Is Your House Haunted?

With Halloween around the corner I think that it’s appropriate to provide a little checklist.  The last thing you want is to find out is that your house is haunted.  So let’s take a little tour and check.

The Garage:  open the garage door and look around.  You probably have a car or two or three in the garage.  Do you make payments on them?  Car payments can be scary.  The average car payment is $474.  Many people lease their cars which can be even more frightening.  Make sure you check thoroughly.

The Living Room:  we love our entertainment.  Nothing is more impressive than a nice big HDTV with surround sound, a Blue Ray disc player and a plush leather sofa.  So when you enter your living room, look around.  Where did you purchase the items in your living room?  Did you pay cash or did you charge them?  Are you still making payments?  Did you get 90 days same as cash?

The Kitchen:  the most social room in the house is the kitchen.  We gather there at parties.  We hang out and talk as a family there.  Over the past few years many of us have spent lots of money upgrading to granite counter tops, top of the line stainless steel appliances and expensive water filtration systems.  You may have even spent thousands of dollars on new cabinets.  Did you save up to pay for these upgrades or did you use an equity line?

The Yard:  we love to entertain.  Noting makes us feel better than having friends and family come over and hang out in the yard.  We spend lots of money making sure that our guests have a good time.  We have intricate landscapes with built in barbeques and fire pits.  It gets really hot in the summer time here in Chino Hills.  Nothing helps to beat the heat like a nice big pool with a waterfall.  How much did you spend on your back yard?  Did you pay cash or did you finance that too?

Especially in today’s economy nothing is scarier than having debt.  Our generation has mastered the concept of over borrowing and living well outside of our means.  Our country has a negative savings rate which basically means that as a nation we spend more than we make.  We don’t really have many good examples out there since our government is doing the same thing and has been for years.

There is one man that has been screaming from the mountain tops for over a decade.  Dave Ramsey is a personal finance expert who appears daily on Fox Business Network and also on 980 AM in the morning.  He helps people who live in these “Haunted Houses” to get out of debt and get their lives back.  I suggest that if you think you might live in a Haunted House, or if you know someone who does, that you check out Dave Ramsey.  He is kind of a modern day Ghost Buster. 

www.ChinoHillsMortgageMan.com

FPU Graduation

Last night 15 more families graduated from FPU.  You have heard me talk about Dave Ramsey and his course many times in the past.  Financial Peace University is a class that helps people get out of debt, stay out of debt, and build wealth by using common sense with their money.  As we all know it is the Tortoise that wins the race every time and not the hare.

These 15 households combined to pay off $106,480.80 in debt while also managing to save $59,803 during the 13 week course.  I am attaching a video slide show that was shown at the graduation.   enjoy...

10 Years From Now

Last month I shared with you how most people ‘take advantage’ of low interest rates by refinancing their mortgage but never really gaining ground on paying off their home.  If you recall, most people keep their 30 year mortgage for only 5 years before refinancing again to yet another 30 year loan.  I also shared my personal loan information and how by making my old / higher payment, I would pay my home off in 10 years rather than 30.  If you need to read this you can find it on my blog at www.debtmanschest.blogspot.com

Let’s pretend for just a second that you live on less than you earn, stop borrowing money, and you off your house in 10 years.  It can be done.

·         What would your life look like without a mortgage payment?  Could you visit your college aged children whenever you wanted no matter where they are?  Would you be able to help them graduate from college without any student loans?   Imagine the great graduation gifts you could give.

·         Would you keep your job?  If you like your job then sure but imagine the stress of downsizing melting away because you have no financial obligations.  Would you quit your job and do something fun just because you can?  Perhaps you could go back to school and get the degree you never achieved or the certification you always wanted.  There sure are a lot of options when you don’t have a mortgage.

·         Where would you go on vacation?  Better yet, where wouldn’t you go on vacation.  I always dream of my sons playing soccer in college.  My dream is to go to every game no matter where or when.  How cool would that be.  I am also a fan of the Pittsburgh Steelers.  I have never been to Heinz Field but as soon as I can I will be a season ticket holder and fly back for games, just because I can.  What would you do?

·         Who would you give your money to?  Your church?  An orphanage?  Imagine all of the wonderful charities right here in our own fantastic city that are doing amazing things for people in our community that you could support. 

Most people don’t believe that paying off your home is possible.  I am here to tell you that I teach people just like you and me how to do this.  Not with made up numbers and inflated projections but with your income and your budget.  Its called Dave Ramsey’s Financial Peace University.  I have been teaching it now for over 2 ½ years and have helped hundreds of people to get their lives back and start dreaming again.  Hope is a four letter word for so many in this economy but it doesn’t have to be.  As for me and my family we refuse to participate in this recession.  You should join us.  For more information on FPU please email me at Alex@ChinoHillsMortgageMan.com

Who Said 30 Years?

If you follow my articles each month, you know that I don’t write about mortgages.  My goal is to impart wisdom as it relates to your personal finances.  I teach a Dave Ramsey lesson each month.  This month however, the topic is mortgages.  You see, over the past few years I have become the mortgage man who tells you to STOP BORROWING MONEY!  Every other lender out there is telling you that now is the time to refinance.  Well, perhaps, but you have to consider more than just the rate.

When I talk to folks about their mortgage I always recommend the 15 year fixed.  Why?  Well, the 15 year mortgage always gets paid off in 15 years or less.  The 30 year mortgage never gets paid off in 30 years.  It get’s refinanced over and over.  People need money so they pull equity out.  Most people keep their 30 year loan for an average of 5 years and then refinance back to a 30 year again…never gaining, but losing ground on paying off their home.

Let’s run some numbers to put this in perspective.  Here is a real life situation for you to consider.  This is my personal loan scenario.  I had a loan amount of $334,582 on a 30 Year Fixed at 6.25% with a monthly payment of $2,060.08.  I recently obtained a loan modification and my lender reduced my rate to 2% for the first 5 years and extended the loan to 35 years in order to bring my payment down.  My new payment is $1,102.91. 

What are my options?  There are several, but let’s consider these two…

1.       If I make every payment as planned I will pay $615,808 over 35 years.

2.      If I continue to make my old payment of $2,060 I will pay the loan off in 15.8 years and pay a total of $390,576.  That is a savings of $225,232!  How can I afford to NOT do this?

Most people only dream of paying off their home but don’t think it is a reality.  They continually refinance and use the savings to buy more stuff.  If you are one of the fortunate ones who is able to refinance or obtain a loan modification, please make the right decision and start paying down that mortgage.  I plan on taking no more than10 years to pay my house off.  My kids will still be in high school and we will be 100% debt free. 

Don’t believe it takes 30 years to pay off your home.  Where did the 30 year mortgage come from anyway?  I am not sure but I suspect the idea came from a banker.

With rates at 4.625% on a 30 Year Fixed with no points you probably should refinance.  I strongly encourage that you to have a plan so that you finish paying it off in at least half the time. Go For It!  You can always reach me at    alex@ChinoHillsMortgageMan.com