Tuesday, June 18, 2013

"Up" in the air

Being a parent we can't help but get caught up in watching cartoons with our kids. And yes, there has been times when our kids have gone to bed, then Keith and I find ourselves still watching the cartoons. Something that, honestly, I hope I never grow out of! ;)
One fond memory I have is taking my daughter to see the movie "Up" in 2009. It was so cute, and made us both tear up a bit. Of course the "Realtor" in me started asking "Why didn't Carl just sell his house"!
After all he was offered double the last offer was, what seller wouldn't jump at that!?

 Then I brought myself back to reality and told myself it was just a movie and to enjoy it with my daughter!

If I was a little more nerdy I could say, just for fun lets pretend this wasn't a fictional scenario and take a look at what would have happened if Carl had make the financially sound decision to sell his home to the developer. We would need to look at the location of the home, next the size of the home (ie: number of beds, baths, sq ft), lastly we would look at the price per sq ft of comparable homes.

It can be done, I've seen people do it! However, I prefer to keep the mind set that Carl was just as happy going on his adventure with Russell, never realizing the financial mistake he made.

Thursday, June 13, 2013

A good credit score is important for more reasons than just obtaining new credit. These days, it can be factor in everything from landing a new job, to getting the best deals on your insurance policies.
1) A 100 Point Drop for One late Mortgage Payment? - Sad, but true! A single 30 day late mortgage loan payment can cause your score to drop by as much as 100 points. Credit scoring algorithms vary based on many factors and there are also instances where the damage can be even greater.

2) 90 Days Late - Not only can this shave 100 points and more from your score, but it can also take as long as 7 years to erase the penalty for this. This is certainly a situation you want to avoid and one of the best ways that you can do this is to maintain an emergency cash reserve account equal to at least 3 months of living expenses or more. 

3) Adding Up The Cost - At the time, a single missed payment will only cost you a late fee, but when the expense really adds up is on your next loan or a missed opportunity. Low credit scores typically mean a higher rate and cost than can add up to hundreds of thousands of dollars of extra interest expense over the life of a loan.

4) Few Plan on This Happening - Yet it does. There are certainly things beyond our control such as accidents, illness, job loss, family issues, etc. At other times, it can just be carelessness or even the result of a hectic life. If you're prone to forgetting or don't have a scheduled time to sit down and pay bills, it can help to set up auto payment through your checking account or to put a perpetual reminder on your calendar. 

Opportunities and needs come up sometimes when we least expect them. Allowing payments to be made late is not something that we can readily fix after the fact as little other than time will decrease the negative impact. Since we can't speed up time, this leaves prevention as the one sure remedy!