Natalie’s Blog

‘These are supposed to be my golden years.  My days should consist of leisurely activities of my choosing not preparations for a second career.’  Sound familiar?  Unfortunately, this scenario has reached epidemic proportions among retirees and soon-to-be-retired baby boomers.  What happened to my retirement?

Let’s begin with the obvious: defined-benefit retirement plans also known as pension plans are extremely rare in today’s corporate environment.  The fact is pension plans of days ago are viewed as an unattractive expense for corporations.  The media has related thousands of stories wherein faithful employees were given the promise of a pension but in tough economic times were put out to pasture by corporations seeking to remain in business or pad the pockets of top executives.  They call it “restructuring”, employees know it to be “a raw deal”.

What are we left to do?  For those who are retired or approaching retirement, your home equity may be the answer to your problems.  Some are taking advantage of reverse mortgages (you must be 62 years of age to qualify).  Conservative estimates say there are more than 20 million Americans over the age of 62 who own their homes free and clear.  Many in this group are funding their retirement by receiving monthly payments from a mortgage company.  This is a viable option for many since equity not income is the primary qualifying factor.

What can those in the work force do to avoid the challenges of retirement?  Let us examine a few options:

If your company offers a retirement plan, most likely it is a 401(k) plan.  One benefit of these plans is company matching.  Some companies offer 50% matching or more up to a certain percentage of employee income.  A second benefit is that contributed funds grow tax-deferred.  This option appears to be extremely attractive, however, caution should be exercised when taking into account the entire tax implications (much of your retirement could end up in Philadelphia with the IRS).  Depending on your tax bracket, the average retiree should expect the government to take 25% to 33% of your well-deserved funds.  Do the math; it is quite a chunk!

A second option is an IRA (Individual Retirement Account).  This plan operates essentially the same as a 401(k) and has similar tax implications (you’re starting not to like Philadelphia, aren’t you?).  Yet another downside to this option is the limitation on contributions ($5,000.00 per individual in 2008) not to mention the 10% early withdrawal penalty for persons who wish to access funds prior to age 59 ½ (there are a few exceptions including withdrawals for first time home buyers, post-secondary education and catastrophic medical expenses).

There are two additional plans gaining popularity.  They are the Roth 401(k) & IRA.  These two plans are a step in the right direction.  Although these plans use after-tax dollars, they grow tax-deferred and distribute tax-free at retirement.  The downside of these plans is comparable to their non-Roth counterparts.  There are limits on contributions and a 6% penalty for excess contributions.  Similarly, there are penalties for early withdrawal.

It is not difficult to see why planning for retirement can be frustrating and confusing.  Well then, diligent retirement preparers, is there another option to meet your retirement planning goals?  There is a quiet strategy that has been used for years by the wealthy.  Properly Structured Permanent Life Insurance Contracts are the only retirement vehicles that allow participants to accumulate funds tax free, allow access to funds tax free, and have the ability to last into perpetuity upon transfer to your heirs.  There are additional benefits to this plan that should be discussed with a financial specialist.  This strategy is a favorite of the MRE Group.

In the final analysis, we can no longer count on corporations to look out for our best interest with regard to retirement planning.  We must put forth the due diligence to prepare for our own needs.  With the responsibility left to us, we can avoid the nagging question: What happened to my retirement?  Contact Leslie Vinson, of the MRE Group, today for further details on financial planning.

The MRE Group would like to thank you for your continued support, and we hope to continue to remain your trusted choice in real estate and financial services. As always, if you have any home-related questions, or hear that any family, friends, or neighbors are interested in moving do not hesitate to contact us by phone or email. Thank You.

Leslie Vinson, Financial Planner with the MRE Group

This has been a wet and soggy March, April, and May (especially May). June? I always said I wanted to visit Seattle, I think I just changed my mind.

The rain is beneficial, we all know this and there are days that we wish for the rain. However the growing concern for my clients and most homeowners is, “what about flood insurance”. There is good reason for the growing concern. It used to be that the mortgage company only made you buy flood insurance if you were in “high risk” areas. Nevertheless, with the onslaught of more showers, hurricanes and tornados, in places one never expected, even if the mortgage company does not require the insurance you need to consider it. Most homeowners do not realize that their everyday hazard insurance policy does not cover damage caused by flooding. Therefore, the question remains, how much flood insurance should you purchase and how will this affect your premiums and budget? These questions are necessary especially in a growing recession. The peace of mind is that the federal government provides policies through the National Flood Insurance Program and you can purchase it through private insurers. The federal government sets the rates so you do not have to shop for your insurance based upon price. If you trust your insurance agent and feel comfortable, utilize the same gauge that utilized for your hazard insurance. Normal recommendations are 100 percent of cost to cover the replacement. Of course, the value of the home and your chattels will determine how much insurance you purchase.

We recommend going to The Federal Emergency Management Agency’s website to see the risk zones for your area. Look at the flood maps provided to determine the risk. One might also consider the history of the property. Have you or your neighbors had any extensive damage from flooding in the last few years?

The policies offered by the federal government have varying limits as to time of enforcement, basements and “high cost” areas. Research private insurers, you might want to consider a blend of both federal and private policies.

Be completely educated before making the final decision, but do not wait. Remember your mother always said “better to err on the side of caution”, so do not let cost be a factor.

Natalie Dean, Real Estate Consultant

Price: $3,100

Bedrooms: 4

Bathrooms:2.5

4 Years Young! This is a gorgeous home and loved by original owners. Owners suite is a lush hideway after long days work. Enjoy warm moments with family and friends in an enormous space that includes breakfast room, large kitchen and den. Great for entertaining the seller has added a beautiful deck on the rear just in time for summertime bbq. Fast growing area. THIS LISTING IS A RENTAL AS WELL AS FOR SALE!

Price:$463, 750

Bedrooms:4

Bathrooms:2.5

4 Years Young! This is a gorgeous home and loved by original owners. Owners suite is a lush hideway after long days work. Enjoy warm moments with family and friends in an enormous space that includes breakfast room, large kitchen and den. Great for entertaining the seller has added a beautiful deck on the rear just in time for summertime bbq. Well kept neighborhood in a fast growing area. MUST SEE

Price:$180,000 

Check out this new Rental property that I just posted on my Web site. It is at 4410 Oglethorpe Street #704 in Hyattsville, MD. This Rental property has 2 bedrooms and 1 baths. This is BANG FOR YOUR BUCK! Fabulous renovated condo 1 blck from Rehabed Historical Mt. Rainier Art District ie Brand new 400k townhomes and retail shopping. The property backs to Dematha High School. Pristine building and park like out side grounds await you as the New Tenant. Convenience galore-coffee houses-5 min to New PG Plz-8 min dwt. Condo dues: 450.0. 

Price:$1,450 

Check out this new Condo property that I just posted on my Web site. It is at 4410 Oglethorpe Street #704 in Hyattsville, MD. This Condo property has 2 bedrooms and 1 baths. This is BANG FOR YOUR BUCK! Fabulous renovated condo 1 blck from Rehabed Historical Mt. Rainier Art District ie Brand new 400k townhomes and retail shopping. The property backs to Dematha High School and gorgeous quiet neighborhood of single family homes. Pristine building and park like out side grounds await you as the New Homeowner. Convenience galore-coffee houses-5 min to New PG Plz-8 min dwtw.
Condo dues: 450.0.

All of the information you read in today’s periodicals talk about the “bottom” but many ask the bottom of what? Well it used to be just the bottom of the real estate and mortgage industries now we have added to our list, the stock market. Analyst say it is difficult to judge the bottom in the stock market you see big gains and sizable pullbacks. In the housing market  it can be just as challenging, you see no gain and lowering interest rates and banks have become much stricter on who they lend to and how much. Is this the bottom of all three? Where is the economy going? Is now the time to stay or go?

At the MRE Group, we are no experts on the stock market, however we can recommend a few good financial planners to you if need one. We are however experts in the real estate and mortgage industries. Traditionally the trend has been for persons to lock up huge amounts of money into their real estate investment. Experts contend that no longer is that necessary or prudent in times where “diversified portfolios” are the order of the day. The stock market and real estate industries have long since had an ebb and flow soaring during times of overvaluation and plummeting when no longer favorable with the masses. Leslie Vinson of Mortgage Star says, “You can take a mortgage calculator and see that on average, through highs and lows of the economy, a property will increase in value from 5% to 6% yearly.” Of course, that does not account for times like 2001 to 2006, were the industry recognized amazing growth trends for five years. Many homeowners realized a 10% to 12% increase each year.

All economist say to buy low and sell high, the real estate market will rebound. Remember the 80’s, the market was low and interest rates were 12% to 15% for good credit borrowers, today the averages are much better.

The best thing to do is be a smart investor. There are so many advantages to homeownership, tax benefits not given to stock investors, leveraging assets with financial institutes and most of all a built in savings plan. Talk to persons who have the benefit of owning a property through more than one cycle of highs and lows, see if they do not say their home has been one of the wisest investments they ever made for their families.

The MRE Group would like to thank you for your continued support, and we hope to continue to remain your trusted choice in real estate and mortgage services. As always, if you have any home-related questions, or hear that any family, friends, or neighbors are interested in moving do not hesitate to contact us by phone or email. Thank You.

Natalie Dean, real estate consultant

I am always amazed at the intellect of this young generation. Many of them are business owners by the age of 15 most will own more than one business before they reach 30 years old. They are the reason and the genius behind the technology advancement we all have come to rely on daily. In fact without it, most of us would be out of business or out of job quick fast and in a hurry. However just like all bright stars, they still need help as they continue to chart their life’s journey. The new statics read that 51% of them have credit cards and credit card debt before they reach college. This means that most of them are in debt by the ripe “old” age of 17 to 18 years old. Wow! Those are remarkable and disparaging figures. We know our young people are being targeted by these big consumer credit card agencies earlier and earlier so what steps can be taken to remedy the problem and protect them from becoming prey? One word, EDUCATION.

All of us can get involved, parents, mentors, aunts, uncles become a friend and educate these ones on the dangers of being in debt. As the nation spirals into a recession and the student loan debt, cost of housing, gasoline and food all increases by enormous amounts. We cannot control these things. However, we can control the debt that we assume. I love my parents and I thank them every day for making us sit down and talk about finances weekly from an early age. Talk about protecting a kid from heartache. Educate the young on the benefit of a cash environment, if you do not have the cash to pay for it NOW you cannot afford it. Tell them about the 10% rule, of every dime you earn 10% should automatically go into the bank as savings, preferably into an account that is not linked up with an ATM card and has penalties for having a balance under a certain amount. If it is necessary to have a credit card educate them on two of the best, American Express that charges no interest for the first 14 months and has a 2,000 limit. The catch is you have to have good credit to qualify. Discover Card has a “Credit 101” booklet and the company’s website has a “student center” with a budget calculator, quiz and a glossary of key terms. I suggest unless your young person is extremely responsible take the time to go on the site with them and make sure they take advantage of these tools. Then when they go to make that not so smart purchase with their friends over the weekend, what you just taught them will resonate in the back of their minds. Hey, they just might step away and say, “Sorry guys maybe next time, I just can’t afford it today”

Natalie Dean, real estate consultant

As this economy continues to spiral out of control and other stock market giants buy huge static corporations like Bear Stearns and record number of bankruptcies of small and medium sized business are being filed. Consumer debt and spending has reached well into the billion dollar mark and the resounding woes of the housing crisis continues to flood the airways, it is easy to become overwhelmed. However, there is light hovering at the end of the tunnel. In the Washington Area, one of the wealthiest in the nation, housing prices although not plummeting have stabilized allowing many would be renters to cash in as First Time Home Buyers.The correction of the real estate market has led to a series of wonderful changes allowing for affordable housing. FHA loan limits have risen from their traditional 362,000 to well over 729,750 in high cost area, homeowners are now allowed to give 6% closing help through the help of the Ameridream and other seller down payment assistance programs. Fannie Mae and Freddie Mac the institutions utilized to back conventional mortgages raised conventional conforming loans limits and houses are in much better condition than in times past with homeowners willing to do any and all necessary repairs (cosmetic and non cosmetic) in order to attract area buyers. Foreclosures are on the rise and not just for the savvy investor but are popping up all over our multiple listing service, giving homeowners and edge in getting a bargain in the market. This is a good time purchase real estate.  Across the region, the median cost of housing is down especially in Loudoun and Prince William Counties. These two counties saw phenomenal amounts of growth during our real estate boom of 2000 to 2005 and now are leading the area in foreclosure crisis. As the tide on the housing market takes shape many wonder, have we hit the bottom. They may wait it out to get the best deal. Remember that just like with the stock market or any investment when you think you are seeing the bottom it probably has already occurred and the best deals are gone.  The MRE Group would like to thank you for your continued support, and we hope to continue to remain your trusted choice in real estate and mortgage services. As always, if you have any home-related questions, or hear that any family, friends, or neighbors are interested in moving do not hesitate to contact us by phone or email. Thank You.
 

What, the MRE Group is in the News? 

Recently the Natalie Dean of the MRE Group had the wonderful privilege of helping one of the Real Estate staff writers of the Washington Informer. They wrote an interesting article on the benefits of performing a home inspection. You can read more on this story at the Washington Informer, pg 14. 

MRE Group Book of the Month Club 

In the February issue of the MRE Group newsletter, we promised to begin a book of the month club. We practice avid reading here at the Group and encourage it in all of our clients. Knowledge creates power, which in turn can stimulate growth and ultimately financial freedom. This month our book is recommend to us by our own Leslie Vinson, mortgage guru and spirited entrepreneur. The book, The Millionaire Next Door written by Thomas J. Stanley and William D. Danko, is a national best seller “that is changing people’s lives and increasing their net worth”.  Later in April, we will have a discussion on this book on our online blog.

Natalie Dean, Real Estate Consultant

FINANCIAL TIDBITS

Feature Article: How to Get the Most out of your Personal Property Taxes in 2008

Can you believe it we are already 30 days into the 2008 Calendar Year! I often say to my husband, “Remember just yesterday when the school year seemed to last forever? When summertime seemed to last but for a few hours while you stayed outside until the street lights came on? When every time you turned a year older was milestone – a telling accomplishment!”  Now, days turn into months and months into years in what seems like a nanosecond.  Well even though I am a little older and time moves a little faster these days, I still look forward to a new day, a new season and most of all a new year. It is always refreshing to have an opportunity for exciting and favorable changes. What changes are you inclined to make this year? They say, ‘goals that are not written are just good thoughts’ so do not stop today until you write them down and start making exciting and favorable changes.

At the MRE Group, you know we pride ourselves on making changes that benefit our client and customer base. One change that we will be implementing is in our E-Letters, once a quarter we will include some much-needed financial health reading. Yes, we are starting our own book club! We want our readers to be involved so please ask question, post information on our blog and most of all make suggestions on books you have read or are reading that have increased your financial health and well being. We are going to start this year with some wonderful reading from The Washington Post business section. We recommend the column brought to you each week by a young woman who is a financial guru, Michelle Singletary, she writes the column “The Color of Money”. She has incredible insight and touches on every aspect of financial health at every stage of life. Regardless of whether you are a retiree or just embarking on life you can benefit enormously from this column. It is a necessary read. Therefore, start your change this week, pick up the Sunday Post, and be convicted to read the column.

The MRE Group would like to thank you for your continued support, and we hope to continue to remain your trusted choice in real estate and mortgage services. As always, if you have any home-related questions, or hear that any family, friends, or neighbors are interested in moving do not hesitate to contact us by phone or email. Thank You.

Natalie Dean

Your Trusted Real Estate Advisor

Prince George’s County Homeowners Alert!!!

**1/3 of all homeowners in Prince George’s County just received their new assessment notices. You may want to remind your past clients that these assessments can be appealed but they only have until February 11^th to file any appeal.

Included in any new assessment notices is a Homestead Tax Credit Application. The property owner must fill out this Homestead Tax Credit Application to reverify that the property is their primary residence. This document must be filed by April 1, 2008.

If this form is not filed the county will consider the property to be a non principal residence. The homeowner will lose their homestead tax credit and will end up paying more transfer taxes in the event of a refinance.

For all other local area markets in need of information regarding your specific tax assessments, please email or call the MRE Group as we have specific criteria and would be happy to forward the information to you.