Rear View Of Loving Couple Walking Towards House

What to Expect When Purchasing a Home

Rear View Of Loving Couple Walking Towards House

Mortgages & Home Buying 101

Owning a home is a dream for many people. It’s something they hope to accomplish at some point in their lives. Sure, it is a hard task that requires a lot of work, but with proper budgeting anyone can do it! Mortgages and home buying can be very confusing and scary but researching the steps will relieve some stress. Provided below are common questions and answers people have.

It takes how many years to save for a down payment on a home?

Unfortunately, saving for a down payment on a home can take a lot of hard work and planning. Using the following example, we can illustrate the process you can take to figure out how long you will need to budget for.

Assume you make $56,000 and save around 15% of your income each month. That’s around $8,400 a year. It would take about 5 years to build a 20% down payment for a $216,000 home.

Buying insurance on your loan will allow you to have a smaller down payment but might be offset with greater monthly payments. With proper planning and a bulletproof budget, owning a home can be easy and a great goal to look forward to!

What Should I Expect at Closing?

Once you’ve taken all of the steps in saving, getting a mortgage, and finding your dream home, it’s time to close! There are few things you should be prepared for.

  • Your lender will send you a closing disclosure that outlines the terms of your loan, final closing costs, and outstanding charges or fees.
  • Do a final walk-through of the property to make sure everything is as it should be. For example, make sure any repairs that were made are as expected and that you are happy with your future home.

What to Bring to Closing

  • You will sign many legal documents between you and your lender.
  • Pay attention to all of the costs and escrow items. A majority of the time, the buyer is required to bring funds in the form of a cashier’s check made out to the escrow company.

Present Parties

  • Closing agent
  • Attorney
  • Title company representative
  • Home seller and their real estate agent

Closing Documents

  • Loan estimate and Closing disclosure
  • Initial escrow statement
  • Mortgage note and Deed of Trust
  • Certificate of occupancy


How to Use a Student Credit Card

When it comes to credit cards it’s very important to know key factors on how to use them correctly, especially as a student. If you don’t know how to properly use them, you could end up with a bad credit score or worse: end up in debt. To help prevent those scenarios, here are some tips you should know as a student.

You Choose Your Credit Card, not the Other Way Around

It’s important to not just apply for a credit card because you want a “free” new item, like a shirt or phone case. It’s important to research the company and see if the card you want is actually a good offer. Make sure to check for fees, interest rates and of course, compare it to other companies to see which offer is better and benefits you the most. Like stated in thebalance.com, the best credit cards for students to look for have no annual fees, low interest rates, and a low credit limit.

One Credit Card is Enough

As a student, you have a lot to pay for, especially when you think about your future. College includes having to pay for textbooks, food, rent, parking, and membership fees. Having just one credit card can help limit your spending. This will help you to not build up a ton of credit card debt. With one credit card, you can pay for most of those expenses and only focus on one card to pay off.

Control Your Spending

Don’t go over your credit limit! As a student, you might not focus on how much you spend, but it is very important to understand that getting too close to your credit limit makes it more difficult to pay it back in full at the end of each month. Also, know that credit bureaus do not like when you use more than 30% of your credit limit. To avoid overspending, keep track of the items you purchase and record them so you know if you are getting close to your limit.

Your Card, Your Money

Don’t let someone else use your card! When you apply for a credit card it’s for you to use, not anyone else. It’s your credit card, so it’s your responsibility. Allowing a friend or even a family member to borrow your credit card, even if they pay you back, is risky. Also, lending your credit card can cause you to get close to your credit limit because you don’t know how much they are planning to spend.

A Credit Card is Credit, not Debit

Credit cards and debit cards are two different things. Understanding that a credit card is not a debit card is important; don’t take cash out. This is known as a cash advance; credit card companies can charge from 2-5% cash advance fees and other fees due to the withdrawl. It’s important to stay away from cash advances and to read over the terms that go along with cash advances from your credit card company.

Credit cards have many uses, but it’s important to use them correctly. Keep these tips in mind once you receive your first credit card.


5 Saving Money Tricks for this Holiday Season

The Holiday season is upon us and this could either mean you are overly excited about the celebrations or you’re overly stressed out about money. Granted, you can also be both, excited and stressed out. This is normal during this time and we are here to offer you some guidance.

How can you save your money and spend wisely this holiday season?

Make a Budget

It should be no surprise to you that a budget is the smartest way to keep track of your money. You should keep one year-round but you should also have a separate one during the holiday season.

When you create your holiday budget, be smart and avoid setting yourself up for failure. Do not set a budget that is unrealistically low or one that is way too high. Also, think about cutting back in other areas. Can you avoid brunch Sundays with your friends for a month? Or even little things like buying coffee every morning?

Make a list of gifts that you absolutely need to get and another list of gifts you can make yourself. Getting a beautiful printed picture in a cute affordable frame can be just as nice as a $50 bottle of wine. After all, it is the thought that counts.

Make a Potluck

Getting your friends and family together to celebrate is always a beautiful tradition. However, if you are the host, it can be a very expensive one too. Deviate from the all-or-nothing thinking and ask your friends to help you with side dishes and dessert for your celebration. Not only will a potluck save you money, it will also save you precious needed time.

Get Flying Deals and Discounts

If you’re planning on taking a nice trip out of town, search for discounts. Gone are the days where travel agents had the only good flight packages. Now you have a million ways to get discounted fly tickets, car rentals and hotels. In fact, you can even get some travel benefits with your BSCU credit card.

Here is a trick: When you search for flights online, make sure to check at different times of the day. Believe it or not, some flights can get very cheap when you purchase them at odd hours like 2:00am.

Have Will-Power and Know When You Need to Stop

When your list is finished and you’ve checked it twice, it’s time to stop shopping. Know when you’re finished, and avoid stopping by the mall “just to see what they have” – this can lead to making poorly planned purchases and blowing your budget.

Most people get the itch to shop a few days before Christmas, if this is you, then leave some shopping you NEED for the last days. This way, you will still feel like you are getting something but you are not just “checking things out.”

Time to Use Coupons.

If this isn’t typically you, that is okay but during this time you’ll be wise to utilize coupons. You can get coupons online, via email, through a newspaper and you can even buy a cheap coupon book at the mall. The point is you have choices. Do not buy that $25 dress when you can get it for $15. Be smart because every dollar adds up.

Finally, remember to enjoy this time with your family and if you have to spend, spend wisely. We hope this helps.

 


3 Ways to Help Your Teens Build Good Credit

When your teen finally takes the big leap and moves out of the house, they’re going to need a solid credit score for a lot of life steps: renting an apartment, getting a loan or finding a good deal on insurance.

For that reason, it’s important that teens build up their credit scores before they move out. There are a few ways you can prepare them for this in the years leading up to graduation.

  1. Make sure they have a checking account and debit card to go along with it
    Getting your teen started with their own bank account is a significant step in building their credit score without ditching their safety net. A teenager under 18 years old can still sign up for a debit card; they just need a co-signer. Since you are co-signing on the card, your personal account will be linked to your teen’s in case of an overdraft. With this checking account and debit card, you should also teach your teens the importance of managing money well.
  1. Teach them the credit card basics
    Credit cards are a bit more complex than debit cards, so it’s important to sit down your teen and help them understand the basics. Signing them up for their own credit card is a bigger step than signing up for a debit card, but it’s an additional step that will help boost their credit score — assuming they pay the bills on time and in full. U.S. News & World Report contributor Amelia Granger says that the most critical skill a teen can learn is to pay their bills in full, even if that means starting with a smaller credit limit. Make sure you are monitoring your teen’s bills to confirm they’re not damaging their credit score rather than building a good foundation for the years ahead.

 

  1. Help them open a Secured Credit Card
    A Secured Credit Card is the perfect card to teach your teen how to properly manage money. It does this by not allowing them to use the money they don’t have, instead locking in a minimum amount of $500 they must use as if it were borrowed money from the bank. This card will help them improve their credit score and after a year they will be able to apply to a regular credit card.

Responsible money management is tough to practice if you learn it late in life. Your kids will be much better off by teaching them good financial practices.


Shopping Online Vs. In-Person

With the advent and spread of smartphone technology, entrusting your money to an online bank has become an increasingly popular alternative to the traditional experience. Traditional banks, however, still offer several distinct advantages that the online experience cannot provide, including in-person customer service when you have questions or concerns.

How do you decide which type of bank to use? Here are a few things to consider about your transactions.

Getting cash

If you use cash on a regular basis, make sure to consider the locations and accessibility of in-network ATMs before choosing your bank. Choosing a local bank or credit union means you should have good access to multiple ATMs, and many banks will reimburse you for fees incurred by using other ATMs.

Online banks don’t typically have ATMs of their own, which means you are more likely to pay a fee to withdraw your cash. These fees usually run a few dollars per withdrawal, but can often be frustrating since you are paying to take out your own money. This isn’t always the case, though. According to Business Insider’s Megan Durisin, some online banks will provide you with compensation for your fees. However, there is usually a cap on how much they will reimburse you per month.

Making deposits

When choosing your bank, you also want to consider how you will deposit money into your account. While both online and traditional banks usually allow direct deposits from your employer, online banks have several restrictions when it comes to other deposits.

At a traditional bank, you can deposit cash, checks, money orders and more. Simply walk into your bank and speak with a representative about your deposit. If you make a significant number of deposits, especially with checks or cash, traditional banking is a convenient option.

With online banking, your deposit options are a bit limited. Depending on your bank, you might be able to digitally deposit a check, but there are usually limitations on how much you can digitally deposit in one day. If your check exceeds that limit, you’ll have to mail it in. To deposit cash to an online bank account, you may have to purchase a money order and mail that in, as well. “You might have to pay a small fee for the money order,” explains Spencer Tierney, a contributor at NerdWallet. “For amounts larger than $1,000, you may have to spring for a cashier’s check at a bank.”

Customer service

Many online banks provide great customer service, including online live chats and call centers. But for some, speaking face to face is an important part of creating a trusting relationship with your financial institution, and it is a service that Durisin notes can only be offered by a traditional brick-and-mortar bank.

Choosing your bank is a personal decision that should be based on services that are most important to you and your lifestyle. Speak with a representative at either a traditional or an online bank to learn more.

 


How Community College Can Save You Money

Financial benefits of taking classes or earning a degree at a community college

To college hopefuls, the financial burden it represents can be daunting. However, community colleges offer multiple money-saving opportunities while still allowing you to earn an education.

  • Tuition savings

Tuition is perhaps the most immediate money-saving benefit of applying to a community college rather than a larger four-year university. Hocking College lists the average cost of tuition and fees at a four-year university as follows: One year at a private school runs an average of $33,480, and one year for in-state residents at public schools runs an average of $9,650. Comparatively, community college costs an average of $4,900 per year for public institutions and $15,478 per year for private institutions. Hocking College notes that community colleges only require two years of schooling while traditional colleges require four. As such, the price difference becomes far more pronounced when multiplied.

  • Room and board savings

Another source of savings, as pointed out by The Princeton Review, is room and board. Because there is a community college located within 90 percent of U.S. residents’ commuting distances, this allows students to continue to live at home while they complete their degrees.

  • Job savings

Community college students often take classes part-time while keeping their job. This allows the chance to save up money or pay for classes going forward. Hocking College says that this could be an especially good choice for nontraditional students, such as parents or older students, who simply don’t have the ability to take full-time classes.

Even if the student is not of a nontraditional group, community college degrees are only two-year degrees. This means that students can go into the workforce in half the time it would take attending a four-year school, giving them a head start in the workforce.

  • The 2+2 plan

Community college can also help students whose ultimate goal is to complete a bachelor’s degree at a four-year institution. The method for doing so is often referred to as the “2+2 plan.”

The plan involves taking advantage of the above sources of savings for two years at a community college before transferring the credits to a larger university to complete a degree. According to U.S. News, many community colleges offer agreements that ensure student credits will transfer to certain four-year schools. It described the situation in Massachusetts, where community college graduates with a GPA of at least 2.5 can transfer all credits, guaranteed, to any state university by using the Joint Admissions or MassTransfer programs.

In theory, this academic plan could result in a significant savings when pursuing a bachelor’s degree. However, both U.S. News and Dr. Robert Ronstadt, a former vice president of Boston University writing for Forbes, offer warnings about the 2+2 plan.

U.S. News says that not all four-year institutions accept credits from all community colleges, so students should speak to advisors at both schools to make sure that transfer credits are accepted, and under what circumstances they are accepted.

Dr. Ronstadt says that the 2+2 plan can also lead to trouble if it isn’t completed properly. The problem, he says, is that to achieve the savings promised by the 2+2 plan, students absolutely must graduate in the implied four years. If classes at the larger university prove to be difficult or not enough credits transfer, causing the student to take 3 or 4 years at the second school, the savings from the two years in a community college are swiftly consumed. In addition, to successfully complete the 2+2 plan the student needs to be a full-time student at the community college, which could put an overwhelming burden on students who need to work to pay expenses, potentially causing schoolwork to suffer and jeopardizing the transfer to the four-year school.

Overall, community college can definitely save students money due to lower cost of tuition, convenience of location and the option to work while taking classes. Whether the student then uses these boosts to transfer to a bachelor’s program at a four-year school or to graduate and enter the workforce is up to them.


4 Ways to Start Investing in Your 30’s

If you’re in your 30s, now is the time to prioritize investment

Your 30s are a time of transition. While you are no longer in the beginning years of adulthood, retirement is still far away. Investing may seem like less of priority than starting a family, purchasing a home or paying off student loans.

While these are important goals, your 30s are a crucial decade for investing. According to finance writer Paula Pant in an article for The Balance, if you begin saving for retirement at age 30, you will need to save at least 15 percent of your income to retire at age 65.

Whether you’ve already prioritized investing or need a place to begin, these are some options to help you build wealth and save for retirement.

 

  1. Focus on your 401(k)

If your employer offers a 401(k), maxing it out is one of the most important investing steps you can take in your 30s. According to the IRS, the maximum you can contribute in 2018 is $18,500. Your contributions are taken from your paycheck before taxes and are not taxed until you make withdrawals for retirement. “Perhaps best of all, many employers will match your contributions, at least up to a cap,” finance writer Arielle O’Shea notes in a February 2017 article for NerdWallet. “That’s free money you won’t find through other offerings.” If you’re unable to contribute the maximum amount to your 401(k), taking full advantage of your employer’s match is a good place to start.

 

  1. Consider a Roth IRA

If you’ve maxed out your 401(k), or if you don’t have access to one, consider opening a Roth IRA. According to O’Shea, Roth IRA contributions “go in after tax, which means no tax in retirement. Your money also grows tax-free in a Roth IRA.” For 2018, the IRS says you can contribute $5,500 to a Roth IRA unless your income is above $120,000.

 

  1. Other investment accounts

Beyond your 401(k) and Roth IRA contributions, investing in stocks is another avenue to consider. Picking individual stocks is one option, although successfully doing so requires a high level of research and expertise. Another option is an index fund. According to finance writer Dayana Yochim in an August 2017 article for NerdWallet, “When investors buy an index fund, they get a well-rounded selection of many stocks in one package without having to purchase each individually. And because these funds simply hold all the investments in a given index … management fees tend to be low. The result: Higher investment returns for individual investors.”

 

  1. Investment risk

Any investment involves risk. However, O’Shea writes, “Risk is one reason there’s such emphasis on investing when you’re young—young people have a long time horizon before retirement, which means they can worry less about short-term volatility. That allows them to accept risks that should lead to higher average returns over the long term.” For example, stocks offer a higher return on investment, but they are also riskier. Bonds and mutual funds carry less risk but a lower return rate. A more aggressive investment strategy for your 30s might emphasize a heavier allocation of stocks with a smaller percentage of bonds. Then, as you get older, you can slowly shift your investments to focus on safer holdings.

 

While in your 30s, it is important to prioritize investing in retirement, especially if you’re only just getting started. Whether that’s the case or you’re building on what you’ve invested, the additional effort will help put you on the path to peace of mind and a secure retirement.


Credit Check

How to Remove Credit Report Errors

Credit Check

What do you do when you spot an innacuracy on your credit report? Take steps to dispute it. Because of the Fair Credit Reporting Act, cleaning up your own credit report is usually quick and easy. Credit reporting agencies (often called credit bureaus) should only report accurate and current information.

Step one – Obtain your credit reports
To know exactly what is happening with your credit, check the reports from all the major credit bureaus – TransUnion, Equifax, and Experian. The information on each report may vary because not all creditors report to every bureau. You may receive a free report from each company once per year from Annual Credit Report Request Service, or you may obtain them from the bureaus directly for a fee.

 

Step two – Know what can be removed
You can’t rid every negative notation from your file – credit bureaus are obligated to report all credit and debt information as long as it is correct and timely. So what can be removed?

  • Wrong information. If the report lists incorrect information, such as an account you never opened, someone else’s name, or a judgment for a lawsuit you were never a part of, you can have it permanently purged from your record.
  • Duplicate information. While an account can sometimes show up multiple times, you may want to have your report list it just once. This can prevent lenders from believing you have more debt or credit problems than you actually do.
  • Old, negative information. In most cases, negative information, even when accurate, won’t haunt you forever. Your credit report may reflect lawsuits, judgments, liens, foreclosures, a Chapter 13 bankruptcy (from the filing date), late payments, and charged-off accounts for seven years. Chapter 7 bankruptcy will be evident for ten years from the date of filing. Child support arrearage and default notations for student loans, though, can be reported until satisfied.

Step three – Dispute inaccuracies
If you do spot errors or items that should have aged off your report, it is time to take action:

  • File the dispute with the bureau. You may make your dispute on the company’s website, over the phone, or by mail. In all cases you’ll have to provide your personal identification and a description of what is wrong, and what the correct information is. If you have any documents that support your case (such as copies of cashed checks that confirm you paid an account), include those as well.
  • Wait 30 days. After you file your dispute, the bureau has 30 days to investigate the matter, and a dispute notation will show up on your report. The creditor will have this time to verify the information, and if they can’t prove it’s accurate, the bureau will stop reporting it. When the bureau completes the investigation they will send you a written report covering what they found, and an updated copy of your credit report if it resulted in any change.

In the majority of cases, removing inaccuracies is that simple. However, if the investigation results in no change, contact the creditor by phone and/or mail and explain why the information is incorrect and that you want them to report the accurate information. Include copies of supporting documents (a statement showing a zero balance, for example), if you have them. The creditor may not continue to report unproven information.

Finally, if the situation still doesn’t get resolved to your satisfaction (or if the negative information is correct but you have a good reason for why it happened), consider writing a letter of explanation to add to your report. In one hundred words or less, you can explain your side of a credit problem. Write the note clearly, include supportive facts, and send it to the bureaus to be attached to your report. This “100-word statement” could make a positive difference to whoever is reading the report.


Save money and refinance.

5 Ways to Cut Your Monthly Expenses

Save money and refinance.
Little changes make a difference!

Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement. One way to get lifestyle creep under control is to have any future raises you get direct deposited into savings – like a 401(k) account through your employer, or an Individual Retirement Account (IRA). But here are five things you can do right now to cut your monthly expenses.

  1. Make a Budget
    The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Then break it down even further to ferret out items that are ripe for reducing. Many people, for example, are surprised to learn just how much they pay for pricey lattes and snacks from restaurants and vendors that would cost a fraction of that amount if they were made at home or purchased at a grocery store.
  2. Lower Your Mortgage Payment
    The biggest monthly expense for many people is their home mortgage. If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment.
  3. Get an Insurance Checkup
    If you have a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal. If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.
  4. Examine Your Auto-Payments
    Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment. However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans that include loads of premium channels that are rarely watched.
  5. Cut the Cord
    If you’ve already ditched your land line, good for you! If not, doing so is one of the quickest and most pain-free ways to trim your expenses. Most all of us have our cell phones with us all the time anyway, and if you really like the feel of a traditional phone in your hand, a VOIP (Voice Over Internet Protocol) plan that provides phone service over the Internet is a lot cheaper than traditional land line service.


Credit Report

6 Confusing Things About Your Credit Report

If you’re not used to reading them, credit reports can make about as much sense as a restaurant menu printed in a foreign language. At least in a restaurant, you can point to what someone else is having. But if you don’t know how to read your credit file, you could make mistakes that could lead to your financial life being harder than it needs to be.

Here are some common misinterpretations people make about their credit reports and how to avoid them.

  1. They have too many student loans listed for me
    When student loans are listed on credit reports, they are often broken up into individual loans for each semester you took out a loan. Of course, you still want to make sure all the loans are yours, but don’t be surprised if you see a lot of loans listed under the same provider.
  2. I must be a victim of ID theft because someone else’s name is on my report
    When companies like Equifax, Experian and TransUnion compile your information, they look to gather up all financial information that is being reported for you. In doing so, they may accidentally confuse you with someone with a similar name or other bit of identifying information. This can result in that person’s name, address, date of birth, Social Security number, etc. being mistakenly listed on your credit report. You can always have this kind of information removed from your credit report by disputing the information at the website of the bureau that is listing the information. You can access the website for the individual bureaus listed above by simply adding “.com” onto the name of the credit reporting agency.
  3. I paid that collection account, it shouldn’t be on my report anymore
    Collection agencies aren’t required to remove a collections account from your credit reports once you have paid it. All they are required to do is list that the account has been satisfied. Negative accounts like these stay on your credit report for seven years from when the account first went delinquent with the original creditor, whether they are paid or not.
  4. My credit score is missing
    The credit reports we are all entitled to by federal law – available at www.annualcreditreport.com or by calling 877.322.8228 – do not come with a credit score. There is currently no law that automatically provides everyone with a free score. FICO is the company that provides the score most commonly used by lenders. You can purchase a score from them at www.myfico.com.
  5. My date of birth and address are part of lending decisions
    When you access your credit reports, you will see that some of your personal information is listed in addition to your financial data. For example, the report may list where you live, when you were born, and who you have worked for recently, among other things. You needn’t be worried that this is being used against you when a potential lender is looking at your reports, though. It is illegal for a lender to use age or address when making lending decisions and these pieces of information are not calculated into your FICO credit score.
  6. All these inquiries count against my score
    When someone other than you looks at your credit report, it results in what is called an “inquiry” being put on your credit report. If you’ve ever looked at credit reports, you may know that there can be a whole lot of them listed at any one time. Keep in mind that the only inquiries that are ever factored into your credit score are ones that happened in the past year (even though they stay on your credit report for 2 years) and the ones that were for the purpose of you applying for credit or financing some other type of financial contract. The other types of inquiries are not counted against you.