Saturday, November 11, 2006

Be Careful the Headlines that you Trust

When reading anyone's opinions about finances, always have one question in the back of your mind. What is the agenda? For instance, here is an opinion made by an economist about the real estate market.

"The bad news is just about behind us. It appears that we have bottomed out."

That certainly is good news coming from the Chief Economist with the National Association of Realtors. I am sure that there is no agenda in that statement.

Let's consider another opinion about the United States Economy.

David Walker who is a comptroller has this to say about the United States Economy.

He describes the fiscal health of the economy as “a ship of state on a disastrous course that will flounder on the reefs of economic disaster if nothing is done to correct it.”

Credible? Agenda? Well, David Walker is the Comptroller General of the US Government. He is not an elected official. He has a secure 15 year term. He can speak the truth without reprucussions. He is one of the few Government officials who doesn't have to play politics. In fact he is going around the country warning people that we possibly are going to face a "financial tsunami."

He sees the real truth and he is the Chief Accountant/numbers cruncher for the US Government.

Now that we are out of the season of politics, make sure that you pay attention to the other side of the story. Beyond the agenda, there are some major problems that spell risk for your money.

Friday, November 03, 2006

Refinancing? Buying a New Home? The Big Banks want to be Your Friend

With the slump in real estate and increase in interest rates, the borrower/consumer now find themselves in the driver’s seat. Banks are seeing their revenues starting to slow and they want your business. So, they are willing to offer all types of incentives to gain your business.

Bank of America encourages you to apply with them and then go shop around. If you find a better deal, they will pay you $ 250.00 towards the closing costs of a loan with another company. Of course, it might take Congressional intervention to get that check. (Opps!! just thinking out loud and writing at the same time)

Charles Schwab said that they would give their current clientele a .25% discount on the rate for a new adjustable rate mortgage (awful choice) or home-equity loan. Amazingly enough they will give you a lower discount if you take out a fixed loan. Think through that with me. They will reward you more for taking out a loan that is not in your best interest and long-term better business for them and they will reward you less for taking out a loan that is much better for you.

Big banks (as I have stated many times) are not out to do you any favors. They are out to make money as fast as they can. This is evident through the way they take advantage of customers through credit cards and the bait and switch tactics used through many of their programs.

If you are buying a home or re-financing, go with someone that is not a marketing machine with dicey offers. Go with someone who can consult and be a trusted resource.

There are two ways to start. The smaller regional banks work hard at getting your business the right way. Many of the regional banks take the “hand shake” approach and treat banking customers the right way.

Go with a referral from a trusted resource. Alice White has been a frequent guest on my show. I have known her for over 25 years. Just last week she was able to save a Prudent Money reader almost a full percentage point off of what another broker was offering. She can be reached at alwhite@firsthorizon.com or 972-335-2252.

These are big decisions. Make sure that they are prudent decisions with a trusted resource. You don’t have time to over spend with another marketing ploy.

resources for this blog: www.minyanville.com and the Wall Street Journal