Tips for Improving Your Credit Score

Young man in denim shirt on the phone with credit card company, working to improve his credit scoreWhen you find an apartment you really love, you don’t want to give up on it due to a shaky financial track record. Even if you have a less than stellar credit history, there are many things you can do to improve your score in both the short, and long term. Follow along as we dive into how your credit score works and learn what you can do to work on improving your credit score, no matter your financial background.

Credit Score 101

What makes up your credit score anyway? Your credit score is a grade that tells lenders how you stack up against other potential borrowers. Basically, it’s a rough indication of how likely you are to repay a loan on time. The FICO credit score is an industry standard that is used in over 90% of lending decisions and by all three major credit bureaus. So, this score is most likely what your landlord sees. Don’t be caught off when they do–visit ApartmentSearch’s Moving Resources to find out what your credit score is right now, for free. If your credit score isn’t what you (or your landlord) had in mind, then keep reading and we’ll tell you how to work on improving your score in each of the five areas that FICO considers.

Improving Your Score

1. Make payments on time, every time.

Your payment history is the single most important factor contributing to your credit score. Don’t worry, a few missed payments here and there won’t damage your credit score beyond repair. Try these tricks from Forbes to help your score recover from a spotty payment history.

In the short run…

  • Get current! If you have any outstanding or missed payments, pay them off as soon as possible.
  • Negotiate! If you have a mostly clean payment history, ask your lenders if they will “erase” a missed payment from your record. Explain to them why your payment was late (you lost your job, had an unexpected expense come up, like a medical bill etc.) and offer to pay off the remainder of your balance in exchange for a clean slate.

In the long run…

  • Set up automatic payments for your credit accounts so that you never miss another payment again!

2. Avoid maxing out your cards.

Having a lot of loans, or even a lot of credit card debt, won’t necessarily hurt your credit score. With that being said, lenders will look at your credit utilization ratio (the percent of your total available credit that you have spent) to see what kind of relationship you have with debt. Do you rely heavily on credit to make monthly purchases? Do you frequently use up most of your credit each month? These behaviors are red flags that could be hurting your score, even if you pay off the balance in full each month. Here’s how you can reduce your credit utilization ratio to improve your score.

In the short run…

  • Raise your credit limits. If you have a good payment history, ask your lender to raise your total credit limit. This will lower your credit utilization ratio, and you won’t even have to change your spending habits.
  • Make two payments a month. The first payment will lower your Credit Utilization ratio, and the second will prevent you from paying a late fee and any additional interest.
    Don’t close unused cards. Make a few small purchases on them each month to keep them active. Then pay them off to keep your balance down.

In the long run…

  • Keep your balance on credit cards as low as possible.
  • Pay off debt instead of shifting it around. The same amount of debt on fewer cards can actually hurt your credit score, says FICO.

3. It’s OK to be the new guy on the block.

If you are new to the credit market, or if you’ve never had a line of credit before, this will likely impact your credit score. Thankfully, the length of your credit history only accounts for a small portion of your overall score.

If you’ve never had a credit card…

  • Open one as soon as possible! Use it responsibly and make payments regularly and consistently.
  • Become an Authorized user. If you don’t qualify for your own credit card, ask a relative with a strong credit history to make you a user on their card. Again, be responsible and make all your payments on time. Over time, you will accumulate credit history that will enable you to open up your own card.
  • Be wary of new cards. Opening up new lines of credit can make lenders nervous. Without a stable payment history, who knows if you’ll be able to meet this new financial obligation?

In the short run…

  • Don’t open up lots of new credit cards at one time. Especially if you have a relatively short credit history, this can reduce your credit score.
  • Don’t open new credit cards that you don’t need to increase your credit line. This could negatively impact your credit score in the long run.
  • Know that checking your credit score WILL NOT lower it.

In the long run…

  • Only open up new lines of credit as you need them. If you can, use the credit you already have to make new purchases.

4. Mix it up, but stay on top of your accounts.

The two basic forms of credit accounts are revolving accounts (like your credit card) and installment accounts (such as student loans or mortgages, which you take on as a lump sum and then pay off over time). A mix of both demonstrates responsibility and financial security, provided the accounts are in good standing, says Credit Karma.

In the short run…

  • Consider paying for high ticket items on an installment plan. If you are going to make a big purchase (like a new computer or a piece of furniture) consider asking the store to put it on an installment plan, rather than paying for it with your credit card. Retail installment plans often have low or zero interest rates, so you might even save money in the long run.

In the long run…

  • Don’t open up lines of credit you don’t need. It won’t help your credit score to “mix it up” if you don’t use or pay off the new credit accounts.

Now that you are armed with knowledge about how to improve your credit score, it’s time to put it into practice! Take it a day at a time and you’ll soon see: repairing your credit may not take as long as you think. Head to ApartmentSearch.com to pick out your next dream apartment and give yourself a fun goal to work towards!

Source: blog.apartmentsearch.com

4 Things to Know Before Renting an Income-Restricted Apartment

Family sitting on couch in stylish income restricted apartmentThere’s no doubt about it: Like pretty much everything else in life, the cost to rent an apartment in the U.S. is going up.

Median monthly rent for U.S. apartments rose by 15 percent from 2000 to 2016, according to Harvard University’s Joint Center for Housing Studies. During that time, the median monthly rent went from $850 to $980.

To reduce the cost of an apartment, some renters turn to something called income-restricted housing. At complexes that offer income-restricted apartments, the monthly rental amount takes into account the renter’s income.

How does all of this work? Here are four things you should know before renting an income-restricted apartment.

1. Income-restricted apartments are designed to be affordable.

Income-restricted apartments are meant to help lower-income people afford a place to live. If you qualify for an income-restricted apartment, the savings can be significant.

To be approved for an income-restricted apartment, a household’s gross annual income must be at least 50 or 60 percent less than the median income of the area where you’re looking for an apartment. This percentage depends on the landlord and the type of unit you’re considering. The U.S. Department of Housing and Urban Development (HUD) sets the income guidelines each year.

Here’s an example of how income-restricted housing works.

As of April 2018, a single person making 60 percent of the median income in Phoenix would pay $777 for a one-bedroom apartment or $933 for a two-bedroom apartment in Phoenix, according to the Arizona Department of Housing.

By comparison, the average April 2018 rent for a one-bedroom apartment in Phoenix was around $860 and around $1,000 for a two-bedroom apartment.

The rent for an income-restricted apartment doesn’t go up or down based on your income.

So, if you pay $777 a month for a one-bedroom, income-restricted apartment that’s identical to the one-bedroom, income-restricted apartment next door, your monthly rent also is $777. It doesn’t matter that your neighbor’s take-home pay is slightly more than your pay, as long as both of you meet the income guidelines.

2. The landlord of an income-restricted property will check your background.

As apartment landlords usually do, the landlord of an income-restricted property will make sure you can afford the rent by verifying your employment and income. This also allows the landlord to confirm that your income matches what’s required for an income-restricted apartment.

In addition, the landlord normally will look at your credit record, rental history, and criminal background before approving your rental application.

By the way, don’t lie about income or anything else on your application. If the landlord discovers the lie before you sign a lease, your application could be rejected. Or if the lie is uncovered after you’ve signed a lease, you could be evicted.

3. Income-restricted apartments aren’t public housing.

Income-restricted apartments are owned and operated by private landlords.

But if you live in public housing, a government-run housing authority owns your building and is your landlord, according to the Massachusetts Law Reform Institute. In a few cases, a private company manages the property but the housing authority still owns it.

Typically, rent in public housing is based on a percentage of a renter’s annual income, so one renter might pay a lot less than a neighbor does for an identical apartment. This is known as income-based housing. Most residents of public housing pay 30 percent of their adjusted gross income, which is gross income minus tax deductions.

4. Income-restricted apartments often look like more expensive apartments.

In many cases, you can’t tell the difference between an income-restricted property and a traditional property, since they often appear a lot alike both inside and outside.

Here’s a description of an income-restricted apartment community in Texas:

“Beautifully landscaped grounds contain a swimming pool, picnic area, and a playground. We provide a fantastic clubroom with full kitchen, a fitness center, and an on-site laundry facility. Our apartments offer walk-in closets, large patios, fully equipped kitchens, and full-size washer/dryer connections.”

Sounds pretty great, right? Income restricted rental programs may be more common than you realize. Rental companies will often offer conventional and income restricted apartments side by side. You just have to know where to look and ask! Even if you’re not eligible for such apartments in your area, you can still find affordable apartments on ApartmentSearch. Search for apartments by price and once you sign your lease, get paid $200 in rewards.

Source: blog.apartmentsearch.com

6 First Time Home Buying Mistakes I Made When I Bought My First House

Are you thinking about buying a house? Do you want to avoid common home buying mistakes?

I bought my first house when I was only 20 years old. Even though that was a little over 11 years ago, I have looked back many times and wondered how I did it.first time home buying mistakes

first time home buying mistakes

I made so many first time home buyer mistakes!

Of course, I was young and had a lot to learn. But, I definitely could have done more research to avoid many of the home buying mistakes I made, like not comparing interest rates or understanding the total cost of buying a home.

I’m not alone in how I approached buying a house. There are many people who simply do not understand everything that goes into buying a house, and that’s something that can negatively impact your finances and cause stress. 

Over the years, I have received many emails about buying a house in your early 20s or when you’re young. I also get lots of questions from people who have been renting and are thinking about buying their first home.

I thought it would be interesting to look back on the home buying mistakes I made and explain how to avoid the same mistakes I made. Hopefully you can be a better prepared home buyer than I was!

The mistakes first time home buyers make can cost you money and may even lead to regret. Perhaps you’re wondering why you even bought your home!

One thing you may not know about me is that the first house I ever lived in was actually my own. Growing up, we always lived in small apartments and rented. I wanted to have a home of my own – moving so often as a child was tiring.

Buying a house and being a homeowner was a completely new thing for me.

I had never done yard work, had to deal with house maintenance, home repairs, or anything like that.

I was as new as could be when it comes to living in a house!

It was a buyer’s market when we started searching. It was back in 2009, so the housing market was coming down. This meant that a monthly mortgage payment wasn’t too much more than rent at an apartment.

I felt like I was ready to buy my first house, and I needed a place to live.

So, buying a house seemed like a logical decision.

I made many home buying mistakes, like I said. While I made it through everything, my mistakes could easily have led to major financial trouble.

Read on below to learn more about mistakes home buyers make and my first-time home buyer tips.

Related content on home buying mistakes:

Here were some of my home buying mistakes.

 

first-time home buyer mistakes

This was our first house.

I didn’t prepare.

I was only 20, so I didn’t really understand how things worked, even though I thought I did at the time.

I found an online mortgage lender, and back in 2009, that was kind of a new thing. The company ended up doing a bunch of odd things and made a bunch of paperwork mistakes. It almost seemed scammy because online mortgages were so new at the time.

While my realtor was great and a family friend, she recommended a mortgage loan officer to me, and I just used that person.

The loan officer was great and very friendly.

But, I didn’t compare interest rates at all, I didn’t try to raise my credit score before I started looking at homes, and more.

Instead, I should have been paying attention to my credit score and worked to increase it before I started looking at rates. Then, I should have applied with multiple mortgage lenders and found the best interest rate.

Basically, I didn’t prepare.

Had I spent time increasing my credit score and shopping around for better rates, I could have gotten a better interest rate and saved money on mortgage payments.

While a small percentage difference in interest may not sound like much, it makes a big difference in how much you pay each month and how much you pay over the course of your loan.

For example, here’s the difference in two 30-year mortgages on a $200,000 home (this is before annual taxes being added in to the monthly payment):

  • With an interest rate of 3.25% your monthly payment would be $870, and you would pay $313,349 over the course of your loan.
  • With an interest rate of 4% your monthly payment would be $955, and you would pay $343,739.

That’s a difference of $85 a month, and you will have paid $30,000 more once your mortgage is paid off.

Looking back, I would have done more research on the home buying process and the factors that impact interest rates.

One of the easiest things you can do to avoid this mistake is to start paying attention to your credit score. You can receive free credit reports and credit scores, and I recommend reading Everything You Need To Know About How To Build Credit to learn more.

I avoided adding up all of the costs because it was scary.

Okay, so I knew that having a house could/would be expensive, and luckily we were fine, but wow, are there a lot of costs!

I avoided adding them all up for a while because I knew they would be higher than I thought. Eventually I did, and I was right – adding everything all together was a doozy.

We didn’t start adding up these costs until we were farther along in the buying process, and this is one of the home buying mistakes many people make. 

There are lots of people who only think about their mortgage payment, but there are so many more costs associated with buying a home

Before we purchased a home, we should have gone through all of the typical costs of owning a house and compared it to our housing budget. Comparing your current budget to your new homeowner’s budget will tell you whether or not you can actually afford to buy a home.

Here are some of the homeownership costs you want to consider:

  • Gas/propane.  Many homes run on gas in order to have hot water, to use the stove, and so on.
  • Electricity. Generally, the bigger your home then the higher your electricity bill will be.
  • Sewer. On average, your sewer bill may cost around $30 a month from what I’ve seen.
  • Trash. This isn’t super expensive either, but it’s still a cost to include.
  • Water. Water bills can vary widely. I know many who live in areas where the average water bill is a few hundred each month.
  • Property taxes. Property taxes can vary widely from town to town. You may find yourself looking at two similar houses with similar price tags, but the property taxes may differ by thousands of dollars annually. That is a LOT of money. While it may seem small when compared to the actual home purchase price, remember that you have to pay property taxes annually and a difference of just $3,600 a year is $300 a month for life.
  • Homeowners insurance. Homeowners insurance can be cheap in some areas but crazy expensive in others. Don’t forget to look into the cost of earthquake, flood, and hurricane insurance as well as that can add up quickly depending on where you live – not thinking about these was one of the home buying mistakes I made.
  • Maintenance and repairs. Even if your home is brand new, you may have to pay for repairs, which is something that will come up eventually. No matter how old your home is, repair and maintenance costs will eventually come into play.
  • Homeowners association fees. This can also vary widely. You should always see if the house you are interested in is in an HOA because the fees can be high and there may also be rules you don’t like.
  • Home furnishings. Furnishing your home can be done cheaply, but I know some who buy huge homes but can’t afford to put anything in them, such as a table, a bed, and so on. Why own a $500,000 house if you don’t have any furniture?

 

I probably should have spent less on the actual house.

While the house we bought was less than the amount we were pre-approved for, I definitely think that we could have found a house for even less.

We bought at the top of our budget, and this is one home buying mistake that can really get you in trouble.

Thinking back on it, the amount that we were pre-approved for, as young 20 year olds, was pretty insane. I am very glad that we did not buy a house that was that expensive.

It’s not uncommon to be approved for much more than your budget realistically allows for. Just because the bank approves you for a $350,000 mortgage, for example, does not mean you can afford to buy a house at that price.

We bought at the top of our budget thinking that we would get better jobs eventually. While that worked out in our favor since we were each barely making above minimum wage, it was a decision that could have ended quite badly.

 

We were living paycheck to paycheck and didn’t have an emergency fund.

We were young and didn’t have high paying jobs when we bought our house. In fact, we were barely making more than minimum wage at our jobs.

While we never racked up credit card debt, I did accrue student loans and we were living paycheck to paycheck.

Had one major (or even minor) thing happened with our new house, the only option would have been taking on debt. This is not where you want to be if you have just taken out a big mortgage. 

The best way to avoid this first time home buyer mistake is to set some money aside for emergencies before you buy, and to buy a house that fits in your budget. You want to be able to continue saving while making your new monthly home payments.

 

Make sure your home insurance covers what you need.

While I never had to use my home insurance, there were a few things that it did not cover, and I should have at least thought about them beforehand.

One of the biggest coverage issues was flooding. Flooding is a common problem where we lived in Missouri, yet I didn’t realize until a few years after I had already lived in the house that flooding was not covered unless you signed up for an additional policy.

Now, we weren’t in a floodplain – your lender may require you to buy special flood insurance if you live in a floodplain – but basement flooding was still a fairly common issue where we lived. 

Another special insurance consideration are earthquakes. Many normal home insurance policies do not cover earthquakes.

You can avoid this home buying mistake by researching what is the best kind of insurance policy for where you live. Floods and earthquakes aren’t a problem everywhere, but in some places you may want to have that kind of coverage.

 

Have a larger down payment.

We were 20, and we didn’t have a lot of money saved up before we bought our house.

Therefore, we did not put down a 20% down payment. That might sound like a lot, but 20% is the recommended amount to put down if you want to avoid PMI (private mortgage insurance).

A lender charges PMI because putting less than 20% down makes the loan look like a riskier investment for them. PMI protects lenders from borrowers who default on their loans.

PMI is normally around 0.5% to 1% of the mortgage annually, and it’s added to your monthly payment. If you borrowed a $200,000 mortgage, you would likely pay between $1,000 to $2,000 a year until you paid down enough of your mortgage principal to remove PMI.

We put less than 5% down towards our house purchase, and this led to us having PMI.

I don’t remember exactly how much we paid each month for PMI, but looking back, I could have used that money to pay off my student loans faster, save more, and so on.

While having a larger down payment isn’t one of the home buying mistakes I could have easily changed back then, in general, just saving more money instead of frivolously spending it in the beginning would have been a good decision.

Related content: Can You Remove PMI From Your Mortgage?

 

So, what’s going on with the house now?

As many of you know, we sold our house over 5 years ago. We wanted to travel more, and selling our house made more sense than keeping it.

We actually sold it for quite a loss, as the market was further down than when we bought it.

I’m happy that we bought the house – it taught us a lot, gave us responsibility, and gave us a place to live! And, it taught us how to avoid home buying mistakes in the future.

One of the things I haven’t mentioned is what we paid each for our mortgage. Our monthly payments were just under $1,000. 

Where we lived in the midwest is known for being a low cost of living area. I can’t imagine how we would have bought a house in some other parts of the U.S.

But, the low cost of living meant that buying a house at 20 was more doable.

Is it normal to regret buying a house? Is it normal to have buyers remorse after buying a house?

I don’t know what the statistics are on home buyers remorse, but it does happen. Hopefully with the tips before buying a house above, you can avoid that as much as possible.

Also, being realistic when it comes to what to expect when buying a house can help greatly as well.

What home buying mistakes did you make when you purchased your home?

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Source: makingsenseofcents.com

Mistakes I Made When I Bought My First House At The Age of 20

Are you thinking about buying a house? Do you want to avoid common home buying mistakes?

I bought my first house when I was only 20 years old. Even though that was a little over 11 years ago, I have looked back many times and wondered how I did it.first time home buying mistakes

first time home buying mistakes

I made so many first time home buyer mistakes!

Of course, I was young and had a lot to learn. But, I definitely could have done more research to avoid many of the home buying mistakes I made, like not comparing interest rates or understanding the total cost of buying a home.

I’m not alone in how I approached buying a house. There are many people who simply do not understand everything that goes into buying a house, and that’s something that can negatively impact your finances and cause stress. 

Over the years, I have received many emails about buying a house in your early 20s or when you’re young. I also get lots of questions from people who have been renting and are thinking about buying their first home.

I thought it would be interesting to look back on the home buying mistakes I made and explain how to avoid the same mistakes I made. Hopefully you can be a better prepared home buyer than I was!

The mistakes first time home buyers make can cost you money and may even lead to regret. Perhaps you’re wondering why you even bought your home!

One thing you may not know about me is that the first house I ever lived in was actually my own. Growing up, we always lived in small apartments and rented. I wanted to have a home of my own – moving so often as a child was tiring.

Buying a house and being a homeowner was a completely new thing for me.

I had never done yard work, had to deal with house maintenance, home repairs, or anything like that.

I was as new as could be when it comes to living in a house!

It was a buyer’s market when we started searching. It was back in 2009, so the housing market was coming down. This meant that a monthly mortgage payment wasn’t too much more than rent at an apartment.

I felt like I was ready to buy my first house, and I needed a place to live.

So, buying a house seemed like a logical decision.

I made many home buying mistakes, like I said. While I made it through everything, my mistakes could easily have led to major financial trouble.

Read on below to learn more about mistakes home buyers make and my first-time home buyer tips.

Related content on home buying mistakes:

Here were some of my home buying mistakes.

 

first-time home buyer mistakes

This was our first house.

I didn’t prepare.

I was only 20, so I didn’t really understand how things worked, even though I thought I did at the time.

I found an online mortgage lender, and back in 2009, that was kind of a new thing. The company ended up doing a bunch of odd things and made a bunch of paperwork mistakes. It almost seemed scammy because online mortgages were so new at the time.

While my realtor was great and a family friend, she recommended a mortgage loan officer to me, and I just used that person.

The loan officer was great and very friendly.

But, I didn’t compare interest rates at all, I didn’t try to raise my credit score before I started looking at homes, and more.

Instead, I should have been paying attention to my credit score and worked to increase it before I started looking at rates. Then, I should have applied with multiple mortgage lenders and found the best interest rate.

Basically, I didn’t prepare.

Had I spent time increasing my credit score and shopping around for better rates, I could have gotten a better interest rate and saved money on mortgage payments.

While a small percentage difference in interest may not sound like much, it makes a big difference in how much you pay each month and how much you pay over the course of your loan.

For example, here’s the difference in two 30-year mortgages on a $200,000 home (this is before annual taxes being added in to the monthly payment):

  • With an interest rate of 3.25% your monthly payment would be $870, and you would pay $313,349 over the course of your loan.
  • With an interest rate of 4% your monthly payment would be $955, and you would pay $343,739.

That’s a difference of $85 a month, and you will have paid $30,000 more once your mortgage is paid off.

Looking back, I would have done more research on the home buying process and the factors that impact interest rates.

One of the easiest things you can do to avoid this mistake is to start paying attention to your credit score. You can receive free credit reports and credit scores, and I recommend reading Everything You Need To Know About How To Build Credit to learn more.

I avoided adding up all of the costs because it was scary.

Okay, so I knew that having a house could/would be expensive, and luckily we were fine, but wow, are there a lot of costs!

I avoided adding them all up for a while because I knew they would be higher than I thought. Eventually I did, and I was right – adding everything all together was a doozy.

We didn’t start adding up these costs until we were farther along in the buying process, and this is one of the home buying mistakes many people make. 

There are lots of people who only think about their mortgage payment, but there are so many more costs associated with buying a home

Before we purchased a home, we should have gone through all of the typical costs of owning a house and compared it to our housing budget. Comparing your current budget to your new homeowner’s budget will tell you whether or not you can actually afford to buy a home.

Here are some of the homeownership costs you want to consider:

  • Gas/propane.  Many homes run on gas in order to have hot water, to use the stove, and so on.
  • Electricity. Generally, the bigger your home then the higher your electricity bill will be.
  • Sewer. On average, your sewer bill may cost around $30 a month from what I’ve seen.
  • Trash. This isn’t super expensive either, but it’s still a cost to include.
  • Water. Water bills can vary widely. I know many who live in areas where the average water bill is a few hundred each month.
  • Property taxes. Property taxes can vary widely from town to town. You may find yourself looking at two similar houses with similar price tags, but the property taxes may differ by thousands of dollars annually. That is a LOT of money. While it may seem small when compared to the actual home purchase price, remember that you have to pay property taxes annually and a difference of just $3,600 a year is $300 a month for life.
  • Homeowners insurance. Homeowners insurance can be cheap in some areas but crazy expensive in others. Don’t forget to look into the cost of earthquake, flood, and hurricane insurance as well as that can add up quickly depending on where you live – not thinking about these was one of the home buying mistakes I made.
  • Maintenance and repairs. Even if your home is brand new, you may have to pay for repairs, which is something that will come up eventually. No matter how old your home is, repair and maintenance costs will eventually come into play.
  • Homeowners association fees. This can also vary widely. You should always see if the house you are interested in is in an HOA because the fees can be high and there may also be rules you don’t like.
  • Home furnishings. Furnishing your home can be done cheaply, but I know some who buy huge homes but can’t afford to put anything in them, such as a table, a bed, and so on. Why own a $500,000 house if you don’t have any furniture?

 

I probably should have spent less on the actual house.

While the house we bought was less than the amount we were pre-approved for, I definitely think that we could have found a house for even less.

We bought at the top of our budget, and this is one home buying mistake that can really get you in trouble.

Thinking back on it, the amount that we were pre-approved for, as young 20 year olds, was pretty insane. I am very glad that we did not buy a house that was that expensive.

It’s not uncommon to be approved for much more than your budget realistically allows for. Just because the bank approves you for a $350,000 mortgage, for example, does not mean you can afford to buy a house at that price.

We bought at the top of our budget thinking that we would get better jobs eventually. While that worked out in our favor since we were each barely making above minimum wage, it was a decision that could have ended quite badly.

 

We were living paycheck to paycheck and didn’t have an emergency fund.

We were young and didn’t have high paying jobs when we bought our house. In fact, we were barely making more than minimum wage at our jobs.

While we never racked up credit card debt, I did accrue student loans and we were living paycheck to paycheck.

Had one major (or even minor) thing happened with our new house, the only option would have been taking on debt. This is not where you want to be if you have just taken out a big mortgage. 

The best way to avoid this first time home buyer mistake is to set some money aside for emergencies before you buy, and to buy a house that fits in your budget. You want to be able to continue saving while making your new monthly home payments.

 

Make sure your home insurance covers what you need.

While I never had to use my home insurance, there were a few things that it did not cover, and I should have at least thought about them beforehand.

One of the biggest coverage issues was flooding. Flooding is a common problem where we lived in Missouri, yet I didn’t realize until a few years after I had already lived in the house that flooding was not covered unless you signed up for an additional policy.

Now, we weren’t in a floodplain – your lender may require you to buy special flood insurance if you live in a floodplain – but basement flooding was still a fairly common issue where we lived. 

Another special insurance consideration are earthquakes. Many normal home insurance policies do not cover earthquakes.

You can avoid this home buying mistake by researching what is the best kind of insurance policy for where you live. Floods and earthquakes aren’t a problem everywhere, but in some places you may want to have that kind of coverage.

 

Have a larger down payment.

We were 20, and we didn’t have a lot of money saved up before we bought our house.

Therefore, we did not put down a 20% down payment. That might sound like a lot, but 20% is the recommended amount to put down if you want to avoid PMI (private mortgage insurance).

A lender charges PMI because putting less than 20% down makes the loan look like a riskier investment for them. PMI protects lenders from borrowers who default on their loans.

PMI is normally around 0.5% to 1% of the mortgage annually, and it’s added to your monthly payment. If you borrowed a $200,000 mortgage, you would likely pay between $1,000 to $2,000 a year until you paid down enough of your mortgage principal to remove PMI.

We put less than 5% down towards our house purchase, and this led to us having PMI.

I don’t remember exactly how much we paid each month for PMI, but looking back, I could have used that money to pay off my student loans faster, save more, and so on.

While having a larger down payment isn’t one of the home buying mistakes I could have easily changed back then, in general, just saving more money instead of frivolously spending it in the beginning would have been a good decision.

Related content: Can You Remove PMI From Your Mortgage?

 

So, what’s going on with the house now?

As many of you know, we sold our house over 5 years ago. We wanted to travel more, and selling our house made more sense than keeping it.

We actually sold it for quite a loss, as the market was further down than when we bought it.

I’m happy that we bought the house – it taught us a lot, gave us responsibility, and gave us a place to live! And, it taught us how to avoid home buying mistakes in the future.

One of the things I haven’t mentioned is what we paid each for our mortgage. Our monthly payments were just under $1,000. 

Where we lived in the midwest is known for being a low cost of living area. I can’t imagine how we would have bought a house in some other parts of the U.S.

But, the low cost of living meant that buying a house at 20 was more doable.

Is it normal to regret buying a house? Is it normal to have buyers remorse after buying a house?

I don’t know what the statistics are on home buyers remorse, but it does happen. Hopefully with the tips before buying a house above, you can avoid that as much as possible.

Also, being realistic when it comes to what to expect when buying a house can help greatly as well.

What home buying mistakes did you make when you purchased your home?

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Source: makingsenseofcents.com

20 Grocery Shopping Tips to Save Your Family Big Bucks

Groceries make up a huge chunk of your family budget. With Mighty Mommy’s strategies and smart tips, you can drastically cut your food bill and enjoy hearty savings along with delicious meals.

By

Cheryl Butler
February 15, 2021

food prices rose 2.6% in 2020. That’s the biggest increase in nearly 50 years.

Whether the pandemic is the reason you’re spending more on food or you’ve just never taken the time to figure out a money-saving strategy for your grocery bill, now is the perfect time to turn that around. These smart grocery bill hacks will save you time and help you keep your hard-earned bucks in your wallet without the hassle of clipping coupons. 

Have a plan to save money on groceries

1. Don’t wing it; plan it!

Hands down, the easiest way to save thousands of dollars each year on your grocery budget is to get on board with meal planning. No matter the size of your family, when you take time to plan your meals you’ll always be ahead of the grocery game. Having a plan, and a shopping list to match, will not only save time, but you’ll be less inclined to buy things you don’t need. Bonus: You won’t have to waste gas on extra trips because you forgot to pick up a key ingredient.

2. Get a meal planning app

A free meal planning app will eliminate the guesswork. Two of my favorites are Spoonacular, which syncs with your google calendar, and Yummly, where you can search for recipes based on meal course (such as entree or side), prep time, or fun new menu trends.

3. Keep your pantry stocked

You don’t need to have tons of extra space in your home to have a well-stocked pantry. You know what your family loves to eat, so make sure you always have the basic ingredients (like pasta, rice, seasoning mixes, and more) on hand. If you always have the basics to whip a meal together, you’ll be less likely to opt for pricey take-out. So, before you make your weekly grocery list, shop your shelves first. What do you have that you could use in your meal plan this week? What’s running low?

Supercook is a time-saving app for doing a little planning based on what’s in your pantry. Enter the ingredients you have on hand and it suggests dozens of yummy, cost-saving meals you can whip up in no time!

4. Stock up during sales

Take advantage of sales to stock up. My rule of thumb for sale items is to buy one to use now and two for later. Just make sure you’re buying versatile, family-tested items you know you’ll use. Impulse items might end up abandoned on a pantry shelf long past their expiration date.

Try these produce hacks

5. Shop seasonal

My grandmother taught me early to take advantage of seasonal produce. Whether it was berry-picking season or time for autumnal root-veggies—nature always provided a palate of seasonal goodness. As tempting as it is to buy juicy strawberries in January, you’ll likely pay more for out-of-season produce. Pay attention to mother nature’s timetable.

6. Weigh your produce

Grocery stores have scales for a reason! I can’t tell you how many times I thought I could eyeball a bunch of cherries or a few heads of broccoli only to find that I bought way more than I needed.

7. Grab from the back

Your friendly grocer stocks the oldest products at the front of the shelves so they’ll get purchased before they expire. If you’re using that produce in a meal soon, go ahead and grab from the front. But if you’ll need to store your produce for a while, reach in and grab from the back to get something fresher that will last longer in your fridge or pantry.

8. Buy reduced

Of course, fresh produce is great! But don’t be afraid to buy from the “reduced” section in your favorite store. Bell peppers, tomatoes, bananas—there is always something that needs to be used immediately. If you’re going to use bell peppers in tonight’s recipe, go ahead and get the ones that are marked down for a quick sale. They’ll still be fresh and tasty, but you’ll save money. You’ll also make sure that produce doesn’t end up wasted when your grocer has to discard it.

9. Nix the pre-cut produce

As tempting and timesaving as the pre-cut straw carrots or apple wedges are, you’re probably paying way too much for the convenience. Buy the whole fruit or veggie and take a few minutes to prep yourself.

Older kids make excellent sous-chefs! Teach them to use a knife safely so they can chop veggies and fruits. They’ll learn valuable life skills while they help out in the kitchen. Check out the video below for a review of knife skills.

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Take advantage of your freezer

10. Stock up on freezing supplies

Freezing meals, leftovers, and fresh produce reduces waste and saves time and money, so keep the necessary supplies on hand. You’ll need sealable storage containers and bags. (Bonus points if they’re reusable—you’ll be both frugal and eco-friendly!) Have masking tape and markers on hand to date and label your items so you won’t have mystery contents taking up valuable space.  I keep a simple freezer inventory sheet on a magnet on my freezer where I note the date and the item that was frozen.

11. Learn what you can freeze

Some surprising items that freeze beautifully: whole avocados, breadcrumbs in canisters or bags, dairy products such as cream cheese, sour cream, yogurt, shredded and sliced cheese, pancake mix, nuts, chocolate chips, hummus, or even premade peanut butter and jelly sandwiches. Soups and sauces freeze well in Mason jars (be sure to leave one or two inches at the top of the jar for expansion.) Buy chicken breasts and other meats in bulk when on sale and slice and bag individually in marinades or plain. Even cake mixes and containers of frosting freeze well.

12. Cook and freeze family favorites in batches

Batch cooking means making a double batch of a favorite recipe. You serve one batch and freeze the other. This technique requires planning and some extra work up front, but the reward is having a variety of your family’s “go-to” recipes available in a pinch. Betty Crocker has a helpful article full of great tips: Thirty Day Batch Cooking. I learned about batch cooking during my early pregnancies. The time and energy, and indeed the money I saved by employing this technique, was priceless.

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Recommended by Mighty Mommy

If you freeze a lot of food, the FoodSaver vacuum sealer is an excellent investment. It keeps frozen food fresher much longer and prevents freezer burn. I couldn’t do without it!

Incorporate these nifty cost-saving quick-tips

13. Don’t be afraid to try generic brands. Many come from the companies you already love.

14. Embrace “yellow sticker” items, especially meat. These are items reduced for a quick sale. They’re still safe to eat, of course. Or you can add them to your freezer stockpile.

15. Download your store apps. You’ll be able to take advantage of digital coupons or sales you didn’t see in your flier.

16. Shop in the middle of the week. This is when most stores offer their weekly deals.

17. Consider ordering groceries online. You’ll be able to see your order tally right before your eyes, and you won’t be as likely to make impulse purchases.

18. Download the Fetch Rewards app. This is like putting free money in your pocket every time you shop. Simply scan your receipts each time you shop and you’ll earn rewards and bonuses that you can cash in for gift cards at Amazon and your other favorite online shopping sites.

19. Shop with cash, not a debit card. Several years ago, I switched to shopping with cash. Knowing I have a set budget helps me stick to my grocery list. And speaking of grocery lists …

20. Never shop without a grocery list. You’ll buy stuff you don’t need and forget stuff you do! Pinterest has lots of free templates to get you started.

Don’t forget about the local dollar store—it’s useful for more than just party supplies! Most stores have staples like condiments and spices, but also grocery items like bread and beverages.