Month: November 2013

Setting A Holiday Budget

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If you haven’t started saving yet for Christmas, it might be a bit challenging.  But it can definitely be done — you don’t need to rely on credit to have a good season. When you save a little each month all year, the Christmas season becomes something worth anticipating.

Create Your Lists and Check Them Twice
Before any dollar amounts are discussed, create a set of lists to outline your holiday priorities. What starts as a simple list of each holiday your family celebrates will eventually turn into a detailed list of the specific items you’ll need to buy for each meal and which gifts will be purchased for each person. Be thorough in yo ur list-making by including who you’ll give gifts to, any potential travel, hosting requirements, grocery lists, any necessary home improvements, décor, and miscellaneous expenses that will inevitably creep in such as postage and increased electric bills if you’ll be turning on any decorative lights. Also, don’t forget about year-end charitable giving donations as those will also impact your budget.

Count Your Pennies or better yet, track them. Remember that a budget is a fluid entity, so be diligent in your efforts to track where your money is going. Not only will you be able to identify potential overages before they happen, but you’ll also have this information as a reference point for setting next year’s budget. A bit of planning and organized action now will lead to less stressful, debt-free holidays in the future


Thinking About An FHA Loan? You May Want To Think Again.

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A number of new requirements regarding home loans issued through the Federal Housing Authority (FHA) went into effect, requirements that have mortgage brokers and real estate agents shaking their heads in disappointment. This is because it will be much more difficult to obtain an FHA loan.

Historically, FHA home loans have offered favorable terms to borrowers with less-than-perfect credit and little money to put down. For many first-time homeowners, an FHA loan was their ticket onto the real estate ladder. However, according to Yahoo! Finance some of those potential borrowers may be shut out by the new FHA guidelines.

Changes to FHA lending standards include:

  • Collections and judgments against borrowers must now be counted as debts when calculating the borrower’s debt-to-income ratio
  • Judgments must be repaid in order to obtain an FHA loan
  • Beginning in January 2014, a borrower’s debt-to-income ration cannot exceed 43%; previously, a debt-to-income ratio of as high as 55% was acceptable

All of this adds up to significantly tighter lending standards for those wishing to obtain FHA loans. Certainly, mortgage brokers and real estate agents are nervous that these new requirements will have a negative impact on their customer base. But consumer protection supporters are praising the new guidelines as important steps towards preventing those who can’t afford to buy homes from obtaining loans that will get them into trouble.

For those interested in acquiring an FHA loan in the wake of these new requirements, the best thing to do is review your credit report carefully and get current with any outstanding debts. Not only will this improve your overall credit score, thereby making you more attractive to lenders, it will also allow you to more easily qualify for an FHA mortgage.