Now Is The Time To Buy Before 2014 Begins

We mentioned in an earlier blog that interest rates will be staying lower, and it's still cheaper to own than to rent. 

So in today’s blog, we’re pulling out the sledgehammer to give you a nudge if you’re on the fence: This last quarter is a great time to buy a home before 2014.

There had been concerns that the feds would tighten requirements for home loans, but that hasn’t happened yet. Many banks and credit unions have easier criteria to help some people get that home loan they’ve been wanting. If you have good credit and some savings for a down payment, you probably can get your own home. If you stay in your home at least five years, you could profit from the sale.

Home prices aren’t at rock bottom anymore, but they are still relatively low. And they will continue to rise. The Home Price Expectation Survey projects an increase in home values over the next five years to be between 12.3% and 32.8%. If you wait longer, the house will cost more.

There is less competition from home flippers. Investors can’t move as quickly now as they used to coupled with increasing housing prices are making house flipping less attractive. That gives you more inventory. And as we also mentioned, home builders are still building new homes to also increase the inventory.

MSN Real Estate reported that builders are offering aggressive discounts with completed new homes. The nice thing about a new home is you get a warranty not only on the home, but also the appliances.

“[Builders] want to save their credit, save their brand, save their reputation and clear out inventory,” he said. “They can go buy cheap land today with that cash.”

Did we mention it’s cheaper to buy than to rent in most areas? You also get the mortgage interest deduction which isn’t going away any time soon. Plus instead of putting money into savings, you’re building up equity in your home. And you’re avoiding the cost of rising rents. How many of us have met people who had their rents increased recently because the landlords felt they could?
Interest rates aren’t at their lowest, but they are still relatively low. Unfortunately, they could start increasing again.

As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about one full percentage point over recent historic lows.
The National Association of Realtors, the Mortgage Bankers Association, Freddie Macand Fannie Mae, in their July forecasts, have all projected 30-year-fixed mortgage interest rates to be between 4.8 and 5.1% by this time next year.

One percent could mean the difference in the amount of house you can afford.
There’s still time to get your credit in order.  Talk to a reputable loan officer about what your options could be and how much you could afford. It’s still a solid investment if you’re intending on living there for a few years.

What Are Starter Homes?

Are starter homes just for young people?

Are starter homes the same as first homes?
Are starter homes always condos or townhouses?
We hear a lot of questions about starter homes. And as we’ve blogged, it is still cheaper overall to own a home than to rent right now. But if you don’t have a lot of savings or income, does this mean you should buy the little condo and live there for a year or three until you can buy a larger home?
Then, what do you do with your starter home? Should you sell it or rent it out?
Let’s back up.

The Personal Questions

The number one question you need to ask yourself is if you want to be a homeowner. It doesn’t matter if it makes good financial sense. Some people like having someone else be responsible for repairs and maintenance. When that water pipe starts leaking, you the homeowner will need to hire a plumber to fix it.
Once you’ve answered yes, then it’s time to find a reputable loan officer and get preapproved for a loan. That will tell you the ballpark of what you can buy. Remember, though, if you buy a home with your maximum loan amount, you will be house rich and cash poor for awhile.
This may not be a bad thing if you don’t want to move again for awhile, but keep in mind you won’t be going on many vacations and will have to get creative with inexpensive furnishings. If you have very young children, you can use a room as the toy or play room instead of furnishing it.
If you want to buy a starter home, live in it a few years, and then sell it, make sure you buy a house that is affordable, otherwise you will have difficulties selling it to someone else looking for a starter home.
It’s also a good rule of thumb to buy a house with at least two bedrooms if you want to resell the property.
If all you can afford is a one bedroom condo, you may want to look into renting it out when you’re ready to upgrade.

So Where To Buy?

Here’s where we get into the chicken or the egg scenario. A great Realtor will be an expert in an area and help you find a great property but you should know the areas where you’re interested in buying.
So spend some time driving around and looking at open houses. You’re not really there to look at the houses (although, go for it and get some great decorating ideas). Take the time to meet the Realtors and find out which area is their expertise.
Then get referrals from friends.  Don’t rush this. Your Realtor is your partner, and you want to feel comfortable and have a high level of trust.
Your home, ideally, should answer the question of “Is this good for me” in four areas:

• A neighborhood with well-maintained, attractive homes.
• A location convenient to local amenities.
• Close proximity to work.
• A quality school district, especially for first-time homebuyers who plan to have children.

You may not even be thinking of kids right now, but when you buy a home, you should. Why? Well, you may have kids in the future and it also impacts the resale value of the house.
Don’t hesitate to look at new construction as well. There are some really good deals going on because building companies need to sell existing homes so they can finish building the rest of them
Are you ready to buy your first home? Now is still a great time to buy before the end of the year.

Often Overlooked Tax Deductions for Homeowners

Did you do any home improvements last year?  If so, did you know you can deduct the sales tax?  And if you took out a home loan for it, you might be able to deduct the interest.

That’s just one of the twenty one  most overlooked tax deductions that Kiplinger reported on recently, and some others we’ve found for you specifically for homeowners.

 

State Sales Tax

If you think the deduction for state sales taxes expired in 2011, you’re right. But a bill approved this past Jan. 1 restored it, and the restoration is retroactive. Review the IRS restrictions, but don’t overlook deducting big-ticket purchases, including major home improvements.

Mortgage Points

You may want to talk to a professional about this one since it can get complicated. When you refinance a loan for the first time, the points are deductible, with a caveat: You can’t deduct them all at once, as you can with an initial home purchase. Rather, your tax-deductible points must be spread out over the life of the loan.  (And if you just bought a home this year, don’t forget to deduct those points!)
But here’s the important tip: When you refinance again, you’re essentially ending the prior loan, and you can deduct the rest of the points from that transaction with one exception. (You knew there had to be a catch)  If you re-refinance with the same lender, then you roll those as-yet-undeducted points into any new points and spread it out the total over the loan term.

Energy-saving home improvements

Tax credits for some energy-efficient home improvements officially expired at the end of 2011, but like the sales tax, Congress recently revived them, retroactive to 2012. The maximum credit for 2012 is $500 of which only $200 can go towards windows. And that $500 is the maximum you can claim on all of your tax returns from 2006 through 2013.
The good news is that there is no limit for a different credit for homeowners who installed qualified alternative energy equipment like geothermal heat pumps, solar hot water heaters, etc.  That credit can be 30% of the total cost including labor and is valid through 2016.

Improved Home Office Deduction

A tax break that allowed business owners to write off 100% of the cost of qualified assets placed into service expired in 2011. Congress didn’t extend it retroactively, but it came back as a break to write off 50% of the cost of a qualified asset for purchases in 2012.
However, Congress did restore retroactively the ability to write off the full cost of new assets in the year that you put them into service.  The former limit was $39,000, but now it’s up to $500,000.

Mortgage Interest Paid at Settlement

You can find this in your closing statement.  If you have any questions, contact your loan officer. You will have to use Schedule A and itemize.

Property Taxes

You can deduct your state and local property taxes for the assessed value of the real property unless your money is being held in escrow for the purpose of paying the taxes.

Selling Costs

You can deduct simple expenses that you incurred selling a home in the past year including repairs, advertising expenses, title insurance, and broker’s fees.  The repairs can only be deducted if they were made because you intended to sell.

Mortgage Insurance Premiums

If you had PMI (private mortgage insurance) for your primary residence, you might be able to deduct the cost of the premiums. This deduction also includes a second home if it’s not a rental property.
However, it phases out once your adjusted gross income reaches $100,000.  You can only deduct the premiums paid for the current tax year.  And there are some other rules and regulations if your mortgage is provided for by the Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service. Contact a licensed tax professional to find out what you are eligible for.

Home Improvement Loan Interest

If you took out a loan specifically to improve your home, you can deduct the interest because it’s considered a “capital improvement”. However, it has to specifically improve and increase the value of the home.  So new paint or carpeting doesn’t count, but adding on a new bathroom or a roof might.

Construction Loan Interest

Let’s say you’re finally ready to build your dream home on the property you’ve owned for awhile.  You may qualify to deduct the interest.  The IRS has quite a number of regulations on this including that it will be used for personal purposes.
Remember, everyone’s situation is different. Contact a licensed professional to review your particular situation.  If you need to, talk to them after April 15th and file an amended return.
Will you be getting money back this year?  If you are, will you use it for a vacation or put it into savings?

Should You Fix Up Your Home or Trade Up?

With mortgage rates so low, you may be asking  yourself if you should trade up your home to a larger one or if you should look into  an equity line of credit and add on additions to your current home.

Money magazine has a detailed article in their April, 2013 edition that looked at two case studies. For one family, they needed more room than their current home could be expanded to. For the second couple, they were happy adding on for what they needed.
The case studies evaluated how much space was needed, what the budget would be, the ROI, and the impact on the homeowners.  The couple that remodeled their home will have to find a short term rental apartment for the six months that their house is being renovated. The family that traded up has the cost of movers, but they may need additional housing if they sell their home before they close on the new one.

So what should you look into?

Step One – Is Selling a Realistic Option?

If homes in  your area aren’t selling, you may not have much choice. Of course, you could look into turning your current home into a rental, and buying a new home. Again, you’ll need to do some soul searching to decide if you want to be a landlord, and if your finances can afford that option.
Also, if your credit is not very good or you’re buried under credit card debt, you should probably wait until you’re on more stable ground.

Step Two – Do You Want to Move?

If you really love your neighborhood, and the schools, and the shopping, parks, bike paths, neighbors, you may want to ask yourself if you really want to move.  If the answer is no, then you can start to look at how much extra space do you want, and if it’s possible with your current home and lot size.

Step Three – Where Do You See Yourself in 5-10 Years?

If you’re in a small townhouse, and you intend to start a family, you may want to look into buying a new house.  If you’re in a medium size house, but your kids will be gone by then, you may want to stay put.  You may be retiring in 5-10 years and no longer want a house with stairs, or one that’s closer to more senior activities.

Step Four – Crunch Those Numbers

You may want the help of a tax advisor when you look at whether or not you will be subject to capital gains taxes if you sell your current home.  Consider having a home appraiser come in to let you know the current value of your home.  Ask them how it would impact the value if you added on the additions.  Also, you will want to have a home inspection to identify any major or minor repairs that would need to be done before selling.
A good general contractor can help you estimate the costs involved with the remodel. You can estimate costs of green upgrades and other remodeling that you may have been wanting to do.
Figure out if you would need to spend time living in a rental while your home is being remodeled or if you sold your home before you bought a new one.
Get an estimate from movers if it’s free with no obligation.
Calculate your expenses if you sold the home including termite inspection, home inspection, closing costs, any penalties for early pay off of your current mortgage, etc.
Then add it all up.

Step Five – Think and Talk

Spend some time on your own thinking, and spend some time with your partner talking about the whole situation.
And do remember, if you remodel, you will get it exactly how you want it.  However, if you’re not that happy where you’re living, you could find your dream home and have the opportunity to move into it.  Zillow has a useful article with some calculators here.  They also provide a list of the return on investment for remodeling areas of your home.

Step Six – Look Into Financing

Talk to your mortgage loan officer to find out what you would qualify for with a new mortgage or with a home equity line of credit.  They may have some programs available that would be perfect for you.

Households Return to Borrowing Ways

The fourth quarter of 2012 reflected that consumers are starting to feel more comfortable about borrowing after years of cutting debt. Household debt rose 0.3% to $11.34 trillion. Household debt includes credit cards, student loans, auto loans and mortgages.

 

 

New Mortgage Debt Increases

Per the Wall Street Journal:

Americans took out $553 billion in new mortgages to buy homes, and far fewer consumers fell into foreclosure. That nudged up the amount of mortgage debt. The upshot: After years of shrinking, the nation’s mortgage tab—the biggest source of consumer debt—is stabilizing and possibly poised to rise.
The report suggests Americans are recovering from their boom-era debt hangovers. If consumers shape up their finances, they might be more willing to take advantage of historically low interest rates to buy homes and spend more. That could boost hiring and revitalize growth. The economy grew at an annualized rate of only 0.1% in the fourth quarter, the Commerce Department said Thursday.

Economists at the New York Fed noted that the uptick in consumer borrowing using car loans and mortgages seems to indicate that the central bank’s low-interest-rate policies are succeeding.
We Americans still don’t have as much debt as a few years ago down from a peak of $12.7 trillion in 2008. Credit card balances also fell 4% throughout 2012 suggesting that many of us aren’t spending freely on big-ticket items either.

Still, Americans are gradually borrowing more to finance other things like homes and cars.
Overall housing-related debt, including home-equity loans—where consumers borrow against the equity in their homes—was roughly flat at $8.6 trillion late last year. But that masked considerable improvement: A combination of rising mortgage debt and a 13% fall in foreclosures offset an increase in defaults on home-equity loans.

Distressed Properties Prices On Rise As Well

Per TheStreet:

Distressed property prices are rising on the back of strong investor demand and limited inventory, RealtyTrac said in a report released Thursday.
Properties in foreclosure or owned by lenders sold for an average price of $171,704 during the fourth quarter, increasing 2% from the third quarter and a4% from the fourth quarter of 2011.
Short sales — where the borrower and bank agree to sell the property for less than the amount owed — also saw improving prices, helping to reduce lenders’ losses. Short sales in 2012 were short of the loan amount by an average of $81,621, down 7% from an average $87,809 in 2011.
Mortgage technology firm FNC measures the foreclosure discount by comparing the foreclosure sale price to the underlying market value of the property, which is the market price the seller would receive if the property were sold under normal circumstances.
FNC last week reported that the foreclosure discount had dropped to 12.2% in the fourth quarter of 2012, compared to the 25% discount seen at the peak of the credit crisis in 2008 and 2009.
According to that report, higher-priced foreclosed homes were selling for close to market value, while lower-priced homes still suffered an 18.4% discount in the fourth quarter of 2012.
According to RealtyTrac, the average price of a foreclosure sale is at a 30% discount to the average non-foreclosure sale price.
Distressed property sales still account for 43% overall existing home sales, which has the effect of depressing overall prices.
However, the number of new foreclosures have been declining, while the existing inventory of foreclosed homes has been rapidly seized by yield-hungry buyers.

So, mortgage rates are still at historic lows, but may not be for long if more people are applying for mortgages, investment mortgages, refinances, and home equity lines of credit. As we discussed in a prior post, mortgage rates vary based upon a variety of factors, including the number of people applying.
So if you’re looking into whether you should apply now, contact me.  I am a reputable mortgage loan officer who works diligently to stay on top of rates and market factors that impact the mortgage market. I will be able to help you find the right options whether you’re a first time buyer or looking to pick up investment properties.

Refinancing When You're Underwater

 

If your home is  worth less than what you owe, you’re underwater, and that’s not a fun place to be, especially with interest rates at historic lows.

You can make the payments, but you’d rather not spend that much on them.  Here’s what you can do.

Step One: Are you really underwater?

Housing prices have gone up in a number of areas.  Your home may have crossed the threshold.  Or perhaps you received a low appraisal when you purchased the home.  (Please see our other blog post on tips for increasing your appraisal value.)

 

 

Step Two: Are you current on your payments?

If you can show that you’re a good lending risk and all of your obligations are current (see our post on your credit score), lenders tend to be more flexible as you’re not a credit risk.

Step Three: The details

First, figure out who guarantees or owns your mortgage.  If it’s backed by  Fannie Mae, Freddie Mac, FHA, VA or USDA, then there’s a good chance you can refinance.
There is a Federal program called The Home Affordable Refinance Program (HARP) part of the Making Home Affordable program.  They have certain requirements for refinancing:

• You are the owner-occupant of a one- to four-unit home.
• At the time you apply, you are current on your mortgage payments.
• The amount you owe on your first lien mortgage does not exceed 125 percent of the current market value of your property.

If your loan is backed by the FHA, you will want to look into the FHA Streamline Refinance program.  Their requirements are:

• You will not have made a late payment in the past 12 months.
• You will not have completed an FHA Streamline Refinance in the prior 6 months.

If you’ve financed with Veterans Affairs (VA), then you will want to find out more information about that Interest Rate Reduction Refinancing Loan (IRRRL).  Their only requirement is:

• You must refinance into a loan with a lower interest rate unless you are refinancing into a fixed-rate mortgage from an adjustable-rate mortgage (ARM).

And if you’ve been guaranteed by the USDA, there is a pilot program (only available in AL, AR, CA, FL, GA, IL, IN, KY, MI, MS, NV, NJ, NM, NC, OH, RI, SC and TN) called the Single Family Guaranteed Rural Refinance Pilot.  Their requirements are:

• You will not have made a late payment in the past 12 months.
• Your current mortgage rate must be 100 basis points higher than the refinance rate. Example: If your current interest rate is 6 percent, you would need to refinance into a rate that is equal to or lower than 5 percent.
• Make sure you contact your current servicer or the USDA Rural Development Office.

What If I’ve Missed Some Payments

Sometimes, things happen.  You had the flu and forgot to schedule the payment until it was considered late.  Money was tight.  We’ve all been there.  There is a program as well called the Home Affordable Modification Program (HAMP)

The Last Step

The final step for all of the options is to contact me and inquire about your eligibility.  As a Loan Officer, I am trained in all of these programs and monitor the rates to find the best options for you.

Why Mortgage Rates Change So Much

 

Did you ever wonder why mortgage rates fluctuate so much and you’re encouraged to lock in a rate?  Why can’t they just stay the same for a few weeks or a few months.

They’re a little like stock prices in that they change based upon supply and demand, and the rates are affected by inflation rates.  Additionally, they are impacted by the secondary mortgage market.

What Is the Secondary Mortgage Market?

The secondary mortgage market is where loans and servicing rights are sold by market leaders Fannie Mae and Freddie Mac, and also purchased by investors such as mutual fund companies, banks, hedge funds, and teacher and municipal pension funds.  (see more information in this Yahoo! Homes blog post)

What are the other things that impact the rates?

From Homeguides in the San Francisco Chronicle:

Growth

The economy naturally grows and shrinks and is very sensitive to events within the economy as well as outside the economy.  When the economy is on a growth path the demand for money increases and interest rates are pushed upward. The opposite is true when economic growth slows or stops.

Inflation

A key concern during periods of economic growth is inflation. Inflation increases prices and deteriorates spending power in the economy, which slows growth. The implication for future homeowners is that inflation pushes mortgage rates higher as lenders increase interest rates to hedge against the effects of inflation on profits, making home buying more expensive.

Federal Reserve Board

Economic activity is measured nationally to determine the appropriate interest rate.

Money Supply

Although the Federal Reserve is unable to directly set interest rates, the agency can influence rates indirectly by increasing or decreasing the supply of money in the economy. By increasing the money supply, the Federal Reserve puts downward pressure on interest rates. Decreasing the money supply puts upward pressure on interest rates. Consequently, if the Federal Reserve decreases interest rates, mortgage rates come down and borrowing for a home purchase is cheaper and encourages home buying.

We’ve written posts on how this is going to impact not only mortgage rates but fees that are charged.  With all of these factors, rates can change frequently.

So What’s This Mean For You?

Work with a reputable mortgage loan officer.   A good loan officer will diligently monitor interest rates for their clients, and advise them of opportunities to manage their mortgage debt at a better rate. They will also let you know up front about industry trends that may impact your rate, and offer recommendations as to the best time to lock in a rate during the process.

January 30, 2013

Your Best Deals In February

It’s hard to believe we’re almost at the end of January.  We hope you got some good deals for your home, but if you didn’t, there’s plenty more for February.

There are some major events in February that will yield some good bargains and opportunities, so plan ahead.  However, there are some things you may want to wait on like the iPad mini since Apple usually releases new products end of April or early May.  At that point, the prices on the prior model will drop.  Also, if you wait until July, there should be some great prices on refurbished models.  Also, there is a mobile show in Spain in late February when the companies introduce their new mobile phone models, so wait to purchase a new phone until March when the prices on the older models will go down.

Still A Good Deal

It’s still a good time to buy 2012 electronics like HDTVs and some computers.
Tax software still has some pretty good deals.
There is still a large inventory available on outerwear like winter coats.
It’s also still a good time for things like air conditioning, boats, motorcycles, etc.  And it’s a good time for wedding supplies since most people still get married in the Spring and Summer.
For your home maintenance, you should be able to find discounts from roofers and other home improvement or remodeling contractors.  The weather may delay the completion of the project, but you should get a good discount as the contractors like to stay busy.

Valentine’s Day Sales

Now, we don’t really mean buy things before Valentine’s Day as the discounts will be minor.  But after Valentine’s Day, you should be able to get some significant discounts on jewelry, lingerie, candy, cards, decorations, etc.

President’s Day Sales

During the three day event, you should be able to find some incredible bargains like 80% off of bedding, apparel, tools and furniture.  Other stores will tack on an additional 20-30% off existing sales
Furniture manufacturers release their new models in February, so you should be able to find some great deals when the stores want to clear out floor space.


Resources
MSN Money Best Deals in February
DealNews: Best and Worst Things to Buy in February
Lifehacker: Best Buys In February
Yahoo! Shine: 5 Things to Buy in February

How Often Does Your Credit Score Change?

January 24, 2013

This is a question we often get during the mortgage process.  A credit check may have uncovered some incorrect information, and you get it updated.  So how fast will it change?

What is a Credit Score?

Per the reporting agencies (TransUnion, Equifax, and Expperian), your score is a snapshot of your current credit report as well as how many pulls you have had on your report.  For example, from Yahoo:

“Right now it’s 11:40 my time,” said Rod Griffin, director of public relations for Experian, when I interviewed him for this story. “Let’s say a lender requested your credit report right now. If you apply for credit (again) in an hour your credit report could be different,” he says, referring to the inquiry that would have been generated when the first lender accessed my credit information.
“Credit reports can change as often as every day if there is new information provided to the credit bureaus,” says Barry Paperno, community director for Credit.com.
If you want to be technical about it, you don’t really have a credit report on file with the credit reporting agencies to begin with. Explains Griffin: “We have information from each of the lenders, and we go out to our databases and compile information from those databases when a credit report is requested. Your credit report represents a snapshot of your credit history at any given point in time.”
That means that the information is available in the credit reporting agencies’ (CRAs) databases at the time a credit report is requested is the information that will be reported. “You don’t have a credit report until you apply for credit and it’s requested,” Griffin says.
But it’s not like checking your online bank account and seeing the debit card purchase you made a few minutes ago in your running balance. “It’s not real time,” says Griffin.

So What Do You Recommend?

• Set up payment reminders so you never have a late payment again.  Do remember that a lot of credit card companies want the payment a few days before the due date to have time to process it.  It’s not fair since they say it’s due on a certain date, but it’s best be a few days early.
• Set up automatic payments using online banking where you can.
• Reduce the amount of debt you  owe.
• Check your credit report annually.  You can get your free report here.  Now, this won’t give you a score unless you pay for it.  But you can at least look for mistakes which do happen.
• Get your credit report 3-6 months before applying for a major loan.
• Be patient.  It can take 30-60 days for information to be updated on a credit report after you’ve made changes (like paying off a student loan, or had disputed information resolved)

8 Surprising Things That Impact Your Credit

And what would a post be without some trivia.  This is from Credit.com blog:

1. Renting a car
2. Applying for credit (even when you aren’t rejected)
3. Disputing an account
4. Having credit cards, but no loans
5. Just a single late payment
6. Closing an account
7. Divorce
8. Late library books

Three Scams to Be Aware of and Avoid

 

In a prior post, we talked about what you need to do if your identity is stolen.  In today’s post, we’ll look at some common scams going around currently, and resources for learning more about them.

Scammers rely upon the natural trust of people.  A good rule of thumb is always to trust but verify.

 

 

Secret Shopper Scams

This sounds like a great idea: be paid to shop and report back on  your experience. And there are legitimate companies out there.  Unfortunately, there are many more scammer companies.

From the Federal Trade Commission (FTC):

Don’t Pay to Be a Mystery Shopper

Dishonest promoters use newspaper ads and emails to create the impression that mystery shopping jobs are a gateway to a high-paying job with reputable companies. They often create websites where you can “register” to become a mystery shopper, but first you have to pay a fee — for information about a certification program, a directory of mystery shopping companies, or a guarantee of a mystery shopping job.
It is unnecessary to pay anyone to get into the mystery shopper business. The certification offered is almost always worthless. A list of companies that hire mystery shoppers is available for free, and legitimate mystery shopper jobs are listed on the internet for free. If you try to get a refund from the promoters, you will be out of luck. Either the business won’t return your phone calls, or if it does, it’s to try another pitch.

Don’t Wire Money

You may have heard about people who are “hired” to be mystery shoppers, and told that their first assignment is to evaluate a money transfer service, like Western Union or MoneyGram. The shopper receives a check with instructions to deposit it in a personal bank account, withdraw the amount in cash, and wire it to a third party. The check is a fake.
By law, banks must make the funds from deposited checks available within days, but uncovering a fake check can take weeks. It may seem that the check has cleared and that the money has posted to the account, but when the check turns out to be a fake, the person who deposited the check and wired the money will be responsible for paying back the bank.
It’s never a good idea to deposit a check from someone you don’t know and then wire money back.

Delivery Email Scams

You’re waiting for a package that you ordered and you get an email appearing to be from FedEx stating that they couldn’t deliver your package and to please click on a link to reschedule delivery.  Unfortunately, it’s a trap to get your personal information, or to download malware onto your computer.
From the Better Business Bureau (BBB.org)

Fake delivery emails: Phishing emails enter consumers’ inboxes claiming to be from reputable companies like UPS, Federal Express and others. They claim to link to tracking information, but are really just filled with phishing links designed to get the consumer’s personal information for fraud.

BBB tip: Don’t click on any links or attachments in emails until the sender of the email is confirmed as the company. Red flags include typos, grammatical mistakes and unsolicited emails from unfamiliar companies. When in doubt, call the company the email came from to verify the legitimacy.

Some email programs will show you the actual link when you  hover your mouse over it.  Often, you will be able to see it’s a completely fake domain.

Gift Card Scams

You bought or received a gift card but the number was written down by someone.  Once you buy it and activate it, they can clean it out of the funds before you can buy.
From Scambusters:
8 tips to protect yourself from a gift card scam:

1. Don’t buy gift cards from online auction sites. Since this is a large source of gift card fraud, these cheap gift cards may well be worthless to you. Sure, some of these cards are real, but many are stolen, counterfeit or used. It’s not worth the risk.
2. Only buy gift cards directly from the store issuing the gift card or from a secure retailer’s website – no matter how much cheaper they may be somewhere else. If you do buy a gift card online, make sure you buy it from the place that you plan to use it.
3. Don’t buy gift cards off of publicly displayed racks in retail stores. In addition, don’t assume that because gift cards are inaccessible to the public, they are safe. After all, store employees can participate in gift card scams too.
4. Always carefully examine both the front and back of a gift card before you buy it. If you can see a PIN number, put the card back and get a different one. If a gift card looks like it could have been tampered with, don’t buy that gift card.
5. Always ask the store cashier to scan the gift card in front of you. This will guarantee that your card is valid when you buy it and that it reflects the balance you just charged it with. This will also protect you from crooks who exchange worthless cards for the cards you think you are buying.
6. Always keep your receipt as a proof of purchase as long as there is money stored on the gift card. Since many retailers can track where the gift card was purchased, activated and used, if the card is stolen, some retailers will replace the card for you if you have your receipt.
7. If possible, register your gift card at the store’s website. Although not all stores offer this option, you can uncover any misuse of your gift card sooner and report it more quickly.
8. Finally, never, ever give your Social Security number, date of birth or any other unneeded private information when you purchase a gift card. No reputable company will ask for this info.

Five Keys for Successful Goal Setting

Maybe this is the year you repaint all of the rooms in your home.  Or maybe the year you finish the five projects that you’ve started over the last ten years.  Maybe this is the year you’re going to set up a garden for some fresh, organic vegetables.  Or the year you try to get your orange tree to produce good oranges instead of the bitter ones for the last few years.

Maybe you’re going to set up a business We have two prior posts that can help with that:

Thinking of Starting a Side Business?
Part 2: Thinking of Starting a Side Business?

Step One – Where You Goin’

The more clearly you can see where you want to end up, the faster you’ll get there.  Some people create vision boards where they cut out pictures of their goal achieved so they can see it every day, and feel great about their goal.  Others meditate for 15 minutes in the morning and evening about what their lives will be like when they achieve the goal.  The key is to get emotionally involved, and very detailed about what you want, how it will impact you, and how great it is now that you’ve achieved it.  Yes, your brain is only so good.  You need to think as though you’re already there.

Step Two – What Actions?

Vic Johnson often uses the example of running in the Boston Marathon.  There are some things you need to do every day, like running.  And there are things that you only need to do once, like fill out the application.  But if you don’t fill out the application, you won’t get to your goal of running in the Boston Marathon.
The key is to identify what has to be done in order to reach your goal.

Step Three – Schedule It

Sometimes, a task can be overwhelming.  Such as if you want to increase your earnings by $25,000 this year, pay off $15,000 of credit card debt, or if you want to lose 40 lbs.  But if you divide it by 12 months, the goal becomes more manageable.
Another example is if you want to increase your customers by five over the next ten weeks.  And if you get one customer for every seven referrals or twenty meetings or one hundred mailings, then you know how many you need to do (35 referrals over ten weeks is only about 3 or 4 per week).
The key is to feel that warm glow inside and say “I can do that!”

Step Four – Plan It

Successful people know what they need to do that day.  When you leave work, write down the five things you need to do the next day.  Or when you go to bed, write down on a list pad the top items you need to achieve tomorrow.  This works in a few different ways.  First, when you sleep, your brain starts problem solving, and when you wake up, you’ll have some ideas on how to get things done faster.  Secondly, if you reach a lull in your day where you’re just goofing around on Facebook or reading emails that aren’t moving you forward, you can pull out your list and remind yourself of what you need to do next.
David Allen also recommends keeping the next action associated with your task list.  For example, if you want to grow tomatoes, your next big action may be to contact your Master Gardener association and find out which ones grow best in your area, when you should plant or start from seeds, etc.  So the next step would be to find out how to contact your Master Gardeners.  Then, when you have a moment between meetings, you can sit down and google it.
The key is to always know what you could do next.

Step Five – Keep On Keeping On

This is the key of persistence.  We can be really good for a week or two, but it’s not always easy over the long haul.  That’s why goal achievement experts recommend smaller chunks with clear metrics.    Let’s say you want to pay off $12,000 of credit card debt over the next year.  Due to interest, it’s going to be more then $1000/month.  And let’s say you’re choosing to swap your large latte for a small latte, and put the difference towards paying down.
Yes, you’ll see the amount decrease each month on your statement, but it could get difficult on week three when you really want that large coffee because it’s cold and you want extra get up and go.  How to get around this?  Use a common fundraiser technique and create a thermometer or some other visual aid that you can fill in and see just how far you’ve gone.

Things to consider

Some people have difficulties with a year goal.  For them, the experts recommend setting a 90 or 100 day goal with a big reward when you hit it.
When you’re feeling weak, remind yourself of the goal and why you want to achieve it.
At first, focus on one major goal at a time.  If you want to increase your income and lose weight and repaint the house, you’ll probably fail at everything because you’re too scattered.  Once you’ve learned to flex that goal setting muscle, then you can start working on two things, and you’ll know how to focus completely on what you’re working on, and then let it go when you focus on the next thing.
And finally, give up that all or nothing mentality.  If you’ve been on a quest to lose weight and you go out for a bit special dinner, don’t get mad at yourself because you had the cheesecake!  Enjoy every last bite, and then get back on your plan the next day.  Plus, remember that it’s impossible to gain five pounds in a day.  It’s water bloat from the sodium, and if you drink water, do gentle movement, and enjoy your fruits, veg, and lean protein, you’ll see your weight continue to go down.
So what’s your big goal for January?