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Mortgage Tips for First Time Home Buyers

July 14, 2011 Comments off

mortgageIf you’re in the market for a new home, there are certain things you need to keep in mind. This is especially true if you’re a first time home buyer. Getting your first mortgage can be intimidating, but if you’re patient and do your homework you should be able to get a mortgage with reasonable rates. Following are a few tips for first time home buyers.

Preparation and Organization

Being a first time home buyer means you’ll have a lot of things to learn. Among them are that preparation and organization are important. If you’re not good at these things, you should take the time to train yourself, because rushing headlong into getting a mortgage will cost you a lot of money. Instead, learn to be patient and take things one step at a time. Before you approach a lender, you need to be prepared by gathering and organizing all the documents you’ll need. If you go into your first loan application meeting with all your ducks in a row, it will make the process go much smoother, and you will be one step closer to owning your own home.

Gather Information

Before taking that first step toward the purchase of a new home, you should take the time to gather all the information you’ll need to get a loan. Among the first steps is to find out what your credit score is. You can do this by calling one of the three credit reporting bureaus: Experian, Equifax, or TransUnion. This will give you a good indication of how much credit you can reasonably expect to get, and will also give you some insight into what sort of interest rates you can look forward to paying. Knowing your credit score will help you determine the price range of a home you can realistically afford to buy. Keep in mind the fact that you will not only have to pay a mortgage, but all the other expenses associated with owning a home, such as utilities, insurance, and maintenance. You will also need to have proof of income, such as tax returns, in order for the lender to decide on the details of a loan.

Research

Determining ahead of time what type of loan to ask for, or that you qualify for, such as a FHA, VA, or conventional loan. Ask your friends and relatives that already own their homes about what type of information you should collect before approaching a lender. The Internet is a valuable resource for this type of information, as well. The more prepared you are when you actually start looking for a home, and subsequently a lender, the better off you’ll be. You may even want to seek the advice of a loan counselor. They would be able to determine what type of loan is best for you.

Patience Is a Virtue

Once the wheels are in motion, the process can seem excruciatingly long, but keep in mind that important decisions have to be made as to whether or not a lender wants to take a chance on you. They need to be sure you will not only be able to pay back the loan in a timely manner, but that you have the character to do so. They may ask for additional information along the way. Be sure to respond in a reasonable amount of time, and don’t be put off by delays. When the loan application comes through, you can start looking for a home.

The Search Begins

When you’re sure you will be able to get a loan, and you have a general idea of how much you can reasonably expect to get, you can actually start looking for a home. Decide on the type of neighborhood you want to live in, and start checking for houses that match your income and loan potential. The Internet is a good place to start looking, but simply driving around and looking at for sale signs is a good way to spend a Sunday afternoon. Once you have a general idea of the type of home you’re looking for it may be time to contact a realtor. Then the search can begin in earnest. The process of buying a home has many steps, but knowing ahead of time whether or not you qualify for a loan, and how much you will be able to borrow, will determine the type of home you can actually afford.

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Determine Your Needs Before You Search for a Personal Loan

July 13, 2011 Comments off

Knowing what you need, not what you want makes a big difference.

personal loanEven folks with bad credit still need to get a loan every now and then. This is where a personal loan can come in handy. The funds can be used for debt consolidation, to pay off your car loan, or fulfill a personal debt. How you use it isn’t the focus – the fact is that you need a loan.

Even if a traditional lender has turned you down, you can still apply online and get the funds you need. In fact, a personal loan can be just what you need to prevent you from having to file for bankruptcy. Very often, personal loans are better for you than unsecured credit cards, which often have extremely high interest rates.

A guaranteed online personal loan usually comes with an easy application process, and you can usually get your money within 24 hours. For larger amounts, you may need to put up collateral to secure the loan. Collateral loans are better than bad credit loans or no credit check financing, because the interest rates in those circumstances is often very high.
You should note also that payday or cash advance loans require quick repayment, often in as little as two weeks. If this isn’t enough time for you, then you could face rollover fees and high interest payments.

To find the best personal loan for you, you can use a search engine online and type in your zip code and the type of loan you’d like. You’ll get a multitude of answers, and you should be sure to read all the information about each lender that you can, before you make your choice.

You should have two goals in mind when searching for the right personal loan: get the loan and repay the loan according to the agreed-upon terms.

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Refinancing your home: Is it worth it?

June 10, 2011 Comments off

refinanceMake sure you know the facts before you sign

Refinancing your mortgage is like taking out a new loan at a new, lower rate. The terms change, and most lenders require that you have at least 10 to 20 percent equity in your home before you can refinance.

But how do you know if it’s worthwhile for you to refinance? How do you tell if the difference in interest rates is enough to make financing worthwhile?

Refinancing may make sense if you have a second mortgage or home equity loan with a higher rate. It also makes sense if you want to take advantage of lower interest rates to shorten the term of your loan in order to pay off your loan much sooner.

But sometimes it just doesn’t make sense. If you’ve had your mortgage for more than 10 years, you could end up paying a lot more if you refinance. After 10 years, you should have begun chipping away at the principal, and if you refinance, your payments will once again go against interest. So evaluate your situation carefully, and consider the total interest cost over the life of the loan.

If you are considering a refinance, think about how long you plan to be in the house. If you aren’t staying there long, you could lose money.

But if you’re going to be there a while, figure out how long it will take to pay off the cost of refinancing and start saving money. To do this, deduct the new payment from the current payment to find out what your monthly savings would be. Multiply this figure by your combined state and federal tax rate to get your tax cost, and subtract that figure from your monthly savings. Divide the total of all the fees and closing costs by your net monthly savings after the tax adjustment. This will show you how many long it will take to pay off the refinance.

The bottom line is this: your house is your home. It’s not an ATM. Using it as such is dangerous. If you must refinance, make doing so worthwhile.

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