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Facing Your Financial Fears

The Money Nerve
Facing Your Financial Fears

Facing Your Financial Fears

We all have money habits ingrained in our lives, yet many of us are afraid of facing financial fears. Financial fear is often caused by emotional response that we unconsciously carry with us, and facing your financial fear is the first step to eliminating stress and worry.

There are dozens of emotions that surface when it comes to money. When I was thinking back on the emotions I have dealt with in client meetings over the years, I came up with an extensive list. But one emotion seems to crop up more often than others. It’s exhaustion. Looking at the root cause of our financial actions can be exhausting. Being broke can be exhausting. Budgeting can be exhausting.

Exhaustion

Many people have a message in their mind stuck on replay, and it says, “I don’t want to look at my financial reality. I just don’t want to look at how messed up I actually am.” It seems less exhausting to live in a make-believe world! The problem with that assumption is that it’s a fantasy. As soon as you get an overdraft fee – BAM! Welcome to the real world. Dealing with reality out of fear makes you may feel even more de- energized and defeated.

Turn your exhaustion around:

• Analyze your true situation. Don’t spend money before you receive it.
• Have a contingency plan
• Create a strategy to move in a new direction.
• Investigate smarter personal finance tips and tools

Determine where your “MONEY NERVE” is by facing Your Financial Fears

1. Write down a recent, uncomfortable Money Nerve moment and analyze how you might have mitigated the emotions behind it and improved the situation.
2. Start a journal to track your money habits and emotions
3. Make a list of people in your inner circle of family and friends with whom you could discuss finances.
4. Make a list of professionals who could provide financial advice, maybe a CPA or a financial advisor.
5. Pick the three strongest emotions that trigger your Money Nerve. Mentally trace them back to what you believe to be the root cause. For example, “My father got angry whenever we wanted to eat out.”
A.
B.
C.
6. Write down a recent, uncomfortable Money Nerve moment and analyze how you might have mitigated the emotions behind it and improved the situation.
7. Review your journal entries to identify other emotions that trigger your Money Nerve.

Becoming more aware of the emotions that trigger your Money Nerve will create new options for making positive change in your life!

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Low and No Payment Mortgages

mortgages

Low and No Down Payment Mortgages

Low and No Down Payment Mortgages

~ written by Clever Dude

Hi Money Nerve readers! Thought this “Clever Dude” article about mortgages was very informative. Check out the details.

Many years ago, mortgages required a good credit score and a large down payment of at least 20%. That’s no longer the case since the Federal Government created several home loan programs making it easier for borrowers to attain a mortgage loan.

Here are some loan programs that allow for a low, or no down payment.

FHA Loans
The Federal Housing Administration was introduced to help encourage home ownership in the U.S.You may qualify for an FHA loan with just a 580 credit score and a low down payment of just 3.5%. That’s a much lower down payment than conventional loans which require between 10% – 20% down.

One of the great things about FHA loans is that the down payment can be a gift from a friend or family member. Up to 100% of the down payment amount can be gifted to the borrower allowing for 100% financing to those who are receiving a gifted down payment.

The FHA also allows for higher debt-to-income ratios than other types of home loans. In some cases, lenders can allow for DTI ratios up to 50%. With this calculator, you can figure out how much house you can afford factoring in PMI and property taxes.

Pros and Cons of FHA Loans

Pros

Low down payment
Low 580 credit requirement
Lower interest rates
Higher debt-to-income ratios allowed
Up to 6% of closing cost can be paid by the seller
Non-occupying co-borrowers allowed
Many FHA approved lenders nationwide
Higher allowed debt-to-income ratios

Cons

Low loan limits
Fixer-upper homes can’t be financed
Mortgage insurance premium required
High MIP costs, up to 1% of loan amount
Up-front MIP required

VA Loans
If you’re a Veteran you may qualify for a VA mortgage. VA loans are the cheapest type of mortgage loan available. They require no down payment and no mortgage insurance is required. In order to qualify, you must be an active, or retired Veteran or a Veteran spouse.

Like FHA loans, VA loans come with lower mortgage rates than most conventional loans do. They do require a higher credit score than FHA, most lenders require a minimum 620 credit score to receive 100% financing.

USDA Loans
The U.S. Department of Agriculture created the USDA rural housing program to help loan to median-income borrowers become homeowners in rural parts of the country. USDA loans do not require a down payment.

Because they are 100 % financing lenders have higher credit score requirements. Typically you will need a minimum 640 FICO score to qualify for a USDA mortgage. When you think of the term “rural” you generally think of farms and ranches. However, about 97% of the country is in an eligible USDA location. Most areas that are 30 miles outside of major cities are USDA eligible.

Conventional 97 Loans
Fannie Mae is one of the largest buyers of mortgage in the U.S. Fannie Mae has started the 97% LTV conventional mortgage loan which requires just a 3% down payment. That’s even lower than FHA. To qualify for this loan program you must have at least a 620 credit score.

Some of the benefits of conventional loans are the higher loan limits than Government backed mortgages. In low-cost areas of the country, the loan limit is $424,100 which is over $150,000 higher than the FHA limits. Like FHA loans, conventional 97 loans also allow 100% of the down payment to come from gift funds.

The Bottom Line…
There are many mortgage programs besides just FHA that offer low or no down payment loans. USDA and VA are the only two mortgages that offer 100% financing. If you’re not eligible for either you may qualify for FHA or a conventional 97 loan with low down payment requires, much lower than traditional financing.

Knowing your options is an important part of the process especially before speaking to a loan officer. Not all lenders offer all types of loans, knowing the different types of loan programs can help you save a bundle on your home.

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Powerful Change: Fake It Until You Become It!

Mind Over Matter

Powerful Change: Fake It Until You Become It!

Do you always accept circumstances as they appear to be?  When you resign yourself and take everything at face value, you leave many doors with better or different options shut. By opening your mind, investigating new ideas, finding new ways to tackle a challenge and visualizing a different perspective, you can make intentional changes. You can fake it until you become it!

Here are some thoughtful solutions for beginning a new journey of personal assessment and growth. Baby steps can create massive change.

Begin exploring personal and financial growth

· What are your strengths?
· Is your internal view of yourself realistic?
· Do your values align with your goals?
· Are there mental/ emotional barriers that need overcoming to be successful?
· What do you need to take the next step?

Examine your story and ask questions. Does this story (well worn and comfortable) still fit your life? If not, how do you take stock of the past and re-frame that internal vision of yourself?

Reflect on these questions below to determine where you are:

Who are you?
What are your values?
What are you passions?
What is your purpose?

Have you ever browsed through old photos and marveled how people and places have changed so dramatically? Notice the changes in you over time. Begin to investigate ways to realign your passion and purpose to reach your goals. Life is about change;  knowing who and where you are in life will assist you to move in a new direction.

You have the power to change

If you allow other people’s stories to define who you are, it is time to take responsibility for who you are. Embrace who you are, own your choices and begin to make proactive decisions and adjustments to reach your goals.

We all have different wants and needs. Some people have a strong desire to invest in their future. Others want to live exuberantly at the moment. We all have unique emotional reactions regarding our present situation. When we feel pain or guilt, are scared and ashamed of our actions, it is a sign to do somethingdifferent. Use this pent-up power to make a mental change; drawing from this mindset results in astounding physical changes.

Fake it until you become it!

I want to share this video of Amy Cuddy speaking about powerful change, on both an emotional and physical level. If you have ever felt inadequate or that you are a “fake” – and it’s just a matter of time before “everyone” finds out, watch this clip! It is life changing! In addition to focusing on a new shift in perspective, Amy shares scientific evidence that simple changes in your body language can effect other people’s opinions about you and enhance your success! It certainly affected me, and I hope you will also find it valuable.

Video: Don’t Fake it ‘till you make it; Fake it until You Become it!