Month : April 2014

Home Ownership

Things to Consider When You Buy Your First Home

Buying your first home is an exciting experience and it is one that you’ll remember for the rest of your life. Although memorable and, in some ways magical, moving home can also be an incredibly stressful time, and it is one that, if not planned correctly can take a strain on your health. One of life’s biggest decisions, the decision to move home should never be taken lightly. Here are three things you have to consider:

Creating an Extensive Pros and Cons List

Every single angle must be covered when you’re looking to move home. Most people make a pros and cons list about the house itself, but very few actually pause to make one about the financial ramifications of buying the house itself. Yes, it is undoubtedly important that you make one about the place you intend to live, but it is also important that you make one about the debt you accumulate, because you may have that debt for as long as you have the house.

Consider the Impact of Any Existing Debt

From student loans to credit cards, we all seem to have debt these days, with collective debt in Britain worth £1,430,000,000,000 (£1.43 trillion). If you have a large amount of debt then the decision to take on a mortgage as well should be carefully considered.  To simplify your outgoings, you could choose to consolidate your loans to one monthly payment.* Of course, this doesn’t solve the problem entirely and may increase the amount you repay overall, but depending on your level of debt, it could help you bring everything under control.

Consult Parents and a Financial Advisor

All financial decisions should be carefully thought out.  When making a decision of this magnitude, it can be helpful to consult with parents and a financial advisor.  Parents are always a good starting point, and they know everything about you as a person and whether a home is right for you. When it comes to financial intricacies, however, they may not be right and, if so, don’t hesitate to consult a financial planning expert, as these people can help you decide what’s affordable for you and what isn’t, helping to prevent you from struggling further down the line.

Moving house is an exciting process, but it can also be incredibly stressful. You have to consider every single stage of the process in turn before deciding to move and, if you fail to do so, your exciting experience could turn out to be a little stressful. The three things mentioned above are essential and, if you do this, you’ll be heading in the right direction.

*Consolidating your debt may increase the amount you pay back overall and extend the repayment period of your debts.

Money Management

Save Money on Everyday Things

There are lots of ways to save money – and most of them are mechanisms that we take very much for granted. But how do we seek out deals and whether or not those deals are actually worth the few pennies they might save?

Internet Shopping

We already know that one of the best ways to save money is to order something online instead of shopping for it in a local store. Unfortunately, if you aren’t careful, the cost of shipping stuff to you will usually more than make up the difference for what you saved on the sticker price of an item. One of the best ways to save money is to shop online and use a coupon code.

Coupon codes are easy to find—there are entire sites, like Couponshoebox.com, that are built around sharing the discount and coupon codes offered up (sometimes barely publicly) by web vendors.  For example, if you are interested in options trading, you can apply an Optionshouse promo code to start a stock trading account and receive some bonus offers. You can also search the site for things like deals on Netflix or a gift from a children’s store for your kid. Before you click “pay now” on your shopping cart, check a promo code warehouse to help you save even more money (a simple Google search can yield dozens of results).

Deal Websites

When Groupon first rolled out everybody went nuts buying up all of the deals and offers they could. It didn’t take long before people figured out that, if they weren’t careful, they were literally throwing money at site simply for offering them deals. That said—if you take some time to actually search through these sites and only buy the deals you know that you will actually use and not the deals you think or hope you’ll use (hint: check for deals that are expiring soon because they’ve usually been given extra discounts), they can be a great place for savings.

Coupons

Coupons are a particularly troublesome money saver. This is because most of the time they don’t save you very much money at all—even when you only use them on things you want and use regularly. The trick to coupons is to only use coupons printed by manufacturers. Store coupons look like better deals but they are typically only on items that have recently been marked up or that the store is having trouble moving off of the shelves. Go directly to brand and manufacturer’s sites for the best deals and coupons.

Store Programs

Store programs can actually be pretty great. You sign up for a card at Safeway, Albertsons, Fred Meyer, wherever. Every time you shop, you swipe your card. The system tracks what you buy and spits out coupons for the things you buy the most—and the deals are usually pretty great. These programs will also track how much you spend and give you points. You can trade in these points for things like gas discounts, free coffees from in store coffee shops, etc.

Some stores, like Fred Meyer, will send you a gift card based on your point value for a sales quarter ($1=1 point. 785 points=$7.85 gift card). The only drawback is that you have to be okay with sharing your information with the store. Some people aren’t too keen on that.

Really, the difference between a good deal and a scam is often time—your time. If you take real time to seek out and research the discounts and deals you find, you can save a lot of money. It’s when you take something at face value that you start to get in trouble. 

Bankruptcy

Declaring Bankruptcy Can Be A Way Of Getting Relief From Your Debts

You are struggling with lots of debts currently, and it seems to be impossible for you to repay your loans. You can seek professional help by means of which you can go for proper debt management. One of the effective ways can be debt consolidation by means of which you can clear off your debts. However, in this context, you will have to remember that you use your debts wisely. On the other hand, it is also a good way to clear off your debts by declaring bankruptcy. You can start fresh with a life free from debts. However, prior to filing for it, you will have to have adequate knowledge on it.

Clearing Your Debts Legally:

Bankruptcy is a process through which you will be able to clear off your debts with the help of bankruptcy court. There are chapters 7 and 13 and you can file your case in any of these chapters based on your debt condition.  Filing bankruptcy can be your last resort because it can clear your credit report over the years. Based on the amount of debt you owe to your creditors, you can choose the chapter. If you are not much confident, you can always talk to a professional.

Reaping The Benefits:

It is true that many people will advise you not to file for bankruptcy, and the society will look down upon you as bankrupt, but there is of course a positive side to it. It can be a great source of relief to people like you who are drowning in debt. As you file for bankruptcy, your debts will be cleared, and you will not be legally obliged to your creditors. If you file under chapter 13, you will not have to be worried about your properties and the Federal court will pay off your debt. Even if, your possessions have been taken by any of your creditor, he will be instructed to return the possession.

Halting The Process Of Foreclosure:

If you have not succeeded in making your home loans, the bank might start the process of foreclosure to sell your property. However, as you file for bankruptcy, the bank will have to stop the process on the instructions of the court. They will give you some more time to clear personal loansoff the outstanding debts. Thus, you can be assured that it will help you to clear off many debts so that you are able to start fresh once again.

However, there is much other information that you should acquire before declaring bankruptcy. You might have to experience some problems based on your situation. You should talk to a professional properly so that you are successful in fetching the most important details before making any move. In addition to that, you will also have to find out the suitable chapter for you on the basis of which you can make your filing. It is only after thorough information and details that you should be able to go for the best.

Debt Management

Credit repair – Is it really needed?

Credit repair can mean rebuilding your credibility in the eyes of the lenders. While doing this is no overnight activity, it is not an impossible one too.

As you know, credit score is the most important thing in individual’s life as by people’s credit score lenders decide weather to lend money or not, to qualify for home loan, business loans, auto loan everything depends on the credit score. Even the rates given on insurance also depend on the credit score of a person. There are firms which give you ways to repair your credit score quickly but most of them are scams so here are some techniques which are not recommended by us for credit repair.

1. Selecting and taking the services of a credit restoration agency

There are many companies who promise to repair your credit report. If you are thinking to hire such companies then wait for a while and go through this article further to know about it more.

According to Ken Lin, CEO of credit karma, there are many companies who give advertisement to repair credit report to lure poor customers and basically they don’t help you out of it rather than they will help you to file bankruptcy which is not a part of credit repair. If you have decided to hire any of these companies for repairing of credit report then make sure that you go to a genuine company. You can judge which company is genuine by few points 1) if a company wants fees to be paid before service is provided then understand that company is not genuine. 2) If the company is not telling you your legal rights then assume that company is not genuine. 3) If the company says you not to contact the credit reporting agencies directly then assume that the company is not genuine at prlog.

You cannot get your credit report by throwing money on credit reporting agencies. All you can do is look for genuine ways which can help you to clear negative remarks from your credit report. It is best that you should keep a look on your credit report every 3 months so that you can get your credit report rectified if there is any sort of mistake done by credit reporting agencies.

2. File Segregation – Right or wrong

File segregation means creation of new credit file by making an application for employer identification number from IRS. Once you get your EIN then you can apply for credit from your EIN number rather than social security number. This thing is considered as fraud and some of the credit repair companies use this technique to repair your credit report.

3. Consolidating debts 

Usually credit reporting agencies derive your credit score by looking on the total credit used by you from the available credit. They even look at the time since your credit account is opened. So because of this consolidating your account can spoil your credit score because it will increase the amount of credit and can decrease the length of your credit account from time since it is open. Even if you consolidate all your account then also it will put a negative impact on your credit score because 10% of credit score is based on the new credit account which you open.

4. Getting the discrepancies removed from your credit report 

Some credit repair companies claim that they can get your entire negative remark remove from your credit report. They tend to say that the credit reporting agencies will clear all the negative remarks from your credit report for 30 days while they will investigate the problem but actually it is not true, while even at the time of investigation the negative remark remains on your credit report until and unless problem is found.

5. No credit – An oath 

There is no compulsion that you should use your credit, you can avoid using them buy not buying home, car, shopping, booking tickets, hotel rooms, and shop online. All these things are difficult to do online but you can manage to book all this offline by paying cash. All these things are fine which you can forget to do but don’t forget to clear off all your debts because your lenders will not forget you.

These are just few of the options or the steps which you can take in case you are looking to repair your credit report. However, there are a lot of people who take multiple loans without even being aware of their credit report and the scores. This mostly happens in the cases when you have a really good credit score and whatever loans you apply for gets approved by the lenders without any queries regarding your financial credibility. However, things are fine till the time they are. Once you get stuck in any kind of financial issues, repayment of multiple loans can pose a lot of problems for you.

Looking at the current economic situation dealing with the perennial issues of recession are in no ways easy. The financial meltdown which basically dates back to 2008, has its affects felt even today. There are a lot of people who have suffered losses in business or have lost their jobs due to recession and for them loan repayments have become a tough commitment to meet. They are looking out for ways to maintain their credit rating from falling and at the same time keep up with their payments.

One of the best ways to deal with your finances in such situations is to keep your spendings to the minimum.

Home Ownership

Prepare to get rid of the hurdles in home loans

Getting home loans was never as tough as it is today. However, knowing the hurdles you may face in getting these loans can make your work a lot easier and can guarantee your success for approval of the same. 

When the situation gets tough everything gets tough. Well, the same applies to loans, the lending business and even the financial status of the individuals. If you are really wondering what we are talking about, you need to just look at a few years back only. The state of recession fuelled by the sub- prime crisis, triggered an atmosphere of uncertainty where people got fear for their financial security.

Lenders too suffered huge losses on account of non-payments and defaults by customers. There were several lenders and the credit card companies at prnewswire.com which suffered because of the bankruptcy filing and the foreclosures. The market had less buyers which deflated the cost of the properties and thus the foreclosed properties could not be sold by the banks and the lenders forcing them to bear heavy losses.

All this saw the lending norms of the lenders getting tough. Qualifying a loan was no longer an easy task for the borrowers. They had to complete a detailed process and the need for documentation rose to the higher levels. When it came to the approval of the home loans, getting them became all the more difficult. looking at the huge amounts involved in these loans and the losses suffered by the lenders in the past, these loans took a longer time to get approved.

However, for an individual buying a home in all and all cash transaction was never easy. There are almost 90% of the customers who still prefer taking a home loan to buy a house and are ready to fulfil the tough lending norms , no matter what it takes them.

Here are some points which prove to be a hurdle for people getting approval for home loan.

1)      Higher credit score requirement: to get approval for home loan a borrower have to maintain perfect credit score for attaining best deal available in market. Although a little lower credit score can also help you to get approval for loan but higher interest rate and fees is charged by people who have a little low credit score. Every lender have minimum credit score criteria set which have to be maintain by borrower to get approval for loan. If in case a borrower don’t fit to the minimum criteria of credit score then he will face difficulties in getting approval for loan and if in case his loan get approved then he have to pay very high interest on the borrowed sum.

2)      Greater scrutiny of income and asset: now a day’s lender has started verifying assets and income of borrower before lending them money for mortgage. This is because lenders want surety that borrower can repay the loan amount and this surety can be gained only when a borrower will prove that he can manage to pay off the loan amount easily and have an asset which he can pledge with lender as collateral against the loan amount.

3)      Every changing borrower requirement: earlier lenders only use to look for a decent credit score to give approval for loan to buy any size house but now they have set many criteria’s for borrower to qualify for getting approval of loan. Now a borrower should have at least 700 credit score to get loan approval. If in case they get approval for loan at credit score less than 700 then they have to pay high interest amount on the borrowed sum. Even they should have total debt ratio below 36%, he also have to arrange for minimum 20% down payment and should have a stable job to get approval for loan.

4)      Home appraisals are coming low: due to short sale of home the prices of real estate is going down day by day which has made home appraisals low. Now a days appraisals are completed by appraisers who are inexperienced and don’t know much about the market in which they are working. Because of all this all loan application are being rejected. This is because the interest rates are so low that lenders don’t lend money unnecessarily. For home buyer it is the best time to buy home as mortgage will be available to them with very less interest rates.

5)      Fewer opportunities for small business owners and independent contractors: there is a loan which is named as liar loan in which there is no need of documentation to present in front of lender from borrower. By the help of this loan some borrower deceives their way to get mortgage which they were not getting because of their poor credit score. but these loans have proved to be very helpful loan for people who are self employed and who don’t get regular pay check so they can use t to show lender as a prove of their income to avail fiancé in future. This money is used by businessmen to pay themselves the minimum amount required too get rid of payroll taxes.

6)      Condo purchases face additional tests: condo loans are the toughest loan which don’t get easily approved as other loans get easily approved. These loans are not easily approved and for people with bad credit score is impossible to get qualify for these loans even if they are ready to pay the highest interest rate which lender can charge against the total amount of loan.

So, just check out the hurdles and prepare yourself to cross them with ease.