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Avoid Changes to Your Financial Profile During the Loan Process

Avoid Changes to Your Financial Profile
During the Loan Process

Once your loan package has been sent to the lender, there are a number of things you should avoid doing that will change your financial picture. Remember, the lender is looking for stability and consistency. If you want the best interest rate, keep that in mind. Here are a few things to consider:

The lender is looking to see what your source of down payment is.

Your lender will most likely ask you to provide proof of your liquid assets. This includes bank statements for checking and savings accounts, verification of investments, and any other liquid assets. Some of the things they ask for may seem trivial, but keep in mind, if you are planning a move to a new home, it's important to have all documentation readily available. If the lender asks for cancelled checks or deposit receipts to meet certain conditions, you want to be able to find these things quickly to avoid delaying the closing of your loan. Make sure your paper trail is easy to document, and don't move money from one account to another.

Major purchases tip the scales against your favor.

Avoid making any major purchases. You might be thinking about purchasing new appliances for the new home. This is not the time to do it. Avoid making any major purchases on jewelry, appliances, furniture, vacations, or anything with a significant price tag.

Buying or leasing a car can make a negative impact on the way the lender views your financial status. This is a big ticket item that dramatically affects your debt-to-income ratio. You may feel you have room in your budget to purchase a new car, and think this is a worthy investment if you are looking for a home that will mean a longer commute for you on a daily basis. But by tacking a car payment onto your existing debt, you reduce the amount that you will qualify for in a home loan. A $400 a month car payment can reduce your approved loan limit by as much as $50,000. Think about doing this after your loan is approved if you really need it.

If you have to change jobs, you may be asked to document why this change occurred.

If you are changing jobs to increase your income, that's a no-brainer for the lender. If you have an erratic work history to start with, another job change may make it look worse for you.

If you are an hourly wage employee, most likely a job change will have no effect on your ability to qualify for a loan. If you have a track record of a consistent amount of overtime or consistent bonuses over the last two years, the lender views this favorably. If you change jobs, there is no way of knowing if the new employer will pay overtime. Many do not! If you work on a salary + commission or straight commission basis, it has a dramatic effect on your stability. If you are considering starting your own business, again, this is something to consider after your loan is funded.

Call me directly for a free consultation.

Karl Peidl
Accredited Loan Consultant
Pleasant Valley Home Mortgage Corp.
Phone: 856-252-1224
Cell: 609-254-6687
kpeidl@pvhmconline.com
www.karlpeidl.com

New Jersey: Licensed by the N. J. Department of Banking and Insurance Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

0 comments • Karl Peidl - Accredited Loan Consultant • January 13 2010 12:35PM

Shopping for the Right Mortgage

Shopping for the Right Mortgage

Finding a mortgage that's right for you should be easy. But there are often many different programs to choose from, as well as a myriad of ways to structure the loan in terms of the amount, term, payment, rate, closing costs...the list of options may seem endless.

However, because there are so many options available, it's important to seek advice from an experienced mortgage professional who has your best interest at heart. The first step in determining which program is right for you is to ask yourself the important questions listed below. These questions can also help you confirm that you've chosen the right mortgage professional as well, because he or she should be asking you the same questions before trying to put any mortgage in place:

How long do you anticipate living in your home?
Do you expect any changes over the next few years, such as expanding your family or having children go off to college or even move away?
Do you expect any changes in income due to promotions, relocations, retirement, inheritance, or pensions?
Are you expecting a change with regard to your investments?
When it comes to investment strategies, are you conservative, aggressive, or somewhere in between?

The reason these questions are so important is that different loan programs will offer specific benefits that will appeal to borrowers at different stages of life. What one homeowner might find desirable might cause another to reach for the Rolaids®.

In the end, be sure you are given a complete picture of exactly how much your mortgage will cost you over the period of time you anticipate having the loan in place. This is the single most important factor you should consider when shopping for a mortgage. Not only does this data illustrate the bigger picture of your financial goals, it allows for adjustments should things change a little sooner than expected. A good timeframe for this projection is anywhere from three, five, or even up to seven years.

When shopping for a mortgage, you should always evaluate your choices carefully and consider how they will fit in with your long-term financial plan. Answer the important questions listed above and call me for a free consultation. Together, we'll find the program that's best for you.

What Are Points and When Should You Pay Them?

Interest Rates: When is the Best Time to Lock?

How Much Money Should You Borrow?

Karl Peidl
Accredited Loan Consultant
Pleasant Valley Home Mortgage Corp.
Phone: 856-252-1224
Cell: 609-254-6687
kpeidl@pvhmconline.com
www.karlpeidl.com

New Jersey: Licensed by the N. J. Department of Banking and Insurance Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

0 comments • Karl Peidl - Accredited Loan Consultant • December 28 2009 10:50AM

Upcoming Fed Meeting Could Affect You



The Fed is meeting December 15th and 16th, and its actions could impact home loan rates! Don't Wait. Call me before the Fed acts so we can review your situation and determine if there's anything you need to do.

New Jersey: Licensed by the N. J. Department of Banking and Insurance Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

Karl Peidl
Accredited Loan Consultant
Pleasant Valley Home Mortgage Corp.
305 Harper Drive, Suite 3
Moorestown, NJ 08057

Phone: 856-252-1224
Cell: 609-254-6687
kpeidl@pvhmconline.com
www.karlpeidl.com

2 comments • Karl Peidl - Accredited Loan Consultant • December 10 2009 12:46PM

Are You In for a Trick or Treat? Learn What Remains for Those Seeking a Home or Loan

Are You In for a Trick or Treat?
Learn What Remains for Those Seeking a Home or Loan

The last weekend in October you were likely treated to a host of Halloween characters, all in search of treats, not tricks. People searching for a new home or a mortgage, whether they donned a costume or not, may have gotten a little of both.

Home loan seekers have been treated to great rates all year long since the Federal Reserve announced it would be purchasing mortgage backed securities, with rates diving below 6.00% since last December. However, if you are looking to buy a home, according to the Case-Shiller index, home prices increased for the fourth straight month, possibly signaling the end to home price declines. So, the question now is what lies ahead?

How About a Little Perspective?
Applications for home loans fell the last few weeks of October as average reported rates for a 30 year fixed rate climbed above 5.00% according to both the Mortgage Bankers Association of America and Freddie Mac. The reason most cited for the decline in applications was increasing rates. Which means that for many people a rate above 5.00% was the cause for a decline in applications.

Perhaps this could be for one of two reasons. The first could be that anyone who could refinance into a sub-5.00% rate had already done so. The second is that people could be thinking that either rates will fall below 5.00% again or that rates in the low 5.00% range are simply not that attractive.

If we were to take a look at home loan rates dating back to 1980, a span of nearly 30 years, the average monthly reported rate for a 30 Year Fixed Rate loan according to Freddie Mac was 9.07%. While the thought of a rate in the 9.0% range seems exorbitant today, today's rates were inconceivable prior to 2001...and especially in October 1981 when rates were a whopping 18.45%!

The chart below shows the average reported monthly interest rates since January 1980. This graph does not take into account the amounts paid to obtain these rates, which were as high as 2.6% in 1984, compared to 0.7% in 2009. The red line represents 7.00%, showing that rates below 7.00% were an abnormality prior to 2002.

The low rates we have seen this decade are largely attributable to the impact of the 9/11 bombing which launched global economies into a tailspin. The result was an aggressive lowering of rates from the Federal Reserve to stabilize the economy. The impact of low interest rates resulted in a rapidly and unsustainable appreciation in property values.

As property values started their return to "normal" we witnessed the plunge into our current recession. We also saw the Federal Reserve get into the mortgage backed securities (MBS) market, becoming the major buyer of MBS this year, driving rates to current and lower levels.

While rates may appear a little less attractive based on where they have been this year, do not let that cloud your judgment. Any home loan rate with a five as the first number followed by a decimal point is a fantastic rate, when all things are considered.

Just as Halloween Has Passed, So Will These Rates
In short, as the Federal Reserve begins to pull back their purchase of MBS, as was started in October, mortgage rates will rise. It is not inconceivable to believe we will see interest rates well above 6.00% at some point in 2010, in particular after March as the Fed is scheduled to wrap up its MBS purchase program on March 31, 2010. Regardless of where we have been, for those wanting a phenomenally low interest rate, acting sooner rather than later is the best decision.

Try These Numbers on for Size
For comparison sake, just to offer a little more perspective, if one were to look at borrowing $150,000 for 30 years, here are some principal and interest payments to consider. A rate of 5.25% would yield a monthly principal and interest payment of $828. The average interest rate of 9.07% since January of 1980 would yield a payment of $1,214 or nearly $400 higher. The highest interest rate of 18.45%, in effect in October 1981, would require a payment of $2,316, a whopping $1,488 a month more. Viewed from a different perspective, one could borrow $417,000 at 5.25% for $13 less a month.

Yes, admit it. We have become spoiled with the best home loan rates we have ever seen. Sure, everyone would love a 30 year fixed rate that starts with the number four. However, do not let rates off their lows deter you from making a decision that could save you thousands of dollars over the time you may have your next loan in effect.

What about Home Prices?
There is no shortage of data one can choose from to base an argument for whether or not home prices have bottomed. One thing is clear though; national data is only relevant for determining overall trends, not local realities. That said, the S&P Case-Shiller index is widely touted as an accurate assessment on both national and local levels for the areas they report on.

Indexed to 100 in January 2000, it is easy to see when home prices began their rise and how they became out of sorts with where they should have been. It's also easy to determine when home prices started their decline in mid-2006.

The chart below, showing a 20 city composite of home prices, also demonstrates what many like to point to in order to demonstrate that home prices have bottomed and are on their way to stabilization and appreciation. The last four months have each marked an increase in month over previous month comparisons; although still lower than the 12 month previous number that is often used for comparison.

The red line indicates the point that many are referencing as the bottom of home prices. Whether you are a buyer looking to take advantage of prices not seen since 2003 or a homeowner looking to refinance, this point of reference could be the trigger you need to make a decision to move forward. No one wants to pay more for a home than they could have and increasing values hopefully will make it possible for more people to rid themselves of higher priced loans.

Whether housing has made a bottom or not, first time home buyers (FTHB) have voted with their wallet, showing that home prices overall are now affordable and they have been buying en masse. Washington and the IRS, FTHBs have accounted for monthly sales volume as high as 50% or more of total sales this year.

What Now?
Whether you are looking to refinance or purchase a home, the best way to determine what you may be eligible for is to speak with a professional. They can assess your situation and help you make a decision that is in your best interest.

However, in order to make the best decision and take advantage of rates that historically will be viewed as the lowest we may see in our lifetime, sooner is better than later to pick up the phone. Regardless of what happens to home prices, we do know that interest rates are on the rise. The Federal Reserve will end their program for purchasing MBS next March putting pressure on home loan rates to rise.

Go on, pick up the phone, call your mortgage professional and say "Trick or Treat!" Sure, you might be a little late according to the holiday calendar but you just might find something to be thankful for.

Karl Peidl

Loan Officer

Pleasant Valley Home Mortgage Corp.

305 Harper Drive

Suite 3

Moorestown, NJ 08057

856-252-1200 x1224

856-252-1240 (fax)

877-296-5454 (toll free)

www.pleasantvalleyhomemortgage.com

0 comments • Karl Peidl - Accredited Loan Consultant • November 06 2009 10:46AM

Practical Tips To Enhance Your Financial Freedom

Practical Tips To Enhance Your Financial Freedom

Fixer-Uppers Made Easy

If you've been passing up on buying a home because of the expense of anticipated cosmetic repairs, you're missing out on a great opportunity. Sure, it used to be that if you bought a home and then applied for a home equity loan to pay for repairs, the result would be two separate loans (or worse, a mortgage plus a short-term loan for repairs that often had a much higher interest rate). This is not the case anymore if you qualify for an FHA Streamlined 203(k) loan.

The Department of Housing and Urban Development's FHA Streamlined 203(k) loan allows qualifying home buyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. And the best part is, the additional funds are combined into your mortgage, so you only have to worry about one loan.

There are, of course, rules and guidelines we have to follow, and not every repair qualifies. But if you or anyone you know are interested in taking advantage of this great opportunity, give us a call, and we'll gladly provide you more information about this valuable program.

Unfeasible Fees

Despite the looming crackdown on banks for high overdraft fees, banks are still finding ways to nickel and dime consumers. Here are a couple of painful fees discussed recently by Forbes magazine.

Balance Transfer Fees aren't so balanced when banks charge a fee of between 3 and 5 percent. This means that transferring a balance from a credit card with a 15 percent interest rate to a card with a better rate of 12 percent may not save you anything at all. In fact, depending on your fee, it could cost your more.

Balance Requirement is another costly fee for many consumers with "free" checking or savings accounts. Sure, the bank waives the service charge for maintaining a set minimum balance, but fall below this number and you could be charged up to $8 every time - not to mention the opportunity cost of the money set aside for maintaining your balance in the first place.

Would you pay your broker 25 percent commission? Well, Forbes reported that Bank of America is charging customers from other banks $3 for ATM withdrawals. If your bank charges an additional fee, you're likely paying up to $5, or 25 percent, every time you take 20 bucks from the ATM. Ouch!

School Loan Forgiveness Program

Are you having trouble paying back your federal student loans or you just aren't looking forward to 25 years of monthly payments? Well, according to www.FinAid.com, you could qualify for the government's Loan Forgiveness program, which cancels all or part of qualifying federal student loans based on your work or volunteer service.

Created by The College Cost Reduction and Access Act of 2007, this program is designed to help certain borrowers with their educational expenses. To qualify, you must: perform volunteer work (AmeriCorps., Peace Corps., and Volunteers in Service to America); perform military service; and teach or practice medicine in certain communities.

Ask your Human Resource professional if you qualify or visit FinAid's website.

There's also a Public Service Loan Forgiveness Program that discharges any remaining qualifying educational debt after 10 years of full-time employment in certain positions of public service. Jobs include: emergency management, government (excluding members of Congress), military service, police officers and fire persons, public health workers (including nurses, nurse practitioners, nurses in a clinical setting, and others), public education, early childhood education, social work in a public child or family service agency, and many more.

Social Security Suffers

For the first time in 35 years, it's expected that Social Security beneficiaries will receive no cost of living adjustment (COLA) increase next year. Since the automatic COLA went into effect in 1975, beneficiaries have never failed to receive an increase, raising concerns that millions of beneficiaries will suffer a lowered standard of living since, according to The Kaiser Family Foundation, Medicare Part D (prescription plans) and Medicare Part C plans are expected to increase. In addition, about 60% of Medicare Part D plans are expected to have an annual deductible in 2010 while only 45% had an annual deductible last year.

To address these concerns, legislation has been introduced to provide an increase independent of the automatic benefit adjustment, including H.R. 3557, which seeks to provide a 2010 benefit increase based on the average COLA from the past 10 years. The projected increase in Social Security benefits would average $35 per month, or $420 annually. Congress is also considering creating a one-time payment of up to $250 for singles and $500 for couples.

At the time of the writing of this article, however, no such bills have passed, so it's important to review these programs carefully.

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

Karl Peidl
Lincoln Mortgage Company
251 Bellevue Avenue, Suite 102
Hammonton, NJ 08037

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0 comments • Karl Peidl - Accredited Loan Consultant • October 26 2009 01:33PM

Credit Repair Service: What to Expect

Credit Repair Service: What to Expect

Google the term "credit repair" and 19 million results are instantly generated. With so much information available, and so much of it conflicting, how do you know which credit repair company is legitimate and which ones are really just looking to take advantage of desperate consumers?

The following are steps you can take to know exactly what to expect from a legitimate credit repair company and the valuable services they provide:

Get a referral from your mortgage professional. Not only do we work with credit repair specialists on a regular basis, our business depends on your success. It's in our best interest to make sure you are represented by professionals who are experienced in dealing with creditors, the credit bureaus, and collection agencies.

Interview your candidates. Make sure they understand and can explain to you how credit scores are calculated. Remember the 5 factors that make up a credit score that we discussed in a previous article? Without a detailed knowledge of the specific elements that make up your credit score, how can they possibly create a successful strategy to increase your score?

Don't believe the hype. Credit repair takes time. Don't fall for advertisements from companies promising miracles in just a few days or weeks. Remember, it took time for your score to get where it is, and it will take a legitimate credit professional time to fix it, depending on your situation. For the most part, expect 3 to 6 months for the best results, and up to a year or more if you have more serious problems like bankruptcies or identity-theft issues.

Don't spend more than $1,500. Depending on your situation, expect to spend between $800 and $1,500 for a legitimate credit repair company. Again, if you have serious credit challenges such as charge offs, collections, public records or identity theft issues, expect to be in the higher range and vice versa. In today's market, where FICO scores one point below 740 could cost you thousands of dollars in interest and monthly payments, you'll be glad you made this investment in your financial future.

Monitor your progress. Be sure to communicate with both your mortgage professional and your credit repair representative throughout the process. To ensure success, we all need to be on the same page. With the right team of professionals, you can expect your credit score to increase between 10 to 220 points over the course of 6 weeks to 6 months. That's going to save you a lot of money on your mortgage, credit cards, auto loans, and even student loans.

Credit repair is a valuable, worthwhile service when you're working with the right company. If you have questions about credit repair and how it affects your chances of securing a mortgage or refinance, don't hesitate to call. We'll be glad to review your credit and see what, if anything, needs to be done to help you meet your financial goals and needs.

If you or anyone you know has any questions about credit scores or what can be done to repair them, please don't hesitate to call.

Karl Peidl
Lincoln Mortgage Company
251 Bellevue Avenue, Suite 102
Hammonton, NJ 08037

609-878-7013

kpeidl@linc-mort.com

www.karlpeidl.com

2 comments • Karl Peidl - Accredited Loan Consultant • October 07 2009 08:38AM

Bi-Weekly Mortgage Payment Programs: The Truth Revealed

Bi-Weekly Mortgage Payment Programs: The Truth Revealed

A Bi-Weekly Mortgage is a mortgage where you make "half payments" every two weeks, rather than one payment per month. This results in making the equivalent of 13 monthly payments per year, rather than 12, significantly reducing the time it takes to pay off a thirty year mortgage. This is done by by taking your normal monthly payment and dividing it by two. Since you would pay 26 bi-weekly payments, by the end of a year you would have paid the equivalent of one extra monthly payment. This additional amount accelerates your loan payoff by going directly against your loan's principal. The effect can save you thousands of dollars in interest and take years off of your mortgage.

If you search for "bi-weekly mortgage" with an Internet search engine, you will be overwhelmed by the number of companies offering "Bi-weekly Mortgage Reduction Services" or "Bi-weekly Savings Programs." Beware, you are entering dangerous waters.

Beware of Bi-Weekly Mortgage Reduction Services and Savings Programs

These "Reduction Services" and "Savings Programs" are charging you fees to "make a bi-weekly mortgage payment" for you. The enticement is that they will save you an impressive amount of money on your mortgage and reduce the number of years you pay on your mortgage.

The enticement is that they will make bi-weekly mortgage payments for you.

The real story is that they are not actually making bi-weekly payments on your mortgage. They are making bi-weekly deductions from your bank account. These funds are placed into an account from which your monthly mortgage payment is made (which only takes 24 deductions - but during the course of a year 26 deductions will be made from your account). With the extra 2 deductions, the "Service" makes an additional mortgage payment. In other words rather than making 12 mortgage payments, 13 payments are made.

The enticement is that they are providing a special service to you that would either not be possible for you to get on your own or that you won't have the time or discipline to make it happen.

The real story is that you can easily make an additional mortgage payment each year. An easy way to do this is to have your mortgage payment automatically deducted from your account each month with an additional 1/12 payment to be applied to the principal amount. At the end of 12 months, you will have made an additional payment. And you won't have to pay any fees to a "Service".

To help you see how much you can save by doing this yourself, you can use this bi-weekly payment calculator.

Karl Peidl

Accredited Loan Consultant

Lincoln Mortgage Company

251 Bellevue Avenue, Suite 102

Hammonton, NJ 08037

609-878-7013

kpeidl@supmort.com

http://www.karlpeidl.com/Home

4 comments • Karl Peidl - Accredited Loan Consultant • September 16 2009 12:57PM

Refinancing in Galloway NJ: Shopping for the Right Mortgage

Refinancing in Galloway, NJ

Shopping for the Right Mortgage

Finding a mortgage that's right for you should be easy. But there are often many different programs to choose from, as well as a myriad of ways to structure the loan in terms of the amount, term, payment, rate, closing costs...the list of options may seem endless.

However, because there are so many options available, it's important to seek advice from an experienced mortgage professional who has your best interest at heart. The first step in determining which program is right for you is to ask yourself the important questions listed below. These questions can also help you confirm that you've chosen the right mortgage professional as well, because he or she should be asking you the same questions before trying to put any mortgage in place:

How long do you anticipate living in your home?
Do you expect any changes over the next few years, such as expanding your family or having children go off to college or even move away?
Do you expect any changes in income due to promotions, relocations, retirement, inheritance, or pensions?
Are you expecting a change with regard to your investments?
When it comes to investment strategies, are you conservative, aggressive, or somewhere in between?

The reason these questions are so important is that different loan programs will offer specific benefits that will appeal to borrowers at different stages of life. What one homeowner might find desirable might cause another to reach for the Rolaids®.

In the end, be sure you are given a complete picture of exactly how much your mortgage will cost you over the period of time you anticipate having the loan in place. This is the single most important factor you should consider when shopping for a mortgage. Not only does this data illustrate the bigger picture of your financial goals, it allows for adjustments should things change a little sooner than expected. A good timeframe for this projection is anywhere from three, five, or even up to seven years.

When shopping for a mortgage, you should always evaluate your choices carefully and consider how they will fit in with your long-term financial plan. Answer the important questions listed above and call me for a free consultation. Together, we'll find the program that's best for you.

Ways to Raise Your Credit Score - And Fast!

Karl Peidl

Accredited Loan Consultant

Lincoln Mortgage Company

251 Bellevue Avenue, Suite 251

Hammonton, NJ 08037

609-878-7013

kpeidl@linc-mort.com

www.karlpeidl.com

2 comments • Karl Peidl - Accredited Loan Consultant • September 14 2009 11:08AM

Refinancing in Hammonton NJ - Trigger Leads: Protect Your Personal Data

Refinancing in Hammonton NJ
Trigger Leads: Protect Your Personal Data

Did you know that the major credit bureaus sell your personal information? It's true! Known as "trigger leads", the files of borrowers applying for a home loan are immediately flagged, packaged, and sold by the credit bureaus to the highest bidders.

For about $25 to $100 or more, your name and certain specifics about your credit report, including your address, phone number, mortgage history, and even your FICO score range, are sold to unscrupulous mortgage companies which then blindly solicit your business. This results in numerous unwanted phone calls and junk mail offers which are in no way associated with your real estate agent or loan professional.

Unfortunately, no legislation presently exists to prevent the credit bureaus from profiting at your expense. As a trigger lead, you are simply at the mercy of any number of too-good-to-be-true offers designed specifically to try and discredit the mortgage professionals you know and trust.

Don't be fooled! Ultimately, there are only a limited number of sources where lenders may turn to obtain mortgage money, and it's unlikely that you will find an unbelievably low rate without an unbelievably high cost. That's why, prior to taking an application for any loan program, I always encourage my clients to opt-out of credit bureau solicitations by visiting www.optoutprescreen.com. For homeowners looking to refinance, this is the simplest way to avoid the problem altogether.

As you embark on what could be the largest financial transaction of your life, it's important to have a professional mortgage specialist on your team who has your best interests at heart.

If you'd like more information on trigger leads, credit reports, or the various mortgage products available to help you reach your financial goals and needs, call me today.

Refinancing in Hammonton NJ: Credit Tips That Will Score Lower Interest Rates

Karl Peidl
Lincoln Mortgage Company
251 Bellevue Avenue, Suite 102
Hammonton, NJ 08037

609-878-7013

kpeidl@supmort.com

http://karltalksmortgages.com/

0 comments • Karl Peidl - Accredited Loan Consultant • September 03 2009 12:52PM

Financial Tips for Couples Who Need to Talk

Financial Tips for Couples Who Need to Talk

Tough economic times can cause a major strain on your marriage. And while we all know that communication is often the key to overcoming this challenge, discussing finances with a spouse can be extremely difficult for many people. With this in mind, here are some tips to at least get the conversation started.

Get Out of the House - One of the worst times to discuss finances with your significant other is just after you've paid the bills. Let's face it, there's something about writing all of those checks that suddenly makes the reality of your monthly finances sink in. So, instead of approaching your spouse with statements in hand, try waiting a few hours. Think about what you want to say and how you want to say it. Then invite your partner for a walk or a cup of coffee at a local coffee house. The key here is a change of environment, a relaxed, neutral place where your partner won't feel like he or she is being attacked.

Give Your Partner Some Credit - If starting the conversation is hard for you, try opening with a story about your parents' attitude and behavior towards money. This will provide an opportunity for your partner to do the same, opening the door for the discussion. Experts suggest starting off with an example of your own shortcomings and how you hope to change it. Also, offering a compliment of what he or she has been doing right is a great way to break the ice.

Never Assume - Your goal here is to establish a common ground, to create and quantify a plan of action that will benefit you both, even a small goal that you both can work toward as a team. Because of this, you really can't assume that your values and beliefs are absolutely correct and flawless. Be respectful and humble and listen to what your partner has to say. Most importantly, don't blame.

Bring in an Expert - Take the conversation to the next level. Once you've established a general plan, talking to a financial planner together can serve not only to ease the tension, but to solidify your common goals. Either way, keep talking, keep trying, and avoid bickering. Remember, no argument has ever decreased anyone's monthly bills and keeping quiet has never increased anyone's savings.