Holidays

Merry Christmas to all! What a great time of the year for my family and I hope you and your family are experiencing a great time together as well. We have all gathered up the best possible gifts for our friends and family and are now enjoying time together and getting ready to "break bread" together too. What a wonderful time of the year.

This is a good time to think of the great opportunities ahead of us for 2008. We need to think smart and try to prepare ourselves for any and all emergencies. During the Holiday rush we sure don't mind spending money like we have it forever. I happen to have what I considered a catastrophe, last Friday I bought my family a brand new main water line as the one in the ground had burst. I was distraught. Not sure how to handle this. I don't have a husband to help with these things. My oldest son had just arrived home from his night job and I, of course, was at my job. He was able to work with the plumbers for me while I talked to them and we were able to scrape just enough money to pay for it. Of course I was very concerned about my boys Christmas. It was interrupted, however I feel that our Christmas holiday is sort of a divine intervention for my family to see. My new water line cost $1,000., which was all I had. My plan was to get my boys some nice things and have enough money until payday and to keep me current. It just so happened that I came into a nice $1,000. bonus the day before the catastrophe along with grocery and gas gift cards along with none other than a WII game system. WOW to my surprise how things in our lives work out. The power of the life paths are so intriguing to me and always will be. I feel very blessed and very grateful.

This whole experience has made me realize that saving more money NOW is so important. So I am on a mission to increase my savings to $200. mo. and I will just do it. It is so important, you don't know how scared and alone for a split moment I felt. If I had not been so blessed to have received that money, I do not know how I would have paid for my family to have water and just in time for Christmas. So now is the time to re-evaluate our spending and saving habits.

Have a wonderful Christmas and safe and Happy New Year!


Remember: Always pay yourself first!

The power of information

Everyday we need information and we give information in all aspects of our life. We need to make sure we have all the information and that it's correct. When you talk to a Loan Officer about a home loan there are specific and basic pieces of information you will need. If you go prepared the loan application process will be so much smoother. You will need your ID, drivers license, passport or equivalent, and social security card. Your most recent pay stubs covering a one month period and past 2 yrs W2's. If self employed you need your past 2 yrs tax returns with all schedules. Most recent 2 months of bank statements, if you don't have a bank account now, you need to go open one up. Your money for closing costs, down payment and reserves needs to be documented as to where it came from, so get an account opened today. If you have a 401K through work bring the most recent statement or any life insurance policy with a cash value will also be good. If you have CD's, money market or a trust be sure to have all that information for the LO to be able to verify with a verification of deposit, VOD. If you pay or receive child support bring the divorce decree or child support order. Landlord information or if you live with family you will need those names and addresses. You will also need to bring a check for your credit report as the LO will pull your credit while you are there and be sure to review the whole report to be sure all credit good or bad is yours. If you have paid collections or tax liens or judgments in the past they may very well still show up on your CR as those places say they will report the payment to the credit bureaus and they rarely do, so also keep all your documentation and information of paying these things for the future.
Yes a lot of information is needed to buy a home, but the end result of home ownership a very rewarding feeling. So be prepared and the whole mortgage loan application will not be as painful as you have heard.

Remember: Information is knowledge

Discipline

Most of us think discipline is something you do to your kids. You never realize it is something we need to do in our everyday lives. Discipline is what more adults need. It will help you achieve everything you want out of life. Too many people live in the fast lane all the time and do not discipline themselves as far as pleasure in life. Sure we all deserve to enjoy ourselves and do what we want, but we will stay in the hole forever unless we discipline ourselves to not getting everything we always think of.
For instance I know people that go out and buy whatever they think they should have, not "need", but want. One in particular gets a new cell phone every month, week, whenever and new computers, TV's, yet cannot keep up with the everyday living expenses and was a homeowner but let the house go. This is a prime example of someone who lacks discipline. She will now have to spend the next 3-5 yrs fixing her credit. This will require discipline and without it she will never gain credit again. This is what we do to ourselves.
So start today with discipline in your budget, spending and dealing with everyday life.

Remember: Discipline is not just for kids

Role Models

We don't know when growing up that we might someday have children and have to know what to teach them about life. They sure don't give you a handbook at the hospital while checking out that instructs you on how to be a good role model in all aspects for your children. We mainly rely on our Parents and Grandparents, who, by the way also were left with the same dilemma. So each generation stumbles through and we all try to do the best we possibly know how. What I have learned as a single Mom for many years is to show my boys how to work hard to earn a living and be successful and to SAVE. My Parents struggled like I have for many years and my Brother and I really didn't know it, because they covered up their money troubles, I'm sure they didn't want us to worry. Of course I am still to this day very fortunate to have both my Parents and they are still married to each other, 50 yrs. This is something many people today don't have. With that my Dad was and still is a hard worker and very smart. He worked outside the home while my Mom was the domestic engineer. She kept all the inner gears of our household running smoothly as possible, while Dad traveled for his job every week. So over the years after I became an adult, married and divorced with 2 boys to raise, I realized I had learned how to survive on very little money while trying to "rob peter to pay paul", after many years it became very tiresome and old. I have finally figured out how to make myself save money and am trying to teach this same philosophy to my boys so they won't have to face crisis's unprepared. There is nothing worse than thinking you have more money in your bank account and then you discover how wrong you were. One clerical error can cost you hundred's of dollars. I know, I have lost many, many dollars this way. Our Parents are our role models and they do the best they can. Mine did. I have learned from them that you continue to do what you believe in and be positive about it everyday and you will be successful. My Dad has been successful and I have too for not going to college. My degree is in the Mortgage business.
Think about what you have ever learned from your Role Models and try to incorprate that into your life.
So start today by writing down a simple budget plan for yourself and your kids can start learning as early as 12. You can use notebook paper, write down what income is coming into the household and what your bills, expenses are to go out for the month. Once you see it on paper and know in your head how much money you have for wiggle room, you will tend to not overspend. In today's times we all have to learn how to build our wealth by spending our money very carefully.
If you ever have a question or comment, please feel free to email me. I am always willing to help people think in the right direction.

Remember: Think smarter not harder

Communication

Have you ever played "the phone game"? You know where one person tells someone something and then that person passes along what they "thought" they heard and so on until it reaches the last person who has to tell the group what was said to begin with and it is always something so different than what was actually said. Sometimes, alot of times, when you are talking to a credit professional or mortgage specialist it seems like this happens and you wonder how things could get so messed up. It is so important to tell everything about your situation as correctly as possible, because most all of your info has to be verified and clarified. It seems the mortgage banking industry is all about making sure everything everyone has said is exactly true to the best of every one's knowledge. All this verifying and clarifying makes the process to obtain credit or a mortgage loan seem that much more difficult.

So to make things easier on yourself and everyone else of interest be sure you gather up all your information and or documents to make your credit experience more pleasant than some. It's all about COMMUNICATION.

Remember: Communication is the key to everything!

Why good credit is good

Good credit is like money in your pocket. Even if you have no credit and lots of money this is still not good. The lending industry these days view someones credit history as a gauge for how they might repay a loan. If you have no credit there is no way to know if someone actually pays their bills and on time. Sometimes you can provide what is called alternative credit to show how you pay your bills, ie; utilities, car insurance, rent/housing, etc; In today's times lender's are more apprehensive in lending when there is no history of repayment unless you put down a good amount of money which in most lender's eyes says you won't walk away at the risk of losing all that money, just as if you threw it out the window. There are many things you can do to improve your credit when it is tarnished. Some people think once they have the bad credit there is nothing to do about it.
I have been in the Mortgage business 24 yrs. and my credit is not what it should be. However, I have been a single Mom for many years and that does sometimes put many extra strains on how we dole out our money in order to continue with daily life. I have struggled and still do with tarnished credit against me. I am working to get it cleared up, but it does take time and diligence everyday. I have found that most of us like to spend, spend, spend. I have not really done a lot of spending, but I have made stupid choices in what I may have spent money on and thus the snowball effect takes place. I know many people in my position that only have themselves to borrow from and in the end that costs us much more money than we ever intended. I believe that good money skills should be taught when you are a child and I know I wasn't. My Parents struggled when my Brother and I were young and eventually they got it all straightened out and got through it. I watched this and both my Brother and I have continued to have money issues, rough credit and no savings. I am now a homeowner and have started saving with a small savings account and through a 401K at work. If you really think about it, the cost of a pizza meal delivered is what you could put in a savings account a month. If that's all you can do for now, that is a great start. It is never too late or too little. I have 2 boys and I am trying to instill good spending and saving habits and it is still difficult to do. My oldest is 23 and works now for 15 mos. and keeping a job was the most important part first, now it is about saving and not spending. My other son is 15 and of course likes to spend money he doesn't have. I am working on that as well.
So my whole point is that you may hear out in the world that you must save so much and if you don't start when you are an infant you will never have any retirement, all this negativity, anyway, you can do whatever you want as long as you continue to think positive and make positive changes, large or small. You can do it. So today start writing down how you can improve your whole financial picture without taking food off your table or doing without. Try brown bagging your lunches more, making meals at home more. None of this will kill anyone, it is what our families did and we need to stay away from the fast food life as much as possible, so much more expensive yet people today have gotten caught up in the fast lane of life and forget really how to live. So start today to show yourself how you can begin to improve your credit quality and become a homeowner someday yourself or buy that new car that you need and learn to change your spending habits. All of this is just about 3-6 mos away if you really put your mind to it.

Remember: Make good choices.

To buy or not to buy

I know you really want to buy that dream home you have always thought of. It is not always the best choice for you at the time. So you find a Real Estate Agent to show you homes. You know what you think you can afford based on the current rent you pay or not if living "rent free" with family. So you see several homes the agent picked and none really light your fire, so the agent takes you to others they are a higher sales price and of course you love them and you found one that you must have. Great! Now you are wondering if you really can afford this wonderful home and the agent tells you that on paper, YES you qualify. Another GREAT! So now you have bought your home and now your gutters have all fallen off and you don't have the money to replace or your washer has flooded in your home and your carpet needs to be replaced. In the meantime of checking with your homeowners insurance agent and/or your home warranty company you have to make spend money for the carpet or to go to the laundry mat or so on. These are all extra expenses you did not account for at the most jubilant time of your life. Buying a home is one of the biggest events to happen and the biggest purchase you will make. So being prepared definitely helps.
To qualify for the home with no money you can chose to use one of the down payment assistance programs(DPA) that is currently offered for FHA insured properties. The Seller of the home you like agrees to participate in the DPA program and this required 3% down payment is included in the sales price, therefore increasing your loan amount and house payment, but you don't have to put any money of your own into the transaction and you don't really have any money to anyway so you like this idea.
At this time FHA is looking to add tougher credit restrictions to allow the use of the DPA gift, which is good. Most people today need to really take a long hard look at their current credit picture and write how much money comes into the household and how much goes out to know how much y0u can start saving. In order to buy a home you should really have 6 months mortgage payments saved in the bank. You never know when you will need that money. Owning a home adds a lot of new responsibility to your life now.
Real Estate Agents want to make the sale to gain the commission and don't always tell you all the pitfalls to becoming a first time homeowner. There are a handful that will help counsel you, but it is always best if you do your research before you start looking. Once you start looking and see something you like you usually can't say no. So be prepared. You will sleep easier at night knowing you CAN afford your home and you were prepared.

Today is the best time to start saving, planning and preparing.

Remember: The harder you work the luckier you get