Moore Mortgage Solutions

     Over the last couple weeks, we have watched as the rain has caused flooding in parts of our State. With that in mind, we should all take stock in how prepared we truly are to face a disaster.

     The Red Cross, http//www.redcross.org, has steps for how to prepare for an emergency. It states our emergency kit should be for three to four days. And the Seattle Times on December 8, 2007 in their Weekend Living section also had an article on what our emergency kit should look like.

     But there is more to being prepared than just having an emergency kit, the proper clothing and equipment. I offer up three areas we seem to forget about: emergency money funds, current up-to-date homeowners’ insurance policy, and a secure place for personal important documents.

     In this first of three part series article, let’s start with the emergency money funds.

    They are:

• Cash on hand----cash for one to three days for necessities. Without services such as electricity, cash will be king.
• An account that is very liquid with $3000 to $5000 in it. This should be easy to tap into once services are back on line. A simple savings account that is accessible from any ATM machine works well besides earning some interest on the money.
• The last fund is the biggest one. This fund should have one year plus 10% of your living expenses and should be review yearly. This will allow you to calmly deal with the multitude of decisions you will have to make instead of being in an unhinged state of disbelief.

     Having these types of funds available to you allows you not to tap into your retirement accounts. Remember the IRS will be more than happy to tax those monies withdrawn at 10% plus kindly tack on an additional percentage at whatever your tax bracket is.

     The fastest way to set up these accounts is through the equity of your home. If you should decide to tap into the equity of your home, I need to stress that you do not use these monies for what we call do-dads. Do-dads are things like that new red Lexus convertible you may be eyeing down at the dealership, family vacations to exotic places or that hot stock tip from a neighbor or friend.

     The second part of this three part series will be on your homeowners’ insurance policy will be posted next week.

     In the meantime, if you wish to talk to me about how to set up these funds through the equity of your home, please feel free to call me.

     Until then, make every day an inspired day!

Betsy Moore

betsy@mooremortgagesolutions.com

    The first part of this series I talked about was having three emergency types of funds.

    An important aspect to remember is that your home is not a savings account. If your home should be lost in a fire or a flood and you have used your home as your savings/retirement account, your savings/retirement account just went up in smoke or was washed away in a flood.

    Another interesting note...when I was in Florida this past week, I was talking to a man whose home was blown away by Hurricane Charlie four years ago. He told me that he is still waiting on FEMA to pay him back for the allowable reimbursed expenses he incurred.

    Please do start putting together those emergency funds. And even if you don’t have to use them for an emergency, you will always have the peace of mine that you can survive a disaster.

    The second part of this series is about your homeowners’ insurance policy.

    This is another area we tend to overlook. We either don’t review it annually or sometimes we skimp on what we want to insure. Only 25% of insurance agents are pro-active on doing a yearly review with their clients so is up to you.

    Though most policies have an inflation addendum for building costs it may not always be enough for your area. My insurance policy clearly states it is my responsibility to make sure my home is insured against significant losses.

    We also tend to forget to tell our insurance companies what we’ve done to our homes. Don’t let all that money and hard work you’ve done on a re-model go up in smoke or be washed away by a flood.

    And as we live longer and make more money, our discretionary income increases. We tend to buy more expensive items such as art work, sculptures, and we inherit from our families.

    Though the money can’t really replace personal items in our hearts such as your great grandmother’s wedding china, the toy wooden truck that your grandfather made for you, or your favorite stuffed animal when you were growing up, we may be able to find a piece or two on EBay.

    It is always better to be safe than sorry. So please go around your home, photograph those most precious items, get them appraised and insured. You’ll be glad you did it.

    The third part of this three part series will be on how to protect your most valuable documents and will be posted within the week.

    In the meantime, if you wish to talk to me about how to set up the emergency funds through the equity of your home and how better to protect yourself, please feel free to call or email me.

Until then, make every day an inspired day!

Betsy Moore

206-331-2749

betsy@mooremortgagesolutions.com