Your Credit Questions and Answers

Home loans have a different impact on your credit score than credit cards. Since most home loans last for 30 years after a few years they are an excellent credit reference. That is if you make your payments on time. The monthly grind of making the Home Mortgage Payment isn't much different after a few years than paying rent.  The rent increases over the years while your Mortgage payment will stay the same except for tax and insurance increases.  For many households the increase in house prices creates the largest family asset. The Home Loan is often the longest loan to show up on your credit report.  It also shows lenders you can make payments over an extended period of time.   The size of your Home Mortgage payment when compared to your claimed income when you Apply for a loan may also have a significant impact.  

  I am about to have my last birthday of my 7th decade.  I know, a strange way to say I am turning 69. I was 33 years old with a problem. I had no idea how credit worked. I had a couple of credit cards which I usually paid on time.  At 28 I had purchased my first house with owner financing.  The woman I bought my first house from did not check my credit as I made a significant down payment.   At 33 years old I was applying to purchase my second house and I was going to rent out my first house. We applied for a home loan from a bank, however my wife at the time had missed a payment on her credit card and I had missed a payment on my credit card. The Bank required an explanation as to why we had missed payments.  I thought it was silly as neither of our missed payments were for more than $25.  My income at the time was significantly more than needed to easily make the payments and other than a small loan on the first house we were debt free.   ...

  A HELOC is a Home Equity Line of Credit .  Any home or rental property that does not have a loan or mortgage against it can be used to get a HELOC. Normally a HELOC will be in first position on the property. How is a HELOC different from a Mortgage? A mortgage will have a monthly payment that pays down the debt on a ten, fifteen or thirty year schedule.  If you make extra payments on the mortgage you still have to make the scheduled monthly payment. You cannot borrow back the extra payment without getting a new mortgage.   The interest rate on my mortgages is usually locked in for the term of the loan.   The fees to get the mortgage were around $3,000.  There are no annual fees, just the interest on the mortgage. A HELOC will normally have a required monthly or quarterly payment of the interest on the balance owed.  The amount you owe on the HELOC can be changed up or down easily.   Let's say you have a $150,000 HELOC on...

 Let me first state I am not a financial advisor, realtor, or accountant.  What I am posting here is my opinion. The Benefits of Rental Real Estate Investing Leverage, Loan Pay Down, Cash Flow, Appreciation, Tax Benefits and Longevity. Leverage Leverage is the ability to borrow money.  If I went to a bank or credit union and wanted to borrow money to purchase or start a small business they would grin and suggest I find a rich uncle to finance it. Borrowing to buy rental or personal residential real estate is different.  There are many programs that will help you buy your first house, duplex, triplex or fourplex.  Sometimes if you plan to live in the property for twelve months you will be able to borrow as much as 95% of the value of the property.  It is usually fairly simple to purchase Rental real estate if you have 25% to put down. Loan Pay down From the very first payment part of the payment will start paying back the loan on the property.  Renter m...

Delayed Gratification and Credit go hand in hand.  Delayed Gratification is waiting until you can truly afford something before buying it. Delayed gratification is beneficial when it comes to managing credit. Do not be tempted to use credit to purchase items you cannot afford. Buying things you want with credit but do not need will get you into carrying debt on your credit card.   This can lead to high levels of debt and financial stress. By practicing delayed gratification, you can develop the habit of only using credit for necessary purchases and paying off the balance in full each month. This can help you avoid high interest charges and improve your credit score, which can ultimately lead to better financial opportunities in the future. Additionally, delaying gratification can help you avoid overspending and impulse purchases, which can lead to unnecessary debt and financial difficulties.  Take the time to consider your financial goals and priorities, you will ...

How wealth is created in 2022 or 1970.  The US suffered significant inflation through the 1970's.  The Oil Embargo and taking the US off the gold standard changed the US and the world economy.  We have seen several bubbles and crashes since then.  My view is in order to go from poor to middle class and beyond you must invest in assets.  I chose Rental Real Estate and it worked very well for me.  One of my brothers chose Stocks and it worked well for him also.  The people of the US still have the most potential in the world for financial mobility.  In other words, it is the best environment available to go from poor to middle class to wealthy.   How to Become Wealthy You do not have to make a lot of money to become wealthy. You have to invest in assets that increase significantly in value. What is the F.I.R.E. Movement? The FIRE (Financial Independence Retire Early) movement is a large group of people that are working toward retiring at ...