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. 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…
Read More: Mortgage
Finance Findings is Binary Dollar’s periodic link dump.
Send your submissions for Finance Findings to henry@binarydollar.com.
Read More: Around The Horn
Geezeo joins the ranks of Mint.com, NetworthIQ.com, and Wesabe.com as a social personal finance site. The USP (unique selling point) of the site is their mobile accessibility.
It works like this:
Henry’s walking down the street. He stops and wonders if he’s got enough for a Big Mac. He sends a text message to the ether and waits. Moments later a text message comes back with all of my account balances that he setup at the website. Welp. Looks like Henry will have to go another day without food.
It’s targeting students or recent graduates for their service but anyone can use it. They target them because they’re more “connected”. It’s also US-only. Sorry Canada. They have compatibility with 6000+ institutions.
Here are a couple of improvements I would make:
- Instead of texting the word “geezeo” to get current account balances, make it a common word that I can enter without switching to “abc” mode.
- Instead of texting the word “geezeo update” to update my balances, it should already be updated when you retrieve your current account balances (see item 1). Why would anyone want non-updated information? Deprecate this.
- Send a pie chart or graph or something via MMS if possible.
There are more things but here’s the one sentence summary: “Geezeo tracks your money automatically and there’s also discussion boards as well.”
Is it useful? Sure. Consistent awareness of your financial situation is very important for building wealth or getting out of debt.
Will I use it? Probably not. Calculating my net worth at the end of the month is good enough for me.
-h
PS - Sorry about the absence. I was doing pull-ups this entire time.
Read More: Money · Saving · Spending
referral
Finance Findings is Binary Dollar’s periodic link dump.
Send your submissions for Finance Findings to henry@binarydollar.com.
Read More: Around The Horn
Umbrella insurance is a type of insurance that provides extra protection beyond your auto and homeowners insurance. Let’s say that a tree on your property falls and completely destroys a neighbor’s house. You get sued and are ordered to pay $500,000 in damages, but your insurance will only cover $300,000. If you don’t have umbrella insurance, you’re going to have to cover that additional $200k out of your own pocket. Unless you like giving away a couple hundred thousand dollars (if you do, give me a call), you’re probably going to wish you had umbrella insurance. For around two or three hundred dollars a year, you can get an umbrella policy that will provide you with up to $1 million of umbrella coverage.
Read More: Insurance · Tips
Finance Findings is Binary Dollar’s periodic link dump.
Send your submissions for Finance Findings to henry@binarydollar.com.
Read More: Around The Horn · Money
Fidelity offers Age-Based 529 investments. Just pick a year.
The best time to save for your children’s college tuition is when your child is born. A small investment now will help them cover their college costs in the future. Say you invest $10,000 when they’re born. Assuming a 12% annualized return, it will grow to about $80,000 by the time the kid’s 18 years old and ready for college. $10,000 investment to pay for $80,000 in school costs? Not a bad price to pay for college at all.
Watch out though: You don’t want a bear market to challenge your kid’s future. You’ll want to secure that fund as cash as the child gets older. Use an age-based 529 investment to save for college.
Age-Based 529 Plans automatically adjust from aggressive (mostly stock investments) to conservative (mostly bonds and cash) as the child comes closer to their project college years. All you have to do is pick a projected year and the fund will handle the rest. The downside is that you pay a bit more in management fees since it’s an actively managed funds. The upside is that you get to spend more of your time playing with your kid instead of balancing their investments.
Read More: College · Family · Investing · Money · Saving · Tips
Finance Findings is Binary Dollar’s periodic link dump.
Send your submissions for Finance Findings to henry@binarydollar.com.
Read More: Around The Horn · Money
The sooner you and your spouse can agree on where the family money goes, the better. The best time to figure out finances is before you’re married when both of your money is separate.
I’m getting married in November. The shared finances discussion has begun. It will continue for the next few months until we’ve covered all of the ground rules. These premarital financial discussions should minimize the fights while we’re married.
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Read More: Debt · Family · Investing · Money · Mortgage · Real Estate · Retirement · Saving · Spending · Tips
Buy books that are used. Most are in good condition. You’re buying the book for the words so don’t worry that the spine is a little bent or the pages are a bit folded. I just bought a $35 dollar book on Amazon.com for $15 bucks used.
Some people are irked by buying books used. They’re afraid that the previous owner had abused and neglected their book before putting it on the market. Rest assured: They’re nothing wrong with most used books. The previous owner is selling it because they need the money. Or they do what I do and buy books and then not read them.
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Read More: Frugal · Saving · Spending · Tips
