Credit Sesame Can Help Homebuyers Fix This Problem Before It Happens

If you’ve ever searched for a home to buy, you know the first step is mortgage pre-approval — and in today’s competitive market, you likely need to have it before you even put in an offer.

But if you’re like one-fifth of Americans, an error on your credit report could mean banks could be scared of lending to you and won’t give you a pre-approval. And even if they do, it could be for an absurd loan rate that can cost you tens of thousands of dollars or more by the time you pay off the house — yikes.

So if you didn’t see that roadblock coming, your dream house could be someone else’s before you have a chance to fix it.

That’s why you need to make sure your credit report card is free of errors and your score is in tip-top shape before you even start Zillow-ing. A free website called Credit Sesame makes it super easy to check for issues and can help you raise your score. And when you do improve, you can earn cash rewards every 30 days!1

By signing up for a free account with Credit Sesame, you’ll have quick access to your score and personalized tips on how to improve it. You’ll also get free credit monitoring and ID protection, meaning no surprises when you start the homebuying process.

It takes about 90 seconds to join the free service. And you don’t need to put in your credit card — meaning no sneaky subscriptions.

Being prepared before you put an offer on the corner lot starts with a clean credit report and a high credit score. Just enter your email address here to sign up for your free account with Credit Sesame. It could be the first step toward your dream home.

Kari Faber is a staff writer at The Penny Hoarder.

1 This is a limited time offer. To be eligible for cash rewards, a deposit of $25.00, every 30 days, must be made into your Sesame Cash account. Rewards earnings are available for credit score improvements of ten points or more within a 30-day reward cycle. Improvements are calculated from your baseline credit score, as determined by Credit Sesame. Please review the full program terms for more details.

Source: thepennyhoarder.com

7 Eviction Moratorium FAQs for Renters, Landlords

If you’re behind on your rent because of the coronavirus pandemic, you just got extra time to catch up. During his first day in office, President Joe Biden extended an order that bars most landlords from pursuing evictions through the end of March 2021.

With millions of people at risk of eviction, housing advocates have argued that a large wave of homelessness could worsen the spread by crowding shelters and forcing people into cramped living spaces.

7 Eviction Moratorium FAQs: What Renters and Landlords Should Know

President Donald Trump initially passed the order through the Centers for Disease Control in response back in August. Before Biden ordered the extension, the moratorium was set to end Jan. 31, 2021. We’ve compiled what we know about the latest order into this eviction moratorium FAQ.

1. How do I know if I qualify for the eviction moratorium?

To qualify, you’ll have to sign a sworn declaration affirming that:

  • You’ve tried to obtain government assistance for your rent or housing payments.
  • You earned no more than $99,000 in 2020 if you’re a single tax filer or $198,000 if you’re married filing jointly. You could also qualify if you weren’t required to file taxes in 2019 or if you received a coronavirus stimulus check. (The income limits for the first stimulus checks were the same as the moratorium limits.)
  • You’ve been unable to pay the rent because you lost your job, income or work hours, or you’ve had significant medical expenses.
  • You’ve made your best attempt to make partial payments that are as close to the full payment as possible.
  • The eviction would either leave you homeless or force you into close quarters or a shared living situation.

2. What should I do if my landlord is threatening to evict me?

Print out this declaration form, fill it out and give it to your landlord or whoever owns the property you live in. Note that the form still cites Jan. 31, rather than March 31, as the date the moratorium ends. Each adult covered by the lease should print out their own form. You don’t need to send a copy to the federal government.

3. Does this mean my back rent is forgiven?

No, no, NO. We cannot stress that point enough. Any unpaid rent you owe will continue to accrue. In fact, the order explicitly states that it doesn’t preclude landlords from charging fees, penalties and interest as the result of missed payments.

If your rent is $1,000 a month and you last paid in August, you should expect to owe $7,000 in back rent for September through March, plus whatever fees and interest your landlord tacks on AND April’s rent when April 2021 rolls around.

4. Does the order provide money for rental assistance?

No. The order simply delays eviction proceedings for another two months. It doesn’t offer financial assistance for renters or landlords. However, the stimulus bill that became law in December included $25 billion in emergency rental assistance.

The assistance will be administered by state and local governments. Renters may be eligible if their household income is less than 80% of the area median income, they’ve been impacted financially by COVID-19 and they’re at risk of losing their home. Money can be used for back rent and utility payments, as well as future payments.

To apply or get more information, you’ll need to contact your local housing agency. Figuring which agency to connect with can get complicated. If you’re not sure what agency to contact, try calling the 211 helpline for direction.

5. I’m a landlord who lives off of rental income. What does this order mean for me?

The order doesn’t include financial assistance, however, you could be eligible for a piece of the $25 billion of rental relief. Check with your local housing agency for more information.

Landlords can still pursue evictions, back rent, fees and interest once the moratorium ends. But the order also makes it clear that landlords who violate it could face hefty penalties.

An individual who violates the order could face a fine of up to $100,000, a year in jail or both — and that’s if the eviction doesn’t result in death. If a death does occur, the possible fine goes up to $250,000, in addition to the possibility of a year in jail.

Organizations that violate face a fee of up to $200,000 in cases that don’t involve death, or up to $500,000 for cases where a death occurs.

6. What if I live in a motel?

You’re not covered under the order. The moratorium only applies to tenants covered under a lease. It explicitly states that those living in hotels, motels and other temporary housing are excluded.

In this case, we strongly suggest calling the 211 helpline, which can connect you with local housing resources.

7. Are there any circumstances in which a tenant can still be evicted?

Yes. You can still be evicted for reasons other than not paying. Engaging in criminal activity on the property, threatening other tenants and causing property damage are all still grounds for eviction.

What to Do if You’re Behind on Rent

If you’re behind on rent, you need to treat this as a temporary reprieve to get a plan in place. Don’t wait until March to make your action plan.

Your first step is to try negotiating with your landlord. They may be willing to accept partial payments or waive fees, particularly if you can show them that you’ll be able to resume on-time payments.

Take a hard look at all your bills. Your food, health care and shelter are your top priorities. We’d advise paying your rent unless doing so means going hungry or without medication. Stop making credit card and loan payments if you must. You’ll still owe that rent come April. It will be a lot easier to recover from falling behind on credit cards than losing your housing.

Get connected with local resources now. When you’re facing homelessness, the best resources are available at the local level. Calling that 211 helpline now, even though you’re not on the brink of eviction, is a good starting point. They can also connect you with local food pantries, which could free up some money to put toward rent.

Reach out to family and friends. If you know someone with a spare room who might be willing to let you move in, now is the time to start talking — provided, of course, that the living situation wouldn’t put you at increased risk of contracting the coronavirus.

Pay whatever you can. Every dollar you can put toward rent is a dollar that you won’t owe in April, so pay as much as you can toward your rent, even if you can’t afford the full amount. If you do find yourself facing eviction, showing that you made a good-faith effort to pay can only help your case.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]

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Source: thepennyhoarder.com

3 Must-Do Moves to Prepare for a Mortgage Refinance

3 Must-Do Moves to Prepare for a Mortgage Refinance – SmartAsset

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Mortgage rates are still relatively low. That means that there’s no time like the present to consider refinancing the mortgage loan you have for your home. Shaving at least a point or two off your current rate or converting your 30-year loan to a shorter 15-year term can help you keep more of your money in your pocket and out of the hands of lenders. 

Before you go looking for a refinance loan, it’s a good idea to polish up your application package to make yourself as appealing as possible to lenders. SmartAsset has put together a quick checklist of things you need to do that can up your odds of getting your new home loan approved.

1. Track Down All Your Documents

Refinancing your home usually involves just as much paperwork as your original mortgage loan required. So getting your ducks in a row ahead of time can make the process a bit easier. You’ll likely need proof of income from your pay stubs for the past few pay periods and copies of your tax return for the last two years. If you’re receiving any child support or alimony payments, it’s also a good idea to have receipts or canceled checks on hand to show the sources of that income.

Next, you’ll need to gather up recent statements from your bank and investment accounts as proof of your assets. Lenders often check your account history from the past two years, so it’s best if you hold off on making any big withdrawals or deposits in the months leading up to your refinance application. If you do have any unusual banking activity, be prepared to explain it to the lender with documents to support your claims.

2. Take a Look at Your Credit

Lenders want to see that you’ve got enough income to cover your monthly payments after you refinance, but they’ll also be concerned with your credit score. If it’s been a while since you checked it, there’s no reason to put it off any longer.

There are plenty of ways to check your score without paying anything. You can get free copies of your credit report from each of the three reporting bureaus through AnnualCreditReport.com. Also, a number of credit cards now offer complimentary FICO scores to card members. You can also get a look at your credit score from SmartAsset.

3. Find Out What Your Home Is Worth

Unless you’re applying for an FHA Streamline Refinance, you’ll need to have an accurate estimate of what your home’s value is before applying for a new mortgage loan. The bank must have enough information to decide how much of a loan you’re eligible for. If the appraisal value comes in too low, you may not qualify for a refinance at all. That’s something you want to know before you get too far along in the application process.

Bottom Line

Doing a little homework before you enlist the help of a professional can give you an idea of whether it’s worth it to shell out several hundreds of dollars for an appraisal. From there, you can compare your home’s value to the sale prices of similar homes to determine what ballpark you’re working with.

If you want more help with this decision and others relating to your financial health, you might want to consider hiring a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with top financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Photo credit: ©iStock.com/baona, ©iStock.com/Geber86, ©iStock.com/Nuli_k

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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Why There’s No Way to Avoid Paperwork When Refinancing

Why There’s No Way to Avoid Paperwork When Refinancing – SmartAsset

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So you’re ready to refinance your mortgage loan to one with a lower interest rate. This could be a good move. Depending on your new interest rate, you could save a good bit of money each month in mortgage payments. You might also think that because you’re refinancing with your current mortgage lender, the one you already send your home loan payment to each month, you won’t have to come up with the reams of paperwork usually involved in a mortgage refinance.

Check out our refinance calculator. 

On this latter point, you’d be wrong. Your mortgage lender will always require you to come up with certain documents to prove your income, job status and credit score. This holds true even if you’re refinancing with the mortgage lender who is servicing your existing loan.

So get ready to dig for that paperwork. When you’re refinancing, there’s usually no way around it.

Existing Lenders Need Papers to Approve a Refinance

You might think this makes little sense. After all, your mortgage lender verified your job status and income just five years ago when you took out your existing mortgage loan. But look at it from your mortgage lender’s perspective. Your lender’s job is to make sure you can make your mortgage payments each month, without defaulting on them.

When you apply for a refinance, your lender must verify that your financial situation hasn’t changed since you were first approved for a mortgage loan. Your lender doesn’t know if your spouse lost a job or that you no longer own a rental apartment that once provided steady income each month.

Related Article: 3 Smart Reasons to Refinance Your Mortgage

If your income has changed since you first applied for a mortgage loan, you might not be able to afford your new monthly payment, even if it’s smaller than the one you’re making now. So your lender, playing it safe, requires you to verify your employment status and income before approving you for a refinance, even if he or she has been receiving regular home loan payments from you for years.

Here’s the interesting part of all of this: Because your current lender will require you to provide as much paperwork as any other one would, you might as well shop around when you’re ready to refinance. You can choose any lender licensed to do business in your state. And you might find someone offering a lower interest rate than your existing lender.

The Documents You’ll Need to Refinance

If you are ready to refinance – whether with your current lender or a competitor – you’ll have to provide certain information to prove your income and job status.

You’ll likely have to submit pay stubs from at least the past month and your W-2 forms from the last two years. You’ll need to send copies of your most recent bank account statements and maybe even your tax returns from the last two years.

Your lender will also check your credit to determine whether you have a history of paying your bills on time. Again, you might find this strange. Haven’t you been sending in your monthly mortgage payments to this lender? What your lender doesn’t know is if you’ve been paying your car loan or student loan payments by their due dates. Your credit score will give lenders a more complete view of your financial habits.

Related Article: 3 Must-Do Moves to Prepare for a Mortgage Refinance

Bottom Line

Providing all this paperwork isn’t much fun. But it’s the only way mortgage lenders can make sure you can afford to refinance. This holds true even if you’ve already established a long-term relationship with your lender.

Photo credit: ©iStock.com/sturti, ©iStock.com/Rawpixel, ©iStock.com/DragonImages

Dan Rafter Dan Rafter has been writing about personal finance for more than 15 years. He is an expert in mortgages, refinances and credit issues. Dan’s written for the Washington Post, Chicago Tribune, Phoenix Magazine, Consumers Digest, Business 2.0 Magazine, BusinessWeek online and dozens of trade magazines.

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