The Pros and Cons of Student Loans

This is the time of year where many students have returned to school, whether it's grade school or college. I remember like it was yesterday when my daughters were in high school. They both were high-achieving students with bright futures ahead. They participated in so many school activities ranging from sports, clubs and community service. Those activities were very important when it came to the college application process. Colleges look for well-rounded students who do more than just get good grades. 

If you have a high schooler, you are most likely in touch with the guidance office along with the college coordinator. They are vital in helping your student understand what goals they have to reach to get to applying for college. In my years of volunteering at the high school. I learned that so many students did not take advantage of the resources that their school was offering. It's a shame, because those staff members have so many helpful tools and advice. 

Many parents often stress over saving money for college. It is not something that every family is able to do. Of course, college is not for everyone. Some students end up entering the working world since college didn't seem like it was a possibility. This is why I will again encourage parents to have their student meet with the college coordinator from their school. They have resources that you didn't know existed. They can assist with applying for scholarships as well as student loans. Is the process easy? No, it's not. It does take some real effort, but you would be surprised by how many people qualify for student loans. You can learn more here. 

Taking out a student loan is a huge responsibility, because obviously it has to be paid back. Student loan debt is something so many adults incur, but the end reward will be well worth it as long as you have a game plan in place. Going into college with a career goal in mind is key. If your student successfully makes it through to obtain their college diploma, they will be able to compete in the job market. Don't think that parent ends when your kid goes off to college, because they still can use your guidance to maneuver through the stages to independent adulthood. 

It is so important to give our kids the gift of financial literacy. Teach them about credit, saving money and investing early on. This will make applying for and paying back a student loan a bit easier. We have a handful of years to go with my youngest in regards to applying for a loan, but thankfully his big sisters and dad have been through the process a number of times. If you are currently dealing with your high school student or adult child looking at taking out a loan, be sure you are there to support them. Believe me, that little bit of support goes a long way. 

Why Should Parents Save Money for Their Children?

Although your children might still be very young, time with them seems to pass quickly. It may feel like no time has passed, yet soon they will reach their next birthdays, milestones, and, eventually, adulthood. Putting money aside for your child, no matter how small an amount, can help them to make a good start in independent living. In addition to this, the earlier you start a savings account, the more time it will have to accrue interest on top of the amounts that you deposit.

Education

While your child’s mandatory schooling years may not come at a cost, higher education usually involves student loans, or upfront payments, unless your child is eligible for a scholarship. Something like a master's degree in speech language pathology could possibly help your child to advance in their career, but may not be something they would consider without a form of financial backing. Putting money away each week or month, even when they are a baby, can help to contribute towards tuition fees, as well as any other materials they might need to complete their course. Even if your child doesn’t want to gain a higher education, there may be other types of education they wish to pursue, or even tools they might need to gain employment in a certain career.

First Car

When your child reaches a certain age, they may want some level of independence while still living within the family home. Being able to pay for driver’s education, as well as a cheap first car, may be difficult to achieve, especially if your child has many school commitments that prevent them from taking on more hours at a part-time job. Lessons could be taken over an extended period of time, or in a single, intensive course. Having some money put aside can help your child to gain this extra freedom. Of course, they will still have to find the money for gas for the car, but at least you can rest assured that you have helped them along the way.

First Home

Your child buying their very first home may be decades away, but that doesn’t mean it is something that shouldn’t be thought about. The down payment for a home can vary, depending on where you live, as well as the average house price at the time, and even due to the income you have. This can be very difficult for anyone, so you may want to try to ease the burden on your child as much as possible. If they have even a percentage of the money towards the down payment of their home, this can cut down on the length of time it will take to save up for the rest of the amount.

Putting money aside during the early years doesn’t mean your child needs to go without in the present. By figuring out how much you can feasibly put aside each month, a little nest egg can be built up over the years which will make your child’s transition to adulthood that little bit easier.

Take Advantage of Online Tools for Your Home Projects

Since COVID hit a year ago, so many things have changed tremendously. The days of walking into a store or showroom look a lot different now. You see everyone wearing a mask and following distancing guidelines. Some businesses have moved to an online model to supply their customers with products and services. I have seen many of my realtor friends offer virtual house tours. It's actually pretty neat if you are crunched for time and can't get to a property on time. I have even seen some people do them as a Facebook or Instagram Live. This gives a lot of flexibility to potential buyers, since you can view a video on your time. 

If you are looking into purchasing or refinancing a home, now is the time. The interest rates have been super low since COVID hit. We definitely took advantage of it, and did a refinance recently. Our entire refi was done completely online with the exception of the closing where signatures were required. This is especially a good time for first-time home buyers to take advantage of the lower interest rates. There are even special incentives like no money down, or reduced interest rates for part of the term of the loan. I read an article that mentioned despite living in this pandemic, credit scores are rising. Whether you are looking to purchase your first house, a second home, or upgrading what you already have, try applying online for a mortgage and see how much you can qualify for, and what programs might be out there to suit your specific needs. Knowing what you can afford is key. 

One great thing about if you do refinance and are eligible to get some cash out, you can finally do those long awaited upgrades that have been sitting on your to-do list. This is my current situation that I am working on with my family. We are now trying to pick out items for an upcoming kitchen remodel. So far we know that we want white cabinets and lighter counter tops, since our flooring will be a deep brown wood color. I am one of those weirdos who prefers white appliances because I find them easier to keep clean. Stainless steel is the popular finish, but I can't get past the look of fingerprints and smudges. I won't completely rule it out if we can get a good deal on appliances. Unfortunately that is as far as we have gotten in the planning stages of the kitchen project. We still have to agree on a sink, faucet, hardware finishes, paint color and about a bajillion other details. 

It feels like a huge chore, but I am so thankful that we can view everything online, and only go into the store if it's necessary. So while a lot of things have changed since COVID, there are lots of good things that have come out of it. For those who don't like leaving home if you don't have to, all you need to do is click, pay and wait for your delivery. Hey, it works for me! Are you planning any spring home projects? 

Understanding Reverse Mortgage Talk

Retirement is supposed to be a fun and relaxing time for people. If you don’t pay attention to the financial side of things in the years leading up to it, you could find yourself in a rough spot when that time arrives. A reverse mortgage is one of the most sound ways of getting around the financial strains that come with retirement. When you first start investigating, there may be some terms and concepts you are not familiar with. Do not panic! We want to help you by breaking down the basics. 

Finding the value of your home

During the duration of your home ownership years, you most likely will make improvements to your property. This is one of several factors that could influence the overall value of the home. Others might include how old the home is, whether or not the area the home is located in is considered desirable, and if you still have an active mortgage on the house. 

Understanding a Reverse Mortgage Calculator 

The reverse mortgage calculator is a central component of the reverse mortgage application process. It is a subjective way for the bank (or any other lender) to determine how much money you can borrow in the form of a reverse mortgage. Because government has implemented laws that prevent you from borrowing the full value amount of your house, the reverse mortgage calculator will help to determine what percentage of that you will be able to borrow. It calculates the value and the applicable percentage.

But what is an HECM, then?

The concept of reverse home loan comes down to the fact that the surety of the bond is linked to your house, and that the loan can provide you with a source of money each month for as long as you choose to live in the house, as opposed to a traditional loan, where you would have been liable for paying the loan back in monthly payments during the course of its validity. 

HECM is very similar. It stands for home equity conversion mortgage, and it is also a reverse loan, but what makes it different is that it is issued by a federal agency and not by banks. The chief difference is that an HECM is insured by government, whereas a privately-issued reverse mortgage is not. 

Receiving your reverse home loan money

One of the most popular ways of doing this is to take it out as a line of credit. Another is to opt for being paid out all in one go, as a lump sum payment. There is also the option of taking receipt of your money in the form of monthly payments of equal value. Many people like this option, as the prospect of a predictable amount coming in monthly gives them a way to budget these funds. Of course, the same applies as if you were drawing a regular salary: you’ll have to keep your spending in check to prevent running out of money!

The Beginner’s Guide to Home Loans

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Okay, you’re finally ready to buy a house. You’re cruising the market, scouting neighborhoods, and just beginning to look at your finances. Unfortunately, however, house hunting is a lot more difficult than the shows on HGTV portray it to be. Here are a few basic financing terms you should know before showing up to your bank when looking for a house.

First, you should know what a mortgage is. A mortgage is essentially a long-term loan where you borrow money from a bank and pay it back, with interest, until you’re the full owner of whatever you bought. Basically, it’s a type of loan for property. It’s also usually a secured loan, where you put something up for collateral that the bank can take in case you stop making payments.

You also should understand what a loan is, more broadly. A loan technically occurs anytime one person borrows a lump sum of money and agrees to pay it back at a later date. Typically, formal loans involve interest, which means that you pay back a little more than you originally borrowed. Mortgages are always a type of loan, but not all loans are mortgages.

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Home equity loans are loans for a set amount of money that’s secured by your home — in this case, your home is the collateral. The danger, here is, that you might lose your home if you stop making payments. But many use a home equity loan to make home improvements, pay for their child’s education, or invest in some other significant item — they’re usually used for big purchases that you can’t otherwise afford.

This is actually almost a synonym for a second mortgage, which is probably another term you’ve heard. They’re essentially the same, but have slightly different rules for how much you can borrow and when you can get the loan. Home equity loans typically occur after you already own a property, whereas a second mortgage can be taken out while you’re still paying off your first mortgage. Your credit history, financial state, and bank will all determine what you’re allowed to do, however.

Hopefully, this brief guide helped explain some of the differences between the types of loans you can take out as you prepare to buy a house. Nothing about the process is simple, but with a little research and a lot of expert help, you’ll be homeward-bound in no time — happy house hunting!

Top 3 Reasons To Consider Getting Insurance for Your New Horse

If you’re the proud owner of a new horse, you may have been looking around for the best horse insurance you can get your new animal. While owning a horse is a dream come true for many people and is likely an exciting time, it also comes with risks and responsibilities. It might seem intimidating to consider the risks that come with having a horse, but thankfully, a little preparation ahead of time is all it takes to put yourself and your horse in the best possible position to stay safe no matter what lies ahead. If you’re on the fence about whether you need insurance for your new friend, consider these important reasons insurance could help protect you and your horse.

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1. Your Horse Could Have an Accident

If you’re planning on using your horse in equestrian sports, or even if you’re just keeping it for hobby riding, it’s important to keep in mind that accidents are always a possibility. While it might not be pleasant to think about, consider what you’ll do if your horse gets injured unexpectedly.

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Without insurance, veterinarian bills could quickly burn a hole in your pocket or, in worst-case scenarios, even prevent your horse from accessing the quality care they need. If you have good insurance in place ahead of time, on the other hand, you won’t have to worry about out-of-pocket costs in the event of an accident. You can focus on getting your horse help right away.

2. Your Horse Could Pass Away

In a similar vein, if your horse should die before its time, you may be left with countless expenses but no horse to ride in competitions, for example. Certain insurance policies can help provide you another horse in these cases. If your horse has to be put down for medical reasons and you can get proof from your veterinarian that the horse could not be saved, you may be able to get compensation from your insurance company that you could then invest into your next horse.

3. You Can Protect Yourself From Lawsuits

Finally, if you happen to get sued because of alleged damages caused by your horse, having the right insurance policy can help protect you from certain liabilities. Without insurance, you may have a tougher time when legal issues arise.

Owning a horse can be a dream come true, but also entails potential risks that have to be taken into account. If you’re thinking about getting horse insurance, keep these key facts in mind and you’re sure to make the right decision for you and your new animal.