Hey Guys,
I know I said I'd wait 2 weeks to publish a new blog post, but the anticipation is killing me.
Below is an article I wrote recently that I'd like to share with you all...it's definitely a must read:
What Every Homeowner Should Know About Mortgage Fundamentals
Buying a home is the American dream. With mortgage rates at record lows, first time homeowners are flocking to mortgage brokers looking for a good deal. But buying a home is a serious investment and not something to be rushed. Before you sign on the dotted line, you should know the basics of the mortgage you're about to take on.
Here are some tips that can help you make sense of mortgages.
1. Be sure you can pay the loan back - plus interest. You're borrowing against your home and property - When you get a home loan, your mortgage involves the purchase price - plus the interest. If you fail to pay off your mortgage according to the terms of the contract you sign, the lender (often your bank) can foreclose on the home. Make sure you can realistically make the payments before your borrow!
2. Get pre-approved to get the home you want. Pre-approval is easy to get and involves a brief background and credit check. Some lenders can have a pre-approval decision for you in minutes. Having pre-approval is ideal when your home price offer is competing against others, and you want an edge to help you stand out.
3. Make a sizeable down-payment if you can afford it. The down payment on your home is anywhere from 5-20% of its value (before real estate fees and taxes are applied).
Making a larger down payment often entitles you to "points" which lets you pay a lesser interest fee on the loan. Each point you pay is an additional percent of the mortgage loan. You'll need to decide whether the pay-off is actually beneficial in your case.
4. Know the Two Types of Mortgages. Because of the housing crisis, most mortgages available today are fixed-rate, which means that you "lock in" the interest rate when you apply for the loan, and it remains at that percentage while you pay it down. There are also Adjustable Rate Mortgages (ARMs) that change throughout the length and terms of your loan. ARMs often start off lower than fixed-rate mortgages, but steadily rise over time.
5. Gauge Your Loan Term Realistically. Mortgages often have a set time period that you pay them off on - usually 15-30 years (although 20 and 25 year increments are becoming more popular). The shorter the time frame, the sooner you'll pay off your loan, although your monthly payments will be higher. If you opt for a 30 year mortgage, you'll pay less per month, but the ending cost will be more. Consult your lender to decide on a term that is realistic for your budget.
Whether you're a first time homeowner or you're refinancing, keeping these tips in mind will help you secure a solid mortgage that can help you make the most of your home.
Whichever mortgage type, length and amount you choose, remember that your monthly payment should not be more than 25-33% of your gross monthly income, factoring in additional costs such as homeowner's insurance and property/real estate taxes.
I really hope this post helps all those who took the time to read it.
The More You Know,
Judy O'
Wednesday, November 12, 2008
Thursday, October 23, 2008
5 Debt to Wealth Strategies that Can Lead to a Comfortable and Secure Lifestyle
With all the media talk on the subprime mortgage crisis, the floundering stock market and a volatile economy - people are turning to saving - now more than ever.
But how do you save effectively when you're buried in a sea of credit cards and bills? How can you not only be free from debt but actually become wealthy in just a few short years? Here are five winning strategies that can take you from debt to wealth in no time!
1. Budget, budget, budget - You may already be thinking to yourself, "I already have a budget and I'm barely making ends meet as it is!" - but force yourself to sit down and make a realistic account of how much you spend each month - and what you spend it on.
You may be surprised at how quickly an extra $100 per month is being thrown away on eating out - when you could be cooking at home, or how that $300 bonus you got at work simply got squandered away on needless "stuff" when it could have been put away in an emergency fund.
2. Cut Costs Where You Can - Some estimates put the average cell phone bill at a whopping $60 a month. Just think - if you "downsized" your cell phone plan, you could save half of that every month. What about cable TV? How many premium channels are you paying for that you don't watch? What about your car? It may be time to trade in that SUV for a leaner, gas-sipping model instead.
3. Leverage Your "Valued Customer" Status - If you've swimming in credit card debt and can barely get your head above water, it's time to call on that Preferred Customer status you've probably earned during the months - or years - of paying on those cards.
Find out your interest rate and the length of time you've had each card and see what your credit score is (you can get one credit report free each year from annualcreditreport.com). Armed with this knowledge, contact your credit card office and let them know that you've been offered a better deal by a competitor. Mention the length of time you've been a cardholder, the amount you're paying each month and your credit score (720 or better gets you the best rates).
If the person on the other end of the line seems unwilling to help you, speak to the supervisor - or threaten to close your account. Don't actually close it though as this can put an added blemish on your credit report. Chances are, just by mentioning the details above, you can negotiate a better, lower rate.
4. Sock it in a Savings Account - Even though the interest rates aren't the best, getting some return is better than none at all. Plus a savings account can act as a cushion during hard times. Saving anywhere from $5-$10 per day can add up to not only a helpful emergency fund, but also a tidy sum in your nest egg when you're ready to retire.
4. Consider Refinancing - Your car, your home, consolidating your student loans, all of these are areas where you can think about refinancing at a lower or fixed rate. You can find your car's value at Kelley Blue Book - kbb.com, then see financial search engines like BankRate.com which can help you find the lowest refinancing rate in your area.
With just a few simple steps, you'll be well on your way to not only climbing out of debt, but saving for a brighter future as well!
The More You Know,
Judy O'
But how do you save effectively when you're buried in a sea of credit cards and bills? How can you not only be free from debt but actually become wealthy in just a few short years? Here are five winning strategies that can take you from debt to wealth in no time!
1. Budget, budget, budget - You may already be thinking to yourself, "I already have a budget and I'm barely making ends meet as it is!" - but force yourself to sit down and make a realistic account of how much you spend each month - and what you spend it on.
You may be surprised at how quickly an extra $100 per month is being thrown away on eating out - when you could be cooking at home, or how that $300 bonus you got at work simply got squandered away on needless "stuff" when it could have been put away in an emergency fund.
2. Cut Costs Where You Can - Some estimates put the average cell phone bill at a whopping $60 a month. Just think - if you "downsized" your cell phone plan, you could save half of that every month. What about cable TV? How many premium channels are you paying for that you don't watch? What about your car? It may be time to trade in that SUV for a leaner, gas-sipping model instead.
3. Leverage Your "Valued Customer" Status - If you've swimming in credit card debt and can barely get your head above water, it's time to call on that Preferred Customer status you've probably earned during the months - or years - of paying on those cards.
Find out your interest rate and the length of time you've had each card and see what your credit score is (you can get one credit report free each year from annualcreditreport.com). Armed with this knowledge, contact your credit card office and let them know that you've been offered a better deal by a competitor. Mention the length of time you've been a cardholder, the amount you're paying each month and your credit score (720 or better gets you the best rates).
If the person on the other end of the line seems unwilling to help you, speak to the supervisor - or threaten to close your account. Don't actually close it though as this can put an added blemish on your credit report. Chances are, just by mentioning the details above, you can negotiate a better, lower rate.
4. Sock it in a Savings Account - Even though the interest rates aren't the best, getting some return is better than none at all. Plus a savings account can act as a cushion during hard times. Saving anywhere from $5-$10 per day can add up to not only a helpful emergency fund, but also a tidy sum in your nest egg when you're ready to retire.
4. Consider Refinancing - Your car, your home, consolidating your student loans, all of these are areas where you can think about refinancing at a lower or fixed rate. You can find your car's value at Kelley Blue Book - kbb.com, then see financial search engines like BankRate.com which can help you find the lowest refinancing rate in your area.
With just a few simple steps, you'll be well on your way to not only climbing out of debt, but saving for a brighter future as well!
The More You Know,
Judy O'
Why Ask Why?
I want take this opportunity to introduce myself to you and tell you a little about why I created "The Rainy Day Rescue Report."
My name is Judy O'Rourke. I'm a 40 year old financial consultant living in Austin, Texas.
I decided to start this blog in light of the fact that the majority of everyday people are currently struggling through troubled financial times in America; and, because of my extensive knowledge about the financial industry in general, I feel as if I have a moral obligation to share what I know with the rest of the world.
My plan is to post new blog entries on a regular basis, most likely bi-weekly.
I sincerely hope this blog will help people better understand their current financial situations and give them the ability to make sound financial investments in the future.
The More You Know,
Judy O'
My name is Judy O'Rourke. I'm a 40 year old financial consultant living in Austin, Texas.
I decided to start this blog in light of the fact that the majority of everyday people are currently struggling through troubled financial times in America; and, because of my extensive knowledge about the financial industry in general, I feel as if I have a moral obligation to share what I know with the rest of the world.
My plan is to post new blog entries on a regular basis, most likely bi-weekly.
I sincerely hope this blog will help people better understand their current financial situations and give them the ability to make sound financial investments in the future.
The More You Know,
Judy O'
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