FINANCIAL EDUCATION

Debt is not always a negative thing, and can even be good for your credit as long as you can afford to pay it back in a reasonable amount of time.
Whenever you borrow money—from a bank, credit card company, or friend—you take on a debt. By managing your debt wisely, it will improve your credit history which allows you to purchase and invest in important things (like a home) that you might not have otherwise been able to afford. But taking on too much debt and feeling “in debt” financially, can be a problem. If your debt, excluding your mortgage, exceeds 20 percent of your take home pay each month, you could be in over your head.

You may be “in debt” if you:
• Spend more than you earn
• Pay bills late because you don’t have enough money
• Make only the minimum payment required on your credit cards
• Have reached your limits on your credit cards

Negatives of too much debt:
• Can lower your credit score
• Limits your ability to get credit in the future
• Causes stress
• Creates a cycle of debt

Your home is often the most significant purchase you’ll ever make, and we’re excited to help you make the dream of homeownership come true. It takes planning, saving for a down payment, and an understanding of what you can afford.

How much home can you afford?

First, review your budget and finances, and be realistic. From the lender’s point of view, what you can afford and the size of the mortgage you can qualify for will depend on your:

• Credit History—With good credit, you are likely to qualify for a mortgage and potentially get a lower interest rate on your mortgage, which will save you thousands of dollars over the life of the loan.
• Debt-to-Income Ratio—When you apply for a mortgage, lenders compare your income to your current loans and other debts to see how much you can afford to spend each month on mortgage payments. Figure out how much money goes towards debts every month compared to your gross monthly income. For example, if you pay $400 a month on school loans and another $300 a month for an auto loan and $200 a month for the rest of your debts, your monthly debt payments are $900. If your gross monthly income is $2,500, then your debt-to-income ratio is 36%.
• Down Payment—The larger your down payment, the less you need to borrow. The down payment is usually expressed as a percentage of the sale price or appraised value, whichever is lower. While 20% of the sale price is common as a down payment, some mortgage products require much less.

Mortgage Solutions

Investing* is not just for the wealthy. If you’re contributing to a retirement plan or have purchased a home then you have already started investing to build wealth. The best way to build wealth is to make your money work for you. Stocks, bonds and mutual funds are all common investments that can build wealth over the long-term.
What is the difference between saving and investing?
• Saving is setting aside a certain amount of your income over a period of time in order to accomplish a goal.
• Investing is a long-term activity accomplished by having your money make more money for you.
Why invest?
Investing helps you stay ahead of inflation, and meet long-term like paying for your child’s college education or planning for retirement so that you can maintain a lifestyle you will enjoy.
Where do I start?
We offer a wide range of financial services and would love to discuss the perfect solutions for you.
*Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFGIS Insurance Agency), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Advisory services are only offered by Investment Adviser Representatives. Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency.

Learn More About Investing