Showing posts with label Mortgage loan. Show all posts
Showing posts with label Mortgage loan. Show all posts

Tuesday, January 14, 2014

5 Mortgage Problems You Want To Avoid So You Don't Lose Money

They say we learn from our mistakes, so that means it's a good idea to make them in the first place. What they really mean is that it's good to make a spelling mistake so the teacher can correct you. They're not telling you to make a terrible mistake when you're half way through the biggest purchase of your life. You'll still learn from the mistake, but it could cripple you. Let's look at a few things you don't want to mess up when it comes to your mortgage.

Don't go crazy with credit


Before you apply for a mortgage you don't want to have too much credit in your name. That means any big purchases you're thinking of making should be put on hold until your future mortgage is wrapped up. Even if you have the best credit rating in the world it's going to scare companies away when you owe lots of money to different people. What would happen if your circumstances changed and your finances were hit? Everyone who has lent you money would have to compete with each other to get theirs back.


Don't hide from your lender


A lot of people hate hearing bad news so they don't open their mail when it comes in. If they can't afford to pay their mortgage it gets worse because they stop answering their phone. Lenders find it impossible to reach people, but I'm sure you realize this will never make the problem go away. It could actually make it worse since lenders have a few options at their disposal and they could maybe save your home, but unfortunately this is never going to happen when they can't even contact you.


Don't skip the inspection


It's easy to fall in love with a beautiful home as soon as you walk through the front door. Sometimes they just 'feel' right and you know you want to buy it. Unless you can see into the future you don't know what is going to go wrong. The only way you can find any unknown problems is by getting a home inspection and you need one carried out before your offer becomes official. Your perfect home might look beautiful to the naked eye, but you don't know what is going on behind the scenes.


Don't lie on your application


At the moment you might not have the greatest income in the world and you could even owe some money to credit card companies, but you still have to tell the truth when you're filling in your mortgage application. It's even harder when you know you're due a big pay rise within the next year because you'll have to settle for a much smaller loan at the present moment. If your lender finds out you've lied to them you could end up in a lot of trouble and it could also be a federal offense.


Don't pick the wrong mortgage


I know it's easy to change your mortgage these days and everyone swaps around like crazy, but don't pick the wrong mortgage in the first place and you'll save yourself so much hassle. You might still need to change it further down the line, but at least you'll save yourself a few years of wasted money. People only choose the wrong mortgage in the first place because they choose the wrong people to help them, but you can take care of that by making sure you speak to a skilled financial adviser.


You only get one shot


Once you mess up you'll lose money and there is no getting away from it. You can always take out another mortgage, but your money will never magically appear again. Take your time if you're buying a home for the very first time because you don't want to regret something even if it only affects you negatively for a few years.

Author Byline:
The author of this article, Ian Andrews, is a freelance blogger, currently writing for First World Mortgage, well-known mortgage lenders in Connecticut. Ian loves cooking and on weekends he provides lessons to the underprivileged youth.


Thursday, December 19, 2013

The Top 5 Tips to Refinance Your Mortgage

In efforts to improve lending in the struggling U.S. economy, the government has begun to reduce the federal interest rate by buying bonds. This has created a lending environment which is very favorable towards the borrower. Since it has become less expensive to borrow money, lenders can provide great interest rates for home owners to refinance. In addition to taking advantage of the currently low rates, there are a few other things a homeowner can do to reduce their interest rates, reduce cost and fees, and save time overall.

Here are the top 5 ways to reduce your costs and expenses when refinancing: 


Reduce Closing Costs - there are a bevy of "fees and expenses" that can be tacked on when you apply for a mortgage or refinance. Closing costs usually amount to about 2 - 5% of the total cost of your home. These expenses include things like appraisals, title search fees, pest inspections, origination fees, broker fees, etc. In your GFE, or good faith estimate of fees (when you apply for your refinance), brokers or lenders will include an itemized list of these expenses. 

This list will include all the necessary fees as well as extra expense which pay the broker or lender. It is possible to reduce closing costs by negotiating with your mortgage broker or lender. Ask a lender to explain the fees and see if they can "waive" application fees, underwriting fees, and processing fees. Buyers may negotiate with the sellers to absorb some of the closing costs. You can also opt for a no closing cost refinance. Sometimes this type of mortgage does pass the costs and fees into the mortgage at a higher interest rate. 

Refi to get rid of Private Mortgage Insurance - PMI or private mortgage insurance is required if you have lower than 20% equity in your home. PMI can be expensive and can cost in the range of $50 per every $100,000 borrowed. For many homeowners, this amount can mean the difference between buying and renting. If the expense of PMI is too large, a borrower can refinance in order to get rid of it. A lender can get rid of your PMI by re-appraising your home and determining whether or not you have 20% equity in it. If you believe that your home values have improved, and that your equity position is 20% or better, refinancing to get rid of PMI might be a good step to take. 

Improve Credit to get Better Interest Rates - having pristine credit will always improve your access to loans and cheap money. There are ways that you can actively improve your credit score. Ways you can improve your credit include pulling your own report and clearing any mistakes which may be pulling your credit number down. 

Experts estimate that over 30% of credit reports contain inaccurate data that could negatively affect a borrowers ability to get a loan. Since all U.S. citizens get access to 1 free credit report per year at annualcreditreport.com, it is very easy to pull this report and check for any bad data. If you see anything that look inaccurate, you can write a letter disputing the inaccurate information. 

If your report seems up to date and accurate, but your score still needs help you may need to take a more active role to improve your score. In this case, you may consider a "credit builder loan" from a credit union. This type of loan is a small easy to re-pay loan, designed specifically to improve a borrower credit score. It usually takes around 6 months to repay and can improve a borrowers credit a number of points. 

Shop Online For The Best Interest Rates - since the online marketplace for loans is one of the easiest ways to find rates, you can compare multiple lenders fairly easy. There will still be a fairly large difference in rates and expenses from lender to lender. Some lender costs ranges from $100's - $1000 for the fees that compensated to each broker or lender. By searching online, you can quickly determine which lenders are charging the most in fees. You should also contact multiple lenders to let them know you are working with other companies to get the best rates. This will give you some leverage and you may be able to negotiate to get the best rates possible. 

Reduce the Amortization Period (shorten loan term to save) - most mortgages come with a repayment (or amortization period) of 15 to 30 years. The simple fact is that, the longer the amortization period, the more money you will repay in interest. Even though a longer repayment term will come with a lower monthly payment, you will still end up paying more money in the long run. 

By reducing this repayment period, you will end up paying SIGNIFICANTLY less interest on your mortgage. The difference of 5 years on a $200,000 mortgage (at 4%) can amount to as high as $25,000 in total interest payments. You need to decide whether or not a lower monthly payment or less in the total amount of interest payments is better for you.


Sunday, December 8, 2013

Why Lenders Deny Your Loans Despite a Good Credit Score

Your credit report gives you a detailed analysis of your credit history and this can make or break your ability to borrow funds for any important reason in the near future. The use of the credit report by the lender helps them carry out essential background checks that can tell a lot about your ability to repay the loans that you may have taken. 

However, sometimes, there is a possibility that you may possess an excellent credit score, yet you may not get a loan approval leaving you startled and wondering what may have gone wrong. To put it simply, the lenders have to look for their profit sources as well. 

Therefore, despite having a good credit score, some factors may hamper your ability to get a loan from your lender. A comprehensive list has been compiled that explains as to why you may be unable to make the cut. 

1.) Opting for short sales:


It goes without saying that short sales call for negotiation. However, this type of a negotiation does absolutely nothing to hamper your credit score. However, a short sale calls for you to pay an amount that is far lesser than the original amount owed by you. This itself can cause the lenders to be on their toes when you apply for a loan. Therefore, you should not be surprised if a lender refuses to support you financially because they will always have inkling that you may flake out on them and pay them much less than you owe based on your past experience.

2.) Paying the minimum acceptable amount:


When you pay a minimum amount but something that is of an acceptable standard it will cause absolutely no harm to your credit report. Therefore, it will have “pays as agreed” stamped on your credit report. While your report will look clean and acceptable, if a lender performs close background checks and comes across this flaw, he is likely to severe any professional relationship that may have had any kind of scope. The simple reason for this is the fact that minimum payments are an indication of underlying debt issues and no lender wants to be put on the spot in terms of debts and outstanding loan payments.

3.) Registering credit cards in a successive order:


It is completely alright to have a few credit cards in your name. As long as you are good with your payments, your credit score cannot be harmed. However, lenders do not take too well to people who have a knack of opening credit cards in a rapid succession. Therefore, if you want to have easy and hassle free access to loans in the future avoid opening cards within weeks or even months apart. Lenders fear that although your credit score is currently decent enough, the scenario may change with the arrival of several credit cards. Therefore, they may refrain from giving you a loan despite a good and clean credit report.

4.) Think twice before co-signing a loan:


You may do this out of good will and may extend a helping hand to a friend or family member in need but this in turn can jeopardise your own attempt at getting a loan at a future date. This is simply because of the fact that while you may be asked to pay off the loan for the person you have co-signed, you may find it increasingly difficult to pay off 2 loans at one time or in quick succession, thus decreasing your chances tenfold despite a good credit score.

Author’s bio:

Julianne Farmer is a finance analyst working with a well known financial firm. Her job requires her to do regular background checks and keeping in touch with investors and other management teams for the company. She likes to keep up with the stock market changes.



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Saturday, November 30, 2013

20 Year Mortgage? 5 Benefits to Paying Yours Off In Less Time

Most mortgage terms are for thirty years. That is the traditional length of time most lenders arrange for homeowners to pay off their home loans. Nowadays people are opting for shorter loan terms including 20 year and 15 year mortgages. There are several advantages to having a shorter term loan repayment plan. Below are five benefits.

Pay less interest


Spending one dollar more than you have to spend is a waste of money. Paying interest is the cost you pay for borrowing money for your home. Deciding to pay off your home sooner will save you thousands of dollars in interest payments. This frees up money for you to invest back into your home or other into other income generating investments.

Asset to Pass Down


Having an asset that you can pass down to loved ones can make all the years of hard work worth the time. Instead of leaving your beneficiaries with debt, having your home paid off earlier gives you time to enjoy your property and pass that value on to your family.

Recoup your money


If you decide to look into new homes in Colorado you may choose to sell your home. Selling your home can help you recoup all of the money you paid into it, in addition to profits from home value increases in your area. You may even choose to rent your home and generate consistent monthly income.

Security in retirement


One of the main concerns when people make preparations for retirement is the limited amount of income they receive on a monthly basis. As a result, people look to either downsize or completely rearrange their lives to accommodate their new income reality. Having your mortgage paid off gives you security. Having a home to live in is one of the most basic needs that no longer has to be factored into your retirement plans.

Debt free


Mortgages are typically the largest debt people owe. Paying off your mortgage sooner rather than later can get you on the path to becoming debt free. All of your income can be used for investments instead of paying down debt. This can ultimately lead you to free up more of your income for other investments or better family vacations.

Living a more frugal and modest life in your earlier years can really go a long way to get you out of debt quicker. It is as always a personal decision and you must access what is right for you and your family. But there are many benefits to living a debt free life and not paying more then necessary in interest.

If you are looking to purchase a home in the near future, obtaining a shorter term mortgage is a great option. That choice will have you fully owning your home and becoming debt free sooner than ever before.

Brionna Kennedy
is native to the Pacific Northwest, growing up in Washington, then moving down to Oregon for college. She enjoys writing on fashion and business, but any subject will do, she loves to learn about new topics. When she isn't writing, she lives for the outdoors. Oregon has been the perfect setting to indulge her love of kayaking, rock climbing, and hiking.



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Friday, November 29, 2013

Getting a Mortgage - Are You Ever Too Old?

As retirement slowly creeps up on you, you might think that it’s far too late for you to buy your first home. While this can be true in some cases as it wouldn’t suit certain individual’s situations, there are still occasions where it’s a good idea to buy. In this article, we answer the question that many people have been scared to ask - are you ever too old for a mortgage?

For the older homebuyer, there may be some extra things to think about that younger borrowers needn’t even consider. You’ll still want to get an idea of the crime rate, schools, and compare prices of similar houses in the area; but older home owners will also need to accept the fact that maintenance will become harder for them as they get even older. In a rented house, appliances, leaks, and other problems can be replaced and fixed no problem for free, but in your own home you’ll need to arrange a professional to fix them. Not only that, but simple things like cleaning the house will be a lot harder too. The closer you get to retirement age, the more you should think about your health, your finances, and how the house will impact your family in the future.

Some people say that buying a house when you’re older is better, as you have more savings and investments tucked away. However, if your retirement plans involve lots of exotic destinations and cruise ships or something similar, then it makes no sense to burden yourself with a mortgage to pay off (and the other fees that come with being a home owner). However, if you plan on settling down in one place for your retirement (having done all your travelling previously), then it might not be such a bad idea to get a mortgage now.

You might want to consider a time when you aren’t so mobile though - will you be able to afford care in your home? If not, you might one day need to move to a caring home which could result in you selling the house (even more hassle, and upsetting).

A home should be considered as a long term investment, and you need to think about what will happen to the investment when you can’t look after it yourself anymore. You don’t want to be left panicking, “how can I sell my house fast?”, do you? To help plan for the future, you may want to invest in a maintenance service and make sure you have cash tucked away for a rainy day just in case.

Sitting down with your loved ones and talking about long term plans for the house is also a good idea, as you’ll be able to fill them in on all of your ideas. How long do you plan on staying there? Do you plan to sell it eventually? Or are you planning on leaving the home to your kids or grandkids? Whatever your plans, make sure you have a good chat with them so you’re all on the same page.

Buying a house could be a great investment for you, regardless of age, providing you’ve thought it through properly and planned as best you can. In conclusion; you’re never too old for a mortgage if the time feels right for you!



Wednesday, November 27, 2013

4 Advantages to Homeowner Loans You Need to Know

Are you looking to take out a loan? Homeowner loans might seem daunting and risky because you’re borrowing generally a large sum of money against the asset (your home). What this means is that if you can’t afford to pay the monthly amount, your home will be reclaimed to make the payments. 

This concept is challenging to deal with and intimidates a lot of people, but it needn’t. Homeowner loans are much more than a way to lose your home, and they can be a very sensible investment, when taken out for the right reasons, so to help you decide, here are 4 benefits to homeowner loans that you really ought to know.


4 – Borrow Huge Sums


When you take out a homeowner loan, the stakes are higher because your house is on the line. As a result of this, however, you are able to borrow a larger amount of money than you’d be able to with an unsecure loan, so whether you’re looking to extend your home or go on that once in a lifetime holiday, money doesn’t have to limit you with a homeowner loan. 


3 – Attractive Interest Rates


Because there’s more at stake, the interest rates on homeowner loans are likely to be significantly lower than with unsecured loans. From a lender’s perspective, this is a less risky investment because they know you have a lot on the line. So if you know that you’re not going to have a problem paying your monthly repayments, a homeowner might be a good idea because you’re not going to have to bother with high interest rates.


2 – Consolidating Debt


Are you struggling to pay your debts off? If you think you might benefit from consolidating your debts into one easy monthly repayment, one of the best options available to you is a homeowner loan. Using a secure loan, you could pay off a large number of debts – all with their own individual interest rates, and transfer the debt into a single payment with a low interest rate. This makes debt-management less stressful, and could be well worth the effort of setting up the loan and transferring your existing debt.


1 – Afford Something Special


You have worked hard to get into a position where you own your own home, so by taking out a homeowner loan, you don’t have to limit yourself to investing the money into consolidating debt. Spend the money on something you’ve been trying to save up for. Do you want to help your children through university? What about renewing your wedding vows? Maybe you just want to take time out in your timeshare? Whatever it is you want to do, you can use a secure loan for it.

All you need to do to find out more about secure homeowner loans is speak to the experts at a place like 1st Stop Home loans, with a little bit of guidance, you could find the perfect loan for you.


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Tuesday, November 12, 2013

How to Overcome a Personal Finance Crisis in Retirement

retirement
retirement (Photo credit: 401(K) 2013)
Having financial troubles when you're retired is the pits. A financial crisis can strike at any time, however, and completely wipe you out. You've got little or no savings, and you just don't know what you'd do if you had to pay for a major car repair, a new furnace, or if you had to loan money to a friend in need. 

Go To Work Part-Time


One option that many seniors consider these days is going back to work part-time. Part-time work can include anything from a dietician or nutritionist to a mediator to Santa Claus during Christmas time. Now, dressing like Santa might not seem like it would rake in the big bucks, but it can. If you negotiate a 40-day season contract, you can reasonably earn between $10,000 and $50,000, depending on where you live.

That's more than some people make in an entire year. Of course, it all depends on your expertise. Entry-level Santas only make $10 per hour. 

Sell Your Annuity Payments


If you're desperate for cash, selling an annuity payment can help. This is mostly a last-ditch effort kind of thing though. Most courts in the U.S. make it difficult to sell payments to a third-party funding company unless there's a good reason for doing so.

Basically, you must prove that you will be put into a better position financially if you sell the annuity. Since annuity payments protect you from the possibility of spending through all of your retirement, many judges are reluctant to allow these transactions to go through. But you can convince a court if you wanted to, say, pay off a large debt or debts, if you were planning on using the money for emergency purposes, or if you needed the cash to pay for health insurance deductibles or an expensive medical procedure. 


Get a Reverse Mortgage


Reverse mortgages were popular in the mid-2000. They've mostly fallen out of favor because they were oversold. Still, for the right person, a reverse mortgage could be the right move. Basically, a reverse mortgage turns your home into a sort of savings account. Your home's equity is opened up, and you're allowed to spend it "at will."

Some companies encourage you to use an annuity in combination with the reverse mortgage, but many do not.

Now, because it's a mortgage, it's technically a loan against the property. The bank charges interest and fees, like closing costs, so there's a lot to consider before rushing out to sign paperwork.

One of the benefits of this type of loan, however, is that it does not need to be repaid prior to your death. If you plan on staying in the home forever, the reverse mortgage will be repaid either by your children or the home will be given back to the bank and the bank will sell it.

You can get around this by buying a life insurance policy that's just large enough to pay off the mortgage when you die. That way, the house stays in the family, but you get the lump sum of cash you need right now.

Anthony Jensen has worked with a number of retirees. He is thrilled to help people through difficult financial times.



Friday, October 18, 2013

Should You Purchase a Home After Retirement?


Most people make some major changes to their lifestyle after retiring. Some retirees spent years living in a community they hated and want to move away. They may want to consider buying a home, but aren’t sure whether they can afford to do so while they are no longer working. However, it may still be possible to purchase a home.
What to Consider Before Buying a House in Your Golden Years

You will want to make sure that you make an informed decision. There are a number of things that you will need to consider before buying a home during retirement:


Understand Your Budget


Most retirees are living on a tighter budget after they retire. You will need to know how much money you have on hand to spend when looking at homes for sale in Atlanta Georgia.


Cost of Renting Versus Buying


Many people rent houses after retiring because they believe that is all they can afford. There is nothing wrong with being thrifty, but you will need to know what the actual costs are before making a decision. Trulia conducted a study which found that it is actually cheaper to buy a house in the 100 largest cities in the country. That study also found that the savings are at least 40% in 85% of these cities.


Interest Rates


Interest rates are another important factor to take into consideration. The banks have offered record low interest rates, which mean this may be a perfect time to buy. Some people are still worried that they may not be able to secure a mortgage in the future, because the Federal Reserve has said that it may taper its stimulus plan. However, the stimulus will probably run in the foreseeable future. Mortgage rates have actually continued to drop as the Fed announced that it will continue its monetary easing policies.


Stability of Income


You will also need to consider how stable your income is before deciding whether to buy or rent. Buying a house is a long-term commitment. You may need to think twice if you think your income will drop in the future. This may be a problem if you have a temporary structured settlement or other windfall that won’t last forever. You will also need to consider it if you are going to be working part-time after retiring from your main job, because you probably won’t work forever. You definitely don’t want to use up your entire savings trying to pay for a new house if you won’t have much income in the future.


Ability to Get a Down Payment


You will also need to have a down payment to buy your house. You may not have a lot of money on hand. However, you may be able to borrow money from your 401K to use. According to Ben Barzideh, a financial wealth consultant, you can borrow up to $50,000 or half the value of your portfolio. This could be a great way to come up with a down payment for your new house.

About the author: Kalen writes about real estate financing and investing. He hopes to invest in some rental properties later this year.



Friday, October 4, 2013

How Much Home Can I Afford?

Obviously, everyone wants to own a home, and this can be easier as long as there is sufficient money to buy a new one. However, there are many ways and options to consider in buying and owning a home. The first thing that comes in mind when planning to buy a home is the amount of the house. If you are thinking of getting a home loan, then you should first determine how much you can afford for the home loan.

There are several factors to consider in getting a home loan since the payments can be on par. This makes sense in considering your current financial situation before deciding to buy a house. Likewise, you should also take into account your income, the credit history, debts and the cost of the house. In this way you can easily determine how much home you can afford to loan. Before making your final decision, it is important to consider some pointers.

Down Payment


One of the important pointers to consider in determining the amount of home that you can afford to buy is the down payment. Usually, home loan would require paying 20% down payment from the total house cost. However, you can also opt for non-standard loans that require lower amount of down payment. The downside of getting non-standard loan is the higher interest rates. This makes sense of asking for calculations before making your decision.

Income and Monthly Obligations


In determining how much home you can afford, you need to consider the monthly income and obligations. The mortgage company would require you to furnish the income details as well as the monthly obligations. These details will help the company in identifying the mortgage amount in which you can qualify. In calculating your loan capability, the mortgage company will check your credit card debts.

Interest Rate


Another factor to consider in determining the amount of home that you can afford to buy is the interest rate. Obviously, if the interest rate is lower, most likely you can afford buying bigger house. That is why home buyers should be aware about the prevailing interest rates in the area. It is also necessary to ask for quotes from different mortgage companies. In this way, you can compare which mortgage company can give you the best deals. In addition, you should also consider fixed rate mortgage than a variable rate mortgage. It is because the latter would impact your monthly obligations.

Location


The cost of the property that you want to buy also depends on the location. If you want to own a home in a commercialized area, then you should expect for higher cost. You need to conduct thorough research if you want to find a property located in your chosen area yet with the price that you can afford. Usually, if the property is of close proximity to the city it would be more expensive.

Indeed, it is very challenging to find affordable property. Nevertheless, St. Louis real estate can help you in finding the home that you can afford. If you cannot afford to buy a home, there are other options to consider. All you have to do is to seek advice from mortgage companies.



Thursday, October 3, 2013

Reverse Mortgage Lenders.

To put it simply, reverse mortgage can be categorized under home loans that possess special features. One of these special features permits you to receive cash for a certain portion of the home equity. This system of mortgage is particularly beneficial for the older generations, specifically the retired ones who do not have any means of income. This can help them positively and with its increasing benefits becoming more popular among the masses, reverse mortgages have gained immense popularity and there are several companies that are vying to provide and offer this incredible service to their customers. 

Reverse Mortgage is a lending system that is typical of the United States and traditionally involves activities by large, well known banks. 2011 was the year when several famed banks emerged victorious in terms of providing reverse mortgage. To name a few, Wells Fargo, Bank of America and MetLife Bank made it to the top of the list. Of the total reverse mortgages, Wells Fargo and Bank of America were successful in generating 43 %, which was promptly followed by MetLife.

All the same, it should be noted that there has been a drastic change in the reverse loan markets and the scenario has changed quite dramatically. Earlier, it was the banks that were held in high regard when it came down to reverse mortgages. The tables were turned when in the year 2011, Wells Fargo and Bank of America found it inappropriate to provide reverse mortgages to their customers. They gave a very simple reason, which was quite the concern at the time – the dwindling prices especially concerning homes. Besides, the financial standing of the person borrowing the mortgage did nothing to influence their decision making process. This area received another blow when in 2012, MetLife made a crucial decision of parting ways with retail banking. Therefore, what the customers have today are several small scale reverse mortgage lenders mushrooming all over the globe that do not particularly have any experience in the areas of traditional banking.

It took just 2 years to completely transform the face of the reverse mortgage world. Between the years 2011 and 2013, a tremendous change took place and therefore, the popular banks that were known for providing excellent reverse mortgage services suddenly died down and were replaced by smaller known companies. As per the latest information, this year, the company that tops the list of providing ace reverse mortgage services is Liberty Home Equity Solution, which is followed by Security one Lending and American Advisors Group to secure the second and the third place respectively. The top 10 list was rounded by Associated Mortgage Bank.

Although these companies emerged victorious in the year 2013, there has been a drastic reduction in the overall volume of the reverse mortgage, 50 % to be precise. There is a possibility that the consumers have a deep sense of trust instilled in bigger, well known brands and therefore, they fail to apply the same level of trust on brands that are not that well known, despite their specialisation and area of expertise belongs specifically to the reverse mortgage area.

The best thing that you can do is familiarise yourself with these companies and learn more about their policies and standards. Usually, it is far easier to learn more about well known stalwarts like Wells Fargo since people are aware about it. However, it is also important that you go the extra mile to learn about the other reverse mortgage lenders as well before you make your decision. The best way to do this is by thumbing through reviews of people who have previously availed of their services.


Friday, September 20, 2013

How Having A Good Credit Score Can Help You With Retirement



One of the most important factors of overall financial health is having a good credit score. While most people are fully aware how important it is during their working years, many do not realize how important it is after they retire. There are five important reasons why your credit score will continue to be important, even after you have retired.


Mortgage Refinance


One of the most significant reasons to keep your credit score high is so you have the opportunity to refinance your mortgage in the future. As mortgage interest rates move up and down, there could come a time when you will want to refinance your mortgage to take advantage of lower rates. If you do not have a good score, you will likely not qualify for the lowest possible rates.



Co-Signor


Many retired individuals would be great options to co-sign mortgages, auto loans, and student loans for their children and grandchildren. Regardless of the assets that you have accumulated, or the defined income that you have from social security or pensions, you will not be able to co-sign a loan if you have a poor credit score.


Insurance


During retirement, you will have to continue to maintain auto insurance, homeowners insurance, and maybe even life insurance policies. Insurance companies are continuing to place more of an emphasis on credit scores when determining insurance premiums. Because of this, you could end up spending hundreds of dollars more on insurance over the course of a year.

Senior Living


Another important way that your credit score could be important is if you choose to move into a senior living facility. Many of these facilities confirm credit scores to ensure that you will be reliable to pay rent each month. If you have a poor credit score, you may be denied admissions or will have to pay a higher entrance fee deposit.


Other Debt


During retirement, you may still want to take out some debt to make larger purchases. With a good credit score you will qualify for the lowest rates on auto loans, personal loans, and credit cards. With a low score, you will likely pay much more in interest.

In conclusion, having a good credit score even when you are in retirement will continue to be important. For those that have poor credit scores, it can still be improved through the help of a credit repair service. For more information on the benefits, you should read more testimonials from Lexington Law, which are written by actual clients that have benefits from a credit repair service.


Sunday, September 1, 2013

Managing a Mortgage: Tips for the Big Payments in Life


A mortgage is a large commitment for any family. It is important to manage a mortgage and the money in the household responsibly. This will help when attempting to finance other large purchases in future. Several tips will help families to manage a mortgage, and prepare for other big payments in the future. 


Create a Detailed Budget


The most important part of managing a mortgage and preparing for other large purchases is to create a detailed budget. The budget should include everyday expenses like groceries, and gas and utility payments. It should also include taxes, financing fees, and savings for an emergency fund. A detailed budget allows the family to see the exact state of finances at any given point, and it can indicate when it is necessary to cut back on spending before debt grows out of control. One household budget also helps to save for future purchases.

Pay Down Principal If Possible


The principal on a mortgage or any loan is the amount borrowed without interest. The amortization of many mortgages sees homeowners paying large amounts of interest for years before the principal starts to drop significantly. Homeowners should attempt to make additional payments each month to reduce the principal only. This actually lowers the total amount of interest that has to be paid over time. It also shortens the term of the loan.

Avoid Late or Missed Payments


It is important to avoid late or missed payments on a mortgage or any loan. Late payments can negatively affect credit, making it harder to finance other large purchases like a car. They can even incur fees from lenders that increase the amount of money owed each month. One way to avoid this is through a short-term loan. Dallas short term loans provide a fast way to make mortgage payments if there is an emergency, or if a paycheck is late. The short-term loan can prevent a bank from ruining personal credit, and can also help to avoid costly fees from mortgage lenders.

Refinancing


Families who are consistently having trouble making mortgage or other loan payments will want to look at refinancing. Refinancing has the potential to lower monthly costs for the remainder of the mortgage. The drawback is that the overall amount of money paid to the bank increases and could come with extra fees. Refinancing can help if the mortgage seems unsustainable.

Anyone managing a mortgage or other expense should make every effort to stay in communication with the lender. Communicating regularly and staying informed about the state of the mortgage is an essential part of management. A good relationship with the lender could help if problems occur in the future.


Tuesday, August 27, 2013

95% Mortgages (NewBuy Scheme)- Benefits Of This Scheme

If you are in the market for a new home and you are buying a home for the first time, the 95% mortgage NewBuy Scheme should be good news to you! This plan is making home-buying more easy and available to all individuals. In this article, you will learn about the 95% mortgage NewBuy Scheme and the main benefits of this scheme. So read along if you are planning to buy a new home.

The 95% mortgage NewBuy Scheme was launched in March of 2012 by the government. The scheme was designed as a new initiative for first-time home buyers, allowing you to purchase newly constructed homes with a downpayment of at least 5% with a 95% mortgage. This scheme allows mortgage lenders to approve loans to individuals with a much lower deposit than is typical, and can be risky for lenders. However, more and more lenders are willing to do such, as there are many individuals willing to buy new homes under this new plan. For those of you who aren’t aware of what a 95% mortgage plan is, it allows the borrower up to 95% of the homes’ total value.

The benefits of the 95% NewBuy scheme are many. For one, the NewBuy loan is only available to first-time buyers and can be used to purchase a home or an apartment. This leaves room for more choices, as you are not limited to a specific type of home. Another advantage of the NewBuy loan is that it is government-backed, so you know it is not a scam and it can be trusted. The government is contributing to an insurance policy, which is in turn allowing the mortgage lending companies to provide these loans to you, the buyer.

Another major advantage to the NewBuy scheme is that it works just like any other mortgage. You will not be charged higher monthly mortgage rates because you used this plan. You will simply pay the same amount on your loan as someone who received a loan through another avenue. Also, you will not be charged with any second charges on your home.

Another advantage to the NewBuy scheme is that you are only required to make a 5% or 10% down payment on the home. This is a significant difference in most loans, as you might be required to put down a very large initial payment, one which you might not have been able to afford. Because so many mortgage loans require such a large down payment, this has kept many individuals from being able to purchase a home, which is unfortunate. There are many people who could afford to pay the monthly mortgage rates, but who are unable to pay the large down payment. That is why the NewBuy scheme is great for first time buyers. It allows them to become homeowners without breaking the bank, and they are still able to make their monthly mortgage payments.

About the Author
Ashley Parker is a realtor who suggests checking out the Cala Homes Link for more information on 95% mortgages.




Saturday, August 24, 2013

Nine Essential Ways to Boost Your Retirement Fund

Do you have enough money to retire when you turn 65? If you want to travel the world, live debt free or buy a beach cottage, you need to plan to save enough money. With these nine tips, you can successfully boost your retirement fund. 

1. Buy Needs, Not Wants


Do you know the difference between a want and a need? If not, you’re probably spending instead of saving a lot of money.
You’ll save thousands of dollars by simply evaluating your needs and wants. Then, before you spend a penny, buy only what you need and rarely what you want.

2. Save Automatically


It’s human nature to say you’ll save and then spend the money instead. Ensure your retirement fund grows when you automatically transfer money to your retirement account every week. You won’t miss that automatic deduction in your checking account, but you will appreciate your growing retirement fund.

3. Build an Emergency Fund


Sometimes, life events like a roof leak or medical bill hit hard. They tempt you to withdraw from your retirement account or stop automatic savings. Instead, build an emergency fund to cover unexpected expenses that aren’t in your household budget and ensure your retirement stays on track. 

4. Decrease Credit Card Debt 


Nothing sucks money out of your pocket like credit card debt. It’s often accompanied by high interest rate and monthly fees. Find a debt repayment calculator online, stop charging and plan to get out of debt quickly.

5. Pay off Your Mortgage


A long-term expense, your mortgage keeps you tied to your day job. Free yourself by repaying your mortgage so that you can retire on time. 

6. Accumulate Experiences, Not Stuff


Buying collectibles, clothes and tools may make you feel good in the moment, but then they’re a hassle to dust around or maintain. They don’t enrich your life, build relationships or fulfill your dreams.

Experiences, however, provide long-term benefits. They are worth every penny, and you’ll relive the time you swam with sharks, taught your grandkids to play chess or rebuilt a car with your dad’s 1950 Ford Mustang Parts. Yes, experiences cost money, but they are worth their weight in gold compared to the value of stuff.

7. Diversify Your Portfolio


Don’t place your retirement egg in one basket. Create a portfolio of investments that includes a mix of high and low risk options, and protect your money. 

8. Organize Your Paperwork


Do you know where your retirement fund statements are located? Find, organize and inspect each one to ensure you understand the charges, changes and growth of your retirement money. 

9. Remember Your Dream


Post your retirement dreams in your checkbook, on your closet door and near your computer. That list keeps you focused on saving rather than spending money.
Don’t simply hope and dream that you’ll have enough money to retire. Implement these nine tips, and retire like you want. 

BIO: Alicia Lawrence is a content coordinator for a tech company and blogs at MarCom Land in her free time.


Monday, August 12, 2013

The Benefits of Mortgages for Boomers

Many home buyers are under the mistaken impression that they should try to purchase in cash. While cash-buying can certainly result in some benefits for home buyers, it also robs them of the chance to take advantage of the benefits of a home loan.

Even though most people may view mortgages as simply a debt that must be paid off, home loans come with their own advantages.

Flexibility


If a home buyer opts to only make a purchase in cash, their options dwindle considerably. Many properties may be out of their price range, narrowing their choices. Mortgage borrowers, however, have the freedom to choose the home of their dreams, not just the home they can pay for upfront.

Mortgages also give home buyers more flexibility in how they can pay off a home. Different payment plans can be selected, and if interest rates fall in the future, borrowers can refinance their loans to take advantage of the savings.

Protection


While paying for a home in cash may seem like a great way to prevent the risks associated with loans, it will also generally wipe out an individual's savings. This means that if another issue arises which requires financial assistance - medical treatment, college tuition, etc. - they will be at a disadvantage. A mortgage borrower, on the other hand, will be able to hang onto their cash in case such a situation occurs.

Additionally, many home buyers often forget that the costs of a home go beyond the purchase price. Closing costs must be accounted for, as well as things like maintenance and repair. Buying in cash can leave home buyers at a disadvantage when it comes to financing these things.

Taxes


Mortgage interest is tax deductible, as is the interest on a home equity line of credit. In addition, borrowers can roll the costs of property taxes into their loan amount, making it easier to pay them as part of a monthly bill.

Credit


All debt is often lumped into the bad category, but there's a difference between good debt and bad debt. A high-quality mortgage qualifies as good debt on a person's credit report, and as long as they stay current on their loan, it can give a big boost to their score, making it easier to borrow money in the future and receive low interest rates on credit cards.

Time


The greatest benefit of home loans is that they allow buyers to make a purchase sooner rather than later. Chances are cash buyers will have to put off homeownership for a long time in order to save up enough money. Depending on the market, waiting too long can make the cost of a home even more expensive, which in turn means having to wait even longer. Mortgage borrowers are able to finance a home purchase when they want to, giving them the freedom to make homeownership a reality.


Tuesday, August 6, 2013

Home Mortgages: What Essential Things Should You Know

Strictly speaking, a home mortgage is a very specific type of loan that is designed to cover the purchase of a new home. A home mortgage doesn’t operate identically to other types of personal loans that you may have taken out, even if you take them both out from the same financial institution. While you may have a few months or even a year or more to pay back a loan for a few thousand dollars, for example, you would have 25 or 30 years to pay back the balance on a mortgage. Interest rates are also determined by a different set of criteria when talking about home mortgages. Before you sign on the dotted line with your local bank and look forward to purchasing that new home, there are a few very important things that you’re going to want to know about.

One important factor of buying a home that you need to consider is just when you start the mortgage process. According to Fox Business, experts indicate that you should always start preparing the paperwork needed for your mortgage between six months and one full year before you actually start shopping for a house. The mortgage application and approval process can be a long one, so you want to get things started as early as possible to avoid delays later on. Additionally, knowing what type of mortgage you qualify for will affect the types of houses that you should be looking at.

You can find out about additional mortgage rate information by using sites like kanetix.ca. You’ll be able to see current rates, view fixed rate trends and track any changes that may be emerging in the market at large. The information on the site can be a great way to stay up to date as possible with mortgage information and to get an accurate gauge of how much you can expect to pay when it comes to buying that home of your dreams.

You should also be aware of the fact that the total amount of money that you use as a down payment on your house will directly affect the overall terms and conditions of the mortgage that you sign up for. You may not actually have a choice when it comes to how much you can put down depending on the situation. Some banks are going to require a 20% down payment before you can be approved for a mortgage, while others may only need 10% or even 5%.

Another factor of buying a home that you’re going to need to consider are the closing costs associated with the final parts of the process. Closing costs generally aren’t part of the down payment on a home, so they will likely have to be rolled into the total amount of money that you’re using the mortgage for. Also keep in mind that the overall closing costs on your home will vary depending on a number of different factors including the total price of the home and even the area in which you live.

Donald Ayers enjoys blogging about his personal finance know how. His articles mainly appear on money saving blogs.



Monday, July 29, 2013

How Loan Rates Affect the Housing Market

Interest rates vary for a number of reasons. However, what affects them the most are changes in the decisions of the Federal Reserve, the current state of the economy, and the rate at which people are either borrowing or saving.

A huge percentage of home sales are normally financed. People buying homes usually apply for mortgages, which is actually just the act of borrowing money. Therefore, when the reasons mentioned above undergo changes, it is typical to expect that the housing market will be affected.

Interest rates refer to a percentage of the total money borrowed which is charged to the borrower by the lender for its use. Of course, the higher the interest rate, the larger the amount of money the borrower is expected to pay. The reason the housing market is affected by the change in the Federal Reserve’s decisions is because the Federal Reserve, just like lenders, sets an interest rate at which it lends money to financial institutions including banks. In turn, this interest rate that is charged to the banks and other financial institutions will affect the rate at which they lend money to businesses and potential home buyers who want to apply for a mortgage. Any increase in the rate of the Federal Reserve is proportional to the rate of the banks and other financial institutions.

For that reason, when the interest rate of loans and mortgages is lower, people are more encouraged to borrow as they know that in doing so, their loan will be cheaper and will cost them less. On the other hand, when the interest rate is high, borrowing money slows and the number of people applying for loans and mortgages are fewer. So, the lower the interest rate, the more sales there are in the housing market.

When mortgage rates are lower, there is no doubt that homes become more affordable. More people want to apply for a mortgage and purchase a home, which definitely helps boost the sales in the real estate market. Even those homeowners who are looking for opportunities to refinance take advantage of the times when rates are low. When refinancing, a homeowner can trade their current home loan for a new one, which can be more affordable for them. In addition, low rates also help development and construction companies. Since more people want to purchase homes, there is an increase in demand for houses. Therefore, not only do development and construction companies gain business but they also get to finance their construction at lower costs since they can borrow money with low rates.
Interest Rates
Interest Rates (Photo credit: 401(K) 2013)
One important thing to keep in mind, though, is that even if loan rates are affecting the housing market’s mortgage prices, sometimes they aren’t in direct correlation. As mentioned earlier, low rates often result in more demand for houses, which home sellers sometimes take as an opportunity to increase the price of their house. However, if the prices get too high, buyers back off, which may result in a decline in demand, which could hurt the housing market.

If you are a home owner, you should know that adjustable rate mortgages are affected also by the Federal Reserve, the economy, and the rate at which people borrow or save. You are lucky if you have a mortgage which is locked in for a certain period of time; however, if you are tied in to an adjustable rate mortgage, then you should expect that the interest rate might vary at any time. It could change every year or as often as every month, depending on the state of the market and the three factors mentioned earlier. When the recession hit back in 2008, there were a number of homeowners who had to face foreclosure because they weren’t able to make their mortgage payments. Their mortgage rates increased to an amount which they weren’t able to afford any longer.

So, if you are currently locked into an adjustable rate mortgage, make sure to prepare for the possible increase or decrease. Monitor your credit reports and adjust your finances accordingly. Make sure to put away a little more money for your monthly mortgage payment than you usually pay. This way, you know that you have the money to make your mortgage payments, despite a change in the interest rates.

Author Bio:

Joy Mali is an active finance blogger who is fond of sharing interesting finance management tips to encourage people to manage their personal finances. More specifically, she advocates that people should check credit reports and scores regularly.


Friday, July 26, 2013

How to Deal With Mortgage and Credit Card Management

As we are all aiming to ride out the financial wave to safety, you may be currently facing issues when it comes to repaying on a credit card or taking out a mortgage. Thanks to the economic recession we have all be tightening our fiscal belts whilst taking out favourable terms with a number of different credit card firms or banks. Whether you are seeking alternatives or looking to control your personal finance, here are a few options on how to cope with managing your credit. 

Do your research


If you wish to keep a hold of your credit cards then it is essential that you scan a wide variety of companies on the net. This is in order to obtain the best interest rate or APR so your repayments or as low as possible. Different firms will charge different types of rates so it is essential you find the best deal where you can reduce interest rates and more. This includes;

  • Decreasing monthly payments.
  • Eradicating any charges.
  • Asking for a lower interest rate.

Settle debt immediately


Whether you have a credit card or are renewing an existing mortgage loan, it is crucial that you pay off the monthly debts in good time. This is because you may run into trouble in the long run when it comes to missed payments. Like a credit card, a mortgage payment is taken monthly so you should ensure;

  • Settlement of any outstanding monthly payments as soon as possible in one lump sum.
  • Ask to discuss how to pay less over the course of a month.
  • You have enough money to pay or your credit rating may be affected. 

Prioritise


Do you really need to take out a credit card or struggle with mortgages? If you really do not have enough funds to cover these monthly payments then you should draw up a schedule. Credit card repayment can be left to a certain extent while a mortgage needs to be paid off in full. Alternatively it may result in the loss of your home. Yet, if you speak to an independent financial advisor, they will be able to put you in the right direction as far as the best home loan rates are concerned. This will provide you with the opportunity to repay within your budget so that you are not short at the end of the month.

Little and often


If you choose to pay back the minimum amount each month, it will allow you to be in control of your personal finances. In this way, it may take you longer to pay the full amount back on your mortgage or credit card but paying in bite size chunks will ensure you don’t run into debt. By adopting a less is more attitude you will have the chance to;

  • Be in control.
  • Repay the lowest amount when necessary.
  • Not rack up any additional loans.

Seek help


If you have been unable to agree on reduce interest rate payments as well as reduced balance, then there are other solutions available. You can always seek approval from independent advisors or ask friends or family to cover you until you can repay them back. This won’t be as much of a burden especially as it will only be a temporary loan to tide you over until your next pay cheque.

If you are disciplined and keep a close record of all your outgoing and incomings then you will have the ability to manage your finances. By following just a few of these steps, you will be well on the way to financial freedom and taking control of your personal finances.

About the Author:
Westpac is one of the banks in New Zealand that offers the best and reasonable home loan rates. They also have credit card deals and more.



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