Posted by Elizabeth Dennis on November 13, 2011 | No Comments
Building and maintaining good credit is essential when it comes to purchasing a house. The difference between good and bad credit can save or cost a homeowner thousands of dollars over the course of the life of a loan in terms of interest rate. Home buyers with good credit are going to be able to secure a much lower interest rate from a bank or a mortgage company than a person with much worse credit. In order to save you money, follow these tips on how to get your credit in order before purchasing a house.
Check Your Credit
One of the worst things you can do is to not keep on top of your credit report. Sometimes, mistakes do happen and you could wind up with some bad information on yours. As a result, you could see your score drop to an unacceptable level or you could wind up with a much higher interest rate. As a result, you should get a copy of your credit report at least once a year. This will allow you to make sure your it is accurate and you will not have any surprises. In addition, pull another one just before applying for a loan in order to make sure that everything is in order.
Close Some Accounts
Another good way to boost your credit is by closing store accounts. These store charge cards normally come with very high interest rates and fairly low limits. As a result, get rid of these by paying them off and closing them. You really only need one or two regular Visa or MasterCard cards in order to have the purchasing power you need.
Watch Your Limit
When buying a house, you will need some credit to play with. Therefore, it is important to not use more than 80% of the credit limit on revolving accounts. Having credit card accounts near their limit can have a drastically negative effect on your overall credit score. As a result, you will want to pay down as much as you can on your credit cards before applying for a home loan.
Re-establish Credit
If you need to re-establish your credit before buying a house, don’t just buy things you don’t need in order to show that you are now more responsible. Instead, get a secured card that reports just like a regular credit card. Use this card to purchase everyday items and at the same time, deduct the money from your checking account. That way, you will pay it off every month and your credit will be rewarded at the same time.
Put off Big Purchases
If you are thinking of making other big purchases right before buying a house, don’t. This will only have a negative effect on your overall credit. For example, if you also need a new car, put off the purchase until after you have closed on the house. The recent purchase will bring down your score and show up as a new and high debt which you have just incurred.
Posted by Elizabeth Dennis on October 30, 2011 | No Comments
Purchasing a house is the single largest decision that you will ever make in your life. Not only are you trying to find the perfect house to make a home, but you are also trying to get the best deal possible. One of the things to consider other than the cost of the mortgage itself, is the price that you will wind up paying for insurance.
Some homeowners, especially new ones, don’t think about this additional cost and how it can take them over their budget. In fact, homeowner’s insurance is required when you get a mortgage so it is not an expense which you can skip. In order to keep the cost of homeowner’s insurance down, here are a few tips which you can follow.
Shop Around
No one really wants to spend time shopping for insurance, but it is a great way to save you a few bucks on your policy. Be sure to ask your friends who they use and you can even contact your state insurance department in order to get a complete list of agencies in your area. Of course, don’t forget to look online as well as some agencies may have more of a virtual presence than a real brick and mortar one. You can also use online quote services to help you find an idea of the price you are likely to pay.
Change Your Deductible
In order to get a better out of pocket rate each month, you may want to raise your deductible. This is the amount of money in which you will have to pay toward a loss before the insurance will begin to pay on a claim. The higher your deductible, the more money you save on the premium. For example, if you raise the deductible from $500 to $1000, you could save 25%. However, be sure to take into account where you live. If you live in an area prone to hurricanes, for example, this may not be the way to go or you may need another policy for specific damages.
Use the Same Agency
Many insurance agencies will give you a discount if you have multiple policies with them. That means if you have your home along with your cars and even your life insurance, you will wind up paying less in premiums on all your policies.
Home Security
Another way to cut down on insurance premiums is to upgrade your home security. You can get a 5% percent discount for smoke detectors, dead bolt locks and a burglar alarm. You can even get a larger discount if you upgrade to a sophisticated system that will not only call emergency services but also has a sprinkler system in order to protect your home in the event of a fire.
Credit
Keeping up your credit will also help you reduce your monthly premiums. More often, insurers are now looking at credit history and taking it into consider when writing your policy. The better your credit, the less you are likely to pay.
Posted by Elizabeth Dennis on May 17, 2011 | No Comments
Finding the best online mortgage is very similar to finding a traditional mortgage. One thing to be aware of, however, is to stay with reputable companies and those that also have a large presence. These will be much more trustworthy and financially stable than others.
In order to get the best online rates, first obtain a copy of your credit report from all three major reporting companies. Check to make sure that there are no mistakes and that all three have virtually the same information. Everyone is entitled to one free report a year and if you find any mistakes, make sure they are fixed immediately.
Be sure to evaluate mortgage points as well as fees. These normally are charged for underwriting a mortgage loan. Don’t be fooled by a great online mortgage quote as the fees and points may make the rate seem too good to be true.
Next, compare the online quotes that you have received once you fill out all the appropriate information online. Compare fixed interest rates against adjustable rates as well as mortgage payments, points, fees, and overall rate. Be sure to get at least three quotes from reputable mortgage brokers.
If you find a mortgage that you believe you would like, be sure and ask for a Good Faith Estimate. This is not a binding document, but it is a written estimate of all the costs associated with originating a loan. This estimate will keep lenders from changing or charging extra fees at a later date.
When looking for an online mortgage, you can go to a traditional lender that also offers loans on its website or you can look for one that specialize in online mortgages such as E-loan or Quicken. Of course, do some research into the company to make sure that they are trustworthy and not a predatory lender and stay clear from any site that seems to promise too much.
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