I am back! I was on vacation for a little over 2 weeks, and it was wonderful to be able to see a little of the world. My husband and I did our best to shore up the economies of Greece and Italy, but, honestly, I think it will take more than our efforts to make a difference. Wouldn’t you know it, when we left we exchanged for Euros when the Dollar was weak and when we came back, we exchanged back to Dollars when the Euro fell. Shorted on both ends!
A friend of mine forwarded the following link to me, shocking me no end. Sure, it’s easy to read in the papers how many trillions the US is in debt, reading numbers on the paper has no real impact; it doesn’t sink in until you actually SEE what is happening right in front of you. Here is the US debt clock: Take a deep breath and click on this: http://www.usdebtclock.org/ Scary, huh? Since this scary picture is forever imbedded in my mind, I felt that this is a good time to drive home some of the issues take us into that “debt” reality.
IS YOUR CAR DRIVING YOU OUT OF YOUR HOME? America is CAR country, the bigger, the more expensive, the more gadgets, the better. The common mentality is that you need to keep up with the Joneses and changing cars every couple of years is the way to do so. But how much is this status symbol costing you? Is the payment for your car(s) (and it is a plural for most of us) driving you to the brink of foreclosure on your home? Think about it: everyone is so concerned with the pain of mortgage debt that they forget that car debt can be just as much of a burden. Click here for a thoughtful article on this issue. As for me, my Jeep is 14 years old and in the early years I have gone through all the kinks and replaced major parts, I’ll be darned if I give it up and start all over again with something else. When you see it on the road, don’t laugh; it’s “debt” free!
IS THERE LIFE AFTER FORECLOSURE? Now that’s an interesting question. Sure there is, but when does it start? A foreclosure will critically affect credit scoring, making it difficult for a person to get re-established. But the ability to qualify again for a new home may take many years, and it may depend on the reason for the foreclosure in the first place. Was it a job loss? Was it a divorce? Was it related to health issues? In reviewing credit histories, lending institutions closely scrutinize the “why” and how much control the Borrower had to allow that step. If the foreclosure was a strategic decision to walk away to minimize future economic disadvantages, then life may not resume so quickly after all. In all matters, and especially money matters, it behooves us all to consider carefully what we need in the future before we make a decision here in the present. Click here.
RENT OR BUY? For those who are seeking to take advantage of the 2010 First Time Home Buyer’s credit, or for those who are now in a position to purchase, regardless if it’s the first or tenth time, there are certain questions to ask before we take that first step. Click on the article here. For instance: Are you ready for all the property maintenance that comes with homeownership? Compared to stocks, where we look for a decent return on investment (ROI), will you find the same for a home? Are you nervous that your Landlord may change, rents go up, or even the property being foreclosed on? Consider your answers carefully.
I have seen a number of clients who rushed to take advantage of the 2009 Home Buyer’s Credit and are now living to regret their impulse buy. They found out that the “bargain” was not that much of a bargain; that now they have to get under the sink and stop that leak; and what do you mean my taxes went up?? All those expenses other than the mortgage that were originally just numbers on a paper were slowly squeezing them dry. So I caution those who are considering: make sure you look at all the factors before you blindly jump right in!
BUT IF THE DECISION HAS BEEN MADE… and you are purchasing a home, here are some mistakes others have made from which you should learn, as published in CNNMoney.
1. Not checking your credit score first for errors or unknown debts
2. Buying a car first, which lowers your scoring
3. Skimping on that all important home inspection, especially when buying REO or short sale properties
4. Not hiring an attorney when there are special issues
5. Not putting in contingency clauses that will allow you to back out without loss
6. Not budgeting for special insurance needs, like flood, earthquake, or even fire in high fire hazard areas
Personally, I can add a couple of more things:
7. Not budgeting correctly your loan and other closing costs before the closing
8. Not budgeting correctly all your monthly house related costs, including mortgage, taxes, insurance for after the closing.
VACATIONING IN THE PIIG ZONE: As promised at the end of the last issue, here are some very brief thoughts on traveling in the PIIG Zone (they even use this moniker on CNN International!): We loved Santorini (Greece), but a visit in the afternoon would have been better; the ancient city of Ephesus (Turkey) is eye popping; we got really good at taking the vaporettos in Venice – once we figured out the direction we were headed; there is nothing more beautiful than the Coliseum and Roman Forum at sunset; I hate cobblestones and I think all of Rome was paved with them; in Rome we spent an outrageous $20.00 for a 1 fish filet, 2 McChicken sandwiches and a large fries (McDonalds); we ran into 2 different protest demonstrations in 2 different countries (Greece and Italy) so yeah, the people are not happy; and finally, the airport attendants shepherding us through check-in and customs at LA’s Tom Bradley airport were rude and obnoxious and created a really bad image of our country for those just arriving.
BUSTED! A final personal note: one second of inattention will be causing me months of grief. The day after I got back from vacation, I managed to fall off a ladder and fractured my foot in several places. So for a minimum of 6 weeks I am resigned to a big black boot and crutches 24/7. My doctor has already said that my foot will never be the same again and has limited the type of exercise that I am allowed. I may never wear high heels again (fate worse than death)! Let this be a lesson to all: all it takes is one second of inattention to cause an accident and regrets, maybe for the rest of your life.
Happy Summer!
~Living is more a question of what one spends than what one makes~
Marcel Duchamp, Artist (1887-1968)
