Home Finance Loans News

6 worst home fixes for the money

nadim — Wed, 22 Feb 2012 18:57:49 +0000

It’s the magic phrase uttered by almost anyone who’s ever considered the cost of home remodeling: “We’ll get it back when we sell.”

Unless you keep those projects practical, though, you might just be kidding yourself.

For example:

Steel front door: Good.
Master suite addition costing more than the average American home: Bad.

Every year, Remodeling magazine looks at the hottest home upgrades and renovations and calculates just how much owners get back with they sell.

Upkeep is more popular than upgrades these days, says Sal Alfano, editorial director for Remodeling. These are the projects that often recoup the biggest slice of expenses at resale. But prices and returns do vary regionally, he says.

Ever wonder what brings the lowest return when you plant that “for sale” sign? Think high-dollar, high-end and highly personalized add-ons that make you drool. Like a totally tricked-out garage built from the ground up. Or a super luxe master suite addition. Or the home office redo designed just for you.

Here are the six improvements that rank dead last nationally when it comes to getting those renovation dollars back at resale.

Article source: http://www.bankrate.com/finance/real-estate/6-worst-home-fixes-for-the-money-1.aspx

Best value for your investment?

nadim — Wed, 22 Feb 2012 06:21:26 +0000

The year has started with a bang as far as stock market investors are concerned. Yesterday, the Dow briefly crossed 13,000 for the first time since May 2008, and many traders are starting to consider whether investors are missing out on a significant rally if they stay on the sidelines, according to CNBC.

The Dow, with its limited index of 30 stocks, might signify more of an emotional rally in the minds of advisers, but the broader SP 500 provides the bigger picture. It, too, has been rallying, ending the day Tuesday at 1,362, within striking distance of a three-year high.

Data compiled by Bloomberg since 1962 show the SP index to be the cheapest ever when compared to bonds. Since 2009, profits have doubled, pushing the earnings yield to 7.1 percent when compared to the 10-year Treasury rate. Even so, investors pulled $135 billion out of stock mutual funds last year, the fifth year in a row they’ve continued to flee equities in favor of low-yielding cash.

Why the reluctance to invest in equities? As Wall Street erases the losses of the recession, only slight improvements in employment and housing are conspiring to keep the economy growing at a sluggish 2 percent overall. Many investors are also shell-shocked by the steep losses they incurred in 2008 and 2009 and prefer to sit on the bench rather than take a chance.

But don’t let fear prevent you from building wealth. If you have a significant portion of your money in cash and fixed-income and the time horizon to invest, equities may help you reach your goals faster.

Are you considering moving money from safer investments into equities?

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Article source: http://www.bankrate.com/financing/wealth/best-value-for-your-investment/

Call counsin Vinny, quick!

Tim — Wed, 22 Feb 2012 00:19:38 +0000

Oscar-winning actress Marisa Tomei could use a little help from a crafty New York lawyer to settle an insurance lawsuit brought by a notably eccentric neighbor in her Greenwich Village apartment building.

If this sounds like the setup for an outrageous John Waters movie, you’re half right: the notably eccentric neighbor in question is none other than the pencil-thin-mustachioed auteur director of such B-movie classics as “Hairspray,” “Cry-Baby” and “Pink Flamingos.”

Three Chubb Group insurance companies representing Waters, another downstairs neighbor and a New York bank filed suit recently in Manhattan against the “My Cousin Vinny” star for $128,756 in water damage they claim was caused by a September 2010 leak in Tomei’s 11th floor apartment at 59 West 12th St. in Greenwich Village.

The suit claims that Tomei’s “negligence” caused $15,079 damage to Waters’ condo in 8D, $80,451 damage to unit 10BC owned by Michael Baron, and $33,227 to unit 10D owned by the Bank of New York Mellon. Exact cause of the leak was not specified in the lawsuit.

According to The Huffington Post, Waters said via email that the standard insurance claim was out of his hands and that he had no animosity toward his actress neighbor.

Although Tomei won the Academy Award for Best Supporting Actress for her role as Mona Lisa Vito in the 1992 comedy, lawyer Vinny Gambini, played by Joe Pesci, was her fiance, not her cousin, in the film. The pair was summoned to the deep South to help spring Vinny’s cousin Bill, played by Ralph Macchio.

Water damage can be tricky and litigious in an apartment or condo setting. Typically, when the source of the water originates from outside the home, your homeowners insurance will cover the property damage and your insurer will then subrogate, or recover damages from the responsible party, on your behalf, as Chubb is doing in the Tomei case. In other scenarios, the apartment or condo association’s insurance can come into play as well.

One reader’s comment to an Insurance Journal story on the Tomei lawsuit did offer an intriguing suggestion as to the cause of the damage:

“I wonder if Costanza was somehow involved.”

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Article source: http://www.bankrate.com/financing/insurance/call-counsin-vinny-quick/

Does Americans’ love of plastic trump savings?

nadim — Tue, 21 Feb 2012 12:11:48 +0000

In Bankrate’s February survey, just more than half, or 54 percent, of Americans said they have more money in emergency savings than in credit card debt. This compares to 52 percent last year. One in 4 Americans has more credit card debt than emergency savings, up a smidgen from 23 percent last year.

And this year, 16 percent of survey respondents said they have neither credit card debt nor emergency savings. “This means they’re only one unplanned expense away from having high-cost debt,” says Greg McBride, CFA, Bankrate’s senior financial analyst.

“Those most likely to have more in emergency savings than credit card debt are households with incomes of $75,000 or more, college grads and retirees,” says McBride. And parents are most likely to have more credit card debt than emergency savings.

Not surprisingly, he adds, “Those most likely to have neither credit card debt nor emergency savings are households with annual incomes of less than $30,000, those with a high school education or less and the unemployed.”

However, the news is not all grim. After all, savings do triumph over credit card debt, since twice as many Americans have more savings than debt. Sheyna Steiner’s story, “Survey shows savings triumphs over debt,” offers more analysis on this survey question as well as excellent tips on how to pay off debt while building savings.

Survey’s other findings

Americans’ outlook on their personal finances remains unchanged from January, according to Bankrate’s survey. February’s Financial Security Index holds at 97.3, but that’s still the highest level since June 2011.

Every month, Bankrate asks Americans how they feel about vital financial matters pertaining to job security, savings, debt, net worth and their overall financial situation. Any index value below 100 indicates lower levels of financial security versus 12 months ago. When Bankrate first started the survey in December 2010, the Financial Security Index reading was 94.6. The following month, it spiked to 98.5, drifting lower from there until May, and then reaching its nadir of 92.3 in August 2011. The index has yet to register above 100, which would indicate more optimism than pessimism.

Bankrate’s Financial Security Index gauges how Americans feel today versus a year ago on vital financial matters. An index value below 100 indicates declining levels of financial security; a value above 100 reveals higher levels of security compared to 12 months ago.

Article source: http://www.bankrate.com/finance/consumer-index/financial-security-poll-0212.aspx

Home equity loan rates for Feb. 2, 2012

nadim — Mon, 20 Feb 2012 23:59:55 +0000

Home Equity

5.45% (line of credit)
6.73% (loan)

Rates on loans backed by home equity were mixed in Bankrate’s weekly survey.

The typical home equity loan rose 12 basis points to 6.73 percent. The typical home equity line of credit, or HELOC, was 5.45 percent, unchanged from last week. A basis point is one-hundredth of 1 percentage point.

Article source: http://www.bankrate.com/finance/news/home-equity/interest-rates-020212.aspx

Romney for the rich?

nadim — Mon, 20 Feb 2012 05:40:38 +0000

Republican presidential candidate Mitt Romney defended his comment last week that he’s not concerned about America’s poor by explaining that his campaign focus is the majority of those in the middle class. But in an interview with CNN, he also said he’s not concerned about the very rich either, because they’re “doing OK.” The very poor, he added, have a “safety net” in the form of public assistance, while the very rich presumably have the resources to recover financially.

Photo courtesy PR Photo. Republican presidential candidate Mitt Romney

Romney is part of the elite class of wealth, with an estimated net worth of $250 million, and though he is attempting to align himself with the struggles of middle-income Americans, the rich may see him as an ally too.

One of the hot-button issues for both the rich and the middle class is taxes. President Obama has made it clear he’s no supporter of tax breaks for the rich, saying, “Washington should stop subsidizing millionaires,” in his State of the Union address and pledging to tax those with million-dollar incomes.

Romney’s stance on taxes isn’t as unkind to the rich. The fifth priority in his economic plan is to “pursue a conservative overhaul of the tax system over the long term that includes lower, flatter rates on a broader base.” In addition to maintaining the existing tax cuts on capital gains and income, he has talked about eliminating capital gains and dividend taxes for investors with incomes below $200,000, which will help the middle class rebuild their investment portfolios.

Romney has already received the support of one high-profile billionaire. Donald Trump announced his endorsement of Romney from the Trump hotel on the famed Las Vegas strip. Whether that support hurts or helps the presidential hopeful is not certain yet. One Republican consultant in Reno, Nev., Robert Uithoven, told the Boston Herald that Trump’s high-profile image of conspicuous wealth may hurt Romney if he’s seen as out of touch with average Americans.

Do you think Romney will make a difference for middle-income Americans?

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Article source: http://www.bankrate.com/financing/wealth/romney-for-the-rich/

Savings bonds stuck in feud over inheritance

nadim — Sun, 19 Feb 2012 23:26:05 +0000

Dear Linda,
Your grandparents’ savings bonds aren’t part of a tontine in which the last surviving child gets all the money. Because the registered owners have both died, the bonds would be part of the estate of the last to die. The disposition of the savings bonds is controlled by either that person’s will or, if that person died without a will, the state laws of intestacy in his or her state of residence. It seems entirely reasonable that your aunt’s estate is entitled to half of the savings bonds proceeds, assuming your grandparents only had two children.

While your grandparents’ estates, aside from these bonds, are settled, it’s not unusual for an estate to have to be reopened to include assets that weren’t reported in the original accounting of the estate, especially for items such as savings bonds.

In the absence of a living beneficiary, the disposition of the savings bonds depends on whether there was a court-appointed representative to the estate and whether that court-appointed representative has been discharged. The TreasuryDirect website has the specific information as to what is required to redeem savings bonds in these situations.

Since you say the bonds are Series E savings bonds, the bonds have matured and are no longer earning interest. If your grandparents deferred paying income tax on the interest income until maturity, there could be a big tax bill associated with cashing in the bonds. There is also the cost of meeting the requirements of the Treasury Department to cash in the savings bonds. Your stepcousin’s attorney could be doing you a favor in arranging for the bond’s redemption by navigating these requirements.

Article source: http://www.bankrate.com/finance/savings/savings-bonds-stuck-inheritance-feud.aspx

Poor pay more for auto insurance

Tim — Sun, 19 Feb 2012 23:26:04 +0000

The poor pay more for auto insurance and that ain’t fair. That’s the executive summary of a new study by the Consumer Federation of America funded by the Ford Foundation that calls for an end to de facto price discrimination based on questionable rating factors.

CFA executive director Stephen Brobeck and director of insurance J. Robert Hunter unveiled their findings at a press teleconference on Monday. The study focused on the economic impact of auto insurance on low- and moderate-income consumers, defined as the roughly 40 percent of us with annual incomes below $40,000.

It wasn’t exactly breaking news that many low-income drivers struggle to afford required car insurance these days; all states except New Hampshire mandate liability coverage and four-fifths require uninsured motorist coverage. What was shocking was how badly these drivers are being treated by the auto insurance companies.

“The cost of minimum liability coverage varies by state, but is affected by a number of factors that are beyond or nearly beyond the driver’s control, including age, gender, residence, education and occupation,” says Hunter. “Many low- and moderate-income drivers, because of largely uncontrollable factors, pay a high price for auto insurance, even if they have maintained a perfect driving record and drive relatively few miles.”

To prove it, CFA did the following real-life math using a 30-year-old single male from St. Louis with a perfect driving record who commutes 20 miles per day:

If he was an executive in an exclusive suburb, his rate was $558.

If he only had a high school diploma, his rate went up $71.

If he had been unemployed for a period, his rate went up $84.

If he moved to a lower-income ZIP code, his rate went up $347.

If he paid on installments, his rate went up $60.

If he was uninsured for a period, his rate went up a whopping $638.

If he didn’t have a car for a time, his rate went up $337.

“This drives what used to be a $558 rate to $2,095, an increase of $1,537,” notes Hunter. “None of these factors are affiliated with risk, yet you can see that his rate went up almost four-fold just by changing a few of those factors. Insurers have never provided a thesis on many of these factors on why they measure risk. We think these factors are surrogates for income, which is forbidden to be used by all the states, and the use of these proxy factors should not be allowed in our estimation.”

To make matters worse, in several states, including Arizona, Texas and Arkansas, some major insurers charged some drivers higher premiums for the state-mandated minimum coverage than for the higher limits that wealthier drivers might purchase.

“This is like charging more for a little box of cereal than a big box of cereal,” says Hunter. “It appears that some insurers are discriminating against purchasers of the minimum coverage who are disproportionately lower-income car owners.”

As for solutions, the CFA suggests several:

Lower minimum liability requirements.
Lower rates for required minimum liability coverage.
Consider establishing a low-income auto insurance program.
Add some risk factors, such as miles driven, that might lower the insurance rates of lower-income drivers.
Hold a National Association of Insurance Commissioners hearing to address auto insurers who charge more for minimum coverage than for standard policies.

“It is urgent that state insurance commissioners act to reduce disparate treatment and reduce disparate impact,” says Brobeck.

What are your thoughts on the CFA findings?

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Article source: http://www.bankrate.com/financing/insurance/the-poor-pay-more-for-auto/

To pay for your kid’s college, HELOC or refi?

nadim — Sun, 19 Feb 2012 05:05:21 +0000

Dear Kelly,
First, take a look at your family’s overall financial picture. Can you afford to take on this level of debt without derailing your plans for retirement? A college education isn’t a birthright, and there’s something to be said for the children having some “skin in the game” when it comes to being responsible for their college costs.

That said, assuming the children are at or near college age, I think a cash-out refinance is better in today’s interest rate environment than a home equity loan. Bankrate’s national average as of Feb. 2, 2012, for a 15-year fixed-rate mortgage is 3.34 percent and 4.12 percent for a 30-year fixed-rate mortgage. A home equity line of credit, or HELOC, is at 5.45 percent.

If you can find a deal on a HELOC, it might work out better. The advantage to the HELOC is that it has lower closing costs, and you don’t have to take out the full credit line at closing. You can write checks against the credit line to pay the tuition bills. The disadvantage, besides the higher interest rate, is that it is at a variable rate that can go higher over time.

I’d rather see you lock in the low fixed rates and invest the cash until needed for college costs than pay the higher interest rate on the HELOC and put yourself at risk for even higher interest rates in the future.

Article source: http://www.bankrate.com/finance/refinance/pay-college-heloc-or-refinance.aspx

2012 list of failed banks

nadim — Sat, 18 Feb 2012 10:53:17 +0000

–>

This list shows the U.S. banks that have failed this year, and is updated weekly.

Most of the banks are acquired, and the cost to the Deposit Insurance Fund, or DIF, which backs up the Federal Deposit Insurance Corp.’s promise to reimburse customers, is shown in the right column.

Check your own bank’s safety usingÂ Bankrate’s Safe Sound bank ratings.

These are the U.S. banks that failed in 2011.

Article source: http://www.bankrate.com/finance/banking/2012-list-of-failed-banks.aspx