5 Things Every Renter Should Know Before Buying

Buying a home can be financially rewarding, but it also has its challenges. Many renters can’t wait for the day when they’re able to get the keys to their own house. Ownership can provide a sense of stability, giving you full control to decorate and remodel as you like. But before buying, it’s important to know exactly what you’re getting into. Some people start the homebuying process with rose-colored glasses, or they feel the experience will be far better than renting—and sometimes, it is. At the same time, you need to be realistic and understand that buying might be more expensive and time-consuming than renting.

1. Profits aren’t guaranteed

Some people buy a home because they’re tired of wasting money on rent. Rather than put money in a landlord’s hand each month, they purchase a home to build their own net worth. Unfortunately, there’s no guarantee that buying a home will be financially beneficial.

If you purchase at the right time, your property may appreciate a little each year, which increases your equity, and you can earn a profit when you’re ready to sell. But sometimes, home prices go backwards. Rather than appreciate, property values depreciate. In a bad market, you could end up owing more than you paid for the house. And if you sell before home prices recover, you can lose money and pay out-of-pocket to sell the property.

2. Maintaining a yard takes time and money

If you lived in an apartment before buying a house, your landlord’s maintenance department likely handled the landscaping. As a homeowner, you’re responsible for your exterior, which involves mowing your lawn, pulling weeds, seeding, and fertilizing. Maybe you always dreamed of having a beautifully landscaped yard, but it takes money to maintain an outdoor masterpiece. You’ll also sacrifice your free time. According to the Bureau of Labor Statistics, the average American spends about 1 1/2 hours a week maintaining their lawns and gardens — but as a newbie, it might take you longer.

3. You might pay more for utilities

If you’re moving from an apartment to a single-family home, anticipate an increase in monthly utilities. The amount you pay for electricity depends largely on the size of the property. And if your apartment was smaller than your new home, you can realistically pay an extra $20-$30 every month. You’ll also pay more for utilities if your new home has natural gas, whereas your apartment was electric. Plus, homeownership means paying your own water and sanitation bills.

4. Your mortgage may slightly increase from year to year

Some people purchase a home because they’re tired of yearly rent increases. However, just because you buy a home with a fixed-rate mortgage doesn’t mean your mortgage payment will never change. Your property taxes can increase, which can increase the monthly payment a little each year, and if you file a claim with your homeowner’s insurance, your agency may raise your rate. Since both of these expenses are included in your mortgage payment, any increase or decrease affects your monthly payment.

5. Homeownership can slow your savings efforts

Saving money might be a priority, just know that buying a house can slow your efforts. Ownership can be financially beneficial in the long run, but in the beginning, you’ll drain your savings account buying the property, plus there’s ongoing repairs and maintenance which can cut into your disposable income.

If you’re ready to own your own place, buying can be rewarding and satisfying, but there are things you should know before you even think about starting the process. If you know what you’re getting into, you won’t have unrealistic expectations or be caught off guard.

source: totalmortgage.com

What You Need To Know About Debt Forgiveness

If you have ever had your bank or other financial institution forgive your mortgage you still have to pay taxes on that amount. However, there are some homeowners that have an exception to this especially in recent years.

The following are a few tips issued by the IRS about mortgage and tax forgiveness:
Whenever a debt is cancelled the result is usually income that is taxable. However, one thing most homeowners don’t know is that you may not have to pay taxes on this debt if it was a mortgage on the home you currently live in all year round.

The money must be used for your main home in the form of renovations, additions or remodeling.

$2 million is the limit that can be used in most exceptions and $1 million for a married couple.

In some cases you may have the option of reducing the taxable amount and also the amount of the debt if it is part of a debt consolidation case.

Homeowners who have used some of the money to renovate or remodel their home can also check to see if they qualify for exclusions. Exclusions are monies before the principal is applied.

Proceeds received from any other source will not qualify homeowners for exclusions. For example if debt is obtained from credit cards it will not qualify for exclusions.

Form 982 is the form that homeowners should use if they qualify for exclusions and attached to their income tax forms.

No other debts will qualify homeowners for exclusions. Debts included are rental homes, debt for, credit cards, businesses or a car loan. There are other cases that can also qualify homeowners to use this form such as monies from bankruptcy cases.

If your bank or other financial institution cancelled or reduced your mortgage they will send you a form to be used when filing your income tax. The form is 1099-C and Box 2 should contain the amount that was cancelled or reduced.

These are just a few of the tips offered by the IRS for mortgage forgiveness. If you would like more information just visit the IRS website. Be sure to read all the information available on mortgage forgiveness, cancellation and reduced mortgages. You can also get any other forms you need for filing your income tax including exclusion forms at the IRS website. If you still have questions you can also contact your local tax specialist who can help you with filing your income tax and provide you with all the forms you need.

To see if you qualify for any exclusions you can contact your bank or other financial institution that carries your mortgage. They can also answer any questions you have about mortgage forgiveness as well as determine if you qualify for exclusions.

For additional information on exclusions and mortgage forgiveness you can also search online. Many financial websites have information on both and can also answer any questions you have about your home and your mortgage as well.

source: 20smoney.com

Five Easy Steps to a Better Credit Score

Improving credit score is not really a rocket science.  Check out these five easy steps on how you can get a better credit score:

Apply for a credit card if you don’t have one.  Using a credit card regularly and paying off your monthly charges on time is a great way to boost your credit score.  This does not mean you should spend a fortune on credit card shopping.  You can use your credit card to pay for a small purchase so repayment can be easy.

Choose a credit card with a low rate and with features that matches your lifestyle.  Read and understand the fine print before submitting your application.  Make sure that your payments are reported to the available credit to maintain a high score.  If you own a credit card or credit cards, check your balance first and plan your spending ahead to avoid maxing out your limit.


Manage different types of accounts.  It’s not enough to have a credit card or multiple credit cards in your name.  You can further improve your credit rating by acquiring different types of debt such as a personal loan, a student loan, a car loan, or if you possible, a mortgage loan.

Lenders who check credit history are interested in how capable you are of manage debt and credit.  If you have a credit card, and at least two different loans in your name, this will surely strengthen your credit standing.  Of course, it’s important for you to submit your monthly loan payments on time to protect your personal credit.

Check your credit report regularly.  Consumers are entitled to one free report from each bureau every 12 months or annually. You can visit www.annualcreditreport.com to order your free report for this year.  You may choose to request all your three reports from the three bureaus at once or you can order one report from one bureau throughout the year.  If you want to directly order from a credit bureau, there is a fee of $9 to $12 per report.

Checking your credit report will give you the chance to examine it for possible errors. In case you find an incorrect detail, you can send a dispute letter to the bureau that issued your report.  You must also ensure that all your account activities are accurately recorded.

source: creditcreators.com

Four Strategies to Completely Settle Your Credit Card Debt

If you are looking for information on how you can pay off your credit card debt in the soonest possible time, then we advise you to pay close attention to the remainder of this piece. Below, we have listed down and tackled four effective strategies that you can use to gradually pay down what you owe so that you can eventually free yourself from your credit obligations.

Tried and Tested Tactics for Paying Off Credit Card Debt


Come up with a credit management plan on your own. Many consumers have successfully retired their credit card obligations by making important changes in the manner by which they manage their personal finances. Some found it necessary to limit the use of theirfor credit counseling services. You can also rely on the experience and expertise of financial advisers to free yourself from the bondage of credit card debt. To do this, you just need to sign up for credit repair services with a credible counseling firm. For sure, with the help of a certified financial adviser, you will discover effective techniques on how you can gradually settle your credit obligations and soon rehabilitate your credit profile. Your credit repair course can also help you gain insights on how you should manage your personal finances so that you can prevent yourself from falling into debt traps, which can once again inflict severe damage to your credit standing.



Apply for a debt consolidation loan. In some cases, you must apply for another credit program to completely retire your outstanding financial obligation. After all, you need to have ample funds to pay off your credit card debt, once-and-for-all. Good thing there is a popular credit program these days called debt consolidation loan. Under this program, you will receive sufficient funds that will allow you to settle all your existing credit obligations – such as credit card debt, an unsettled secured or unsecured personal loan, and even unpaid utilities bills. In return, the lender will ask you to pay back what you borrowed in affordable monthly installments which will be based on your financial capability.



File for bankruptcy. Bankruptcy is rarely considered as an option for retiring credit card debt. Rather, it is perceived as a last resort, most especially if all the efforts that you have invested to pay off your credit obligations proved to be in vain. After all, with this program, you can expect to have a clean slate once your credit accounts have been completely discharged.



Still, you need to remember that there are stringent requirements imposed on those who wish to apply for bankruptcy. So, before you process the paper works and apply for this program, we encourage you to seek professional assistance from a bankruptcy attorney. Through this professional, you can soon discover if indeed you are qualified to file for this quick-fix strategy, and at the same time, you can receive valuable information that you can use once you start with your court proceedings.

source: creditcreators.com

How to Achieve Comprehensive Bad Credit Repair

Are you interested to know how you can attain complete bad credit repair? If you are, then we suggest that you read the rest of this article. In the succeeding paragraphs of this piece, we have enumerated and discussed five tips that can help you succeed in your quest not only to rebuild your credit history, but also to recover your overall financial well-being.

Helpful Pointers for Credit Consumers

Pay off your debt. There is no better way for you to fully regain your creditworthiness other than paying off your credit obligations. So, to succeed in gradually paying down your debt, you need to closely examine your personal finances. Try to identify expenses that you can eliminate to free upon delinquent borrowers and credit cardholders.



Use your credit card wisely. Keep in mind that your credit card activities are being monitored and reported to the three credit bureaus. And the employees of the credit reporting agencies use your credit and payment transactions in computing for your credit rating. So, if you are serious about your desire to cause dramatic improvements to your credit history, then you need to use your credit card wisely. Make sure that you pay your credit charges on time and in full each month. And see to it that you don’t max out the spending limit set on your card account. In so doing, you can gradually push your credit score up, until such time that you can fully regain your credit reputation.

Order copies of your credit report on a regular basis. In some cases, your poor credit standing can be attributed to the outdated and incorrect entries found in your credit report. After all, the system used for updating your credit and payment transactions is not perfect and prone to human error.

This is the reason why finance experts encourage consumers, like you to regularly order copies of their credit files from the three credit reporting agencies – Equifax, Experian and TransUnion. This way, you will have the chance to determine what your latest score or rating is, and to validate the accuracy of the transactions listed on your credit report.

 Read, read, and read. We also suggest that you look for excellent sources of information that can help you achieve your goal of attaining thorough bad credit repair. You can visit the professional blogs and websites of finance advisers where you can obtain expert opinion on how you should manage your lines of credit. You may also take financial literacy courses online so that you can receive practical suggestions not only on how you can regain your credibility as a borrower, but more importantly on how you can responsibly manage your personal finances.

source: creditcreators.com