I got some questions in the comments on my last post. I’m writing this post to explain them more clearly. I was going to write a long reply, but more people will read it if it’s a post. This is the third article about my mortgage modification experience and you can read the previous two articles here:
First of all, right now I’m only short $200 a month based on the modified mortgage payment. I am no longer several hundred dollars short. This month, last month and the month before that I was about $500 short based on my original mortgage payment.
With the hiring of the best debt relief services, there are many benefits available in the debt settlement. The paying of the mortgage amount is easy and simple for the individuals. The learning about the mortgage modification is essential to have the best debt relief services.
You can’t make partial mortgage payments, so I saved what I had left over each month when I couldn’t make the full mortgage payments, and I caught up on the utilities on which I was behind.
I’m not posting my itemized budget because it’s private. You can assume I have the necessary expenses of a homeowner with one teenager and two dogs. There are few wants in the budget, and I do save for my son’s birthday and Christmas gifts. He doesn’t get a haul from me. He gets mostly what he needs, like clothes and shoes. His dad and grandparents take care of the wants. He is of the age now that if he wants something he goes out and earns the money himself.
He doesn’t have a car and he isn’t old enough to drive. His bike was stolen last year so we trash-picked a pretty good one and fixed the minor problems with it. We don’t rent movies or go to the movies, we don’t buy books that aren’t needed for school and we don’t partake of entertainment that costs money. We check out books and movies from the library (free). Our libraries have huge DVD and video collections of entertainment movies, TV series, and documentaries. If they don’t have a book I want to read, they get it through the inter-library loan program, though I may have to wait for it to get here.
I spend 5-6 days a week at the public libraries with students. There is no reason not to use the free resources available. They have plenty of free programs that are informative and entertaining on top of the usual library resources.
Ok, back to my income discussion. A couple of hundred dollars is one student, and the really heavy business of the tutoring year is about to start. Mid-term exams are in December before Christmas break. I had a college student who made up that income but she dropped the class and quit tutoring because she was supposed to take a different one. So I need one more student again.
Keep in mind my budget is based on my tutoring income, not on my online income. Online income isn’t stable and it isn’t much, but it does provide a small cushion. I reported it, but my HUD counselor agreed it wouldn’t be a good idea to base a budget on an unstable income source. Anything net business expenses from that income goes into savings.
A balanced budget for a modification is required. If you show that your financial situation is steadily improving and stabilizing at a point where you can meet all your obligations, and that your budget will be balanced in a month or two, they accept it.
The HUD counselor won’t call your mortgage company unless he or she feels you are financially stable or close to it and will make it within 30-60 days. The mortgage company won’t give you the modification if they don’t agree with the HUD counselor’s analysis. They both go over all the paperwork thoroughly. They verify your income, bank statements, and tax returns before they accept your budget.
My budget just went through my lawyer and federal bankruptcy court. I have no desire to go to prison, so I was not only 100% truthful about it, I have the receipts to back up my numbers, which agree with my bank statements.
A balanced budget isn’t required to discharge a bankruptcy under Chapter 7. It is under Chapter 13. Financial education classes about budgeting are required and I took those classes. Even though I don’t subscribe to all of Dave Ramsey’s teachings, his budgeting methods are very good, and I’ve kept a detailed monthly budget for a couple of years.
The HUD counselor and mortgage company did a second budget based on the modified mortgage payment, and I’m one student away from having enough to meet all our expenses including savings for an emergency fund and once-yearly expenses. Right now I don’t have enough to save for the once a year payments or reestablish an emergency fund.
I have enough saved to make the one-time contribution payment and the first modified payment required for my mortgage modification. I saved the money left over that would have gone toward mortgage payments for the 3 months I couldn’t pay (partial mortgage payments aren’t accepted).
My marketing plan isn’t a pie-in-the-sky plan that may or may not pay off. There are a lot of students out there who need a tutor and I need to find one of them. Every time I do any marketing at all I get a couple of students. I got 3 new students in October, but lost the one who dropped her class.
Getting one more student will not be difficult. I hope to fill my schedule completely this month and start a waiting list. I have one hour to fill on Mondays, two on Tuesdays, and two on Thursdays. My tutoring schedule for high school students is constrained to 5 hours per weekday (M-Th) because of the time school lets out and the time the libraries close, excluding homeschool students. They’re available during the day. I can add students who are willing to meet on weekends. I have one weekend student so far.
There aren’t enough high school and college math and science tutors to go around. We have the largest population in the state, a ton of public and private high schools, one large community college, a major historically African American university, and the flagship state university (LSU) right here in town. Getting my name out there is all I have to do to get more students.
I started with marketing to the families and schools I worked with when I was an employee of the tutoring company. I marketed to my local homeschool lists and I have one homeschool student. I have been branching out since school started and I’ve gotten students from referrals, web searches (Google local), and directly visiting some schools I haven’t worked with before.
I have students from Baton Rouge Community College and LSU. Friends who went back to college are students. One of my friends is the director of Student Support Services at LSU and she gives out my contact information whenever a student asks for a non-campus tutor. I start working with a student tomorrow whose mom was a previous colleague from when I was a chemist.
I get referrals from my previous tutoring employer. Her number is still all over town so she refers her previous tutors whenever people call and find out she closed her business. I worked with her for 3 years and she provides me with a highly respected reference as well as referrals.