Economy Archives - Shakadoo

What If You Can’t Pay Your Bills?

14034459259_0bb1d3e049_z The fact is, there are many Americans with no savings and no retirement plans. It’s not ideal, but it’s reality. There are millions of people just living paycheck to paycheck and working to get by. But what happens when a bill is unexpectedly high? What if you have a medical or car issue and can’t get to work? What happens when all the work is just simply not enough? What happens if you can’t pay your bills? Check out this post by Rosemarie at the Busy Budgeter for help:

-Make sure your spouse knows the situation, don’t try to hide it.

-Determine which bill can be paid late

-Call or email the bill company, let them know when you will be able to pay it.

-Ask them for help- see if they can give you a grace period, waive a late fee, etc.

-Think longer term- what can you do to make sure it doesn’t happen again? Get a working budget, cut unnecessary expenses, look into assistance programs if you’ve cut all the costs you can.

Photo Credit: Pabak Sarkar

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Real Estate Investing FAQs

by Kathy T.

Any kind of investment is a risk. Investing in stocks, a business venture, or real estate can be a giant money sink, or it can really pay off if you do your research and know what you’re doing. There are always less risky options that will reward you more. For a handy guide about real estate investing, check out this post by Lisa Ross at Tour Wizard. It has a list of questions you should ask yourself if you are considering investment:

-Am I Ready To Invest? Have I Done The Research?

-Where Should I Invest? – Have a solid plan.

-What type of property should I buy?

-Am I financially ready to handle the risk?

-What is my reason for starting to invest? Is it strong enough?

Photo Credit: Chris Potter

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Getting Married Without Going Into Debt

by Kathy T.

My friend got married last year, and her wedding budget was $20,000. Her parents paid for all of it (lucky!), and it was a beautiful ceremony. Everything was perfect, and I’m extremely happy for her, but spending that kind of money on one day just boggles my mind. And it’s not as if she’s some sort of extreme exception. In fact, most couples in America spend $10,000-$30,000 on their wedding. Goodness! That makes me glad that I’m opting for the “running away to Vegas” approach 😉 . But, if you want to have a gorgeous, traditional ceremony, but can’t afford an extravagant budget, have no fear! There are plenty of ways to cut costs at weddings. Check out this post by Kayleigh Gaddor at Credit Karma for tips:

-Make a budget ahead of time and stick to it- plan out every tiny detail!

-Choose an off-peak time for best prices on upscale venues

-Pick a fun or funky venue- try an outdoor space, a local attraction, or, to save big, consider having a backyard wedding at your home or a friend’s, or in your church if you are religious.

-Trim the guest list to save on catering

-Get creative- DIY as much as you possibly can!

Photo Credit: Jason Sussberg

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Strong Housing Market For 2015?

by Kathy T.

According to this post by Mark Edwards at Active Rain, economists are now predicting a secure and robust year for the housing market next year. Since the 2008 collapse, the market has steadily been gaining momentum. As of 2014, the market has been great for the few sellers that are willing to take the risk. Demand is way up, and supply is down- and experts have forecast an even stronger market next year. Check out the full post for more info:

An improving economy, low mortgage rates, larger household formations, and pent-up demand will help increase single family home production in 2015, according to economists who participated in the NAHB Fall Construction Forecast Webinar last month.

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Discounted FHA Loans Coming in 2015

by Kathy T.

The HAWK (Homeowners Armed With Knowledge) Program by the FHA is all set to roll out next year. The point of the program? It offers discounts to people getting an FHA loan- if they take several classes on homeowning. Personally, I think this is a great step. Providing people with more financial education before they take out a mortgage (or any large purchase) is the key to economic health. Read this article by Karen Highland at the Frederick Real Estate Online blog for more information on the discounts:

The classes cover how to evaluate housing affordability and mortgage alternatives, to better manage their finances, and to understand the rights and responsibilities of homeownership. After taking the classes, which are taken both before and after closing, mortgage insurance premiums will be cut for those borrowers. The average savings should amount to $325 a year, or almost $10,000 over the life of the 30-year loan.

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Higher Rent= More Roommates

by Kathy T.

Roommates, am I right? They eat all your food, leave messes everywhere, and bring over their annoying friends at 3 in the morning. You can’t live with them, but you can’t live without them. Especially now, as rent prices skyrocket. In most big cities now, you can expect to pay more for rent than for a mortgage. Even in the college town where I lived with my sister for a while, our rent was about $1,100 a month. Meanwhile, friend of mine had recently bought her own home. It was small, but it worked for her and her fiance. Their monthly mortgage payment? Around $600. So- if you are thinking of renting, you absolutely need roommates to lower the cost. Read this post by Camille Salama at Zillow for more info:

As of 2012, more than a third (32 percent) of adults live in doubled-up households, or homes where two or more working-aged adults live together but aren’t married or partners. The share of doubled-up households has steadily risen over the past decade, up from 25.4 percent in 2000 and 30.8 percent in 2010.

This rise in doubled-up households coincides with rental prices that are increasingly unaffordable nationwide.

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Less Homes Underwater

by Kathy T.

The housing market has steadily been improving. More houses are becoming available, prices are affordable, foreclosures are lessening, and sellers are able to be picky. One thing that was also dragging down the economy was the sheer number of underwater homes (when someone owes more on their mortgage than the home is worth). The good news is, those are disappearing as well. According to this post by Amber Nelson at the Mortgage101 blog, now there are only 6.5 million underwater homes (compared to 12 million in 2009):

“The rebound in home prices in 2013 helped 4 million property owners regain at least some positive equity in their largest asset—their home. We still have a long way to go to eliminate the negative equity overhang but significant progress is being made every day across most of the country.”

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Mortgage Regulation Worries?

by Kathy T.

Two of the main things that led to the economic collapse of 2008 were: 1. People buying things using money they didn’t have (or couldn’t come up with) and 2. Banks and other lenders giving out money to people that couldn’t pay it back. So, it’s only natural for regulators to be extra alert from now on, and to keep a watchful eye on lenders even today. This article by Patrick Sheridan at CNN Money explains:

The fact that the mortgage servicing industry is increasingly being concentrated in the hands of a few companies worries some. It may be difficult for these companies to manage the sheer number of mortgages that they’ve agreed to service. That’s why Sitkin wants servicers to have more procedures in place to ensure that they can handle the number of loans they own.

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Mortgage Rate Fluctuation

by Kathy T.

If you don’t quite understand the housing market and what causes mortgage rates to be in a constant state of flux, this one is for you! This article by Ilyce R. Glink at Yahoo Homes does a great job laying out all the reasons for market ups and downs, and why rates will be high sky one month and back to normal a week later. Obviously, it’s affected by normal economic forces like supply, demand, appreciation and inflation, but did you know about the Secondary Mortgage Market that affects rates much more heavily?

The secondary mortgage market is where loans and servicing rights are sold by market leaders Fannie Mae and Freddie Mac and bought by investors such as mutual fund companies, banks, hedge funds, and teacher and municipal pension funds.

On Wednesday, the Fed announced it would keep interest rates at below 0.25 percent in an effort to further stimulate the housing market and, hopefully, the broader economy. The Fed plans to keep interest rates near zero until the unemployment rate drops to 6.5 percent, as long as inflation remains in check.

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Lower Rates from Fed

by Kathy T.

It’s no secret that mortgage rates have been rising steadily. This increase over the last few months, along with the increase in home sales has spooked some economists and real estate experts. Some fear that it could lead to another housing bubble. In response, the Federal Reserve has announced that it will continue its stimulus program for just a bit longer. Polyana de Costa at the Bankrate blog has more:

Mortgage rates have dropped about an eighth to a quarter percentage point since the Fed announced Wednesday that it won’t cut its bond-purchasing stimulus program just yet
The Fed says it will continue to spend $85 billion per month in Treasury and mortgage bond purchases to support job growth, the housing market and mortgage rates.

Since May, mortgage rates have shot up because the Fed had said it would likely slow the pace of purchases this year.

Photo Credit: Craig Hatfield

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