Brutal facts are not always pretty or inviting, but they are reality. Initially brutal news may take you back and even make you feel beat up. But take heart, it is good for bad news to travel fast. You are better off to hear negative news first, before the information becomes filtered through other perspectives, or the facts fester and become worse.
Brutal facts that are not given attention move from an inflamed infection to relational and organizational gangrene. Inevitably there follows an amputation; someone or something has be severed. This extreme action could have been avoided if the brutal facts had been revealed, recognized and acted upon early. Brutal facts are our friends; so do not dismiss the messenger because the message is bad, he or she is just the delivery person.
The wise receiver of brutal facts will extract the “chaff and keep the wheat”.
A brutal fact may relate to your finances and/or your property situation. What is the reality of your cash situation? Take care of your " financial business" or it will take care of you by tumbling down around you.
So where can we find these brutal facts? Your trusted advidsor, Your spouse, parent or friend that has some "horse sense" is a good starting point. They have a vested interest in you, so normally their perception of the facts is fairly accurate. Listen with an ear to learn, but if you become defensive or argumentative they will eventually shut down. Because they care, is why they want you to be aware.
Why not change on your own terms rather than being forced to change on another’s? This is the essence of brutal facts—there are some things that need to change. You, the work culture, and your family are always in flux, so use this as an opportunity to move from mediocrity to excellence. Embrace the brutal facts, learn from them and become better.
Do you currently have concerns that need to seriously consider? Askl youself, "How do I need to change"? "What trusted advisor can assit with making the right" decision.
Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts
Tuesday, September 27, 2011
Thursday, July 28, 2011
4 Steps to Minimize the Risk of Owning a Home
Not so long ago, in a not-so-distant land, owning a home was thought of as the safest "investment" around. Fast forward to the present day, and home ownership seems super scary to many people who can afford homes, and would like to own them, but are paralyzed by the fear of buying a lemon, or having a mortgage catastrophe.
Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.
1. Stick with a fixed-rate mortgage. Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year. This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms. As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.
If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to
a fixed-rate mortgage. The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent.
2. Put - and keep - a home warranty in place. One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular.
A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters. In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary. I remember the home warranty company replacing a $900 water heater in my first home; what a GOD send!
Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty. Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.
3. Get repair bids and estimates, not just inspections. After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want. Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it. Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.
But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost. If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires. That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.
4. Buy on the 10-year plan. Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." The same advice is good for buying a home in today's real estate market. Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.
You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.
complements of
http://www.trulia.com/blog/taranelson/2011/07/4_steps_to_minimize_the_risk_of_owning_a_home?ecampaign=cnews201107D&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2011%2F07%2F4_steps_to_minimize_the_risk_of_owning_a_home
Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.
1. Stick with a fixed-rate mortgage. Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year. This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms. As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.
If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to
a fixed-rate mortgage. The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent.
2. Put - and keep - a home warranty in place. One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular.
A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters. In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary. I remember the home warranty company replacing a $900 water heater in my first home; what a GOD send!
Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty. Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.
3. Get repair bids and estimates, not just inspections. After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want. Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it. Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.
But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost. If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires. That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.
4. Buy on the 10-year plan. Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." The same advice is good for buying a home in today's real estate market. Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.
You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.
complements of
http://www.trulia.com/blog/taranelson/2011/07/4_steps_to_minimize_the_risk_of_owning_a_home?ecampaign=cnews201107D&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2011%2F07%2F4_steps_to_minimize_the_risk_of_owning_a_home
Monday, July 25, 2011
City Of North Las Vegas Values
Last week in the news we heard of the possibility that the City of North Las Vegas, Nevada may be taken over by the State of Nevada.
See articles:
http://www.lasvegassun.com/news/2011/jul/21/north-las-vegas-mayor/
http://www.lasvegassun.com/news/2011/jul/12/north-las-vegas-finances/
In the first article: “Mayor Shari Buck stresses that North Las Vegas is not at risk of being taken over by the state, but she admits the city will have a difficult time figuring out its finances for the next two years.”
In the second article:
“But a city doesn’t reach the brink of insolvency because of one hardheaded union, or even two. Recent and past moves by city officials, the unions and residents have led to this fix. North Las Vegas, once among nation’s fastest-growing cities, has seen steep declines in tax revenue during the recession, while its operating costs have risen to pay for big projects planned in anticipation of continued growth” The article continues with the poor planning on the city councils part.
Personally, it’s time for some hard core decision making….Voters. Instead of voting in politicians that have NO experience in running businesses much less know and understand how a budget works or even know what that word means. Vote in solid business owners and entrepreneurs that have a proven track record of how to stay within budget and grow businesses.
Hearing this news, I have to wonder what will this do to the already low property values in the city. The state of Nevada is in no financial condition to take over more financial responsibility.
See articles:
http://www.lasvegassun.com/news/2011/jul/21/north-las-vegas-mayor/
http://www.lasvegassun.com/news/2011/jul/12/north-las-vegas-finances/
In the first article: “Mayor Shari Buck stresses that North Las Vegas is not at risk of being taken over by the state, but she admits the city will have a difficult time figuring out its finances for the next two years.”
In the second article:
“But a city doesn’t reach the brink of insolvency because of one hardheaded union, or even two. Recent and past moves by city officials, the unions and residents have led to this fix. North Las Vegas, once among nation’s fastest-growing cities, has seen steep declines in tax revenue during the recession, while its operating costs have risen to pay for big projects planned in anticipation of continued growth” The article continues with the poor planning on the city councils part.
Personally, it’s time for some hard core decision making….Voters. Instead of voting in politicians that have NO experience in running businesses much less know and understand how a budget works or even know what that word means. Vote in solid business owners and entrepreneurs that have a proven track record of how to stay within budget and grow businesses.
Hearing this news, I have to wonder what will this do to the already low property values in the city. The state of Nevada is in no financial condition to take over more financial responsibility.
Thursday, May 27, 2010
What Goes Into My Credit FICO Score
What is a FICO score?
In the United States a credit score (FICO – Fair Isaac Company) is a number that is based on a statistical analysis of one individual’s credit report and is used to decide the creditworthiness of that individual and the probability of the individual to repay the debt. A FICO score is based on obtaining information from their credit report, typically from the three major credit bureaus: Experian, Equifax and Trans Union.
What goes into a FICO Score?
35% Payment History
30% Amount Owed
15% Length of Credit History
10% Types of credit used
10% New Credit
What is the minimum FICO score I need to get the best rate possible?
Fico scores range from 300 to 850. A credit score of 760 or higher places you in top tier. Only 15 % have scores above 800. The benefits are practically the same if you have a 760 score. The median score is 723.
How long can negative items on my credit history impact my score?
7 years. Negative items generally affect your score. As time goes by their impact will lessen. If you pay your bills and keep account balances low and do not open a lot of new ones your score can rebound fairly quickly.
What is required to clean up my credit score?
Paying bills on time and not maxing out credit. About 2/3 of your score is based on payment history. The later you are the more points you lose and how much you owe and the percentage of your credit limit that you have used. Try to keep your balances on credit cards below 25% of your available credit.
In the United States a credit score (FICO – Fair Isaac Company) is a number that is based on a statistical analysis of one individual’s credit report and is used to decide the creditworthiness of that individual and the probability of the individual to repay the debt. A FICO score is based on obtaining information from their credit report, typically from the three major credit bureaus: Experian, Equifax and Trans Union.
What goes into a FICO Score?
35% Payment History
30% Amount Owed
15% Length of Credit History
10% Types of credit used
10% New Credit
What is the minimum FICO score I need to get the best rate possible?
Fico scores range from 300 to 850. A credit score of 760 or higher places you in top tier. Only 15 % have scores above 800. The benefits are practically the same if you have a 760 score. The median score is 723.
How long can negative items on my credit history impact my score?
7 years. Negative items generally affect your score. As time goes by their impact will lessen. If you pay your bills and keep account balances low and do not open a lot of new ones your score can rebound fairly quickly.
What is required to clean up my credit score?
Paying bills on time and not maxing out credit. About 2/3 of your score is based on payment history. The later you are the more points you lose and how much you owe and the percentage of your credit limit that you have used. Try to keep your balances on credit cards below 25% of your available credit.
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