Payment shock still needed?

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  • #64048

    I could seriously use some guidance from people who’ve successfully completed this, what system did you use or how did you manage to make absolute certain that you “saved” according to the required standards. With bills coming our and processing times for bills varying depending on if its a weekend, etc. it’s not going to be easy to make sure my account reflects an exact amount on the 20th. Ideally I’d keep the required savings separate but that sounds like its going to be a headache since transfers between accounts are frowned upon.

    #64049
    Kristijay
    Participant

    As frustrating as it is, payment shock is an exercise in money management and most crucially…timing. Once you get the hang of it for your personal situation (statement start and end dates, pay dates, bill due dates, and budget) it’s not so bad.

    #64051
    Nelsont
    Member

    @Kristijay is right. Plus what confuses me is why you are so stressed out about this. Just continue to do your thing. You’ve gotten this far. It sounds like you are living very close to the vest but if you are saving 1100 every month you should have no problems.

    #64052
    Kristijay
    Participant

    Another recommendation would be to utilize a budget in conjunction with a calendar. I’m usin one called “You Need A Budget” (YNAB). It helps me to allocate every dollar of each paycheck to every expense. So if I have $1500 and I need $300 for payment shock, I will budget out $1200 for my expenses. I track due dates and pay dates using my phone calendar to make sure my balances are on track when my bank statement closes.

    #64053

    I am finding it really frustrating as well, @tattedqueen87, but I think you understand it perfectly. We did a lot of juggling to make sure bill payment dates coincided with bank statement closing dates, etc. It was a lot of work – I won’t lie. Fortunately most things bill on the same day or within a day or two every month, and some are flexible about changing due dates for you. But it’s also really dicey when pay checks don’t line up perfectly with statement closing dates for your bank – you’ve got to plan way ahead. Which will be the case when you own a home as well – your mortgage due date won’t change because your paycheck comes a day after it’s due.

    #64056

    I’m stressed out because I think that if a) I am paying my rent on time, and b) I am saving the payment shock amount, that should sufficiently demonstrate my ability to pay a mortgage. I don’t understand the necessity to scrutinize how my leftover money is spent.

    For example, say that in February I’ve got an extra $400 sitting in my bank account of “extra money” after my payment shock is met. Lets say I want to save it to take my family to Six Flags on my kid’s birthday next month. Oops but I can’t do that because now that I’ve saved that money its basically locked and I can’t touch it. In what world does that make sense?? If I’ve saved my required amount I feel like I should have the option to spend the rest how I see fit or save it if I want to.

    #64058

    @BakerTheBaker I’m actually really happy that I’m payed on the 1st and the 15th every month, If I were paid bi-weekly I can imagine that it would be a whole lot more difficult to figure this all out.

    #64059

    The short answer is that NACA can make any rules they need to in order to facilitate their program, participation in which is optional. They are offering an enormous service to us, with huge benefits, and a few short-term restrictions. You can take your kids to Six Flags after you close on your house. Their position is literally that if you can’t put off a vacation for six months, you can’t handle the rigors of owning a home. They make several points about this in the handbook. It may be more helpful to think of it this way: They get to tell you how to manage your money for a few months so that you can borrow a much, much larger amount of someone else’s money to own a home forever. It’s a fair trade.

    #64060
    Kristijay
    Participant

    You might just have to postpone any and all unnecessary expenses until after you have closed on your home. But only you can decide what sacrifices you are going to make or if it’s worth it. I didn’t buy anybody Christmas presents this year or do anything for my birthday Dec 29, my nieces birthday Jan 1 or my parent’s 40th anniversary Dec 20. But they understand that I have a goal in mind and that I have to make some temporary sacrifices to meet that goal. I’m right here with y’all. I just had my intake last month. We can do this!

    #64064
    NACA_Dreamer2020
    Participant

    Right. “They make the rules.” I think, though, that folks should be careful in insinuating that people aren’t managing their money correctly if their checking account and total end balances don’t match up each month simply because of when the end balance falls in the month/and when paydays happen. Mismanaging funds is an entirely separate issue.

    #64065

    @Naca_Dreamer2020 I agree that this is not an accurate way of determining whether funds are being mismanaged or not. Think about this for a minute.

    Hypothetical scenario (humor me) say on the 15th of the month John Doe gets a $2k paycheck, he puts his $200 shock payment in savings and keeps $1800 in checking. John Doe’s bank statements close on the 20th so he postpones paying all of his bills until the 21st. John Doe’s bank statements show that his ending checking balance is $1,800. On the 21st John Doe pays all of his bills, buys groceries and has $500 left over. He spends the $500 on scratch offs. Its okay though because he gets another paycheck on the 15th and will repeat this again so his ending balance will still be $1,800 and his savings will still increase by $200. John Doe is meeting NACA’s standards of financial stability, right? Meanwhile in real world standards, he paid his electric and phone bill late and wasted $500 on scratch offs.

    #64067

    And I’m really not trying to be a negative Nelly, I just don’t feel like I’m being set up for success. I am going to try my hardest and I guess that at least if I don’t wind up qualifying for NACA at the very least I should be prepared to apply for a traditional mortgage when all is said and done. Especially since NACA requires me to pay off my collection accounts anyway – I mean if I do that my credit will improve and I should be able to get a traditional loan.

    #64069
    NACA_Dreamer2020
    Participant

    @tattedqueen87 please know and understand that you are not alone in feeling confused and recognizing the above scenario could happen as well. The purpose of checking accounts is for daily expenditures and the purpose of a savings account is to, well, save. I am hoping to demonstrate a monthly budget and hoping my MC is able to help us come up with a solution that truly reflects the amount we are saving and the actual amounts being spent. I believe that is what they are here for. If it makes you feel any better, my sister went through this process last year as well. She has been a home owner through NACA for over a year, so while it may seem like an insurmountable task, it is not impossible. She did not have this same issue, though, but I do think there is a solution. <3 if I get some more information after trying my solution, I will post it here.

    #64070
    Nelsont
    Member

    Let’s remember that if you are buying a house you will always be scrutinized. The large deposit/withdrawal thing is NOT NACA. It’s a HUD requirement which means it’s a federal requirement. I have purchased 3 houses through 3 different methods, conventional, FHA and NACA. EVERY large purchase and deposit for EVERY house I have ever bought was highly scrutinized and I’m sorry to say this but yes that is the nature of the industry. If you want to take your kids to 6 flags while in the process of obtaining a mortgage loan then you will criticized/scrutinized for it. I was even told on 2 separate occasions over the years point blank wait until you close to buy furniture. Securing a mortgage loan is not easy and if anybody tells you differently they have a different view on things.

    #64071
    NACA_Dreamer2020
    Participant

    @nelsont if I may, I don’t think that’s my point or hers, though. I don’t the issue is ”it’s too hard,”or “too much work.” It’s the potential (?) for mismanagement of money actually being encouraged or rewarded with a mortgage vs actually properly managing finances not. I actually am hoping there is a solution that my MC can offer or that @Ttrumble can offer because there’s no way I am the first, last, or only to experience this scenario.

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