Real Estate and Housing http://www.wisebread.com/taxonomy/term/4810/all en-US 4 Reasons Why You're Too Old — Or Too Young — For a Mortgage Loan http://www.wisebread.com/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/house_jenga_000057875522.jpg" alt="Man learning why he is too old or too young for mortgage loan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're never too old for a mortgage loan &mdash; and if you're at least 18, you're not too young to take out a <a href="http://www.wisebread.com/the-55-arm-loan-just-might-be-the-best-mortgage-loan">mortgage loan</a>, either. Mortgage lenders are not allowed to use age as a factor for denying borrowers a mortgage loan. Thank the Equal Credit Opportunity Act for this; the federal law prohibits discrimination based on everything from a borrower's age to that person's race, color, or national origin. But just because you can qualify for a mortgage loan at 19 or 90, doesn't mean that you always should.</p> <p>&quot;To me, the age isn't the main factor, ever,&quot; says Kyle Winkfield, owner of The Winkfield Group, a retirement planning firm in Rockville, Maryland. &quot;Everything has to do with your own personal situation. Can you afford what you are biting off, what you are signing up for with a mortgage? A lot of financial tragedies could be avoided if people would ask whether they can really afford a mortgage loan, no matter what age they are.&quot;</p> <p>Here are four reasons why you might be too young or too old for a mortgage loan.</p> <h2>1. Your Income Isn't High Enough</h2> <p>When determining whether you can afford a mortgage, your lender will consider any source of regular monthly income. When you're younger, the majority of your income usually comes from your steady job. When you're past retirement age, your monthly income might be made up of Social Security benefits, a pension, legal settlements, income from real estate that you own, or several other sources.</p> <p>Lenders usually want your total monthly debts &mdash; including the cost of a new mortgage payment &mdash; to be no more than 43% of your gross monthly income. But just because a lender approves you for a mortgage of $200,000 doesn't mean that you can really afford the monthly payments that come with such a loan. Take a close look at your income. Will the addition of a mortgage payment, whether you're 20 or 70, bust your monthly budget? Owning a home is nice, until making those monthly mortgage payments becomes a real struggle.</p> <p>&quot;You might qualify for a mortgage with a $3,200 monthly payment,&quot; Winkfield says. &quot;But in reality, with all the other things that come up with owning a home &mdash; the electric bill, maintenance, surprise repairs &mdash; can you really afford it? You have to take a long look at your finances, no matter how old or young you are.&quot;</p> <h2>2. Your Credit Score Is Low</h2> <p>Lenders rely on your three-digit credit score to determine if you are a good lending risk. If your score is low, you'll pay a higher interest rate on your mortgage loan, and that might make your monthly payment so high that taking on a mortgage loan doesn't make sense.</p> <p>Erin Ellis, financial educator at Philadelphia Credit Union, says that a low credit score is often a challenge for younger borrowers. Some young borrowers might not have enough of a credit history to even have a score. If these borrowers can even find a lender to loan them mortgage dollars, they'll have to pay dearly for them in the form of higher interest.</p> <p>Older buyers, too, can have credit score issues, too. Older borrowers who have recent bankruptcies, missed payments, or foreclosures on their records will struggle to get a mortgage loan with a reasonable interest rate.</p> <p>&quot;If your credit score is low, it often doesn't make sense to apply for a mortgage loan,&quot; Ellis says. &quot;The low interest rates make mortgages appealing today. But if your credit score is low, you won't get those low rates.&quot;</p> <h2>3. You Won't Be Settling Down</h2> <p>Buying a house and taking on a mortgage loan is a better investment when you're able to hold onto the property for a long enough period of time &mdash; usually at least seven years. Historically, homes have tended to experience solid appreciation when owners hold onto them for at least this length of time, though appreciation is never guaranteed.</p> <p>If you're young and just getting started in your career, renting might make more sense. You don't know how long you're going to remain in one neighborhood or city. Job changes might take you to new communities or even countries before your home has a chance to appreciate in value significantly.</p> <p>And if you're older? There are again no guarantees that you'll hold onto your new home for a long enough period of time. You might suffer ill health and have to move to an assisted-living facility. You might decide to move to a new part of the country so that you can spend more time with your grandchildren.</p> <p>If you aren't sure how settled you are into your current community, taking on a mortgage loan might not be a wise choice.</p> <h2>4. You Can't Clear the Down Payment Hurdle</h2> <p>The down payment on a home can be a struggle for both younger and older borrowers. Even if you qualify for a mortgage loan backed by the Federal Housing Administration, you'll have to come up with a down payment of 3.5% of your home's purchase price, if your credit score is high enough. For a home costing $200,000, that 3.5% comes out to a down payment of $7,000. For conventional financing, you might have to come up with a down payment of 10%, or $20,000.</p> <p>That's a lot of money for a young person just getting started on a career. Yes, borrowers can use financial gifts &mdash; as long as they are true gifts and not a loan that they have to pay back &mdash; to cover all or part of a down payment. But young people whose parents don't have $7,000, $10,000 or $20,000 sitting around might struggle to come up with a down payment.</p> <p>Older buyers have their own issues with down payments. They have to make sure that their combination of monthly income and savings will last them through their retirement years. Spending a chunk of their savings on a down payment could put them at financial risk, especially if they don't have much money from another home sale to help cover down payment costs.</p> <p>If your down payment will wipe out all of your savings, it might make sense to wait until you've saved more money for a down payment. After all, you'll need money to furnish and maintain your home after you've purchased it.</p> <p>But if none of these factors are an issue for you? Taking on a mortgage loan might make financial sense.</p> <p>&quot;If you can qualify for a mortgage loan &mdash; and that's a fairly big 'if' &mdash; then I think a mortgage makes sense for most people,&quot; says Matthew Tuttle, chief executive officer and chief information officer of Tuttle Tactical Management in Greenwich, Connecticut. &quot;I know this can be controversial, but I'm a big fan of never paying your mortgage off. The only time when a mortgage doesn't make financial sense is when interest rates are extremely high. At these low interest rates, why wouldn't you want to take out a mortgage loan?&quot;</p> <p><em>Has your age impacted your search for a mortgage loan? </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-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">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/how-to-prepare-for-a-home-purchase-in-2010">How to Prepare for a Home Purchase in 2010</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/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> <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-things-millennials-can-do-to-buy-a-house-within-the-next-decade">5 Things Millennials Can Do to Buy a House Within the Next Decade</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/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing age credit history credit score loans mortgages Wed, 24 Jun 2015 13:00:26 +0000 Dan Rafter 1462787 at http://www.wisebread.com Don't Forget to Budget for These Unexpected Moving Expenses http://www.wisebread.com/dont-forget-to-budget-for-these-unexpected-moving-expenses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-forget-to-budget-for-these-unexpected-moving-expenses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple_moving_pet_000059374950.jpg" alt="Couple forgetting to budget for unexpected moving expenses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Moving to a new city can be both exciting and stressful. Maybe you're moving to <a href="http://www.wisebread.com/5-things-you-must-do-before-you-quit-your-job">relocate for a job</a>, or to be closer to family and friends. Whatever the reason, the process can become overwhelming for both your sanity and your budget if you're not careful.</p> <p>As my husband and I plan our own cross-country move this summer, we've come across a few more added expenses than we initially budgeted for. So when you plan <em>your</em> <a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">big move</a>, don't forget to set aside funds for these unexpected costs.</p> <h2>1. Real Estate Broker Commissions</h2> <p>In exchange for finding you the perfect housing situation and negotiating a good deal on rent, the broker will charge a commission fee for their service. However, it's important to know that real estate commission fees are always negotiable.</p> <p>You can, of course, opt to not use a real estate agent to help secure the perfect apartment in order to save money. On the flip side, they may be able to negotiate a <a href="http://www.wisebread.com/6-ways-to-haggle-your-way-to-cheaper-rent">better deal on monthly rent</a>, or find an apartment that you wouldn't have found on your own. Both of these could offset the cost of the real estate broker's commission.</p> <h2>2. Increased Housing Payments</h2> <p>Obviously one of the biggest changes to your monthly budget will be the increased housing payments. Are you moving to a city that has a higher or lower cost of living? This will determine whether or not you'll have to allocate additional money for monthly housing costs.</p> <p>In preparation for our <a href="http://www.wisebread.com/10-ways-to-save-on-a-long-distance-move">cross-country move</a> this year, my husband and I are already practicing paying a higher rent payment by setting aside an extra $300 a month into our moving fund. This strategy is helping our budget get used to paying the extra money so we won't be financially strapped the first several months after our move.</p> <h2>3. Lease Signing Fees</h2> <p>Part of your moving budget should include funds for a security deposit, as well as first month's rent, since these are typical fees that many landlords require to be paid when signing a new lease.</p> <p>Additional fees that may be tacked on to your final bill include a move-in fee to hold the apartment in your name, application fees, admin charges, and pet fees. Before signing a new lease, be sure to ask your new landlord for a list of all the fees included so you'll be prepared to pay for these added expenses.</p> <h2>4. Apartment Search Fees</h2> <p>Moving across the city is one thing, moving across the country presents a whole other set of challenges. On top of the other costs mentioned here, you'll also have to take time to <a href="http://www.wisebread.com/7-tips-to-save-on-apartment-living">conduct an apartment search</a> in your new city.</p> <p>On a recent weekend trip to check out apartments in our new city, my husband and I had to pay for three nights at a hotel (including parking fees), plus extra money for food, gas, and other expenses related to the apartment search. When creating your moving fund, be sure to budget a bit more for any travel or commuting expenses.</p> <h2>5. Rental Insurance Premiums</h2> <p>Many apartment complexes and landlords require tenants to <a href="http://www.wisebread.com/13-things-you-must-inspect-before-signing-a-rental-agreement">purchase rental insurance</a> to cover any damages to your personal property. We're currently paying $113 a year for rental insurance coverage of up to $20,000 to have our stuff secured in the event of fire, flood, or theft.</p> <p>This cost is very small compared to the coverage it offers, but is none-the-less an important cost to factor into your budget. Depending on what state you're moving to, and the type of building you'll be living in, your rental insurance premiums may go up or down.</p> <p>Factors that play into the monthly premium includes, how secure the location is (if the complex is a gated community or not), what the buildings are made out of, and what year the apartment was built.</p> <p>When prepping for a big move, don't forget to factor in these additional moving expenses so you're not blindsided by the costs.</p> <p><em>Are you planning to move soon? What are some other unexpected costs you're budgeting for?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-smith">Carrie Smith</a> of <a href="http://www.wisebread.com/dont-forget-to-budget-for-these-unexpected-moving-expenses">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/self-employed-heres-how-to-get-your-apartment-application-approved">Self-Employed? Here&#039;s How to Get Your Apartment Application Approved</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-ways-to-apartment-hunt-on-craigslist-without-getting-scammed">6 Ways to Apartment Hunt on Craigslist Without Getting Scammed</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/6-reasons-you-should-always-hire-a-moving-company">6 Reasons You Should Always Hire a Moving Company</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-7-best-affordable-cities-to-start-a-family">The 7 Best Affordable Cities to Start a Family</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/20-tips-for-getting-your-security-deposit-back">20 Tips for Getting Your Security Deposit Back</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Real Estate and Housing apartments expenses moving relocating renting Mon, 22 Jun 2015 15:00:13 +0000 Carrie Smith 1459653 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="/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-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/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/5-appraisal-facts-that-could-save-you-big-money">5 Appraisal Facts That Could Save You Big Money</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-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</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-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</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 How One Family Lives Well (And Even Owns a Home) on Just $11 an Hour http://www.wisebread.com/how-one-family-lives-well-and-even-owns-a-home-on-just-11-an-hour <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-one-family-lives-well-and-even-owns-a-home-on-just-11-an-hour" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/family_time_000015201444.jpg" alt="Family lives well on only $11 an hour" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Budgeting is a tough skill for anyone to master, but the difficulty increases for those living on a low income. Without any wiggle room for financial mistakes, it can be all too easy to rely on credit cards and payday loans to make ends meet.</p> <p>But with a little organization and resourcefulness, it is possible to live well, save money, and even own a home without <a href="http://www.wisebread.com/5-ways-to-make-extra-income-online-today">pulling in a huge paycheck</a>.</p> <h2>An Inspirational Family Example</h2> <p>Samantha Luh, a 23-year-old mother of two and her husband John, 24, of Grove City, Ohio, understand the importance of budgeting on a limited income very well. Samantha works 30 hours per week as a medical assistant for $11 an hour, and John earns $13 per hour working as a manager for a roofing company.</p> <p>Both Luhs' hours can be variable, and John will go from working 40+ per week in the summer to about ten hours each week in the winter. Their 2015 earnings will likely be less than $40,000 for the family of four. (For comparison, the <a href="http://www.realtor.com/local/Grove-City_OH/lifestyle">median income</a> for their community is just over $65,000.)</p> <p>Despite those financial challenges, the Luhs have created a rich life for themselves and their two sons. For instance, Samantha organizes their finances to make sure she never misses a birthday or gift-giving occasion, and she is justifiably proud of the recent purchase of their first house.</p> <p>Here is how Samantha is able to make their limited budget work for them.</p> <h2>Planning Ahead</h2> <p>I spoke to Samantha on a Thursday, and she told me that she only had $0.30 in her checking account at that moment &mdash; but she was getting her next paycheck the following day, and she already knew where that money was going.</p> <p>&quot;We are currently living paycheck-to-paycheck, which I don't like,&quot; she says, &quot;but it means that I plan where our money goes before we even have it.&quot; Since most of their bills are due on the first of the month, they expect to have very little money leftover from their first paychecks of the month. Their second paychecks go toward their groceries and gas for the month.</p> <p>Any &quot;extra&quot; money in a paycheck is saved up to spend on non-essentials, such as gifts. &quot;I love buying presents for people,&quot; Samantha says, &quot;so I look for things throughout the year to buy for my loved ones. I start Christmas shopping in January and I'm usually done by August. I keep an eye out for things my kids and family and friends would love, and either wait for a sale or save up for the item. That way I don't feel time pressure to buy.&quot;</p> <p>Though their emergency fund dropped from $2000 to $500 last year when they had to replace their 25-year-old secondhand bed, Samantha has a plan in place for that, too. Since they both bought a home and had a baby in 2015, they anticipate a larger-than-usual tax refund in 2016, which they will immediately put into their savings account to cushion them from future financial hiccups.</p> <h2>Setting Priorities</h2> <p>What sets the Luhs apart from other young couples living on a low income is their willingness to prioritize the things that matter most to them &mdash; like owning a home.</p> <p>Starting two years ago, Samantha and John worked to build up their credit and save money for a down payment for the $101,000 home they bought earlier this year. Though they were only able to put $5,000 down on the home, they were able to add another $2,000 to the down payment by asking the sellers to help with closing costs. Now they are living in a place they own, and their mortgage is only $25 more per month than they spent on rent.</p> <p>But prioritizing for the Luhs is about more than just planning for big purchases. For instance, they know what can be trimmed from the budget if they ever have a shortfall. &quot;We can pay all of our bills right now, but we know that the cell phones will go if there is ever a month when we can't make ends meet,&quot; she explains. &quot;That's why we have cell phones without contracts, so we can cancel them if we ever need to.&quot;</p> <p>Since their priorities are so clearly defined, impulse buying is simply not done in the Luh household. If they are ever tempted by a purchase, Samantha stops to think through whether or not it's really necessary. And if they do decide to buy something, she figures out a way to save up for it over the next couple of weeks, even if it's only a $20 purchase.</p> <h2>Splurging Creatively</h2> <p>Anyone who has had to live on a severely limited budget knows how much of a drag it can be. But Samantha and John have found several creative ways to keep fun in the budget without sacrificing their bottom line.</p> <p>In particular, they both love movies but they can't afford the $10-per-ticket price at the local multiplex. So they shop the $5 bargain DVD bin for movies they want to watch, and for half the price of a theater ticket, they have flicks on hand that they can watch over and over.</p> <p>In addition, Samantha squirrels away the gift cards that they receive as presents. &quot;It pays to spread them out,&quot; she says. &quot;If we're getting cabin fever, I can look to see what gift cards we still have, and then we can afford to do something fun without spending our own money.&quot;</p> <p>At the time of our conversation, Samantha and John's wedding anniversary was approaching. They planned to celebrate at The Cheesecake Factory, because they had a gift card.</p> <h2>Living Well is a Matter of Intention</h2> <p>By any metric, Samantha and John are bringing in a modest income, and many young parents would find it challenging to raise two kids on so little money. But the fact that the Luhs are mindful about their finances and refuse to let anyone else's priorities affect them means their life is full and satisfying.</p> <p>&quot;It can be kind of stressful to cut it so close,&quot; Samantha says, &quot;but we know our kids are okay. And that's the important thing.&quot;</p> <p><em>What tips and tricks does your family employ to live well on a limited budget?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/how-one-family-lives-well-and-even-owns-a-home-on-just-11-an-hour">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/8-creative-ways-to-save-money-on-food">8 Creative Ways to Save Money on Food</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-reasons-why-2015-is-the-year-to-buy-a-house">5 Reasons Why 2015 is the Year to Buy a House</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-psychological-traps-preventing-you-from-saving-and-how-to-fix-them">4 Psychological Traps Preventing You From Saving — And How to Fix Them</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/dont-forget-to-budget-for-these-unexpected-moving-expenses">Don&#039;t Forget to Budget for These Unexpected Moving Expenses</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-easy-ways-to-budget-for-summer-vacation">7 Easy Ways to Budget for Summer Vacation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Real Estate and Housing homeownership limited income money stories paycheck-to-paycheck saving money Wed, 10 Jun 2015 17:00:12 +0000 Emily Guy Birken 1451254 at http://www.wisebread.com The 5/5 ARM Loan Just Might be the Best Mortgage Loan http://www.wisebread.com/the-55-arm-loan-just-might-be-the-best-mortgage-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-55-arm-loan-just-might-be-the-best-mortgage-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/mortgage_statement_000012201263.jpg" alt="the 5/5 loan arm might be right for you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Want the lower initial interest rate of an adjustable-rate mortgage (ARM) with at least <em>some </em>of the stability of a fixed-rate loan? The 5/5 ARM might be an option.</p> <p>This relatively new loan is popular among consumers who want low monthly payments but don't want to worry each year that this payment might rise. That's because the <a href="http://www.wisebread.com/7-ways-to-lower-your-credit-card-interest-rate">interest rate</a> attached to a 5/5 ARM doesn't reset &mdash; or adjust &mdash; as often as it does with a traditional loan.</p> <h2>Is it Right for You?</h2> <p>That doesn't mean that the 5/5 ARM is the right mortgage choice for all borrowers. Even though there is less financial risk than with traditional ARMs, there is still some.</p> <p>&quot;As with all ARMs, you are taking a little bit of a gamble,&quot; said John Walsh, Chief Executive Officer of Milford, Connecticut-based Total Mortgage. &quot;If after you set your interest rate for five years interest rates start decreasing, then you made the wrong decision. If rates start increasing after you set your initial rate, then you made the right decision for those five years.&quot;</p> <p>Traditional ARMs are attractive because they come with lower initial interest rates. But they also come with higher risk: After a set number of years &mdash; often five or seven years, but perhaps as many as 10 &mdash; in which the interest rate with an ARM remains unchanged, it then adjusts every year, rising or falling according to which economic indices the ARM is attached to.</p> <p>An ARM might be tied to the London Interbank Offered Rate, better known by the acronym LIBOR. After an ARM's fixed-rate period ends, each year that loan's interest rate will rise or fall depending on what's happening with the LIBOR index.</p> <p>There is a bit of a safety net built into most ARMs. They'll usually come with a cap that limits how much monthly payments can rise once the loan enters its adjustable period. An ARM might have a cap of 2% plus the one-year Libor index, for example.</p> <p>That's complicated, so it's important to ask your lender just how big of a jump your mortgage payment can take during its adjustable years. If you can't handle the maximum possible increase? An ARM might not be for you.</p> <h2>Advantages of a 5/5 ARM</h2> <p>A 5/5 ARM, though, is a bit different. Lenders advertise it as a loan product that combines the stability of a fixed-rate loan with the low initial payments of an ARM.</p> <p>Like all ARMs, the 5/5 ARM comes with a fixed-rate period. In this version, the interest rate doesn't change for five years. After this set period ends, the rate adjusts. But it then remains at its new level for five more years instead of adjusting every 12 months.</p> <p>And the 5/5 ARM will continue in this pattern until borrowers pay it off, sell their homes, or refinance to a new loan. The interest rate will remain in place for five years, adjust, remain in place for five more years, adjust, and so on.</p> <p>Most 5/5 ARMs come with caps, too. If your interest rate cap is 2%, your rate can't rise higher than that level during each adjustment period. This cap is important, letting you calculate your worst-case-scenario payment.</p> <p>Say you start your 5/5 ARM with an interest rate of 3.25%. If your interest rate cap is 2%, rate can only jump to a maximum of 5.25% when your loan hits its first adjustment period after five years. That comes out to an average interest rate of 4.25% for the first 10 years of this particular 5/5 ARM.</p> <p>Peter Grabel, Managing Director of Luxury Mortgage Corp. in Stamford, Connecticut, says that a 5/5 ARM might be a good choice for a younger couple looking to buy a first home. The lower initial interest rate means that this younger couple might be able to get into a larger home than they otherwise would have if they instead sought out a traditional fixed-rate mortgage with a higher interest rate.</p> <p>But borrowers who apply for a 5/5 ARM need to be certain that they can afford the higher mortgage payment that might kick in after five years, Grabel said.</p> <p>&quot;Maybe five years from now this young couple will be making more money,&quot; Grabel said. &quot;They might be able to afford a higher interest rate then. For people willing to take a little gamble, this is a good loan choice: They pay less now while paying potentially more in years six to 10.&quot;</p> <p><em>Have you considered a 5/5 ARM? Why or why not?</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/the-55-arm-loan-just-might-be-the-best-mortgage-loan">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-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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/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> <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-things-millennials-can-do-to-buy-a-house-within-the-next-decade">5 Things Millennials Can Do to Buy a House Within the Next Decade</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/front-loaded-loans-a-financial-conspiracy">Front-loaded loans: a financial conspiracy?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing adjustable-rate mortgage ARMS fixed-rate loan loans Fri, 05 Jun 2015 11:00:15 +0000 Dan Rafter 1442313 at http://www.wisebread.com 5 Reasons Why 2015 is the Year to Buy a House http://www.wisebread.com/5-reasons-why-2015-is-the-year-to-buy-a-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-why-2015-is-the-year-to-buy-a-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple_new_homeowners_000051793940.jpg" alt="Couple learning why 2015 is the year to buy a house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you've been dragging your feet or going back and forth about buying a house, 2015 might be the year to move forward with a home purchase. <a href="http://www.wisebread.com/5-things-millennials-can-do-to-buy-a-house-within-the-next-decade">Buying a home</a> has become harder over the past six or seven years &mdash; we can thank the mortgage/housing meltdown for this. Lenders tightened their guidelines with regard to credit and income, which made it difficult for many to qualify for mortgages. Some would-be buyers had no choice but to delay buying until later.</p> <p>Well, later has arrived. Due to recent changes in mortgage loan products and shifts in housing markets across the country, this might be one of the best years to jump into homeownership since 2008.</p> <h2>1. Killer Interest Rates</h2> <p>Low mortgage rates were common in the early 2000's, but after the mortgage crisis, rates increased to around 6% or 7%. These higher rates made it harder for many to purchase, but rates dropped again in 2012 to the 3%&ndash;4% range and breathed life back into the lending industry. In mid-2014, some mortgage experts predicted that interest rates would rise sharply in 2015, but new data suggests <a href="http://www.bankrate.com/finance/mortgages/mortgage-rates-forecast.aspx">rates will remain low</a> for the remainder of this year. If you want to get in while rates are low, now's the time, especially since there's no way to know whether rates will rise in 2016.</p> <h2>2. Cheaper Mortgage Insurance Premiums (FHA)</h2> <p>You can purchase a home without a 20% down payment, but you'll have to pay mortgage insurance. Lenders require this type of insurance if you don't have at least 20% equity. Mortgage insurance protects the bank in case you default, and it's included in your monthly mortgage payment. It opens the door to ownership if you don't have a large cash reserve, but unfortunately, you'll also pay more monthly.</p> <p>There's good news if you're thinking about getting an FHA home loan. As of January 2015, the Federal Housing Administration <a href="http://money.cnn.com/2015/01/07/real_estate/fha-mortgage-insurance/">reduced their mortgage insurance premiums</a> from 1.35% to 0.85%. This 0.50% reduction means it'll cost less to have an FHA mortgage. In fact, an FHA home loan may be cheaper than getting a conventional mortgage. Ask your mortgage lender for an FHA and a conventional mortgage quote to compare the savings. According to the White House, &quot;The lowered premiums will help more than 800,000 homeowners save on their monthly mortgage costs and enable up to 250,000 new homebuyers to purchase a home.&nbsp;&quot;</p> <h2>3. Lower Down Payments for Conventional Mortgages</h2> <p>FHA home loans isn't the only mortgage program seeing changes in 2015. For the past several years, conventional mortgage lenders required at least a 5% down payment from buyers. If you were purchasing a $300,000 house, this meant coming up with $15,000 out-of-pocket. However, Fannie Mae and Freddie Mac announced the return of the 3% down payment in 2015 &mdash; a tremendous savings that will help many first-time homebuyers purchase much sooner. Instead of struggling to save $15,000 to purchase a $300,000 house, you can get the keys to a new place with a $9,000 down payment.</p> <h2>4. Increasing Home Values</h2> <p>Rising home prices can be a good or bad thing, depending on which end you're on. If you're buying, higher prices mean you'll pay more for a property than if you had purchased last year. And as a seller, rising home values let you sell at a higher price, which might be the ticket if you're having difficulty drumming up a down payment for a new place. Down payments are a major stumbling block for people hoping to purchase a house. If you already own a house, increasing property values mean you're able to walk away with a bigger profit, which you can use to buy the next place.</p> <h2>5. Rent Isn't Getting Any Cheaper</h2> <p>Some people prefer renting because it gives them flexibility and they don't have to worry about home maintenance or repair. But at the same time, rental prices are unpredictable. Landlords can increase rental rates every year, and before you know it, you're paying way more than you started out paying. Buying, on the other hand, results in predictable monthly payments (if you have a fixed-rate), and you don't have to worry about a mortgage lender jacking up your rate. Because rental increases are inevitable, buying a house might be cheaper than renting in the long run.</p> <p><em>Are you planning on buying a house this year? Why or why not?</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/5-reasons-why-2015-is-the-year-to-buy-a-house">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/5-times-you-shouldnt-rush-to-pay-off-your-mortgage">5 Times You Shouldn&#039;t Rush to Pay Off Your Mortgage</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-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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-one-family-lives-well-and-even-owns-a-home-on-just-11-an-hour">How One Family Lives Well (And Even Owns a Home) on Just $11 an Hour</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/six-options-if-youre-underwater-on-your-mortgage">6 Options if You&#039;re Underwater on Your 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/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 FHA homeownership mortgages pmi savings Fri, 29 May 2015 17:00:09 +0000 Mikey Rox 1433839 at http://www.wisebread.com 6 Ways to Apartment Hunt on Craigslist Without Getting Scammed http://www.wisebread.com/6-ways-to-apartment-hunt-on-craigslist-without-getting-scammed <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-apartment-hunt-on-craigslist-without-getting-scammed" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/for_rent_sign_000018543162.jpg" alt="Man learning how to apartment hunt on craigslist without getting scammed" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Using Craigslist to find an apartment is not a novel idea. As a matter of fact, it's by far the most popular way for prospective renters to find a new place. But it doesn't come without its drawbacks, the biggest being fraud and scams designed to separate you from your hard-earned money. Here are a few of the biggest scams currently going and some tips on how to protect yourself from them.</p> <h2>1. Always Verify the Owner</h2> <p>One of the most popular <a href="http://www.wisebread.com/8-vile-craigslist-scams-to-watch-out-for">Craigslist scams</a> these days involves a crook gaining access to the apartment or home, and showing it to you under the guise of being the real landlord or owner. To sweeten the pot, and get you to bite, they might even offer a deal on the deposit, or pick up some of the fees. As you can imagine, this has the potential of ending badly with you losing significant money. They'll end up taking your first month's rent and security deposit and you'll never see them &mdash; or your money &mdash; again.</p> <p>When looking at Craigslist listings, always make sure you verify the owner of the apartment or home. Most counties and cities have websites in place that allow you to look up public records to determine the real owner of the property. If this is not a possibility, drive by the property and look for signs showing that it's actually for rent. Be sure to call the phone number listed at the physical address and verify the owner, as well.</p> <h2>2. If It Sounds Too Good to Be True, It Probably Is</h2> <p>When scanning through Craigslist listings, be cautious of apartments that seem too good to be true, as they probably are. Often these listings are fake and designed to pull you in with the lure of a &quot;fantastic deal.&quot; Also, if a listing sounds terrific, but is chock full of misspellings and bad grammar, proceed with extreme caution as it could be a sign of a fraudulent or fake ad.</p> <p>Do some research ahead of time to familiarize yourself with the local housing market and the going rents and fees. Do this by scanning local classified ads and utilizing websites like <a href="http://hotpads.com/">Hotpads</a> and <a href="https://livelovely.com/">Lovely</a>. Once you do this, you'll be able to easily spot red flags like unusually cheap rent, small security deposits, and lack of tenant screening.</p> <h2>3. Never Give Personal Information Upfront</h2> <p>Another way scammers use Craigslist to try and entice potential victims is by convincing you it's a really hot property, typically via e-mail, and insisting you &quot;act fast&quot; to reserve it. The most typical scam is asking you to submit a rental application before you view the property. This is done in an effort to get your personal information, such as Social Security and bank account numbers.</p> <p>Avoid this situation by always making sure you view the unit and verify the owner <em>before</em> you fill out a rental application. The only thing that a landlord can legally ask you for prior to showing the place is a valid photo ID.</p> <h2>4. Never Trust an E-mail</h2> <p>Unfortunately, scammers are&nbsp;<a href="http://abclocal.go.com/story?section=news/consumer&amp;id=9513869">hacking into the e-mail addresses</a> of landlords and property owners on Craigslist and defrauding prospective tenants by posing as the real owners. The scam typically starts by answering your e-mail inquiry with a hard sell on why they need your personal information (or a deposit) before showing you the place. Because of this, it's always smart to talk to a real person to verify the property. Most scammers don't want to talk to you on the phone and will try to get your money without doing so. If the listing has a phone number, call it, and verify the rental and all the ad details. If all of your phone calls go unanswered, and unreturned, you should move on to the next prospective listing.</p> <h2>5. Never Wire Money</h2> <p>If a landlord or property owner insists on you wiring money to secure a property, it's probably a scam. There is absolutely no solid reasoning to ever pay with a wire transfer. Sending money by wire transfer is essentially the same thing as sending cash and once it has been sent, it's nearly impossible to get it back.</p> <h2>6. Beware of the Middleman Scam</h2> <p>The &quot;<a href="http://info.stevebrownapts.com/blog/bid/292049/9-Ways-to-Avoid-Apartment-Rental-Scams">middleman scam</a>&quot; is when a scammer pretends a property is available for rent on Craigslist and claims to be handling, or managing, the place for the &quot;real&quot; owners. They'll often claim the owner is out of the country and has trusted the place to them. This middleman will attempt to collect rent, a security deposit, and various fees and then will quickly disappear with your money. Typically, they'll use photos and property information copied directly from a real estate website and create a completely fake listing on Craigslist. Avoid this scam by insisting on seeing the property first and verifying that the place is actually for rent by talking directly to the landlord or neighbors.</p> <p>The bottom line is to always trust your gut instinct, especially in terms of the professionalism of the Craigslist listing and the ease (or lack thereof) of reaching the property owner directly. If something about the deal just doesn't seem right, then move on to the next apartment or rental home and avoid the strong potential for a scam. There will always be plenty of legit listings to meet your needs.</p> <p><em>Have you ever been the victim of a Craigslist housing scam? If so, how did it go down?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kyle-james">Kyle James</a> of <a href="http://www.wisebread.com/6-ways-to-apartment-hunt-on-craigslist-without-getting-scammed">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-vile-craigslist-scams-to-watch-out-for">8 Vile Craigslist Scams to Watch Out For</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-forget-to-budget-for-these-unexpected-moving-expenses">Don&#039;t Forget to Budget for These Unexpected Moving Expenses</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-safe-is-craigslist">How Safe Is Craigslist?</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-vicious-home-rental-scam-dont-get-conned">The vicious Home Rental Scam – don’t get conned.</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/countrywide-tried-to-steal-my-parents-money-how-you-can-avoid-being-a-victim-of-mortgage-servicing-f">Countrywide tried to steal my parents&#039; money - How you can avoid being a victim of mortgage servicing fraud</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Real Estate and Housing apartments craigslist renting scams Wed, 27 May 2015 15:00:09 +0000 Kyle James 1431269 at http://www.wisebread.com 5 Things Millennials Can Do to Buy a House Within the Next Decade http://www.wisebread.com/5-things-millennials-can-do-to-buy-a-house-within-the-next-decade <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-millennials-can-do-to-buy-a-house-within-the-next-decade" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple_new_home_000060136542.jpg" alt="Millennial couple who just bought a house together" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Millennials &mdash; children born between 1980 and the early 2000s &mdash; are tech savvy and educated, but they also face more financial stress than previous generations. Between high unemployment rates and costly student loan debt, it's harder for <a href="http://www.wisebread.com/4-things-millennials-should-do-today-to-prepare-for-retirement">Millennials to achieve financial independence</a>. As a result, many Millennials don't have immediate plans of buying real estate.</p> <p>If you're a Millennial, it might take longer to purchase your first property, but rest assured that homeownership isn't completely out of reach. With careful planning, there's plenty you can do to buy a house within the next decade.</p> <h2>1. Live With Your Parents a Few More Years</h2> <p>There's no shame in moving back home with your parents after college. For most Millennials, down payments and closing costs are the biggest hurdles to homeownership. Even with a full-time job, many Millennials simply don't have disposable income to save 5% to 20% for a down payment or come up with cash for other mortgage-related expenses.</p> <p>If you and your parents are okay with the idea, move back home and live with your folks while working full-time. Your parents will likely charge less rent than a landlord (or maybe you have a pair of those fiction TV parents who let their kids live at home rent-free &mdash; lucky duck!), giving you the opportunity to bank a lot of your income.</p> <h2>2. Get a Second Income Stream</h2> <p>If you can't move back home, secure another income stream and put this extra money toward your house fund. This approach gets you closer to your goal, especially if the money you earn from a full-time job only covers basic expenses and there's nothing left for building a down-payment fund.</p> <p>&quot;I was tired of rent increases and desperately wanted to buy, but didn't think it was possible, especially since all my income went to rent and other living expenses,&quot; says Erica, a 31-year-old English teacher from Chesapeake, Virginia. &quot;I sacrificed my free time and started tutoring and freelance writing on the side. I saved every cent, and in two years I saved a little over $7,000 for a down payment on a condo.&quot;</p> <h2>3. Adjust Your Spending Lifestyle</h2> <p>You're young and energetic, and naturally you want to have a good time. But if you're serious about buying a home within the next decade, you need to work in harmony with this goal and adjust your spending.</p> <p>Cash for a down payment and closing costs isn't going to fall out of the sky and miraculously appear in your bank account, so you need to make smarter decisions. It's okay to have a good time, but being young isn't an excuse to blow your money chasing fun or getting the latest electronic gadgets. The money you spend enjoying the &quot;good life&quot; can be put to better use, such as paying down debt or building your house fund faster.</p> <h2>4. Get Out of Debt</h2> <p>Between 2012 and 2013, approximately 60% of students graduating with a bachelor's degree&nbsp;<a href="http://trends.collegeboard.org/student-aid/figures-tables/average-cumulative-debt-bachelors-recipients-public-four-year-time">borrowed an average of $27,300</a>, and according to a 2014 Wells Fargo Millennial Study, &quot;About half of Millennials (47%) are using more than <a href="https://www08.wellsfargomedia.com/downloads/pdf/com/retirement-employee-benefits/insights/2014-millennial-study-report.pdf">half of their monthly incomes</a> to pay off various types of debt.&quot;</p> <p>Even if you have a job and cash to buy a house, lenders factor in your debt-to-income ratio. And unfortunately, if your monthly debt payments exceed 43% of your gross income, you might not qualify for a mortgage.</p> <p>Right now, paying off debt should be your biggest focus &mdash; and yes, student debt counts. You can also make headway if you take the above advice and live with your parents, or at least split living costs with a roommate.</p> <p>Making higher payments and living within your means also helps you overcome credit card debt. Too often, young adults are so concerned with having a certain type of lifestyle and keeping up with their friends that they live off credit cards and acquire massive debt at a young age.</p> <h2>5. Fix Credit Issues</h2> <p>According to Credit Karma, the average Millennial has a <a href="https://www.creditkarma.com/trends/age">credit score around 630</a>. There are mortgage programs specifically for borrowers who have a low credit score, but these mortgages come with higher mortgage rates, which means paying more interest over the life of the loan and a higher monthly payment. Improving your credit score will not only help you qualify for a mortgage within the next decade, it can result in a more affordable monthly payment.</p> <p>Paying down is one way to give your credit score a boost, but you'll also need to pay your bills on time, which accounts for 35% of your credit score. Applicants with credit scores in the mid-700s to 800s qualify for the most favorable rates.</p> <p><em>Are you a Millennial? Would you like to buy a house someday? Let me know what proactive steps you're taking toward that goal 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/5-things-millennials-can-do-to-buy-a-house-within-the-next-decade">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/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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/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> <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-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-its-actually-okay-to-be-underwater-on-your-home">6 Times It&#039;s Actually Okay to Be Underwater on Your Home</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-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s Mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing loans millennials mortgages new house Tue, 26 May 2015 21:00:09 +0000 Mikey Rox 1431001 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="/files/fruganomics/imagecache/250w/blog-images/When%20Should%20You%20Lock%20in%20a%20Mortgage%20Rate_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-9"> <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/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-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/5-appraisal-facts-that-could-save-you-big-money">5 Appraisal Facts That Could Save You Big Money</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-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</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-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</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 When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse http://www.wisebread.com/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple_home_improvement_000043083204.jpg" alt="Woman applying for mortgage loan without her spouse" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You and your spouse or partner are ready to apply for a mortgage loan. It makes sense to apply for the loan jointly, right? That way, your lender can use your combined incomes when determining how much <a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">mortgage</a> money it can lend you.</p> <p>Surprisingly, this isn't always the right approach.</p> <p>If the three-digit credit score of your spouse or partner is too low, it might make sense to apply for a mortgage loan on your own &mdash; as long as your income alone is high enough to let you qualify.</p> <p>That's because it doesn't matter how high your credit score is if your spouse's is low. Your lender will look at your spouse's score, and not yours, when deciding if you and your partner qualify for a home loan.</p> <p>&quot;If one spouse has a low credit score, and that credit score is so low that the couple will either have to pay a higher interest rate or might not qualify for every loan product out there, then it might be time to consider dropping that spouse from the loan application,&quot; says Eric Rotner, vice president of mortgage banking at the Scottsdale, Arizona office of Commerce Home Mortgage. &quot;If a score is below a certain point, it can really limit your options.&quot;</p> <h2>How Credit Scores Work</h2> <p>Lenders rely heavily on credit scores today, using them to determine the interest rates they charge borrowers and whether they'll even approve their clients for a mortgage loan. Lenders consider a FICO score of 740 or higher to be a strong one, and will usually reserve their lowest interest rates for borrowers with such scores.</p> <p>Borrowers whose scores are too low &mdash; say under 640 on the FICO scale &mdash; will struggle to qualify for mortgage loans without having to pay higher interest rates. They might not be able to qualify for any loan at all, depending on how low their score is.</p> <h2>Which Score Counts?</h2> <p>When couples apply for a mortgage loan together, lenders don't consider all scores. Instead, they focus on the borrower who has the lowest credit score.</p> <p>Every borrower has three FICO credit scores &mdash; one each compiled by the three national credit bureaus, TransUnion, Experian, and Equifax. Each of these scores can be slightly different. When couples apply for a mortgage loan, lenders will only consider the lowest middle credit score between the applicants.</p> <p>Say you have credit scores of 740, 780, and 760 from the three credit bureaus. Your spouse has scores of 640, 620, and 610. Your lender will use that 620 score only when determining how likely you are to make your loan payments on time. Many lenders will consider a score of 620 to be too risky, and won't approve your loan application. Others will approve you, but only at a high interest rate.</p> <p>In such a case, it might make sense to drop a spouse from the loan application.</p> <p>But there are other factors to consider.</p> <p>&quot;If you are the sole breadwinner, and your spouse's credit score is low, it usually makes sense to apply in your name only for the mortgage loan,&quot; said Mike Kinane, senior vice president of consumer lending at the Mt. Laurel, New Jersey office of TD Bank. &quot;But your income will need to be enough to support the mortgage you are looking for.&quot;</p> <p>That's the tricky part: If you drop a spouse from a loan application, you won't be penalized for that spouse's weak credit score. But you also can't use that spouse's income. You might need to apply for a smaller mortgage loan, which usually means buying a smaller home, too.</p> <h2>Other Times to Drop a Spouse</h2> <p>There are other times when it makes sense for one spouse to sit out the loan application process.</p> <p>If one spouse has too much debt and not enough income, it can be smart to leave that spouse out of the loan process. Lenders typically want your total monthly debts &mdash; including your estimated new monthly mortgage payment &mdash; to equal no more than 43% of your gross monthly income. If your spouse's debt is high enough to throw this ratio out of whack, applying alone might be the wise choice.</p> <p>Spouses or partners with past foreclosures, bankruptcies, or short sales on their credit reports might stay away from the loan application, too. Those negative judgments could make it more difficult to qualify for a loan.</p> <p>Again, it comes down to simple math: Does the benefit of skipping your partner's low credit score, high debt levels, and negative judgments outweigh the negative of not being able to use that spouse's income?</p> <p>&quot;The $64,000 question is whether the spouse with the bad credit score is the breadwinner for the couple,&quot; says David Reiss, professor of law with Brooklyn Law School in Brooklyn, New York.&nbsp;&quot;The best case scenario would be a couple where the breadwinner is also the one with the good credit score.&nbsp;Dropping the other spouse from the application is likely a no-brainer in that circumstance.&nbsp;And of course, there will be a gray area for a couple where both spouses bring in a significant share of the income. In that case, the couple should definitely shop around for lenders that can work with them.&quot;</p> <h2>You and Your Spouse Can Still Own Your Home Together</h2> <p>Spouses or partners might worry that not having their names on the mortgage loan application means that they don't have an equal ownership stake in the home.</p> <p>Fortunately, that's not true.</p> <p>Rotner says that couples just have to put both names on the home's title. If they do that, both will have equal ownership of the home, no matter whose names are on the mortgage loan.</p> <p>&quot;Title expresses ownership in a property,&quot; Rotner says. &quot;Being on the mortgage loan expresses a financial obligation to the property. There is a difference.&quot;</p> <p>Partners might have one other concern about being left off the mortgage loan: It will be more difficult for them to boost their weak credit scores.</p> <p>Every time consumers make their mortgage loan payments on time, it helps their credit scores. But partners whose names aren't on the mortgage loan won't see any benefit from on-time payments, even if their income is helping to pay the mortgage bill each month.</p> <p>&quot;That is a valid concern,&quot; Rotner said. &quot;But what is the trade-off? You either get to buy a home that you couldn't otherwise buy or you get a 700 credit score. What is more important?&quot;</p> <p><em>Are you and your spouse both on the mortgage? What about the title?</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/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse">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-10"> <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/6-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s Mortgage</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-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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/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> <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-things-millennials-can-do-to-buy-a-house-within-the-next-decade">5 Things Millennials Can Do to Buy a House Within the Next Decade</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/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit scores loans mortgages spouse Mon, 25 May 2015 11:00:16 +0000 Dan Rafter 1429779 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="/files/fruganomics/imagecache/250w/blog-images/7%20Steps%20to%20Take%20If%20Your%20Mortgage%20Application%20Was%20Declined_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-11"> <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/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-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/5-appraisal-facts-that-could-save-you-big-money">5 Appraisal Facts That Could Save You Big Money</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-simultaneously-buy-and-sell-a-house">How to Simultaneously Buy and Sell a House</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-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</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 5 Times You Shouldn't Rush to Pay Off Your Mortgage http://www.wisebread.com/5-times-you-shouldnt-rush-to-pay-off-your-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-times-you-shouldnt-rush-to-pay-off-your-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/father_daughter_000039463172.jpg" alt="Father not rushing to pay off his mortgage" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're fortunate enough to have disposable income, <a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">paying off your mortgage</a> early might seem like a smart way to spend your cash. It's definitely a better approach than wasting your money on shopping and recreation. And given how a mortgage loan can take up a third of your monthly income, getting rid of this debt lets you do other things with your cashflow. But just because you have extra cash to pay off a mortgage doesn't mean you always should.</p> <p>Here's a look at five times when you shouldn't rush to pay off your mortgage.</p> <h2>1. You'll Miss Out on Tax Advantages</h2> <p>During the first half of a 30-year mortgage, a large percentage of your mortgage payments go toward paying down the interest, so your principal balance only decreases a little from year-to-year. It's frustrating to say the least, but think twice before dumping your disposable cash on extra principal payments.</p> <p>Some people will jump at any opportunity to pay off their home sooner, but there are tax advantages to keeping a mortgage loan. If you itemize your yearly tax return, there's the option of writing off your mortgage interest payments and lowering your taxable income. This reduces the amount owed to the state and federal government, or it might result in a bigger refund. This single deduction reduces my tax liability by more than $2,000 a year.</p> <h2>2. You Don't Have Any Type of Emergency Fund</h2> <p>Everyone needs an emergency fund, period. It doesn't matter who you are or what you do, if you're a middle-income American, you're going to hit at least one rough patch in your lifetime. A six to 12-month cash reserve is your backup plan for unexpected expenses or major setbacks like a job loss. However, you might feel paying off your home takes priority over saving. Your home is your biggest investment, and naturally, you want to protect it. But ask yourself: How's your savings account looking?</p> <p>If you have plenty of cash in a rainy day fund to handle life's curveballs, paying off your house early isn't a bad plan. But if you don't have any type of emergency savings, the focus should be on building your account. Paying more toward your principal builds equity and gets you closer to owning the property outright, but this plan might backfire if you find yourself unemployed without a cushion.</p> <h2>3. You Don't Have a Solid Retirement Plan</h2> <p>A few years ago I had a conversation with a couple that was committed to paying off their 30-year mortgage early. They put every extra cent toward their mortgage, sometimes paying an extra $400 or $500 a month. Both were in their early 40s, and despite their age, neither had started saving for retirement.</p> <p>Their plan was to focus on retirement planning after paying off the house. From their point-of-view, the house was their retirement. Without a mortgage, they wouldn't need as much monthly income later in life. I understand their thinking, but there are no guarantees a plan like this will work.</p> <p>Their plan didn't take into account curveballs like long-term unemployment due to illnesses or layoffs. If for some reason they couldn't pay their mortgage, they would potentially lose their house and their equity &mdash; and essentially their retirement.</p> <p>There's nothing wrong with paying extra toward your mortgage, just make sure you're also planning for the future and saving enough for retirement.</p> <h2>4. You Have High Interest Debt</h2> <p>What you paid for your house is probably more than what you owe on credit cards, and getting rid of your biggest expense may seem like the best way to attack debt. But although we spend hundreds of thousands of dollars buying a house, average mortgage interest rates aren't as high as some credit cards'.</p> <p>Credit card debt is a never-ending battle, especially when you have a high interest rate and you're only paying your minimum. Paying off your mortgage early is an excellent goal, but don't rush. Make high-interest debt your priority. These include credit cards, personal loans, and other lines of credit. Besides, paying off these debts gives your credit score a boost. Once you have these creditors off your back, you can focus on paying off your mortgage.</p> <h2>5. You Have a Prepayment Penalty</h2> <p>Some mortgage lenders stick borrowers with a prepayment penalty, which is basically a fee for paying off their mortgages early, usually within the first five years. This penalty discourages early pay-offs. Lenders calculate an estimated rate of return for each loan, and the longer a borrower owes on a loan, the more a bank earns.</p> <p>Typically, a prepayment penalty only applies to refinances and cash payoffs, and most banks waive the fee if a borrower sells the home. If you're coming into money and thinking about paying off your home, read your paperwork to learn whether your mortgage has a prepayment penalty.</p> <p><em>Did you pay off your mortgage early? Do you have other tips on why we shouldn't? I'd love to hear your thoughts 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/5-times-you-shouldnt-rush-to-pay-off-your-mortgage">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-12"> <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-reasons-why-2015-is-the-year-to-buy-a-house">5 Reasons Why 2015 is the Year to Buy a House</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-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</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/six-options-if-youre-underwater-on-your-mortgage">6 Options if You&#039;re Underwater on Your 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/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">The 5 Best Pieces of Financial Wisdom From Warren Buffett</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing debt investments mortgages savings Mon, 18 May 2015 09:00:11 +0000 Mikey Rox 1421641 at http://www.wisebread.com 6 Times It's Actually Okay to Be Underwater on Your Home http://www.wisebread.com/6-times-its-actually-okay-to-be-underwater-on-your-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-times-its-actually-okay-to-be-underwater-on-your-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/house_mortgage_water_000021615609.jpg" alt="Times it&#039;s okay to underewater on your home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In the last decade or so, it's become quite common for people to find themselves underwater on their home loans. When real estate values plummeted around 2008, millions of people ended up owing more than what their properties were worth. This led to mass foreclosures and big financial problems throughout the country.</p> <p>Being underwater on your home is rarely a good thing, but there are some cases when homeowners can get through unaffected as long as they are responsible and otherwise in good financial shape.</p> <p>Here's a look at some cases when owing more than you own is not the worst thing in the world:</p> <h2>1. If You Have No Immediate Plans to Sell</h2> <p>The best advice for anyone who is underwater on their home is to stay put. It's obviously hard to predict what life may throw at you, but if you've purchased a home with the intention of staying in it for a long time, being underwater on <a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">your mortgage</a> doesn't matter too much. This is especially true if you have a fixed-rate mortgage and are making the monthly payments without trouble. Someone who continues to live in a home really doesn't need to worry about its value. If you keep making payments, you'll eventually own the home free and clear, no matter what happens to real estate values.</p> <h2>2. If You're Working to Make Your House More Valuable</h2> <p>You might find yourself underwater, but if it's because you've spent money to boost the overall value of the home, it's probably okay. Maybe you renovated the entire kitchen or even added a family room or bedroom. Maybe you spent money to finish the basement. This money should be viewed as an investment that will pay off down the road. Just make sure you continue making payments on the mortgage in the meantime, as you wait for the value of the home to shoot up.</p> <h2>3. If the Home Is Generating Healthy Rental Income</h2> <p>If you're renting out the home and have tenants with good credit, being underwater is okay. If you're lucky, the rental income will meet or even exceed the mortgage payments. Be sure to have a plan if the rental income goes away, however.</p> <h2>4. If You Want to Offset Capital Gains</h2> <p>Generally speaking, selling a house for less than you paid for it isn't a good thing. But if the house is not your primary residence, there may be ways to save on your taxes by selling at a loss. If you own a rental property for more than a year, you may be able to sell it at a loss and have this count as a reduction of your income. This is called a <a href="http://www.irs.gov/publications/p544/ch03.html#en_US_2014_publink100072547">section 1231 loss</a>, according to the IRS. You can also use a capital loss to offset a capital gain, if you made a profit on another property. Note that this only works for investment properties, not for properties serving as your primary residence.</p> <h2>5. When Your Property Taxes Will Be Reduced</h2> <p>One of the silver linings about seeing a house decline in value is that you might pay less in property tax. If you're paying 1.25% annually in property tax, and your house has declined in assessed value by $50,000, that's a $675 savings. If your plan is to stay in the house for a long time, then you should be pleased to pocket a little bit of extra savings. Note that in these cases, there may be a difference between the home's market value versus the local government's assessed value for tax purposes, so check with your municipality.</p> <h2>6. If You Are Getting a Good Return on Your Money Elsewhere</h2> <p>These days, interest rates are so low that there's less of an incentive to make extra mortgage payments. You may feel tempted to boost your payments to ensure that your equity is more than what you owe, but if you have no plans to sell immediately, you may be better off placing that money in the stock market or other investments. As long as you continue making payments on the house, you may find that earning a 9% return from an index fund is a better deal than pumping the mortgage.</p> <p><em>Have you ever been underwater on a home? How did you deal with the situation?</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/6-times-its-actually-okay-to-be-underwater-on-your-home">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-13"> <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-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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/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> <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-things-millennials-can-do-to-buy-a-house-within-the-next-decade">5 Things Millennials Can Do to Buy a House Within the Next Decade</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/6-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s Mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing home ownership loans mortgages values Mon, 11 May 2015 15:00:11 +0000 Tim Lemke 1414191 at http://www.wisebread.com 6 Money Moves to Make for Tomorrow's Mortgage http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-money-moves-to-make-for-tomorrows-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/house_keys_000044377414.jpg" alt="Money moves to Make for Tomorrow&#039;s Mortgage" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Borrowers who start preparing for a mortgage loan long before they're actually ready to apply for one are making the right move. They can identify potential trouble spots early enough to resolve them before lenders start picking apart their financials. Prepping for your mortgage application as long as a year ahead of time? That's not a bad plan, say mortgage lenders.</p> <p>Here are six steps you can take today to get ready for that mortgage application tomorrow.</p> <h2>1. Study Your Credit Report</h2> <p>Your first move should be to order your free credit report from <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a>. You are allowed one free copy of your credit report from each of the three national credit bureaus &mdash; TransUnion, Equifax and Experian &mdash; every 12 months. Don't order your reports from anywhere else. Other sites might try to charge you or provide their own reports rather than those from the big three bureaus.</p> <p>Once your report arrives, study it carefully. Your report will list basic information such as your name and address. But it also lists your open accounts. If you owe $10,000 on a car loan, your report will list it. If you owe $5,000 on a credit card, that information will be there, too.</p> <p>Your report will also list any negative judgments against you. This could be something big, like a foreclosure or past bankruptcy filing. This section will also list late payments on student loans, car loans, credit cards, and other debt. These negative judgments can all <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">cause your credit score to drop</a>.</p> <p>If you find any errors &mdash; maybe you never did make that late payment on your car loan, or maybe you paid off and closed that credit card account years ago &mdash; make sure to ask for a correction. This is easier today: <a href="http://www.experian.com/disputes/main.html">Experian</a>, <a href="https://www.ai.equifax.com/CreditInvestigation/home.action">Equifax</a> and <a href="http://www.transunion.com/dispute">TransUnion</a> all let consumers dispute report information online.</p> <h2>2. Get Your Credit Score</h2> <p>The information in your credit report is used to determine your credit score. Lenders rely on credit scores to determine the interest rates they charge consumers. And if your score is too low, you might struggle to qualify for a mortgage at all. Lenders today generally consider a FICO credit score of 740 or higher to be an excellent one.</p> <p>Unlike your credit report, your credit score usually isn't free. You can order your score from any of the three credit bureaus. If your score is low &mdash; say, under 700 on the FICO scale &mdash; it's time to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score">take some steps to boost it</a>.</p> <h2>3. Pay Down Your Debt</h2> <p>If you are using too much of your available credit, your score will suffer. Pay down as much of your credit card debt as possible before you're ready to apply for a loan. But be careful. It often doesn't make sense to completely close a credit card account. If you close a credit card &mdash; and take away that available credit &mdash; the percentage of your credit that you are using could automatically soar. Better to pay off your credit cards but not close them.</p> <p>Framarz Moeen-Ziai, senior vice president of national sales and production for San Ramon, California-based Commerce Home Mortgage, says that credit card management is key for consumers preparing for a mortgage application.</p> <p>&quot;Some people live their lives on mileage cards. They charge everything because they want to earn their miles. Then they pay off the entire balance at the end of the month,&quot; Moeen-Ziai says. &quot;That's fine. But what if we get your credit information at the same time you have $7,000 or $8,000 worth of charges on a card with a balance of $10,000?&quot;</p> <p>Moeen-Ziai says that he's seen big credit swings because of balance management.</p> <p>&quot;If your balance is zero, your score is 770. If it's nearly maxed out, it might fall to 700,&quot; he says.</p> <h2>4. Pay Your Bills on Time</h2> <p>The other big drag on your credit score? Missed or late payments on credit cards, auto loans, student loans, and other forms of revolving credit. Resolve now to never again make a late payment. Your score will gradually rise as the months of on-time payments pass by.</p> <h2>5. Calculate Your Debt-to-Income Ratio</h2> <p>Lenders prefer to work with customers whose debt-to-income ratios are 43% or lower. What does this mean? That your total monthly debts, including estimated monthly mortgage payments, equal no more than 43% of your gross monthly income. If your debt-to-income ratio is higher than 43%, it's time to either boost your monthly income or pay down as much debt as possible.</p> <h2>6. Talk to a Lender</h2> <p>You might think you're wasting a lender's time if you're not prepared to apply for a mortgage loan in the next three, six, or even 12 months. Stop thinking that way. The sooner you speak with a mortgage lender about your finances, the more time you have to prepare for a mortgage. And just because you talk to a lender, doesn't mean you have to actually take out a mortgage loan with that professional.</p> <p>&quot;My advice is to call a lender as early in the process as you want to,&quot; says David Atis, senior loan officer with Home Point Financial Corporation in Parsippany, New Jersey. &quot;You want to work with someone who is ready to go on the journey with you, not someone who refuses to work with someone who isn't going to close in the next 30 days.&quot;</p> <p><em>Did you prepare for a mortgage application in advance? What steps did you take?</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/6-money-moves-to-make-for-tomorrows-mortgage">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-14"> <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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-prepare-for-a-home-purchase-in-2010">How to Prepare for a Home Purchase in 2010</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-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</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/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> <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/5-things-millennials-can-do-to-buy-a-house-within-the-next-decade">5 Things Millennials Can Do to Buy a House Within the Next Decade</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit reports credit scores home buying loans mortgages Fri, 08 May 2015 11:00:08 +0000 Dan Rafter 1410183 at http://www.wisebread.com 5 Essentials to Consider Before Buying a Vacation Home http://www.wisebread.com/5-essentials-to-consider-before-buying-a-vacation-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-essentials-to-consider-before-buying-a-vacation-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/5%20Essentials%20to%20Consider%20Before%20Buying%20a%20Vacation%20Home_PHOTO_NEW.jpg" alt="Couple relaxing in a vacation home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Sponsored by Chase Mortgage Banking.&nbsp;<a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C652%7C1969&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.</em></p> <p>Wouldn&rsquo;t it be wonderful to have a little place waiting for you on a tropical island or a woodsy lake? Apparently a lot of Americans think so: second home purchases were up by a nearly a third in 2013 <a href="http://www.realtor.org/news-releases/2014/04/vacation-home-sales-surge-in-2013-investment-property-declines">according to</a> <a href="http://www.realtor.org/news-releases/2014/04/vacation-home-sales-surge-in-2013-investment-property-declines">the National Association of Realtors</a>. The pros are pretty obvious. It&rsquo;s a place where your family could make memories over generations; an opportunity to become part of a vacation community and make new friends you see year after year; and a place for getaways that require little planning. But there are also cons to owning a second home, compared to other vacation options. You may yearn for variety after spending a few summers in the same town, or the chores involved might make vacation feel like work. Here are five critical questions to ask yourself before you make the leap.</p> <p>Does that vacation property meets your needs? Review the <a href="https://www.youtube.com/watch?v=EHY1LJBUIcY">video below to find out</a>.</p> <p><iframe width="560" height="315" src="https://www.youtube.com/embed/EHY1LJBUIcY" frameborder="0" allowfullscreen=""></iframe></p> <h3>Do You Have Enough Saved for the Down Payment?</h3> <p>You may have bought your primary home with only five percent down, but that&rsquo;s not likely to happen for a second home purchase, which is considered a riskier deal from a bank&rsquo;s point of view. Lenders may ask for <a href="http://www.realestate.com/advice/should-you-buy-a-vacation-home-84561/">30 to 40 percent</a>.</p> <h3>Have You Taken the Expenses Into Account?</h3> <p>Beachfront properties can take a beating from storms and sun, and houses that sit empty for long stretches or get beaten up by renters may have higher maintenance expenses. Some families have found themselves paying tens of thousands in maintenance costs for every week that they actually use their vacation home &mdash; money that could put you in a five-star hotel instead. One adviser recommended this rule of thumb: if the total costs from both your primary and second home add up to <a href="http://www.bloomberg.com/news/2014-08-13/bought-a-new-vacation-home-i-m-so-sorry-.html">less than 30 percent of your income</a>, you&rsquo;re good to go. If not, think twice. Beyond maintenance, you need to account for homeowner&rsquo;s association fees, furnishings, taxes and possibly the costs of an additional vehicle.</p> <h3>Do You Understand the Tax Implications?</h3> <p>Income tax rules governing your vacation property may be different than those for your primary home when it comes to <a href="http://www.irs.gov/publications/p936/ar02.html">mortgage interest deduction</a>, <a href="http://www.investopedia.com/articles/pf/07/vacation_home.asp">profit from sale</a>, <a href="http://www.irs.gov/taxtopics/tc415.html">profit from rent</a> and other issues. Then you will have to note your property tax responsibility for the second home too. Consult an accountant to get a clear picture of the taxes you will owe.</p> <h3>How Stressful Will it Be?</h3> <p>Advertisements frequently tout &ldquo;stress relief&rdquo; as one of the benefits of a vacation home. But real-life owners know that in some ways, owning a second property can add stress to your life. First, there&rsquo;s maintenance. Unless you are wealthy enough to pay a caretaker or other employee to maintain your vacation home, part of every &ldquo;vacation&rdquo; there is likely to be taken up by fixing, painting and making service appointments. &ldquo;People become slaves to their homes,&rdquo; <a href="http://www.nytimes.com/2010/07/24/business/24wealth.html?pagewanted=all">Milton F. Pedraza, chief executive of the Luxury Institute, told the <em>New York Times</em></a>. For just the end of the season, there is a <a href="http://buildipedia.com/at-home/design-remodeling/summer-vacation-property-maintenance-interior-exterior-checklists">20-point list of recommended maintenance chores</a> for summer cottages. You&rsquo;ll also need a plan in place for <a href="http://www.houselogic.com/home-advice/maintenance-repair/maintain-your-vacation-home/#.">emergency repairs in your absence</a>. Then there&rsquo;s worry. Will you fret about possible break-ins or bad weather when you are miles away from your property? If you rent the property out, you will have to either pay a management agency or deal with the inevitable work of answering tenant queries and cleaning up after their messes.</p> <h3>Are You Buying as an Investment or a Luxury?</h3> <p>When the real estate market was on a long boom, many people saw a second home an investment whose value increase would offset expenses. But the <a href="http://www.wsj.com/articles/SB122002210930483439">crash changed that</a>. Nowadays, experts are split on whether buying a vacation home is a good investment. Many warn that expenses eat up any rental income the property may generate when you&rsquo;re not using it. &ldquo;Financially, most vacation homes are probably a train wreck. I&rsquo;ve had one for about 10 years and to be totally honest I&rsquo;ve never made enough cash flow to cover my mortgage,&rdquo; <a href="http://www.biggerpockets.com/blogs/2872/blog_posts/24097-are-vacation-homes-good-investments">wrote real estate investor </a><a href="http://www.biggerpockets.com/blogs/2872/blog_posts/24097-are-vacation-homes-good-investments">Dave Van Horn</a>. Others point out that the market for vacation homes is <a href="http://finance.yahoo.com/blogs/breakout/the--luxury--investment-even-the-missle-class-should-consider-141146807.html">recovering more slowly</a> than the rest of the real estate market, so bargains might still be get-able that would put the buyer in the position to cover expenses through appreciation and rental income. And, the emergence of the sharing economy via companies like Airbnb have made it easier for property owners to get generate cash with vacation properties.</p> <script type="text/javascript" charset="utf-8" src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/88244652/289_1969.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/5-essentials-to-consider-before-buying-a-vacation-home">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-15"> <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/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-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/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/5-appraisal-facts-that-could-save-you-big-money">5 Appraisal Facts That Could Save You Big Money</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 vacation home Mon, 04 May 2015 11:00:40 +0000 Carrie Kirby 1368909 at http://www.wisebread.com