The Handy Investing Answer Book. Paul A Tucci
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old, must own your home (meaning you have either no mortgage on your home or a very small balance due), and must live in the home.
How much equity may a homeowner pull out in a reverse mortgage?
The amount a homeowner may pull out in equity in a reverse mortgage depends on the age of the youngest borrower/owner of the home, the current interest rate, the current appraised value of the home, and any mortgage insurance the lender may be required to purchase.
Why are reverse mortgages controversial?
Reverse mortgages are controversial because many lenders target an older, less informed market of potential clients who may not be aware of the many risks of removing equity from their homes. The fees are very large, compared with other forms of loans, and there is a risk that home prices may not increase, therefore making it very difficult for the loans to be repaid. There are no strict income requirements to obtain this type of loan.
When must the homeowner pay back a reverse mortgage?
The homeowner must pay back a reverse mortgage when an owner sells the home, moves out of the home for 12 consecutive months, or fails to pay the property taxes or property insurance on the home.
What is an alternative strategy to using or obtaining a reverse mortgage?
Many retirees choose to downsize their lives and sell their principal residence in order to monetize their home equity, and subsequently pay cash using this equity to purchase a smaller home. This strategy contributes more to sustaining your wealth than pulling equity from the house in the form of a home equity or reverse mortgage.
How do I rebuild my credit history after filing for bankruptcy?
In order to rebuild your credit history after a bankruptcy, try to establish a line of credit in small amounts, and pay off these amounts every month. Decide never to spend more on your credit cards than you can afford to pay off entirely each month. If your issue was overspending, learn how to create and live within a budget. If your issue was large medical expenses for you and/or your family, consider getting a job that offers more affordable or subsidized medical insurance at better rates. If your issue is not having adequate savings to survive economic downturns, work hard to save six months to one year of expenses, and do not touch these savings, no matter what happens.
What is the best order of priority to pay off credit card debt?
You should make a list of all your credit card debts, and determine the interest rate on each of these obligations and each monthly payment. Give highest priority to the credit card debt that carries the highest interest rate and highest monthly payment. Give higher priority to debts with no tax advantages, such as credit cards, than to debts such as mortgages, as there are tax advantages to having the mortgage.
How many U.S. households have credit cards?
There are 54 million households with credit cards in the United States today.
How much credit card debt exists in the United States?
Roughly $866 billion in credit card debt in the United States exists today.
What is the average amount of credit card debt for U.S. card holders?
The average card holder has $15,788 in credit card debt. This could be debt related to anything from everyday purchases of food and gas to clothes, large household items such as TVs or washing machines, to monthly utility bills.
What percentage of card holders are more than 60 days delinquent on their credit cards?
Nearly 4.27% of all card holders are more than 60 days past due on their credit card payments.
About 54 million households in the United States have credit cards, and the average person has 3 to 4 cards.
What is the difference between a debit card and a credit card?
A credit card allows you to borrow money from a card issuer in exchange for paying the provider of the goods or service in full. You must pay off the balance of the purchase in full, plus any interest or fees charged during the statement balance period. A debit card deducts money immediately from an account (usually a checking or savings account at a bank), and therefore incurs no interest payments. The bank then sends you a monthly statement that shows all transactions cleared for the month on the debit card.
What does “living within your means” mean?
Living within your means is defined as the amount of income you take in, less your taxes, is the same as the amount of money you need in order to live.
What does the phrase “living beneath your means” mean?
Living beneath your means is defined as the amount of income that you take in, less your taxes, is less than the amount of money you need to live.
Why is budgeting so important to create wealth and financial success?
If you are good at managing your expenses—spending less than what you bring in—you will find money left over each month, which can be directed to savings or investing. Living beneath your means is one of the most important keys to financial success.
What must I do in order to live beneath my means?
The answer to this is found within your attitudes about money and material goods, and your ability to postpone or do without certain items now, in expectation of getting some future payback as a result of your frugality. For example, you must decide that having a stress-free financial life—by driving a paid-for, ten-year-old car—actually feels better than the stress created by having to pay off a $20,000 loan to finance a brand new car.
Why create an expense budget?
You can create an expense budget so you may attain or reach some financial goal in the future, whether to save a certain amount of money for a future purchase, such as a house down payment, educational expense, a vacation, or a large appliance, or to pay down debt.
How important is it to have a goal in mind when I decide to create an expense budget?
It is very important to have a goal in mind when you create an expense budget. Visualizing the goal makes it much easier to check your progress toward that goal, and measure your progress, whether positive or negative. Having the end prize in mind—whether an amount, or an actual physical item you would like to purchase—makes the goal more tangible and, in the end, more easily attainable.
What is a “budget”?
A budget is the established limit of the amount of expected expenses during a defined future period.
Setting up a family budget is an important step in keeping expenses under control and staying out of debt.
What is “zero-based” budgeting?
Zero-based budgeting is a method by which one accounts for the spending of every dollar of income from all sources. If any one category must be revised upward, another must be revised downward so the effect is zero on the total amount that is spent during the budgeting period. This way, your expenses can never exceed your income, if you stick to your budget.
What are some steps in using a budget?
The steps in using a budget are Goal Setting, Budgeting, Analysis, Monitoring Actual Expenses, Improving the Budget, and Adjusting Behavior.
What are some typical family budget categories?
Food (groceries, restaurants); Housing (mortgage/rent, property taxes, insurance, utilities, repairs); Clothing;