Saving Up for Your First Home? Our Guide to Finding Ways to Save Your Down Payment Faster

If your goal is to purchase a home, you may find that it’s challenging to save up enough money for your down payment. While this is something that many first time home buyers struggle with, it is by no means insurmountable. By making a few simple changes you will be able to accumulate the funds you need for your down payment.

Keep Track Of Your Spending
One of the reasons why it can be difficult to save money is that you aren’t even sure of where your money is going. While you may be aware of major expenses such as rent, car payments and utilities, it’s easy to lose track of many of the smaller bills and impulse purchases. If you aren’t keeping a budget, you should begin as soon as possible. Software programs and apps such as Mint.com can make this simple.

Consider If You Have Anything To Sell
You may be able to raise some quick cash by selling some personal belongings. Don’t part with something that will cause you regrets, such as a precious family heirloom. However, if you’re like many people, you probably have lots of items you no longer need. In addition to holding a garage sale, you could sell items such as jewelry, electronics, art or almost anything on eBay.

Refinance Credit Cards
Refinancing credit cards or any type of debt can help you save money on monthly bills. Balance transfers can often give you a more advantageous rate with credit cards. If you have a car loan, you may be able to find better terms with a different lender.

Find Another Source Of Income
In addition to finding ways to cut back on your spending, taking in some extra money every week can make it much easier to save up for that down payment. Perhaps you or your spouse could find time for a part time job. You might also consider starting a part time business, such as an online store that can be managed from home.

If you are creative about it, you can probably find many ways to save up for your down payment. You should also do plenty of shopping around when it comes to finding the best deal on a mortgage for your first home. Consult with a qualified mortgage professional to get an idea of what you can realistically afford.

Freelancing in 2015? Three Tips for How to Secure a Mortgage if You’re a Self-Employed Entrepreneur

If you are self-employed, either as a freelancer or as the owner of your own business, your income can fluctuate greatly from year to year. That can make it difficult to get approved for a mortgage, although there are some things you can do to improve your chances. Here are three tips for securing a mortgage if you are self-employed.

Make Sure Your Credit Score Is In Good Shape

While your ability to pay back a mortgage is the most important factor in approval, your credit score is a close second, and that goes for every borrower, not just those who are self-employed. If you have a credit score in the high range — something above 750 or 760 — it will help you get approved for a mortgage. To boost your score, make sure you pay all bills on time, pay down your debt levels and don’t make any new big purchases or apply for new credit soon before you apply for a mortgage.

Have a Large Down Payment

The more money a bank lends you to buy a house, the more risk it is taking in that the money won’t be paid back. If you are self-employed and considered a higher risk to begin with, one way you can alleviate some of that risk is to be able to put down a large amount of money. Putting down 20 percent is standard for a conventional loan, and you should be willing to contribute at least that much. Putting down at least 20 percent also will save you money in the long run, because you won’t have to pay for mortgage insurance and you will pay less in finance charges over the life of the loan.

Have Significant Assets

One way to put a lender at ease about your ability to pay for a mortgage is to have significant reserves in the form of assets. If you have large amounts of money in regular savings, brokerage and retirement accounts, it offers a reserve for you to tap should your income take a dive. Other forms of property, such as personal and business property that’s paid off and has value, also help.
If you are self-employed and are thinking about buying a home, contact a mortgage professional to discuss your situation and to see if you will be able to qualify for a home loan.

Are You Ready to Make the Leap into Home Ownership? Here’s How You Can Tell

Are you ready to make that leap from living at home or renting to owning a home of your own? While everyone moves at their own pace, here are some signs that you can use to determine if it is time to own your own home. Let’s take a look at some of the reasons you can use to justify your decision.

Are You Sticking Around?

If you plan on moving soon for a job or think that you won’t be in town much longer, it may be better to rent. However, if you are thinking about living in the same town or within the same county for years to come, it is time to put down roots.
The stability that comes with home ownership may make you more prepared for a marriage and/or a family if that is something that you want. This stability may make you more attractive if you are single and searching for a long-term relationship.

Do You Have a Steady Job?

Those who have a steady job and know that they have a stable salary may want to make the move to home ownership. As long as there aren’t any other major debts eating into your income, you can probably handle a mortgage and other costs associated with home ownership.
The equity that you build in your home can help you build wealth for the future if and when you want to retire. Your home may also make a great rental property in the future, which can help you diversify your portfolio and keep you solvent for years to come.

You Are Spending More Time Watching Television Shows Related to Home Ownership

You may have caught yourself recently watching shows revolving around people or couples who are looking for homes. You may also be watching programs dedicated to giving tips as to how you can upgrade your home. If you watch these shows frequently, it may be a sign that you are ready to move out on your own and take on the exciting challenge of being a homeowner.

Are you ready to be a homeowner in the near future? Only you can say for sure if it is time to make that leap. However, those who are looking for a long-term housing solution may be ready to make that move. For more information, it may be worthwhile to talk to a mortgage professional to see what you can

Tax Time is Upon Us: Learn About Tax Deductions and How to Write off Your Home Mortgage Interest

Much to the chagrin of taxpayers all over the country, the tax-filing season begins in January and runs through April 15 of each year.

As the current tax season approaches, it presents an opportunity to help tax-payers clarify their responsibilities and remind them of certain important tax deductions that may be available.

Filing Responsibilities

Every person in the United States is required to file their tax returns by April 15 so long as they have some form of qualifying income. Based on filing status, income and available deductions, tax-payers must file a 1040EZ, 1040A or 1040 (long-form for itemized deductions).

Qualifying income is generally defined as, but not limited to wages, commissions, miscellaneous income (rental, interest), investment income and alimony. These forms of income are reported on a periodic basis to the IRS and State governments by employers, banks, contract employers and/or other responsible parties.
The most common tax receipts that must be sent to tax-payers by January 31 are W-2s and 1099-Misc forms.

Calculating Taxes

While the IRS requires individuals to report all forms of income, they also allow certain living costs to be used as deductions to offset income in order to arrive at a “taxable income” number on which tax liabilities are calculated.
If a tax-payer’s deductions fail to exceed the combined statutory standard deduction (2014: $6,200 if filing single, $12,400 if filing as married couple, $9,100 if filing Head of Household) and personal exemption of $3,950 per dependent, they will want to file the 1040EZ or 1040A. If itemized deductions exceed this number, the 1040 becomes preferable.

Mortgage Interest Deduction

For a majority of tax-payers, the largest tax deduction available is usually mortgage interest paid on secured debt where the primary residence and in some cases second homes or rental property serve as collateral. In most of these cases, all interest paid during the year is deductible.
If the mortgages are large enough, the total interest paid will typically push the tax-payer into position to itemize deductions. It is important for tax-payers to read the rules related to mortgage interest deductions as they tend to be somewhat complicated.

Other Important Deductions to Consider

Once a tax-payer qualifies to itemize deductions, many other living expenses become deductible. Other prominent deductions include property taxes, charitable contributions, childcare costs, qualified moving expenses, certain work related expenses and certain medical expenses.
Prior to using any deduction, it is incumbent on the tax-payer to review deduction guidelines in order to determine applicability.

Three iPhone and Android Apps That Make Managing Your Mortgage Payments Quick and Easy

Your mortgage payment may be among the largest payments you make every month. While certainly

an important part of your budget, this payment is also critical to helping you build equity in your home because it attributes to mortgage principal reduction. Managing your mortgage payments can be challenging, but there are some incredible apps available for use with Android or iPhone smartphones that can simplify your mortgage management tasks.

Mortgage Mentor
This app is available for both iPhones and Android devices, and is designed to be compatible with all types of mortgages. It can calculate PMI for adjustable rate and variable rate mortgages, and it can help you to determine the true cost of a mortgage. Through the use of this intelligent app, you can track your account information in real-time, or you can manipulate the numbers to help you to make more thoughtful and intelligent decisions about your finances.

Loan Calculator Pro
This app is only currently available on iOS devices, but those with this operating system may want to download it today. It has some of the same capabilities as Mortgage Mentor, but it goes a step above and beyond by providing you with mortgage payment notification reminders. It also has a unique feature that allows you to set a final payoff date for your mortgage, and it will calculate how much money you need to pay per month toward your mortgage to accomplish this goal.

Bill Payment Log
The Bill Payment Log app is a unique program that can entirely replace the outdated manual entry checkbook balancing task. It is suitable for use with iOS, Android and even Windows. You can use it to monitor and track payments for all credit accounts, including mortgages. While it does not have the analytical tools associated with some of the other mortgage apps, those who are looking for an all-in-one app that facilitates bill payment tasks for all accounts, this may be a great option to consider.

Making your mortgage payments on time is important, but you also may need to know if you need to pay extra each month and what the effects of that will be. You may also be concerned about “what if” scenarios for your adjustable rate mortgage. There are numerous apps available on the market today that can help you to facilitate your efforts, and these are among the leading choices available.

Tankless Water Heaters: The Pros and Cons of Going Tankless In Your Home

Large water heaters are unsightly appliances that home-sellers would rather hide. Although it’s not always possible to banish these structures, it is possible to replace them with a version that is not as
overbearing. Tankless water heaters have the potential to make one home stand out amongst the competition, but they do have some disadvantages along with the benefits.

Pro: Tankless Water Heaters Use Less Energy
Traditional water heaters continuously heat water that is just sitting in the tank, and this requires energy. Tankless water heaters, on the other hand, do not heat the water until someone needs it. Therefore, they are more energy-efficient and cost less to operate.

Pro: Tankless Water Heaters Last Longer
Traditional water heaters will need to be replaced after about a decade, but tankless water heaters can last much longer. If someone is planning on purchasing a home with a new tankless water heater, he or she would not have to think about replacing it for about 20 years.

Pro: Tankless Water Heaters Are More Space Efficient
The typical traditional water heater is 24 inches wide and 60 inches tall. Tankless heaters save a lot of space because they are generally only 20 inches wide and 28 inches tall. They open up a lot of space, and this impresses buyers greatly.

Con: There Is Less Available Hot Water with Tankless Heaters
Although a tankless heater can provide a home with hot water only when it is needed, the amount is limited to a few gallons at a time. This will mean that more than one occupant in the home cannot take a shower at the same time. They will definitely not be able to do this while they run the dishwasher or the washing machine.

Con: Tankless Water Heaters Are Typically More Expensive
Tankless water heaters cost around $1,000 while the traditional version only has a price tag equal to $300 or $400. While this higher up-front purchase cost is a con, if you consider that a tankless water heater should last longer than a traditional heater you may end up saving a bit over time.

FICO Scores: How Does Your FICO Score Impact Your Mortgage? Let’s Take a Look

Most people have heard the term FICO score, but some remain confused as to what it actually is and if it affects them when they try to obtain a mortgage. A few questions can be answered to help people understand how it can affect the amount of interest you pay on your loan.
What is a FICO Score?
A FICO score is a credit grade of a borrower, based on credit history as reported to 3 separate credit reporting agencies. It is based on a number of factors, including the amount of credit a person has, payment history, late payments, judgments, loan defaults and other factors.
A mathematical formula developed by Fair Isaac Corporation (thus the term FICO) is used to grade the credit risk the borrower represents. Scores range from 350 to 850. A score of 650 or better is considered good and a score above 750 is considered very good.

Does a FICO Score Affect a Mortgage Rate?

Mortgage interest rates are calculated in part, on the amount of risk the borrower represents. The higher the risk the borrower presents, the higher the interest rate the lender must charge to account for the risk. With FICO scores, the lower the score means a higher risk, and thus, less favorable mortgage terms. Those with low FICO scores may have difficulty finding a mortgage.
How much the rate will change depends on the lender. Myfico.com estimates that with current rates, a borrower with an average FICO score can expect to be charged more than 1.5 percentage points more than a borrower with an excellent score. Though the difference in interest may not seem to be much, it will add up over time.
For example, a borrower seeks a $200,000 mortgage on a 30 year fixed rate. Because they have an excellent credit score, they obtain a mortgage at 3.549%. Monthly principal and interest payments at that rate amount to $904 per month. Total interest paid on the loan will be $125,285 over the 30 year period.

Another borrower seeking the same mortgage has a lower credit score, in the average range. The borrower is offered the same mortgage but at 5.138% interest. The monthly payment will be $1094 per month and the borrower will pay $192,607 in interest. The difference in this case, between an excellent FICO score and an average score is $187 per month, $67,302 over the life of the mortgage.

Is a FICO Score Permanent?

No. A credit score will change depending on the borrower’s credit history. A borrower with a lower score can increase it over time by taking certain steps to improve it. Obtaining their credit report is the first step to improvement. It should be reviewed for accuracy, and incorrect entries should be reported. Outstanding judgments, if any, should be paid. Paying down revolving credit card debt also can help.

Visiting an experienced mortgage professional to discuss his or her current FICO score is another good start. The mortgage professional can discuss the effect it has on your mortgage rates and how to improve your score and put a borrower on the path to obtaining the best mortgage rate possible.