Michele Lerner Michele Lerner, author of "HOMEBUYING: Tough Times, First Time, Any Time," has been writing about personal finance and real estate for more than two decades for a variety of publications and websites including Bankrate, Investopedia, Insurance.com, National Real Estate Investor, The Washington Times, Urban Land, NAREIT's REIT, and numerous Realtor associations.
The best way to ensure that you build wealth and avoid debt is to diligently plan and save as much money as possible for both future needs and desires. However, exactly how you handle your savings can depend greatly upon your financial habits. Some financial experts recommend setting up a simple savings account tied to your checking account, while others advocate opening multiple accounts to be used for various savings targets.
There are pros and cons to each approach. Of course, a major part of your final decision depends on your financial personality.
These days, drivers keep their cars longer than ever, as the average age of the 240.5 million cars and light trucks in the U.S. is almost 11 years. And since that’s an average, you can assume there are plenty of cars older than that riding down American highways.
A car that lasts for years is great, but the older it gets, the more likely it is to face mechanical trouble. The Toyota Tercel I drove for more than a decade regularly racked up repair bills of up to $900 until I finally realized I could save more money by simply buying a new car. Financially savvy owners with deep savings accounts and emergency funds are prepared for unexpected problems, but those of us who haven’t thought ahead can quickly wind up stuck with significant bills.
Many home buyers fall in love with their house, sometimes at first sight. However, it is important to be careful when you open up your heart – otherwise, you may get trapped in a money pit. Your first step to avoid falling into that trap is to complete a thorough home inspection with a reputable, licensed inspector. Once this is done, take your investigation a step further by requesting a comprehensive loss underwriting exchange (C.L.U.E.) report from the sellers.
While many homeowners are familiar with the option of refinancing their mortgage, not all homeowners understand loan recasting. This may be because not all lenders offer recasting or re-amortizing, and not all borrowers are eligible. However, the process could save you money in two ways: by reducing your monthly mortgage payment, and by allowing you to avoid the cost to refinance.
Extremely low mortgage rates and rising apartment rents in many cities have led some people to dive into homeownership more quickly than they’d originally planned. However, others are choosing to wait until the housing market recovers, in spite of the incentives to buy. The truth is, there’s no one right answer when it comes to determining whether to rent or buy a house.
There are a number of considerations you must make when making this decision. Renting and buying both present a number of pros and cons, and your own financial situation may be the biggest factor of all.
Whether you’re buying a home or refinancing your current home, you may assume your choices for financing with a fixed-rate home loan are limited to a 30- or 15-year term. While these are the most popular loan choices according to the Mortgage Bankers Association (MBA), many lenders offer mortgage loans for almost any loan term you choose.
The MBA says that 15% of all mortgages for refinancing homeowners were for non-traditional terms in June 2012, while only 2% of mortgages for a home purchase were for non-traditional loan terms. In fact, 85% of purchase loans were 30-year fixed-rate loans.
If you have an FHA-insured mortgage on your home, you may have the opportunity to refinance with an FHA streamline refinance. While the hype surrounding the FHA streamline refinance program makes it sound fabulous, the reality is that mortgage lenders often put what are called “overlays” on FHA guidelines. In other words, while the FHA says you can basically refinance your underwater home even if you have bad credit and are unemployed, most lenders require you to meet a certain level of standards.
That said, if you have an FHA loan and can qualify for an FHA streamline refinance, it can be a great deal. Just make sure you compare your options for other types of mortgage refinance.
Whether you’re interested in snapping up a bargain home and renovating it to meet your needs, or you have a kitchen full of outdated appliances that you’d like to replace, an FHA 203k home loan may be the solution to your financial needs.
Unlike standard mortgage loans, this loan – officially known as the Federal Housing Administration’s 203k Rehabilitation Mortgage Insurance Program – wraps renovation and purchase or renovation and refinancing costs into one mortgage.
Record-low mortgage rates have been generating an avalanche of refinance applications, but if you’re age 55 or older, you need to seriously consider refinancing in the context of your retirement planning.
How close you are to retirement has a big impact on this decision: If you have 10 to 15 more years of work ahead of you, your reasons to refinance may be a lot different from someone who intends to retire within a year or two. If you have at least a decade or more to prepare for retirement, your goal could be to shorten your term in order to pay off your loan before you stop working. And if you are retiring sooner and know you can’t eliminate your mortgage balance before your last day on the job, your goal could be to lower your monthly housing payment.
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