Tag Archives: mortgage

Ways to Get Out of Debt

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“We got so far out of debt, we got lost!”

Having a credit card or taking a loan is a commitment that requires a lot of self-control. It is easy to spend borrowed money. It is easy to pay only the minimum payment due. It’s easy to say “yes” to something you don’t have to worry about until the future. But when the future arrives and you’re still in the hole, what can you do?

Getting out of debt requires a coherent and realistic plan that might start with a little prioritizing. Credit.com recommends making a detailed list of all of your debts, a list that includes the total balance, interest rates, the minimum monthly payment, and the three- or five-year pay-off amount that is likely available on your statement. That way, you can compare each debt and evaluate which one is the most pressing based on the interest rate or amount owed.

Consumer expert and blogger Clark Howard advises that in addition to organizing the debt you owe, you should commit to not accruing new debt if possible. Focus on the debt you currently owe rather than looking for opportunities to get new things that you will have to finance. When you organize your debt, list the smallest first and the largest last. Once you tackle the first, you will gain confidence that you can also tackle what remains, and you will see a clearer picture of when you can be debt-free.

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“If we jump high enough, debt can’t reach us!”

One way to avoid having to open new credit lines is to commit to spending cash instead of thinking of your money in terms of credit. Time magazine’s Family Finance writer Kara Brandeisky explains that people who pay in cash are more likely to “feel the pain associated with spending real money,” citing a study that showed consumers are less likely to make luxury impulse buys with credit cards.

Another key part of making a financial plan is to be sure to pay more than the minimum balance each time. Paying the minimum only requires you pay a very small portion of your debt—and then leaves the rest of it in your account to accrue interest. One way to avoid paying a lot of interest is to utilize available balance transfers—most of which offer a promotional period with low or zero percent interest.

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“I got a retweet!”

Make a plan with deadlines and set amounts that you are to pay off, and be willing to adjust that plan when necessary. Track your behavior using a chart or taking notes about whether you really did what you said you were going to do, and be honest with yourself. You may want to create a plan, then schedule time to reassess it every month in the beginning, slowing down to every quarter as you progress. That way, you’ll be sure you’re on the right track and you’ll have the added reward of seeing your debt totals go down.

Clark Howard also advised debtors to use any “excess” cash against their debt. Excess or unexpected cash may come from a higher tax return than expected, a rebate, sales of items on eBay, or even selling your diamonds with us. If you have that cash, prevent the debt you already owe from adding up by putting it toward it. You’ll never miss it!

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“Yes!! …Also, I’m excited for pumpkin spice lattes.”

Liberating yourself from debt is an achievable goal if you are willing to change the way you think about money and the way you live your life. If you make a pact with yourself that you are going to pay off your debt, then uphold that pact, you can knock the debt train right off the tracks and get things moving in a more positive direction. Eighteen percent of people surveyed by CreditCards.com said they expect to never pay off their debts. But that pessimistic attitude doesn’t have to be yours if you plan properly and act according to plan. So chop up that plastic and get out of the black!

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“Debt doesn’t bother me…because I’m really a super hero.”

Tips for Buying a Home

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Ever get that feeling like you just want to put down some roots?  You’re not alone (obviously: usnews.com reports that census data indicates that for the last 5 consecutive years, 600,000 new American homes were acquired annually).  As you contemplate this decision (the purchase of what is for most people the most expensive item they will ever possess), you naturally are wondering “What are the smartest moves I can make?  What should I avoid like the swine flu?”  With home buying season in full swing, here are some useful tips on how to get the most bang for your buck and the best house on the block.

Keep your money like your letters: stationary.

Wheeling and dealing just months prior to attempting to close on a home doesn’t send the best message to creditors and banks.  In fact, it freaks them out like a creepy clown who offers you glistening red cotton candy.  It’s best to keep your money stable and it’s “not wise to make any huge purchases or move your money around three to six months before buying a new home.” states hgtv.com.  Just…be cool.

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Get ready to make yourself comfortable.

If you can’t stay in one location for the next few foreseeable years, then you are NOT ready to buy.  Unless you’re a professional “house flipper,” who knows the intricacies of the market, bouncing from home to home is not a stellar idea.  “With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.” reports money.cnn.com.  Don’t forget: each time you purchase a home there are “closing costs,” which can be devastatingly high, even when the overall market is seeing a spike.  Your helpful attorney still needs to get paid, like a boss.

Make a list, check it twice.

Before even viewing your first potential new living space, you should make a list of all the things that you absolutely can not live without (hard wood flooring, functioning pipes, garage door operator, the Clapper, etc.)  Further down on the list, clearly demarcate the items that you would strongly like to have (lemon yielding trees, glossy garden gnomes).  Then, you can scribble at the bottom some “would-be-nice” features (within Fresh Direct delivery radius, chic gothic porch lights, sexy neighbors).  When inspecting homes, bring along your list.  Foxbusiness.com supplies the advice: “If you fall in love with the house and your checklist shows that the house has none of your must-haves, it will at least make you pause and think.”  Meaning, if you’re all but ready to cut a check for a modern one bedroom ranch style home, and then you refer to your list and realize you have 8 kids, please do not make the purchase.

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“I’ll have to ask my agent…and my Aunt.”

At this point you are well aware that a real estate agent can possibly find you the perfect home – of course when utilizing an agent you’ll have to pay their fee (check out Bravo’s “Million Dollar Listing” to watch some of these 6 figure commissions get handed out like Skittles).  If you want to avoid such a cost, or just want to keep all options open, try simply asking around.  You’d be surprised to see what results a few emails sent out to friends and kin could drum up.  Some sellers elect to not use an agent either, and will list their property “for sale by owner.” Investopedia.com suggests “driving around the neighborhoods that interest you in search of for-sale signs.”  You may find your dream house right on your fantasy block.  And lest you forget, there is always the ever expansive internet to scour for permanent lodgings, just try not to become overwhelmed by the multitudinous sea of choices.

Foresight for sore eyes.

“When it comes to investing, the best place to invest is in an up-and-coming area,” says frontdoor.com.  This may seem obvious, but it can be very tempting to look the other way if you find a lovely house…that is in a rapidly deteriorating location (ie – if the neighboring homes all come with pit bulls on the lawn and screams/death rattles from within, it’s best to move it along).  The safest bet is to buy in an area that looks as if it’s expanding and developing, or at least is just stable; you can always make improvements to your home, you can’t to the neighborhood.

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“Lowest Mortgage Rate” Ads:  Worst.  Thing.  Ever.

A quick Google search on ‘ways to finance a new home’ will leave you bombarded with a slew of sparkly “lowest mortgage rate” advertisements.  Caveat emptor!  Forbes.com warns that “these ads are typically paid for by lead-generation firms that pass on your personal information to pushy mortgage lenders.”  It’s the ole ‘bait and switch’ move.  Many a plucky and unsuspecting new home buyer has fallen prey to these louche-like tactics, becoming proselytized into confusing and rigidly binding mortgage contracts.  Just stay away from these and anything that resembles them, and, if possible, consult with a financial planning specialist.

Speaking of mortgages…shop around!

Various banks and lenders can offer you different types of mortgages/loans.  You need to pick the one that is right for you.  For instance, there are long term loans, with a “fixed rate” (which is lower than an “adjustable rate” loan, where you have more leeway, and are not necessarily locked in for decades.)  “You might be one of those people who never plans to buy another home, so maybe you’re more interested in a 30-year, fixed-rate mortgage,” offers howstuffworks.com.  Even if you’re a commitment-phobe, you’ve got to be thinking about the big picture, and what makes the most financial sense with your lifestyle (real estate purchases for the novice are no place to be acting out any “Mad Max” fantasies of reckless abandon – let’s stay grounded and keep it real…estate.)

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Become a supplemental-case.

One of the shrewdest things you can do before making a massive purchase is to supplement your income.  Not everyone is adept at playing the market or has a yacht that they can hock.  However, there is one asset that many Americans are in possession of: a piece of diamond jewelry.  Either a diamond engagement ring, vintage diamond earrings that were handed down from Nana, a diamond tennis bracelet gifted by an opulent and impetuous former lover; a lot of different people have a lot of different diamonds.  If you have a diamond that is one carat or higher, it can go a long way in aiding the initial financing of a home.  The liquidation of a diamond engagement ring can significantly help with the down payment of a property.  The most important thing to do if you are in this boat (and, again, don’t actually own a boat), is to find a trustworthy intermediary with a great reputation.  Enter Diamond Lighthouse.  Our unique diamond selling platform allows for people to get the true, fair value for their diamond jeweler.  We don’t buy diamonds, we help you sell yours and take a commission from the sale = we want to get you the most money possible.  Find out everything there is to know on this topic right here.

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Let Diamond Lighthouse find you the best value imaginable for your diamond jewelry, as you begin your new home purchasing journey.  Remember, at the end of the day, there’s no place like home.

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-Joe Leone