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What should I know before buying a home?Here are some tips that could save you a lot of time, money and trouble.Plan ahead. Establish good credit and save as much as you can for the down payment and closing costs.
Get pre-approved online before you start looking. Not only do real estate agents prefer working with pre-qualified buyers; you will have more negotiating power and an edge over homebuyers who are not pre-approved.
Set a budget and stick to it.
Know what you really want in a home. How long will you live there? Is your family growing? What are the schools like? How long is your commute? Consider every angle before diving in.
Make a reasonable offer. To determine a fair value on the home, ask your real estate agent for a comparative market analysis listing all the sales prices of other houses in the neighborhood.
Choose your loan (and your lender) carefully. For some tips, see the question in this section about comparing loans.
Consult with your lender before paying off debts. You may qualify even with your existing debt, especially if it frees up more cash for a down payment.
Keep your day job. If there is a career move in your future, make the move after your loan is approved. Lenders tend to favor a stable employment history.
Do not shift money around. A lender needs to verify all sources of funds. By leaving everything where it is, the process is a lot easier on everyone involved.
Do not add to your debt. If you increase your debt by financing a new car, boat, furniture or other large purchase, it could prevent you from qualifying.
Timing is everything. If you already own a home, you may need to sell your current home to qualify for a new one. If you are renting, simply time the move to the end of the lease.How Much House Can I Afford?
How much house you can afford depends on how much cash you can put down and how much a creditor will lend you. There are two rules of thumb:You can afford a home that’s up to 2 1/2 times your annual gross income.Your monthly payments (principal and interest) should be 1/4 of your gross pay, or 1/3 of your take-home pay.The down payment and closing costs – how much cash will you need? Generally speaking, the more money you put down, the lower your mortgage. You can put as little as 3% down, depending on the loan, but you’ll have a higher interest rate. Furthermore, anything less than 20% down will require you to pay Private Mortgage Insurance (PMI) which protects the lender if you can’t make the payments. Also, expect to pay 3% to 6% of the loan amount in closing costs. These are fees required to close the loan including points, insurance, inspections and title fees. To save on closing costs you may ask the seller to pay some of them, in which case the lender simply adds that amount to the price of the house and you finance them with the mortgage. A lender may also ask you to have two months’ mortgage payments in savings when applying for a loan. The mortgage – how much can you borrow? A lender will look at your income and your existing debt when evaluating your loan application. They use two ratios as guidelines:Housing expense ratio. Your monthly PITI payment (Principal, Interest, Taxes and Insurance) should not exceed 28% of your monthly gross income.Debt-to-income ratio. Your long-term debt (any debt that will take over 10 months to pay off – mortgages, car loans, student loans, alimony, child support, credit cards) shouldn’t exceed 36% of your monthly gross income.Lenders aren’t inflexible, however. These are just guidelines. If you can make a large down payment or if you’ve been paying rent that’s close to the same amount as your proposed mortgage, the lender may bend a little. Use our calculator to see how you fit into these guidelines and to find out how much home you can afford.Why Should I Refinance?
If you have a low 30-year fixed interest rate you’re in good shape. But if any of these Five Reasons applies to your situation, you may want to look into refinancing.1. Decrease monthly payments.
If you can get a fixed rate that’s lower than the one you currently have, you can lower your monthly payments.2. Get cash out of your equity.
If you have enough equity you can get cash out by refinancing. Just decide how much you want to take out and increase the new loan by that amount. It’s one way to release money for major expenditures like home improvements and college tuition.3. Switch from an adjustable to a fixed rate.
If interest rates are increasing and you want the security of a fixed rate, or, if interest rates have fallen below your current rate you can refinance your adjustable loan to get the fixed rate you’re looking for.4. Consolidate debt.
You can refinance your mortgage to pay off debt, too. Simply increase the new loan amount by the amount you need and the lender will give you that cash to pay off creditors. You’ll still owe the lender but at a much lower interest rate – and that interest is tax-deductible.5. Pay off your mortgage sooner.
If you switch to a shorter term or a bi-weekly payment plan, you can pay off your home earlier and save in interest. And if your current interest rate is higher than the new rate, the difference in monthly payments may not be as big as you’d expect.Is refinancing worth it?
Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance.Use the reasons above as a guideline and determine whether or not refinancing is the right thing to do. You can also use our refinance analysis calculator to help you decide.What Are the Costs of Refinancing?
Here’s what you can expect to pay when you refinance:The 3-6 Percent Rule
Plan to pay between 3% and 6% of the amount of the new loan amount (if want cash-out, the loan amount will be larger). Yet some lenders offer no-cost refinancing in exchange for a higher rate.Getting to the Points
Points play a big part in how much it’ll cost to refinance – the more points you pay, the lower your interest rate. Points are a good idea if you’re planning to stay in your home for a while, but if you’ll be moving soon you should try to avoid paying points altogether.Negotiate the Fees
Be aggressive and investigate the fees your lender is asking you to pay. You may not need an appraisal, or your loan-to-value may be such that you no longer need Private Mortgage Insurance. Sometimes if you refinance with your current lender they won’t need a credit report. With a little research it’s amazing how much you can save.Here, we’ve explained the different loan refinancing fees.Application Fee: This covers the initial costs of processing your loan application and checking your credit.Appraisal Fee: An appraisal provides an estimate or opinion of your property’s value.Title Search and Title Insurance: A Title Search examines the public record to discover if any other party claims ownership of the property. Title Insurance covers you if any discrepancies arise in ownership. (A reissue of the title can save 70% over the cost of a new policy.)Lender’s Attorney’s Review Fees: In any financial transaction of this scope, a lawyer’s participation ensures that the lender isn’t legally vulnerable. This fee is passed on to you.Loan Origination Fees: This is the cost of evaluating and preparing a mortgage loan.Points: These are basically finance charges you pay the lender. One point equals 1% of the loan amount (for example, one point on a $75,000 loan is $750). The total number of points a lender charges depends on market conditions and the loan’s interest rate.Prepayment Penalty: Some mortgages require the borrower to pay a penalty if the mortgage is paid off before a certain time. FHA and VA loans, issued by the government, are forbidden to charge prepayment penalties.Miscellaneous: Other fees may include costs for a VA loan guarantee, FHA mortgage insurance, private mortgage insurance, credit checks, inspections and other fees and taxes.How to Save Money Refinancing:Research all costs and fees.Don’t be afraid to negotiate with your lender.Shop around for the lowest rates.Check with your current lender for lower rates with costs that are reduced or waived.What Kinds of Mortgages Are Available?Fixed-Rate Mortgage – interest rates and monthly payments remain unchanged for the life of the loan
Adjustable-Rate Mortgage – interest rates and monthly payments can go up or down, depending on the market
Hybrid Loans – a combination of fixed and adjustable mortgages
· How do you decide which loan is best? These questions may help.How much cash do you have for a down payment?
What can you afford in monthly payments?
How might your financial situation change in the near future and beyond?
How long do you intend to keep this house?
How comfortable would you be with the possibility of your monthly payments increasing?What is a Fixed Rate Mortgage?
This is the most common loan arrangement in the U.S. With a fixed-rate mortgage the loan’s principal and interest are amortized, or spread out evenly, over the life of the loan, giving you a predictable monthly payment.The upside is, if rates are low, you can lock in for as long as 30 years and protect yourself against rising rates. However, if rates fall you can’t change your rate without refinancing the loan and that could cost money.The 30-year Fixed-Rate Mortgage, the most popular and easiest to qualify for, will give you the lowest payment. But you can also get a 20-, 15- and even a 10-year fixed-rate mortgage if you wish to save interest and pay your home off sooner.What is an Adjustable Rate Mortgage?
With Adjustable-Rate Mortgages (ARMs) interest rates are tied directly to the economy so your monthly payment could rise or fall. Because you’re essentially sharing the market risks with the lender, you are compensated with an introductory rate that is lower than the going fixed rate.How often does the interest rate change?
That depends on the loan. Changes can occur every six months, annually, once every three years or whenever the mortgage dictates.How much can my rate change?
Your ARM will stipulate a percentage cap for each adjustment period, which means your interest may not increase beyond that percentage point. If the market holds steady, there may be no increase at all. You may even see your payment decrease if interest rates fall.How are the changes determined?
Every ARM loan is tied to a financial market index, such as CDs, T-Bills or LIBOR rates. Your rate is determined by adding an additional percentage (known as a margin) to that index’s rate. When the index rises or falls, your rate rises or falls with it.Is there a limit to how much interest I’ll be charged?
Yes. It’s called a ceiling, or lifetime cap. This is a guarantee that your interest rate will never exceed a designated percentage. For instance, if your introductory rate was 5% and you have a lifetime rate cap of 6% (meaning that your interest rate can never increase more than 6% during the life of the loan) then your ceiling would be 11%.What are the benefits of an ARM?’ With a lower initial interest rate (usually 2% to 3% lower than fixed-rate mortgages), qualifying is easier and the payments are more manageable at first.
‘ You may qualify for a larger loan than you would with a fixed-rate mortgage.
‘ If you’re only planning to stay a short time the interest rate is likely to stay lower than that of a fixed-rate mortgage.
‘ If you expect regular pay increases that would cover the increase in your interest, or if you believe interest rates will fall, an ARM might be the wiser choice.
· A few words of caution:Negative Amortization -This happens when a lender allows you to make a payment that doesn’t cover the cost of principal and interest. Watch for this, it may be used as a lure to get you into a home with the promise of low initial payments. Or, a lender may give you a payment cap instead of a rate cap. In this mortgage arrangement, if interest rates increase, your monthly payments could stay the same – but the higher interest will still be charged to your loan, adding to it instead of reducing it. Either way, if you find yourself with a negative amortization ARM, you’ll be adding to your debt.Discounted interest rates – Sometimes a lender will advertise an unusually low initial rate. This is a discounted rate, and it’s essentially a marketing tool. If your ARM offers a discounted interest rate you are certain to see an increase at your next adjustment period, even if interest rates don’t change.What is a VA Loan?
Administered by the Department of Veterans Affairs, these special loans make housing affordable for U.S. veterans. To qualify you must be a veteran, reservist, on active duty, or a surviving spouse of a veteran with 100% entitlement.A VA loan is simply a fixed-rate mortgage with a very competitive interest rate. Qualified buyers can also use a VA loan to purchase a home with no money down, no cash reserves, no application fee and reduced closing costs. Some states allow a VA loan for refinancing as well.Many lenders are approved to handle VA loans. Your VA regional office can tell you if you’re qualified.What is a FHA Loan?
FHA loans are designed to make housing more affordable for first-time home buyers and those with low to moderate income.Both fixed- and adjustable-rate FHA loans are available, and in most states, an FHA loan can be used for refinancing. The difference is, they’re insured by the U.S. Department of Housing and Urban Development (HUD). With FHA Insurance, eligible buyers can put down as little as 3% of the FHA appraisal value or the purchase price, whichever is lower. Qualifying standards are not as strict and the rates are slightly better than with conventional loans.Convertible ARMs
Some adjustable-rate mortgages allow you to convert to a fixed rate at certain specified times. This mitigates some of the risk of fluctuating interest rates, but there will be a substantial fee to do it. And your new fixed rate may be higher than the going fixed rate.Two-Step Mortgages
This is an ARM that only adjusts once at five or seven years, then remains fixed for the duration of the loan. Not only will you benefit from a lower rate for the first few years, but the new fixed rate cannot increase by more than 6%. It may even be lower, depending on market conditions. Then again, you also run the risk of adjusting to a much higher rate.Convertible Loans
Another ARM choice, the convertible loan offers a fixed rate for the first three, five or seven years then switches to a traditional ARM that fluctuates with the market. If you strongly believe that interest rates will fall a convertible loan might be a smart move.Balloon Mortgages
These short-term loans begin with low, fixed payments. Then, in five, seven or ten years a single large payment (balloon) for all remaining principal is due. While this saves money up front, coming up with a large payment at the end of the loan may be difficult. Some lenders will allow you to refinance that payment, but some won’t, so be sure you know what you’re getting into.Graduated Payment Mortgage (GPM)
With a GPM you pay smaller payments that gradually increase and level off after about five years. Lower payments can make it possible for you to afford a bigger home, but they’ll be interest-only payments, adding nothing to the principal. This could put you in a negative amortization situation.How Can I save on a Fixed Rate Mortgage?
Short Term Mortgages
You don’t have to finance your home for 30 years. Granted, the payments will be lower, but you’ll be paying them longer. You could, instead, opt for a period of 20, 15 or even 10 years, pay your home off sooner and save in interest.Furthermore, lenders offer much more attractive interest rates with short-term loans, so your payments may not be as much as you’d think.The table below shows you the interest savings on a $100,000 loan at 8.5% interest:30 yr$768.91$176,808.9520 yr$867.83$108,277.5815 yr$984.74$ 77,253.12By paying $215.83 more a month on a 15-year mortgage, you’d save $99,555.83 in interest over a 30-year loan – and own the house in half the time.What Determines the Cost of a Mortgage?
There are five factors that determine the ultimate cost of a mortgage.The principal, or amount of the loan, is the total amount you borrow (the purchase price minus your down payment).The interest rate adds significantly to the cost of your mortgage. Fixed or adjustable, the interest paid at the end of the loan can exceed the original cost of the home itself. For instance, a $100,000 loan balance at 8.5% for 30 years will cost you $277,000 by the time the loan is retired.The term of the loan is the length of time until the loan is paid off. A longer term means more interest and higher cost.Points are interest paid on the loan and they’re purely optional. You pay points at closing if you want to reduce the interest rate and make your monthly payments smaller. One point equals one percent of the loan amount.Fees are paid to the lender at closing to cover the costs of preparing the mortgage. They can vary according to where you live and what type of loan you’re securing.While points and fees are not financed, they still contribute to the cost of the mortgage.What is Private Mortgage Insurance?Private Mortgage Insurance, or PMI, is insurance purchased by the buyer to protect the lender in case the buyer defaults on the loan. PMI is generally applied when you put down less than 20% of the home’s purchase price. The reason is this:With 20% down, you are considered a low risk. Even if you default the lender will probably come out ahead because they’ve only loaned 80% of the home’s value and they can probably recoup at least that amount when they sell the foreclosed property.But with 5% or 10% down, the lender has a lot more invested in the loan and if you default, they will almost surely lose money. This is why lenders require buyers to purchase PMI if they put down less than 20%. It’s insurance that, no matter what happens, the lender will recoup its investment.How does PMI increase your buying power?
In simplest terms, PMI allows you to put less money down, and the benefits are as follows:You can read the entire article at:[http://www.dtnmortgage.com/FREQUENTLY.ASKED.QUESTIONS.REGARDING.HOME.MORTGAGE.LOANS.html]

The first myth I would like to focus on regarding search engine optimization is the myth that revolves around the notion that search engine optimization (SEO) is complicated.I am always interested in the reasons people give for certain thoughts and I have heard many regarding how complicated search engine optimization (SEO) can be – especially for non-seo professionals. But I must say that I have not found this opinion to be true regarding search engine optimization.I do not feel that search engine optimization (SEO) is complicated.I know many people who have achieved great search engine rankings using SEO, including myself, and most have stated that using search engine optimization on their websites was not complicated. At times some stated that depending on what they were doing it took time to complete the SEO work; but seo being complicated – no.I tend to feel that if individuals have an average amount of computer knowledge and skills and they have good SEO information that they can use to guide them through the SEO work process, they will not have any problems concerning search engine optimization.Basically, it is not search engine optimization that makes SEO work difficult; it is the lack of access to good information concerning SEO that can make search engine optimization (SEO) appear to be much more difficult than it actually is in all honesty.SEO work can take time to complete depending on the level of detail involved; but it is not brain surgery.Now can anyone do SEO? – the answer is no; however, the people who would have trouble doing SEO work are the same people who would have trouble completing a large variety of computer related tasks.Generally, if an individual can operate a computer well enough to follow instructions to install software, they usually can complete seo work successfully provided they have good instructions and information.Search engine optimization work is not as simple and/or as quick as adding a few meta tags; but search engine optimization is not nearly as hard and time consuming as you might have been lead to believe from prior discussions and/or from information you have read concerning SEO.I feel the main reason that some people portray search engine optimization (SEO) as being complicated concerns the amount of money that is generated directly and indirectly from the utilization of search engine optimization (SEO).Search engine optimization (SEO) is a multi million-dollar industry.Great organic(free) search engine results literally help generate billions of dollars each year for website owners and search engine optimization is a beneficial technique in helping to achieve those organic(free) search engine rankings.It is no wonder with billions of internet sales and advertising dollars available on a yearly bases that search engine optimization (SEO) which can provide an individual or company a competitive edge in the ultra high pace internet world will attract a variety of opinions, ideas, supporters and detractors.Moreover, through a combination of perception and reality that highlights search engine optimization as a key to increasing internet sales, search engine optimization is a very popular topic for decision makers within many companies and frankly if these individuals along with the general internet community can be convenience that search engine optimization is complicated then many of these people will decide to outsource SEO related services, hire search engine optimization employees and/or contract consultants to complete their search engine optimization work. Thus, money is a key player in how search engine optimization is portrayed in the media, inside the seo industry and at large within the general internet community.If used properly search engine optimization can help to achieve a higher search engine ranking for a website.Many people are almost afraid and/or in awe of SEO because much of the information concerning search engine optimization (SEO) is not shared with the general public, which has created a cloud of mystery around the entire industry. Therefore, the average person does not understand search engine optimization and/or its benefits because of this situation.However, the lack of good information should be expected considering the current competitive nature of business on the internet and the amount of money that can be earned from achieving good search engine rankings for a website.

There are two different categories of commercial financing from an accounting perspective: on-balance-sheet financing and off-balance-sheet financing. Understanding the difference can be critical to obtaining the right type of commercial financing for your company.Put simply, on-balance-sheet financing is commercial financing in which capital expenditures appear as a liability on a company’s balance sheet. Commercial loans are the most common example: Typically, a company will leverage an asset (such as accounts receivable) in order to borrow money from a bank, thus creating a liability (i.e., the outstanding loan) that must be reported as such on the balance sheet.With off-balance-sheet financing, however, liabilities do not have to be reported because no debt or equity is created. The most common form of off-balance-sheet financing is an operating lease, in which the company makes a small down payment upfront and then monthly lease payments. When the lease term is up, the company can usually buy the asset for a minimal amount (often just one dollar).The key difference is that with an operating lease, the asset stays on the lessor’s balance sheet. The lessee only reports the expense associated with the use of the asset (i.e., the rental payments), not the cost of the asset itself.Why Does It Matter?This might sound like technical accounting-speak that only a CPA could appreciate. In the continuing tight credit environment, however, off-balance-sheet financing can offer significant benefits to any size company, from large multi-nationals to mom-and-pops.These benefits arise from the fact that off-balance-sheet financing creates liquidity for a business while avoiding leverage, thus improving the overall financial picture of the company. This can help companies keep their debt-to-equity ratio low: If a company is already leveraged, additional debt might trip a covenant to an existing loan.The trade-off is that off-balance-sheet financing is usually more expensive than traditional on-balance-sheet loans. Business owners should work closely with their CPAs to determine whether the benefits of off-balance-sheet financing outweigh the costs in their specific situation.Other Types of Off-Balance-Sheet FinancingAn increasingly popular type of off-balance-sheet financing today is what’s known as a sale/leaseback. Here, a business sells property it owns and then immediately leases it back from the new owner. It can be used with virtually any type of fixed asset, including commercial real estate, equipment and commercial vehicles and aircraft, to name a few.A sale/leaseback can increase a company’s financial flexibility and may provide a large lump sum of cash by freeing up the equity in the asset. This cash can then be poured back into the business to support growth, pay down debt, acquire another business, or meet working capital needs.Factoring is another type of off-balance-sheet financing. Here, a business sells its outstanding accounts receivable to a commercial finance company, or “factor.” Typically, the factor will advance the business between 70 and 90 percent of the value of the receivable at the time of purchase; the balance, less the factoring fee, is released when the invoice is collected.Like with an operating lease, no debt is created with factoring, thus enabling companies to create liquidity while avoiding additional leverage. The same kinds of off-balance-sheet benefits occur in both factoring arrangements and operating leases.Keep in mind that strict accounting rules must be followed when it comes to properly distinguishing between on-balance-sheet and off-balance-sheet financing, so you should work closely with your CPA in this regard. But with the continued uncertainty surrounding the economy and credit markets, it’s worth looking into the potential benefits of off-balance-sheet financing for your company.