When this happens there are a number of solutions to the problem – debt consolidation is one of them.

So What is This Debt Consolidation?

 

If you owe money to various companies then it’s easy to lose track of what payments are going where. Debt consolidation simply means getting a loan to sort all of these creditors out. This means you end up with one monthly payment instead of several.

It doesn’t work for everyone of course, but used correctly it can provide a great solution to your problem. The fact is, you know what’s going out of your checking account and when!

If you owe money to various companies then it’s easy to lose track of what payments are going where. Debt consolidation simply means getting a loan to sort all of these creditors out.

This means you end up with one monthly payment instead of several. It doesn’t work for everyone of course, but used correctly it can provide a great solution to your problem. The fact is, you know what’s going out of your checking account and when!

Ok But is a Home Equity Loan the Answer?

First of all of course, you must be in the fortunate position of having your own property. If you do, then a home equity loan can solve your problems. As a homeowner you know you have cash in the property which could possibly be accessed at a fairly low rate of interest. Because of the low interest rate you can certainly benefit in terms of consolidating your debts.

Ok But is a Home Equity Loan the Answer?

Well let’s just say you have a debt on a credit card which carries an interest rate of 15 per cent. You might also have an auto loan standing at six per cent. The total balance of both loans comes to $20,000. If the interest rate average is 10.5 per cent, this would mean you’d be paying $2,000 in interest payments alone every year.

It’s very possible to get a home equity loan for lower than 5 per cent, but only if you have a good credit score. In this case the interest payments on the two loans combined, would go down to less than $1,000 per month. That can make a big difference in anyone’s language. It’s safe to say then; a home equity loan can become a great source of debt relief.

But There’s A Catch!

‘Should you de-fault on the home equity loan or the line of credit provided you could possibly lose your home outright? You must be certain the risks are very limited, and you can manage to make the payments before even considering such a loan.’

What if I Have Bad Credit?

There are some lenders out there who are willing to help individuals with poor credit – the downside is these interest rates will be quite high making debt consolidation a poor move in certain cases. It all depends on the level of debt!

Remember this all boils down to the interest rates involved but in if you plan ahead you could improve your credit score by paying one of the debts off before taking out a home equity loan.

Any Advice?

It’s always possible to lower the amount you owe by negotiating with companies instead of taking out any form of debt consolidation loan. On the other hand you could employ the services of a debt management company who can act positively on your behalf. You might even be able to slash the level of debt by up to a half. Then you could be able to manage the payments much better.

And the Upshot?

The upshot is a home equity loan provides you with an excellent option if you’re looking to consolidate debt. Should you a have a near perfect credit score then you will almost be guaranteed to save money in this way. If you have a poor credit score you’ll probably be unable to find a deal that is beneficial to debt consolidation.

It’s a personal choice as to whether or not we stay in our homes when retirement comes, or move somewhere else specifically to enjoy these years.

Some people dream of moving abroad, others like to begin afresh in a new location. But whatever we choose to do the same considerations come into play as buying any other property at any time.

Let us guide you and give you some great advice on the topic. But first you need to ask yourself a few questions?

What will you plan on doing in retirement?

• By this we mean will grandchildren come to visit?
• Will you be taking up a specific hobby or occupation?
• Do you have adequate healthcare nearby?

You really must take all of these things into consideration before making a decision.

So what do we have available?

Well let’s begin with what we call vacation homes as these can be altered slightly to become the primary home of the retiree. Quite a lot of people will have a vacation home and wish they could live there all the time! Well of course this is very possible in retirement for sure!

No-one can predict what will happen in the future so we can’t be certain of values in this area. Some Americans will be lucky enough to purchase both a retirement property and a vacation home!

And there’s the good old condominium!

These are extremely popular with retirees and of course they are great for downsizing. Those able to live in a condominium community will find a range of facilities and a wonderful opportunity to add to their social lives. Perhaps the greatest attraction here is the fact maintenance costs are suddenly reduced. This can have a big effect on your cash flow!

The downside is it can be a bit more difficult finding a condominium, but the process is very similar. You need to qualify for a loan and your credit history must be good – and of course you still need a regular income. Some lenders may even require you to make a 25 per cent down payment, so be aware of this! The crux seems to be that unlike mortgages the condo association has to qualify in order for the mortgage to be rubber stamped!

In truth the borrower doesn’t have much control over this area of the process. These lenders are following new guidelines from the Federal Housing Association or FHA. According to Fannie Mae – these requirements must be met:

• No single investor can own more than 10 per cent of the units.
• More than 50 per cent of the units must be owner-occupied
• All planned amenities must be completed if the development is more than a year old.
• No more than 15 per cent of owners can be classed as delinquent on monthly fees.
• Those borrowers who make a downpayment of less than 25 per cent will pay either an extra 0.75 per cent of the loan at closing, or a rate of interest 0.25 per cent higher!

Check this out:

So what about retiring overseas?

For many this is the dream situation – living in a paradise or gorgeous place – retiring and simply enjoying life. And it can be done big time! Low living costs and small property taxes make this sound very appealing. You can find some of the best housing markets in the world close to the United States, if not in it! There are a number of destinations overseas attracting complete communities of expatriates!

The benefits can be fantastic but you need to do your research and plan well. Some nations will have their own rules and regulations regarding how the property can be used so you must take good advice on this. Talk with a real estate professional who is experienced in the field to determine whether such a move would be practical for you in the long run.

We’ve already taken you through some very important stages of the process and now you should be ready to move on.

The next step can make the whole difference to your mission:

Finding A Real Esate Agent

It’s amazing how many people find a real estate agent through word of mouth. This could be through family, colleagues or friends.

But what you really require is an in-person meeting with an agent as this will tell you if they can meet your needs.

It also means you can ask any questions and make yourself aware of the next stage and what’s involved! You may be required to sign an agreement but make sure you understand fully what you’re signing up to.

Once this has been done then it start’s to get really exciting in real terms as now you can begin looking for your home!

Your agent might ask for a wish list so they can help you along the way. This is where the needs and wants we talked about in part one come into their own. The agent will probbaly use the multiple listing service (MLS). This will give them a run down of all properties listed by brokers and agents!

The agent will be able to work their way to a handy list by narrowing down the property type. All the usual things come in here such as the number of bedrooms, bathrooms, age of property, floorspace etc. It will also enable the agent to filter everything down further and quite quickly!

Things To Consider At This Stage!

You must consider the resale potential of any property you buy just to be on the safe side. There are appraisals carried out to substantiate the purchase price in the form of home inspections, pest inspections and even through a preliminary title report. Your agent can give you some good and thorough advice on all of this. When this is completed then you need to gather yourself together ready to make an offer!

The Offer

Unless you are very fortunate you aren’t going to find your perfect home right away. You may need to look around lots of them and keep going over your wants and needs. There will come a time however when you need to make a decision. The home will obviously have to be in your price range, and if it is you can make an offer!

The agent will help you with this also bringing all offers to the seller who will either accept it or make a counter offer! Be patient as this might involve going backwards and forwards a number of times before falling on the right deal.

So what happens next?

You will find a number of contract contingencies enabling buyers to cancel the contract without any penalty under certain conditions. Buyers will have 10 days to inspect the property for things like lead-based paint as a great many homes may have this if they were built before 1978. Make sure you are completely happy before getting ready to close.

The big sigh!

The big sigh will come freely once you’ve closed the deal and you’ve bought your first home. Closing of course transfers ownership between two parties.

The house will be recorded in the name of the buyer and the city or county will be told of the transaction, and record the buyer as the new owner!

Well done – you’ve just bought your first home – Good luck!

Every American will know buying your first home can be the most important financial decision of your life. It can be emotional and take quite a bit of time. And of course it can be difficult financially. Help however, is at hand.

So let’s take you through the complete process in the hope you will be very clear about what’s involved.

First things first!

Before we can even begin to move forward we need to ensure our finances are sorted and in complete order! Failure to do this will mean we can’t buy our first home – simple as that!

Sit down with a drink and look at your budget – your income and expenditure – then you’ll be in a position to know if you can afford your first home. Don’t estimate anything and get it in black and white. You must also get a copy of your free credit report, if this is very good then you may even get better terms on the mortgage? Do this as professionally as you can – it’s absolutely vital to get things in order at this stage!

Research And More Research About Lenders And Mortgages

Take a look at the internet and the shops in the mall, and make yourself aware of the types of mortgage lenders around you. Read up as much as you can on the mortgage process and get used to the terms and the steps involved. If you’ve done plenty of research then you’ll have the best advice and this means you can make better decisions.

You may even in certain circumstances be able to negotiate a better deal! The more you do the better it will be. Then take a deep breath and move onto the next stage and get pre-approved for a mortgage!

Pre-approval simply means working out how much a buyer can afford to borrow from the lender. It may not always be set in stone so be aware of this. Any lender involved can work out this figure by reviewing the financial records of the borrower – debt-to-income ratio, credit score and general outgoings all come into this process.

Becoming pre-approved for a mortgage is a very big step as it gives you the rubber stamp ready to make an offer for a home. The fact is sellers are more likely to listen to an offer from a pre-approved-buyer then anyone who hasn’t fully gone through the process. Now you should smiling – but there’s something very important you need to do at this stage!

Hone Your Needs!

It’s so important to work out what you really need and what you don’t, doing away with the latter, as this can help you financially. This will enable you to get the home you need for practical terms and not the home we all dream of having but can’t afford! You have to be realistic. Do you need somewhere in the city, near a school or on the city outskirts. Do you need a garage or a garden etc. All of these things are vital to the process and you’ll be glad you carried them through!

In part 2 we’ll take a look at the remainder of this lengthy process and give you great advice along the way.

Check out this: homebuying.about.com/od/buyingahome/qt/0307Buyinghome.htm