Category Archives: 7 things

7 Tips on Budgeting and Saving Your Money

Everyone wishes they could have an unlimited bank account. Unfortunately, it’s time to get back in the real world. If we want something we have to work hard and earn it. Our goals and desires in life often come with a price tag attached to it and in order to achieve them we need to learn to budget our money. Yes, budgeting is hard, but it doesn’t have to be. More often than not, a substantial amount of our money is being spent on unnecessary expenses such as coffee trips. Uncovering these unnecessary expenses is the first step to learning how to budget and save your money.

1) Read your statements:

Reading your monthly statements will enable you to see exactly where your money goes. Add up all the unnecessary expenditures such as daily coffees, magazines, ATM withdraws and that expensive sandwich from the local deli that you could make at home for a quarter of the price. What’s the total? Compare that to the cost of making coffee at home, buying a hot flask, and preparing your meals at home. Ouch, it hurts right? Spending an extra 30 minutes a week prepping lunch meals and making a coffee at home can save you tons of money and give you more time to relax on your lunch break.

2) Analyze your bills:

Bills, unfortunately, are something that goes hand in hand with growing up and something you cannot avoid. However, how much you are paying for your bills is something you can change. Sit down and scrutinize every bill that comes through that door. Are you being over charged for a service you did not use? Do you really need an all inclusive phone plan? Does the A.C. really need to be on high when you’re not in the house? Stop paying more than you need to for these services and utilities by being more conscientious about your usage. You’ll be surprised how much you’ll save by opting for a cheaper phone plan, dropping those channels you never watch and turning the A.C. off when you leave the house.

3) Distinguish between luxuries and necessities:

Yes, I understand you want that new pair of shoes or the latest phone, but do you really need them? Be honest, the answer nearly always is no. Being brutal about what you actually need can reduce your monthly living costs drastically. Go one step further by cutting down on how often you pay for necessities such as getting a haircut every 6 weeks instead of every 4 weeks or by carpooling with co-workers to save on gas.

4) Prioritize:

If you know you want to buy a new home, but you also want to take a vacation abroad, and purchase a new car, prioritize! Sit down and be realistic about what is top priority for you. Can you compromise on anything? Find a budget trip to a nearby state or visit friends and family? Do you really need a brand new car or could you settle for an older model that’s been lightly used for two-thirds of the price? Do you really need a home that has 2 spare bedrooms and space for an extra car in the garage? By compromising you may find that you can achieve all these desires within your budget.

5) Open a savings account:

Open a savings account and have a percentage of your wages direct deposited straight into that account. This way the money won’t be available for you to just spend at will and you’ll find you won’t even miss the money if you don’t see it. Aim for at least 10% of each paycheck to go into savings. But, make sure you still have enough to pay all your bills and living costs.

6) Shop around:

If you must make purchases that are not necessities then do your homework and shop around for the best price. Online search engines will help you to determine the best prices for what you are looking for. Go one step further by taking these to a competitor and ask them to make you a better offer. Save money on shipping by taking the price to local stores that offer price matching services such as Best Buy and Fry’s Electronics. The savings you make, no matter how small or big, will mean you are one step closer to purchasing that house, sparkling new car, or the vacation of your dreams.

7) Budget:

Here’s the big one. Sit down and strategically allocate a sum of money for each bill and living cost. By doing this you will be able to see exactly where your money is going. You’ll also be able to tighten the strings on what you spend on each cost. Think about groceries: do you end up throwing away half the fridge by the end of the week because you shopped on impulse? Setting a budget means you’ll be more cautious to strategically buy your food shopping for the week. A great way to keep track of your budget is to use a personal finance and budget tracking app on your smart phone. JasonRPrice.com recently reviewed the best personal finance and budget apps to manage your money on the go.

By taking the time to go over your finances, living costs, and shopping around you could end up saving hundreds of dollars a month. Putting that in a high interest savings account for a year will earn you interest, improve your credit score, and help you buy that dream home. For more information on financing your next purchase contact Premier Mortgage Lending today at 702-485-6600.

7 Questions to Ask Your Mortgage Adviser.

Taking out a mortgage, or any type of loan, is a big step. With that step is a lot of information that you’ll need to be clued in with. Asking the right questions will help you to be clued up on the contract you are about to sign.

What should you ask your mortgage adviser?

1) What types of loan programs do you offer?

Asking your mortgage adviser what types of loan programs are offered will help you to decide which loan is right for you. Every loan comes with a different set of features, fees and requirements. Learning about each type of loan will give you the tools to decide which loan will work best for you and your financial status.

2) Can you estimate and explain your fees?

The fees that come attached to a loan vary depending on the type of loan, your credit score and many other factors. Asking about all the fees tied to the loan you are considering will ensure you are aware of the total cost of the loan and where your monthly payments are going.

3) How much will my monthly payments cost?

Every loan has a different interest rate, and while the 15-year fixed loan may be a drastically better rate, it may not be a realistic loan to take. When applying for a loan, you should ask your mortgage adviser what the monthly payments will be on each loan you are considering. Sit down and realistically calculate your monthly income and your monthly expenditure. While the 15-year fixed loan may be cheaper in repayments than a 30-year fixed loan, it may not be if you cannot afford to make the monthly payments.

4) Are there any prepayment penalties on this loan?

Yes, everyone likes to be repaid on their loan early, and yes, it looks great on your credit score. However, when you repay your loan before the contracted repayment term is finished, many loan companies will have a prepayment penalty. Ask your adviser what this will be, as it may not be worth it to make a prepayment on the loan.

5) Could you estimate closing costs on this loan?

With every loan you take out there are a set of closing costs attached to it. These closing costs are charged on top of the loan you are taking out and are generally between 2-5% of the purchase price of a home and are due after you have closed on the home. Lenders are required by law to give you a good faith estimate (GFE) of what the closing costs on your home will be within three days of when you apply for a loan. However, remember that this is just an estimate and actual closing costs may vary up to 10%.

6) Can you close on this loan within my timeline?

If you’re on a tight timeline to buy a home, make sure that the lender can close on the loan within your schedule. If they can’t, you either need to look at a new lender or work on a new schedule.

7) What am I paying in points?

When the adviser tells you the par rate they can offer you, you may want to ask for a lower rate, known as an underwater rate. When you ask for an underwater rate you will pay points in order to lower your monthly payments. One point is equivalent to 1% of your loan. Depending on your credit, you’ll be offered an underwater loan for a certain amount of points which are either paid up front or added onto your loan.

 

7 things mortgage lenders like to see from borrowers

The most complex aspect of the home buying process is securing a mortgage in our current market. Mortgage lenders require detailed information from borrowers in order to determine eligibility and the interest rate of your mortgage.

Here are seven things mortgage lenders will ask for as part of this process:

  1. Social Security numbers or taxpayer identification numbers for all borrowers.
  2. Current financial status, including but not limited to: account numbers and status of all checking, savings, money market, retirement, and credit card accounts. They will also want to see copies of at least 2 to 3 months of checking and savings account statements and balances.
  3. Proof of employment, i.e. recent W-2s or pay stubs to prove your financial stability.
  4. Information on any consumer debts, i.e. complete credit history, from car loans to student loans, etc.
  5. If you are receiving financial help from a friend/relative for the down payment on your mortgage, then your mortgage lender will ask to see a Gift Letter showing the funds are a gift and do not have to be repaid. This letter needs to be written, signed and notarized by the person lending the funds.
  6. Proof of utility bill payments and rent payments. This exemplifies your payment history and revolving debt.
  7. Finally, your entire federal income tax returns. Why? Just another added level of protection against fraud or misrepresentation of income to the lender.

Mortgage lenders may well ask for additional information depending on your marital status, employment status or credit history.

For more information on Premier Mortgage Lending’s Finance options, please visit our website or contact us on 702-485-6600 today.