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Mark Said:

How should I start off my path to real estate?

We Answered:

Check ALLIED real estate school online for info, I got a license from them.

Arnold Said:

Any other women in their early twenties feel this way?

We Answered:

YEAH I FEEL YA GURL I'M 24 AND FEEL THE SAME DAMN WAY

Shirley Said:

Could you please give me some advice on a refinance of my mortgage? Details...?

We Answered:

What you've been offered is a very, very bad deal.

The lender is using your mortgage as a debt consolidation loan. You're taking all sorts of little and moderate debts--ones that'll be paid off soon--and putting them into a 30 year mortgage. Your laptop, for instance, will be worth zero in a couple of years (heck, it's a lease, not even a purchase), but you're rolling that debt into a loan that extends for 30 years. Very bad idea.

You'd get to "skip" two payments. I'm sure those payments are wrapped into the mortgage, too. So, you save maybe $2,000 from skipping two payments...but you end up owing $2,000 in principle and probably around $4,000 in interest. Very bad idea.

As someone else noted, if your interest rate on the student loans is below 6.35%, you'd be trading lower-rate loans for a higher-rate loan. And, again, for 30 years.

Also, take a look at the APR on the new mortgage. I'll bet it's a lot higher than 6.35%. (It's normal for the APR to be slightly higher than the state rate; how much higher is the issue.) I'm guessing there are a few thousand dollars worth of junk fees thrown in there.

Also, how's he getting rid of the PMI? You're estimating your house might appraise for $160,000. (Get a Realtor to do a CMA on the property.) You'd owe $152,000. That's a 95% loan. Maybe he's doing what was done a couple of years ago--an 80% without PMI and a 15% with PMI. You'd have almost no equity, as you already recognize. And what if property values decline? You'd be upside down--owing more than the property is worth. Even at those figures, $160,000 value, $152,000 owed, if you had to sell, you'd have to bring $8,000-$10,000 to closing.

It's a terrible deal for you.

Hope that helps.

Tyrone Said:

What percentage of your net income should you spend on all your bills including mortgage, car, insurance, etc.

We Answered:

For financial solvency, one third of your income is the general rule of thumb for rent/mortgage. Utilities can vary widely and 60% for rent/mortgage and utilities does not seem high to me, especially in an urban environment where they cost of living is high. With housing still overinflated most people do not meet the one third requirement and pay close to or above 50% of their salary on rent/mortgage alone. I think if you are comfortable with your own budgeting and plan ahead that is what is most important.

Leon Said:

If you have a flood insurance policy, do you carry flood contents insurance?

We Answered:

If I were you I would get a quote without contents coverage. Most times you know a flood is coming (unless it is a flash flood but you should have some clue there too) & you can empty the important things out of the house & leave. There is very limited basement contents coverage (washer dryer, deep freezer & that is about it other than the house systems). Even if you purchase some contents coverage, you will need to empty out the basement of contents, if you have any down there, if you know a flood is coming if you want coverage for the contents.
Yes, if you didn't live in a special hazard flood zone & your property was rezoned into the special hazard flood zone & you ALREADY had a policy in place on the standard rate policy (NOT on the preferred rate policy which is available to only to zones B, C & X) BEFORE the rezoning, you are grandfathered into the same rate & you can be rated in the same zone (you could continue in zones B, C or X instead of one of the A or V zones). I just had this happen to one of my insureds. They had a flood policy in zone X in the standard rate. I wanted to rerate to the preferred rate to get a better premium for them & when I rerated I found out they were recently rezoned to zone A. I called the National Flood Insurance Plan & they told me about the grandfathering & they said I could leave the current policy AS IS with the same coverage, zone & premiums. If they ever cancelled the policy, they would have to be rewritten to the new zone with the higher rates.
Did your agent tell you about an elevation certificate? This may be very helpful to you. If the lowest part of your home (basement floor if you have a basement) is above the flood plain, you may be able to get a much cheaper rate. It may be worth it for you to contact an engineer, it could cost several hundred dollars to have this done but if you are even with or above the flood plain, it could save you many hundred dollars per year. Your agent should be able to quote the difference. I bet it could make up the cost in one year or less.
Also, another thing you should know - if you sit way above any body of water, like up on a hill or knoll, depending how high you are, you may be able to get a "letter of map amendment" from an engineer. This would essentially take you out of the special hazard flood zone & end your need for flood insurance by the bank. You would submit the letter to FEMA & the bank.

Fernando Said:

Are we doing well financially? How do we compare?

We Answered:

You're way ahead of the average, of course, because your finances are headed in the positive direction. The average person is in debt. No debt other than your mortgage is perfect. You're socking away 15% or so of your income -- great.

I see nothing to quibble about here. You don't say how old your kids are, but if you're planning to put them through college, you should plan on working that long. After that, it's just a question of whether or not you *want* to work -- my guess is that you'll be financially set.

Here's an easy rule of thumb to track your progress -- I call it the FTI (for "Forget This Index" -- when it reaches 1000, you can walk into your manager's office and say "Forget This!"):

Age * Net Worth / Yearly Expenses

Age is your average age
Net Worth includes everything, including home equity and pension balances
Yearly Expenses doesn't include payroll taxes or investments

You're at 35 * 219k / 55k or so -- I'm guessing on your expenses, based on your description. That's already at 139, which is great for age 35. It'll continue to go up as you age and as your portfolio grows faster than inflation.

When your expenses drop (kids finish college), you might be all set! Pay off the home to lower expenses further, cut your income down as well, remove your itemized deductions and take advantage of the standard deduction, pay next to nothing in taxes, and enjoy the rest of your lives!

Good luck,

Doug