Housewife and mom looking to make some home improvements.

Purpose of loan:
This loan will be used to pay for a new air-conditioning unit and heat pump that needed to be replaced after a tornado in May.

My financial situation:
I am a good candidate for this loan because, in addition to being a stay-at-home mom, I also have two businesses.  I sell Avon and am a free-lance graphic designer.  With Avon, I sell approximately $200.00 worth of product every two weeks at 40% commission, which means I earn approximately $160 every two weeks from that alone.  With Graphic Design, I have just started working with two companies, Big Atom Productions and JMLD Voices, LLC. We are currently working on compensation for JMLD Voices, LLC.  where I will be the chief graphic designer/ web designer for this new company. My husband works for Cerner Corp and brings home the bulk of our money and just got a $5,200.00/ yr raise on Tuesday.

Monthly net income: $4,000.00

Monthly expenses: $3265.00
Housing: $1200.00
Insurance: $75
Car expenses: $400.00
Utilities: $310.00
Phone, cable, internet: $230.00
Food, entertainment: $500.00
Clothing, household expenses $50.00
Credit cards and other loans: $500.00

To help this mom out click here: Housewife helping improve home

General Motors scrambles to save $15bn as car sales plummet

GM to cut jobs, sell assets, raise cash to survive

Car slump weakens US retail sales

And those were all hot off the press! The news is not pretty. Now if you absolutely need to buy a vehicle right now I recommend you round up the cash and buy something someone has to unload at a fire sale. You’ll save thousands even when compared to an interest free loan. If you can’t pay for your car outright then try to put down enough of a deposit that you can get a loan on a used vehicle. You just wouldn’t believe the bargains that our out there.

Finally, if you must buy new then press the dealer for a low interest rate, if any, and a low price! They’re desperate to move cars (and trucks!).

Happy driving.

Being an eternal optimist I can’t even process the thought of the American dream ending. But, we may need to sleep awhile longer whilst we dream of home ownership.

Check the article out here: Curtains for the American Dream?

Click here to view the embedded video.

Pretty catchy isn’t it? (Note: We are not an affiliate site nor have we previewed the CD they created this clever marketing campaign for so if you visit their site and purchase their CD you’re on your own! We recommend you simply enjoy the song.)

What am I talking about?

• Buy-now-pay-later loans on purchases

You’ve all seen the offers for furniture, appliances, carpeting, and all sorts of other major purchases. “Buy now and pay later!”, “No payments for 24 months!”, etc….

It won’t matter what your credit scores are or what your payment history is on your credit report. Make a purchase using one of these too-good-to-be-true loans and the algorithm (formula) used by credit bureaus goes bonkers and cuts your scores by about 50 points!

I suppose it correlates a buy-now-pay-later purchase with a person that can’t control their spending or afford their purchases. Whatever the reasoning or logic built into the algorithm I recommend you stay away, far away, from any of these buy-now-pay-later deals. This includes the free credit offers from Lowes, Home Depot, and other stores that are eager to get you to spend more then you were ready to before their “great deal”.

• Add up all of the credit available to you from credit card companies and similar lenders (just revolving debt, no car or home loans). Now divide your total balances into the total credit that has been made available to you. For example: If you have 3 credit cards that offer you a combined $15,000 of credit and you have a $2,500 balance on each of them, your total outstanding balance would be $7,500 so your debt-to-available credit ratio would be 50%.
• Credit bureaus calculate your credit scores using powerful algorithms and one of the key measurements they use is the percent of your outstanding balances compared to your available credit. The key percentage amounts that separate the high credit scores from the low credit scores are 100%, 75%, 50%, and 25%.
• If you have $15,000 worth of credit available and your balances are over $15,000 combined you’ll be lucky to get a loan, and if you get a loan you may as well bend over. What lender would loan someone money that has already demonstrated they can’t manage their current debt?
• The next level that makes a big difference in scores is 75%. If your debt-to-available credit is over 75% your scores may drop 50 points versus a ratio of over 50%, but still under 75%.
• Of course the next levels are 50% and then 25% with scores moving much higher still if you can get you total revolving debt under 25% of your total available credit.
• The difference in credit scores for someone with a ratio of over 75% and someone with less then 25% can be remarkable and the difference in the loans available and the interest rates offered dramatically different.

• So before you apply for a mortgage, home equity line, car loan, education loan, credit card, or any other loan please do one of two things or both:

1. Pay off as much of this revolving debt as you can. If you need to borrow some money from a family member or someone close to you then do so. Going in for the loan with a low ratio of debt to available credit will help your scores a lot!
2. An often overlooked trick to lower the ratio is to ask the credit card companies to increase your credit lines. If you’re not already in terrible shape they’re usually up your available line and that will lower your ratio without the need to come up with more cash.

To get started order a copy of your credit report from any one of the three bureaus. They’re obligated to share a copy with you once a year at no cost. You’ll find out what they and their computers see and then you can begin the process of beautifying your credit reports. (Tip: Don’t close ANY revolving accounts (i.e. credit cards)!!

Resources:

What is a credit bureau? Credit Bureaus per Wikipedia

Factors in Determining Beacon Score:

As you can see most of the other factors used in calculating your credit scores are either impossible to change or take a lot longer to work on before they have any effect on your scores.

What really caught my attention in her article was the fact that there is currently over $900 billion dollars worth of credit card debt in the U.S.. This is a staggering amount! Equally as eye-opening is the fact that credit card companies are earning on average over 15% a year on that debt. Now you know why they are able to send out so much direct mail.

Think about how much money that is for a few minutes and then think of how much you’d love to tell them to take a hike. If you won’t do it for yourself then perhaps you can motivate to do it to keep them from making any more off of you.

$900 billion x 15% = $135 billion!

What you need to know is that many of these offers charge a transfer fee upfront with 3% being the most common. This fee guarantees you’ll pay at least 3% interest in the first year and if you pay the balance off earlier then your effective interest rate is even higher. For example if the fee is 3% and you pay it off in 3 months your effective interest paid on that “no interest” debt is 12% annualized. (3% x 4 (12 months / 3 months)).

Even without a fee it’s important to understand the reason these credit card companies are so eager to have you sign up. They know a large percentage of those who do sign-up will become hooked on this new source of spending power and end up paying them interest on a balance each and every month once the honeymoon is over. Truth is they want you to run up the balance and pay it off, just not each month. They make a lot more money of you make minimum payments each month for years on end.

If you can control yourself and transfer balances from cards with higher interest rates without using the card you’re clearing the debt off of then it makes sense to take advantage of the offer. But, if you’re like most people and you run up balances on both of the credit cards then you shouldn’t go for the offer or you’ll just sink further into debt and increase your monthly payables.

There are some financial advisors that will advise their clients to borrow as much as you can with the lowest possible payments. The theory is that you’ll invest the money that you’re not sending to the mortgage company and earn a higher rate of return on that investment then the interest is costing you on your loan. Personally this hasn’t worked well for my wife and I as we never had any trouble finding something more exciting to do with that money then parking it into a mutual fund or money market account.

Unless you’re an ego freak that needs a couple of Ferrari’s you can’t afford the mortgage payment will be your largest monthly bill to pay and the most important. Odds are you’re going to pay it if it’s the only payment you’re able to make that month. So it stands to reason that you’re going to make your mortgage payments month after month for years. Can you say the same for your investment account? Will you religiously make those investments like clock work? Sure, you may have a 401k plan that gives you the best of both worlds, but what about the monthly savings you have thanks to that ARM loan that gave you lower monthly payments?

Don’t turn your first home into a financial nightmare. Be sure you have plenty of funds for a down payment and be very sure you can comfortably handle the monthly expense. Consider how you will handle the payment if your spouse becomes a stay at home mom or dad. How long could you let him or her stay home with your child? What about a job loss? Can you hang onto the house long enough to sell it in this market?

Still set on buying a home? Be patient and be financially conservative is the best advice I can give you.