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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. 

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!
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