Extension News: March 2003 Archives

Your child wants a horse – now what?

It happens to most parents at one time or another. Your child comes to you and asks for a pet. For many, cats, goldfish, hamsters or dogs become a relatively easy addition for most families to make, and owning an animal is great for teaching responsibility and compassion. However, if the animal your son or daughter really wants is a horse, the impacts are much greater.

First, consider your child’s age and stage of development. Is your child old enough and big enough to physically handle and ride a horse? Does he/she have the mental development to observe his/her surroundings and make quick decisions with respect to the animal’s behavior?

If your child wants to own a horse, they will need to learn a lot about basic care and safety, as well as how to ride. Riding lessons or a 4-H Horse Club are excellent introductions and the cost is quite nominal compared to an outright purchase of an animal.

In addition to teaching, many basics required of a successful horse owner, these activities give you and your child a chance to try the activity out before making a long-term commitment.

There are many good riding stables in New Hampshire. You’ll find advertisements in local papers or through the New Hampshire Horse Council. Be sure to ask a potential riding instructor about their experience teaching youth and make sure you ask for references.

Make sure the riding instruction takes place in a safe arena and that your child wears a properly fitted and approved safety helmet. Ask the riding instructor if the lesson includes instruction on how to care for horses as well.

If your child is serious about horses, he/she must realize there is a lot of work involved, including feeding, cleaning stalls, grooming and maintaining equipment. There are many 4-H Horse Clubs and Pony Clubs in New Hampshire as well. Contact your local UNH Cooperative Extension office for information about 4-H Horse programs.

Some stables offer a lease agreement for a horse. The agreement might call for you to pay all or a portion of the animal’s feed, care and upkeep in exchange for your child’s opportunity to ride and show the horse as much as they want.

Be sure to ask questions about who pays for veterinary and feed costs, when and how you can get out of a lease or whether you can transport the horse off grounds for shows. Get a written lease that clearly outlines the cost and responsibilities of both parties.

If you do decide to buy a horse for your child, prepare to educate yourself as much as possible prior to a purchase. You’ll need to have an appropriate facility, at either your home or a boarding facility. As with a lease situation, be sure to get a boarding agreement in writing. In addition to a shelter and exercise area, you will need space to store hay and feed and a plan to dispose of the manure your horse will create.

Selecting the right horse for your child is very important. Matching your child’s size and skill level to the size, temperament and training of the horse is critical to a positive experience, as well as the safety of your child.

Match a young, novice rider with an older, well-trained animal. Never buy a young horse for a new rider to “grow up with.” You should also consider what your child is interested in doing with the horse. Some horses are much better suited to pleasure and trail riding, while others are better for showing or jumping. Consult with a trusted and experienced person who owns or manages horses and don’t hesitate to ask a veterinarian to check a potential purchase for health problems.

The costs of horse ownership can be very expensive. The cost of buying a horse varies greatly, and the cost of boarding could run $200 or more per month. Consider both the costs of feed and bedding, which can be quite high, as well as the purchase of tack and equipment. You’ll also need a horse trailer (and the vehicle to pull it) if your son or daughter wants to take their horse to shows or events.

There are great benefits to horse ownership. Gaining skills in horse care and riding give a youth greater self-confidence, coordination and agility, and they will learn about responsibility and compassion as well.

Many people who ride regularly do so for exercise and relaxation, and the common interest in horses introduces you to many new people with similar interests. Horse ownership, however, is a great responsibility. Consider the decision carefully. This article outlines some important considerations you must make before buying a horse. Do your homework before you buy a horse; it’s very important. Consult horse professionals, reputable web sites or books, and contact your county UNH Cooperative Extension office for more information.

By Lisa Townson, Extension Specialist, 4-H Youth Development – August, 2004

One recent radio ad caught my attention. “Reduce your mortgage payment by up to 45 percent. Save hundreds of dollars a month.” Even the most cynical listener would want to know how to save so much money each month. The ad went on to talk about refinancing, and what you needed to do.

I kept waiting for the final punch that told me how to save money. Finally it came. “Once you’ve refinanced, you only make interest payments on the family mortgage”

Aha! What the ad didn’t mention is that your mortgage principle balance never goes down. You could be making interest payments for the rest of your life and never reduce the balance of your mortgage. Years later you would still owe the same amount.

Predatory lending

This example falls into the area of predatory lending. In his article “The Poverty Sharks,” Dan Allsup writes about how some lenders make a staggering 104.3 percent on cash advances. Other examples note that your interest rate on a credit card can be well over 20 percent, and if you miss a payment, or are late, that rate can be increased automatically.

If you ever read the very small print on your credit application, it’s all spelled out for you - if you understand the credit-ese.

Predator tactics: refinanced mortgages, cash advances, consolidation loans, payday loans

More and more Americans who find themselves in financial trouble fall prey to offers for refinanced mortgages, cash advances on their credit card, and consolidation loans. In some geographic areas, “payday loans” can cost a borrower 400 percent for just a few days’ advance on a paycheck. Asks Allsup, “If you can’t make it on a full paycheck this week, what chance do you have with a smaller one next [week]?”

Although 15 states forbid payday lending, New Hampshire allows the practice. The Center for Responsible Lending conservatively estimates that predatory payday lending practices cost American families $3.4 billion annually. Only 1 percent of payday loans go to one-time emergency borrowers.

‘Flipping’

One of the most common predatory lending practices is known as ‘flipping’ or ‘repeated financing.’ The lender gets all the benefits and the consumer often ends up owing more money. The carrot for the consumer is a reduction in monthly payments, similar to the ad described above. What the lenders don’t tell you is that you will end up paying more over a longer period of time.

Up-front credit insurance

Another predatory lending practice involves bundling a loan with additional products. One that has proved very costly for consumers is the practice of bundling up-front, lump-sum credit insurance with a loan. If you ever chose to refinance the loan, you in essence will also refinance the insurance, and if your next lender also bundles up-front insurance, you end up financing and paying the new lump-sum insurance coverage. This can add thousands of dollars to each loan. It makes more sense to purchase a separate "credit life" policy, paid in installments throughout the life of your loan, which will pay the balance on your loan to your lender if you should die .

Targeting vulnerable populations

Other predatory practices include targeting vulnerable borrowers, such as elders and low-income families, with offers for high-cost loans, and charging and/or financing excessive points and fees.

As a consumer you need to be aware of high-pressure sales tactics, high interest rates, balloon payments (low monthly payments with a big payment due at the end of the loan), and promises to refinance the loan at a lower interest rate in the future.

The predatory lending industry has grown so quickly that local, state and federal agencies haven’t been able to enact laws fast enough to protect us. But last June the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development urged Congress and individual states to adopt laws banning excessive fees, credit insurance, balloon payment and other predatory practices. Since North Carolina enacted such legislation last fall, at least six lenders have moved out of the state. Currently New Hampshire places no limit on how much interest can be changed on credit cards.

Avoid falling victim to predatory lenders

HUD offers several tips that can help you avoid predatory lenders:

• Before you buy a home, attend a homeownership education program. Non-profit housing agencies such as the Concord Area Trust for Community Housing (CATCH) in Concord, and Affordable Housing, Education, And Development (AHEAD) in Littleton offer classes throughout their service areas.
  
  
• Hire a properly licensed inspector who will not over-estimate the value of your home, thereby making you eligible for a loan for more than your house is worth.
  
  
• Don’t make false statements on your loan application.
  
  
• Don’t let anyone convince you to `borrow more money than you can afford to repay. If you get behind on your payments you could lose your home.

Empower yourself

The best way to deal with your debt load: empower yourself. Take a money management class such as Making Money Work for You offered by UNH Cooperative Extension Family & Consumer Resource Educators throughout the state. You can check for upcoming classes on our Family Development Event Calendar.

Take a good look at your spending habits, develop financial goals, determine your actual needs and wants, talk to your family about doing with less and protect the money you do have now and will have in the future.

by Deb Maes, Extension Educator, Family & Consumer Resources

More resources

• U.S. Department of Housing and Urban Development: Don’t be a Victim of Loan Fraud
  
  
• Credit: Truth-in-Lending - U.S. Department of Justice fact sheet provides a brief summary of the federal Truth-in-Lending Act (TILA), information on relevant state and federal statutes. Discusses balloon payments, payday lending, credit card scams and more.
  
  
• Predatory Lending in New Hampshire - Learn More, file complaints.
  
  
• Subprime Mortgage Loans: Borrower Beware!
  
  
• Center for Responsible Lending - A wealth of online resources to help you protect yourself from predatory lending practices
  
  
• HUD-Approved Nonprofit Consumer Counseling Services in New Hampshire - When you need help with consumer debt