Category Archives: Personal Finance

Things to Consider Before Applying for a Mortgage

Buying a house is a big step for everyone. People started to realize that they need to act as soon as possible in order to avoid the risk of paying more every month due to the increase in rates. The whole process of finding the right house and applying for a mortgage can be overwhelming for some people.

Applying for a mortgage is the only solution for most people to get to their first home. More than 6 million homes are sold in the US each year and the current American mortgage debt is $10.3 trillion. The people applying for a mortgage each year in the US can fill 80 Churchill Downs arenas, the race track for the annual Kentucky Derby.

Good preparation is essential for making sure the process goes as smoothly as possible, and to avoid any unnecessary costs. The mortgage application can be approved easily in some cases, but some people have trouble filing the mortgage application due to credit history and income. That is why in this article, we will go through some of the things you need to consider before you apply for a mortgage.

  1. Know what you need

Knowing what you need is essential in order to get the right loan. In most cases, lenders will want a standard package of materials. These include a month of recent pay stubs from buyers who will be listed on the loan application. Having the right documents will fast forward the process. You can also expect to hand over at least three months of bank account statements, and of course, you need documents to explain any unusual transactions (deposits or withdrawals). Knowing what you need is determined by the type of house you need as well as the monthly rate you can afford.

  • Knowing you limit

You should know that there are rules to follow in order to make sure you have enough money to afford the monthly payments. Ignoring to follow these rules can lead to huge financial problems, and the back will take over your house due to missed payments. Most people call it the 28/36 rule. In other words, your mortgage must be lower than 28% of your gross income and your total debt payments. These include any loan that you have for example, mortgage, car loans or any other monthly payments. All of the loans must not go over 36% of your gross income. This rule is designed explicitly from previous experience just to make sure you are financially stable.

  • Understanding the housing market you want to get in

Most of the time, the type of loans depends on the kind of home you are interested in. It is all connected from previous cases and lenders apply different rules to go by. For example, Florida is a state where many projects went bankrupt, which is why lenders have sticker standards. In some cases, they even expect to go cover 25% down payment in order to make sure everything goes without any problems. Choosing the right market will improve the rules for your loan, so make sure you do proper analysis before you apply for a mortgage.

  • Pay off any debts before applying for a mortgage

As we mentioned before, lenders would want you to have more than 36% of your total gross income for revolving loans. This means that it is important that you pay off any debts before you apply for a mortgage. Improving your financial balance will make sure that you get approved without any problems. Also, it will make your life easier since you will have fewer debts to worry about. Some people run into mistakes acquiring too many loans which later becomes a problem for living a normal life.

Since applying for a mortgage is a serious thing, you need to make sure you are prepared for the journey. It is essential that you get everything right in order to avoid losing your home due to failed payments. Sometimes it is better if you find a financial advisor that will guide you through the process.

How to safely send money to friends

Let’s say that you have a friend that has been going through some financial problems, and you want to help him get out of it. The problem is that your friend lives in another state, and you can’t get the money to him in person. How can you safely send cash to friends without the worry that your confidential information will be compromised?

Use Xoom

Powered by Paypal, Xoom gets backed through a major online payment system to lend it credibility. You can trust that your personal data won’t get compromised on this secured system. With Xoom, you have the advantage of fast transfers to bank accounts, and you can choose to do a cash pick-up much like how you would with a Western Union.

The negative of Xoom comes from its expensive transfers. You can pay up to $5 for sending cash between $200 and $1,000. In addition, if you will send it to a friend in another country, the exchange rate isn’t as favorable as some of the other choices.

Western Union

One of the industry giants with a long-established reputation, you can trust that you will have a dependable transfer to your friend. Western Union offers greater safety through protecting personal information, and giving security questions to keep you safe. When your friend goes to collect the money, they will need to provide an identification card exactly as the name states, and they will have to give the MTCN or tracking number to proceed. Getting through to the vulnerabilities will be much harder for hackers on this system.

Walmart

As you noticed, many of the biggest companies in the business have been mentioned for safe sending of cash to friends. This has been deliberate. The bigger companies have greater security, and Walmart has an added plus of beating many of its traditional money transfer companies on price, such as MoneyGram and Western Union. Having thousands of Walmart stores across the nation and even internationally, you will have no shortage of places for your friend to collect the cash. Because of that, they won’t have to go to a seedy neighborhood to collect the cash where they might face robbery. Having a lot of cash on you even after the money transfer can be dangerous if the wrong person knows about it.

Google Pay

Interesting technology, you can use Google Pay to transfer money via email or through phone number. Your friend can cash out for free with an in-app wallet through a debit card. For extra safety when sending money to friends, you might add an extra step of authentication with a PIN number. You might also use a screen lock to secure Google Pay. A lot of great security features add to your safety with this app. At the same time, Google will keep your payment info and confidential information safe. This is a giant corporation after all.

Never Send to Strangers Online

It may be time to highlight a big safety issue. Never send money to strangers online that you consider as friends but don’t know personally. You have a big problem with doing this: You don’t actually know them. You have countless stories of unwitting people who sent money to an online friend, and they never saw them again. In addition, don’t buy the sob stories. In some cases, scammers will use a fake emergency situation to elicit sympathy. When you send money, know who you’re working with to stay safe and ensure that the cash gets used as it should. Once the money has been received, you have no way of getting a refund. Real online friends won’t ask this of you.

Scams to Beware Of

You do have some scams out there that have given money transfers a bad name. For example, you have some bad seeds like Crown Currency Exchange. When they went bankrupt, they left their customers high and dry without a way to reclaim their cash. You have a few negative signs to be aware of. First, never send your money through a company that doesn’t give you sufficient details about who owns it, who the senior managers are and how long the transfer will take. Second, the company should be listed in the FCA register to show that they are a legitimate Authorized Payment Institution. Finally, beware of extremely unfavorable exchange rates when sending cash to someone in another country.

In general, you can avoid problems with safety through going with the tried and proven companies. If a deal seems too good to be true, you may want to consider someone else. There’s no reason to risk your money. Always know the person that you will be sending your money to. Many of the problems with money transfers come in when people send money to people that they don’t actually know. If someone is asking a large sum from you, you might be wise to go the other direction.

Can I get Loans with a Bad Credit?

Your credit score is an important consideration when creditors are evaluating whether or not to issue a loan. The interest rate for your loan will also be based on your credit score. Borrowers with a bad credit score get loans at high-interest rates, and some of the lenders may disapprove of their application. However, such borrowers can opt for bad credit loans online.

Financial institutions may have their own cutoff credit scores. If your credit score is below the cutoff point, lenders are less likely to approve your loan application. On the other hand, if you have a good credit score, your lender may be willing to check your credit report to check your credit history.

What are the Benefits of Bad Credit Loans?

Our financial situations have ups and downs. As a result, not everyone may have a good credit history. In some cases, you may be unable to gather all the money you need for your monthly bills, and you end up struggling with high-interest rates.

No Credit History Checks

One of the top reasons for the popularity of bad credit loans is that lenders do not consider your credit score when reviewing your application. Bad credit loan lenders are interested in seeing whether you have a steady job or sufficient income to pay your outstanding bills.

Additionally, you will be required to have assets that cover the amount of loan you requested. If you have had a stable job for one year, the chances of loan approval are high.

Improving your Credit

Other than offering you money to cater to pending bills, bad credit loans offer borrowers a chance to manage their financial situation responsibly and repay their loans on time. Budgeting and responsible debt management will be helpful in improving your credit scores.

Access to Large Sums of Money

Another major advantage of borrowing bad credit loans is that you can receive large amounts of money if your loan application is approved. Bad credit loans lenders will be willing to offer credit if your income can cover the monthly payments for your loan.

Flexibility

Borrowers have different needs and problems. As a result, bad credit loan lenders offer loans that are designed according to the needs of each client. When you choose the right lender, you will get a loan that meets your unique needs. When choosing bad credit loans, be sincere with yourself.

Talk to your lender about your financial situation and ensure that they are aware of your financial position. Also, do not make hasty decisions. Take time to find the right loan offer that suits your needs. Failure to do so may result in the worsening of your credit score.

Bad credit loans are classified as either secured or unsecured. If you opt for a secured loan, it will be secured on assets such as a car or a house. Failure to adhere to the loan terms will result in the liquidation of your assets.

However, a secured loan has lower interest rates. On the other hand, if you apply for unsecured loans, you will not risk your assets, but you will repay your loan at higher interest rates.

How can I find the right Loan with Bad Credit?

Bad credit loan lenders offer a several types of loans depending on your needs. Therefore, it is vital for borrowers to understand their needs before applying for bad credit loans. The following are some insights for you when applying for a loan with bad credit:

Gather your Personal Information

Before you apply for the loans, ensure that you understand your financial state from the perspective of your potential lender. Review and understand your credit score and report before a loan application. You can use various online resources to check your credit status.

Improve your Credit Score

If you notice that you have a bad credit score, consider improving it before applying for bad credit loans. Some of the ways that can help you to improve your credit scores include repaying your current debts, reviewing your credit reports to identify errors, and limiting the number of hard credit inquiries.

Loan applications trigger inquiries into your credit. A high number of hard inquiries will have a negative impact on your credit score. When you decide to apply for a loan, avoid going for every loan that you come across.

Check and monitor your credit report regularly from credit bureaus. If you notice some suspicious activities in your credit history, report the incident as soon as possible, and dispute them. Reviewing your credit history offers you insights on how to repair your credit score.

Talk with your Financial Institution

Once you have completed reviewing your credit score and report, find out the minimum credit score requirements of your lender. First, talk to your bank or credit union as they are aware of your financial state.

Credit unions may have more flexible lending requirements than some financial institutions and may be willing to offer you a loan. Talk to your lender and inquire whether your credit score qualifies you for a personal loan.

Prove you can pay the Loan

Lenders need assurance that you can pay back your loan and any accrued interest. Therefore, the amount of bad credit loan you will get will depend on your ability to repay it. Some of the actions that you can take to increase the chances of approval for your loan include providing proof of payment and having a cosigner.

Your cosigner should have good credit scores and clear history and will guarantee that you will pay back your loan. If you fail to pay back a loan, lenders will turn to your cosigner for repayment. A bad credit loan lender may also ask for proof of income from your cosigner.

Consider several Lenders and Loan Types

Financial experts may recommend you to go for loans from reputable lenders. Bad credit loans may have higher interest rates or be capped at lower amounts as lenders may be cautious with the loans. However, you should also consider offers from less-reputable lenders.