I’VE KNOWN AT LEAST half-a-dozen folks who regularly carried five-figure credit card balances. In fact, I was once friends with a woman who had $100,000 in card debt—not just a staggering sum, but also a warning sign about her spending habits that I should have heeded far earlier than I did.
Folks who flock to HumbleDollar tend to be financially disciplined, so this sort of behavior will no doubt spark tut-tutting among some readers.
IF YOU’RE IN THE market for a home and a mortgage, this is a tough time, with shrinking inventory, lofty home prices and interest rates that feel overwhelming. I know all about this—because I’m a mortgage broker.
For many, today’s housing and mortgage market mean putting their homebuying dreams on hold. What if you go ahead, despite 30-year fixed-rate mortgages above 7%? I advocate controlling what you can. One of the variables that you can influence—and which can help save a tremendous amount of money—is your credit score.
THE HOUSE I GREW UP in was built in 1950 by my father, with some assistance from his best friend Joe, who was a master homebuilder by profession. After his work day as an accountant for a local hardware and lumber chain, my dad would head over to the job site and labor into the night.
My mom also provided some sweat equity, painting and even swinging a hammer at times. I was born in 1962,
AN ARTICLE PUBLISHED in The Wall Street Journal told the story of Americans in their 30s who are spending heavily and piling on debt as we leave the pandemic behind.
One family with an income of $80,000 in Lincoln, Nebraska—where the cost of living is low, with housing costs 22% below the national average—had $20,000 in credit card debt and $160,000 in student loans.
They used stimulus checks to work down their credit card debt.
IF YOU PUT DOWN less than 20% on a conventional home loan and you’re still paying private mortgage insurance (PMI), do what I did: See if you can get those pesky PMI payments eliminated.
I purchased a home in September 2017 for $341,000. The interest rate was near 4% and I put down roughly 10%. Why not put down 20%, so I could avoid PMI? My thought: If I can borrow money at an interest rate below 5% and get a reasonable rate of return elsewhere,
THE BEST FINANCIAL advice I could give to a Gen Z or millennial is this: Join a credit union. But they probably wouldn’t listen.
A GOBankingRates survey earlier this year found that fewer adults under age 40 are banking with credit unions, instead preferring national or online banks by as much as a two-to-one margin. I’ve done all my banking with a local credit union for almost 18 years, and it’s provided me with a degree of personal customer service that’s likely less common with banks.
BORROWING FROM MY 401(k) helped my wife and me buy our home in 1997. I’m grateful I was able to reach inside my retirement plan for the money we needed for the house down payment.
Experts often warn against 401(k) loans because, even if the loan is repaid, the money borrowed can miss out on investment gains. That’s certainly a risk. Still, there’s a second way of taking money out of a 401(k)—and it’s far more harmful to retirement savings.
WHEN WE MOVED to Pennsylvania in 1996, I wanted to buy an old house. After months of looking, we found a stone farmhouse close to my new job and in a good school district. There was just one problem: We didn’t know if we could afford it.
We hadn’t been able to sell our home in Maryland, so we didn’t have any home equity to bring to the table. When our real estate agent saw the asking price,
THE AGE-OLD DEBATE about not borrowing to buy depreciating assets came up again in a recent HumbleDollar article. Despite being a big proponent of debt-free living, I could relate to the story of borrowing to buy a car. In fact, I’m guilty of having gone deeply into debt in my younger days to feed my passion for music—and I don’t regret it.
I grew up listening to Indian music of various genres,
WHAT IF I SAID YOU could borrow to buy a home and have no mortgage payment? Would you think I was nuts?
Trust me, I’m not. If you’re age 62 or older, it’s possible to finance a home purchase and have no ongoing mortgage payments. How? By taking advantage of a home equity conversion mortgage, or HECM. The federally insured HECM is the most popular reverse mortgage in America today.
Now, I know what you’re thinking.
ACCORDING TO MY local newspaper, the average home price in my town rose 450% over the past 25 years. That made me ponder how I could use my home equity to fund my desired retirement lifestyle. I’m certainly not alone in thinking this way.
There are three ways you can access home equity. You can sell your home and downsize, you can take out a home equity line of credit or you can take out a reverse mortgage.
THE HIGHEST CREDIT score possible is 850, and I’ve hit that mark in eight of the past 12 months. In the other four months, I had a score of either 844 or 846 under the credit rating formula created by FICO, formerly called Fair Isaac Corp.
A FICO score between 800 and 850 is considered exceptional and gets you the best rates on loans. A score of 670 or more is considered “good,” but more doors and opportunities are available when your score hits 740,
IF YOU’RE LIKE MANY people, you’ll cringe when I mention reverse mortgages. The perception is that they’re loans of last resort for desperate retirees who don’t have any other options. But I suggest keeping an open mind. I believe reverse mortgages can be a shrewd way to unlock liquidity during retirement.
Reverse mortgages have evolved significantly, and retirees are often pleasantly surprised when they learn how today’s loans work. They find that many of the negatives they’ve heard are no longer true.
WE NEEDED MONEY to close on a new home. The mortgage process progressed smoothly—until the underwriters suddenly rejected the property right before closing. To get together the money needed to close, my wife and I had to resort to loan sharks—ourselves.
We borrowed from our IRAs. The rules allow tax-free distributions for either a 60-day rollover to a new IRA or reinvestment back into the same IRA. When we called Vanguard Group to execute our “rollovers,” the phone reps were well-versed on this short-term,
BUY NOW PAY LATER is an online payment method that’s growing in popularity. Money and investors have moved toward participating companies big and small, as they seek to stake their claim in this growing market. What’s the big deal and why is everyone excited?
Buy Now Pay Later (BNPL) allows consumers to purchase goods and pay for them in the future. Approval happens in seconds. You make a down payment, such as 25% of the total purchase,