Stop Flirting With Disaster

by Stacy Francis, CFP®, CDFA

Nobody likes (or needs) to spend much time thinking about a possible future disaster. But sometimes an ounce of prevention is worth a lot more than a pound of cure. Losing precious documents to disasters such as theft, fire, earthquake or flood can cost you countless hours and thousands of dollars as you try to restore them. Buying a fireproof safe will set you back about $100. You decide.

Savvy Ladies' Tip: Buy a fireproof safe online (Google “fireproof safe”) and have it delivered right to your doorstep. Then store these documents inside:

• Birth certificates, marriage certificate, divorce papers • Passports • Social Security cards • Title to your home (the deed) • Title to your car (the pink slip) • Will, trust, and power of attorney • Advance directives (living will, health care) • Insurance policies (car, home, long-term care) • Stocks and bond certificates • Photographs of your possessions (for insurance purposes)

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Buying a Home When You're Female and Single

by Stacy Francis, CFP®, CDFA

Are you thinking about buying a home? Here's some expert advice

A lovely little house with a white picket fence and a husband to buy it for her used to be the average little girl's fantasy, or so goes the stereotype. But these days, the average woman is more than likely dreaming about buying her own home. And according to statistics, she and her savvy single friends are setting records doing just that!

In fact, over 52% of women-headed households in the U.S. own their own homes and single women constituted the fastest growing demographic of first-time home buyers recently.

Nonetheless, the prospect of buying a home on your own can be daunting. In order to purchase the home of our dreams you need to get real about your finances. Here are some questions you need to ask yourself before you purchase a home.

Can you afford to buy a home?

Consider these two guidelines:

1) Your monthly mortgage payment, including principal, interest, real estate taxes, and homeowner insurance, should not exceed 28% of your monthly income before taxes.

2) Your total amount of debt (mortgage, credit cards, car payments, student loans, etc.) should not be more than 36% of your gross income--this is referred to as your debt-to-income ratio.

Sadly, due to low interest rates many individuals are buying more home than they can afford. They strap themselves with mortgage payments that stretch them to the limit and forget to budget for maintenance. When the first thing goes wrong with the home, they're in over their heads. Ladies, if you can't afford the sort of place you want to buy — with a loan that does more than just pay your interest — you may want to wait until you can pay a more substantial down payment.

Should you buy?

Are you planning to stay put for three years or more?

If you're not planning on living in the same place for at least three years, buying is not a good idea. You need to consider the cost of moving and the cost of buying and selling makes renting a smarter move if you plan on living there only for a short time.

Are you willing to maintain it?

Owning a home is more work than renting. No more calling the landlord when the plumbing breaks, the refrigerator stops working and the air conditioner dies.

Is your credit in decent shape?

Be sure to check your credit score at www.myfico.com before you decide to buy. Unless you have a credit score of 700 or above, you could pay above average rates to finance your purchase. That can be costly!

You are ready to buy!

By and large, whether you're single or divorced, the toughest part of buying a house is coming up with the down payment. However, the following resources are a good place to look for mortgages requiring low down payments.

Fannie Mae: This type of mortgage features a loan-to-value ratio of 97%, meaning you need only come up with 3%. Only people with modest incomes will qualify for this type of loan, and a pre-purchase homebuyer education class is required for approval.

Federal Housing Administration (FHA): This government agency doesn't offer mortgages, but it does insure residential loans provided by private lenders. This means that once you qualify for FHA insurance, you may buy a home with only 3%-5% down. FHA-backed mortgages have a maximum loan limit depending on the average housing cost in each region.

USDA Mortgage: 100% Financing No Money Down options exist for non-military borrowers, too. The U.S. Department of Agriculture offers a 100% mortgage, too. The program is formally known as a Section 502 mortgage, but, more commonly, it's called a Rural Housing Loan.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

The Benefits and Risks of Owning a Home

by Stacy Francis, CFP®, CDFA

With all of the excitement in real estate lately, you might be wondering if you should take the plunge and buy a home. Homeownership has many advantages – both financial and personal. But there are many things to consider before you jump in and make your purchase. Here we take a look at some of the benefits and expenses of owning your own home.

Firstly, the differences between renting and homeownership are:

Tax savings There are possible tax savings to be derived because you can deduct mortgage interest and property taxes from your federal income tax and many states’ income tax if you itemize your deductions.

A more stable monthly housing expense Depending on the type of loan you choose, you may be able to budget your finances more definitely. If you choose a fixed rate, your monthly housing loan or mortgage expense can remain the same for the life of your mortgage.

Equity Equity is the difference between the fair market value (appraised value) of the home and the outstanding mortgage balance. It is possible to build equity in your home over the life of your loan. This will allow you to plan for future goals like your child's education or your retirement. But be careful, there are advantages and disadvantages to using the equity.

While there are advantages such as tax savings and equity, owning a home can cost a lot. Homeownership may not be right for everyone. You may not be in a situation in life where you are able to make the big commitment that is associated with owning a home.

So what are the risks of homeownership?

Monthly housing expenses can increase If you’re not careful, your monthly mortgage payment may be larger than your rent. While these higher monthly payments may be offset by a tax benefit at the end of the year, it is still a lot of money to let go at the time. It is recommended that you talk to a tax professional to understand your particular situation.

You become your own landlord This may sound like a good thing, and it certainly has its advantages, but being your own landlord means more responsibilities. If an appliance breaks, you will have to pay for its repair or replacement. You are also responsible for the maintenance and upkeep of your home and your property.

You must sell your house to move Owning a home is a big deal. If you decide to move one day, it isn’t as easy as packing up and leaving. Depending on the local real estate market, you might not be able to sell your home quickly.

Property values can depreciate Like with most products, the minute you purchase it, its value could depreciate. You can lose value in your home for a number of reasons, such as a recession, the condition of your home not being kept up, or a drop in a neighborhood's home values. If your home loses value and you have to sell it for less than you owe, you will be required to repay the full mortgage.

Overall, homeownership is a good investment for most people, but there are risks. If you understand the benefits and risks of homeownership, you can make the best decision about when to buy a home.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

5 Quick Fixes for Your FICO Score

by Stacy Francis, CFP®, CDFA

An old friend - a real estate agent in the Midwest sent me an email this morning with a topic she suggested I post in my blog. With real estate prices at record lows, many aspiring homeowners are looking her up. Many fulfill both the down payment and income requirements for a mortgage. Unfortunately, they tend to underestimate the extent to which the credit markets have changed over the past couple of years. These days, there’s no way around it: your credit score must be sky high. Wanting nothing more than for her clients to have their dream homes, she has put together a list of quick lifts for that FICO score.

1. Pay down balances. A main ingredient in the credit score formula, the size of your balances really does matter. Pay them down – or even better, off.

2. Protest unfair information. If you have an entry on your credit report that shouldn’t be there (honestly, now), know that you can dispute it. If you submit complaints to the company that posted it as well as the credit-reporting agency, they will investigate and take it off, leaving your record a whole lot cleaner.

3. Ask for help. If you’ve been a loyal customer for years and normally make your payments on time, chances are, if you talk to customer service, they will disregard that one time you forgot to pay your bill because you were on your honeymoon. Ask politely – and thou shall receive.

4. Don’t neglect the oldies. Another important factor in the credit score formula is how long your accounts have been open. So even if the Victoria’s Secret card you applied for when you were in college doesn’t have the most useful perks, use it once in a while for a credit score boost.

5. Make your payments on time. It seems simple, yet so many people fail on this count. If you have a hard time remembering your payments, set up a reminder.

 

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

How the Recession Can Help Your Finances

by Stacy Francis, CFP®, CDFA

A newsflash from travelzoo.com just plopped down in my inbox. Apparently, this weekend, flight fares between New York and the West Coast run as little as $99, round trip. Now, with two little kids, spontaneous travel is not as easy for me as it once was. Still, I love that the possibility is there! Slashed airfares all over the country (and all over the world) is just one way the recession can help your finances. Below are a few others. 

  1. Mortgage payments. With interest rates at record lows, this is an excellent time to refinance. Furthermore, with landlords growing increasingly desperate, renters with outstanding payment records may be able to negotiate a discount. Or take advantage of the rare low home prices-low interest rates combo and buy!

  2. Going out of business sales. Enjoy major discounts on the items you were planning to buy anyway (a car, new carpet for your bedroom, a flat screen TV) by sweeping up all the bargains out there.

  3. New business opportunities. Old, established companies going out of business means there will be plenty of room for up-and-comers once the economy comes back around. Start out slowly, be patient, and before you know it you’ll be in a perfect position to prosper.

  4. New wisdom. Yes, the past year or two have been painful for most. That we have learned the hard way may be the understatement of the year. Still, there’s no way around it: our attitude toward money has changed for the better.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

5 Ways to Make Your Home Sell Faster

by Stacy Francis, CFP®, CDFA

Great news from my friend who is moving to Miami: she found the condo of her dreams last weekend. Since she doesn’t have the money – or credit - to own two properties, she called me up to ask if there’s anything she can do to speed up the process of selling her Manhattan home, without lowering the price. Below are a few minimal-effort things that set you up for a quick and lucrative sale:

  1. Keep the house or condo clean, neat, and cozy. At the end of the day, it is all about whether your prospective buyers can picture themselves living there. Make it easy for them!
  2. Stay away from major projects, like remodeling. Instead, leave it up to the buyers to customize. Your taste for purple may not be theirs.
  3. Consider painting the walls in warm, neutral colors. It adds a lot to the cozy-factor, and it won’t cost you much.
  4. If you have pets, try to recruit a pet sitter during showings, and stow away food bowls etc. Even though Mystic, my cat, and Katy, my puppy, are my favorite furry friends, not all people are pet lovers.
  5. Set the scene as though you are expecting guests – plates and flowers on the dining table, music on low volume, perhaps even a packet of yeast in water in the oven to create the smell of freshly baked bread! Chances are the prospective buyers will feel so welcome, they’ll never want to leave.
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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

How to Be a Winner in Today’s Real Estate Market

by Stacy Francis, CFP®, CDFA

One of my best friends told me last night over tapas and sangria, that the time had come for her to purchase her first home.

She is well prepared: she has done all the research, checked off all the requirements for credit, income and money for a down payment, and thought about the future. She knows the importance of a great agent.

Now, did I have any tips for how to spot a bargain?

First of all, I told her, remember that a reduced price does not necessarily equal a good deal. Perhaps the house was overpriced from the start. Keeping this in mind, pay extra attention to the following types of listings:

  1. Old ads. A survey by online real estate agent Redfin suggested that a whopping 83% of heavily discounted homes have been on the market for 90 days or more. 
  2. Estate sales. Chances are the sellers can’t wait to cash out. Plus, since they didn’t pay for the property, they may be less concerned about getting their initial investment back.
  3. Fixer-uppers. Many times, the fact that the owners are selling before making major repairs signal a preference for a fast sell over a high price.
  4. Recent purchases. If a house was purchased less than five years ago, chances are, the owners are either desperate house flippers or financially strapped and unable to make their mortgage payments.

 

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Homeowner’s Insurance Basics

by Stacy Francis, CFP®, CDFA

I am aware that we are in a real estate crisis and many homeowners are suffering, but everywhere around me, people are buying, buying, buying. And truly, for those who have been patiently awaiting a decline (or weakness, or at least standstill depending on where you live) in real estate prices, this is a time to celebrate. With so many of my friends closing deals on condos and houses, the topic on everyone’s mind seems to be homeowner’s insurance. Here’s what you should know.

Homeowner’s insurance is usually mandatory, at least if you are taking out a mortgage. Even when you pay cash, I still strongly recommend it.

You know how when you rent, your personal property (the things inside your house or apartment) must be insured separately? Homeowner’s insurance is different, because it covers both the building and structure of your home (along with any other buildings on the property) and your personal property. In some instances, it even covers lawsuits. It is, however, important to note that homeowner’s insurance does not cover you in the event of flooding or a major earthquake. If you live in an area affected by these, you can purchase earthquake/flooding insurance separately.

In most cases, loan providers require proof of insurance prior to closing. They then can add the insurance policy to your mortgage payments, and may sell the right to service your loan to a third party. It is important that you keep track of who your insurance agent and servicer are, and that you check in with them a couple of weeks before payments are due to make sure everything is proceeding according to plan.

 

 

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

What Types of Insurance Does Your Family Need?

by Stacy Francis, CFP®, CDFA

One of the moms from the park called me last night, in tears. Not only had she come back to her apartment to find the door ajar and her things all over the floor – when she got hold of the landlord, he informed her that his insurance policy only covers the building structure – not the renters’ personal property. So when her valuables were stolen she lost not only many dear memories, but the money invested in them as well. If you are one of the many people confused about insurance, below are the most common ones to consider.

  1. Renter’s insurance. Renter’s insurance is the one the mom from the park now wishes people had told her about. It covers the things inside your house or apartment when you are renting.
  2. Homeowner’s insurance. Homeowner’s insurance is usually mandatory if you take out a mortgage, and recommended either way. It is also important to note that your homeowner’s insurance needs to be updated when you make major changes or renovations.
  3. Health insurance. This is a complex one with a myriad of different options. Shop around to see what type and provider and coverage would be most beneficial for your family.
  4. Life insurance. Many employers supply their employees with this type of insurance. In case yours doesn’t or not enough insurance is provided, you need to purchase it on your own.
  5. Auto insurance. If you have teenagers who drive, it is generally cheaper to add them to your policy than to get them policies of their own. Make sure everyone who drives your car is covered.
  6. Disability insurance. This, too, may be provided by your employer (or your spouse’s), but you may also need to purchase it on your own as most employers do not provide enough coverage.

Depending on your unique circumstances, other types of insurance, too, may be beneficial for you. If you have your own business, you will need additional types. You may also want to insure art and other valuables.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Real Estate: Should You Refinance?

by Stacy Francis, CFP®, CDFA

I was stunned to read in the newspaper this morning that it is now possible to secure a 30-year fixed mortgage at 4.5% (restrictions apply). This, of course, is wonderful news for anyone shopping for a home: we now have a real estate market with falling prices in many areas and interest rates at record lows. But those already in possession of a home, too, can benefit. How? Through refinancing.

When you refinance your home, you take out a new mortgage to pay for all or a portion of your old mortgage. If you have built a lot of equity in your home (the value of your home minus the size of your mortgage), you may even be able to increase the size of the mortgage and free up more cash. The latter could save you a lot of money if you are carrying high-interest debt, but always remember that you are putting your house on the line. Because of this, many people prefer to handle a short-term cash crunch with a HELOC (home equity line of credit). However, with the current credit environments the terms for getting a HELOC can be quite difficult. Some banks require credit scores over 750 even.

So apart from pulling cash out of your house, what are the reasons people refinance? The main one is that by refinancing, you may be able to secure a lower interest mortgage and shrink your monthly payments – sometimes significantly. This, of course, saves you money. Other people refinance to change the terms and conditions of their mortgage.

Whatever your reason is, beware that fees associated with refinancing can be quite substantial, so be sure to work with someone you trust or call me as I know several excellent real estate brokers. We can help you determine whether the savings versus cost of the loan are worth the refinancing. If you’ve been making your payments on time, chances are, the same provider that gave you the first loan may offer you a new, better deal.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Should You Buy a Vacation Home?

by Stacy Francis, CFP®, CDFA

I just returned from a lovely weekend of skiing in Vermont. Being pregnant meant that I got to enjoy lovely hot chocolate in the lodge. One of my hubby’s friends just bought a gorgeous cabin there, and invited us to come check it out. Between the stunning mountain views, the fireplace, the perfect slopes and newly renovated kitchen they couldn’t have made a better choice, and it was only hours before my husband pulled me aside to ask when we were going to look into a vacation home of our own. After all, he argued, we would get a tax break on the mortgage interest!

For those of you thinking the same thing, below are a few things to consider before you start shopping.

  1. Are the weekend pages of your calendar usually blank or filled with scribbles? If you, your husband or your children have commitments during the weekends, chances are you’ll rarely be able to use your vacation home.
  2. Are you an explorer or do you prefer vacationing in the same spot every year? You may want to ask the rest of your family the same thing to avoid future conflicts!
  3. How do you feel about guests? If your vacation home is a nice one, people will want to visit. I know I will visit Vermontagain – the sooner the better!
  4. Does your definition of relaxing involve butler service? Chances are, you may be better off at the Four Seasons than scrubbing dishes in your rustic country kitchen.
  5. Can you afford it? Do you have the money for a down payment or would you need to rely on a second mortgage or HELOC, putting your primary residence at risk? If the latter is the case, I’d say it’s not worth it. But if you are still craving that cabin even after this little quiz, chances are a vacation home is in your future.
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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

5 Tips When Buying a Home

by Stacy Francis, CFP®, CDFA

Remember my friend who is moving to Miami? She called again last night, to report that she is flying down there this weekend to start looking at condos. She asked me to put together a list of things to keep in mind as she browses the market for a sub-tropical paradise of her own. Since she assured me she doesn’t mind if I post it in the blog, here you go!

  1. Think about what you need, not just what you want. It is, of course, of the utmost importance that you love the place – but the love is not going to last if you have to squeeze two of your children into the same bedroom or try to do your office work in the living room, to the tunes of American Idol.
  2. Set a realistic budget, keeping in mind that your expenses may change in the future. We have all seen during the past year what happens when we take on mortgages we cannot afford. By now, we should know better.
  3. Research the neighborhood – thoroughly! I am sure you have heard the saying that you should never buy the most expensive home on the block. It is true.
  4. Visit the house or condo more than once before signing anything – and if possible, have a professional look it over. This can protect you from unpleasant surprises down the road.
  5. Be proactive at closing. Check in with everyone involved frequently to make sure the process is running as quickly and smoothly as possible.
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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

5 Tips When Selling a Home

by Stacy Francis, CFP®, CDFA

February has never been the most pleasant month in the Northeast, but I was still shocked when a friend called me up last night to inform me that she is leaving town – for good! When she learned that she could get her hands on a condo in Miami for less than a fifth of what she put into her Upper East Side apartment, there was just no stopping her. So, she asked me, what do I need to know before I put my home on the market?

Below are just a few helpful tips:

  1. Do your research before you set your price. If it is too low, you miss out on potential earnings, not to mention that your pricing may have a negative influence on other homes in the neighborhood. If, on the other hand, you pick an unrealistically high price, your listing will turn into a buyer-scarecrow.  
  2. Pick the right agent. This can really make or break the deal. Approach friends, family and colleagues whose judgment you trust, and find out who they use. If this is not an option, the Internet is a fantastic resource.
  3. Decorate and make small changes. A leaking sink will most certainly turn potential buyers off, and may make them think twice about making an offer. It would have been an easy fix.
  4. Conversely, it is generally a good idea to skip any major changes and renovations. Many buyers like to customize anyway, so you can save both time and money by leaving such tasks to them.
  5. Be proactive at closing. Check in with everyone daily to see if there is anything you can do to speed the process up. Find out what the next steps are and stay ahead of the game.

 

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Real Estate: Reading the Fine Print Before You Commit

by Stacy Francis, CFP®, CDFA

Reading the Fine Print Before You Commit

After December’s holiday festivities, January can feel like a dreary, lonely month. So you can imagine how delighted I was when I picked up the mail the other week and found an invitation to a cocktail party at an old college friend’s place. The invite promised delicious hors d’oeuvres and divine views, and my friend kept her promise. The condo was modern, light, spacious, and equipped with all the newest luxuries.

When I asked my friend how she had gotten her hands on such an amazing place, she laughed and told me getting her hands on it had been easy – getting rid of it was the challenge. Apparently, last October, one of the women on her floor had run into financial difficulties and therefore wanted to sell her condo. Unfortunately, it turned out that the contract had a clause prohibiting residents from selling their condos until all the units had sold. And the building, despite the marble counters and commercial dog driers, was only 33% occupied.

The Dalai Lama once said “leave your mistakes behind, but never the lesson.” So here you go. In the era of sign-on-the-dotted-line and inch-thick stacks of contracts, you really do need to read the fine print – or, even better, go over it with a legal professional.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

What Size Mortgage Can You Afford?

by Stacy Francis, CFP®, CDFA

With real estate prices free falling in many areas, mortgages seem to be the topic on everyone’s minds. It is hard to narrow down all the different concerns people have into a structured format, but my facilitators report that one of the most frequently asked questions in the Savvy Ladies Empowerment Circles is: what size mortgage can I afford?

This is a great question! Even better, it has a simple and straightforward answer. Most lenders limit the size mortgage an individual or a couple can take on to 28% of the gross income. If you have other types of debt, the total payments for your debt, including your mortgage, needs to stay below 36%.

This comes as a surprise to many, as it is not unusual for people to spend 40% or more of their income on rent and still make all their payments on time. Because of this, some lenders will let you borrow a little more, especially if your credit rating is stellar or if you put down a decent down payment.

But what you also need to ask yourself is . . . how much can you pay, without having to cut down on things like contributions to retirement savings accounts? Don’t forget that taxes and insurance costs will pile up on top of your mortgage payment. As houses are illiquid (today more than ever), take an in-depth look at your finances – or hire an expert to do so – before you commit to a mortgage.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Scoring a Mortgage in Turbulent Times

by Stacy Francis, CFP®, CDFA

“For years,” a woman said during a recent telephone conference, “I was waiting for the real estate bubble to burst so that I could buy something. Now that it finally has, no one can get a mortgage.”

While it is true that it is much more difficult to score a mortgage today than, say, two years ago, it is still far from impossible. My husband and I just got a mortgage 3 months ago. Here are three things you can do to increase your chances:

  1. Work on your credit score and history. If you have a stellar credit score and a flawless history, you’re halfway there. And even if you’ve had a few hiccups in the past, paying down your balances and making your payments on time will greatly increase your chances.
  2. Don’t ask for a larger mortgage than you can afford. Banks are very wary of this problem right now. If your household income is, say, $6,000 per month before taxes, don’t ask for a mortgage where the interest alone will cost you $5,000 per month. Be realistic, and banks will think higher of you.
  3. Make a down payment. Not only will doing so make the amount you need to borrow smaller, but it also shows the lending institution that your finances are sound and that you are ready to be a house owner. We actuallyput down a 25% down payment making our monthly mortgage more manageable.

So while I won’t disagree that first time home buyers will have a harder time making their dream come true today, there is certainly hope. After all, many houses do sell even in today’s market – and so someone must be buying them. If you follow these easy guidelines, you may very well be next one.

 

 

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Shopping for a Home

by Stacy Francis, CFP®, CDFA

My husband and I just purchased our home and are so excited and smiley these days, when you see us you think we have slept with a hanger in our mouth. A home is something almost everyone wants, but acquiring one can take a lot of work – and money. While it would be impossible to cover everything you need to know in one little entry in my blog, here are a few things to keep in mind if you are – or are considering – buying a home.

  1. The higher your credit score, the lower the interest rate you are going to score, meaning the more house you will get for your money. While many people with less-than-excellent credit scores can get mortgages even today, it is probably going to cost you.
  2. Down payments can come from unusual places. It is generally a good idea to make some sort of down payment when you buy a home, but if you don’t have the cash saved up, there are other ways to get your hands on one. Try asking your employer for a loan against your 401(k), or consulting a private bank.
  3. Houses are illiquid investments, and especially these days. Before you purchase your first home, it is a good idea to think about the future – whether you’ll need more room for children or may need to relocate to a new area. You never want to be in a hurry selling a house because that tends to get expensive.
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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Investing in Real Estate

by Stacy Francis, CFP®, CDFA

A client just called me up to ask what my take was on the real estate market. She half-wanted to get into what mass media refers to as “flipping houses,” but was concerned that this may be the end of the real estate boom.

The truth is, of course, that the real estate boom ended quite a while back, in most places. What we are seeing now is a bit of a correction, along with the effects of a slowing economy. When two families in a neighborhood are trying to sell their homes, and a third one forecloses, the next buyer expects to pay less, throwing the area into a downward spiral of more worries and more foreclosures.

The good news is that if you are in good to excellent financial shape, and you are in no hurry to sell the houses you buy, this is not a bad time at all to get in. Historically, and with a few geographical exceptions, real estate prices have never kept dropping for very long. If you have the patience to keep placing bids well below market prices and hope someone gets desperate and accepts, you can score yourself some fantastic deals. And if you can wait long enough, chances are you will be able to sell the houses for significantly more. With these lower prices, I would actually say it is less risky to get into real estate now than, say, a year ago.

Keep in mind that while the above applies to most areas in the US, local exceptions apply, so make sure to take the pulse on your neighborhood before you hop to it.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Reverse Mortgages

by Stacy Francis, CFP®, CDFA

I had lunch with a friend today, who works with mortgages. She said that while for obvious reasons, not that many people are signing up for conventional house loans at this time, many are inquiring about so-called reverse mortgages. For those of you not familiar with these, I thought I should share.

If you are a senior who own your home and need more income, some people will suggest that you take out a reverse mortgage. A prerequisite is that you have paid off a good portion – if not all – of your home. You can then get a deal where the bank “pays” you a certain sum of money each month, and your mortgage grows accordingly. In a way, these “payments” are the opposites of amortizations, where you own more of your house each month, and the bank owns less.

After you pass on, the bank owns whatever portion of your house that you have mortgaged. For obvious reasons, the bank will not let you lend more than your house is worth. They use complex calculations to make sure that the monthly sum they “pay” you is small enough that your total mortgage will not go beyond the value of the house during your life expectancy.

While reverse mortgages can be the only way out of a desperate situation sometimes, be very wary of fees if you are getting one for yourself (or someone in your family). Many times the fees are so huge compared to the amount of money you can take out; you are better off seeking an alternative money source.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Renting vs. owning your home

by Stacy Francis, CFP®, CDFA

My cousin had his house appraised today, and he was not happy. Of course, he’s far from the only one feeling this way. With the US real estate markets free falling like rocks dumped from skyscrapers, an increasing number of people are growing wary. Very wary.

For years, everyone I’d meet would urge me to buy, buy, buy. Few investments were performing better, and what could possibly beat an investment that you can live in and enjoy while it makes you money?

Today, it’s a different picture altogether. In San Diego county, for example, the median house price dropped from right below $500,000 to the current $390,000 (more than 20%), in only a year. We are all familiar with the market in Detroit (my husband and I just purchased two houses there for a total of $30,000), and overall it is not hard to see why people are nervous. Still, while a nightmare for many, this market presents excellent opportunities for those who have been waiting to buy. But apart from timing and prices, what factors should be considered when faced with this decision?

First of all, there is the issue of fixed vs. variable expenses. While many landlords insist on one-year leases, some will go month to month as well. This is a good option if your income situation is shaky, or if you may be relocating shortly. If, on the other hand, you have a steady income and are set on staying where you are, it might be more beneficial to invest in a house rather than dumping a considerable amount of money into rent each month. After all, the real estate markets are going to turn around sooner or later, and when they do, your investment will start to pay off.

It is also worth mentioning that houses are some of the most marginable investments out there. If you are a knowledgeable investor and tend to score high returns on your investments, it might work to your advantage to buy a house, get a mortgage, and invest the money. As long as the yield from your chosen investment is higher than the 5-6-7% you pay for the mortgage, you can walk away with the difference -- and a sunny smile. 

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.