Using A Reverse To Deal With Debt

DEALING WITH DEBT

Debt does not have a timeline.  It seems like many folks regroup at the beginning of the new year, but in reality, managing debt is a year round job.

Gas prices are up, food prices steadily rising, utilities, and health care, all seem to have no end in sight and are adding to your cost of living.  What do you do?  I put together a few ideas for you to help.

First, consider building up an emergency fund.

Try to put away three to six months’ worth of expenses in an account that you can access for emergencies only.  This little stash of cash should help you from using high interest rate credit cards, if for some reason you run short of cash for medicine or home repairs.

Consider paying off your mortgage and convert as much as possible into a liquid asset.  Especially if your investments are making you less than the percentage you are currently receiving.   If want to pay off you mortgage and increase your cash flow to pay off those credit card debt or car payments, consideration should be given to looking into a reverse mortgage.  With a reverse mortgage you can pay off the mortgage and make no monthly payment.  This could increase your cash flow tremendously.

If you use credit cards, look for ones that offer no annual fees, or low late fees.

Some other pointers.  Charge purchases to credit cards only if you can pay them off each month.  If you’re already in lots of debt, try stop using them.    You may want to consider calling your card company and ask for a lower rate or even a low payoff. You never know unless you call.

Suppose you are seeing those credit card balances increasing every month.  Yes, some are using credit cards to stay afloat to meet ever rising expenses.  If this is happening to you, consider evaluating all your available assets.  One asset often considered the last resort is the equity in your home.  When, in reality it should be your first thought.  Why?  Because you can utilize your homes asset and still maintain the built up reserves you have in your 401K, stocks and other assets and best of all, you still can live in and own your house.  If you want to know more, you should look into how to use a reverse mortgage to help you with managing your debt and relieving your final stress.

If you are still working, avoid payday loans.  The annual rates for these loans can be close to 400%.

Lastly, you can consult a credit counseling agency.    Counselors will try to negotiate lower rates and flexible payments with your creditors.  Avoid credit counseling agencies that charge high fees or offer you advice without reviewing your situation closely.

For more tips on finding a reputable counselor, give us a call, we can give you a list of local credit advisors who little to nothing for their services.