What to eliminate from 31 ideas and what to add

There’s an older article that refers to 31 ideas. I see no reason to replicate it.  Check it out.  There are some great suggestions.

 
Here’s what I would not do (or at least be wary of):

• Make an extra mortgage payment.  This is only worthwhile if you’ve sat down with your financial planner and decided this is actually in your best interests.  It likely isn’t.

• Increase your student loan payment.  Again, only worthwhile if you’ve considered the interest rate, whether you can deduct the interest, and whether it makes sense in your overall financial plan.  Remember, paying off debts is not the same as accumulating assets.

• Seeking a lower interest credit card.  Initiating new credit can bring down your credit score, so if you’re planning to buy a house, this could be a bad idea.  Otherwise, it’s a great idea.

• Be careful about shopping for new home and auto policies.  Make sure that you’re not losing “seniority” at your insurer that you would be giving up should you change companies.

 
Here’s what I applaud and highly recommend:

• Set an automated payment toward your debt.  In this, I’m thinking about the minimum monthly payments.  Make sure those are paid automatically.  Now, you might always pay more or pay them off, but I can’t tell you how many clients thought they were paying ABC Bank for their mortgage but sent the payment to the credit card division and didn’t catch the mistake until they were 30 days late.  Yikes.

• Check your credit report.

• Reread your estate planning documents. Make sure you still agree with them.

• Walk a loved one through your affairs. 

 
Here’s what I would add:

• Call your mortgage broker and see if you can do better on your residential loans.

• See the comment near “Investments and Retirement” about checking out your medical report file from the nationwide consumer reporting agencies.  Like checking your credit report, you may discover mistakes that are causing you money.

• Consider buying long-term care insurance.

 
If we can help you with any of these items or with a referral, please call.

As home loans get harder to obtain, the number of renters increases, and so will rent

Come October 2011, buyers’ purchasing power is will reduce even further:

• The FNMA (Fannie Mae) loan limit will be reduced from $729,000 to $625,500, pushing more buyers into jumbo loans for which there are fewer lenders and consolidators.

• Jumbo loans require 6-12 months of reserves, which is more than FNMA requires.

• Interest rates will likely rise, making qualifying for a loan even harder.

• Mortgage insurance for FHA loans will increase by 30% in April 2011.

• Credit scores are on the decline.

• As home equity has vanished, buyers who want bigger homes will not have the equity from the sale of their current home to put toward the new purchase, which will likely require a 30% down payment.

What does this means?  More people staying in their homes, more people unable to qualify for a loan, more people renting instead of buying.  This is all true before we get to the conversation of the recurring suggestions in Congress that the mortgage interest deduction should be reduced or eliminated.  There are times when it’s good to be a landlord. This is one of them.  And, yes, we do investment property loans, too.  Give us a call.