Points To Consider Before Applying For Home Loan

Home loanReal estate developers are working very hard to make your dream of owning a house come true. Most of the people go for home loan while buying a new home as it saves you from the tax and also reduces the burden of paying the entire amount of loan altogether. There are many points which are to be considered before applying for home loan. If you are not active before applying for home loan then you can make mistake and have to pay more interest and other payments then you actually need to pay.

  • Know your loan eligibility

One of the important factors to be considered before applying for home loan knows your loan eligibility. The amount of loan which banks sanction depends upon your past record of repayment of loans, your income and your credit card dues. Before applying for home loan, you must check whether you have been regular in paying all your dues and previously taken loans. You must have a check that how much amount you can spare on the monthly EMIs from your regular income. Before you apply for home loan, you must be aware that this much specific amount you are going to spend on EMI. If you are able to spare this amount then only apply for home loan. Usually banks offer loan up to the 80% of the total cost of your property but this is not compulsory.

  • Check your credit score

Before applying for home loan, you must have a check on your credit score. You will get your credit score between the scale of 300 and 900 points. These points are assigned to you on the basis of your existing liabilities and loans, loan repayments, bank account statement, credit card bill payment and also on the base that how much time you have applied for the loan till now. This all things are taken into consideration while applying for home loan. For knowing the credit score, if you are paying processing fees to three to four banks to know the maximum limit of yours then you can be called as credit hungry according to CIBIL and the chances of getting loan is reduced. This CIBIL rating gives the net salary excluding your variable heads and existing EMIs and loans as it predicts the vital capacity of the person applying for home loan to repay it.

  • Choose your lender

A very important factor to be considered while applying for home loan is your lender. Make sure to do a detailed research while finding a financing company or bank while taking home loan. Also see what are the terms and conditions of giving a loan and also see the interest rate and tenure of the loan. Interest rate is very important factor but this does not mean that you should avoid other factors like customer service or the charges if there is early termination of the home loan. Check these details before you choose the lender for your home loan.

Credit Habits To Develop at 20

Credit Habits at 20 Teenage, it’s the age generally preferred for fun, enjoyment and living your life in craziest ways. But after teenage when you enter into twenties, it’s high time you need to start to plan your saving habits and credit tendency. You need to have an idea regarding your credit habits and mold it into right direction and make it stable if it’s not. Here are 5 simple ways of credit habits one should develop at their 20’s and maintain it lifetime.

  • Educate Yourself

Credit, it’s not such a thing with which you want to take a chance with or conduct experiment with. You become double sure with your credit related things. It’s like a cup of tea to kill your credit health rather than to improve or maintain it. You are availed with only one chance to build your credit history from scratch. Thus before starting up with your credit habits, it’s pretty much important to get proper knowledge and education regarding what factors to go in your credit score and how to read your credit report.

If you are reading this you must be encouraged to take the first step. However it’s very simple to get educated as internet offers you with all available information you want.  You should have information regarding ins and outs of your credit and also about personal finance. It’s not like you have to be some expert but have just that much education which can help you get a good start with your credit journey.

  • Monitor Your Credit

Having a track on your credit reports and scores could be beneficial to you in 2 ways. The first thing is that it gives you a good opportunity to learn how your credit reacts to different financial action.  Tracking your score helps you to see firsthand how it affects each time you do something credit related like applying for a new loan or paying down your balances. Second benefit you get from tracking your score is that you can detect fraud and errors on your report and act to it promptly.

Now you would be wondering how you would do this. It is very easy. You can get paid and free service that allows you to monitor your credit reports or scores. Just check whether it is free or payable. You can also get free copy of your credit report every year from AnnualCreditReport.com.

  • Build A Crisis Fund

As proved by the survey conducted by the February Bank rate, 21 percent of people in the age group of 18 to 29 years have more credit card debt than they have in their crisis fund. This is irrelevant and improper as financial emergency can occur anytime and you must have  savings for that emergency. If you don’t have such savings then it can cause trouble and can deteriorate your credit tendency.

You can create a crisis fund by putting aside a specific amount from your each pay and over a time it would be a good amount which can save you in trouble situations.

  • Pay Your Bills On Time

One of the best alternatives to build credit is timely payment. Your credit score is measured by repayment of debt in a timely manner. For calculating credit score, the most highly weighted factor is your on time payment percentage.  Just a single late payment can detain your credit health for years.

Generally people have a problem of forgetting their dates of payment. You can try out setting up calendar reminders to email or text themselves when credit cards due date is coming up. If you have several numbers of credit cards and have a problem keeping track of all of them, then you can fix a common date for all of them making it easier for you.  You can also enroll in autopay services. If none of these work out, you can pay your all bills on first day of every month.

  • Limit Your spending

The most difficult habit to cultivate among all of this is to limit your spending when you already know you have a good amount of income, you cannot resist yourself from limiting your spending. But you must be aware that loans and credit cards are not free money. You have to repay them back. Failure in repaying may result in suffering of your credit score.

You must be thinking how to limit spending? Before purchasing ask yourself a question do you really need it or without purchasing also it can work. This will help to reduce extra purchases.

How To Organize Your Financial Records

Financial RecordsDo you receive financial statements, electric bills and bank documents on a daily basis? Then, there are chances that you may get confused while keeping tab of all details. In the world of rapid communication and technology, you may keep all the records in a tab or a smartphone. But that is not the only solution. Let’s take a look at the easiest ways to organize your financial records smartly.

Be Careful With Papers

If physical papers are significant to you, then you must learn to care for the financial information, long-term personal details, bank certificates and vouchers. Fireproof safe, filing cabinets are ideal to keep your passport, will, birth certificates, PAN card, social security cards and tax return documents in safe custody.

Lessen The Burden Of Paperwork

From your phone bills, bank documents, gas bills and financial certificates, decide what you need to keep and what can be shredded. Piling huge amount of paper in your cupboard or storing bunch of emails in your inbox will only cause you confusion. Cable bills, phone bills, tax documents could be discarded once they are old over a year. ATM receipts could also be thrown away once you register the latest figures of your bank balance in cheque book or computer.

Keep A Tab On Your Expenditure

If you successfully organize all your financial records, you will be able to track your monthly expenditure effectively. Right from your groceries, rent, utility bills, student loans and credit card payments – all the details will be at your fingertip. This way you save a lot of amount at the end of the month. If you end up saving a decent amount of money yearly, you opt for opening a fix deposit account or spend for loan with high interest.

Good debt vs. bad debt

Good debtMost of you might be confused between the two notions of good debt and bad debt. First of all the meaning of a debt must be made clear. Debt is something that a person is bound to pay back. But there is a difference between good debt and bad debt.

Good debt is something that the person cannot afford to pay up-front but he has the money to pay it up on a scheduled date as in home equity loan or mortgage. Bad debt is something that the person cannot afford to pay as he has not saved enough money to repay the debt and hence he has to apply for a loan.

The most usual and common form of bad debt is known to be the credit card. They should be used with utmost care. The best way to prevent yourself from getting into a debt after using your credit card is to pay it off as soon as the bill arrives. This will show to the companies that you are a responsible customer. The other examples of bad debt are personal loans and cars. It is better to buy a used car and maintain it for one or two years instead of buying a new car that depreciates with time.

The best examples of good debt are business loans and mortgage. Anything that is borrowed and can be measured in monetary terms can be a good debt. The value of the car depreciates and its value is always less that what you had bought it for. Student’s loan is another example of a good debt as it helps you to attain higher education and hence have higher income in terms of job. This money can be used to pay off the loan.

Bad debt has no value or its value tends to decrease over time whereas good debt tends to increase the value over time.

Types of short term loans

short term loansThe procedure to apply for short term loans has become easy. Short term loans normally extend between 10-14 days but the money lenders may want to extend this period to some more days to get the interest. There are various types of short term loans depending on the amount of money you need and the duration of the loan. Given below are the types of short term loans:

• Payday loan- this is a type of loan where the amount of money taken on loan varies from £50 and £500. This is required to meet the temporary cash and can be repaid the next time you get paid. A payday loan is essential when there is financial emergency such as immediate work for your house like car repair and stuff. It can also be required to pay the direct debits which are outstanding for the current period.

• Bridging loan- this is a loan which is taken to meet the immediate expenses. There are times when your money may be blocked somewhere else for which you are not able to pay the current expenses. One best example to explain this loan is when you buy a commercial property and want to set up an office and you need money for renovation but you don’t have enough cash in hand because it has been used up in buying the property. The amount of money taken on loan in cases of bridging loans is higher than the amount taken in payday loans. The interest rate in bridging loans is also higher than payday loans because the lender has to lend more money in this case.
• Credit card- this is a settlement with the bank and there are no intermediaries. In this procedure a person can take a loan from the bank any time they want and after a month or so they can repay the amount.

Fixed annuity – safe or dangerous

Fixed annuityFixed annuities are particularly thought of because of their safety. You can’t really lose money due to stock market declines when you yourself are a part of it. Yet, fixed annuities are not always safe.

Even though the chances of losing money in the market do not arise in case of fixed annuities, one thing that you must keep in mind is that there are other aspects of them that may make them unsafe. The first being there is lack of liquidity. Yes there is a tax postponement component, however, you must always consider that if you need the money, you might be needed to pay certain amount/amounts of penalties to collect it. This is called surrender charges. Often these charges can turn out to be quite high on your annuities. This is what makes them riskier as far as liquidity is concerned.

The rating of the particular insurance company is also a major factor of consideration. Though it is known that ratings of companies are not at all the final word to be believed as far as safety is concerned, yet doing your research is always the best option. The safety of your annuities is directly related to the safety of the company, hence it is essential that while choosing an insurance company you do your diligence and that you do it properly.
Yet, it is not all bad. The current returns generated on fixed annuities is one of the biggest positives of entering into such an account. This leads to a consistent and sufficient income stream to compliment your other income, be it after retirement or before.

At the end of the day, entering into a fixed or a variable interest annuity should be a decision left on you for which the necessary research and preparations can be taken by only you. Your investment needs is almost a major factor on which this decision would depend.

Benefits Of Hiring A Wealth Manager

Hiring A Wealth ManagerIf it is the first time that you have earned a huge amount of cash the first it is very crucial for you to hire a wealth manager. A wealth manager not only teaches you how to keep your hard earned cash but also teaches you how to make your money grow. Here, you should not confuse a finance advisor with a wealth manager. Hiring a wealth manager is much expansive than hiring a finance advisor. You may ask then – what is the reason of choosing a wealth manager over a finance advisor? Let me help you with this.

First off, manager is a term that indicates to the person who manages everything in an organized manner. Whereas, the term advisor indicates to the person who’s task is to give you advice which you may not even follow. This is the basic difference between a wealth manager and a finance advisor. The task of a finance advisor is done at the very moment he gives you his valuable finance related advice. However, following those advices is completely up to you. On the other hand, a wealth manager sees himself whether or not you are spending your money in a right way. Moreover, he also looks into the matter of growing your money.

Besides this there are many more reasons for hiring a wealth manager. Only a wealth manager can help you to plan your future properly. It is his responsibility to secure your future and to make sure that even after your retirement you can enjoy life just like you were enjoying while working. Only a good wealth manager can tell you whether you should put your money in bank or invest it somewhere else. Simply, a wealth manager doesn’t only advices to stable your life financially but he does everything that takes to make your like stable.

Handy tips to manage credit card debts

manage credit card debtsAll leading credit card companies woo customers with promotional gimmicks and several offers that seen too-good-to-be-true in the short run. A lot of people get swayed by the lofty promises made by the credit card companies and end up having more than one credit card to their names. However, you need to understand that more often than not people with credit cards run into credit card debts and this can put a person’s financial health at risk. So, if you do have a credit card and want to use it to make purchases, you will have to make sure that you are able to handle your credit card debts efficiently. For this, expert credit card management is required.

If you have already raked up a credit card debt, then it is advised that you stop using your credit card to make further purchases immediately. However, you are advised against closing all the credit card accounts abruptly and this will affect your credit score adversely which will hamper and diminish your financial capacity. So, you need to practice self control and be determined not to use your credit card until and unless you have cleared all your existing debts. This might take some time, but you will slowly but surely do away with all the debts.

Also, to manage your credit card debt properly you must draw up a budget and make a determined effort to stick to that budget. Make a list of your debts complete with the rates of interests charged, credit limits, minimum fees, annual fees and all the other associated fees. The bills with the highest rates of interests should be given priority and you should make arrangements to pay them off as soon as you can. If possible, pay off the entire due amount at a go so that you do not incur the interest rates anymore.

Cheap auto insurance is not impossible for young drivers

Cheap auto insuranceYoung drivers often complain about increased auto insurance rates. Actually, the teen drivers are usually suspected of rash driving leading to car accidents and hence the higher rates. But there are ways how you can achieve cheap auto insurance despite being a teen driver. The article below shares the secrets of landing up with affordable car insurance rates in your college years.

No flashy cars

Young drivers are often fascinated by flashy cars to flaunt a cool style statement. But if you are looking for a cheap auto insurance pricey cool cars are a strict NO. These cars are more prone to burglary than the usual standard models and hence beget grater auto insurance rates. Thus, go for the sturdy normal cars until you rose and shine enough to afford the higher premiums.

Good academic record

Your high-school/college grades play a major role in deciding your auto insurance rate. Students with good marks usually land up with cheaper insurance premiums. Thus, maintain a commendable academic record when you are in search of inexpensive premiums.

Safety driving course

This is another significant point when you are looking for cheap auto insurance rates. Do you know that safe driving education certificate from a reputed institution can beget you around 15-20 percent discount on auto insurance rates? Actually, when you have taken up a safe driving course and have passed in flying colors, it can be expected that you will sincerely abide by the traffic regulations on road- which implies less accidents on your part & hence lesser claims.

Drive less

You must know that your car insurance rates depend largely on the miles driven annually. The bigger the miles driven higher will be insurance rates. Thus, its better that you count on public transport for your usual daily travel and use the car only for special occasions- like road trips with friends or parties.

A Guide To Student Loans

Student LoansNowadays student loans hold a very important place in the lives of the student. Higher education has become so expensive that most of the students have to get loans from the appropriate authorities. Handful students get hold of scholarships. But majority of them will dependant on student loans only. Student loans are specifically designed for students. Students can payback the loan after their particular educational course is complete and they get a good stable job. Plus the rates of interest related to the student loans are agreeable and better than the other kinds of loans.

The two main sources of student loans are: Federal government and private organizations. It is better to apply for student loans provided by your government since you will get more unique benefits. But at times federal student loans may not cover all your expenses. Therefore you can approach some reliable private organization for a student loan. Federal government will give you a loan only if you have definite proof that you are in need of a financial help. Plus your conduct and character will also be taken into account before your student loan is approved.

The rates of interest offered by the private organizations are surely higher in comparison to the rates offered by the federal government. If you get multiple student loans then it is advised by experts that you must consolidate them. Once consolidation is done you will be able to repay your loan through single monthly payments that also at lower interest rates. Whenever you are signing an official document regarding your student loan make sure that you read through the terms and conditions carefully.

Before applying for the student loans keep the necessary documents ready. Decide whether you want a federal loan or a private student loan. After the decision is made apply for the loan and wait for the good news.