What NOT To Do

 

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As your trusted mortgage advisor, my team and I provide you with more than just a loan. It’s part of our continuing service to offer the following tips that may be of help when you’re looking to purchase a new house or refinance your home loan.

What NOT To Do

As you choose the path that leads to the home of your dreams, you can take either a pleasant Sunday stroll in the park or a gut-wrenching tiptoe through a minefield. Here are the six most-important “don’ts” when you’re considering buying a new house.

Six Dont’s

1. Don’t go on a spending spree! Draining your savings or running up credit card debt to buy a new living room set, a big-screen TV, or a new car could make a difference in your interest rate and whether you even qualify for a mortgage. Avoid spending money until after the closing is completed, whether by credit or cash. Keep your debt down and as much money in your bank account as possible. Your lender will check bank and credit card account history.

2. Don’t change jobs. Unless it can’t be avoided through such things as drastic location changes, experts say it’s best not to change your employment picture until after closing. A worse move is to change from a salaried position to self-employment. Lending institutions like to see steady employment and generally insist that self-employers show a minimum of two years of successful income.

3. Don’t mess up your credit. Don’t try to improve your credit score without talking to a professional. For example, you may think you’re going to bump your score up a few notches by canceling credit cards. But, canceling the wrong ones for the wrong reasons can seriously damage your credit score. Credit experts say it’s important not to have too few or too many open credit accounts, and the best credit is old credit. Another possible pitfall is to transfer all your credit card balances to one card to get zero balances on the others.

4. Don’t pay off all your bills. Paying credit cards down to below 50 percent of the your credit limit is generally helpful to boosting your score. But, paying off all your debts is only wise if you still have enough cash remaining to make your down payment, closing costs and prepays. In other words, don’t deplete your savings to pay off your credit cards.

5. Don’t think about lying. Lenders want to know how much cash you have to put into the house — truthfully. If you’re borrowing the money for a down payment and have to pay it back, it will have an effect on your ability to meet all your obligations. If it’s a gift and doesn’t have to be paid back, that’s fine. Whatever you do, don’t borrow it from your uncle and tell the mortgage banker it’s yours! The bank may ask you to document how long you’ve had the money or where you got it from. A lie could backfire and ruin the whole deal.

6. Don’t do any spring-cleaning. Don’t throw out bills, bank statements or tax returns. However, it’s a great idea to organize all the important papers that may be requested by a lender. Such documents may include W-2s, 1099 income statements, recent pay stubs and tax returns for the past couple years if you’re self-employed. While you’re at it, round up your prior title insurance policy, any canceled checks, settlement statements, or other forms of proof that you paid collections or disputed accounts.

Do These 20 Things Before Applying for a Mortgage

You’ve got the itch to buy a home. Maybe it will be your first. Maybe it’s one you saw a “for sale” sign in front of and instantly fell in love with. Maybe you’ve been saving for this big purchase for many years. No matter the circumstance, it’s a big deal — because the homes we buy are typically the biggest purchases we’ll ever make.

Here are 20 things to know about and ways to prepare before applying for a mortgage.

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15 popular college towns where it’s cheaper to buy a house than live in a dorm

Although sharing a tiny dorm room is a rite of passage for many undergraduate students, it’s not always the most fun experience.

And, at some schools, it’s also not the most economical choice. For students looking to begin investing in real estate early, or just to save a buck, finding a place off-campus might be a smart starting point.

Residential real estate company Redfin compared the monthly cost of living in a dorm at 195 public colleges across the U.S. to the median monthly mortgage for a condo in the same cities to determine where it’s actually cheaper to buy. Read more.

 

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Going Green At Home

Keeping the environment clean is more than just a fad, it is something everyone should be practicing in order to keep our planet healthy and safe, for ourselves and future generations. There are minor changes you can incorporate at home that will help maintain a healthier planet. Some ways homeowners can go green at home are: Monitor your home’s temperature, the less energy you use, the better. Heating and cooling a house takes up about 50% of your energy consumption, and regulating usage could save money. Use cleansers that are free from toxins and thus, safer for the environment. Install energy-efficient light bulbs. Choose bamboo flooring instead of hardwood floors. And finally, use low VOC paint when painting in the home to decrease air pollution inside and outside. More here

Summer Safety Tips

It’s still only July, so we still have quite a few hot days ahead of us. That’s good news for those who enjoy fun in the summer, but we should also take a minute to refresh ourselves on some common dangers and how to avoid them. The National Safety Council provides some good, basic tips that everyone should follow. It may be a little late for their “practice firework safety” advice, but “how to beat the heat” and “water safety for kids” are still particularly apropos. Go out, have fun, get a tan, but stay safe this summer!

 

How Often Should You Make Your Mortgage Payment?

If you’ve done any research into home ownership, then you’ve undoubtedly run across the various ways that making your payment differently can impact your lifetime cost (in terms of interest), and how long it takes to pay down your mortgage. Typical schemes include making one extra payment per year, or dividing your payment in half and paying the same amount each month, but in two installments. Fox News explores the impact of taking it one step farther and making weekly payments.

 

What’s Your Mortgage Plan?

For most people, the only possible mortgage plan is to pay it off as quickly as possible.

 

 

There’s nothing wrong with this attitude in general, but did you know there are many situations where it may not be best?

 

For instance, what if you pay your loan off in 15 years, just as Junior is entering his freshman year at college? You’re footing the bill, so you tap home equity to pay for school. Unfortunately, you may end up paying a much higher ratethan you could have if you had put your extra dollars toward a college savings plan rather than your home loan.

 

Many other scenarios relate just as well. For example, how do extra mortgage payments stack up next to investments in retirement savings? The purchase of adequate insurance coverage?

 

We’re always happy to have a conversation about the future benefits you may realize when you establish a well thought-out plan specific to your needs today. After all, taking action now is the best way to achieve your goals for tomorrow.

How Deep Is Your Well?

The concept of “getting out of debt” commonly rules our thinking when it comes to financial planning.

 

But there are two types of debt. One is to be avoided, and the other can be used strategically.

 

For instance, if you carried over last month’s meal charges and are now paying a high rate of interest to finance meals that are long gone, that’s not good debt.

 

Alternatively, having a loan that’s offset and secured by an appreciating asset can actually serve you well. Why? Two reasons:

 

1. Using other people’s money to leverage an asset that usually rises in value (such as a home) often proves highly profitable. Inflation works to the owner’s benefit and against those who provided the cash. The owner’s advantage is even greater when the cost of funds is low because the value of the asset can rise faster than the value of interest paid.

 

2. Leveraging someone else’s cash allows your assets to remain more liquid. Liquid assets can help create a reserve well that is not only deep, but also far from dry. Having more of your own money when the need or opportunities arise can be safer, faster and less costly than scrambling to borrow funds quickly.