Help Prospects Sock Away Homebuying Bucks
Chances are pretty high that you run into prospects who are in the frame of mind to shop for homes but haven't managed their money well enough to qualify yet. If they're still living paycheck to paycheck, offer them a few suggestions for building their nest egg.
How They Can Get Ahead
Lifestyle website Lifehacker.com looks at debt traps that can seem attractive to nervous people but can actually provide more harm than help. Payday loans, for example, are short-term loans with high interest rates. But the interest rates are often so high that people have to take out a second loan to pay the first, creating a debt cycle. According to the Consumer Financial Protection Bureau, Lifehacker says, some 80 percent of these loans are renewed or rolled over every 14 days. Suggest alternatives such as going to a community credit union or small bank to work out a small loan with a realistic payment plan.
Another debt trap, according to the post, is insurance: Prospects may save money by skipping it, until they need it. Suggest to your prospects that if they negotiate a higher deductible, they might be able to leverage whatever savings they have to pay a smaller premium. Again, saving up that amount to cover the deductible might create a few tight months, but it can pay off quickly. Prospects can also look for ways to get discounts, especially on car insurance.
Debt settlement can damage credit scores even more than they would have been, if the settlement company handles it poorly. Prospects can often discuss their situation with the creditor. Also, nonprofit credit counselors can give customized advice on how they can manage their debt.
Finally, debt consolidation seems like it turns many payments into a one-stop solution, but it can extend the term of the debt, and penalties for missing payments can be severe. Again, nonprofit credit counselors can help prospects negotiate lower interest rates and create budgeting plans that may help them attain their goals.
Remind your prospects that whatever their situation, for a serious plan to save enough, a counselor who works for a nonprofit organization can evaluate their full situation and provide them with a specific path to reaching their goals. In the meantime, these ideas will keep you in their mind as the agent who got them that far.
Source: "Common “Debt Traps” That Keep You Living Paycheck-to-Paycheck," Lifehacker.com (Sept. 23, 2014)
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