Southern Elite Team

Tips on Showing Your Child How to Use Credit Wisely:

In the past, credit card companies rushed to college campuses (even some high schools) to sign up students who had no visible means of ever repaying the credit card. Since they had no income to even make the minimum payments, it’s ruined their credit for many years to come.
Ideally, you might want to start the process when your child reaches age 16.
Even if you consider co-signing a credit card for your child, there are a couple of steps you can take to make sure they understand how to use credit cards wisely.
Step 1 – Open up a checking account and ask for a debit card to be included with the account. Review how much is in the account, how much they have to spend, and talk with them about overdraft fees if they take out more money than is in the account. If they manage that responsibly for 6 months (to a year), go to the next step.
Step 2 – Add your child as an “authorized user” to YOUR credit card account. He or she will get a credit card with their name on it and they will start to establish their own credit history. Set a limit. Determine who will pay for each charge, and how. Do that for 6 months or more, and if they don’t comply, remove them from the card and have a good heart-to-heart talk about spending, budgeting and credit scores.
Step 3 – If they have demonstrated that they can handle a credit card responsibly, you might want to co-sign on the credit card with them. Make them accountable. Ask them to share the charges and repayment terms with you. Create a User Name and Password so you can also watch what’s happening online. Show them how to do the same.
Remember, as a co-signer you are on the hook, too, and if they fail to make payments, it reflects on your credit also.

Did you know that fake ID’s and stolen identity documents can be purchased on line for as little as $100?

If you lose your wallet or purse, you could get lucky and hope an honest soul finds it and returns it to you!

Or it may be stolen — with the intention of creating a fake ID to sell on the Internet, or using your credit cards to purchase things—both of which amounts to “identity theft.”

Here are 7 things to do if your wallet goes missing in action:

1. Call your credit card companies. Report when you first noticed it missing. The last time you used the cards. The dollar amount of the last purchase made.
2. Cancel your credit cards.
3. Notify the Department of Motor Vehicles. To get a replacement driver’s license, you usually have to bring in two forms of ID.
4. File a police report. Keep a copy of the report in case you need to prove that the credit card purchases were unauthorized.
5. If your passport is missing, report it to the State Department: 877-487-2778.
6. If your Social Security card is missing, report it to the Inspector General: 800-269-0271.
7. Notify the credit bureau and place a free, 90-day “Fraud Alert,” where you will be notified if anyone tries to open a new account using your Social Security number.

The average amount of fraud is $5,720 per victim. Unless you made the telephone call to apply for credit, never give out your info by email or telephone to people who are “posing” as a bank rep or a government agency. They ALREADY have your personal info so you don’t need to give it to them again.

Oh, and one last thing. Never carry your Social Security card in your wallet!

Investing in real estate has great potential for passive income.  It can also be part of your retirement planning by selling the home and getting a big chunk of equity.

It also comes with risks.

So I wanted to share with you some of the things that I have learned when it comes to knowing our local real estate market and the real estate agents who specialize in working with real estate investors.

• • Know what’s happening in your area – Are people moving into your area because of job opportunities? Are people retiring there? Are you in a vacation area where you can buy short-term rental homes?  Do you want to buy a duplex or four-plex home, live in one of the units and rent out the others?

• • Understand the costs involved – In addition to a mortgage payment, taxes and insurance, you will need to budget for repairs, landscaping/snow removal.

• • Long-term or short-term investing – Investing in real estate can help you build your wealth over the long term. Or buying fixer-uppers and selling them immediately can give you more cash over the short term.  You will need to decide which one is right for you.

• • Know all of your financing options – the mortgage rules are different in regard to the down payment, the closing costs and interest rate. I can help you decide which loan program would be the most advantageous for you.

• Know your numbers – Cash flow and income tax rules can benefit you when you invest in real estate. That’s where a great accountant/CPA can help you determine if the numbers work for you and your tax bracket. (I can recommend one to you.)

• Build your own real estate investment team – Even if you are only considering buying one or two rental properties, it’s best to work with people you can rely on to give you good advice. A real estate agent who specializes in working with investors (I can recommend some to you), a property management company (if you don’t want to manage your own), and a network of contractors who will help you if the home needs to be repaired.

If you are interested in exploring the possibility of investing in real estate, please let me know and we can set up a time to talk.

I’m not an insurance agent, but I’ve heard enough stories to know that when reviewing your homeowner’s insurance coverage, don’t assume that everything will be covered in case of a claim.

In fact, a National Association of Insurance Commissioners’ survey revealed that homeowners misunderstood what their policy covered.

Here are some of the things NOT covered by standard homeowner’s insurance policies:

• 68 percent think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered.
• 51 percent think damages from a break in the water line on their property supplying water to their home are covered.
• 37 percent think damages due to a break in the sewer line on their property that connects to their municipal sewer system are covered.
• 35 percent think damages from earthquakes are covered.
• 34 percent think damages from mold are covered.
• 31 percent think damages from termites or other infestation are covered.
• 22 percent think pets stolen from or injured on their property are covered.

Call your insurance agent if you’ve done any of the following:

• Acquired expensive possessions, such as furniture, computers, stereos and televisions.
• Made any major home improvements – usually anything more than $5,000.
• A change in your state’s laws where you could be held legally responsible for the actions of anyone who drinks in your home and then has an accident in your house or after leaving it. Your policy should protect you against lawsuits due to these types of liability issues.
• Added any backyard items, such as a trampoline or pool, which may require you to increase your liability coverage through an umbrella policy that protects you in the event that someone is injured while on your property.
• Purchased jewelry, acquired family heirlooms, antiques, art – consider purchasing an additional “floater” or “rider” to your policy to cover these special items. They’re typically not covered by a basic homeowner’s or renter’s policy.

Make an inventory of all of your personal property, along with a photograph or video of each room. Also, save your receipts for major items and keep them in a safe place away from your house or apartment. That will make it easier if you need to file a claim.

Please call me if you are thinking of switching insurance companies or if you’d like me to recommend an insurance agent to review your current coverage.

Last year, the IRS announced that all tax-preparers are required to

• Register with the Federal Government
• Pass a competency test
• Take continuing education courses
• Obtain a federal Preparer Tax Identification Number (PTIN)

But, even if they are registered and have a PTIN number, it does not necessarily mean that they are competent.  In a recent audit, the IRS had found substantial errors—overlooking common deductions, or incorrectly interpreting the tax code.

You might even want to hire another tax preparer to review previous tax returns to make sure you claimed everything you were entitled to deduct.

Before hiring a tax preparer, consider the following:

• Check with the Better Business Bureau to see if any complaints have been filed
• Check to see if they have a PTIN number from the IRS
• If CPA or Attorney, check with your state’s professional board for complaints and if they have a current license
• Ask what continuing education courses they have taken within the last 12 months
• Ask if they belong to any professional organizations
• Ask how long they have been preparing tax returns
• Ask if he/she is familiar with the “type” of tax return you need to file
• Find out how they determine the fees you will pay (will it be hourly or flat fee?)
• How many clients have they represented in IRS audits?

Steer clear of tax preparers who claim they can get you a larger refund—without reviewing your paperwork first.

Steer clear of tax preparers who charge a “percentage” of your refund—the tax return may contain inaccurate info in order to pump up the refund amount.

Steer clear of tax preparers who have “a lot” of experience with representing clients who have been audited—this may be a sign that they claim “questionable” deductions.

If you need a good tax preparer, please email or call me, because being in the mortgage business, I know several who are truly competent and I know will help you get your tax return filed accurately and filed on time.