How 2017 Rate Volatility Impacts Home Affordability

Prospective home buyers may feel disheartened when they see rates rise. Here’s what it really means for them.

Rising mortgage rates decrease how much home you can afford, but you have more flexibility than you might think because of how lenders qualify you.

Let’s recap the wild ride rates have been on since November, then review how this impacts affordability, and how you can qualify for the most home possible.

2017 rate recap and outlook

Mortgage rates rose .75 percent between the election and Christmas last year, driven by a belief that the new administration’s proposed policies of infrastructure spending, tax cuts, and deregulation would be inflationary if enacted.

Rates rise on inflation threats, and this is what happened post-election.

We said back then the dramatic rate spike might level off, and now that’s happening, albeit in a very volatile way. Rates are up and down daily as investors react to new government policies. One day investors bet inflation will be muted by policy delays or roadblocks (lower rates), and another day investors return to the post-election inflationary bet (higher rates).

The net effect is that rates are off post-election highs, and now are up about .5 percent since the election.

Rate volatility will continue as investors and the Federal Reserve try to predict rate direction under the new administration, so let’s see how it impacts your home-buying plans.

How rates impact home affordability

On a $350,000 home purchase with 20 percent down, a rate spike of .5 percent reduces the home price you can afford by about $17,000.

This measure can make you think you’re doomed to a smaller house or worse neighborhood. But if you understand how lenders think, you can find solutions.

Mortgage lenders use a debt-to-income (DTI) ratio to qualify you, meaning they divide your bills (for housing, car payments, credit cards, etc.) by your income to get a percentage of how much of your monthly income you spend on bills. Most lenders don’t lend to you if your monthly bills are more than 43 percent of your income.

If you earn $65,000 per year and have car, student loan, and credit card bills totaling $615 per month, you qualified for that $350,000 home purchase when rates were .5 percent lower, but now you don’t.

The reason: your DTI percentage was below 43 percent pre-election, but now it’s above 44 percent after rates rose.

On the surface, the only solution would be to reduce your purchase price by $17,000 to $333,000 to get your DTI back below 43 percent.

How to increase home affordability

But instead of reducing your price by $17,000, you can reduce your other non-housing bills.

For example, let’s say your credit card payment was $125 on a balance of $3,125. You need to get that payment down to $45 to qualify for your original $350,000 home purchase price, and you can do so by paying down the balance by $2,000.

That’s a lot better than reducing your purchase price by $17,000, and if you’re light on cash, you can negotiate a seller credit at closing to recoup the $2,000.

How to make the right decisions

Just like all real estate is local, all lending is individual.  So don’t automatically assume rising rates push down the price you qualify for.

A good lender will examine your full financial profile and goals, then dive into the math to find solutions for you.

Looking for more information about mortgages? Check out our Mortgage Learning Center.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

10 Free Activities For Couples Paying off Debt

This post may contain affiliate links. Please read my disclosure for more information.

When my fiance told me he wanted to pay off his student loan debt as fast as possible, my short answer was “NO.”

The little voice inside my head kept reminding me of all the things I’d miss out on if I couldn’t spend money.

It’s not that I didn’t want to pay off my student loans. In grad school, my plan was to have them paid off before I turned 30. But somewhere along the way the compounding interest and dinners out with friends paralyzed me into thinking it simply couldn’t be done.

So when I [finally] got on board with this crazy idea that we’d pay for our wedding in cash and pay off both our loans (and a car loan I’d picked up along the way) I was terrified I’d be a friendless hermit by the end of it.

How to Pay Off Debt Without Becoming a Hermit

But it didn’t take long to see that there’s a lot more to living than tacos, coffee, and vacations. I didn’t stop spending altogether (at least all the time) I became more selective with my spending.

And being selective with my spending means I no longer waste my time on things I only kind of like and I value the things I really do enjoy so much more.

So in order to do more of the things I love that do cost money, we trade in activities like movies, theme parks, and weekend getaways for free activities. Here are some of my personal favorites that you might like too.

  1. The Library

The library is a treasure trove of fun. It’s grown from novels and encyclopedias to include eBooks, DIY books, CDs, movies, and so much more than I could’ve imagined as a kid.

I’ve discovered amazing recipes, learned macramé, and my husband, who doesn’t love reading, has even gotten in on it recently. And it’s free. You don’t even have to search high and low for what you want.

Search the library database from the comfort from your home and request a hold on any item, they’ll deliver it to the library of your choice and alert you when it’s there. Easy peasy!

It’s also an alternative to coffee shops for getting work done. There are quiet spaces and even room rentals available.

  1. Social Running Groups

We love the running group we’re a part of. You can find them at most running stores or groups and events on Facebook. For us, there’s at least one on any given side of town and usually every night of the week.

Most do a 5K(ish) run that starts and ends at a store or bar. Trust me when I say all levels of runners/ walkers/ joggers participate. And since the pack disperses pretty early on it’s easy to cut your run short and not be noticed (not like I ever do that ;))

Trav and I don’t always run together, but sometimes we do, other times I’ll run with a friend or by myself. Everyone meets back up at the end and hangs out. Some groups have raffles or free beer at the end.

  1. Yelp Events

You know about Yelp right? It’s a website/ app that you can find new places to eat, drink, and play. Each city has a Community Ambassador that hosts Yelp events, they are awesome and make for a great free night out.

We’ve been to many and have been thoroughly impressed. The ones we’ve been to have included free food from local restaurants, free (alcoholic) drinks, and lots of free Yelp swag. One even gave us an hour of unlimited gameplay at an arcade, so fun!

You have to be diligent in checking for these official Yelp events, they always fill up. When you find one RSVP on the event page then wait for a confirmation email. There are no +1’s so everyone has to RSVP and get confirmation individually to attend together.

  1. Pantry (Dinner) Party

The dinner party is an oldie but a goodie. You may have to buy some groceries for this one or you can use it as an excuse to clear out the pantry and fridge.

A side dish that goes with nothing? Vegetable about to go bad? Anything [almost] freezer burned?

Get some friends together and it’s sure to be a food match made in conglomerate heaven. And you get the bonus of spending time with good friends or building relationships with new ones!

  1. Bike Ride

Self-explanatory. We love a good bike ride. We live right off a trail and it’s another great exercise activity to do with your significant other, friends, or just by yourself.

And if you want to meet new people, many cities have biking clubs on most days of the week and ranging in speed/experience.

  1. Home Improvement Class

If you own a home or are thinking about purchasing one, this is a great one. Home Depot offers free workshops on everything from installing light fixtures and tile to water conservation hacks and a DIY dog feeder.

Even if you don’t own a home these are great tricks to have up your sleeve for when that time comes.

And it’s empowering to know that if something breaks I can fix it or if he’s at work I can install it. There’s something to be said for the confidence (and frustration) completing a home improvement project can bring.

  1. Events in the Park

We live in a city that loves to be outside and that means tons of free events, orchestra nights, movies on a big screen, fireworks, and parades to name a few. We love bringing a blanket, some chairs, and a picnic for the evening.

The trick is getting there early to find free parking and bringing your own food to avoid the temptation of all the vendors.

This is also a great activity to do in groups because a lot of these things only happen once or twice a year and everyone attends, so why not go together!? Find your city’s event calendar or downtown blog to find out what’s available.

  1. Volunteer

We volunteer at our church and at a foster group home in our area. Volunteering is an amazing way to see your partner interact with others, to grow in boldness (hi introverts) and get to do something for free that helps others and makes you feel good.

I love Habitat For Humanity (make use out of those home improvement classes!) and Big Brothers, Big Sisters (there’s a Big Couple option that’s really fun.) There are options for all time commitments.

And it’s not limited to humanitarian groups. You can volunteer at events like music and food festivals for a couple hours then enjoy those events for free!

  1. Find Water

As a couple who lives 15 minutes from the beach, it’s a wonderful place to relax and feel like you’re somewhere else for a few hours. Trav can play Frisbee with his friends while I nap under the umbrella (I’m dreaming of it right now!)

You may not be close to a beach but you’re probably near some body of water (even if it’s frozen over right now.)

Bring your own drinks and food for the day and it’s a free vacation! You may have to do some extra searching beforehand to find free parking but it’s totally worth it. Don’t forget to reapply sunscreen! Even in winter!

  1. Pokemon Go

And last but not least, the phenomenon that really inspired this post several years ago, Pokemon Go. Can you believe people are stil playing this game!?

Seriously though, it’s amazing to me how addictive this game is and the fact that it’s totally free. Trav and I have been in a head to head battle to see who can catch the best Pokemon, who can level up faster, and walking/running like crazy to hatch those eggs!

Bonus: your group run can double as a Pokemon adventure. I’ve hatched many an egg that way.

And I think a little competition in any relationship is a good thing, just know when to comfort your brokenhearted husband when you catch the Pikachu first. Love it or hate it this is a fun game to play together.

<img data-attachment-id="2601" data-permalink="https://www.modernfrugality.com/10-free-activities-for-couples-paying-off-debt/10freeactivities-2/" data-orig-file="https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?fit=735%2C1102&ssl=1" data-orig-size="735,1102" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"" data-image-title="10 free activities for couples paying off debt" data-image-description="

10 free activities for couples paying off debt

” data-medium-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?fit=200%2C300&ssl=1″ data-large-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of feeling like you have to stay at home 24/7 while paying off debt? Here are 10 free activities to do with your partner while paying off debt. #debtpayofftips #debtpayoff #howtogetoutofdebt #freecouplesactivities #freedatenightideas #frugaldatenight” data-pin-title=”Free Activities to Live a Little While Paying Off Debt” class=”aligncenter size-large wp-image-2601 jetpack-lazy-image” src=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/10-free-activities-for-couples-paying-off-debt.png” alt=”These 10 free activities for couples paying off debt are great! #payoffdebt #frugalfun” width=”400″ height=”600″ data-recalc-dims=”1″ data-lazy-srcset=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/10-free-activities-for-couples-paying-off-debt.png 400w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?resize=200%2C300&ssl=1 200w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?w=735&ssl=1 735w” data-lazy-sizes=”(max-width: 400px) 100vw, 400px” srcset=”data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7″>

<img data-attachment-id="2601" data-permalink="https://www.modernfrugality.com/10-free-activities-for-couples-paying-off-debt/10freeactivities-2/" data-orig-file="https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?fit=735%2C1102&ssl=1" data-orig-size="735,1102" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"" data-image-title="10 free activities for couples paying off debt" data-image-description="

10 free activities for couples paying off debt

” data-medium-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?fit=200%2C300&ssl=1″ data-large-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of feeling like you have to stay at home 24/7 while paying off debt? Here are 10 free activities to do with your partner while paying off debt. #debtpayofftips #debtpayoff #howtogetoutofdebt #freecouplesactivities #freedatenightideas #frugaldatenight” data-pin-title=”Free Activities to Live a Little While Paying Off Debt” class=”aligncenter size-large wp-image-2601″ src=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/10-free-activities-for-couples-paying-off-debt.png” alt=”These 10 free activities for couples paying off debt are great! #payoffdebt #frugalfun” width=”400″ height=”600″ srcset=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/10-free-activities-for-couples-paying-off-debt.png 400w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?resize=200%2C300&ssl=1 200w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2016/08/10freeactivities.png?w=735&ssl=1 735w” sizes=”(max-width: 400px) 100vw, 400px” data-recalc-dims=”1″>

<img data-attachment-id="4453" data-permalink="https://www.modernfrugality.com/10-free-activities-for-couples-paying-off-debt/mf-10-free-activities-for-couples-paying-off-debt-to-avoid-boredom/" data-orig-file="https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/MF-10-Free-Activities-for-Couples-Paying-off-Debt-to-Avoid-Boredom.jpg?fit=700%2C1350&ssl=1" data-orig-size="700,1350" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="Free Activities to Live a Little While Paying Off Debt" data-image-description="

Are you tired of feeling like you have to stay at home 24/7 while paying off debt? Here are 10 free activities to do with your partner while paying off debt. #debtpayofftips #debtpayoff #howtogetoutofdebt #freecouplesactivities #freedatenightideas #frugaldatenight

” data-medium-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/MF-10-Free-Activities-for-Couples-Paying-off-Debt-to-Avoid-Boredom.jpg?fit=156%2C300&ssl=1″ data-large-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/MF-10-Free-Activities-for-Couples-Paying-off-Debt-to-Avoid-Boredom.jpg?fit=311%2C600&ssl=1″ loading=”lazy” width=”311″ height=”600″ data-pin-title=”Free Activities to Live a Little While Paying Off Debt” data-pin-description=”Are you tired of feeling like you have to stay at home 24/7 while paying off debt? Here are 10 free activities to do with your partner while paying off debt. #debtpayofftips #debtpayoff #howtogetoutofdebt #freecouplesactivities #freedatenightideas #frugaldatenight” src=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/10-free-activities-for-couples-paying-off-debt.jpg” alt class=”wp-image-4453″ srcset=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/10-free-activities-for-couples-paying-off-debt.jpg 311w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/MF-10-Free-Activities-for-Couples-Paying-off-Debt-to-Avoid-Boredom.jpg?resize=156%2C300&ssl=1 156w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2019/02/MF-10-Free-Activities-for-Couples-Paying-off-Debt-to-Avoid-Boredom.jpg?w=700&ssl=1 700w” sizes=”(max-width: 311px) 100vw, 311px” data-recalc-dims=”1″>

Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.

Source: modernfrugality.com

7 Texts You Should Ignore

Whether you’re trying to win tickets to a sold-out concert, remind your partner to buy milk, vote for your favorite reality TV personality or ask your headphones-encased kid a question, there’s a text for that. While texting is a great convenience and time saver (not to mention an international obsession), if you respond to a wrong text — think: Wyle E. Coyote and the Roadrunner — look out below!

Phishing via text works the same way as email, the only difference is format, tone and, of course, length. The goal remains to commandeer as much information about you as possible (to use for fraud) and/or take control of your device. The pilfered information can be seriously harmful to your sanity, not to mention your finances, since scam artists are always looking to make a quick buck at your expense.

There are many texts you should handle with kid gloves, and still others that you should ignore.

Get Help Now

Privacy Policy

I’m not talking about the obvious “don’ts” here, like looking at texts that were not sent to you. (Oh, and in case you missed that memo, sneaking a peak at your partner’s texts is and always will be a one-way ticket to relational oblivion.) What you need to worry about are texts that could have plausibly been sent to you.

This latter category of text is not always obviously fraudulent. The same thing that makes texting second nature to you is what makes it a potential hazard to your personal information safety.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

Regardless of their apparent merit, instead of replying to unsolicited texts directly, you should call the purported sender directly to be sure they aren’t trying to contact you.

With that in mind, here are seven texts you’ll want to be wary of.

1. Texts From Your Bank With Links

Automatic transaction alerts are an excellent security measure. You can set an alert on your checking and savings accounts to cover all kinds of parameters, such as the minimum balance you have to maintain without incurring a fee, a trigger amount on a withdrawal and more. These can be delivered via text, and here’s the thing: the SMS version from your bank will never contain a link. If you get one that does, ignore it. You can also call your bank directly.

2. Texts From the IRS

This is the easiest phishing scam to detect. The IRS never sends texts — ever. It’s also worth noting that the IRS won’t email you about official business either. The only way to do business with the IRS is via the United States Postal Service or by telephone — and if you are contacted by phone, it’s a good rule of thumb to tell the person who called you that you are concerned about security, and you need a reference number or department because you are going to call back on the IRS main phone line about whatever the matter may be. Also keep in mind that just because your caller ID tells you the incoming call is from the IRS does not mean it is the IRS since many phishers are consummate “spoofers.”

3. Texts From Your Credit Card Company With a Call to Action

This is similar to a text from your bank, but with more options for failure. You may have transaction alerts set that get delivered via text. You may have also consented to promotional notices. The bottom line with texts from your credit card company: whatever they are allegedly saying to you via text, they will say to you on the phone. Ignore any texts with a call to action, even if you want to take the action, and call your credit card company directly on the number designated on the back of your credit card. Especially ignore the text if it says that clicking on the link (or calling the number) is the only way to get a particular promotion.

4. Unsolicited Texts From Your Doctor, Lawyer, or Accountant

Businesses that collect a lot of personal information from clients, like medical practices, law firms or accounting firms can be prime targets for hackers. If you get a text from any of these folks, no matter how convincing, and no matter how much about you they seem to know (remember, these same professionals may not have the best defenses against hackers), ignore the text and call them.

5. Random Texts From Your Mortgage Company

I am guessing you’re getting the gist of this game, but any seemingly official notification about one’s mortgage somehow has the ability to completely unhinge people, especially if there is a problem. As data breaches have become the third certainty in life, it is quite likely your mortgage information is out there. If a scammer gets ahold of it, they might try to scare you into taking an action via text, like sending payments to a new address. Ignore them and call your mortgage holder.

[embedded content]

6. Scary Texts From Your Auto Lender

Nothing is quite as classic in the storybook of personal finance as the repo man coming to take your car. Because it’s a common nightmare scenario, we are liable to fall for it. Ignore any texts you get from your auto lender. Instead of replying, always call to find out what you already know: someone just tried to scam you.

7. Promotional Texts From Your Favorite Game

Don’t be embarrassed. We all have a game we like to play, and so do our kids. The problem here is that for real devotees, there is very little one won’t do to get an edge. Whether it’s buying points or weapons or secrets, or getting the latest upgrade the second it’s released, true gamers are a juicy target for scammers who send texts hawking special promotions, and they are less likely to be careful about whom they give their contact information to, since getting more game time is more important than anything. Same rule applies here: ignore any text that you get, and make sure your kids do as well. Go online and find the promotion from a reputable site.

If you think you’ve responded to a phishing text, you should monitor your credit for signs of identity theft. (You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.)

When it comes to staying safe, let restraint be your co-pilot. A little pause goes a long way and you don’t want to end up being the get for scammers.

More Money-Saving Reads:

Image: Todor Tsvetkov

Source: credit.com

November 2016 Budget

This post may contain affiliate links. Please read my disclosure for more information.

I’m on a financial high going into November. It’s my favorite time of year; the weather is crisp, people are happier, and my favorite holiday, Black Friday, is right around the corner. I’m on cloud 9.

And I have one more thing making my money-saving heart flutter (or palpitate, I can’t tell the difference lately.) My student loan is now 4 digits. I’m finally under 10 grand! I didn’t see this day coming anytime in my 20’s and it’s here. You guys, hard work and perseverance pay off! And I’m really excited to have you to share this moment with.

So in November we decided to kick it into HIGH gear to get my student loan completely paid off by the end of the year. This was our original goal but we had a setback in April that made us plan to have it paid off in January. But thanks to a lot of overtime and the fact that I get paid on Wednesdays (and there are 5 in Nov this year!) we decided to get a little crazy.

Also Read: October 2016 Budget

In October you’ll remember we budgeted $3800 for student loan payment and we ended paying $4070 (Again thanks to Travis’ overtime from volunteering to pick up shifts.) I was on a shopping ban which basically meant no impulse buys. I worked from Starbucks once a week because I had a gift card and I bought shampoo and a shirt for Halloween (because these were at Goodwill and look how cute we are!)

Volleyball Player Costumes

Volleyball Player Costumes

We did pretty good sticking to the line items but went over in restaurants this month. Fitting since I just wrote a post about how much you can make by eating out less. But we spent less in gas than we budgeted so it evened out by the end.

Our Real Budget

November 2016 Budget

November 2016 Budget

We used EveryDollar to copy October’s [revised] budget and made a few adjustments. We cut our lifestyle budget almost in half this month and all the extra money we’re making is going to our $5,000 debt payment. Yes, you read right, $5,000.

I’m doing another month of the shopping ban because I used my personal money on some blog related items in September. You have to spend money to make money, especially in a competitive space like the Internet. But so far those investments have been paying off and I’ll definitely tell you about them someday.

I also wanted to point out our “giving” category. I’ve had surprisingly mixed responses to this one. We decided at the beginning of our debt freedom journey on a consistent $500 each month. This was definitely a compromise we had to make early on and once we found a number we were both comfortable with we just stuck with it.

Some very generous people can’t see giving less than 10% even while going into debt and some people won’t give anything while they’re paying off debt.

I give now because my end goal is to be outrageously generous. Giving is a gift not only to those who receive it but to me too! I don’t feel guilty about feeling real good when I give. Ultimately though, it’s whatever helps you sleep at night.

I run half marathons and nowhere along the race do I wish I’d trained less.

Giving now is like my training to give more later. And that’s how I justify spending more right now on giving than on my lifestyle. If you’re interested in this subject I highly recommend Generous Justice by Timothy Keller. A great read on why social justice is important and how you can be generous most effectively.

Our Real Budget

Our Real Budget

<img data-attachment-id="4828" data-permalink="https://www.modernfrugality.com/november-2016-budget/mf-how-we-paid-off-over-4000-of-debt-in-october/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?fit=600%2C900&ssl=1" data-orig-size="600,900" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="How to pay off a chunk of debt in a short time" data-image-description="

Tips to help you pay off a chunk of your massive debt quickly. #budgetingtips #budgetinghacks #debtpayofftips #debtpayoffhacks #budgetingtricks #payingoffdebtquickly

” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?fit=400%2C600&ssl=1″ loading=”lazy” width=”400″ height=”600″ data-pin-title=”How to pay off a chunk of debt in a short time” data-pin-description=”Tips to help you pay off a chunk of your massive debt quickly. #budgetingtips #budgetinghacks #debtpayofftips #debtpayoffhacks #budgetingtricks #payingoffdebtquickly” src=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/november-2016-budget-2.jpg” alt class=”wp-image-4828″ srcset=”http://www.hanovermortgages.com/wp-content/uploads/2021/03/november-2016-budget-2.jpg 400w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?resize=200%2C300&ssl=1 200w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2016/11/MF-How-We-Paid-Off-Over-4000-of-Debt-in-October.jpg?w=600&ssl=1 600w” sizes=”(max-width: 400px) 100vw, 400px” data-recalc-dims=”1″>

Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.

Source: modernfrugality.com

Buying A Foreclosed Home in 10 Simple Steps.

Buying a foreclosed home is probably one of the best financial decisions you can make as a first time home buyer (although it’s not without risk).

In fact, it’s one of the best ways to make a good return on your investment. That is because foreclosed homes usually have more value than a traditional purchase.

However, the process of buying a foreclosed home can be risky and is different than a traditional purchase.

Plus, it can be very competitive as other buyers (sometimes real estate investors with a lot of cash) are probably looking for the same opportunity.

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free

So, if you’re thinking of buying a foreclosed home soon, do your due diligence and act fast. And use the following steps below as a guideline.

What is a foreclosure?

Before we learn how to buy a foreclosed home, we need to define what a foreclosure is.

Simply stated, a foreclosure is a property where the owner has defaulted on his or her loan payments. It can be other loan requirements, such as not having proper insurance coverage for the property. It can also be keeping the property in a bad condition.


LendingTree: A Better Way to Find A Mortgage

LendingTree.com is making getting a mortgage loan simpler, faster, and more accessible. Compare the best mortgage rates from multiple mortgage lenders all in one place and at the same time. LEARN MORE ON LENDINGTREE.COM >>>


The lender (a bank, credit union, etc…) in the hope of getting some of their money back, takes legal possession of the property. The lender, in turn, will try to sell the house.

Foreclosed homes make buying a house a great opportunity for home buyers.

Why? The lender’s goal is to sell the foreclosed home as fast as possible. Holding on to a foreclosed, empty home costs the lender money.

So they are more concerned about selling it as quickly as possible rather than holding on to it for the highest price.

If you’re considering of buying a foreclosed home, follow these steps below.

Buying a foreclosed home in 10 Simple Steps:

If you’re a motivated buyer willing to buy a house in foreclosure, knowing these steps is important in order to buy a house at below market. It’s even more important if you’re buying a foreclosed home at auction.

Here are the 5 steps you need to take when considering buying a foreclosed home.

1. Get your finance in order

Remember you’re buying a foreclosed home from a bank that wants to get rid of the property as fast as they can. So time if of the essence.

Time is of the essence, especially if you’re buying the foreclosed home at an auction. Once your hand goes up, and you win the bid, be prepared to pay the down payment and sign the contract. Generally with buying a foreclosed home at an auction, there’s no cooling off period.

So organize your finance before you start looking.

That means knowing how much you can afford to borrow, making sure your credit score is in good shape, and having your down payment is ready, etc…

2. Secure a pre-approval letter from a lender.

Buying a regular house requires you to take out a mortgage loan to finance it (unless, of course, you have enough cash to buy the whole property).

Buying a foreclosed home is no different. The same concept applies.

Related: Apply for a Mortgage Loan Today

So before you start looking for a foreclosed home, make sure you can secure a mortgage. You can start doing that by getting pre-approved.

The process is not complicated, all you need is to find mortgage lenders. Then compile all necessary documents including your bank statements, pay stubs, or other forms of income.

Your credit score is one of the most important things, mortgage lenders look at to pre-approve you. So make sure your credit score is good.

Having a pre-approval letter can signal to sellers that you’re a serious buyer. It can also signal that you will be able to secure a loan.

3. Work with a real estate agent

A real estate agent will not only help you find current foreclosed homes listings, but can also inform you of those properties that will be listed soon.

This way, you are able to go through all of the foreclosed homes that are within your mortgage pre-approval range.

There are other reasons working with a real estate agent is important when buying a foreclosed home.

One is that, they may have experience helping other people finding foreclosed homes. Second, with that experience, they are able to tell you whether a foreclosed home will make a good buy or not.

4. Start your search: where to find foreclosed homes?

Finding a home in foreclosure can be very easy. Generally, your real estate agent can give you a list of them. You can easily find them listed on popular sites like Zillow, Redfin or Trulia.

Better yet, you can drive through any neighborhood, and you will likely see signs that say “bank owned”

Are you interested of buying a foreclosed home? Check out mortgage rates right now.

Additional steps in buying a foreclosed home

If you are in a hurry to buying a foreclosed home, these three steps above should suffice. But if you want to make sure your home buying process goes as smoothly as possible with no real surprises later on, continue on the following steps.

5. Compare prices

Before buying a foreclosed home, it’s always a good idea to compare prices of recent sales of similar foreclosed properties.

Again, your real estate agent can help you with that as well.

6. Get the right home loan

The number of home loans available to you can be mind-boggling.

However, LendingTree’s online platform has over 1500 home loans and can match you up to 5 mortgage lenders so you can choose the best mortgage rate.

So you should always do your due diligence to make sure you find a mortgage specific to your needs.

Not all loans are made equal. Rates and fees can vary from one mortgage lender to another.

So don’t make the mistake at looking at one lender only.

Use a free comparison website such as LendingTree to compare home loans side by side.

7. Inspect the property

Once you find the home and make an offer, make sure you hire an inspector to do a thorough inspection to determine the condition of the property and the overall cost of any repairs and renovations the property might need.

So even if you’re likely going to save money by buying a foreclosed home at below market, don’t try to save money by foregoing a physical inspection on the property.

No matter what the circumstances, always do an inspection.

8. Find a good lawyer

A lawyer should do all the legal work involved in buying a foreclosed home.

They will do a title search to see if the property has any liens, etc.

A lawyer can also guide your through the contract negotiation process.

9. Consider repair costs

Foreclosed homes are offered “as is.” So, you should expect some damage done to the house. Perhaps the previous owner was upset about losing their home and did real damage to the property.

And if they did not have the money to make their mortgage payments, it’s safe to assume they did not have any money to maintain the house.

It’s a good idea to also consider repair or renovation costs when buying a foreclosed home.

10. Consider other costs

In addition to the down payment and repair costs, closing costs, there are other costs involved in buying a foreclosed home. They include moving costs, maintenance costs, etc..

So make sure you consider these costs when making your budget.

In conclusion, property in foreclosures are properties where previous owners have failed to meet their loan requirements and the lenders take legal possession of the property. Although they can be risky, they are usually a better value than a traditional purchase.

So, if you’re a potential home buyer willing to do the due diligence to find rare opportunities, you can be significantly rewarded.

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

Related:

Related Resources

Not All Mortgage Lenders Are Created Equally

When it comes to getting a mortgage, rates and fees vary. LendingTree allows you to view and compare multiple mortgage rates from multiple mortgage lenders all in one place and at the same time, so you can choose the best rates for your needs. LendingTree makes getting a loan faster, simpler, and better. Get started today >>>

Source: growthrapidly.com

Turn Your Quarantine Clutter Into Money

I placed more online orders than I can count in 2020. And I justified all of them.

My front porch was filled with boxes containing all sorts of things: furniture (I needed to redecorate), paper towels (I needed to stock up), crafts (I needed activities), board games (more activities) and a treadmill (I needed exercise).

But if I’m being honest, I bought a little too much.

Take a look around your place. If your quarantine habits were even a tiny bit like mine, you could turn that clutter into money. Here’s how.

Too much stuff? Sell it

Perhaps you purchased more than you ended up using, like board games or video games. Or maybe you bought new products to replace old items and were left with a drawer of discarded technology.

Chelsea Lipford Wolf, co-host of the “Today’s Homeowner” TV show and host of the “Checking In With Chelsea” web series, says she made over $1,000 selling things online during the last six months of 2020 through Facebook Marketplace, an outlet for buying and selling locally.

You can, too. Look online for this or another marketplace that suits your needs. For example, Facebook Marketplace caters to local transactions, while other sites focus on product categories like tech or apparel. Read the directions to see how the site works and check for customer reviews or a Better Business Bureau accreditation before committing. Make an account, then get to work.

You can sell almost anything online — technology, furniture, clothing, video games and toys, to name a few.

Here are Wolf’s keys to making things sell:

  • Presentation. “You want the item you’re selling to be the focal point of your photo,” Wolf says. Clean it first, then take flattering photos in natural sunlight, preferably near a window. Get multiple angles.

  • Price. Consider what someone might pay for the item, then price it slightly lower to make it move. You can also check listings posted by other users to determine the going rate.

  • Particulars. Spell out everything in the description, including the brand and any imperfections. A more detailed listing means less back and forth with potential buyers. As the saying goes, “Time is money,” Wolf says.

Too much work? Consign

Depending on which site you use, you’ll have to write listings, package your items and send them either directly to the buyer or to the platform you used to make the sale. In some cases, you can deliver in person.

To save time and effort, take your stuff to a local consignment store instead. You’ll likely make less, but the store does the selling for you. Expect to pocket half of the selling price, Wolf says.

Other options? Give things away to family and friends. Donate to a local charity. And throw away items that have absolutely no use.

Too many temptations? Scale back

Once you’ve sold and donated what you can, fight the urge to impulse shop again. Keeping up your current habits could get you right back to where you started. One way to avoid that? Save first and buy later.

This approach is the exact opposite of putting something on a credit card and paying it off after the fact, says Pam Horack, a certified financial planner and the owner of Pathfinder Planning LLC, based in Lake Wylie, South Carolina.

Save money and wait to place an order until you can afford it in full. Horack says her family has a designated clothing account. When someone needs a new pair of shoes, the money comes from what they’ve set aside.

You can do the same with a general spending account. “If you don’t have money in that account, then you can’t buy it,” Horack says. “That needs to be your rule.”

There are also ways to stay busy without spending much, if any, money. Here are some of Horack’s ideas: Redecorate your house by moving around your furniture. Spend time outdoors. Finish up projects around the house. You’ll spend less and accumulate less stuff.

Too expensive? Buy used

But you can’t stop shopping altogether. For things you absolutely need, consider buying on the same websites you used to make extra money.

When you list products, you won’t sell them for as much as you originally paid for them. That means you can purchase things at a significant discount, too.

Consumers have been buying and selling used during the pandemic, according to Sara Beane, media relations specialist at technology marketplace Swappa. “Everybody is kind of strapped during this unprecedented time,” Beane says.

For example, the site saw a rush on laptops around back-to-school season.

Search used marketplaces by model and condition of the item. You’ll find many price points to fit your budget.

But before you hit the “buy” button, do some organizing, Wolf says.

“If you have so much stuff that you can’t see what you have, then you’re going to buy more than you need.”

This article was written by NerdWallet and was originally published by The Associated Press.

Source: nerdwallet.com

Why You May Not Want to Be an Executor

Being asked to be an executor is an honor you might want to pass up.

Settling an estate typically involves tracking down and appraising assets, paying bills and creditors, filing final tax returns and distributing whatever’s left to the heirs. At best, the process is time-consuming. At worst, it takes hundreds of hours, exposes you to lawsuits and thrusts you into the middle of family fights.

Robert Braglia of New York, a certified financial planner, was executor of an estate where the woman disowned three of her four children and left most of her money to just one of her many grandchildren. That could have caused an uproar even if the family got along, which it didn’t: Two of the woman’s children were fighting over the woman’s ashes before she actually died.

“Even without conflicts — which there always are — it is an enormous job,” Braglia says.

Before you agree to take on this role, be clear on what’s involved.

You could be doing it for many months

The time involved in settling an estate varies enormously. A small estate with few debts might be distributed within six to 12 months. It may take years to finalize a large estate with contentious heirs, lots of creditors or assets that are difficult to value, such as a business or rare collectibles.

A survey by EstateExec, an online tool for executors, found the typical estate took about 16 months to settle and required 570 hours of effort. The largest estates, worth $5 million or more, took 42 months and 1,167 hours to complete.

That doesn’t necessarily mean the executor has to put in that many hours, says CFP Russ Weiss of Doylestown, Pennsylvania. An executor can use some of the estate’s funds to hire an attorney and other help that could be more efficient than trying to figure everything out on their own.

“If you have other professionals involved — an attorney, a CPA, an investment person or wealth advisor — they’re doing most of the heavy lifting,” Weiss says. “Executors are like the quarterback in the administration of the estate.”

Executors may also collect a fee, with the amount depending on state law or what’s specified in the estate documents.

You might have a tough time finding assets

Even with help, executors should expect to spend many hours finding documents, inventorying assets and debts, arranging appraisals, communicating with financial institutions and government agencies, managing property and keeping careful records. If the estate includes a home, the house may have to be emptied of possessions and readied for sale.

The less organized the estate, the more time it may take to track down assets. EstateExec CEO Dan Stickel said his father, who died at 69, rented multiple storage sheds without telling his children where they were. Finding the various backyard sheds was challenging enough, but then they had to sort through the dusty contents. Those included piles of newspapers, battered furniture and several bars of silver bullion hidden under a dirty tarp.

Even then, they missed something. The auction company Stickel hired to dispose of the rest of the sheds’ contents found a box containing $30,000 in savings bonds. Fortunately, the company returned the bonds to the family.

You could be sued

Executors have a fiduciary duty to the beneficiaries, which means the executor is required to put the beneficiaries’ interests first. People are typically advised to choose executors who are responsible, honest, diligent and impartial.

“It’s an honor. If somebody asks you, it’s to say, ‘I trust you, and I trust you implicitly that you will handle my affairs in a way that’s fair,’” Weiss says.

But the fiduciary duty comes with potential legal and financial consequences. Executors can be held personally responsible for mistakes and other problems. For example, one child may remove items from a parent’s home that are bequeathed to another child. The heir whose items were taken could sue the executor for failing to secure the home.

Executors also may have to make judgment calls, such as whether to spend the estate’s money to fix up a house for sale and if so, how much. Unhappy heirs can sue over those decisions, as well.

Given everything that can go wrong and the time commitment, people should think carefully about whether they really want the job before agreeing to be an executor, says CFP Kate Gregory of Huntington Beach, California, who has settled both her mother’s and her husband’s estates.

Gregory says she would agree to serve again only if a family member asked, and only if there wasn’t likely to be a lot of conflict among the beneficiaries. Even then, she would want to see the will or trust documents to ensure there aren’t any unpleasant surprises that could cause discord. She also would insist that the documents name alternates in case she can’t or won’t serve. No one can be forced to be an executor, but Gregory says she would feel better about saying “yes” if she knew there was a plan should she later say “no.”

“I want to make sure that I could resign,” she says.

This article was written by NerdWallet and was originally published by The Associated Press.

Source: nerdwallet.com