The Imaginary Mortgage - Fake It Til You Make It

by Erica Starr 2. May 2012

Imaginary MortgageHave you ever bitten off more than you could chew or found yourself asking the question, “How did I get myself into this?” In today’s housing market, thousands of homeowners are asking themselves this very question.

Let’s back track a few years to 2006 – a time when young people applying for mortgages were getting approved for three to four times the amount of what they could actually afford.  But hey…spend it if you got it, right? Wrong.

I can guarantee you that the vast majority of the homeowners who are either a) facing foreclosure or b) have already had their home foreclosed upon are saying to themselves, “If I only knew then, what I know now.”  What if I told you that they technically could have “known then what they know now”?  Sound outrageous?  Not really.

Before you roll your eyes or click away, hear me out.  I promise it’s really not that crazy of an idea.  In fact, it’s actually just a dash of common sense seasoned with a little bit of planning (there’s a novel idea).  For the past three to four years, I’ve been “looking” to buying my first house in Canton.  Like many 28-year-olds, I would be a first time home buyer as this would be my first go-round as a homeowner, and more importantly, my very first monthly mortgage.  I’ve gone through the motions of getting pre-qualified for a loan, and with the help of my real estate agent and lender, I have a pretty good idea of how much house I can afford (keywords “pretty good idea”).  But wouldn’t it be nice to test drive my mortgage payment before I drive it off the lot?

Ladies and gentlemen, I present to you the imaginary mortgage…kind of.

So how does it work? Let’s discuss…

Do the Math

Talk with your lender to see how much you can afford. Once you find the mortgage payment amount that you think you are comfortable with, work out the numbers to figure out the amount that your mortgage payment would be if you actually went through with a purchase. Don’t forget to factor in property taxes, insurance, interest rates and other monthly mortgage-related payments such as mortgage insurance and homeowner association fees (it may also make sense to kick in a few extra bucks for maintenance and home improvement projects for we all know if it can break, it will).

What is a mortgage? For example, here is a high level look at a 200K monthly mortgage budget for a rowhome in Canton. (These are not exact numbers and don't reflect actual mortgage rates)

Purchase Price: $200,000 

Mortgage: $930.00
Home Owners Insurance: $60.00
Mortgage Insurance Premium: $185.00 (if applicable)
Taxes: $300.00
Total Mortgage Payment: $1475.00

Utilities: $250.00
Cable & Internet: $120.00
Maintenance & Home Improvement Fund: $100.00
Total: $470.00

Total Imaginary Mortgage Payment: $1945.00

“Pay” Your Mortgage Payment

That’s right, actually start paying your hypothetical/imaginary mortgage. Set up an account at your local bank and start depositing your mortgage payment amount into that account on a monthly basis.  (If you are currently renting, pay the amount that your mortgage payment exceeds your rental payment.)

Don’t Cheat

Pay your mortgage and forget about it. Though you technically have access to your “mortgage” funds, that doesn’t mean you should touch it. You wouldn’t be able to use that money if you had a real mortgage, so you shouldn’t think – or more importantly, act – otherwise in this scenario.

Put Yourself to the Test

Really challenge yourself to stick to your new budget and make your mortgage payments on time. If you find that you just can’t survive without tapping into your imaginary mortgage or that you’re making “late mortgage payments” on a normal basis, chances are that you’ve probably bitten off more than you can chew. Sign up for a personal financial management tool to help you find out where your money is actually going. You might find that you could afford to cut back on your trips to Starbucks and save a buck or two.  On the other hand, if you can easily go about your normal everyday life without being drastically impacted by the dent in your wallet, you’ve now not only proven to yourself that you can handle the mortgage payment, but you’ve also gotten used to living within your “new” means and saved up a nice chunk of change to use as a down payment.

That’s it!  Pretty simple, huh?  Nothing but a little bit of planning, discipline and budgeting – the same factors that you’ll need when you finally take the plunge and buy your first home (or second home for that matter). Only now, you’ll sign those papers with the confidence and comfort of knowing that you can easily afford your new home.

If you found this article helpful, be sure to check out these related articles:

Has Anyone Seen My $200 Million?

Tricks to Throwing a Budget-friendly Barbeque

How to Decide: Home Equity Loan or Line of Credit

5 Mobile Banking Security Tips

by Erica Starr 16. February 2012

1st Mariner Bank Mobile BankingIt wasn't that long ago when the only way to deposit, transfer or withdraw money was to physically visit your local bank branch or ATM. Today, thanks to the wonderful world of technology, consumers have a full suite of options to choose from when conducting their financial transactions.

With online and mobile banking on the rise, it's only natural that security be on the minds of both financial institutions and customers.

So what's the deal? Is mobile banking a secure way to bank? In sort - yes. 1st Mariner's Mobile Banking solution offers the full encryption and security suite that is utilized for our traditional (desktop) online banking platform. However, as with most things, as technology gets more advanced you can never be too safe.

There are certain precautions customers should keep in mind when opting to go mobile.

1. Download the official app from your bank's website.

It's only natural to go to the iTunes store or Android Market when you are looking to get a new app. However, non-reputable people are putting apps out there everyday, for the purpose of phishing consumer information. It's always better to start with your bank's website to make sure you aren't being scammed.

2. Don't send personal information via SMS (text messaging).

Regardless of the situation, never EVER send personal information, (PIN, account numbers, social security number, passwords, etc.) via SMS. SMS is not encrypted, so your bank will not send personal information via SMS, and you could leave yourself vulnerable to phishing if you send sensitive information through this medium.

3. Avoid conducting your banking needs on public networks.

While enjoying your coffee at the local coffee shop might sound like a good time to check your account balances,you might want to think again. Most public Wi-Fi networks are not secure so always be sure to switch to a secure network (i.e. your phone's 3G or 4G data plan) before logging into your account information.

4. Take advantage of your phone's security features.

Perhaps the biggest risk associated with mobile banking is the risk of losing your phone. Almost all smart phones offer some sort of security feature that is built into the phone itself. From screen locking mechanisms to GPS locating apps (i.e. Where's my Droid or Find My iPhone), your phone offers several different ways to prevent your personal information from getting into the wrong hands. As new phones hit the market, the security features will continue to become more and more advanced (i.e., facial and fingerprint recognition).

5. Take advantage of your bank's mobile banking security offerings.

If you are considering a mobile banking app, look for one where data can be wiped from your cell phone, if you lose it. With 1st Mariner's mobile banking, users can access their account from their desktop and shut down access through their mobile phones and thus eliminate the risk of fraud.

Still not sure if you are comfortable taking your banking mobile? That's okay - we commend you for being overcautious when it comes to your finances. We are too! That's why we're here to walk you through the ins and outs of our mobile banking services and answer any questions that you have. You'll see for yourself just how secure mobile banking really is.

Answer our Facebook Question of the Week.

Are you using a mobile banking solution? How so? Feel free to leave some commentary on our wall as to why or why not.

 

If you found this article helpful, be sure to check out these related articles:

Top Three Myths About Online Banking Revealed

It's 11:00 p.m. Do You Know Where Your Money Is?

I'll Take "What is Check Fraud" for 500, Alex

A Holiday Video Message from 1st Mariner Bank

by Erica Starr 20. December 2011

Happy Holidays from your 1st Mariner Bank family...

Every month we send out the 1st Mariner Bank eNewsletter that is aimed to keep you updated on 1st Mariner happenings. From information on our new and current products, to financial tips and advice from local experts, the 1st Mariner Exchange is just another way to keep you informed and equipped in your financial journey.

Not to mention, you get to help us avoid chopping down several trees in the process.

With the rush of the holiday season, the last thing we thought you’d have time to do is read another email. We thought, today, let’s 86 our traditional monthly eNewsletter and have a little fun for the holidays. (If you’d like to sign up for our eNewsletter, click here)

Over the past week, we went around and asked some of your favorite 1st Mariners a few questions about how they spend the holidays, their holiday likes and dislikes, and some fun holiday trivia. I mean, naming the reindeer is something everyone can do….right? Or not.

Wanna see how they did?

It’s a short, funny three-minute video holiday card that we hope you’ll enjoy as much as we do.

We’d like to sincerely thank you for affording us the privilege and opportunity to serve you.  Here’s to wishing you and your family a very happy and safe holiday season!



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