July 13, 2016
How to Manage Your Credit Card Debt: A 4-Step Strategy
Being in debt is undoubtedly stressful, more so when the interest rates keep pushing your overall debt to skyrocketing amounts. Many people fall into the temptations of unnecessary expenditures and end up making purchases more than they can afford. Nonetheless, there are smart ways to reduce your debt and regain a sound financial health. Follow this step-by-step solution to help you manage your finances and work your way toward a debt-free life.
1. Create a debt payoff plan.
Take time to come up with a strategic debt payoff plan that fits your budget, and be sure to stick with it. Determine the amount of your total debt load so you can devise a realistic plan. Make a list of all your debts, including the debt amounts, due dates, creditors, and monthly payments. Identify your monthly expenses, such as electricity bills, transportation costs, and groceries. Calculate how much is left from your overall monthly income after deducting monthly expenses, and allocate a portion to debt payment.
It helps to cut back on certain expenses and use the extra money to pay down your debt. When making payments, check your debt list and update it as your debt changes. Also, make a bill payment calendar to make it easier to know which bills to pay with your paycheck.
2. Prioritize your most expensive debt.
If you carry a balance on multiple cards, it's essential to make at least minimum payments. Compare the interest rates of your credit cards, and focus on paying off the balance with the highest interest first. Double or triple your minimum payment on the most costly card. Whenever your budget allows, try to pay weekly instead of monthly. Early and multiple payments help you pay off debt more quickly. You can continue to make the minimum payment for your other credit cards while increasing your payment on the credit card with the highest rate.
After paying off the card's balance, focus on the next credit card with the highest interest rate. Make sure to stay consistent with your debt repayment plan. Avoid skipping or easing up on monthly payments even as your debt decreases considerably. Always keep in mind that your goal is to drive your overall balance down to zero.
3. Pay your bills on time.
Avoid missing monthly payments, as interest rates and finance charges usually increase when you consecutively miss payments. Paying late is a bad habit that makes it more difficult to pay off your debt, because you also need to pay a late fee. If you tend to forget about due dates, create a reminder on your phone or computer that will alert you several days before the payment is due. Create a list of your pay-down goals, and put it near a calendar or in your wallet to keep yourself reminded whenever you're tempted to skip payments. If you miss a payment, settle it as soon as possible so it won't be reported to a credit bureau and affect your credit score.
4. Include your holiday bonus in your debt payoff strategy.
Now that you're determined to reduce your debts, it helps to allocate your bonus to debt payment instead of spending it on luxury purchases. This way, you can accelerate your debt payoff and also improve your credit score. Additionally, save any extra cash and build an emergency savings fund by putting part of your bonus in an investing account or a high-yield savings account. Keep adding to your emergency savings fund throughout the year. When an urgent expense comes up, you don't have to use your credit card as you have a backup savings plan in place.
These are the first steps that you can do to take control of your debt and get on the right track. Be sure to limit the use of your credit cards, and avoid making unnecessary purchases. If you can't stay away from the temptation, bring cash with you instead, and leave your credit cards at home whenever you go shopping.
June 22, 2016
Staging Your Home for a Quick Sale
When it comes to staging your home for a quick sale, the right accessories can make all the difference. You want your home to look spacious and uncluttered, but that does not mean leaving your rooms empty.
If you are putting your home on the market, it is important to remove any and all clutter. Whether that means renting a storage locker or just moving a few items to the shed out back, the goal is to make the home look as large as possible.
After you have removed the clutter, it is time to bring in the accessories that can seal the deal. When staging the bedroom, a beautiful green plant or flower arrangement on the nightstand will dress up the space and give it a new elegance. A vase full of fresh flowers on the vanity will make the bathroom more beautiful while covering up unwanted odors.
Plants are not the only accessories that can make your home staging more successful. Displaying an art book and some upscale fashion magazines on the coffee table will make the space look more interesting and inviting. A well-placed tower lamp in the living room can make the entire space look more elegant.
Artwork is another vital aspect of staging your home and making it look its best. If your walls are currently home to nothing but family photographs, it is a good idea to put some of those personal items away and give the space a wider appeal.
While every well-staged home needs some artwork, what items you choose are even more important. You will want to choose artwork with a wide appeal and a neutral look and feel. Landscapes are always a good choice, as are still lifes and abstract pieces.
If you are looking for a way to dress up your bedroom, den or living room, try adding a piece of modern sculpture or an artistic vase. You do not have to spend a fortune on artwork to stage your home. Even an inexpensive piece can lend an air of elegance to your home.
The goal of staging is to make sure they love what they see. The right accessories can make all the difference.. Whether you are selling an upscale property or a starter home, every buyer who comes through will picture themselves in the space.
June 8, 2016
Why is Saving Money So Hard?
Saving money is a lot like dieting -- easy to understand but difficult to execute and follow through. Intellectually, you know that having that extra piece of pie or second helping of French fries is a bad idea, but it is hard to push back from the table and say 'enough.'
Saving money is much the same. You already have the tools you need to put money aside, but actually doing it can be difficult. You might know that you should be saving for retirement or building an emergency fund, but you also want instant gratification, that shiny new smartphone or other new gadget.
Seek Out Opportunities to Save
Saving money is an active endeavor, and that means you need to seek out opportunities wherever you can find them. The next time you make your grocery list, take a few minutes to go through the online circulars for the local stores. Find the lowest prices on the items you need for the coming week, and add up the money you save.
Something as simple as saving a quarter apiece on canned goods can give you extra money to save. Shopping smart and hunting bargains is a great way to start or add to your savings, all without impacting your lifestyle or depriving yourself.
A little creativity can make saving money a lot easier and less painful. Something as simple as pocketing your change and putting it in a piggy bank can give you the inspiration you need to get started.
You probably loved putting coins in your piggy bank when you were a kid. Why not rediscover that feeling of accomplishment as an adult. Empty your pocket change into your piggy bank each day, then take all that change to the bank at the end of each week. You can beef up your savings and start your emergency fund, all with money you didn't think you could live without.
Set Realistic Savings Goals
If you start a new diet with the goal of losing 50 pounds in a month, you will surely fail. The same failure will probably result if you set too high a savings goal. You cannot go from zero to a fully funded emergency fund or maxed-out retirement plan overnight -- and you should not try to.
Instead of trying to do everything at once, start small. If you are not currently participating in your retirement plan at work, contact the human resources department and set aside 1 percent of your pay. Once you get used to having that money come out of your paycheck, try raising it to 2 percent. Pretty soon, you will be contributing more than you ever thought possible.
The fact that the savings rate is so low is proof of the difficulty of saving money and sticking to financial goals. Even so, there are things you can do to save money and start building an emergency fund. Even if you think you have no money to save, you can probably squeeze a few bucks from your budget and jump-start your savings goal.
May 25, 2016
Before You Hire a Realtor Ask These 5 Questions
Selling a home is a big decision. An equally big decision is choosing a Realtor. On a basic level, your Realtor is responsible for finding the best buyer for your home at the price you're asking. However, a Realtor's job goes far beyond this, as they are also responsible for helping you prepare your home to be sold, working with you to list the home for the proper price, and making the entire sale process as stress-free as possible for you.
According to data from the National Realtors Association, most people don't ask their Realtors many questions beyond what their fees are and how much they can sell the home for. Every Realtor will have their own style and specialty, so finding the one that's right for you takes more consideration than choosing the Realtor with the best prices. If selling a home were easy, everyone would do it. That's why it's crucial to ask a few additional questions of your potential Realtor.
Here are five questions that you should ask your Realtor before you hire them.
1. What is your experience?
This seems like a very generic question, but it's a very important one. Knowing how many homes your Realtor has sold in the last year and their overall experience will help ensure trust in their process. Real estate is a job that you learn from experience. The more houses that your Realtor has sold the better they will know the market and what the potential is for getting your home sold in a timely fashion. You want to pick a Realtor who you feel can handle your entire purchase process from listing your home to closing the sale.
2. How are you planning to market my home?
Anyone can hammer a 'For Sale' sign into their front yard, but you hire a Realtor to market your home to a vast amount of potential buyers. In today's market people can discover your home from anywhere online. A good Realtor will get your home listed on Multiple Listing Services (MLS) as well as have other marketing tactics like advertisements, direct mail and email marketing. Don't be afraid to ask your Realtor for their marketing plan.
3. Do you work with clients in this price range?
If you're selling a home for $500,000 and the last five homes your Realtor has sold have been for $200,000, you may want to reconsider your selection. Home prices attract a different types of buyers and you'll want to find a Realtor that is able to get into the mindset of the buyer.
4. What are the drawbacks of my home?
The key to selling your home is making sure it's listed at the proper price. Having a Realtor that is up-front about some of the drawbacks of your home can provide you with the best chances of selling your home as well as some insight into the Realtor's experience and desire to sell your home. If you are aware of some flaws that your Realtor doesn't point out, they may not be 100% vested in selling your home.
5. Do you have references?
Hiring a Realtor is like hiring an employee for a job. References will allow you to cross-check information, learn information about other seller's experiences and get a feel for their working style. You'll be working with your Realtor for an extended period of time and communicating with them on a regular basis so it benefits to hear how the communication process was from other clients.
May 11, 2016
3 Ways to Change Your Financial Habits
Some financial habits are good, but others can hold you back and prevent you from saving. If you need to change your financial habits, it is important to take a step-by-step approach. This three-step approach can help you get a handle on your finances.
1. Set Specific Goals
Many people fail in finance because they set goals that are too vague. Setting goals like 'save more money' or 'put money away for retirement' are far too vague to be effective.
Instead, set specific goals like 'save 10 percent of every paycheck' or 'pay cash for every purchase.' These specific goals will be more effective at getting you to change your financial habits.
2. Find Out What is Holding You Back
You have the best of intentions when it comes to budgeting and saving your money, but somewhere along the line you go off track. Until you find out what is holding you back and sabotaging your efforts, it will be almost impossible to stick to an effective budget.
Identifying these budget bottlenecks is an essential part of the process. Review all of your money habits, from the use of credit cards to how often, and promptly you pay your bills. If you tend to run up a balance on several different credit cards, put those extra cards away and restrict your spending to a single card. If paying the bills all at once is too overwhelming, pay each one as it comes in. Identifying and overcoming budget bottlenecks is one of the best ways to get a handle on your spending.
3. Put Your Plan in Motion
Now that you know what has been holding you back, it is time to put your plan into action. Trying to do too much too soon could sabotage your efforts and cause you to fail. Starting slow is the better approach. You can work your way up to your ultimate goals later on.
If your goal is to put aside 10 percent of each paycheck for retirement, you might want to start with 1 percent. Once you are used to that investment, ramp it up to 2 percent, then 3 percent and so on, until you reach your goal.
Getting your finances on track is not an easy process. If it were, everyone would have a stellar credit score and a fully funded retirement plan. If you have been putting off aspects of your financial life, now is the time to get going.
April 27, 2016
Thinking of Buying a Home? Ask Yourself These Questions
Many people simply assume that buying a home is always better than renting, but that is not always the case. Owning a home makes sense in certain circumstances, just as renting is a smart move in others.
If you are thinking about buying a home, there are a number of questions you need to ask yourself before you call a real estate agent. Making an honest assessment of yourself, your finances and your goals can steer you in the right direction. So can asking the following questions.
How Long Do I Expect to Stay in the Home?
Over the long run, home prices have appreciated steadily, but short-term price trends are much harder to predict. As homeowners found out in 2007 and 2008, real estate prices do not always go up. Prices can decline quite sharply in just a short time, and that can leave buyers who bought at the top in a very uncomfortable position.
If you are buying a home as a place to live in for the long term, you will probably be quite pleased with its performance in the coming decades. If you are looking for a quick flip, you might be disappointed. You might indeed find a bargain and make a quick profit, but you could just as easily lose money on the deal.
Can I Afford a 20% Down Payment?
Putting a significant amount down on a home can eliminate costly private mortgage insurance and give you additional wiggle room should prices decline in the future. If you cannot make a down payment of at least 20% in the price range you are looking at, you might want to set your sights - and your price - a bit lower.
Stretching to make the mortgage payment and buying more home than you can comfortably afford is a recipe for disaster. If you think you can afford a $200,000 home, looking at properties in the $150,000 to $175,000 can get you more for your money and allow you to sleep more easily in your new bed.
How Much Will the Home Really Cost?
You can find out how much your mortgage payment will be in a matter of minutes. All you need is the purchase price, the interest rate on your mortgage and an online calculator.
The problem is those calculators do not tell you the whole story. Even the most sophisticated mortgage calculator cannot tell you how much your real estate taxes will be in 10 years, or how much you will have to spend for a new roof. Taking home repairs and maintenance into account is a critical part of the equation. If you fail to budget for such expenses, you are putting your financial future, and your home, at risk.
Asking yourself these vital questions can make the decision to buy a lot easier. If you have satisfactory answers to all the above questions, you may be ready for the financial commitment and decades-long responsibility of home ownership. If not, you might want to keep renting and saving money.
April 13, 2016
5 Smart Ways to Improve Your Credit Score
Whether you want to buy a house or just get a better rate on your credit card, your credit score will play a big role in how well you do and how much you have to pay.
If you do not know your three digit credit score, now is the time to find out. There are plenty of places to get a free copy of your credit report and your credit score - some credit card companies are even printing customer's current credit scores on their monthly statements. Once you are armed with that vital information, you can take steps to improve your standing and get a better rate on the loans you need. Here are five ways to improve your credit score today.
Put your bills on automatic pilot. One of the best ways to raise your credit score is to pay your bills on time, but it is easy for payments to slip through the cracks. Avoid late payments and credit score hits by paying your bills automatically from your bank account.
Sign up for payment reminders. If you are not comfortable with debiting your checking account automatically, at least sign up for payment reminders. These reminders are a great way to prevent missed payments and late fees.
Pay down your debt. The less you owe the easier it will be to deal with debt and avoid late payments. Put bonuses, raises and other extra money toward paying down your debt and stay on track to get rid of your existing balances once and for all.
Avoid opening new accounts or closing old ones.
Question errors on your credit profile. You should be checking your credit report at least once a year. Doing so gives you a chance to spot problems early and get them corrected. Question errors on your credit report right away - and follow up to make sure they have been corrected.
Whether you are a recent college graduate just getting your start in life or a recent retiree getting ready for a whole new chapter, having a great credit score can make things a lot easier. If your credit score has taken a hit due to past mistakes or just plain bad luck, the five tips above can help you get back on track.
March 23, 2016
Location, Condition, Price: The Top Three Features Of A Good Rental House
When you are shopping for an investment property you should make some of the same assessment criteria important that you would use if you were buying the property for yourself. A nice home in a good location will usually be safer, cleaner, and have better access to amenities. This will make the home more comfortable, pleasant and attractive to long term tenants.
Use a buyer’s checklist for curb appeal. If the current homeowner is not maintaining the exterior of the house in an attractive manner then it is likely that there will be problems with repairs prior to renting out the home. When you drive into the neighborhood are there signs of neglect for the neighborhood overall? If you see garbage in the streets and yards, graffiti on fences, walls or utility boxes, abandoned shopping carts, too many cars parked on the streets and untended homes, then it is likely that the neighborhood is in decay. The price of a house in this area is likely to be less expensive and you may even find a home in good repair, but you are placing your investment at risk in such neighborhoods.
Check the curb appeal! It’s important for buyers but equally important to attract long term tenants. Look for signs of fresh maintenance. The yard should be mowed, the bushes trimmed and in good health, the branches of trees cut back and cared for. The house exterior should be clean or freshly painted without peeling paint or obvious signs of problems. The roof should look flat and fairly new. The gutters should have leaf covers and downspouts with drainage directing pads at the bottom. Fencing should be intact and in good condition. Don’t forget the house inspection! This is your investment property that will bring you income for years to come.
The biggest mistake made by investors is not allowing enough time to find a good rental home. Spend time in the neighborhoods you are most interested in purchasing an investment property and walk around. When you walk several blocks in each direction you will develop a clear picture of the neighborhood, and you will experience the area in real time. See if people living in the neighborhood are your target rental market, students, families, etc. Can you walk to stores, transit, shopping, activities, theaters, parks, hiking trails and other areas? Pay close attention to any signs of problems in the area and talk to your real estate rental agent about issues that may not be readily visible. When you find the right house in the right neighborhood, purchasing an investment property can be an attractive option.
March 9, 2016
Make Money When You Buy
Every intelligent real estate investor understands the basic principle of making money when you buy. It’s extremely important to learn and understand this concept for your business because it can mean the difference between succeeding and failing. Forget all the infomercials on television that try to sell you on simple ways to make it rich in real estate, because the fact is, investing in today’s market takes a savvy person to make great deals happen and these great deals are carefully crafted.
The principle of making money when you buy is an attitude when it comes to investing. In a nutshell, you want to purchase a property that will make you money now and in the future. How you buy the property now will determine how successful you are in the future when you decide to sell. Focusing on what the property should be for your business in the future instead of looking at its potential for today, can place your business on the quick path to bankruptcy. There are too many inexperienced investors that pay exactly what the market commands for a property just to get in the game and have a property under their belt. If the property is being used as a rental, they find out quickly that they’re losing money every month. Or, an investor seeks to flip a house for a profit and after he’s exploded his budget, realizes his potential profit has been flushed down the toilet.
You want to focus your attention on what the property will do for you right now. If it will be a rental, then look at how you can make it cash flow as soon as a tenant is placed. If you plan to flip the property, then pay attention to what the after repair value could be and then be conservative with your listing price when it’s ready to go on the market. Make sure you stay within your budget for repairs and make sure your mortgage loan’s interest won’t significantly hurt your budget for holding costs.
Make a great deal happen through negotiations and doing your homework on the property. Negotiate a purchase price that realistically works with your numbers and gives you profit at the end of the day. The markets will shift and change over time but chances are slim that they’ll shift in your favor if you bought at the wrong time or at the wrong price. Take your time and stay focused on how this deal will help you make money today and tomorrow. If you take this approach, then you’ll have many more successes than failures and you may stay in business for the long haul.
March 1, 2016
Important Steps to Take to Prepare for Retirement
Some adults begin planning and saving for retirement immediately after graduating college and entering the workforce. Others delay retirement planning, believing that they have several decades to save for their Golden Years. However, once adults reach the age of 30 or 35, many inevitably take a closer look at their retirement plans and make a more concerted effort to prepare for their retirement years. During this decade of your life, taking three important steps will help to establish a successful retirement years down the road.
Pay Off Your Credit Cards
While some retirees carry outstanding credit card balances, you will be more financially secure and require less recurring monthly income to sustain your lifestyle if you do not carry credit card debt. Now is the time to create a debt elimination plan as it provides you with ample time to carry out that plan. Likewise, consider taking steps to eliminate other personal debts you owe, such as car loans and student loans. The ideal goal is to be debt-free in your retirement years. When this goal is accomplished, your budgetary expenses will include only the basics like food, utilities, insurance payments and other standard items. Even if you owe a considerable amount of money right now in credit card debt, many years remain before you retire. Developing and following the plan now will make it easier to achieve a debt-free status by retirement.
Review Your Mortgage
While your credit card payments and other personal debts may be a large portion of your current budget, your home mortgage payment likely is also substantial. Review your mortgage today to determine when it will be paid in full. If your current mortgage term extends beyond your retirement debt, refinancing to a shorter term mortgage may be beneficial. Some homeowners may also benefit from refinancing to pull equity out of their home for debt consolidation purposes. Others may lower their monthly payment by refinancing, and this may enable them to pay other debts off more quickly. Because each person's financial situation is different, the decision to refinance is a personal one. Taking time today to consider the pros and cons of refinancing can help you to establish a mortgage that is most beneficial for your retirement goals.
Fund Your Retirement Account
At this point in your life, funding your retirement accounts is imperative. With the benefits of compounded interest, dividend reinvestments and more working for you over time, funding your retirement accounts earlier is beneficial. If you do not currently have a retirement account, now is a great time to open an account. If necessary, make adjustments to your contributions to take full advantage of an employer-matching retirement program. Use online retirement calculators and other similar tools to determine how much money you may need in retirement. Adjust your contributions accordingly to ensure you reach your goal. Revisit your accounts regularly to ensure that you remain on track with your savings.
Whether you have already started preparing for retirement or have yet to get started, this decade of your life is the ideal time to create a more focused, detailed plan. Following these important tips now can set the stage for success with your retirement planning efforts. With several decades still remaining before you retire, the power of time is on your side if you get started today.
February 11, 2016
Can You Afford to Buy a New Home?
If you're throwing your hard-earned money away on rent each month, putting that same amount towards your own home could be an incredible advantage. However, it's also imperative to consider whether you can afford the costs associated with a mortgage, property insurance and potential repairs that might be necessary in the future.
Buying a starter home doesn't have to feel like an overwhelming experience. Here are some things to think about that might help you make a more informed decision.
Evaluating Local Prices
It's not uncommon for home prices to be unusually high in some areas, but to be relatively low within a specific city. It can be tempting to move forward with purchasing a home even in the midst of spiking prices in an effort to ensure that prices won't rise even higher. In some cases, higher market trends might be an indication that a downturn is within the near future. While the general rule of thumb for investing is to 'buy low, sell high,' forecasting the right timing to invest in the real estate market isn't always as straightforward. The most efficient way to evaluate local housing prices is to consult with a local Realtor who has adequate experience. This is an important step that could help to safeguard your financial investment.
Assess Your Personal Goals
How long do you anticipate staying in your home? Do you have plans to relocate within the near future, or are you looking to settle down for a decade or longer? What goals do you have for your new home? If you're planning on raising your family there, you should be relatively protected even during the midst of a fluctuating market. For example, even if interest rates spike a year after you've purchased a new home and it triggers a drop in demand, it most likely won't have an adverse effect on your home's equity if you're planning to stay there indefinitely. On the flip side, if you decide to move a year after you've purchased and interest rates begin to soar, you could take a financial hit.
How Much of a Down Payment Can You Afford?
Normally the minimum down payment will come from your own savings and resources, however you may receive a gift from an immediate relative that can be used as well. The amount your down payment will affect the price of the home you can purchase, the size of your mortgage and your monthly payment, and as well the amount of insurance you will pay. Work with a mortgage professional, they have expertise in these areas and can advise you!
The Bottom Line
The number of years that you plan to live in your home will make a significant impact on whether you might benefit more from renting for a while or not. Determining whether it's the right timing to buy might not have as much to do with the economy as it has to do with your personal goals and budget.
January 27, 2016
4 Ways That You Can Pay Off Your Mortgage Early
Most mortgages are taken out for 15- to 30-year periods. However, this shouldn't stop you from paying off your mortgage early if you come into the extra money. You can also save money off of interest and pay off the mortgage sooner if you take out a 15-year loan, but this means that you'll be paying much more on a monthly basis than if you had a 30-year loan. This means that you'll want to figure out what you can afford while still being able to pay off the loan early if possible. The following are four ways that you can pay your mortgage off early.
.Refinance your mortgage - You can save a decent chunk of money by refinancing your mortgage if the interest rate drops at a significant enough rate and you have a fixed-rate mortgage. How does it work? Basically, you're taking out a second loan in order to pay off your first loan, which means that the terms of the second loan have replaced those of your first. If the interest rate drops by a single percentage point, you could end up lowering your monthly payments by a couple of hundred dollars. Of course, the actual number you'll save depends on how big the loan was and what the new interest rate is compared to the old interest rate. In some cases, refinancing your mortgage won't be worth it since you won't save that much money on a monthly basis - and the loan period resets. So if you are refinancing your 30-year fixed rate mortgage two years in, you'll end up taking 32 years to pay off your loan when all's said and done. The advantage of refinancing, though, is that you can take the money you are saving every month and apply it to your mortgage payments, thereby paying it off sooner. One thing to keep in mind is that some lenders may charge a penalty for paying off your mortgage early - so be sure to ask about this before refinancing to make sure the penalty is worth the trouble.
.Pay extra every month - If you have a fixed-rate mortgage, then you'll have to make the same payment every month for the duration of your term. However, there's no reason why you can't pay more than this. Paying an extra $100 or $200 a month for the duration of your loan can help you save money on interest as well as help you pay your loan off early. However, if you get to the point where you can pay a substantial amount more every month on your 30-year mortgage, you may want to just consider refinancing to a 15-year mortgage.
.Make payments twice a month - Mortgage payments are required once a month, but that doesn't mean that you are limited to only making that single payment a month. By simply splitting your monthly payments in half and paying them every other week, you can end up paying your 30-year mortgage off four years early. This is because you'll end up making 26 mortgage payments a year, which is equal to 13 months - one more month than is required, and it shouldn't affect your budget by much since you're just splitting your regular monthly payments into two. Not only will you end up paying a little extra towards your loan every year, you'll also end up saving a ton of money in interest payments, all of which combine to contribute to being able to pay off your 30-year loan in roughly 26 years.
.Make large one-time payments - There are times where you may get a large influx in income, whether it's because you've inherited some money or received an end of the year bonus from work, just to name a few examples. Making a few large one-time payments, you can end up saving tens of thousands of dollars in interest while also paying off your mortgage a few years early. Some lenders may even be willing to lower your monthly payments after you've made a large one-time payment as well - just be sure to ask your lender if they are willing to do this before you take out a mortgage.
Nobody likes being in debt and nobody likes paying thousands of dollars in interest. These are four ways that you can not only pay your mortgage debt off early, but also reduce the amount of money you would have ended up paying in interest.
January 13, 2016
Strategies to Dig You Out of Debt
Debt. It's something almost everyone will have at some point in their life. But what happens when your debt begins to get the better of you? What options are available? Some simple strategies can help you get your debt out of a seemingly unmanageable situation; it's just a matter of choosing the right one for you.
One common debt issue is having multiple credit cards but feeling like you're getting nowhere in paying them off, even when you're making payments larger than the minimum. People tend to get caught up in making sure they pay all their cards off at the same rate, regardless of balance owing or interest rate. The solution is to prioritize your debt.
Select the card you want to pay off first and focus your efforts on it. Keep making the minimum payments on your other cards; you don't want to damage your credit rating by having late or delinquent payments reported on your credit history. For example, if you have three credit cards and are paying a sum over the minimum payment on all of them, take the extra amount you're paying on the other two, and focus on the one you want to eliminate first. This should be the one with the highest interest rate. Once it's paid off, refocus on the next, including the amount you'd been paying on the now paid off card. Doing this will feel slow at first, but will give you a feeling of accomplishment as you pay off each debt.
Another option is to sit down with your bank or credit card provider and discuss lower interest options. If your rating is still healthy, most banks will switch between different credit cards, such as moving from a cash back card to a lower interest card. Others will lower your interest rate. Keep in mind, if you don't ask, the answer is automatically "no".
You can also look at debt consolidation loans. By using your home’s equity, you can consolidate your higher interest rate debt into a well-planned mortgage. One important strategy is knowing “good debt” from “bad debt”. Work with an experienced professional in the area!
Your last option is to declare bankruptcy or to complete a consumer proposal. A consumer proposal will allow you to retain more assets than a bankruptcy, but both will effectively destroy your credit rating. If this happens, you will not be able to apply for credit from anyone but a high risk, high interest lender until seven years from the completion of the consumer proposal or discharge of the bankruptcy.
When dealing with debt there are several solutions. The key is to recognize when your debt is becoming a problem and take action. The longer you wait to deal with the problem, the fewer options you will have available to you. If in doubt, speak to an experienced advisor. A meeting will cost you nothing but time, and could provide you with some direction as to what is the best option for you.
Your solution could potentially be a combination of all of these strategies. Sitting down with an an experienced professional will help you determine whether a prioritized payment strategy, restructure of debt, consolidation, or a mix of the three are going to be the best fit for you. Most importantly, you must act before you get to the point where Bankruptcy becomes your only option.
December 22, 2015
Five Sure Signs it's Time to Downsize
As you grow older, your needs will start to change. One of the main things that you may want to consider altering is your accommodation or property. But how do you know when it is time to downsize your home? If you're approaching retirement age, keep reading and see if any of these signs apply to you.
1. You Have Too Much Room
After children have left the home, you may find that you have too much room. Although a family property may have been the perfect size for you when you were growing up, it is likely that a younger family could now make much better use of the space. Sentiment can make it hard to downsize; however, you should remember that the memories of your children's childhoods will remain with you and not with the house. Downsizing could be the much more practical option.
2. You Have Trouble Getting Around
Mobility issues affect many people that are reaching retirement age. If you are struggling to move about your home or walk up and down the stairs, it may be time to consider downsizing to a smaller property that is on one level, such as a bungalow or an apartment. This will remove the obstacle of stairs and make your home much safer.
3. Cleaning is a Chore
Cleaning the home is hardly ever an enjoyable task, however if you are finding it to be a never ending struggle, it may be time to downsize. Home maintenance should be a manageable task and not something that takes over your free time. A smaller property will require much less upkeep, giving you more time to yourself.
4. You're Lonely
Living on your own can be lonely, especially if you have previously shared your home with children or a partner. If you are craving company, it may be worth downsizing and moving to a retirement complex. A smaller property in a complex will still give you freedom and privacy, however it will enable you to socialise with other people who are in a similar situation.
5. You Can't Afford It
Whether it's mortgage repayments or utility bills that are making it hard for you financially, downsizing to a smaller property could be the ideal solution. Downsizing may also enable you to release money through an equity release scheme or property sale. This will give you some room to breathe financially and should also help to improve your wellbeing. If you are considering moving property in order to improve your finances, do make sure that you look into the estimated expense of the new property. You may be able to save money on utility bills in a smaller property, however you may be expected to pay towards maintenance costs if you are in a private complex which may offset the initial savings.
If you are currently in a property that is too large for you, it may be time to contact a realtor to see what options are available to you. Downsizing is nothing to be ashamed of, and it may just be the best decision you make.
December 9, 2015
4 Hidden Problems That Could Be Hurting Your Home Sale
One of the biggest fears that home sellers have is that their property will end up on the real estate market for months on end. This is a nightmare for a number of reasons. First of all, having your house listed on the market for more than a month or two can cause a huge strain on your finances, especially if you've just moved into a new home. Secondly, a house that has been on the market for a long period of time is less likely to sell, often because buyers come to assume there is something wrong with it. If your house has been on the market for more than a few months, and you're sure you've priced it right, then there may be an unseen factor that is hurting your chances at selling. Here are four such factors that could be hindering your home sale:
1. Messy neighbors
You may have put a lot of time and resources into making sure your home's curb appeal is top notch. However, your home's curb appeal can be affected by your neighbor's lack thereof. If you live next to someone who has neglected their yard, buyers can easily be turned off. This is especially true if your neighbor's yard isn't just overgrown and unkempt, but has also become a mini-junkyard of sorts, the landscape littered with rusted and broken lawn equipment. This can be difficult to deal with, since you can't force your neighbor to do anything about it. Try organizing a block-wide cleanup in the hopes that the neighbor will take part as well. If this doesn't work, try talking to the neighbor -- you can even offer to help. If this still doesn't get you anywhere, there's a good chance your local health or zoning department will help if your situation is truly intolerable.
2. Poor parking
Does your house require off-site parking? Does your street have weekly street cleanings that require half the road to be cleared? These are issues that can become a real nuisance to some people, especially buyers that have more than one car in their family. If there are issues with parking, then buyers are going to figure it out right away as they try to find a place to park in order to come look at your home. Consider offering to pay the first month's fee at a nearby garage or to pay for a resident parking sticker as an incentive.
3. Thin walls and ceilings
Can you clearly hear when someone is walking around upstairs? If you turn the TV on in your living room, can you hear it in every other room of your house? If so, your home probably has thin walls and ceilings. Not only will buyers be discouraged by the fact that they can hear every sound disturbance from anywhere the house, but they'll be turned off by the lack of privacy that this affords them. There are a few solutions to this. Adding carpeting to your flooring can help create sound barriers, although this is a typically costly improvement. A more affordable alternative would be to have cellulose insulation blown into your walls and ceilings. Not only can this help reduce the amount of sound that travels from room to room, it can also have a positive effect on the heating costs of the home.
4. Noise pollution
You may still have an issue with outdoor sounds leaking into your home even if you've taken care of your thin walls and ceilings. If your home is located near a busy road or a train line, then these sounds will most likely be heard inside of your house. You may have gotten used to these sounds years ago. The first thing you should do is look up local noise regulations to see if there are any nearby violations you can report. Other solutions include making sure to seal any gaps around your home that could be letting sound in, such as around your windows. You may need to caulk your windows to help prevent outdoor sound from penetrating your home. Blackout curtains can help a great deal as well.
Sometimes, no matter what you do in terms of prepping your own home for sale, there could be unseen influences that are killing your sale. These are some of the more common hidden problems that could be driving potential buyers away.
November 25, 2015
Buying a New Home Instead of an Existing Home
If you're planning on investing in real estate, then you're going to have two main options: to buy an existing home or buy a new home. An existing home is a house that has been lived in before, whereas a new home is a house that has just been constructed and has never been lived in, although the term also refers to houses that are still in the pre-construction phase. There are a lot of advantages to buying a new home, but you may want to consider the drawbacks as well before you make a final decision.
The Advantages of Buying a New Home
If you decide to buy a new home that's still in the pre-construction phase, then you'll be able to customize the house while it's being built. This means that if you want a finished basement or a luxury kitchen, you can have them integrated into the home design. What you see is what you get when it comes to existing homes, which means that you may have to invest in major remodeling if you want additional features.
No renovations necessary
There's always a chance when buying an existing home that you will need to put money into repairs and renovations, especially if the house you are buying is relatively old. You can be comfortable in the knowledge that a new home won't require any additional renovations or repairs.
A new home will boast new appliances, HVAC equipment, electrical systems, plumbing and more, all of which should run smoothly for years without needing repairs. With an existing home, many of these features may be old and outdated, not only requiring more maintenance but potentially not working as efficiently either.
Lower utility bills
New homes are typically built with more environmentally friendly materials and make use of newer -- and therefore more energy-efficient -- appliances and systems. More and more construction firms are implementing green building practices as well. All of this results in a home that's not only friendlier to the environment, but also much more energy efficient, resulting in lower energy costs for the homeowner. Many appliances and systems built decades ago are outdated and inefficient. The same goes for the building practices from "back in the day," which means that older homes are much less efficient.
The Disadvantages of Buying a New Home
A new home is typically much more expensive than an existing home. You can expect new homes to cost as much as 20 percent more than a comparable existing home. You should also keep in mind that all of those luxury features and amenities that you want when customizing a new home can add up to make the home substantially more expensive.
Less convenient location
Many new homes are built in developing communities. This means that if you are one of the first homeowners in the neighborhood, you may end up living in a development that won't be completely finished for years. You'll have to deal with the eyesore of construction all over the area. You could also face the risk of ending up being a homeowner in a development that's never finished at all because funding ran out, in which case your house loses a tremendous amount of value. Another thing to consider is that many newer developments are built farther away from amenities such as schools and grocery stores. This is in contrast to existing homes in established neighborhoods where amenities have already popped up throughout the years.
Existing homes tend to have a lot of character due to their design, whether it's an old American craftsman-style home or a Victorian-style home, to name just two of many examples. These existing homes have a lot of charm due to the amount of architectural details inherent in their style. New homes lack these details and are typically built more with function in mind, which means they lack the charm and character of older homes.
Homebuyers have a lot to consider when choosing between a new home and an existing home. New homes certainly have their advantages, from their customizability to their overall energy efficiency. However, they have their drawbacks as well, including the initial price and the potential location. Keep these advantages and disadvantages in mind and make your decision based on your specific homebuying needs.
November 12, 2015
What To Look For When Buying Your First Home
Becoming a first time homebuyer is an exciting time in an individual's life. You may already have a family that needs more than simply being a good structure to protect against them against the elements. In addition, making sure your first home is a good investment can also secure your financial position in the future. Home seekers should consider a number of important points when looking for their first home:
A Fairly Priced Home
Finding the right home at the right price is every homebuyer's dream. You may have to do a significant amount of searching to find that perfect residence. Knowing how much you can afford and how big a mortgage is available to you at a good rate is an important part of this process. Many homebuyers find that pre-qualification for a loan can help to refine their search criteria. Ask your rental agent about how pre-qualification can help you.
Enough Room For Growth
Experts note that people are staying in their first home longer than they did in previous eras. This trend is a result of less mobility for jobs and higher home prices. When house hunting, you should choose a home that can serve your family for 10 years. If you plan to expand your family, take your need for extra space into account, so that you are not forced to move into a bigger home at a bad time in the real estate market.
Updates in Key Areas
A home that has been updated in key areas is a good option for buyers. These homes will not require updating, which will increase your costs significantly in coming years. Bathrooms, kitchens and family areas should reflect today's trends, with easy-care materials and convenient storage space.
Roof and Gutters in Good Condition
New roofing can be a considerable expense for a new homeowner. You should ensure that the roof and gutters on your chosen property are in good condition. Find out how old they are and whether they have been recently repaired. Take a look at the gutter system to see if it has been maintained properly. Visual inspection can often tell you whether the current owner has kept up the property or let it fall into disrepair. A home inspector can examine the roof and other major systems of the residence to alert you to possible problems.
Features That Are Inexpensive To Maintain
A home may look beautiful but be expensive to maintain to keep that high level of desirability. Features such as a swimming pool, may be intriguing, but will require regular and seasonal maintenance. A glass-enclosed room may have impact, but it will require ongoing care to keep it looking clean and clear. Similarly, landscaping that is impressive may require expensive monthly upkeep. Keep these additional costs in mind when assessing the property.
Close To Good Schools
If you already have children, you are likely to look for a home in an area that has a reputation for good schools. Even if you don't have children, these areas offer considerable benefit when you are ready to resell the home. These areas tend to remain stable, regardless of real estate market trends. Homebuyers can choose from a number of areas known for academic excellence that will ensure that the property holds its resale value in the future.
Close To Convenient Transportation Routes
A residence that is in a good location, close to popular transportation routes, can maintain its value over time. It will be a desirable property to a new owner when you are ready to resell.
An updated home that is in good repair, easy to maintain and fairly priced, as well as close to good schools and convenient transportation routes, can ensure that your first home purchase suits your needs and advances your financial goals. Paying attention to these features will also give your home greater resale value.
October 28, 2015
The Benefits of Investing in Income-Producing Properties
Making money in any real estate venture is a difficult task, and many people don't have the skills (or the stomach) for flipping houses. An alternative to this intrinsically risky activity is to purchase a property for the long term and rent it out. These types of income properties are becoming more and more common and the following article will touch on why income properties make so much sense.
Low Interest Rates
Interest rates in Canada are currently at historic lows, and the central bank does not appear to be interested in increasing the rate any time soon. These rates allow investors to finance their properties more easily and allow them to offset a great deal of their reduced housing expenses via the income generated by renting the property. It is important to consider other costs associated with the property such as utilities, insurance, maintenance, and property taxes, but by renting out your property you are effectively having someone else pay down your mortgage for you.
Using Equity for Future Redevelopment
Holding an income property as a long-term investment means that over time you will be paying down a significant amount of your mortgage while, potentially, seeing appreciation in your property value. This long-term strategy could leave you in a position for future redevelopment of your property using mostly income (or equity) generated from your property.
Depending on your local taxing jurisdiction there are likely some tax implications to consider before renting out a property. It's important to understand the details related to property taxes, income taxes, and capital gains taxation. It is also crucial to understand what expense items are income-tax deductible. In many cases you will be able to deduct mortgage interest, utilities, property taxes, property management fees, and many other items. Some areas also permit investors to incorporate, allowing them to be taxed at the corporate tax rate while they pay themselves dividends. Each situation is different but incorporating can result in a corporate income-tax rate significantly lower than a person income-tax rate.
Grants from Municipalities
The need for higher density is a major priority for many local jurisdictions, and grant programs are becoming a popular way for municipalities to encourage investors and homeowners to add suites to their properties. These grants will not typically cover the entire cost of constructing a suite at your property, but some municipalities offer incentives of up to 25% of the construction expense.
Gaining Equity by Adding a Suite
Adding a rental unit, or multiple rental units, will typically add substantial equity to your property. This means that on top of having an investment that is generating income on a monthly basis, you will also have extra equity available if you do decide to sell your property in the short term.
It is important to remember that as a rental investment, your property doesn't need to be renovated to a brand new level. Sweat equity is great, but try to keep costs reasonable, and maintain building quality at a level comparable to the local market, and expect to see some depreciation over the life of your investment.
The biggest benefit of holding a long-term income property is the return you will see over your investment horizon. Your property will produce income regularly, and hopefully appreciate in value, and this could all be happening while you're paying down some form of housing debt. For these reasons, the returns an investor can expect to see from their purchase or development of an income property have the potential to far outperform most other investments of a similar size.
October 14, 2015
4 Homebuyer Tips To Make House Hunting More Efficient
Going house hunting can be fun and exciting at first, but the more houses you look at, the more frustrating you might become -- especially if you just can't seem to find the perfect home. No one said that finding a new home was going to be easy, but you can cut down on some of your frustration by preparing yourself better for your quest to find the perfect home. Here are four tips that should help make the house-hunting process more efficient:
1. Do your research online
Instead of driving around and looking for open house signs in neighborhoods that you like, do some research online. Not only will it be easy to find a schedule of open houses online, but you can learn more about the property by checking out the listing. There also are numerous apps, such as Open Home Pro, that display upcoming open houses. An online search can save you the trouble of going to an open house for a home that is in no way what you're looking for.
2. Create a plan
Work with your real estate agent to develop a plan of action. This should include a schedule of open houses that you should attend. Your real estate agent can help you narrow down the list to open houses that are worth going to, as well as recommend those they have been alerted of through their vast real estate network.
3. Take plenty of notes
Once you've gone to more than a couple of open houses, you're going to begin forgetting some of the smaller details you may have noticed while you were on the tour. In fact, you may begin confusing houses and forgetting which property had what feature. Jot down notes during the open house or directly following it. Your notes should include first impressions, likes and dislikes, and questions you may have. These notes will allow you to compare the different homes you've looked at; you will be able to judge a home based on its pros and cons, and help to inform your agent about your findings. The agent can then help you to prioritize new listings and find properties that fit your needs at an even more nuanced level.
4. Use open houses as a way to screen homes
Instead of arranging private showings for every home you think you might be interested in, go to the open house first to see if a private showing will be worth your time.
House hunting can take up a lot of your time, which is one of the most frustrating things about homebuying. Doing your research beforehand, creating a plan, taking notes, and using open houses as a way to screen homes will make your house-hunting process much more efficient.
September 23, 2015
Holding an Open House - Can These Tempting Tips Boost Your Chances of a Sale?
Is your home currently on the market? Are you hoping for a quick sale and want to stack the odds in your favour? One powerful option to consider is to maximize the potential of the open house showings of your home. It is no longer enough to pop a sign on your lawn, leave a plate of cookies on the counter, and hope buyers will fall in love with your home. Today's sellers need to approach a showing like a reconnaissance mission. By analyzing the competition, taking advantage of technology, and understanding buyer patterns, you can significantly increase the potential of open house showings. Will one of the following tips help you sell your home faster?
- Use a mobile app to offer potential buyers extra details. Add the app link to feature sheets and email footers. If you're fortunate enough to have numerous visitors to your open house, you may not be able to attend to them all at once. A mobile app helps visitors discover tempting tidbits until you have a moment to attend to your next set of potential buyers.
- Consider holding your open house later in the afternoon. Instead of competing with other open houses for time slots early in the day, treat guests to viewings just slightly before the dinner hour. Your home's showing can leave a lasting impression and provide an intriguing topic for dinner conversation.
- Don't wait until the day of an open house to start promoting. Start marketing well in advance by updating your email signature, posting previews to your Facebook page, and tweeting out tempting tidbits on Twitter. Make sure lawn signage is in place ahead of time and neighbourhood bulletin boards have a current promotional flyer for your home.
- Consider creating a virtual tour for visitors that might not be able to attend your showing. Thanks to the abundance of helpful photography apps, you can create panoramic shots or videos of each room without having to hire a professional photographer.
- Another option that is growing in popularity is to use a drone to photograph the exterior of a home. Check with local hobby shops to see if they offer drone photography as one of their services. Be sure to check with city officials first to ensure that there are no air space restrictions in your area regarding aerial photography. Use the video to garner attention ahead of time for your open house.
These are just a few options you can consider to boost the potential of your open house. With numerous homes for buyers to consider, making your open house stand out is crucial if you want to increase your chances of a sale. Do you think you will be integrating any of these real estate tips into your next showing?