mortgage http://www.wisebread.com/taxonomy/term/2370/all en-US 8 Money Moves to Make the Moment You Get a Promotion http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moves-to-make-the-moment-you-get-a-promotion" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_excited_hands_74632665.jpg" alt="Man making money moves after getting a promotion" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So your company finally recognized your hard work and gave you that promotion you've been wishing for. And it comes with a nice bump in pay!</p> <p>What should you do now? Do you immediately go and buy a new car? Celebrate with a trip to Saint Tropez?</p> <p>No. If you'll notice, exactly none of the suggestions below involves buying any material items. Celebrate your promotion if you want, but your new money is best off being used to secure your long-term financial future. Consider addressing these eight things if and when you are fortunate enough to get a promotion.</p> <h2>1. Build That Emergency Fund</h2> <p>Are you prepared if something big happens in your life? Do you have at least three months of expenses available in liquid savings? The new income from your promotion can be partially set aside to prepare for the inevitable disaster, whether it be a health emergency, car accident, or flooded basement. Once you get that emergency fund in place, you'll be able to invest and save for larger goals with a clear mind.</p> <h2>2. Get More Organized</h2> <p>If you're not making a lot of money, it's often hard to do anything more than deposit your checks and pay your bills. But with a bump in income, it may now be possible to be more strategic about your financial situation. Rather than having just a single bank account, open distinct accounts for specific savings goals. Begin using an account aggregation platform, such as Mint.com, to see a single view of your finances and track your spending. You may also benefit from meeting with a financial adviser to come up with a plan for short-term and long-term savings goals.</p> <h2>3. Evaluate If Your Expenses Will Increase</h2> <p>Getting a promotion usually involves more money, but it may also mean more expenses for you. Maybe now you will have to work longer hours, necessitating more child care expenses. Perhaps you will no longer be able to work from home, and will incur commuting costs. You may even have to spend more on professional clothing if you've moved into a high-profile position.</p> <p>Make sure to take these new expenses into account when determining how much your net income will increase from the promotion.</p> <h2>4. Bump Up Your Retirement Contributions</h2> <p>If you get a raise, you should strongly consider taking all or most of your increase and boosting your regular retirement contributions. (Or begin making contributions, if you haven't started.) If you have a 401K but aren't contributing enough to get the full company match, see if you can get to that level. If you've been saving more but are just shy of maxing out your annual 401K contributions ($18,000 for most people), try and see if you can reach that threshold. The same goes for making the maximum annual contribution of $5,500 into your individual retirement account (IRA.)</p> <p>Even if you can increase contributions by a mere 1% or 2%, that's additional money that can grow substantially over time.</p> <h2>5. Check Your Tax Situation</h2> <p>There's a dark side to earning more money: You may end up giving more to Uncle Sam. In some cases, a raise may even put you in a higher tax bracket, thus wiping out any salary gains. So before you go making any major lifestyle changes, check to see what your actual take-home pay will be. You may be able to avoid a big hit from Uncle Sam by boosting contributions to your 401K, contributing to a health savings account, or making other adjustments that reduce the amount of your income that is taxed.</p> <h2>6. Target Your High-Interest Debt</h2> <p>If debt is weighing you down, now's time to start tackling it in earnest. Use your extra income to go after the debt with the highest interest rate &mdash; usually, this is a credit card. Once you have that debt paid off, keep it up. You'll be amazed at the financial freedom you'll obtain through the extra income and the reduction in debt payments. It's almost like getting two salary increases! (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso">The Fastest Way to Pay Off Credit Card Debt</a>)</p> <h2>7. Ask for a Credit Limit Increase</h2> <p>This may seem counterintuitive, since we just suggested you get your credit cards paid off. But with new income, you can ask for a higher credit limit which will then improve your &quot;debt to credit&quot; ratio. That ratio compares the amount of debt you have to the amount of debt you can incur. Generally speaking, a low ratio of debt to credit is what will help your credit score, as long as you don't increase the actual amount you are spending.</p> <h2>8. Consider Refinancing Your Mortgage</h2> <p>You may have been wanting to lock in a lower interest rate on your home for some time, but found the upfront costs to doing so a hurdle. Now that you have some extra income, you might find it easier to pull the trigger on refinancing the loan, thus saving money in the long run. Interest rates are still historically very low, and your higher income may even help you get a higher credit score, making you even more attractive to lenders.</p> <p><em>Get a promotion recently? What did you do with your extra take home?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-best-free-financial-learning-tools">9 Best Free Financial Learning Tools</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-obstacles-that-are-especially-tough-for-women">5 Financial Obstacles That Are Especially Tough for Women</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-lessons-i-learned-selling-office-supplies">8 Money Lessons I Learned Selling Office Supplies</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-siri-can-be-your-personal-finance-assistant">9 Ways Siri Can Be Your Personal Finance Assistant</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-best-money-management-tips-from-john-oliver">7 Best Money Management Tips From John Oliver</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Career and Income emergency fund investing mortgage promotions raises retirement saving Mon, 11 Jul 2016 10:30:07 +0000 Tim Lemke 1747766 at http://www.wisebread.com 9 Ways Being Too Responsible Can Cost You http://www.wisebread.com/9-ways-being-too-responsible-can-cost-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-ways-being-too-responsible-can-cost-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_stressed_overworked_000086169843.jpg" alt="Woman learning how being too responsible can cost her" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You go through life looking to avoid risk. You look to save a dollar whenever you can. You're smart. Sensible. Responsible.</p> <p>But is this approach to life really the best thing for your finances? There may be times when a <em>little bit of risk</em> is better for you long term, or you may be so focused on one financial goal while you are neglecting another.</p> <p>Here are some examples of when being responsible has a financial downside.</p> <h2>1. You Have Too Much Liquid Savings</h2> <p>It always makes sense to have a sizable emergency fund to help cover unexpected costs, like a major car repair or medical emergency. But it doesn't make sense to carry massive amounts in a low-interest savings account to prepare for every conceivable disaster. Every excess dollar you keep in a basic savings account is a dollar that could be invested elsewhere, generating a bigger return and helping you build toward retirement. Opinions vary on how big your emergency fund should be, but few financial advisers recommend saving more than nine months of expenses. Don't steal from your future self by being too concerned about possible disasters now.</p> <h2>2. You're Too Focused on Saving for College</h2> <p>You're a responsible parent, and you want to help your kids pay for their college education. So you open a <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso">529 college savings plan</a> and pump money into it. That's great, but are you costing yourself future retirement funds in the process? In an ideal world, you can save plenty for both retirement and college costs, but it's important not to divert too much away from retirement. When it comes to saving, retirement should be your first focus. Your kids can always borrow for college, but you can't borrow money to retire.</p> <h2>3. You Always Buy the Cheapest Thing</h2> <p>Being frugal is usually a good thing. But there is some truth to the adage that you get what you pay for. If you consistently look to purchase the lowest-end version of a product just to save a few dollars, you may cost yourself in the long run. Sometimes things are inexpensive because they are low quality. And if something is cheaply made, you may end up replacing it sooner and costing yourself more in the long run. This is especially true for bigger ticket items like appliances. The best path financially is to search for value, not simply low cost, when shopping.</p> <h2>4. You Always Buy the Most Expensive Thing</h2> <p>Just like it's not necessarily best to buy the cheapest version of an item, you shouldn't reflexively go high-end all the time, either. It's a fine idea to pay more for quality and longevity in a product, but sometimes things are expensive due to unneeded bells and whistles, or because a manufacturer wants you to believe they have a premium product. Again, it's important to do your homework and find the correct balance between quality and price.</p> <h2>5. You're Too Helpful Sometimes</h2> <p>I would never advise against helping others. But there are some cases when you are putting your financial health at risk by lending others a hand. For instance, you may cosign a loan for your daughter so she can get a new car, but your credit could be ruined if she fails to make payments. You might &quot;lend&quot; money to your brother-in-law to start a business, even though you're fully aware he'll never pay you back. Generosity is okay, but it's best not to be too cavalier about lending or giving money to everyone that asks.</p> <h2>6. Your Investment Portfolio Is Too Conservative</h2> <p>You want to make sure that your retirement portfolio is protected from a stock market crash. So you invest heavily in stable investments like dividend stocks, bonds, and cash. This is fine if you are approaching retirement age. But if you're decades away from retirement, it pays to be far more aggressive. Sure, there will be times when your portfolio will take a big hit. But it will most likely go up over time, and you don't want to miss out on the years when there are big stock market gains. If you want to build the biggest retirement nest egg possible, it's best to shed your fear and invest heavily &mdash; perhaps even exclusively &mdash; in stocks when you are young.</p> <h2>7. You're Staying in the Same Job</h2> <p>So you like your job because it's got a steady paycheck and decent benefits. Staying put seems like the responsible thing to do. But there's some evidence to suggest that people who job hop can end up earning more. According to Forbes, employees who stay in a job longer than two years will end up earning 50% less in their lifetimes than if they switched jobs more often. Consider that the average raise these days is about 3%. Do you think you could command a bigger bump by looking elsewhere? If so, consider going for it. And don't worry about a short job stint hurting your resumé. Harvard Business review reported last year that there's <a href="https://hbr.org/2015/07/setting-the-record-straight-on-switching-jobs">no longer a stigma</a> against staying at a position for a short period of time.</p> <h2>8. You Paid Off Your House Early</h2> <p>There's always a desire to pay off that mortgage as soon as possible. If anything, it's a massive psychological boost to know you own your house free and clear. But there is a financial downside to paying your house off early, especially when interest rates are low like they are now. Let's say you have a 3.65% interest rate on a 30-year mortgage. But let's say you could earn a 7% annual return by putting money in the stock market. Where's a better place for your money? When investment returns are higher than your interest rates, there's no real compelling financial reason to pay off a loan early.</p> <h2>9. You Want to Fix Everything Yourself</h2> <p>You can definitely save money if you're handy. From plumbing repairs to changing your own oil in your car, it's often silly to pay someone to take on things you can do on your own. But do you know your own limitations? There are many instances when an attempt to fix something on your own can make a problem worse. (I know this from personal experience.) By hiring a professional to handle some repairs, you may have a better chance of ensuring things are done properly and constructed to last. This will save you money in the long run.</p> <p><em>Any other ways being too responsible costs us? Do the right thing and let us know in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-ways-being-too-responsible-can-cost-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-2016-budget-challenge-how-to-lose-weight-without-counting-calories">My 2016 Budget Challenge: How to Lose Weight Without Counting Calories</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/can-i-conquer-my-vanity-for-the-sake-of-my-sanity">Can I Conquer My Vanity for the Sake of My Sanity?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-seven-deadly-sins-of-consumerism-and-the-frugal-redemption">The seven deadly sins of consumerism (and the frugal redemption).</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-natural-for-me-to-spend-as-i-do-0">It&#039;s NATURAL for me to spend as I do!</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-frugal-promises-i-have-not-kept">6 Frugal Promises I Have Not Kept</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle being too responsible costing you mortgage overspending saving too much Fri, 25 Mar 2016 10:30:04 +0000 Tim Lemke 1678302 at http://www.wisebread.com 4 Phone Calls That Will Save You Big Every Month http://www.wisebread.com/4-phone-calls-that-will-save-you-big-every-month <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-phone-calls-that-will-save-you-big-every-month" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_phone_call_000062926794.jpg" alt="Woman making phone calls that will save her big" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you want to save money, you should call your credit card company, mortgage lender, insurance agent, or cable provider. Ask for everything from a lower interest rate to a less costly cable subscription.</p> <p>Unfortunately, too many consumers simply accept their current rates, fees, and plans when a simple phone call might save them hundreds of dollars a year, says Beverly Harzog, an Atlanta-based credit card expert and author.</p> <p>&quot;If you have a good credit history, if you've always paid your bills on time, you are considered a valuable customer,&quot; Harzog says. &quot;If you call your credit card company and ask for a lower rate, you might get it. The card companies don't want to lose good customers.&quot;</p> <p>Here are four service providers that you should call today.</p> <h2>1. Your Cable Company</h2> <p>Cable companies are under increasing pressure from competing services. A growing number of consumers are turning to streaming services such as Netflix or Hulu. But at the same time, monthly cable bills have been inching ever higher. The Leichtman Research Group reported last year that the average U.S. monthly cable bill has rose 39% since 2010 and now stands at $99.10.</p> <p>You don't have to pay that much. Try calling your cable company today and asking for a lower monthly rate. Make sure that you come armed for success: It helps if you've been given a better offer from a competitor. You can then share that offer and hope that your current company either matches or betters it.</p> <p>You also need to be serious about walking away from your cable provider. If you are considering making the move to 100% streaming, and are willing to cut the cord, your provider might make an offer tempting enough to retain you as a customer.</p> <h2>2. Your Mortgage Lender</h2> <p>Most financial experts expect mortgage interest rates to rise throughout 2016. But as of early December 2015, these rates were still at historic lows. According to Freddie Mac's Primary Mortgage Market Survey, the <a href="http://www.freddiemac.com/pmms/">average interest rate on a 30-year fixed-rate mortgage</a> stood at 4.01% as of Dec. 31. The average interest rate on a 15-year fixed-rate loan was 3.24%.</p> <p>If you haven't refinanced, it might be time to do so. Call a mortgage lender today &mdash; it doesn't have to be the one that is currently servicing your loan &mdash; and ask whether you qualify for a refinance.</p> <p>The savings could be big. If you are paying off a 30-year fixed-rate mortgage of $200,000 at an interest rate of 5%, you're paying about $1,073 a month in principal and interest, not including insurance and property taxes. Say you've paid off $20,000 on that loan. If you refinance the remaining $180,000 into a 30-year fixed-rate mortgage with an interest rate of 3.95%, you'll pay about $854 a month &mdash; again, not including taxes and insurance.</p> <p>That's a savings of about $219 a month, or $2,628 a year. Just remember that refinancing isn't free. You can pay thousands of dollars in closing costs, so make sure that your monthly savings allow you to repay those costs quickly.</p> <h2>3. Your Credit Card Company</h2> <p>Bankrate reported that the average interest rate on cash back credit cards was 15.30% in late December. If you owe too much, your credit card balance could grow significantly each month until you pay down that debt.</p> <p>A lower interest rate could help. Fortunately, many credit card providers are willing to drop your rate. It helps if you've been a good customer. If you frequently pay your credit card bill late, the odds are high that your provider won't grant your request for a lower rate. But if you have a history of paying your bill on time and you've been a customer for more than a year, your credit card company might be willing to lower your interest rate to keep you.</p> <p>As with your cable provider, you might have more success if you've received a better offer from another card. If you tell your provider that you're considering moving your balance to another card, it's more likely that you'll get an offer for a lower interest rate. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=seealso">Best 0% Balance Transfer Credit Cards</a>)</p> <h2>4. Your Insurance Companies</h2> <p>You probably pay a lot each month for homeowners, life, health, and auto insurance.</p> <p>Insure.com reported that the average annual cost of a full-service auto policy in 2015 stood at $1,311. ValuePenguin says that the annual cost of a 20-year term life insurance policy worth $250,000 was about $300 for a 25-year-old who doesn't smoke, and about $1,175 for a 40-year-old who does smoke.</p> <p>You can lower your insurance bills depending on changes in your life. Say you've lost 50 pounds or given up smoking. Your life insurance provider might be willing to lower your monthly bill. Maybe you haven't had a speeding ticket or a car accident in five years. Call your auto insurance provider, you might qualify for a good-driver discount. If you've installed a new home security system, call the company that provides your homeowners insurance. You might qualify for a monthly discount.</p> <p>You'll never know if you don't call.</p> <p><em>Have you called these &mdash; or any other &mdash; service providers and asked for a discount? How much did you save?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-phone-calls-that-will-save-you-big-every-month">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-lessons-from-its-a-wonderful-life">Financial Lessons From &quot;It&#039;s A Wonderful Life&quot;</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/use-the-8020-rule-to-maximize-your-financial-opportunities">Use the 80/20 Rule to Maximize Your Financial Opportunities</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-check-if-your-mortgage-statement-is-correct">How to check if your mortgage statement is correct</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance better rates cable company insurance mortgage phone calls Wed, 06 Jan 2016 12:00:03 +0000 Dan Rafter 1632872 at http://www.wisebread.com 3 Times a Refinance Is the Wrong Move http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-times-a-refinance-is-the-wrong-move" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000041245128.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It seems that everyone &mdash; your neighbor, brother-in-law, boss &mdash; has a lower interest rate on their mortgage loan than you do. And that's probably not surprising, given that mortgage rates have fallen to historic lows, with rates in the mid to high 3% range for 30-year, fixed-rate loans.</p> <p>That means it's <a href="http://www.wisebread.com/refi-shy-how-to-determine-if-now-is-the-time-to-refinance">time for you to refinance</a>, right? Not necessarily.</p> <p>A refinance doesn't always make sense, even if it will reduce your interest rate by more than a point. Several factors play a role in whether a refinance is the right choice: the cost of refinancing in your area, your current interest rate, the amount of time you plan to spend in your home, and how much of your existing mortgage you've already paid off.</p> <p>Too many homeowners, though, only pay attention to how much their rate might drop. Peter Grabel, managing director with Luxury Mortgage Corp. in Stamford, Connecticut, says that this is the wrong approach.</p> <p>&quot;Deciding whether to go ahead with a refinance requires not just an analysis of how much you might save each month, but also a look at your entire life,&quot; Grabel said. &quot;You need to look at your age, your income, your future plans. You need to take on a real study of your life and your goals before deciding whether refinancing makes sense.&quot;</p> <p>Here are three times when a refinance might not be the smart choice.</p> <h2>1. Your Rate Won't Drop Enough to Recover Refi Costs</h2> <p>Refinances aren't free. The Federal Reserve Board estimates that a refinance can cost 3% to 6% of your loan's outstanding balance in closing costs. If your rate doesn't drop by enough, you might not save enough money each month to recover these closing costs for four years or more.</p> <p>Consider this example: You are paying off a $200,000 30-year, fixed-rate mortgage at an interest rate of 4.5%. Your monthly payment at this rate will be about $1,013, not including whatever you pay for insurance and property taxes.</p> <p>You decide to refinance. When you approach a lender, you have a remaining balance on your loan of $190,000. You qualify for an interest rate of 4% for your new 30-year, fixed-rate mortgage. At that rate, your monthly payment will fall to about $907, again not including insurance and taxes. You'll be saving about $106 a month, or about $1,275 a year.</p> <p>But say your refinance costs 3% of your outstanding loan balance of $190,000. That comes out to $5,700 in closing costs. At $1,275 in savings a year, it will take you nearly four-and-a-half years to pay back the costs of the transaction.</p> <p>And remember, that's at the low end of the Federal Reserve Board's estimate when it comes to refinancing costs. Grabel said that homeowners pay different refinancing costs in different parts of the country. So you might pay more to close your refinance, which would mean an even longer payback time.</p> <p>If your payback time is too long? A refinance might not make sense. Especially if...</p> <h2>2. You Plan to Move Soon</h2> <p>Refinancing makes more sense for owners who plan to live in their residences for at least five years. These owners plan to stay put long enough to enjoy more months of savings after they've recovered their closing costs.</p> <p>Grabel recently counseled a couple to skip a refinance. Why? The couple was ready to have their second child and expected to move to a larger home in one or two years. Grabel calculated that the break-even point on their refinance would come a year after they closed it. If this couple did move that soon after hitting this point, the costs and the work involved in a refinance &mdash; you'll need plenty of paperwork to close one &mdash; wouldn't be worth it.</p> <h2>3. You're Too Far Into Your Existing Mortgage</h2> <p>Here's what homeowners sometimes don't consider: In the early days of your mortgage loan, most of your monthly payment goes toward paying off interest and little to actually reducing your principal, the amount of money you originally borrowed.</p> <p>But as the years pass, you slowly begin paying off more principal than interest each month. That's a good thing.</p> <p>When you refinance, though, you start over with a new mortgage. This means that most of your monthly payments will again go toward paying off interest instead of paying down your principal balance.</p> <p>Starting over might not matter much when you've only been paying off your loan for a year or two. But if you're eight, 10, or 15 years into your loan? Starting over means that you'll be paying much more interest over the lifetime of your new loan.</p> <p>You'll also reach the end of your loan later in life. Say you refinance to a new 30-year, fixed-rate mortgage when you are 35. If you take the full three decades to pay off this new loan, you'll be 65 before you make your last payment.</p> <p>This is why Grabel recommends that homeowners who have paid off a significant portion of their existing mortgages take out new loans with shorter terms. Instead of taking out a 30-year mortgage, it might make more sense to refinance to a 15-year or 20-year loan. This way, you'll pay off your loan faster and you won't pay as much interest over the life of your loan.</p> <p>Again, though, the decision requires an in-depth look at your own financial goals.</p> <p>&quot;Maybe cash flow is an issue,&quot; Grabel said. &quot;Then you'd want to refinance to the loan that gives you the lowest monthly payment. That'd usually be a 30-year loan. But if you are more interested in the lifetime costs of your mortgage, then going with a shorter-term loan that doesn't come with as much interest is the way to go.&quot;</p> <p><em>Have you re-fied lately? What was your break even?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/choosing-the-right-mortgage-loan-15-or-30-years">Choosing the Right Mortgage Loan: 15 or 30 Years?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment">Here&#039;s What to Do If You Can&#039;t Afford Your Mortgage Payment</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-avoid-getting-scammed-with-a-reverse-mortgage">How to Avoid Getting Scammed With a Reverse Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-millenials-should-invest-in-a-home">4 Reasons Millenials Should Invest in a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing equity interest rates loans mortgage owning a home refinancing Mon, 02 Nov 2015 13:15:15 +0000 Dan Rafter 1603197 at http://www.wisebread.com Prioritize These 5 Bills When You're Short on Cash http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/prioritize-these-5-bills-when-youre-short-on-cash" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_worried_bills_000026396353.jpg" alt="Woman prioritizing certain bills when she&#039;s low on cash" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you should pay all of your bills on time. But what if you're short on cash this month? Is it better to pay certain bills late?</p> <p>Yes, actually. Some bills are not reported to the three national credit bureaus of TransUnion, Experian, and Equifax. Bills in this category include utility bills, cell phone payments, medical payments, and cable bills. This doesn't mean that you should pay these bills late. But if you have to do some emergency financial juggling this month? Pay your cable late, not your mortgage or credit card payment.</p> <p>Here are five bills you should always pay on time, each month. Not doing so could damage your credit, leave you with huge financial penalties, or even cause you to lose your home or car.</p> <h2>1. Your Mortgage</h2> <p>Dave Hardin, president of Hardin Financial Group in Troy, Michigan, says that no late or missing check will hurt your credit score more than a missed mortgage. A single late mortgage payment can cause your credit score to fall by 100 points.</p> <p>&quot;If you pay that late, that will have the single greatest effect on your credit score,&quot; Hardin said. &quot;Your mortgage is the big one.&quot;</p> <p>If you miss too many payments, your mortgage lender will foreclose on your home, evicting you and taking ownership of your property.</p> <p>But don't panic if you're two days late on paying your mortgage. As Hardin says, your mortgage lender won't report your payment as officially late until it is at least 30 days past the deadline. This gives you some leeway if you are struggling to scrape together enough cash to pay your mortgage this month.</p> <p>&quot;That doesn't mean you should wait that long to pay your mortgage,&quot; Hardin said. &quot;But late officially means 30 days late, not two days.&quot;</p> <p>Paying your mortgage bill late can also set you up for future financial pain. Kyle Winkfield, managing partner of O'Dell, Winkfield, Roseman and Shipp in Rockville, Maryland, says it's easy for your finances to spiral out of control when you miss a mortgage payment.</p> <p>&quot;Say you miss your $2,000 mortgage payment one month. Now you have to come up with $4,000 the next month to catch up,&quot; Winkfield said. &quot;That's not easy.&quot;</p> <h2>2. Student and Auto Loans</h2> <p>You should never miss your student or auto loan payments either, Hardin said. That's because these are fixed payments that you know are coming up each month. Missing fixed payments is a big deal because lenders are more likely to believe that you didn't send in your payment not because you forgot about it, but because you couldn't pay it.</p> <p>Your car payment is an especially important bill, because your loan is secured by your actual car. This means that lenders have something to go after should you stop making your payments.</p> <p>&quot;Be vigilant about making your car payments,&quot; said Scott Sadar, executive vice president of Somerset Wealth Strategies in Portland, Oregon. &quot;If you are not, your car could be repossessed.&quot;</p> <p>Again, these payments aren't officially late until 30 days have passed.</p> <h2>3. Credit Card Payments</h2> <p>Missing your credit card payment could leave you with a double whammy of pain. First, credit card companies will report your missed payments to the credit bureaus if you are 30 days late or more, causing your credit score to fall.</p> <p>Secondly, if you pay late by 60 days or more (in some cases less), your credit card company can assess a penalty interest rate on your card. This can be financially devastating if you carry a balance on your credit cards each month. Sadar says that these rates can hit 22% or higher, which can cause existing balances to grow quickly, even if you don't make any new payments with your card.</p> <p>See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">When To Do a Balance Transfer to Pay Down Credit Card Debt</a></p> <h2>4. Your Rent</h2> <p>It wasn't until last year that Experian and TransUnion began collecting data for on-time rent payments. The third major national credit bureau, Equifax, still doesn't do this. But even if the credit bureaus weren't tracking your rent payments, you'd still want to make this payment on time every month. Simply put, you don't want to lose your home, and missing too many rent payments could lead to that.</p> <p>It's not easy for landlords to evict tenants, and it will take more than one or two late payments. But if you fall too far behind, your landlord will start the eviction process, possibly leaving you without a place to live.</p> <p>&quot;You always want to protect the roof over your head,&quot; Winkfield said. &quot;That holds true whether you own a home or you are renting. Always make the payments that keep that roof over your head.&quot;</p> <p>Of course, you don't ever want to be in the position where you can't pay all of your monthly bills. Yes, paying your cable bill late one month isn't going to destroy your finances. But if you're juggling payments every month, that's a sign that there is a problem. It's also a sign that you need to take a closer look at your budget to determine if you there are expenses you can eliminate.</p> <p>&quot;Sometimes we get too wrapped up in our wants instead of our needs,&quot; Winkfield said. &quot;If things are tight &mdash; and we've all been there &mdash; then you might need to eliminate some of the wants from your budget.&quot;</p> <p>And if you are struggling to pay certain bills? Don't hide. Hardin says that the best move you can make is to call the creditors behind the bills and explain to them that you are struggling. Many will work with you to find at least a temporary solution. If you call, creditors are less likely to report you as late to the credit bureaus.</p> <p>&quot;If you don't call, the lenders have no choice but to think that you aren't paying just because you don't want to pay,&quot; Hardin said. &quot;You should not be embarrassed to call your creditors. You'd be surprised at how easy creditors make these conversations. They don't want to lose you as a customer, so they usually are willing to work with you.&quot;</p> <p><em>Have you ever fallen behind on your bills? How'd you cope?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-credit-without-using-credit-cards">How to Build Credit Without Using Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die">What Happens to Your Debt After You Die?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-one-couple-paid-off-147k-of-debt-even-while-unemployed">How One Couple Paid Off $147k of Debt (Even While Unemployed)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-a-credit-card-when-you-have-bad-credit">How to Get a Credit Card When You Have Bad Credit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bad credit bills car payment credit score late payment loans mortgage student loans Tue, 20 Oct 2015 13:15:23 +0000 Dan Rafter 1596724 at http://www.wisebread.com Why You Should Be Saving Big With Bi-Weekly Mortgage Payments http://www.wisebread.com/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mortgage_pay_date_000008692460.jpg" alt="Learning how bi-weekly mortgage plans can save you thousands" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Sending a check to your mortgage lender every two weeks instead of once a month &mdash; through what is known as a bi-weekly mortgage program &mdash; could shorten the length of your mortgage and reduce the amount of interest you'd pay over the life of your loan. But is <a href="http://www.wisebread.com/the-surprising-reasons-your-fixed-rate-mortgage-payment-could-rise">making mortgage payments</a> every two weeks a smart move? Not always.</p> <p>Mortgage experts say that homeowners need to look at their entire financial picture before deciding whether a bi-weekly mortgage program makes sense for them.</p> <p>&quot;There is no one-size-fits-all approach here,&quot; said Chris Birk, education director with Veterans United Home Loans in Columbia, Missouri. &quot;You can't say that a bi-weekly payment schedule is always the smart decision. Often it is. But for other borrowers, it's not always the best choice.&quot;</p> <h2>How it Works</h2> <p>If you sign on to a bi-weekly payment plan through your lender, you'll make mortgage payments every two weeks. Because there are 52 weeks in a year, you'll make 26 payments in a calendar year. If you're good at math, you'll notice that this comes out to an extra month's payment.</p> <p>When you pay off a mortgage loan in the traditional way, you make 12 payments in a year, or one per month. That would come out to 24 bi-weekly payments. But under a bank's bi-weekly payment plan, remember, you are making 26 &mdash; not 24 &mdash; bi-weekly payments. Those extra two payments at the end of the year go directly toward reducing your mortgage loan's principal balance.</p> <p>Say you had a 30-year fixed-rate loan with a balance of $200,000 at an interest rate of 4.4%. If you paid that loan off with traditional once-a-month payments, your monthly payment, not including taxes and insurance, would be $1,001.52. If you took the full 30 years to pay that loan off, you'd pay more than $160,000 in total interest.</p> <p>If you went with a bi-weekly payment plan, you would pay $500.76 every two weeks &mdash; again, not counting taxes and insurance. If you took the full 30 years to pay off your loan, you'd pay just more than $132,000 in total interest. That's a savings in interest of nearly $30,000.</p> <p>You'd also pay off your mortgage loan in 26 years instead of 30.</p> <h2>It's Not Always the Right Choice</h2> <p>The math shows that bi-weekly mortgage plans work: They do reduce the amount of interest you pay each month while shortening the term of your mortgage.</p> <p>But that doesn't mean that a bi-weekly plan is always the right choice.</p> <p>If you plan on living in your home for a short period of time, a bi-weekly mortgage might not make sense. You won't save much in interest if you move out of your home in five years, say.</p> <p>Bi-weekly plans also mean that you'll be sending more money to your lender each year, too. In our example of a 30-year fixed-rate loan of $200,000 with an interest rate of 4.4%, you'd pay about $1,000 more each year under a bi-weekly plan than you would with a traditional repayment program. That might not seem like much money, but if you're attempting to save for a big purchase &mdash; say a child's college education &mdash; that $1,000 could come in handy.</p> <p>Then there's the fact that of all the debt to carry, mortgage debt is usually the most affordable, thanks to the low interest rates that come with it. Homeowners burdened with high interest rate debt, such as credit card debt, should pay more dollars each month toward reducing that debt rather than their mortgage balance.</p> <p>&quot;If you can financially do it, I am always an advocate of being debt-free,&quot; said Rick Roque, managing director of retail with Michigan Mutual in Port Huron, Michigan. &quot;But because mortgage rates are so low, it often doesn't make sense to work so hard to pay off your mortgage debt.&quot;</p> <p>On the flip side, Roque said, by paying off more of your principal balance at a quicker rate, which you would do with a bi-weekly plan, you do gain more access to equity. You can then take out home equity loans to help fund major home improvements or a child's college education.</p> <p>&quot;You do gain a tremendous amount of financial leverage when you have more equity,&quot; Roque said. &quot;You can leverage that equity in your home for emergencies or educational opportunities. That is a powerful tool.&quot;</p> <p>The bottom line? Bi-weekly mortgage plans work. Just consider whether they'll work for your financial needs.</p> <p><em>Are you on a bi-weekly payment schedule?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-millenials-should-invest-in-a-home">4 Reasons Millenials Should Invest in a Home</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">What Is Private Mortgage Insurance, Anyway?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move">3 Times a Refinance Is the Wrong Move</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fallacy-of-homeownership-as-a-sound-investment">The Fallacy of Homeownership as a Sound Investment</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-trade-in-your-car-why-not-your-home">You Trade-In Your Car…Why Not Your Home?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing bi-weekly mortgage program buying a house equity homeownership lenders mortgage payment plans Thu, 01 Oct 2015 13:00:35 +0000 Dan Rafter 1570347 at http://www.wisebread.com 8 Credit Mistakes That Could Hurt Your Mortgage Application http://www.wisebread.com/8-credit-mistakes-that-could-hurt-your-mortgage-application <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-credit-mistakes-that-could-hurt-your-mortgage-application" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/A000044377414_0.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p><a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289|652|2247&amp;k3=logo&amp;k4=&amp;r=http%3A%2F%2Fwww.chase.com%2Fmortgage" rel="nofollow"><img src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/sponsor_logo.jpg" class="nopin" nopin="nopin" align="right" alt="" /></a></p> <p>Sponsored by Chase Mortgage Banking.&nbsp;<a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C652%7C2247&amp;k3=disclaimer&amp;k4=&amp;r=http%3A%2F%2Fwww.youtube.com%2Fmynewhome" rel="nofollow">Review their resources</a>&nbsp;to help you find and finance your home.</p> <p><img width="605" src="http://wisebread.com/files/fruganomics/072215-SurprisingThings-hires.png " alt="" /></p> <p>See more ways you can improve your credit score today.</p> <!-- Content Well 650x300 Zone --> <script type='text/javascript' src='http://static.fmpub.net/zone/20744'></script> <!-- Content Well 650x300 Zone --> <script type="text/javascript" charset="utf-8" src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/289_2247.js"></script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lynn-truong">Lynn Truong</a> of <a href="http://www.wisebread.com/8-credit-mistakes-that-could-hurt-your-mortgage-application">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">Mortgage Application Declined? Here’s How to Respond</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">4 Steps to Finding Your Mortgage Lender</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-is-the-best-time-to-lock-in-a-mortgage-rate">When Is the Best Time to Lock in a Mortgage Rate?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-crucial-things-homebuyers-overlook-at-open-houses">12 Crucial Things Homebuyers Overlook at Open Houses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing chase credit cards mortgage Tue, 18 Aug 2015 11:00:00 +0000 Lynn Truong 1529667 at http://www.wisebread.com 6 Financial Mistakes to Stop Making by Age 40 http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-financial-mistakes-to-stop-making-by-age-40" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_budgeting_000033505114.jpg" alt="Couple figuring out financial mistakes to stop making by 40" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>It doesn't matter if you're in your 20s, 30s, or 40s &mdash; everyone makes financial mistakes. But, the mistakes we make in our later years are often different from those we made as a young adult. Even if you've gone through some financial growing pains, there's room for improvement.</p> <p>Here's a look at six financial mistakes you need to stop making by age 40.</p> <h2>1. Buying More House Than You Can Afford</h2> <p>Some young adults rush to acquire the same lifestyle as their parents, and they get in over their heads buying homes they can't afford. I've seen it with several of my friends &mdash; they want to look like they ball, but can't maintain the proverbial court. But there's no rule that says we have to constantly move up. If you're living above your means, it's time to downsize and get serious about your money.</p> <p>Being house poor can have a tremendous impact on your personal finances. You might be able to swing the house payment every month, but if you don't have money for anything else, you're less likely to save for retirement &mdash; and there's a good chance that you'll end up with credit card debt. Besides, the cracks will eventually show &mdash; and that will defeat the purpose of why you went into debt in the first place. Not worth it at all.</p> <p><strong>RELATED:</strong> <a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">How to Land a Mortgage Lender You'll Legitimately Love</a></p> <h2>2. Tapping Into Your 401(k)</h2> <p>Twenty-something adults can afford to tap into their 401(k)s if they endure economic hardships or need cash to buy a house (although it's not recommended by most money experts). Since they're young, there's time to replenish the account. Older adults, however, don't have this luxury. If you're approaching middle-age and hoping to retire in your late 50s or early 60s, this isn't the time to play around with your retirement account. Stop using your 401(k) or IRA as an emergency fund. As an alternative, you need to keep enough cash in your liquid savings to deal with unexpected expenses that pop up. (Which, incidentally, might mean telling your kids &quot;no&quot; sometimes.)</p> <h2>3. Saving Like You're Fresh Out of College</h2> <p>When you're just out of college and starting out, you may not have a lot of cash to put toward saving for retirement. Therefore, you might contribute the bare minimum after opening a 401(k) &mdash; maybe 2% or 3% of your income. This is okay in your younger years. But by the time you hit 40, you need to step it up a notch.</p> <p>Look into increasing your 401(k) contributions to 5% or 6%, especially if you're getting an employer match. This is essentially free money that can take your retirement account to the next level. (Plus, you deserve it!) Also, consider ways to diversify your retirement savings, such as opening an individual retirement account or dabbling in other investments, like stocks or real estate.</p> <h2>4. Putting Your Child's Needs Ahead of Your Retirement</h2> <p>All parents want to give their children the best. This might be the best private schools, extracurricular activities, educational vacations, or college funds. But be careful about putting your kids' needs over your retirement &mdash; after all, you can't afford to help them if your own financial situation isn't secure first.</p> <p>The sooner you start stashing cash away for the future, the more financially stable you'll be when you leave the workforce. If you put the majority of your disposable income into giving your children the best life possible, your retirement could take a backseat to their needs and wants. And if you don't save enough, this can result in working longer than you want later in life, or having to get a job after retiring to make ends meet. Not to mention you might not be able to afford helping your children as much as you'd like.</p> <h2>5. Never Reevaluating Your Life Insurance Needs</h2> <p>Your life insurance needs can change as you get older. A policy purchased in your 20s while you were single without kids or a mortgage probably doesn't offer the coverage you need today. It might be time to upgrade your policy to ensure your family has enough financial support in the event of your death, especially if you're the breadwinner.</p> <p>There are no hard or fast rules regarding how much life insurance to get, but the policy should be enough to cover your funeral and burial expenses, pay off any existing debt, plus provide your spouse and dependents with ongoing financial support.</p> <h2>6. Getting Comfortable With Credit Card Debt</h2> <p>At this point in your life you probably recognize the danger of using credit cards. But just because you no longer rely on credit cards doesn't mean you should get comfortable or shrug off your existing balances. If you still owe thousands, paying the minimum isn't going to cut it. Like, ever.</p> <p>Develop a plan to <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=internal">get rid of credit card debt</a> once and for all. Go through your house and sell things you don't need. Instead of spending a work bonus going on vacation, use this cash to erase account balances. You can even temporarily reduce how much you're contributing to your retirement account, and use the savings to pay off credit card debt. Whatever means you need to eliminate this debt (outside of robbing a bank, of course), use it. You'll feel freer and more financially stable once that burden is off your back.</p> <p><em>Are there other financial mistakes we need to stop making by age 40? Let me know some of your suggestions in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-the-kids-move-out">7 Money Moves to Make as Soon as the Kids Move Out</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years">Make These 7 Money Moves Now Or You&#039;ll Regret It in 20 Years</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt kids life insurance money mistakes mortgage retirement Mon, 10 Aug 2015 09:00:14 +0000 Mikey Rox 1519218 at http://www.wisebread.com 5 Clever Tax Shelters Anyone Can Use http://www.wisebread.com/5-clever-tax-shelters-anyone-can-use <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-clever-tax-shelters-anyone-can-use" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_gold_piggy_bank_000059335918.jpg" alt="Man finding easy ways to reduce tax burden" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For the middle-class, building wealth for your family can be like constructing a house &mdash; the biggest challenge is setting the foundation. And it starts with keeping your taxes as low as possible. This can sometimes result in relocating to an area where the cost of living and taxes are more affordable, trading high-cost districts in areas like New York City and San Francisco for a more sustainable lifestyle in an area where the job market is strong, like in Houston or Dallas.</p> <p>But there are other smart, easy ways to <a href="http://www.wisebread.com/7-states-with-the-lowest-taxes-for-retirees">reduce your tax burden</a>, too. Read on to familiarize yourself with a few.</p> <h2>1. Avoid Personal and Business Income Tax</h2> <p>You won't have to worry about paying personal state income tax if you live in one of these nine U.S. states: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. And you will avoid corporate income tax if you do business in the states of Nevada, South Dakota, Texas, or Wyoming.</p> <h2>2. Take Advantage of Retirement Plans</h2> <p>Most people start saving for retirement once they land their first &quot;real&quot; job by contributing to employer-sponsored plans. Some employers will match as much as 100% of your 401(k) contributions up to 3% of your salary. That's a guaranteed 100% return of your investment! So, let's say you've contributed $3,500 &mdash; your employer will put in another $3,500. There isn't another investment that can guarantee this type of return. Plus, if historical average stock market returns are any indication, your money will likely grow an average 8%&ndash;12% per year tax-free or tax-deferred. Meanwhile, investing in your 401(k) will reduce your annual income and possibly your tax bracket, further reducing your tax burden.</p> <h2>3. Contribute to a 529 College Savings Plan</h2> <p>Qualified Tuition Programs (QTPs), often referred to as 529 Plans, are tax shelters that allow you to save for higher education expenses. In many ways, they resemble retirement plans, offering tax-deferred growth on contributions. Plans vary and have different lifetime contribution limits &mdash; generally around $200,000 &mdash; but there is no federal tax on earnings, and often no state tax if your plan's beneficiary chooses an in-state college.</p> <h2>4. Avoid Estate and Inheritance Tax</h2> <p>The estate and inheritance tax doesn't affect many people, because you're not required to file an estate tax return unless your estate is valued at $5,430,000 or more as of 2015 &mdash; and only six states levy their own inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. And the transfer of property through an estate or inheritance is taxed only in Nebraska and Pennsylvania. Consider yourself lucky &mdash; unless you've got a very sizeable estate, your progeny will probably be spared this tax blow.</p> <h2>5. Buy a Home</h2> <p>When you purchase a home, you can deduct interest paid on your mortgage, a percentage of your real estate taxes and depreciation, and receive credits for certain home improvements. Not a bad deal. But if you're in the business of flipping real estate, it gets even better, because when you sell a property, any profit of under $250,000 (for single tax filers) is tax-free. That amount doubles to $500,000 if you're married and filing jointly. The only requirement the IRS has is that you occupy the home as your principal residence for at least two years before you sell.</p> <p><em>What other easy tax shelters do you employ?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/5-clever-tax-shelters-anyone-can-use">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-skip-these-8-tax-breaks-for-students">Don&#039;t Skip These 8 Tax Breaks for Students</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/101-tax-deductions-for-bloggers-and-freelancers">101 Tax deductions for bloggers and freelancers</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-tax-changes-for-2016">5 Important Tax Changes for 2016</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-the-government-pays-you-to-live-green">11 Ways the Government Pays You to Live Green</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes charitable donations deductions mortgage retirement tax credits Wed, 05 Aug 2015 13:00:14 +0000 Qiana Chavaia 1508985 at http://www.wisebread.com 4 Steps to Finding Your Mortgage Lender http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-steps-to-finding-your-mortgage-lender" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6 Steps to Finding a Mortgage Lender That Will Get You Your Dream House_PHOTO.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Sponsored by Chase Mortgage Banking. <a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C652%7C2180&amp;k3=disclaimer&amp;k4=&amp;r=http%3A%2F%2Fwww.youtube.com%2Fmynewhome" rel="nofollow">Review their resources</a> to help you find and finance your home.</em></p> <p>I vividly remember signing my first mortgage agreement, my hand trembling slightly as I held the pen. It&rsquo;s a lot of money to commit to paying back! Since that day, between refinances and new purchases, I&rsquo;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.</p> <p>When it comes to a mortgage, everyone has different needs. See <a href="https://www.youtube.com/watch?v=99kpHX0vQ2Y">which products make sense for you</a>:</p> <p><iframe src="https://www.youtube.com/embed/99kpHX0vQ2Y" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <h2>Compare Rates</h2> <p>When you&rsquo;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&rsquo;s be frank: Price is the main factor in your choice.</p> <p>I keep an eye on the general trend of mortgage rates in the financial news, then check <a href="http://www.bankrate.com/funnel/mortgages/?ic_id=home_smart%20spending_CompareRates_Mortgage_30YearFixed&amp;prods=1">Bankrate.com</a> to get an idea of the range of rates available.</p> <p>Comparing rates can be challenging because it&rsquo;s not always clear what a listed rate includes. Banks may charge a higher percent interest for a zero-fee loan, where the borrower&rsquo;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&rsquo;s current home, in the high-cost San Francisco Bay Area, we needed a jumbo loan, which costs slightly more than a standard, or &ldquo;conforming&rdquo; loan.</p> <p>One way to get an accurate idea of what your mortgage should cost is to use a rate calculator like the one at <a href="http://www.mtgprofessor.com/Ext/Partners/PricingTool.aspx">The Mortgage Professor</a>. 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&rsquo; 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.</p> <h2>Decide What Type of Lender You Want to Work With</h2> <p>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.</p> <p>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&rsquo;t solely a rate decision. Rather, it&rsquo;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.</p> <p>&ldquo;Online financing is popular with tech savvy consumers and can be a convenient alternative to traditional lending sources,&rdquo; writes <a href="http://www.forbes.com/sites/moneybuilder/2013/03/26/a-look-behind-the-curtain-how-to-choose-a-mortgage-lender/">Forbes contributor and industry insider Mark Greene</a>.</p> <p>Then again, you might get less personal attention working with an online lender than you would with your local bank.</p> <p>Personally, I have taken out mortgages sitting in a lender&rsquo;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&rsquo;t mind the lower level of service. In fact, I liked that they were in a hurry, because my loan closed quickly.</p> <h2>Research Potential Lenders</h2> <p>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&rsquo;t expect a special rate, <a href="http://www.bankrate.com/finance/mortgages/choose-mortgage-lender.aspx">according to Bankrate</a>. If you&rsquo;re considering a lender you haven&rsquo;t worked with before, look them up on the Better Business Bureau and ask friends and family if they&rsquo;ve had experiences with the company. The real estate site <a href="http://www.zillow.com/agent-finder/mortgage-lender-reviews/">Zillow has reviews</a> of mortgage lenders. Your real estate agent probably also has one or more recommendations, and possibly even an <a href="http://www.forbes.com/sites/moneybuilder/2013/03/26/a-look-behind-the-curtain-how-to-choose-a-mortgage-lender/">in-house lender</a> which can make things very convenient. (But you won&rsquo;t be obligated to use the in-house lender and should still shop around.)</p> <p>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.</p> <h2>Consider Working With a Mortgage Broker</h2> <p>Once upon a time, using a mortgage broker to shop loan offers for you was commonplace. Nowadays, only <a href="http://www.nytimes.com/2013/12/01/realestate/choosing-between-mortgage-broker-and-bank.html?_r=0">one in 10 borrowers work with one</a>.</p> <p>Should you? That depends.</p> <p>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 <a href="http://www.thetruthaboutmortgage.com/how-does-a-mortgage-broker-get-paid/">getting borrowers to pay higher interest rates</a> -- a practice that damaged brokers&rsquo; reputations in the eyes of many. Then again, nowadays you also have access to mortgage rate and fee data online, so it&rsquo;s not too hard to do what brokers do for yourself.</p> <p>But working with a broker can save you time if you don&rsquo;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&rsquo;t necessarily cost more than borrowing directly from a lender, according to the web site <a href="http://www.thetruthaboutmortgage.com/mortgage-brokers-vs-banks/">The Truth About Mortgage</a>.</p> <p>Just like with researching a lender, research a broker you&rsquo;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&rsquo;t rule out consulting a broker in the future if I needed help.</p> <script type="text/javascript" charset="utf-8" src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/289_2180.js"></script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">Mortgage Application Declined? Here’s How to Respond</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-mistakes-that-could-hurt-your-mortgage-application">8 Credit Mistakes That Could Hurt Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-is-the-best-time-to-lock-in-a-mortgage-rate">When Is the Best Time to Lock in a Mortgage Rate?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-crucial-things-homebuyers-overlook-at-open-houses">12 Crucial Things Homebuyers Overlook at Open Houses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing chase credit cards mortgage Mon, 20 Jul 2015 11:00:14 +0000 Carrie Kirby 1487213 at http://www.wisebread.com Here's What to Do If You Can't Afford Your Mortgage Payment http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-to-do-if-you-cant-afford-your-mortgage-payment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/house_payments_mortgage_000004582800.jpg" alt="How to keep your home if you can&#039;t afford the mortgage payment" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We know the scenario: Maybe your spouse lost a job, dropping your household income. Maybe your hours at work have been cut. Or maybe your own job has disappeared. Whatever the financial emergency, your monthly mortgage payment has become unaffordable.</p> <p>What can you do if you want to keep your house? There are steps you can take to relieve your burden. But be warned: Most of them involved a sacrifice on your part.</p> <p>&quot;Being faced with the threat of losing your home can force you to make some real serious financial decisions,&quot; said Kyle Winkfield, president and chief executive officer of the Winkfield Group, a financial planning firm in Rockville, Maryland. &quot;There are few things that can keep you as focused on how you are spending your money.&quot;</p> <p>Here are four possible strategies to keep your home when that <a href="http://www.wisebread.com/7-things-you-need-to-know-before-buying-your-first-house">mortgage payment</a> becomes too much of a financial burden.</p> <h2>1. Bring in a Tenant</h2> <p>Rent a room and reduce your expenses. Do you have an extra room in your home? Maybe you have a finished basement that you rarely use. Depending on your municipality's regulations, you might be able to rent out that room. If you're fortunate, that extra income can be enough to help you cover your mortgage payment.</p> <p>Be sure to check with your local government first. You don't want to violate any local ordinances by renting out that extra room on the third floor of your home.</p> <p>If renting a room isn't an option, look carefully at your monthly expenses. Is there anything you can cut to provide some extra dollars for your mortgage payment? You might consider eliminating cable TV subscriptions or gym memberships. Maybe you can cut out restaurant meals and trips to the local movie theater.</p> <p>&quot;Taking a hard look at your budget might be more productive than you think,&quot; Winkfield said. &quot;Depending on how much of a burden that mortgage payment is, you might save enough each month to be able to keep your home until you can somehow boost your income.&quot;</p> <h2>2. Find Part-Time Work</h2> <p>This isn't always ideal, but maybe you can find a second part-time job to bring in enough extra income to help reduce the burden of your monthly mortgage payment.</p> <p>You don't want to spend all of your time at work, and holding down two jobs can be stressful. But so can losing your home to foreclosure. If a second job can help you cobble together enough income to cover your mortgage each month, sign up, and hold that part-time job until you can overcome whatever financial crisis damaged your household budget.</p> <h2>3. Modify Your Mortgage</h2> <p>As soon as you notice that you are struggling to pay your mortgage, call your lender. This can be embarrassing, but it's a necessary step. Ask for help. Ask for a loan modification.</p> <p>In a loan modification, your lender can take several steps to reduce the size of your monthly mortgage payment. It can decrease your loan's interest rate, forgive a portion of your principal balance, or extend the term &mdash; the number of years you have to pay back your loan &mdash; of your mortgage. All of these steps will result in a lower mortgage payment.</p> <p>Be warned, though, that your lender doesn't have to accept your request for a loan modification. You must first offer proof that you have suffered a financial hardship. This can be in the form of bank account statements showing a drop in available funds, paycheck stubs showing that your monthly income has plummeted, or medical bills showing how much you owe because of a recent illness and injury.</p> <p>You must also have the right household income. This can be tricky. Winkfield says that if you earn too much money each month, your lender will deny your modification request because it thinks that you make enough to pay your mortgage. But if you make too little money, your bank will deny your modification request because even after it modifies your loan, you still won't have enough funds to cover your monthly payment.</p> <p>Finding that sweet spot in the middle? That's no easy task.</p> <h2>4. Declare Chapter 13 Bankruptcy</h2> <p>You might be able to keep your home by declaring Chapter 13 bankruptcy protection. But Winkfield says that this should be a last resort. Declaring bankruptcy can hurt your credit score by more than 100 points. And a Chapter 13 bankruptcy filing sits on your credit report for seven years, making it a challenge to qualify for a new mortgage loan or any form of credit.</p> <p>&quot;This should only be used if you have absolutely no other option,&quot; Winkfield said.</p> <p>In a Chapter 13 bankruptcy, a bankruptcy judge drafts a payment plan that allows you to pay back your creditors on a schedule that you can afford. This plan will include more affordable payments to your mortgage lender each month. You'll also get to keep your home.</p> <p>You might also file for Chapter 7 bankruptcy, in which some or all of your debts are permanently wiped out. But this form of bankruptcy protection comes at a steeper price. First, it remains on your credit report for 10 years. Secondly, you might have to sell your home, and other assets, anyway as part of your bankruptcy agreement.</p> <p>Being unable to cover your mortgage is stressful. But being proactive and budgeting creatively can maximize your chances of keeping your home.</p> <p><em>What steps have you taken to overcome mortgage troubles?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move">3 Times a Refinance Is the Wrong Move</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-avoid-getting-scammed-with-a-reverse-mortgage">How to Avoid Getting Scammed With a Reverse Mortgage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse">When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing bankruptcy loans loss of income mortgage Tue, 14 Jul 2015 09:00:09 +0000 Dan Rafter 1481988 at http://www.wisebread.com 12 Crucial Things Homebuyers Overlook at Open Houses http://www.wisebread.com/12-crucial-things-homebuyers-overlook-at-open-houses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-crucial-things-homebuyers-overlook-at-open-houses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/open_house_sign_000003207979.jpg" alt="Things homebuyers overlook during an open house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Sponsored by Chase Mortgage Banking. <a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C652%7C2081&amp;k3=disclaimer&amp;k4=&amp;r=http%3A%2F%2Fwww.youtube.com%2Fmynewhome" rel="nofollow">Review their resources</a> to help you find and finance your home.</p> <p>I yell at my TV. I can&rsquo;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. &ldquo;You can paint over that hot pink wall!&rdquo; I advise them. &ldquo;You could replace that light fixture in an hour!&rdquo;</p> <p>They never listen, but you should: When you are home shopping in real life, it&rsquo;s important to look beyond those little things to take note of things that would much more difficult &mdash; or even impossible &mdash; to change.</p> <!--<p><a href="https://www.youtube.com/watch?v=KirXg3rY4hc">Watch the experts call out what to look for at an open house</a>:</p> <p><iframe src="https://www.youtube.com/embed/KirXg3rY4hc" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>--> <h2>1. Layout</h2> <p>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.</p> <p>&ldquo;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,&rdquo; real estate broker <a href="http://homebuying.about.com/od/buyingahome/qt/HomeLayout.htm">Elizabeth Weintraub writes</a>.</p> <p>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).</p> <h2>2. Major Systems</h2> <p>If the house is on the market during the summer, you may not think to ask about the furnace. If it&rsquo;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 <a href="http://www.homepros.lendingtree.com/Article/hvac-sales-and-installation">installation flaws that compromise the system&rsquo;s efficiency</a>.</p> <p>Thoroughly testing major systems will be your inspector&rsquo;s job, but there is nothing wrong with taking note of the following warning signs of outdated systems:</p> <ul> <li>Window air conditioners, indicating a lack of central air<br /> &nbsp;</li> <li>A furnace made by a company that went out of business years ago (Do a quick search for the company while you&rsquo;re there to find out)<br /> &nbsp;</li> <li>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)<br /> &nbsp;</li> <li>Knob and tube wiring in the attic; outdated outlets and DIY wiring extensions, which both could be fire hazards</li> </ul> <h2>3. Structural Issues</h2> <p>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&rsquo;ll need a professional to diagnose the true extent of a structural problem. But there are a few <a href="http://homeguides.sfgate.com/there-structural-damage-home-46177.html">signs that can tip you off</a>: Large cracks in the walls or foundation, doors that stick or won&rsquo;t close, a <a href="http://lancaster.unl.edu/feature/structuraldamage.shtml">swayed or sagging roof line</a> when viewed from a distance, and wood joists that crumble with a jab from a screwdriver.</p> <h2>4. Water Leaks</h2> <p>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.</p> <h2>5. Old Paint</h2> <p>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&rsquo;s less of a concern.</p> <!-- Content Well 650x300 Zone --> <script type='text/javascript' src='http://static.fmpub.net/zone/20744'></script> <!-- Content Well 650x300 Zone --> <h2>6. Location</h2> <p>&ldquo;You can always change what&rsquo;s inside your home, but you can never change what&rsquo;s outside of it,&rdquo; warns the website <a href="http://www.newhouseflip.com/importance-of-location/"><em>New House Flip</em></a>. It&rsquo;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&rsquo; or relatives&rsquo; homes. Find out how much crime the neighborhood has, and whether there are any parks or businesses you&rsquo;d like to frequent. Are the yards in the neighborhood and parks well maintained? Are the schools good?</p> <p>Also note the home&rsquo;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.</p> <p>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.</p> <h2>7. Homeowner&rsquo;s Association</h2> <p>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.</p> <h2>8. Neighbors</h2> <p>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?</p> <p>You are not just looking for information here. You&rsquo;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?</p> <h2>9. Noise</h2> <p>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&rsquo;s masking: Traffic noise? Barking dogs? A rattling furnace?&nbsp;</p> <p>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.</p> <h2>10. Odors</h2> <p>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.</p> <h2>11. The Basement</h2> <p>Don&rsquo;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&rsquo;t mean it will always be that way. Sniff for musty smells. Look for <a href="http://homebuying.about.com/od/homeshopping/qt/Wetbasement.htm">water stains, mold, or efflorescence</a> (ashy or sparkling salt deposits) on the walls.</p> <p>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&rsquo;t want them to be ruined in a flood.</p> <h2>12. Resale Value</h2> <p>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.</p> <p>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.</p> <p>Most homes aren&rsquo;t going to be move in ready. You&rsquo;ll have to do a little bit of preparing, repairing, or upgrading. What&rsquo;s important is that you sort between the stuff that&rsquo;s simple and the ones that are costly. Do you have any additional tips to share about what can&rsquo;t be overlooked during an open house?</p> <script type="text/javascript" charset="utf-8" src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/289_2081.js"></script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/12-crucial-things-homebuyers-overlook-at-open-houses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">Mortgage Application Declined? Here’s How to Respond</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">4 Steps to Finding Your Mortgage Lender</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-mistakes-that-could-hurt-your-mortgage-application">8 Credit Mistakes That Could Hurt Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-is-the-best-time-to-lock-in-a-mortgage-rate">When Is the Best Time to Lock in a Mortgage Rate?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing chase credit cards mortgage Thu, 11 Jun 2015 11:00:15 +0000 Carrie Kirby 1425900 at http://www.wisebread.com When Is the Best Time to Lock in a Mortgage Rate? http://www.wisebread.com/when-is-the-best-time-to-lock-in-a-mortgage-rate <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-is-the-best-time-to-lock-in-a-mortgage-rate" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/When Should You Lock in a Mortgage Rate_PHOTO.jpg" alt="Man figuring out mortgage rates" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Sponsored by Chase Mortgage Banking. <a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C652%7C2043&amp;k3=disclaimer&amp;k4=&amp;r=http%3A%2F%2Fwww.youtube.com%2Fmynewhome" rel="nofollow">Review their resources</a> to help you find and finance your home.</em></p> <p>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&rsquo;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.</p> <p>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&rsquo;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&rsquo;s possible that by the time the settlement&rsquo;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&rsquo;t increase while your loan is being processed.</p> <p>So why doesn&rsquo;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&rsquo;ll be able to find the home you want and get your offer accepted within that time frame. It&rsquo;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.</p> <p>Truly, there&rsquo;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.</p> <p><a href="https://www.youtube.com/watch?v=6PAb58zaFSQ">See all the benefits of locking in your mortgage rate today</a>:</p> <p><iframe src="https://www.youtube.com/embed/6PAb58zaFSQ" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <h2>As Soon as You Get a Quote for a Rate You Can Afford</h2> <p>If you&rsquo;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&rsquo;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?</p> <p>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&rsquo;s also wise, particularly if you&rsquo;re considering a long-term lock-in, to inquire about the availability of adding what&rsquo;s commonly called a &ldquo;float down provision&rdquo; to your lock in agreement. This provision allows you to take advantage of lower rates, should they drop while you&rsquo;re locked in to the rate you were first quoted.</p> <p>&ldquo;I just wanted a rate under 4 percent, so I locked in immediately when I got there,&rdquo; said Erica Howell, a 27-year-old first-time homeowner from Portsmouth, N.H. &ldquo;It&rsquo;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.&rdquo;&nbsp;</p> <h2>Upon Approval of the Loan</h2> <p>Choosing to lock in your mortgage rate after you&rsquo;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&rsquo;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. &ldquo;As soon I got approved, I locked in my rate,&rdquo; said Kelly Dibble, who purchased a one-bedroom apartment in Stamford, Conn. in 2014. &ldquo;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.&rdquo;</p> <h2>After You Sign a Purchase Agreement</h2> <p>The situation you want to avoid is having the clock ticking on your lock in before you&rsquo;re ready to make an offer on a home. A situation like that can compound the pressure you&rsquo;ll feel to quickly find a home that&rsquo;s truly a good fit for you &mdash; and that can potentially lead to hasty decision making and down-the-road buyers&rsquo; remorse. Alas, you can dodge such problems by waiting to lock-in your rate until after you sign a purchase agreement. &ldquo;It&rsquo;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,&rdquo; said Karin Pipczynski, who purchased a two-bedroom home with her boyfriend in March. &ldquo;We didn&rsquo;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.&rdquo;</p> <p><em>When would you suggest locking in a mortgage rate for a home purchase?</em></p> <script type="text/javascript" charset="utf-8" src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/289_2043.js"></script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/when-is-the-best-time-to-lock-in-a-mortgage-rate">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-mistakes-that-could-hurt-your-mortgage-application">8 Credit Mistakes That Could Hurt Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">Mortgage Application Declined? Here’s How to Respond</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">4 Steps to Finding Your Mortgage Lender</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-crucial-things-homebuyers-overlook-at-open-houses">12 Crucial Things Homebuyers Overlook at Open Houses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing chase credit cards mortgage Tue, 26 May 2015 11:00:07 +0000 Brittany Lyte 1425899 at http://www.wisebread.com Mortgage Application Declined? Here’s How to Respond http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/mortgage-application-declined-here-s-how-to-respond" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/7 Steps to Take If Your Mortgage Application Was Declined_PHOTO.jpg" alt="Couple reviewing their finances" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Sponsored by Chase Mortgage Banking. <a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C652%7C2029&amp;k3=disclaimer&amp;k4=&amp;r=http%3A%2F%2Fwww.youtube.com%2Fmynewhome" rel="nofollow">Review their resources</a> to help you find and finance your home.</p> <p>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 &ndash; one where lifelong dreams for stability, community belonging, and the start or growth of a family will be fulfilled.</p> <p>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.</p> <p><a href="https://www.youtube.com/watch?v=jkIH3wVkwuU">Don&rsquo;t panic! Here&rsquo;s what to do if your mortgage is declined</a>:<br /> <iframe src="https://www.youtube.com/embed/jkIH3wVkwuU" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <h2>Talk to Your Mortgage Lender</h2> <p>If your mortgage loan request has been denied, ask why your lender rejected your application. You have a right to know &ldquo;the specific reason for the rejection&rdquo; according to the <a href="https://www.consumer.ftc.gov/articles/0347-your-equal-credit-opportunity-rights">Federal Trade Commission (FTC)</a>.</p> <p>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.</p> <p>Get your documents in order to discuss and tackle problems that led to the rejection.</p> <h2>If You Were Rejected Due to a High Front-End Ratio</h2> <p>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 (<a href="http://www.investopedia.com/terms/f/front-endratio.asp">monthly housing expenses divided by monthly income</a>, expressed as a percentage) to determine if you could struggle to make payments. Ideally, this <a href="http://www.bankrate.com/finance/mortgages/how-much-house-can-you-buy--1.aspx">ratio will be 28%</a> or less.</p> <p>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&rsquo;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.</p> <p>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&rsquo;s security features to reduce the cost of your homeowner&rsquo;s insurance.</p> <h2>If You Were Rejected Due to Debt Load From Other Loans</h2> <p>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.</p> <p>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 <a href="http://www.investopedia.com/terms/b/back-endratio.asp">back-end ratio (aka debt-to-income ratio)</a> and is calculated by dividing total monthly debt expense by monthly income, expressed as a percentage.</p> <p>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?</p> <p>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.</p> <p>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.</p> <h2>If You Were Rejected Due to Your Credit Score</h2> <p>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 <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a>. Make sure your information is correct and up-to-date.</p> <p>In addition, you should be able to get your <a href="http://www.consumerfinance.gov/askcfpb/6/i-got-my-free-credit-reports-but-they-do-not-include-my-credit-scores-can-i-get-my-credit-score-for-free-too.html">credit score</a> 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.</p> <p>Based on your credit information, identify methods of potentially improving your score, such as eliminating credit card balances.</p> <h2>If You Were Rejected Due to the House Value</h2> <p>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&rsquo;s market value.</p> <p>The lender&rsquo;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 <a href="http://www.zillow.com/mortgage-rates/buying-a-home/loan-to-value-ratio/">loan-to-value (LTV) ratio</a>.</p> <p>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.</p> <script type="text/javascript" charset="utf-8" src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/289_2029.js"></script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-mistakes-that-could-hurt-your-mortgage-application">8 Credit Mistakes That Could Hurt Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-is-the-best-time-to-lock-in-a-mortgage-rate">When Is the Best Time to Lock in a Mortgage Rate?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">4 Steps to Finding Your Mortgage Lender</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-crucial-things-homebuyers-overlook-at-open-houses">12 Crucial Things Homebuyers Overlook at Open Houses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing chase credit cards mortgage Mon, 18 May 2015 16:43:14 +0000 Julie Rains 1425891 at http://www.wisebread.com Denied a Mortgage? Here's How to Fix It Fast http://www.wisebread.com/denied-a-mortgage-heres-how-to-fix-it-fast <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/denied-a-mortgage-heres-how-to-fix-it-fast" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-real-estate-agent-talking-house-Dollarphotoclub_65072638.jpg" alt="couple real estate agent" title="couple real estate agent" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're applying for a mortgage, be prepared to fulfill a long list of guidelines set by the lender. You need acceptable credit, sufficient income, a consistent work history, and cash for mortgage-related expenses. If you're missing any piece of the puzzle, the lender might turn down your request. But getting denied for a mortgage doesn't mean that you have to give up your dream of owning a home. It is your inalienable American right, after all.</p> <p>Still, there are a number of reasons why a lender rejects an application, and depending on the reason for your denial you may be able to resolve the issue quickly and get approved. Here are five things you can do to undo a mortgage rejection.</p> <h2>1. Renegotiate With the Seller</h2> <p>Getting pre-approved before shopping for a house is a smart move. A pre-approval lets you know early on if you even qualify for a mortgage, and how much you can expect to receive. You can wait until after submitting a bid to apply for a mortgage, but then you risk bidding on houses you can't afford. If you need more than a bank is willing to lend, the lender has no choice but to deny the mortgage request. To keep the ball in your court, you can go back to the seller and renegotiate the deal. If the seller can reduce the price to an amount that's affordable for you (remember &mdash; you ain't too proud to beg), the mortgage lender may approve your application.</p> <h2>2. Bring More Cash to the Table</h2> <p>In today's fickle housing market, many home sellers aren't walking away with a ton of cash. They might sell a house for exactly what they need to break even and pay realtor commissions. For that reason, going back and re-negotiating a lower sale price might not be an option. But this doesn't mean you've lost the battle. If the bank rejects your mortgage because you don't qualify for the sale price, you can make a bigger down payment and cover the difference out-of-pocket. This only works if you have a sizable cash cushion. For example, if you need $200,000 to purchase a house, but you only qualify for $190,000, give the seller a 5% down payment instead of 3%.</p> <h2>3. Pay Off Existing Debt</h2> <p>Don't underestimate the consequences of too much debt.</p> <p>A mortgage lender will examine your credit report to see how much you owe elsewhere. The bank looks at your credit card balances, auto loans, student loan debt, and any other loan payments you may have. And unfortunately, a high debt-to-income ratio can be the kiss of death when applying for a mortgage. An underwriter may deny the mortgage if you're juggling too many expenses and your income can't support another monthly payment.</p> <p>If you don't have a cash reserve, a high debt-to-income ratio isn't something you can fix overnight. You'll have to develop a debt-payment strategy and slowly pay down balances. But if you do have a cash reserve, immediately paying off your credit cards or loans might save the deal. Typically, mortgage lenders don't want an applicant's total debt payments &mdash; including the mortgage payments &mdash; to exceed 36% to 43% of gross monthly income, depending on the type of mortgage.</p> <h2>4. Rapid Rescoring</h2> <p>You might not know about this trick, but if you're denied a mortgage because of errors on your credit report, <a href="http://www.foxbusiness.com/personal-finance/2012/06/29/rapid-rescore-can-fix-your-credit-score-in-hurry/">rapid rescoring</a> can fix these issues in a matter of days. Errors on your credit report can pull down your credit score. Although you can dispute these errors, it can take weeks or months for the bureaus to investigate and delete negative information from your file.</p> <p>Rapid rescoring can correct errors faster than disputing the traditional way. There's a fee for each corrected item, as much as $25 to $30 per account, depending on which rescore company you use. Proof of errors are expedited to the credit reporting agencies, and removal takes place within three business days. A mortgage lender can put you in contact with a rapid rescore company.</p> <h2>5. Apply With a Different Bank</h2> <p>Just because one bank denies your mortgage request doesn't mean another bank will. Many banks have different credit score requirements. For example, one financial institution may require a minimum credit score of 700 for a conventional loan, whereas another bank only requires a 680 credit score. Find out why a lender denied your mortgage, and if it had anything to do with your credit score, you might have a different outcome working with another bank.</p> <p><em>Were you ever denied for a mortgage? How did you fix it in your favor?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/denied-a-mortgage-heres-how-to-fix-it-fast">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-reduce-mortgage-closing-costs">8 Ways to Reduce Mortgage Closing Costs</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/buy-the-same-house-twice-for-less-than-buying-it-once">Buy the Same House Twice for Less Than Buying It Once</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/things-i-wish-i-knew-before-i-bought-my-second-house">Things I Wish I Knew Before I Bought My Second House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-i-didnt-pay-my-mortgage-off-in-full">Why I Didn&#039;t Pay My Mortgage Off In Full</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-interesting-ways-technology-can-help-you-buy-a-home">6 Interesting Ways Technology Can Help You Buy a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit credit repair home buying mortgage Thu, 05 Mar 2015 12:00:08 +0000 Mikey Rox 1316790 at http://www.wisebread.com