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Can You Afford To Buy A House?

Can You Afford To Buy A House

Are you at that point of your life where you’d like to move out of your apartment and into a home of your own? While living in a house may sound fantastic, it also comes with a huge price tag.

Can you afford to buy a house?

This is the most important question you can ask yourself before jumping into a brand new mortgage. You’d be surprised how many people don’t take this seriously!

Buying a house is a huge decision which will impact you not just now, but for years to come, especially if you want to buy a house for the long term. The terms of the mortgage are as important to consider as the price itself.

Depending on the type of interest rate you get and what happens in the future with the housing market, the house you can afford now may or may not be affordable in the long run.

When asking yourself whether you can buy a house or not, the two things you have to determine are your monthly income and your monthly expenses.

Your income is obviously pretty simple, unless you’re self employed and your income varies. If it does, you should calculate everything using the bare minimum income you might receive. Your expenses will include your mortgage payments, your homeowners insurance payments, your property tax, and the slew of expenses you’re probably already paying such as food, gas, other insurance, car payments, any other existing debt, household supplies, medical expenses, and so on.

What you calculate now will give you some notion of what you can afford, though not a complete picture since the future entails change and unpredictability. Changes in your income and expenses are not just possible, but likely. With that in mind you’ll want to give yourself a fair amount of buffer for change.

Online Calculators

You can start your search by using an online calculator which will give you a vague idea of the threshold you should be looking at for your monthly mortgage payments and the total price of a home. For every house you seriously consider buying, though, you’ll have to run all the numbers yourself. Your calculations may determine whether you are happy and secure in the future or facing foreclosure and struggling to eat every month.

One final thing to take a close look at is what type of interest rate you accept in your loan terms. Fixed and adjustable interest rates have advantages and disadvantages, though one advantage of fixed rates is that they are predictable.

Adjustable rates are unpredictable and subject to the changes which affect the housing market. This means they could go up, could go down. In recent history they did go up—way up—which is one of the main reasons why so many homes are now in foreclosure.

What are adjustable mortgage rates good for?

For short-term home buyers who plan to be in a house for just a few years, they can reduce interest rates to a fixed, low rate. After a few years however that rate is floated against the market index, so after that there are no guarantees. Long-term buyers can enjoy more predictability and certainty with a fixed rate.

Buying a house will alter the course of the rest of your life, so choose wisely. If you need to wait a few years or get a smaller house or a house in a rural area, that’s not necessarily the end of the world. It’s better to do that than to try and buy a home which you won’t be able to afford in a few years.

FHA Mortgage Insurance

FHA Mortgage Insurance

Want to purchase a house, but don’t have a lot of money to put toward a down payment—or any money to put toward one?

Have little or no credit? If you don’t look like a sure bet to lenders, you may have a hard time getting a mortgage. But if you are able to qualify for FHA mortgage insurance and find a lender which originates loans insured by the FHA, then you may be able to get a home after all.

What does FHA mortgage insurance do?

When a lender participates in FHA mortgage insurance, the lender receives protection should you default on your loan. This reduces the risk exposure for the lender and makes the lender more likely to consider you if you appear to be a higher risk buyer than they might normally consider for a loan. If you do happen to default on the loan, the FHA will cover the loss.

Not all loans and not all home buyers qualify for FHA mortgage insurance though. Certain requirements must be met.

Typically the cost of the mortgage insurance is passed on to the homeowner as part of the monthly mortgage payment. This does mean that the cost each month to you will be higher if you get FHA mortgage insurance, but it does have other benefits.

How do you get FHA mortgage insurance?

You don’t contact the FHA directly for a loan since the FHA itself doesn’t originate loans, only insures them. You will need to search for lenders in your area who originate FHA loans. The terms will be set by the lenders, not the FHA, even though certain requirements have to be met. This being the case, you’ll want to shop around for the best rates and terms.

Even though a lender is more likely to consider you for a loan with FHA mortgage insurance, they will still examine your risk profile to determine whether to give you the loan. If you have a good debt-to-income ratio, that can help your case.

Your payment history on other loans and debts may also be taken into account. If you have little or no credit, you may be able to get the loan if you get a co-signer. Under the FHA guidelines, that person doesn’t have to live with you in the house. A parent or a relative is a good choice for a co-signer.

Not only does FHA mortgage insurance help lower income people to get home loans, but they also make those loans more affordable. Instead of settling for another loan with a lot of unfriendly terms and a higher interest rate you can get an FHA insured loan which is more reasonable. Mortgage insurance can reduce your down payment too; many first time home buyers with FHA insured loans only need to put down 3.5% on their homes and can receive as much as 6% toward their closing costs.

If you’ve been thinking there is no hope for you to buy a home with your credit history or your income, then check into FHA mortgage insurance and lenders who offer loans which include it. You may be surprised to discover that a home could be in your future after all. Just shop around until you find the best offer which includes the most friendly terms.

What is FHA Mortgage Insurance?

What is FHA Mortgage Insurance

Looking to buy a home for the first time, but having a rough time getting a loan approved?

You may be able to get assistance through the FHA’s Mortgage Insurance program.

What is the FHA?

FHA stands for the Federal Housing Administration. The FHA is a branch of the Department of Housing and Urban Development (HUD).

FHA has a number of functions, but one of the primary ones is to dispense the government’s official mortgage insurance for first time home buyers.

How can mortgage insurance help you get a loan?

As a first time home buyer, you are seen as a big unknown, and therefore a possible risk, by most lenders. They have no idea how you’ll treat the home and if you’ll keep up with your payments.

When a lender encounters a complete unknown, they are most likely to pass over you and wait for someone with a stable record—unless they have some kind of assurance that they will be paid.

FHA’s Mortgage Insurance program covers new home buyers with good credit standing so that the lender will have this security. This makes the lender look at you in a different light; since the government has agreed to back you as a good investment, the risk is removed for the lender, and they may be willing to give you a chance.

Again though, your credit is crucial and the government will not back you if you have bad or no credit, so work on building good credit before you try to get into the FHA Mortgage Insurance program.

What kinds of mortgages can you get insurance for? The most common program is 203 (b), which is for new homes, but there are a number of others, including program 234 (c) for condominiums.

House or Condo

The house or condo which you are applying for insurance for will have to be your primary residence, and for each type of home, there are more specific guidelines which you will have to explore.

What else can you do to make it easier to buy a home in the recession? Along with procuring FHA Mortgage Insurance, you can look into zero down payment homes, in particular those in rural areas.

The USDA 100% Financing Program is a great way to get a new home in a rural spot. Since these areas have emptied out, there are incentives for buyers to repopulate them, like zero down payment and lower closing costs.

Many of the homes in rural areas are cheaper than homes in urban areas too, so you’ll have less to pay in the long run.

Things are tough in the recession, but you don’t need to become discouraged if you are a new home buyer in good credit standing. Lots of other people are in your position, and it’s to the benefit of the government and lenders that you buy a home.

It helps the lenders, bolsters the economy, and therefore is good for the government too. That’s why incentives like this program are in place. So check into it and see if you can buy a new home today!

FHA Streamlined Refinance

FHA Streamlined Refinance

The FHA does permit streamline refinances on insured mortgages. The term “streamline” refers to the amount of documentation and underwriting which needs to be performed by the lender, and does not mean there are no costs involved in the transaction.

The requirements for a FHA streamline refinance are:

  1. The mortgage to be refinanced must already be an FHA insured mortgage.
  2. The mortgage must be current, with no late payments in the last 12 months.
  3. The refinance must result in a lowering of the borrower’s monthly payments.
  4. Cash out refinances are not allowed under the FHA streamline program.
  5. Borrower should be aware of the significant difference between “no cost” (Lender pays fees but charges you a noticeably higher interest rate) and “no out-of-pocket cost” (cost added to your new loan).

REFINANCE: FHA Streamline Refinance Basics

This refinance option is considered streamlined since it allows you to lower the rate of interest on your current property mortgage loan quickly and frequently without an appraisal.

FHA Streamline Refinancing also reduces the amount of paperwork that needs to be filled out by your mortgage lender, saving you precious time and money.

To qualify for a Streamline Refinance your original home mortgage loan must be an FHA mortgage loan in good standing and the refinance needs to lower your monthly interest payments.

Refinancing with this option reduces your monthly expenses by lowering your mortgage payments, also keep in mind that doing a cash-out is not an option with the FHA Streamline Refinance.

This works well for borrowers who are in good financial standing without any substantial debt since it permits you to have a little additional money each month that can be put to good use elsewhere.

What Is A FHA Loan?

What Is A FHA Loan

The Department of Housing and Urban Development (HUD) was created in 1965. HUD over sees the Federal Housing Administration, recognized commonly as FHA.

The FHA’s duty is to administer government loans and to set the FHA loan requirements for the government loan guarantee program.

Many first time home buyer’s ask, What is a FHA Loan?, without ever getting a clear concise answer, we’ll give that to you here. The main purpose of FHA is to allow buyer’s who do not qualify for conventional or “A” loans an opportunity for home ownership.

Without the reduced FHA loan requirements, millions of homeowners would not be able to participate in the “American Dream”.

FHA gives lenders a government guarantee that as long as they, “the lender”, gave the loan in good faith and followed all FHA loan requirements then the government will pay the lender back for losses due to foreclosure, etc.

Credit Problems?

Buyers who might have some credit problems or in fact they just do not have any of the traditional credit (car loans, credit cards, etc.) might be able to obtaining FHA financing.

Additionally, Federal Housing Administration home loans are assumable, allowing any person who qualifies, the ability to take over your mortgage without the extra cost of getting a new mortgage.

Also, the lender or seller must pay for part of the closing costs (called non-allowable costs) associated with obtaining an FHA loan. The borrower on the other hand “is” allowed to roll all allowable costs into their new mortgage loan making the amount they need to close substantially lower.

Borrowers will find that FHA “mi” (mortgage insurance) is lower for an FHA loan versus a conventional loan with 3.5% down. Lastly, FHA loan requirements often require less income to qualify as these loans can exceed conventional debt ratios of 28/36% as their standard is 31/41%.

#1 FHA Program

The #1 FHA program by popularity was created just for first time home buyer’s is called the 203b. This is your common fixed rate loan for between 1-4 family’s who plan to owner occupy the property and only requires a minimum down payment of 3% from the borrower (s).

The 203b loan also permits 100% of the money needed for closing to be a gift from a relative, organization, non-profit or government agency. Whether the gift is a loan or not, you just need a letter for the lender from the family member stating it is a gift and does not need to be paid back.

Many individuals make the mistake of assuming FHA loans are only open to first-time home buyers. This is just not true. FHA mortgages are available to anyone, whether your buying your first or third home and can be used to buy or refinance a home.

If you are currently looking to refinance a home loan the current mortgage loan does NOT have to be a FHA loan.

The large disadvantage to FHA loans is that the FHA loan requirements limit the size of the loan a borrower can obtain. Others might try to show you that the 1.5% FHA upfront mortgage insurance premium (MIP) is a disadvantage.

However this amount makes just a very small increase in the borrower’s month payment and is partially refundable in certain cases. If you’re still looking for additional information on what is an FHA loan? or FHA loan requirements continue here.

Why Are High Risk Personal Loans Gaining Popularity

Why Are High Risk Personal Loans Gaining Popularity

It is a great task to get approved for loans if your credit history is not good. However, you need to improve your credit ratings to be able to access traditional loans with lower interest rates for your financial requirements. High risk personal loans can be considered a perfect offer as there is no need to possess good credit score for the approval. Besides, the offer can be the right means to improve your credit history by paying off the dues in time.

Various types of loans are offered to satisfy the needs of the consumers. Personal loans are becoming very popular as there are various forms of personal loans meeting the specific requirements of the consumers. Secured personal loans can be obtained by presenting security for the approval. For unsecured personal loans there is no need for submitting any asset. While there is the advantage of lower interest rate for secured personal loans, there is the risk associated with the offer. The lender has the right to possess the property set as security for the loan to recover the loan amount if you do not make the payments as specified.

As for unsecured loans, there is no assurance for the money lent. This makes the offer a risky one for the lenders. However, the lenders try to minimize the risk by charging higher interest rates for the yahoo loans. A brief overview of the high risk personal loans might be of some help to the borrowers with poor credit who do not have any property to present as collateral to obtain secured loan.

High risk personal loans are the way out for poor credit borrowers

High risk personal loans can be the only option for the bad credit borrowers who are in need of urgent financial requirements. Easy accessibility of personal loans lead to bankruptcy for most of the people due to the lack of analysis of the features of the offer and lack of understanding of one’s affordability. The credit bureaus maintain the record of loans and the transactions related to that including loan default and late payments of an individual. The credit score is assigned based on these activities. The default leads to poor credit score which in turn makes it difficult or even impossible to get approved for loans for lower interest rates. High risk personal loan is the only way out to improve the credit score as well as satisfying the financial requirements.

Features of high risk personal loans

Most of the high risk personal loans are short term loans. The loan amount is small and the interest rates are very high generally. The loan term is short and you cannot expect flexibility in the terms. However, the rate of interest, the term of the loan and the loan amount vary with lenders. Some of the lenders consider the situation of the borrowers and accept to extend the repayment time. Although the loan offer is not much in favor of the borrowers, the advantages in the offer are worth noticing especially if you are a poor credit borrower.

Advantages of high risk personal loans

  • High risk personal loans are easy to access as the process is simple and the requirements are very minimal.
  • The credit record is not an issue in the offer and so ideal for bad credit borrowers.
  • The quick access helps in times of urgent financial requirements. The loan is disbursed in less than 24 hours and the process is done online as well to enable speedy process.

By filing specific application to the credit bureaus, you can see to it that your present credit performance is being watched. By making prompt repayments on the high risk personal loans, you can improve your credit score making it possible to get approved for traditional loans if needed in future.

How To Recover From Forex Related Scams And Frauds

How To Recover From Forex Related Scams And Frauds

If you are one of the many victims of forex related scams and frauds, almost all of the mistake’s percentage must be blamed into you. Why? Either you make hasty forex decisions, did not make your research assignment before opening a forex trading account, or you are too blinded with the scammer’s promising offer. At the end of the day, you still can’t find a solution to recover your hard-earned money that has been taken away by forex scammers and frauds.

These persons are in fact, a total disgrace from the decent profession of forex traders and from the foreign exchange market as a whole. So before releasing completely your trust in the forex market, you should take in to consideration that there are numerous legit websites and forex broker companies online that are on the business for years or decades. If you want to recover from your forex terrible experience, continue reading this article

Review Your Mistakes

Before taking another forex decision, you must review your past mistakes first. Determine which aspects the scammers are looking for. For a more effective way to review, make a checklist of your possible mistakes so you will be aware on what to do next time.

Learn From It

After reviewing your mistakes, you should learn from it. It is a must, because if you don’t, the shame of being scammed twice is totally on you. Learning from your mistakes will make you a better forex trader. Make your past mistakes as a motivation to be strong, be wise, and be alert in the vast cyber-space of forex market.

Research More About Forex Brokers

Doing your research first before making any decisions and forex-related actions will never hurt you. In fact, research will broaden your knowledge especially on legitimate forex brokers. So before trusting your hard-earned money into some brokers that you don’t actually know, run a thorough background research and try their demo account first.

Be Careful, Be Alert, and Be Wise At All Times

Foreign exchange market is undoubtedly risky at all times. From the moment you choose to open a forex trading account until you are entering an actual deal. Once you’re in the market, there are lot of things to consider first before entering trades and deals. Don’t be hasty; don’t be too confident even you have lots of money, because it can be gone in a single tick of the exchange rates.

If you follow these steps, you will surely recover from your mistakes and will definitely enjoy the true benefits forex market has to offer.

Set Your Forex Robot Autopilot

Set Your Forex Robot Autopilot

It is no doubt that forex trading market is one of the most desirable market where one can have ample opportunities of making money in any point in a day. Since it a 24 hour market, it is impossible to trade every hour and watch and monitor which currency pairs are at play. Getting yourself a forex robot and setting it at autopilot gives you the leverage in your trading.

With your autopilot forex robot, you don’t have to pop in and out in trading and miss the opportunity to gain profit. You don’t have to take fewer positions and hold for days because your Forex robot is doing the tasks for you. It can also allow you to look at long term and get better change at buying or selling and of gaining profits. It also allows you not to miss enter or exit position since your autopilot forex robot sets automatically trading orders for you. Since you can set it up with stop-loss orders; your money is protected if ever there’s a sudden move against your position thus you’ll not loss anything.

Your autopilot currency trading robot is your trading buddy and it will allow you to have the flexibility to watch the market and let you have the information while not being present. Because you forex is set autopilot, you’ll get the chance to pick the currency pairs which are the most active even on times you are not present. It will also updates on what time major currency markets open and choosing the winning trends for you automatically will let you not miss a profitable trading time. Moreover, since Forex robot is build in aiding you trade successfully without the hassle of studying the complexities of trading tasks, you’ll don’t need to study the technical aspect of currency pairs. All is simplified for you.

Trading successfully is dependent on your level of understanding of how forex works and your tolerance for risk and leverage. But with autopilot forex robot you can escape these factors and still become a successful forex trader.

How Does Forex Trading Work?

How Does Forex Trading Work

Forex trading is buying or selling currencies of different countries against each other. Forex stands for Foreign Exchange (FX). For instance the European currency is known as EUR and the United States currency is known as USD. So when you trade in a Forex market that means you are either buying EUR/USD, or selling EUR/USD simultaneously.

What is a FX market?

The FX market is a big, developing and liquid monetary market that functions all the 24 hours in a day. Do not misunderstand FX market to be a market in the customary sense for the reason that you will not find any central trading site or even an exchange. The majority of the Forex trading is carried on via telephone or through the webs.

How Does Forex Trading Work?

Forex trading is normally done by a broker or else a market maker. As a trader in Forex it is left to you to select a currency pair. Picking the currency pair should depend on the anticipation of change in their values so that you can place a trade and make profits. For instance, if you had bought say 1,000 Euros in 2011 January, and then the cost would have been approximately $1,500 USD. Right through 2011 the Euro’s worth vs. the U.S. Dollar’s worth enhanced. At the year end 1,000 Euros was worth $1,800 U.S. Dollars. And under such a situation if you had opted to finish your trade, you would have made a profit of $300.

Through whom can Forex trading be conducted?

Forex trading can be conducted via a broker or market maker. Orders can be given with simply a few clicks of your mouse and the agent then communicates your order to a partner in the Interbank Market so as to fill your place. When you put up the shutters on your trade, the broker ends your place on the Interbank Market and credits your account with the profit or loss. Literally all this takes only a few seconds. Wonderful is it not?

Basic Terms in Forex Trading

Here are some of the basic terms in Forex trading which you should know:

Cross currencies – Currency pairs without the inclusion of USD are called cross currencies. But the base currency is always identical.

Bids and asks: BID is the selling price of the base currency, ASK is the purchasing price of a currency.

CFD Trading Strategies: 3 Critical Factors To Profitable Forex

CFD Trading Strategies: 3 Critical Factors To Profitable Forex

Forex, understandable a trading of two international or two foreign currency exchange speculative market, is as old as the existence of money as a means of exchange for goods or services. The difference in their accessibility to the ordinary man is the availability of enabling technology with time. In other words, when the transaction was exclusively between countries and major banks, trade was so limited.

Nowadays, with internet technology and advancement in modern trading tools, almost anybody can now trade. The situation has been further enhanced with the leveraging power of Contracts For Difference (CFD). Specifically, this article is a focus on CFD trading strategies. The critical factors being discussed here would lead to profitable Forex trading if implemented.

  1. CFD Trading Leverage

A leveraged stock market opportunity that gives you access to greater funds than trading actual stock market. With CFD trading, you do not have to pay for the full value of the trading position you have chosen. Rather, you put up a deposit or margin, from as little as 5%. In other words, a trader can leverage his/her trade up to 20 times the initial capital.

  1. Develop a Trading Pattern That Suits Your Personal Profile

Educate yourself properly. A good CFD trading plan is critical to your success on a long term.

Identify what you are good at and keep it

CFDs can be used to trade an extremely wide array of financial products and this means they offer a way to easily start dealing across a large cross-section of the market. For example, a trader that has interest in shares, the level of the price of oil, or the exchange rate of the British Pound against the US Dollar, can deal in all these markets from one account of a single CFD provider.

  1. Use Stops Religiously

Stops enable you to protect your worse-case scenario by limiting your downside (unless the stock caps considerably).

Stop loss that limits the downside – A stop loss order is an automated instruction given by the trader to deal if the price runs counter to speculation. A stop order can either be attached to an existing position, or it can be used to initiate or start a new position.

Summary: As a leveraged (instrument) system of trading, CFD is arguably the most powerful. The benefits are enormous if well planned, and losses could be overwhelming if trading position is not well articulated. CFD trading strategies as discussed in this article is an analysis of 3 critical factors to profitable Forex. These strategies work and would always work if well implemented. Give them a try.

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