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.

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.

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.

Today, most mortgages issued actually come from mortgage brokers. These people are there in order to marry a buyer with specific loan. There are many different services that brokers will undertake including assessing borrower’s credit worthiness, finding a product that matches the client’s needs, gathering the required documentation, completing the lending forms, submitting materials and explaining any legal issues. For their services, many brokers will charge a fee of one to three percent of the loan amount.

As of 2004, there were approximately 53,000 mortgage brokerage companies in the United States. These companies employed almost a half million people and accounted for 68% of all residential loans. In order to keep the mortgage brokerage industry on the up and up, there are more than ten federal laws, five federal agencies and forty-nine state laws or licensing boards keeping an eye on the business.

The most important service provided by a mortgage broker is to act as a go between for the lender and the buyer. As a result, they will work with dozens, if not hundreds, of lenders as a freelance agent. When a buyer comes to a mortgage broker the broker will analyze the client’s credit to see which lender best fits the buyer’s needs. The loan application is then submitted to several lenders and the one that offers the best terms is then chosen. The most talented mortgage brokers can generally find a loan for just about any type of credit or credit history. Once a buyer is presented with the choices for lenders, be sure to shop around and make sure that the terms are reasonable.

As with most things, there are some disadvantages to working with a mortgage broker. At times, a buyer can get overcharged for the broker’s fees and the broker can make false promises of being able to find anyone a reasonable loan. In addition, they may not have access to certain bank programs that a traditional lender would have. Finally, when dealing with out of town lenders, they might not understand local heating or septic systems, thereby slowing down closing until all of their questions have been answered. At these times, using a local bank may be the way to go.

But there are still many advantages as well. A mortgage broker will do all the heavy lifting for you and can look at wholesale rates which will typically be lower. They can also finance tricky deals and may be the best option when trying to finance unique or commercial properties. Mortgage brokers can also be easier to get in touch with and have less levels of bureaucracy.

Many people do not understand what bodily injury coverage actually is.  Bodily injury coverage is the part of your insurance plan, which covers you in cases such as getting hurt in an accident, getting sick and needing prolonged care and even in cases where you possibly die in a car accident.

If you are in an accident, bodily injury coverage will ensure you are taken care of in times of need when you are involved in accidents, which are not your fault.  No fault accidents happen on a daily basis, you want to make sure you are prepared because you never know what can and will happen.

Bodily injury coverage will pay for costs of surgeries or medical care required because of a car accident.  Hospital fees are outrageously high and if you do not have the bodily injury coverage clause in your car insurance coverage, you could be stuck with loads of money to dish out to the hospital for the care you received due to a car accident.

If you need care for a home nurse for a prolonged period, the bodily injury coverage insurance will pay for this.  This is also expensive over a period and without bodily injury coverage, you might have to pay for this type of particular care.

If you lose your vehicle due to a car accident, bodily injury coverage will help with making ends meet during this period of your life.  If you are killed during an accident, your bodily injury coverage will pay for the expenses entailed with the car accident and sue the other driver for expenses for your family.

Your bodily injury coverage will pay for an accident even if you are at fault but there is a “cap” on how much they will pay.  These types of accidents occur often because no one is perfect and bad things do happen to good people.

Every state mandates all car owners to carry minimally liability car insurance.  Check with your local DMV (Department of Motor Vehicles) to find out your own states mandated limits.  You want to ensure that you are driving legally on the road as well as being covered during accidents, no matter if they are your fault or someone else’s fault.  You cannot afford to drive your vehicle without bodily injury coverage insurance.

Contact your insurance sales agent and inquire about bodily injury coverage for your vehicle.  If you already have this coverage, feel free to ask your insurance agent what precisely does it cover and not cover?  If you do not have this coverage, you will want to add bodily injury coverage to your insurance policy.  You simply cannot afford to not have bodily injury coverage for protection of not only your vehicle but for you.

These look great initially but ensure that you always look at the fine print.  Most of these contracts require you to bring your car back to the dealership for repair work.  When you buy extended warranty plans from a particular dealership such as this, you might be left hanging if that particular dealership goes out of business.

Some will say that when you buy extended warranty plans, it’s equivalent to throwing your money out the window.  Extended warranties are great if you need them, if you do not, it can prove to be expensive and a waste of money.  Some car shoppers opt for extended warranties because they want peace of mind.

Make sure you review your coverage plan carefully and choose the right plan that fits your needs.  It is obvious with the high cost of repairs that a coverage, which covers minor repairs that come along with normal wear and tear, is wise options.

Do not be lured into cheap extended warranty plans.  It is true that you get what you pay for and you do not want to be stuck with having a cheap extended warranty plan that does not cover your repairs when you need it most.

Some people will buy extended warranty plans simply because it is the cheapest.  This is not always the best way to go when seeking extra coverage for your vehicle, in fact, it could prove more expensive in the end if your vehicle breaks down a lot or you gain a major repair such as an engine or transmission and your cheap plan does not cover this.

Cheap auto extended warranties do not cover many minor repairs and when you do file claims with them, they will leave you in the cold.  Some companies will require you to pay for the repairs yourself while reimbursing you later.  You do not want to do business with these types of warranty companies.  You want to buy extended warranty plans from a company that will take care of you when you need them.

It is wise to gain as much information on warranty companies as possible before you buy extended warranty plans.  You can search the web or go one-step further and contact the Better Business Bureau.  If you cannot find any information on a particular company, it is wise to buy extended warranty plans from that company.

You must be warned that there are chances when you buy extended warranty plans for your vehicle, no matter the company you buy it from, will not always cover everything that goes wrong with your vehicle.  If you do not perform required oil changes and other required maintenance, your auto warranty company reserves the right to pay for any repairs, which are a direct result of your neglect of your car.  Make sure you keep up on the required maintenance of your car.

In general, a homeowner can expect to pay anywhere from two to three percent of the loan amount when refinancing a home loan in closing costs.  This amount is made up of various fees which you will encounter when refinancing.  The most prevalent fee is the refinance loan application fee.  This will cost the homeowner anywhere from $250 to $500.  The lender closing fees are also tacked on and average about $750 nationwide.  There are also settlement fees which can tack on an additional $350.  Depending in which state you live, title examination fees can range from $150 to $450.  Title insurance will also vary from state to state and will run about $225 to $400.  Refinancing also takes a lot of documentation and the fees for preparing those documents can run from $200 to $400.  There can also be fees for home inspections, mortgage insurance and hazard insurance.

The above amounts are only estimates and can vary greatly depending on your lender and state.  In some cases, it will pay to shop around for the best rate especially when it comes to title insurance a title search.  You may also be able to save money if the work related to the mortgage is still current.  For example, this could include fees for surveys or inspections.  Before you commit to any loan or start the refinancing procedure, it may be a good idea to talk to a real estate professional or lawyer in order to get a better idea of the fees which you might be facing.  In some cases, you may not have the cash available to go through with the refinancing at that particular moment and would find it better to wait until you can save a little bit more.

An important thing to consider when going through a refinance is to pay attention to the time of the month.  When the refinance closes, there will likely be some outstanding interest on the old loan.  For example, if you close on the 15^th of the month, you will have fifteen days of interest due on the old loan and about fifteen days on the new one.  Your first payment would not be due until the first of the next month because you will have pain the previous month’s interest in the closing costs.  These are just some extra fees that can get tacked on that most people don’t think about.

Keep in mind that not costs are the same.  They can vary by hundreds of dollars depending on which part of the country you live in.  However, there are some rough estimates you can follow to get an idea of how much closing is going to cost.  First, be sure to get a good faith estimate from your lender.  Take this estimate and compare it to an online closing cost calculator.  If you are coming up with a big difference in fees, be sure to bring any questions up to your real estate agent and lender before signing any documentation at the closing.

There are numerous housing closing cost fees.  For example, expect to pay between $50 and $100 for a credit report.  You will have to have the house you are looking at appraised and that will cost between $200 and $400.  The recording and notary fees will cost between $50 and $100.  Escrow fees are some of the most expensive and can be as high as $800 or as low as $200.  All of the documents have to be prepared and the cost of doing so can run up to $100.  You must have a house inspected before you buy it and that can tack on an additional $150 to $250.  Transfer fees are generally up to $100 and lawyer fees can run up to $500.  In all, you could find yourself paying close to $4000 in fees as you close on your new home.

But what happens if you find yourself short of cash at the closing?  In this case, it may be possible to roll the fees into the loan.  However, this can only be done under certain circumstances.  If you didn’t spend all the money the bank was willing to lend on the house, then you can just add in the closing costs with little problem.  If, however, you are close to the loan-to-value ratio, then you might need to get a little more creative.  If you have already reached the maximum LTV, you may need to ask for a seller concession.  Here, you go up on the agreed on selling price by 6% or so.  Then the seller “gives” the buyer back that six percent for closing costs.  For example, if you get a loan for $90,000 on a $100,000 home, the buyer increases the price by 6%.  The buyer then puts down $10,600 rather than $10,000 and the loan is increased.  The extra money is then used to pay the closing costs.  An easier way to have the costs taken care of is to find a very motivated seller who is willing to pay all the closing costs for you.

If you self-employed and looking for a mortgage, the first thing you must do is be very honest with yourself about what you can and cannot afford.  This is especially true if you are dealing with low or no-documentation loans because it can be easy to fudge the numbers a little bit.  You are the only one who truly knows the ebbs and flows of your business and if you can afford the house that you really want.

Once you are certain that you can make the payments, there are numerous things the self-employed can do to make themselves more attractive to lenders.  First, you will want your credit score to be the highest it can possibly be.  Be sure to get a free credit report and check for any inconsistencies or mistakes and have them corrected immediately.  Those with a score over 730 have a better chance of getting a much lower rate, thereby saving themselves thousands of dollars over the course of the loan.

Secondly, put down as much as you can safely afford to do so.  This will make you much more attractive to a lender and you will be less likely to walk away from a home with more money invested into it.  Next, have some significant savings in the bank.  This will show lenders that even if you do fall on hard times, you will have plenty of money to pull from in order to keep up with the payments.  In addition, you will want to pay off any consumer debts such as credit cards.  This will not only free up money for positive cash flow, but it will make it easier to qualify for a higher loan amount.

Lastly, have an established track record of self-employment.  Typically, banks and other lenders will want to see at least two years of documentation.

Speaking of documentation, those who are self-employed will find themselves having to present more of it than traditional workers.  Since you won’t have W-2’s to present, you may find yourself having to show at least two years worth of tax returns, profit and loss statements, business credit reports, balance sheets and documentation which shows your income.

It may also be easier to qualify for a loan if your spouse has a traditional job and a W-2 from their employment.  Because you will be sharing the house, this provides peace of mind that there is a steady income in which to fall back on if need be.

Lastly, be sure to find a lender, either via a bank or mortgage broker, who specialized in loans for the self-employed.  Typically, they will know which type of mortgage will work best for your particular situation and know where to look to get the best rates.

In most cases, financial advisors will tell consumers to wait at least two years after a bankruptcy to try and get a mortgage.  However, there are times where if you have 15% down and can cover the closing cost, you could qualify the day after your debts are discharged.  But keep in mind that you might have a hard time explaining to a bankruptcy judge where all of this money suddenly came from.  Also, understand that the rates won’t be as attractive as the will be if you put two or more years in between you and the discharge.  When you take into consideration that you will be paying interest on the loan for thirty years, getting a lower rate will save you significant money in the long run.

You also cannot be in any form of credit counseling or similar program when trying to get a mortgage.  The best idea is to go on and discharge those debts as lenders will be looking at debt to income ratio, savings and employment history.

Even if you have a bankruptcy in your past, there are still ways to make yourself attractive to lenders.  First, keep the same job.  Lenders like to see buyers who have a long history of stability with the same employer.  Many times, they like to see someone who has been with the same company for at least a year.  While employed and since your debts are taken care of, put some money in the bank to show lenders that you do know how to save.  In addition, get a credit card with a low limit.  Put a little on that card each month, but be sure to pay it off when the statement comes.  This will help you use credit to rebuild your credit.  Lastly, pay all your bills on time and you will soon have a good enough credit background to qualify for a mortgage even after a bankruptcy.

You can even refinance after discharging your debts.  If you file a Chapter 7, you can do so immediately.  If, however, you file Chapter 13 you can actually refinance before the discharge takes place since you are on a payment plan for the next three to five years.  You may even payoff your Chapter 13 if you have enough equity in your home at the time of the filing.  In addition, depending on your trustee rating, credit score and income you may be able to find 100% financing.  You will need to find a mortgage broker to do this work for you.  Banks won’t do this type of refinancing until you have rebuilt your credit over a number of years.