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People looking to purchase a home in the near future have several options available to them when it comes to their mortgage. Here are five common mortgage loans people may want to consider to see which one is best for their individual financial situation.
A fixed-rate mortgage loan is one in which homeowners pay one fixed interest percentage over the course of their loan. Common loan lengths are 15, 20 and 30 years long, with 30 year loan terms being the most common. Fixed-rate mortgages are by far the most common type of mortgage as almost 75% of mortgages are fixed-rate.
Fixed-rate mortgages are best for people who want a predictable payment over the life of their loan and people who plan on staying in their home for a long time. They are also best when interest rates are likely to climb in the future.
With an adjustable-rate mortgage, the interest rate homeowners pay changes over the course of the loan at set intervals. As the current market interest rates change, homeowners’ interest rates adjust to reflect the change in rates as well. This type of loan generally offers a lower interest rate than a fixed-rate mortgage.
Adjustable-rate mortgages are best when interest rates are expected to decrease over time. They are also best for people who do not mind the risk associated with this type of loan and those who would be able to handle potentially significantly higher payments.
A balloon mortgage is a mortgage that starts off like a fixed-rate mortgage for a set period of years, but once that time period is up, the entire balance of the loan is due immediately. At this point, homeowners have the option of either paying the balance in full or refinancing their mortgage.
Balloon mortgages are generally best for those people who plan to sell or refinance before the loan balance is due. People who are certain they will receive a large inheritance or settlement within the next few years may be interested as well. Otherwise, a fixed-rate or adjustable-rate mortgage is a safer alternative for most people.
With an interest-only loan, homeowners pay only the interest on their loan for a set period of time, before they begin making higher payments that include both their principle and interest amounts. During this time, homeowners can make payments towards their principle balance if they want to, but they are not required to. Interest-only loans can end up costing homeowners more in interest over the life of their loan, but the money is not due right away.
Interest-only loans are best for people who have very little money currently, but plan to have a significantly better income in the near future, such as college students just entering into their career fields.
FHA loans are an attractive option to many low-income and first time homeowners. Because they are backed by the Federal Housing Administration, FHA loans allow people to purchase a new home with as little as 3.5 percent down, as opposed to the typical 20 percent some banks require. Furthermore, the down payment can be given as a gift and sellers are allowed to contribute to closing costs. FHA loans may require additional paperwork, but they can help some people qualify for home-ownership who would not be able to afford it otherwise.
FHA loans are best for people who want to purchase a smaller, less expensive house with a small down payment or a down payment they received as a gift. They are also best for people who do not qualify for traditional loans.
The Internet has made the home buying process easier than ever. Not only can you search for homes and research cities online, but you can also apply for home loans online as well. The following steps show you how.
Available interest rates and loan terms vary widely among lenders so it pays to shop around. Start with banks and credit unions you are familiar with, but do not be afraid to research new options well. Not all major companies are good to work with and many smaller, less familiar companies might offer great personalized service you would not find at a large banking institution.
Be sure you compare lenders not only based on the rates and loan terms they can offer you, but also on their track record for customer service as well. Company reviews on the Better Business Bureau website and reviews found through simple internet searches can let you know if the company you are considering is reputable or risky.
Once you are ready to begin filling out an online application, take a minute and gather all the financial information you will need to fill out the forms. This way, you will not have to stop several times mid-process to go track down a piece of paperwork you did not realize you would need. If you leave a form unfinished, you run the risk of your application timing out and you having to start the application entirely over from scratch.
Lenders typically want to know how much money you make and how much money you owe. They will likely want information from paycheck stubs and W-2’s to verify your income. They will also likely want copies of your bank account and investment statements to verify your savings. You may need paperwork to prove rental income or child support as well.
When you are ready, go on the lender’s webpage and begin filling in the online application. Many websites will require you to create a user account, but the account should be free and should only take a couple minutes to create. Once you are logged in and viewing the application, simply fill in all the information accurately and take your time so you do not make mistakes.
If you have any reason to doubt whether you will be approved by a lender, you may want to go ahead and fill out a couple applications with different lenders. Filling out multiple applications within a narrow window of time, typically two weeks, will not hurt your credit the way filling out multiple applications over the course of a couple months would. Then, if one application is not approved, you will hopefully have a back-up.
If you have any questions while you are filling out your online application, do not hesitate to call the lender and ask. It is better to fill in the information correctly the first time, rather than to guess and be denied or be mistakenly approved and then later denied when you cannot back up your information. Any company that deserves your business will be more than happy to have someone thoroughly answer any questions and concerns you may have.
The last step in the online loan application process is simply to review what loans you have been approved for and accept and the one with the most favorable rates. You are not locked into a contract until you have submitted and signed all the necessary paperwork at closing.
The low interest rates currently available make refinancing an easy and attractive option for homeowners hoping to lower their monthly mortgage payments, pay off their mortgages sooner or a combination of both. Refinancing with a home equity loan is a little more complicated, but it is possible.
First of all, homeowners should determine if they want to refinance just their home equity loan, just their primary mortgage or both. While one loan may already have a favorable interest rate, there are other factors to consider. Refinancing just the primary mortgage automatically makes the home equity loan a lien on the property. Furthermore, refinancing just the original loan without refinancing the home equity loan usually requires lenders to agree to a subordination agreement. Refinancing just the equity loan should be a pretty simple refinancing process. However, refinancing both together into one new loan has the advantage of combining two monthly payments into one.
There are two common ways to refinance a loan: a cash-out refinance and a rate-and-term refinance. With a cash-out refinance, homeowners take out an entirely new loan, which they use to completely pay off their existing loan or loans. This type of refinance is best when increasing home values make it difficult for homeowners to refinance. Rate-and-term refinances are simple refinances designed to change a loan’s rate and terms. They are best in situations where current interest rates have dropped significantly.
The two most common reasons to refinance are to receive a better interest rate and to obtain better loan terms. A lower interest rate may not always save homeowners money, however. If homeowners decide to refinance both their primary mortgage and their home equity loan into one new loan and the new loan leaves them with less than 20 percent equity in their home, they will have to pay primary mortgage insurance, which can cancel out any benefits received from a lowered interest rate. Furthermore, refinancing costs money as homeowners must pay closing costs and fees again. Homeowners should consider if they plan on living in the home long enough to recoup their costs and make refinancing worth it.
In situations such as adjustable-rate mortgages and balloon mortgages, where payments are likely to increase significantly in the near future, and in situations where interest rates have significantly lowered since the homeowners originally obtained the loan, refinancing can be a smart financial move.
There are times when refinancing will not improve homeowners’ interest rates. The interest rates homeowners receive are determined in large part by their credit scores. Homeowners wanting to refinance at a better rate should make sure their credit scores are in good to excellent shape before they try to refinance. This will be tremendously helpful in being approved for a new loan and in receiving a good interest rate.
Just like with any new loan, it is in homeowners’ best interest to shop around for the best interest rates and loan terms. Rates and terms can vary considerably among lenders. Staying with the same lender can be advantageous in that the lender will already have homeowners’ paperwork and records on file and the lender may be willing to give more favorable terms to homeowners whose business they want to keep. Switching lenders can also be advantageous if other lenders offer better rates and terms or if homeowners have had any problems with their current mortgage lender.
We know there are a lot of tips out there on how to save money, we don’t have any new ones to add to the list, but we have tried the ones we are giving you. Practical should not mean you don’t get any of the things you desire in life. Practical money savings tips can help with more than just saving you money.
Example: If you switch your light bulbs in you home to the new CFL bulbs, you save money and help the environment at the same time. Now that’s a practical money saving tip and helpful to the environment.
We can all save on energy cost, buy installing a programmable thermostat, I used to turn the thermostat up and down, most times I would forget to turn it down before I left for work, and a lot of energy was wasted but the house was warm or cool all day. I used to think that if I turned the heat down at night I would freeze in my sleep. Now I can tell you it’s not true, and when I awaken the house was warm. I saved money on energy and had a couple of bucks left in my pocket.
We all know we should buy things when they are on sale it saves us money, but if you buying something because it’ s on sale, are you really saving money? Why buy something you don’ t need just because it’ s on sale? That would be unpractical, so the next time you are in the store ask yourself do I really need this? Or do I just want it because it’ s on sale?
Since you are reading this online, why not cut your phone bill? Do you know there are companies out there that can provide you with phone service right over your Internet connection? You don’ t have to turn on your computer to use their services, but you do need DSL or a cable modem. You can cut your phone bill by more then 50%.
Speaking of saving energy, why not caulk all your windows? Caulk is inexpensive and will save on your heating or cooling bill, so get some caulk and a caulk gun and go to work.
Do you know how much that leaky faucet costs? Just one little drip can cost you a lot; I was amazed at the amount of money it was costing me. So check all of your faucets and stop the leaks, and see how much you can save.
With a Social Security number, any thief can get a hold of a person’s identity and open lines of credit in their name. This can devastate that individual for years or decades. However, the identities we should be more concerned with are our children’s identities. Since children will not have lines of credit, banking accounts, or loans in their name, a thief can steal a child’s Social Security number without any red flags being raised until that child comes of age. If that child’s identity was stolen a decade ago and they are trying to apply for college, a car loan, their first mortgage or apartment rental application, their credit may be severely damaged and the person’s future will be devastated. Here are the ways family members and public officials can protect a child’s Social Security number and personal identity.
All Social Security files related to a child should be locked in a safe or other protective unit. Only immediate family members should access to the Social Security number since there are few legal requirements to provide the Social Security number to third parties. This is especially true since most third-party organizations will have account numbers made of the child or the child is considered a beneficiary of the parent or guardian. Schools, child care facilities, or medical officers will never require the child’s Social Security number. No insurance provider for the parent or guardian needs the child’s Social Security account either. When a person, through e-mail, phone calls, or a letter, claims they need the child’s Social Security number, the parent or guardian should not provide that number to them. Government organizations and banking or financial institutions where the parent or guardian is opening an account for the child will require Social Security numbers.
Even if the physical Social Security files are placed in a safe, information related to a child could be found online. Various transactions, data filings, or financial information related to a family has become digital thanks to the internet. All families should make sure their computers are secure and have the latest anti-viral and anti-malware programs. Constantly scanning the computer and securing any browsing while on financial or government websites is necessary. Taking these steps will make sure that any information related to the child is not found by hackers, viruses, or other malicious third-parties.
Every individual can see their credit report for free once a year. A parent or guardian should capitalize on that by asking for a credit report from the three largest credit agencies for the child each year. Every yearly report should have little to no credit activity. When there is extensive credit activity, then this is a red flag. Report this immediately to the credit bureaus and file a fraud alert file with them.
If the child is old enough to understand the importance of their Social Security number, parents and guardians will need to educate the child on proper etiquette regarding that information. If a stranger ever asks them for such information, the child must know never to give that information to anyone. Also, proper internet safety and etiquette needs to be taught to the child. The child must never answer or input personal information online whether from a message board, instant message, social media, or on a malicious website. A child that knows what to do with their personal information will make sure that information does not fall into the wrong hands.
This guide will help you learn how to dispute errors and inaccuracies on your credit report. The details included in your credit history generally includes your bill payment history, residence history, employment history and many times your legal history. It is necessary to understand that too much of this information (if unfavorable) will have a damaging effect on your ability to open new lines of credit as well as the interest rates of your current credit. Having detrimental items on your credit report may also hinder your ability to obtain high paying jobs in particular markets.
It is usually advisable to monitor your credit report on a bi-annual basis at minimum, even if you are fairly certain you have a strong credit rating. Mistakes are just a part of life, however mistakes on your credit report can have serious consequences if not dealt with quickly and properly.
If you discover an error in your report, open a claim and file a dispute. The credit bureaus are obligated by law to investigate the claim. The creditor is also required by law to repair the error, if the claim is found to be in your favor. While this is good news, unfortunately most companies will not look into a credit error issue on their own unless a formal dispute has been filed.
Here are the basic steps for starting a credit dispute:
The credit bureaus don’t move quickly, so don’t expect immediate results. Their investigation will usually start within one month. All information you supplied will be utilized in this process so ensure you deliver valid, correct and clear information. This is basically what credit-repair businesses would do for you, but with a little effort, it’s something you can-do yourself.
The creditors/lenders are subsequently requested to assess the accuracy of the error and report back to the credit bureau . In the event that the information you provided regarding the reporting inaccuracy is found to be correct, the creditor has the ability advise each credit bureau in order for your credit history to be corrected. If the inaccuracy is found not to be an error, but legitimate, you will see no change on your credit report.
If your dispute is unable to be resolved, you have the ability to leave a dispute notice on your credit report, so anyone viewing it will see that some items listed may not be 100% accurate. The credit reporting agencies will provide you written proof of all correspondences with the creditors they deal with in attempting to resolve your dispute.
You really have the choice to leave a notice of difference of opinion in your credit history in order that everyone who views it comprehends that this might or might not be exact, but when the ticket stays unsolved. All communication with the credit bureaus will be in write for the documentation too as theirs.
When the first lender does not refile, all negative notations in your report are immediately dropped from your credit report after seven years.
Technology has made many things about our lives easier, but one thing that has become harder is protecting your identity. With increasingly sophisticated means of stealing your personal information, identity thieves have made it necessary to be extremely vigilant about protecting yourself from damaged credit and financial loss. It’s no longer sufficient to simply shred documents and regularly review your accounts. You also need to be scanning the internet on a daily basis for potentially harmful information and signs of identity theft.
The problem is few people have the time required to be that vigilant. Enrolling in a credit monitoring service, such as ProtectMyID, provides you with all the online protection you need. Backed by Experian, one of the nation’s three leading credit bureaus, ProtectMyID offers you the peace of mind and protection you need, all at an affordable price. For as little as $15.95 per month, you get:
You will receive alerts whenever ProtectMyID finds anything that could indicate that your identity has been stolen. They will also help you stop and repair any damage that has been done, as well as alerting you when a full month has gone by with no further signs of identity theft to report.
Enrollment in ProtectMyID takes just a few minutes on the Experian website. If you’ve never used the product before, you can sign up for a seven-day trial membership for only $1, plus tax. If you decide that you do not want to continue your membership, simply cancel within that seven days and you will have no further charges. Experian also offers a 14-day money back guarantee, should you decide that you are not happy with the service you are receiving even after continuing beyond your trial period.
In addition to ProtectMyID, Experian offers other products that enhance the protection and assistance your receive. Lost Wallet Protection provides you with a simple way to deal with the headaches of a lost or stolen wallet with one phone call. ChildSecure offers you the ability to ensure that your child’s identity remains safe as well, as the fraudulent use of the identity of minors is a rapidly increasing problem.
As you enroll in ProtectMyID, take your time and carefully review the information on each screen. If you rush through, you may find that you have enrolled in products and services that you do not want and are difficult to cancel. Be sure to write down phone numbers and email addresses for future reference. This information is provided on Experian’s website, but it can be difficult to locate. Finally, be sure to note when you sign up so you can cancel within your trial period if you want without paying any additional charges.
We rate ProtectMyID at 3 1/2 stars. Not one of the most comprehensive credit monitoring services, but a good value for the monthly cost. For a low monthly fee, you can have the peace of mind in knowing that someone is constantly watching for signs that your identity has been stolen and is ready to help you fix the problem before it’s too late.
With identity theft becoming such a fast rising crime, it comes as no surprise that identity theft monitoring services are also quickly rising. It is important to keep tabs on one’s credit, but with so many programs available, choosing a company can be daunting. We will review one of these services, Identity Lookout and touch on the basics of their services, as well as some of the pros and cons of the company.
Identity Lookout credit monitoring service charges a fee of $12.95 per month. If you would like to try the service before committing, there is a 7 day trial for only $1.00. Of course, you can cancel the service before the trial is over to avoid a monthly charge if you do not plan to keep it. Identity Lookout provides daily monitoring of your credit report at all three credit bureaus, Equifax, Experian and Transunion. You will have access to view your Experian credit report. This program also provides a basic identity theft protection. In the event of fraudulent activity, you will be provided fraud resolution assistance. Clients also have the option of up to one million dollars in identity theft insurance under this program. In addition, Identity Lookout will perform constant internet scans of their client’s social security numbers and credit cards for any types of misuse.
Some of the most appealing aspects of Identity Lookout’s service include the opportunity to have things not included on your credit report monitored. Clients can add their ATM cards, check cards, debit cards and even their children’s social security numbers to their account for routine scanning. Identity Lookout also provides customers with an immediate e-mail alert of any type of possible identity theft activity. Catching and stopping fraudulent activity quickly is imperative and these e-mail alerts can help do just that.
The main con of Identity Lookout’s service is they do not show their clients their credit scores. Credit scores are an easy and quick way for individuals to see how they rank in the world of credit. It would be helpful for a client to be able to see exactly where they stand before applying for a mortgage, car loan or even a credit card. Thoroughly reviewing one’s credit report is necessary, but time consuming. The option to quickly check your score regularly would be a wonderful perk to this service.
Identity Lookout is a decent option when choosing a credit monitoring service. They will help you stay ahead of identity theft. However, it is important to determine if the negative aspects of their program are outweighed by the positive aspects. A 7 day trial would be a good way to determine if their service will fit your needs.
Monitoring your credit is an important step in understanding your current financial and credit status. To do this, it is wise to sign up for a credit monitoring service.
Identity Guard is one of the highest rated identity/credit monitoring service on the market today. The company’s membership is based on their Monitor, Protect and Recover* services.
Monitor: use of technology to monitor personal and financial information in order to provide credit, public record and identity monitoring with prompt security alerts regarding potential threats to your identity which can be delivered via email, text or phone.
Protect: provides anti-virus software for your computer, and keystroke encryption to allow safe browsing of the internet; their program ID Vault* helps protect logins, passwords and credit card information on your most visited shopping and member sites.
Recover: in case your identity is stolen during your membership, Identity Guard will provide personal recovery assistance that puts you in contact with experts and counselors, and offers identity theft insurance and lost wallet protection.
The Gold membership is $18 per month and excludes certain features such as public record monitoring, anti-virus software, and password protection, and only provides consumers with 1 credit score report per month;
The Platinum membership, at $24 per month, provides members with all of the services bulleted above as well as credit scores from all three credit bureaus;
The Platinum+ membership costs $34 per month and provides all of the services of the Platinum level plus adds a bonus child security feature (kID Sure*) that helps protect your child’s identity. Their free mobile app is a nice added feature for those consumers who are serious about guarding their identity and protecting their credit.
The Identity Guard monitoring service offers flexible membership options which fit all budgets. With access to credit scores, a rock solid monitoring service plus additional security benefits, this puts Identity Guard as one of our top recommended identity monitoring companies.
CreditReport123.com is a service that monitors your credit, but unlike many other services, you get great value for the monthly fee. Their service is easy to understand and very helpful for both monitoring your credit and using their tools to help build up your credit rating. One of the most important aspects of their service is that it is legitimate. There are so many websites claiming to monitor your credit, but many of them take your money and do little or nothing after providing you with your credit scores.
Keep in mind that you are allowed under federal law to get a copy of your reports from all three credit agencies free of charge. When a company offers to provide you with them, you need to look beyond this to determine the value of the service. It is here that CreditReport123 does so well. Although excellent as a simple credit monitoring service, they are ideal for a person attempting to rebuild their credit or simply increase their credit rating. Naturally, after you have enrolled in their program, you will have access to your credit reports from all three companies along with your credit ratings. In addition to this, you will be provided with quarterly updates; this is an ideal time frame for those trying to get their credit ratings up.
You will have your credit monitored 24 hours a day, and the company will send you an alert when there is a change. This can be something positive or negative, so you can both protect your credit rating from inaccurate data or malicious reporting as well as monitor the good changes that will factor into a better credit rating. It takes time to build up better credit especially when you start from a low number. When you have a monitoring system like this, you will know what things you are doing to build up your credit are more effective than others.
This is a great tool for those building credit or repairing credit. Starting with your presence credit rating, you can change various parameters that make up your rating and discover what actions are better than others. Once you get an idea of what factors are more important than others, you can implement a strategy and then determine how successful you have been with each quarterly report.
To receive everything that they offer, you will pay a monthly fee of $16.99. For this price you will be receiving much more that simple monitoring of your credit report. If this is all you want, then the service is okay, but if you are trying to rebuild credit or get higher credit ratings, then this service is perfect for you. If you want to try their service for a month to see if it is right for you, there is a low $3 fee. Many companies offer a free trial, so this is the only down side to other services compared to other similar services.
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