Personal Finances

Home ownership – an integral part of the American dream - is the "dream that never dies." Despite a difficult economy, the dream of home ownership is alive and well and living in the hearts and mind of potential home owners. Actually, there are plenty of reasons to continue to live the dream.

Heart's Desire

Home ownership starts in the heart. The need for home and family is at the core of our being. If you are located in eastern Canada, you can even buy a home in Heart's Desire or live at your home at in Heart's Content.

Low Pricing

When house prices are at their lowest, it is the perfect time to pick up a home. Whether you are buying for the first time, moving to a bigger place, or planning an investment, buying during favorable conditions is a wise move.

No Mistake

Buying a home is hardly ever a mistake - if the buyer is aware of and prepared for the real deal. The smart home buyer checks into all important details before buying a home. They review the condition of the property and state of the neighbourhood as well as their financial obligations. When home buyers are ready for home ownership, only unforeseen circumstances can wreck their "perfect home."

Home Equity

Home equity is an invaluable asset. Home owners hope to benefit from that equity in the future. Having home equity beats paying rent - where you are just helping to feather someone else's nest.

Better Deal

According to recent studies, home owners, their families, and the community do better with home ownership. People who buy a home have a substantial investment and, according to research, better health. Children do better in school and communities grow and benefit from the participation and involvement of the home owners in the neighbourhood.

Long Term Gain

Home ownership is a long term commitment but there are long term gains for the home owner. And actually, little pain in the process, when you consider the comforts of home! It helps home owners to think of ownership in the long term. That perspective gets them in the frame of mind to live within their means and contribute to their savings.

Investment

Sometimes people buy homes as an investment. Even then, home ownership should still be seen as a long term investment. For the maximum investment possibilities, do not view home ownership in the short term.

Although many investors think about 'flipping' homes, sometimes you have to stay longer to make it pay for you. It is wise to look at buying a home as a 7-10 year investment. As well, there are tax deductions for home owners, but buyers need to be aware of the type of savings.

Home Sweet Home

Home ownership is about feelings and emotions. Of course, potential home buyers have to temper these thoughts with reality. Home ownership involves mortgages and maintenance.

You can't go to sleep in this dream. A home buyer has to be on their toes. They have to see things in the cold, harsh light of day. If home buyers are prepared for the deal, they can live the dream in their home, sweet home.

Realtors Weigh In: Is Home Ownership Still Part of the American Dream?

Are You Dreaming Of Home Ownership?

Image courtesy of enewhomesandliving.com

Often consumers feel overloaded with debt. In reality, many people try to handle too much debt for their available resources. Credit repair is possible but borrowers must be willing to admit that they are in trouble.

Addressing Debt

When it comes to debt, burying your head in the sand will just add to your burden. It does no good to avoid bankers' phone calls. Definitely, it does no good to buy 'more' to try to make yourself feel better about everything. As odd a solution as that may sound, more than one person chooses that route. When you find yourself overloaded with debt, you have to address the situation in a realistic manner.

No Instant Cure

Firstly, do not look for an instant cure. Debt settlement takes time. It makes perfect sense that settlement involves a step-by-step process. Bad credit did not happen overnight but many borrowers expect to escape from its wrath overnight –and with little pain. Credit repair does not work in that way. It takes time and effort.

Not only does bad credit build up over time but the credit can also arise from various sources. When you have major credit cards, department store cards, and maybe a loan agreement or two in your pocket, you have a disorganized mess. That tangle does not just refer to an untidy wallet. A ton of credit can add up to a ton of problems.

Debt Settlement

Yet borrowers can settle their debt. They need not expect it to be an easy process but negotiation is possible with lenders. Debt settlement is an agreement between a borrower and lender that settles the borrower’s debt. The arrangement involves a one-time payment and a lender accepts less than the original loan. The payment can be just 40%-60% of the loan.

Debt settlement can be used to settle varied types of debts - unsecured loans, personal loans, credit card debt, merchant loans, and medical bills. The earlier you request debt settlement, the best chance of the most favourable solution. The process can work better if you employ the services of a credit specialist.

They know how to negotiate with lenders. Credit experts understand the process. It is wise to have a knowledgeable professional in your corner.

Credit Specialists

Don't expect to phone your bank, request settlement, and get immediate agreement. Settling a debt is a complicated business. In fact, most banks refuse the first request.

Keep in mind that you are not the only one looking for debt settlement. A credit expert will be prepared for that initial rejection. They are familiar with the lender's approach and they know how to work within the system.

Lenders are willing to work with buyers – especially with buyers' representatives. As well, the consumer has to be prepared to work with lenders and their credit specialist. All parties must act in good faith. Lenders will put forth certain conditions. In addition, they want borrowers to bring something to the table.

Your credit specialists will work for you. Using a credit expert, you will probably settle for far less than the original debt. Credit experts can help you get maximum savings.

Consumer Proposals

Has Debt Settlement Worked For You?

Today's home buyers are facing a different marketplace than home purchasers in past decades. Even if we look at home buyers during previous economic downturns, today's buyer is not living the same reality. Yet a glaring similarity exists between modern home buyers and purchasers in other decades (or even - centuries) in US history. Home buyers have a dream.

Home Buyer Education Programs

Another fairly common thread between home buyers of the past and present is the challenge of turning that dream into a reality. The path is not always as clear as the dream. In fact, more than one financial expert is convinced that many people do not understand the home buying process. A few US and Canadian organizations are addressing this issue with the introduction of Home Buyer Education Programs.

Realizing The American Dream

Beginning in October, Freedom Debt Management, a non-profit in Boca Raton, has partnered with Citi Group to begin a Home Buyer Education Program. This initiative will help South Florida first time buyers. The company hopes to help 100 families within the first year. Appropriately, the education program, consisting of two four-hour courses, is called, "Realizing The American Dream."

Existing Need

Some people may argue the value, or indeed, the need for such Home Buyer Education Programs. Yet online forums alone suggest that many first-time home buyers are not savvy about the process. Organizing these programs is not being condescending towards the first-time home buyer.

The simple truth is that if individuals never traveled a certain path, or doesn't know the way to get there, they cannot arrive at their destination – at least not in the most efficient manner. Yet some observers question how much first-time home buyers can learn in eight-hour sessions. If the program is well-organized and has valuable content, there is, however, no doubt that a home owner comes out with a better advantage.

The Program

The director of the Boca Raton program explains that their initiative enhances people's concept of saving and budgeting. In addition, the program focuses on possible credit traps, scams, and other threats to one's financial future. Class topics include mortgage affordability, understanding credit, getting a mortgage loan, shopping for a home, and keeping a home, as well as other related subjects.

"Strong financial skills can lead our residents to be able to buy homes, be prepared for financial emergencies, and be more comfortable in retirement, which leads to a stronger and healthier community. We are here to help our residents get their financial future in shape!” says Darish Still, Director of Counseling with Freedom.

Freedom Debt Management, Inc. offers homebuyer education program

Educating The Nation

Of course, Boca Raton is not the only city with a Home Buyer Education Program. The courses (or shorter but similar workshops) are in operation across the US in places such as Stockton and Norwalk. Canadian first time home buyers are also attending classes. Tarion Warranty Corporation offers online New Home Buyer Education Seminars online to help Ontario first-time home owners understand the warranty process and coverages with new homes.

Online education available for new home buyers 

Do You See Value In Home Buyer Education Programs?

Buying a home should not start on the day that you begin looking at houses. Surprisingly, some home buyers go that route and do not prepare to make the purchase. If individuals don't get ready for a home purchase, they will find home buying much more stressful than the prepared buyer.

Buying A Home = Hopes and Dreams

Everyone recognizes home buying as a major commitment. Yet purchasing is a home is also tied in with emotions and hopes and dreams. Some potential home buyers let their emotions get the better of them. They do not focus on the financial and other practical details involved in buying a home.

The unprepared buyer can end up finding the perfect home and then realizing that nothing is in place for the purchase. When the prepared buyer finds the perfect home, everything that needs to be in order is organized at that point. The prepared buyer can enjoy the experience of finding their dream home and will proceed with relative ease through the home buying process.

Preparing to Buy a Home

1. Down Payment

Most home buyers cannot put together a down payment at a moment's notice. A down payment is a substantial expense. The amount varies according to the loan, lender, and loan program. It can be as low as 3.5% of the home's purchase price for FHA (Federal Housing Administration) loans. Down payments, however, can also be as high as 20% of the purchase price. Wherever the amount falls, the down payment reflects a percentage of the sale price of a house so home buyers have to be prepared to pay a hefty sum.

2. Closing Costs

Often first-time home buyers are surprised by the closing costs. Of course, sometimes the seller will offer to help with this expense but this scenario happens mostly in a buyer's market. Home buyers are advised to include closing costs in their budget. They can expect to pay in the range of $2700 in the US market.

3. Credit Rating

Home buyers should enter into the process with the best possible credit rating. If an individual is thinking about buying a home in the near future, they should check their credit rating – preferably, a few months in advance. Being prepared with that information means that a potential buyer has the chance to improve their credit rating.

4. Pre-approval

Pre-approvals for loans give a positive edge to home buyers. Having a pre-approved loan makes it easier to negotiate and arrive at a deal. Home sellers respond well to potential buyers with pre-approvals in hand.

5. Moving-in Expenses

Obviously, home buyers have to factor moving-in expenses into their budget. These costs can include the actual 'moving' as well as new furniture expenses or necessary renovations. Some shopping for furnishings and changes to a house can be deferred until after a home buyer settles into their new home. Yet some things have to be taken care of before a buyer moves into a new property. If basic furniture is needed or renovations are necessary to accommodate young children, these concerns have to be looked after before the move.

What Do You Think Is The Most Important Step In Preparing To Buy A Home?

"Between 70% and 80% of advisers are men, and many veterans have built careers serving a mostly male clientele."

In today's enlightened society, it is easy to forget that, once upon a time, women did not even have the right to cast a vote. Of course, the general consensus is that the modern woman has moved far beyond that point. No doubt, there is no disputing the shift in direction and change of attitude towards gender. Yet while women have advanced in every area, the system (and some in the system) have lagged behind the ladies.

Often women still face extra challenges compared to men in the same situation. That horrible truth is more likely to raise its ugly head in areas that were dominated previously by men. The area of personal finance needs some adjustment to find a balance that is fair to everyone. Keep in mind that most advisers are men and most of their clients have been men.

Women's retirement accounts have been shown to be much less than men's accounts and women have a longer life span. It is vital, therefore, that women feel comfortable with their adviser and confident about their course of action. The industry is changing and starting to understand that the system must accommodate both genders. Yet we have not reached that utopia in the world of personal finances.

Why Do Women Face Extra Challenges With Personal Finances?

1. Advisers Lose Sight Of The Client

Sometimes advisers see what is best for them - not for the client. A lady in her 60s might want to be conservative with her choices. Her 30-year old adviser may be a big risk taker. The adviser says to go with the risky option but that might not go very well for a client in retirement. The youthful adviser has years to recoup any losses but a 63-year old is in a different position. Savings can disappear quickly with the wrong investment.

On the other hand, the opposite scenario can prove true for a woman. Often she might want to take a risk but is warned against it. If the adviser thinks that there is a substantial risk, it makes sense to raise alarm bells. Yet sometimes an adviser makes the suggestion because he thinks that the risk is too great for a woman. Of course, the same individual might suggest the risky stock right off the top to a man.

2. Advisers Fail To Communicate

Generally, advisers want to sell and 'sell fast' and that approach works well with most male clients. Women investors prefer that they explain the process and show them how they can reach their goal. Obviously communication has to be central to a good adviser/client relationship. Yet often women do not feel that they are getting the whole story and advisers are just in a hurry to complete the deal.

3. Advisers Fail To See The Difference

Women have different needs than men - especially for retirement. Most likely, they earned less during their working life. The same retirement plan does not fit men and women. Yet often advisers have a 'one plan fits all' attitude.

How Retirement Planning Shortchanges Women

Do You Think Women Face Extra Challenges With Personal Finances?