Get Debt FREE and Raise Your Credit Score!

  

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Pay Off  YOUR Debt,  NOW!

The only way to raise a credit score is to pay off your debt or at least reduce it to an acceptable level! I recommend paying off high interest rate  credit card debt first.They can suck the life out of your finances! As for those, "magic cure" credit repair commercials you hear and see promising a quick fix, their scam is even greater than high interest rate scam your credit card company is charging you!

What steps do you need to take to build your credit score to the highest level possible? How can you secure a mortgage with a lower interest rate? Use my common sense guidelines provided below to get rid of the debts that have reeked havoc on your chances for a lower-interest mortgage on your dream home.

1.) Pay Your Bills on Time – All the Time!
I know, I know – this isn’t always easy. But, lenders of all kinds look for reliability on your part. Since loaning money is a risk for them, they look for signs that you have a reliable income and the discipline to pay your bills over time. When they see those signs, they say to themselves, “Hmmm, this person looks like a good risk to me; therefore, he or she deserves a lower interest rate.”

2.)  Do Not – I Repeat! – Do Not Open Unnecessary Credit Cards!
People sometimes open credit card accounts in order to increase their available credit. Absolutely avoid this temptation! It’s simply too darned easy to charge for items you don’t really need, and, before you know it, you’re back in debt or have increased it to an unreasonable degree.

3.) Budget, Budget, Budget!
Financially, this is possibly the most “unsexy” task there is, and yet it’s the most vital and important one you can possibly undertake! YOU need to figure out where you stand financially. Budgeting will allow you to get rid of debt, improve your credit score, and shape a low interest rate financial future for you!

4.) How Much Debt is Too Much?
Here’s the first question to ask yourself in terms of budgeting: How much debt is too much?
Actually, there’s a standard financial formula that allows you to answer that question. This formula is called the debt to income ratio, and what it does is measure your net monthly income against your debt.

Here’s an example:
"George” has a net monthly income of $2000 and his monthly debt payments are $500.
So, to get his debt-to-income ratio, George divides $500 by $2000 and gets this ratio:
500÷2000 =.25 (25%)
  
Is this a good ratio?
Well, financial experts generally agree that debt expenses should be 25% or less of your income. George’s ratio is reasonable but could be better.So, what’s the ratio of your debt to your income? Figure that out by taking the next step.

5.) Calculate Your Debt-to-Income Ratio
You can answer that question by completing the following tasks:

Task 1: Analyze your bills from the last month. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)

Task 2: Review your credit card bills and add up the minimum payments owed on each card.

Task 3: Figure out your monthly take-home pay (net salary).

Task 4: Divide your monthly fixed expenses by your monthly income to get your debt-to-income ratio.

What percentage did you get? If it’s 25% or greater, then it’s definitely time to budget in order to reduce or eliminate your debt.

 I’d be happy to discuss some more in-depth  budgeting tips and provide you with information on mortgages at the same time!

What Are FHA Loans and How Do They Benefit Me As A Consumer?

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The Federal Housing Agency (FHA) doesn’t directly offer loans. Instead, its purpose is to provide mortgage insurance for Americans to purchase or refinance a principal residence.
To put it another way, the mortgage loans are funded by private lending institutions (mortgage companies, banks, savings and loan associations, etc.), and those mortgages are then insured by FHA/HUD.

The Benefits of FHA Loans

If you qualify as a prospective homeowner, these loans have three great benefits. First of all, your down payments are lower. Second, closing costs are also lower. And, finally, it’s easier to qualify for credit.

Who Qualifies?

FHA has programs for:

• First-home buyers
• Seniors
• Fixer uppers
• Manufactured housing and mobile homes
• Energy efficiency, etc.

If you’re a first-time home buyer, a FHA loan can be a good deal for you. See the eligibility requirements below. Later, I’ll cover the fixer-upper category requirements. Check with the FHA on other programs.

First-Home Buyer Programs

These programs have the following eligibility requirements:

• You must meet standard FHA credit qualifications (judged by the individual’s credit record).
• You’re eligible for approximately 97% financing.
• You’re able to finance the upfront mortgage insurance premium into the mortgage.
• You’re also responsible for paying an annual premium.
• Within this category, the eligible properties are one-to-four unit structures. As of this writing, the highest maximum FHA mortgage is $362,790 while the lowest maximum amount is $200,160.


The 203(k) Program for Fixer-Uppers
The 203(k) program issues loans to allow you to buy or refinance a property. In the loan, you can also include the cost of making the repairs and improvements.

The loans are provided through approved mortgage lenders nationwide, and they’re available to buyers wanting to occupy the home.

The down payment requirement for an owner-occupant (or a nonprofit organization or government agency) equals about 3% of the acquisition and repair costs of the property.

There are several steps to obtaining such a loan:

• You find a fixer-upper and sign a sales contract after doing a feasibility analysis of the property with a realtor.
• The contract should state that you’re seeking a 203(k) loan. It should also state the contract is contingent on loan approval based on additional required repairs by the FHA or the lender.
• You then select an FHA-approved 203(k) lender and arrange for a detailed proposal showing the scope of work to be done. The proposal should include a detailed cost estimate on each repair or improvement of the project.
• The appraisal determines the value of the property after renovation.
• If you pass the lender's credit-worthiness test, the loan closes for an amount that will cover the purchase or refinance cost of the property, the remodeling costs and the allowable closing costs.
• The amount of the loan also includes a contingency reserve of 10% to 20% of the total remodeling costs. It’s used to cover any extra work not included in the original proposal.
• At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs and improvements during the rehabilitation period.
• The mortgage payments and remodeling begin after the loan closes.


You can decide to have up to six mortgage payments (PITI) put into the cost of rehabilitation if the property is not going to be occupied during construction, but it cannot exceed the length of time it’s estimated to take to complete the rehab.

• Escrowed funds are released to the contractor during construction through a series of draw requests for completed work.
• To ensure completion of the job, 10% of each draw is held back; this money is paid after the lender determines there will be no liens on the property.


Whew, somewhat complicated, isn’t it? Well, we’re dealing with a government program! But, FHA loans can be a good deal for you, and I’m available to guide you throughout the entire process. Just give me a call today!

Things You Can Do to Prevent a Burglary in Your Home

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Special thanks to Judy Tolliver of American Electronics for participating in this week's blog. You can contact her at 402.895.1800 or jtolliver@ae4u.com.

The best thing you can do to avoid a burglary is to take steps that will deter a potential burglar. National statistics point to one thing that makes a burglar choose one home from another – and it is almost always a home’s approachability. If you have a home that seems occupied, chances are a thief will head in the other direction. Likewise, if you are protected by a security system a burglar will shy away from approaching your home.

In short, the easier you make it for them to enter, the greater the chance you will have an intruder approaching your home. Here are some tips provided by our security expert that will help you to avoid a bad situation entirely.

Install a Peephole in Your Door

If your door doesn’t already have one, have a peephole installed and ideally one with a one-way view. Not only does it provide you the added protection of being able to clearly see who is at your door but also it acts as a deterrent to thieves that do not want to be identifiable.

Take Extra Precautions to Lock and Reinforce Doors

It may sound like common sense but a surprising number of thieves enter homes with unlocked doors, windows or other access and entry points. In fact, statistics report that a staggering forty percent of home invasions take place in situations where the homeowner was not careful about locking windows and doors.

Be Watchful of Garage Doors and Their Openers

A very common practice for homeowners is to house their garage door opener in a very convenient, accessible place – usually right near the interior entry door to the home. The problem with that is that it’s very predictable and easily accessible to a potential burglar too. Not only does our expert recommend keeping all garage door access points closed but also it is strongly suggested to house your garage door opener in an inconspicuous place.

Be Prepared With a Plan

In case the unthinkable does happen, the best defense you and your family can have is to be prepared with a plan that outlines exactly what you will do in case an intruder breaks in. If possible, set up a safe room with a cell phone that can be used to call authorities. For families with children, you should practice a drill just as you would in case of a fire plan.

Get the Added Protection of a Security System

These days, security systems have come a long way from just twenty years ago. With remote viewing access and the ability to adjust things like heat, lights and locks from afar – there are added protective measures you can take.  A security company sign acts as a strong deterrent to ward off criminals, giving you protection on top of the expected monitoring you will receive from the company. Most systems have a panic button set up to instantly call the police when triggered.

Take Extra Care When Away on Vacation

Burglars usually prowl neighborhoods looking for people that are gone away on vacation or for extended periods of time. Some things you can do to help prevent them coming to your home include setting lights, music and TV on a timer so as to make it look as if someone is home. You can also secure sliding doors with pins to prevent horizontal and vertical movement. Keep newspaper and mail deliveries going but ask a neighbor to pick your items up. Neighbors can also park their vehicles in your driveway for the illusion that someone is home.
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For more tips on how you can live safely and prevent a home intrusion, contact your security company today. As your trusted advisor, I have several excellent resources available as well. Stay safe!