First Time Financing: Real Estate Tips for Finding a Home

Very few purchases are as large and important as that of a home, and the first time you go through the financing process you'll be introduced to a variety of essential lending concepts. Gaining equity through home ownership is an essential way of building a healthy financial portfolio, and home ownership is also an emotionally rewarding experience. Consider the following tips when starting your search for your new home.

Search Tips for Your First Home

Finding a house to buy is quite a different search from finding apartments to rent, and you'll need to consider a wide array of amenities when searching for your first home. One of the most important differences is calculating how much of a mortgage payment you could handle with a home versus how much rent you could pay for an apartment.
You'll need to list your debts and income to determine the maximum payment you could afford while paying a mortgage. Most financial experts suggest paying no more than one-third of your income on rent, but that number may change for a mortgage. Remember that home ownership comes with costs that include:

• Home owner's association (HOA) fees
• Landscaping costs 
• Mortgage insurance 
• Property taxes 
• Utilities 
• Yearly maintenance

You'll need to add these additional costs into your estimated mortgage payment to get the most accurate picture of how much mortgage you can afford. Home ownership comes with some distinct benefits, but it's also a significant financial commitment.

Getting Financing Early in the Search

Getting a feel for the different types of homes available in the area you'd like to live takes time, and it's fine to perform some early searches before you're absolutely ready to start the search. However, once you're serious about buying a new home, your number one priority is obtaining financing.

Two terms you'll need to learn include "prequalified" and "preapproved". Each is useful, but only one will help you when it comes to making an offer on a new home. Getting prequalified is pretty simple, and all it takes is giving a bank your basic financial information to get an idea of how much mortgage you can afford. It's a helpful number, but it won't help you land the home of your dreams.

Preapproval, on the other hand, is a process that requires much more information be given to the bank in order to see if you have the creditworthiness to get mortgage approval. The reason getting preapproved is so important is because sellers like to see that you're serious about buying a home. Preapproval tells then that you're looking to buy and aren't just window shopping for a new home.

Preparing Financially and Domestically

Saving the down payment and making sure you have enough income to sustain a mortgage payment is important for buying a home. However, it's also important that you have savings above and beyond your down payment. Wall2Wall Media suggests you might want to have some domestic tasks taken care of like buying furniture and appliances for your new home first.

The reason you need some savings above and beyond what you'll spend to obtain your mortgage, is because there are always little things that go wrong or unexpected purchases that come along with buying a home. As long as you have a modest amount of savings to cover those costs, you won't have to deal with costly credit cards or loans to cover those last-minute expenses.

Additionally, purchasing essential appliances like a washer and dryer and the refrigerator in advance of your move-in date should help you avoid having to shop for these items at the last minute when it might be tempting to buy them with a credit card or make a hasty purchase without shopping around first.

The name of the game in getting financing for a home is preparing well in advance for each step. Don't rush into the process, and you'll be sure to get the home of your dreams, or that Apartment for rent in Liberty Village before you know it.

Is Freezing Your Credit a Good Idea?

Your credit might be in danger. In fact, technology has created countless ways in which hackers and thieves steal identities and wreak financial havoc on innocent victims. Most people protect themselves by having some form of protection as part of their account.

However, many people choose to freeze their credit as an additional security measure against identity theft. But is freezing your credit a good idea?

There are pros and cons to freezing your credit and understanding the requirements in freezing it will help you decide if it’s the right choice for you.

Why Freeze Your Credit?

A credit freeze has traditionally been offered to account holders who’ve experienced some forum of identify theft of fraud. Recently, the practice has become popular among those who just want to protect themselves in advance.

By freezing your credit, you put your credit report on hold and prevent anyone from gaining access to your credit score or financial history. In fact, not even you can access it without following specific procedures to unfreeze it.

A credit freeze fully protects your reports from access to anyone. Credit inquiries that are commonly performed for loans, purchases, and accounts are also locked out when your credit is frozen.

Benefits of a Freeze

But why would you want to fully lock down your credit? Quite simply, it’s the most secure way to safeguard your credit from financial hackers. It prevents would-be thieves from accessing the most valuable information you have about your money.

If you use a service that monitors your credit, chances are you’ll only find out that you’ve been a victim of identity theft after it’s already occurred. However, by freezing your credit, you proactively prevent any attack on your finances.

What to Watch Out For

Freezing your credit also has some drawbacks that you should consider. It can be an inconvenient way to protect your credit given the difficulty of allowing anyone to access your credit.

So if you want to apply for a loan, rental, or make any purchase that requires a credit check, you’ll have to plan in advance in order to allow the lenders access.

This also requires you to go through specific procedures, which can take time and cost money. There is a fee involved in unlocking your credit, as well as the need to provide a special pin number that you’ve established beforehand.

The cost of unfreezing your credit will vary depending on your local requirements. Different lenders use specific credit bureaus. You may need to unlock your credit with all of them if a lender requires it.

However, if you’re freezing your credit with a help of a mortgage broker due to identify theft, then the fees will not be required. In all other cases, you will likely need to pay for any changes to the status of your credit freeze.

Most people aren’t aware of the frequency with which lenders and other parties perform credit inquires. So make sure that you understand which ones do, in order to prevent the inconvenience and cost of freezing your credit repeatedly.

The following are just some examples of when someone might require access to credit:

• Mortgage
• Insurance
• Credit
• Loan
• Job application
• Cell phone service
• Home utilities
• Online transactions

In order to protect your credit from identity thieves, there’s no better way than freezing it. It prevents access to your credit score and protects your most valuable information.

Although there are some drawbacks with respect to the fees and inconvenience of freezing your credit, the benefits can outweigh them with the full protection it provides and the peace of mind you’ll have around your personal finances.

Venetia Rose has been a freelance writer and blogger. She loves to share and keep herself updated with the latest tips in mortgage and financial consulting. Her interests are cooking, photography, craft and painting. Follow her on Face book https://www.facebook.com/laksh.venetia

Six Signs You Need To Modify Your Current Budget

It takes a special discipline to be able to start and keep a budget. Setting aside money for a 401(k) plan, groceries, bills and allowances can be a drag, especially if there's no money left after the essentials. But before loose spending can even be worth talking about, make sure the current budget is realistic for everyday needs.

Never enough money for groceries

If you're buying high-priced foods, such as frozen prepared meals, this will eat into money quickly. Instead of grabbing a frozen lasagna meal, buy tomatoes, pasta noodles, spices, cheese and other necessary ingredients. While you may only need about half of these items to make an entire pan of lasagna, the rest will be left over for other meals. Keep this spending habit in mind for any frozen dishes. Make the meals yourself, and freeze what's left to save on groceries. 

Can't afford to fill up the car gas tank

There's a minimal amount that you can do about toll fees and regular auto maintenance, but there is something to be done about gas-spending prices. Use smartphone apps, such as Gas Buddy, to keep track of which gas stations have the best prices for your car. There's no need to drive several neighborhoods over to purchase gas, but at least do comparison pricing to find the best prices in the area. Also, check auto websites for coupons, such as money off on oil changes, tune-ups and for spending a certain amount on larger chargers.

No money for smaller bills because of larger bills

Maybe paying a lump sum for rent all at once will eat into expenses for the next two weeks. Try setting aside half of the money for rent or a mortgage for one pay period and the other half when it's due. This way you have a better opportunity to avoid late fees and other everyday living expenses that are short-changed because of bigger bills.

High electricity bills

Some electricity programs, such as the Multi-Family Home Energy Savings Program, are providing real estate companies with supplies for a more eco-friendly home. Make sure your landlord is doing the same for apartment dwellers. Using eco-friendly equipment like compact fluorescent light bulbs or CFLs may cut down on electricity bills and payments to replace supplies that would last far more hours or even years. 

Short on allowance money for kids

There are plenty of chores for children to do around the house, but if the issue is having the money to spare from your budget then reach out to friends. Teenagers usually need more money, especially around graduation and senior prom time. Ask friends if they need extra help around their offices. Consider after-school programs or summer jobs to help kids learn about expenses. The more they learn about how money works, the more they'll respect you trying to spend wisely.

Higher bills for credit cards

Depending on the credit card, even one late payment can modify the monthly rates. If you're spending more than you're paying, it's time to cut up the credit card. Initially it may be difficult to do so because credit cards come in handy when a wallet is empty and a checkbook has a zero balance. But if the balance continues to get higher and you're late on payments, it's time to reconsider.

Creating a budget is much easier than staying on budget. Avoid throwing out unrealistic numbers that you know you'll never meet, at least on your current salary. But if you set a monetary amount for a budget, stick to it. When you've got that down, then it's time to use these ways and others to figure out how to stay within that budget. Over time it'll become second nature even if it's initially an annoyance. Be sure to talk to financial professionals if you don't know where to start or are in too much debt right now.

Informational credit to A C Waring and Associates Inc.

Four Financial Skills you need to Master

For many people the idea of having more than enough money may seem foreign to them. According to a recent UK money habits study, 53 percent of people in the United Kingdom struggle to make their monthly payments and only 46 percent of people have a monthly budget. 

It is possible to have enough money to pay your bills each month and build up a healthy savings account as well as a retirement fund. 

But, if you want to become free from financial stress, there are financial skills you need to master first.

If you are on a low income, make sure to take advantage of money help such as grants and benefits, this can reduce certain financial pressures which can help you avoid the temptation of loans, especially short-term loans.

Pay off your debt:

One of the first things you need to do is pay off any debt you have. If you don’t have any debt, keep it that way. Credit cards and loans can be tempting. The idea of paying for something later is appealing, particularly when you aren't making very much money. The problem with this is that interest rates compound daily which means you could end up paying a lot more than what you actually spent.

If you are currently in debt, cut up your credit cards and start paying down your debt as quickly as possible. Say goodbye to paying extra fees and interest rates for things you've already enjoyed.

Have a budget:

You cannot be financially successful if you don’t have a budget. Unless you are using 100 pound notes as dish rags (and if you are, stop it and send a few our way…) you need a budget so that you know how much you make and you know how much you spend. 

Trying to become financially sound without a budget is like trying to build a tower without instructions, you may be sort of successful, but you’ll have success much faster if you have a guide. Kick Jiminy Cricket to the curb and let your budget be your guide.

Live on less than you earn:

This principle actually ties in really well with paying off your debt. One way to avoid debt and to avoid the strain of living month to month is to start living below your means. Basically, spend less than you make. If you always spend every pound you have, you’ll never have anything left over to invest.

Credit cards give you a skewed perception of how much money you actually have, which is why so many people up end deep in credit card debt. The money you are spending isn’t actually yours. Look at your income and find ways to reduce your sending so that you can save at least 10 percent each month.

A simple trick to living below your means: automatically deposit a certain amount from your checks each month. Withdraw it in cash and store it under your mattress or transfer it to a separate account that’s more difficult to access. Pay yourself first.

Invest wisely:

Once you have eliminated your debt, work on a budget and spend less than you make, you can begin making investment options. Investments make your money work for you. Because investments can be tricky, and even a little scary, it’s usually best to work with a professional advisor who can help you create the right investment portfolio. 

A simple rule to remember: diversify. You’ll still earn money on your investments but with a much lower risk. Essentially, don’t put all your eggs in one basket.