What Do You Want From Life?
Do you own a home? Do you have the security of a savings account? Can you afford to set aside a percentage of your take-home pay for investment? Everything that you do in life is connected to your credit report. There is nothing that can have as significant an impact on your life, and ultimately on your financial freedom. It’s worth taking a close look.
The Interest Rate Connection
Most people that embark on a program of credit repair have a single and valuable short term goal in mind. The most common goal is home ownership. In many cases consumers with credit issues simply can’t qualify for mortgage financing. These individuals would like to improve their credit scores enough to obtain mortgage approval. There are also a large number of people in credit repair programs that currently own homes but due to credit issues received expensive sub-prime financing. They would like to improve their credit scores enough to refinance into a better mortgage and reduce their payments.
Building Personal Wealth
Both of these goals are valid. Historically home ownership has been the foundation of almost all personal wealth. Home ownership is also likely to be the largest financial obligation that you will have in your life. And the quality of your credit will determine the size of the monthly payment associated with home ownership. The importance of this connection is enormous.
Home Ownership Costs and Benefits
Homeowners with sub-prime mortgage financing typically pay a premium of up to two percent on their mortgage rate. This interest premium on a typical $200,000 mortgage amounts to $333 per month, or $4,000 per year. In addition, sub prime borrowers are usually limited to some form of adjustable rate financing that often results in additional premium costs to them over time. There are many benefits to home ownership that may outweigh these extra costs. But there are also actions that you can take to eliminate the extra costs and the looming adjustable rate adjustments as soon as possible.
Credit Repair Works
Don’t underestimate the power of credit repair. You would do yourself a horrible disservice by ignoring the potential improvement in your credit report that can result from an informed review of the content of your credit and a systematic program of repair. Dealing with the credit bureaus can be challenging, but if you take some time you can learn how to do this yourself, or you can hire a reputable credit repair company.
Enormous Benefits
What is credit repair worth to you? The case above is pretty typical. An improvement in your credit score may very well save you in excess of $333 per month. What would this do for your life? If you were to deposit that $333 each month into a money-market account earning 5%, in ten years your account would have grown to $51,000. In twenty years this same account would have a balance of $136,000. Not a bad return on your credit repair efforts.
The Tip of the Iceberg
If instead of investing your monthly savings in a money-market account you were to apply that $333 each month to the principle balance on your new mortgage, assuming an interest rate of 6% you will pay off your mortgage in seventeen years instead of thirty. Would you enjoy being mortgage free? What if I were to tell you that your mortgage is just the tip of the iceberg? Do you want to know the real benefit of great credit? Consider every single thing that your credit will affect. Think about your auto loans, credit cards, personal loans, and equity lines. The math is staggering.
Take Action
It’s up to you. Make sure that your credit is every bit as good as it can possibly be. Don’t let anything stand in the way of taking action. You can undertake a program of credit repair on your own. Or you can check out a couple of good credit repair companies. Speak to them on the phone. Ask questions. They should have many years of experience in dealing with the credit bureaus and be experts in the field of credit scoring. There is so much to gain. Be proactive.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
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I am a contractural loan processor. Currently I have no clients but my daughter and her friend want to be pre-qualified for a mortgage. Any suggestions as to who I can give the referral to?
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If God is omnipotent, can he create a mountain of debt that he himself can't pay off?
Confederate moneys value
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A relitive left me 2 $10.00 bills 1864 confederate they are in plastic and graded by a company PMG they are graded 63 choice uncirculated and they have consecutive serial numbers. Can you tell me there value if any.
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How do I get as good a deal when I come out of my fixed period?
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what to do? I purchased my home in 06 for $744M and have an interest only mortgage for $500M. Given the collapse on the real estate market, the FMV of the home is unknown. I have tried to refinance and even though have a FI CO score of 780, I do not qualify for a mortgage. The interest only mortgage is not due until 5/11. Even though the mortgage is interest only, I do make principal payments. Should I wait until the loan matures, with the hope that the housing market would be better?
What is the proper investment ratio (stocks, bonds ...
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What is the proper investment ratio (stocks, bonds, cash, etc) for a 72 year old retiree that wants to earn but protect the assets in a $1.5 million portfolio?
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