How To

Apache is functioning normally

After this week, who is ready for an escape? While I’m not actually going anywhere (there’s too much to do here), I am going to take this weekend to fantasize about life in far away places. Like this Swedish apartment photographed by the incredible Jonas Ingerstedt.

This space takes you through a moody and muted journey. Each surface is adorned with collectables making you feel as though you are stepping into a museum. Every design detail serves a purpose, but feels casual enough to be livable. Tones of green so soft, make the backdrop feel neutral enough to layer in pops of color. Rich textures and unexpected details add warmth, comfort and a touch of whimsy.

From an interior design standpoint, what makes this space so interesting is the way that the space is utilized from the floor to the ceiling. Each surface, even the lowest point in the room, is decorated. Art is placed on the floor instead of hung on the wall. A bookshelf starts at the lowest point and reaches to the top of the ceiling. A gallery wall fills up an entire room. Every surface from the coffee table, to the dining table, to the kitchen island is accessorized with such intention. From every object to each floral arrangement, you never question the purpose of so much detail in one small space. That in my opinion is design done right.

This design proves that neutral does not have to be tones of white, but instead can be your favorite vibrant hue in a muted form. Different tones of green whisper from room to room, acting as the perfect contrast to the pops of red sprinkled throughout the space. I love how this space has an abundance of natural greenery and floral arrangements translating the muted green color palette into something much more tangible. While I’ve gone uber neutral in our house, I’m thinking a layer of this understated green might be the perfect addition.

SHOP THE POST 1 Page Plant Hanger | 2 Mid Century Bamboo Rocker | 3 Agate 4 Book Ends |4 Wool Blend Throw | 5 Florence Sofa | 6 Cream Pillow | 7 Modern Candelabra | 8  Marble Coffee Table |9 Wide Armed Dining Chair | 10 Glass Cone Bottle

This space is the perfect example of how to push the limits of design, I hope you are inspired to run with a color palette that pushes your boundaries. After seeing this space, you won’t regret it!

For more inspiring home tours, CLICK HERE.

%%youtubomatic_0_0%%

Source: apartment34.com

Apache is functioning normally

If you have someone counting on you financially – or even if there is someone in your life who may be required to pay off your debts and your final expenses in case of the unexpected – then you likely need to have life insurance.

You can use life insurance proceeds for any number of circumstances, such as paying off a home mortgage and credit card debt, as well as replacing lost income. Replacing lost income ensures loved ones can continue to pay their everyday living costs, in turn, keeping those you care about from financial hardship.

When you are shopping for life insurance, you want to make sure that you choose the right type and amount of coverage for your specific needs. You should also ensure that the life insurance carrier you obtain the policy from is reliable and stable financially so that your loved ones can be more assured that they will get the funds that are owed to them. One insurer that fits these criteria is the Baltimore Life Insurance Company.

The History of The Baltimore Life Insurance Company

The Baltimore Life Insurance Company was initially founded back in 1882, as The Baltimore Mutual Aid Society of Baltimore City. Five men began the company with a starting sum of $260.93 in company asset. At that time in U.S. history, many people purchased life insurance coverage so that they or a loved one would not have to buried in a potter’s field, as versus replacing lost income of a breadwinner.

While it took several years for the company to start growing, by the year 1900, it was starting to pick up steam. At that time, the company’s name was also changed to The Baltimore Life Insurance Company of Baltimore City.

Over the years, the Baltimore Life Insurance Company has held steady through several recessions, and even depressions, in the United States. But it has persevered. Today, Baltimore Life Insurance Company insures more than 300,000 policy holders – both families and businesses – in communities across the country.

With its home office now located in Owings Mills, Maryland, the Baltimore Life Insurance Company operates in 49 of the U.S. states, and in the District of Columbia. The products and services of the Baltimore Life Insurance Company are marketed through 13 different career agency sales groups that operate in Maryland, Pennsylvania, Ohio, South Carolina, and West Virginia, as well as through an independent sales division.

The company’s independent marketing organizations’ ability to develop strong relationships with clients is the key to the success of clients as well as the insurer. To achieve this, the Baltimore Life Insurance Company offers extensive support, such as:

  • A competitive product portfolio
  • An electronic application and underwriting process (known as INSpeed)
  • Stellar customer service

The key market segment that the company targets is those who are in middle-class America.

The Baltimore Life Insurance Company Review

As of year-end 2016, the Baltimore Life Insurance Company had invested assets of nearly $1.2 billion – which equates to approximately 4 percent more than year-end 2015, and total assets of $1.241 billion. The company’s surplus stood at more than $81 million, which is a significant increase over the year prior.

The company also increased its new business sales in 2016, by 8 percent over its 2015 figures. Given its normalized sales and its death claims, the Baltimore Life Insurance Company continues to demonstrate positive operating income.

Today, just as it was when the company began in 1882, the Baltimore Life Insurance Company serves the mutual interests of its policyholders, its agents, its employees, and the communities around it. Commitment to excellence guides the company’s actions to the following:

  • Financial discipline
  • Making a positive difference
  • Integrity and respect
  • Openness and honesty

The Baltimore Life Insurance Company serves in some ways, including through sponsorships and employee volunteerism. Just some of the charities the company supports include the United Way and the Community Grants Program, as well as regular blood drives via the Red Cross.

Insurer Ratings and Better Business Bureau (BBB) Grade

Based on the company’s financial stability, and its ability to pay out its policyholder claims, the Baltimore Life Insurance Company has a rating of B++ (Good) from A.M. Best Company. This rating is fifth out of a possible 16 ratings.

Also, even though the Baltimore Life Insurance Company is not a Better Business Bureau (BBB) accredited company, the BBB has given this insurer a grade of A+. This is on an overall grading scale of A+ to F. Over the past three years, the Baltimore Life Insurance Company has only had to close out three customer complaints through the Better Business Bureau (and only one of these was in the past 12 months). All three of the complaints centered on problems with the company’s products and services.

Life Insurance Coverage Offered Through The Baltimore Life Insurance Company

The Baltimore Life Insurance Company offers a long list of personal life insurance options to choose. These can help to address both individual and family needs. These policy offerings include the following:

  • Secure Solutions Protector – Level Term Life Insurance – The Secure Solutions Protector level term life insurance coverage offers initial level premium periods of 10, 15, 20, or 30 years. After that, the policy may be renewed on an annual basis. All of the death benefits and the premiums are fully guaranteed to the insured’s age 100.
  • Home Secure – Simplified Issue Level Term Life Insurance Coverage – This plan provides both a death benefit that can be used by beneficiaries, as well as the option for living benefits, which can be applied if the insured becomes disabled or is diagnosed with a terminal illness. These living benefits may also be used if the insured is confined to a skilled nursing home facility. Also, this plan has a return of premium option.
  • Secure Solutions Advantage – Whole Life Insurance – This whole life insurance policy offers guaranteed cash values, along with a level death benefit. The policyholder may also receive dividends from the company to take as cash, or to put towards the purchase of additional life insurance coverage.
  • Silver Guard I, II, and III – For those who are between the ages of 50 and 80, final expense life insurance protection may be necessary. The Silver Guard plan can provide those funds. And, once qualified, as long as the premium remains paid, the plan will stay in force.
  • Lifetime Navigator – Universal Life Insurance – The Lifetime Navigator universal life insurance plan combines the affordability of permanent life insurance, flexible premiums, and a built-in lifetime insurance protection guarantee feature. For those who are seeking long-term protection with a competitive premium cost, this could be a viable option.
  • Generation Legacy – The Generation Legacy allows the transfer of funds from non-qualified annuities and other qualified plans, and offers an easy, tax-efficient way of passing a much later gift from these proceeds to the insured’s loved ones.
  • Secure Solutions – Single Premium Whole Life Insurance – The Secure Solutions Single Premium Whole Life insurance plan allows the transfer of cash funds such as money market and CD accounts. Plus, if the insured is diagnosed with a terminal illness, he or she may access the policy’s living benefits for paying their medical costs, or any other financial need that they see fit.
  • Critical Illness Insurance – The critical illness coverage from the Baltimore Life Insurance Company provides for medical expenses that are associated with the major critical illnesses, such as cancer, heart attack, kidney failure, major organ transplant, and stroke. This plan provides a cash benefit that can be used for costs that are not typically covered by regular health insurance policies such as home health care, experimental medical treatments, copayments and deductibles, and the lost income of a spouse or other caregiver.

Other Products and Services Offered

In addition to the life insurance coverage products that are offered via the Baltimore Life Insurance Company, there are also other products and services that can be obtained through this insurer. These include the following:

  • Retirement Annuities – The annuities that are offered by the Baltimore Life Insurance Company include options such as flexible premium retirement annuities (FPRAs), single premium deferred annuities (SPDAs), and single premium immediate annuities (SPIAs). All of these financial vehicles can help to ensure that a retiree will have an income for a set amount of time in the future.
  • Workplace Solutions – Baltimore Life Insurance Company works with business owners to help provide voluntary supplemental benefits for better meeting the needs of employees and their loved ones. These solutions include a permanent whole life insurance product, critical illness insurance coverage, disability income protection, dental insurance, long-term care insurance, personal major medical coverage, and more.
  • Financial Needs Analysis – The Financial Needs Analysis, or FNA, can help clients to set financial goals, prioritize them, and initiate a plan of action. The FNA should ideally be reviewed on a regular basis.
  • Prescription Savings Program – The Baltimore Life Insurance Company offers the ScriptSave Value Program that can help individuals and families to save money on necessary prescription medications. Both name brand and generics are eligible for this savings program.
  • Personal Planning Guide – Although nobody wants to dwell on it, there can be unexpected expenses thrust upon loved ones when an individual passes away. But, by going through the personal planning guide, individuals and families can plan for such costs in advance, and can often avoid having to dip into savings or other assets to pay these expenses.
  • Grants Program – For over fifteen years, the Baltimore Life’s Community Grants Program has helped many organizations in the communities where the company’s employees live and work.
  • Identification Program – As a community service, Baltimore Life Insurance Company offers several ID card programs to local groups and organizations. These programs can enhance the safety of the communities where the company serves. These cards include Child ID and Youth SportSmart cards, as well as medical emergency cards.

How to Find the Best Life Insurance Premium Quotes with Baltimore Life Insurance Company

If you have been looking for the best life insurance premium quotes on coverage from the Baltimore Life Insurance Company – or from any insurance provider – it is typically recommended that you work in conjunction with an independent life insurance agency or brokerage that has access to many different insurance carriers. In doing so, you will be better able to compare, side-by-side, the plans and the premium prices of different options, and from there you can decide which one will be the best for you and your specific needs.

When you are ready to move forward with comparing available life insurance options, we can help. We are an independent insurance broker, and we work with many of the top life insurance carriers in the industry. We can provide you with all of the important information that you will need for making a well-informed decision – and we can do so right from your computer. If you are ready to begin the process, then all you have to do is just simply fill out our quote form.

We understand how overwhelming it can seem when you are in the process of shopping for life insurance. There are many different policies and companies to choose from – and you want to be sure that you are moving in the right direction. Our life insurance experts can get you through this process easily, though. So, contact us today – we’re here to help.

Source: goodfinancialcents.com


Browse by Topic

Source: mint.intuit.com

Apache is functioning normally

Mike and Georgia had looked for six months before they found their perfect townhome. Like many buyers, they were more worried about the sellers accepting their offer than they were about investigating the Homeowners Association (HOA). Turns out, the HOA almost ruined the deal. Because the HOA had let their FHA approval lapse, Mike and Georgia were not able to go with an FHA loan. When they switched to a conventional loan, they had to drain their savings in order to qualify for the higher debt-to-income ratios. At this point, they took a more careful look at the HOA’s meeting notes and were alarmed to read that roads would soon need major investments and that HOA fees had been rising higher and faster than local rents for the past five years. The entire scenario was a nightmare, costing Mike extra time and money—and he now gets to pay the association a pretty penny every month for the hassle.

HOAs aren’t usually top of mind when you’re looking to buy a home. In fact, HOAs can be completely overlooked until you learn that your dream house comes with one.

If you’ve carefully figured out just what you can afford to spend every month on a mortgage and then get hit with the added expense of an HOA, you may find your perfect home suddenly out of reach. But all the HOA news isn’t bad. Sometimes the benefits of an association can make homeownership more manageable—especially if you’re used to apartment or condo living.

Whether an HOA is part of your home shopping wish list or not, here’s everything you need to know to make a smart decision when it comes to joining an HOA.

What is an HOA and why do they exist?

One Salt Lake buyer, Kip. A., shared this insight, “HOAs are meant to ensure that a community maintains a good standard of upkeep and generally do a good job at that. Some HOAs might include lawn care, snow removal, and community amenities such as a clubhouse or pool.”

Homeowner associations are legal entities that exist to govern a planned community like a subdivision or apartment complex. HOAs ensure that certain rules and regulations (like what color you can paint your front door) are followed, and usually take responsibility for maintaining common areas like parking and sidewalks. An HOA will typically take care of at least some of the landscaping and exterior home maintenance.

As Kip noted, they can also provide community amenities like a pool, fitness center, and park areas. In some instances, HOAs provide road and waste management to areas that are outside city service areas. HOAs are funded by membership fees that are required to live on the property. Fees can range from $75 to more than $400 per month, depending on the neighborhood and the services provided.

Things to watch out for when it comes to an HOA

If you fall in love with a home that has an HOA, this is your must-do list before putting in an offer.

  • Dig into the fees: Find out what the current fees are, what they cover, and how often you can expect increases. Most HOAs in Utah have some limits on how much fees can be increased without homeowner approval. However, the board can usually approve a minimal increase without asking for input or taking a homeowner vote.
  • Verify what your fee covers: Be very specific when you look into what your HOA fee covers and what it doesn’t. If landscaping is included, find out the specifics—how often is the lawn mowed and edged? Is tree and hedge trimming included? What if you have a broken sprinkler? Verify policies for snow removal, waste and recycling, and which portions of your home are covered for repair under the HOA’s homeowners insurance policy.
  • Ask about big projects: HOAs need to maintain things like roofs, fences, and community amenities like swimming pools. Find out if any big projects are on the horizon and what the costs look like. Sometimes HOAs will impose a special assessment on top of your monthly fees in order to pay for something big like re-tiling the pool.
  • Read the minutes: HOA meeting minutes are public and available to all homeowners. Ask to review recent minutes, which should include the latest financials. Look for any complaints that seem consistent and note outstanding HOA fees from owners who are in arrears. The minutes should also include how much money is currently in the reserve account for emergencies and big projects. This can give you a clue into the health of the community and the potential for extra fees and increases.
  • Study the CC&Rs: The HOA governs the CC&Rs (Covenants, Conditions, & Restrictions) of the community. These are the rules that let homeowners know what modifications are allowed (painting, shutters, etc.) and what is not allowed. Some communities have liberal policies and others are highly restrictive, not even allowing wreaths on front doors or more than one small pet. Owners are fined if they violate the CC&Rs, so it’s highly important to understand what they are and whether or not you can live with them.

Life with an HOA… advice from Homie buyers and sellers

Many Homie buyers and sellers have lived with HOAs—and some have passed on a house because of the HOA—and wanted to share their experiences to help other home buyers.

Rob T. warns homeowners of the costs of an HOA over time, “Make sure that you understand the long-term costs of an HOA and consider if they are providing value equal to that cost. Since you are paying them monthly, make sure they doing their job. HOA‘s can be hit or miss. Some provide great value while others create huge hassles. Where possible, check with current residents in the area to see what they say about their HOA before you buy.”

Justin P. shared why he likes his HOA, “I like having an HOA to protect my property value from gross negligence or outrageous and inconsiderate decisions by neighbors.” However, he added this advice, “Read the CC&Rs to know what restrictions you may have as a homeowner, but judge the HOA’s ability to protect your property value by browsing the existing neighborhood to see how well kept it is.”

Clinton M. cautions potential buyers about possible fines and liens, “When purchasing a home in an HOA neighborhood, be well aware of the fact that your neighbors will be on the lookout for any infractions and are willing to turn you in (subjecting you to fines) for any violations. Be advised that your failure to pay your dues will result in a lien against your property and you can be foreclosed upon by your community. Not surprisingly, the community interest is at stake – if the HOA bankrupts, it goes on your credit too! The best advice I could give to any family or friend would be to think twice about purchasing in an HOA community.”

Homeownership is exciting, and it’s important to feel confident and comfortable about the community in which you buy. If an HOA is part of the package, be sure to do your research first. It’s nearly impossible to get out of HOA requirements and restrictions, and if you’re not happy with how yours is run, you could be in for a world of headaches, extra fees, and disappointment.  

Source: homie.com

Apache is functioning normally

Anybody that has tried to change their satellite or cable service knows how much of a pain in the butt it can be.

You’ll spend at minimum an hour on the phone and most likely by the end of it you’ll be so disgusted that even a hot shower won’t make you feel any better.

One of the biggest fears that investors have when starting with a new brokerage firm is what happens if you want to quit or break up with your financial advisor.

Are you going to be stuck in the same situation as trying to transfer your satellite service and are you going to be hit with massive amount of surrender fees?

Is this something that you worry about?

Let’s take a look how it works if you want to transfer your brokerage account.

If you’re in the process of hiring a new financial advisor or opening an online brokerage account, the first thing you want to do is ask,

“What happens if I ever want to leave? What type of cost or transfer out charges would I incur?”

If it’s really a concern of yours, I wouldn’t accept the explanation verbally. Get it in writing. Make sure you can see exactly how much you would pay if you had to pay anything at all.

Many people don’t realize how easy it is to actually transfer your brokerage account elsewhere. It’s easier than switching banks. It’s easier than dropping your cable. It’s easier than changing your cell phone provider. Yes, that easy!

The beautiful thing about transferring is that you actually don’t even have to talk to the institution that you’re currently with. Say,”What?” Yes, that’s right. You can actually transfer out without ever having to notify them that you’re leaving. How beautiful is that?

Brokerage Account Transfer Example

Let’s say for an example that you have a brokerage account with Edward Jones and you’ve been with them for four years. You’ve now decided that you want to work with XYZ Financial. Instead of contacting Edward Jones and telling them why you’re leaving, you would actually go to XYZ Financial, open the same type of brokerage account that you have opened at Edward Jones and then sign XYZ Financial’s transfer paperwork.

XYZ Financial’s back office should then contact Edward Jones’ back office and the transfer is all done for you. The reason that this is so simple is that most brokerage firms use an account transfer process called the automated customer account transfer service or ACAT.

The rules that govern the ACAT system require firms to complete various pages in the transfer process and in a very specific period of time window. If the transfer is made using the ACAT system, then the transfer should take no more than six business days.

Here’s brief description of the ACAT process directly from the SEC website:

Most account transfers between brokerage firms are made using the Automated Customer Account Transfer Service (or “ACATS”) system. The National Securities Clearing Corporation operates ACATS, and both the New York Stock Exchange and the National Association of Securities Dealers, Inc. require their member firms to use ACATS.

These rules require firms to complete various stages of the transfer process within a limited period of time. If the transfer is made through ACATS, and there are no problems, the transfer should take no more than six business days to complete from the time your new firm enters your form into ACATS.

There are situations where the accounts may not be able to utilize the ACAT system. In those cases, you can expect upward to two weeks for the transfer to take place. In the last couple years, I’ve only encountered a few situations where an account could not be transferred utilizing ACAT. Most likely, you won’t run into this situation.

Brokerage Transfer Out Fees

What about cost?

All brokerage firms are going to charge some type of transfer out fee.

That fee can range anywhere from $55 on up to $95, at least what I’ve seen.

It may also be more for an IRA. Another potential cost that you may incur is an IRA custodial fee.

I know some firms will charge you both for the transfer out fee and a prorated cost of the IRA custodial fee. I know in one case a client had to pay $115 to transfer out his IRA. Ouch!

The only other issues that may come up is depending what type of investments you hold. I’ve seen some mutual funds that aren’t able to be transferred “in-kind” so  they have to be sold at the brokerage firm that you’re currently with before the account can transfer.  In that case you would have to contact them to give them instructions to sell what can’t be transferred.  If you want to avoid the phone, you can always draft a letter with your instructions to liquidate the investments and then transfer the account upon settlement of those funds.

Please also note that insurance or annuities are a whole other animal when it comes to transferring. It’s pretty simple to change the broker record on annuity accounts, but there also may be surrender charges on the actually policy itself.  Be sure to verify with the insurance company before liquidating any annuity contracts.

Source: goodfinancialcents.com

Apache is functioning normally

How to find the best car insurance in California

While price is important to many people, you might also want to consider other factors when choosing an auto insurance company. The best car insurance policy looks different for everyone and will depend on your needs, lifestyle and financial responsibilities. To see which car insurance company might provide the best fit and options for you, here are some steps you can take.

Consider minimum insurance requirements in California

California requires drivers to carry at least minimum levels of liability insurance coverage on their vehicles to drive legally in the state. This includes the required minimum amounts of bodily injury liability and property damage liability coverage. According to the California Department of Motor Vehicles, all California motorists must carry at least:

  • $15,000 in bodily injury liability coverage per person
  • $30,000 in bodily injury liability coverage per accident
  • $5,000 in property damage liability per accident

California also requires that insurance companies offer you uninsured and underinsured motorist bodily injury coverage, along with uninsured motorist property damage, but you can decline in writing if you do not want to have them. Understanding California’s car insurance laws can help you understand if you need additional coverage or higher limits.

Consider lender requirements

If you finance or lease your vehicle, you may need to purchase a car insurance policy that complies with your financial institution’s requirements. For example, collision and comprehensive insurance are typically optional coverage types, but if your car is financed, most lenders will require you to purchase them. This is commonly known as a “full coverage” policy. Your financial institution may also require you to purchase higher liability limits, especially if you lease your vehicle. You might also want to consider gap insurance, which is designed to pay the difference between your vehicle’s actual cash value and the loan or lease amount if your car is totaled or stolen. According to the Insurance Information Institute (Triple-I), it is typically cheaper to purchase gap insurance from your insurer instead of from an auto dealer.

Consider your individual needs

Every driver has a different set of auto insurance considerations. You might live in an area where traffic and tourism are heavy, like Los Angeles or San Francisco, have a teen driver to insure or maybe have a few accidents or moving violations on your driving record. Based on your unique needs, it could make sense to have collision coverage and comprehensive coverage, uninsured motorist coverage or towing and rental reimbursement. Understanding your individual coverage needs might help you narrow down the companies you request quotes from. Households with teen drivers might look for companies with specialized young driver discounts, for example.

Source: thesimpledollar.com

Apache is functioning normally

How much is car insurance in New Jersey?

The average cost of car insurance in New Jersey is $1,754 per year for full coverage, according to 2022 data obtained from Quadrant Information Services. Minimum coverage costs an average of $782 each year. This means that New Jersey’s minimum coverage is above the national average of $622, while full coverage is well below the national average of $2,014. The higher minimum rate may be related to the high number of urban areas there are in the state, where you will often see elevated rates to reflect the increased possibility of accidents. Additionally, New Jersey has just implemented Phase I of a two-phased approach to raising the minimum levels of liability coverage required to drive legally in the state. You should keep in mind that your rates will likely differ from the averages based on your individual rating factors.

Also, compared to the rates of nearby states, New Jersey’s premiums come in below average. Take Pennsylvania, for instance. Although Pennsylvania and New Jersey are neighbors, the average cost for a full coverage policy in Pennsylvania is $2,040 per year, more than $200 higher than New Jersey. New York, one of the most expensive states for car insurance in the country,  is even higher, averaging a whopping $3,139 annually for full coverage.

How to find the best car insurance in New Jersey

Drivers in New Jersey must maintain continuous coverage to avoid potential hefty fines and suspensions to their driver’s licenses and vehicle registrations. In addition to complying with the law, a sufficient car insurance policy could provide essential financial protection if you are involved in a car accident. Since every driver has their own needs when it comes to auto insurance, no one company will be best for all. For this reason, it may be a good idea to shop around and request quotes from multiple companies. We’ve compiled some things you might want to keep in mind while you’re shopping so that you can find auto insurance in New Jersey that fits your needs.

Consider minimum insurance requirements in New Jersey

New Jersey car insurance laws are unique, and it is a no-fault state. There are two options for minimum required coverage: the basic policy and the standard policy. Basic policies include just a required level of property damage liability per accident and personal injury protection (PIP) coverage and come with the option to purchase bodily injury liability coverage. If you choose a basic policy, your ability to add other coverage types could be limited.

Standard policies include bodily injury liability, property damage liability and PIP, and also come with a broader range of optional endorsements to choose from. Understanding New Jersey’s car insurance laws could help you decide if you need to purchase more coverage than just the minimum required. In 2023 and again in 2026, the minimum liability levels required to drive legally are increasing, which will likely mean a corresponding increase in your premium if you opt for minimum coverage car insurance.

Consider lender requirements

Drivers with loans or leases may have additional car insurance requirements to consider. Financing and leasing companies want financial protection for their asset (your vehicle) until it is paid off and in your name. They often do this by imposing insurance requirements that you must meet to comply with your financing or leasing agreement. To satisfy lender requirements, you may need to have full coverage insurance, which includes comprehensive coverage and collision coverage on your car insurance. Although not required, you could also consider gap insurance, which helps pay the difference between your loan balance and your vehicle’s cash value if your car is totaled.

Consider your individual needs

Auto insurance is a highly personalized product. Each driver has their own needs, but you might find that not every company offers what you are looking for. If you have a youthful driver in your home, you may need to tailor your search toward companies that offer cheap car insurance rates for teens. Those who work remotely may find savings by purchasing pay-per-mile insurance. If you drive for a ridesharing company like Uber or Lyft, you may need to find a company that offers rideshare insurance. Before you shop, it can be helpful to list your priorities and use this as a guide while requesting car insurance quotes.

Source: thesimpledollar.com

Apache is functioning normally

Save more, spend smarter, and make your money go further

File this story under the “Why Can’t Credit Scoring Be Less Complicated.”

I received the following question from a Minter a couple of weeks ago and couldn’t wait to write an article answering his question.

“John, last week I went to a car dealership to buy a new truck. I went on the test drive, really liked the truck and asked the dealer if they could get me a better interest rate than by credit union, which was offering me a great rate for 48 months. When the manager showed me my credit report I noticed that the FICO score that was used was some sort of auto credit score. I asked the guy what that meant and he was clueless. What gives?”

The FICO Auto Industry Option

What gives is that most auto lenders that use FICO credit scores use a different variety of FICO score called the “FICO Auto Industry Option” score. Let’s call it the FICO Auto Score, for short.

FICO develops a variety of credit scores including these semi-customized scores referred to as Industry Option scores. These scores are used by lenders in the auto, credit card, and installment industries, which pretty much covers everyone.

Here’s How They Work

Stop thinking like a consumer and start thinking like a lender, just for a moment.

If you are an auto lender do you really care how an applicant is paying their mortgage loan or their credit card bills?

You probably do, but not nearly as much as you care about how they’re paying their auto loans.

Well, you’re not the only one who thinks that way. FICO has built an entire stable of these credit score variants specifically for different loan types.

There are auto specific scores, bankcard specific scores, mortgage specific scores, installment specific scores and personal finance specific scores…all on the market today.

The choice of which score to use is one made by the lender.

Because you’re asking about the FICO Auto score we’ll focus on that one. The FICO auto score calculates your base or generic FICO score, and then holds on to it in credit score limbo.

Then, using what’s technically referred to as a “scorecard overlay” the FICO auto score takes a second bite at the apple and re-evaluates the consumer’s credit report but this time focuses on attributes that are especially important for auto loan risk evaluations.

For example, do you have other auto loans on your credit report?

If so, are those loans paid on time or are you missing payments? These are specifics that tell an expanded story about how you’re likely to pay an auto loan rather than simply “any” loan.

How Different are the Two Scores?

Don’t get me wrong, your auto score isn’t going to be wildly different than your generic FICO score.

You’d be safe to assume that the two score varieties will be within plus or minus 15 to 20 points, but that can vary.  Of course this is all academic if you’ve got fantastic credit reports.

Those are going to yield a great credit score regardless of the score type.

This rule is going to hold true not only for FICO’s generic score, but also their industry specific scores.

And, it’s going to hold true for every other credit scoring system on the market, like the VantageScore credit score, which I wrote about for Mint here.

It’s also going to hold true for the free scores available from the variety of websites that give them away, like www.CreditSesame.com. The better your credit reports the better your scores, regardless.

Unlike sites that allow you to check your credit report for free, FICO’s industry specific scores are not available to consumers on any website for any price.

In order to get those you’ll just have to keep relying on the Finance and Insurance Manager at the local auto dealership.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.

Save more, spend smarter, and make your money go further

  • Previous Post
    4 Easy Ways to Save Money This Summer

  • Next Post
    How to Search Mint.com for Transactions by Date

Browse Related Articles

Source: mint.intuit.com

Apache is functioning normally

Here’s yet another post in my growing series of wondering if home prices are too high.

Earlier this week, Black Knight Financial Services noted that home prices increased to within 3.8% of their all-time highs set back in June 2006. Other home price indexes (and specific metro areas) are spitting out new record highs.

That may scare some folks, including myself, as I tend to be a bit more conservative when it comes to massive year-over-year home price increases.

It has been about 10 years since home prices were defying expectations and now they appear set to finally surpass those old unsustainable highs.

If you’re wondering why home prices have risen so much since bottoming around 2012, the answer is pretty simple.

Home prices got way too cheap after the crash and inventory has remained very tight in spite of a flood of foreclosures. That, plus super low mortgage rates sprinkled in, has driven home prices higher and higher for months on end.

Your Last Chance to Get In

  • The fact that sentiment is still mixed
  • Tells me that this housing recovery still has legs
  • It’s also important to remember that recoveries have ups and downs
  • Just like downturns, and they play out longer than anticipated

But now we’re getting a little irrational again, at least in my opinion. I’ve been hearing that ill-fated sentiment of “Buy a house now or you may never get the chance!” SMH.

Usually when people start saying things like that it isn’t long before it all goes very wrong. But as I noted in recent posts, we aren’t quite there yet.

Indeed, a return to bubble-era home prices doesn’t mean the bottom is just going to fall out. Clearly this has played out in history many, many times. Otherwise how would we reach new highs to begin with?

There’s no inherent problem with higher highs, but how quickly we get there could pose a threat, and overshooting the mark is also a major concern.

A commentary released this week by Freddie Mac titled, “How to Worry About Home Prices,” attempts to answer that very question. But they even admit it’s a tough one to answer.

However, they do outline a strategy we can use to determine if and when we’ll be facing another crisis thanks to unsustainable home prices.

Start with the PTI

  • Consider the price-to-income ratio (PTI)
  • Which is used to determine if home prices are outpacing wages
  • This can tell us if the current trajectory is sustainable
  • Or if affordability will begin to erode and take the housing market down with it

It rhymes with DTI, but is actually the price-to-income ratio used to determine if home prices have outpaced incomes.

Freddie refers to it as the “clearest indicator of the long-run sustainability of house prices,” although still not entirely sufficient on its own.

Basically you can use this metric to determine which metros in the United States require further scrutiny.

The median PTI ratio between 1993 and 2003 was 3.5, so this is seen as “normal” according to Freddie.

It climbed as high as 4.8 in 2005 before the housing bubble popped, and as low as 3.2 in 2011 when everyone lost confidence in the housing market.

We’ve since returned to 4.0, which is above the norm but just below 4.1, which Freddie calls an “outlier threshold” and says separates the “usual” and “unusual” values of the PTI ratio.

In other words, we’re getting into murky territory again, but that alone is not reason to freak out, at least not yet.

Then Ask Why the PTI Is High

  • Assuming the PTI in your city is high historically
  • You need to determine why it’s elevated and if it’s above normal range
  • Then you need to dig down and find out if a high PTI is warranted
  • Based on things like employment growth (think tech scene in Seattle) or if it’s financially driven by things like easy credit (uh oh!)

We need to know why the PTI is high for a given metro to see if it points to another housing bubble.

In red-hot San Jose, home to Silicon Valley, the PTI is a seemingly very high 9.6, but the outlier threshold for that specific region is 9.4. So while elevated, it’s just above its already historically high level.

Then consider Dallas, where the PTI stands at just 3.4, but is actually above its outlier threshold of 3.2.

This is why you have to examine each metro carefully, instead of attempting to determine if the entire nation is under or overvalued, or evaluating a PTI without historical and geographical context.

Once we have our PTI, we need to ask three main questions to determine if a bubble is imminent.

Are there nonfinancial reasons for the high PTI ratios?

If a given metro’s PTI is elevated for nonfinancial reasons, then it could be perfectly fine because bubbles are financially driven.

For example, if the region is growing rapidly because of employment demand in a specific industry, high home prices may be perfectly acceptable and sustainable.

Limited supply is also driving home prices much higher.

Additionally, the PTI ratio may be thrown off because of income inequality – put simply, if richer people are the ones buying homes they may actually have the income to absorb higher home prices. So it’s not a perfect science.

Conversely, if home prices are rising rapidly for no apparent reason (such as easy credit) you might start to worry.

Are credit conditions deteriorating?

Next, we have to ask if credit conditions are going downhill. As of now, mortgage underwriting is not even comparable to what it was before the previous crisis, and that’s a very good thing.

There aren’t many stated income loans being originated these days, nor are borrowers allowed to finance investment properties with zero money down and 620 credit scores.

Most of today’s mortgages are fully-documented, fixed-rate mortgages with nothing exotic whatsoever.

In short, standards are a lot higher than they were and should stay that way for the foreseeable future. The only risk is these new 3% down mortgages, which could pose a threat as home prices continue to rise.

If borrowers are putting next to nothing down simply to qualify because home prices have outpaced incomes, we could have a problem.

The good news is that hasn’t happened too much lately. In fact, limited inventory and intense competition is forcing buyers to put more money down to beat out other offers.

Is leverage increasing?

Lastly, we need to determine if leverage is increasing. Essentially, if mortgage debt is rising relative to home equity. At the moment, this isn’t the case.

In fact, mortgage debt has declined while homeowner equity has increased. This gives homeowners a bigger cushion between what they owe and what their properties are worth.

If they face some sort of financial crunch, those with a healthy cushion can sell if need be and probably still take in a tidy profit (and walk away with some cash in their pocket to use for rent and other needs).

During the prior crisis, you couldn’t sell your home for more than the bloated mortgage balance, which led to even more downward price pressure and tons of short sales and foreclosures.

As noted, we aren’t at that point yet and everyone appears to be paying off their mortgages. You don’t see too many interest-only loans, and definitely no pay option arms. This means today’s homeowner is actually building equity, unlike the crop of owners back in 2006-2007.

So where does that leave us? Well, the Freddie researchers conclude that aside from a few potential trouble spots, “we don’t need to worry about house prices — yet.”

A bit ominous but pretty spot on.

The issue is that the way the housing market works, we’re bound to repeat history in the future.

As home prices climb further out of reach, financing is eased to accommodate new buyers. We’re already seeing that.

These buyers wind up purchasing too much house for their budget and when the housing market naturally cools off, they’re left with very little equity and a massive mortgage (and accompanying housing payment).

I don’t see a scenario where it won’t play out like this…it’s basically ingrained in the market. So the next housing bubble is a matter of when, not if.

Source: thetruthaboutmortgage.com