Excuses & Wealth Building

Learn how you can fly higher and build wealth more efficiently if you leave all excuses behind…

 

In the current economy it can seem difficult to achieve your dreams.

With COVID 19 running rampant in many parts of the United States and many areas in the World it can often seem impossible or improbable to achieve what you may have planned prior to the COVID 19 economic environment.

Even so, if you leave all excuses behind and you pursue (you must decide to get started) what you desire at your highest level—the success that you desire can still be in your future.

It is important that you realize that adversity of all kinds will occur throughout your lifetime and the sooner that you realize that, the more effective you can be in responding to that adversity.

You can utilize a proactive approach as things in your life improve, along with a mindset of resilience to move forward effectively as you build wealth by doing the following:

 

1) Determine where you are at financially

You can leave all excuses behind at this time by making a real commitment to manage your finances better at this time, and throughout your lifetime.

You can use personal finance statements along with the goals that you desire to occur most, to achieve at a higher level as you move toward the goals that you desire most.

 

2) Know how credit affects you and your family

You can leave all excuses behind by having mastery of your credit and knowledge of how YOU can use credit effectively throughout your lifetime.

You can manage your credit file and credit score effectively if you have working knowledge of how credit works and you apply that knowledge to your unique credit situation.

 

3) Have a comprehensive picture of your finances and financial future

If you approach your finances in a comprehensive or all encompassing manner you can “see the whole picture” so to speak, as opposed to looking at your finances in isolation or in a piecemeal approach.

You must know how your insurance, investments, taxes, education funding, estate planning/wills and retirement planning and the need to create a properly funded emergency fund at the earliest time possible all correlate, so that you can leave all excuses behind–once and for all.

 

Conclusion

It is important that you look deep inside and make the decision to manage your finances at a level that is the best that is within you.

By doing so you make “your path” toward your ultimate success much more likely to come true.

All the best to your path to success as you now know what you need to do—as you pursue what you desire to come true—at a level that is the absolute best that is within you…

 

As added motivation in these difficult times the creator of TheWealthIncreaser.com will leave you with a poem that was inspired by hummingbirds and other birds that were seen this summer that can hopefully inspire and help you move forward in a more efficient manner:

 

Humming Coming at You so that You can make Your Dreams Come True

Mourning dove from up above showing you love

Hummingbird fly’s down low—showing you the way to go

Hawk coming down from up high toward the ground—to inspire you to turn your life around

Mourning dove comes to your fence to show love and recompense

Humming coming at you to ensure that you make your dreams come true

Humming coming at you to make sure you do what you need to do

Thrasher running on the ground trying to urge you to master your credit so you can win

Wren coming in to make sure you are ready to use your pen

Butterflies go high so that you can ask why and put your plan in place to exceed the sky

Wasps come to sting so that you can focus your dreams and be more than it now seems

All this and more is what is in store

Even so pursue what you desire—at a level that will take your success higher—so that you can achieve from wire to wire

Excuses no more—as you soar…

 

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Decision Making & Wealth Building

Learn how you can” turn the curve” and “make better financial decisions” in your life so that you can avoid the risks that have detoured so many…

 

In life there will be many turns and twists that you will have to make and it is you who must put yourself in position to make the optimal or best decision as it relates to your finances and financial future so that you can turn when and where necessary and smooth out the curves that may appear too sharp at this time.

 

While others remain idle or focus on the wrong things, you can in a relatively short time period, work on what you need to do to move toward making your dreams come true.  By knowing where you now stand financially and putting in place systems that will allow you the opportunity to make better financial decisions you can position yourself and your family for a lifetime of success and put yourself in position to pursue what you desire at a level that is your absolute best.

 

Isn’t it time you see your future with the clarity that will allow you to move to action in a manner where you truly believe you will achieve the financial outcomes that you desire!

 

By seriously looking at how you make financial decisions and digging down deep within your heart and mind you can put together a plan that allows you to turn the curve in your financial life and avoid financial strife as you move to action daily without having to think twice!

 

You can implement the following steps in your life at this time to help ensure that you will achieve your financial and life goals in a more timelier manner.

 

Determine where you are at right now…

You must know in “certain terms” the state of your financial affairs and you can do so most efficiently by creating a budget or cash flow statement so that you can get started fast on moving toward the goals that you desire or the goals that will help you achieve at a higher level throughout your lifetime.

 

By knowing your income and expenses you can get to a point where you know if you have discretionary income that will allow you to make better decisions that will lead you toward reaching your goals.

 

Determine how you will move forward…

Once you know your discretionary income and monthly inflow and outflow of funds you can devise the steps that you need to take to reach your goal(s) in a more efficient manner.  Will you utilize credit and cash to achieve what you desire and will you save now to make what you want most occur in your future?

 

Will you utilize written plans and “really think” about your future in a way that says, I am truly sincere in the effort that I will put forth to reach my goals even when twists, turns and curves appear in the horizon?

 

You must determine the best way to move forward based on your money management personality and the goal(s) that you desire most!

 

Determine how you will consistently do and review in order to ensure that your dreams will come true…

Your daily action on a scheduled basis and your desire to achieve at a level that is the best that is within you along with periodic reviews of how you have performed will greatly enhance the likelihood of successfully achieving the goals that you outline.

 

Will you wake up daily, weekly, monthly or annually (depending on your need to do so) and include in your routine a “time frame” to look at your finances from a comprehensive perspective and determine if you can make improvement?

 

Conclusion

By making the decision early on that you will not allow adversity or any other negative factors influence your future in a negative way you can put yourself in position to move forward–starting today.

 

You no longer have to approach the winding roads of life with fear because the success that you desire is now near!

 

It is imperative that you are “clear on your goals” and you “make the decision” at the earliest time possible to “confront your finances” as the decision to do so is often the key decision that you need to make that will take you toward achieving lasting (lifelong) success in all areas of your finances.

 

All the best to your decision making and future success…

 

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Reflections & Wealth Building

Learn about “3 Steps” that you can take to work toward financial freedom…

 

Learn why as you go down the highway of life you must reflect back on your past experiences if you desire to build wealth more efficiently in your future…

 

In life there will be times when you will wonder why the wealth building success that you desire to happen is not happening when you want it to.

 

Even so, you must not complain or be weary.  By reflecting back on the financial decisions that you have made in your past you can set yourself up for a more prosperous future.

 

By reflecting on your past experiences, being more discerning on what you expose yourself to “at this time” and improving on your “mental thought environment” you can put yourself in position for a more prosperous future.

 

Learning from your past through reflection…

The primary purpose for looking back is for improved guidance and direction.

 

Although “do it now” may be your attitude, building wealth at the level that you desire will depend on your current income and expenses on a monthly and annual basis and how effectively you manage and plan for your future.

 

What can you do to change the direction that you are going?  You can prosper if you reflect back and make a sincere decision to achieve at your highest level of excellence now and in your future.

 

Peace, joy and happiness can occur and remain in your life if you learn from your past and make a sincere effort to improve your future.

 

By reflecting back on your money management skills, how you manage your credit and how you manage your finances from a comprehensive perspective you open up real possibilities for achieving real success, now and in your future!

 

Reflecting back on your money management skills…

It is important that you yourself have a meaningful understanding of how you manage your money on a daily, weekly, monthly and annual basis as by reflecting back on how you manage your finances you can determine your money management personality and make improvements where necessary.

 

Your goal must be to achieve at a higher level of excellence when it comes to managing your finances in an overall manner on a consistent basis.

 

In short you want to understand how to manage your finances in a more intelligent, consistent and proactive manner so that you can achieve more during your relatively brief stay while you are here on planet earth.

 

Reflecting back on your credit habits…

Furthermore, you must ensure that you manage the credit affairs in your life in a way that puts you in control–and keeps you in control.

 

By looking back and visualizing how you have managed your credit and looking at your credit in a new and more inspiring way you can enhance your knowledge of how credit works and get to a point where you can use your knowledge of credit in a way that almost effortlessly works for you and your family throughout your lifetime–not against you.

 

Reflecting back on your ability to comprehensively manage your finances…

You must reflect on how you have managed your insurance, investments, taxes, emergency fund, education planning, estate planning/ wills and retirement planning.

 

You can then put yourself in position to learn what you need to learn to increase the likelihood of successful outcomes in the various areas of your finances at the various stages in your life.

 

Conclusion

It is important that you are curious about your finances and you reflect back in the areas mentioned above so that you can achieve more throughout your lifetime.

 

Why live your life daily with anxiety and uncertainty on the inside when you can choose to embark on a highway to success that has fewer roadblocks and a clearer path toward success.

 

And just as the reflectors on your bicycle when you were younger provided protection from others to help keep you alive and help get you to where you desired to go–so too can reflecting back at this time protect you against financial dangers that may occur in your future–to help get you to where you need or desire to be.

 

You no longer have to wonder about what lies in your future if you do what you need to do.

 

You can achieve your dreams (and more) if you decide at this time to seriously address the areas of your finance that you may have neglected in your past.

 

All the best toward your future success…

 

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South Fulton Demographics

Learn about the Demographics of South Fulton so that you can make a “more informed” home buying decision…

 

Many visitors who move to Georgia or who are now in Georgia and want to become a home owner are interested in learning about affordable communities that they can move into in the south metro area of Atlanta.

 

In this discussion we will provide you “access to” demographic data for the South Fulton area so that you can make a more informed decision about your next home purchase in the South Fulton and surrounding area.

 

It is important that you set realistic goals, you know what you can afford upfront, you do your research upfront and you ask and get answers to the right questions “prior to” searching for your new home.

 

It is important that you put a checklist together of what you deem to be the most important amenities in the home that you desire, you know what you can afford (by getting pre-qualified or pre-approved) so that you don’t look in the wrong areas and/or price points and waste your (and others) time.

 

Do you want a fenced yard of a certain size, a garage for 1 car or 2, great schools, privacy from others in the neighborhood, or any other amenity, you (and/or your real estate agent) can narrow down your search and save invaluable time by planning in advance?

 

You can learn more about the home buying process at HUD by going to https://www.hud.gov/topics/buying_a_home

 

The following links will provide you additional information “by zip code” as it relates to crime, schools, home prices and much more in the selected zip codes in the South Fulton area.

 

SOUTH FULTON

https://www.bestplaces.net/zip-code/georgia/collegepark/30337 (College Park–includes parts of East Point)

https://www.bestplaces.net/zip-code/georgia/east_point/30344 (East Point)

https://www.bestplaces.net/zip-code/georgia/collegepark/30349 (College Park–includes parts of Union City & East Point)

https://www.bestplaces.net/zip-code/georgia/fairburn/30213 (Fairburn–includes parts of Union City)

https://www.bestplaces.net/zip-code/georgia/fairburn/30268 (includes parts of Fairburn, Chattahoochee Hills & Palmetto)

https://www.bestplaces.net/zip-code/georgia/fairburn/30291 (Fairburn–includes parts of Union City)

https://www.bestplaces.net/zip-code/georgia/atlanta/30354 (includes Hapeville, College Park & Atlanta))

 

NEARBY SOUTHWEST ATLANTA

https://www.bestplaces.net/zip-code/georgia/atlanta/30331 (southwestern area of Atlanta)

https://www.bestplaces.net/zip-code/georgia/atlanta/30336 (southwestern area of Atlanta)

 

NEARBY DOUGLAS COUNTY

https://www.bestplaces.net/zip-code/georgia/lithia_springs/30122 (just outside of South Fulton in Douglas County)

 

NEARBY FAYETTE COUNTY

https://www.bestplaces.net/zip-code/georgia/peachtree_city/30269 (Peachtree City is in the south metro area of Atlanta but outside of South Fulton in Fayette County)

https://www.bestplaces.net/zip-code/georgia/tyrone/30290 (Tyrone is in the south metro area of Atlanta but outside of South Fulton in Fayette County)

https://www.bestplaces.net/zip-code/georgia/fayetteville/30214 (Fayetteville is in the  south metro area of Atlanta but outside of South Fulton in Fayette County)

https://www.bestplaces.net/zip-code/georgia/fayetteville/30215 (Fayetteville is in the  south metro area of Atlanta but outside of South Fulton in Fayette County)

 

Whether you are a first-time home buyer, a move-up seller or a veteran real estate investor we hope that this page has given you some added insight on your next purchase in this (or other areas or zip codes) beautiful area.

 

Contact us today if you have additional questions or concerns about the South Fulton and surrounding areas.

 

NOTE: If you don’t see the zip code or city that you are interested in you can go to https://www.bestplaces.net/ and type in the zip code or city to get demographic information that may concern you.  Additionally, you can go to Greatschools.com to learn in a more detailed way about schools in the area that you are considering moving into and city-data.com to learn about demographic data from a different perspective.

Also, if you reside in the Atlanta Metropolitan area you can directly benefit from the knowledge, expertise and experience of the creator of this site by scheduling a confidential “in person” consultation today by calling 404-952-9284 or email tj@TheWealthIncreaser.com

 

All the best toward your home buying success…

 

Thomas (TJ) Underwood

 

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15 Questions that every home buyer should know the answers to “prior to” purchasing their home…

Learn why as a  home buyer you should know the questions that you need to ask and have answered  “prior to” purchasing your home…

 

1) Q: What is the difference between a pre-qualification and a pre-approval?

A: A pre-qualification is often done by mortgage lenders based on your stated income and expenses and it gives you a dollar amount that you qualify for when you go home buying. 

 

A pre-approval is a more formal approach that will provide you that same information but it will actually use documentation that you provide along with your credit standing to give you a more accurate picture of your home buying power. 

 

In short a pre-approval gives you more negotiating power than a pre-qualification when you place an offer contract on a home.

 

2) Q: What is the importance of a good credit score and how can I go into my home purchase having a great handle on my credit?

A:  A good score generally starts at around 700 and the higher you go after that point the better.  You get into the great or excellent range once you score 750 or higher and that would put you in position to get the best rate in most transactions that involve credit. 

 

You can attain mastery of your credit in the most effective way possible by gaining a real understanding of the 5 credit factors at this time.

 

3) Q: What is an escrow account and how will it affect my home buying decision?

A: An escrow account is used by mortgage lenders and mortgage servicers to hold funds of borrowers that are then used to pay property taxes and insurance.  In a sense it acts as a savings account for a borrower that allows for the payment of their property taxes and hazard (homeowners) insurance so that they won’t have to make the payment directly to the taxing authority or insurance company.

 

If you put less than 20% down on your home purchase many lenders will also collect mortgage insurance on a monthly basis from you and that too would be a part of your monthly payment.  If you have an FHA loan the insurance is called a “mortgage insurance premium” and if you had a conventional loan the insurance would be called “private mortgage insurance.”  They both serve the same purpose as they will protect the lender against loss if you default on the mortgage loan.

 

Your monthly payment of the insurance will normally be based on “your credit standing”, your home location and your loan amount, therefore it is imperative that you use the mastery of your credit factors mentioned above–in as effective a way as possible “prior to” your home purchase.

 

4) Q: Why are the cash flow and other personal finance statements so important prior to my home purchase?

A: A personal cash flow statement (budget) allows you to know your inflow and outflow of cash on a monthly basis.  A personal income statement allows you to know that information on an annual basis and finally a personal balance sheet allows you to know what you own and what you owe so that you can determine your net worth at a particular point in time.

 

By knowing this information upfront you put yourself in a better position for making decisions that are good for you and your family whether it be a home purchase or any other major financial obligation.

 

5) Q: What are closing costs and who will pay them at closing?

A: Closing costs as it relates to a home purchase are the costs associated with your mortgage as a result of your home purchase and they vary from lender to lender and your particular state or country. 

 

Common closing costs include title charges, attorney fees, transfer taxes, intangible taxes, mortgage application fee, appraisal fee etcetera depending on the lender and your locale.

 

As to who will pay, that is normally negotiable and also depends on your locale.

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6) Q: Why do I need a down payment to purchase a home?

A: A down payment allows you the opportunity to lower your loan amount and shows the lender, seller and others that you have “skin in the game” and therefore are more serious about your purchase offer.  If you put little or nothing down you are in most cases more likely to walk away from the loan obligations when times get tough.  If you have “skin in the game” so to speak–you are less likely to do so.

 

Even though you may qualify for a 100% loan if your credit score is high enough or you may receive down payment assistance it is important from a psychological point of view to not only put money down but to have an established emergency fund.

 

By doing the above I have found that homeowners find ownership more rewarding and they tend to be able to weather financial storms that come their way.

 

With little or no down payment I have seen purchasers walk away from their obligations due to frustration and hopelessness. The key is to do all you can on the front end to prevent getting into a situation where you will be forced to walk away or find yourself in a hopeless situation.

 

7) Q: Is A Home Warranty A Worthwhile Investment?

A: The choice of whether or not you should get a home warranty can often be a difficult one.

 

It is imperative that you have the home properly inspected, you know the age of the home along with the age and working condition of the appliances, plumbing and HVAC systems.

 

Home warranties generally cover appliances, heating and air conditioning and plumbing.

 

Whether or not a Home Warranty policy is appropriate for you will depend on your personal situation—from finances to your risk tolerance level and most importantly the condition of the property (including appliances) that you are considering for purchase.

 

It is also important that you choose a desirable home location with strong schools that is situated in an area that has the amenities and businesses that you frequent or desire.  Furthermore,  you must be aware of environmental concerns and other demographic data of concern in the area that could affect your quality of life.

 

To learn more about Home Warranties click on this link.

 

8) Q: Are there down payment assistance programs available to help purchase a home?

A: There are many programs available at the local and state level. There are also targeted home buyer incentives for police/firefighters, educators, and nurses available in many areas of the United States.

 

HUD also offers low down payment options on some of its inventory of homes.

 

If you are not currently working with an agent or you want to learn more you can contact our office directly by email at tj@thewealthincreaser.com—or call us at 770-719-4550 and/or log on to Atlanta area down payment assistance programs to learn more.

 

9) Q: What should I be concerned about if I purchase my home as a lease purchase?

A: Many Lease-Purchase homes are often advertised by sellers in local newspapers, on for sale signs, the internet and other media and potential home buyers often seek them out in their strong desire to own their own home.

 

Let’s look at the potential lease-purchase from a buyer’s and seller’s perspective.

 

As a purchaser if you did not initiate the lease-purchase offer or someone who represents (i.e. agent, attorney etc,) you did not initiate it, the offer will more than likely not be in your best interest.

 

This is usually what occurs when a potential home buyer sees a lease-purchase ad in the various media and respond to it. They usually have no idea of the home buying or financial planning process and want to own a home at all costs.

 

They will be easy prey for a savvy home seller and/or their representative because they are not fully aware of the process and they are not in proper position to negotiate the terms and price.

 

Sellers and/or their representatives normally will structure the sales contract in a manner that will maximize the terms and sales price to their benefit and minimize the terms and sales price to your (purchaser’s) benefit.

 

Those are some of the reasons I dislike lease-purchases from the buyer’s perspective. In addition at the end of the lease purchase you will be locked in to that specific property at the specific price that you agreed to, regardless of market conditions.

 

If prices of homes have risen or fallen you are locked in. The purpose of a lease purchase is normally to buy the purchaser time so that they can get their credit to a level where they can qualify for a loan at a good rate.

 

Once you qualify for a loan at a good rate you have the potential to purchase ANY property, so why limit yourself to one particular house.

 

Most lease purchases offered through Multiple Listing Services where you have to deal with real estate agents are usually for one year and usually not more than two, as real estate agents are concerned about their commission and will normally not accept an offer beyond that period.

 

Other seller’s who offer lease purchases without the assistance of an agent may offer a longer lease-term than three years but they will more than compensate for the longer term by structuring the terms and sales price in their favor.

 

If you must purchase a lease-purchase it is imperative that you draft the terms and sales price yourself or with the assistance of a competent real estate agent or other professional. A better option if you feel you really want the property and don’t want to lose out may be a lease option purchase where you are not locked in to that purchase and you can opt in or opt out.

 

Again structuring the terms and purchase price is key so make sure you utilize competent professionals.

 

An even better option (and one that I really like) for you may be to continue renting and get your credit score and reports to a level where you qualify for an FHA or Conventional loan at prevailing market rates (competitive interest rate) and then purchase the home of your choice with no lease purchase premium included or a lease option fee included.

 

Again make sure you, have a low debt load, you are pre-approved as opposed to pre-qualified, you have a six month emergency fund or other compensating factors at work and you are properly positioned to purchase.

 

By being ready, willing, and able to purchase you and your agent should be able to negotiate a better deal in most cases than if you were to go the lease-purchase or lease option route.

 

10) Q: What is The Complete Home Buying Process when I purchase my home?

A: It starts with preliminary home buyer pre-qualification to post-closing in my opinion and based on the way our company operates. A professional real estate agent should be concerned with more than just your ability to purchase a home—they should also be concerned with your ability to maintain and keep your new home.

 

Therefore, “preliminary pre-qualification” is a vital step. Don’t skip this step, many homeowners have skipped this step in the past to their own peril (loss of house, financial difficulty etc.).

 

The home buying process begins well before you decide to place an offer on a home. The preparation that you put into buying a home on the front end will pay great dividends on the back end if you do it the proper way.

 

I often have the potential home buyer pull their credit from the three major credit bureaus and have them obtain their credit scores as well.

 

This gives the consumer confidence that they are in control of their own financial destiny.

 

Although they may not see it now this will help them start to take control of there financial affairs if they are not doing so already. Assuming their credit and credit scores are satisfactory we move on to the next step.

 

A quick front end and back end ratio analysis is then performed.

 

If their credit and credit score situation is unsatisfactory they correct them (usually within 12 months) and we then move to the next step.

 

Assuming you have no bankruptcies, judgments or other public record data on your report it can normally be cleaned up within 12 months if you have the right cash flow and are disciplined in paying off outstanding debt and paying your revolving and installment accounts in a timely manner.

 

While working with buyer’s I try to implement a comprehensive strategy in their home buying pursuit.

 

It is important to begin at the cash flow (budget) analysis point and move forward from there. I look at their total financial situation so I can be of the most benefit to them (assuming they agree to the complimentary service).

 

From there we can see if there is discretionary income available after all variable and fixed expenses have been paid.

 

I then perform personal balance sheet, income statement and net worth analysis to get an even better look at their financial situation so I can be of the most benefit to them (again assuming they agree to the complimentary service). Front and back end ratio analysis would then be performed again.

 

I then analyze all of this based on family size, future goals (retirement, college, etc.) financial needs and wants and other factors that may be present in their situation.

 

I then decide if they qualify based on their down payment saved, emergency fund, cash flow situation and their ability to reach their goals based on what they stated above.

 

I also look at other factors (compensating) and non-compensating as well—such as a future financial windfall, other household income that will not be included on the loan application, expected increase in family size, child going to college and any other factor that could potentially have a negative or positive effect on their home purchase.

 

Assuming all of the above turns out to be positive I inform them of the home buying process in greater detail.

 

I then inform them of the advantages of getting pre-approved as opposed to pre-qualified (more negotiating power).

 

Once they are pre-approved we begin the home search and once a home is found to their liking we put an offer contract on that property (along with earnest money deposit).

 

After negotiation and a final sales price and terms are agreed to the buyer performs an inspection (usually a professional inspector is hired) based on the time limits specified in the offer.

 

If there are problems of concern to the purchaser we counter the offer and negotiate until a final sales price is agreed to. Once all contingencies are met the contract moves forward and the closing occurs.

 

Be aware that not all real estate agents will be concerned with your “preliminary pre-qualification” but you should be—you have to live with the choice and decision you make well into the future, so it is important that you get this step right.

 

Once the contract is accepted you make formal application for the loan (unless buying with cash) and once you receive the loan commitment letter (a contract between you and the lender—make sure you understand what you are signing) and the process moves forward.

 

Once the inspection is complete and repairs are negotiated the contract continues to move forward. If no agreement is reached the contract may become null and void.

 

Assuming the contract moves forward and closing approaches after you receive your mortgage commitment, the attorney will submit a title insurance binder along with other legal paperwork required by your lender. Once everybody has signed off approval a closing date can be set.

 

Most Real estate closings are often exciting and stressful at the same time.

 

There are many legal papers being shuffled back and forth, as well as checks for large sums of money being exchanged among parties.

 

It is highly recommended that you do a final walk through of your soon to be new home prior to closing.

 

The final walk through allows you to reconfirm the condition of the house prior to closing.

 

This normally happens a day or two before closing. Don’t skip this step because this is usually your last chance to verify that there has been no change or damage to the property, all agreed on repairs have been made, appliances you expect to be there are still there and that the seller’s personal belongings have been removed.

 

Don’t assume anything.

 

A lot can happen between having your offer accepted and getting to the closing table. If possible it is not a bad idea to do another walk through several hours before closing just as an added security and peace of mind effort.

 

Make sure that you bring photo identification to the closing. This is required since 9/11.

 

Be sure to save all of your closing paperwork in a safe place.

 

You will need some of it for your taxes as interest, points, and now MIP or PMI is now deductible on your tax return. The deed and abstract should be placed in either a fireproof box and/or safe deposit box.

 

The documents are very important and due care should be utilized to safeguard them.

 

They are an inconvenience to replace and will cost you valuable time and money. Also file your homestead exemption by April 1st of the year after closing in the County in which the property is purchased.

 

In Georgia you will save on your property taxes (must be owner occupied residence) and it is worth the effort if you are an owner/occupant.

 

At closing, the seller gives the title to the buyer in exchange for the purchase price that is stated in the contract. The seller also delivers a deed, title evidence, and a property survey if required. The buyer brings insurance, termite letter, cashier’s check etcetera.

 

You will be required to sign final mortgage papers, IRS Form 1099, a form known as the HUD-1 statement or Uniform Settlement Statement and other closing documents. The attorney will explain the purpose of each of these.

 

In addition what the seller or buyer brings to closing will vary depending on your locale, so be aware that state laws vary on buyer and seller responsibilities. In addition, who brings what will vary based on how closing costs were negotiated.

 

In most cases, there are no warranties after closing

 

The only defects that you can make notice of or complain about are defects that you can prove were known and/or hidden defects that were not disclosed or could not have been found out about through a reasonable investigation.

 

Post Closing is critical. Utilize a cash flow budget. Stay in touch with your agent. Your deed and mortgage will be registered and filed at the county recorders office.

 

On a day when you have time it may be wise to go to the recorder’s office a month or more after closing to ensure that the deed and mortgage was properly recorded. In some areas you may be able to verify that the deed and mortgage was properly recorded by doing an online search.

 

The above home buying process assumes 1st time buyer with no house to sell!

 

Also remember that all home buying situations are different and may require a more detailed offer and closing than that listed above.

 

Use the above home buying process as a guide only as each situation will be unique.

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11) Q:  After the purchase of my home, will preparing my taxes be difficult?

A:  If you have prepared your own taxes in the past you may feel comfortable continuing to do your own taxes.

 

However, there are some nuances that are unique to home ownership that you must be aware of.  However, if you get up to speed on the current home ownership issues in the current tax code, you may put yourself in position to continue preparing your own taxes.

 

For income tax preparation you can utilize the tax professional of your choice or if your tax situation is not very complicated after your home purchase—you can choose among the following:

 

www.HRBlock.com

www.1040Return.com

www.turbotax.intuit.com

www.onepricetaxes.com

 

If you live in metro Atlanta—you can possibly get free tax preparation if you meet income eligibility and family size guidelines through the United Way VITA program.

 

12) Q: What are covenants, conditions and restrictions or CCR?

A: CCR is short for covenants, conditions and restrictions, CCR refers to rules that signing parties of a property contract must adhere to concerning the purchase or use of a property.

For instance, a CCR is a no-pets rule for tenants of an apartment. You’ll find the term in real estate documents including deeds and homeowner’s association or even in rental agreements.

 

13) Q: What is a CMA and how will it be used by real estate agents to benefit me and my family?

A: Real estate agents conduct a CMA, or comparative market analysis, to help their clients determine an offer or listing price at which to buy or sell a home, respectively.

A CMA involves doing a comparison of on-the-market or recently sold homes in the same geographic area and with similar characteristics of the property that you are considering for purchase.

As a home buyer you would use the information derived from the CMA so that you would not “over-pay” for the property.  As a seller you would use the information for “marketing your property at an appropriate price” so that you would not over-list the property.

You can contrast a CMA with a “property appraisal” which is ordered by your lender and  provides a more detailed analysis of property value as the lender wants to ensure that the loan that they would be making to you would at least be based on the value of the property.  An appraisal is performed by a licensed appraiser and would have CMA data along with other data of the characteristics of the home that would provide the lender more certainty that the loan that they provide is based on a realistic value of the property.

 

14) Q: What is earnest money?

A: An EMC, or earnest money contract, is the paperwork that accompanies an earnest money deposit that a buyer makes to a seller as a show of good faith in a property transaction.

Specifically, the EMC usually includes, at a minimum, the earnest money deposit amount that is normally submitted in the form of a personal check.

The earnest money contract would also include any contingencies that would allow a buyer to back out of the sale–such as a failed home inspection or failure to obtain financing at a reasonable rate of interest.

In many states and countries “earnest money is part of a standard offer contract” and would be submitted at the time an offer is placed on the home.

 

15) Q: What are REO’s?

A: Real-estate-owned (REO) properties are defined by two things:

  • Those that have been repossessed by a lender after the property underwent the foreclosure process (including “friendly foreclosures” and “short sales” that did not materialize) and
  • The ones that failed to sell at a foreclosure auction

Lenders may choose to put a REO property up for auction again or work with a broker to sell it.

Most liens are removed after a foreclosure property sale, but certain liens may remain and they could include the following:

  • Any lien recorded on title prior in time to the foreclosing mortgage.
  • First Mortgage (if the foreclosing mortgage is a second or third mortgage)
  • HOA or COA assessment liens (in certain states)
  • Mechanic’s Liens (in some states)
  • Government liens such as state and federal tax liens, city or county liens, US Government liens.
  • IRS liens (IRS may buy the property within 120 days after sale at the price paid at foreclosure sale)
  • Code Enforcement Liens, Environmental Liens, and Utility Liens
  • Child Support Liens

It is important that you purchase home buyer title insurance to protect against “liens” and potential “clouds” in the title of any home you close on!

It is also important that you are aware of FHA, VA  and other government backed foreclosed homes that may be available in your area.  Always keep in mind many foreclosed homes are not the bargain that you might expect–therefore be sure to do your research up front–not “after” you purchase the foreclosed property.

In addition, a home inspection by a certified (ASHI GAHI CABO ICC FREA)  inspector prior to closing will help ensure that you do not make a purchase with costly hidden defects or other needed repairs that you may not have anticipated.

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About the author

Thomas (TJ) Underwood is a licensed real estate agent in the state of Georgia and has tackled topics ranging from real estate to retirement planning in his more-than-a-decade-long career as a writer and blogger.

During his stint at TheWealthIncreaser.com, he’s been featured by Yahoo Finance, Trulia, and other leading online digital companies. You can connect with him on TheWealthIncreaser.com to find out what he’s been writing about lately or tap further into his expertise if you have a financial question of concern.

 GLOSSARY OF REAL ESTATE TERMS…

 

Thomas (TJ) Underwood

 

Copyright©2014–2020–TheWealthIncreaser.com–All Rights Reserved

 

Homeowner Escrow Accounts & Wealth Building

 

Learn more about your home escrow account so that you can build wealth more efficiently…

 

Over the years the creator of TheWealthIncreaser.com has received many questions about escrow accounts of homeowners and they all wanted a clear explanation of what escrow accounts were all about as it is rarely a subject that is explained in meaningful detail by many in the finance industry.

 

Let us first start by defining what a home escrow account is and then we can dive into some of the more frequently asked questions—and answers that hopefully will put your mind at ease as it relates to homeowner escrow accounts.

 

A home escrow account is an account that home owners have that is established with their mortgage servicer for the payment of taxes and insurance–generally.

 

An escrow account acts as a savings account that is managed by your mortgage servicer.  Your mortgage servicer will deposit a portion of each mortgage payment that you make on a monthly or otherwise agreed basis into your escrow account to cover your estimated real estate taxes and insurance premiums.

 

In a nutshell,  it’s really just that simple!

 

Your escrow account will cover regular property taxes and homeowners insurance as well as flood insurance if it’s required in your area.  It does not generally cover water/sewer bills, storm water fees or other assessments by your local government.  It does not cover homeowner association dues or supplemental tax bills.

 

It is important that you realize that your tax or insurance bill would be sent directly to your mortgage servicer and you would normally not be involved in the process.  In essence, you are relieved of paying those bills directly as long as you keep the account funded at the right level and you stay current on your mortgage loan.

 

If you don’t have a mortgage on your home or you have a more exotic loan type—you would pay your taxes and insurance directly to your taxing authority or insurance company.

 

Additionally, if you own your home outright you would not be mandated to carry insurance, however your tax payments would be mandatory and it would be your responsibility to ensure that they were paid in a timely manner.  It is also a good practice to carry insurance unless you can effectively “self-insure” your property.

 

Whether you need to have an escrow account or not will  depend on your loan type and your lender.  Government-backed loan options, like FHA and USDA loans, require an escrow account.

 

Lenders of conventional loans can decide if an escrow account is necessary!

 

Even if an escrow account isn’t necessary, they can still be a good idea. If you don’t use an escrow account, you’ll be responsible for paying property taxes and insurance yourself, so you’ll need to handle budgeting and paying them on time.  You can simplify your “monthly finances” by setting up an escrow account if your mortgage servicer allows you to do so.

 

When you have an escrow account, your lender or mortgage servicer manages the payments and budgeting for you, and you’ll be able to spread out your taxes and insurance payments over the year, instead of paying a lump sum all at once.

 

How Escrow Analysis Works

Your mortgage servicer and/or lender will estimate the amount that will have to be paid for your real estate tax and homeowners insurance bills.  This estimate, provided during closing and often adjusted in future years, is based on the taxing authority and insurance company, or previous tax and insurance bills of the previous homeowner.

 

Each year, your mortgage servicer will analyze your account to make sure you’re paying the right amount to maintain the minimum required balance according to a formula.  Because the formula is based on an estimate of your taxes and insurance that can change over time, the amount can be overestimated or underestimated.

 

This is called an escrow shortage or escrow overage in the mortgage industry!

 

If there’s an escrow overage, you’ll get your money back with a refund–HOORAY!

If there’s a shortage, you’ll typically have a couple of options to pay the remainder–BOO!

 

Your first option is to pay the full shortage up front.

 

Another option would be to “pay the shortage over a period of 12 months” along with your regular payment.  However, this option may not be allowed by some mortgage loan servicers.

 

You also may pay a “partial amount” with some servicers, and your payment would go up–but not as much as stated in the communications (Escrow Account Disclosure Statementthat you would receive from your servicer.

 

If you chose to “pay nothing” you would in essence be choosing to “pay the shortage over a period of 12 months” and your payment would go up by a certain amount–normally the amount stated in the communications (Escrow Account Disclosure Statementthat you would receive from your servicer.

 

You would normally receive this notification 30 to 60 days before the monthly increase, thereby giving you additional time to decide which of the above options you would choose if allowed by your servicer.

 

How Escrow Works When Buying A Home

When you make an offer on a home, you’ll typically include a personal check of 1-2% of the purchase price depending on your state or jurisdiction.  This is called “earnest money,” and shows the seller of the home that you’re a serious buyer and not merely wasting their time.  The check would not be deposited until the seller accepted your offer.

 

If your offer is rejected, you’ll get your money back, however if the offer is accepted, the money will go into an escrow account to be held until it’s time to close.

 

Then, the money will be used toward your down payment and closing costs. In this scenario, the escrow account acts as a neutral place for the money to sit until all paperwork is finished and the home is officially yours.  Although this is an escrow account it differs from the one in this discussion as the escrow account in this discussion is used primarily for property taxes and insurance of a home that has already been purchased.

 

Refund of Escrow

In cases where you overpay your taxes due to the servicer coming up with the wrong amount needed to pay taxes and it is over a certain amount a refund check would be sent to you by the servicer.  This often happens in the early years of your mortgage but could happen later depending on your particular area and circumstances.

 

If you have excess funds in your escrow account you would receive a refund check based on a formula.  That refund check would be a welcome surprise to you.

 

Payment to Escrow

In some cases you will have to make an additional payment in a lump sum or on a monthly basis to your mortgage servicer.  If your taxes or insurance increased during the year or when your policy renewed–you might face a situation where you would have to pay an additional amount to bring your escrow account back up to an acceptable level.

 

Other Costs Associated with Homeownership

In addition to your escrow payment that includes mortgage, interest, taxes and insurance there are other costs associated with home ownership that you must budget for on a monthly basis and they include the following:

 

Special Assessments

In some subdivisions or neighborhoods a “special assessment” could be put into effect for sidewalk or sewer improvements and you would possibly be responsible for a number of years depending on the improvement, the amount and your jurisdiction

 

HOA Fees

In some areas and communities you may have to pay home owner fees or association fees based on the amenities in the neighborhood.

 

Furthermore many associations control what you can and can’t do in the subdivision such as changing your house paint color, parking on the road, assessing penalties for your failure to pay HOA dues and other control mechanisms that seek to keep the property values as high as possible in the subdivision.

 

Utilities

You must account for utility payments such as water, electric, gas, phone and other monthly recurring costs associated with homeownership.

 

Stormwater Fees

In some communities storm fees are assessed to homeowners and they are often outside of your water payments and escrow payments.

 

Rapid Fire Q and A

 

Q1: How does escrow accounts work? 

A:  Your escrow account allows your mortgage servicer to pay your real estate taxes and/or insurance premiums for you.   The payments are initially made by you to your servicer and they subsequently forward the payment to the taxing authority and/or insurer. 

Every time you make a monthly mortgage payment a portion is deposited in an “escrow account” that is managed by your servicer.  An escrow account ensures that your bill is paid in full and on time and frees you from the task of handling those payments yourself.

 

Q2: Exactly what payments come out of my escrow account?

A:  Your real estate taxes and/or insurance premiums.  If you don’t have a mortgage you would not have an escrow account and you would pay your taxes and insurance directly!  

Private Mortgage Insurance and/or Mortgage Insurance Premium (if you put less than 20 percent down at time of purchase) would also come out.  Flood insurance and other fees if included on your real estate tax bill might also be included.

 

Q3: Where do I get the information that is needed to calculate my escrow payments?

A:  Most loan servicers will project your your real estate and insurance payments based on past numbers, or information on your closing documents.

 

Q4: Can the amount that I pay monthly change?

A: Absolutely, it depends on the movement (up or down) of your taxes and insurance in most cases.  With most servicers a review is done at least annually and any changes (increases) in your mortgage payment will be reflected on your “Escrow Account Disclosure Statement” which you would receive after the review was conducted.

 

Q5: If I pay too much for the year will I get a refund?

A: As mentioned earlier if you pay too much—you will receive an escrow refund—and it would be a big surprise for you—prior to your landing on this page. 

If you pay too little–you would have to pay a lump sum to possibly keep your payment the same or pay more on a monthly basis–again that too would be a big surprise to you,  prior to landing on this page.

 

Q6: How do I know if my payment calculation is accurate?

A: As to the accuracy of your payments, your mortgage company will perform calculations to ensure that there are sufficient funds.  They would normally maintain a “minimum escrow balance” and under the law they may also add a small cushion in anticipation of changes in your taxes or insurance premiums.  Those amounts are added to your monthly mortgage and you would pay them monthly.

If there  was an overage of a certain dollar amount you would be refunded a portion.  If their was a shortage you would owe an additional amount.  You can do a ballpark estimate by dividing your most recent tax bill by 12.  Your loan servicer will also have to keep a 2 month reserve in most cases. 

Therefore, add two months to the estimate (i.e. $1,200 / 12 = $100 per month and $1,200 plus 2 months = $1,400–$1,400/12 = $117 per month estimate) and you will come up with a ballpark figure that you can use as a check.  

 

Q7: Is a minimum balance required in my escrow account?

A: Yes, minimum account balances are governed by federal law–or by your loan contract and applicable state law. 

In most cases your minimum balance (excluding PMI or MIP) will be 2 months  of escrow payments unless your loan contract specifies a lesser amount. 

 

Q8: If my payment increases, can I still receive an overage check?

A: Yes, due to the most recent estimates for the year you may receive a refund and when the taxes increase–the review by your servicer might signify an increase in your monthly payment “after” you have received your escrow refund check. 

If you have an overage of $50 or more and your loan is current, your servicer would be required to send you those funds rather than “decrease” your monthly payments. 

 

Q9: Why can’t my mortgage company apply the overage to future mortgage payments?

A: By law they must notify you if you have an overage of $50 or more and your loan is current, your servicer would be required to send you those funds rather than “decrease” your monthly payments. 

If you desire to make an additional payment from the overage check you can do so, however you must cash in the check and indicate additional payment of principal or interest when you send in your monthly mortgage payment.

 

Q10: What options do I have if there is a shortage in my escrow account?

A:  You can choose to pay the entire shortage (or in some cases a partial shortage depending on the lender) or pay the shortage over 12 months and that would increase your monthly payment. 

If the additional payment amount will cause undue hardship you can contact your lender and see what can be worked out.  PMI or MIP may be able to be eliminated if your property and loan meets certain conditions and that would have the effect of lowering your monthly payment.  Other options such as loan modification may also be available.

 

Q11: Are there penalties involved if I fail to pay my shortage in full?

A: No, if you elect not to pay the shortage your monthly payment would increase but there would be no penalties or additional interest payments due.

 

Q12: Why did my taxes and/or insurance go up?

A:  Your taxing authority possibly increased the millage rate and/or your property value increased.  Your home insurance policy may have increased for this same reason–among others.  Based on projections made by your loan servicer your escrow account payment would then go up in most cases.

 

Q13: If I get news early that my taxes and or insurance will go up can I send in additional amounts?

A:  You can normally send additional escrow account payments at any time, and your taxes and insurance would be paid.  If there is an overage or shortage your servicer would send you a refund or request additional funds  or increase your monthly payment.  

 

Q14: If I pay monthly by automatic draft will my new payment amount be automatically adjusted as a result of escrow changes?

A:  Yes, your mortgage servicer would normally adjust your payment based on the new payment.  Please ensure that you have enough money in your account to meet the new monthly payment amount.

 

Q15: Will my third-party payment provider adjust my payment to meet the new payment amount?

A:  If you use a third party, that can be a little trickier.  You may want to contact them and let them know your new payment amount that was reflected on the Escrow Account Disclosure Statement.

 

Q16: Can I view my escrow account disclosure online?

A: Yes, most lenders have an online dashboard portal that allows you to do so.  Many lenders will also mail you an Escrow Account Disclosure Statement notifying you when your payment will increase. 

 

Conclusion

Your escrow account allows your lender to pay your real estate taxes and/or insurance premiums for you.

 

Every time you make your monthly mortgage payment a portion is deposited into your escrow account and depending on when your taxes are due or your insurance policy renews—the money is pulled out and paid to the taxing entity(s) and insurance provider.

 

Whether your escrow was calculated effectively by your mortgage servicer and you are due a refund or if you may owe an additional amount, you can alleviate your fears by knowing how escrow accounts work on the front end–and planning for your future success.

 

You must know at the earliest time possible that taxes and insurance can rise or fall for varying reasons and it is your responsibility to know what is happening in the area in which you live. You must also know that taxes and insurance can rise or fall and that too is your responsibility to know at the earliest time–where and when possible.

 

To alleviate your concerns about escrow account movement be sure that you establish a properly funded emergency fund and you have a conceptual overview of your life stages that will benefit you greatly in your future.

 

Furthermore you must know if you have a fixed rate mortgage or one that can potentially fluctuate.

 

Always consider the total cost of homeownership—prior to your home purchase.  That means you must know your mortgage payment including escrow, your utility payments, yard maintenance, age of HVAC, water heater, electrical and other appliances and components of your home.

 

Your options will vary depending on type of loan and the fine print in the loan documents of your particular lender when all is said and done.

 

You now are equipped with the homeowner escrow knowledge that you need to succeed.

 

You now know that when market downturns occur such as the 2007/2008 housing debacle or the economic downturn that we are now experiencing due to COVID-19 there is a good chance that your mill rate and taxes will remain steady or possibly go down due to falling home prices depending on your particular home location.

 

You also know that if you are in an improving neighborhood that is in high demand your taxes could potentially go up!

 

It is your responsibility to plan on the front end for all scenarios whether an increase in taxes, insurance rates, special assessments, HOA fee increase etcetera–and it is important that you properly establish an emergency fund at the earliest time possible as you move along through the various stages of your life.

 

All the best toward your homeowner escrow success…

 

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Decisions & Wealth Building

 

Learn why the decisions that you make throughout your life can help you achieve your wealth building goals more efficiently…

 

In the current environment it is important that you reflect on your ability to make the best or most optimal decision at the various stages of your life.

 

On this father’s day 2020  the creator of TheWealthIncreaser.com reflected back on the importance of making good decisions so that you can achieve more in the current economy.

 

The decisions that you made in your past (for the most part) have directed you to where you are now at.  However it is important that you now focus on your future and the decisions that “you can now make at this time” that can lead to you achieving what you desire  as you build wealth.

 

By making the decision to take the following 3 steps and acting on making those steps happen at a level that is the best that is within you—you can start on a sincere journey toward making your dreams come true.

 

It is important that you decide to see exactly where you stand financially at this time so that you can use the financial data to make better decisions for your future moves as it relates to your finances.

 

You must decide at this time to get a real handle on your monthly inflow and outflow of cash, know what you own and what you owe and know what you make and spend annually.

 

It is important that you have the mindset that you will manage your finances in a manner that puts you in control–not creditors or others who have no concern for your future outlook!

 

If you at this time have great credit (740 or higher credit score) you are to be commended.  However, it is important that you make the decision to continue to manage your credit effectively.  And for those who do not have great credit at this time, it is important that you decide at this time to manage your credit more wisely.

 

You can do so by understanding the 5 credit factors and gaining the knowledge of how you can make the “5 credit factors” work for you and your family in a more rewarding and beneficial way–starting today!

 

By utilizing the “5 credit factors” that you now have the opportunity to master you can put yourself in position to do what you need to do–to make your wealth building dreams come true.

 

For those of you who have a net worth that allows you to navigate through life without utilizing credit–you too are to be commended.

 

However, you too must make the decision to manage your cash flow at an optimal level.

 

It is important that you have a mental picture of all areas in your financial life that you need to address.

 

You must take an accurate and analytical look at your insurance needs, your investment concerns, your current tax position, your emergency fund position, your education funding needs, your estate planning/wills and your retirement planning concerns.

 

By doing so you put yourself in a better position to make decisions that are good for you and your family and you greatly enhance the possibility and probability of achieving your wealth building goals.

 

Conclusion

 

By deciding to take decisive action and leaving all excuses behind, you position yourself and your family for a more prosperous future–inside of your mind.

 

You must realize that it is your responsibility to “decide right now” to achieve at your highest level of excellence while you are here on planet earth–and it is your responsibility to know your self-worth.

 

Why live your life on a daily basis with worry, anxiety, fear and a lack of direction on the inside of you when you can make the decision to choose a better path toward making your dreams come true?

 

By doing so you open up new possibilities for not only yourself, but also future generations as well.

 

All the best to your decision to achieve at a level that will lead you to a higher level of success…

 

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Patience & Wealth Building

Learn why you must have patience as you build wealth…

 

It is important that you have patience as you build wealth as in many areas of wealth building time is involved.

 

In this discussion TheWealthIncreaser.com will discuss ways that you can use patience and a plan of action to achieve your wealth building goals.

 

1) Have a comprehensive overview of your finances…

Prior to selecting the financial professionals that you need to help you achieve optimally you must know where you want to go.

 

It is important that you realize that there are things that you don’t know—that you don’t know that you don’t know and that applies to all of us.

 

Your lack of knowledge can be very detrimental to your future wealth building efforts if you don’t have a mental construct of what you need to know.

 

Therefore you must know at this time that you must know your inflow and outflow of cash on a monthly basis along with the knowledge of your net worth so that you can gain a better picture of where you can go.

 

You must also have mastery of how credit works and finally you must know all areas of your finances that you must address.

 

Patience will be required of you, however by visiting this site you now have a concise blueprint of what you need to do.

 

2) Choose the right financial professionals

 

It is important that you choose highly competent financial professionals to work with.

 

Although turnkey tax programs, franchise tax preparation companies, discount brokerages and robo advisors are in abundance everywhere, that does not mean they are your best choice.

 

You must have the patience to interview the financial professionals that you need to help you achieve your wealth building goals and not seek the quick way out as the quick way out can put you in a worse position for building wealth in many cases.

 

Take the time out of your busy schedule to interview and ultimately work with financial professionals that you are comfortable working with that has the competence and track record that you need to succeed!

 

3) Realize that patience is required to reach your goals…

Since you now have a more complete picture of what you need to do in your financial life and you have selected or chose financial professionals that you are comfortable with and are sincerely working in your best interest, you must realize that reaching your educational, goals, tax goals, investment goals, estate goals and retirement goals will require that you have patience as you must allow your investments the opportunity to grow.

 

Conclusion

 

Your wealth building efforts can be achieved, however it is important that you are patient as you must give your money time to grow.

 

You must also have the patience to interview and assess financial professionals that you don’t know and may cause discomfort upon meeting initially but may be a good fit for you and your future goals.

 

Even if you choose to pursue your wealth building success by doing it on your own you must realize the pitfalls and know that there are areas that you make lack the required knowledge in and it is your responsibility to get that knowledge on the front end.

 

You must not have a “blind” mind as it relates to seeing your finances and financial future!  And you must know the steps that you need to take to reach the goals that you desire.

 

By doing so you can reach the goals that you may now feel are outside of your reach and avoid the disappointments that so many have encountered because they were looking at their finances in isolation and they lacked the patience to put together a comprehensive plan  (at the right time) that gave them a real sense of reality of where they could truly go–and put them in the know.

 

All the best to using your patience to achieve lasting success…

 

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Life Stages & Wealth Building

Learn why it is important to invest in your future early in your life stage so that you can build wealth more efficiently…

 

Investing for your future can be a way to reach many of your goals.

 

However, it is important that you know your money management personality and what stage you are now at in your life so that you can choose the type of portfolio that allows you the opportunity to reach your intended wealth building goals.

 

In this discussion TheWealthIncreaser.com will (hopefully) help you come to a clearer decision on your investment portfolio selection based on where you now are in your life stage and your intended goal(s).

 

Regardless of your life stage you must begin your wealth building journey by knowing what you are building wealth for.  Or another way of looking at it is what are your goal(s) for utilizing the funds that you plan on investing and what is the timeline when you will need those funds?

 

If you are saving for your retirement and you are age 30 you can use a more aggressive portfolio than if you were saving for college for your 9 year old son.  If you were age 70 and was seeking steady income during your retirement years you would want to take a more conservative approach with your portfolio selection.

 

If you are uncomfortable in the selection of portfolios you can use financial advisors, however it is important that you choose your financial professional(s) wisely.

 

Below we will analyze three savings scenarios to help give you an overview of how you can put together an investment portfolio that could possibly help you build wealth more effectively and more efficiently depending on your life stage.

 

Saving for Retirement

If you are age 30 and you plan on retiring at age 62 you want to “save aggressively” due to the long time horizon as it gives you time to absorb the ups and downs of the market.  If you wanted to achieve financial independence and retire early you would be at a point in your life stage where you would have a need to invest even more aggressively.  Under either scenario you would want to put up to 85 percent of your portfolio in stocks and 15 percent in bonds.

 

Saving for College for your Children

If you are age 30 and you plan on saving for your 9 year old sons college tuition you want to save less aggressively or at a “moderate” level, therefore your investment portfolio might consist of 60 percent in stocks and 40 percent in bonds based on your time horizon of 9 years.

 

Saving for Income During Your Retirement Years

If you are age 70 and you are retired you would be at a point in your life stage where you invest more conservatively.  You would take a “conservative” approach because you are at a point in your life where you can’t afford to take losses–therefore a consistent blend of 65 percent bonds and 35 percent stocks might be appropriate for your situation.

 

Conclusion

 

It is important that you have a conceptual overview of where you are now at in your life stage as that knowledge has the potential to provide you more clarity about where you are now at and where you can possibly go.

 

The above scenarios are to be used as a guide only and you may have to tweak the investment percentages to meet your intended goals based on your particular age and time span for use of the funds.  However, it can be used as a starting point to get you in the frame of mind to invest in a way that will help you build wealth.

 

By determining at the earliest time possible the goals that you want to pursue and determining the type of portfolio that is needed you can move about your life in a manner that reduces anxiety and provide a road map that is realistic and achieve goals that are more likely to occur.

 

Keep in mind that market downturns can occur and on occasion at the time that you want to utilize (cash in) the funds for your intended goals.

 

By getting a real jump on your investments by knowing where you now are and where you want to goyou are showing great faith and belief in yourself and there is great favor–in your horizon by doing so!

 

All the best to your life stage and wealth building success–regardless of your age or life stage…

 

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Home Ownership & Wealth Building

Learn why you must determine if home ownership is for you on the front end—if you desire to build wealth efficiently…

 

In the current economy many are contemplating whether moving into a home or continuing to rent is the best option for them and their family at this time.

 

In this discussion TheWealthIncreaser.com will discuss ways that you can decide on whether purchasing a home now in an effort to build wealth or continuing to save and purchase at a later date is your best option.

 

Even though owning a home is the dream of many around the world, home ownership may not be for you—or for you at this particular point in time.

 

You must determine on the front end if you are “ready to buy” (by looking at your financials), “willing to buy” (by understanding what home ownership consists of) and be “able to buy” (by having the credit score and funds that are needed to consummate the closing).  You must also know your responsibilities after the closing so that you will improve the odds that you will remain a homeowner!

 

Let’s now look at the above concerns in greater detail to determine if home ownership is right for you at this time so that you can build wealth or pursue your path toward the success that you desire and deserve in a more efficient manner.

 

Looking at Your Financials…

It is important that you know at the earliest time possible what you make and what you spend on a monthly basis.

 

Therefore you must create a monthly cash flow statement or budget at a minimum and use the information that is obtained from that analysis to make wise financial moves—whether it be a home purchase or any other major purchase.

 

You must have the income that allows you to meet your current or potential housing payment and pay off your other debt on a monthly basis in a way that leaves you in the black (positive income after income and expenses are determined).

 

Looking at what Home Ownership Offers You …

 It is important that you understand the home buying process “prior to” closing on your new home.

 

If you purchase in the right way your home purchase can be an investment in your and your family’s future and can help you build wealth more efficiently.

 

Home ownership offers you the opportunity to have more peace of mind by having private access to your own dwelling that you are responsible for in the form of making timely monthly payments if you take out a mortgage–as well as other upkeep.

 

You are also responsible for maintaining the interior and exterior of the home, upkeep for landscaping, Heating Ventilation and Air Conditioning, water, electrical, gas and all appliances in the home—among other areas of upkeep.

 

Looking at Your Credit Score and the Funds You Need to Close…

You must also ensure that you have been managing your finances wisely in the past—or at least for the past 24 months or so.

 

If you lack the money management personality that allows you to manage your finances effectively—now may not be the time to purchase your dream home.

 

Do you have an emergency fund in place or do you have a plan to properly establish one prior to or during your period of home ownership that is realistic and achievable based on your household income?

 

Do you have the necessary down payment and funds for closing on the home that you desire?

 

Do you know the price points (what you qualify for that allows you to live at the level that you desire) of the homes that meets your monthly budget that will or will not leave you house rich and cash poor?

 

By answering the above and other pressing questions that are unique to your net worth at this time and your income and expenses—you put yourself in a better position for your home purchase regardless of the economic climate or what others may be doing.

 

Conclusion

 

The purchase of your dream home could be the key toward more freedom and financial independence (wealth building) for you and your family if you do it right on the front end by addressing the topics that were discussed above.

 

By purchasing when the time is right in the right neighborhood with strong schools and an improving economic landscape you can build equity and possibly refinance (pull money out for home renovations or other financial concerns), sell (after 2 years of ownership as an owner occupant you can sell tax free on gains up to $250,00 or $500,000 if married), use the interest payments to lower or limit your tax liability (deducting the mortgage interest on schedule A),  rent the property out (for income and tax advantages) or pass on the property to future generations in a way that allows your future generation to have a better stake in where they can take their life and their family’s.

 

You must realize that as with any investment–market downturns can and will occur–and that is true in the housing industry as well!

 

Always realize that home ownership is not for everyone as many are totally comfortable renting and using their funds to build wealth in other ways.  However, home ownership can be a powerful tool for those who use it in the right way–and are properly positioned to purchase at this time.

 

Still others are at a debt level that makes owning even a starter-home unrealistic at this time!

 

Even though there are no guarantees in life, a home can be purchased and utilized in a way that can help you build wealth.  If used effectively your home purchase can be used as a major tool for helping you enjoy your retirement years in a way that serves your best interest as well as helping you achieve many other goals that you have.

 

Besides, you have to live somewhere!

 

All the best toward your home purchase and building wealth at a level that is “your” absolute best…

 

 

The above article was written by Real Estate Agent Thomas (TJ) Underwood who is a licensed real estate agent in the state of Georgia serving the South Metro area of Atlanta.  He is the creator of TheWealthIncreaser.com and has over 20 years of real estate experience in the Atlanta market.  He has written over 500 articles on personal finance and real estate along with a number of books and e-books and he is passionate about helping potential home owners purchase their home in a manner that serves their best interest and his writing style reflects that passion.

 

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Home Buying 101…

 

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