The Harsh Truth About Women and Finance

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One of the more memorable acceptance speeches delivered at this year’s Academy Awards was from Best Supporting Actress, Patricia Arquette. Her remarks about gender equality and the pay gap between men and women struck a chord that lasted beyond the show, and she recently spoke at an event sponsored by the United Nations on the same topic.

In 2015, it is shocking — though not surprising to some — that women would be paid less for doing the same job as men. Yes, times are changing but perhaps not fast enough in this case. Ms. Arquette made the comment that change starts with women.

I mention this because of a Boston Globe article written recently about how women lag behind men in financial literacy. This is another example where there should be gender equality. The gist of the article says that women scored lower than men in answering questions related to money and finances.

It also goes on to say that the women who were polled were more financially vulnerable than their male counterparts.

Whether or not a gender pay gap is a factor, the truth is that women today need to understand their finances as well as men for a number of reasons.

In the case of a divorce, a woman who may have relied on her husband now bears the full responsibility for her financial well-being.

Among married couples, we know that women tend to outlive their husbands and at some point they need to have a solid grasp of their financial situation.

Obviously there are many exceptions to the rule and plenty of women are both the breadwinner and the decision-maker of the family when it comes to finances. However, it is important that all women (and men, too!) learn and understand how their finances work so that they can make informed decisions at critical moments in their lives.

Here’s the link to the quiz to test your financial capability.

March’s Home Improver
Crocus Focus

There are a few sure signs of spring. First is the end of snow (which may or may not be the case after this record-setting year). Next, there are the clocks “springing ahead” to Daylight Saving Time. Finally, there is the emergence of the beautiful crocus plant.

The crocus is a perennial bulb that is a member of the iris family. It blooms in several colors, including purple, white and saffron. In fact, the spice saffron is made from crocus flowers.

Why does the crocus tend to bloom before other plants? One thing we know is that the crocus will bloom at the first reasonably warm day and will remain unharmed even with a few remaining snowstorms left in the season.

The crocus is also resistant to insects, though a hungry squirrel may have its way with it. Its hardy nature makes it a plant you can expect to see growing in your yard for many years to come.

If you plan to plant crocus bulbs, the best time to do it is in the fall. The bulbs settle in for a long winter’s nap before poking up through the soil at the first sign of spring. Some varieties of crocus actually bloom in the fall and should be planted in late summer. Clearly, this plant enjoys a change in seasons.

The crocus looks best when it grows under trees and in large flower beds. Your blooming crocus will display its stunning colors as its delicate leaves sway in the breeze. Following a brutal winter, this amazing flower offers hope for a warm and beautiful spring.

This Home’s Just Not That Into You

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Shopping for a new home is like starting a new relationship. At first, you’re attracted to the neighborhood, then you become infatuated by the beautiful bathroom and the extra closet space. You love that it’s near the local market and the dry cleaner. At first glance it’s so perfect, you forget to factor in any of the cons while going all-in on the pros.

Oops, it’s a pretty long commute to work. That’s OK, you tell yourself. It’s still worth it. Oh, and there’s only a tiny backyard. Well, you can always buy your produce at the market rather than starting that garden you’d always dreamed of — and forget about parking your new car in the garage that doesn’t exist. No worries, you think, at least I have that whirlpool bath. While soaking in the tub you realize that you’re not in the best school district and the mortgage payment doesn’t leave much room to make improvements.

Regret starts to creep in. Why did I dive head-first into this relationship? Why did I choose a home that didn’t meet all of my needs? Why didn’t I make a list of non-negotiables? Noisy traffic on busy streets, parking on an icy hill during winter — or trying to find a place to park anywhere in Boston, for that matter. If it was a nuisance in small doses, it could drive you crazy on a daily basis.

This is, sadly, a common situation for first-time homebuyers. It’s the one of the primary reasons why people rarely, if ever, stay in the first home they buy. A good home relationship starts when you temper the emotion of owning a new home with the practicality and long-term usefulness of it. So what should you look for in a rock-solid relationship with your home? Here are a few tips.

1. Shop Around. There’s no need to choose a home under pressure. It’s a rash decision that you may regret for years. Better to take your time with your decision, even if it means renting or living at home a little longer.

2. Never Settle. This is a tricky one. Depending on your financial situation, you may not be able to afford the perfect house in the perfect neighborhood with the perfect school system. That does not mean you should be happy with the first couple of homes you check out. Making a compromise should only happen after you feel you’ve seen the best of what is offered and you are comfortable accepting the terms of your mortgage. It is not uncommon for buyers to spend a year or more searching for the home that they can love for the next 30 years.

3. Work At It. People change. Lives change. Your home shouldn’t be a museum showing how you lived 20 years ago. Expect to improve your kitchen and bath, expand a room, or add an addition. These are financial considerations to make before the baby comes or your mother-in-law moves in or the kids go off to college.

4. Leave When It’s Time. Empty nest. Divorce. Aging. These are just three reasons to consider leaving your home and finding one that works for the person you are today. It can be a difficult situation, but too many people stay in home relationships that have soured — and that only leaves them bitter. Better to accept that it’s time to move on and remember what it was like when you fell in love with your first home.

The best place to start the process is with a mortgage professional who can answer all your questions. Call me today at 617-965-1236.

February’s Home Improver
Ice Dam Damage

Ice dams form on snow-covered roofs. The snow that melts first is the layer closest to the roof, due to the rising heat in your home. As the snow melts it runs down the side of your roof and freezes again, forming those scary-looking icicles and creating a frozen dam that prevents water from running into your gutters. The water prevented from the dams can find its way in through small holes in your roof, which can lead to damage of your walls, ceilings and basements.

Preventing ice dams starts with removing snow from the roof. Use of a roof rake is the best method. Shovels can damage tiles and create water seepage sites. Keeping gutters clear is also important, and removing dangerous icicles is necessary. If you feel the slightest bit uncomfortable on a ladder or on a roof, contact a professional. Too many falls and injuries have occurred this winter by non-professionals who thought they could handle the job.

In the spring — in advance of next year’s winter weather — consider a new roof or fixing the existing roof. Heating coils may also be installed on the roof to prevent ice dams from forming.

Stay safe and warm. Spring is just around the corner!

Age and Term-Related Mortgage Myths

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When it comes to selecting the length of your mortgage, certain factors apply. There are some misconceptions about length due to age and income that don’t necessarily apply. Let’s bust some myths about mortgage term lengths.

Myth No. 1: A 15-year mortgage is always better than a 30-year mortgage. False. When you’re younger, you should expect your income to increase over time. If you have kids and enough money to afford paying down your principle quickly, then take on that 15-year mortgage — especially if you plan to tackle another major financial obligation: your children’s college tuition. On the other hand, as you move closer to retirement age, your income will probably level off or decline. In this case, playing it safe makes the most sense. Go with a 30-year mortgage with payments that you can make comfortably over time.

Myth No. 2: People over age 60 will not be approved for 30-year mortgages based on the fact that they could die before the mortgage is paid off. Yikes! Not true. A borrower’s age is never a consideration, thanks to the Equal Credit Opportunity Act. This is a protected category and is not to be considered during the application process. Your loan is determined by your income, savings, assets and credit history.

Myth No. 3: A 15-year mortgage will lower your monthly payment. Complete myth. While you will pay less interest over time, your monthly payment will be higher due to the fact that more of it goes to the principle reduction. If you are newly divorced or single, you’re working with only one income. A 30-year mortgage may work better for you in the long run.

Making these decisions can be difficult. There are so many factors to consider. The best thing you can do before making such a significant financial commitment is to call me at 617-965-1236. We’ll discuss all of your options so that you can make an informed decision that makes sense for you. I look forward to your call.

DIY Winterizing Tips

Stay warm and safe with these do-it-yourself fixes.

Although winter doesn’t officially arrive until next week, freezing cold temperatures have been invading New England for weeks. If you’re feeling a chilly draft or just want to prepare for when it gets reallycold in the next month or so, follow these easy, inexpensive ideas to keep the cold outside and the warmth inside.

1. Buy or make a door snake. Remember when you were a kid and your parents had a stuffed snake that you couldn’t play with because it was keeping the cold out? You can still find them. If you know how to crochet or know someone who does, a door snake will block out drafts for the price of a skein of yarn.

2. Switch the direction of your ceiling fans. Ever wonder why your ceiling fan moves in either direction? It’s not a lefty-righty thing. Because hot air rises, the ceiling fan should run in reverse (clockwise) at a low speed during the winter. This will cycle the warm air back down from the ceiling to where you are.

3. Seal gaps in windows. If you have old drafty windows, you should expect a big heating bill if you do nothing about it. Finding and caulking the gaps will accomplish two things: It prevents cold air from seeping in, but it also avoids wood rot by keeping moisture out. Here’s a tutorial.

4. Buy, test or replace your detectors. Your home needs both smoke detectors and carbon monoxide detectors to keep you safe this winter. Replacing batteries may not be enough, as typical detectors have a reliably functioning lifespan of only 6-8 years. If you’re buying a new detector, write the date on the inside of it so you’ll know when to purchase a new one. If you suspect your detectors are older than what is recommended, you owe it to yourself and your family’s well-being to replace them immediately.

What Is a PLA and How Can It Be Used for a Downpayment?

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I’m always looking for creative solutions to help my clients purchase their homes. One of the most common obstacles, particularly for divorced women, is coming up with the downpayment. I asked my good friend, Jay Gordon, of the Popper-Gordon Group at Morgan Stanley, if he had any ideas to share.
He suggested creating a Portfolio Loan Account (PLA). This can be set up to borrow against most account types at Morgan Stanley, with a few exceptions.
Provided that you maintain a certain level of collateral, a PLA can give you the line of credit you need to cover your downpayment. In most cases, there are minimal or no fees to set up your PLA and it can be established in a week or two, without a lot of paperwork.
If you’re concerned about the plan to repay the loan, there is good news: the repayment structure is flexible, offering variable and fixed rate options. Variable rate PLAs can be paid off in full at any time with no penalty.
Upon approval of your PLA, you will have immediate access to your line of credit by writing a check or wiring funds when needed. You won’t need to reapply each time you borrow against the PLA. There is no obligation or penalty if for any reason you decide not to use your line of credit.
If this option for liquidity makes sense for you, or if you have any questions regarding a portfolio loan account, please contact me at 617-965-1236.

October’s Home Value Improver

Outdoor Lighting for Safety and Curb Appeal

At this time of year, you may find yourself driving to work in the dark and driving home in the dark. This is a good time to view your home when the sun is not shining on it. How is the lighting? Are the walkways safe? Does your home have good curb appeal? Is it lit well enough to keep intruders away? These are important questions to ask, especially for divorced women who are single moms. Good lighting is used for more than beautifying your home. It’s also an important safety measure that all homeowners need to consider.

Here are some creative tips for outdoor lighting:

1. Pathway Lights. If there is a pathway to your front door, be sure to properly light it to avoid tripping on uneven pavement or avoiding ice that can cause slip-and-fall accidents. You don’t need very bright fixtures, but enough light to safely guide people to your door.

2. Patio Lights. Use indirect light for outdoor gatherings. Cool bulbs rather than harsh light make for a more comfortable outdoor event.

3. Doorway Lights. Install two small lanterns on either side of your door frame. For larger entryways, consider this option, but add a hanging lantern, centered above the door.

4. Landscape Lighting. If your home is set back from the street, it is recommended to have landscape lighting. A well-lit home without any landscape lights can look isolated and appear standoffish to your new neighbors. A few simple lanterns emitting soft white light will make a noticeable difference.

If you are looking for an outdoor lighting expert, I am happy to recommend one of my most trusted contacts. Call me at 617-965-1236.