Home Mortgage and Refinancing

Here’s a look at 4 reg flags that might indicate your financial habits are in turmoil and that your mortgage will be in trouble very soon. If any one of these describes your current situation this should raise concern. If you find yourself in a position where you’ve done more than one or all of these things than it’s critical you meet with a financial specialist and see if you can straighten out your life as any day now you will likely hit rock bottom.

1. No Money for Maintenance
If things are breaking down in the home but there’s no money to be found to fix them, this is a sign your money is too tight. As an added penalty, all those repairs needed ultimately bring down the value of your home until they are fixed, and it is not rare for one problem to lead to another, more expensive problem.

2. Needing Cash Advances To Survive
If you find yourself getting a cash advance to pay for your groceries, your power bill, or worse yet, your mortgage itself – and doing this often, this is a huge red flag that you’re in danger. Not only does it indicate a lack of financial reserve, but every cash advance is a small loan to be paid off and they are almost always attached to a horrifying interest rate.

3. Cashing Out Your IRA/401k
Pulling the cash out of your retirement fund not only robs you of precious dollars (and the loss of interest on those dollars that otherwise would be) for your retirement, but it’s a warning sign that you do not have the money to pay your bills. Usually this is the last step people take before losing their home so if you’re at this point, your mortgage is probably teetering on the edge.

4. Your Credit Cards Are All Full
Credit cards give us easy access to money which obviously gets a lot of people into trouble. If the credit cards are all maxed out because you didn’t have the money around to pay the bills, this is dangerous in two ways. It means you’ve lost your easiest source of loaned money and it means you’ll be paying a lot of money in the the form of loan interest.

By Wardrobe Closets and Home Editor, DeAngelo Sage.

With our current market and current economy owning a home is not as easy as it used to be. It is no longer a buyers’ market and mortgages can be hard to come by, especially if you have a spotty credit history. There are a few things you can do to better prepare yourself for your home loan, these tips should save you some serious money, but don’t apply to those looking to buy a second home.

1. Learn how a mortgage works and as much about the process as possible. You see mortgages are not as straight forward as your typical car loan. They may seem similar at first, as they both require a down payment and charge your annual interest on top of your monthly loan payments. There are several common types of mortgages, and couple of uncommon ones. If you have poor credit you may want to look for a bad credit mortgage broker to help explain the differences between all the types of home loans. Don’t get caught up like my buddy who after paying his mortgage on time for 5 years is getting foreclosed on because his interest rate was adjusted and he can no longer afford to live there.
2. Make the effort to fix as much as your credit as possible, even if this means waiting a year or two. Just a raise your credit rating a couple of points can save you thousands of dollars and be the difference between an affordable mortgage and one you can’t afford. So definitely pay off and outstanding debts and try to remove any negative items on your credit report. You also may want to ask your credit card companies to raise your limit. The higher your credit available is to your actual debt, the better your credit score range will be. Don’t overlook this even if you qualify for a bad credit home loan, as bad credit loans can add up to a substantial sum at the end of 30 years.
3. This may seem simple but overlooking this last step is what causes a lot of people to lose their homes. Make a budget of what you can afford to pay every month and shop for a home based off that number. There are way too many people who try to fit their budget around their mortgage payment instead of the other way around. It may mean a smaller house, or one slightly different than your dream home, but it may also mean keeping your home.

Following these tips should help you find and keep your perfect house, as house you can call home for a long time. Just remember this is the biggest purchase of your life and definitely deserves the time and effort you need to put into it. Thanks for reading.

Lately, I’ve been it the process of buying a new home and as part of that I’ve consider different types of mortgage programs that would best fit my situation.  One program I’ve been leaning towards a lot is the 15 year fixed mortgage rather than the traditional 30 year fixed mortgage.  So in this article I’m going to list 3 major benefits to getting a 15 year mortgage.

Less Interest

First off, when we compare a 15 year mortgage vs 30 year mortgage we will pay far less in interest with this type of loan.  In fact I recently ran a comparison of a $120,000 mortgage and found that by going with the 15 year mortgage I would save over $55,000 in interest.  On top of that I also found that lower term mortgage such as the 15 year mortgage will carry lower interest rates than a 30 year mortgage.

Less Interest Per Payment

The next reason to consider is the payments.  Obviously, with a 15 year mortgage the payment will be higher than a 30 year mortgage however with a 15 year mortgage you will pay far less in interest.  In fact with a $120,000 loan more than half of the payment will go towards the principle portion of the loan, which is great.

While with a 30 year fixed mortgage nearly 80% or more of the payment will go towards the interest in the first 5 to 10 years of  the loan.  In fact it will typically take till year 15 of a 30 year loan to pay just half the payment towards the principle.

Pays Down Faster

Finally, the last big reason to consider a 15 year mortgage is because it pays down a whole lot faster.  In fact if you would make a $1000 payment on a $120,000 mortgage you would pay off the 15 year mortgage nearly a half year sooner even though you are paying off the same amount of money.  The reason for this is because lower term mortgages have smaller interest rates.  In fact the current rate on a 30 year fixed mortgage is around 4.25% while a 15 year fixed is around a 3.75%.

One Final Thought To Consider

In the end a 15 year mortgage is one of the best mortgage deals around so take advantage of it if you can.  However I also need to stress one warning with the 15 year mortgage, if you can’t afford the payment that comes with it I suggest you go with a 30 year mortgage instead.  Having a payment you can’t afford is to big of a risk to bare because it could cost you your house if you’re not careful.

Investing in your future is something that is very beneficial for you and for your family and loved ones as well. When we are still able and working or having our own business, we tend to go for and invest for basic needs like clothing, food, education and shelter. More often, people invest in business or save their money in banks to be prepared for the “rainy days.”

Most people will also go for mortgages to get a house or car for themselves. When lenders underwrite your loan, they calculate your insurance and property taxes as if they were paid monthly. This calculator does the same thing. Of course, you may have to mentally add mortgage insurance, if required, and Homeowner’s Association Fees. This calculator is called a PITI calculator or can also be a mortgage calculator with taxes.

For other individuals who have paid for their respective mortgages and loans, they have IRAs or Individual Retirement Accounts that they also use to invest to secure their future. There are even alternative forms of ira investments that we can choose from this 2011.

They say that when investors think of an Individual Retirement Account, they often think only of the stocks, mutual fund, money markets, bonds, annuities and CDs that they already know they can invest in within the IRA. But there are alternatives to these. These alternative investments are becoming an increasingly popular choice for those seeking to invest their retirement plan assets. These non-traditional investment vehicles range from the familiar – for example, limited partnership units – to the not so common, such as real estate investments.

There are risks involve when you go for real estate investments. Experts would say that your IRA can’t take out a mortgage so you’ll have to buy the property for all cash.And the tax deductions normally associated with real estate are no good to you if you buy the property in an IRA.

In the end, we need to secure our IRA assets. A thorough research on any investment will surely take you a long way.

Students all over the world will encounter college student credit problems, and the problem with today’s generation is that students have no idea how to avoid them. The credit card companies love to target college students because most are very irresponsible and are just beginning to start out their adult lives.

When a college student enters the school that they have been waiting to attend, they are then bombarded with instant access to college student credit cards. The problem with these credit cards is that they are designed to make money off carried balances which can drive a college student into life-long debt. These loans and debts eventually becomes thousands and thousands of dollars by the time the student graduates. Once the student gets the job that they have been working four years to obtain, now takes a backseat to their debt. This becomes a problem because this may affect their credibility to obtain excellent credit score rating which will affect their credits.

Young people these days will have a hard time saying no to temptations as “free money” is right there in their pockets. What students don’t understand is that this is money that they do not have, and eventually will fall in the hands of their parents. Parents have a hard time controlling their kids as they are finally coming of age, and the students now take on a life of their own. It was the parent’s responsibility to raise the kids to be responsible children, so that when they finally go to college, they will know how to act.

One of the best ways to get a child ready for the adult life is by giving them summer jobs. When a child is spoiled and just “given” money, they tend to forget how hard it is to earn money in this ever competitive world. A short talk with your children about money and how to be responsible with their money can avoid college student credit problems in the future. So if you have a child in high school, get ready for the future challenge that you are about to encounter.