Say Goodbye to Credit Card Debt in 2021

If getting into a better financial position is your New Year’s resolution for 2021, a great place to start is making a plan to pay off your credit card debt(s). Carrying a credit card balance from month to month can lead to paying massive amounts in interest. Here are some things you can do to leave your credit card debt in 2021.

1. Reduce Your Interest Rate 

The interest rates on credit cards are normally much higher than other kinds of accounts. This can mean that more of your monthly credit card payment goes towards interest instead of the balance of your account, which can make it difficult to pay off credit card debt. Reducing your interest rate will allow you to pay off your debts faster. Ask your credit card company for a lower APR. Even a slight decrease can save you money.

If you qualify, another option is to use a balance transfer card in order to take advantage of a promotional introductory rate. Many of these cards offer 0% APR for the first year. You will want to make sure you can pay off the balance before the promotional rate expires as the rate could increase drastically after the promotional time period passes. If you do not expect to be able to pay off your credit card debts within a year, consider a applying for a personal loan. If you are eligible for a fixed-rate loan, you could use the loan to pay off your cards and save money on interest in the long run.

2. Choose a Debt Payoff Approach

If you choose to go forward paying off your credit cards individually (as opposed to using a balance transfer card or a personal loan), you will need to create a payoff plan. Two common methods of prioritizing debt repayment are the debt snowball method and the debt avalanche method.

With the debt snowball method, you put your focus on the debt with the smallest balance first. While continuing to make minimum monthly payments on all of your other accounts, you’ll put extra money towards the account with the smallest balance. Once this is paid off, you will be able to put even more of your financial resources towards paying off the next debt.

Conversely, the debt avalanche method starts with you putting any extra resources into paying off the debt with the highest interest rate. You will still continue to pay minimum balances on your other accounts, but the faster you are able to pay off your high interest rate debts, the more money you will save in the long run and the quicker you will be to pay back the full amount of your debt. This method will save you more money, although the quick succession of paid off accounts with the snowball method may provide more motivation. Choose the method that you think will give you the best chance of success.

3. Budget to Pay More Than the Minimum

If paying off your credit cards is your number one financial priority this year, set up a budget that allows you to put more than the minimum payment towards your CC debt every month. This might mean making some temporary sacrifices to free up more money in your budget (eating out less, canceling cable to opt for a streaming service, etc.). Any unexpected income should also go directly towards your credit cards. Bonuses, tax refunds, cash gifts, and any other random cash will help you work towards that ZERO balance.

Veitengruber Law offers a number of customized debt management solutions to help you achieve your financial goals. While some people are afraid of the potential “lawyer fees” only adding to their debt pile – rest assured that our fees will show you a very fast return on investment. And, most importantly – we aren’t in this business to take your money! We want to help. Let 2021 be the year you take charge of your debt.

2021 New Jersey Real Estate Market Forecast

If you work in the industry or plan to buy or sell New Jersey real estate this year, you need to know the real estate market outlook for 2021. Achieving your real estate goal is possible this year with enough planning and research about current trends. Pay attention to the following to stay in the know.

1. Prices Are Still Rising

2020 saw a gradual increase in listing prices throughout the year. With a low inventory and many looking to take advantage of low-interest mortgages, prices have spiked. This is a trend experts expect to see continue throughout the winter. Prices may level out with an influx of homes on the market when the weather starts to get warmer. Sellers should list now. Buyers: consider making an offer as soon as possible to avoid paying more later. On the other hand, if you do not need to move ASAP, and are up for a gamble, you could wait to see if prices drop in the second half of 2021.

2. High Turnover Rate

Homes are expected to spend less time on the market this year than in previous years. With less competition and buyers motivated to move, the homes that are listed tend to sell quickly. This is good news for sellers looking to sell their homes as soon as possible. For buyers, this means you’ll need to make competitive offers so you don’t miss out on a property that might be perfect.

3. Highly Competitive Buying Market

Because of the two factors above, buyers will find themselves in a highly competitive buying market. If you plan to purchase a home in 2021, you need to act fast to get ahead of competition. With that being said, if it is your goal to buy a home this year, there is at least one big advantage for buyers in 2021: historically low interest rates are expected to stick around through much of the year.

4. The Suburbs are Booming

With many jobs going virtual throughout the pandemic—and more people observing stay-at-home orders due to COVID mandates—many homeowners are recognizing the importance of space. Suburban areas continue to gain popularity as city folks trade proximity to work and attractions for affordable space and bigger yards.

If you are a seller in the Philadelphia or New York suburbs, this could mean heavy competition for your home. Conversely, with people leaving cities in droves, the need for rental units in urban areas has decreased. This has caused landlords to lower prices and offer better deals. If your dream has always been to live in the city, now might be a good time to take the leap and experience city life while you can.

5. Virtual Realty is a Reality

Post-coronavirus real estate action has seen a major emphasis on virtual accessibility. Buyers expect to be able to do almost everything online, from live streams of open houses to tours via Facetime or Zoom. Real estate agents and home sellers have met this demand by offering more online features, like video listings and better digital marketing methods. While many buyers still prefer to see the real thing in person, these new digital trends are likely to stick around as new staples in online real estate.

Experts are saying a housing market crash is highly unlikely for 2021, with a robust seller’s market and continual demand for houses for sale. If you have real estate goals for 2021, rest assured the market looks to be strong throughout the year.

Selling Your New Jersey Home in 2021

While times might feel uncertain in many ways right now, 2021 is a really good time to sell a home. Whether you are expecting your family to grow, want to downsize, or are looking to relocate to a new city, we’ve compiled a list of important things to keep in mind if you plan to put your home on the market this year.

A Seller’s Market

2021 is seeing a continuation of those historically low 2020 mortgage rates which means buyer demand is up. At the same time, due to the pandemic and recent economic fluctuations, not many people are looking to sell. A low inventory and motivated buyers makes this a market that strongly favors sellers. The earlier you list, the more likely it is that you’ll be able to take advantage of current market conditions. You could even find yourself entertaining a bidding war, meaning you could stand to make a bigger profit than you are expecting. Even if you don’t find yourself fielding competitive bids, the current high value of homes should help you find buyers willing to pay top dollar for your property.

What About Buying?

With all of that being said about how great the market is for sellers, you also need to look at the flipside of the market you’ll be entering as a buyer. While all of the above market conditions are ideal for a seller, when you find yourself in the position of buyer, things will not be as favorable. Low inventory may mean it will be difficult to find a home you love. At the same time, you may find that even if you do sell your old house for top dollar, you will still be paying a premium on a new home.

Because of the lopsided favorability of the current market, it is important to look into your buying options before you make the decision to sell your current residence. If you are downsizing, for instance, it might make sense to sell your larger home in order to move into a house better fit for your needs. In this seller-centric market, you may find great success and some profit if you downsize. If you’re looking to upsize, this might not be the best time to take the leap.

Are You Positioned to Be a Successful Buyer?

When weighing your buying options, research your current and future neighborhoods. Talk to real estate experts in these areas to get a feel for the climate. Be realistic about your situation in comparison to the market. Do you stand to make a profit by selling your current property and buying a new home? Or are you more likely to find yourself in a deficit? If you plan to sell and buy at the same time, you also need to be able to secure financing if needed. You enter into the process with good credit, minimal debt, and steady employment to have the best chance of securing financing.

The Market Is Not Constant

A lot can change in a year, as we learned last year. The housing inventory is low now, but it could open up as the year goes on. Despite this, 2021 will likely see a plethora of motivated buyers looking to take advantage of historically low interest rates to save money on their mortgage. If you are worried about finding a new home if you sell your current residence now, you could wait to see if inventory opens up in the spring so you have more options will still taking advantage of low interest rates.

If you are looking to buy or sell in 2021, Veitengruber Law is here to connect you with real estate professionals in our network and to help you get the most out of your contract.

4 Money Moves to Make in January for Year Long Financial Health

Most New Year’s resolutions require a long year of commitment and discipline. But if your 2021 resolution is to save money or get out of debt, there are a few things you can do right now to ensure success throughout the rest of the year. These four moves will make it a lot easier for you to squash debt and get yourself on good financial footing.

1. Create A Budget

If the first thing you do towards your financial goals in 2021 is set a budget, you’ll be locked into the right path immediately. Sit down with your bank statements, credit card bills, and any other loan/debt accounts. Look at how you spent money in 2020 and make note of where you can make some changes to better fit your goals in 2021. Determine your hard expenses: bills, housing, food, etc. Once you have a good idea of your expenses, you can see how much money you have left over to put towards savings or paying down debts. If you can stick to this budget, meeting your financial goals should be almost effortless.

2. Decrease One Expense

It’s true that you can’t do anything about some expenses like fixed payment loans and some utilities. However, you actually have a lot more control than you realize over some of your monthly costs. Pick one of these expenses and find ways to reduce it.

If you dine out often, make it a goal to cut this expense in half. If you have a top tier cable plan, switch to a streaming service instead. You do not have to go crazy and cut every single expense. If you can pick one to cut down on in January, you will save major money over the course of the year. Once you start looking, you may realize that you can cut costs in more than one place.

3. Automate Savings

If you find yourself at the end of your pay period without any extra money to put towards your savings or to make additional payments on your debt, you should look into savings automation. Set up an automatic transfer into your savings account every paycheck or on a specific day every month. You can also set up automatic payments towards your loans or credit cards for a specific amount. This will help you stay consistent and will help you remove the temptation to overspend.

4. Set a Debt Payoff Goal

Whether you are carrying debt into 2021 from holiday spending or due to financial troubles from the pandemic – make a plan to pay off your debt. Determine how much debt you have and set a realistic time frame for paying off that debt. Example: “I’d like to have x debt paid off by summer.” Once you have your goal, curate a plan to make it happen. This might mean trimming your budget, finding additional employment, or consolidating your debt.

By undertaking these four simple tasks in January, you can set yourself up for a year of financial success. If you are carrying unmanageable debt into the New Year, Veitengruber Law can offer debt management solutions that go beyond these small steps.

My Mortgage Servicer Made a Mistake. Now What?

Through human error or technological glitch, a mortgage servicer can make mistakes. Even a tiny mistake can cost you a lot of money over the life of your mortgage. Because of this, checking your account and mortgage statements for mistakes is something every homeowner should do on a regular basis. If you ever notice an error, you should notify your mortgage servicer as soon as possible.

Common mistakes made by lenders:

• failure to pay taxes and insurance out of escrow
• faulty loan modifications
• improper initiation of a foreclosure
• force placing insurance by mistake
• misapplied mortgage payments
• overcharge on the homeowner’s account

If you notice any of these mistakes, or others, it is important to notify your mortgage provider with a notice of error. This can be done over the phone or via letter. Upon receipt of the notice of error, the mortgage provider will have a specified number of days to address the error. The time they have to fix the mistake varies from situation to situation and even among providers. You should be able to find this information in your contract or on your servicer’s website. It is wise to request documentation from your mortgage servicer stating that they have received your notice of error and the time frame in which you can expect a response. If you cannot resolve the error with your service provider, or they are not answering you, you will have three years during which you can file a lawsuit.

It is important to note that your mortgage servicer is not obligated to assist you with every request. For instance, if you ask for information they have previously provided, they do not legally have to respond to the request. If your inquiry or notice is too broad and lacking specific information, they also do not have to respond. In the event your mortgage has moved to a new servicer, your former mortgage servicer is no longer obligated to help you. Despite not being obligated to respond, they will still need to inform you they received their request and will not be responding.

As a homeowner, you are protected under the Real Estate Settlement Procedures Act (RESPA). RESPA was put in place to prevent mortgage services from taking advantage of their borrowers. Among other things, RESPA protects your escrow account and requires mortgage servicers to make full and timely disclosures to borrowers about how their mortgage is being handled. If your servicer makes a mistake, you are legally protected. Keep in mind that no matter what the mistake is, if you can afford to continue making your mortgage payments, you should always stay up-to-date unless your attorney advises you otherwise.

When you notice a mistake and your servicer or lender does not respond to your concerns, or if you need advice on how to notify your mortgage servicer, Veitengruber Law can help. Our experienced legal team will help you determine the problem and the best way to communicate and negotiate with your mortgage company.

Can I Make an Offer on a House Without Mortgage Preapproval?

A preapproval letter indicates how much a lender is willing to loan a homebuyer so that they may purchase a home. This letter will include the interest rate and terms of the loan. The process of getting preapproved is almost as extensive as getting an actual mortgage. Because of this, many homebuyers want to skip this step and jump right into submitting bids. And while you do not have to possess a preapproval letter in order to make a purchase offer on a home, you should probably have one anyway. Here is everything you need to know about preapproval letters in the home buying process.

For starters, a preapproval letter can give you an edge over other buyers. Because you will need to go through most of the steps of applying for a mortgage, getting a preapproval letter signals to a seller that you have already put in the work and have financing available to actually purchase the home. While the amount on the letter is not absolutely guaranteed, it is the strongest sign a prospective buyer can provide to show that they do have the means necessary to buy the property. If you have a preapproval and another buyer making a similar offer does not, this could be a deciding factor for the seller.

Don’t confuse preapproval with prequalification.

Getting prequalified for a mortgage is much quicker and normally involves answering a few questions about your income, what kind of cash you have available for a down payment, your monthly expenses, and your Social Security Number so they can check your credit score. Based on the answers to these questions, a lender will let you know if you can apply for a mortgage with them and about how much money they would be willing to lend you.

Prequalifying is a good way for a homebuyer to narrow down their list of potential lenders. But keep in mind that any estimated loan amount on a prequalification note is very much an estimate and shouldn’t be relied upon by you or a seller. Your lender will need to take a much more in-depth look at your financial situation before firming up an offer. It is very possible that a lender who prequalifies you will end up offering you a loan, but for (sometimes much) less than your prequalification amount led you to believe. They may even reject your application outright. This is why a preapproval letter is so important, (and much preferable to a prequalifying note) in helping you and a seller determine your financial standing.

It is important to note that while getting preapproved is a good idea, it will impact your credit score. Because the preapproval process is almost as extensive as a full mortgage application, it will typically include a credit check. This creates a hard inquiry entry on your credit report, which can result in a minor, temporary decrease in your credit score. Within a few months, your score should be back to normal, if you notice any changes at all. The competitive advantage preapproval gives you is worth any temporary drop in your credit score. Your loan provider will also understand any small fluctuation in your credit score when they issue your final loan offer.

Buying a home is probably the biggest purchase you will ever make. You want to ensure you have done everything possible to achieve your real estate goals. Preapproval can make the process smoother and means you are one step closer to the home of your dreams.

Reasons to Pay Your Mortgage Off Early

If you own your own home, there’s no doubt that you’re looking forward to the last time your have to pay your mortgage payment. Once you fully own the home, you can use the money you were using to fund your mortgage payments for things you’ve always wanted to do. Paying off your mortgage early is a great goal, but it isn’t the right money move for everyone. Here are five scenarios wherein paying down your mortgage faster makes sound financial sense.

1. Your Current Home is Your Forever Home

If you plan on occupying the home you’re living in now for the long haul, paying down your mortgage early can end up saving you tens of thousands of dollars in interest payments.

2. You Don’t Have a Lot of Revolving Debt

For those who don’t tend to carry credit card balances, paying more towards your mortgage could be a smart way to use your resources.

If you do carry credit card balances from month to month, you should consider using any extra money to pay down these debts before you put any extra money toward your mortgage. Because of higher interest rates, credit card debt that lingers from month to month can quickly end up costing you a substantial amount in interest alone. Excessive credit card debt can also damage your credit.  It is best to handle credit card debt before trying to pay your mortgage off early.

3. You Inherit a Lot of Money

If you gain a lot of money because you are the beneficiary of an estate or you get a financial windfall through other means, using that money to pay down a big part of your mortgage can be a great idea. In doing this, you will not reduce your monthly mortgage payments, but you will shorten the life of the loan, which will save you a decent amount of money on interest.

4. You Want to Rent Out Your Home

This one depends on a lot of factors surrounding your specific property, like how much income it actually brings in. The interest you pay on your mortgage on rental properties can be a tax write off in New Jersey. Keeping your mortgage is a good way of reducing your taxable income.

On the other hand, if you would be ineligible for a tax benefit, owning your rental can allow you to pocket all the income you make from monthly rental payments.

5. You Are Ready to be Debt Free

The average American holds over $130,000 in debt. Mortgages, student loans, medical debt, credit cards, auto loans, and other debts can add up. If you are ready to get that number down to ZERO and your mortgage is next on your list, go for it!

If you have a lot of other debt with higher interest rates or if you do not plan on staying in the home you’re in for more than a few years, paying off your mortgage early might not be a good goal for you. If you are struggling with your debts, Veitengruber Law can offer solutions to get you in a better financial situation. No matter where you are starting, living debt free is possible.

I Missed a Credit Card Payment! What Should I Do?

You missed a credit card payment. It’s not good, but sometimes it happens. Don’t spend too much time stressing over it and get to work minimizing the impact of this misstep. If you follow the tips below, you can hopefully avoid the worst of the negative effects to your credit as well as additional penalties, fees, and financial woe.

1. Make the Minimum Payment ASAP

If possible, make the minimum payment as soon as you can. Most credit card issuers do not report late payments to credit bureaus until a payment is 30 days past due. Making even the minimum payment before the 30 days has passed could prevent your credit report from being negatively impacted by your missed payment. Keep in mind this isn’t foolproof: some card issuers report missed payments immediately. Regardless, making some kind of payment on your credit card debt should be your first step.

2. Call Your Credit Card Issuer

Once you miss a payment, you are likely to see two charges on your account: a late fee and an interest on the balance. If the missed payment was merely an accident—and you have the financial means—your best move is to immediately pay off the balance of your account and call your credit card issuer to explain your error. If you are able to pay off the balance of your card, you can try asking for a refund on the late fee or any interest charges. They can approve or deny this request, but it is worth a shot.

If you missed a payment because you have fallen on difficult financial times, you should still call your card issuer. Many card issuers are currently offering relief for payments. You may be surprised at what you can negotiate with your credit card company. You can also ask about any changes to your account you can expect. Some companies will increase your interest rate after a missed payment, but by calling to explain your financial situation, you may be able to avoid this.

3. Set Up Automatic Payments

To help ensure that this doesn’t happen again, you can set up automatic payments or sign up for an e-mail or text notification reminding you a payment will be due soon. You can sign up to pay the minimum each month on the due date or to pay off the balance in full from month to month to avoid paying interest fees.

4. Keep an Eye on Your Credit Report

Make sure you keep an eye on your credit report for a few months after a missed payment. You will want to check to see if the late payment is recorded on your credit report. If it is, it will remain on your report for seven years and will negatively affect your credit score. If your payment is over 180 days late, it is possible your credit card issuer will declare the debt a charge-off, meaning they will remove it from their books but you will still owe the debt. At this point, the debt can go into collections.

The longer you wait, the bigger the consequences when it comes to dealing with a missed credit card payment. Don’t put it off: make at least the minimum payment and call the credit card company. Acting quickly can save your credit and prevent the problem from snowballing out of control.

 

Why Can’t I Get a High Limit Credit Card?

A high limit credit card normally comes with a line of credit between $5,000 and $10,000, although some are much, much higher. A high limit credit card can quickly boost your credit because it will raise your overall available credit while simultaneously lowering your credit utilization rate. Other benefits are for those who have high monthly expenses or want to buy an expensive item without having to spend the time saving up for it. With a high credit limit comes a lot of responsibility to spend within your means. Because of this, not everyone is eligible for a high limit credit card.

Financial institutions use statistical models and complex algorithms to determine how high your credit limit will be. The criteria that goes into this calculation includes your income, your net worth, your debt balances, what kind of debt you have, your credit history, and your credit score. Credit card limits are determined on an individual basis. Two people with similar financial profiles may get very different credit limits. Here are a few reasons why you may be struggling to get a higher limit on your credit cards.

1. Income and Net Worth Are Low

Obviously, someone with a lower income is not likely to be approved for a limit as high as someone making substantially more money. Financial institutions equate a borrower’s level of income to their ability to pay a credit card bill. Often times, as your income increases, you will become eligible for higher credit limits. That being said, a high net worth does not necessarily mean you will receive a high limit credit card.

2. High Balances on Other Credit Cards

This factor is the likely culprit if you cannot get a high limit credit card despite a high income. If you have a lot of debt already, most lenders are not going to be keen to provide you with a high limit credit card. Even if you are able to make your payments on time and in full, if your debt-to-credit ratio is high, this does not look promising to financial institutions. They may not be willing to gamble on providing you with a high limit if there is any doubt about your ability to repay your debts.

3. Low Credit Score

A borrower with a low credit score is automatically considered a high-risk borrower. If your credit score is below 670, you will likely have a difficult time getting any loans in general, much less a high limit credit card.

4. Lack of Credit History

Even if your credit utilization is low, you have a steady job making decent money, and you pay your bills on time, if you do not have a credit history, you will not qualify for a high limit credit card. In this situation, you may not quality for any credit card. Without a substantial enough credit history, you will need to build your credit in other ways. A secured credit card is a great place to start if you do not qualify for an unsecured card right now.

5. Economic Turmoil

If none of the above issues applies to your situation, look to the state of economic affairs nationally for why your credit limit is so low. After the 2008 financial crisis, many financial institutions were only offering very low limits on most credit cards. A lower limit could be in response to shifts in the economy in general.

If you are trying to become eligible for a high limit credit card, increasing your credit score and decreasing your other debts can help. Veitengruber Law offers credit repair counseling to repair and rebuild your credit.

What Happens After My Foreclosure is Finalized?

There are two common outcomes of a foreclosure lawsuit: the homeowner wins and is able to remain in the home OR the bank keeps the property. If the bank successfully forecloses on your home, you will need to leave the property. As the homeowner, you still have rights in the eviction process; for example, you must be notified of the eviction beforehand. But at the end of the day, you will responsible for the expenses of moving. If you are struggling to cover these expenses, you have options. We’ve compiled some tips to help homeowners transition out of a foreclosed home.

Know Your Timeline

First, it is important to understand the timeframe you are likely to be dealing with. After final judgment occurs, the lender/bank will receive a “Writ of Execution.” This Writ has to be presented to the Sheriff’s office within a year and will authorize the Sheriff to sell the property. From the date the Sheriff receives the Writ, the auction must be scheduled within 120 days. A notice of the sale will be published publicly and posted physically on the property. Once the property sells, the new owners will be granted a “Writ of Possession,” which is effective for 90 days. The eviction will be scheduled within that time period.

1. Present Your Case in Court

There are many ways a homeowner can prolong the foreclosure process according to NJ law. You are entitled to contest the lawsuit, redeem your ownership rights by paying off the total debt, and even postpone the Sheriff’s Sale by moving the date up to two times. Even after the eviction period has begun, you still have options. The eviction process can take as little as two weeks and as long as 90 days to enforce. There is a lot of wiggle room there. There will be time during the foreclosure proceedings to present your case explaining why you should be granted more time post-foreclosure to prepare to vacate the property.

2. Talk to the New Owners

If the home has a new owner, it is possible that they might not want to wait a few months for you to move out of the house. A new homeowner who has big renovation plans or an investor looking to turn the property into a rental might be willing to offer “cash for keys” in order to expedite your move. Keep in mind that the new owner is not obligated to offer this, nor are you obligated to take any cash for keys offers. But it is an option if you are struggling to get the funds to cover a new place to live.

3. Don’t Feel Pressured to Leave Sooner than Required

A cash for keys offer might seem too good to pass up, but do not discount the benefits of staying in the home for as long as possible. By staying in the home, you will be able to save more money towards your move which means you’ll enter your new living situation on better financial footing. You can also take the time you will need to tie up loose ends and pack up all of your belongings. That being said, it is important not to put off moving until the last minute. It is legal for the police to physically remove you from the home.

If your home is heading for foreclosure and you don’t know what to do, Veitengruber Law can provide the expert legal advice you need. We will guide you through your options until you have a solution that works for you.