Twila Van Leer

First-Time Home Buyer? Do It Right

July 14, 2014 By Twila Van Leer

Get The Best Mortgage Loan For Your Home

Making your first investment in a home is a big deal. A combination of angst and anticipation on a steep learning curve. At the moment, the inventory of possible buys is low and lenders are being selective. Be aware and be wary. The better prepared you are the greater your chances of success.

Even if you have the burden of student debt, now at an all-time high average of $30,000 per graduate, it can be done, but it requires an astute approach. On the plus side, interest rates continue to be relatively low, so now is the time. A suggested timeline for home-buying includes:

A year in advance:

Get serious about the figures. Trulia.com has a “rent-or-buy” calculator that would help you decide if buying is in the cards or whether it would be wiser to continue renting. At the moment nationwide, buying is 38 percent cheaper than renting. Feed in your data and see how you score. Get your finances in order. Spend the year saving money and, if possible, paying down debt. An FHA loan requires at least 3.5 percent down. Conventional mortgages call for 10 percent to 20 percent. Are your jobs stable? The potential mortgage institution will want to know. Be studying the housing market to learn what appeals to you. Browse the Internet listings and save the ones that you think you’d really like to see.

Six months to go

Order free credit reports and eliminate any mistakes before they come to the attention of a potential seller. Pay your bills on time and if you have a few bucks left at the end of a pay period, apply them to debt. Don’t take on new debt. Approval for mortgage applicants requires a minimum credit score of 755. Zillow.com has an online calculator that will help you estimate what you can afford for a new home, based on income, savings and debt. Look at tax rates in the target area you propose. Don’t court disappointment by overestimating what you can afford. Try to forecast future expenses. Maintenance on a home adds, on average, 1 percent to the cost of home owning.

Three months out

You’re ready, armed with the information you need. Now determine what type of mortgage you want to pursue. Fixed mortgage rates, now at about 4.4 percent, could go up to 5 percent this year, according to industry forecasts. A 7/1 adjustable-rate loan carries interest of only 3.5 percent now. For the sake of that lower rate, however, you run the risk that you could stay in the home longer than seven years and face a sharp interest rise. That’s why 92 percent of mortgage borrowers stick to fixed-rate loans. Many banks will pre-approve a mortgage loan based on income and credit. That’s a huge advantage when the actual search for a home begins.

Time to go

Find a realtor in the area where you want to buy. Screen to be certain the person you select will serve the best interests of your home purchase. Good questions to ask: How does the realtor go about finding listings and how are potential bidding wars handled?

That’s it. Happy house hunting!

Free Checking? Try A Credit Union

July 9, 2014 By Twila Van Leer

Finding a financial institution that offers free checking is usually not hard, and many credit unions are joining the ranks, making it even easier. And the fees associated with checking where it isn’t free are plateauing, according to an article in Bankrate.com.

The 2014 Credit Union Checking Survey conducted by Bankrate reported that 72 percent of the country’s 50 largest credit unions charge no monthly service fee and apply no fees to point-of-sale transactions.

Free checking frees up money to spend elsewhere.

The figure is slightly down from the 78 percent posted in 2010. The continuing trend, however, is good news, showing that free checking is a staple at most credit unions and there is no indication that that will change.

In contrast, banks appeared moving in the opposite direction, with a drop among the institutions offering free checking from 76 percent in 2009 to 38 percent in 2013, Bankrate reported.

Some banks, while charging a checking fee, offer an offsetting opportunity. For instance, Alaska USA Federal Credit Union in Anchorage waives its $5 monthly fee if the customer uses direct deposit into a checking account. Others drop the fee if the consumer agrees to e-statements or maintains a minimum balance. With these trade-offs factored in, the number of free checking amounts rises to 96 percent.

That makes the talk about the demise of free checking moot, says Greg McBride, one of Bankrate’s analysts.

Credit unions have incentive to offer free checking, since they are not-for-profit cooperatives with obligations to members, rather than stockholders. There is a sense of providing service to members whereas banks are concerned with profit-making. Free or low-fee accounts are a matter of pride with the non-profits. It’s an attitude that is core to their business.

Bankrate also looked at other fees related to credit union banking and found that most of them are holding steady.

About 30 percent of the credit unions in the survey either had no fee associated with using an out-of-network ATM or allowed up to five uses per month of those ATMs.

Overdraft fees have risen slightly at the credit unions, according to the study, from an average of $26.74 to $26.9. The average bank fee for overdrafts is $32.20, while those who exceed their credit union balances commonly pay $25 to $30.

Surcharge fees paid by nonmembers to use a credit union’s ATM went up 5 percent between surveys, now standing at an average $2.41. Since 2010, such fees have risen by 20 percent, and it appears likely that the non-member usage will continue to see increases, industry leaders say.

Credit union membership has increased by more than 8 percent since 2008 and assets have grown by more than 30 percent. The financial crisis that hit the country a few years ago likely pushed the increase. As consumers began to feel “fee fatigue” more frequently, they took new looks at the historic benefits of credit unions and either switched from their banks or added a credit union to their financial options.

While current no- or low-fee offerings are expected to continue, credit unions are feeling the effects of a long period of low interest rates and other financial factors, as are their competitors. All financial institutions will continue looking at fees and evaluating services and offerings, industry leaders say.

3D Printing, A Technology For Regular Folks?

June 25, 2014 By Twila Van Leer

3D Printing Cube - Displayed on magazine website - Dezeen.com — 3D Printing Cube – Displayed on magazine website – Dezeen.com

Predictions that 3D printing is rapidly becoming a reality raise a lot of questions. Does that mean that a printer (or two or more) will join the standard computer in the majority of American homes? Or will the technology create industrial and commercial tools that will affect individuals only as they become users of their products?

It would be easy to envision a whole line-up of 3D printers in the home — one to print out custom makeup for the ladies in the family; one to create toys for the kids, another to whip out golf balls for dad, not to mention the family food printer that would produce elegant pastries as well as standard pasta dishes.

There is plenty of debate already ongoing among the experts in the field regarding the potential for individual applications of the technology vs. broader uses. Before you get carried away with visions of your home’s 3D printing devices, you might like an opinion from one of those who is deep into the development of the prototypes that precede the real thing.

Terry Wohlers, who heads a company involved in analysis and consulting on matters related to the evolution of 3D printing, is a skeptic about the potential of widespread use of 3D printers in the home, but he is certain that in the near future, the technology will be used to benefit all Americans through commercial, medical and industry applications.

He relates the future of 3D to the present saturation of computers. “Just like with computers, you have some computers at home for specific things and computers at work for other things,” he explained. Food is the only thing “manufactured” in the majority of American homes and 3D likely will find its useful place to facilitate that activity, he believes.

Fabricated: The New World of 3D Printing by Hod Lipson

Hod Lipson, who is exploring many kinds of eventual 3D printing uses as a scientist with Cornell University’s Creative Machines Lab, has a little broader conception of how the technology might affect individuals. He sees people using 3D printers to enhance nutrition and direct health regimens, among other things. A robot conceivably could guide your eating habits.

“You will have a hard time explaining to your grandchildren how you could live without a 3D printer,” he says. “In two decades we’ll wonder how we were able to live without 3D Printing.” Already the term “3D printing” is working its way into the American vocabulary and soon, the phrase will drop off the tongue as readily as the word “computer,” the visionary leaders of the movement predict.

3D Food Printers? Move Over Microwaves

June 19, 2014 By Twila Van Leer

Make room in your kitchen for a gizmo that prints food. Mind-boggling but true. The 3D printing technology is already developed and there are advance-guard food preparation models on the market, selling for $99 to $5,000.

This ravioli mold was printed with a 3D printer.

Here’s how it works: Suppose you have ravioli in mind. Assemble the ingredients — the first step you always take in preparing meals. Then the machine takes over, “printing” a thin layer of pasta from one of its capsules. Next comes a layer of your tomato-based filling from another capsule, followed by another layer of pasta filling for the standard ravioli design.

The 3D printers do NOT make something from nothing, stresses Lynette Kucsma, co-founder of Natural Machines in Barcelona, Spain. The company calls its food printer the Foodini, of course. It is scheduled for release in October and will sell for about $1,300 initially. Kucsma predicts that the device will be as common as the kitchen microwave and that it will take less time to catch on with the current tech-savvy public. She feels it will offer a more healthful approach to food preparation, edging out some of the fast foods that are standard American fare these days.

“The point is to get people away from eating processed foods and start cooking again,” she said, but cooking in a Space Age mode. In a time-pressed society, having a mini food manufacturing device in the kitchen will be a more healthful approach, as well as saving time, she predicted.

3D Printed Sugar Seen On 3dsystems.com — 3D Printed Sugar

For instance, in the above example, each ravioli takes under a minute. That means 10 in 10 minutes. The food printer is an assembly device that does the tedious work of putting things in order and doing the tedious chores, such as rolling pasta dough. You still must add necessary ingredients and cook the assembled food. Natural Machines and other hopeful competitors in the emerging market are already working on companion pieces that will take care of the cooking.

Cornell Creative Machines Lab, which also is creating a 3D food printer, joins in making futuristic claims for the technology, predicting that dining out as well as cooking in will be significantly affected. The company cites USDA figures that show the average American spends 33 minutes a day on food preparation. Food printing could become a set-and-forget process that could cut the time by 150 hours per year.

Before such devices become standard household equipment, they are likely to enhance fancy items such as pastries for restaurant chefs. But standard microwaves are already shuddering in their shoes as they see the shape of the future in 3D food printing.

Making a sandwich with 3D printer as seen on 3ders.org

Feeling Insecure About Social Security?

June 13, 2014 By Twila Van Leer

If you’re contemplating looking closely at your Social Security options, the first rule is: Don’t depend on the Social Security Administration to come running with individual advice. The administration makes the options (many and often confusing) available. You’re on your own to do the research and determine what approach is best for you.

William Meyer operates a website, Social Security Solutions, which, for a fee, looks at your data and suggests the best solutions. He advises, based on long experience, that if you are considering a less-common choice for receiving your SS benefits, that you go directly to the nearest SSA office. You can’t depend on the agency following electronic requests if they are out of the ordinary, he said.

The obvious choice for maximizing your SS payments is to begin collecting benefits after age 70. The monthly payment at that age is 76 percent higher than if you start getting checks at age 62; 32 percent higher than if you made your first claim at age 66. That means, of course, that you must bank on longevity, gambling that you’ll live long enough to collect the higher payments to more than break even. If you live until age 90, you will accumulate almost $162,000 more in benefits.

However, Merton Bernstein, retired law professor and SS expert, advises acting on the side of the odds. He says the longevity odds are so bad that it’s a rash bet. “Take the money and run,” he suggests.

Marital status has a large bearing on SS issues. If you choose to divorce after less than 10 years, you lose the opportunity to collect SS benefits based on up to half of your ex’s earnings or on the basis of your own earnings, whichever is greater.

The sad truth is that if you don’t remarry, your ex-spouse is worth more to you dead than alive, especially if he or she was a high earner, says Carol Thomas, who worked for the SSA for more than 28 years. She answers questions about SS at RetirementCommunity.com. When an ex-spouse dies, you will be treated just like a widow or widower, she said. If you are at least 60, you can collect your expired spouse’s benefit, allowing your own benefit to grow unclaimed until you reach age 70. Then you can switch if your own is higher.

The longer the ex-spouse works, the better your associated benefits will be, so if it is feasible, encourage him or her to stay employed at least until age 70. Then at the death of the ex-partner, you can claim half of his or her maximum SS.

There are key differences between spousal and widow/widower benefits that can be very confusing, said Dan Keady, director of financial planning tor TIAA-CREF Financial Services. A widow or widower can begin benefits based on his or her own earning record and later switch to survivors benefits. Or he/she can begin with survivors benefits and later switch to benefits based on his/her own earnings, even if the surviving spouse is filing before full retirement age. That is not possible with spousal benefits.

Applying for disability insurance, the first step should be to hire a lawyer or other expert adviser, according to the experts. Representatives of the administration won’t tell you that, but it is important to have representation from the outset. An application for disability benefits should be accurate and precise. Small mistakes can interminably slow the process or result in denials. A better explanation of benefits might be found at MyRetirementPaycheck.org, sponsored by the National Endowment for Financial Education.

It’s a long and often complicated process. The answers are available and you should consider all your options. But it may take time and the involvement of others who have expertise.