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Month: February 2019

6 Tips To Improve Your Credit Score

improve credit scoreWhether you are seeking to buy a home or make another large purchase, it is important that you have a good credit score.

Many consumers do not think about this until they are already in the process of buying a house, and then they realize that their FICO credit score is not what it should be. Don’t make that mistake-follow these guidelines to improve your credit score now:

1. Get a copy of your credit report. In most states, it is now the law for you to be able to receive a free copy of this report. Look over it carefully and make sure there are no errors. If there are errors, correct them as soon as you can.

2. Do not open credit card accounts that you will not be using, and do not open a lot of new accounts in a short period of time. Just because you get a free gift or 10% off a purchase for opening a credit card, if you do not intend to use the card or you already have many cards, think twice before you open a new account. The free gift may not be worth the reduction in your credit score.

3. Be sure to pay your bills on time. You obviously do not want a lot of 30 or 60 day late payments, or worse, unpaid bills on your credit report.

4. Keep your credit card balances low. If you have a card with a $5,000 limit on spending or cash advances, keep your purchases at $1,000 or below. If your card limit is $25,000, keep the balance below $7,000.

5. If you have some bad or questionable credit on your report, open some new credit accounts and pay them promptly and responsibly. Lenders will want to see that you are able to handle paying off the debt in a timely manner.

6. Do not worry if you do have credit cards or loans. As long as you do not have too high of a balance on the credit cards and you are paying them off regularly and promptly, this can actually improve your credit score.

These are just some of the ways you can improve your overall credit score. Keep in mind that credit scores affect many areas of your life from loans to interest rates to job offers (potential employers sometimes check credit scores).

Your credit score is affected very quickly by negative credit. Paying bills on time and other positive credit will probably not improve your score for 6-12 months.

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Private Mortgage Insurance: The Basics

private mortgage insurancePurchasing a new home – especially for young families – can be difficult even with private mortgage insurance (PMI), but having such insurance strategies in place allows people to purchase homes even when they can’t afford a sizeable down payment.

Private mortgage insurance is required for approximately 10% of those who seek mortgages every year and is usually required by the mortgage company if you can’t afford at least a 20% down payment on your home.

Who Needs Private Mortgage Insurance?

Private mortgage insurance isn’t required for everyone, but according to bankrate.com, approximately 1.5 million Americans had it in 2005.

Your mortgage company assures its investment in you by requiring private mortgage insurance, which usually runs between $60 and $150 per month in addition to your mortgage payments.

You can read your mortgage agreement to find out how long you have to carry it.

How Large of a Down Payment Do I Need to Avoid Private Mortgage Insurance?

Most mortgage companies only require private mortgage insurance if you put less than 20% down on your home.

Statistics have shown that people who put less than 20% down are more likely to default on their mortgage, so rest assured that this number wasn’t pulled out of thin air.

Although 20% is the norm, however, you might get away without private mortgage insurance if you put a little bit less. It depends on the mortgage company.

How Can I Shop Around for the Best Private Mortgage Insurance Rate?

You can’t. Your mortgage company works with one of the eight insurance companies nationwide that provide private mortgage insurance, and they will sign you up with that provider’s service.

The good news is that most private mortgage insurance is about the same price per month; the bad news is that you don’t get a say in the matter.

Why is Private Mortgage Insurance Necessary?

The mortgage company uses private mortgage insurance to pay for the loan if you default.

In other words, if you fail to make your monthly mortgage payments, the insurance company will reimburse the mortgage lender for their loss. Because so many homeowners default on their mortgages, this is a necessary insurance policy for the mortgage company.

When Can I Drop My Private Mortgage Insurance?

That all depends. Some mortgage lenders will allow you to drop private mortgage insurance as soon as you have 20% equity in your home (i.e. you’ve paid off 20% of the loan).

Others, however, require that you hold the private mortgage insurance for a specific number of years.

Check with your mortgage company to find out if you are still required to carry private mortgage insurance, and if not, how you should go about dropping it.

What’s the Catch?

Most people don’t even realize that they can cancel their private mortgage insurance at a certain time.

When you close on a house, you are inundated with paperwork, and you might not read everything as closely as you should.

The Private Mortgage Insurance Act (which went into effect in 1999) says that homeowners have the right to cancel their insurance once they’ve met the requirements set forth by the mortgage lender.

Don’t be taken advantage of, and make sure that you’ve read all the paperwork carefully.

There’s no reason to pay an extra bill every month if you’ve met the necessary requirements.

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How I Only Spent $9,000 on a Four-Year College Education

cost of collegeThe cost of college is astronomical!

When I began looking at college for my daughter I quickly realized I could buy a nice summer home for what I would spend for a four-year degree.

Tuition had risen over 200% of what I paid per year in the ’80s. As a responsible parent, I had tried to put aside a few dollars for education early on – but sometimes life happens. The thought of accumulating a huge amount of debt from student loans during four years was disturbing.

I knew that I had to develop a plan to obtain financial assistance and do it rather quickly if I wanted my daughter to go to college. So, I decided to do what I do best – research and plan.

What I Learned

When to begin looking for financial aid is more important than where to look for scholarships. If you and your child wait until senior year of high school to begin looking for funding, you have greatly limited your success. I began looking at the different types of aid available and their requirements when my daughter was in eighth grade. That was when I discovered that I would not meet the requirements for federal aid. I had to develop another strategy. I began seeking scholarships.

I found out there were many scholarships offered by local entities in my city, county, and state that didn’t require students to have extremely high-grade point averages, extreme financial need, or great athletic ability. You may find that your area may have the same type of opportunities. While some of these scholarships don’t pay full-tuition (some may be as low as $100), they do provide enough funds to buy books, pay some room and board for a year or supplement other fees that are associated with attending a post-secondary institution. Most of the local scholarships I found didn’t require a parent to submit tax forms or wade through lengthy applications.

I spent a lot of hours seeking scholarships from various online sources and signing up for free scholarship searches that provided electronic notifications of scholarships for which we were eligible. Online services will provide information on scholarships based on your child’s career interests. NEVER PAY TO FIND SCHOLARSHIPS. You can find them on your own! Here are some places to look:

Newspapers
Clubs and organizations often announce winners of scholarships. Keep the names and contact information of these scholarships. Contact the club for requirements.

Colleges
College-based scholarships are provided by the local/regional college to students who meet certain academic requirements. Most rely on SAT or ACT scores, high school ranking, choice of major or residence. Check with the college or university your child plans to attend. Don’t assume the college will automatically consider your child for the scholarship even if he meets all the criteria. It is still the student’s responsibility to apply and meet all deadlines.

Businesses and Corporations
Start with businesses and corporations in your town or in your state. Their requirements may be less stringent than some of the national companies. If your child has a particular interest, such as engineering or culinary, check with companies that supply those industries. They may have scholarships that are awarded to students interested in their industry. Contact the public relations department or check their website for information. After you have explored your options with the locals, begin to look for scholarships from the national companies such as Coca-Cola, Ford, and Microsoft just to name a few. An internet search may provide information about others.

Private Scholarships/Foundations
Trust funds, memorial funds, foundations or individuals provide private scholarships. These scholarships may have very specific requirements such as residence, school, interests or hobbies. Check on the internet or your area phone book for foundation information.

Clubs and Groups in Your Community
Even if you aren’t a member of any local civic groups and organizations like the Optimist Club, Lions or Kiwanis – or even a sorority or fraternity – your child may still be eligible based on his involvement in the community. My daughter received a sorority scholarship, but I am not a member.

Professional Societies and Associations
Professional societies and associations offer scholarships to encourage students to choose majors in a certain field. Check with medical, public safety or teaching organizations with local chapters in your community. Use the Internet to find professional societies in the field that your child will be majoring. They may possibly be offering money to students.

Religious Organizations
Churches, synagogues or other places of worship often sponsor scholarships. Check with worship-oriented service groups as well. You may not have to be a member of the organization but believe or live their mission or tenets. Some will provide scholarships to students who plan to major in a particular religion or belief.

Minority Organizations
To provide for increased minority diversity, organizations such as the NAACP, sororities or fraternities and some civic organizations use race, ethnicity, religion or gender as eligibility requirements for their scholarships.

Your Job
Check with your union or place of employment. Some of these scholarships are based on length of membership or employment; however, they are an excellent starting point.

Your Friends and Family
Many times your friends will see information through all of the above-listed sources. Have them on the lookout for you. I received quite a bit of information from friends regarding scholarships. (And who knows, maybe they’ll throw in a few dollars, too.)

On Campus Jobs
On campus jobs or work study is another option that schools offer. Students work a limited number of hours per week. The money earned can go toward fees, travel expenses or just spending money.

Ready, Set, Go

startBy the time my daughter had entered her freshman year, we had received a full tuition scholarship (for four years), a sorority scholarship (she was not a member), and a scholarship from our church. Those funds covered 80% of her first year room and board expenses.

We continued the process throughout her four-years. As she went through, we received more money from the college, she became a resident assistant that allowed for free room and board, and she received a part-time job as a student ambassador.

So, parents of ninth, tenth and eleventh -graders TAKE NOTE. Get to work EARLY. EVERY student should explore all financial aid options and meet with a financial aid counselor.

Remember, college and scholarship applications look for community involvement, academic achievement, social interaction, and a host of other qualifiers.

Get your child involved, get his grades “acceptable” and work on those entrance exam scores!!!!

And remember; keep looking for scholarships after your child is in school. Schools often provide scholarships to attending students, too.

Good luck!

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Why You Should Consolidate Student Loans

student loansCollege tuition has increased at rates well above inflation in the last few decades in order to support the cost of highly-trained professors, university research, facilities, activities, equipment and the like.

The college has gotten so expensive that most students can’t afford to pay for it upfront any more, and according to a recent NPSAS study, 2 out of every 3 students ended up with student loans after college.

If you are one of those students, you should consider the option to consolidate student loans.

Student loan consolidation is a good thing to do for a number of reasons, let’s look at why it’s such a good idea.

The average college student ends up with $19,202 in federal student loan debt after graduation. Usually, this money is broken up into several different small loans each semester, with whatever the variable interest rate Congress happens to decide. Right now it’s at 6.8%, which is a lot higher than it’s been recently, but the new democratically controlled congress is working to lower it, but there’s no guarantee either way. If you do consolidate student loans now, your rate is guaranteed to stay the same and there will be no surprises.

Usually there’s a 6 month grace period before you have to begin repaying your federal student loans, and usually, you’ll get a discount if you consolidate student loans within this time period. Often time this consolidation discount can give you from .5% to 1.0% off your rate, which is a great deal.

You can also say money when you consolidate student loans by enrolling in a “direct debit” payment system. Basically, the money is taken out of your checking account through means of EFT transfers rather than you writing a check every month. There’s evidence which supports that people who pay with EFT are much more likely to pay than those who just use checks.

With a lot of refinancing companies, you can get some money back after you make your payments on time for a certain period after you consolidate student loans. In my fianc辿’s case, she was able to get 3% of her loan balance back after paying 9 payments on time through College Loan Corporation.

With consolidation loans, you get to make one easier payment rather than writing checks to multiple banks, which makes student loans a lot easier to manage. Usually, the application processes aren’t too bad either, but saving on the interest rate is the main reason to consolidate your student loans.

There’s a lot of different companies that will allow you to consolidate student loans, you’ll want to compare at least 3 different companies to make sure you are getting the best deal on your student loan consolidation loan. You’ll want to consider repayment terms, fees, interest rates, and any other special features that come with refinancing with a certain company. It’s definitely a worthwhile thing to do after you graduate college, so be sure to do so.

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How To Find the Right Home Loan Lender

home loanIt is nearly impossible to log onto the Internet or turn on the television without seeing an advertisement for one or another home loan lender.

In addition to the lenders are those offering second mortgages, refinancing, home equity loans, and a host of other loans that are willing and perfectly happy to use your home as security for the benefit of loaning you their money.

The truth is that ninety percent of the companies you see are legitimate businesses the ugly truth is that there are those who engage in predatory lending practices.

You need to make sure that you are aware of what you truly can and cannot afford to pay each month and over the course of many years before talking to any lender.

It is becoming common practice for people to want more house than they can realistically afford.

People want bigger, better, newer, and more than their budgets will allow and banks over the last decade have been happy to offer all kinds of loans that will help people get into these dream homes, the problem is that eventually, the real world catches up and people realize all too late that they can’t really afford the higher utility costs in addition to the mortgages, or the honeymoon period ends for adjustable rate mortgages and homeowners find they simply cannot make the higher payments.

If there is any doubt about the truth of that, take a look at the record numbers of foreclosures around the country.

You need to make sure that you choose a company that will listen to your short term and long-term financial goals and give you advice and suggestions on how the particular mortgage they offer can assist you in achieving those goals. Don’t choose the first one you find in the phone book or the one that your friend’s mother’s cousin’s brother recommends.

Talk to several different providers and select the one that you not only have the best sense of rapport with but also that you feel will actually go to the mat for you and your mortgage needs.

Mortgage lenders are a dime a dozen, but they are not all created equal and it’s important that you remember that while they work for the mortgage company or lender they represent, they are also working for you.

Ask yourself if they return your calls quickly and answer your questions completely and efficiently. This is not to say that they are on call 24 hours a day for you, they have lives too, but common professional courtesy would be a returned phone call within 24 hours.

Be sure you ask all the questions you have and feel comfortable with a particular lender before signing anything. If a lender pressures you to sign any papers before you are ready, find another one.

You should never feel pressured into choosing a lender and you should never feel threatened, if one ща еруь is willing to work with you, chances are there is another. Taking the time to find the right mortgage lender for you can save time, money, and grief in the long run.

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