Keep Your Finances In Shape This Holiday Season

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

When it comes to holidays many of us sometimes get above ourselves with gift-giving and it takes a hefty toll on our budgets. Many people have a crazy misconception that its “priceless” to create a picture perfect holiday experience. This thinking will put a strain on your budget and the last thing you want to do is start off a new year with your finances in shambles.

All of the financial troubles that come with the holidays can be avoided if you think with your head and not your heart throughout the process. A significant step is making sure that all of your major bills are paid before you start holiday shopping. Things like rent or mortgage, gas, electric, water, and phone bills should be prioritized over a hefty price tag on a gift you brought. Also things like food and any medication you may need should also be kept in mind.

One major “no-no” when it comes to the holidays is spending important bill money because you are depending on a monetary gift that you think you are not guaranteed to get. The first rule of being financially fit is to be smart with your money.

There are some extra things that we use in our day-to-day lives that we may be able to part with for a month. These things include cable, high speed internet, dining out, and monthly memberships and subscriptions. With innovations like Netflix and smartphones, a month without cable and desktop internet is not so bad.

Another way to save money during the holiday season is to make an agreement with friends and family to exchange gifts after Christmas. This may take away some excitement, but the huge savings will be helpful to your pockets.

Most of all we need to all keep in mind that the important thing about the holidays is to create memories that will last a lifetime, not who is giving the best gift. It should not be hard for anyone to understand that we have all been affected in some way by the economy.

With that said,

Happy Holidays to you and your family from NHS of Baltimore!

Being Prepared When "Life Comes At You Fast..."

By: Jacqueline Wilson, Loan Processor, NHS of Baltimore

State Farm insurance company has a commercial that depicts mayhem coming upon a person with a slogan “life comes at you fast.” When we see this commercial we can relate because we all have experienced unexpected mishaps from time to time. We try to have “rainy day funds" but we all know that these are very hard economic times and the amounts put away for the rainy day funds seem to get smaller and smaller. As a result, the extra funds to resolve these emergencies and continue to function are not available.

Such mishaps as when the car gets towed and you need it right away to get to work, or the car dies never to be revived and a down payment is needed to purchase a new one. Perhaps you receive a large utility bill or some other unexpected event occurs, there are no savings and the regular bills have to get paid, there is no extra. These are the unexpected occurrences that cause people to consider payday loans as a way out because “life indeed does come at you fast”.

In the past, the payday loan companies went unnoticed and this industry really grew. Nationwide there are 25,000 of these companies ranging from small mom and pop shops to large chains. In Missouri alone there are about 1500 payday loan stores and many of the loans have an 422% APR. Check into Cash in Cleveland Tennessee has an APR of a massive 459 %. What this means is that the consumer writes a check for $300.00 and actually gets $255.00 in cash, the difference of $45.00 goes to fees, it is reported that some of these loans are flipped as many as 8 times and escalate from $325.00 to as high as $793.00 before it is paid. In California alone (a place that has been hit hard by the recession) consumers borrow 2.5 billion dollars a year from payday loan lenders. In an attempt to curve these practices some credit unions and lenders have begun to offer small dollars loans at annual rates as low as 12%.

Taking into account the numbers stated above, the residents of Baltimore City that utilize payday loan services can really appreciate the Borrow and Save Program which is offered by Neighborhood Housing Services of Baltimore, Inc., The program was originally offered in the East Baltimore region – however, due to high demand the program has now been expanded to accomodate consumers citywide. The program was launched in August 2009 to help borrowers break the perpetual short-term borrowing cycle, establish healthy banking relationships, gain personal money management skills, and learn the benefit of savings and asset building.

The program provides loans between $ 300.00 and $ 1,000.00 with repayment terms of six months to a year at an APR of 7.99%. Borrowers who currently do not have a banking relationship are required to open a bank or credit union account to receive the loan. Borrowers are also expected to take a financial literacy course, this course is offered free of charge by NHS of Baltimore in an effort to educate consumers so that they do not have to resort to loans at all.

For information about the Borrow and Save program, please contact Jacqueline Wilson at 410-327-1200 ext. 117.

Fear of Homeownership

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

Despite President Obama’s recent veto to a bill that could speed up foreclosure and Maryland’s new home loan interest rate being at an all-time low of 3.875 percent; many Marylanders are still in fear of becoming a homeowner. With the nations foreclosure rate still growing, I must admit that not a day goes by without me worried about foreclosure affecting me or a family member in the future.

I think most people’s perception of homeownership is that it is very hard to buy a home yet so easy to lose it. In essence, homeownership is perceived as a goal you work so hard for and it can be taken away in an instant. However, this perception could not be further from the truth. Of course there are challenges along the process to homeownership, as there are with every major decision we have to make in our lives.

In most cases of foreclosure, the person has lost their home for reasons that could have easily been avoided. For example, many people looking to own a home fail to receive proper housing counseling at the beginning of the homeownership process. Lack of appropriate knowledge about homeownership that is acquired through housing counseling has caused many people to enter bad mortgages, buy homes they cannot afford, and make crucial mistakes in the loan modification process etc. Also a main factor in foreclosure is people waiting too long to seek help. If you are facing foreclosure, you should seek help before feeling sorry for yourself.

Although homeownership is something you have to work hard for, the goal of sustainable homeownership is not far-fetched. There are an overwhelming amount of programs and incentives that assist with down payment and closing costs. Through the Down Payment and Settlement Expense Loan program, buyers are eligible for $5000 to help with costs. Other homebuying incentives are listed on the Live Baltimore website.

I still have my worries but the knowledge of various counseling, homebuyer education, and foreclosure prevention has eased some of my worries. I believe that if the right steps to homeownership are taken from the beginning, the foreclosure rate would not be as high as it is today. When I am ready to buy my first home, the first thing I will do is make sure I have a homeownership advisor by my side in the process.

So you've decided to buy a home....now what?

By: Julienne Joseph, Homeownership Advisor, NHS of Baltimore

Buying a home is one of the largest investments you will ever make. Once you have made the decision to purchase a home, there are steps that need to be taken. Being informed and prepared for the process alleviates the anxiety and stress of the process.

Step 1: Getting Your Ducks In a Row

Once you have determined that this is the time to buy, start gathering the documentation your lender may need in order to secure your financing.
- Homebuyer Certificate. Enroll and Complete a Homebuyer Education Course. Certification may be required (prior to submitting an offer) in order to receive incentives offered by City or State Organizations.
- Your Last Three Years Tax Returns and w-2's
-Most recent 30 days of pay stubs
- 2 most recent statements for all checking, savings, 401k, IRA and investment accounts

These documents will help your Loan Officer accurately evaluate your ability to repay your mortgage and to determine how much of a sales price you can afford.

Step 2: Contact a Lender

A lender is the professional who will provide you with the products and programs a particular bank offers to suit your particular financing needs. Speaking with a lender in the beginning of the process saves time, gas, and money by letting you know just how much buying power you have before you start your search.

Step 3: Consult A Real Estate Professional

Your real estate professional is a key player in the home buying process. They will help you search for the property you wish to buy and represent you in the negotiations of sales price, closing costs, repairs, etc. After receiving your pre-approval from the lender, a letter is issued and given to the real estate professional of your choice to show them that you have secured financing. A pre-approval tells your real estate agent/realtor how much home you can afford. The letter is essential because it narrows your search so the real estate professional won't waste time searching for homes that are over or under your approval limit. At this phase, you will tell your real estate professional all that you are looking for in a home (i.e. number of bedrooms, bathrooms, square footage, etc.). Based on the criteria you provide, they will search their database of available properties and present the homes that meet your needs. Once selected, you and your agent will set an appointment to actually view the property.

Step 4: Make an Offer

You have found a property that you would like to purchase. You and your agent will now submit a contract to the seller proposing the price you are willing to pay for the property. It is common that upon the submission of the contract to the seller, you will provide an Earnest Money Deposit or an “EMD”. The “EMD” is a sign to the seller that you’re serious about purchasing that home. This deposit is held by the broker of your real estate professional until closing and credited towards your closing costs. If the offer is accepted by the seller, the contract is then deemed “ratified”. “Ratification” means that you are now in a legally binding contract that states that you agree to buy the property from the seller and the seller agrees to sell the property to you.

Step 5: Choose An Attorney or Title Company

The title company will be responsible for preparing the documents on your closing day (i.e. The deed, mortgage note, etc.) If you do not have an attorney your lender or real estate professional can recommend one.

Step 6: Get A Home Inspection

After ratification, you will want to get a home inspection. A home inspection will inform you of any repairs that need to be made to the property. It's always wise to get an inspection to ensure that you are aware of the condition of the property.

Step 7: Order an Appraisal

An appraisal will always be ordered by your lender. The appraisal is ordered on your behalf in the name of the bank to make sure that the collateral (the property in this case) is worth what the contract has stated.
*Rule of thumb*. Hold off on ordering the appraisal until you receive the home inspection report. Doing so will avoid you having to pay for an appraisal on a property that you may determine is too damaged to purchase. If the appraiser comes out, before or during your home inspection, you may be responsible for covering the cost of the appraisal even if you choose not to buy the property.

Step 8: Perform the Final Walk-Thru

The inspections are done and your financing is secure. The day of (or the day prior) to closing, you and your agent will take a final look at your property to ensure that it is in satisfactory condition. Once the final walk-thru is done, you are ready to close.

Step 9: Prepare to Close

The title company or attorney has completed your closing package and the final figures are generated. Your attorney will provide you with the amount you will need to bring to closing.

Step 10: Receive Your Keys

All of the documents are signed and you are now a proud homeowner. The real estate agent or attorney will be in possession of your keys until the signing is completed. At that point, they will present you with your keys and the home is now yours!

Consider homeownership to be an investment.....

By: Sunny Cooper, Special Projects Manager, NHS of Baltimore

More recently, there has been a plethora of articles and commentary as to the decline of homeownership and its decreased financial profitability to the end-Homebuyer. While buying a Home may not reap the huge financial rewards of a few years ago, it is still an investment.

Buying a home is an “Investment in You”

It’s your achievement.
It’s a testament that you did it (made a financial investment) – all by yourself…
You worked hard, saved, went to classes and got your credit in order.
That in itself is your accomplishment. This accomplishment is represented in something tangible – A home.



Buying a home is an “Investment in Your Community”

You made a commitment to invest in a particular neighborhood by buying a home.
You maintain this investment by:
- Cutting the grass,
- Planting fall bulbs for spring tulips,
- Petitioning for speed bumps on your street along with your neighbors,
- Checking in on an elderly neighbor.

These neighborly interactions create a sense of community thus increasing the value of your home.


Buying a home is an “Investment in - Your City”-

The city needs investors who are committed to its success in order for it to thrive.

Potholes are filled, parks are cleaned and school buildings are improved – in part on funding received from property taxes. A strong invested citizen base attracts new businesses that “want” to move to the area. It attracts retail opportunities such as grocery stores and movie theatres. Lastly it demands public services necessary for the health and welfare of all citizens alike.

Gone are the days that the purchase of a home was merely for a – “5 yr Investment Strategy”…

Gone are the days that a home was purchased to be used as “Bank” with which to withdraw equity to fund other jumpstarts…



Hopefully we are returning to the ole’ retro idea – Buying a Home in which to actually “Live”.

Homeowners Insurance: What do you need to know?

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

When it comes to buying a home, most people work very hard to purchase the home and everything in it. It can take many years to build up a home from scratch. People should keep in mind that like anything else in your life, your property is at risk to dangers that are beyond your control. This could potentially wipe out everything you have spent years working hard for. These are primary reasons why one should have homeowners insurance.

Homeowners insurance coverage can offer a peace of mind, and will enable you to pick up the pieces and recoup financial losses in the event that your home or belongings are damaged and destroyed. When taking out homeowners insurance, it is very important to ensure that you are providing yourself with sufficient coverage. The first step to getting homeowners insurance is to find out what your home is actually worth. In addition to estimating the worth of your home, there are other factors to be aware of when purchasing a home.

Shopping around for good insurance prices and coverage plans is imperative. Many insurers have been raising rates to make up for losses they suffered during the financial crises. Also, insurers are competing for new customers meaning some of them are cutting better deals for new policy holders than for existing ones. This is why when shopping around, it is important that you find an insurer who is loyal to you.

Another issue that homeowners run into is having too much insurance coverage. It is very common for policies to contain inflation –protection provisions that automatically increase your coverage amount. Usually that would be a good thing, but now that construction costs have fallen, not so much.

Homeowners should also be aware of their reputation when seeking homeowners insurance. The same way lenders check your credit score to find out what amount to charge you, insurers look to see what claims you have filed in the past. At times, insurance records can be full of errors. Checking your insurance records before you seek coverage is necessary.

When selecting a deductible, you should go with the highest deductible you can afford and use your savings to cover the cost of minor repairs. Filing a claim for every broken window or minor damage can increase your premiums by 10% to 15%. Increasing your deductible from $500 to $1000 can lower your annual premium as much as 25% according to the Insurance Information Institute.

One of the most important factors when it comes to homeowners insurance is the history of the house. Though it seems unfair, claims associated with the property before you buy it can result in you paying more than you usually would. You can get information on past claims by asking for a copy of the seller’s CLUE disclosure report. Although you may be able to negotiate with the seller, you are stuck with the history of the house you buy.

Short Sales

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

A short sale is a sale of real estate in which the proceeds fall short of the balance owed on the property’s loan. Short sale occurs when a borrower cannot pay the mortgage loan on their property but the lender decides that selling the property at a moderate loss is more efficient than pressing the borrower. Using the short sale process as an alternative to foreclosure is easier for both parties because it allows the bank to avoid hefty fees and it will not hit the borrowers credit report as hard as a foreclosure would.

Before agreeing to do a short sale, borrowers need to make sure that they have a precise understanding of its terms. The most important thing borrowers need to know is that the short sale does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, this is known as the deficiency.

Although it may initially seem as if there are no disadvantages to a short sale, borrowers should weigh out all options before agreeing to go through with a short sale. The main advantage to using short sale as an alternative is that it is less damaging to one’s credit and more helpful to future mortgage applications than a foreclosure. Disadvantages to short sales include the extensive paperwork requirements, loss of equity in home, and property tax will still be payable among many others.

When considering a short sale, borrowers also need to be aware of fraud that can occur during the short sale process. Many business journals have reported that lenders have been engaging in fraud during the short sale process. The fraud involves lenders in second position demanding kickbacks in the form of cash payments from the home buyer or real estate agent. These payments are fraudulent because they are not disclosed anywhere on the closing documents or HUD 1 statement which makes them in violation of RESPA (Real Estate Settlement Procedures Act) rules.

If a borrower begans having financial problems and thinks that their home may be in jeopardy, the first thing they should do is seek the advice of a homeownership advisor. There are many non-profit organizations that offer free counseling and have specialty in dealing with foreclosure prevention and the terms of a short sale.

Renters Living In Homes Facing Foreclosure

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

In today’s economy, renters and tenants are now being affected by foreclosure nearly as often as homeowners. The mortgage crises began in 2006 and resulted in millions of Americans losing their homes to foreclosure. Now there are thousands of renters, who without warning, are discovering that there rented house or apartment is now owned by a bank who wants them out because the property is being foreclosed upon.

Many tenants have no clue that their building has been taken at foreclosure. Because of this, they unfortunately continue to pay rent to the former owner who pockets the money but no longer maintains the building since they do not own it. New owners often refuse to make repairs and sometimes fail to pay utility bills. This makes life almost impossible for tenants as long as they are living in the foreclosed property.

Before May 20, 2009, most renters had no rights and lost their leases upon foreclosure. However, this changed when President Obama signed the “Protecting Tenants at Foreclosure Act of 2009.” This legislation states that leases would survive a foreclosure, meaning that the tenant could stay at least until the end of the lease and that month-to-month tenants would be entitled to 90 days. This protection law applies to Section 8 tenants as well.

A tenant who holds a lease and has to move out so that new tenants can move in may opt to sue their former landlord in small claims court. This is possible because after the lease is signed, the landlord is legally bound to deliver the rental for the entire lease term. When a landlord defaults on a mortgage, which sets in motion the loss of a lease, the tenant can sue for the damages it causes.

Today when a rental home is being foreclosed, tenants no longer have to feel like they are between a rock and a hard place. Due to these new rights, being a tenant in a foreclosed home does not mean you are instantly out on the street. There are also other resources that these tenants can utilize for help in these situations. Tenants can speak with a HUD certified housing counselor who will offer responsible, quality advice at no charge. For general information or referrals, tenants can contact the Baltimore Neighborhoods, Inc. Tenant- Landloard Hotline.

Maryland’s Homestead Tax Credit

By: Sunny Cooper, Special Projects Manager, NHS of Baltimore

The homestead tax credit is a program brought on to help homeowners deal with large assessment on their main residence. The way the homestead tax credit works is that it limits the increase in taxable assessments each year to a fixed percentage. According to state law, every county and municipality is required to limit taxable assessment increases to 10% or less each year. Taxpayers should make sure they are aware of the homestead caps for each local government.

This tax credit does not limit the market value of the property as determined by the Department of Assessments and Taxation. It is a credit calculating on any assessment increase exceeding 10% (or the lower cap enacted by the local governments) from one year to the next. The credit is calculated based on the 10% limit for purposes of the State property tax, and 10% or less (as determined by local governments) for purposes of local taxation. In other words, the homeowner pays no property tax on the market value increase which is above the limit.


Taxpayers who wish to receive the homestead tax credit, should also be mindful of the new application requirements. This tax credit requires that all homeowners submit to a one-time application to establish eligibility for the credit. The application form will be in an assessment notice mailed to a third of the homeowners at the end of December for the next three years. New purchasers of residential properties will also receive this form.


The homestead tax credit will only be granted if certain conditions were meant during the previous tax year. Conditions include that the property must not have been transferred to new ownership, there had been no change in the zoning classification requested by the homeowner resulting in an increased value of the property, and the previous assessment was not clearly erroneous. A further condition is that the dwelling must be the owner’s principal residence and the owner must have lived in it for at least six months of the year, including July 1 of the year for which the credit is applicable, unless the owner was temporarily unable to do so by reason of illness or need of special care. An owner can receive a credit only on one property---the principal residence.

If you have been denied the homestead tax credit, you may appeal the decision if you feel that you are eligible. To appeal you must contact the Central Office for the Homestead Tax Credit Program. A final denial of a Homestead Tax Credit by the Central Office may be appealed within 30 days to the Property Tax Assessment Appeal Board in the jurisdiction where the property is located.

Renting vs. Buying a Home

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

One of the biggest financial debates of all time is arguably the topic of renting vs. buying a home, which one is better? As June is National Homeownership Month, many columnists are putting out articles maintaining that it is more advantageous to be a buyer instead of a renting.

A huge misconception is that the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on mortgage. However, what people fail to realize is that when it comes to renting vs. buying, the tax incentives for homeowners can save them a significant amount of money. For example, a renter may start out paying $800 per month with annual increases of 5%, a homeowner on the other hand can purchase a home for $110,000 and pay a monthly mortgage of $1,000. With the tax savings of homeownership, after six years the homeowner’s payment will be lower than the monthly payment of a renter.

Other advantages to homeownership are that it builds stability, people are free to change décor and landscaping, and you do not have to depend on other people to maintain the property. The only advantages to renting as oppose to homeownership is that it is much easier to move and there is little or no responsibility when it comes to maintenance.

Before people make the decision of whether to rent or own a home, they should utilize their resources and find out which is better for them. Talking to a homeownership advisor or simply taking a financial literacy course can help you figure whether you should become a homeowner and if your finances will allow you too.

In the meantime, many people who have accomplished the dream of homeownership are celebrating, as June is national homeownership month. Homeowners can visit the HUD website to find local homeownership events in their area.