Pay down piggish debt before larding on a home
Question: My husband and I stumbled on our dream house. It's really perfect, just what we need for our family. The problem is that we've made some bad decisions in the past and our credit rating is probably not so good. We're still working on getting out of a bunch of credit card debt, so that's working against us. How do we find a good loan that fits our situation?
Answer: You don't.
The best time to fire someone is before you hire them. And sometimes the best loan for you is the one you don't take out.
Before you know it, most dream houses become just-a-house. But a nightmare mortgage is forever. OK, just 30 years, but is seems like forever.
If you've got debt problems sufficient to damage your credit rating, somebody is trying to tell you something. You have a problem you need to fix.
It sounds like your bad decisions may not be behind you yet — it sounds like you're about to make another one.
I have written recently about over-buying a house, but let's briefly revisit the issue: no one ever just buys a new house. The first time someone utters the word "update," I'm thinking $30,000 for a new master bath, $20,000 for carpet and flooring, $15,000 for new furniture"»
You want a dream house? Great. I want you to have one, too. Here's what you need to do to get there:
First you get those credit cards paid off.
Then you work on paying off your car loans.
At the same time you are paying down the bad debt, you are putting monthly deposits into your emergency savings account until you have six months of income saved. Once you've got this done, you can buy your new cars out of this account and pay yourself back.
Once all of the above is done (yes, it will take a few years), then you can start thinking about dream houses.
A dream house is not much of a delight when the end of the road is a financial nightmare. So take care of business first.
The road to a real dream house starts with a plan, is paved with discipline, accountability and regular (monthly) action and naturally results in a happy ending.
When the time is right, wherever you find your dream house, for you it will be the most peaceful neighborhood in town.
Byron R. Moore, CFP® is managing director-planning group of Argent Advisors Inc. Write to him at 500 E. Reynolds Drive, Ruston, LA 71270, email him at bmoore@argentmoney.com or call him at 251-5858. The views expressed in the preceding commentary do not necessarily reflect the views of Argent Advisors Inc. No forecasts can be guaranteed. Argent Advisors Inc. does not offer tax or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax or legal advice.
The best time to fire someone is before you hire them. And sometimes the best loan for you is the one you don't take out.
Before you know it, most dream houses become just-a-house. But a nightmare mortgage is forever. OK, just 30 years, but is seems like forever.
If you've got debt problems sufficient to damage your credit rating, somebody is trying to tell you something. You have a problem you need to fix.
It sounds like your bad decisions may not be behind you yet — it sounds like you're about to make another one.
I have written recently about over-buying a house, but let's briefly revisit the issue: no one ever just buys a new house. The first time someone utters the word "update," I'm thinking $30,000 for a new master bath, $20,000 for carpet and flooring, $15,000 for new furniture"»
You want a dream house? Great. I want you to have one, too. Here's what you need to do to get there:
First you get those credit cards paid off.
Then you work on paying off your car loans.
At the same time you are paying down the bad debt, you are putting monthly deposits into your emergency savings account until you have six months of income saved. Once you've got this done, you can buy your new cars out of this account and pay yourself back.
Once all of the above is done (yes, it will take a few years), then you can start thinking about dream houses.
A dream house is not much of a delight when the end of the road is a financial nightmare. So take care of business first.
The road to a real dream house starts with a plan, is paved with discipline, accountability and regular (monthly) action and naturally results in a happy ending.
When the time is right, wherever you find your dream house, for you it will be the most peaceful neighborhood in town.
Byron R. Moore, CFP® is managing director-planning group of Argent Advisors Inc. Write to him at 500 E. Reynolds Drive, Ruston, LA 71270, email him at bmoore@argentmoney.com or call him at 251-5858. The views expressed in the preceding commentary do not necessarily reflect the views of Argent Advisors Inc. No forecasts can be guaranteed. Argent Advisors Inc. does not offer tax or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax or legal advice.
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