Why you might have to buy flood insurance

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Is your property located in a flood zone?

According to the Federal Emergency Management Agency, the answer is yes. FEMA says all properties are in flood zones — it’s just a matter of whether that zone is considered low, medium or high risk.

There are two types of high-risk areas: special flood hazard areas and coastal high hazard areas.

FEMA says homes in special flood hazard areas have a 26% chance of experiencing a flood over the course of a 30-year mortgage. Coastal high hazard areas are subject to damage not just from floods but also from waves.

If you live in an area known for flooding, you might already be considering flood insurance. But if you have a mortgage, you might not have a choice. Your lender might require you to purchase this coverage. Learn why in my Mortgage-Calc.com article, Why you might have to buy flood insurance.

A Broker's Open House Can Help You Sell Your Home

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If you're selling your home, you might want to consider holding a lesser-known type of open house called a broker's open house or broker's preview.

This event gives the selling agent an opportunity to market your home to other agents who might see that your home matches the requirements of a buyer.

Find out how a broker's open house differs from a traditional open house, whether a broker's open house can help you sell your home faster, and more in my Investopedia article, A Broker's Open House Can Help You Sell Your Home.

What it means when your mortgage is sold

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When you borrow money to take out a mortgage, you owe principal and interest to some entity that owns your mortgage.

These entities include investors such as banks, hedge funds, pension funds, governments, Fannie Mae and Freddie Mac.

Just like investing in stocks and bonds, owning mortgages gives investors the opportunity to earn money.

Sometimes investors decide to sell their investments, and that includes your mortgage. Does this selling activity have any affect on you? Learn what it means when your mortgage is sold in my Mortgage-Calc.com article.

The Income Property: Your Late-in-Life Retirement Plan

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Suppose you're in your fifties or sixties and know you don't have nearly enough money to retire. One possibility for generating the income you'll need is an investment property.

The real estate market can present bargains that will help you earn a high return on investment compared to your other options.

But owning a property is not always the passive, easy investment it's made out to be. You need to understand both sides of what you're getting into before you start shopping.

Find out how much you can expect to invest and earn, how to choose a location for your rental property, and problems that might derail your plans if you aren't careful in my Investopedia article, The Income Property: Your Late-in-Life Retirement Plan.

Which Companies Provide the Best Customer Service?

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I've had a few great customer service experiences lately that are worth mentioning.

-Discover. I noticed that I hadn't received my bonus cash back for any online purchases I'd made through Shop Discover for all of 2012. I assumed there was a problem with my browser, but couldn't figure out what it might be.

I emailed Discover to ask about the missing cash back. I gave them a list of all my purchases since January on which I thought I should have earned a Shop Discover bonus. Within just a few hours, a representative replied saying that I would receive credit for each of these purchases. She provided a detailed list of how much credit I would get for each one.

That email plus a few minutes of research meant $42.28 in cash back that I otherwise would have missed out on. I can redeem $40 of that for $50 in gift cards. I was impressed that I didn't get any pushback from Discover and the response was so fast and through.

(In case you didn't already know, Shop Discover lets you earn extra cash back on online purchases made through the Discover website using your Discover card. The bonus cash back is usually in the 5% to 10% range. I used Shop Discover to earn extra cash back on pet food, clothing, tax software and home improvement purchases.

-eBates. I had the same problem with eBates that I did with Shop Discover, which was why I suspected a browser issue and not a provider issue. But eBates did have tracking tickets for my purchases, which made me think my browser setup was probably correct. So why wasn't I earning any cash back? Again, a quick email and a quick response put the missing money in my eBates account. All I had to do was provide the details of my order.

-Gap. I recently bought a workout top from Gap.com and when it arrived, it didn't fit. I called up customer service to exchange it for a different top. The call only took a few minutes, and I had the new shirt in two days, with free shipping, even though I don't live near their distribution center. I received similarly fast shipping the last time I placed an exchange. I'm sure it costs them extra to provide this service, but it makes me feel like they care about my business. It also relieves the disappointment of getting something you were looking forward to and having it not be quite what you expected.

A credit card that helps pay down student debt?

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Sallie Mae, the giant student lender, says you can use the rewards you accumulate from its cash-back credit card to pay down eligiblestudent loans.

But if I were a student -- or a recent graduate -- I'd hesitate to sign up for this card, despite its sign-up bonus and benefits.

Find out why in my Interest.com article, A credit card that helps pay down student debt?

What is title insurance? Why do you need it?

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Title insurance is a policy that protects your mortgage lender from potential claims against your property.

The property serves as collateral for the mortgage, so a lender does not want to give someone money to purchase real estate, then have a third party dispute the borrower’s right to that property.

For this reason, lenders always require that you pay for a title insurance policy when you take out a mortgage. The process of issuing title insurance looks for any existing problems with the title through a process known as a title search.

Get the essential information you need in my Mortgage-Calc.com article, What is title insurance? Why do you need it?

You’re not likely to collect on Allstate’s auto insurance satisfaction guarantee

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Have you ever thought your insurance company was great--until you had to file a claim?

Maybe you've seen Allstate's advertising for its Claim Satisfaction Guarantee, a promotion that addresses consumer dissatisfaction with the auto insurance claims process. The company says it will give you a 6-month credit on your premium if you’re unsatisfied with your claims experience. (However, presumably for legal reasons, Allstate says the payment of the credit doesn’t mean that it agrees with the reasons for your dissatisfaction.)

A six-month credit is worth a lot of money. According to InsWeb.com, the median six-month insurance premium in 2011 ranged from a low of $436 in Idaho to a high of $1,1111 in Louisiana.

And the only reason you might get a lesser credit is if you haven’t actually paid Allstate a full six-month premium because your policy was canceled during the period when your covered accident took place.

In that case, your credit would be no more than the prorated premium you actually paid on that vehicle.
In other words, if you take out a policy in September, get in to an accident in October and cancel your policy in November, you won’t be able to make money off of Allstate by getting a check for a six month premium when you only paid a two month premium.

That sounds fair, especially since Allstate would probably already have lost money on you from paying your claim.

In most states, the offer ends for policy periods beginning June 1, 2013 or later. So if you become an Allstate customer this year in part because of the Claim Satisfaction Guarantee but have an accident in July 2013, you’ll be out of luck if you’re not satisfied with your claim experience.

Allstate might be using this promotion to improve its image and its ranking with consumers. Two recent J.D. Power and Associates studies show that Allstate is just average among auto insurers.

USAA, which only writes policies for military personnel and their families, consistently received the highest scores of around 900. The lowest score any insurer earned in any region was 705. Allstate's scores ranged from 759 to 806.

Besides improving its general image, if the Claim Satisfaction Guarantee gets you to stay on as an Allstate policyholder despite a bad experience, it could be money well spent for the company.

If you remain a customer, Allstate gets to keep collecting your premiums. The company also saves money by not having to replace your business with that of a new customer, and acquiring new customers is expensive.

To get the full scoop on Allstate's Claim Satisfaction Guarantee, read my Interest.com article, "You're not likely to collect on Allstate's auto insurance satisfaction guarantee."

Fidelity offers an alternative to traditional checking accounts

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Fidelity's Cash Management Account offers a no-cost alternative to expensive big-bank checking accounts.

It has no monthly fee, no minimum balance requirement and no pesky “gotchas” like requiring a monthly direct deposit.

Checks are free, and there are no fees to use your debit card or pay your bills online.

Here are three more things I like about the account besides it's zero-cost features.

1. Fidelity’s cash management feature helps you maintain just the right amount of money in your checking account so that you’re neither in danger of not covering your bills nor letting excess cash sit idle when it could be earning more in an investment account.

2. If you invest with Fidelity, having your brokerage account and your checking account all in one place gives you added convenience. Personally, I've had nothing but excellent experiences with Fidelity and have no qualms about recommending them.

3. The account will automatically help you avoid overdraft fees and bounced payments.

The only thing this account could do better is to offer a higher interest rate.

Get the full details on Fidelity's Cash Management Account in my Interest.com article, Fidelity offers an alternative to traditional checking accounts.

Why you shouldn't buy a home on leased land


Did you know you could buy property without owning the land it sits on?

You're familiar with mobile homes, right? They're the most well-known example of a home you can own while paying a monthly fee to rent the ground it sits on.

But you can do the same thing with an actual house, or even a condo. You’ll find different types of leased land properties in different parts of the country. Some leased land communities are retirement or vacation home communities.

How can you identify these properties, which are often disguised in real estate listings?

-The property might have a regular street address but also have a lot number.
-The home might be priced far below similar homes in the area, or be far nicer but priced like an average home.
-The price might be a dream come true given the location, like waterfront property for the price of an inland property.
-The listing might describe the home as being in a planned development or master planned community (though traditional homes can also fit this description). 

Sometimes, it may simply appear that the property is governed by a homeowners association (HOA) because the listing might mention the association features you’ll have access to, like a community pool and playground. However, the HOA fees will be sky-high, double or triple the standard HOA rate for your area. That's because part of the HOA fee will go toward community amenities; the rest will cover your land lease fee.

I don't think these arrangements really work out in favor of homeowners, as I discuss in my Mortgage-Calc.com article, Why you shouldn't buy a home on leased land.

There are also lifestyle issues to consider. Land lease communities, like other HOA properties, can have restrictive rules such as how long guests may stay with you or what types and sizes of pets you can own.

Indeed, leased land properties often belong to HOAs. That means you not only need to understand the details of the leased land arrangement, but you should also understand what you’re getting into when you buy a home in an HOA. Learn how they work in my articles, 9 Things You Need to Know About Homeowners Associations and What Living in a Homeowners Association Means.

Ways to Make Necessary Travel Affordable When Money Is Tight

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Sometimes you're forced into going on "vacation" whether you want to or not. You might be a member of the bridal party for an out-of-town wedding or have a family reunion or milestone birthday party to attend in a distant city.

I think Suze Orman has it right when she says “people first, money second,” but that doesn’t mean you have to put yourself in a bad position financially to be there for the people you care about. There are things you can do to minimize the cost of your trip no matter where you’re going. Here are a few suggestions on how to cut back.

Airfare: Do you have frequent flyer miles you can use? If not, if you’re close to an award ticket, consider buying a few miles to top off your account. It may not be the best deal in the long run, but if you have to travel now and you don’t have money now, it’s better to spend $150 to buy miles and use a frequent flyer ticket than to spend $350 to buy the ticket outright.

If you have a few months until your trip, try signing up for a credit card that awards a generous number of frequent flyer miles for new signups to get enough miles for your trip. Keep in mind that the miles will take a while to post to your account, and frequent flyer seats get snatched up fast, so if your travel dates and times aren’t flexible, you may have a hard time actually using those miles. I know we have at least one out-of-town wedding coming up in about a year, so I've been using this technique to rack up enough miles on a variety of airlines so at least one of us can fly for free.

Also look at flying on Southwest, because if the fare drops after you buy your ticket, you can get a refund for the difference. You can do this on other airlines, too, but their ticket change fees usually eat up the savings from the lower fare.

Other options include trying your luck with Priceline and adjusting your trip so you’re traveling on unpopular days and/or at unpopular times. On a recent trip, we flew home from New York on the fourth of July because it was the least expensive option. We didn't get to attend any barbecues or go to any fireworks shows, but seeing a few fireworks from the plane and saving a couple hundred dollars was worth the trade off.

Transportation: Renting a car can be expensive especially if you reserve it at the last minute. If you’re traveling specifically to attend an event, you might be able to catch a ride with someone else (and offer to pay for gas or help offset their rental costs)--that's what we did when we attended a wedding in Puerto Rico.

And while navigating public transportation in an unfamiliar city is never fun, it might be worth figuring out if it means the difference between an affordable trip and an unaffordable one. You might also be able to use a flat-rate car service instead of taking a cab--that saved us money on airport transportation in New York. Instead of paying for every minute we were stuck in traffic, we were able to relax knowing that we had already locked in a flat fee, and our driver had an incentive to get us to the airport as quickly as possible so he could get his next fare.

I've also had good luck securing inexpensive rental cars through Priceline. Renting cars from the airport can be less expensive than renting from a neighborhood location, but sometimes there are airport taxes that make it cheaper to rent a car near where you're sleeping. I've also borrowed friends' cars while visiting them instead of renting a car.

Accommodations: Obviously, the easiest way to save money on travel is to stay with someone you know at your destination and room for free instead of shelling out $100+ per night. If you’re traveling to attend a special event, perhaps there’s someone else going who also wants to cut costs that you can share a hotel room with. I've also known people to go camping (even when attending weddings), though I'm not a camper myself.

Food: One of the major expenses of traveling is eating out for every meal. If you’re staying in a hotel, you can try to find an extended stay one that has a kitchen, which means you can buy some groceries and prepare your own, inexpensive meals. You might think this type of hotel room would be more expensive, but it often isn’t.

If an extended stay hotel isn't an option, a hotel room with a fridge and microwave can still save you money. As a last resort, you can eat picnic-style: get a cooler and some ice and plan to eat sandwiches for the length of your trip. You’ll save a bundle. If you’re staying with friends or family, they probably won't mind lending you some fridge space and letting you use their kitchen.

Souvenirs, gifts, and travel supplies: It probably goes without saying, but if money is tight, you should skip these items altogether. Whatever suitcase, clothes, shoes, etc. you already own will have to be sufficient. Save your limited funds for the expenses you can’t avoid. If you already own a digital camera and a computer, you’ll be able to create plenty of trip mementos for free. If you absolutely must get new clothes (such as for a wedding), find a way to fit them into your usual monthly budget and buy items that you’ll be able to wear again to work or for other special occasions. Stores like TJ Maxx really do have designer brands at surprisingly affordable prices.

If you find yourself faced with a trip you can’t say no to this year, change how you usually do things to make your trip affordable. You may be able to scrounge up the money for it by looking at ways you can cut your monthly expenses (which will pay off not just in terms of making one trip affordable, but giving you more breathing room every month).