Learn to use a common sense approach to personal finances. Personal finances are 90 percent behavioral. Change your behavior; you will change your finances.
Cut you expenses as much as you can. Stop going out to dinner or buying that item you think you deserve. It is time to act like an adult not an overgrown child that throws a temper tantrum when he does not get what he wants. After putting together a zero item budget. This means at the end of the month you have zero dollars left because every dollar you have has a name and a purpose.
An envelope system is a awesome way to help control spending. Example, you can afford 140 dollars a week on groceries. When you get paid, put 140 dollars in a envelope. This is what you spend on groceries for the week. When there is no money left you stop spending money on groceries. This can be adjusted. Do the same thing for cloths, entertainment or even pizza.
After 90 days, you stuck to a written budget, stuck to the envelope system, used cash for your needs, are living beneath your means, cut your expenses to the bone, got another source of income and you feel you have no other option, then proceed in obtaining a equity loan.But....
You may put your most valuable asset at risk.
Homeowners-particularly elderly, minority and those with low incomes or poor credit-should be careful when borrowing money based on their home equity. Why? Certain abusive or exploitative lenders target these borrowers, who unwittingly may be putting their home on the line.
Abusive lending practices range from equity stripping and loan flipping to hiding loan terms and packing a loan with extra charges. The Federal Trade Commission urges you to be aware of these loan practices to avoid losing your home.
Equity Stripping
You need money. You don't have much income coming in each month. You have built up equity in your home. A lender tells you that you could get a loan, even though you know your income is just not enough to keep up with the monthly payments. The lender encourages you to "pad" your income on your application form to help get the loan approved.
This lender may be out to steal the equity you have built up in your home. The lender doesn't care if you can't keep up with the monthly payments. As soon as you don't, the lender will foreclose-taking your home and stripping you of the equity you have spent years building. If you take out a loan but don't have enough income to make the monthly payments, you are being set up. You probably will lose your home.
DON'T- Agree to a home equity loan if you know you don't have enough monthly income to make your payments.
* DON'T- Be pressured into signing anything you are unsure of.
* DON'T- Sign any documents in your home equity loan that you have not thoroughly read or that has blank spaces that are claimed to be filled in at a later date.
* DON'T- Sign the deed of your property over to anyone. Consult an attorney or someone you trust and has your best interest at heart.
* DON'T accept a home equity loan that includes extra products or any insurance you may not want.
Always remember, you must use a common sense approach to personal finances and learn how to be abnormal. Meaning use cash for your purchases live beneath your means and remember personal finances are 90 percent behavioral. This way of thinking will put you in a position to win.
http://www.articles2k.com/article/117/105818/Use_Common_Sense_Before_Applying_For_A_Home_Loan/
