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Southwest Airlines Just Got Even Better with the Southwest Rapid Rewards® Plus Credit Card

Kris Majaski — Wed, 05 Apr 2017 23:05:27 +0000

As one of the most popular airlines, Southwest is also known for providing a number of perks such as free bags and no change fees. The Southwest Rapid Rewards® Plus Credit Card, however, includes these benefits plus more, providing a valuable combination of airline rewards and credit card perks. If you travel with Southwest Airlines, this card can not only help you get the most out of your purchases but also points for free flights. (See also: Best Co-Branded Airline Credit Cards)

Why We Like This Card

Earn 40,000 points
3,000 anniversary points

How This Card Works

This card awards two points per dollar spent on Southwest and Rapid Rewards Hotel and Car Rental partner purchases and one point per dollar spent on all other purchases.

Bonus Offer. Earn 40,000 points after you spend $1,000 on purchases in the first 3 months your account is open.

You can redeem your points for award flights, gift cards, and other travel perks such as car rentals and hotel stays with Southwest partners. There are no blackout dates or seat restrictions when you redeem. There is no limit to the number of points you can earn, and points do not expire.

Other Benefits

No change fees. There are no change fees with Southwest Airlines, which can save you hundreds of dollars if you need to change your flight.

Bags fly free. First and second checked bags fly free with Southwest Airlines.

Anniversary bonus points. You get 3,000 bonus points after your cardmember anniversary each year.

Considerations

Annual fee. If you don’t earn enough points for award flights or use any of the card benefits to justify the annual fee, you should instead consider a travel reward card with no annual fee. (See also: Best Credit Cards With No Annual Fees)

Foreign transaction fee. The foreign transaction fee of 3% can become costly if you frequently travel abroad. For foreign purchases, it’s best to use credit cards that do not charge this fee. (See also: Best Credit Cards With No Foreign Transaction Fees)

Who This Card Is Best For

This card is best for travelers who frequently fly with Southwest Airlines and can take advantage of its rewards program to get free flights.

Info about the Southwest Rapid Rewards® Plus Credit Card from Chase has been collected independently by Wise Bread. The issuer did not provide the details, nor is it responsible for their accuracy.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Get More Points for Business Purchases with the Chase Ink Business Preferred Credit Card

Kris Majaski — Thu, 12 May 2016 04:15:11 +0000

Editor's note: This offer is currently unavailable.

The Chase Ink Business Preferred℠ Credit Card offers a program that allows small business owners an opportunity to earn rewards for their business purchases. (See also: Best Credit Cards for Small Businesses)

How This Card Works

This card awards 3x points per dollar on the first $150,000 spent in combined purchases each year in the following categories: travel, shipping, internet, cable, phone services, and advertising purchases made with social media sites and search engines (then 1 point). Earn 1 point per $1 spent on all other purchases.

Bonus offer. Get a bonus of 80,000 points if you make $5,000 in purchases with your card in the first 3 months of account opening, which can be worth $1,000 in travel if you redeem through Chase Ultimate Rewards.

You can redeem your points for cash, gift cards, and even merchandise, with each point typically worth one cent. If you redeem your points for travel through Chase Ultimate Rewards, you receive 25% more value for each point.

Other Benefits

Free employee cards. Add employee cards to your account at no additional charge. Your employees can make business purchases with limits that you set, and can earn points for the company at no extra cost to you.

Cell phone protection. Get up to $600 per claim in cell phone protection against covered theft or damage for you and your employees listed on your monthly cell phone bill.

Trip cancellation insurance. Receive trip cancellation and trip interruption insurance if your trip is canceled or cut short. Get reimbursed for prepaid, non-refundable travel expenses which often include passenger fares, tours, and hotels.

Purchase protection. Your purchases are protected against damage or theft up to 120 days, plus extended warranty.

Considerations

Annual fee of $95. You need to make sure you earn enough rewards through spending to cover the cost of carrying the credit card.

No introductory APR. If you need to transfer a balance from another credit card or plan on making a large purchase that requires time to pay down, you can save money on interest with a card that offers a 0% intro APR, even if it means choosing a consumer card instead. (See also: When to Choose a Business Card Over a Consumer Card)

Cap on bonus categories. If your business expenses are typically more than $150,000 per year in any category, you can lose out on bonus points.

Who This Card Is Best For

This card is best for small business owners whose expenses fall largely in the bonus categories and can use the Chase Ultimate Rewards portal to redeem the points for travel at a 25% discount. Further, because there isn’t a foreign transaction fee, it’s a great card for small business owners whose spending includes international transactions or traveling abroad.

Info about the Chase Ink Business Preferred℠ Credit Cardhas been collected independently by Wise Bread. The issuer did not provide the details, nor is it responsible for their accuracy.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Chase Ink Business Cash℠ Credit Card Review

Kris Majaski — Thu, 28 Jan 2016 18:29:18 +0000

Editor's note: This offer is currently unavailable.

In addition to a variety of highly-rated consumer credit cards, Chase also offers popular business credit cards. If you're a small business owner looking for a way to easily earn cash back on business-related purchases, the Ink Business^SM Cash Credit Card may be the card for you. (See also: The 5 Best Credit Cards for Small Businesses)

How This Card Works

This card offers 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. You can also earn 2% cash back at gas stations and restaurants on up to $25,000 in combined purchases each year, and 1% cash back on all other purchases made with the card. You'll earn 1% cash back after you reach the $25,000 limit each year.

Bonus offer: Earn $500 bonus cash back after spending $3,000 on purchases in the first three months after account opening.

This card awards cash back in the form of points with one point being equal to one cent. You can redeem your points for cash for statement credit or direct deposit into a checking or savings account. You can also redeem for travel or gift cards through Chase Ultimate Rewards.

Other Benefits

Free employee cards. Earn more cash back by providing your employees their own cards.

Extended warranty protection. Extend the warranty on your purchases by an additional year on eligible warranties of three years or less.

Pros

Bonus offer. If you spend $3,000 with your card within the first three months of opening the account, you can receive a bonus worth $500. This bonus is one of the most valuable cash rewards offered with a credit card, especially among those without annual fees. (See also: 5 Best Credit Cards That Offer Bonus Cash for Sign Up)

0% introductory APR. If you need to make a large purchase to get your business going, you'll have 12 months to pay down the balance without the added expense of interest with this card. The introductory APR not only saves you money but is also one of the longest introductory periods for purchases being offered by business credit cards. (See also: The 5 Best Credit Cards with 0% Intro APR)

5% cash back on business purchases. You can earn as much as 5% cash back in a broad range of business-related expenses, which can help cut the costs in those categories. Business credit cards offering 5% cash back on office supply purchases specifically are limited. (See also: The 5 Best Credit Cards for Office Supply Purchases)

Cons

Cap of $25,000 on bonus categories. If your expenses in either the 5% or 2% categories total more than $25,000 per anniversary year, those purchases will only earn 1% cash back once you reach the cap. (See also: The 5 Best Cash Back Credit Cards)

Foreign transaction fee. If the majority of your business expenses are foreign transactions or if your business requires traveling abroad, those purchases will incur a fee of 3%, which cancels out a large amount of the rewards you earn. If your expenses are primarily international, you should instead consider a business credit card that does not charge foreign transaction fees. (See also: The 5 Best Credit Cards with No Foreign Transaction Fees)

High balance transfer fee. Most credit cards charge a balance transfer fee of 3%. This card has a 5% fee. Depending on the interest you're currently paying, and other options you might have for transferring a balance at 0% APR, this might not be the best card for that. (See also: Best Cards with $0 Balance Transfer Fee)

Who This Card Is Best For

The Chase Ink Business Cash Credit Card is best for small business owners who spend less than $25,000 per year in office supply store, cable, internet, cell phone, gas, or restaurant purchases in order to earn the most cash back. This card is also best for those whose business expenses are more office related rather than travel related and are primarily domestic purchases, and it can be especially ideal for those who are just getting their businesses going or plan on a large purchase right away thanks to the card's sign-up bonus and introductory APR offers.

Info about the Ink Business^SM Cash Credit Card has been collected independently by Wise Bread. The issuer did not provide the details, nor is it responsible for their accuracy.

This article is from Kris Majaski of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Chase Total Checking and Savings: Easy Everyday Banking

Amy Lu — Mon, 07 Dec 2015 23:01:36 +0000

Years ago, when you wanted to open a checking or savings account at a bank, you'd head over to a bank in your neighborhood. These days, setting up a new account no longer requires a live person to walk you through it. There are banks exclusively online to prove it. (See also: Banks Still Offering Free Checking and Great Interest Rates)

If you're shopping for a bank to open a checking or savings account at, you're probably wondering which bank is best: local credit union, exclusive online bank, or one that provides both online and brick and mortar services. While online exclusive banks may offer slightly lower fees or higher APYs, a large, traditional bank can provide valuable resources and services along with integrated online and mobile options that make banking a breeze.

Take, for example, Chase Total Checking®. Their motto is “Simple and Accessible” — and with 16,000 Chase ATMs and 4,700 branches across the nation, it won’t be too difficult to find a location to get cash or deposit checks in person. And you can get even more out of your banking if you open a Chase Savings^SM account too. And they're offering new customers up to a $200 bonus! See details below.

How to Open an Account

To open a Chase Total Checking® account, you need to deposit a minimum of $25. There is a $12 monthly service fee, which you can get around by doing one of the following:

Make direct deposits to your account totaling $500 or more.
Maintain a $1,500 minimum daily balance.
Maintain an average daily balance of $5,000 or more in qualifying linked deposits or investments.

The minimum deposit for a savings account is also $25. The monthly fee is $5, which is waived if you do one of the following:

Maintain a $300 minimum daily balance.
Have at least one repeating automatic transfer of at least $25 from your personal Chase checking account.
Link your savings account to a Chase Premier Plus Checking, Chase Premier Platinum Checking, or Chase Private Client Checking account.
Be younger than 18 years old.

Sign-up Offers

Chase is offering $200 for their new customers who open a Chase Total Checking® account and set up direct deposit. But be sure to jump on them soon — these offers expire April 14, 2021.

Online and Mobile Banking

If you prefer to do your banking from the comfort of your living room — or really, anywhere with Internet connection — Chase offers online and mobile banking. Some of their services include:

Chase QuickDeposit: Take a picture of your check and deposit it with the Chase Mobile App. Easy!
Chase QuickPay: Send money to another person, no cash or checks necessary. Just enter the recipient’s email address or mobile number and Chase will send them an email with instructions on how to accept the payment. They don't have to be a Chase customer, but they do have to create a Chase user account.
Online Bill Pay: Your bill payments will be sent on the date you specify. If your payment is ever delayed, Chase will refund 100% of any late fees (provided they got the payment request before the cutoff time and the payee information was correct).

Automatic Savings

You can set up a repeating automatic transfer from your Chase checking to your savings account...and forget about it! Actually, don't, because it's important to monitor your money. But there's no denying that Chase's Automatic Transfer Program takes most of the effort out of saving, and it's an easy way to get the monthly fee on your savings account waived — just set the transfer amount to at least $25 a month.

Account Alerts

Need to keep a close eye on your account? (I mean, who doesn’t?) Chase will text or email you if your account is low on funds, there is a large transaction, or other account activity. It’s easy to personalize what account alerts you receive and how you receive them.

Are Chase Total Checking® and Savings^SM Right for You?

If you're looking for a solid bank with both a physical presense as well as plenty of online and mobile conveniences, Chase is a great option. Along with their basic banking offerings, Chase has a good reputation for their other consumer products like credit cards. Having a lot of your financial accounts under one company can be incredibly convenient.

This article is from Amy Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Farnoosh Torabi Shares Favorite Holiday Shopping Tips With Wise Bread Readers!

Camilla Cheung — Fri, 04 Dec 2015 16:00:03 +0000

I love giving gifts (and getting them) when the holidays roll around, but in the excitement to spread the good cheer, it’s easy to get carried away and to spend a little more than I can afford. How can you plan wisely and avoid carrying debt into the New Year, without feeling like you’re depriving yourself? Fortunately for us, Farnoosh Torabi, personal finance guru, TV star, and author of When She Makes More: The Truth About Navigating Love and Life for a New Generation of Women, is here to share her best holiday spending strategies, which I’ll certainly be implementing this season, and hopefully, my wallet will thank me in the New Year!

1. What are some of your favorite "overlooked" tips about spending smart during the holidays?

Make a kids-only rule. Limit the number of gifts you have to buy for friends and family by making a rule such as gifts for the kids only. Alternatively, you could do a gift exchange where you only have to buy one family member a gift instead of all of them.

Shop early. By doing some shopping in advance and taking advantage of sales throughout the year, you can avoid paying full-price at the last minute. Just be careful not to forget about the gifts you have stashed away.

Search your home for unused gift cards. They may be lying forgotten in a drawer. Even if they are to a store you don't normally frequent, chances are you can use them to buy a gift for someone else.

Favor clever over cost. Gifts with a clever touch – like ones that celebrate an inside joke or old memories – can often trump a pricey present. Sites like Living Social and Groupon are also great

2. Your book, When She Makes More: The Truth About Navigating Love and Life for a New Generation of Women, gives a lot of great advice for women who are the top-earners in their households. What do you think is a great gift for the ultra-successful woman CEO who already has everything?

The gift of time and/or a little luxury and pampering. Offering her a free weekend to do anything she wants while you run her errands and take care of the kids would be an incredible gift. During this time off, you could book her a day at the spa and invite her friends to surprise her at her favorite restaurant – because, really, when was the last time she saw them?

3. What are some of the biggest personal finance mistakes people make during the holiday season?

Not communicating with your significant other. Few things put a damper on marital felicity like a giant credit card bill in January. While it's sweet to surprise your significant other with a nice holiday gift, make sure you're both on the same financial page to avoid unwanted surprises in the New Year. Be open about expectations and budgets this season.

Focusing on material gifts rather than experiences. In a few years, the toys and knick-knacks may be forgotten, but great experiences allow you to create memories with your friends and family that will last a lifetime. Make sure you prioritize quality time with your family and friends, which is more important than frantically rushing around buying gifts.

Not keeping an eye on your credit score. By spending more on your credit cards than you can pay off at the end of the billing cycle, you risk both paying interest on the balance, as well as dinging your credit score. One way to keep tabs on your credit score is to use a credit card like the Chase Slate® card. As a cardmember, you'll have free access to your FICO score through the Chase Slate Credit Dashboard, as well as valuable information such as the main factors, positive and negative, behind your score. Additional tools allow you to track your 12-month credit trends, and offer suggestions on how to improve your credit. Managing seasonal finances wisely with the right planning and tools can help keep your score intact and even improve your score into the New Year.

4. If someone spent too much money this holiday season and is experiencing the dreaded "holiday hangover," what is your best advice on how they can dig themselves out of that hole?

To minimize the impact on your finances, you might pick up a few side jobs (babysitting, dog-walking, seasonal jobs) to help offset the extra expenses, which can enable you to pay off your balance in full. You can also sell some unwanted items such as extra clothing, furniture, and electronics.

If you do find yourself struggling with debt in the new year, you can alleviate the financial burden by making sure you have a good balance transfer card that doesn't have an annual fee or penalty APR, such as the Chase Slate® card. That way, you won't be paying excessive interest as long as you make your monthly payments. This is a temporary solution, of course, as you'll have to pay your balance in full before the introductory period ends, but will give you some temporary relief.

5. What is the favorite gift you’ve received that cost nothing or very little?

For one of my birthdays, my then long-distance boyfriend (now husband) surprised me by coming to visit me in New York a couple days sooner than he said he’d be there. I got home to my apartment and he was waiting for me by the door with flowers!

6. Do you have a holiday message to the readers of Wise Bread?

Remember to enjoy the moments more than the gifts! Things don’t last, nor make us happy. But memories do.

This post is sponsored by Chase Slate®.

This article is from Camilla Cheung of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Credit Mistakes That Could Hurt Your Mortgage Application

Lynn Truong — Tue, 18 Aug 2015 11:00:00 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

See more ways you can improve your credit score today.

This article is from Lynn Truong of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

When You Should Get a Business Credit Card Over a Consumer Card

Jason Steele — Mon, 27 Jul 2015 14:00:13 +0000

If you have a business, it’s worth considering a small business credit card. In some cases, the rewards and benefits mirror their consumer cards with little to no difference. In others though, the rewards offered by the small business card can be significant. And regardless of the rewards offered, small business cards can be used in other ways that will benefit you and your business. Here are five of the benefits that small business cards can offer over using a personal card. (See also: Best Small Business Credit Cards)

Enjoy Bonuses for Business Expenses

Just like the market for personal cards, there's a highly competitive market for small business credit cards. And one of the ways that banks compete for their business is by offering the most aggressive rewards for spending. With business cards, the rewards are more likely to be focused on common business expenses. In contrast, similar personal credit cards are more likely to offer bonuses for groceries and entertainment charges. Furthermore, the rewards earned from employee spending as authorized cardholders is retained by the primary account holder, increasing the opportunity for business owners to earn valuable points, miles, and cash back.

Separate Personal and Business Expenses

The primary benefit of a business credit card, and the reason they exist in the first place, is to separate personal and business expenses for the sake of record keeping and filing taxes. Can you use a personal credit card to do this? Yes, but the balance will appear on your personal credit report. In contrast, a business credit card's balance will not affect your credit score, unless you miss payments. As a primary account holder, you're still personally liable to pay back all charges on your business credit card.

Use Expanded Reporting Tools

Business users are likely to need additional information from their credit cards for accounting purposes, which is a feature provided by many small business credit cards. Get quarterly and year-end summaries that include custom, itemized reports of your spending. In addition, some cards offer downloadable purchase records compatible with common accounting tools such as Quicken, QuickBooks, and Excel. Mobile apps may also be available that allows cardholders to save images of the receipts and tag them with customizable categories.

Have More Control Over Authorized Users

If you need to give employees a card to use, business credit cards can offer better management, reporting, and control over their spending abilities. You can set up alerts on purchases, adjust spending limits, and view usage among different employees. Some consumer cards offer additional cards for authorized users, but it has the same card number and does not distinguish purchases between cardholders.

Earn Valuable Sign-Up Bonuses

One benefit that some credit card users find attractive is that they can earn increased rewards from sign the up bonuses offered by the business version of a card. When an exceptional offer comes around, it's often extended to both the business and personal versions of a credit card, allowing business owners multiple opportunities to earn this bonus. In fact, someone who owns multiple businesses may be able to apply for separate accounts for each one.

This article is from Jason Steele of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Which Credit Cards Have the Best Travel Redemption Value?

Jason Steele — Thu, 23 Jul 2015 08:30:55 +0000

Travel rewards cards have come a long way and cardholders can take advantage of opportunities to get more value from their points. While co-branded airline credit cards offer special benefits to frequent flyers of one specific airline, general travel rewards cards can offer more flexibility in redeeming award flights and other travel bookings. Especially valuable is the opportunity to transfer points to miles on a 1:1 ratio. Check out these programs to find the best credit card suited for your travel plans. (See also: Best Credit Cards that Offer Points to Miles Transfer)

Chase Ultimate Rewards

Chase offers transferrable Ultimate Rewards points to holders of its Sapphire Preferred. Currently, it allows you to transfer to 11 different travel partners on a 1:1 basis in the following programs:

British Airways Executive Club
Korean Air SKYPASS
Singapore Airlines KrisFlyer
Southwest Airlines Rapid Rewards
United MileagePlus
Virgin Atlantic Flying Club
Hyatt Gold Passport
IHG® Rewards Club
Marriott Rewards
Ritz-Carlton Rewards

These are great options, especially when you consider that all three major airline alliances are represented. For instance, Delta awards can be booked using Korean Air miles, while American Airlines awards are offered by the British Airways program. In addition, several of the major hotel programs are featured, and transfers from this program are virtually instantaneous, allowing you to book airline tickets or award nights at hotels that you found before the availability disappears.

Other features include the ability to book travel, including hotels, airfare, car rentals, cruises, and activities directly through Chase at a rate of 1.25 cents per point. Finally, Chase allows spouses and domestic partners to share points at no charge.

Amex Membership Points

This program is offered by many different American Express cards. Cardholders can transfer their points to 17 airline programs:

AeroMexico Club Premier
Air Canada Aeroplan
Air France/KLM Flying Blue
Alitalia MilleMiglia
All Nippon Airways (ANA) Mileage Club
Asia Miles
British Airways Avios
Delta SkyMiles
El Al Israel Matmid
Emirates Skywards
Etihad Airways Guest
Hawaiian Airlines
Iberia Plus Avios
JetBlue Airways TrueBlue
Singapore Airlines KrisFlyer
Virgin America Elevate
Virgin Atlantic Flying Club

These options represent a wide range of foreign and domestic carriers, including those that are part of major airline alliances as well as several independent carriers. Furthermore, American Express sometimes offers transfer bonuses for specific airlines that allow you to receive greater than a 1:1 exchange rate. Transfers to airlines generally occur in just a few seconds, however there is no way to share points between other cardholders, including spouses and domestic partners.

This program also includes hotel transfer partners including:

Choice Privileges at a 1:1 ratio;
Hilton Honors at a 1:1.5 ratio;

In general, these hotel points are not considered to be as valuable as airline miles at the ratios offered, but the exchange rate for Hilton Honors points can be worthwhile in some cases. (See also: Best Credit Cards That Transfer to Hotel Points)

Citi ThankYou points

Citi's ThankYou program from our partner Citi has been around for many years, but it only became a serious competitor once it began offering transfers of points to travel partners. It currently offers transfers from Citi Prestige cards to the following frequent flyer programs at a 1:1 basis:

Asia Miles
Etihad Guest
EVA Air Infinity MileageLands
Air France/KLM Flying Blue
Garuda Indonesia
Malaysia Airlines Enrich
Qantas Frequent Flyer
Qatar Airways Privilege Club
Singapore Airlines KrisFlyer
Thai Airways Royal Orchid Plus
Virgin Atlantic Flying Club

In addition it offers transfers to Hilton Honors at a 1:1.5 ratio.

Although this program shows a lot of promise, it currently has no US based airlines in its program, and it features airlines like Malaysia and Garuda Indonesia that don't even offer service to the United States. While each of these programs is partnered with US based carriers, their awards charts do not offer very compelling value in most cases, with Singapore and Air France/KLM Flying Blue being the two best options. Furthermore, point transfers can take at least a day or two, and over a week in some cases.

One strength is that members are allowed to transfer their points to any other member at no charge. In addition, Prestige cardholders receive an exceptional 1.33 cents per point for airfare reservations and 1.6 cents per point if the airline is American or US Airways.

Which Is Best?

Choosing the program that works best for you will always depend on your individual travel needs. For example, the American Express program can offer great rewards from airlines like Virgin America, Hawaiian, and Air Canada. Someone who flies a lot on Southwest will get tremendous value from Chase's Ultimate Rewards program. And even though Citi's ThankYou program still has a way to go before it can compete with its rivals on transfer partners, receiving 1.6 cents in value per point towards flights from American and US Airways can be a great deal, especially when you consider that you will earn miles and be eligible for upgrades on these flights.

By taking a close look at the advantages and drawbacks of these flexible reward programs, you can choose the right one for your needs, or even decide to earn points in more than one.

This article is from Jason Steele of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Steps to Finding Your Mortgage Lender

Carrie Kirby — Mon, 20 Jul 2015 11:00:14 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

I vividly remember signing my first mortgage agreement, my hand trembling slightly as I held the pen. It’s a lot of money to commit to paying back! Since that day, between refinances and new purchases, I’ve signed or e-signed for a total of seven mortgages. It got easier because after going through the process a couple of times, I learned how to feel confident I was working with the best possible mortgage lender and getting the best deal I could. These are my tips on finding the best lender for you.

When it comes to a mortgage, everyone has different needs. See which products make sense for you:

Compare Rates

When you’re shopping for a home, price is just one factor among many more personal choices such as floorplan and neighborhood. But with the mortgage, let’s be frank: Price is the main factor in your choice.

I keep an eye on the general trend of mortgage rates in the financial news, then check Bankrate.com to get an idea of the range of rates available.

Comparing rates can be challenging because it’s not always clear what a listed rate includes. Banks may charge a higher percent interest for a zero-fee loan, where the borrower’s costs are wrapped into the mortgage. Another problem with consulting lists of rates is that your individual circumstances affect what rate is available to you. For instance, for my family’s current home, in the high-cost San Francisco Bay Area, we needed a jumbo loan, which costs slightly more than a standard, or “conforming” loan.

One way to get an accurate idea of what your mortgage should cost is to use a rate calculator like the one at The Mortgage Professor. Then you can contact lenders and ask for their best rate/fee combinations; if they charge more than the amount you saw on the rate calculator, ask why. Just like any transaction, it pays to shop around and ask lenders to match or beat other lenders’ prices. For my most recent refinance, I got three quotes, and one of the lenders offered to match the lower fees quoted by another lender.

Decide What Type of Lender You Want to Work With

You could take out your mortgage with a major bank, with a credit union, or with a company that specializes in mortgages only. Many of that last category operate online instead of having offices you can walk into.

Online-only lenders may advertise lower rates than other lenders, but remember that you could always ask the lender you like best to match that rate, so which kind of lender to work with isn’t solely a rate decision. Rather, it’s a decision about who you feel comfortable with and about how you want to get through the paperwork, which is likely to involve little actual paper with an online lender.

“Online financing is popular with tech savvy consumers and can be a convenient alternative to traditional lending sources,” writes Forbes contributor and industry insider Mark Greene.

Then again, you might get less personal attention working with an online lender than you would with your local bank.

Personally, I have taken out mortgages sitting in a lender’s office, and I have also done them through a lender with which I interacted solely by email and phone. The latter advertised lower rates. Employees with the first lender spent more time explaining things to me, while the employees of the second company could sometimes be brusque. But since I was familiar with the mortgage process by the time I worked with the second company, I didn’t mind the lower level of service. In fact, I liked that they were in a hurry, because my loan closed quickly.

Research Potential Lenders

You probably already have a checking account at a bank or credit union, so you could consider getting your mortgage from them and enjoying the confidence of working with someone you already know -- just don’t expect a special rate, according to Bankrate. If you’re considering a lender you haven’t worked with before, look them up on the Better Business Bureau and ask friends and family if they’ve had experiences with the company. The real estate site Zillow has reviews of mortgage lenders. Your real estate agent probably also has one or more recommendations, and possibly even an in-house lender which can make things very convenient. (But you won’t be obligated to use the in-house lender and should still shop around.)

Once you have a list of a few lenders that other people liked working with, call a loan officer at each and ask questions. If the rate and fees are comparable, go with the company you feel most comfortable with.

Consider Working With a Mortgage Broker

Once upon a time, using a mortgage broker to shop loan offers for you was commonplace. Nowadays, only one in 10 borrowers work with one.

Should you? That depends.

You could see now as a better time than ever to work with a broker, since post-financial-crisis regulations require brokers to pass licensing exams, and ban them from profiting off of getting borrowers to pay higher interest rates -- a practice that damaged brokers’ reputations in the eyes of many. Then again, nowadays you also have access to mortgage rate and fee data online, so it’s not too hard to do what brokers do for yourself.

But working with a broker can save you time if you don’t want to shop around. Brokers can be especially helpful to borrowers who have trouble getting a loan, like those with less-than-perfect credit. And working with a broker doesn’t necessarily cost more than borrowing directly from a lender, according to the web site The Truth About Mortgage.

Just like with researching a lender, research a broker you’re considering working with, talk to more than one, and compare the costs. Personally, I interviewed a broker recommended by my real estate agent once, but I found a better rate than the ones he quoted on my own, so I told him thanks, but no thanks. But I wouldn’t rule out consulting a broker in the future if I needed help.

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Things You Need to Know Before Buying Your First House

Ashley Marcin — Mon, 13 Jul 2015 11:00:13 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

My husband and I bought our first house when we were in our early twenties. Almost a decade later, we recently closed on our second home. We learned a great deal throughout the process, but we definitely had more confidence this time around. We were older, yes, and also wiser having gone through all the preparation, negotiations, and random struggles for the second time. But if I could go back, here are all the things I wish I had known before we signed on the line for that first deal.

First-time buyers — review these tips to help you through a complicated process.

Settling Isn’t Always Wise

When we went around neighborhoods looking at various to-be homes, we’d evaluate them based on a checklist. Inevitably, we wouldn’t find absolutely everything we were looking for, so we’d discuss if we could deal with a place that, say, didn’t have a garage or another that had only one tiny bathroom. The old kitchen in another was hardly functional and our budget wouldn’t allow for remodel. Eventually we did our fair share of settling and took on some not-so ideal features. These same features were — surprise! — difficult to sell when we put our place on the market last year. If you’re not choosing a forever home, consider what's sticking out as a negative. Chances are it will delay future resale unless you have the funds to transform it.

Sellers Will Negotiate

Depending on where you live, markets can vary wildly according to location. Where we live, there’s a glut of great houses sitting vacant at ridiculously low prices. In a college town just an hour north of us, you can’t snag a deal unless you know a house is going to be listed weeks in advance. Then there’s usually a bidding war. (Your agent should know this information specific to your area.) When we were buying our first house, we were so concerned with possibly insulting sellers that we weren’t terribly aggressive with our offers despite it being a buyer’s market. In fact, we even bid above asking price on our first house because we heard multiple offers were coming in, which may or may not have been true. We spent a good amount of time feeling like we paid too much, which is especially hard to reconcile when putting a place back on the market years later.

Agents Really Matter

Our first one didn’t do much to guide our search or lead negotiations. At the time, we thought this was the norm — that perhaps all the agent does is give us access to see the homes we’ve requested and to give us paperwork. Seems simple enough. Well, from our second sale and purchase, I can tell you that an experienced and politely aggressive agent can make a massive difference. Ours was a huge advocate for us and helped lower the asking price, deal with some tricky closing issues, and move the whole process ahead faster during snags. She definitely earned her commission.

You’ll Fall In Love Again (and Again)

Having gone through a number of houses and potential homes by now, I assure you: You will fall in love with many properties. You might think that this or that home is the only place you can ever imagine nesting. Then something else will pop up and blow your socks off. Promise. If you’re not getting the price or overall deal you want with a certain house, it’s totally fine (and recommended) to walk away. Chances are it won’t sell immediately (and you can revisit negotiations) or a place even more awesome will pop up. Just keep your eyes and ears open.

You’ll Need Savings . . .

Even if you buy a relatively new home, you shouldn’t deplete your savings account with your down payment. In the first year we lived in ours, we had to unexpectedly fix some plumbing issues in the bathroom. A DIY project to remove the carpeting in the kitchen turned ugly and expensive. Then the water heater died one cold January day. You see where this is going. Unexpected costs pile up, and you need to be prepared to financially deal with them. Consider this a kind warning before stretching your budget higher.

. . . And Some Stress Management Skills

At the height of the buying process, I felt like we were hemorrhaging money. We handed over a grand for our earnest deposit, a few hundred more for the home inspection and another hefty fee for this or that application. Then came the loan process as a whole. Since I’m self-employed, the amount of documentation needed for my employment started to feel terribly invasive and almost accusatory. After that hurdle was cleared, we tried coordinating moving plans and other logistics only to discover that the closing was moved back due to a missed code issue (the deck was an inch too high and needed a railing — more money). It’s not always this way, but it’s best to set up a support system and maybe even some yoga classes in advance. Keep breathing.

Neighborhood Has Big Impact

We lucked out the first time around in that our house was situated in a quiet, quaint neighborhood with nice neighbors. However, we didn’t check out any of this stuff during our search. We liked the house, rushed to the office to sign the papers and submit our deposit, and kept our blinders on until we moved in. With our second house, we spent a good amount of time researching the schools in the area, checking out the walkability score, and meeting the neighbors to ask about anything from the trash collection process to how often the fire house siren goes off in the middle of the night. If you’re only looking at the inside of a home, you’re only getting half the picture.

What did you wish you knew before you bought your first house?

This article is from Ashley Marcin of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

12 Crucial Things Homebuyers Overlook at Open Houses

Carrie Kirby — Thu, 11 Jun 2015 11:00:15 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

I yell at my TV. I can’t help doing this when watching reality real estate shows, where home shoppers seem to always be rejecting houses for things that could easily be changed. “You can paint over that hot pink wall!” I advise them. “You could replace that light fixture in an hour!”

They never listen, but you should: When you are home shopping in real life, it’s important to look beyond those little things to take note of things that would much more difficult — or even impossible — to change.

1. Layout

Think about how one room flows to another, and look for wasted space or awkward areas that would be hard to make good use of. Quirks that might simply seem odd during an open house may become downright annoying if you have to live with them.

“Before deciding that a bad layout can be improved by moving walls, ask a contractor to tell you if the walls you want to relocate or remove are load-bearing walls because, if so, it might be impossible or financially unfeasible,” real estate broker Elizabeth Weintraub writes.

Common layout problems include stairways or long hallways at the entrance (not welcoming), bathrooms visible from the front door or dining table (ew), and bedrooms right off the living room or kitchen (too noisy).

2. Major Systems

If the house is on the market during the summer, you may not think to ask about the furnace. If it’s an older home being sold by a longtime occupant, you can bet the wiring is not up to powering big-screen TVs or computer monitors. Even if a house was modernized for the market, a quick job might include installation flaws that compromise the system’s efficiency.

Thoroughly testing major systems will be your inspector’s job, but there is nothing wrong with taking note of the following warning signs of outdated systems:

Window air conditioners, indicating a lack of central air
A furnace made by a company that went out of business years ago (Do a quick search for the company while you’re there to find out)
Steel pipes rather than new copper, probably indicating poor water pressure. (Run the hot water or get a look at the pipes in the basement to check)
Knob and tube wiring in the attic; outdated outlets and DIY wiring extensions, which both could be fire hazards

3. Structural Issues

You know a problem is going to cost you when an engineer is involved in fixing it. Whether it's drainage, foundation issues, or just a bad roof, you’ll need a professional to diagnose the true extent of a structural problem. But there are a few signs that can tip you off: Large cracks in the walls or foundation, doors that stick or won’t close, a swayed or sagging roof line when viewed from a distance, and wood joists that crumble with a jab from a screwdriver.

4. Water Leaks

Look up at the ceiling corners and see if you can spot discoloration or spots of peeling paint due to moisture. A leaking pipe, damaged roofing, an improperly finished chimney or other vent, or just a bathtub that overflowed long ago could cause water spots. Find out the source before you buy; some issues could be a quick fix, but a longtime problem could have caused extensive damage or mold.

5. Old Paint

Open windows and examine the sills for peeling paint. If the house was built before 1978, this paint could contain dangerous lead, which can be expensive to remove safely. If old layers of lead paint are thoroughly covered by newer paint in good condition, it’s less of a concern.

6. Location

“You can always change what’s inside your home, but you can never change what’s outside of it,” warns the website New House Flip. It’s too easy to focus on a beautiful home to the exclusion of its surroundings. Ask yourself how the location would affect your driving time to work and friends’ or relatives’ homes. Find out how much crime the neighborhood has, and whether there are any parks or businesses you’d like to frequent. Are the yards in the neighborhood and parks well maintained? Are the schools good?

Also note the home’s position within the neighborhood. Some people realize they don't like being on the corner, with pedestrians walking along two sides of the home and potentially more sidewalks to clear after a snowfall. An alley running alongside the house can be an eyesore and a security risk. And note what is directly across the street from you: This is what you will see every day when you look out your front window.

If you attend a weekend open house, you might also want to swing by the block on a weekday. It may not have been apparent on Sunday that a nearby business attracts tons of weekday traffic, or that the warehouse across the street uses a loudspeaker to direct workers, or that the house is along a popular walking-to-school route.

7. Homeowner’s Association

You might think to ask about the HOA for a condo, but keep in mind that single-family homes can be part of associations too. Find out how much the dues are, and take a look at the books and meeting minutes. (Are the meetings frequently contentious? You may be walking into a toxic interpersonal environment.) Have transparent and detailed records been kept? Does the HOA have adequate reserves? If the group is in debt or facing unexpected expenses, a fee hike might be imminent.

8. Neighbors

Don't be shy. Knock on a few doors while you're there. Talk to the people you may potentially be living next to. Find out if they have children or pets, how long they have been living there, and what they think of the neighborhood. Did they like the sellers? Does their basement flood? Does the power in the neighborhood ever go out?

You are not just looking for information here. You’re also testing the waters to see if these guys are going to be your future barbecue buddies or a daily thorn in your side. Does this seem like a household you would like to interact with on a daily basis?

9. Noise

Did you notice rail tracks on your way to the house? Is the real estate agent playing music or white noise during an open house? Ask for it to be turned off to find out what it’s masking: Traffic noise? Barking dogs? A rattling furnace?

You can also test to see how noise carries within a house by having a companion go to other rooms and stomp around or play music.

10. Odors

Breathe deeply in every room of the house and in the yard. Cigarette smoke and pet odors may call for the tearing out of carpets, but outdoor odors from a nearby factory or farm is something you would just have to learn to live with.

11. The Basement

Don’t ever skip the basement when touring a home, whether it is furnished or not. Your primary concern is whether the basement stays dry year-round. Just because it is dry now doesn’t mean it will always be that way. Sniff for musty smells. Look for water stains, mold, or efflorescence (ashy or sparkling salt deposits) on the walls.

Basements can be a pain to dry out, and it can be expensive to stop the problem from recurring. These concerns are especially relevant if the basement is finished or if you plan to finish it, because once you have invested in flooring and furnishings, you don’t want them to be ruined in a flood.

12. Resale Value

You never know what the future holds. Things you might not mind, like a very small backyard, a hillside lot, no garage, or only one bathroom, could have a big impact if you have to make an unplanned move and sell quickly.

Make sure that the home truly has the number of bedrooms it advertises. To most buyers, that means that the room has a window and a closet, at the minimum. Some will not consider a serial bedroom, which you have to walk through another bedroom to reach, to be a true bedroom.

Most homes aren’t going to be move in ready. You’ll have to do a little bit of preparing, repairing, or upgrading. What’s important is that you sort between the stuff that’s simple and the ones that are costly. Do you have any additional tips to share about what can’t be overlooked during an open house?

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

When Is the Best Time to Lock in a Mortgage Rate?

Brittany Lyte — Tue, 26 May 2015 11:00:07 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

Big-ticket purchases are prone to freak us out. Simply put, the stakes are higher. And since a home is the most expensive purchase many of us will ever make, it's important to do whatever’s in our power to ensure a fair deal. To do this, you have to look far beyond the price on the for sale sign. In fact, the mortgage rate can make or break your budget, so knowing when to lock in a good rate is crucial to your bottom line.

Shopping for a mortgage typically plays out like this: You scope out a slew of lenders for the most favorable interest rate and apply to the lender offering the best terms. But by the time you reach the point of settlement, it’s not uncommon that several weeks or even months will have gone by. Will you still receive the terms you bargained for? The answer depends on several factors. The mortgage rate you are quoted is typically only guaranteed at the time of the quote. It’s possible that by the time the settlement’s ready the rate will have jumped, maybe even so high that you can no longer afford to purchase a home. Fortunately, you can avoid such an unwelcome surprise by locking in your rate so it doesn’t increase while your loan is being processed.

So why doesn’t everyone lock in the rate on their mortgage? First of all, not all lenders offer lock ins. And many that do charge a fee. Lock ins also commonly come with expiration dates, typically ranging from a few weeks to 60 days, and it can be difficult to forecast whether you’ll be able to find the home you want and get your offer accepted within that time frame. It’s also important to understand that locking in your rate comes at a risk. Unless your lender is willing to honor any lower rates that may become available while your loan is processing, a lock in could prevent you from scoring an even better deal than the one you started with.

Truly, there’s no perfect timing. But there is a bit of strategy when it comes to choosing when to lock in your mortgage rate. Read on for our roundup of the best times to execute a lock in, depending on your financial and situational needs.

See all the benefits of locking in your mortgage rate today:

As Soon as You Get a Quote for a Rate You Can Afford

If you’re on a tight budget and the possibility of even the smallest hike in your quoted mortgage rate could push your dream of homeownership out of reach, it’s best to lock in a rate as soon as you find one you know you can afford. Consider basing the decision of whether to pursue a short- or long-term lock in based on the answer to the one question every home hunter should ask their lender: Approximately how long will it take to finalize my loan?

Longer rate locks generally tend to make sense for folks who are building a new home or planning to buy one in foreclosure, since the legal process behind those types of deals tends to take longer. It’s also wise, particularly if you’re considering a long-term lock-in, to inquire about the availability of adding what’s commonly called a “float down provision” to your lock in agreement. This provision allows you to take advantage of lower rates, should they drop while you’re locked in to the rate you were first quoted.

“I just wanted a rate under 4 percent, so I locked in immediately when I got there,” said Erica Howell, a 27-year-old first-time homeowner from Portsmouth, N.H. “It’s a gamble to lock in so early because the rate very well could go down, but it also could go up. But I trusted my lender to know the market and I trusted my instinct that I needed a rate under 4 (percent). I got it and I grabbed it and I never looked back.”

Upon Approval of the Loan

Choosing to lock in your mortgage rate after you’ve been approved for the loan can be smart if a heavy demand for housing is slowing down the loan application approval process at a time when rates appear to be trending down. This strategy allows you to reap the benefit of any lower rates that may surface while you’re waiting for your loan application to be finalized and saves you from wasting part of the duration of your lock in on waiting for the loan approval. “As soon I got approved, I locked in my rate,” said Kelly Dibble, who purchased a one-bedroom apartment in Stamford, Conn. in 2014. “I wanted to lock in as soon as possible because it was one less thing to worry about, but my lender suggested I wait until I got approved. I trusted that advice and I think it worked out well for me.”

After You Sign a Purchase Agreement

The situation you want to avoid is having the clock ticking on your lock in before you’re ready to make an offer on a home. A situation like that can compound the pressure you’ll feel to quickly find a home that’s truly a good fit for you — and that can potentially lead to hasty decision making and down-the-road buyers’ remorse. Alas, you can dodge such problems by waiting to lock-in your rate until after you sign a purchase agreement. “It’s a sellers market right now in San Diego, so we knew it could take a long time for us to find a place that worked for us,” said Karin Pipczynski, who purchased a two-bedroom home with her boyfriend in March. “We didn’t want to feel rushed, so we locked in as soon as we signed the purchase agreement and that saved us from what I saw as a gamble.”

When would you suggest locking in a mortgage rate for a home purchase?

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Mortgage Application Declined? Here’s How to Respond

Julie Rains — Mon, 18 May 2015 16:43:14 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

Buying your first home (or a subsequent one) may fill you with excitement. Making the decision to become a homeowner is likely one that you have carefully considered. After possibly months of searching, you may have found the perfect home – one where lifelong dreams for stability, community belonging, and the start or growth of a family will be fulfilled.

You may think you have done everything right in getting ready for this big step. But then, your mortgage application is declined. Here are ways to respond.

Don’t panic! Here’s what to do if your mortgage is declined:

Talk to Your Mortgage Lender

If your mortgage loan request has been denied, ask why your lender rejected your application. You have a right to know “the specific reason for the rejection” according to the Federal Trade Commission (FTC).

You may learn that your ratios, such as your debt-to-income or loan-to-value ratios, were too high or your credit score too low. If you have done an independent evaluation of your numbers, then you can confirm whether the lender has cause for concern or if there has been a miscommunication.

Get your documents in order to discuss and tackle problems that led to the rejection.

If You Were Rejected Due to a High Front-End Ratio

Consider whether your proposed mortgage payment realistically fits within your means. Just as mortgage lenders often do, look at the percentage of your income devoted to your mortgage payment. Specifically, calculate your front-end ratio (monthly housing expenses divided by monthly income, expressed as a percentage) to determine if you could struggle to make payments. Ideally, this ratio will be 28% or less.

At first glance, your income may readily cover the principal plus interest associated with the mortgage loan. However, other expenses may be included in your mortgage payment, such as property taxes, homeowner’s insurance, and private mortgage insurance. Depending on the location of your home and the amount of your down payment, these numbers could dramatically increase your monthly payment, moving the affordability of a home from entirely possible to extremely difficult.

Identify ways to reduce your mortgage payment, particularly via add-ons that you may be able to control. For example, talk with your insurance agent about increasing your home’s security features to reduce the cost of your homeowner’s insurance.

If You Were Rejected Due to Debt Load From Other Loans

When evaluating your financial picture, look at your outstanding loan balances including credit card debt, student loans, and vehicle loans. Consider how much of your current monthly budget is applied to payments that service this debt.

Generally, your mortgage lender needs you to keep total loan payments (including your proposed mortgage payment) to 36% of your monthly income. This percentage is your back-end ratio (aka debt-to-income ratio) and is calculated by dividing total monthly debt expense by monthly income, expressed as a percentage.

Think about how and why you have acquired debt. Have you borrowed for your college education and a vehicle in order to build a career that generates significant income? Or have you spent carelessly and accumulated credit card debt? How have you managed your income to reduce your debt load?

If you make payments on time and are steadily reducing debt, then you may have no problem handling your current debt load plus a mortgage payment. But if you have struggled to keep up with payments and your credit card balances are growing, then you may need to take aggressive action to deal with your loans.

Measure your progress toward paying off non-mortgage debt. Develop a plan or simply stay focused on your current plan to reduce outstanding balances. Consider paying off one loan in order to eliminate a payment and reduce your back-end ratio.

If You Were Rejected Due to Your Credit Score

Consider that your creditworthiness may have prevented you from obtaining the mortgage you wanted. To deal with this issue, start by pulling your free credit reports at AnnualCreditReport.com. Make sure your information is correct and up-to-date.

In addition, you should be able to get your credit score from the mortgage lender that declined your credit application. Often, a lower credit score may simply mean higher mortgage costs, not a flat-out rejection. However, a higher interest rate may have priced the mortgage payment out of your reach.

Based on your credit information, identify methods of potentially improving your score, such as eliminating credit card balances.

If You Were Rejected Due to the House Value

You may have fallen in love with a house and decided to buy the property at nearly any price. But since your mortgage application was denied, contemplate whether your offer (and loan request) may have been out of sync with the home’s market value.

The lender’s rejection of your mortgage application may have had nothing to do with your financial worthiness and readiness, and everything to do with the value of the home. No matter how great your ability to repay a loan, lenders must protect themselves by making sure that the loan collateral (your home) has a certain financial value. As a result, lenders may require a certain loan-to-value (LTV) ratio.

If your real-estate deal falls through because the home is valued at substantially less than your offer (and loan request), consider making a counteroffer or verifying the accuracy of the appraisal. Or make a larger down payment in order to reduce the LTV to a level acceptable by your lender.

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Essentials to Consider Before Buying a Vacation Home

Carrie Kirby — Mon, 04 May 2015 11:00:40 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

Wouldn’t it be wonderful to have a little place waiting for you on a tropical island or a woodsy lake? Apparently a lot of Americans think so: second home purchases were up by a nearly a third in 2013 according to the National Association of Realtors. The pros are pretty obvious. It’s a place where your family could make memories over generations; an opportunity to become part of a vacation community and make new friends you see year after year; and a place for getaways that require little planning. But there are also cons to owning a second home, compared to other vacation options. You may yearn for variety after spending a few summers in the same town, or the chores involved might make vacation feel like work. Here are five critical questions to ask yourself before you make the leap.

Does that vacation property meets your needs? Review the video below to find out.

Do You Have Enough Saved for the Down Payment?

You may have bought your primary home with only five percent down, but that’s not likely to happen for a second home purchase, which is considered a riskier deal from a bank’s point of view. Lenders may ask for 30 to 40 percent.

Have You Taken the Expenses Into Account?

Beachfront properties can take a beating from storms and sun, and houses that sit empty for long stretches or get beaten up by renters may have higher maintenance expenses. Some families have found themselves paying tens of thousands in maintenance costs for every week that they actually use their vacation home — money that could put you in a five-star hotel instead. One adviser recommended this rule of thumb: if the total costs from both your primary and second home add up to less than 30 percent of your income, you’re good to go. If not, think twice. Beyond maintenance, you need to account for homeowner’s association fees, furnishings, taxes and possibly the costs of an additional vehicle.

Do You Understand the Tax Implications?

Income tax rules governing your vacation property may be different than those for your primary home when it comes to mortgage interest deduction, profit from sale, profit from rent and other issues. Then you will have to note your property tax responsibility for the second home too. Consult an accountant to get a clear picture of the taxes you will owe.

How Stressful Will it Be?

Advertisements frequently tout “stress relief” as one of the benefits of a vacation home. But real-life owners know that in some ways, owning a second property can add stress to your life. First, there’s maintenance. Unless you are wealthy enough to pay a caretaker or other employee to maintain your vacation home, part of every “vacation” there is likely to be taken up by fixing, painting and making service appointments. “People become slaves to their homes,” Milton F. Pedraza, chief executive of the Luxury Institute, told the New York Times. For just the end of the season, there is a 20-point list of recommended maintenance chores for summer cottages. You’ll also need a plan in place for emergency repairs in your absence. Then there’s worry. Will you fret about possible break-ins or bad weather when you are miles away from your property? If you rent the property out, you will have to either pay a management agency or deal with the inevitable work of answering tenant queries and cleaning up after their messes.

Are You Buying as an Investment or a Luxury?

When the real estate market was on a long boom, many people saw a second home an investment whose value increase would offset expenses. But the crash changed that. Nowadays, experts are split on whether buying a vacation home is a good investment. Many warn that expenses eat up any rental income the property may generate when you’re not using it. “Financially, most vacation homes are probably a train wreck. I’ve had one for about 10 years and to be totally honest I’ve never made enough cash flow to cover my mortgage,” wrote real estate investor Dave Van Horn. Others point out that the market for vacation homes is recovering more slowly than the rest of the real estate market, so bargains might still be get-able that would put the buyer in the position to cover expenses through appreciation and rental income. And, the emergence of the sharing economy via companies like Airbnb have made it easier for property owners to get generate cash with vacation properties.

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Appraisal Facts That Could Save You Big Money

Carrie Kirby — Mon, 20 Apr 2015 11:00:06 +0000

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

An appraisal is a professional’s opinion of your home’s market value. Lenders will order an appraisal for home purchase loans to make sure the home is worth the price being paid. Often appraisals are needed to refinance as well. Here are five things you should know about the appraisal process, whether you are buying, selling or refinancing.

The appraisal takes dozens of factors into account. Learn more about them in the video below.

1. Your Property is Not the Only Thing the Appraiser Will Look At

“When I inspect a home for an appraisal, the inspection is really the ‘tip of the iceberg’ of the work I do,” San Francisco Bay Area appraiser Ann O'Rourke writes on her web site, Appraisal Today. Before arriving at your home, the appraiser has probably already obtained a plat map and researched the zoning and public records. After checking your property against the map, and noting any improvements and damage, the appraiser will compare your home to others that recently sold to formulate an estimate of its value.

2. You Can Educate the Appraiser About Your Home

If an appraiser visits your home, this is your opportunity to show it at its best. Complete any small repairs before the appraisal date. Clean up the yard and house. Even though appraisers aren’t supposed to take clutter into account, they are human, and no one feels upbeat when faced with a mess. Besides, cleaning shows that you take good care of the home. While the appraiser looks, let them know about improvements you may have done (New furnace? Bathroom renovation?). You can also give him or her a written list and may even want to provide receipts to show what you have invested in the home.

3. A Low Appraisal Can Stop the Sale or Reopen Negotiations

If the seller has researched the market and set an appropriate price, the appraisal is likely to come in at close to the agreed-upon price. But sellers should beware that if the appraisal comes in low, the deal will probably not proceed as agreed. Since the buyer most likely won’t be able to get a mortgage for a house priced above appraisal, the deal may fall apart or the seller may have to agree to a lower price.

4. You Can Challenge a Low Appraisal

So the worst has happened and your appraisal came in below the selling price. All is not lost. You can request a copy of the appraisal and review it with your real estate agent. Pay special attention to the comparable homes the appraiser selected. If those homes sold for less because they lack updating or some other feature that your home has, you can have your agent submit a list of more appropriate homes for comparison. You can also write a letter listing improvements and features that the appraiser may have overlooked. The Bigger Pockets Blog has advice on how to keep the letter non-confrontational, and even offers a template for download.

5. As a Buyer, Guard Against Inflated Appraisals

Once you’ve agreed to pay a certain price, you naturally hope that the appraisal will back that up. But in reality, appraisers are protecting both the lender and the buyer against inflated prices. So it’s a good idea to ask the same questions about an appraiser that a seller would: Is she licensed and local? Did he really visit the home?

Request a copy of the appraisal, not only to check for accuracy, but as an information source to make sure you know all about your future property’s strengths and weaknesses.

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

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7 Things You Need to Know Before Buying Your First House

Settling Isn’t Always Wise

Sellers Will Negotiate

Agents Really Matter

You’ll Fall In Love Again (and Again)

You’ll Need Savings . . .

. . . And Some Stress Management Skills

Neighborhood Has Big Impact

12 Crucial Things Homebuyers Overlook at Open Houses

1. Layout

2. Major Systems

3. Structural Issues

4. Water Leaks

5. Old Paint

6. Location

7. Homeowner’s Association

8. Neighbors

9. Noise

10. Odors

11. The Basement

12. Resale Value

When Is the Best Time to Lock in a Mortgage Rate?

As Soon as You Get a Quote for a Rate You Can Afford

Upon Approval of the Loan

After You Sign a Purchase Agreement

Mortgage Application Declined? Here’s How to Respond

Talk to Your Mortgage Lender

If You Were Rejected Due to a High Front-End Ratio

If You Were Rejected Due to Debt Load From Other Loans

If You Were Rejected Due to Your Credit Score

If You Were Rejected Due to the House Value

5 Essentials to Consider Before Buying a Vacation Home

Do You Have Enough Saved for the Down Payment?

Have You Taken the Expenses Into Account?

Do You Understand the Tax Implications?

How Stressful Will it Be?

Are You Buying as an Investment or a Luxury?

5 Appraisal Facts That Could Save You Big Money

Are Chase Total Checking® and Savings^SM Right for You?