Wealth Builder University Blog

Today's Bare Essentials of Mortgage Planning

I have experienced the evolution of mortgage products and services over the last 30 years through a the interest rate highs and lows at different times in the market place. As I see it, facilitating a mortgage for a borrower today is much different than even 3 years ago.

Little thought has gone into doing much of anything different in the mortgage business than just trying to keep up with consumers wanting to refnance, muscle the purchase of a new home, or just consolidate credit debt to take advantage of more credit card debt to finance lifestyle.

Now as an aging 'baby-boomer' population is looking to retirement many boomers find that Game Plan 'A' is not working out. Whether it's a credit issue, too much debt, mortgage foreclosure, or no money for retirement...these new realities are here. So what is Game Plan 'B' for this final quarter? 
It's this reality facing so many Americans that begs a solution. Unfortunately, many are unaware of their options or possible solutions.

In light of today's realities doing mortgages going forward has to be different. As I look at how the mortgage process might be reinvented, I would assert that, at least, the following items be considered as the 'bare essentials':

• 1.  Credit Score Management: What are the specific things you can do to increase your credit score?
• 2. Debt Freedom: What is your monthly strategy for getting 100% debt free in a shorter time?
• 3. Mortgage Planning: How much mortgage do you really need and for how long? How can a mortgage actually 'work for you' v. you wanting to get rid of it as soon as possible? Do you know what new banking tools are now available to automate and accelerate your debt retirement?
• 4. Prepaid Retirement: Does your  Mortgage Plan address money for  Retirement?  Are you  going to live longer than  your cash?

If you are in the middle of a mortgage process now or thinking about it, ask these questions of your loan officer. If he doesn't know or you don't feel that you can trust his answers, find someone you can trust. Don't move forward with a mortgage without these 'bare essentials' getting addressed! Insist on a Mortgage Plan that includes them.

Greg Johnson, Co-founder
Wealth Builder University

STOP! Get a Second Opinion on Your Current Mortgage

An article on Recasting.....

Test Your Financial Literacy: What Are Three Types of Money?

Most people are pretty much aware of how much cash they have in their checking account, saved or invested. This cash surplus represents their 'Accumulated Money' (Type #1). Accountants call this your 'quick assets'. Money that could be tapped in an emergency, for college, a vacation or future retirement. A reality check on your quick assets might cause you to experience a range of emotions: from a peaceful, serenity (if you're sitting on a pile of surplus cash)... to anxiety or even shear panic.

Then, I automatically shift my attention to my monthly spending...the speed at which I burn through that green fuel we call cash. Our monthly consumption defines how we 'show up in the world'; and, it defines what is accumulated throughout the year. Let's call it our "Lifestyle Money" (Type #2).

It would be nice to start the day with good news

I subscribe to many feeds from professionals in the Mortgage business.

I got one this morning from Todd Ballenger at www.kendalltodd.com discussing the latest report from The office of Federal Housing Oversight FY 2006 Performance Plan and information from a number of other sources. One of the sources was the latest data from the National Association of Realtors quoting their Housing Affordability Index

Usually the information in these reports are technical (these are no different) but there is a section that Todd says, "The housing affordability index from the NAR showed a big drop, less than 50% of American's now have income necessary to afford a house at the $221.900 average entry point level."

Can someone please help me out here.  Is the apparent problem the "low level of income" or the "average entry point level"?

Wouldn't the numbers look different if we just lowered the expectation of what the "entry point level" is?

Why is the bad news the level of income we have instead of the price we want to pay for our first house?

I look forward to better news for all of us tomorrow morning.

Alex

Check out the College of Mortgage Planning

Credit Reports Can Cost You More than Money

I always keep my eyes open fr new information and content to add the the Wealth Builder University.

This morning there was a valuable piece of information at Bankrate.com's website entitled, "How a bad credit score can cost you".

In addition to the usual issues such as higher interest charges you might have to pay, the article raised the issue of, "your credit score can decide where you live, what you drive, your insurance, where you work…".

It did not point out the percentage of "errors" found in the average credit report and that those errors may cost you the opportunity to get a job.

Many companies now use your credit report as a source of information to help them make hiring decisions!

Imagine losing your job because someone else made a mistake on your credit report.

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