Turned Down for a Mortgage? Prepare to Apply Again.

More prospective homebuyers are eager to enter the market as the economy improves. Yet in this post-recession world, many borrowers are finding it difficult to navigate stricter lending requirements and successfully reapply for a loan after being turned down.
If you’ve been turned down for a mortgage and want to know how to prepare to apply again, start with these tips.Evaluate Your Cash Flow: One of the primary roadblocks to obtaining a mortgage is cash flow. At a minimum, you need a 3-percent down payment and about $1,500 for closing costs. You’ll also need to take moving and ongoing maintenance costs in account, including utility deposits, appliances, a lawn mower, home furnishings and other miscellaneous expenses. As a general rule, prospective homebuyers should have at least $10,000 saved before shopping for a home.
Build Your Credit: Many young people today haven’t used credit, aside from student loans, so lenders have difficulty assessing their ability to pay back the home loan. Borrowers who fall into this category need to focus on building a positive credit history with three trade lines, such as a credit card, auto loan and signature loan, for at least two years before attempting to reapply.
Avoid a “House Poor” Lifestyle: Many consumers assume if they can qualify for a loan, they can afford a house; but that’s not always the case. With lenders approving 31 percent of gross salary for a house payment and 43 percent for all debt service, it’s easy to buy a house one can’t afford. It’s important to remember the mortgage is only part of the financial commitment of owning a home. You should also consider ongoing costs, such as commuting, utilities, HOA fees, landscaping and general home maintenance. It’s wise to limit house payments to 28 percent of gross income, and all debt service to no more than 34 percent.

Is a Reverse Mortgage Right for you?

Seniors are living longer than ever before. Medical advances and a focus on healthy living have dramatically improved longevity, but living longer presents a complication: the potential to outlive savings.
Older adults often do not anticipate the high costs of health and long-term care, or the uncertainty of Social Security and Medicare. As a result, many are exploring reverse mortgage loans.A reverse mortgage, also referred to as a Home Equity Conversion Mortgage (HECM), enables homeowners 62-years and older to convert part of their home equity into tax-free cash.
If you or a family member are considering a reverse mortgage, it’s important to first evaluate the following:

Loan fees: Borrowers are tasked with paying upfront mortgage insurance, origination fees and closing costs. It’s critical for seniors to read the fine print and understand the fees they’re paying.
Taxes and insurance: With a reverse mortgage, seniors borrow money against the equity of their homes and are not required to make loan payments. However, they still must pay property taxes and homeowners insurance, or they risk foreclosure.
Home maintenance: Seniors are responsible for home maintenance, but cannot take out a home equity loan or second mortgage to cover repairs.
Home equity: The borrower’s home equity is reduced by the amount of the reverse mortgage. The estate will receive whatever equity hasn’t been borrowed.
Loan repayment terms: The loan is due when the borrower sells the home, lives away from the home for 12 consecutive months, fails to pay property taxes or insurance, or passes away. The principal, interest and closing costs are repaid from the proceeds of the sale of the house. If the heirs elect not to sell, the money is paid from the estate.

To obtain a reverse mortgage, the U.S. Department of Housing and Urban Development requires seniors to undergo reverse mortgage counselingfrom an approved third-party organization.
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Gift Cards: How to Make the Most of Them

Since 2007, gift cards have been the most requested gift – you probably have received gift cards also. And what is not to love about gift cards? They give us the chance to shop, dine out, or enjoy activities guilt free, whenever we wish. But surprisingly, more than $2 billion dollars’ worth of gift cards went unused in 2012. Don’t let your gift cards fall into that statistic. Here are some times to make the most of your gift cards throughout the year.
Keep it Close-A gift card will not do any good sitting in a drawer or filing cabinet. Place it in your wallet immediately when you received it so you have it with you when you need it. But remember, gift cards should be treated like cash and aren’t replaceable if lost or stolen, so keep them secure.Know the Terms-Fees and terms of use vary widely among gift cards. Some cards are assessed a fee for non-use after a period of 12 months. A few months of these fees can quickly diminish or eliminate a gift card’s balance. If you’re not sure of the card’s terms, it is best to use it right away.
Sell or Trade-So you got a gift card for the best steakhouse in town but you are a vegan – what do you do? Sell or trade it for a card you’ll actually use. You can do it informally by trading with a friend, co-worker or family member. Or sell fit cards you won’t use to a site (like Gift Card Granny) for up to 93% of the face value. Granted, you’ll lose a few dollars, but it’s better to have the cash than let the card go to waste.
Keep Track of the Balance-If you don’t use the gift card’s full amount in on go, keep track of the balance. You can always check the balance over the phone or online. But the easiest way is to simply wrap the receipt listing the remaining balance around the card and keep them together in your wallet.
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Save Your Money – Plan a Spending Freeze

A spending freeze is just that – not spending any disposable income for a day, a week, two weeks or longer. A spending freeze can help you learn how you have been spending (or wasting) money in the past, and add extra money to your savings account once you’re done. If the thought of not spending any money for a week or longer seems like too much, consider this: it is easier to work through a spending freeze voluntarily, rather than living through one forced by lack of emergency funds.
Before you start a spending freeze, there are a few things you should do first.
Spot Check Your Finances- Make sure the payments you do make, utilities, ect., are the best deal possible. Devote some time to shopping auto insurance discounts, trim your cable TV costs, and ask about any savings or budget plans offered by your utility companies. Review statements for unnecessary fees, and reconsider all ot the monthly auto-pays you have in place. Eliminate services you don’t use any more, or that are just not worth the money.Update Your Monthly Budget and Savings Goal- Set a goal to save a specific amount and have a definite plan for the money once it is saved. Update your monthly budget to determine how much you expect to save during your freeze. Then, write down your plan for the money you’ll save during your freeze. Temptation to spend will be easier to face if you can picture paying off the credit card balance, making a healthy deposit to your savings, or paying for that small home improvement project with cash.
Stock Up and Prepare­- Make sure you have basics on hand to last through your freeze – running out to the store for toothpaste or laundry soap will be hard to avoid if you run out, defeating the purpose of your freeze. Take a complete inventory of your pantry, freezer and fridge and plan meals around what you already have. Grocery shop ahead of time – and plan some flexibility for days that don’t go according to plan, to prevent last minute pizza orders because your planned dinner that day just did not work out.
Have you ever used a spending freeze to save money? What did you learn from your freeze?  What is the longest time you have gone on a spending freeze?
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How to Save When Dining Out

One of the most effective ways to save money and stick to your budget is cooking meals at home. But there will be times when you want to dine out to celebrate a special occasion, meet up with friends for a bite, or just take a break from cooking. Not to worry. You can still enjoy a meal out now and then and stick to your budget by keeping these tips in mind.
Plan Ahead- Arriving at the restaurant ravenous and unprepared is a sure recipe for overspending. Do a little restaurant reconnaissance before you get there so you can have a game plan in mind. Spend a few minutes reviewing the menu online and get an idea of what you’d like to order. As with all spending decisions, decide on a budget for the meal and stick to it.Stick to Water- No, it’s not the most exciting drink on the menu, but it is the only one you will get for free. Drinking water with your meal won’t only save you money, it will help keep you hydrated and counteract the effects of the added salt often used in restaurant meals. If you need another reason to skip that bottle of wine, a Food Network survey of professional chefs revealed that wine at a restaurant can cost more than double what you will pay retail.
Choose Appetizer Over Entrée- Restaurant portions have gotten so large that appetizers are now the perfect size to have for your main meal. Choose one or two plus a side salad and you’ll have a perfectly satisfying meal that rings in less than the cost of an entrée.
Make it Worth Your While- If you do decide to order an entrée, make sure it is something special that you can’t or won’t make for yourself at home. Things like pasta with red sauce, roasted chicken, steamed vegetables and hamburgers all have a huge markup when ordered in restaurant. Choose something unique that you can easily replicate on your own to make it worth the expense.
Go Halvsies- If the restaurant you are going to is known for its large portions; make a plan to split the entrée with your dining companion. You can also ask your server to box up half the entrée before it is plated. You’ll enjoy  a just-right portion for your meal and have leftovers for lunch or dinner the next day.
Ditch Dessert- Unless the restaurant is home to an award-winning pastry chef or know for one special dessert, just say no when the inevitable question arise. Just like beverages, desserts are some of the highest-margin menu items. You’ll be better off waiting until you get home to have a little something sweet for a whole lot less.
Use Coupons and Apps- If you are having a casual meal with friends or family, don’t forget to check for coupons or use an app like Out to Eat with Kids to find the best deals- even freebies.
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5 Little-Know Facts About Credit Cards

Living a cash-only lifestyle is one of the best ways to avoid overspending and staying out of debt. But to do things such as purchasing airline tickets or renting a car, having at least one credit card is almost a necessity. Plus, using a credit card responsibly can help build a positive credit history. But how much do you really know about these little rectangles of plastic we keep in our wallets.
Here are five interesting or little known facts about credit cards you can bring up the next time there’s a lull in the conversation (a few of them might even save you money, too):
Charge plates where the precursor to credit cards- Used until the early 1960s, charge plates were small, aluminum or white metal embossed plates about the size of dog tags. They had a paper or cardboard backing with the merchant’s name and customer’s signature, and were often kept on file at the issuing store. The clerk would have to retrieve a customer’s charge plate from a file when they wanted to use it.The first general-use credit cards were sent unsolicited…To residents of Fresno, California by Bank of America in 1958. These BankAmericards were maed of paper and had a credit limit of $300. By late 1959, more than 2-million people throughout California had received one of these cards. And not long after that, 20% of those accounts became delinquent, costing the bank nearly $9 million dollars. The Federal Truth in Lending Act eventually made it illegal to send credit cards unsolicited, however, the practice of spending pre-approved applications for credit cards is still alive and well.
$50 is the maximum liability for unauthorized use- If your credit card is lost or stolen and used without your consent, you’re on the hook for $50 maximum. You can thank the Fair Credit Billing Act for this rule, which also says that once you report a card as lost or stolen, you are not responsible for any transactions that occur following the report. So it is really important to let the card issuer know immediately if you lose track of your card for any reason.
You can’t use your credit cards overseas…unless you request a version that has a microchip, rather than a magnetic strip. European credit cards use chip-and-pin technology for added security, which makes our magnetic strip cards incompatible with their card readers, Chase, Citi, and US Bank are among the card issuers who offer cards with a chip. Just be sure to request your new card well in advance of your trip to be sure you receive it in time.
Your card might be declined if…You are getting dangerously close to your spending limit. Gas pumps automatically authorize a $50 sale (even if your actual transaction amount is lower), so if you have less than that available to charge, your transaction will be denied. Restaurants will typically authorize an amount equal to the total amount on the bill plus 25% gratuity. If you think your card might not be able to handle it, pay with cash to avoid the embarrassing “Excuse me, but your card was declined…” speech. (If you are at or near your max on one or more cards, credit counseling can help you budget and get your spending back on track).
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Keeping your 2017 New Years Resolutions

For many of us, New Year’s resolutions often vanish in days – weeks at most.

“Weight loss” is the No. 1 New Year’s Resolution with 21 percent of respondents, followed by “improve finances” with 14 percent. Nearly half are successful by the six-month marker; the rest give up during that timeframe.

Your personal finances require a better outcome. Even if you’ve resolved before and failed, there are still ways to set a course and stay on track.

Resolution-keeping starts with good resolution-making. It’s one thing to say, “I want to pay off my student loans,” or “I want to retire early.” It’s another to measure the size of the challenge, identify obstacles and build a task list to make that goal happen. So if you’ve committed to a particular resolution, go through it again and identify the behaviors and practices you need to change.

For example, if you wonder whether you’re saving enough, maybe your first resolution is to make or review your budget to get a realistic picture of where your finances stand at all times.

Want to add some fairly easy money resolutions that can help your finances overall? Consider the following:

Know your net worth. Budgeting involves day-to-day tracking of finances, but having a quick way to determine your net-worth – your assets minus your liabilities – offers the biggest picture of how you’re doing and what next steps you might take to improve your circumstances. Make this calculation an annual kickoff to the New Year.

Build an emergency fund. If you don’t have money equal to three-to-six months of daily expenses set aside, make that a priority. Shoring up an existing emergency fund – and evaluating whether it’s still adequate to your needs – is probably one of the best ways to keep other financial goals on track. After all, when emergencies happen, it pulls funds away from bills you need to pay as well as savings and investment goals.

Automate. Depending on your comfort level with all things digital, virtually every aspect of your financial life can be managed online or with computer-based software. From setting up a basic online calendar to track pay dates, bill due dates and deposit dates for savings and investments, automation could help you create a daily series of reminders and action items that will keep your money issues on time and on track.

Recommit to retirement. If you’re employed or self-employed, here’s how to make a retirement savings resolution stick. First, make sure you’re signed up for a 401(k), 403(b) or 457 plan at work or a corresponding SEP-IRA, self-directed 401(k) or other self-employment retirement plan that fits your tax and financial situation. Then check what your maximum contribution is for your respective plan. Finally, through budgeting or a plan to bring in more income, determine how you can come as close to your maximum contribution as possible for the coming year. And of course, don’t forget about Traditionial or Roth IRAs that you can contribute to independently of these employer-based plans. All of these options can improve your retirement prospects while saving you considerable money on taxes.

Review your benefits and insurance. For most employed and self-employed people, open enrollment for health and other company benefits wrapped up before year-end. But that doesn’t mean you can’t spend time reviewing the choices you’ve made for health insurance, retirement savings or flexible spending plans, as well as reviewing your personal home, auto, life and disability coverage for potential savings and/or better coverage. If you work with a qualified financial planner or tax professional, you might want to bring up some of those questions with them.

Reset savings and bill repayment goals. By now, you’re probably getting a very good indication that most of your financial decisions are linked. Get some assistance in determining how best to address the amounts and types of bills you have so you eventually free up more money for savings and investments.

Set regular reviews. It’s generally a good idea to review your budget performance monthly to identify unusual items and plan for expenses you’ll have to tackle in the future. You may want to take an overall look at your finances in January and June to make sure spending, savings and investment goals are on track.

Bottom line: Making financial resolutions makes you feel good. Keeping those resolutions feels a lot better. Develop long-term money habits that position you for success.

Budgeting for a Teen Driver

While it is true that number of teen drivers have decreased since the Great Recession, there are still plenty of 16-year olds eager to become newly minted drivers. If you have a teen in your home who is ready to get behind the wheel, it is going to have an impact on the overall family budget, but that is not necessarily a bad thing. Giving your teen the opportunity to drive is a great way to teach them lessons in responsibility and money management. Here are several things you need to consider when budgeting for a teen drive.
Define the Ground Rules and Consequences- Driving is a huge responsibility and no teen should take it lightly. Make your rules and expectations crystal clear and lay out what the consequences will be for breaking them. Consider drafting a contact for your teen to sigh that lays out the behavior you expect.Share the Expenses- Teens who really want to drive should also be willing to work for it. Take into account all the costs of driving including insurance, buying gas, vehicle maintenance and paying for damage or repairs not covered by the cost of insurance. Decide together what your teen can realistically afford to pay for and hold them to it. If they miss a payment or fall behind, revoke their driving privileges until they pay up.
Look for Insurance Discounts- Adding a teen to your insurance will likely be costly, but there are ways to soften the blow. Many insurance companies will offer discounts for teen drivers who have completed formal driver’s ed training. Some will also offer good student discounts as much as 15%. Discounts and amounts will vary by state, so be sure to shop around and compare before you commit.
Cap the Mileage- Consider putting a mileage cap on how much your teen is allowed to drive each month. It will help cut down on fuel costs, vehicle wear and tear and also help them make decisions about when it is worth it to drive and when it makes more sense to find a ride, walk or take public transportation.
Take Advantage of Free Labor- If your teen wants to drive buy isn’t working a paying job, let them earn driving privileges by doing work around the house. Things like yard work, cleaning the garage and of course, washing the car, are all good ways to keep your teen busy and show them that driving isn’t just given; they have to work for it. Plus, it will buy you some free time and save you from paying someone else to do the job.
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Do You Actually Need to Know Your Credit Score?


Knowing your credit score is just one part of being an informed consumer. But even if you know the magical three-digit number, do you know what it actually means? Here is a quick overview.
A credit score is a three-digit number that reflects the information in your credit report. Most folks are familiar with the FICO model that generates a score from 300-850. A 300 is very low, while an 850 means lenders will be extreamly eager to lend you money. A score of 720 or above is generally considered ‘very good’.Scores were developed so that loan officers wouldn’t have to actually read and understand credit reports. They are widely used and apparently the scores really do indicate the likelihood that a consumer will repay a debt. That means the lenders can trust someone with an 810 and charge extra interest for some with a score of 610.
Of course the lenders get to decide what they think is a good score or a cut off score. And here is something you probably didn’t know: the score you have before you visit a car dealer is not the same score the dealer will see. They get a special score based on auto deals. And if you looked at your score from the three major reporting agencies, you would see three different scores. Plus scores can fluctuate up or down in as little as a few days. 
Want to know more about your credit? You will be better off reviewing your complete credit report, rather than just paying to receive your FICO score. You get a free copy of your full credit report at www.annualcreditreport.com. It will tell you every issue have and you will be able to start work on fixing the problems you see. You can’t do this with just one of your credit scores alone.
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How to Deal with Boomerang Kids

Mounting student loan and credit card debt, combined with a less than optimum job market for young adults, has created an increase I adult children returning home to live with their parents. Often referred to as ‘boomerang kids,’ they are not always in a hurry to get out on their own and assume full financial responsibility for themselves. Here is how you can help your adult children who are struggling financially, without enabling them.
Wait for Them to Ask- If your child is struggling financially, it is going to be tempting to rescue them by inviting them to come home. Try to fight that impulse and wait for them to ask, instead. That way, you know they’ve exhausted all other possible options and truly need your help, rather than taking what they know as an easy way out.Establish Expectations Up Front- Experts agree, nothing is more important that establishing clear timelines and expectations for how the arrangement will proceed. Sit down with your child and review their current financial situations and how long it will realistically take to get back to the point where they can be on their own again. Reinforce that this is a temporary arrangements to help them save money and get ahead, not an indefinite free ride.
Insist on a Financial Contribution- Yes, your child is trying to save money and/or pay down debt, but that doesn’t mean they are exempt from chipping in for food or household expenses. Even if it is for just a small weekly amount, it will help you offset the additional costs of having another person in the house. Plus, making that payment to you will help them stay accountable. If they have no money coming in, give them a list of household tasks to complete each week.
Put Your Financial Future First- It may sound harsh, but you shouldn’t put your own financial future in jeopardy to help an adult child. Do not give them access to your credit or debit cards. And by no means should you dip into your 401(k) or other retirement savings to bail them out. Allowing them a place to live while they take steps to becoming financially independent is contribution enough.
Encourage Them to Get Help- If your adult child is struggling with student loan payments or credit card debt, we have help available. Student loan counseling and credit counseling have helped thousands of young adults find their financial footing and regain their independence. Encourage your child to reach out and ask for the help they may need.
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