NKS Monthly

It may sound cliché, but there’s something about the renewal of life and energy that comes with the first warm rays of spring that seems to touch us all.

Feeling inspired, we decided to take the opportunity to also come out of our winter slumber and say a more personal “hello” to our friends of NKS Financial. Things are going well in our office and contrary to what you may think of the current housing market, we have been quite busy in the past few months. In these times, we couldn’t be more thankful for our faithful clients and their referrals.

We have been fortunate enough to be able to provide many a-past clients with some unprecedented deals on refinances and purchases alike. I know you probably hear it from every angle, but now is truly the perfect opportunity to at least inquire as to what we can do for you and your home - or new home - dreams. Most recently, we have been hearing of a special loan program for school teachers, fire fighters and police officers alike. If you or any of your friends or family are involved in the latter public services, please take this opportunity to look into your options.

As you may have heard, the United States Post Office has decided to increase the postage rates for all outgoing mail. I know even my office has a hard time keeping track of the prices these days, seeing as how often they are changing, so we have decided to enclose our current cheat sheet for the newest postal modifications as well as a couple of stamps to put towards the increased prices.

If you would like any more information pertaining to the rate increase, please visit www.usps.com.

We hope this letter finds you and your family healthy and happy. I know my family and I are doing our best to take advantage of the beautiful weather ahead. I’d love to hear what you and yours have planned for the coming months.

Sincerely,

Neal Smith

“Your Lender for Life”

It is amazing how every year goes by faster and faster.  It seems like yesterday when my first son, Jackson, was born.  Now he turns five in January. It is so crazy.  Having children has really changed my perspective of things.  Just the fact that my wife and I are the ones training and molding these two wonderful boys to be incredible men is mind blowing to me!  There is a great book written by Shad Helmsteader called, “What you say when you talk to yourself.”  It is a must read.  One of the things Shad writes about in his book is a concept of your child being an unprogrammed computer and all they are doing is living out your programming.  So imagine they have a keyboard on their back and everything you do and say are having lasting impressions on your children.  Raising our children is a full time job in itself and hard work.  This is a huge responsibility and I am up for this challenge and loving it.  I recommend you go out and read Shad’s book.  It is one of those life changing books.  There are programs that each of us has in our own minds that were programmed by our parents.  Unfortunately, not all of the programs are good.  Shad also writes about training ourselves, so that we can reprogram some of those poorly written programs in our own human computer.

I hope this letter finds you and your family healthy and happy.  If you get a chance to read Shad’s book, send me a quick email.  I am interested to hear your thoughts after reading the book.  I hope you have a magical 2009! I plan to.

Happy Holidays!

Neal Smith

Cut Clutter & Make Money 

Yard sale, garage sale or rummage sale, no matter what you call it, it’s a great way to get rid of extra things and earn some additional cash. The amount of money you bring in depends on a few valuable secrets. Make sure your sale is a success by following some these suggestions.

Summer is the season for selling. Statistically, summer is the best season to sell because people have more flexibility during longer daylight hours and more vacations and time off mean more shoppers. Also, if you have a sale in August or September you’ll benefit from the large number of college students who need to furnish their new dorms or apartments on a budget.

So what should you get rid of? The basic rule of thumb is if you haven’t used or worn something in two years then it’s probably time to get rid of it. The best-selling items at garage sales are typically baby goods such as strollers and high chairs, sporting goods, furniture, tools, books, kitchen items and toys. Clothes often do not sell very well. You will have to price them very low if you want them to move. Be sure to sort clothes by size for the customers to easily locate items that they are interested in. Presentation is key, clothes should be clean and wrinkle free.

Don’t have time for a garage sale? Sell your items on eBay or craigslist. Do your research and price your item comparably to the others on the market. A picture is worth a thousand words. Be sure to include pictures with any and everything you sell online. Don’t forget to include shipping costs when selling on eBay and make sure that your buyer has proper transportation to pick up the item if you’re selling on craigslist. There are also services available to you that you can drop off your items to a selling service and they will post them on eBay for you. Check out the websites www.i-soldit.com, www.orbitdrop.com or www.quikdrop.com for more information.

Do you have items left over from your garage sale? Donate to charity. When donating to charity make sure to get a receipt in the value of the items donated. Save these receipts for your taxes.

Remember, “One man’s trash is another man’s treasure”.

Back to School

Cool clothes, the right backpack, lunch box, notebook, calculator and more. In recent studies the National average cost to prepare your offspring for the fall migration back to school is nearly $600.

The most valuable gift you can give your school-bound children, however, doesn’t cost a cent – it’s your enthusiastic partnership in their education! Research studies have shown time and again that excellence in student achievement is closely linked to active parent participation.

Parents make a difference. Children of involved parents have better grades, better attitudes and better behavior.

o Develop a relationship with your child’s teacher. Volunteer in the classroom or go on field trips. Don’t miss Back to School Night or teacher conferences.

o Instill a love of reading. Have good books available for your children at every age.

o Limit TV and video games.

o Know your child. If you suspect a learning disability, take advantage of the vast resources available.

o Be available. Talk frankly to your children about the values you want for them.

You are the first and most important teacher your child will ever have. Don’t underestimate the value of your contribution. From kindergarten to college “back to school” is filled with emotion. Acknowledge the jumble of emotions your child may be experiencing and reassure them that today’s unknowns are tomorrow’s routines.

Tips for Smart Borrowing on a Home Equity Line of Credit

A Home Equity Line of Credit is a credit line secured by the equity in your home. You can use a HELOC to provide cash as needed for a purchasing a rental property, home improvement, bill consolidation, vacation, school tuition or whatever else you like. There is a pre-set limit and you can write yourself a check whenever you need it. Payments are determined only on the amount of funds that are owed.

A home can be a good way to build long-term wealth but be aware of what the risks are when borrowing against your equity. Be particularly wary of using home equity to pay off consumer debt. You may end up deeper in debt in the long run. In general, you don’t want the term of your loan to last longer than what you’ve purchased. For example, if you use a HELOC to buy a car, try to pay off the balance in a few years and definitely before you trade in for a new vehicle.

It is important to know what the tax rules are when it comes to HELOCs. The tax deductibility really depends on what you used the HELOC monies for. The tax break is limited to interest on loan amounts of $100,000 or less. You need to consult your accountant about the tax rules regarding your specific situation.

We have HELOCs available up to 90% of the value of your home. There is no cost to the borrower to do them. You may have a minimal recording fee and an annual fee on your credit line.

For more information on Home Equity Lines of Credit and how it may be beneficial to you contact my office. There are a lot of banks that are limiting availability of HELOCs, so this might be a good option for having available money now. Remember, there is NO FEES to do a HELOC!

It’s about time

I wanted to share with you a personal experience that just happened to me. Most of you do not know that I have not seen my father since I was two years old. It’s a long story, but basically my parents had me when they were 21 and they did not have the skills for marriage or to take care of a small child. Luckily, my grandparents, on my mother’s side, stepped in and raised me.

Two weeks ago, my uncle contacted me to tell me that my father was flying to the United States and that he wanted to meet me. My father currently resides in Thailand and Indonesia.

It was a whirlwind. I picked him up at Sacramento Airport on Thursday, May 22^nd, and he returned to L.A. on Saturday the 24^th. What an amazing 48 hours. It was really cool getting to know and learn more about him. We had a really good time. He stayed at my house and he saw up-close what it is like raising a 2 and 4 year old. He was blown away at how much energy Jackson and Max have.

It is really hard to put into words what the experience was like. My biggest take away from this is that how similar he and I are, but that particular choices have really put us in different places in life. I did see so many similarities: his looks, mannerism, speech patterns and much more. It was almost like those stories of twins that are separated at birth, and grow up to be so similar.

In all of this, I found out that I have a 5 year old half-sister that lives in Japan. Someday, when she is old enough to understand, I will have to find her.

Meeting my father really increased the level of appreciate I have for the Grandfather who raised me. I am the man I am today, because of his influence. Thank you POP!

My father and I left things open for future communication. I hope to get to know him more and more as time goes on. I am so glad that he finally decided to make the effort to meet me.

I hope this letter inspires you to do something that you have said you would do “some day”. “Some day” needs to be today.

If you have a something that are putting something off, do it now! My dad and I could have easily started this relationship 20 years ago if he or I would have made the effort. That is my big regret. My life and his could have been that much fuller if one of us would have made the effort sooner. Don’t put it off. Make the effort so your life can be fuller too!

It’s a good life,

Neal Smith

Spring has sprung, the flowers are blooming, the birds are serenading, which means it’s that time of year again – “spring cleaning” time! Although many of us dread spring cleaning, I do think that the following home maintenance tips are less tedious and important for your family’s safety.

1. Inspect your smoke detectors and make sure that there is at least one on each floor of your home. Test them every three months and replace the battery as needed.
2. Check the light bulbs in all of your fixtures and replace them with fluorescent bulbs that are energy efficient and don’t produce as much heat.
3. Keep a fire extinguisher accessible that is filled and ready for quick use if necessary.
4. Have your air conditioning system inspected to insure it’s working in proper order. Have your ducts cleaned if necessary.
5. In your yard, remove all dead trees and bushes. Keep all of the healthy trees and bushes trimmed and away from AC units and utility boxes.

Spring cleaning is a tradition that allows us to freshen up our homes and get a head start on the hectic seasons of spring and summer. If you need some help in your spring cleaning endeavors here are some helpful tips to get the entire family involved. Even the most unwilling helper can make a big difference in the work load.

1. Have everyone pick their favorite CD and take turns playing them while you clean.
2. Have good snacks and drinks on hand for break times. Choose your family’s favorites and set a time when you all can take a break to enjoy the snacks together.
3. Turn it into a contest by dividing the family into teams with equal amount of work. The team that accomplishes the most by the end time gets an extra treat or prize.
4. Plan a reward for when the entire job is finished. Take the family out to a movie or order a pizza and rent a movie so that you’ll all be able to lounge on the couch basking in the knowledge of a job well done.

This Crazy Real Estate Market – many unfortunate situations, but many opportunities

I don’t know about you, but I have never experienced such uncertainty in the real estate market.  Unfortunately, I am talking to at least one person a week that is on the verge of losing their home.   In many situations, people bought homes that they should not have or refinanced and got a very risky loan.  As you know I have been in the mortgage business for over 15 years.  I can remember many times where I advised the client not to purchase a home and they went elsewhere and did it from another mortgage lender.   I really wish that those people would have listened to me.  Many of them are in trouble today.  For many it was gambling with high stakes and now they have to pay the price. The good news is that for some families we are figuring a way for them to keep their home. 

The root cause of this is Wall Street creating a huge demand for these sub-prime loans.  Many of these loans should not have been done.   At the time, we were all reaping the benefit because home prices were increasing tremendously, but now we have a dose of reality. 

The chart bellow tracks the amount of loans that are scheduled to reset (adjust), since January of 2007 to December of 2009.  THIS CHART IS REALLY SCARY.  It shows that many more people are going to have significant increases in their mortgage payments now or very soon.  Most likely these people will not be able to afford it and they are going to lose their home.  Everywhere I turn I am hearing on the news or reading in the paper about the problems in the real estate market.   Right now we are in the 4^th inning of this problem.   

Notice the lines that are orange.  That is what I want us to focus on.  If you look at the chart there was $20-$50 billion dollars of sub-prime mortgage loans that their interest rates were going to change each month last year.  This year it is even worse.  The number is as high as $100 billion in March of this year. 

Valentine’s Day is the day to celebrate those you love, but where did the day originate from?  Many experts say that it originated from Saint Valentine, a Roman who was martyred for refusing to give up Christianity.  He died February 14, 269 A.D.  Legend also says that St. Valentine left a farewell note for the jailer’s daughter, who had become his friend, and signed it, “From Your Valentine”.  Other experts say that Saint Valentine was a man who served as a priest at the temple during the reign of Emperor Claudius.  Claudius then had Valentine jailed for defying him in 496 A.D.  Pope Gelasius set aside February 14^th to honor St. Valentine. 

Gradually February 14^th became the date for exchanging love messages and St. Valentine became the patron saint of lovers.  The date was marked by sending poems and simple gifts such as flowers.  In the 1800’s the first Valentine’s Day cards were introduced in the U.S. and now the date has become very commercialized.    

So, what are you planning for Valentine's Day?  Do you need some ideas to make this Valentine's Day a day to remember?  Why not skip dinner out and have a picnic in your own living room.  Spread out a blanket and light some candles.  Buy some wine, cheese and bread and enjoy a romantic night in.  How about a scavenger hunt for your loved one?  Have each clue eventually lead to a small gift or even dessert.  For those of you with great memories try recreating your first date together.  Want to get your heartbeat going?  Partake in a physical activity like ice skating or go on a hike.  You don’t have to go far to go wine-tasting, tour at your local wineries.  Whatever you end up doing this Valentine’s Day remember it’s a day to celebrate those you love.

Wishing you and yours a wonderful Valentine's Day!  

Recently, the Federal Reserve has cut the Fed Funds Rate by .50% and the Discount Rate by 1.0%. With all of the uncertainty of the credit market these days, many borrowers have called expressing concerns regarding their short-term-fixed-rate loans that may be rolling into adjustable-rate products within the next couple of years.

If you currently have a 5-, 7-, or 10-year fixed rate loan on your property and are within a 2-year window of it rolling to an adjustable loan, we need to schedule a 10-minute mortgage consultation with you.

As your mortgage manager, I feel a responsibility to advise you regarding your options for your future mortgage. I am here to help you determine if there are other options you should consider to help protect you for the future.

It might make sense to get into something with a longer term, so that you are protected if the market continues to tighten or if property values become affected due to the current trends.

Please give me a call to discuss your options. We value our clients and want to ensure that we are doing everything possible to help our borrowers make the right lending choices for their future. This is a crucial financial time in history, and no one is certain how severe the current credit crunch may be or how long it will last. Because of this, it is critical that you be proactive today to protect your financial future!

Rest assured that my team and I are here to help. Please call or email us at your earliest convenience.

Thank you for trusting us with your mortgage needs.

It’s a good life,

Neal Smith