|
Welcome
to Homefront News, a quarterly newsletter presented
by Bernie Saul, President, Equitylink Mortgage, Inc.
Archives
November,
2005
Inside
this Issue:
|
Vital
Documents Map
Like
a lot of couples, Karen and I divvy up chores.
I manage our finances (except her checking account)
and she manages the house. She is the head chef
and I am the remodeling contractor and fix up
guy. She makes all the little decisions, I make
all the big decisions, and she decides which one’s
are big and which one’s are small.
Regrettably,
if anything ever happened to me, Karen might have
a hard time finding our important documents. For
all of you couples like us, who otherwise can’t
remember where you stashed the life insurance
policy, or the warranty for
the washer & dryer, this simple solution is
an act of kindness and love. Let me show you how
to create an inventory of your most important
records, so that in an emergency, you will be
able to find or reconstruct them with ease.
Where
do I start? Relax! The whole process shouldn’t
take more than 2-3 hours and will give you enormous
peace of mind. Your documents map will contain
the following:
Location
List of Records… open every box or file
drawer where you keep records, and list the contents.
Example: coffee can in freezer—coin collection;
top right drawer of desk—insurance policies,
tax returns, auto titles.
Photo
Copies of Your Wallet Contents… every
January make a copy of both sides of each credit
card, drivers license, insurance cards, membership
cards, etc. If any of your personal information
is lost or stolen, then register for fraud alert
with each of the three credit bureaus: Equifax
(800-525-6285), Experian (888-EXPERIAN), and Trans
Union (800-680-7289).
Summary
of Accounts… Write down every bank, credit
card, investment, and insurance account that you
have. Be sure to include account numbers, and
contact information.
Safe
Deposit Box Inventory… make a list of
all critical documents (birth certificates, marriage
licenses, stocks/bonds) as well as valuables (jewelry,
photos, awards) that are stored under lock and
key somewhere. Make copies for easy access in
your household files.
Once
you have made this map, store a copy in 3 different
places; a folder in your home or office, with
a family member not living in your home, in your
safe deposit box. You
will make someone feel important!
|
NEW
at EquityLink…
I
am pleased to announce that we have established
a partnership with Citi Financial which gives
us the opportunity to offer true “no-cost”
second mortgage products and home equity loans,
at competitive pricing.
|
|
|
The
Fiscal Forecast…
Oil
prices are finally coming down. The last two employment
reports have been weak. Consumer confidence is down.
The real estate market seems to be cooling and the wholesale
price report shows that prices other than food and energy
are stabilizing. So why higher interest rates now?
For
one reason, the Fed has been raising rates for more
than a year now. The first few increases were moves
to restore rates from historically low levels. Then
we were focused on achieving neutral levels, and now
we are approaching the level at which rates will provide
a drag to the economy.
Why
do we need to slow the economy? Higher energy costs,
higher home prices, and even the effects of the hurricanes
are producing a big inflation scare. Add the fact that
Greenspan theoretically would like to finish the “dirty”
work before he leaves office in January. Certainly,
the Fed will consider the fact that the lower rates
of the past decade could mean that we have lowered the
“benchmark” for tightening the economy.
I
am cautiously optimistic that it will not be necessary
to return to the monetary policies of the nineties which
drove rates above 8 percent.
|
Consumer
Debt Binge
Thanks
to rock bottom interest rates and easy ways to borrow,
consumers have been on an all-out spending spree for
several years. Now, though, there are signs that the
bills may be piling up too high.
US
consumers are more vulnerable than ever to rate increases
because they’ve taken on more adjustable-rate debt
in recent years—meaning monthly payments fluctuate
when interest rates change.
Nearly
half of all consumer debt and 26% of all mortgage debt
is now adjustable, estimates Joe Abate, senior economist
at Lehman Brothers.
And
recent data suggests the debt burden on households is
growing heavier, despite low interest rates. The “debt
service ratio,” which is the Federal Reserve’s
estimate of the ratio of debt payments to after-tax
income, hit 13.4% in the first quarter of this year,
an all time high since the Fed began tracking it in
1980. And, the financial obligations ratio, which adds
in auto lease, mortgage and rent payments as well as
insurance and property tax payments to the debt service
ratio, became 18.45%.
Overall,
US consumers now owe roughly $11 trillion, nearly double
what they owed a decade ago. The vast majority of that
debt growth came from people tapping into their escalating
home equity to take out big mortgages.
For
consumers, this means it’s high time to make a
serious dent in their debts, especially those with adjustable
rate terms such as mortgage loans, home-equity loans,
and credit cards. While it may not be realistic to pay
off some debts entirely, one can at least make more
than the minimum payments each month—and stop making
future purchases on credit.
|
|
Fraud
Alert Update!
Keep
your auto registration and insurance cards on your person—not
in your car.
|
|
Effective
immediately, the conforming loan limit is now
$417,000…
Which is the loan cap where loans become “jumbo”
and subject to higher interest rates.
|
|
|
|
