The theory behind a credit union is that it’s working for you (and every other member) whenever it operates. That means that as an account holder you get favorable returns on your savings, checking, and money market accounts as well as good interest rates on your loans. The company I work for has a credit union and I opened an account within the first week of working because I knew somewhere down the road I might turn to them for a mortgage. Well, I poked around with LendingTree and two other mortgage-finding services (still only one response!) and it’s about time I talked to my credit union.

This was brought on by the this article, written by Gerri Willis, where she says that becoming buddy buddy with a small bank now may pay off later, when the housing price growth cools down. Basically, when the market slows down and a bank begins to foreclose on homes, the relationship you develop now will put you ahead of the game when the slowdown occurs. The bank won’t want to keep the properties, they’ll want to sell them to you.

Her tip is to first target the right bank, one that holds at least 55% of the mortgage loans it sets up. A bank can sell the loan whenever, it’s in the fine print if you read carefully, and they can’t foreclose on a loan if they don’t own it. After you target the bank, move your finances there to build a level of trust. They can trust you if they see your money! Then, the short article moves into discussing how to target areas and stuff like that which isn’t important to me at the moment.

So my plan of attack now is to talk to some local small banks and seeing if they can give me a favorable mortgage. Right now, the best seems like a 30 Year Fixed with monthly payments of around $1500 on a $250k loan (via LendingTree). If they can give me a pretty good offer and fit some of the other criteria Gerri mentions, I’ll consider giving them my business. But first things first, the credit union deserves a visit.

This is a very disturbing trend, yet another announcement by a major retailer that the credit data was once again exposed. In an AP article, data was stolen from Polo Ralph Lauren Inc. and HSBC North America is starting to notify holders of their General Motors-branded MasterCards that their credit card information may have been compromised. It now looks like thieves aren’t trying to steal data as it’s being transmitted (the nature of encryption makes that impossible if you’re actually encrypting the data), they’re picking it off data at the destination…

(Click to continue reading…)

As I mentioned earlier, I submitted a request to LendingTree at about lunch time today and around 1:30pm, Diane from LendingTree’s “Incubation Department” gave me a call to introduce herself and give me an idea of how LendingTree’s process works. Essentially, she will be the interface/middlewoman between myself and twenty-seven lenders (her number). I don’t know if there will be a premium put on the interest rate for this great service, but that’s what the competing offers from LoanWeb and MonsterMoving (where they don’t get involved, they just give out information) are for.

In talking to Diane, I told her I would want a $250k mortgage for a $300k house with the $50k down payment funded by my own savings and help from my parents. It turns out, when you put down less than 20% and part of it is a gift, you have to show at least 5% of that down payment comes from your own savings. Luckily, I’ll be able to contribute at least $15k of my own funds so I will be in the clear with regards to that.

Diane said a pre-approval letter, which is not binding, would be processed in 24-48 hours once I provided the following pieces of information (which would be used for a credit check):

• 2 Year’s W2’s
• 2 month’s bank statements (or other verification of down payment)
• 1 months pay stubs

I could send it in an email or fax, two very convenient options, but I question the security of the transmission medium. I will definitely not send it across email because it’s not going to be encrypted. At least with the fax, I don’t know enough to know it’s not safe.

I asked her if I could nix out specifics, like bank account numbers and social security numbers (they already have that anyway), and she went into her talk about how the security at LendingTree is good and my information will be kept confidential, etc. I could black it out but eventually, when I really locked in a loan, I’d have to provide it. I think I will black out the account numbers this time around because I don’t want them to have it in the event I go with another lender or if I decide to rent for another year.

Then I thought to check online, there were 9 offers waiting for me. The first on the list was a 7/1 ARM (the product I want) for an APR of 5.91% with HSBC Mortgage Corp. Clicking on Offer Details, I found that estimated fees (Tax Service, Underwriting, Processing, Document Prep, and Credit Report) would be $995 but the fine print indicated this didn’t include:

pre-paid interest (depends on the day of the month you close your loan), real estate taxes & escrows, settlement or closing service fees, title insurance, recording fees, hazard insurance fees and pest inspection. (sheesh!)

I looked at a few of the other offers (A 30 Yr. Fixed from National City had a monthly payment only $60 higher) and one thing I realized was that none of them talked about PMI. I know for a fact that I’d have to get a PMI because $50k/$300k is only 16.7%, under the 20%. I’ll have to call up Diane and ask about getting a second loan to avoid PMI…

As a comparison, I’ve only received one other email with regards to a mortgage from a loan officer from Annapolis First Mortgage. Granted, it’s not LoanWeb or Monster’s fault, they probably just disseminate information to the companies in their network so the chain is longer; but the direct communication with LendingTree gives them a significant leg up. LendingTree seems like a very professional outfit and I’ve been very impressed with them so far. The turnaround time is very important to me because I hate having to wait to get things done.

I’m going out with Realtor today (it’s a friend of mine who is testing for it and a fully licensed Century 21 agent) to look at a few more houses; I’ll report back my findings. One thing I’ve already learned so far is the types of homes I’m interested in are snatched up usually within a week of listing. What that means is that I should get myself pre-approved for a mortgage as soon as possible. If I find my dream house at the dream price and I need to go out and find a loan, it’ll be gone faster than a fat kid going after free cake. So I began my search online for a solid rate and some help on what kind of loan I’ll need.

The first step to getting a mortgage is finding out the prevailing rates and just filling out some online forms. I know I could go to the bank or whatever, but for me, the easiest thing is to go to LoanWeb.com (off Bankrate.com), LendingTree.com (when banks compete, you win!), and MonsterMoving.com and get bombarded by mortgage lenders. I’m alright with a few dozen calls, 75% of which I expect to be noise, from these folks just to see the various pitches. I want to hear some pitches so I can identify what the “keywords” in the language are and how to sniff out the BS.

(Click to continue reading…)

I’m looking for a townhouse and prices are downright ridiculous. I’ve narrowed down what I’m looking for in a house to a 3 bedroom, 2+ bathroom townhouse in the $260k – $320k range in a relatively nice area south of Baltimore, MD. I can rent an apartment for approximately $1,000 (most likely less than that because of promotions and the like) and so after reading a whole bunch of gibberish online, I’ve resorted to using a couple freely available calculators to see what the best option for me is.

If you haven’t heard of DinkyTown.net (it’s one helluva name), then let me introduce you to the best collection of free financial calculators ever. Pop your head over to this link and you’ll find the little app I used to make these calculations.

Here are the results:

The numbers used in the analysis are up for debate but I thought a ballpark figure was enough for me to get a good idea of what I’d be getting into. According to the figures I supplied, the breakeven point is 8.2 years. Over eight years until owning the house would have been better than renting! That doesn’t sound like a long time but for someone in their twenties, it’s about a third of their life so far… that puts owning a house in that gray area where I won’t know my plans in 8.2 years.

So why are all these twenty-something’s snatching up houses? The key is in the appreciation rate of the house. I put 3% in the analysis above but if I were to increase it to 6%, the breakeven point is 2.3 years. 2.3 years is a great time frame because I probably plan on living in that home at least five years. Is 6% reasonable? That depends on whether you think we’re in a housing bubble.

I think a bubble exists in areas of Baltimore where homes that were around $10k-$50k two years ago now command north of $350k after being gutted and redone. A lot of those prices are based on buyers who believe the “area will get better,” something I hope, for their sake, happens. If it doesn’t, then you now own a very home in a very rough area… making it difficult to sell. Now, in the suburban areas south and west of the city, where I’m looking, we’re talking about homes that commanded $200k last year now commanding around $300k. I would say a bubble also exists in the areas I’m looking but a significantly smaller bubble. I feel as though the risk is far less in these suburban areas because as a buyer I’m not buying into an area that’s bad but will get better, I’m buying into an area that’s already decent.

Regardless, a 6% appreciate rate seems somewhat reasonable for a home so I think a 2.3 years break-even point is something I can make a decision on. I played with a few of the other numbers, like term of the loan (going to 30 years hardly affects break-even point but drops the monthly payment by $700ish), and none of the other factors seemed to make a big difference. So, now I just need to find a townhouse that I like and I can afford.

In a previous post, I talked about giving that ex24.com iPod Shuffle promotion a try. I missed out on the previous promo of $100, 1 trade, and run away with a free iPod; so I had to go with the $500, 1 trade, and lots of waiting. I sold my single share of AAPL, netting 91 cents after the 80 cent purchase commission, and I received a response from them about my iPod: 4 weeks. When I get it, I’ll take a picture of my spoils and wait for about 5 months (or 6 months plus April 10th).

A little while back I mentioned I was going to begin my search for a house and on Sunday (yesterday), I visited three prospective homes. I learned something very very quickly, something I didn’t fully realize beforehand — townhouses are freaking expensive. The cheapest of the three homes we saw was $280k (the other three were basically $320k). The other thing I realized was I didn’t know anything about what to look for in a home, so I brought a discriminating eye (very very important), my girlfriend…

They say that you need to look at at least six houses before you can really begin contemplating what kind of home you want. I don’t know who they are but I saw three today and I believe it — I’ll need at least six to really nail down what’s important for me.

So far each of the three places had one great positive for me but a whole host of negatives. The place that was really big (.09 acres, 3,920 sq. ft) and really nice inside basically sat right next to I-95 and wasn’t really in a neighborhood. It was like a side street off the main street; like 8 homes stuck in an alley basically. That’s the one thing you can’t see from the virtual tour and probably would make it hard to sell. The place that was in a great neighborhood had two miniature bedrooms (beside the master) which would make it difficult to rent out, critically important to me. It also had basically no backyard but did have a nice little area outside the fences. Finally, the one place that had the greatest price ($280k) was on the periphery of a bad looking neighborhood but itself was in a nice little community. The place had a great basement and a decent backyard (two decks) and my girlfriend was a fan of the place except for the backyard.

So far three places, what did I learn? These are some things that are important to me:

1. A nice spacious kitchen with decently new appliances. A crappy microwave doesn’t matter (they cost like $20 new) but a new fridge, oven and range are important.
2. Decent neighborhood – I want the feel that I own a house and have some quality neighbors. The one huge place didn’t have much of a neighborhood feel to it. I’d have like 8 neighbors and we’d all sit around and check out the view of I-95.
3. Spacious backyard – My girlfriend and I want to get a pet so a nice backyard is key. It’s also a good place to sit out in the spring and read or just hang out. A lot of places around here have sheisty backyards penned in by old nasty wood fences.
4. Classy Facade – The whole townhouse face of a building just gives me a better feeling, maybe it’s just conditioning. Basically what I mean is if the outside looks like crap, I won’t like it even if the inside is fantastic. I mean the design, not necessarily the specifics (which are changeable, like crappy shutters)
5. Finished basement – With a townhouse, an unfinished basement probably looks like crap. I don’t mind it though if it’s not finished because it would give me a little project to do.

I think I’ll check out a site someone at work recommended: HomesDatabase.com for some more good leads. Anyway, those are my first impressions on my house hunting trip. If you have any tips or things to look out for (or good resources online to read), I’d love to hear them.

With skyrocketing gas prices these days, knowing where to pay the least for gas is clutch. I thought it would be a great idea if someone setup some sort of database that people could input gas prices and that everyone would have access to. Then I discovered GasBuddy.com that provides just that. You can also get quick access to local information by going to [name]GasPrices.com for whatever state or major metropolitan area. MarylandGasPrices.com will give you data for Maryland.

The main page will tell you the lowest and highest gas prices in the area, which may not be as useful if you select it by state because the cheapest gas might be far away. But it does give you a general idea of which areas are cheaper than others. It also tells you which chains are cheaper too. In Maryland, Wawa and Royal Farms tends to lead the pack in cheapest gas. As expected, Exxon charges the most.

To further refine your search, there’s a “Search For Gas Prices” panel on the left. In there you can select the area, typically the name of a city, and station chains. I don’t ever use the station chains but I do select neighboring areas to see where I can get a lower price on gas.

The site relies on user input for up to date gas prices. It’s really easy to enter the prices under “Report A Price Here.” If you happen to see a gas price along the way and it’s convenient, enter it in the site. Everyone benefits from that information.

Finally, there are some fun statistical data pages like a chart graphing average gas prices and message boards. You should check out the entire site and read all the useful information available. And please do help keep us all informated by contributing to the site.

Yesterday I wrote a joke post about how I won about a billion dollars in an “international lottery.” Hopefully everyone understood I didn’t actually win a billion dollars but I was just pointing out how obvious a scam that was. Everyone with an email address has gotten email from “Bank of America” (not really BoA, a farce BoA) or “Paypal,” requesting personal information. I’m sure you’ve even been asked by the envoy of a recently deceased monarch (Nigerian?) to “hold funds” if you are willing to send them some bank information. Maybe you’ve been asked to verify your account information at Ebay… but bottom line, they’re all phishing scams and you shouldn’t respond to any request by anyone to provide sensitive information.

I believe phishing referred to back in the day of modems and bboards, phishers would call up blocks of phone numbers in hopes of hitting a bboard they could interface with. Now, malicious scammers send out spam to try to catch a tiny percent of folks who do respond to these emails. NEVER RESPOND.

What if someone calls you and asks you to verify information? If it’s Bank of America (and you actually have a BoA account, which I don’t), then say thank you, hang up, and then call them back. Look on the back of your Bank of America card and call them. If anyone ever asks you for information, call them back and go through the official channels if you’re seriously concerned. 99.999% of the time it will be a scam. Don’t become a statistic!

Can you imagine my luck? I didn’t even know I entered in the 1,300,000,000.00 international lottery but luckily Mr. William Lopez from Super Standard Company notified me by email that I have been approved for a lump sum payment of 1,625,000.39! That’s awesome! I’m so rich! I’m going to buy two houses right now because they say the real estate market is sizzling hot right now. I mean, when you win 1,625,000.39 in lottery, you can blow it on whatever you want right? Read on to see the notification email and all that jazz!

So here’s the first half of the letter because I was so excited I couldn’t read the whole thing at once:


WINNING NOTIFICATION
FROM: THE DESK OF THE MANAGING DIRECTOR INTERNATIONAL PROMOTIONS/PRIZE AWARD DEPARTMENT.
CALLE COLONE-28080 MADRID-SPAIN
REF Nº: EPSL/25003127/CSL/02
BATCH Nº:0007571982

ATTN: WINNER,

RE: AWARD NOTIFICATION/ FINAL NOTICE.

We are pleased to inform you of the release of the results LOTERIA PRIMITIVA/INTERNATIONAL PROGRAM, Held 19TH March 2005 Your email address name attached to a ticket number 025-1146992-750 with serial number 2113-05 drew the lucky numbers 4-18-24-30-31-35 which consequently won the lottery in the 3rd category. You have therefore been approved for a lump sum payout of 1,625,000.39 (One Million Six Hundred and Twenty Five Thousand Euros and Thirty-Nine Cents) in cash credited to the file reference number: EPSL /25003127/CSL/02. This is from a total cash price of 20,368,770.00 (Twenty million three hundred and sixty-eight thousand, seven hundred and seventy euros only) shared among the seventeen international winners in this category.

CONGRATULATIONS!!!


Congratulations indeed! 1.6M in Euros is about $2M USD! With $2M in an Emigrant Direct account, I’d make over $60k a year for doing nothing except collecting interest payments! Sure my money isn’t totally protected by the FDIC (only the first 100K) but who cares? Banks are the bedrock of our capitalist society, I should be fine.

But with $2M, I think I would want to donate some of it to a school, get an honorary degree, and maybe the wing of one of the libraries named after me. Hmmm… a couple hundred thousand probably only buys me a bookshelf or maybe a bust in the back with all the nerdy science fiction novels by Heinlein and Asimov. That’d still be awesome… anyhow, before I get ahead of myself I need to figure out how to get this money into my account ASAP…


Your fund is now deposited with our correspondence bank insured to your name. Due to the mix up of some numbers and names , we advice that you keep this award from public notice until your claiming or unwarranted taking advantage of this program by participants. All participants were selected through a computer ballot system drawn from 25,000 names from Asia, Australia, New Zealand, Africa, Europe and North America as part of our international promotions program which we conduct once every year. We hope that with part of your prize, you will part-take in our end of year high stake 1,300,000,000.00 international lottery .


Shoot, there’s always a mixup! I’m glad they advice me to keep this from public notice… nah, you guys can’t enter it so I don’t mind gloating about my new found loot. It’s an international lottery that I didn’t even enter so how would you even know where to enter? That and I’m so surprised I hadn’t heard about this before, it’s done every year on every continent except Antarctica (polar bears and penguins don’t need millions).


To begin your claim please contact your claim agent,

SUPER STANDARD COMPANY
Mr. William Lopez
Foreign services manager
Tel:0034 65 9060871
Email: superagent@terra.es

for processing and remittance of your prize fund into your designated bank account.


Super Standard Company? That’s a weird name for a company… but they must be pretty cool since they let him have superagent as his email address. I guess if your job was to hook people up with $2M, you’d get a pretty big head and call your self superagent. Heck, I would.


Note: All prize funds must be claimed before the 18Th of April 2005 after this date all funds will be returned to the MINISTERIO DE ECONOMIA Y HACIENDA as unclaimed. In order to avoid unnecessary delays and complications, please endeavour to quote your reference and batch numbers in every correspondence with us to your claim agent. Furthermore, should there be any change in your address do inform your claim agent as soon as possible. Congratulation once again from all members of our staff and thank you for being part of our promotion program.


I have eleven days and there’s no way the MINISTERIO DE ECONOMIA Y HACIENDA is getting a penny of my hard earned money! I’ve never even been to Spain! I suppose I have to send them all my bank information, my social security, and my mom’s maiden name in order to get put into this lottery… better get that to them quick! I know they only want me to contact them but to speed along the process I’ll just email them that information.


N.B. Any breach of confidentiality on the part of the winners will result to disqualification. Please do not reply to this email address. Contact your claim agent.


Oh crap.

THIS IS A SCAM!!! To avoid this scam and others, check out my post about avoiding phishing scams.