Michael Creed's Blog

After taking a week off (from Blogging) for Labor Day, I have decided to write about debt today.  Are you stressed about your debts? Here are four solid tips to help you breath easier:

Analyze your situation

Redo your budget

Personalize your due dates

Consider your options for consolidating your debts

Analyze your situation

Debt can pile up quickly, leaving you unsure exactly how much you owe. So it's important to keep a running tab of balances, interest rates and required minimum payments. Consider using a debt evaluation calculator to get a handle on your situation and your current debt to income ratio. Here's a great one from MSN Money.

Redo your budget

A budget that worked six months ago may not work today if your debt to income situation has changed or the cost of consumable goods (i.e. groceries and gas for your work commute) has increased. If possible, include a "payment" to yourself every month; money you can set aside for an emergency situation. This will help ensure that you don't get farther into debt when your budget cannot stretch to meet an unexpected demand.

There are several online resources that offer worksheets to assist you in this process. One example can be found at Kiplinger.com.

Personalize your due dates

If you have bills that are due at awkward times of the month - days that don't coincide well with when you get paid - consider calling your creditors and asking them to change your due date.  Some people find it easier to group dates around times when they have the most available cash.  Many credit card and other companies' systems are set up to accommodate such a request.

Consider your options for consolidating your debts

Consolidating your debt can be one quick way to ease your budget stress.  Consolidating higher-interest debt into a low-rate debt consolidation loan can lower your monthly interest payments and give you some breathing room that you can then use to begin paying down the consolidation loan.  Of course, it's important to consolidate the debt into a loan that has a lower interest rate than the rate of your current debt.

One popular, lower-interest debt consolidation option is a cash-out refinance of your home loan. This type of loan uses the available equity in your home to fund the debt consolidation at interest rates that could potentially be five to ten percentage points lower than a high-interest credit card, depending upon your situation.

Further, an added benefit is the fact that the interest you pay on a cash-our refinance/debt consolidation loan is usually tax-deductible; something that is not available with credit card debt.  Of course, you need to check with your accountant to make sure this applies to you.

If you would like further information on a debt consolidation loan, please contact me for a free quote!

Great news!

Chairman of the House Financial Services Committee, Barney Frank, has discussed publicly the fact that he has negotiated an agreement with HUD Secretary Steve Preston that will provide for the continuation of privately funded downpayment assistance.

The agreement allows HUD to impose risk-based pricing on downpayment assistance transactions which provides Secretary Preston the fiscal protection he seeks for the FHA insurance fund.

According to an Inman News article published today, Chairman Frank is quoted as saying "The FHA loved the ban on down-payment assistance (but) hated the ban on risk-based pricing," Frank said at Saturday's hearing. "That seemed to me to offer an opportunity. So (HR 6694) will replace both bans with middle ground -- and it will pass the House, I can guarantee you. What you want to do now obviously is talk to your senators. We think it will go through there -- it has the approval now of the Secretary of HUD."

Thanks to the advocates of downpayment assistance, there is significant momentum in this direction. We urge everyone to continue the campaign to save DPA by contacting their Senators and request a swift passage of pro-DPA legislation.

This is great news, but the fight isn't over; please click here to contact your senators!

Read the entire article: http://www.inman.com/news/2008/09/10/congress-weighs-reprieve-seller-funded-gifts