Do you know exactly what your homeowners insurance covers? If not, take a close look at your policy. Your insurance company will recoup costs for most accidents and disasters, but some things just aren’t covered.
Understanding what your homeowners insurance doesn’t cover and why can help you plan ahead. Knowing where you’re vulnerable also enables you to make smart choices that could prevent or minimize your financial liability in the case of an accident or disaster.

1. Injuries sustained by trampolines

Yes, you read that right. If your kids and their friends (or you and your friends) are flying high on a trampoline located on your property and someone breaks a limb or two people knock heads, you are responsible. Some insurance companies won’t even insure residences that have a trampoline.Trampolines are actually more dangerous than they might look. According to the U.S. Consumer Product Safety Commission (CPSC), in 2012, an estimated 94,900 people were treated in emergency rooms for trampoline sustained injuries. From 2000 to 2009, 22 deaths resulting from trampoline accidents were reported to the commission. Injuries include colliding with another person, landing improperly and breaking or injuring limbs, getting hurt falling or jumping off and receiving injuries from hitting the trampoline’s springs or frame.

2. Aggressive dog breed attacks

Given the fact that dog bites cost insurance companies an estimated $250 million a year, it’s not surprising that certain breeds with aggressive tendencies are considered off limits when it comes to homeowners insurance. Even if you have a sweet, happy pouch, you’re unlikely to find insurance for any bites or attacks caused by certain breeds, including German shepherds, pit bulls, Dobermans, Rottweilers and even Labrador Retrievers. Some insurance companies will also refuse to insure against dog bites if your best friend has a history of aggression.

3. Floods, and sewage backup

If you want flood insurance, you must buy a separate flood insurance policy. This has been the case since 1968 when the government founded the National Flood Insurance Program, which is part of FEMA (Federal Emergency Management Agency.) Premiums for separate flood insurance vary according to your geographic area’s flood risk. There is usually a 30-day waiting period on new flood insurance.
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Also be aware that sewage backups, even though they may be related to a flooding situation, are not covered within a flood insurance policy. In order to cover your home in case of the sewer backing up into your house or the sump pump overflowing, you must purchase a sewage backup rider for your main insurance.

4. Earthquakes

Earthquake is another natural disaster not covered in your standard homeowners insurance. To get coverage for the extensive damage quakes can cause, including home replacement, you must get an additional earthquake policy. Most major insurers offer earthquake insurance, or you can purchase a policy from the California Earthquake Authority (CEA), which was created in the wake of the devastating 1994 Northridge, Calif. earthquake that resulted in $10 billion in losses.
It’s strongly suggested that homeowners in the high risk “Pacific earthquake belt” get quake insurance, as approximately 81 percent of the world’s largest earthquakes occur in this region, which runs from Southern California up the west coast to Alaska.

5. Nuclear, conventional, or civil war

If we have any type of war—including nuclear, conventional or civil, your home won’t be covered. The good news is, though, that unless your policy says otherwise, you should be covered in the case of a terrorist attack.

6. Mold and water damage

A spate of costly mold claims in the early 2000s caused insurance companies to adjust policies to either deny mold coverage outright or add limits. Some companies exclude all coverage for mold related issues, except for mold resulting from fire or lightening, while others offer a limited amount of coverage—such as a cap of $5,000. Some coverage is situational. For instance, you might be able to obtain coverage if the mold was caused by a sudden occurrence like a burst pipe, but you would not be covered if the condition was caused by leaking pipes that you failed to maintain. Additional mold coverage can also sometimes be added as a rider.
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Find out exactly what is and isn’t covered by your homeowners insurance, and avoid being blindsided if an accident or disaster strikes.
Julie Bawden-Davis is a staff writer for SuperMoney. Her mission is to help fight your evil debt blob and get your personal finances in tip top shape. Photos: Flickr

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© Julie Bawden-Davis

When it comes to love, dating and marriage, your figure is important, particularly if you’re a woman. A recent study “discovered” that men find women with an hourglass figure – those with bust, waist and hips measurements with ratios in the neighborhood of 36-24-36 — more attractive. Shocking, I know.

An equally surprising study revealed that women are just as superficial, they just have different priorities. Here’s the bombshell. If you’re a guy, height and a six-figure salary work wonders with the ladies.

The Figure That Really Turns Her On

However, another figure is becoming increasingly important for single ladies seeking a relationship: your credit score.

According to a study by freecreditscore.com, an affiliate of Experian, 75 percent of women and 57 percent of men considered credit scores an important factor when evaluating a potential mate.

It may seem unromantic, cold or even outrageous to consider somebody’s credit score when deciding something as intimate and important as marriage. However, according to the same freecreditscore.com study mentioned above, women view financial responsibility (95 percent) and paying bills on time (92 percent) as the top financial attributes when evaluation a romantic relationship. A credit score just happens to be an excellent tool for determining whether someone possesses those attributes

Credit Score Dating is a Thing Now

Several small dating websites, such as creditscoredating.com and datemycreditscore.com, are riding this trend by requiring members to self-report their credit score as part of their profile. Users can then search or filter candidates based on their credit score.

Creditscoredating.com even provides a cheat sheet to help members assess the credit score of potential dates. Here’s a lightly edited version of it.

850 or higher: Start planning the wedding.
Anything above 750: Take him to see your parents.
700 to 750: Has potential as a fixer-upper.
650 to 700: One night out material, but bring your own cash.
600 to 650: Keep on looking.
Below 600: Run! They couldn’t even get a car loan.

Heartless, utilitarian and materialistic? Maybe, but it’s hard to argue with the logic. Dating, not to mention marrying, someone with a poor credit has serious consequences. Sometimes your credit score is more relevant to your financial health than your current salary or even your bank balance, particularly if you’re young or just starting a new career.

Your credit score determines whether you will qualify for a mortgage, a car loan, a lease, or even get a job. Banks will usually shy away from customers with a score of 660 and below. Even an average credit score (700 to 750) could mean your apartment lease application is rejected or you don’t qualify for the best interest rates and insurance premiums reserved for customers with good to excellent scores (750 to 850).

A Low Credit Score Could Be a Deal Breaker

“Save both time and money; run a credit check on them. A score below 700 is a no-go for marriage.” That was the advice of a reader, Eric Jones, in response to an article on online dating published by Freakonomics.com.

One in four men and women agree with Eric and consider a poor credit score a deal breaker when considering marriage.

So, if you’re a single guy looking for anything more serious than a quick fling, working on a 750+ credit score is a much better investment of your time than pursuing a perfect six-pack.

Money, and Credit, Matters

Obviously, a credit score is just a number.

It cannot define a person, and there are many reasons why a perfectly suitable partner may have a less than sterling score. Also, let’s not confuse being thrifty and paying your bills on time with being obsessed with money. Actually, a recent study of 1,734 married couples found that couples who don’t value money very highly score 10 to 15 percent higher on marriage stability and relationship quality than couples where one or both are materialistic. I know, another shocker: materialistic people don’t make the best marriage partners.

Nevertheless, credit scores do provide a useful snapshot of a person’s spending habits. And if you have to filter potential marriage partners, it does seem fairer to use figures they have more control over than their height, or waist-to-hip ratio.

My fellow writer Julie Bawden-Davis shares a few questions to ask your partner before getting married, #1 being if he or she has any credit card debt. These days, it’s unlikely that someone doesn’t have credit card debt, but getting the conversation started can save a lot of stress in the long run.

The hard truth is that money matters in relationships. A lot. Arguing about money, not children, sex, religion, politics, the in-laws, or even whose turn it is to do the dishes, is the number one cause of divorce. The same study also concluded that money arguments were both longer and more intense than all other marital squabbles.

In other words, choosing a partner that has similar views about money and budgeting is a smart move that can avoid a lot of heartache down the road. Protecting yourself financially is always a smart move.

This article was written by staff writer Andrew Latham. His mission is to help fight your evil debt blob and get your personal finances in tip top shape.

Debt keeps you down and makes it hard to live a fulfilling life. When your bank balance teeters on empty, your credit cards are maxed out and debt collectors keep calling, it’s natural to feel discouraged and want to give up and stop trying.

Related article: Wages Garnished? Here’s What to Do Next

If you’re tired of dragging around the albatross of debt but think you’ve tried it all when it comes to unshackling yourself, read on for secret debt reduction tips.

1. Daydreaming Can Help You Get Out Of Debt

When it comes to debt, daydreaming is good for you. Of course you don’t want to spend all of your time fantasizing, but taking a few minutes once or twice a day to visualize your credit card balances at zero does wonders for your chances of success.

Mindful meditation lowers your blood pressure and puts you in a positive mindset regarding paying off your debt, which will help you take positive actions.

2. Have Your Family Commit to a Budget

When you all vow to get out of debt, it’s easier to stick to a budget. If you start to waiver in the face of a new purchase, your significant other or another family member can be the voice of reason and stop you from digging yourself deeper into debt.

3. Get Out Of Debt By Seeking Out a Better Credit Card Deal

No doubt you’ve heard the warning to avoid taking out further credit. While this is true in practice, it’s important to look at how much money is flushed away each month in interest. If you have a credit card with an interest rate higher than 13.99% percent, ask your credit card company to lower the interest rate. If it’s already lower than that, lowering it might be difficult.

If the credit card company won’t lower your rate, apply for a balance transfer credit card with a 0% interest rate and use it to pay off your former card. When you do this, if you think you might be tempted to use the paid off credit card, cut it up.

Use a debt repayment calculator, such as the one on CreditKarma, to see how much you’ll save each month by switching cards.

4. Avoid Late Charges – Increase Your Chances Of Getting Out Of Debt

The amount of money that goes into late charges can cripple your efforts to pay off your debt. Whenever possible, avoid paying late fees. If keeping track of when your bills are due is difficult for you, consider using an app like Check that reminds you when it’s time to pay.

Related article: How can you avoid late fees on your credit card?

5. Check All Your Balances Daily

Sound like overkill? It’s not. Constant reminders are your best bet for getting out of debt. If you only look at your balances once a month when you pay your bills, after a couple of days the reality of your debt starts to fade in your mind. Then when a spending opportunity presents itself, you’re more likely to bite and get yourself into even more debt.

Every morning when you wake up take a look at your debt situation. Seeing it in black and white will encourage you to stick to your budget, and watching your debt being paid off keeps you encouraged throughout the day.

6. Announce Your Get Out of Debt Plans

Forget the taboo on talking about money and let your friends and family know your plans for whittling down your debt and getting rid of it. Encourage them to regularly inquire about your debt. Not wanting to tell Aunt Millie that you slipped up and splurged will encourage you to stay on track with your budget.

7. Try Debt Consolidation

If you can’t seem to budget and pay off debt on your own, consider a debt consolidation program. This would consolidate your debt into one monthly loan payment. Such a plan usually also means paying a lower interest rate.

8. Consider Student Loan Forbearance

If student loans are making it difficult to dig out of debt regarding your other bills, you may qualify for a forbearance, which is a temporary halt to payments or a reduction in the amount you pay for up to a year. This allows you to funnel your money towards your other debt.

Related: 7 Lesser-Known Ways to Repay Student Loans

9. Never Pay Retail

Make it your mantra until you get out of debt to never pay full price. Always seek out a bargain for your purchases, and if you can’t find a deal on brand names, use generics.

You can save a great deal of money that can be directed to paying off debt by shopping sales, requesting price matching and store coupons that can be found online or through smartphone apps, such as RetailMeNot.

10. Keep Accounts at Two Separate Banks

Dividing and conquering works like magic when it comes to paying off debt. Put into your everyday living checking account just enough to cover daily and monthly expenses. Direct your debt payoff money into another account, such as an online bank.

Don’t carry the debit card for the debt payoff account with you, so you won’t be tempted to use the money for everyday purchases or worse, splurges. Pay off your debt and only your debt from that account.

11. Secret Tip To Getting Out Of Debt : Banish Guilt

No doubt you kick yourself every time you look at your credit card bills or you hit ignore on your cellphone when a debt collector calls with the nasty reminder of how you overspent. You didn’t get into debt on purpose, so lighten up on yourself. It will be a lot easier to stay clearheaded and move forward and pay off your debt if you say no to guilt.

12. Celebrate Often

More than anything, sticking to your debt payoff program requires that you keep a positive mindset. Once you start slipping into negative thinking and tell yourself you’ll never climb out, you start making poor choices with money. Set aside a small amount of money to reward yourself at the end of every week for sticking to your budget.

Living in the negative when it comes to your finances is definitely a downer, but using these tips will help you climb out of debt so you can enjoy financial freedom.

Contributors : Julie Bawden-Davis

Massive mortgages, rising interest rates, and expensive utilities are leading to an uptick in downsizing, with many Americans shifting from suburban homesteads to so-called tiny-houses.

The diminutive dwellings — generally smaller than 400 square feet with a price tag between $10,000 and $100,000 — are popular among young people, retirees and anyone in between hoping to reduce the expense of homeownership.

But because of their unique proportions, these mini-mansions often aren’t financed the same way other homes are. Here are some options.

Get a mortgage

Tiny houses don’t require huge loans with sizable interest payments. And with so little payout, traditional mortgage lenders often don’t want to bother with reams of origination and servicing paperwork.

Some 68% of tiny house owners don’t have mortgages, compared to 29.3% of all U.S. homeowners.

Source – The Tiny Life blog.

But with a mortgage, you’ll have access to longer payback terms, lower rates and the interest payments are tax deductible. If your humble abode sits on a permanent foundation, you might have some luck landing one.  Bonus points if you’re having a professional construction company build the structure.

Not sure how to find a mortgage lender? Here are 6 tips to finding the best mortgage company.

That’s because mortgage lenders are looking both for borrowers who are unlikely to walk away from their debt and for properties that will hold up over time and retain or grow their value.

Major financial institutions will be more reticent to underwrite a small loan. So check out our basic mortgage guide and then talk to your local bank or credit union for tiny house options.

Recommended Lenders for Mortgages and Real Estate Investments

Lender	Maximum Loan
	$200 million	Apply
	up to $625,000	Apply

Get manufacturer financing

Companies that sell tiny prefabricated houses sometimes offer payment plans and other financing deals for customers. Ask the manufacturer whether there are loan option adjusted for specific models or extras such as a washer-dryer unit or a compost toilet.

Get an RV loan

If your tiny house is built on a trailer, you might be eligible for an RV loan.

Different states define recreational vehicles differently, but generally, your home must be mobile and certified by the Recreational Vehicle Industry Association as meeting manufacturing and safety regulations.

These loans generally carry interest rates between 4% and 7% over 7 to 15-year terms, with 10% to 20% down required. If your tiny home is your main abode, you may have to look elsewhere – RV loans often aren’t intended to cover primary residences.

Try peer-to-peer lending

The tiny house community is close-knit and dedicated to the concept of simple, sustainable living. Try matchmaker services like Lending Club that connect borrowers to lenders based on credit history, requested loan amounts and other factors.

Or personal loans

Many tiny home owners use general personal loans to finance their property, shelling out for the higher interest rates and betting that they can pay back the funds within a shorter time-frame than other types of loans.

If you have stellar credit, you might qualify for an unsecured loan that doesn’t require you to put down collateral. Lightstream has a loans specifically for tiny houses with fixed rates as low as 4.29% with automatic payments and loan amounts from $5,000 to $100,000. Terms range from 24 months and 84 months, with no home equity or down payment requirements.

Lightstream spokeswoman Julie Olian said the company looks for lenders with several years of credit history and a variety of accounts, good payment history and evidence of savings habits.

“If they’re approved, their money can be used to purchase a tiny home or for any renovations, land or expenses that would be associated,” she said. “The applications for tiny house loans have continued to grow at a relatively steady pace — it’s a category that’s really emerged over the last couple of years.”

Best Personal Loans for Good Credit

Lender	Minimum FICO score	Estimated APR
	680	1.99% – 14.49%	Apply
	650	5.07% – 14.95%	Apply
	660	5.99% – 35.89%	Apply
	620	4.93% – 29.99%	Apply
	580	9.95% to 36%	Apply

Even with poor credit, you can qualify for a tiny house loan. You will need to pay higher rates, but making regular payments on your loan can, over time, improve your credit score.

Lenders Accepting Bad Credit

Lender	Min. FICO	APR Range
	No Min	35% – 155%	Apply
	580	9.95% – 36%	Apply
	600	15.49% – 34.99%	Apply
	600	5.99% – 35.89%	Apply
	640	36% – 199%	Apply

A secured personal loan — which will usually feature a lower interest rate and more money than the unsecured alternative — is another possibility.

Other financing options

Depending on how much of your tiny home you need to finance and how quickly you can pay it back, consider credit cards. Some providers offer 0% introductory rates for up to a year and a half — check out options here.

A home equity loan or home equity line of credit could work if your tiny home is a secondary home or a vacation property — just draw funds from your primary residence.

Take a more in-depth look at your financing options. Compare rates and read reviews on the best personal loans, credit cards and home loans available!

Whether you already own a home or are new to buying a home, getting caught up in house hunting is common. When you admire a fully equipped kitchen or marvel at a walk-in closet that’s bigger than your bedroom, it’s tempting to decide that a hefty mortgage is worth the sacrifice.

Before you make an offer, consider the consequences of being house rich and cash poor. Determining the right price range for your dream home ahead of time makes it more likely you’ll qualify and helps you avoid overextending yourself.

Try these steps for determining how much mortgage you can comfortably afford:

Determine debt-to-income ratio

Your debt-to-income ratio (DTI) is the amount of your debt compared to your income. Mortgage lenders take a close look at this figure when determining how much mortgage you can afford and how much of a loan they will extend you. This ratio is determined by adding up your revolving debt, including credit card minimums, and car, student and other loans. The lower your debt in comparison with your income, the more home you can afford.

Determine the total cost of buying the home

In addition to the mortgage payment, there are a wide variety of one-time and continuing costs associated with buying a home, including the down payment, potential closing costs, property taxes and insurance, homeowner’s association fees and utilities. All of these costs totaled should not be more than 28 percent of your gross income.

Add your housing costs and debt load

In order to get an accurate picture of the amount of money you must generate each month in order to keep paying your mortgage and other loans, add up your total debt and housing costs. This figure should not total more than 38 to 40 percent of your gross income.

Factor in maintenance costs

It’s not a matter of if your home will require maintenance; it’s a matter of when. All homes require upkeep, and some home repairs can be costly, such as roofing. Expect to need to pay about 1 percent of the cost of your home per year on repairs. This means that if you pay $400,000 for a home, you will want to set aside $4,000 a year for maintenance. In terms of budgeting, this means about $333 per month.

Consider life circumstances and lifestyle

Factors such as your financial obligations to others and spending habits also play a part in how much home you can actually afford. When you have dependent children who rely on you financially, this will affect your monthly cash flow. And if your lifestyle is such that you are used to spending a substantial amount of discretionary income, this must also be considered in order to get a true picture of how much mortgage you can really afford. On the other hand, if you are frugal with your money and do a good job of budgeting, you can probably afford a higher mortgage.

When examining your life circumstances and discretionary income, be realistic and honest with yourself. If you’re used to spending $400 a month on activities like traveling and eating out, it’s highly unlikely you’ll be able to cut that amount to zero so you can pay your mortgage. If you are truly committed to buying a home, however, it is possible to reduce your discretionary income and make home ownership a reality.

Keep these tips in mind for ensuring that you purchase a home that fits your financial profile, and you’re likely to soon find yourself picking up the keys to your dream home.

“How Much Home Can You Really Afford?” was written by Julie Bawden-Davis, a staff writer for SuperMoney. Her mission is to help fight your evil debt blob and get your personal finances in tip top shape.
Copyright © 2013 Julie Bawden-Davis
Photo: Images_Of_Money

The next time you step outside into the soothing shade of a tree, know that Mother Nature is giving you much more than shade. As a matter of fact, trees are a gift that keeps on giving.

“Whereas many home items like roofing and siding depreciate in value over time, trees contribute increasingly more value to your property as time goes on,” says R.J. Laverne, a board-certified master arborist at The Davey Tree Expert Company. “The right tree properly maintained can live 100 years or more and increases in value every year.” This seemed like an appropriate post for Arbor Day 2014!

Trees increase home values

Studies show that real estate values are impacted by the presence or absence of trees. “Data shows that buyers are willing to spend three to seven percent more on homes with ample trees versus few or no trees,” says Laverne. A 2010 study done on the value of home landscape trees in Portland found that the presence of street trees increased the sale price of homes by an average of $8,870.

Check out our article about DIY landscaping to beautify any yard, big or small.

Generally, the bigger a tree grows, the more it is worth, which is why older trees tend to be pricier. A variety of factors play into the value of your tree, including its size, health, the tree’s distance from your home and its species. Fast-growing trees like cottonwoods tend to die young, so they aren’t worth as much as slower growing species, like oaks.

A plant appraiser can determine how much an individual tree is worth, but on average it can range from a few hundred dollars for a young tree to thousands of dollars for a mature tree.

Add to the value of your trees how much they save you on energy, and you’re talking a significant amount of money. Shade from trees reduces the need for air conditioning. Studies have shown that parts of cities without cooling shade from trees can literally be “heat islands” with temperatures as much as 12 degrees F. higher than surrounding areas, says Laverne.

Check the value of your trees

You can determine the value of your trees with Davey’s Treesense Mobile App, which is powered by the USDA Forest Service iTree Design. Use the app to calculate the many benefits of your trees, including energy savings, storm water interception and how they improve air quality.

Maintenance is important

Just as properly maintaining your trees can be worth tens of thousands of dollars, not caring for your trees can be a huge financial drain. Improperly maintained trees or those planted in the wrong place experience a shortened life span. A declining tree detracts from your property value, even becoming a liability, and having a failing tree removed is also costly.

With a little investment in terms of pre-planning and maintenance, you can guarantee that your trees thrive. Keep the following tips in mind.

• Plant the right tree in the right spot. Research how large the tree you want to plant grows to make sure that it will fit in the desired planting location at maturity.
• Consider below ground health. The condition of a tree’s root system determines the tree’s overall health. Underground disturbances can profoundly affect the health of a tree, so protect the root zone by avoiding digging and running over the area with heavy equipment and vehicles.
• Mulch. Replace grass under the canopy of a tree with a 2- to 3-inch layer of mulch, which will result in the tree getting more water and beneficial nutrients and micro-ingredients. The wider the area of mulch the better, as long as it starts two to three inches from the trunk.
• Be attentive. Call an arborist if you see signs of decay, such as open cavities, hanging limbs, discolored leaves and early leaf drop. Recognizing the early stages of some tree diseases can make a difference in whether the tree will survive.
• Water. Keeping young trees well watered in the first two to three years is critical to long-term health. In the absence of rainfall, water trees on a weekly basis and more frequently during especially hot weather.
• Staking. The only time staking is necessary is if a tree is in danger of falling over in high winds. Use flat straps to attach the tree to the stakes, and remove the stakes at the tree’s one-year planting anniversary.

• Now that you know what a goldmine you have in your yard, you can give your trees a hug and thank them.

Ready to buy a new home, but not sure if your credit is in good enough shape to qualify you? Preparing your credit to apply for a mortgage and get a loan with a favorable interest rate requires keeping these 10 tips in mind.

Related article: 10 Things To Ask Yourself Before Buying A New Home

1. Get Your Credit Score

Facing reality is your first step in preparing your credit for buying a house. To get your credit score for free, try CreditKarma or Mint. Both sites enable you to get your score without charge. If you order your score from both sites and they are different, average out the two numbers to get a more accurate score. If you want to be extra sure of your score and see the number most often used by mortgage lenders, pay for your score at FICO.

Here’s a useful article if you’re surprised by your credit score: 10 Important Things You Have To Know About The Recent FICO Credit Score Changes.

2. Check Your Credit Report

While your score gives you the specifics, your credit report offers the big picture. The information reflected on your credit report directly affects your score. For instance, it will show if you have any late payments on record and how much of your credit is currently in use.

Get a free credit report for all three major credit bureaus (TransUnion, Equifax and Experian) by visiting AnnualCreditReport.com or from one of these credit reporting sites. Your report will highlight areas in which you need to make improvements.

3. Know Your Credit Score Goal

Understanding the ideal credit score range for buying a home helps you know what to aim for regarding your credit. Credit scores range from 300 (very poor) to 850 (excellent).

According to Fannie Mae and Freddie Mac, you generally need a score of at least 620 to qualify to buy a home. This is the minimum score. If your credit falls between 620-699, you’ll pay a higher percentage rate and go through a more rigorous application process than if your score is in the 700s. Scores of 740-750 or above usually qualify for the best interest rates on the market.

4. Examine Your Credit Report for Accuracy

Considering that your score is directly affected by what is on your credit report, it’s important to verify that all of the information on your credit report is accurate. The U.S. Consumer Financial Protection Bureau advises correcting mistakes on your credit report by contacting the credit reporting company that is showing the error as well as the company that is the source of the information.

5. Pay down Credit Card Debt

The lower the percentage of your credit you have in use, the higher your credit score will be. Prepare your credit for buying a new home by paying down your credit card debt as much as possible. Start with the largest balances, concentrating first on those cards that are maxed out or nearly maxed out.

We’ve got some great tips on paying down your credit card debts with How to Pay off Credit Card Balances More Effectively.

6. Avoid Using Paid-Off Credit Cards

Once you’ve paid down credit card balances, wait 45 days for the changes to be reflected on your credit report. Also avoid using your credit cards while applying for a mortgage and while your home is in escrow. You want the balances to stay as low as possible during this time.

7. Leave Old Open Credit Lines Alone

If you have credit lines on your report still showing, despite the fact that you paid them off some time ago and aren’t using them, don’t close them. Leaving them alone is good for your credit, because a big part of determining your credit score and credit worthiness for getting a mortgage loan focuses on how much credit you have versus how much of it is in use. You want a high amount of credit and a low amount of it in use.

8. Diversify Your Credit Report

In addition to major credit cards, it’s a good idea to have other debt represented on your credit report, such as student loans and car loans. Known as seasoned trade lines, each of these different types of debt should show up on your credit report at least seven to 12 months prior to applying for a mortgage loan.

9. Don’t Open New Credit Lines

At least six months prior to applying for a mortgage, avoid adding new credit of any kind. Even minor credit additions can diminish your chances of getting a mortgage loan. Except for paying off debt, leave all of your accounts alone during this time.

10. Be Patient, It Won’t Happen Overnight

How long it takes to get your score up to snuff for a mortgage depends on a lot of things. This includes what your score is now, and how much money you have available to pay off current debts. Reaching your financial goals doesn’t happen overnight, but keep moving, saving, and preparing your credit. You’ll reach your goal of buying a new home in no time!

Since flipping houses became a hot trend over the last nine years, buying distressed homes, fixing them up and selling them for profit has continued to bolster the real estate industry and the economy.

“There is a steady flow of foreclosures available for flipping, and the practice can be quite lucrative,” says Kurt De Meire, CEO of CountyRecordsResearch.com in Huntington Beach, California. “In California alone, at least 100 properties start foreclosure proceedings daily.”

There is a steady flow of foreclosures available for flipping, and the practice can be quite lucrative. In California alone, at least 100 properties start foreclosure proceedings daily.
Kurt De Meire, CEO of CountyRecordsResearch.com

When it comes to financing for flipping houses, De Meire has used just about every financing avenue available. “There are many ways to acquire and finance property. Don’t limit yourself to the traditional loans for flipping houses. I’ve done it all.”

De Meire’s company operates in California, Arizona, and Nevada and for 27 years has tracked and reported on foreclosures, including defaults, trustee sales and REOs (repossessed property by banks and lenders). The company also processes foreclosures for lenders.

De Meire’s website updates every 15 minutes, giving those who subscribe to his service real-time information on houses that are available for purchase and could be flipped. He also teaches investors how to buy foreclosures, which he says 99 percent of the time buyers purchase for flipping.

If the idea of making money flipping houses interests you, read on for cost-effective ways to get the financing you need.

Methods of buying foreclosed property

There are four main ways to buy foreclosed property. The method you use to buy the property will affect how you finance it.

1. Approach the owner during the default period

The most common way to buy property for flipping is to approach the owner during the three-month default period that occurs after the the lender files the default. During this time, the owner has the option to sell the property or pay the loan to make it current.

If there is equity in the home you buy during the default period, it’s usually a good idea to take over ownership subject to existing financing. This means that you pay all the delinquent mortgage payments and take over the existing mortgage. You also buy the seller out with an agreed upon price.

For example:

For a house worth $500,000 that has a first mortgage of $300,000, De Meire suggests offering the owner $20,000. You must also bring the mortgage current by paying the delinquent amount due, which is $30,000, for purposes of this example. This leaves you with mortgage payments for the $300,000 while you renovate the property for sale. If you’re able to flip the property and sell it for $500,000, you’ll make nearly $150,000.

If there’s no equity in the home and there are multiple loans, offer the owner a short sale proposal, which is an offer equal to less than what is owed on the property.

For example:

For a house worth $500,000 that has an upside down loan of $600,000, approach the owner with a short sale proposal of $400,000 for the property, contingent on the lender’s approval. “This requires the lender to cooperate and accept less than is owed on the loan, which is the definition of a short sale,” says De Meire.

With this scenario, you will want to get funding for the $400,000, which if approved will result in you owning a home with $100,000 in equity.

2. Bid at foreclosure trustee sales

At the end of the three-month default period, if the owner hasn’t sold the house, the property is auctioned at a public trustee sale, which is open to the public. A major advantage of buying a home at a trustee sale is that any loans that are “junior” to the “senior” loans, such as second and third loans, are wiped out. This decreases what is owed on the home.

For example:

Sometimes the lender that forecloses on the loan is a second, third or fourth loan and not the first. That means that at the trustee sale, you would have to pay off that second, third or fourth loan to purchase the property. If it is the second loan you pay off, the third and fourth loans are erased, and so forth.

De Meire describes how this works with a personal example:

“I paid $160,000 cash at a trustee sale for a waterfront property in an exclusive community. The money I paid was for the second loan on the house, which was the loan that went into foreclosure. I took the title of the existing first loan of $500,000, and the third and fourth loans were wiped out. After I had fixed the place up, I sold it for $840,000.”

3. Repossessed property sales (REO)

About 50 percent of homes up for sale at trustee sales have no bidders, says De Meire. Those homes remain the property of the foreclosing lenders. When this occurs, De Meire suggests offering to buy the home at a reduced rate.

For example:

If the home is worth $500,000, but the foreclosing lender still owns it with a loan of $600,000, offer the lender $400,000 before they incur any costs to clean up and repair the property for sale. You pay for the property by getting a mortgage from an outside source or with seller carryback financing, which refers to getting a loan from the foreclosing lender.

4. Approach buyers at trustee sales

Individuals who attend trustee sales are there to buy property to sell. You can speed up this process for them by offering to buy the property they’ve just bought. The buyers have to use cash for the sale, but you can get financing to buy the property from them.

For example:

If at a trustee sale an attendee bought a house worth $500,000 for $350,000 cash, you could offer him or her $400,000. The buyer makes a quick $50,000, and you have a house that is worth $100,000 more than you paid for it. You would finance the $400,000 loan with a traditional or online mortgage.

Top financing for flipping houses

If you don’t have enough cash for flipping houses, you’ll need to secure financing. Here are the top sources to consider:

Bank

Getting a bank loan for flipping a house is the same as getting a traditional mortgage. You invest the appropriate down payment and decide on the length of the loan. The bank pays for the property, and you pay the mortgage until you flip the house.

You will need:

• Good credit of +670
• Low debt-to-income ratio
• A good track record of flipping houses. (If you’re just starting the house flipping venture and have no experience, you may have difficulty getting a traditional bank loan.)

Online mortgage lender

An often easier and much faster way to get a mortgage loan is through an online home loan lender. Sometimes referred to as a hard money loan, this type of financing is secured by the property itself and can be a good option if your credit score is lower than 670. Some online mortgage companies offer 15- and 30-year fixed loans, while others are more focused on short-term loans designed for fixing and flipping. Short-term loans tend to have higher interest rates.

Keep in mind:

• The property must appraise at the purchase price or higher.
• The lower your credit score, the higher the interest rate will be.

Home equity line of credit (HELOC)

If you own a home and have some equity, tapping that equity can be a good source of financing for flipping houses. Home equity lines of credit generally come with variable interest rates, but this usually isn’t an issue if you fix and flip the house within a few months and use the profits to pay off the HELOC. Having a line of credit available is also convenient if you plan to flip houses on a regular basis.

Keep in mind that a HELOC is a second mortgage. If you are unable to make payments, you risk losing your home. More about HELOCs here.

You will need:

• Equity in your home
• Good credit of +670
• Low debt-to-income ratio

Flipping houses can be lucrative when you understand the various ways to finance them. SuperMoney offers a convenient way to compare lenders and products. Click here to read expert reviews and user comments on leading mortgage lenders.

Looking for a long-term investment that can provide a steady income stream? Buy rental property. Rental rates are on the rise, which means that becoming a landlord can be especially profitable.

With the U.S. population increasing by one person every 13 seconds, we need more housing. That means investing in rental property can provide a good return on your investment.
Larry Arth, CEO – Equity Builders Group

Larry is founder and CEO of Equity Builders Group, a Florida-based real estate investment group. “Unlike the volatile stock market, rental properties are tangible assets the investor can control more.”

Before you rush into buying a rental, Arth says to keep in mind that rental properties are in demand.

“Today, there are more investors than homes to sell to them. That means it’s a sellers’ market, and buyers must be flexible about how much they pay and how.”

Read this article for more information on how to buy foreclosed property and renovate it for renting.

Location is everything with rental property financing

To have success with rental property, pay close attention to location and buy in an undervalued market, advises Arth. “Find rental property for sale in a market where the median income pays for and supports the median home price,” he says. “This factor is influenced by the population growth in the area, as well as job growth and diversity of employment.”

Arth advises staying away from communities supported by one industry. As an example, he gives Las Vegas, which is fueled by the gaming industry and suffers when the economy slows. Instead, opt for an area that is growing economically and contains diverse employers.

Currently, Atlanta, Chicago, Philadelphia, Oklahoma City, Orlando, Florida and Birmingham, Alabama, are communities Arth calls “investor advantage markets.” Prime locations tend to change, so he suggests doing your homework about an area before buying there.

Financing rental property

There are three main options to pay for rental property. Which you choose will depend on your current financial situation and the number of rental properties you wish to buy.

Cash and then finance

Currently, the most popular method of financing renter-ready property is to pay cash and then get financing, says Arth.

“Cash is king, and sellers prefer cash. By paying cash, you’re more likely to get the property, and you can often negotiate a cash price that can save you a lot of money.”

You use liquid assets to buy the property and then get preapproval for a loan. This usually means you’ll have a loan in process when you close with cash. Once the loan comes through, you can replenish your reserves.

Investment lender loans

If you choose to finance through a lender, such as a bank or an online mortgage company, find one that specializes in investment property. Such lenders understand investment strategies when it comes to rental property.

“Investment lenders are different than lenders for owner-occupied properties,” says Arth. When seeking an investment lender, he also suggests getting one that is licensed to lend nationwide, or at least in several states.

“If you plan on buying rental properties in different states, having a lender that can service all your loans is the most expedient,” says Arth. “Your information is on file with the company, which makes future loans faster to process.”

During your search for a rental property loan, consider peer-to-peer lending platforms, such as Black Hawk Investments Corp., which only offers secured real estate loans.

Like any mortgage loan, you will have to come up with a down payment of 20 to 30 percent. Interest rates for investment property are also slightly higher than for owner-occupied mortgages.

Multi-property loans

Designed for investors who wish to buy multiple properties, these loans allow you to finance five or more properties at once. Such loans can be used to finance single family and 1-4 unit structures. You can include property you already own, and the homes can be located anywhere in the U.S.

According to Arth, a multi-property loan may not be attached to your FICO credit score, depending on how it’s structured, and the company you use for financing. You can sometimes get financing based on the property itself, rather than your creditworthiness.

Note: [https://www.supermoney.com/reviews/home-loan/b2r-finance] This company does such loans.

If you apply for a multi-property loan through the Fannie Mae 5-10 Properties program, you can often get desirable interest rates, but you need a credit score of at least 720, six months reserves on each of the financed properties and two years of tax returns for each of the rentals.

How to choose a lender?

Compare Home Loan Companies

The lender you choose and the resulting loan can greatly affect how profitable you are as a landlord. For that reason, it pays to compare lenders and weigh all of your options before you make a decision. Keep in mind that terms can often be negotiated. To make an informed comparison, ask each lender for their interest rates, required down payment percentage and any fees.

Buying rental property can be a profitable venture. SuperMoney offers a convenient way to compare lenders. Click here to read expert reviews and user comments on leading mortgage lenders.

Recommended Lenders for Mortgages and Real Estate Investments

Lender	Maximum Loan
	$200 million	Apply
	up to $625,000	Apply

Are you house shopping and want home sellers and real estate agents to take you seriously? Pre-qualify for a home loan first. A pre-qualification letter from a mortgage lender that states the mortgage amount you qualify for proves you’re not just a looky-loo.

“Buyers who get a pre-qualification on a loan have a leg up,” says Michael Fisher, a licensed real estate agent with Century 21 Beachside Realtors.

Besides showing that they’ve done their homework, the pre-qualification lets everyone involved know they’re serious. If there are multiple offers on a property, they’ll be more likely to get theirs accepted.Michael Fisher, Century 21 Beachside Realtors

According to this report, 11% of banks reported an easing of mortgage loan standards in Q3 of 2016. No banks declared a tightening. It’s clearly getting easier to get mortgage-approved.

Advantages to home loan pre-qualification

The process of pre-qualifying for a home loan involves supplying a lender with financial information, which the lender uses to calculate the maximum mortgage amount for which you qualify. You receive a pre-qualification letter that states how much home you can afford.

You can show the letter to sellers and real estate agents as proof that you are serious about buying and that you qualify. Knowing the loan amount you qualify for also helps you know which homes are in your price range.

In what is currently a seller’s market, pre-qualification is becoming more and more important, says realtor and attorney Bruce Ailion of RE/MAX Greater Atlanta.

Pre-approval is critical to the buyer. We are in a highly competitive market where cash buyers make up anywhere between 20-80 percent of sales. A strong pre-approval can be nearly as strong as a cash offer.Bruce Ailion

Pre-qualification versus Pre-approval

When you start shopping for a home, you may hear the term pre-qualify and pre-approval used interchangeably. These terms are similar, but not the same.

Pre-qualifying with a lender often only requires a soft credit check, which does not appear on your credit report and won’t hurt your credit score (but that’s not always the case so double check before applying). You provide the lender with certain financial information and get a pre-qualification letter that states the maximum mortgage amount for which you’d qualify.

Pre-approval goes a step further. The lender does a hard credit pull and has you complete an application. They review your finances and application and then approve you for a certain loan amount. Since this process involves having your credit checked, which can cause a drop in your credit score, it’s best to wait until you get close to buying before getting pre-approved.

Pre-qualifying for a home loan is easier than it sounds and is the first step in loan optimization, says Jon Boyd, broker/manager of The Home Buyer’s Agent of Ann Arbor, Inc.

Once you have a purchase contract, you may not have time to find the best loan. Pre-qualification allows you to get started on that investigation early in the process.Jon Boyd

Steps to pre-qualify for a home loan

Pre-qualifying for a home loan is easier than it sounds. The following steps will guide you through the process.

1. Choose a mortgage lender

You need a lender to determine how much home you can afford and to give you a letter stating this information. Check with several lenders and compare their mortgage interest rates and loan options. It pays to do your homework now and choose the best mortgage loan lender, because once you find a home you like, you’ll want to apply for loan approval as soon as possible.

Interest rates

The interest rate affects how much you’ll pay on a monthly basis, so getting the best interest rate possible is important. Look at the Annual Percentage Rate (APR) of each lender. This shows the interest rate the lender will charge for the loan and factors in most additional fees, such as mortgage points and lender origination fees.

Loan options

Most lenders offer fixed and adjustable rate mortgages. Fixed rate mortgages have interest rates guaranteed to remain the same for the life of the loan, which means you can count on the same mortgage payment. Adjustable rate mortgages (ARMs) have a fixed rate for the first 5 to 10 years and then it becomes adjustable. This means the interest rate can fluctuate over time.

Other loan types include FHA loans, which are common for first-time homebuyers and offer low down payments, and VA loans for veterans, which require little to no down payment. There are also Jumbo Mortgages for higher priced homes.

You’ll also need to decide if you prefer a 10, 15, 20, 25 or 30-year loan. The length of the loan will affect the amount of your monthly mortgage payment and how much interest you pay over the life of the loan. Shorter loan lengths mean higher monthly payments but less interest paid overall.

Best home loans

The following online lending companies offer some of the best loans available in terms of low interest rates and high customer service ratings. Compare interest rates and loan options to choose the ideal lender to pre-qualify you for a home loan.

Recommended Lenders for Mortgages and Real Estate Investments

2. Contact your chosen mortgage lender

Ask your chosen mortgage lender to pre-qualify you. The lender will require that you provide financial information that will help them determine how much mortgage you can afford to pay each month. The information you provide will also confirm the type(s) of loans available to you.

Some lender applications call for basic information, while others will need more extensive input. There is no standard method for this prequalifying a borrower within the mortgage industry.

Although requirements vary, you will probably need to provide the lender with the following information to get pre-qualified:

• Approve a soft credit inquiry. A score of 720+ will qualify you for the most favorable interest rates.
• Payment history (included in your credit report)
• Employment history
• Amount of debt
• Amount of income and other assets
• Money available for the down payment

Read this article for a more detailed guide on how to apply for a mortgage.

3. Get your pre-qualification letter

Once the lender determines how much you can borrow and the interest rate you qualify for, most lenders will provide a letter that states this information. You can show this letter to a real estate agent looking for a home on your behalf, so he or she can guide you to homes in your price range.

You can also show the letter to sellers to show them that you are qualified and therefore serious about any offers you make. Sellers will be more likely to accept your offer when they know you’re pre-qualified.

If you’re negotiating to buy a house and don’t want the seller to know that you’re pre-qualified for more than you’re offering, ask your lender to give you a letter that coincides with the amount you’re offering. For example, if you’re pre-qualified for $375,000, but you’re offering $325,000, ask for a letter that states that you’re pre-qualified for the smaller amount.

Buying a home is an exciting venture. Make the process run more smoothly by taking the time to pre-qualify for a home loan before you start house hunting. For information on the best home loans available, consult SuperMoney’s Home loan reviews page.

Every decision to borrow money, whether it’s for a car loan , a home loan or to meet short-term personal needs with low interest personal loans, should be carefully considered before you take on the new commitment.  We invite you to browse our site to compare credit offers and to make use of our handy resources to check and manage your credit profile.

CAPTAIN’S TIP:   You should choose a loan with no less scrutiny than you would choose a life companion, as in both cases it’s difficult to sever ties.

Looking for best personal loans? Check out our personal loan reviews here.

How To Manage Your Personal Finances Successfully

Gigwalk Review: The Largest Mobile Workforce Platform

Debt consolidation loans, consumer credit counseling, debt settlement and bankruptcy, are all options that should be evaluated if you find yourself in a tough spot.  If you’re struggling to keep up with your debt, it’s important to understand the advantages and disadvantages associated with each of these options.  The Captain has a keen eye for red flags and he wants to be sure you have sufficient information at your finger tips to better understand your debt relief options and to avoid costly mistakes and traps.

CAPTAIN’S TIP:

The bad guys smell fear.  Being in debt can be scary but if you find yourself in over your head, it’s important that you don’t panic.  If you panic, you’ll be more vulnerable to scams and traps.  Try and keep calm while you consider your options and you’ll find yourself better able to make wise decisions and to rid yourself of the “Debt Blob”.

8 Important Things Debt Collection Agents Don’t Want You to Know

If your nerves are in tatters from screening calls and your thumb is sore from hitting ignore on your cell phone, it’s time to pull your head out of the sand. Get familiar with your rights when it comes to debt collection.

Chances are you have more options than you might expect regarding your debt situation. Collection agents bank on the fact that you may not be familiar with the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Billing Act (FCBA), which were created to protect consumers in debt.

Educate yourself on what collection agents can and can’t do, and you’ll find those pesky phone calls a lot less bothersome.

1. No Down Payment Required

Debt collectors can earn a hefty commission from collecting from you—generally 30 to 50 percent if they’ve reached their monthly quota.

For that reason, they’ll often insist on receiving a large payment to get repayment started or to prevent collection fees from growing. No need to fall for these tactics. Just pay what you can.

2. Payment Deadlines Are Non-Existent

You’re already late on your payments—that’s why debt collectors are calling you. Creating a sense of urgency by insisting on some mythical deadline is an attempt to get you worried enough to pay up as soon as possible. Collection agents are hedging their bets with this tactic. They know that the longer lead time they give you, the less likely you are to pay.

3. You Don’t Have to Answer the Calls

You can ignore debt collectors if you want. No law requires that you work with them or answer their phone calls. And if you request that they stop contacting you via written letter or inform them that an attorney is handling your debt, they must immediately refrain from contacting you. And by law, collectors can only contact you between 8 am and 9 pm.

4. Consequences Are Often Exaggerated

Avoid falling for the hype when a debt collector tells you that your credit score is going to suffer (it most likely already has), or they’re going to seize your belongings (illegal in some states). The only thing they can do is demand that you pay—but you don’t have to comply.

5. Personal Financial Information Isn’t Required

If a debt collector tries to get information from you such as your bank account numbers, employment background and your social security number, flat out refuse to divulge the information.

Such personal financial facts aren’t required, and giving them out can be dangerous at worst and make the collection efforts more annoying at best.

Related article: 10 Early Signs That Your Identity Might’ve Been Stolen

Personal financial information can help debt collectors find you if you move or change your number or sue you for repayment. When they have your bank account and social security number, they can discover your bank account balances. So when you tell them you’re broke and they mention the $500 you have in your account, you’ll find yourself explaining how the money is earmarked for other bills.

6. Crossing State Lines Is Prohibited

Debt collectors don’t want you to know that if a company has sued you for repayment and won, but you are in a different state, they can’t legally force you to pay. Transferring the judgment for repayment to another state is often not financially feasible for them.

7. Wage Garnishments Have Limits

If a debt collector warns that your wages could all be garnished, they’re lying.

“For ordinary garnishments (i.e., those not for support, bankruptcy, or any state or federal tax), the weekly amount may not exceed the lesser of two figures: 25 percent of the employee’s disposable earnings, or the amount by which an employee’s disposable earnings are greater than 30 times the federal minimum wage (currently $7.25 an hour).” – U.S. Department of Labor

For instance, if you live in California, where the minimum wage is $9 and you make $300 a week, then only $30 could be garnished from your paycheck each week. You also have the option to show that garnishment would cause you and your family financial hardship.

8. Student Loan Repayment Options Exist

Thanks to the 1992 Higher Education Act, you have the right to show financial hardship and set up an affordable repayment plan with the collection agency that can be as low as $10 a month to repay student loans. Once you successfully pay nine out of 10 payments on time, the Department of Education takes over your student loans once again. Knowledge truly is power when it comes to debt collection.

By keeping these consumer rights in mind, you’ll find yourself being more assertive with debt collectors and immune to their high pressure tactics, which means you’re better able to make the right decisions for your financial situation.