You have great credit, always pay your bills on time, and have enough money to make a nice monthly payment on a swanky new house.  But the lender says NO to your loan application because your debt to income ratio is not ideal. You have too much debt and potential debt to qualify.

The best thing to do is to buckle up and knock out that debt as quickly as possible.  Also remember to cancel open credit cards that have a large balance available for you to spend because lenders see that as potential debt. So how do you get rid of debt methodically?   Janet Hutchins of Credit Cards Canada has some great tips, including the debt snowball,

… list all of your debts, starting with the lowest balance and up through the highest balance. List out the minimum payments as well. Next, decide how much extra you have each month to put toward your debt. Once you know this, you continue to pay the minimum balance on all of your debts. But, for the debt with the lowest balance, you put the extra toward it — on top of the minimum balance.

Read about the debt avalanche and debt snowflaking, too.  All great tips for people wanting to lead a debt-free, financially healthy life.

Many people face major financial trauma after losing jobs.  However, help is available from a number of sources if people opt to take advantage of the help available.  When someone experiences job loss through no fault of their own, a possible period of forbearance.

A friend of mine recently rode the modification roller coaster and was turned down. He turned to a HUD-approved financial planner and suddenly – with the authority given them by the power of the president – the ball is rolling again.   “Why wasn’t my client offered forbearance when you learned of the job loss? Are you familiar with what you are required to do by law?  Can you tell me where the citation is?”

For anyone not familiar with their mortgage right, especially if they have an FHA loan, read this from the NY Times,

Under the new rules, lenders are required to consider a forbearance plan among a number of options to prevent foreclosure. Most of the government programs intended to forestall or prevent foreclosure have not lived up to expectations, and many homeowners have lost their homes. Last year, foreclosures were filed against about two million properties, down from 2.9 million in 2010, according to RealtyTrac, a real estate data provider.

Seek a qualified financial counselor if you find yourself in trouble!

Taxes. No one likes them.   If you don’t agree with tax dollars are spent, your only repercussion is to vote in the next election and cross your fingers that the majority of voters made the right decision.  Yet property taxes are vitally important for the public safety and well being of a community.

What do taxes pay for, exactly?  Free From Broke outlines some of the expenses tackled by your hard-earned tax dollars,

Despite the fact that many of us think that police budgets are paid mostly with traffic citations, most is actually provided through property taxes (OK, let’s say in most jurisdictions and leave it at that!).  Again, this includes not only salary and benefits for police and support personnel, but also the acquisition of buildings and police cars.  Just as with a high local commitment to schools, a strong police presence can often have a positive influence on property values.

As a municipal employee, let me just say that police do NOT get paid enough for putting their lives on the line every day!  There are many other important services that people take for granted paid by taxpayers.  And the amount paid is very well worth it in my communities.

After remaining fairly steady (and low), mortgage rates increased this past week to 4.08 percent, the highest rate in nearly six months.

According to CNN Money,

The 30-year fixed-rate mortgage, a popular choice for most homebuyers, hit 4.08%, according to Freddie Mac’s weekly survey. That’s 0.16 percentage points higher than a week earlier and its first time over the 4% mark since October. The average rate for a 15-year loan also climbed, to 3.30% from 3.16% last week.

A friend of mine whose credit is sterling – no bumps or hiccups anywhere – is buying a new house at this time. Even with hungry lenders and a highly qualified buyer, she is struggling to get all her paperwork turned in that  is now required. It’s slow, but recovery will come.

Getting a loan is hard enough today with higher credit standards and more down payment funding necessary. But sometimes people make it difficult on themselves to get a mortgage loan – they are their own worst enemy.  How?  By DOING the things that Kathy Sheehan of Sandy Springs, Georgia says you should NOT DO.  For example,

1. DO NOT apply for any new credit

2. DO NOT change jobs

3. DO NOT make cash deposits into your checking account

4. DO NOT transfer funds from one account to another

5. DO NOT make any large purchases, such as furniture or appliances

There are several other DO NOT directions, but also some things you CAN do if you are planing to get a home loan.  Take heed, home buyers!  Her advice is superior!

Managing your personal finances can be challenging, especially when money is tight and the economy is bad. However, no matter how cushy or perilous your current situation, it’s easy to make mistakes.  Len Penzo of Money Talks News offer eight reasons people fail in personal finance, including this one:

You don’t understand the difference between a want and a need.

One of the biggest impediments to getting your financial house in order is the inability to properly distinguish discretionary and nondiscretionary expenses (otherwise known as wants and needs).

Extra credit: Understand that when taken down to the most basic level, all of us have only four or five primary needs. Those needs are food/water, clothing, shelter, transportation, and health care. Everything else is a want.

We struggle with this every day in my home. With one young-adult aged daughter and a teenaged girl at home, it’s hard to stress that only one tube of mascara is really necessary. Or that just one black shirt will do the trick.

The entire article is good.  Go read!

One in four Americans owe more money than they have in their emergency savings account.  That’s what the article published by Life Inc. proclaims.  What is most surprising to me about this statement is that the number isn’t higher.

Those hit hardest when it comes to debt versus savings, are individuals on the low end of the economic ladder and those with less education, according to the study that polled more than 1000 adults earlier this month.

For example,70 percent of those earning $75,000-plus have more in savings than credit card debt vs. 40 percent of those earning less than $30,000 per year.

With people already hit hard – especially lower and middle income families – money is getting tighter. This means more money for everyday expenses like gas, electric, food, and rent prevents people from dropping funds in savings accounts. This could be financially catastrophic if emergencies arise for families.

Remember to always try to pay yourself first, even if it’s just a few dollars every month.

I don’t know how we did it, but my husband and I somehow squeaked through our closing when we purchased the home we now live in.  Why wouldn’t we? After we wrote our contract and got it to the lender, my husband – knowing we were moving to the “country” – went out and bought a new truck.

OUCH!

That should have demolished our ability to buy a house.  Fortunately our credit score was extremely high and we made really good money (then!) that we were somehow able to get the loan approved.  We got lucky. Others are not often that fortunate.  Rhode Island real estate agent Ginny Gorman tells about the toils and troubles others people have faced,

Credit Bumps that Delay Closings. It was a topic of conversation at a 50th birthday party of one of my clients the other night that got me going on this credit bump subject again. It is those bumps that can alter your credit worthiness for awhile but especially if you are in the process of buying a Rhode Island home.

A couple of the dinner party guests were talking about someone they ‘Knew’ (not them they said) who had an unpleasant experience with a home closing due to a credit issue.

Don’t go out and buy a new truck, the new fridge, living room furniture, or any other major purchases until AFTER you close!

A good credit score is one of the most important tools a buyer has when making a major purchase – whether it’s furniture that you have to finance, a new car, or a home.  A bad credit score means you’ll have a very difficult time getting someone to agree to loan you money because you have demonstrated your inability to repay loans in a timely manner according to your credit score.

However, consumers do have the opportunity to challenge bad dings on their credit reports, but Ron Cooks a credit consultant from Ft. Hood, Texas cautions us to never challenge credit online.

I highly recommend you NEVER use their online dispute systems. It’s like the fox watching the hen house and I’ll explain why.

Reason #1: As most of you know, one factor you have on your side when disputing credit is time. The legal thirty-day limit is not a lot time for a credit bureau, creditor, or collection agency to properly investigate a dispute. The Credit Bureaus online dispute system is set up in such a way that when you use it, it makes their job not only that much easier but cost efficient. The information you put into their limited dispute fields falls right into their electronic verification system.

He makes some really good points for consumers. Thank you for sharing your insight!

An interesting phenomenon is popping up across the country – homes being used as billboards.  For families facing foreclosure, the billboards could be what saves their houses, even though the neighbors may not exactly love the bright paint.  From MSNBC,

In return for allowing the front of their four-bedroom house to become a garish advertisement, the Hostetlers are getting their nearly $2,000 monthly mortgage paid by the marketing company behind the project, Brainiacs From Mars.

In a residential neighborhood without heavy traffic, cars passing by the house slowed and drivers gawked at the vivid colors and a giant Brainiacs From Mars billboard.

I would volunteer my own house but we’re too far out in the country!