I am a CPA, and a licensed Realtor and a licensed Mortgage Originator. No one knows what the future has in store for us. However I am committed to keeping up with what is going on in our financial environment today and do not shirk from offering my two cents for your review. So whether you are one of my tax clients, a former real estate client or a fellow Realtor, take a minute, read what I have to say and then click to join my mailing list. You’ll have no regrets – I guarantee it!
I intend to stay invested in the stock market and remain in the “V” shaped recovery camp.
Now that the economy has started rolling it is not likely to stall
Stock marketIn my last issue I was critical of those expecting a second “Great Depression.” Those same people are now looking back and calling it the “worst recession,” and many are warning of a “double dip.” My best bet is that this “crisis” will go down in history as simply The Housing Bubble at the beginning of the Century. It is certainly true that its bursting caused an economic panic, but this panic was whipped to a frenzy by politicians and the media causing a misguided loss of confidence in our free market system.
Those of us who know better and have invested in prior recessions are making money hand over fist as day after day the market continues to recapture its losses despite the cries of the “chicken littles” glued to their arm chairs watching the talking heads who (by the way) all subscribe to the now famous adage that “it’s a shame to waist a crisis.” You bet. Ever hear of the adage, “the best time to invest is when there’s blood in the streets?” In the near term, I’d continue to dollar cost average into a well diversified portfolio of equities, step up buying on any severe dips, and most importantly, keep confidence in the free market system that has always eventually corrected itself in the past.
Have you missed out on the first time home buyer’s credit?
A lot of you tried to get a mortgage and found out that your credit was too low or your monthly expenses too high. Those of you who went back to the drawing boards and implemented the credit strategies I suggested may be in for a big surprise. It’s very likely the $8,000 free gift from Uncle Sam will be waiting under your Christmas tree!
That’s because congress is very likely to extend, if not increase the credit scheduled to expire November 30th into the new year. They may even increase the dollar amount of the credit, allow the credit to be used by current home owners and even raise the income limit of those able to take advantage. Nevertheless, please keep in mind that mortgage funding requirements are getting more restrictive by the day. You now need a 740 credit score to get the very best rates. You need ten percent down for a conventional mortgage. You can get an FHA insured loan with only 3 1/2 percent down, but lenders want to see a minimum credit score of 620 to 640. How can you raise your credit score, pay down your debts and save for your down payment all at the same time? Establish your Tax Busters connection today! I will show you how.
We have scheduled several more FREE CREDIT MONITORING AND REPAIR SEMINARS over the next few months. Keep in mind raising your credit score from 710 to 740 can save you thousands over the life of a 30 year mortgage! Most people coming to my seminar can raise their score by at least 50 points. Seminar dates are listed below.
CENTURY 21 GALAXY 6161 W. 95TH STREET, OAK LAWN
CREDIT MONITORING & IDENTITY THEFT: SEPT 29; OCT 13; OCT 27; NOV 10; DEC 8
Here are a few highlights from my credit monitoring seminar:
- Avoid the temptation to close a credit card once you pay off the balance. Doing so can precipitate two unintended consequences for your FICO score. 1. It will negatively affect your credit history. (You get more FICO points for old accounts than new ones.) 2. It will negatively affect your utilization ratio. (FICO wants you to keep your ratio of outstanding credit to available credit as low as possible.)
- Once you pay off a card do not let it go dormant. The issuer may stop reporting on the card or even cancel it. A better strategy is to use that card to auto pay a monthly bill then auto pay the card from your checking account.
- Don’t apply for credit more than once a quarter. Inquiries count against you.
- Remember a small hole can sink a big boat. Avoid the tendency to concentrate on big bills to the detriment of small ones. Congratulations for paying your mortgage and all your credit cards, now what about that parking ticket?
- FICO could care less that you are saving a bundle by transferring card balances to the one with the lowest rate. FICO wants all your balances’ utilization ratios to be less than half each card’s credit limit. The card you transfer balances to will have too high an individual ratio, and the creditors of the cards you transfer from can now lower your credit limits which will lower your overall ratio.
- So you’re charging everything you purchase because you want to rack up lots of travel points? That’s super cool dude, except FICO giveth not points because you pay off your balance like a good steward, it taketh away points because all it sees are high monthly balances and high utilization ratios.
- You may be tempted to avoid any form of debt – especially after a bankruptcy or because that’s what you were taught. Many (especially young) first-time home buyers are finding out that a zero credit history is like getting a zero on a spelling test – just a more macho way to fail. Better to piggy-back on a few of mom or dad’s cards or make deposits on a few pre-paid cards before you house hunt.
- Monitor you credit regularly. Don’t wait until you get a denial while you are on a family trip or that all important big date. Remember, by law you own your credit file and it is your responsibility to monitor it!
Your credit files have an impact on every aspect of your financial life and not monitoring and protecting your credit can be the biggest financial mistake you will ever make. Weather you have a FICO score of 520 or 720 there is something to be learned (or reminded of) by everyone who attends one of my credit seminars. Realtors welcome! Send your clients or better yet – bring them!
Gerald Knight, CPA, MBA, MSA
Cell Phone: 312-608-9001
Web Site: www.taxbustersonline.com
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