Unfortunately, the iPod offer is gone but the $24 for a referral is still around. This is a ridiculously easy promotion to take advantage of. Email me using this form with your first and last name and I’ll hook you up with a signup link. You just need to signup, deposit $100, wait ten days (it’ll take that long to clear), and then withdraw $124. Withdraw $100 minimum deposit after only 10 days. No trades required to receive $24 bonus! I will also earn $24 for referring you.

Then, after you’re done, you can just sign up a significant other and then sign yourselves up again with a joint account. So you’ll pocket around $120 for all your trouble.

[ Related Ex24 Posts]

I read an article in CNNMoney today that made me cringe - J.P. Morgan Chase & Company will be offering a swipeless credit card that give holders the option of swiping or just waving their cards in front of a reader. These cards have a special chip that the card reader will detect and charge and the card holders won’t even need to sign. While it rates very high on the “cool meter,” it scares me how much credit card fraud is going to increase with the removal of several key security features.

Let’s take the low-tech route and think about these cards. If you never have to show the cashier the card, you have rendered the signature and photo portrait security mechanisms useless. When used, both mechanisms probably could stop credit card fraud in its tracks but we’ve come to expect that cashiers don’t verify either as often as they should. Also, without actually needing verification of payment (signature), could you pay for something unwittingly with one credit card in your wallet/purse while hard-swiping another? What if you’re maxed out on the “blink” card and wanted to swipe another card? J.P. Morgan Chase is going to get rich off this! I’m sure these are questions they’ve asked but… as history has shown, sometimes the most obvious things are overlooked.

Let’s go high-tech fraud then… what prevents someone from sniffing out these “special chips” and collecting a whole bunch of data? You sit there with a transmitter/receiver, a signal processor, and write up some software to decode the transmission and you have yourself a credit card collector. You fake being a reader yourself and just query one of the chips for sensitive data. It probably isn’t hard to payoff someone manufacturing these readers to sell you one (because you’re a vendor of course!)… so there you go.

Finally, what are you really saving? Time? Is it that hard or that time-consuming to hard-swipe your card in the reader as opposed to waving it in front of it? I honestly don’t think the tradeoffs make any sense whatsoever and we’re just looking at a gimmick by J.P. Morgan Chase & Co. at trying to get a few more card holders.

One of the concerns when we “won” the house for $295k, when it was listed very low at $270k, was that the home would appraise at under the purchase price. In the event that you purchase a home and it is appraised for under the purchase price, the buyer must come up with the difference. The reason is if you were to default on the loan, the lender will forecloses on the home and sell it. If the home is worth less than the loan it will sell for less than the amount of the loan and the bank loses money, that’s why you have to make up the difference in cold hard cash. Luckily for me, the house was appraised at $299k so the nightmare scenario of an under-appraisal didn’t materialize.
In Search of a Home
I called up my mortgage consultant (lender), Nick, to ensure that everything was progressing smoothly and that he needed all the information required of me. I was pretty sure he would’ve called me if there was anything he needed but it is better to be safe than sorry. He assured me that everything was on track and we are going to meet the deadline of closing next Friday (May 27th). This was also when he told me about the appraised value of my new (to me!) home.

As for the roof concerns, after faxing the request off to the seller agent, we received signed confirmation that the sellers (who have been accommodating and extremely polite the one time I met them) agreed to the request. A roofer will begin the repairs on Monday, May 23rd, and we will have a final walkthrough on Thursday, May 26th, a day before closing. While I am concerned that we didn’t spell out specifically what needed repair, the roofer must give us a certification (I will have to research what that means exactly) after the work is complete.

Finally, I have to look into the logistics of how the rent back will work and getting home owner’s insurance. The rent back agreement is that they’d cover my mortgage, taxes, and insurance so I have to double check what will come out of my pocket.

So close…

With readership increasing and your comments coming fast and furiously (I appreciate it!), I wanted to learn more about you folks. So, to facilitate this I’ll be holding a two-week “contest.” All that you need to do to enter is write (a comment with) a little blurb about yourself, how you found this site (via another site, search engine, etc), and, if you’d like, let me know what you thought of it (what’s good, bad, ugly, etc.). Also, if you have a blog and choose to link to me (or already link to me) - that’ll be worth another entry for a maximum of two entries per person.

In return, I’ll draw one of the name’s out of a hat and mail you a hardcover copy of The Millionaire Mind by Thomas Stanley. This means that you’ll need to leave me your email (or some way to contact you), which will remain hidden and I’ll never use for anything, so I can reach you on June 19th May 19th. (Wow, how’d I mess up that one)

Thanks and good luck!

Update: Contest closed. Thank you for everyone who entered, I’ll contact the winner in the next few days and get your address. Thanks again for participating and for the positive feedback. Cheers!

Winner: Incidentally, the winner of the book was Lore and I’ll be shipping out the book in few days. Thanks everyone for entering!

By now, anyone who wants it can get a free credit report at http://www.annualcreditreport.com.

This is sort of old-ish (in web terms anyway) news but it’s worth bringing up just in case you didn’t know about it. The Fair Credit Reporting Act (FCRA) recently made it a national mandate that you are allowed to get your credit report, for free, every 12 months. There is a rollout period so that the three credit unions don’t get clobbered all at once. By Sept. 1st, 2005, everyone will be able to get his or her credit reports once a year absolutely free.

Update: On June 1st, residents in “Southern States” will be eligible to receive free credit reports. Those states include: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas. So far, residents of Western States (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming) and Midwestern States (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin) can already get free credit reports.

The three credit reporting agencies setup a single website, toll-free number and mailing address for all your requests to make it easier on you and on them.
Website: http://www.annualcreditreport.com
Phone: 1-877-322-8228
Address: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

If you’ve never requested your credit report before, I suggest you go through the clearinghouse they’ve setup because you want to check them all for inaccuracies and errors. If you’ve requested them before and fixed all the errors, I would stagger the requests from each of the 3 agencies and get one every 4 or 5 months. Usually when something appears, it’ll appear on all three reports. By staggering your requests, you get three reports a year at three different points in time so you can essentially get 3 free reports a year. While not foolproof, this is a good way to take advantage of the freebie.

Contact Information for Each Agency:
Equifax
Phone: 800-685-1111
Website:http://www.equifax.com

Experian
Phone:888-EXPERIAN (888-397-3742)
Website:http://www.experian.com

Trans Union
Phone:800-916-8800
Website:http://www.transunion.com

As an FYI, residents of Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont already get free reports and won’t need to wait for the mandate to be active in their areas.

Actuaries get paid a lot of money to figure out how much to charge you for insurance. In fact, when I was going through school my guidance counselor told me I should consider a career in “actuarial science” because of my math skills but I told her I wanted to make a quick buck on this “internet” thing. Too bad the “internet” didn’t pan out otherwise I’d be filthy rich. Regardless, someone at Fatwallet posted a link to State Farm’s insurance scorecard (for the lack of a better term) which gives you a really good idea of what to expect when you decide to go insure your car.

(read full article…)

At 9am last Saturday, I met with the home inspector to go through my new home. Overall, the inspection went well with the exception of the roof - which was reported as being “repaired” 8 to 10 years ago. The inspector, Chris from Home Check, was extremely thorough and seemed to know his stuff. At times I felt like he was almost too “doomsday”-ish but that’s better than the other extreme, a lackluster inspection followed by the cashing of my check. While he couldn’t look into walls, he pointed out every single possible fault or trouble area to a level of detail I didn’t expect but welcomed readily. While I don’t know how much experience a typical home inspector has, he had been doing it for five years and my house was the first on his list of three that day (he never does more than three, cuts down on fatigue and quality of work). He was a quirky guy but good to work with.

The termite guy just seemed to walk around the house, poke his head in a few places, bang on a few walls, and write up a report. The gist of the report was: remove any rotting wood and ensure that the mulch in the front of the house was low enough so that termites couldn’t start up families in it and migrate into the house. The seller told us that the house had been treated with termite prevention a while back but no one has since reported of any problems with termites. I’ll just pitch the rotting firewood and be on my way.

The home appraisal guy just walked around the house and was generally very anti-social. The lender, who setup the appraisal, said he’d run around $350. He was in and out before anyone really knew he was there.

Now… the roof issues. There were three main problems:

1. The filters for the vents in the roof were clogged (the inspector said we should just pitch the filters all-together) and so the attic was getting too hot. The high temperature had activated the FRT (fire retardant treatment) in the wood, evidenced by a white chalky residue on the wood, because the wood thought it might be on fire. The net result of the chemical activation was that the wood was now weakened and possibly rotting.
2. The plywood under boards, to which the shingles are nailed to, were showing signs of weakness. Some were weak because of the FRT activation and some were weak because of age. One was very obviously sagging.
3. One of the support beams appeared to have a cut in it and needed additional support. The inspector said to get a certified roofer in there to check it out and fix it - specifically ask for a through-bolt (where you put the bolt through the beam) instead of just nailing some boards onto it for support.

Outside of the roof, there were only some minor cracks that needed filling (to prevent water damage) and some other minor areas that needed a bit of attention. The water heater needed a new anode rod, an upstairs door needing to be hinged better, etc. Nothing serious that would be a deal breaker.

I faxed the home inspection report over to my agent and we decided to ask the seller to repair the damage to the roof. According to him, the seller is obligated to repair up to 2% of the value of the home because of the contract and I seriously doubt the repairs will cost more than $6,000. Specifically, the request will read:

As a result of the home Inspection:

Have a licensed roofer evaluate and correct any damage to roof shingles, plywood, and support beams. Seller to provide buyer with roofing cert.

Buyer hereby releases the home inspection contingency

Also, I uploaded all the pictures I have of the property to Flickr, if you’re interested check them out here. (the pictures are in no particular order and the dog is just their dog, I thought he looked cute)

I can almost smell it!

One of the requirements in the contract for my home is that I secure a loan within two weeks - this is doable when you are working with a local lender who also works fast, hard, and well. Last night, I met with a “Mortgage Consultant” by the name of Nicholas Elko with Equitable Trust Mortgage Corporation, a local lender here in Baltimore. Nick is a solid guy who is very personable, knowledgeable, and gave me confidence he could get me the loan in two weeks. Now, the real meat of the story when you talk about mortgages is the rate and the fees. Nick could be the smartest, hardest working, and friendliest guy ever but if the rates suck, I would still feel like I was being taken advantage of (I did not and would wholeheartedly recommend Equitable and Nick to anyone in Maryland looking for a loan). In a 80/10/10, I’ll be getting 5.875% on my first and 7.5% on my second… both rates seem competitive with the market averages.

What does 80/10/10 mean? That means I’ll be borrowing 80% of the value of the home as a first mortgage, 10% as a second mortgage, and putting 10% down. It’ll be a 30 year fixed loan on both and the bottom line is I’ll be putting out about $1920 a month for the principal, interest, taxes, insurance (PITI), CPRA (parks fees) and HOA. That value is agreeable to me, despite being $1400 higher than my current rent payment. Yikes.

Oh, and you know how Bankrate always lists the lowest rates available? Try to get one of them - you probably never will. Those rates are like teasers for movies, they show you all the awesome action scenes and never any of the super cheesy and badly acted romance scenes guys hate. They’re also from little no-name banks in random little towns nowhere near you. I don’t know about going to a local lender that isn’t actually local to you. Anyway, I’m digressing…

Remember when I talked about LendingTree charging me $995 for loan related fees? How did a local lender compare? They came in at far less. Let us compare:

Expense	LendingTree	Equitable
Tax Service Fee	$45	$80
Underwriting Fee	$375	$150
Processing Fee	$375	$375
Document Preparation Fee	$175	n/a
Credit Report	$25	$45
Flood Certification	n/a	$18
Total	$995	$668

Those fees are only related to the first mortgage, on the second the only fees are a $200 Processing Fee and the $18 Flood Certification Fee - I can only imagine what the LendingTree fees would be on the second mortgage. So with Equitable Trust I’ll be saving at least $327 on the loan related fees even though it’ll be a rush job, which is 32.8% discount.

After you add in a whole bunch of other non-loan related costs, Maryland’s cut of the action, prepaid taxes, insurance, and taxes - my final dollar amount is $9,893 ($7,227 of it being “closing costs”). That means my closing costs will be 2.45% of the value of my home, in light with expectations and every metric I’ve heard (3%).

A reader, risk, noted that he knew of a 15 year fixed rate on the second mortgage of 5.99% (this was before the recent quarter point bump). The second 10 I have now is a 30 year fixed rate but the disparity in rates appears significant. Using DinkyTown’s calculator, the monthly payment of the second loan at 7.5% (my rate) will be $206.27 with the total payment being $74,254.85. At a 15 year 5.99% rate, it’s a payment of $248.75 with a total payment of $44.779.86! While the monthly payment isn’t significantly different ($42), the total payout is $30,000 apart in interest!

I’ll have to call up Nick tomorrow and ask what rate I would get if I only had a 15 year loan on the second. In all fairness, I asked for 30 fixed but never specified what I wanted on the smaller loan (I didn’t even think about it). Plus, we had a talk about the loans and he said Equitable typically sells the loan after a little while because of their asset size. With under $100M in assets, they live off selling the loans to bigger outfits, so they get paid for the legwork. I mean they will get paid based on the loan but it’s not like that interest goes into their pockets. If they were pocketing the $30,000 difference, it might be a red light.

Between when I first wrote this post and now when I publish, I talked to Nick. When I drop it to 15 year loan my rate is the same, 7.5%, which is a difference of $5,000 over the life of the loan. My payment jumps to around $275 a month… my plan is just to keep it 30 and make the larger payments. With my rate being the same, it will make no difference.

Why wouldn’t I just keep the loan as is and prepay? Since you pay more interest up front, you are making interest payments forward on what you’ve loaned (I don’t know if the terminology is correct) even if you pay it down faster later on. I’ll talk to him tomorrow and we can sort it all out, it probably won’t make much of a difference given the size of the loan and how I do plan to pay it off faster.

Les Christie, a CNNMoney staff writer, reported today that the U.S. residential real estate markets remained hot in the first quarter of 2005. The National Association of Realtors, which recently came under fire because of commission policies, reported that of 136 metro areas, 66 experienced double digit jumps, including where I live - the Washington (DC/MD/VA) region. The full list is here and Baltimore, MD notched a 6.9% increase in Q1.

What does that mean to me? Well it means the possibility that I bought at the peak of the bubble still exists (this data is for Q1 and we’re smack in the middle of Q2) but I’m not terribly concerned. Part of that is because someone was willing to pay far more for the house and the home is in an area with good schools. Either way, hopefully these percentage increase keep coming…

I’ll be meeting with a local lender at 5:30 to go over some paperwork and check out the mortgage loan rates. I’m under the gun because I need to get a mortgage loan approved within two weeks. The credit check/score has already been pulled and this guy hasn’t made any indication it’s going to be a problem so I feel as if I’m in good shape. The ballpark rates he’s quoted sound reasonable. The home inspection will be Saturday morning, within the limits of the counteroffer, and the appraisal should be done within the next few days.

I decided to sell the 512mb iPod Shuffle that Ex24 sent me mostly because with the purchase of a new home, cash will be tight and I really don’t want or need this iPod. Another reason is that because I will need to rent back until July 31st and my apartment lease potentially ends June 30th, the less stuff I have to move and store, the better. One little box less is one more thing I don’t have to schlep around, especially when I don’t need it.

If you’re interested in it, I’ve put it on Ebay.

Apple iPod Shuffle 512 MB Brand New Sealed NR NIB (auction ended)