Does Refinancing your Home really Save you Money?

by Justin Weinger on March 26, 2015

The Fed recently stated that, when unemployment falls below 6.5%, home financing rates are going to start going up again. What that means is, if you’ve been contemplating refinancing your home, now is probably a good time to do it.

That being the case, you definitely need to look into the Home Affordable Refinancing Plan, or HARP. HARP is a program created by the federal government a number of years ago that allows American homeowners to save quite a bit of money on refinancing in spite of the major decline in home values in the last few years.

Using HARP, homeowners can refinance their homes at rates that are surprisingly low and, in most cases, reduce their monthly mortgage payments significantly. Last year for example, the average savings was about 33% which, on a mortgage loan of $200,000, equals just north of $4100 in a year in savings. Using the program nearly 40% of American homeowners were also able to shorten the length of their mortgage loans at the same time.

HARP started in 2009 and is set to expire at the end of this year, in December 2015. That leaves American homeowners just under 12 months to take advantage of this plan and its excellent features. There is one caveat however, and that’s the fact that you must be current on your mortgage payments in order to use the program.

It was put into place because the government wanted to keep homeowners from having to foreclose on their mortgage, and the program allows them to do this by lowering their mortgage to more palatable and affordable levels. Banks aren’t exactly happy with the program because it allows homeowners to pick and choose among lenders, and doesn’t limit them to the rates their current lender offers. It also helps homeowners who have a loan-to-value home that’s less than 125% and doesn’t require them to take out private mortgage insurance.

The benefit to homeowners is obvious, including the ability to refinance their home even if the value has dropped significantly. With an average monthly savings of approximately $350, HARP is definitely a program that you should take advantage of if you’re considering refinancing, but do it fast because, as we mentioned, it’s going to expire in less than 12 months.

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The Best Tips for Building Wealth in 2015

by Justin Weinger on March 19, 2015

Every time a new year comes around, it seems that most consumers have renewed energy to work on their goals and dreams for the future. No matter what those goals or dreams happen to be however, there’s no way to achieve them without a healthy dose of cash. Even something as simple as spending more time relaxing and enjoying life with your family takes money so, in 2015 and beyond, use the following Tips to build your wealth so that, whatever goal or dream you happen to have, you can more easily fulfill it. Enjoy.

Tip #1: Create a simple budget and stick with it

We’ve talked about this many times here on our blog and, because it’s so vitally important, were going to talk about it again today rather briefly. Simply put, without a budget in place, it’s very difficult to pay down debt, save more money and sock away money for, well, anything. There’s really no excuse to not create a budget these days because there are plenty of budget apps and websites that you can use to do it quickly and easily. So yeah, just do it.

Tip #2: Create a plan to pay down your debt

if you follow Tip #1 and create a simple budget, paying down your debt is going to be much easier. The reason is that you’ll know exactly where you can cut back on certain expenses and, once done, use that extra money to start paying down your credit cards, student loans or whatever other debt you might have. Pay off the debt with the highest interest 1st and, once that’s done, start paying off the next. Pay, rinse, repeat.

Tip #3: Do whatever you can to earn extra money

Yes, we know that this isn’t easy. It is possible however, and the average consumer has many different skills that they don’t use or used infrequently. Carpentry skills, blogging skills, writing skills and the like can all be used to make a few extra bucks and, today with the Internet, it’s much easier than ever before. Finding jobs on Craigslist, selling services on Fiverr or using your ride-on mower to take care of lawns around your neighborhood can all put a few extra bucks in your pocket and, if you put those bucks towards paying down your debt or stuff them into an IRA or emergency savings account, you’ll be amazed how much extra money you have at the end of the year.

Tip #4: Treat yourself every so often

Let’s face it, keeping track of every dollar and watching what you spend every day can become a bit boring and tedious. It works, don’t get us wrong, but occasionally you need to remind yourself why you’re being so frugal and careful with your money. That’s why, every once in a while, it’s okay to splurge (but just a little) on something like a new pair shoes, a weekend getaway and the like. Just make sure you don’t put your little splurge on credit but instead use cash to pay for it.

Tip #5: Keep visual reminders around to show you why your being so careful and frugal

if you dream of retiring along the coast and spending your days idling away on your fishing boat, keep a photograph of the boat you dream of somewhere that you’ll see it regularly. Whether it’s a dream vacation, a house in the suburbs or the South of France, reminding yourself through pictures is a great way to stay focused on your goals and dreams.

The 5 Tips above aren’t the end all and be all to building wealth but will definitely put you on the right track. If you have questions about personal finance, investing, retirement or anything of the sort, please drop us a line or send us an email and we’ll get back to you with answers and advice.

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Risks of Not Paying Your Taxes

by Justin Weinger on March 12, 2015

Many American consumers, for one reason or another, don’t pay their taxes. Either they can’t afford to pay, they forget to pay or simply don’t believe that they should pay. But here’s the question; what actually can happen if you don’t pay your taxes?

That answer isn’t exactly specific, by any means. For many Americans it means a lot of guilt, to be sure, but in most cases it doesn’t automatically make someone a criminal in the eyes of the law. The problem however is that the longer it takes you to actually start paying those taxes and make things right, the more it will end up costing you in the end.

The good news is that, when it comes to working with the IRS if you’re behind, they’re actually pretty easy to deal with. Of course, you have to make the effort to contact them and show that you want to make things right and, even if you can’t pay the taxes they owe, there are still some steps that you need to take.

Many consumers believe that they will be able to avoid a large tax cost if they don’t file their tax return and, while that might be true in the short term, it will make a big problem even bigger in the long term. Along with late fees on the taxes that you already owe, failure to file fees and interest are adding up month after month, year after year.

Keep in mind that there’s a difference between filing your taxes and not paying them and not filing taxes at all. If you don’t file your federal tax 1040 form the IRS can charge you 5% of your unpaid taxes every single month that your return is late, up to a maximum of 25% of your total tax bill. Also, after 60 days, you’ll be charged either $135 or 100% of the taxes you owe, whichever of those two amounts of money is less. If you have a medical emergency or other situation that keeps you from paying, you need to document it so that you can possibly avoid these fees. You can also apply for an extension so that you can file your taxes late, up to the 15th of October.

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Bankruptcy is an unfortunate reality for many consumers. Even worse is that the decision to file for bankruptcy is often times made after a person’s wages have begun being garnished, or a levy has already been put on their bank account.

Today’s blog will help you to take the steps necessary to use bankruptcy correctly and do it before creditors make it much harder. We don’t necessarily condone filing for bankruptcy but, if that’s your plan already, taking the steps will help. Enjoy.

Step 1: Know where you stand

If you don’t know exactly where you stand financially, the chances that you will react after creditors and debt collection agencies have started taking your money is a real  possibility.

Step 2: Request reports from the 3 major credit bureaus

Following Step 1, getting your credit reports from the 3 major credit bureaus will help you to know more about all of your accounts, old and new, and help you prepare.

 Step 3:  Check Republic records

One of the easiest ways to find out if a bank levy or garnishment is set to begin is to check public records and see if a creditor judgment shows up there.

Step 4: Use your credit report to see if your current employer is listed

You can bet that all creditors and collection agencies do their very best to find you, your bank and your employer. Looking at your credit report is a great way to do that and, if your employer is listed there, you might try having that information removed.

Step 5:  Dont keep a lot of money in your bank account

It used to be that creditors had to levy the  bank branch  where you opened your account but that’s no longer the case. In fact, all they need to do is provide the bank’s corporate office with the judicial levy  authorization order and they’ll have access to your money. If they levy that account before you file for bankruptcy, you probably won’t be getting it back.

Step 6: Avoid a bank levy or garnishment by setting up a payment plan through your creditor first.

Step 7:  If you cant afford  to set up a payment plan and pay your bankruptcy attorney, pay your bankruptcy attorney only

Without their help your bankruptcy won’t progress and you’ll end up losing anyway.

Step 8:  Make sure your case gets filed

Many consumers pay their bankruptcy attorney but never send back the paperwork to file the case. Then, after their creditors begin garnishing their wages or levying their bank accounts, they rush to get it done but it’s too late. Don’t do that. File your case as quickly as possible after your attorney has been paid.

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