All posts by Barbara Nevins Taylor

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How Obamacare Will Work

Obamacare becomes a reality on October 1, 2013. That’s when you can sign up for the Affordable Care Act. The new insurance program will get underway on January 1, 2014 and will bring significant change for people who are uninsured, and self-insured.  This video produced by the Kaiser Family Foundation and narrated by former ABC anchor Charlie Gibson walks you through what Obamacare will mean to you.

In Washington, President Obama said today the Affordable Care Act, “is doing what it’s designed to do–deliver more choices, better benefits, a check on rising costs.”  He said as the plan goes into effect, “there’s gonna be glitches.” But the administration is working through the problems to give Americans more financial security.

He explained that, “…starting October 1st, new online marketplaces will allow consumers to go online and compare private health care insurance plans just like you’d compare over the Internet the best deal on flat-screen TVs, or cars or any other product that is important to your lives.  And you’re going to see competition in ways that we haven’t seen before.  Insurance companies will compete for your business. And in states that are working hard to make sure this law delivers for their people, what we’re seeing is that consumers are getting a hint of how much money they’re potentially going to save because of this law.  In states like California, Oregon, Washington, new competition, new choices, market forces are pushing costs down.”

In New York State, it is estimated that health insurance will be 50 percent less for those who self-insure.

Consumer Savings

A provision of the Affordable Care Act already in place requires insurance companies to spend at least 80 percent of every dollar that you pay in premiums on your health care instead of overhead or  profit. If they don’t spend the 80 percent they must provide refunds to consumers.  In 2012, 13 million people received rebates from insurers.  And 8.5 million rebates of about $100 each are set to go out this summer.

Yet yesterday, Republicans in the House of Representatives voted to dismantle parts of the Affordable Care Act and the President criticized them saying, “We’ve got a lot of problems in this country, and there’s a lot of work that Congress needs to do:  get a farm bill passed, get immigration reform done, make sure we’ve got a budget in place that invests in our children and our future.  And yet, instead we’re refighting these old battles.  Sometimes I just try to figure out why.”

 

News, Vids: Immigration

White House-Why Immigration Is Good For The Country

The White House produced this video and we think it’s worth sharing. It uses information from the Congressional Budget Office to explain why immigration reform will benefit the U.S. economy.

Legislation to create “a pathway to citizenship” for 11 million undocumented immigrants passed in the Senate but stalled in the house. House Republicans oppose what they see as “amnesty” for people who are not in this country legally and didn’t follow the rules. Some Republicans favor a limited program that gives citizenship to young people brought here as children, military veterans and a select group of others who may have technical skills that are in demand.  Some also suggest a guest worker program.

But the Democrats and President Obama continue to push for an immigration overall that clearly spells out what undocumented immigrants can do to become full-fledged citizens.

The Columbia, S.C., State newspaper reports that Republican Congressman Mark Sanford predicted that Congress will ultimately pass immigration reform that contains a pathway to citizenship. Sanford told reporters the house is likely to pass “micro bills that are palatable to the body.”  Sanford spoke to reporters in Hilton Head, S.C. and  said, “Once the legislation leaves the House, I think it will be the Senate side that prevails.” Sanford said he supports the idea of a pathway to citizen after U.S. borders are secured.

Sanford’s comments may mean there is some pressure in the House to produce meaningful legislation that will actually make a difference.

WATCH CONSUMERMOJO’S VIDEOS No-Interest Loan For Deferred Action and How to Apply for Deferred Action

 

Tell us what you think about immigration reform.

 

Consumer News, Scam News

Robocaller to give up Mercedes

Guess you can call it sweet justice. A group in a robocalling scheme settled with the Federal Trade Commission (FTC) and as part of the deal they’ll have to transfer assets including a 2007 Mercedes Benz CL, a 1999 boat valued at approximately $17,000, and a 2002 boat worth about $45,000 to the FTC.

A+ Financial Center was charged with making millions of illegal pre-recorded robocalls claiming to be from “Rachel” and “Cardholder Services” and pitching credit card interest rate reduction services.

In its complaints, the FTC charged the companies in this group and their principles with misleading consumers, calling phone numbers on the Do Not Call Registry, illegally collecting up-front fees, and making illegal robocalls.  The FTC says the A+ Financial Center defendants promised to help lower credit card interest rates if consumers paid an up-front fee of $495 to $1,595.  But after they received the money, the FTC charges they did little if anything to help consumers lower their credit card interest rates.

In settling the FTC’s charges, the defendants are banned from making robocalls and continuing to pitch unsecured debt relief services, misrepresenting the attributes of any financial product or service, and engaging in abusive telemarketing practices such as calling numbers on the Do Not Call Registry.

WATCH CONSUMERMOJO.COM’S VIDEO 3 TIPS TO MANAGE CREDIT CARD DEBT

 

Consumer News, News

Debt Collector to Pay Millions

Harassment by debt collectors is real. People hassled by their constant calls know how maddening, embarrassing and nerve wracking those calls can be.

So it’s a relief for many that Expert Global Solutions, the world’s largest debt collector, agreed to stop harassing consumers with allegedly illegal debt collection calls and to pay a $3.2 million civil penalty.

This is the biggest penalty ever obtained by the Federal Trade Commission (FTC) against a third-party debt collector.

The FTC charged that Expert Global Solutions and its subsidiaries called consumers many times a day even after consumers asked them to stop.

They allegedly called early in the morning, late at night and at consumers’ workplaces. The FTC complaint charges that the companies tried to collect money without verifying debt and continued to call consumers who said they didn’t owe anything.

This action doesn’t put the company out of business, but the FTC asked the court to order Expert Global Solutions to investigate whether consumers actually owe money before the company tries to collect.

The FTC says that under the proposed order, the company must “… stop falsely representing that they will not call a number to collect a debt; not harass, oppress, or abuse a consumer while attempting to collect a debt; not communicate with third parties about a consumer’s debt; not communicate with a consumer at his or her workplace if it is clearly inconvenient or prohibited by the consumer’s employer; except in limited circumstances, cease communications if a consumer has requested no further contact or if a consumer refuses to pay a debt…”

In other words, they must stop all the bad practices that add up to harassment.

watchmoreDebt Collectors-What are my rights?

Featured Stories, Helpful Tips: Mortgage and Homeowners, Helpful Tips:Money, Money News, Mortgage News, News, Scam News

Mortgage Modification Scam Crackdown

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These scammers prey on people in trouble. We run into them over and over and it’s always the same.

They promise to help homeowners who are behind on their mortgages get out from under and modify their mortgages. Instead, they take money, offer little or nothing, and homeowners are left deep in debt and in serious jeopardy of losing their properties.

The Federal Trade Commission (FTC) went after a group of individuals and companies operating out of Nevada and California.

It asked a Federal District Court in Santa Ana, California to stop them from allegedly deceiving homeowners. The FTC says the group advertised on the Internet, TV and radio and falsely claimed it would provide legal help to “save consumers’ homes from foreclosure and lower their mortgage payments.” It charged illegal upfront fees of $2,000 to $4,000.

A temporary restraining order shuts the operation and freezes the defendants’ assetss.  The FTC says, “Three individuals – Ratan Baid, Madhulika Baid, and William D. Goodrich – and seven companies falsely promised lower monthly payments and interest rates, and conversion of adjustable-rate mortgages to fixed ones. Apparently, many consumers who called toll-free numbers were falsely guaranteed a loan modification that supposedly would make their payments more affordable, that they would get results within 60 to 90 days, or that Goodrich, an attorney, would use his impressive legal experience on their behalf.”

While the case works its way through the courts, the people named in the complaint are barred from collecting advance fees for mortgage modifications.

watchmoreWhat Do I Do About Foreclosure and download the free guide.

 

watchmore 4 Tips to Avoid Mortgage Modification Scams and download the free guide.

 

 

 

Helpful Tips: Insurance, Helpful Tips:Money, Helpful Tips:Scams, Scam News

Affordable Care Act Scams

We suppose it’s inevitable. Scammers are taking advantage of confusion about the Affordable Care Act, otherwise known as Obamacare. The Federal Trade Commission (FTC) warns that scammers are trying to convince people to give personal information and money for a program that doesn’t exist yet.

Those who are uninsured, or who buy their own insurance can sign up for the Health Insurance Marketplace starting October 1, 2013. You can’t sign up before then. You can, however, learn about the choices available. Go to HealthCare.gov or call 1-800-318-2596, 24 hours a day, seven days a week to talk with a customer service representative.

REPORT A SCAMMER
The FTC wants you to report anyone you see trying to sign someone up before October 1, 2013.  You can report online or  toll-free, at 1-877-FTC-HELP.
TELL US YOUR SCAM STORY. WE’LL INVESTIGATE

 

 

Featured Stories, Money News, News, Scam News

Debt Relief in Top 10 Frauds

Debt relief scams ranked right up there on the Federal Trade Commission‘s (FTC) top 10 frauds list. It’s estimated that 1.5 million Americans were victims of someone trying to sell a quick fix for credit problems.

Stay ahead of the scammers

 Susan Shinn, an attorney with Neighborhood Economic Development Advocacy Project (NEDAP) warns against using debt settlement companies or others who promise to help you “repair” your debt or credit.

Scams
Debt settlement companies, like credit repair companies, are scams. Debt settlement companies promise they’ll get you out of debt by negotiating discounted settlements with your creditors. Credit repair companies promise that they are going to improve your credit but they often charge you hefty fees to do that. Instead of paying these scam companies, you’ll be much better off if you work with creditors directly, pursue credit disputes on your own, and work with non-profit consumer counseling services or other free financial counseling services.

Tell us your story. If you’ve been ripped off by a debt settlement company tell us your story. We want to share it with the world.

Like us on Facebook and Follow us on Twitter.

 

News, Videos, Vids: Travel

Happy Fourth of July

 The Declaration of Independence below is a quick, good read.

 

An earthquake in 2011 damaged the Washington Monument. The 555 foot marble obelisk honors George Washington. In case, you don’t remember he led the Continental Army, defeated the British and became the nation’s first president.

The monument is closed until a team of workers complete repairs. This video shows off  the high wire skills of some of the talented people at work.

The Declaration of Independence is a good read.

 

 

THE DECLARATION OF INDEPENDENCE

Something to Celebrate

 

IN CONGRESS, July 4, 1776.The unanimous Declaration of the thirteen united States of America,When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

The 56 signatures on the Declaration appear in the positions indicated:

Column 1
Georgia:
Button Gwinnett
Lyman Hall
George Walton

Column 2
North Carolina:
William Hooper
Joseph Hewes
John Penn
South Carolina:
Edward Rutledge
Thomas Heyward, Jr.
Thomas Lynch, Jr.
Arthur Middleton

Column 3
Massachusetts:
John Hancock
Maryland:
Samuel Chase
William Paca
Thomas Stone
Charles Carroll of Carrollton
Virginia:
George Wythe
Richard Henry Lee
Thomas Jefferson
Benjamin Harrison
Thomas Nelson, Jr.
Francis Lightfoot Lee
Carter Braxton

Column 4
Pennsylvania:
Robert Morris
Benjamin Rush
Benjamin Franklin
John Morton
George Clymer
James Smith
George Taylor
James Wilson
George Ross
Delaware:
Caesar Rodney
George Read
Thomas McKean

Column 5
New York:
William Floyd
Philip Livingston
Francis Lewis
Lewis Morris
New Jersey:
Richard Stockton
John Witherspoon
Francis Hopkinson
John Hart
Abraham Clark

Column 6
New Hampshire:
Josiah Bartlett
William Whipple
Massachusetts:
Samuel Adams
John Adams
Robert Treat Paine
Elbridge Gerry
Rhode Island:
Stephen Hopkins
William Ellery
Connecticut:
Roger Sherman
Samuel Huntington
William Williams
Oliver Wolcott
New Hampshire:
Matthew Thornton

 

Consumer News, Money News, News, Scam News

$6.5 Million in Refunds to Military Borrowers

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Even though military members put their lives on the line for this country financial predators consider them fair game. More often than not, they get away with it. Now government investigators cracked down on an auto loan program.

The Consumer Financial Protection Bureau (CFPB) ordered U.S. Bank and one of its nonbank partner companies, Dealers’ Financial Services (DFS), to end deceptive marketing and lending practices targeting active-duty military. The two companies must return about $6.5 million to servicemembers for failing to properly disclose all the fees charged to participants in the companies’ Military Installment Loans and Educational Services (MILES) auto loans program, and for misrepresenting the true cost and coverage of add-on products financed along with the auto loans.

“The Bureau has a special mission to protect servicemembers,” said CPFB Director Richard Cordray. “The MILES program failed to properly disclose costs associated with repaying auto loans through the military allotments system and the expensive auto add-on products sold to active-duty military. We will continue our work to ensure that servicemembers are treated fairly.

The MILES program required servicemembers to repay their auto loans using the military allotment system, which deducts payments directly from a military member’s paycheck before that salary is deposited in his or her bank accounts.  The allotment system was created decades ago to help deployed servicemembers send money home to their families and pay their creditors at a time when automatic bank payments and electronic transfers were not yet common bank services.

Today, the military allotment system may be vulnerable to misuse.  When service members pay by allotment, the lenders often require them to use third-party processors that charge one or more fees.  If lenders require payments by allotment, military consumers could be left with no choice but to pay this additional processing fee in order to qualify and pay for the loan.  This can cost servicemembers more in fees than alternatives like online banking, which are often free.

 

WATCH: ConsumerMojo.com’s video Veterans and Not-For-Profit Schools and What’s Wrong with Payday Loans?

 

Helpful Tips: Mortgage and Homeowners, Mortgage News, News

Mortgage Rates Hover Below 4 Percent

Mortgage rates are higher than they were, but they are down from last week. The average 30-year-fixed rate mortgage is 3.93 percent according to Freddie Mac, the company that buys mortgage loans. It’s still consider a good rate although at this time last year it was about 3.66 percent

The 15-year-fixed-rate mortgage is about 3.04 percent. A year ago it was 2.95 percent.

Adjustable rate mortgages are lower but much riskier.

If you are in the market to buy a home watch our video and read our free guide Mortgage Fees

Money News, News, Scam News

Government Grant Scammer Stopped

At one time or another, you’ve probably heard about a fast way to get money through government grants. The truth is that there is no easy way to get fast cash but scammers take advantage of our dreams.  Government grant scams take your money and deliver little of value.

The Federal Trade Commission (FTC) says, one of these scammers, Meggie Chapman, will now pay $1.68 million to consumers for ripping them off. According to the FTC  Chapman, “assisted and facilitated a scheme that deceived consumers by falsely promising them a “guaranteed” $25,000 grant from the federal government.”

The FTC and law enforcement officials in Illinois, Kansas, Minnesota and North Carolina tried to stop her in 2011.  They won a case against Chapman in U.S. District Court in Kansas in 2011. But she appealed. The good news is that the Court of Appeals upheld the district court’s ruling. So Meggie Chapman is out of the game, we think.  But she will have to pay up.

BOTTOM LINE

Stay away from individuals or companies that offer sure-fire ways to get money through government grants.

 

 

Latest News, News, Student News

Young People Want Health Insurance

With uncertainty about jobs, the economy and life, many young people want certainty about health insurance. A new poll by the Kaiser Family Foundation found that seven out of ten 18-to-30-year-olds say health insurance is “very important.”

Almost half of those under 65 polled say they or someone in their home has a pre-existing condition.  And 25 percent say that they or a family member, at some point, was denied insurance because of the condition.

Obamacare, or the Affordable Care Act (ACA) will prohibit insurance companies from denying coverage to people on the basis of health status or pre-existing medical conditions beginning in 2014.  But this poll found that many still don’t like the idea of Obamacare because they think the law “goes too far in changing the healthcare system.”

Interestingly, what the healthcare law is called is important. Forty-two percent say they have a favorable opinion of Obamacare compared to 35 percent for “the health reform law.” On the other hand, 47 percent have a negative view of Obamacare.

 

Videos, Vids: Banking, Credit, Debt, Money Management

How To Fix My Credit: No Lies

You hear them on the radio and you see them on the Internet.  It’s like an answer to prayer. Plenty of companies promise to fix your credit and change your life.  And there’s something in that.

 If your credit is bad landlords may not rent to you.  You may not get a car loan.  You may not get a mortgage loan or be able to refinance and some employers won’t hire you.  The truth is that you can improve your credit and you can change your life.  But if you pay one of these companies to help you, it’s likely it will hurt you financially. Most are scammers and they take advantage of your feelings of desperation and desire to make things right.  The best policy is to ignore the ads and stay away from the shysters.  In this video How To Fix My Credit-No Lies we walk you through the process to clean up your credit report and improve your overall credit rating.

There’s also a need to check your credit report for mistakes and errors and this video explains that too.

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Reasons To Check On Mom and Dad

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by Barbara Nevins Taylor

I’m responsible for my 89-year-old cousin Marilyn. She’s in a nice assisted living facility in Queens and I tell myself that all is well and I don’t need to check in on her regularly. Every week there are at least ten things that I’d rather do. I try to excuse myself from making the 30-minute drive, which seems like such a drain on my limited time. My silent complaints to myself go on and on. In the end, I always consider how I’d feel if something happened to her and I didn’t make the trip. So I go.

On my most recent visit, she was sitting with the other ladies, in a common area, just staring out into space when I walked in. She beamed a bright smile when she spotted me and seemed to bounce in her chair. That was a sweet reward.

I pulled up a chair and showed her and the ladies recent photos of my husband and me. “He’s so handsome,” one of the ladies said. Cousin Marilyn said, “He’s a doll.” We chatted for awhile, and I said. “Well ladies, that’s all I have today.”  One of them replied, “That’s enough.”  Marilyn said, “It’s all good. Who could want more.”

But I wasn’t quite finished yet. I always make sure that my visit coincides with the doctor’s schedule. Marilyn suffers form Multiple Myeloma, a cancer of the blood. And it’s important for her to get medical care when she needs it. The facility is very responsive, but I think it’s a good idea that everyone knows Marilyn  has someone looking out for her. So I stop in the nurses office and ask, “How is going? Is everything okay?” And I make it a point to talk with the doctor to find out if there is anything I should know.

I talk to the director of the facility and I talk to the staffers. I want everyone to know that Marilyn has someone who cares about her and looks after her. Maybe, this is unnecessary. But I don’t think so. Before my mom died in August of 2012, I did the same thing for her.

Older people need personal advocates and while it can be a strain on family members, we need to pay attention.

readmore

 Taking Care of an Elderly Parent

 

I didn’t spend more than an hour at the facility, but when I left I felt lighter than when I went in. I did my job and all of my reluctance and complaints seem to melt away.

The Number One Reason to Check on Mom, Dad and Elderly Relatives

watchmore When to Choose Assisted Living

 

 

 

 

 

Mortgage News, News, Videos, Vids: Mortgage and Housing

Quick Tips About Mortgage Fees

by Barbara Nevins Taylor

 It costs money to get a mortgage. Fees seem endless. It’s important to know what they are and what you’re paying for. The bank is required to tell you about these charges. Insist on that so there are no surprises.

GOOD FAITH ESTIMATE

“When you speak to a lender, the first thing you should do is ask for a Good Faith Estimate,” says Kenneth Totten, Vice President and Chief Lending Officer of Metuchen Savings Bank.  A Good Faith Estimate lists all of the fees. Peter Lucia, a loan officer with Mortgage Master in Tarrytown, NY, says, “It’s important to know what these fees are going to cost you.”

PRE-QUALIFICATION

The first fee is generally for pre-qualification, and that should include a credit check. This clears the way by essentially pre-approving you to buy a home. You’ll learn exactly how much a bank is willing to lend you based on your income and your credit history. What’s the First Step to Get a Mortgage explains how your credit history affects your ability to borrow.

APPLICATION FEES

Once you’re pre-approved and actually apply for a mortgage, you’ll pay an application fee. Application fees vary from $65 to $640 dollars depending upon the bank and where you live, according to the Federal Reserve Bank of New York.

MORTGAGE BROKER’S FmEE

If you use a mortgage broker to pre-qualify you and help find a bank to lend you money, you’ll pay a broker’s fee of up to 3 percent of the mortgage.

Although the buyer usually pays the broker’s fee, sometimes the lender will pick up the cost.  But if the bank pays the fee the mortgage broker is required to disclose that the bank paid him or her. Theoretically, that protects you from getting a bad deal.

LOAN ORIGINATION FEE

Once you’re pre-approved and choose a property, the lender can charge a loan origination fee to process and prepare the mortgage.  The cost is generally $2,000 to $3,000.

APPRAISAL FEE

Before the bank approves the mortgage, it will hire an appraiser to see if the property is worth the sale price. “The appraiser will set up an appointment with you or the homeowner to do an inside inspection of the home,” says Kenneth Totten of Metuchen Savings Bank. The appraiser will compare the physical aspects and the price of the home that you chose to others that sold recently in the neighborhood.  The borrower generally pays the appraisal fee of $300 to $1,000.  It is possible to negotiate with the bank for them to pick up the appraisal fee.

ATTORNEY AND NOTARY FEES

You’ll pay the bank’s attorney typically $500 to $1,000, notary fees of about $250, and a document preparation fee. That’s what the bank charges to process the documents required.

TITLE SEARCH

You’ll also pay about $700 to $900 for a title search.

This is extremely important Metuchen Savings Bank’s Totten explains, “A title company is going to be doing research on the property to make sure that there is not a claim in the future,”

A claim might include a lien on the property by a plumber, a roofer, or anyone to whom the previous homeowner, or prior owners, owed money. If there’s a question about the title the bank may require you to purchase title insurance. That will protect you against any claims in the future.

ENGINEERING AND INSPECTIONS

Banks often require an engineering inspection and a termite inspection. These are essential investigations to undertake before you buy a home.

“Do not buy without an engineer or an expert who can tell you about the systems of the house.  How well it is built and what problems you are going to have when you step in,” advises attorney Adam Leitman Bailey, author of Finding the Uncommon Deal.

Property Survey, Water Tests, Flood Hazard Inspections

Some jurisdictions require a property survey, water tests and flood hazard inspections. The fees for all of these services usually range from $300 to $500 per expert. It’s money well spent because you learn exactly what you are getting into.

POINTS

A bank may ask you to pay points. “A point is an interest fee that you pay up front instead of paying it for the life of the mortgage,” says Metuchen Savings Bank’s Totten.

Generally a point is 1 percent of the amount you borrow. If you borrow $200,000, a point amounts to $2,000. The bank may charge points if your credit score is low.

Paying points can also give you a better deal on an interest rate.  Totten says, “If interest rates were at 5 percent, and you had your heart set on playing 4¾ percent, you are going to be paying one point ahead of time for the right to pay less for the next 30 years.”

YOUR ATTORNEY

While your fees include the bank’s attorney, it’s smart to hire your own lawyer to review the papers and represent you at the closing.  That can cost another $500 to $1,000.  Choose the attorney carefully.  Leitman Bailey says, “Ask people who they used as their attorney and why.  Ask deeper questions. Why did they like them?  Why didn’t they like them?”

DISCLOSURE REQUIRED

Remember federal law requires banks and brokers to disclose all fees upfront. Make sure that they do, and make sure you understand what you’re paying.

 

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