Myths On Money

This is a guest post by Larry Merrill. Larry has been a Realtor® since 1995, and is the founder of Advance Tech Realty.

The market has some great deals right now and I wish I could take the time to do my home buyers program (it takes 1 1/2 hours). But in short, some of the steps in finding a good deal.

1). Talk to lenders in the area you want to buy a home. Interview a few to see who you would like to work with. Also, check out the rates and types of loans available and what kind of down payment will you need to come in with. Look at closing costs closely, generally the lower the closing cost the better off you will be. Even if the interest is a little higher. This is because the average person stays in their home 5-7 years. So if you pay a lot for a low interest rate, you probably will be throwing away money in the long run.

2). Now that you know how much you can borrow and the amount you need to bring in for closing costs, contact your real estate agent. Again doesn’t hurt to interview (or I can help you locate one). If the agent can set you up on a drip system or hotsheet then you can get an e-mail of any homes in your price range. Also, in this market we are seeing people who just want you to take over payments or seller financing. This can help you get into a house without as much out of pocket money. It is recommended you use professionals to help you set up these types of transactions, don’t try to do them on your own. You will find a good real estate agent can do a lot to help get you into a house or when the time comes get it sold.

3). Make sure you have inspections done on the property before buying. Talk to neighbors to find out if there are problems. This could be about the home you are buying, the subdivision, neighbors, city, etc.

4). Be aware buying a home is stressful, and many times you will wonder if you are doing the right thing. But when you own instead of rent I think it will be worth it. Just do your due diligence…

This is just a brief explanation of buying a home. If you have questions you can check out www.move2cda.com and contact me from there.

You really can become debt free. Whether you are struggling to make it to the next paycheck, wanting more to retire, desperate to stop the collector’s phone calls, or just want to find a peaceful night’s sleep, you can find the financial help you need right here to become debt free. Once you become debt free, your wealth becomes free to grow rapidly, and you can rest well at night knowing your family is secure.

That’s why I designed this website: to provide you with everything you will need to know and have in order to become debt free and find financial freedom. If you want to rid your life of the stress of a tight family budget, get real debt help, and find true financial freedom, then you are in the right place. You can find plenty of free help and free blog posts for you to use to help you find relief. And, if you can’t find the answer you are looking for, feel free to ask a question.

“Normal is getting dressed in clothes that you buy for work and driving through traffic in a car that you are still paying for – in order to get to the job you need to pay for the clothes and the car, and the house you leave vacant all day so you can afford to live in it.”
- Ellen Goodman

Prepare to be EXCEPTIONAL.

Everyone seems to think that I am opposed to buying a home. Almost every fan of the blog that I talk to seems astonished when I tell them that I am very much in favor of people buying homes.

So, let me clarify again my position on renting versus buying.

In my opinion, far too many people (particularly first time home buyers) jump into buying a house because they can’t bear to “waste any more money on rent.” These people have a very valid point. Home ownership provides equity appreciation on the home, which in the large majority of cases will far outstrip any return you could earn in a savings account. This makes buying a home a generally good investment, and certainly can provide much greater long-run results than renting.

I am concerned, however, that first time homebuyers rush to buy before they are financially prepared. Home ownership is much more expensive than renting. You have to pay for hazard insurance, property taxes, repairs, upgrades, and (for first time homebuyers) mortgage insurance. These extra expenses can stretch a family’s budget far beyond what they anticipated when they bought the home. Many of the families who are losing their homes to foreclosure are young couples just starting out. In their desperation to avoid wasting money on rent, they overextended themselves and eventually lost their home.

After losing the home, how much better off are they? They get no equity, pay tons in interest and taxes, and any work they did on the house is pure loss. It’s financially devastating to be foreclosed on. Many families could avoid that if only they would take their time, research the un-told costs of home ownership, and go into the deal with their eyes open. Any financial decision you rush into headlong is susceptible to catastrophe. With a decision this large, potential homebuyers cannot afford to be hasty, because the consequences can be dire.

I think that it is perfectly fine for a family to rent an apartment or small home while they build their financial strength. Once their situation can support the mortgage EASILY, they ought to buy their own place and start up the equity ladder. You must only enter a mortgage if you can have a little extra room in your budget. Don’t stretch to the absolute maximum of your budget to buy the home, because you will find yourself overextended. You have to prepare for unexpected expenses and costs.

Lastly, I am hugely opposed to mortgages. Investment leverage is the only good thing I can think of about a mortgage. Everything else about them is terrible to your finances. A HOME is a great asset: a MORTGAGE is a great burden. Your mortgage is at least DOUBLING the cost of your home over 30 years. Just imagine all that your mortgage is costing you, and how strong your finances could be without that mortgage payment.

Of course, renting does not provide the option of eliminating your housing payment at some point. When you buy a place, you can pay off the mortgage and someday be rid of your housing expense completely. When you rent forever, you pay forever. That’s why I don’t support the idea of long-term renting. If you can pay off your mortgage in less than 30 years (and I can teach you how to get rid of your mortgage AT LEAST 7 years sooner without any extra cost to yourself), then you will have some time to really sock away some money into savings.

I hope that clarifies my thoughts on renting versus buying. If you want more clarification, fell free to drop me a line.

I hate late fees, don’t you? Problem is, in the complexity of our daily world, things can slip past us sometimes. It happens.

That’s why I love this great tip from Isemel on the I Will Teach You To Be Rich forum.

I always pay my credit card off in full, but once in a while I forget to make the payment by the deadline. When that happens, there’s a ridiculous late fee of $29.99 or more.

This way, even if you forget to pay the rest of the bill, you will have already paid the minimum and will not get hit with a late fee.

In my opinion, it is very effective to automate your finances as much as you can, because our finances are so complicated these days. When automating your bills, though, there are two problems to be aware of.

1. Insufficient Funds. Automatic bill pay can be problematic if you keep low balances in your checking account. A good way to try to prevent this is to schedule your bill payments to go out the day after your paycheck gets deposited.
2. Incorrect Billing. The other problem you might face is the possibility that you might be mis-billed, or that you simply won’t know how much you are spending. The solution to this problem is to track your expenses regularly. My favorite way to do this? Mint.com

By automating your bill pay, you remove the unknown element: you. Systems are great because thye are reliable. People (no matter how vigilent), are prone to forgetfulness and error. So, automate at least a minimal payment so you don’t get hit with fees, then pay the rest yourself so you don’t get hit with interest expense.