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How to get ahead of late fees

Is There a Service That Helps You Not Pay Bills

Is a Debt Owed

Patience is the key to furnishing a new home

How to split expenses with your partner

Will my boyfriend's bad credit affect me?

Tax filing options to consider

What to do if your account is turned over to collections

Celebrating Valentine's Day on a budget

Personal Credit and Starting a Business

Finding Money to Reduce Your Debt and Improve Your Credit

Simple Keys to Personal Finance

Be vigilant to avoid telephone and internet scams

Debt Settlement

Understanding credit utilization

Setting New Year's goals that you can keep

The pros and cons of skipping a payment

Strategies for Financially Surviving the Holidays

Creating a fun and memorable holiday on a budget

Keep an open line of communication with parents about their finances.

Make a Choice to Get Ahead Financially

What to do when a relative asks you for money

Should You Buy a Home Now or Wait?

The difference between debt settlement and debt management

Tax Refund Delays for some in 2017

The negative impact of paying a payment 30 days late

Stressed by Finances

How to navigate two significant financial decisions: starting a family and buying a home

How to advise someone close to you who is coming into a significant amount of money

Make a Conscious Decision on How to Spend Your Money

Tips for Back-to-School Shopping

How do you know if you have a good credit score?

Americans spend more money eating out than on groceries

Having Good Credit Saves You Money

Developing good money habits with your first job

How to save for a home

How to Know if you are Ready for Home Ownership

When is the right time to buy a home?

You can improve your credit to buy a home

Plan a Memorable Vacation Without Incurring Debt

The Hidden Costs of Payday Loans

Be Wary of Credit Repair Services

Use Caution when playing the credit card game

What does it mean to say bankruptcy gives you a clean slate?

How your credit is affected by various debt options

Be wary of predatory small business loans

What to do if you fall behind on mortgage payments

Financing a College Education

Money, Credit and Relationships

Should you be concerned with your date's credit scores?

Best options for a small, short-term loan

How to help a relative who is always borrowing money from you

Setting New Year's goals that you can keep

Making the holidays memorable for families on a tight budget.

Skipping a Payment over the Holidays

What to do if you are overwhelmed by medical bills

Make your financial intention a financial goal you can achieve

Should Consumers Use the New EMV Cards?

What to do when a collector calls you

The difference between paying bills and managing your money

My wife and I have gone through some tough financial times, which eventually led us to file for bankruptcy.  Following this experience, I don’t ever want to use credit again, but my wife

What do I need to know to pay ahead on my mortgage?

What to do if you get an unsolicited credit card in the mail

What to do when moving in to share expenses doesn't work out

Should You Buy a Home Now or Wait?

Q. We’ve been working to improve our credit so we can buy a home. My wife thinks we should buy now, even though we will have to pay a higher interest rate.  She said we can always refinance later.  I think we should wait.  How do we know which is the right move?

A. Asking this question is good step in the right direction. Buying a house is an emotional experience. And even after you sign on the dotted line, there’s all kind of sentiment tied to your home. In this case, it’s best to take emotion out of the equation and focus on facts instead.

For purposes of illustration, let’s say you want purchase a $200,000 house and that your credit score is 761. With this score, you could qualify for a rate of 3.7%, which would make your principle and interest payment $920.57 a month. By comparison, if your score is 637 then your rate will be higher, at 5.4%, making your principle and interest payment $1,123.06 a month.

Over the course of a year, you’d pay an extra $2,429.88 a year in interest if you had the lower credit score. Over the life of a 30-year loan, this means you would pay $72,896 more in interest if you paid 5.4%, instead of the 3.7%. Saving $2,429 a year is like getting a dollar an hour raise in pay.  Imagine over 30 years what you could with an extra $72,000.  

While you might have the option of refinancing down the road, this costs extra money, too. Fees may vary, but you could spend anywhere from $3000 to $6000 to refinance your home.

What’s more, the future isn’t certain. To count on refinancing, you are assuming that your credit will improve and that your financial situation will be the same or better a few years from now.  What if you are not able to refinance? What if one of you loses a job? What if your debt load increases because you bought new appliances on credit?  

What if you wait a year and finish improving your credit before you buy?  You will save money over the life of the loan, since you will qualify for a better interest rate.  If you qualify for a better rate, you may be able to buy more home with your money.  Plus, you will not have to spend more money later to refinance. 

Many times we want something, and we want it now.  Whether you are signing 5, 10, or 30 year loan, a little patience can go a long way.  

Bonnie Spain is the executive director of the American Center for Credit Education and Consumer Credit Counseling Service of the Black Hills. For more information, email acce@acce-online.com.

The material in this transmission is provided for personal, non-commercial, educational, and informational purposes only. ACCE makes no representations or warranties with respect to the accuracy or completeness of the contents of this transmission and assumes no responsibility for errors, inaccuracies, omissions, or any inconsistency herein. You should consult a professional where appropriate.