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My Least Favorite Bill

I just paid my least favorite bill yesterday.  It is a bill that arrives quarterly and without fail.  It is almost as much as my house payment, and would be more if I didn’t escrow real estate taxes and insurance.  I am talking  about my quarterly payments for life and disability insurance.

Now I do realize that I have to have the insurance since I am young enough with 5 kids still living at home.  And the good news is that I do have adequate insurance should I die.  It would be a struggle if I become disabled, but I am working on trimming down my monthly expenses so that I might be able to get by on less.

Nevertheless, I hate having to pay that much money every 3 months for something I hope to never actually use.  This provides me with another good reason to get out of debt and be able to achieve financial freedom so that I don’t have to spend so much money on life insurance and disability insurance.

Three Year Plan

In July, I took the time to segregate my debts and pull out all of the consumer debts that I would like to get paid off in 3 years.  I did this because it seemed rather convenient to look at the credit card statements for some useful information.  You know those boxes that tell you if you pay the minimum it will take you 47 years to pay off the balance, but by paying a little bit more, you can pay it off in 36 months.  That is the information that I put together in a spread sheet.

Well, now it is time to start doing something about it.  Why?  Because a third of my budget is going to these credit card, auto loan, and tax debts.  Imagine the extra money that I would have each month if I could simply pay this crap off.  Plus, the interest rate is high on some of this debt also.  The auto loans are at zero percent, so I won’t be paying those off early, but getting the credit cards taken care of is becoming a very high priority.  At the end of the three years, I would still have mortgages and student loans to pay off, but the low interest rate is not near as painful.

In fact, I have even thought about starting another blog solely for the purpose of keeping me motivated and on track.  A little online accountability can go a long way.  Not sure if I will be doing that, but the thought did cross my mind.

The Ultimate Goal

Ultimately, I would like to be able to get rid of my life insurance and disability policy because I am financially free and making some passive income.  If you have no debts and income producing assets, then you really wouldn’t need to have those types of policies.  Then I could get rid of my least favorite bill.

Readers, what would you do if you had all your debt paid off?

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2 comments - What do you think?  Posted by Cash Flow Mantra - October 13, 2012 at 8:10 pm

Categories: Spending, Credit/Debt   Tags: , , , , , ,

Home Loans: Your Nest at Last

The following is a guest post:

When there are dreams budding inside your mind about having your own nest but you have only recently started saving, the time is ripe to consider a home loan. Home loans allow you to live your dream before you own it and give you the opportunity to live with ease and comfort in the home of your choice. If you take home loans you will have to carefully consider your economic position and if you earn enough to pay those easy monthly installments with ease you can forget the woes and chill, for home loans usually allow you to pay the price of your house through a long period of about 15 to 20 years.

Who Can Get It?

There are several things that you have to take care of after the idea of taking home loans hits you. Compiling all the necessary documents is the first point to keep in mind and as the USA is a security conscious state your nationality matters. If the home loans borrower is a green card holder W-2 and pay stubs are needed. If he is self-employed, tax returns, checking/savings bank statements, copies of any stock brokerage or IRA/401K accounts are necessary. Though FICO or credit score as they are referred to in the American market matters and can pose as a stumbling block for non-residents; for Britons there is a ray of hope as UK credit ratings are accepted by certain lenders. For a visa holder, along with W2 and pay stub, copies of visa and passport are necessary. For foreign nationals taking home loans to buy homes in the USA provisions exist which need to be complied with. The next important thing that needs to be taken care of is the deposit. The higher the deposit, the lower the interest.  Therefore saving to be able to put aside a handsome sum as deposit is absolutely necessary. The thing that matters next is choosing the best possible home loans option considering one’s goals. The types of home loans and rates offered by different institutions vary and one must also be careful about the closing cost ones financier may impose on him/her.

The Process and the Processing

Getting pre-qualified for the home loan is the next step. This means that your assets and liabilities are assessed properly by the broker who gives you a clear picture about how much you can qualify for. Once the details of documentation is complete and the deal sealed, the time has come for you to get a GFE and TIL. A GFE is a good faith estimate and a TIL is a truth in lending statement and these are provided to the home loan borrower according to the Federal Real Estate Procedures Act. These itemize the costs incurred in the home loans process. A title search is another important item. It is conducted to ascertain that there are no encumbrances to the ownership of the property. Putting aside a sum into escrow accounts ensures the payment of insurance and tax amounts for the first few months. After this the loan approval process is completed and funds are ultimately disbursed. By 25 to 45 days of the process the loan is ready to be closed and the lender pays througha cashier’s check or wire transfer.  After signing the documents before the notary and paying closing charges, the house finally belongs to the borrower.

Word of Caution

This is the general outline of the home loan process in the US. However this is not the entire story. This is also the same process which precipitated the world economic crisis. Lots of home loan borrowers in the USA are still underwater which mean that their house is worth less than the amount they owe to banks or financial institutions. When real estate prices went down and interest rates went up this situation was born. However really responsible lending or borrowing do not make room for such crisis as in that case a careful restructuring of the home loans accounts by an adjustment of the principal would make the matter more bearable. After all home loans are a great option for the middle class for acquiring their home sweet home and always shall be.

Author bio: Jonny Pean is a financial consultant and writer for EasyFinance.com. He helps people to tackle their financial problems related to loans, personal finance management and home equity issues.

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Be the first to comment - What do you think?  Posted by Cash Flow Mantra - June 8, 2012 at 8:40 am

Categories: Credit/Debt   Tags: , , , , ,

Blogging Through Debt

The following is a guest post:

As a community manager for a really large debt relief company, talking about debt is part of my daily routine.  We produce a lot of content about all things personal finance, with an obvious focus on debt.  The bulk of our bloggers are our customers and they talk about what life is like when you enroll in a debt consolidation or debt settlement plan.

I feel really fortunate to have the ability to showcase content like this, which provides honest and straightforward accounts of debt relief services.  Debt help is a tough thing to research and brings some heavy skepticism.  The skepticism is justified as there are many players in this industry who do not operate with the customer’s best interest in mind.

Offering our customers a platform to discuss their experience with debt relief plans, the good and the bad, really helps to overcome some of the negative stereotypes that plague credible debt relief service providers.  It is also extremely important as a research and educational tool for people seeking help with their debt.  Consumers really need to take the time to understand what is involved to be successful with these debt solutions.

Reading blogs similar to what we feature in our community can help to level set expectations about; how long it can take to pay off your debts, what happens to your ability to secure new credit while enrolled, and what educational resources will be available while you’re participating.  We also share blogs by graduates of our debt relief plan so that consumers can see what life is like without debt and dependence on credit cards.

If you are seeking help with your debt, I encourage you to check out this checklist.  It’s a great guide to help you evaluate debt relief providers.

Suzanne Coblentz is a Social Media and Community Manager for CareOne Services, Inc. a Provider of the CareOne Brand of Debt Relief Services.

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3 comments - What do you think?  Posted by Cash Flow Mantra - March 29, 2012 at 7:44 pm

Categories: Credit/Debt   Tags: , , , , ,

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