With Halloween behind us, retailers are in the Holiday Spirit. Businesses know that consumers spent a median $556 on holiday gifts last year and they want this year to be just as strong.
That’s why it’s barely November and, already, Black Friday ads clog our mailboxes and the airwaves. Retailers want our dollars and they’re offering great deals to early shoppers.
There’s one discount a smart shopper should think twice, however — the ever-present “Open A Charge Card Today And Save 15%” promotion. In the short-term, deals like this will save money.
Over the long-term, however, opening a charge card could cost you much, much more — especially if you plan to refinance your home or buy a new one.
Applying for a charge card can lower your credit score up to 85 points.
According to the myFICO.com website, as a category, “New Credit” accounts for 10% of your 850 possible credit points, comprising the following credit traits :
Your number of recently opened accounts
Your number of recent credit inquiries
Time elapsed since your recent credit inquiries
Your proportion of new accounts to all accounts
Each trait is a negative in the FICO-scoring credit algorithm which means that, with each in-store charge card application, your credit score is likely to fall. How far your score will fall depends on the rest of your credit profile.
Meanwhile, low FICO scores correlate to higher loan fees.
Using a real-life example, assuming 20% equity in a home, for either purchase or refinance, look how loan fees for a $200,000 conforming mortgage change by FICO score :
740 FICO : There will be no added loan costs
720 FICO : You’ll have a 0.250% increase in loan costs, or $500
700 FICO : You’ll have a 0.750% increase in loan costs, or $1,500
680 FICO : You’ll have a 1.500% increase in loan costs, or $3,000
660 FICO : You’ll have a 2.500% increase in loan costs, or $5,000
You can see first-hand how expensive low credit score can be — much more costly than the 15% saved at the mall. That’s why people planning to refinance to today’s low rates and soon-to-be Worcester homeowners, shouldn’t rush to save 15% at the register.
For people in want of a mortgage, high FICO scores are worth protecting.
A home appraisal is an independent opinion of your home’s value, performed by a licensed home appraiser. Appraisals are part of the traditional home purchase process, and lenders require them for most refinances, too.
Appraisers are trained professionals. First, they derive a base for your home’s value based on the recent sales prices of homes that are comparable to yours in terms of bedrooms, bathrooms, style, and square footage.
Then, accounting for features and amenities that make your home different, the appraiser applies “adjustments” to that base value.
This methodology is called the “Sales Comparison” approach and the result is your home’s appraised value.
It’s the most common appraisal method used by lenders.
As a homeowner in Fitchburg , you can’t affect the sales prices of your home’s comparable properties, but you can help your appraiser understand how your home stands apart from these homes. This, in turn, can affect your home’s adjustments, resulting in a higher appraised value.
With home appraisals, every valuation dollar can matter. With that in mind, here are a few tips for maximizing your home’s appraised value :
Be home for your appraisal so you can answer the appraiser’s question, if there are any.
Mention any new roofing, flooring, HVAC, plumbing, or windows you’ve installed since purchase.
Don’t mention projects or repairs you’re “about to undertake”. Appraisers don’t credit for unfinished projects.
Make minor household fixes prior to the appraisal (e.g.; leaky sink, running toilet, peeling paint).
Present a tidy home. This can contribute to a higher “overall condition” adjustment.
Lastly, schedule the appraisal for a time that is convenient for your entire household. An appraiser needs to see, measure, and take photos of every room in your home. If a room’s door is closed because of a resting child, for example, the appraiser may need to schedule a second appointment to complete the appraisal, and that can raise your appraisal costs.
It’s no secret. Rates are low right now. And, it’s not just mortgage rates, either — all types of rates are scraping rock-bottom. Borrowing rates, lending rates and savings rates are at or near their all-time lowest levels.
As a homeowner in Worcester , one way to take capitalize on today’s low rates is to apply to refinance your home. But there are other ways to take advantage, too.
In this 5-minute piece from NBC’s The Today Show, you’ll learn of a half-dozen ways to exploit the current rate environment, including:
Refinance a car loan from a high rate to a low rate, for cheap, in an hour
Balance transfers between credit cards with teaser rates lasting up to 20 months
Move some savings to an “online” bank where savings rates are higher
The interview’s theme is to examine both where you’re spending and saving your money, and make sure you’re doing what’s best for your budget.
Federal Reserve Chairman Ben Bernanke has pledged to hold the Fed Funds Rate near 0.000% until at least 2013. So long as the Fed Funds Rate is low, there will be places you can save.
Last week, the Federal Reserve pledged to leave the Fed Funds Rate near 0.000 percent until at least mid-2013. For credit card holders in Massachusetts who carry a monthly balance, this is good news. Because of the Fed’s call, credit card rates are unlikely to rise before mid-2013.
But cardholders can save on more than just interest costs, as you’ll learn from this two-and-a-half minute piece with NBC’s The Today Show. In the interview, you’ll hear about “built-in” perks offered by most credit cards and ways by which you can save on everyday goods and services.
For example, did you know your everyday credit card might offer:
Travel perks : Automatic trip cancellation protection and car rental insurance.
Shopping perks : Discount admission to concerts and museums; free shipping from overseas.
Consumer perks : Price protection against a drop in price; insurance against theft; extended warranties.
And it’s not just “high end” cards that offer these options, either. Credit cards of all types do what they can to improve consumer loyalty. Offering free perks is just one way in which they try.
Most credit cards offer websites detailing cardmember perks and benefits. Visit the site of your favorite card and see where you might save on everyday items.
The ranks of the landlords are growing. Along with an increasing number of “accidental landlords”, real estate investors now account for close to 20 percent of all home resales, according to the National Association of REALTORS®.
If you plan to buy a rental property in Worcester , or to convert your current residence for long-term rental, make sure your home is properly insured.
A traditional homeowners insurance policy may be unsuitable for landlords.
A landlord insurance policy typically covers the home itself; the owner’s possessions in the home; structures on the land including garages and sheds; and, minimal liability coverage in the event of injury or lawsuit.
It’s common for landlords to increase that minimal liability coverage, adding an umbrella policy for $1,000,000 or more. Umbrella policies protect your home from an unfavorable lawsuit related to just about anything — housing-related or not.
Optionally, a policy may includes provisions for “lost rental income”.
Annual premiums for a landlord insurance policy are often 20% more costly than for a standard homeowners policy. This puts the average landlord insurance premium near $950 per year. (more…)
More homes are going under contract this summer than went during the winter or spring seasons. Many of these homes are scheduled for late-August/early-September closings.
If your home is among them, plan ahead.
Like for the rest of the U.S. workforce, Labor Day is a popular vacation time in the real estate, title and mortgage industries. Closings come together more slowly when the parties involved are on holiday. In addition, when issues arise, they are often slower to resolve because not everyone is “present”.
Therefore, if you’re under contract to buy or sell your home, or have a refinance in-process with a lender, get proactive with your home and your loan. Finalize your approval as quickly as possible.
Here are some tips to help your loan clear faster: (more…)
With Halloween behind us, retailers are in the Holiday Spirit. Businesses know that consumers spent a median $556 on holiday gifts last year and they want this year to be just as strong.
A home appraisal is an independent opinion of your home’s value, performed by a licensed home appraiser. Appraisals are part of the traditional home purchase process, and lenders require them for most refinances, too.
The ranks of the landlords are growing. Along with an increasing number of “accidental landlords”, real estate investors now account for close to 