Month : April 2017

Home Ownership

The Hidden Costs of Buying a Home

First-time home buyers are often unprepared for the hidden costs of buying a home. After they have negotiated with the seller and agreed upon a purchase price, and have received verification from their lender for a mortgage, they are hit with a variety of other expenses that will likely increase their costs by an average of 3 to 6 percent of the home’s value.

For the uninitiated, here’s a list of some of the extra expenses you can expect when buying a home:

Points or Loan Origination Fees – These are upfront payments of the interest that you owe your lender for providing your mortgage. They can range up to 3 percent of the loan amount.

Broker Fees – If you acquired your mortgage through a broker, you will have to pay a fee for the service.

Home Inspection – It’s very risky to buy a home that hasn’t been professionally inspected for any potential problems or defects, and most lenders require an inspection. That cost accrues to you.

Appraisal – Your lender will typically expect you to have the home appraised to ensure that the property value and selling price are correct.

Survey – Many lenders will require you to pay for a survey to determine if there are any inconsistencies in the property’s boundaries.

Credit Report – You will have to pay for a credit report so that your lender can determine your credit worthiness, and to set the loan’s interest rate. You may want to have your credit card debt resolved at this time.

Title Search and Insurance – You will have to pay a title company to examine the ownership records of the property in order to discover any outstanding liens. You will also have to pay for a policy to ensure against errors in the title search.

Private Mortgage Insurance – If your down payment is less than 20 percent, you will have to pay private mortgage insurance as an added cost to your monthly mortgage payment.

Home Insurance – Your lender will require that you purchase a homeowner’s insurance policy that is sufficient to protect its investment in your property.

Document and Recording Fees – In order to properly record the transfer of real property, you will have to pay a variety of fees to local, county and/or state municipalities.

Escrow Fees – These fees are charged to process the paperwork and keep your money in a safe place while you and your seller negotiate final details of the sale.

Real Estate Taxes – You will be liable for taxes on your new home to be paid either yearly or as part of your monthly mortgage payment. You will also have to pay prorated taxes upfront before you can claim title.

Junk Fees – Don’t be surprised at a variety of “junk fees” that can show up on your closing statement. Courier service, wire transfers, credit insurance, inflated recording fees, underwriting and processing fees can all add hundreds of dollars to the cost of buying a home.

Move-In Costs – Don’t forget that you will also need to hire a moving company to move your belongings. You may also need to purchase new carpeting, furniture, appliances, etc.

While some fees can be waived or negotiated, others cannot. So before signing on the dotted line, make sure you understand all the hidden costs of buying your home.

Also, be prepared that you may have to return to your lender at some point in the near future, either to refinance your home or to modify your mortgage. And be sure to look into the hidden costs of those options, as well, before committing to them.

Insurance

Short Term Car Insurance Deals

Oftentimes, we find ourselves committing to financial obligations that we actually do not need and this is severely compromising our personal finance. Take for example the dilemma of getting a car insurance. For a typical family car, one that you use everyday, getting a 12-month comprehensive car insurance policy is a no-brainer since you need to make sure that your car is well covered for any and all eventualities that may happen on the road or elsewhere. 

However, there are plenty of scenarios where this long-term car insurance plan may not sound as rosy. For example, if you are planning to lease a car for a day or two because your personal car is stuck in the garage for repairs, what do you do? You can always include the insurance in the lease but then again, doesn’t that significantly drive the price up causing you to spend more than what you need to? The same can be said of weekly car rentals for travels and holidays. Are you driving fromLondontoParis, for example? You certainly need a car insurance to cover all the risks that you are incurring while on the road and a monthly-long car insurance policy will certainly not cut it. 

If only there is such a thing as a one-day or one-week car insurance offer… 

As it turns out, this is the very logic behind short term car insurance deals. These are policies designed to do away with the unnecessary, long-term insurance coverage that can straddle you with spending you do not need. It’s time to do away with car insurance that eats up your budget but does not serve you that well anyway since it won’t be put to any good use. If you have more than one car, for example, and you’re not using the second on a daily basis, do you really need to pay for a full year comprehensive policy when you can only get one for that period when you take it out for a long drive toItaly and back? 

If you want to be prudent, practical, and financially responsible with your car insurance spending, check out short car insurance deals as this give you the best chance for great coverage at reasonable cost. Rid yourself o the long-term deals and get only those that you need. With short term car insurance deals, you have full control of your insurance spending, just the way it has to be for people who are financially prudent. Nothing else can be more ideal. 

Money Management

How to Handle Unexpected Expenses without Breaking the Bank

unexpected expenses

No matter how carefully you manage your expense and try to plan ahead, unexpected expenses happen. Maybe you suddenly need money for a new HVAC system for your home or a major car repair; or you may have need unexpected medical procedure, or to travel out of town due to a family emergency. Things in life don’t always go as planned and the fallout can be costly! Her are a few tips to help you prepare for and bounce back from unavoidable, unexpected expenses.

Plan Ahead with a Rainy Day Savings Fund

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Ever heard of the old saying, “pay yourself first?” Well, there’s quite a bit of wisdom in that. Make a habit of setting aside a small portion of your earnings whenever you get paid toward a separate “rainy day” fund that’s just for emergencies. Commit to setting aside any amount you can afford – whether it’s 20-percent or five dollars of your weekly pay. As long as you’re consistent it will all add up more quickly than you might expect.

The term, “rainy day” fund may be somewhat old fashion, but the concept is as relevant today as ever. Preparing ahead and having the money you need for financial emergencies puts you in a much better position to handle a crisis with minimal disruption.

Borrow Money from Friends or Family

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If you find yourself facing an unexpected expense with now emergency fund stashed away, you may be able to call upon family and friends for help. It’s important to keep in mind that most folks don’t like being put in the position of loaning money to loved ones. Money issues can obliterate relationships.

If you need to borrow money from a loved one, it’s best to approach them with a plan in place for when and how you plan to pay them back. This lets the person know that you value the relationship enough to plan out possible repayment terms. Be completely honest about how and when you will repay the money you borrow. If someone lends you money, they likely believe you are sincere when you commit to paying it back. Depending on the amount you borrow, you might even consider drafting a contract agreement detailing the terms of the loan for the protection of both parties.

Borrowing money from friends and family is a highly-sensitive situation for all parties involved. Some people have strict rules against loaning money to loved ones in an effort to avoid fracturing relationships. If you ask someone to borrow money and they say no, respect their decision without question. Thank them for their consideration, and consider another option.

Keep a Credit Card for Emergencies

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You may consider getting and keeping a credit card for emergencies only. When you’re short on cash, and an unexpected expense pops up, you can use your credit card to defray the costs. A credit card for emergencies means you don’t have to spend every bit of your cash on your expense. Pay with the credit card and pay the balance as quickly as you’re able. Another plus: making timely payments toward the balance of your purchase helps boost your credit score!

Apply for a Loan

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When all else fails, the only option left to you may be to apply for a loan. Applying for a personal loan though your bank or some other financial institution has become more complicated than in the past.  Among the list of prerequisites borrowers must meet include a target credit score and income, and stable employment (employment for a specified amount of time). Approvals can be few and far between and can take days or weeks to finalize, depending on the institution.

A less complicated and faster alternative is to apply for a title loan. You can qualify for a loan of up to $10,000 if you own your car free and clear. You don’t even need perfect credit to qualify. You can have the money you need in as little as 30 minutes and you get to keep driving your car. There are lots of title loans out there, but the safest option is to go through a reputable company, like TitleMax.

Kelley Luther is a freelance writer who loves writing about money tips and budget advice for millennials. She lives with fellow freelance writer and husband, Mark, and their two Border terrier “children”, Ted and Tim.

Frugality Videos

Quick Tip Thursday: How To Get Cheap Magazines

I just want to give you a quick tip today about buying cheap magazine subscriptions.  I love magazines since they are filled with a lot of great and up to date information.  Here are a couple of places that I go to order my magazines.  One of them is Tanga.com.  They usually have a daily special on a magazine subscription which can result in some really deep discounts.  Another site I visit is BestDealMagazines.com.  I love this site.  It is where I get the majority of my magazine subscriptions because they have $5 subscriptions which is great.  Finally, I like to go to TradePub.com.  This site is mostly trade publications but if you search  through the site you will definitely find things that you are interested in.  I am interested in the Internet and building websites so I tend to go for those.  These magazines can be filled with a lot of great information.

Places To Visit For Cheap Magazines

Tanga.com

TradePub.com

BestDealMagazines.com

 

Home Ownership

The True Cost of Home Security

Home security is a sound investment for those that want to ensure their dwelling, and all of the items housed within, is protected to the fullest. Unfortunately, security is one of those items of owning or renting a house that comes secondary to other important costs until the owner gets a shock to the system such as when they read of a burglary within the neighborhood; then they scramble to get something installed and running.

Home security has gone down in price, but up in technology. The combination of falling prices of digital cameras and other electronics associated with security means a homeowner can make the solid investment in security without breaking the bank; you can see for yourself at www.securitychoice.com.

There are added benefits that come with modern home security systems such as lowered home insurance premiums, ability to monitor the dwelling from mobile devices, remotes, and a multi-point system that aids in the prevention of faults in the system.

ADT is one of the leading home security companies in the United States which define the market and pricing for the industry which makes their offers a great foundation for understanding the costs involved with the installation and regular maintenance of a security system.

Many features and items offered through major services like ADT have become commonplace with other companies, as well, so here is an overview and breakdown of what it may cost on your end:

  • Base installation – $99 is the basic and $199 for premium packages
  • Monthly costs: $36.99 – $53.99

The basic package comes with all the bells and whistles you’d want to cover home security (this is the $36.99 a month package):

  • Monitoring
  • Digital keypad
  • 3 entryway contacts
  • Keychain remote
  • Pet detector
  • High-decibel alarm
  • Backup battery
  • Yard sign and decals

Anyone that have entered a house that has a keypad will immediately understand what type of protection it brings though you may want to expand on some of the features depending on your neighborhood and whether you want that stress on mind.

Here are some of the extras that come with loftier packages:

Essentials Plus ($42.99/mo)

  • Everything from the basic package but with the ability to contact a professional through an intercom on the wireless keypad (Two-Way Voice).

Total Protection ($44.99/mo)

  • Everything in the basic but you won’t need a phone line to send a signal to the security office (Cellguard).

Total Protection Plus ($47.99/mo)

  • The basics but also the Cellguard and Two-Way Voice features

Premium Protection Plus ($53.99/mo)

  • All of the benefits and features before but now with advanced elements such as remote arm/disable, web & mobile access, email & text alerts, and event history (ADT Pulse).

There are some additional options for video cameras and a lamp module which will come dependent on ones need and number of locations required for monitoring.

Consider the cost of a burglary. Your home houses not just its physical items but loved individuals. Physical and psychological damage may come as a result of a burglary even if an individual merely smashes a window or makes an attempt at the door. The basic package will costs just under $500 a year to provide the essential security services.

Owning a home is a big deal, but it’s about what assets it houses that makes it truly a worthwhile investment. Protect those that dwell in the living space and the previous, irreplaceable items by consider home security – it’s worth the peace of mind even if you never need to use it.