The financing vehicles have been in place for several years now for a borrower using some creativity with a seller to make 100% financing possible. However, the real estate market had been so hot in many areas in the U.S. the sellers did not have to even entertain anything resembling creative financing. With a softening market, creative financing is back as a helpful tool to allow sellers to unload their properties as long as an over supply of inventory exists.

Harold and Laura had been renting a home in a suburban area for three years. They had been digging out from under a heavy debt load of medical collections. Laura was leaving work one day and a truck had crossed the line and pinned her in her small car for a half an hour until the jaws-of-life was used to extract her out from her crushed vehicle. With a broken hip, ankle, eye socket and fibula a long recovery ensured and Laura was not able to work for two years. The other driver was at fault, but any financial recovery was years down the road as the other insurance company was playing hardball. In the meantime, with constant harassment for the out standing medical bills and the weight of credit card and installment debt that existed prior to the accident was just overwhelming. Harold had been working two jobs just to meet the basic family needs. Family help was limited and really wasn’t expected. Laura’s therapy had been going on for a year now and real progress was being made. Her employer had kept her job open as a customer service representative ironically at a credit card service center. The benefits were limited and very little of the medical bills and rehab had been covered. Harold and Laura had been seeking some financial advice from a local bankruptcy attorney. It was decided that with their level of income and huge medical bills that filing a Chapter 7 Bankruptcy action might be the best thing to do for mental sanity and cash flow. A Chapter 13-payback plan would be crippling for many years to come. As the bankruptcy attorney explained to Harold and Laura that in his practice example after example comes before him where just bad things happen to good people and that there was no shame in taking care of their financial affairs in this manner. The rationalization process followed.

Two months before filing the bankruptcy, the insurance company was offering a small settlement based on an allegation that Laura may have temporarily been distracted by talking on her cell phone and thus reduced her reaction time. Rather than put up a long protracted fight Harold and Laura, for better or worse settled for an amount that just covered her payoff on her totaled car. They were relieved of that installment. Their attorney for the accident urged them not to settle, but with Laura’s eminent recovery and the stress of the whole ordeal, they grabbed what they could at the time.

Harold and Laura received their notice of the Final Discharge of their Chapter 7 Bankruptcy. All the collections for medical bills, non-secured credit cards and one major medical bill that had resulted in a judgement being awarded for the first responding hospital had all been wiped out. They excluded their family car from the Bankruptcy matrix (which names all the debtors), which still had a $6,850 balance with a $295/month payment remaining. They also excluded a credit card that they had for years and had a low balance and a low monthly payment. This allowed Harold and Laura to maintain two trade lines and their on time rental payment of some $1,250/month outside the Bankruptcy action. Laura had now been back to work at her old job for two weeks. She was fortunate to take advantage of a car pool with a fellow worker who lived a half mile away.

It was like the world had been lifted off their shoulders. Now Harold and Laura had their rent, one car payment and a small credit card and their home utilities. The cell phone service had gone by the way side many months before.

Even through the most brutal times and the lowest of the low, Harold and Laura, as their custom, visited Open Houses after church every Sunday. It was always in the neighborhood and never more than two home visitations. It was Harold and Laura’s way to cope with the dark cloud that had beset them. During this process, they became familiar with a local Realtor who took a very personal interest in their situation. The Realtor, named Betty, knew they were not ready to do anything until some things had been handled. At the most recent Open House visit, Harold and Laura shared that they had put their financial challenges behind them. Laura was feeling great and off all her pain medication. Betty raised the prospect and questioned them if she could figure out a way to get them into a home at a little more than they were paying in rent with little or no money out of pocket, would they have an interest at least in hearing more about it. Harold raised his hands with palms up and a shrug of the shoulders, and shared that it wouldn’t hurt to listen to some possibilities. The accident had caused a detour in the quest to own a home, but it had not killed their dream.

Betty set up a meeting with the Realtor’s in-house mortgage broker to discuss their options. A joint credit report was pulled and as Harold at the time made the most money his middle score was utilized to qualify for a mortgage. His middle credit score was right at 500. The mortgage broker went on to explain that they would qualify for an 85% Loan To Value mortgage. Due to their lack of a cash down payment, it was added, that the only way that they could use this loan option would be with a seller held second of 15% loan to value with the seller also paying up to 6% of the contract selling price. This would then give them a 100% Combined Loan To Value (CLTV). The loan would need to be a Fully Documented loan with verification for employment and income. The mortgage broker felt like he could present Laura’s employment gap due to the accident and use her current income for qualifying purposes. Totaling up the income versus the debts, it was determined that Harold and Laura could buy a home in the $175,000 range IF the seller would offer reasonable terms on the 2nd mortgage. Betty piped in that she had been sitting on a listing for six months and the owner now may have an interest in holding some paper versus renting the property again and deal with the tenant challenges on repairs and upkeep. The home was close to their current residence.

Betty was able to work out the deal with reasonable terms on the second mortgage that would keep the overall monthly payment down at least for the first three years. As the mortgage broker explained, that should be plenty of time to establish a better credit history and qualify for a lower interest rate loan in two years. As an added bonus, the seller agreed to pay all the closing costs and prepaid expenses such as annual hazard insurance and tax escrows plus replacing a leaky roof. Harold and Laura moved into their newly purchased home putting all the travails of the past in the rear view mirror.

Sometimes bad things happen to good people. In this current real estate market, there are creative possibilities. It won’t last forever; the time is at hand for seller help and creative financing.

Dale Rogers

www.sellerhelpsbuyer.com

www.brokencredit.com

Dale Rogers is a thirty-year mortgage veteran and frequent contributor to the Broken Credit Blog. The BCB is a free website created to assist the general public with information about credit repair and responsible mortgage lending.

www.BrokenCredit.com
www.sellerhelpsbuyer.com

The right gold jewelry buyers will be able to give you top dollar for your gold items.  If you do not select honest gold jewelry buyers, then you risk losing money on your deal.

Gold Jewelry Buyers

You can being your search for reputable gold jewelry buyers buy using a major search engine, online yellow pages, blogs, forums, and review sites.  You will find customer experiences, feedback, ratings, comments and evaluations on a gold buyer.  

You should also browse all of the important information that is on the Better Business Bureau  (BBB) website.  At their site, you will find any unresolved complaints, poor ratings and other company data.  You can also find out if a gold buyer is accredited by the agency.  This means that they have met the honesty guidelines that the BBB has in place.

You will find that there are online gold buyers, pawn shops and jewelry stores.  The only viable choice is an online buyer because they have excellent service and provide high quotes.  You will be able to get a fast turnaround time on your items when you use their free mailing kit.  The prepaid envelope allows you to get a quote at no charge to you.

More Cash For Your Gold

A physical store will require you to spend money in terms of gas and time.  You will have to stand in line and visit too many locations just to get an unsuitable quote.  These types of stores have high overhead expenses that an online dealer does not incur.  

Having a satisfaction guarantee also adds to a buyer’s qualities.  If they are willing to go above and beyond for you, then that means you will get be treated fairly.

Once you have gathered all of your unused and unwanted gold items, you should not hesitate to turn them into cash.  Gold jewelry buyers are waiting to make you a great offer.

Read our cash for gold reviews and avoiding becoming a victim of the cash for gold scam. Learn where to easily sell gold jewelry for 3x’s More Cash Profit. To read our complete Consumer Reviews and watch a Special News Video visit www.CashForGoldReports.com My friend, if you are seriously interested in selling gold, I urge you to visit this website before you do anything else.

After reading several opinions I became aware of how confusing and time spending it can be the simple task of going to the mall searching for a new cell phone (telefone celular). There are so many options, brands, models, deals and services available that one can get very confused when it is time to make a choice of which is the best deal to choose from all the options available. Thinking about this problem, I decided to point out a few suggestions and I hope it can be of good use for those who want to save some time, money and find better deals.

Before deciding to buy a cell phone (telefone celular) handset it is wise to really know what your needs are and which type of service will serve you better. If you are an occasional user of a mobile phone, perhaps you may want to consider a service that offers the prepaid charges rather that the service that charges you by the month.

The prepaid choice seems to be very attractive for those on a low budget and also simply because it will give you total control of how much money you want to spend, let`s say in one month or during a certain time. This service is also known as pay as you go. It is by far the most popular plan available today. Keep in mind that with this plan, there is no contract to sign and therefore no penalties involved in case one decides to quit or use another service.

Don`t be an impulsive buyer, before you make any decisions on purchasing a brand or model, I strongly suggest you to look for the online deals available. I personally have found very attractive deals on the internet and the online deals have become very popular with most users. Carefully check the options, prices, features on each model and compare the final costs with the models available at your local shop. Keep in mind that the overhead expenses the traditional shops have are the main reason for the same product to cost much more than the similar product obtained from an online source. Always prefer payments with credit cards, which will offer more security for the online transaction.

Since there are several models and brands of cell phones (telefone celular) available in the market today, you may want to choose what seems to be most appealing to you regardless of its size, shape or design. You are the one who will be using it and you should be pleased with your choice.

Many new features and gadgets have been added to the new generation of cell phones (telefone celular). Most major brands have a variety of models that will certainly satisfy from the simpler to the most sophisticated user. The latest mobile phones have capabilities which include video calling, video recording, digital camera, mp3 player, GPS tracking system and other features. So if you don`t need any of these features, you may just want to stick to the basic and no frills type of handset which is much less expensive to purchase and much simpler to use.

Roberto Sedycias

IT Consultant

This article is under GNU FDL license and can be distributed without any previous authorization from the author. However the author´s name and all the URL´s (links) mentioned in the article and biography must be kept.

This article can also be accessed in portuguese language from the News Article section of page PoloMercantil
Roberto Sedycias has a bachelor degree in Business Administration and over 20 years experience in systems analysis and computer programming. Currently working as IT consultant for www.PoloMercantil.com.br

First-time home buyers are sometimes surprised by the many fees at closing. A good realtor will inform their client that they will pay about 2.5 percent of the price of the home for closing costs. This amount may be as high as 3 percent or more in some circumstances.

Loan applicants must ask the lender for a Good Faith Estimate (GFE). Responsible lenders normally give you a GFE at the time of application. Regulations oblige lenders to disclose estimated closing costs and the Annual Percentage Rate within three days of the application. Loan contingencies vary and sometimes small changes will occur after the initial application.

Closing Costs Determined on Your Chosen Financing Option

Lenders propose several options for fees. One option is a “No Cost” loan. These loans are offered at a higher interest rate than traditional loans; basically your closing costs are included in your loan by the higher rate. Another option long-term buyers prefer is buying your interest rate down through points. Buying a point is one percent of the cost of the loan and typically equals a .125 lower interest rate. Decide your priority. First-time buyers are usually concerned about beginning costs.

Typical Closing Costs Checklist

Generally, a lender will charge an origination fee that can be one percent of your loan amounts as well as a processing fee. Processing fees begin at $350 and go up from there. If you are working with a mortgage broker, there may be bank closing fees too, including an underwriting fee and a doc preparation fee. These fees will generally total between $600 and $900. There are also title fees, title insurance fees, inspection fees and an appraisal fee. Title fees will vary depending on loan amount. Appraisal fees can cost approximately $350 or more. Since all of these fees can vary so much, the GFE is crucial.

Payments for Taxes, Prepaid Interest and Insurance are Deposited in Escrow

To procure financing for your new home, you are required to buy homeowner’s insurance. The first year’s premium will be paid at closing. The lender may require one or two months’ interest at closing as well, since you have about a month of grace before your first mortgage payment is due. The later in the month you close on your home, the less interest you pay at closing. Depending upon the time of year you purchase and what property taxes have already been paid for the year, they will also collect four to nine months of property tax at closing.

Again, in order to prepare for closing costs, smart buyers refer to their Good Faith Estimate.

Explore Alvarado Homes for Sale near Fort Worth, TX.

What Are Closing Costs?

When selling your home “For Sale by Owner” (aka FSBO), your lender usually prepares a “Good Faith Estimate” of closing costs. You are entitled to receive this estimate no later than three business days after you apply for a loan. Because it is an estimate of the costs you may incur, it may not contain all potential costs. The lender will not know what all of the costs are going to be. The “Good Faith Estimate” will be an estimate based on previous experience. Actual closing expenses usually exceed the estimate. To avoid problems, go prepared to pay more than the amount listed on your estimate.

If you are comparing two lenders, look only at the costs charged by the lender. Lenders can only make educated guesses about the charges made by others.

You will receive an itemization of costs you may have to pay when you buy your home. The costs are listed in the order that they should appear on a Good Faith Estimate you obtain from a mortgage lender.

There are two broad categories of closing costs. Non-recurring closing costs are items that are paid once and you never pay again such as loan origination fees, recording fees, survey fees, etc. Recurring closing costs are items you pay again over the course of home ownership, such as property taxes and homeowner’s insurance.

Closing costs are usually made up of the following:

1. Attorney’s or escrow fees (yours and your lender’s if applicable)

2. Property taxes (to cover tax period to date)

3. Interest (paid from date of closing to 30 days before first monthly payment)

4. Loan origination fee (covers lender’s administrative costs)

5. Recording fees

6. Survey fee

7. First premium of mortgage insurance (if applicable)

8. Title insurance (yours and your lender’s)

9. Loan discount points

10. First payment to escrow account for future real estate taxes and insurance

11. Paid receipt for homeowner’s insurance policy (and fire and flood insurance if applicable)

12. Any documentation preparation fees.

On closing day, you’ll present your paid homeowner’s insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

Once you’re sure you understand all the documentation, you’ll sign the mortgage, agreeing that if you don’t make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You’ll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed.

You’ll pay the lender’s agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner.

At closing, you will get:

1. Settlement Statement

2. HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)

3. Truth-in-Lending Statement

4. Mortgage Note

5. Mortgage or Deed of Trust

6. Binding Sales Contract (prepared by the seller; your lawyer should review it)

7. Keys to your new home

Your Settlement Costs are going to consist of the following:

1. Sales/Broker’s Commission: This is the total dollar amount of the real estate broker’s sales commission, which is usually paid by the seller. This commission is typically a percentage of the selling price of the home.

2. Items Payable in Connection with Loan: These are the fees that lenders charge to process, approve and make the mortgage loan.

3. Loan Origination: This fee is usually known as a loan origination fee but sometimes is called a “point” or “points.” It covers the lender’s administrative costs in processing the loan. Often expressed as a percentage of the loan, the fee will vary among lenders. Generally, the buyer pays the fee, unless otherwise negotiated.

4. Loan Discount: Also often called “points” or “discount points,” a loan discount is a one-time charge imposed by the lender or broker to lower the rate at which the lender or broker would otherwise offer the loan to you. Each “point” is equal to one percent of the mortgage amount. For example, if a lender charges two points on a $80,000 loan this amounts to a charge of $1,600.

5. Appraisal Fee: This charge pays for an appraisal report made by an appraiser.

6. Credit Report Fee: This fee covers the cost of a credit report, which shows your credit history. The lender uses the information in a credit report to help decide whether or not to approve your loan and how much money to lend you.

7. Lender’s Inspection Fee: This charge covers inspections, often of newly constructed housing, made by employees of your lender or by an outside inspector.

8. Mortgage Insurance Application Fee: This fee covers the processing of an application for mortgage insurance.

9. Assumption Fee: This is a fee which is charged when a buyer “assumes” or takes over the duty to pay the seller’s existing mortgage loan.

10. Mortgage Broker Fee: Fees paid to mortgage brokers would be listed here. A CLO fee would also be listed here.

11. Interest: Lenders usually require borrowers to pay the interest that accrues from the date of settlement to the first monthly payment.

12. Mortgage Insurance Premium: The lender may require you to pay your first year’s mortgage insurance premium or a lump sum premium that covers the life of the loan, in advance, at the settlement.

13. Hazard Insurance Premium: Hazard insurance protects you and the lender against loss due to fire, windstorm, and natural hazards. Lenders often require the borrower to bring to the settlement a paid-up first year’s policy or to pay for the first year’s premium at settlement.

14. Flood Insurance: If the lender requires flood insurance, it is usually listed here.

15. Title Charges: Title charges may cover a variety of services performed by title companies and others. Your particular settlement may not include all of the items below or may include others not listed.

16. Settlement or Closing Fee: This fee is paid to the settlement agent or escrow holder. Responsibility for payment of this fee should be negotiated between the seller and the buyer.

17. Abstract of Title Search, Title Examination, Title Insurance Binder: The charges on these lines cover the costs of the title search and examination.

18. Document Preparation: This is a separate fee that some lenders or title companies charge to cover their costs of preparation of final legal papers, such as a mortgage, deed of trust, note or deed.

19. Notary Fee: This fee is charged for the cost of having a person who is licensed as a notary public swear to the fact that the persons named in the documents did, in fact, sign them.

20. Attorney’s Fees: You may be required to pay for legal services provided to the lender, such as an examination of the title binder. Occasionally, the seller will agree in the agreement of sale to pay part of this fee. The cost of your attorney and/or the seller’s attorney may also appear here. If an attorney’s involvement is required by the lender.

21. Title Insurance: The total cost of owner’s and lender’s title insurance is shown here.

22. Lender’s Title Insurance: The cost of the lender’s policy is shown here.

23. Government Recording and Transfer Charges: These fees may be paid by you or by the seller, depending upon your agreement of sale with the seller. The buyer usually pays the fees for legally recording the new deed and mortgage (line 1201). Transfer taxes, which in some localities are collected whenever property changes hands or a mortgage loan is made, can be quite large and are set by state and/or local governments. City, county and/or state tax stamps may have to be purchased as well

24. Survey: The lender may require that a surveyor conduct a property survey. This is a protection to the buyer as well. Usually the buyer pays the surveyor’s fee, but sometimes this may be paid by the seller.

25. Pest and Other Inspections: This fee is to cover inspections for termites or other pest infestation of your home.

26. Lead-Based Paint Inspections: This fee is to cover inspections or evaluations for lead-based paint hazard risk assessments.

27. Total Settlement Charges: The sum of all fees in the borrower’s column entitled “Paid from Borrower’s Funds at Settlement” is placed here. This figure is then transferred to line 103 of Section J, “Settlement charges to borrower” in the Summary of Borrower’s Transaction on page 1 of the HUD-1 Settlement Statement and added to the purchase price. The sum of all of the settlement fees paid by the seller are transferred to line 502 of Section K, Summary of Seller’s Transaction on page 1 of the HUD-1 Settlement Statement.

Don’t be overwhelmed by all of the fees and charges. Your closing agent will go over each item one line at a time.

The author, Kyle Soper, is the website Manager of Virtual FSBO (www.VirtualFSBO.com), a FSBO website created in 1999.

Avoid disappointment and SAVE thousands by reading this article.

Everyday there are people just like you that have their mortgage loan turned down because of any one of these mistakes. By acquainting yourself with 10 Deadly Mortgage Mistakes you can save thousands on your mortgage.

1. Using An Interest Only Or Payment Option Adjustable Rate Loan: If you are using these types of loans to qualify for a more expensive home. A home that you could not normally afford, you may be going down the wrong path. There are some circumstances where these loans are useful, but care should be taken in this housing market with slower appreciation and falling prices in some markets. You could end up with a mortgage value higher than the value of the home.

2. Co-signing On Someone Else’s Loan: You could become a great friend or even a hero to someone by doing this. Before you do, ask yourself. Are you willing to assume that liability? Are you willing to forego getting your own home to co-sign? Those could be the ramifications.

3. Making Late Payments: Late payments (especially within the last year) make if very difficult to qualify you for the best terms and rates. It may even keep you from qualifying at all. It might seem unnecessary to say, but always pay on time.

4. Hiding Things From Your Mortgage Broker: Even though it could be embarrassing to discuss previous financial difficulties. Remember that your mortgage broker is there to help. Your mortgage broker can only help you with those things of which he is aware.

5. Over Using Credit Cards: Yes they are convenient, but if the balances are not kept low or paid off it may make getting the best rates and terms on your loan more difficult. Do not take on new debt without first discussing it with your mortgage broker.

6. Making Large Purchases Prior to Your Mortgage Application: On occasion people think that it is in their best interest to get major purchases out of the way prior to making a mortgage application. A key component to determining how much of a home you qualify for is outstanding debt. It is far better to wait until after purchasing your home before considering other major purchases.

7. Choosing a Lender Just Because They Offer The Lowest Rate: Your mortgage rate is an important factor with your loan. Remember that it is only one of several factors. You also need to keep in mind the APR and origination fees. Perhaps the most important factor is accessibility. Is the lender located locally? Can you go sit down and go over the details of your financing. If not, you should think long and hard about using that lender.

8. Not Getting Pre-Approved for a Loan: When you become pre-approved you become a cash buyer and have more negotiating power with the seller. Home buyers can save thousands or dollars in negotiating the home purchase by being pre-approved. Any good Realtor will require the pre-approval prior to showing any homes, because they don’t want to waste your time or theirs.

9. Not Planning for Closing Costs: On the day of your closing you will be expected to write a check to cover closing costs. Closing costs are a number of the expenses incurred when purchasing a home. Those typically include attorneys’ fees, taxes, title insurance, prepaid homeowners insurance, points and other lenders’ fees. These closing costs can amount to between 2% and 7% of the selling price of the home. Your lender should provide you with a good faith estimate early in the loan process to estimate these costs.

10. Not Providing Documents To Your Mortgage Company Timely: When your mortgage broker asks you for additional paperwork, get on it! Do not complain. They are trying to get you approved. If mortgage brokers don’t get the documentation timely, it can result in locks expiring and higher rates. Worst of all, it could mean a delayed or blown closing date.

If you enjoyed this article, you can find more great informatioin at HomeDealsColorado.com

Bruce Swedal is your Highlands Ranch Realtor providing professional real estate services to the Denver real estate market. Visit for your FREE online Denver Home Search.

SELLER CONTRIBUTIONS

A “seller contribution” is one of the best-kept secrets in the home-buying process.  That’s when the seller of a home puts up some of the money needed toward the buyer’s closing costs.  It can mean the difference between a sale of a home and no sale.

Seller contributions can be negotiated at the time of a home purchase by having the seller pay closing costs rather than or in addition to a reduction of the home sales price.

A seller contribution can seal a home purchase in some cases where the buyer does not have enough cash for both the down payment and closing costs.  Many people can qualify for the payment on a home mortgage loans but encounter challenges in gathering the necessary cash.  Often, people worthy of a mortgage don’t have a lot of ready cash sitting around at the moment they find their dream house.  Don’t let the idea of a seller contribution scare you.  An experienced mortgage broker or banker can help you figure out the best way to put a deal together.  He or she should also be able to help you understand the details well enough to be comfortable with the purchase structure.

There are many other benefits of utilizing a seller contribution.  Using the money from a seller contribution for the closing costs can free up more cash for a larger down payment.  This can reduce or eliminate the need for private mortgage insurance (PMI) and can thereby save the borrower anywhere from $50 to $200 each month in PMI charges. This can also be used to achieve better price break points in the loan-to-value ratio to help the borrower get a better interest rate.  Another benefit is the improved pricing or accessibility of “no income verification” mortgages. This is where the borrower cannot verify the income needed but may still obtain the mortgage by increasing the amount of down payment.  If the borrowers have consumer debt with high monthly payments, preventing them from qualifying, they can use the seller contribution to pay off some or all of those debts.  This allows them to qualify or significantly reduce their overall monthly payments.  Also, closing costs are virtually non-tax-deductible. However, points are still tax-deductible.  If paying points, it is very smart to use a seller contribution because while the seller pays the points, they are still tax-deductible to the buyer.

A seller contribution is easy to implement.  There are no negative tax consequences to the seller except for a negligible real estate transfer tax in some areas.  A seller contribution must be fully disclosed.  The amount of seller contribution must not exceed the actual amount of closing costs.  The buyer or real estate agent should check with the lender to make sure that they are within allowable limits, normally 3 to 6 percent of the purchase price.

TITLE INSURANCE

Paying too much for Title Insurance is a very common mistake.  All lenders will require Title Insurance each time a mortgage loans granted.  This is because it insures that the title to the property is free from any surprise liens that occurred previously.  So, in essence, it covers the timeframe prior to the mortgage closing.  That is why a new one needs to be done even on a refinance.  Generally speaking, law regulates title policy fees so all title companies charge the same amounts.

There are a few different things you can do to save yourself money on title insurance.  If you are refinancing, you can save over 50% by providing your old title policy and get the “refinance” rate instead of the higher “basic” rate.  Even on a purchase, you can save 20 to 25% by getting the “re-issue” rate if you get the old title policy from the seller.

RATE SHOPPING

Most people will check the Internet or pick up the newspaper to look up current interest rates.  What you see isn’t always what you get.  Unfortunately, there are many ways to get hurt when shopping for the best rate:

Short Pricing — It is not necessary for lenders to state the “lock-in” duration when advertising a rate, so while a rate may sound good, it may not allow enough time for you to close on your loan.  Most people don’t ask how long the quoted rate is guaranteed for — so make sure you do!

Low Ball Pricing — Some companies will lure you into a mortgage application with promises of a low rate, only to have the rate changes for the worse just before closing.  They may tell you your rate has expired or that the program is no longer available, or they may even delay the closing to break the lock.  It is not nearly as important to shop rates as it is to shop for a reputable lender.

Products — With all the different products and options available, borrowers need a good mortgage professional to help choose the right one that will best suit their needs and goals.  After all, a mortgage is typically the largest financial transaction people make in their lifetime.  It is far more costly to get the best rate on the wrong product that it is to get a competitive rate on the right program for you.

POINTS vs. NO POINTS

So you’re in the market for a mortgage.  After hearing about all the options and products, your head is probably spinning.  If that weren’t enough, after you pick your mortgage, you then have to decide whether to pay points, and how many.

What is a point, anyway?  Points are prepaid interest.  One point equals one percent of the mortgage amount.  One point on a $200,000 mortgage is $2,000.

People are often tempted to pay points because it will reduce their interest rate.  And why not?  If it saves you money in the long run, then it must be good.  But in the real world, it usually doesn’t work out that way.

Let’s look at an example: You take on a $200,000 mortgage with a 30-year fixed rate.  Your lender offers 8 percent with no points, or 7.75 percent with one point, or 7.50 percent with two points, and so on.

Generally, one point equals a quarter of a percentage point.  It’s not a hard and fast rule, but it usually works out that way.

The 8-percent/zero-point option equates to a monthly mortgage payment of $1,467.

The 7.75-percent/one-point option equates to a $1,433 monthly payment, but with $2,000 paid up front.

So your choice is:  save $2,000 now, or save $34 each month going forward.

It’s quite natural for you to make a few quick math calculations:  $2,000 divided by $34 equals roughly 59.  So 59 months (nearly five years) from now, the point you paid will pay for itself.

This is probably how some mortgage bankers will explain it to you.  In turn, you might respond by saying:  I plan to live here more than five years, so the point makes sense.  That can be a big mistake.  Worse yet, it’s the kind of mistake that goes unnoticed.  The simple calculation is flawed; that’s the whole problem.  This is one case where simplicity isn’t good.

Here’s why.  The question really boils down to how you can best use that $2,000.  You can pay a point, you can invest it, you can pay down other debt, or you can put it toward a bigger down payment on your house.  If you plow it into the down payment, now you have a mortgage balance of $198,000.  This changes the original choice you were faced with above.  Now the choice is:

The 8-percent/zero-point option gets a monthly mortgage payment of $1,452 with the lower starting balance.

The 7.75-percent/one-point option equates to a $1,433 monthly payment, but with $2,000 paid up front.

So now your choice is:  put the $2,000 toward the down payment, or pay the point and save $19 each month going forward.  Now when you do the quick math:  you will divide $2,000 by $19 and come up with about 105 months, or nearly nine years.  This isn’t quite the no-brainer the previous decision was.

The average family changes residences about every nine years, according to the National Association of Realtors.  And first-time homebuyers move frequently.  The Mortgage Bankers Association says the typical homeowner refinances once in nine years.  All this brings us to the average life of a mortgage, which is less than five years.  So, more often than not, borrowers will find themselves with a new mortgage before one point pays off.

The case for avoiding points is even more compelling when you refinance a mortgage.  That’s because the tax treatment is less favorable.  The points paid on a first mortgage when you purchase a home are fully deductible on your federal taxes that year.  That’s one of the selling points of points to begin with.  But on a refinance, you must amortize those points over the life of the loan.  This leaves you with slim pickings, at best, on the tax benefit side of the equation.  On a refinancing with $3,000 of points paid, you get to deduct just $100 per year on a 30-year loan.

Lenders love to take your point money.  But you should keep it and put it toward a sure thing, like cutting your loan size.

PRE-PAYMENT PENALTIES

Watch out for pre-payment penalties.  I don’t like prepayment penalties under any circumstance and would do my best to avoid them.  If you are getting a great deal on a loan that has a pre-payment penalty, try to keep it to a one-year period.  Additionally, make sure it’s a “soft” pre-payment penalty. That means there is no penalty if you sell your home, and you can reduce your principal up to 20% per year.  The only time you pay the penalty with a soft pre-payment penalty is if you refinance.  Still, there are so many options out there, why be stuck with a lemon like a pre-pay?

NEGATIVE AMORTIZATION

Negative amortization is when the loan balance increases rather than decreases. This is a dangerous game and is offered in exchange for a lower payment.  An example might be where the borrower makes a payment based on a low 4% rate but the actual rate being charged is 8%.  The difference between what is being charged and the amount paid is added to the loan balance.  Just like a credit card!  You pay interest on the interest as well (ouch).  Your home should not be treated like a credit card.  If the situation persists and home prices level off or even depreciate like they did 10 years ago, you may be unable to sell your home because you owe more than the value.  You may also be unable to refinance the loan because you exceed the maximum loan to value limits.  Avoid this like the plague.

PROCESSING FEES

The most damaging of all could be the additional processing fee (this may have a separate or different name).  This is really “points.”  What is worse is the fact that, because the lender is hiding it as a fee rather than points, they rob you of the tax deduction.

Greg Kazmierczak is Vice President of Marketing at Home123.com. Throughout his 12 years in the lead generation industry, he has developed several online lead generation platforms for auto finance and mortgage companies. He has written for various industry publications and has spoken at seminars on effective lead generation methods and building an effective mortgage lead generation program. He can be reached at greg@home123.com

Locating the best cell phone plan is important to almost everyone who owns one; the trick is to stay focused on the plan aspects you actually need that are within your price range. There is such an abundance of services available nationally that you need to research what types of plans are available; care is required otherwise a buyer can be tied to a contract they do not want.

If you are keen to use a monthly cell phone plan then you have the option of being charged by the minute or by the second. So before you make that decision you need to sit down and work out how many minutes you will use, approximately, per month.

Family plans are becoming more popular as are those based on your geographical location. You will need to take into account that these plans have disadvantages as well.

For prepaid cellular phones, the functionality is often limited so the phone and service you choose may not be able to do everything a similar phone can do when paid for monthly. Plans like those designed for small businesses and families have specific advantages if you are in that type of category.

Of course the biggest benefit a cellular phones that is part of a family plan is that calls made between those family members who are on the same contract usually get a discount. Special rates for family members are sometimes part of the contract and for those who use their phones a great deal, savings can be made.

For businesses with operatives around the country then free calls are normally available with National cell phone plans and are a real incentive to large organizations. There are no roaming charges for this type scheme which is another advantage that many business people find will actually win them over.

Unfortunately, this benefit is not included in regional plans and you will probably be charged for national calls albeit at a reduced rate. Prepaid cell phone plans are often the preferred type for travelers and business people as the traditional plan without roaming and long-distance charges might be best.

The great thing about technology, advancements made eventually become inexpensive and becomes affordable for almost everyone, which is why you see almost everyone with a cell phone. The same goes for the cellular phone industry and the plans offered to John Q. Public. With so many providers today, it is not difficult to locate and purchase a plan that is within the budget of just about any middle income class family.

Cell phones have become a major part of pop culture and families with middle and high school student know all to well how important a cell phone is for social interaction. Text messaging alone makes up large portion of the social interaction between adolescents in the primary grades. Through in the cost of ring tones and added accessories that teenagers demand, and a family cell phone monthly budget can become untenable if the correct plan is not purchased.

Shopping around for a cell phone plan that is affordable is not difficult with a little internet surfing and in no time you will have a plan that fits within your budget that meets your needs.

Phillip Hatley writes on many different subjects including finding inexpensive deals on electronic equipment. For more infomation on cell phone plans, please visit his website.

Most people understand how interest rates affect the cost of a home mortgage, but closing costs are a bit more of a mystery. Many first time homebuyers know that they’ll have to bring a check to cover the “closing costs,” when they sign the papers to close on their mortgage. But not everyone understands exactly what’s included in those costs. Even those who have gone through the process don’t always understand what the closing costs are and why they are paying them. Here are some of the closing costs and fees that you may have to cover when you buy a new house or refinance your mortgage.

Loan Origination Fees

Loan origination fees pay the lender for preparing and submitting the proposed loan, as well as for evaluating it and approving it. While some lenders offer a flat loan origination fee, most banks and lenders express the loan origination fee as a percentage of the total loan amount.

Points

Points are another fee that can be confusing to first-time home buyers. Simply put, points are a way to pay some of the interest on your loan up front, and thereby lower the interest rate on your loan. Lenders set their own price for points, but in general, each point that you pay will lower your interest about one-eighth of a percentage point and cost about $1,000 for every $100,000 of your loan. Points can be a good idea if you plan to live in the home you’re buying for a long time. If you plan to move within a few years, you won’t recover the cost of the points and you’re better off paying the interest on the loan.

Appraisal Fee

Before a lender will approve a mortgage, they require an independent appraiser to make a valuation of that home. The cost of the appraisal will be tacked onto your closing costs — usually between $100 and $400. You may also have to pay a survey fee to establish the boundaries of the property on which the house sits.

Application Fee

Most lenders charge an application fee when you apply for a mortgage, though a few notably do not. That application fee generally must be paid at the time you submit your application. Many lenders will apply your application fee to your closing costs. If you pay a $100 application fee, your closing costs may be reduced by $100.

Title Search and Title Insurance

Before approving your mortgage, lenders also require a title search and title insurance. A title search firm will research the history of the house you want to buy to make sure that the title to it is “clear” — that there are no outstanding liens or encumbrances that might impact the ownership of your home. Even a thorough title search, though, may miss some bizarre happenstance that could affect your home ownership. In that case, title insurance will pay any expenses related to fighting a claim against your title, or pay off your mortgage so that you are free to buy another house.

Credit Report Fee

The bank or lender will charge you the cost of getting your credit report, generally $40 to $50.

Recording and Transfer Fees

You may be charged a small fee for the cost of recording the sale with the county clerk’s office and other legal fees related to the transfer. In addition, you may have to pay a document stamp tax of about 35 cents per $100 of loan amount.

Prepaid Property Taxes and Escrow

The lender may require that you establish an escrow account that will hold premiums for things like homeowner’s insurance, private mortgage insurance and property taxes. These insurance policies and prepaid property taxes protect the lender from losing the house if you fail to insure it or pay taxes properly.

In addition, you will have to pay an attorney fee — generally $300-$500 — for your attorney to review the loan documents and represent you, and interim interest, the amount of interest due on the loan from the closing date to the end of the month.

All of these closing costs should be listed in detail in your closing papers so that you know exactly what you are paying in fees and charges. They should also be detailed in the official Good Faith Estimate that you receive before the loan closing. Some lenders will be willing to negotiate some of these costs and fees, or even waive them entirely.

For financial planning purposes, it’s important to understand all of the costs and fees of closing a mortgage. Buying a home is expensive, so every step you can take to plan for the future matters.

Jeremy Foster is a freelance writer who writes about financial products and specific services available from a mortgage lender.

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