How to Discuss Finances Together in a Marriage

How to Discuss Finances Together in a Marriage.

Finances are a hot topic when it comes to all relationships, especially marriages. Saying “I do” means more than just sharing a life together, it also means sharing financial responsibility for that life. Whether good or bad, each spouse needs to be open and honest about his or her current financial standing. What’s more, the couple must work together to decide on important financial decisions for the future. Learn the basics for discussing money with your spouse.



Part 1 Communicating Effectively

1. Broach the subject casually with your spouse. The time to start talking about merging your finances is before the wedding, but at least 40% of couples avoid doing so.

Start the conversation with your action items first. This could mean starting off by talking to your spouse about your desire to look at your own credit score as you prepare to buy a house and suggest that he or she does the same. Say something like “Have you checked your credit report lately? I’ve been wanting to get a good picture of my financial standing. Maybe we can do it together?”

Things like credit scores for both of you may change how you approach buying a home, for example. You may find if one of you has a higher score than the other, it may be better to buy without both of you on the mortgage. However, things line up, remember you are on the same “team”.

2. Gather data to support your decisions. Print your credit reports and any supporting documentation, such as account balances and credit card debt. Financial choices need to be based on numbers not emotion. Make sure you both have a clear idea of what debts came into the union and how you can work to pay those down.

Early on you are doing this to get on the same page about your individual financial pictures. However, in the future, it may be nice to take time each month to sit down together and look over the numbers. Viewing credit card statements and account balances can be a way to keep you accountable as far as goals and also open the floor for an ongoing discussion with your spouse.

3. Be candid about any bad habits. Before you get started, you must be forthright with your spouse about any habits you happen to have that are not apparent on your credit reports.

An example of a bad habit would include not taking the time to write down purchases made on your debit card so you can balance your check book. When you were single, this may have not seemed like a huge deal, but with two people sharing accounts it can quickly become a problem.

Other bad habits you need to bring to your spouse would include past blemishes on your credit like having too many credit cards open, being in default on student loans or having bills in collection. All of these issues can impact credit, but they can also be addressed and resolved.

4. Refrain from pointing the finger. Placing blame and arguing over money will not make any issues better. If you ask your spouse to be honest about credit challenges and then start the blame game you will probably not get that same level of honesty in the future.

5. Listen to understand, not to reply. This means looking at your spouse as he or she is speaking, listening carefully to fully get his or her point of view, and then taking that one step further by confirming what you have heard.

When you sit down to have a tough conversation with your spouse, you will break the trust if you are not willing to listen. Don’t ask the tough questions unless you are ready to handle any answer.

The exchange of information should be fair and equal.



Part 2 Setting Ground Rules.

1. Decide if you will merge all the money or maintain separate accounts. Even after getting married there are no laws that say you have to merge all your accounts. Having separate accounts does not mean neither of you knows what the other is doing. Both partners should have access to the records of the other since you are sharing a household.

Depending on the credit scores for both spouses, it may make more sense to keep separate accounts especially if you want to buy a home soon. One spouse alone on a mortgage is going to have a higher chance of getting the loan than two people with mixed credit scores.

2. Determine who will be the primary overseer of your money. This will include how you make decisions about both small and large purchases. The person who is most organized and financially savvy may be the best choice for managing the finances. However, both partners should take on the responsibility in some way. So, choose duties according to your individual strengths.

For example, one of you may be better at saving, so you will be in charge of building an emergency fund and overseeing retirement savings. The other may be in charge of paying monthly bills and balancing the checkbook. Decide based on what’s best for you and your spouse.

3. Agree about which of you will handle certain expenses. You will need to know who is writing the check for rent, paying the electric bill and other household bills. You do not want to get into a situation where both of you thought the other paid the electric bill and you learn that it wasn’t paid when the lights are turned off. You also don’t want to pay bills twice and be short money.

Being upfront about how much both of you make and how you will divide the bills will make things much easier. Some families divide everything I half while others just pool their money regardless of who makes what.

The use of credit cards versus cash should also be explored as one partner may be used to always using a card and then paying it off once a month while the other only uses cash. This needs to be talked about.

4. Don’t make big purchases without your spouse’s blessing. Regardless of who makes more money, a big ticket item should be bought together. This is a good time to set boundaries about how much either of you can spend without talking to your spouse. This can be as simple as saying you have a spending limit of $100 without checking in since that is a low amount in your budget and won’t overdraw the account.



Part 3 Overcoming Money Troubles.

1. Build a household budget. This budget should include all the household bills, ongoing needs and bills that were outstanding from before you got married. The budget needs to be realistic and something you both commit to. Consider these tips:

Tally up every single monthly expense and plan for them in advance.

Include separate and joint goals.

Include long-term goals like saving for a down payment on a house.

Negotiate with ongoing bills to cut down interest rates or get rid of fees.

Automate whatever you can so that you don’t miss paying bills and acquire late fees.

Go back and revise your budget as needed.

2. Start building an emergency fund. If you didn’t already have an emergency fund before getting married, now is the time to build one. An emergency fund acts as a cushion in times when unexpected expenses pop up or one of you is out of work.

How big your emergency account is will depend on you and your spouse. Many families tuck away enough money for at least 3 to 6 months of expenses. This provides greater security over the long haul.

This savings account would be for true emergencies only, not impulse buys. Take the time to set boundaries as to what qualifies as an emergency.

Some households use a credit card for emergencies like car repairs. Make sure you both agree if this is a good use of your credit cards and leave the available balance for such an emergency. If either of you has problems with managing credit cards, this may not be the best option for your household.

3. Know your debt situation and decide on a strategy to pay it off.[13] Both of you should have a very clear idea of the other person’s debt as well as your own. Don’t fall prey to the idea that it’s your spouse’s problem—it’s not. Both of your debt is usually considered during major purchases, so working together to shrink each person’s debt is ideal.

It can also be helpful to get financial advising or attend a debt reduction course for couples. If you have a significant amount of debt—or have no idea where to start to pay it down—it may be practical to involve a professional who can assist you.

4. Plan for your retirements. Talk to your spouse and come up with a plan that suits both of you for retirement and start saving. Keep in mind, that men and women often have varying opinions when it comes to retirement, so be willing to compromise and consider your spouse’s perspective.

Include payments to 401K and other investments as a part of your budget. Part of this process also includes changing the beneficiaries for each account now that you are married.

If you don’t already, you also need to draw up life insurance policies to secure your spouse and your family in case of a tragedy.



Question : If we get a divorce, will my wife get 50% of my 401K too?

Answer : Honestly, this depends on the state and the county where you are getting divorced. Different locations have different rules of division in a divorce. Some states are equitable division, meaning you split 50/50 while others are not.



Warnings.

Money troubles have ended more than a few marriages. If you are both responsible, open and honest about money, it will make for a stronger marriage.

Be mindful that some people are sensitive about discussing money. To some, money means power and control and these are very volatile subjects. Handle with care.

It can be a difficult and uncomfortable transition going from being a single person in total control of your finances to being part of a couple. If your partner is resistant, give him or her time. If you can show them that you are interested in working as a team with no judgments, your spouse will eventually come around.

February 10, 2020

how to discuss finances together in a marriage

How to Discuss Finances Together in a Marriage.

Finances are a hot topic when it comes to all relationships, especially marriages. Saying “I do” means more than just sharing a life together, it also means sharing financial responsibility for that life. Whether good or bad, each spouse needs to be open and honest about his or her current financial standing. What’s more, the couple must work together to decide on important financial decisions for the future. Learn the basics for discussing money with your spouse.



Part 1 Communicating Effectively

1. Broach the subject casually with your spouse. The time to start talking about merging your finances is before the wedding, but at least 40% of couples avoid doing so.

Start the conversation with your action items first. This could mean starting off by talking to your spouse about your desire to look at your own credit score as you prepare to buy a house and suggest that he or she does the same. Say something like “Have you checked your credit report lately? I’ve been wanting to get a good picture of my financial standing. Maybe we can do it together?”

Things like credit scores for both of you may change how you approach buying a home, for example. You may find if one of you has a higher score than the other, it may be better to buy without both of you on the mortgage. However, things line up, remember you are on the same “team”.

2. Gather data to support your decisions. Print your credit reports and any supporting documentation, such as account balances and credit card debt. Financial choices need to be based on numbers not emotion. Make sure you both have a clear idea of what debts came into the union and how you can work to pay those down.

Early on you are doing this to get on the same page about your individual financial pictures. However, in the future, it may be nice to take time each month to sit down together and look over the numbers. Viewing credit card statements and account balances can be a way to keep you accountable as far as goals and also open the floor for an ongoing discussion with your spouse.

3. Be candid about any bad habits. Before you get started, you must be forthright with your spouse about any habits you happen to have that are not apparent on your credit reports.

An example of a bad habit would include not taking the time to write down purchases made on your debit card so you can balance your check book. When you were single, this may have not seemed like a huge deal, but with two people sharing accounts it can quickly become a problem.

Other bad habits you need to bring to your spouse would include past blemishes on your credit like having too many credit cards open, being in default on student loans or having bills in collection. All of these issues can impact credit, but they can also be addressed and resolved.

4. Refrain from pointing the finger. Placing blame and arguing over money will not make any issues better. If you ask your spouse to be honest about credit challenges and then start the blame game you will probably not get that same level of honesty in the future.

5. Listen to understand, not to reply. This means looking at your spouse as he or she is speaking, listening carefully to fully get his or her point of view, and then taking that one step further by confirming what you have heard.

When you sit down to have a tough conversation with your spouse, you will break the trust if you are not willing to listen. Don’t ask the tough questions unless you are ready to handle any answer.

The exchange of information should be fair and equal.



Part 2 Setting Ground Rules.

1. Decide if you will merge all the money or maintain separate accounts. Even after getting married there are no laws that say you have to merge all your accounts. Having separate accounts does not mean neither of you knows what the other is doing. Both partners should have access to the records of the other since you are sharing a household.

Depending on the credit scores for both spouses, it may make more sense to keep separate accounts especially if you want to buy a home soon. One spouse alone on a mortgage is going to have a higher chance of getting the loan than two people with mixed credit scores.

2. Determine who will be the primary overseer of your money. This will include how you make decisions about both small and large purchases. The person who is most organized and financially savvy may be the best choice for managing the finances. However, both partners should take on the responsibility in some way. So, choose duties according to your individual strengths.

For example, one of you may be better at saving, so you will be in charge of building an emergency fund and overseeing retirement savings. The other may be in charge of paying monthly bills and balancing the checkbook. Decide based on what’s best for you and your spouse.

3. Agree about which of you will handle certain expenses. You will need to know who is writing the check for rent, paying the electric bill and other household bills. You do not want to get into a situation where both of you thought the other paid the electric bill and you learn that it wasn’t paid when the lights are turned off. You also don’t want to pay bills twice and be short money.

Being upfront about how much both of you make and how you will divide the bills will make things much easier. Some families divide everything I half while others just pool their money regardless of who makes what.

The use of credit cards versus cash should also be explored as one partner may be used to always using a card and then paying it off once a month while the other only uses cash. This needs to be talked about.

4. Don’t make big purchases without your spouse’s blessing. Regardless of who makes more money, a big ticket item should be bought together. This is a good time to set boundaries about how much either of you can spend without talking to your spouse. This can be as simple as saying you have a spending limit of $100 without checking in since that is a low amount in your budget and won’t overdraw the account.



Part 3 Overcoming Money Troubles.

1. Build a household budget. This budget should include all the household bills, ongoing needs and bills that were outstanding from before you got married. The budget needs to be realistic and something you both commit to. Consider these tips:

Tally up every single monthly expense and plan for them in advance.

Include separate and joint goals.

Include long-term goals like saving for a down payment on a house.

Negotiate with ongoing bills to cut down interest rates or get rid of fees.

Automate whatever you can so that you don’t miss paying bills and acquire late fees.

Go back and revise your budget as needed.

2. Start building an emergency fund. If you didn’t already have an emergency fund before getting married, now is the time to build one. An emergency fund acts as a cushion in times when unexpected expenses pop up or one of you is out of work.

How big your emergency account is will depend on you and your spouse. Many families tuck away enough money for at least 3 to 6 months of expenses. This provides greater security over the long haul.

This savings account would be for true emergencies only, not impulse buys. Take the time to set boundaries as to what qualifies as an emergency.

Some households use a credit card for emergencies like car repairs. Make sure you both agree if this is a good use of your credit cards and leave the available balance for such an emergency. If either of you has problems with managing credit cards, this may not be the best option for your household.

3. Know your debt situation and decide on a strategy to pay it off.[13] Both of you should have a very clear idea of the other person’s debt as well as your own. Don’t fall prey to the idea that it’s your spouse’s problem—it’s not. Both of your debt is usually considered during major purchases, so working together to shrink each person’s debt is ideal.

It can also be helpful to get financial advising or attend a debt reduction course for couples. If you have a significant amount of debt—or have no idea where to start to pay it down—it may be practical to involve a professional who can assist you.

4. Plan for your retirements. Talk to your spouse and come up with a plan that suits both of you for retirement and start saving. Keep in mind, that men and women often have varying opinions when it comes to retirement, so be willing to compromise and consider your spouse’s perspective.

Include payments to 401K and other investments as a part of your budget. Part of this process also includes changing the beneficiaries for each account now that you are married.

If you don’t already, you also need to draw up life insurance policies to secure your spouse and your family in case of a tragedy.



Question : If we get a divorce, will my wife get 50% of my 401K too?

Answer : Honestly, this depends on the state and the county where you are getting divorced. Different locations have different rules of division in a divorce. Some states are equitable division, meaning you split 50/50 while others are not.



Warnings.

Money troubles have ended more than a few marriages. If you are both responsible, open and honest about money, it will make for a stronger marriage.

Be mindful that some people are sensitive about discussing money. To some, money means power and control and these are very volatile subjects. Handle with care.

It can be a difficult and uncomfortable transition going from being a single person in total control of your finances to being part of a couple. If your partner is resistant, give him or her time. If you can show them that you are interested in working as a team with no judgments, your spouse will eventually come around.

February 10, 2020

how to find a home after divorce with limited finances

How to Find a Home After Divorce with Limited Finances.

Divorce is an emotionally draining experience, and on top of everything else you need to find somewhere to stay. There are fewer options for people with limited finances. Since you probably can’t buy a home, you should find a cheap rental in a good location. If necessary, you can crash with friends or family or even try to stay at home with your ex-spouse until you save up enough money.



Method 1 Finding a Cheap Rental.

1. Search the Internet. Looking for cheap rental options is a little like searching for a needle in a haystack. However, there are cheap apartment rentals out there. Check websites such as Rent.com. A studio or a bedroom in someone’s house will probably be the cheapest to rent.

You might need a small place at first—really small. In expensive cities, you might get a 100 square foot micro-studio for under $1,000.

Also consider apartments in slightly shady neighborhoods. Check neighborhood crime rates at www.neighborhoodscout.com. Remember that your first home after a divorce doesn’t need to be your permanent home.

2. Contact hotels. You might only need a temporary place to stay, e.g., for a month or so. In some countries, such as Canada, a lease must be for at least 12 months. Your only option for short-term housing might be to stay in a hotel or motel.

Many national chains have extended-stay hotels. Call and ask about rates.

Renting a hotel this way is more expensive than renting an apartment. However, it’s more convenient if you need short-term housing.

3. View the apartment. Call up the landlord and ask to see the place. No matter how desperate you are, you shouldn’t rent a place without first viewing it. Some cheap apartments are unsanitary and unsafe.

Make sure the apartment is close to work or accessible by public transportation.

Check your cell phone reception. You can save money if you just use your cell phone and skip the landline.

Also confirm that there is enough water pressure. Flush the toilet and turn on the taps.

4. Check your credit. More and more landlords are looking at people’s credit history before deciding to rent to them. Pull your credit score and credit history. If your score is low, try to clean up your credit history quickly.

There may be errors on your credit history that are pulling down your score. For example, your ex-spouse’s debts might show up on your credit report, or accounts might wrongly be listed as in default. Dispute any credit report errors. It usually takes a couple months for inaccurate information to come off.

5. Ask if you can forego a security deposit. Landlords typically want a month’s rent as a security deposit to protect them in case you damage the apartment or skip out before the end of the lease. If you have good credit or a long rental history, you can ask the landlord if you can rent without paying a deposit.

If necessary, check whether you can put your rent on a credit card. It’s not an ideal solution, but it will help you get a roof over your head. You can pay the credit balance down once you get re-established.

6. Get a roommate, if necessary. Any apartment is cheaper if you have someone splitting the bills. You can advertise for a roommate on websites such as Craigslist, though it is better if you know the person already. Confirm that the lease allows you to have a roommate, because not all leases do.

If you have to advertise, ask any potential roommate for references and one month’s security deposit.

Be very clear about your expectations regarding cleanliness and having guests over.



Method 2 Staying with Friends or Family.

1. Call them up and ask. Don’t show up at someone’s doorstep with a suitcase, but call ahead of time. Ask if you can stay with them for a little bit. Give them a deadline when you anticipate moving out.

For example, you can say, “Mom, I need to come home. Is that okay? I’ve only got a few hundred saved. But if I can stay with you for two or three months, I’ll be back on my feet.”

2. Save money fast. You can’t sleep on someone’s couch forever, so cut all unnecessary expenses and take on a part-time job if possible. Build up enough money to afford a security deposit on a small apartment.

A part-time job might be ideal since it will keep you out of the house. Check Craigslist for part-time gigs such as dog walker, Uber driver, or bartender.

3. Be a model guest. People are doing you a huge favor by letting you crash with them for a little while. Make things easy on your host by keeping your space clean, not making noise, and being respectful when your host has guests.

Wash dishes or prepare meals without asking. This will relieve your host’s stress.

Avoid draining your friend’s electricity by charging up your computer and phone on their dime. Instead, find a public café or recharge while at work.

Keep complaints to yourself. Do you think the sheets are scratchy? Consider yourself lucky to have a place to stay.

4. Follow house rules. Your friends might have rules that seem weird to you. That’s not the point. You need to follow them if you don’t want to get kicked out. Ask about anything that seems unclear.

Some rules are unspoken. Pay attention to your host’s habits. For example, if they only watch TV with the volume down low, do the same.

5. Buy your own food. You should prepare your own meals so that your host doesn’t feel like they have to wait on you. Ask your friend where the nearest grocery store is and load up on food. Make sure there’s enough room in the refrigerator.

6. Volunteer to cover expenses. You can build goodwill by volunteering to buy food or paying other bills. For example, pick up a large pizza on your way home from work and invite your host to share.

7. Leave when asked. Someone might need you to leave before you want to. Gather your things and thank them. Then call up other family or friends to find a place to stay.

Remember to clean up after yourself. Remove any trash and wash the sheets or vacuum the sofa you slept on. Don’t leave anything behind.



Method 3 Living With Your Ex.

1. Talk to your ex. No law says you must leave your home after a divorce. If you have no money, you might be best off sitting tight until you’ve managed to save up enough for an apartment. Of course, you’ll need your ex spouse’s permission—especially if they were given the house in the divorce decree.

If your ex doesn’t want you in the house, volunteer to stay in the garage or in a guest house.

Staying in the house isn’t an option if there’s been any history of domestic violence, or if there is a restraining order against you.

2. Contribute to the bills. You should split shared costs, such as property taxes, insurance, electricity and—if you can afford it—the mortgage. Sit down with your spouse and talk about what you will contribute.

If you don’t have any money, volunteer to do things around the house. You can cook all meals, make repairs, and clean.

3. Come up with a schedule. Try to limit contact as much as possible. Staying in the house will be uncomfortable for everybody, but a detailed routine can make things easier. If your ex thrives on conflict, then limiting contact will be beneficial.

For example, you might get up an hour earlier than your ex and come back home an hour earlier. Schedule when you’ll use the bathroom and the kitchen.

4. Be considerate. You might have been a slob while married, but now you need to clean up after yourself. Become the ideal roommate. Follow these rules.

Wash your own dishes.

Eat only the food you buy. If you want something your ex bought, ask first.

Volunteer to clean shared spaces, such as bathrooms, and mow or rake the lawn.

5. Avoid bringing dates home. Your ex might hit the roof, and who can blame them? It’s terribly rude to start dating in front of your ex-spouse. If you want to date, then meet outside the home and don’t bring them back.

There’s also no reason to advertise that you’re dating. Keep that news to yourself.

6. Reduce conflict. If you have children, they will be harmed by constant fighting. As long as you are staying in the house, you need to commit to living peacefully. You can defuse tension by practicing the following.

Listen to your ex-spouse and avoid getting defensive. If your ex complains about your habits, avoid the temptation of starting a tit-for-tat argument. After all, your ex might have a legitimate grievance.

Don’t revisit the divorce. You’re living at home for financial reasons, not because you want to pick apart why you divorced in the first place.

7. Leave as soon as possible. Staying in the house should be a temporary solution. Some people get comfortable being part of a couple even when they are no longer married. For your own personal growth, you should move out as soon as you can afford it.



Method 4 Considering Other Options.

1. Rent a motor home. If you need a temporary place to stay, rent an RV or buy a used one. Ask friends or family if you can park on their property. If you don’t know anyone, you can park at a local campground for a fee. Recreational vehicles typically have sleeping, dining, and bathroom areas.

You can find rentals online or by looking in your telephone book. Shop around for the most competitive price.

2. Apply for housing assistance. In the U.S., low-income people can apply for a Section 8 voucher. You find a landlord willing to accept the voucher and rent directly from them. The voucher then subsidizes your rent. Contact your nearest Public Housing Authority to apply.

There are income limits for eligibility. Typically, your income shouldn’t exceed 50% of the median income of a family your size in the county or city where you want to live. For example, the median income for a single person might be $25,000. Your income will need to be $12,500 or less.

Even if you qualify, there’s usually a long waiting list. You might need temporary shelter.

3. Get a room at the Y. Your local YMCA or YWCA might have rooms for rent. Generally, they will charge by the day, week, or month, and you can book online. A night at the YMCA in the Upper West Side costs around $100 a night. This is pricey, but a decent choice if you need a place to crash for a couple days.



Tips.

If you have children but are not receiving child support, contact your local child support agency immediately. They can track down missing parents, establish paternity, and get a child support order in place.

February 16, 2020

How to Find a Home After Divorce with Limited Finances

How to Find a Home After Divorce with Limited Finances.

Divorce is an emotionally draining experience, and on top of everything else you need to find somewhere to stay. There are fewer options for people with limited finances. Since you probably can’t buy a home, you should find a cheap rental in a good location. If necessary, you can crash with friends or family or even try to stay at home with your ex-spouse until you save up enough money.



Method 1 Finding a Cheap Rental.

1. Search the Internet. Looking for cheap rental options is a little like searching for a needle in a haystack. However, there are cheap apartment rentals out there. Check websites such as Rent.com. A studio or a bedroom in someone’s house will probably be the cheapest to rent.

You might need a small place at first—really small. In expensive cities, you might get a 100 square foot micro-studio for under $1,000.

Also consider apartments in slightly shady neighborhoods. Check neighborhood crime rates at www.neighborhoodscout.com. Remember that your first home after a divorce doesn’t need to be your permanent home.

2. Contact hotels. You might only need a temporary place to stay, e.g., for a month or so. In some countries, such as Canada, a lease must be for at least 12 months. Your only option for short-term housing might be to stay in a hotel or motel.

Many national chains have extended-stay hotels. Call and ask about rates.

Renting a hotel this way is more expensive than renting an apartment. However, it’s more convenient if you need short-term housing.

3. View the apartment. Call up the landlord and ask to see the place. No matter how desperate you are, you shouldn’t rent a place without first viewing it. Some cheap apartments are unsanitary and unsafe.

Make sure the apartment is close to work or accessible by public transportation.

Check your cell phone reception. You can save money if you just use your cell phone and skip the landline.

Also confirm that there is enough water pressure. Flush the toilet and turn on the taps.

4. Check your credit. More and more landlords are looking at people’s credit history before deciding to rent to them. Pull your credit score and credit history. If your score is low, try to clean up your credit history quickly.

There may be errors on your credit history that are pulling down your score. For example, your ex-spouse’s debts might show up on your credit report, or accounts might wrongly be listed as in default. Dispute any credit report errors. It usually takes a couple months for inaccurate information to come off.

5. Ask if you can forego a security deposit. Landlords typically want a month’s rent as a security deposit to protect them in case you damage the apartment or skip out before the end of the lease. If you have good credit or a long rental history, you can ask the landlord if you can rent without paying a deposit.

If necessary, check whether you can put your rent on a credit card. It’s not an ideal solution, but it will help you get a roof over your head. You can pay the credit balance down once you get re-established.

6. Get a roommate, if necessary. Any apartment is cheaper if you have someone splitting the bills. You can advertise for a roommate on websites such as Craigslist, though it is better if you know the person already. Confirm that the lease allows you to have a roommate, because not all leases do.

If you have to advertise, ask any potential roommate for references and one month’s security deposit.

Be very clear about your expectations regarding cleanliness and having guests over.



Method 2 Staying with Friends or Family.

1. Call them up and ask. Don’t show up at someone’s doorstep with a suitcase, but call ahead of time. Ask if you can stay with them for a little bit. Give them a deadline when you anticipate moving out.

For example, you can say, “Mom, I need to come home. Is that okay? I’ve only got a few hundred saved. But if I can stay with you for two or three months, I’ll be back on my feet.”

2. Save money fast. You can’t sleep on someone’s couch forever, so cut all unnecessary expenses and take on a part-time job if possible. Build up enough money to afford a security deposit on a small apartment.

A part-time job might be ideal since it will keep you out of the house. Check Craigslist for part-time gigs such as dog walker, Uber driver, or bartender.

3. Be a model guest. People are doing you a huge favor by letting you crash with them for a little while. Make things easy on your host by keeping your space clean, not making noise, and being respectful when your host has guests.

Wash dishes or prepare meals without asking. This will relieve your host’s stress.

Avoid draining your friend’s electricity by charging up your computer and phone on their dime. Instead, find a public café or recharge while at work.

Keep complaints to yourself. Do you think the sheets are scratchy? Consider yourself lucky to have a place to stay.

4. Follow house rules. Your friends might have rules that seem weird to you. That’s not the point. You need to follow them if you don’t want to get kicked out. Ask about anything that seems unclear.

Some rules are unspoken. Pay attention to your host’s habits. For example, if they only watch TV with the volume down low, do the same.

5. Buy your own food. You should prepare your own meals so that your host doesn’t feel like they have to wait on you. Ask your friend where the nearest grocery store is and load up on food. Make sure there’s enough room in the refrigerator.

6. Volunteer to cover expenses. You can build goodwill by volunteering to buy food or paying other bills. For example, pick up a large pizza on your way home from work and invite your host to share.

7. Leave when asked. Someone might need you to leave before you want to. Gather your things and thank them. Then call up other family or friends to find a place to stay.

Remember to clean up after yourself. Remove any trash and wash the sheets or vacuum the sofa you slept on. Don’t leave anything behind.



Method 3 Living With Your Ex.

1. Talk to your ex. No law says you must leave your home after a divorce. If you have no money, you might be best off sitting tight until you’ve managed to save up enough for an apartment. Of course, you’ll need your ex spouse’s permission—especially if they were given the house in the divorce decree.

If your ex doesn’t want you in the house, volunteer to stay in the garage or in a guest house.

Staying in the house isn’t an option if there’s been any history of domestic violence, or if there is a restraining order against you.

2. Contribute to the bills. You should split shared costs, such as property taxes, insurance, electricity and—if you can afford it—the mortgage. Sit down with your spouse and talk about what you will contribute.

If you don’t have any money, volunteer to do things around the house. You can cook all meals, make repairs, and clean.

3. Come up with a schedule. Try to limit contact as much as possible. Staying in the house will be uncomfortable for everybody, but a detailed routine can make things easier. If your ex thrives on conflict, then limiting contact will be beneficial.

For example, you might get up an hour earlier than your ex and come back home an hour earlier. Schedule when you’ll use the bathroom and the kitchen.

4. Be considerate. You might have been a slob while married, but now you need to clean up after yourself. Become the ideal roommate. Follow these rules.

Wash your own dishes.

Eat only the food you buy. If you want something your ex bought, ask first.

Volunteer to clean shared spaces, such as bathrooms, and mow or rake the lawn.

5. Avoid bringing dates home. Your ex might hit the roof, and who can blame them? It’s terribly rude to start dating in front of your ex-spouse. If you want to date, then meet outside the home and don’t bring them back.

There’s also no reason to advertise that you’re dating. Keep that news to yourself.

6. Reduce conflict. If you have children, they will be harmed by constant fighting. As long as you are staying in the house, you need to commit to living peacefully. You can defuse tension by practicing the following.

Listen to your ex-spouse and avoid getting defensive. If your ex complains about your habits, avoid the temptation of starting a tit-for-tat argument. After all, your ex might have a legitimate grievance.

Don’t revisit the divorce. You’re living at home for financial reasons, not because you want to pick apart why you divorced in the first place.

7. Leave as soon as possible. Staying in the house should be a temporary solution. Some people get comfortable being part of a couple even when they are no longer married. For your own personal growth, you should move out as soon as you can afford it.



Method 4 Considering Other Options.

1. Rent a motor home. If you need a temporary place to stay, rent an RV or buy a used one. Ask friends or family if you can park on their property. If you don’t know anyone, you can park at a local campground for a fee. Recreational vehicles typically have sleeping, dining, and bathroom areas.

You can find rentals online or by looking in your telephone book. Shop around for the most competitive price.

2. Apply for housing assistance. In the U.S., low-income people can apply for a Section 8 voucher. You find a landlord willing to accept the voucher and rent directly from them. The voucher then subsidizes your rent. Contact your nearest Public Housing Authority to apply.

There are income limits for eligibility. Typically, your income shouldn’t exceed 50% of the median income of a family your size in the county or city where you want to live. For example, the median income for a single person might be $25,000. Your income will need to be $12,500 or less.

Even if you qualify, there’s usually a long waiting list. You might need temporary shelter.

3. Get a room at the Y. Your local YMCA or YWCA might have rooms for rent. Generally, they will charge by the day, week, or month, and you can book online. A night at the YMCA in the Upper West Side costs around $100 a night. This is pricey, but a decent choice if you need a place to crash for a couple days.



Tips.

If you have children but are not receiving child support, contact your local child support agency immediately. They can track down missing parents, establish paternity, and get a child support order in place.

February 25, 2020

how to owner finance a home

How to Owner Finance a Home.

There are many benefits to an owner financing deal when purchasing a home. Both the buyer and seller can take advantage of the deal. But there is a specific process to owner financing, along with important factors to consider. You should begin by hiring people who can help you, such as an appraiser, Residential Mortgage Loan Originator, and lawyer.

Part 1 Hiring People to Help You.

1. Hire an appraiser. Both the buyer and the seller should hire their own appraiser to determine the value of the house. The seller receives an appraisal in order to select a price for the home, and the buyer gets an appraisal to confirm that the selling price is fair. You can find an appraiser in the following ways:

look in the Yellow Pages, ask for a referral from a mortgage company, bank, or realtor, contact your state’s licensing agency.

2. Hire a real estate attorney. Both parties should work closely with a real estate attorney. A real estate attorney can draft all of the necessary paperwork. The attorney can also protect your interests. For example, the buyer can include a protection clause just in case the property has to be sold in response to a life changing event, job relocation or loss, divorce or death.

You can get a referral to a real estate attorney by contacting your local or state bar association. Bar associations are organizations made up of attorneys, and they often provide referrals to their members or can help you find an attorney.

3. Get advice from a Residential Mortgage Loan Originator (RMLO). A Residential Mortgage Loan Originator can give you advice on how to manage owner financing in a way that is transparent and compliant with regulations. When you owner finance a home, you are essentially providing the buyer a loan until they complete their payments on the home. Since you want your agreement to be clear and binding, it's good to work with a mortgage professional.

Your RMLO can help ensure that your owner financing documents are compliant with the Safe Act and Dodd Frank Act.

Make sure your RMLO is properly licensed by your state. Check with your state’s Department of Business Oversight or equivalent state office to check.

Part 2 Preparing for the Sale.

1. Get approval if you still have a mortgage. Owner financed sales work best when the owner has title free and clear or the owner can pay off the mortgage with the buyer’s down payment. However, if the seller still has a large mortgage, they need to get their lender’s approval.

Check whether you can pay off the mortgage with the buyer’s down payment. If not, then contact your mortgage company and discuss that you want to sell the house.

2. Consider performing background checks to control risk. Both the seller and buyer should perform background checks on each other. Many owner financed sales are short-term, for five years or so. At the end of the term, the buyer is expected to refinance and then make a “balloon payment,” paying off the balance of the loan. As a seller, you will want assurance that a buyer can get a traditional loan at the end of the contract term, which means you definitely want to check their credit history and employment.

In fact, sellers should consider having buyers complete a loan application. You can verify references, employment history, and other financial information.

Buyers also benefit from background checks. For example, they might discover that the seller has been financially irresponsible. If the seller still holds a mortgage on the home, there is a risk of default.

3. Determine loan details. One advantage of an owner financed sale is that the seller controls details about the financing. Because the seller is assuming a lot of risk, they should come up with terms that protect them. Talk with your attorney about what the terms of the loan should be. Consider the following.

a substantial down payment (usually 10% or more), an interest rate that is higher than usual (though less than your state’s maximum allowable interest rate), a loan term you are comfortable with.

4. Ask your lawyer draft a purchase and sale agreement. You want to protect yourself legally by making sure that you have all of the necessary legal documents prepared. Your real estate attorney can draft a purchase and sale agreement, which both seller and buyer will sign. This document provides information about the following:

closing date, name of the title insurance company, final sale price, details about a down payment, if any.

contingencies which must be met for the sale to proceed, such as an acceptable inspection and a clear title report.

5. Draft a promissory note. The seller also needs the buyer to sign a promissory note or other financial instrument. Your lawyer can draft this document for you. It should contain the following information.

borrower’s name, property address, amount of the loan, interest rate, repayment schedule, terms for late or missed payments, consequences of default.

6. Have your lawyer draft a mortgage. The mortgage provides security for the loan. Your lawyer should also draft this document for you. The mortgage is what allows you to repossess the house should the buyer default on the loan.

Part 3 Completing the Sale.

1. Agree on an interest rate and term with the buyer. Your RMLO partner will calculate the agreed upon amount based on a specific period of time and if you have agreed on a balloon payment. Remember that not every state allows balloon payments.

For example, you can base monthly payment amount on a hypothetical 30-year mortgage, but schedule payment of the remaining amount in 5 years (balloon). The RMLO will also create required disclosures for the seller/lender.

2. Close the sale. Both the buyer and seller should have independent attorneys who can review all paperwork to make sure that it is complete. You should schedule a closing to sign everything and make copies.

3. Hire a loan servicer to manage payments. The seller should talk to their lawyer about whether they want to hire a loan servicer. If they do, then their lawyer can recommend someone. A loan servicer provides many important services.

collects the mortgage payments, sets up an escrow, handles tax statements and payments, makes insurance payments, processes payment changes, performs collection services, if necessary.

4. Record your mortgage or deed of trust. You can record it in the county land records office. Doing so will allow the buyer and the seller to take advantage of tax deductions. Making the deal official in this manner also proves that the sale took place.

Part 4 Deciding Whether an Owner Financed Sale is Right.

1. Analyze your situation as a seller. Owner financed sales are rare, and you shouldn’t jump into one until you have thoroughly considered your situation. Think about the following.

You usually must own the house free and clear of any mortgage. Otherwise, you will need your lender to give you permission to sell.

Taxes can be complicated and you’ll want to hire a tax professional to help you.

You might have to go through the foreclosure process if the buyer stops making payments. This can be costly and time-consuming.

However, you may make much more money on an owner financed sale than if you sell the traditional way.

2. Determine if an owner financed sale is ideal as a buyer. Buyers usually like owner financed sales because a seller might be less choosy than a bank or mortgage lender. However, you should consider the following.

You might have to come up with a larger down payment than you normally would. The owner-seller is taking a risk by financing your sale, and in return they might want a larger down payment or higher interest.

Owner financed sales often close faster than other sales.

You need to be sure you can make the balloon payment if one is written into the contract. If you break the contract, then you could lose the house and all of the payments you have made up to that point.

3. Talk with professionals if you have questions. In addition to working with a real estate lawyer, you might want to meet with a tax professional, such as a certified public accountant. Ask about the tax benefits of an owner financed sale compared to selling outright.

If you are a buyer, then you should talk about how to raise your credit score so that you qualify for a traditional mortgage when the balloon payment comes due.

4. Make sure your buyer can cover the balloon payment. Owner financing is most often used when the buyer or property does not qualify for a conventional loan. This means the buyer may not have the resources to cover the balloon payment at the end of your term. Discuss your buyer's options before entering into a contract with them.

If you are a buyer, make sure that you have your options for paying the balloon payment lined up before you agree to the seller's terms.

5. Consider a lease-to-own option. This option is often more advantageous for the buyer and less complicated for the seller. You and the person interested in your home will lock in a potential sale price for the home, as well as a lease agreement ranging from 2 to 5 years. During that time, the person will pay you rent on the home, with a portion of that rent going toward a down payment on the house. After the lease ends, the person can choose to proceed with the sale as arranged, or they can opt to walk away.

If they walk away, they don't get a refund on the extra money they paid toward the down payment.

If they do walk away, you'll need to relist your home.

Tips.

The seller should ask that the buyer purchase homeowner's insurance and confirm the seller as mortgagee.

The seller should establish a land contract. With a land contract, title doesn’t pass to the buyer until the final payment has been made. Discuss this option with your attorney and see if such a contract is feasible.

December 03, 2019

How to Owner Finance a Home

How to Owner Finance a Home.

There are many benefits to an owner financing deal when purchasing a home. Both the buyer and seller can take advantage of the deal. But there is a specific process to owner financing, along with important factors to consider. You should begin by hiring people who can help you, such as an appraiser, Residential Mortgage Loan Originator, and lawyer.

Part 1 Hiring People to Help You.

1. Hire an appraiser. Both the buyer and the seller should hire their own appraiser to determine the value of the house. The seller receives an appraisal in order to select a price for the home, and the buyer gets an appraisal to confirm that the selling price is fair. You can find an appraiser in the following ways:

look in the Yellow Pages, ask for a referral from a mortgage company, bank, or realtor, contact your state’s licensing agency.

2. Hire a real estate attorney. Both parties should work closely with a real estate attorney. A real estate attorney can draft all of the necessary paperwork. The attorney can also protect your interests. For example, the buyer can include a protection clause just in case the property has to be sold in response to a life changing event, job relocation or loss, divorce or death.

You can get a referral to a real estate attorney by contacting your local or state bar association. Bar associations are organizations made up of attorneys, and they often provide referrals to their members or can help you find an attorney.

3. Get advice from a Residential Mortgage Loan Originator (RMLO). A Residential Mortgage Loan Originator can give you advice on how to manage owner financing in a way that is transparent and compliant with regulations. When you owner finance a home, you are essentially providing the buyer a loan until they complete their payments on the home. Since you want your agreement to be clear and binding, it's good to work with a mortgage professional.

Your RMLO can help ensure that your owner financing documents are compliant with the Safe Act and Dodd Frank Act.

Make sure your RMLO is properly licensed by your state. Check with your state’s Department of Business Oversight or equivalent state office to check.

Part 2 Preparing for the Sale.

1. Get approval if you still have a mortgage. Owner financed sales work best when the owner has title free and clear or the owner can pay off the mortgage with the buyer’s down payment. However, if the seller still has a large mortgage, they need to get their lender’s approval.

Check whether you can pay off the mortgage with the buyer’s down payment. If not, then contact your mortgage company and discuss that you want to sell the house.

2. Consider performing background checks to control risk. Both the seller and buyer should perform background checks on each other. Many owner financed sales are short-term, for five years or so. At the end of the term, the buyer is expected to refinance and then make a “balloon payment,” paying off the balance of the loan. As a seller, you will want assurance that a buyer can get a traditional loan at the end of the contract term, which means you definitely want to check their credit history and employment.

In fact, sellers should consider having buyers complete a loan application. You can verify references, employment history, and other financial information.

Buyers also benefit from background checks. For example, they might discover that the seller has been financially irresponsible. If the seller still holds a mortgage on the home, there is a risk of default.

3. Determine loan details. One advantage of an owner financed sale is that the seller controls details about the financing. Because the seller is assuming a lot of risk, they should come up with terms that protect them. Talk with your attorney about what the terms of the loan should be. Consider the following.

a substantial down payment (usually 10% or more), an interest rate that is higher than usual (though less than your state’s maximum allowable interest rate), a loan term you are comfortable with.

4. Ask your lawyer draft a purchase and sale agreement. You want to protect yourself legally by making sure that you have all of the necessary legal documents prepared. Your real estate attorney can draft a purchase and sale agreement, which both seller and buyer will sign. This document provides information about the following:

closing date, name of the title insurance company, final sale price, details about a down payment, if any.

contingencies which must be met for the sale to proceed, such as an acceptable inspection and a clear title report.

5. Draft a promissory note. The seller also needs the buyer to sign a promissory note or other financial instrument. Your lawyer can draft this document for you. It should contain the following information.

borrower’s name, property address, amount of the loan, interest rate, repayment schedule, terms for late or missed payments, consequences of default.

6. Have your lawyer draft a mortgage. The mortgage provides security for the loan. Your lawyer should also draft this document for you. The mortgage is what allows you to repossess the house should the buyer default on the loan.

Part 3 Completing the Sale.

1. Agree on an interest rate and term with the buyer. Your RMLO partner will calculate the agreed upon amount based on a specific period of time and if you have agreed on a balloon payment. Remember that not every state allows balloon payments.

For example, you can base monthly payment amount on a hypothetical 30-year mortgage, but schedule payment of the remaining amount in 5 years (balloon). The RMLO will also create required disclosures for the seller/lender.

2. Close the sale. Both the buyer and seller should have independent attorneys who can review all paperwork to make sure that it is complete. You should schedule a closing to sign everything and make copies.

3. Hire a loan servicer to manage payments. The seller should talk to their lawyer about whether they want to hire a loan servicer. If they do, then their lawyer can recommend someone. A loan servicer provides many important services.

collects the mortgage payments, sets up an escrow, handles tax statements and payments, makes insurance payments, processes payment changes, performs collection services, if necessary.

4. Record your mortgage or deed of trust. You can record it in the county land records office. Doing so will allow the buyer and the seller to take advantage of tax deductions. Making the deal official in this manner also proves that the sale took place.

Part 4 Deciding Whether an Owner Financed Sale is Right.

1. Analyze your situation as a seller. Owner financed sales are rare, and you shouldn’t jump into one until you have thoroughly considered your situation. Think about the following.

You usually must own the house free and clear of any mortgage. Otherwise, you will need your lender to give you permission to sell.

Taxes can be complicated and you’ll want to hire a tax professional to help you.

You might have to go through the foreclosure process if the buyer stops making payments. This can be costly and time-consuming.

However, you may make much more money on an owner financed sale than if you sell the traditional way.

2. Determine if an owner financed sale is ideal as a buyer. Buyers usually like owner financed sales because a seller might be less choosy than a bank or mortgage lender. However, you should consider the following.

You might have to come up with a larger down payment than you normally would. The owner-seller is taking a risk by financing your sale, and in return they might want a larger down payment or higher interest.

Owner financed sales often close faster than other sales.

You need to be sure you can make the balloon payment if one is written into the contract. If you break the contract, then you could lose the house and all of the payments you have made up to that point.

3. Talk with professionals if you have questions. In addition to working with a real estate lawyer, you might want to meet with a tax professional, such as a certified public accountant. Ask about the tax benefits of an owner financed sale compared to selling outright.

If you are a buyer, then you should talk about how to raise your credit score so that you qualify for a traditional mortgage when the balloon payment comes due.

4. Make sure your buyer can cover the balloon payment. Owner financing is most often used when the buyer or property does not qualify for a conventional loan. This means the buyer may not have the resources to cover the balloon payment at the end of your term. Discuss your buyer's options before entering into a contract with them.

If you are a buyer, make sure that you have your options for paying the balloon payment lined up before you agree to the seller's terms.

5. Consider a lease-to-own option. This option is often more advantageous for the buyer and less complicated for the seller. You and the person interested in your home will lock in a potential sale price for the home, as well as a lease agreement ranging from 2 to 5 years. During that time, the person will pay you rent on the home, with a portion of that rent going toward a down payment on the house. After the lease ends, the person can choose to proceed with the sale as arranged, or they can opt to walk away.

If they walk away, they don't get a refund on the extra money they paid toward the down payment.

If they do walk away, you'll need to relist your home.

Tips.

The seller should ask that the buyer purchase homeowner's insurance and confirm the seller as mortgagee.

The seller should establish a land contract. With a land contract, title doesn’t pass to the buyer until the final payment has been made. Discuss this option with your attorney and see if such a contract is feasible.

December 03, 2019