Ask Karen Gibbs

Veteran business correspondent Karen Gibbs answers your personal money questions and addresses current topics that affect YOUR finances on a daily basis. Karen is the financial expert in your corner--no question is too basic or too small. Karen boils down the issues simply: here's what you need to know, and here's what you need to do. Send your money questions to and post your comments below.



Planning for the Inevitable

Karen Gibbs

Hi Karen,
I’m the only child of retired, elderly parents and we’ve had “the conversation”:  to resuscitate or not, whether they want to be buried or have their bodies donated to science as well as any gifts or bequeaths they’d like to make.  Is there any more I can do to prepare for “the inevitable”?
Stephanie of Catonsville


Last Will

Stephanie, your question is a timely one and your parents are lucky to have someone such as you thinking ahead and considering their final wishes.  It will be an emotional and trying time no matter how “prepared” you might be and the last thing you want to worry about is paperwork.  So here’s a guide for before and after as suggested by the good people of Charlestown Retirement Center in Catonsville.

First, know where you can find a copy of the will, birth certificate, marriage license and/or divorce decree.  Ask you parents about life insurance policies, safe deposit boxes ...

Read more



Invest Smart!

Karen Gibbs

Hi Karen, it seems that the U.S. economy is on the mend, but events overseas cause the stock market to gyrate.  How do external events affect our economy and how can the average person make smart investment choices?  Sarah, Harford County


Investment Tree

Thanks for your question Sarah.  After six years, the economic recovery does indeed seem to be taking hold.  Unemployment has fallen from 8.9% in 2009 to 5.6% today.  Gross Domestic Product, a measure of all the goods and services produced in the U.S., has reversed a -8.9% contraction with the economy now growing at a modest 2.6%.  The budget deficit, the difference between national revenues and outlays, has shrunk to $483 billion, down from $1.4 trillion in 2009.

The two sectors that drive our economy, housing and autos, have recovered from their implosions with auto sales showing year-over-year growth across the board.  Home sales show a healing housing market supported by historically low mortgage rates.

Read more



Before you Buy a House

Karen Gibbs

Hi Karen, do you know of any programs to help first time home buyers? Roger, Prince George’s County


House in a Shopping Cart

Great question Roger and your timing couldn’t be better.  The leading source of residential mortgage credit, Fannie Mae, in an effort to help low-income and first-time buyers nationally, started allowing down payments of just 3% of the purchase price this past December.

Home buyers will have to have a credit score of at least 620, must complete income, assets and employment documentation, must attend home ownership counseling as well as purchase private mortgage insurance.

If you meet all those requirements, Fannie Mae will offer fixed rate loans to first time buyers.  Freddie Mac, another government sponsored mortgage enterprise, chartered by Congress in 1970 to provide funds to mortgage lenders, will also allow 3% down payments as of March 23, 2015.

A little closer to home, the State of Maryland, in conjunction with Price George’s County Department ...

Read more



The Truth about Late Fees

Karen Gibbs

Hi Karen, I missed my credit card payment by one day and was charged a late fee.  Will that affect my credit score?- Brenda from Baltimore

Past Due

Brenda, join the club.  I think we’ve all been there.  But there’s good news.  Generally being just one day late won’t affect your credit score, but it depends on your credit card issuer and your payment history.  Some lenders track payments in 30-day increments; 1-30 days late; 31-60 days late and 61-90 days late. While credit rating agencies may not consider a payment late until it is 30-59 days in arrears, you don’t want to have a history of late payments.  Payment history can account for as much as 35% of your credit score.

While your credit score may not get hurt, you will feel it in your wallet.  Most credit card issuers charge a late-fee if payment is not received by the close of business on the due date.  If this is your first late payment, you may be able to call customer ...

Read more



Buy or Rent in 2015?

Karen Gibbs

mortgage calculatorHi Karen, I’ve been renting for a while as I watch the housing market recover.  What are your thoughts about buying or renting for 2015?
    Maurice, Federal Hill

Maurice, Happy New Year.  2014 saw an uneven recovery for the housing market.  Hurt by a brutal winter, home sales started off slowly.  A pick up in demand caused mortgage rates to rise, tempering demand.  So buyers and sellers are cautious going into 2015.  Home sales usually pick up in February and into the spring, so you’re in the sweet spot in terms of looking at price and mortgage rates.

But there is more to the decision than price and interest rates.  Are you planning on staying put for the next five to ten years?  How about your job security?  Is there a chance you may change jobs or locations?  What’s the rental market like in your neighborhood?  Are rents rising or stable?

Do you want a single-family home, duplex or a condo?  Have ...

Read more