Jeff Forman

Dan Stanton & Jeff Forman
Mortgage Consultants
D N J MORTGAGE
Phone: 919-337-5485
Fax: 919-854-2594
jforman@dnjmortgage.com

Mortgage News
Are You Still Waiting for the Government?

During the first quarter of 2009, the first 100 days of the new President's term, you are no doubt going to hear a lot of news stories about the economic stimulus plan and the financial rescue package and their possible ramifications to the real estate and mortgage markets.

You're going to see headlines about new incentives for home buyers and hear stories about 4% interest rates. But the truth is that right now, at the time of the writing of this article, the government already has in place one of the largest tax incentives for qualifying home buyers it has ever offered - up to an $8,000 tax credit for first-time buyers, and mortgage rates are within a half a point of being the lowest they've been in our country's history.

The truth is that, while all of this is great news for those looking to buy or refinance a home in 2009, none of it matters if you can't qualify for financing. None of it matters if you sit on the fence and watch the great opportunity of homeownership pass you by.

Make sure your financial house is in order
If the idea of buying or refinancing a home in 2009 has even crossed your mind, give us a call. We'll review your financial situation and see what makes sense for your individual goals.

Remember, because of increased delinquencies and today's tougher economy, lenders have tightened standards for both new purchases and refis. And while mortgage financing is certainly available and affordable to everyone who qualifies, you're going to need a solid credit score, you'll need to be able to document your income, and, if you're purchasing a new home without a special government program from the VA or USDA, you're likely going to need a down payment as well - at least 3.5% for an FHA loan. And there's no stimulus bill or bail-out plan that is going to change this. So, if you're looking to purchase a new home in 2009, take the time to locate the following items:

• Your W-2s and tax returns for the last two years;
• Your last three months of bank statements; and
• Pay-stubs for the most recent 30 days.

If you haven't checked your credit in awhile, now is the time to do so. A lot could have changed since the last time you checked it, good or bad, and you don't want any surprises that might alter your plans. We'll gladly review your credit for you and see if there is anything that needs to be addressed, but don't wait. It would be a shame to miss out on a great opportunity simply because you didn't check your credit report.

For homeowners with enough equity to refinance, now may be the time to lock in a low rate. Sure rates could go lower, even to the 4% level you've heard about in the news. But rates could just as easily start to rise again, and home values could drop even lower, making it difficult for your house to appraise. In the financial and credit markets, there are no guarantees, and there's nothing in the stimulus bill or bail-out plan to address mortgage rates. Why lose money waiting around for an opportunity to save a little bit more each month in the future when you can have significant savings every month right now?

Let us review your mortgage and see if you can benefit. The worst thing that could happen is you find out that you already have the best mortgage and interest rate possible.

Thank you for reading our Homes & Money newsletter. Keep reading our newsletters and other materials we send to learn more about the ever-changing economy in the weeks and months to come.

If you know anyone who is looking to buy, sell or refinance a home, please forward their name and telephone number to us. We will happily provide the same high level of service that we have provided to you. The greatest compliment you could possibly give us is the referral of your friends and family.

Finance News
Aging Relatives and Finances

Are you noticing subtle - or maybe not so subtle - changes in the way your aging relatives are handling their finances lately? Are you concerned that they might be having serious trouble, but you don't want to say anything to make them feel bad or put them on the defensive? While this can be a sensitive area for many people to discuss with aging family members, there are ways you can assist your family members with their finances without causing embarrassment or completely taking over this important task.

The first step, however, is communicating. You have to do it. If you're concerned that there's a problem, then there's really no way around it. After all, the best time to act on this is before something disastrous happens to their finances or their health that could challenge your lives and your relationship even more. Did you know that a recent study found that nearly 60% of people who endured a home foreclosure never spoke to their lender or even their closest family members, until it was too late? Don't let this happen.

A good way to begin the discussion is to simply ask them how they're doing, and to let them know you are concerned about them. Some experts suggest using "I" statements to help break the ice and get the conversation going: "I am worried about you, and I want to make sure that everything is okay."

Once you've gained their confidence, let them know that you're just there to help. Sit down with them and assess the situation. Offer to help them organize their important documents, like their checkbooks, bills, bank statements, credit card statements, even their mail. Those having difficulty managing their finances will often have large piles of unopened mail, notices from utilities and collection agencies, and excessive amounts of magazine and catalogue subscriptions - even un-cashed checks. These are huge red flags that can help you uncover just how bad the situation may be.

Be sure to discuss their income, assets and insurance policies, even safe deposit boxes. Find out if a will is in place, and discuss whether a health care power of attorney is appropriate. Help them find and apply for government programs or special interest groups and clubs that represent seniors, like the AARP Money Management Program and the National Council on Aging. If it's too much for you to handle on your own, find out if they would be willing to have a family attorney or financial planner review the materials you've already organized together.

It may take a little work and a lot of patience, but don't assume that your relatives will automatically reject your offer to help. Take the time to communicate, and help them get their finances back on track. You'll be glad that you did.

If you need help finding an experienced financial professional, don't hesitate to give us a call.

Creative Cuisine
Chocolate Toffee Cookies

This is a fantastic cookie, reminiscent of English toffee. They not only taste great with a cup of coffee, but they're an awesome accompaniment to vanilla ice cream. The cookie shards can be served whole, wedged into the ice cream or, crumbled into smaller pieces and sprinkled on top.

- 1 Sleeve of saltine crackers (unsalted)
- 1 12-oz package semi-sweet chocolate chips
- 2 sticks unsalted butter
- 1 Cup brown sugar
- 1 Cup sliced almonds

Preheat oven to 325 degrees. Line a 12 by 16 cookie sheet will aluminum foil and grease with butter or non-stick spray. Line the entire surface of cookie sheet with one layer of crackers placed edge to edge.

In a saucepan placed over medium heat, melt butter along with brown sugar. Allow mixture to bubble, stirring continuously until sugar has melted and sauce has thickened. Allow mixture to cool slightly and using a rubber spatula, spread evenly over the entire surface of the cracker layer.

Place cookie sheet in oven and bake for 10 minutes. Turn off the oven and remove cookie sheet. Sprinkle evenly with chocolate chips and return cookie sheet to the warm oven for 10 minutes. Remove cookie sheet again and using the spatula, spread melted chocolate chips evenly over the cracker layer. Sprinkle evenly with nuts and allow the entire sheet to cool in the refrigerator.

After the sheet has cooled and the chocolate has hardened, remove from refrigerator and peel off the aluminum foil. Using your hands, break up the sheet into individual, imperfectly sized cookies. Store the cookies in a cool, dry place.

Street Smarts
Post Office to Raise Rates Again

The U.S. Postal Service announced that the price of a first-class stamp will increase from 42 cents to 44 cents on May 11, 2009. That gives you plenty of time to stock up on what the Post Office calls its "Forever Stamp," a special stamp that has no price denomination printed on it but is good for any first-class letter weighing up to one ounce -- forever, no matter how much postal rates increase in the future. This means you don't have to locate and horde a bunch of one- and two-cent stamps to mail your letters after the increase. You can simply purchase these special stamps at today's 42-cent rate and use them now or in the future, even if postal prices double or triple. The forever stamp, an idea adopted in Europe years ago, was adopted in the US in 2007 and features the Liberty Bell.

Why is this important? Well, here's our two cents. In 1968, first-class stamps were six cents. Since then, the price has risen only 15 times. However, in December 2007, legislation was passed linking postal rates to the consumer price index, which has caused rates to increase each of the last two years - and could easily lead to annual increases from now on. Postal officials estimate that the 2-cent increase will only cost the average household about $3-a-year, but if you utilize the postal service a lot for your business, be aware that other services will also increase on May 11 as well, which do not offer this "forever" feature. This includes a one-cent increase of postcard stamps to 28 cents, a five-cent increase on the first ounce of a large envelope to 88 cents, and a five-cent increase to the first ounce of a parcel to $1.22.

Home News
Ownership Has its Benefits

If you or someone you know are still paying a landlord's mortgage instead of building equity of your own, see what you're missing. Check out some of the other financial benefits of being a homeowner.

Typical Tax Deductions for Homeowners

• Mortgage interest - One of the biggest tax incentives to owning a home is that the interest you pay on your mortgage is tax-deductible, up to $1 million. This deduction applies to any kind of home, including a second home under certain conditions.
• Real-estate taxes - As a homeowner, you can deduct the local property taxes you pay each year, too. This applies to both your principal home and any others you may own.
• Points - If you (or even the seller) paid points to the lender to secure your mortgage, you may be able to deduct those points on your taxes.

New and Temporary Deductions

• $8,000 for First-time Buyers - Just when you were figuring out the $7,500 tax credit for first-time buyers, Congress changed the rules and is now offering an $8,000 tax credit - and guess what? Buyers won't have to repay it unless they sell their homes within three years.
• Mortgage Insurance Premiums - Thanks to Congress, MI premiums can be deducted in most cases by home buyers for mortgages issued after 2006 and before 2010 (although Congress may extend this provision). This one has income limits, so ask your tax professional for help.
• New Standard Deduction - Prior to 2008, only taxpayers who itemized their deductions could deduct state and local property taxes. New legislation changes this for 2008 and 2009. Qualifying tax payers who don't itemize but pay property tax, get up to a $500 extra deduction; married filing jointly get up to $1,000.

Special Incentives

• Tax-Free Profits on Sale - When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes.
• Other Benefits - Ask your tax professional about Penalty-free IRA payouts for first-time buyers, home improvement deductions, energy credits, and even moving expense deductions.

Facts and Figures
Get a College Education for Free

It's no big secret that a college education can cost you or your children years of debt. But guess what? More and more universities, and not just the US military academies, are now offering some students everything from free tuition to free room and board. Check out some of the sweet deals offered by these unique universities.

1. College of the Ozarks - Students pay no tuition in exchange for at least 15 hours a week at a campus work station at this top liberal arts school in the Midwest.
2. Deep Springs College - This two-year, all-male liberal arts college in California offers free tuition, room and board in exchange for at least 20 hours a week of hard work on its ranch.

3. Berea College - This Kentucky college provides a full-tuition scholarship to every student, in exchange for at least 10 hours a week in one of the school's 130 labor departments.

4. Olin College of Engineering - One of the top undergraduate engineering programs in the country, this school provides every admitted student free tuition for four years.

5. Cooper Union - Located in Manhattan, this school offers degree programs in art, architecture, and engineering, and every admitted student receives four years of free tuition.

Other more specialized schools with similar deals include: Curtis Institute of Music in Philadelphia, Alice Lloyd College in Kentucky, the City University of New York's Teacher Academy, and UC-Irvine School of Law (this year only) in California.