What are the best actions new homeowners should take to avoid going into foreclosure in the future?
Question:
Answer:
Like everyone else said. Pay the mortgage first. Your house is a secured asset. Credit cards are not. Do not take out a home equity loan to pay of or consolidate credit card debts. You are replacing an unsecured loan with your house as collateral. You would be better to use 0% or low interest credit cards to consolidate bills.
After that, budget your money, and if possible, make an extra $25 payment each month toward the principal. It doesn't sound like much, but an extra mortgage payment each year will cut a 30-year mortgage in half.
I paid the mortgage first, no matter what else I owed. I always kept an amount equal to two mortgage payments in my savings account.
As the previous person replied and also keep other overhead low. Avoid car payments. Buy a used car for cash or less.
Better yet, get rid of the car if you can. Fuel and cars suck up an amazing amount of $. Don't have more kids than you can afford.
Don't blow money on booze, cigarettes, fast food, eating out alot, etc. Be married and have 2 incomes if possible.
Have a money making hobby supplementing your day job.
Sell needless things, or things you haven't used in 1 year.
Open a brokerage account and invest in the Stock Market half your paycheck (With the help of a Financial Advisor)
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