowers don’t make it to the intended party on Valentine’s.

*If you send them to your sweetie’s work, she may be gone by the time they are delivered.

* Drivers do not wait until someone opens the doors and often leave the roses on the doorstep,  to freeze at this time of year. I never go through my front door, as do many other people, so I wouldn’t see flowers if they were there.

*You are better off delivering your own flowers. Consider Krogers floral department for fast and easy.

 How about something different? Something that is pertinent to your sweetie? Maybe he’s a Nascar fan, and would like a t-shirt reflecting his favorite driver. It doesn’t have to be anything big or expensive. It just has to reflect your feelings. Guys usually refuse to wear anything with hearts on it or mushy sentiments. Don’t buy it if your feelings will be hurt if he won’t wear it.

Inexpensive Ways to Say I Love You

1.       Smilebox card including your photos together.

2.       A special dinner made by you

3.       Candy, cookies, or other goodies made by you.

4.       A framed picture of the two of you.

5.       A framed memory box of tickets, receipt, photos of a special event.

6.       A poem or song written especially for your beloved.

7.       A coffee basket-two cups, specialty coffee, and flavored creamer, and biscotti

The basket idea can be adjusted to whatever is your beloved’s favorite items.

8.       A coupon book with coupons ranging from a car wash to a back rub, or even a kid free day.

9.       There’s always breakfast in bed.

10.   If your sweetie is a reader, a day spent in Half Price Books or other book store might thrill her. A gift card to the store would work too.

11.   Something really special. Name a star after him. You will get a certificate and photo of your star’s location.

All most people want is just to know you remembered, and if given the chance they’d do it all over again. Don’t get anxious and overthink it, just let your sweetie know how you feel.