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  • From 2001 to 2005, the average homeowner saw the value of his or her house jump by more than 50 percent.
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    April 22, 2014
    Bad Mortgage Advice

    The internet is full of mortgage advice: both for first time buyers and veteran homeowners. And a lot of it is good, sound information. However, just because something is on the internet doesn’t mean it’s true! Make sure you speak to a legitimate finance counselor before making any rash decisions based on a simple Google search. Not everything will work out for you, and you need to look at your own individual needs before acting. This article by Tony Moton at Yahoo Homes has a list of bad mortgage advice that people often follow without thinking it through:

    Bad Advice No. 1: “A 30-year fixed-rate mortgage is best for everyone.”

    The kicker is that interest payments over the course of the loan can be quite substantial when compared to mortgages with shorter terms and lower interest rates.

    Bad Advice No. 2: “Stay away from adjustable-rate mortgages.”

    This is a great option for homeowners who plan on moving out of their house before the rate adjusts. However, this does carry some risk, since personal finances and the condition of the housing market may make moving difficult in a set amount of time.

    Bad Advice No. 3: “If your home is underwater, consider a short sale.”

    Even if your home is underwater, it’s a bad idea, asserts Percival. If homeowners can still afford to make their mortgage payments, then they shouldn’t do a short sale.

    Photo Credit: Duncan H 

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    April 21, 2014
    Getting A Mortgage With A Nontraditional Job

    Most of the tips on how to qualify for a mortgage are pretty standard. You basically have to prove to your lender that you are a solid investment: someone who has the income and the dependability to make their payments on time, and won’t fall through on them. Usually, people tell you to make sure that your credit score is in order, you have cash saved for a down payment, and that you have steady employment (ideally, the same job for a few years). But, what if you work in a more creative field? What if you are a freelancer, an artist, or your paychecks are entirely based off of commission? Maybe you’re a small business owner, and your income fluctuates constantly. Fear not! It may be an uphill battle, and you’re going to have to work a little harder than people with a traditional 9-5, but it’s still possible to be approved. Check out this post by Mary McCoy at the Money Crashers blog for some advice:

    Income Verification. If you are paid sporadically but in large chunks, these paychecks are typically averaged out over the course of two years to give lenders a good idea of your monthly take-home.

    Debt-to-Income Ratio. Your debt-to-income ratio cannot exceed 43%.

    Two Years of Personal and Business Tax Returns for the Self-Employed.

    Analysis of Income TrendsBe prepared to explain dips in income. Even if your income looks good when averaged over two years, you have to explain any declining trends prior to qualifying.

    Photo Credit: Mark Kaufman 

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    April 17, 2014
    Meal Budgeting 101

    My bank provides online statements that breaks down my spending into different categories: transportation, home goods, personal, groceries, dining out, etc. And almost every month, without fail, my biggest expense is dining out (not counting rent). I am absolutely horrible at budgeting for groceries and food. When you’re spending money on personal things or trivial purchases, you think about the cost. When spending for food, I kinda just shrug my shoulders and don’t think about it because you NEED food, right? However, you could save yourself hundreds of dollars by thinking ahead, buying groceries, and planning out your meals instead. I desperately need to learn how to do that, so I found this post Lynette at Cleverly Simple to help me out:

    -Make a list: of your favorite recipes and the ingredients you need for them

    -Look at the store ads: decide what meals to make based on what’s on sale

    -Create a schedule: figure out what you’re going to make each day in advance

    -Stockpile ingredients from the ads: get things you know you’ll use.

    -Use your pantry: as you build it up.

    Photo Credit: Sodanie Chea 

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    April 16, 2014
    Wordless Wednesday: Nifty Music Room

    Photo from Audio Production Tips

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    April 15, 2014
    Best Ways To Spend Your Tax Refund

    Getting a tax refund is like being visited by Santa Claus as an adult. They only come once a year, so most people use them on frivolous purchases. And why not? It’s your money! But, there are smarter ways to use it than on useless junk. Whether you’re only getting back a little or a lot, tax refunds can be a huge help with normal expenses, debt payments, or even investments. This post by Kelli at The Freebie Finding Mom has some smart advice:

    -Pay down debt: use it towards student loans, car payments, or credit cards.

    -Build an emergency fund- start it out if you don’t have one already!

    -Look at insurance needs- upgrade if you can!

    -Plan for retirement- put it towards your IRA or 401k

    -Plan for college- either for yourself or your children

    -Invest- and help your money grow

    So, playing a little with your tax refund is fine, but if you put most of it towards one of these other options, you’ll be much better off.

    Photo Credit: Tax Credits

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    April 14, 2014
    Lowering Closing Costs

    Besides saving up for a deposit, closing can be one of the costliest parts of obtaining a mortgage in the home buying process. Basically, closing costs is the general term for all the fees that you have to pay to lenders and third parties. They can even seem exorbitant if you aren’t prepared for them. However, what some people don’t realize is that closing costs can sometimes be negotiable. There are ways to save on (at least a few of) them. This article at Government Mortgage Help could be very valuable for anyone looking to reduce their closing cost fees:

    -If you are obtaining the mortgage for a new home, you can help reduce your out of pocket expenses by getting contributions from the seller. During the negotiation to purchase the home, you can ask to include part of the closings costs as part of the deal.

    -Another way to help eliminate closing costs is working with the lender. In essence, you negotiate a higher mortgage rate in return for a lower settlement or closing costs.

    Photo Credit: Stock Monkeys 

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    April 10, 2014
    Tax Breaks For New Homeowners

    Besides being a huge investment, buying a home can save you in other ways. With home ownership comes a wealth of new tax side effects, and some of them can be extremely profitable! If you’re a new homeowner, you might not know all of the tax deductions that you can receive. Luckily, this post by David Bakke at the HR Block blog will help you out:

    1. Home Mortgage Interest Tax Deduction: The most valuable tax deduction for a first-time home buyer is the mortgage interest tax deduction. 

    2. Points Are Tax Deductible

    3. You Can Deduct Property Taxes

    4. Private Mortgage Insurance is Usually Tax Deductible

    Photo Credit: Images of Money 

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    April 9, 2014
    Wordless Wednesday: Artsy Bookcase

    Photo from Blogspot

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    April 8, 2014
    Is It Possible To Get A Mortgage With Bad Credit?

    One of the very first tips you see when trying to get a mortgage is to get your credit in order. If you can’t pay your bills on time, lenders are going to believe that you won’t be able to make house payments. It’s pretty logical. However, lenders are taking the housing downturn into consideration when passing out loan. Lots of people were affected, and everyone makes mistakes. There are ways to get a mortgage even if you’ve have credit problems in the past. This post by Gerri Deitweiler at the blog has some valuable advice:

    Many people think when they go through a bankruptcy that, “Hey that’s it, I’m not going to be able to buy a house again,” and that’s not true. It’s a matter of waiting a certain amount of time. Currently, if it’s an FHA or a VA loan, the government is more flexible. The waiting period from the time the bankruptcy is discharged — not when you started it, but when it’s completed — is two years. For a conventional loan, it’s four years.

    Photo Credit: striatic 

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    April 7, 2014
    Craigslist Tips

    Selling old or unwanted items online is a great way to bring in some extra cash. It’s like having a yard sale, only you don’t have to drag all your stuff outside. You don’t even need to have a yard! Selling big ticket items like furniture, appliances, and electronics, or even cheaper items like clothing and kids’ stuff is super easy on sites like Ebay and Craigslist. But, you have to know what you’re doing. This post by Crystal at Money Saving Mom has some great tips:

    -Post good photos

    -Write an accurate description and price accordingly

    -Note what area of town you’re in

    -Be ready to respond to inquiries

    -Don’t waste time on deadbeats

    -Meet at a location other than your home

    Photo Credit: Alisha Vargas 

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