Browse Month by December 2012
Products

Buying a Home in Retirement

happy couple pointing toward their new home
happy couple pointing toward their new home

It’s a personal choice as to whether or not we stay in our homes when retirement comes, or move somewhere else specifically to enjoy these years.

Some people dream of moving abroad, others like to begin afresh in a new location. But whatever we choose to do the same considerations come into play as buying any other property at any time.

Let us guide you and give you some great advice on the topic. But first you need to ask yourself a few questions?

What will you plan on doing in retirement?

  • By this we mean will grandchildren come to visit?
  • Will you be taking up a specific hobby or occupation?
  • Do you have adequate healthcare nearby?

You really must take all of these things into consideration before making a decision.

So what do we have available?

showing a house in the palm

Well let’s begin with what we call vacation homes as these can be altered slightly to become the primary home of the retiree. Quite a lot of people will have a vacation home and wish they could live there all the time! Well of course this is very possible in retirement for sure!

No-one can predict what will happen in the future so we can’t be certain of values in this area. Some Americans will be lucky enough to purchase both a retirement property and a vacation home!

And there’s the good old condominium!

These are extremely popular with retirees and of course they are great for downsizing. Those able to live in a condominium community will find a range of facilities and a wonderful opportunity to add to their social lives. Perhaps the greatest attraction here is the fact maintenance costs are suddenly reduced. This can have a big effect on your cash flow!

The downside is it can be a bit more difficult finding a condominium, but the process is very similar. You need to qualify for a loan and your credit history must be good – and of course you still need a regular income. Some lenders may even require you to make a 25 per cent down payment, so be aware of this! The crux seems to be that unlike mortgages the condo association has to qualify in order for the mortgage to be rubber stamped!

In truth the borrower doesn’t have much control over this area of the process. These lenders are following new guidelines from the Federal Housing Association or FHA. According to Fannie Mae – these requirements must be met:

  • No single investor can own more than 10 per cent of the units.
  • More than 50 per cent of the units must be owner-occupied
  • All planned amenities must be completed if the development is more than a year old.
  • No more than 15 per cent of owners can be classed as delinquent on monthly fees.
  • Those borrowers who make a downpayment of less than 25 per cent will pay either an extra 0.75 per cent of the loan at closing, or a rate of interest 0.25 per cent higher!

Check this out:

So what about retiring overseas?

matured retired couple standing in front of their home

For many this is the dream situation – living in a paradise or gorgeous place – retiring and simply enjoying life. And it can be done big time! Low living costs and small property taxes make this sound very appealing. You can find some of the best housing markets in the world close to the United States, if not in it! There are a number of destinations overseas attracting complete communities of expatriates!

The benefits can be fantastic but you need to do your research and plan well. Some nations will have their own rules and regulations regarding how the property can be used so you must take good advice on this. Talk with a real estate professional who is experienced in the field to determine whether such a move would be practical for you in the long run.

Products

Buying Your First Home – Part two

buying a new home in shopping cart
buying a new home in shopping cart

We’ve already taken you through some very important stages of the process and now you should be ready to move on.

The next step can make the whole difference to your mission:

Finding A Real Esate Agent

It’s amazing how many people find a real estate agent through word of mouth. This could be through family, colleagues or friends.

But what you really require is an in-person meeting with an agent as this will tell you if they can meet your needs.

real estate women holding a home for sale sign

It also means you can ask any questions and make yourself aware of the next stage and what’s involved! You may be required to sign an agreement but make sure you understand fully what you’re signing up to.

Once this has been done then it start’s to get really exciting in real terms as now you can begin looking for your home!

Your agent might ask for a wish list so they can help you along the way. This is where the needs and wants we talked about in part one come into their own. The agent will probbaly use the multiple listing service (MLS). This will give them a run down of all properties listed by brokers and agents!

The agent will be able to work their way to a handy list by narrowing down the property type. All the usual things come in here such as the number of bedrooms, bathrooms, age of property, floorspace etc. It will also enable the agent to filter everything down further and quite quickly!

Things To Consider At This Stage!

You must consider the resale potential of any property you buy just to be on the safe side. There are appraisals carried out to substantiate the purchase price in the form of home inspections, pest inspections and even through a preliminary title report. Your agent can give you some good and thorough advice on all of this. When this is completed then you need to gather yourself together ready to make an offer!

The Offer

choosing the perfect home

Unless you are very fortunate you aren’t going to find your perfect home right away. You may need to look around lots of them and keep going over your wants and needs. There will come a time however when you need to make a decision. The home will obviously have to be in your price range, and if it is you can make an offer!

The agent will help you with this also bringing all offers to the seller who will either accept it or make a counter offer! Be patient as this might involve going backwards and forwards a number of times before falling on the right deal.

So what happens next?

You will find a number of contract contingencies enabling buyers to cancel the contract without any penalty under certain conditions. Buyers will have 10 days to inspect the property for things like lead-based paint as a great many homes may have this if they were built before 1978. Make sure you are completely happy before getting ready to close.

happy couple after their home loan approved

The big sigh!

The big sigh will come freely once you’ve closed the deal and you’ve bought your first home. Closing of course transfers ownership between two parties.

The house will be recorded in the name of the buyer and the city or county will be told of the transaction, and record the buyer as the new owner!

Well done – you’ve just bought your first home – Good luck!

Products

Buying Your First Home – Part One

happy family with their new home
happy family with their new home

Every American will know buying your first home can be the most important financial decision of your life. It can be emotional and take quite a bit of time. And of course it can be difficult financially. Help however, is at hand.

So let’s take you through the complete process in the hope you will be very clear about what’s involved.

First things first!

Before we can even begin to move forward we need to ensure our finances are sorted and in complete order! Failure to do this will mean we can’t buy our first home – simple as that!

Sit down with a drink and look at your budget – your income and expenditure – then you’ll be in a position to know if you can afford your first home. Don’t estimate anything and get it in black and white. You must also get a copy of your free credit report, if this is very good then you may even get better terms on the mortgage? Do this as professionally as you can – it’s absolutely vital to get things in order at this stage!

Research And More Research About Lenders And Mortgages

Take a look at the internet and the shops in the mall, and make yourself aware of the types of mortgage lenders around you. Read up as much as you can on the mortgage process and get used to the terms and the steps involved. If you’ve done plenty of research then you’ll have the best advice and this means you can make better decisions.

You may even in certain circumstances be able to negotiate a better deal! The more you do the better it will be. Then take a deep breath and move onto the next stage and get pre-approved for a mortgage!

researching homes with a magnifying glass

Pre-approval simply means working out how much a buyer can afford to borrow from the lender. It may not always be set in stone so be aware of this. Any lender involved can work out this figure by reviewing the financial records of the borrower – debt-to-income ratio, credit score and general outgoings all come into this process.

Becoming pre-approved for a mortgage is a very big step as it gives you the rubber stamp ready to make an offer for a home. The fact is sellers are more likely to listen to an offer from a pre-approved-buyer then anyone who hasn’t fully gone through the process. Now you should smiling – but there’s something very important you need to do at this stage!

Hone Your Needs!

It’s so important to work out what you really need and what you don’t, doing away with the latter, as this can help you financially. This will enable you to get the home you need for practical terms and not the home we all dream of having but can’t afford! You have to be realistic. Do you need somewhere in the city, near a school or on the city outskirts. Do you need a garage or a garden etc. All of these things are vital to the process and you’ll be glad you carried them through!

In part 2 we’ll take a look at the remainder of this lengthy process and give you great advice along the way.

Check out this: homebuying.about.com/od/buyingahome/qt/0307Buyinghome.htm

Bankruptcy

Building a Good Credit History

good credit score
good credit score

The fact is if you ever need to borrow money, get finance on an auto loan, sing up for a credit card or even buy a house, then having a decent credit history is invaluable.

Even if it isn’t great at this moment in time there are steps you can take to build a better history and improve your FICO score.

What you need to do first of all is to take stock of your own personal financial situation and ask this question?

Where am I going wrong?

Sometimes we can affect our credit history without even thinking about it by applying for all the offers coming through the mailbox. These might include offers on credit cards and other financial products from personal loans to credit lines.

 
rejected stamp

Each time we apply for these a footprint is left on our credit file, and of course each time we are rejected then this affects the overall score. It’s the same when we’re invited to take out a store card – this is big business for the companies involved but can be bad news for the individual consumer.

The fact is you don’t need lots of credit cards or credit lines, and they don’t help your FICO SCORE especially if you’re a new citizen of the United States.

What shall I do first?

Make sure you check your credit report on a regular basis just to make sure everything is ok. The whole point of the Fair Credit Reporting Act is to guarantee you can see your own credit report free of charge every 12 months. There are three top companies and these are: Experian, Equifax, and TransUnion. These will help you keep track of any changes and you can even see your FICO score going up bit by bit. It’s there to help you in the long term.

CHECK OUT: https://www.annualcreditreport.com/cra/index.jsp

‘IF YOU SEE ANYTHING WRONG ON YOUR CREDIT REPORT OR YOU DON’T AGREE WITH SOME PERSONAL DETAIL CHANGES THIS SITE WILL ADVISE YOU WHAT TO DO NEXT’.

So how can I build and improve my history?

 
man climbing on his credit report

Well apart from ensuring your bills are paid on time take a look at any credit or store cards you may have. If you have too many then cut these down to just one or two.

Make payments to them on time and keep an eye on your own personal bank account making sure you manage it well. Only apply for a personal loan, credit union loan and any other loan if it’s absolutely necessary. Keep your financial commitments in terms of credit down to the minimum.

If you have to take out more credit make sure you can meet the payments and on time. Don’t apply for every offer coming through the mailbox and don’t be tempted by lots of store cards or credit lines. Do all of this and you’ll find keeping a good credit score will become second nature.

What if I don’t have a credit history?

This affects many people of course and you’ll need to build a history of credit at a steady pace over time. If you are new to the country and on an H1B visa, then you’ll need to open a checking account with a top bank like ‘The Bank of America’, for example. They can issue you with a secure credit card whereby you give them a sum of money upfront which is put onto the card itself. Always pay this on time each month and you’ll soon be able to get an increase in the limit. By doing this you are slowly building good credit. Ideally you need to give things two years and be careful not to overburden yourself financially.

Remember don’t despair as building or even re-building your credit history is always possible. Start today for a better financial future!

Products, Saving and Borrowing

A Quick Guide To Credit Unions

credit union logo
credit union logo

Credit Unions are as popular as pretzels, American Idol contestants and superman. Yes it’s a fact they have more than 90 million members serving more than 45 per cent of the financially active community in the States!

These wonderful institutions grew from a single church, workplace or town. They only took people on who were members or simply attended these places. They eventually came under the umbrella of the Federal Credit Union Act of 1934, described as thus:

“Groups having a common bond of occupation or association, or to groups within a well-defined neighborhood, community or rural district.”

So what are they?

 
explaining how credit union works

Credit Unions are financial institutions who don’t aim to make a profit. They are in fact owned by the members, and the overall aim is to provide a quality service, though of course they must make sensible financial decisions and pay salaries just like banks. They also need to compete with other financial institutions, though most members tend to be in the low to middle income brackets.

‘BECAUSE CREDIT UNIONS ARE NOT FOR PROFIT THEY HAVE GAINED GREAT RESPECT FROM PEOPLE ACROSS THE UNITED STATES. IN THESE DAYS OF HIGH BANK CHARGES THEY PROVIDE A CREDITABLE AND SUCCESSFULL ALTERNATIVE.’

“They really make you feel part of something in a credit union, knowing most other members may be similar to you as an individual. They put people first and I like that very much”

Says John from New York

Note the language

You’ll realise quite quickly the language used in a credit union is a little different to that of a bank. What you recognise as a checking account in a bank will be known as a ‘share draft account’. The customers are called members in a credit union. That apart they provide great competition to the banks.

What do credit unions provide?

 
covered by credit union sheild

They have very similar financial products to banks but these can vary a little. Credit Unions in some cases will choose not to provide exactly the same products however.

This is largely because they don’t carry the same volume of customers. The truth is you’ll find they offer products most members are very likely to use. You can choose between auto and personal loans and a whole host of other similar products.

The great thing is all members pool their assets to provide loans and other financial services to each other, so it’s a very personal thing to some people.

If I’m eligible how do I join a credit union?

Once you’ve established whether or not you can join as having a common bond, then all you have to do is go into a branch and simply as for an application. But you’ll need your driver’s license or some other form of identification. The form is straightforward and most unions will require a minimum deposit of $25 via cash or check. It’s as simple as that! The great thing is decisions are made locally and this means you also get a much faster service in certain circumstances. Have a good look around to find the best credit union for your own personal circumstances. The Credit Union National Association (CUNA)has its own website to help find a credit union near you. It also has various financial tools you can use to help make decision s on the product you need.

But remember!

The Credit Union may carry out a credit check on those applying for a debit card or individual checking account. Check your FICO score just in case! Remember you are entitled to at least one freed credit check every 12 months to ensure all of your details are correct.

Ben from Washington took out an auto loan from a credit union after doing plenty of research. He said:

“It amazed me to discover only one used car loan in five is through a credit union. Maybe it’s because a lot of people don’t realise their rates are very competitive against other financial institutions.”

Who supervises credit unions?

There’s a Government agency responsible for overseeing credit unions called ‘The National Credit Union Administration’

Who is the largest credit union?

At the time of writing The Navy federal Credit Union was the biggest – they serve the U.S. Department of Defence and have $45 billion worth of USD assets across 3.4 million members. It’s worth noting this is a perfect example of those sharing a common bond!

You can see why Credit Unions are so popular especially with the lower paid – why not check one out soon?

 
Is it a bird, is it a plane?…………..No it’s a credit Union………even Superman would be impress with that!!