Real Estate News

    • Making the Most of Your Credit Card Rewards

      24 February 2020

      Using a credit card to earn rewards is pretty simple. Just use the card to buy things and you’ll get cash back or reward points from your credit card company.

      Getting that free money of 5 percent or even more on every purchase is easy, but there are some things you should pay attention to if you want to get the most rewards possible.

      Register for Bonus Categories
      To get the most out of a cash-back credit card, look for a card that gives bonus rewards on certain purchases.

      While 1 percent cash back is common on all purchases, some cards offer a 4 percent bonus for a total of 5 percent for buying from certain types of merchants. These can include restaurants, travel, grocery stores, gas stations, airfare or hotels.

      The categories may change every quarter, with airline purchases earning 5 percent back for three months, then changing to movie theatre purchases for the next three months, for example. The category may even have a cash back limit.

      To get in on these bonus categories, some cards require you to opt in each quarter and manually select which category you want to earn money back on. Some credit cards make it as simple as registering your card online, logging in to your account and clicking a button.

      Use the Right Card for Bonuses
      If you have a few credit cards, it can be difficult to juggle them and remember which card has which bonus for the purchase you’re making. With the bonus categories changing each quarter, it can be difficult to remember which card to use to get the most cash back from it.

      Using a cash-back card that you thought had a bonus at gas stations but instead had a bonus at department stores can leave you with a lot less cash back than you thought you’d be earning.

      Avoid an Annual Fee and Interest
      Paying an annual fee on a rewards card is normal, but be aware of how much more money you’ll have to spend to earn enough cash back or rewards points to make up the difference between the fee and what a no-fee card charges.

      If a cash-back credit card has an annual fee of $75, for example, and pays 5 percent cash back for grocery store purchases, it would require spending $1,500 to get that $75 fee back. That’s a lot of groceries to buy before getting money in your pocket.

      Another area where cash rewards can be eaten up is by card holders who don’t pay off their balances in full each month or on time and pay interest on their credit card balance. People who pay interest each month are often charged a higher interest rate on their cash-back card than if they did the same thing on a credit card with no rewards.

      If you regularly carry a balance on your credit card, look for a card with the lowest interest rate. Don’t look for one with rewards.

      Published with permission from RISMedia.

    • Why You Should Reconsider That Store Credit Card

      24 February 2020

      Few good decisions happen when you’re rushed to make them. This is especially true at the checkout line of a department store, when you’re tired from waiting in line and just want to buy your things and go.

      All of a sudden, the cashier catches your attention by dangling potential savings in your face: “Would you like a 75 percent discount today by applying for our store credit card?”

      However much that one-time discount is, your response should be “No, thank you,” and you should pay and leave. Why? Here are some reasons you don’t want that store credit card:

      High interest rates. The interest rate on a store credit card will likely be higher than a traditional one you get directly from a bank. Why? Because of customers with a poor credit score, the store is taking a chance that they won’t make payments, so a higher interest rate is charged to everyone. The store-branded credit card may also charge higher late fees if a payment isn’t made on time. The good news is that it’s probably not going to charge you an annual fee.

      It can only be used at that company. You can’t use a Nordstrom credit card at Macys, Kohl’s or any other store. Department store credit cards can only be used at the store issuing them, which can be great if you shop there often and the card offers you discounts that you wouldn’t get otherwise. But if you don’t shop there a lot, then using it for one purchase and not paying it off in full when the bill comes will negate your savings.

      You may stop comparison shopping. Having a credit card tied to one store may encourage you to shop there more often or buy things you can’t afford. If it leads to the avoidance of other stores, it could prevent you from comparing prices and not getting the best deal.

      When the Card Is Right for You
      If you’re planning on making a major purchase at a store that has a branded credit card, it can be worthwhile if the card allows you to pay off the purchase over 12 months or so without paying any interest. This can be the best time to use a store’s credit card, as it’s like borrowing money for free. The key is to make monthly payments—whether required or not—and pay it off before the interest-free period ends. If you don’t, the card may charge you interest on the entire purchase from the date you opened the card.

      Published with permission from RISMedia.

    • The Benefits of Automatic Mortgage Payments

      24 February 2020

      Automatic payments can be a smart and easy way to “set it and forget it." The automatic withdrawals from your bank account can be set up to pay internet services, subscriptions, phone bills, credit card bills and even a mortgage.

      Along with accepting payment by check, over the phone and online, many mortgage providers allow mortgage payments to be automatically withdrawn from your checking or savings account every month on the same day.

      One of the best things about having your mortgage on autopay is that you’ll never be late paying that bill. That means no more late fees—and you won’t have to go through the hassle of mailing a check or remembering to pay it. Not having late payments can improve your credit score, since payment history is one of the biggest determining factors.

      When setting up autopay, check if you can adjust or cancel your automatic payments, and how easy it is to do. Also, check if you can choose the withdrawal date. Once set, you may not be able to change it.

      Some lenders allow these payments to be automatically adjusted if there’s a change in your escrow or interest rate. If your mortgage lender doesn’t easily let you set up automatic payments, you can probably do it online through your bank and set up recurring transfers. If you’re living paycheck-to-paycheck and are unsure if you’ll have enough money in your bank account on the day your mortgage payment is due, then you may want to forego autopay.

      Sticking to a payment schedule may make it difficult to make extra payments on your mortgage. While banks are always happy to accept your money, having autopay may require calling the bank or taking a few extra steps if you want to make an extra payment on the principal balance.

      To make sure autopay is done right, set up electronic alerts from your bank to email or text you when a bill is due, paid and when your balance is running low. The last thing you want is a low checking account balance when a mortgage bill is about to be paid automatically.

      Published with permission from RISMedia.

    • How to Dispute Credit Report Errors

      21 February 2020

      If you’ve checked your credit reports lately for errors, congratulations! That’s a smart first step to improving your credit score, which can make getting approved for home loans and credit cards, along with getting the best interest rates, a lot easier.

      Errors can be as simple as a misspelled name, wrong phone number or address, or as serious as an account wrongly reported as delinquent.

      The next step is to fix them. Here are some ways to resolve errors on your credit reports:

      Write the Credit Bureaus
      Write a letter to the credit reporting bureau where you found the mistake. Equifax, Experian and TransUnion are the three major credit bureaus, and you can write to them online or by mail.

      Include your contact information, and explain the error you found and why it’s wrong. Include supporting documentation, such as a copy of an email verifying the status of an account that has been reported incorrectly.

      The Consumer Financial Protection Bureau has sample letters on its website for disputing credit reports. Be sure to keep copies of any letters or documents you send, and if sending anything by mail, use certified mail with a return receipt.

      Alert Creditors
      Banks and credit card issuers that provide information about you should also be notified of errors, unless it’s an identity-related mistake made by the credit bureau—those should be sent directly to the credit bureau.

      Also known as furnishers, companies that provide information to credit bureaus will often have their address listed on your credit report so you can contact the company directly.

      Allow 45 Days
      After reporting errors, allow up to 45 days for them to be fixed. The credit bureau generally has 30 days after receiving your dispute to investigate and verify the information with the furnisher. The credit bureau must report the results back to you within five days of completing its investigation.

      If you dispute an error with the furnisher, it typically takes 30 days to investigate and they must report their findings to you.

      If you’ve submitted incorrect or incomplete information, or have tried to contest the same item multiple times without any new information, then the bureau or furnisher may decide your dispute is frivolous. They must tell you this within five days, along with providing their reasoning. Once this is done, they don't need to investigate further. You can resubmit a dispute with updated materials if your original dispute was labeled frivolous.

      Even if the furnisher insists the dispute information is accurate, you can ask the credit bureau to include a statement in your credit file explaining the dispute.

      Check Back
      Credit report updates may take a while to appear, depending on when new information is sent and a bureau’s update cycle. If you don’t see a change in a few months, contact them again to verify that your account information is being reported and updated.

      Published with permission from RISMedia.

    • Alternatives to Traditional Down Payments

      21 February 2020

      The idea of putting a minimum of 20 percent down on a home is a myth that can keep some people from trying to buy a home.

      While it can be a great way to lower your mortgage payment and convince sellers that you’re serious about buying, coming up with 20 percent of a home’s purchase price can be difficult.

      Here are some other options:

      A lower down payment is acceptable. Lenders know that the 20 percent rule is a myth, and will often accept much less if you have good credit and a steady job.

      The average down payment on a home purchase in 2016 was 11 percent, according to a report on aspiring homebuyers by the National Association of REALTORS®. For borrowers under age 35, the average down payment was just under 8 percent. The largest share of loans for buyers under 35 were for people putting down less than 5 percent or about $3,500. Coming up with 10 percent down, however, can allow you to have a lower credit score—sometimes as low as 500 for an FHA loan—to qualify.

      Around 3 percent is common. A few government agencies require only 3 percent or so down. Loan programs backed by Fannie Mae and Freddie Mac require 3 percent down, while the FHA mortgage that targets first-time buyers asks for 3.5 percent down. The FHA mortgage allows the down payment to be a financial gift or from an approved down payment assistance program.

      The Fannie Mae HomeReady program allows non-borrowing household members to contribute toward qualifying income. So, if you have an aunt or roommate, their income can be included when qualifying for a home loan.

      The programs don’t require perfect credit. The average FICO credit score was 713, but borrowers with a 639 score can still be approved.

      People who don’t qualify for such programs can still buy a home with a 639 FICO score, but may need to increase their down payment to 5 percent.

      There are no-down-payment options. VA mortgages require no money down for current and former military service members, and most lenders offer them.

      Some loans for less than 20 percent down require private mortgage insurance, or PMI, which can add $100 or so to a monthly mortgage; however, VA loans don’t require mortgage insurance.

      USDA home loans also don’t require a down payment. These loans are backed by the U.S. Department of Agriculture, and aren’t for farms but for single-family homes that are in less-dense areas of the country.

      Piggyback loans are available. These require 5 – 10 percent down and are two mortgages that work best for people with good credit. The first mortgage funds 80 percent of the cost and the second is a 10 percent mortgage—the final 10 percent is a down payment. This eliminates the need for mortgage insurance.

      You can find other assistance programs. Down Payment Assistance programs, or DPAs, are run by the government and nonprofits. They offer gifts or no-interest loans to increase homeownership. Nearly 90 percent of all single-family homes in the U.S. are eligible for some kind of DPA.

      All of the major loan types listed above allow DPA funds to be used toward a down payment. Your lender should be able to help you find DPAs in your area.

      Published with permission from RISMedia.