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Do Some Toys Threaten Your Child's Privacy?

Is Santa spying on your kids?

A set of consumer groups think so and are petitioning the Federal Trade Commission to step in on Tuesday.

In a broader report accompanying the complaint, consumer groups are warning that a coming “Internet of Toys” could have long-term implications for child safety.

“Product safety is no longer just about a small toy that you are afraid your kid will choke on,” said Jeffrey Chester, executive director of the Center for Digital Democracy. “It’s about how the products are designed and what they might be doing with your children’s information.”

Two hot new internet-connected toys “subject young children to ongoing surveillance … and pose an imminent and immediate threat to the safety and security of children,” the complaint alleges.

The two toys — one doll named My Friend Cayla, marketed to girls, and i-Que, which targets boys — are made by a Chinese company, Genesis Toys, which has a Los Angeles-based affiliate named Genesis.

iQue and Cayla engage in simulated conversations with children. They use Bluetooth to connect to smartphones and gain access to the internet.

“A child’s statements are converted into text, which is then used by the application to retrieve answers using Google Search, Wikipedia and Weather Underground,” the complaint says.

The toys are available from many U.S. retailers. On one product page, they are described as being appropriate for children ages 3 to 12.

“Via speech-recognition technology, Cayla can understand and respond to your child in real time about almost anything,” the page says. “She can tell stories, play games, share photos from her photo album, and can sing too. She can even help your child with their homework questions.”

The consumer groups — including the Electronic Privacy Information Center, The Campaign for a Commercial Free Childhood and Consumers Union — claim that the devices record children’s conversations “without any limitations on collection, use or disclosure” of personal information. They say the Genesis toys violate the Child Online Protection Act, and that the Federal Trade Commission should step in immediately.

Genesis Toys claims that My Friend Cayla has amassed over 1 million fans worldwide, according to the complaint.

Attempts to reach Genesis for comment were unsuccessful.

Massachusetts-based Nuance Communications, which provides voice-recognition services for the toys, according to the complaint, was also named. Emails and phone calls to the firm were not immediately returned.

Too Much Personal Information? 

The complaint alleges that the toys ask for personal information, such as parents’ names, favorite TV show, school name and home city. The Genesis privacy policy — only available as a pop-up when downloading an app — says all data can be stored and shared with certain third parties, according to the complaint.

The consumer groups also say the toys don’t employ basic Bluetooth security, such as requiring a pairing code.

“As a result, when the Cayla and i-Que dolls are powered on and not already paired with another device, any smartphone or tablet within a 50-foot range can establish a Bluetooth connection with the dolls,” it says. That opens the door to strangers in close proximity being able to use the doll to connect with the child who’s using it, the groups allege.

Last year, Mattel’s release of the Hello Barbie talking toy raised similar concerns, particularly after researchers were able to hack it. Mattel addressed that concern by offering a bug bounty program with its voice-processing partner, ToyTalk.

In a report named Toyfail by European consumer group Norwegian Consumer Council timed to coincide with the U.S. FTC complaint, Mattel scored well in terms of privacy policy disclosures and minimization of data collection. Hello Barbie doesn’t connect to the internet to supply conversation; it relies on pre-programmed dialogue. But recordings of conversations are sent to ToyTalk.

ToyTalk’s privacy policy says those recordings are used to refine its voice-processing service and are not used to contact or market to children.

Still, Josh Golin of Commercial Free Childhood told Credit.com that parents need to be aware of these new kinds of toys.

“These are becoming must-have toys,” he said. “And these problems are ongoing. Sure, there was a splash made when someone hacked the toy, but then it goes away. This issue needs to be front and center for parents.”

The report from the EU group noted that while Hello Barbie’s terms and conditions were written in clear language and are available online — in contrast to Genesis toys — it was critical of Mattel for not explaining how changes to the privacy policy would be announced and for not being clear about what third parties might receive collected data.

“Hello Barbie and ToyTalk only state that they can share data with ‘vendors, consultants and other service providers’ without specifying or giving examples of what this entails,” the report says.

Marissa Beck, a spokeswoman for Mattel, objected to the European group’s criticism of its third-party data sharing notice. “We have an entire section (in our privacy policy) that details this, called “What Information Do We Share With Third Parties?,” she said, pointing to the Hello Barbie policy on ToyTalk.com’s website. She also said the firm is clear about updates to the policy.

In an email, Jade McNorton, a spokesperson for ToyTalk maker, San Francisco-based Pullstring Inc., said “we feel this is clearly communicated” when asked about updates to the firm’s privacy policy, and pointed to this section of it:

If we make changes, we will notify you by revising the date at the top of the Privacy Policy and, in some cases (such as for material changes), we will provide you with additional notice (such as adding a statement to our web site’s homepage or sending you a notification) and/or obtain your prior verifiable consent.

She added that third-party firms which might receive data are detailed in the privacy policy also.

Should Parents Be Concerned?

Fundamentally, these types of toys are “not great to begin with,” Golin said. (Real friends are superior to talking dolls that can mimic friendly conversations). But parents should be concerned that while kids are being trained to “connect with toys, and really confide in them,” there are longer-term concerns, Golin said.

“I think what happens is there is a rush to get things into the marketplace before the technology and policy and ethical considerations have all been worked out …There’s this misguided idea that connecting anything to the Internet makes it better. With toys, there’s all sorts of reasons you don’t want to do that,” Golin said. “The issues are really sensitive. The recordings of children’s conversations are really sensitive. And the fact that these companies can’t explicitly say, ‘This is exactly what we are doing with these recordings,’ should be very concerning to parents.”

“These discoveries are another sign that emerging IoT-technologies may not be well suited for children’s products,” the Norwegian Consumer Council concludes. “Unless the manufacturers and service providers are willing to take these issues seriously, the NCC are concerned that the area of connected toys is rife with potential risks for children’s safety and well-being, as they play and interact with these products.”

Remember, you can keep an eye out for identity theft by monitoring your credit. (You can pull your credit reports for free each year at AnnualCreditReport.com and view two of your scores, updated every 14 weeks, for free on Credit.com.) Parents can request a credit history for their minor children from the three credit reporting agencies with documentation proving they are the parent or legal guardian to keep an eye out for child identity theft as well.

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This article originally appeared on Credit.com.

Avoiding Delivery Headaches

MoneyTips

You picked out a great new dresser and waited anxiously for the company to deliver it to your home. You also expected it to have four legs instead of three. What do you do now? Advance planning can help you avoid these scenarios when possible and help you make the right decisions when delivery accidents do occur. Here are some steps to protect you from the three-legged dresser and other potential delivery hazards with larger items. Take Measurements – Take measurements in your home to know how much clearance you have along the path to your product’s final placement. People usually take measurements of the front door and the door of any other room the item must pass through, but they often forget about stairs and tight corners. If you are not sure if you can make a corner, make a simple test vehicle with a cardboard box or simple wooden frame. Take the weight of the item into account. You might make the corner easily with cardboard, but can deliverymen make the corner carrying a few hundred pounds of furniture? Review Delivery Terms – People are often so excited about their purchase of a furniture, TV, or big-ticket item that their only thought about delivery is how soon it will arrive. Take a look at the terms of liability for delivery. Is the store responsible, or is the delivery company responsible? Are you responsible for setting up your own delivery method? Is the shipment and installation insured, and does that coverage extend to delivery to your home or through full placement in the home? If you do not review the terms, you may have to make a snap decision that you regret. Take the time to understand your options. Inspect Deliveries Before Signing – Delivery companies are on the clock and are interested in getting your shipment delivered, installed, and accepted as soon as possible. Resist being rushed and thoroughly inspect the delivered item before signing any acceptance forms. Look over the inside as well as the outside. Do doors and drawers open properly? Are there blemishes in the paint, scratches in the metal, or chips in the wood? If there is any final assembly required on your part, are all the pieces present? Is the fourth leg of the dresser sitting by itself in the truck? If the item does not meet your expectations, document the damage before signing. Take plenty of pictures illustrating the damage, and make sure that both the delivery company and the vendor receive copies of the pictures and official notification of the damage. That is also true for any damage to windows, walls, or floors caused by the delivery company during their work. If you reviewed the terms beforehand, you know how to proceed with filing a formal complaint. Reject Delivery If Necessary – Damaged goods should be returned without questions. Delivery companies are likely to try to talk you into accepting it in the short term while they work out liability for the problem. Simply refuse to accept and ask the delivery company to take it back immediately. Do not accept the excuse that they will be back for it later as it fits in their schedule. Again, it is important to review the terms with the vendor. Did you sign away rejection rights under certain conditions? What are the vendor's return policies? Are there delays or waiting periods before any settlements can be reached? Do not end up propping up your brand new dresser with wooden blocks or old books, or try to repair any delivery damages yourself. Make sure that delivery terms are clear on your big-ticket items and that you do not passively give in to stores and delivery services. You should expect to receive what you paid for, and in the proper condition. Accept no less. Photo ©iStockphoto.com/PeopleImages

Originally Posted at: http://www.moneytips.com/avoiding-delivery-headaches

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Avoiding Delivery Headaches

MoneyTips

You picked out a great new dresser and waited anxiously for the company to deliver it to your home. You also expected it to have four legs instead of three. What do you do now? Advance planning can help you avoid these scenarios when possible and help you make the right decisions when delivery accidents do occur. Here are some steps to protect you from the three-legged dresser and other potential delivery hazards with larger items. Take Measurements – Take measurements in your home to know how much clearance you have along the path to your product’s final placement. People usually take measurements of the front door and the door of any other room the item must pass through, but they often forget about stairs and tight corners. If you are not sure if you can make a corner, make a simple test vehicle with a cardboard box or simple wooden frame. Take the weight of the item into account. You might make the corner easily with c...

How to Make Successful Resolutions in 2017

By Eric Jorgensen

Learn more about Eric on NerdWallet’s Ask an Advisor

I don’t think any of us plan to work at our New Year’s resolutions for just a few months before giving up, but that’s exactly what many of us end up doing. Changing a habit is hard, and resolutions require that.

Here are three characteristics of successful resolutions. The examples deal with saving money, but this advice can apply to other financial goals or goals about fitness, being more conscientious, keeping in touch with friends and family, and other aspects of our lives.

They are specific

It’s not enough to say, “I want to save more money.” How much do you want to save, why and by when? Once you’ve begun saving, review your progress occasionally to see if you need to increase your effort.

I recommend monthly goals, which give you 12 opportunities to make progress toward a bigger annual goal. If you want to save $1,200 more this year than you did last year, break it down into an extra $100 per month. If you don’t meet the goal one month, spread the difference over the remaining months.

» MORE: How to build an emergency fund

They are realistic

Set a goal you think you can reach, understanding that your kids will still want to play soccer, you’ll still need to eat and you’ll still have to maintain your car and home. That makes saving $1 million in a year an unrealistic goal for most of us. But saving even $25 per month, especially if you haven’t been putting any money away, will help you build the habit.

If you’re increasing the amount you save each month, make sure it’s not going to hurt you financially. It should feel uncomfortable, but it shouldn’t affect your ability to meet your basic needs — not your “wants,” which are a very different thing.

They are personal

Why do you want to save more? Are you really concerned about retirement, or have you dreamed of spending two weeks on vacation without worrying about how you’re going to pay for it? There’s no right or wrong reason to save money, but you need a goal you think is important, not one that everybody else is talking about or recommends. This gives you a reason to continue working when — not if — it gets difficult.

I want to be clear: Just about all of us will need to have some type of financially independent retirement, either because we don’t want to or simply cannot work any longer. You do need to save for this eventuality, and the sooner you start, the more opportunities for success you create.

» MORE: How to build a budget

Find an accountability partner

Setting a good goal is important, but so is your follow-through. Find someone to help keep you focused. That could be a friend or family member, as long as you’re sure that person will push you when you need it.

If you’re hiring a planner, make sure that person will check in with you throughout the year. Paying somebody to hold you accountable for a goal gives you more skin in the game. If you hire somebody, you’ll make sure you get your money’s worth.

Consider everything you want to accomplish during the next year. There are 52 weeks, so you should be able to do all kinds of things, right? Wrong! Each of us has only so much capacity. But setting specific, realistic goals makes this easier. Start small, and remember the “why” when things get difficult.

And perhaps most importantly, don’t forget to celebrate the victory when you reach the goal.

Eric Jorgensen is a fee-only financial planner with MainStreet Financial Planning in Silver Spring, Maryland.

Today's Headlines: A Full Housing Recovery

MoneyTips

Housing Recovery, Here at Last Can we finally say that America has recovered from the housing crisis of the last decade? The answer is yes as measured by one major indicator. The recently released Case-Shiller National Housing Index for September 2016 finally crept over the July 2006 peak value of 184.62, the last value before the slide in home prices that bottomed out in February 2012. Given that prices fell for over 5-1/2 years for a total plunge of 27%, it's no surprise that it has taken over four years to climb out of the hole — and technically, since the index is not inflation-adjusted, we are still 16% below the peak in real values. Even so, the new index value represents an important psychological threshold for the housing market. Does it represent one for you personally? That depends on how much you are directly affected, whether you are entering the market or trying to make the best of your recent gains. We've Recovered. So What? Granted, a full recovery isn't good news for everybody. If you were so far underwater on your home (owing more than your home was worth) that you suffered a foreclosure during the downturn, the housing recovery is too late to help you. In fact, it harms you by making it more difficult for you to re-enter the market. The recovery has also been uneven along geographical and economic fault lines. Certain areas of the country with pre-recession housing booms (such as Las Vegas, Phoenix and Miami) suffered greater declines in home prices and therefore had more ground to make up. Meanwhile, the recovery has been generally tilted toward wealthier homeowners and metropolitan areas. For reference, information from Zillow shows that at the end of 2015, median home values throughout urban areas were within 0.6% of the 2006 peak while median rural and suburban home values were 6% and 7% below the peak respectively. Even within areas of greater recovery, there is a differential between lower-end starter homes and expensive higher-end homes. In the 100 largest metropolitan areas, Trulia reports that starter-home prices have rebounded to peak value in only 34% of the markets while high-end homes reached the peak in 56% of the markets. That's an important statistic. Starter homes play a vital role in the housing market. Those wishing to enter the market must have a supply of affordable homes available, while those wishing to upgrade must have a sufficient market of new homeowners available to buy their existing home. Both supply and demand have been improving, but slowly. First-time homebuyers made up a 34% share of the purchases, the highest rate in over four years but well below the historical average of near 40%. The supply of existing homes is currently at a 5.2-month inventory, an increase of 0.6 percentage points over July's low mark but below the 6-month inventory indicative of a balanced market. It will take a delicate balance to keep those trends moving forward as we enter a new year and a new presidential administration. The Interest Rate Gamble For several years now, pundits have proclaimed that mortgage interest rates will rise and you should buy now to take advantage of historically low rates. However, rates have stayed remarkably low despite the predictions. Why should you believe differently today? Eventually these predictions will be right, as the Federal Reserve has been keeping rates artificially low to provide economic stimulus. President-elect Trump's stated intention to cut taxes and invest in infrastructure should bring on sufficient inflationary pressures to spur the Fed to raise interest rates more often, and perhaps in larger increments — assuming that Trump follows through. Some anticipatory increases have already begun. According to the St. Louis Fed, the 30-year fixed mortgage rate is on a sharp post-election rise, from 3.57% on November 10th to 4.08% on December 1st. However, even if Trump follows through on his stimulus promises, it will take time to put them into effect. During that time, it's possible that home prices will stabilize as supply problems ease. Typically, it's not sustainable for home prices to rise faster than incomes, as they have been recently — people are simply priced out of the market. Should prices stabilize, that leaves aspiring homeowners with a good window of opportunity to buy, albeit a narrow one. The Takeaway The rise in home prices, combined with an expected rise in interest rates and a continuing shortage suggests a tight home market, but you may be able to position yourself to make the best of such a market. If you are planning to get into the housing market, most signs suggest that you should do it sooner rather than later — but don't stretch your resources too thin by overextending on a loan or buying a larger house than you can realistically afford. The same logic applies if you are selling your existing home in order to upgrade, especially if your current home is in the valued starter-home market. Meanwhile, if you are one of the 12% of mortgage holders who are still underwater, you're rooting for home prices to continue rising in order to eventually refinance while rates are still low. Stay current on home prices and rates in your area to take advantage as soon as you can. Finally, remember the real estate mantra: location, location, location. Home prices in your area and price range may vary greatly from the national average, either to your advantage or detriment. To take maximum advantage, research and understand your local real estate market, keep track of available homes and rates — and keep your credit clean and debt low in order to get the best rate when you do decide to act. Photo ©iStockphoto.com/jhorrocks

Originally Posted at: http://www.moneytips.com/todays-headlines-a-full-housing-recovery/582

Today's Headlines: Housing Market Momentum

More Americans Looking To Purchase Homes

$51,000 Salary Needed To Buy Median-Priced House

Today's Headlines: A Full Housing Recovery

MoneyTips

Housing Recovery, Here at Last Can we finally say that America has recovered from the housing crisis of the last decade? The answer is yes as measured by one major indicator. The recently released Case-Shiller National Housing Index for September 2016 finally crept over the July 2006 peak value of 184.62, the last value before the slide in home prices that bottomed out in February 2012. Given that prices fell for over 5-1/2 years for a total plunge of 27%, it's no surprise that it has taken over four years to climb out of the hole — and technically, since the index is not inflation-adjusted, we are still 16% below the peak in real values. Even so, the new index value represents an important psychological threshold for the housing market. Does it represent one for you personally? That depends on h...

Insurance Blind Spots: 5 Coverage Gaps That Could Cost You

You might think you have airtight insurance protection against storms, car accidents and other mishaps. But you’d hate to discover hidden cracks in your coverage once it’s too late.

Here are five insurance problems you might not be as prepared for as you think — and how to plug the coverage gap.

1. No flood insurance

Flooding has occurred in every state in the country over the past five years, according to the Federal Emergency Management Agency. Yet only 12% of homeowners nationwide carry flood coverage, an Insurance Information Institute poll found.

Homeowners insurance doesn’t cover flooding; you’ll need a separate policy. You can find local agents through the National Flood Insurance Program. You can also ask your home insurer for help starting a policy through the federal program, or whether there are companies in your state that offer private flood insurance.

There’s a 30-day waiting period before coverage kicks in, so get your flood insurance squared away well ahead of coming storms.

2. No way to pay off a totaled car

Gap insurance helps you avoid owing money on a car loan or lease if your vehicle has been totaled or stolen. Along with comprehensive and collision coverage, gap insurance is a smart addition if you lease or finance a car.

Say you lease a $20,000 car at payments of $400 a month. Five months later, your car is totaled in an accident. If the car’s value has dropped to $15,000, that’s the amount your collision claim check will be, minus your deductible. That won’t be enough to cover the $18,000 left on your lease.

This is where gap insurance kicks in. It makes up the difference between what your car is worth when it’s stolen or totaled and how much you owe on a car loan or lease.

You can buy gap insurance from the car dealership or your lender. Or you can go through your car insurance company, which is typically cheaper unless you want gap coverage for several years.

» COMPARE: Car insurance quotes

3. No plan for sewage backups

You may not realize that you’re responsible for the sewer line that runs from the main pipeline in the street to your house. Yet standard home insurance typically doesn’t cover backups in this part of the line. Enter sewer backup coverage. It pays for cleanup and repairs from spewed sewage in your house.

Sewer backup coverage is relatively affordable — $40 to $50 a year, according to the Insurance Information Institute. Talk to your home insurer about adding this kind of coverage.

4. No income after a disability

Among 20-year-olds, more than 1 in 4 will suffer a disability before retirement age, according to the Social Security Administration. If you can’t work because of an illness or accident, you need a plan to pay your bills.

Social Security disability insurance is available only to people with long-term disabilities lasting at least one year. Just 38% of workers have access to short-term disability insurance through their employers, according to the Bureau of Labor Statistics.

You don’t have to rely on your workplace for coverage. Individual disability insurance is available from several insurers, including State Farm, MetLife and Mutual of Omaha. If your employer doesn’t offer short-term disability insurance, or your current benefits fall far short of replacing your full income, look into getting a policy elsewhere.

4. No financial safety net for earthquakes

Most homeowners, even those who live in high-risk areas, go without earthquake insurance. They risk financial ruin if their homes and belongings are destroyed. Only 10% of California residents have earthquake insurance, and 14% of people in Western states, according to the Insurance Information Institute.

Standard homeowners insurance won’t pay to fix damage caused by earthquakes. Home insurers might offer earthquake coverage as a policy add-on for an extra cost — and in California they have to. Or you might need to look for stand-alone earthquake insurance.

Californians can shop for a policy through the California Earthquake Authority. For those living in other states, ask your home insurer or agent for help finding companies that sell earthquake coverage or check your state’s department of insurance website.

Alex Glenn is a staff writer at NerdWallet, a personal finance website. Email: aglenn@nerdwallet.com.

This article was written by NerdWallet and was first published by The Associated Press.

Trump calls for canceling Boeing's Air Force One contract in morning tweet

President-elect Donald Trump slammed the cost of a new Air Force One and used Twitter to call for canceling the new aircraft fleet Tuesday, raising questions about the future of the program managed at Wright-Patterson Air Force Base.

>> Read more trending stories

In a tweet sent at 8:52 a.m., the president-elect wrote: "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!"

Boeing spokesman Todd Blecher declined comment and referred all questions to the Air Force, which did not immediately release a response.

The Air Force is planning to replace two aging Boeing 747-200s that serve as Air Force One when the president is aboard with two newer and highly modified Boeing 747-8 airliners. The jets were expected to join the fleet by 2024, replacing a current fleet that will be more than three decades old at the time.

A program official at Wright-Patterson has said the White House has urgently asked for the jets because of reliability concerns as the planes age, among other concerns.

Richard Aboulafia, a senior aviation analyst with the Virginia-based Teal Group, said in an email the tweet was "complete nonsense. But making program management and military requirements decisions via tweet is just very wrong."

In an interview, he said the president-elect's position on the Air Force One replacement was "very concerning."

"This is not from the standpoint of the contract, but just from deeper lack of understanding for what the president does," he said. "It's very important for the president to travel, visit other places in the country, and other countries and be able to manage national emergencies while he travels. You can't do that without Air Force One.

"Now the alternative is he thinks a 50-year-old Air Force One will do the job," Aboulafia said. "Hopefully, nobody can be that completely misinformed."

A message seeking comment was sent to Trump spokespersons this morning.

Todd Harrison, director of the aerospace project at the Center for Strategic and International Studies in Washington, D.C., said it's a tradition for an outgoing president to request a new Air Force One "so that it would not be seen as being for personal benefit." President George H.W. Bush's administration OK'd the purchase of the current fleet, he noted.

"If Trump cancels the program now, it could be another eight years before a new replacement program is started, so that aircraft would be pushing 40 years old by then," Harrison wrote.

The production of the iconic Boeing 747 jumbo jet could come to an end "so it's not clear that the Air Force would be able to buy a commercial derivative plane like the 747 from a U.S. company in the future."

Neither Boeing nor the Air Force has released the latest figures on the program.

Aboulafia said the more than $4 billion Trump cited was "about right over 10 years."

"It's incredibly expensive to be able to manage a country and fight a war from the air, and build two planes that can do that," he said. But he rejected the claim the costs were "out of control."

Loren B. Thompson, a senior defense analyst at the Virginia-based Lexington Institute and a defense industry consultant, said in an email the president-elect "probably overstates" the cost of the two new jets.

"Boeing thinks the program will cost less, but it is hard to say precisely how much because the Air Force hasn't finalized the requirements for the program.

"This is a plane that might need to remain airborne for days during a nuclear war," Thompson wrote. "It must be able to carry out functions no other plane in the world would need to accomplish."

The jet's cost is driven by its mission with self-protection measures such as shielding against electromagnetic pulse in a nuclear explosion and specialized communication gear to command a nuclear strike "which is why it is so much more expensive than the planes Trump is used to buying," Harrison wrote.

The National Museum of the U.S. Air Force hopes to land one of the current Air Force Ones when the plane was expected to be retired in the next decade to add to its collection of 10 presidential aircraft.

Jumbo Loans Require More Payments In Reserve

MoneyTips

Taking out any home loan is a big decision, but for consumers considering the larger "jumbo" option, there's even more at stake. The size of these mortgages can often increase the financial stress on a household. While many places consider $417,000 or more a jumbo loan, but in places where house values are higher, such a loan's qualification may be $625,000 or more. Either way, applicants must ensure that they have at least six months' worth of repayments in reserve. Unlike conforming mortgage loans, lenders of jumbo loans set their own underwriting rules. It means that the guidelines on minimum credit scores and cash reserves will vary from lender to lender. Signing up for a larger than average debt shouldn't be something any homebuyer takes lightly. This is why many lenders demand a large reserve of payments to be held to ensure that borrowers have the right financial footing to afford their mortgage. In general, conforming mortgages need borrowers to have enough savings to meet a couple of repayments. Quicken Loans Vice President Bill Banfield says larger borrowing requires bigger reserves, as lenders "are trying to make sure the client is in a better situation," explains Banfield. As a result, says PNC Bank Mortgage Loan Officer Tyler Case, standard reserves vary between six and twelve months' worth of repayments. At PNC, jumbo loan applicants must have six months of reserves to cover down payments, closing costs, interest, taxes and insurance. With higher home values, some consumers may have no other option than to go for a jumbo loan. Before applying, though, make sure you are financially prepared for such a large debt. Photo ©iStockphoto.com/ARSELA

Originally Posted at: http://www.moneytips.com/jumbo-loans-require-more-payments-in-reserve

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