7 Steps to Buying a Home You Can Actually Afford

August 21, 2014 by · Leave a Comment 

 

 

 

 

 

 

 

So you would like to take advantage of the current housing market but you don’t know where to begin? Here is a quick 7 step list I discovered that can help you get started. Happy house hunting!

 

1) Get your credit in as good shape as possible. Your credit score can make a big difference in your interest rate and lenders are  a lot stricter than they used to be. You can start by ordering a free copy of your credit report from each of the credit bureaus at annualcreditreport.com as long as you haven’t done so in the last 12 months. One study showed that about 70% of credit reports have errors in them so check to see if there are any in yours that could be hurting your credit score and if so, be sure to have them corrected.

You can also use a site like creditkarma.com to see your credit score for free and more importantly, figure out what steps you can take to improve it. The key things are to make sure you make your debt payments on time, pay off as much of your debt as possible (except perhaps car and student loans, which tend to be relatively low interest), and be careful of closing accounts. If you have a credit card that is charging you an annual fee, see if you can convert the card into a no-fee card rather than close it.

2) Be ready with your down payment. Ideally, you would be able to put down 20% of your home’s purchase price to avoid having to pay PMI (private mortgage insurance). If you can’t put down 20%, mortgage companies will usually offer you a smaller “piggy back loan” to help bridge the gap but those loans have higher interest rates.

Don’t dip too far into your savings though. Try to keep at least 3-6 months of expenses set aside for emergencies. If you don’t have enough money available in your regular accounts, you can access up to $10k without penalties from IRAs for a first-time home purchase and your employer’s retirement plan may allow you to borrow from your retirement account with a longer time to pay off home loans. There’s always the “family and friends” route too.

3) Try to pick a mortgage with a fixed rate for the longest time that you think you’ll be keeping the home. That’s because you could see your monthly payments jump up on a variable rate mortgage when interest rates eventually start climbing. On the other hand, fixed rate mortgages have higher interest rates so it may not make sense to pay more to lock in a fixed rate for longer than you need it.

4) Choose the right loan term for your needs. A 30-yr loan has lower monthly payments and can be advantageous if you’ll make good use of the savings by investing them or paying down high interest debt. You can always make extra payments if you want to pay the loan off sooner. But if you’re honestly more likely to splurge the money you save each month, the 15-yr loan could be better since it will cost you less in interest and be a form of forced savings every month.

5) Shop around for a mortgage. Even a slightly higher rate can mean paying significantly more over the life of the loan so don’t just talk to your existing bank. Consider credit unions, which often offer lower loan rates because they’re non-profit. Some brokerage firms like Charles Schwab offer mortgages and sometimes provide discounts for people who keep a lot of money with them. You can also try Web sites like bankrate.com and eloan.com or an independent mortgage broker who can shop around from multiple mortgage companies to find the one that can offer you the best deal. You can then use this calculator to compare the loans.

6) Figure out how much home you can afford. Remember, just because the mortgage company will loan you the money doesn’t mean you should take it. There are rules of thumb like not spending more than 28% of your income on mortgage payments but every person’s situation is different. Two people may have the same income but one may need to save more for retirement or have to make large private school tuition payments for their kids. Take a look at your current saving and spending needs to see how much you can realistically afford to pay each month and don’t forget to leave some room for the potential “hidden expenses” of home ownership like utility bills, HOA fees if applicable, and repairs and maintenance.

7) Start house hunting. Once you’ve gotten pre-approved on a mortgage, work with a real estate agent experienced in the neighborhoods you’re interested in and look at homes that are within your affordable price range. Make sure you look at several places even if you fall in love with the first one you see as you may change your mind with more perspective. Finally, don’t forget to have fun. If you’ve made it this far, you’ve earned it!

From Newswire
Liz Davidson,
Financial Finesse

 

4 tips to raise your credit scores

August 20, 2014 by · Leave a Comment 

 

 

 

 

 

 

 

 

 

4 tips to raise your credit scores

1)  Check your credit reports for errors

a. Annual Credit Report.com

b. Bureaus

c. Online Websites

2) Review your credit reports with a professional

a. Credit Analysts

b. Mortgage Loan Officer

  1. Loan Advisers

3) Keep your CC balances below 30% of limit

a. Example

b. Keep your cards active

4) Before paying any collection accounts, ask a pro

a. May re-age the account and it will show as a newer derogatory account

b. If you do negotiate, use your balance as leverage for a removal/deletion

Effective Credit Report Repair Tips

August 19, 2014 by · Leave a Comment 

 

Credit repair, done right, can do wonders for your credit report and your scores too! Here are a few tricks of the credit repair trade that will really make your scores move fast. Put them to work individually, or all at once, depending on your own needs, and watch the magic happen.

1) Open Accounts Right Now!!!
The FICO scoring model will give you bonus points for opening new accounts after a period of bad credit. It is all in the timing. Those old cards that survived the tough times are still worth something, but when it comes to credit repair FICO wants you to prove that you still have what it takes to get back in the swing of borrowing money. If your credit is crummy, secured credit cards are ideal. Small is good! Open now, pay on time, keep your balances low, and your scores may rise over 100 points in the next six months.

2) The Balance-Limit Connection
This credit repair tip is just as urgent for those opening new accounts today as it is for those managing already well seasoned revolving accounts. A little change in your balances can send your credit scores flying or diving. Have you maxed out a card lately and then checked out your scores? This is a fairly recent FICO tweak which can work for or against you. Try to use less than 30 percent of your limit for the best result.

3) Take a Look!
Have you seen you credit report lately? If not, why not??? There may be errors lurking and a simple dispute or challenge to the credit bureaus may be all it will take to get your scores back on track. Not sure how to check your report or how to dispute? Contact a professional right away. Good luck!

By Cesar Marrufo
ELITE FINANCIAL, LLC.com

Consumer Protection Through Education.

VIP Treatment

August 18, 2014 by · Leave a Comment 

vip
Sen. Dick Blumenthal wants explanations from the three credit rating bureaus about a New York Times report about a VIP list they allegedly keep that favors the rich and famous over everyone else.
The Connecticut Democrat wrote a letter Monday to Equifax, Experian and TransUnion about the reported separate system in which errors and disputes are resolved faster and with more attention than with other consumers, who must rely on an automated system and outsourced customer support to clear up mistakes.
“I am deeply troubled by the implication that your companies are neglecting the majority of consumers and providing preferential treatment for wealthy, famous or well-connected persons, and I ask you to confirm or deny these reports and provide more information on your dispute resolution process,” he wrote in the letter.

“An error-free credit report is vital to a consumer’s financial health, and consumers must be able to quickly resolve disputes and mistakes with the cooperation of the credit reporting bureau,” he wrote. “Every consumer deserves this cooperation, not just the rich and powerful.”
But the credit bureaus deny keeping VIP lists.
“We did respond to the senator, and to be as clear as possible, we do not have VIP lists that provides preferential treatment to anyone,” Tim Klein, a spokesman for Equifax, told FoxNews.com.
“We received the letter, and will be providing a response to Sen. Blumenthal,” Gerry Tschopp, a spokesman for Experian, said in an email to FoxNews.com. “As we’ve stated before, Experian does not have a VIP list.”
The New York Times interviewed an Arkansas resident who said she had been denied employment and credit because her filing was mixed up with a felon who had the same name and birthday, and a Louisiana consumer struggled to remove errors from her credit report that stemmed from a mix-up with a less credit-worthy person with the same name, similar address and Social Security number.
The newspaper also interviewed a number of consumer lawyers and advocates who accused the credit bureaus of lacking an incentive to improve the system because their main clients are the creditors, not consumers.
But Klein cited a new study from the Policy and Economic Research Council that showed less than 1 percent of all credit reports reviewed by the consumers prompted a dispute that resulted in a credit score correction and an increase of a credit score of 25 points or greater. It also showed that one half of one percent of all credit reports reviewed by consumers after the dispute process ended had credit scores that moved to a higher “credit risk tier” as a result of the dispute.

“We’re not perfect by any stretch, but we get it right a preponderance of the time,” he said.

Published May 17, 2011 | FoxNews.com

Five Simple Ways to Boost Productivity

August 15, 2014 by · Leave a Comment 

Follow these common-sense tips to get more stuff done — faster.

Odessa Hopkins knew she wasn’t spending her time as wisely as she could. The owner of a small Greenbelt, Md., marketing and advertising consulting firm called Another Approach Enterprises, was always juggling projects and keeping busy. But she “would work on a lot of things all day long, but at the end of the day I didn’t really finish anything,” says Hopkins, 52. While client deadlines were met, she says projects were sometimes taking longer than they should because she was juggling so much.

In 2009, she sought the help of a productivity coach and began learning ways to better manage her time. “Whenever people think about deadlines, they think about only the deadline that someone else gives them — not their own deadline,” says Hopkins, who also owns CEO Business Café, a local meeting venue for entrepreneurs. “Now, I give myself deadlines all the time.”

Time-management coaches say entrepreneurs often waste a lot of time in their day, but there are strategies for being more productive. Consider these five tips to get more done in a day.

1. Break projects into smaller pieces with deadlines. You can start by prioritizing activities for every day, writing a to-do list each night and scheduling each task, suggests St. Louis, Mo.-based productivity coach Cathy Sexton. For example, Hopkins realized she needed to place a higher priority to projects based on their revenue-generating capability. Once she had a list of what to tackle first, she scheduled a specific time on her electronic calendar to handle each item.
“If you don’t block out your time, everything else is going to get in the way,” Sexton says. Also, consider keeping a timer next to your desk to make sure you keep to your deadlines.

2. Delegate tasks that don’t generate revenue. Bookkeeping, payroll and copywriting are three tasks entrepreneurs often try to handle themselves to save money. But they often aren’t qualified or equipped to handle these tasks and end up losing valuable time that could be spent on revenue-generating activities, as Hopkins learned. “They end up doing what I call lower-value tasks that others could be doing for them,” says Audrey Thomas, a Minneapolis-based productivity coach. Business owners should realize, Thomas says, that outsourcing these activities allows them to devote more time to making money.

3. Stop obsessively checking email. This was another huge time-waster for Hopkins, as it is for many entrepreneurs, especially when messages are constantly flooding your inbox and distracting you from other important work. “I’d say I spend more time talking to my clients about managing email than anything else,” Thomas says. She recommends setting your email program to retrieve messages only manually — when you press a button to check it — or no more frequently than every 90 minutes. Moreover, she says, emails that are easy to respond to should be answered immediately, so you’re not wasting time reading over the same messages again.

4. Take advantage of technology shortcuts. You likely already use Microsoft Outlook, Excel and other common software programs with built-in time-saving features. Yet many business owners end up wasting time because they never learn how to properly use these programs — and the shortcuts. For instance, Microsoft Outlook lets people move items from their inbox directly onto their calendars, but many people still manually create calendar items, says Peggy Duncan, a time-management expert in Atlanta. Simply taking a class or reading a book about how to use common software programs can save a lot of time over the long run, Duncan says. “Any situation you bring up, there is technology out there to make that work basically go away,” she adds. “But people won’t spend the time learning how to use it.”

5. Train your employees adequately. A big time drain for business owners is employees who constantly ask questions, interrupting their day. If this is happening to you, the problem may be that they’re not adequately trained to do their job, warns Duncan. So make sure you have the resources and training procedures in place to best prepare and support employees in their work. Another big time waster, she adds, are customers who call with questions that could otherwise be answered on your company’s website. One solution is to create a “Frequently Asked Questions” section that prominently displays the helpful information on your website. “It should be a no-brainer for your customers to do business with you,” she says

BY Kelly K. Spors | July 29, 2011| entrepreneur.com

Source- http://www.entrepreneur.com/article/220081

 

Will Defaulting on Season Tickets Hurt My Credit Score?

August 14, 2014 by · Leave a Comment 

season tix

Will Defaulting on Season Tickets Hurt My Credit Score?

Attention sports fans: This answer could prove helpful if your team ticks you off.

We recently received a reader question that was very interesting — something we hadn’t thought of before. This one’s for you sports fans out there:

Does anyone know the impact of defaulting on season tickets will have on one’s credit? Will it have an impact on my car insurance, current loans for cars, or anything else? Please let me know. – Angry Fan

How defaulting on season tickets would impact your credit would depend on whether or not the organization reports the incident to the credit reporting agencies. If the default is reported as a collection, because collection accounts are considered severe delinquencies, the account would have a significant impact on your current credit standing and would hurt your credit scores.

This wouldn’t necessarily impact any accounts you currently have open, but if the impact is significant and your credit scores take a severe hit, it could affect future loans, their interest rates and your ability to qualify for them.

Your question prompted us to make a couple of calls to find out exactly how season ticket holder accounts are handled by major league sporting establishments. Interestingly enough, policies vary depending on the establishment, but what we learned may ease your mind.

According to the two major league establishments I spoke with, season tickets are normally paid for in advance, prior to the tickets being released and issued to the purchaser. Generally speaking, there are no contractual payment plans or financing options for standard individual season ticket purchases.

However, depending on the ticket package, some plans may allow the purchaser to hold their preferred tickets with a deposit, offering them a short grace period before they’re required to pay the remainder of the balance.

In the event the purchaser is unable to pay the remaining balance before the deadline defined by the establishment, the hold is ended and the tickets are re-released to the public for purchase.

In some cases the deposit will be refunded, and in others the deposit may be forfeited. It all depends on the purchase rules outlined by the individual establishment. In either case, defaulting on a season ticket purchase would have no bearing on your credit unless there were a contractual obligation or financing option involved with the purchase.

For corporate packages or purchases where suites are a part of the season ticket package, it’s an entirely different ballgame. Suites are contractual and legally binding. If you sign a contract and default on the purchase agreement, this is when defaulting on season tickets could end up as a collection in your credit reports and hurt your credit scores.

What to do if your credit card has been compromised

August 13, 2014 by · Leave a Comment 

Here is some sound advice on what to do if you feel your credit card has been tampered with. Recent security breach teaches us all a lesson.

What Does the Credit Card Company Breach Mean for You?: MyFoxATLANTA.com

Authorized-user credit card plans can be useful, and abused

August 12, 2014 by · Leave a Comment 

Authorized-user credit card plans can be useful, and abused

“Authorized user” sounds like a term you’d find on the warning label of a heavy-duty power tool. (Authorized users only! All other users risk injury or death.)

But in the world of credit reports, an “authorized user” is someone who is allowed to use another individual’s credit card without being responsible for the bill.

That sounds like a sweet deal for the authorized user. But millions of people with good credit use this strategy to help their children or spouses build a solid credit history. Thanks to a recent turnaround by Fair Isaac, developer of the widely used FICO score, this avenue to good credit will continue to be available.

First, some background: When a credit card holder designates a child, spouse or other individual as an authorized user, the card holder’s payment history appears on the authorized user’s credit report. If the card holder has stellar credit, it will boost the authorized user’s credit score. More than 50 million consumers are listed as authorized users on another person’s credit card, according to Fair Isaac.

But in recent years, some credit-repair outfits have exploited authorized-user accounts in ways that Fair Isaac never intended. These companies arrange for people with good credit to “rent” their histories to strangers with tarnished credit.

“Some consumers were paying thousands of dollars to be added to someone’s account to get a short-term increase in their credit rating,” says Tom Quinn, vice president of scoring solutions for Fair Isaac. Fair Isaac officials were concerned that the practice, known as piggybacking, allowed consumers with bad credit to artificially inflate their scores.

In an effort to stop this practice, Fair Isaac announced last year that its new scoring formula, known as FICO 08, wouldn’t recognize authorized-user accounts. Critics said the change would lower credit scores for millions of consumers, forcing them to pay more for everything from mortgages to car loans.

About 1% of consumers would no longer have enough of a credit history to get a score at all, according to a survey by Credit.com, a consumer website. Without a credit score, it’s very difficult to qualify for a loan.

Lenders, meanwhile, raised a regulatory concern. They told Fair Isaac that they used FICO scores to comply with the Equal Credit Opportunity Act, which requires lenders to consider a spouse’s credit history when weighing a potential borrower’s credit risk. If Fair Isaac stopped recognizing authorized users, lenders said they wouldn’t be able to use FICO scores to meet that requirement.

In response, Fair Isaac sent its scoring model back to the laboratory. Company analysts came up with a new version of FICO 08 that will continue to recognize authorized-user accounts but make it more difficult for credit-repair agencies to manipulate credit scores, Quinn says. Fair Isaac declined to provide details on how its new formula will close the piggybacking loophole. The company says it’s working with the three credit-reporting agencies to get FICO 08 adopted as quickly as possible.

“This is great news,” says John Ulzheimer, president of educational services for Credit.com, an outspoken critic of the original proposal. “I’m thrilled with Fair Isaac’s willingness to take a second look at this.”

A credit-building tool

Ulzheimer believes the authorized-user designation offers a valuable way for parents to help children learn how to manage credit without giving them their own credit card. “It’s like a credit card with training wheels,” he says.

There’s no downside for the child, because an authorized user has no liability for the account, Ulzheimer says. If the parent falls behind on payments, the child can ask to have the authorized-user designation removed from his or her credit report.

“When you have someone as an authorized user on a credit card, you give them an escape route,” Ulzheimer says. “If you lose your job or get into a horrible financial mess, you’re not dragging them down with you.”

Still, credit cards, like power tools, can cause a lot of havoc if they’re handled improperly. For that reason, Quinn says, parents who name children as authorized users should set clear limits on how the card should be used.

“When I went to college, I was listed on my dad’s credit card as an authorized user, but I was strictly told it could only be used for emergency purposes and not to buy a round of beer for everybody,” he says. “When it’s done in a family environment where the practices of sound credit are taught, it’s very beneficial.”

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com.

 

Credit 101 Part 6 – Filing a Complaint

August 11, 2014 by · Leave a Comment 

This is part 6 in a series of videos on basics of credit, which is Credit 101. What are my avenues of recourse? Where do I file a complaint? How do I challenge this information? Dispute to the credit bureaus and more is explained. This is something that should be taught in high school. A brief explanation of credit. Interview between Adam Villaneda and Cesar Marrufo. Elite Financial, LLC credit repair in Yucaipa, California. Learn how to fix your bad credit report and position yourself to purchase a home. I do NOT own rights to this music and am not claiming that I do.

New to the U.S? Here are credit building options, and hurdles…

August 8, 2014 by · Leave a Comment 

New to the US? How can you build credit?

Dear Credit Card Adviser,
My son and his family recently moved to the U.S. after living abroad for 11 years. His wife does not have a Social Security number. Can she qualify for a credit card? Are there other actions she can take to boost her credit history?
– M.

Dear M.,
This is a trickier question than it seems, with many parts. Let’s start with your son’s wife, or your daughter-in-law, and discuss how to get her a credit card.

Depending on the creditor, she may or may not need a Social Security number to apply for a credit card. Capital One and Chase require this number on their credit card applications. Discover and Bank of America accept Social Security numbers, but they also will take a taxpayer identification number issued by the Internal Revenue Service.

American Express accepts several forms of identification: Social Security, taxpayer ID, a foreign driver’s license or a foreign-issued passport. Citi doesn’t require a Social Security number, but applicants who don’t have one may be asked to show a government-issued ID at the closest Citi bank branch.

Your daughter-in-law also can be added as an authorized user on many credit cards without an SSN.

Now, let’s look at her credit history. Unfortunately, your daughter-in-law’s foreign credit history can’t be transferred to the U.S. But she can start building one here even though she doesn’t have a Social Security number. It’s best to have one, though, to ensure her credit information is recorded accurately, says Maxine Sweet, vice president of public education at Experian.

“Name and current address are the minimum requirement, but we strongly encourage the lender to provide the SSN, date of birth and previous address if it was within the last two years,” she says. “That additional information can be very important in helping us match the account to the correct consumer.”

TransUnion also builds credit histories on individuals without a Social Security number. Equifax didn’t respond to emails asking about their minimum identification requirements for a credit report.

Getting a Social Security number isn’t easy. Generally, only immigrants OK’d to work in the country by the Department of Homeland Security qualify for an SSN, according to the Social Security Administration website. There are exceptions, so contact the agency for more information.

Now, here’s a potential problem you probably didn’t anticipate: Your son may have a hard time getting a credit card, too. If your son didn’t maintain any open or active U.S.-based credit — such as a mortgage, credit card or other loan — while he was abroad, a lender probably won’t be able to pull his credit score. He may not even have a U.S. credit file anymore.

A U.S. credit report from Experian, Equifax and TransUnion is based on payment history on mortgages, car loans, student loans, personal loans, credit cards and other loans he got here. If he doesn’t have any activity on these types of accounts in the past year or so, his credit report has gone stale, says John Ulzheimer, president of consumer education at SmartCredit.com.

“At that point, the credit report will cease to be scoreable under any credit score criteria,” he explains. Credit scoring models need recent activity to calculate a credit score. No activity, no credit score. No credit score, no new credit in most cases.

That’s not all. The credit reporting agencies don’t maintain credit files indefinitely. By law, negative credit information must fall off credit reports after seven years. Bankruptcies disappear after 10 years. Sounds good, right? But Ulzheimer says credit reporting agencies will eventually drop the good stuff, too. After 11 years, your son’s credit history may have vanished.

Your son should see if he has a credit report. If he does, he should give it a thorough read and make sure there aren’t any errors. He can pull his credit reports from each of the bureaus for free once every 12 months at AnnualCreditReport.com. If he finds he has little or no credit history, he will need to start building credit again the same way a young adult does: through a secured credit card or as an authorized user.

Secured credit cards require an upfront deposit to act as collateral against the line of credit. The deposit equals the credit limit, and it’s placed in a money market account or certificate of deposit while the account is open. Typical deposits run between $300 and $500. The problem is that you need at least six months’ worth of activity on the card before a FICO credit score — the most widely used score out there — can be created.

This is where you, as a parent, can help out, if you have good credit history. Adding your son (and daughter-in-law) as an authorized user on a credit card (or two) will immediately populate his credit file with the card’s payment history. That means he’ll have a calculable credit score, too. He’ll be able to apply for credit in his own name and build from there. Good luck to the whole family!

By Janna Herron | Bankrate.com