The Money Puzzle

What is a good credit score? That’s an important question these days, since credit requirements are getting a lot stricter. This is because of the foreclosure crisis and general recession that has caused many people to default on their credit obligations. For most people, these defaults aren’t their fault. They have to take pay cuts at work, lose benefits, or lose their jobs entirely, while expenses on other things just keep going up and up. Still, if anyone affected by credit problems now wants to get credit offered to them in the future, their credit score is going to be an important factor.

So, what IS a good credit score? The range of credit scores goes from 300 to 800, with the lowest score being the worst and the highest being the best. Most people fall somewhere in between. However, the higher your score, the more credit offers you will receive, the more likely you will be to be approved for credit, and the better interest rates you will get on that credit.

The median credit score right now is around 680. Anything over 720 is considered excellent and anything under 600 is considered poor. If your score is below 500, then it is very poor. In order to get a house loan with anything other than owner financing or a lease option, you’ll need at least a 620 in most cases (lower scores may sometimes qualify for a mortgage, but will have higher interest rates). To get credit cards, personal loans, car loans, and other types of credit, you must meet the credit requirements of the particular creditor with whom you are applying. Credit requirements differ by creditor by quite a bit, so you’ll always want to check before applying to see if it’s worth it to apply.

There is actually a very good reason to get pre-qualified for credit before applying. Each creditor with whom you apply will run a credit check on you and each credit check on your report lowers your score. You want to keep credit checks to a minimum to maintain a good credit score. Follow smart credit practices, and you can always have credit available to you when you need it.

This is the ninth installment in our credit & debt series. Be sure to check back for updates…

Foreclosure is hitting everyone from the poor to the wealthy these days, so it’s not unusual to see empty, vacant houses in the neighborhoods and lis pendens notices in the public records. If you’ve been hit by foreclosure, don’t feel bad, because you are definitely not the only one. While you may be a bit depressed about having to rent for a while (and let’s face it, you’ll have to), you will almost certainly want to buy a house again one day. So, you may be asking yourself, “How long after foreclosure can I purchase a home?”

The answer to how long after a foreclosure until you can purchase a home depends on what type of loan you’re trying to get. If you have twenty percent to put down on the house, you can often get a conventional mortgage right after experiencing a foreclosure, as long as all of your other financial and credit statuses look good. Of course, twenty percent is a lot, even for a home that’s only $100,000, so you may have to wait until you can save it up.

If you’re buying a house with owner financing or as a lease option, there’s no wait after a foreclosure, either, because you are not going through a bank to get your loan. You will be working directly with the owner of the home to set up your payments, and if you don’t make the payments, the owner simply takes back possession of the house. Your credit is typically not damaged (though you can’t use the owner as a reference for future housing), and your credit is not checked to get this type of financing. With more people facing foreclosure, more owners are offering this type of financing to potential buyers.

This is the tenth installment in our foreclosure series. Be sure to check back for updates…

Why is financial planning important? Shouldn’t conventional wisdom state that you should just spend your money as you get it, pay your bills, and then save some for a rainy day or a special occasion such as a trip or a wedding? Why do you need to engage in detailed and sometimes confusing financial planning activities that can involve stocks, CDs, IRAs, bonds, and money market accounts? You’d be surprised at all the ways financial planning can help you build a more secure future for yourself and your family. Here are the top 3 reasons financial planning is a good idea.

1.  You can protect your household against unforeseen loss of income. Let’s face it. The economy isn’t exactly great right now. You never know when you’re going to get laid off, even from a good job. You also don’t know when you might suffer an illness or injury that forces you to go out on disability and take a reduction in pay. Financial planning can help you avoid monetary hardships during these times by having enough liquid assets to pay all your bills and keep you and your family living in the lifestyle to which you are accustomed, even if your loss of regular income lasts for a long time.

2.  You can pay for big expenses without having to stress out about it or take out a second mortgage on your house. Big expenses mean things like the college educations and weddings of your children, or unexpected medical expenses. If you start saving now, using the right type of interest bearing accounts, you will have the necessary money when the time comes and won’t be scrambling to put funds together because you didn’t plan properly. A financial planner can help you decide which types of savings accounts are best for your goals.

3. You can be sure to retire in style and without being a burden to your family. Your financial planner will put you on the right path to a comfortable and financially independent retirement. These are just a few of the many reasons showing you the answer to the question, “Why is financial planning important?”

This is the first installment in our investing series. Be sure to check back for updates…

Have you ever wondered how professional values and ethics can impact career success? Believe it or not, no matter what field you’re in, these two things are very important. Even people in careers where managers may often encourage you to lie to customers, such as in certain sales industries, values and ethics will get you a lot farther than a lack of them. The main reason for this is that people appreciate honesty. So many people are used to being lied to today that whenever someone is honest with them and open about it, it makes an impact that the customer does not forget. Nor do managers forget about this. Employees can lie to managers, too, and the ones who are honest are usually the ones who are relied on more and climb the ladder of success more quickly.

It is easy to think that professional values and ethics may serve you negatively in some cases. Suppose you really screwed up on a project at work. Wouldn’t it be easier to just blame it on someone else or on some outside factors that were beyond your control? Of course it would. But this one lie could eventually lead you to become more comfortable lying about more and more things at work. Soon, you become known as the person who always has an excuse…not obvious enough with the lying to fire, but nevertheless not reliable or trustworthy. These people do not get good assignments or promotions at work. 

In the case of customers, it may seem easier to lie to a customer to get a sale. However, think about whether your product or company is one the customer may want to use again. If you lie to the customer, he or she will soon find out. This means you’ve lost that customer for future sales. However, if you tell the truth about a product or service, even if the truth isn’t great, that customer will appreciate it and remember it, and will come back to you when he or she has need of your company’s offerings in the future. This can boost your career like nothing else.

This is the seventh installment in our jobs & careers series. Be sure to check back for updates…

By Jonathan Gillham

To a family or an individual, losing their home is the most traumatic thing that can ever happen to them. With the current downtrend in the economy and people losing their jobs like dominoes falling down not being able to make your monthly payments to lenders or banks becomes more difficult if you are laid off or your working hours have been reduced. The task of even feeding your family becomes a huge problem especially if you have kids who are babies or schooling.

When you fail to make payments on time to the lender for a loan mortgage, trying to short sale your home can sometimes be rejected by the lender due to the real estate market declining by the day. In fact there are times when you are unable to sell at all. With so many problems to deal with, you may at times not understand why the lending institution or bank refuses the short sale.

Your core problem lies with the hardship letter you produce. You need to produce a hardship letter that delves right deep into the core problem you are facing. Wording your hardship letter is extremely important. It could also be the main reason for rejection so making sure it is first priority should be your goal.

The lender may want to foreclose your home as it may be more profitable especially when there is mortgage insurance involved. Lenders always make sure that the documents that you sign at the time of taking a loan mortgage, has a clause that gives them the legal rights to foreclose your property in case of defaulted payment.

When you submit a proposal to the bank to do a short sale, you may have inadvertently submitted an incomplete one.

The offer you propose may be much lower than the current sale values making it difficult for the lender to recover the monies owed by you not to mention the interest.

Although you may think your proposal is complete a lender or bank may reject it due to numerous reasons. With short sale the banks tend to lose which is the reason they are meticulous. Most people who want their homes put on short sale try to sell in exchange for the outstanding loan mortgage. There are times when you are confident that it will work, the bank rejects your proposal to dispose of you home in this manner.

You should never give up and let your home be foreclosed. There are several methods that you can use which will help you retain your home and your peace of mind. It will also help make your family feel more secure.

Double check and make sure your proposal is one hundred percent complete. If in doubt ask someone who has gone through this same procedure and succeeded. There is no doubt with foreclosure being the ‘first word’ there are many out there who would do anything to save their homes, so make sure you keep yourself updated with the trends.

Next step is to make sure you follow up on your proposal.

Try getting opinions and prices from brokers. Make enquiries so you know you are on the correct track.

To prepare these critical documents you can use the Complete Loan Modification Kit which provides you with all the forms, document templates and an extensive how-to guide.

To learn more about the loan modification process please visit: http://www.foreclosuresmedic.com

This is the ninth installment in our foreclosure series. Be sure to check back for updates…