It’s officially the new year. Your comeback year. We all have some important choices to make with our money in 2009. To help you make the right call, our all-star panel of experts has your first moves:
The credit rules have changed, John Ulzheimer says. In this new landscape, it is more important than ever to take stock of your own credit report and score before anything else. You need a better understanding of where you stand today so you can manage and change your credit practices and pay less in this environment. AnnualCreditReport.comis the only place you can get your credit report for free. You still must pay for your credit score, which you can get for a fee from MyFico.com. This service will give you all thereof your scores as well as your report. Knowing where you stand is so crucial if you plan on applying for any loan this year, Ulzheimer says. Interest rates may be historically low but you still need good credit to get the loan you want.
It’s time to regain confidence in the markets, Joe Terranova says. 2009 will be a “hallmark year,” he says – why not make it the year that you empower yourself to understand the marketplace and how your money is invested in it. He believes this year presents a unique opportunity to begin investing over 5-10 years. All asset classes are cheaper than they’ve been in decades, Terranova says. The key, of course, is staying diversified. In doing so, you protect yourself over the life of your investments for when rates eventually rise again and the costs of goods and services increase. If you’re diversified, you’re protected against inflation.
Lisa Takeuchi Cullen, our jobs expert, knows the dismal employment landscape firsthand. She was recently offered a buyout from TIME magazine, which she took. She now finds herself among the thousands of others on the unemployment line, but she knows how to stay positive. If you’ve lost your job in 2008 or think it’s on the chopping block in the new year, you should be networking every chance you get, she says. Start to think about social networking sites like Facebook as your first step toward a new job (this is the first place Cullen announced she took a buyout). Cultivate those professional contacts. Let people know you are available. Sell yourself!
Mortgage rates are no longer just close to historic lows, David Kittle of the Mortgage Bankers Association says. They’re at historic lows. This is absolutely the time to refinance, he says. Don’t get greedy over a quarter-of-a-point, just make sure you pay no points or origination fees when you get to the closing table. Shop around for lenders and make sure your closing costs are competitive – and if anything has changed from your original application at that closing table, walk away. Homeowners have the chance to take back the drivers seat in 2009, so don’t let yourself fall prey to the same tricks that got us into this mess in the first place. And if you have less than perfect credit, Kittle believes you can still buy a home in the new year. The FHA has changed their down payment rules, so that now even if you have some dings on your credit report, you can still get pre-approved. Just know that, like always, the less money you put down the more at risk you are in maintaining equity in your home.