Frequently asked questions
What is Clear Direction Financial?
We are a company focused on addressing behaviors that create lasting financial and life change. As a by-product of improving your view and relationship with money, you will most likely also experience improvements in other areas of your life. For example, communication with your spouse will most likely improve, your kids will see you a parent and not an ATM and so much more.
How do I know if I need a coach?
Financial coaching is a very hands-on service. We will help you develop and implement a plan specific to your unique situation. You may be facing a crisis like money ralated marriage issues, family or friend boundry issues, bankruptcy, foreclosure or harassing creditors. Maybe you need help building wealth or starting your small business.
Even if you just have some general questions about money management, financial coaching could be right for you. We handle a wide variety of situations. We can offer detailed advice and a specific plan to make your money work for you!
Do you recommend debt consolidation or bankruptcy?
In general absoluley not! Each case is unique and should be evaluated on a case by case basis.
Debt consolidation is dangerous because you only treat the symptom of the problem. The habits—and the debt—are still there. You just moved the debt, you DID NOT pay it off!
By doing a consolidation you will pay about the same amount, which doesn't really help you eliminate debt faster.
Most people take on more debt after consolidating or end up in bankruptcy because they didn't change their behavior. Bankruptcy is one of the most life-altering, negative events one can go through. Chapter 7 bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 bankruptcy, which is more like a payment plan, stays on your credit report for seven years. Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy.
NEVER TAKE MONEY OUT OF YOUR HOME TO "PAY OFF" UNSECURED DEBTS (CREDIT CARDS) This is just dumb! You're moving a debt with limited to no recourse on to your home, which they WILL take if you stop paying. PLEASE THINK ABOUT THIS!!
Avoid bankruptcy & condolidation it if at all possible.
Why do you require both spouses to attend all meetings?
Our policy requires both spouses to attend the coaching session because, from experience, we've learned that coaching only one spouse does not work. This must be a team effort. If your spouse is not on board, sit down with them in a non-distracting environment and communicate how much you want them to participate in the finances. Do not let this be a time to nag, yell, scream, etc. Tell them that attending financial coaching is important to you and your marriage and this can be your Christmas, birthday or anniversary gift this year if they prefer.
Why can't I find your prices online, why do I need to wait for a finacnial strategy meeting?
Each situation is different, this means we don't have a set script for all clients. The financial strategy meeting allows us the opportunity to evaluate your situation, make some basic recommendations and offer a plan, including any fees that may be associated with our service.
Our financial strategy meetings are conducted through face-to-face video conference, this allows us to share documents and do demonstrations if needed in addition to adding the personal in-person feel.
How do I pay for coaching when I am broke?
Financial coaching gives you a high level of detail and individual attention.
Although financial coaching can be expensive, it is a necessity for some. For others, however, it is a luxury. You will have to decide where to draw the line.
If coaching is a necessity, then you also have to compare it to: 1) the costs of bankruptcy, which can be $500—2,000 in legal fees alone, or 2) the cost of credit counseling, which, at $30—$50 per month for four years, would cost around $2,000. Our fees are a bargain compared to these options, plus you'll have a plan to change your financial future! Many couples also find that addressing their financial situation reduces the stress on their marriage.
Can we meet in person?
That depends. We coach worldwide so the majority of meetings are conducted through a virtual face -to- face conference. However, if you are located in the Dallas/Fort Worth Texas area, yes, we have an option to meet in downtown Fort Worth.
What is an emergency fund?
An emergency fund is a savings account dedicated to just that an emergency. An emergency is something you could not have planned. (Think tire blow out). After you're debt-free the goal for this account is 3-6 months of expenses depending on how secure your job is.
This is NOT an "I need a vacation, new car or furniture" account. Be an adult, have some discipline and when you need it you'll thank yourself.
8 Types of Mortgage Loans??
There are several types of mortgage loans, they are designed to appeal to a wide range of borrowers' needs.
For each type of mortgage listed below, you’ll see its advantages and the kind of borrower it's best for. This page concludes with a glossary of terms describing different types of mortgage loans.
1. 30-year fixed-rate mortgage
The 30-year fixed-rate mortgage is a home loan with an interest rate that’s set for the entire 30-year term.
Most common type of home loan
Your interest rate never changes; see the basics of fixed-rate mortgages.
Lower monthly payment than with shorter-term loans.
Best for: Home buyers who want the lower monthly payment that comes from stretching out repayment over a long time. The fixed rate makes the payment predictable. A 30-year fixed offers flexibility to repay the loan faster by adding to monthly payments.
2. 15-year fixed-rate mortgage
The 15-year fixed-rate mortgage has an interest rate that remains the same over its 15-year term.
Often used for refinancing.
Lower interest rate than with longer-term loans.
Higher monthly payment than with 30-year loans, with less total interest paid.
Best for: Refinancers and home buyers who want to build equity and pay off the loan faster. Payments are predictable because the interest rate doesn't change. Because the borrower pays interest for fewer years, total interest payments are less.
An adjustable-rate mortgage is a home loan with an initial rate that’s fixed for a specified period,
then adjusts periodically. For example, a 5/1 ARM has an interest rate that is set for the first five years and then adjusts annually. See the pros and cons of adjustable-rate mortgages.
Initial “teaser rate” is lower than on most other loans, giving comparatively lower monthly payments at first.
Initial rates can often be locked for one, five, seven or 10 years.
Best for: Home buyers who don’t plan on having the mortgage for a long time, or who believe interest rates will be lower in the future.
4. FHA mortgage
An FHA mortgage is a home loan insured by the Federal Housing Administration. FHA loans are backed by the government and designed to help borrowers of more modest means buy a home.
Allows down payments as low as 3.5%. (depending on the lender)
In some cases Credit scores as low as 580 can qualify.
Mortgage insurance premium payments are required.
Best for: Borrowers with lower credit scores and a down payment less than 20%.
5. VA mortgage
VA loans are mortgages backed by the Department of Veterans Affairs and are available to military service members and veterans.
No down payment required.
Upfront VA funding fee required. You'll want to check out this year's VA funding fee chart.
No mortgage insurance.
Best for: Military-qualified borrowers who appreciate a low interest rate and no down payment minimum.
6. USDA mortgage
USDA home loans are mortgages backed or issued by the U.S. Department of Agriculture. There are USDA eligibility requirements.
No down payment is required on most properties.
Home improvement loans and grants are also available.
Income limits and property value caps apply.
Best for: Income-qualified buyers in rural and some suburban areas who want a low or zero down payment.
7. Jumbo mortgage
Jumbo home loans are mortgages above a certain dollar amount, in most cases over $500K. Jumbo loan limits vary by county and are adjusted periodically.
Can have fixed or adjustable rates.
Often require a credit score of 700 or higher.
Usually require a down payment of 10% or more.
Best for: Buyers of expensive homes and owners who want to refinance jumbo-size mortgages.
8. Interest-only mortgage
An interest-only mortgage requires payments only on the lender’s interest charge. The loan balance, or principal, is not reduced during the interest-only payment period.
Can be appropriate for borrowers who are disciplined enough to make periodic principal payments.
Useful to home buyers who don’t expect to remain in a house for the long term.
Borrowers will have to show lenders substantial assets or a proven ability to pay.
Best for: Borrowers with high monthly cash flow, a rising income, large cash savings or an income that varies from month to month. Also for those who receive large annual bonuses they can use to pay down the principal balance.
Other mortgage terms
Now you know the types of mortgages you're likely to encounter when buying a home. Here are four subsets of mortgage types you might hear about along the way:
Conventional mortgages: Lenders use the term conventional mortgages to describe loans that aren’t backed by the government.
Conforming mortgages: Another industry term, which defines a mortgage that meets local loan limits, as set by the government. See the differences between conforming and nonconforming mortgages.
Government-backed mortgages: Loans guaranteed by the Department of Veterans Affairs (VA loans), FHA-insured loans and loans backed or issued by the Department of Agriculture (USDA loans).
Reverse mortgages: A way to unwind equity in a home as a lump sum or stream of income, for homeowners over age 62. See
What is Coaching?
Coaching is a form of development in which an experienced person, called a coach, supports a learner or client in achieving a specific personal or professional goal by providing training and guidance. The learner is sometimes called a coachee