Category Archives: Financial

Struggling to Get a Mortgage? Here’s Some Help

getting-a-mortgage

The real estate market has been struggling for a while for a variety of reasons, leading to plummeting home values and a lot of empty properties. There’s growing belief that rising rental prices will lead to an upsurge in homebuying; however, numerous Americans are struggling to get a mortgage, because they cannot meet the modern demands of picky lenders. If you’re planning to apply for a home loan, be aware of the following:

Times Have Changed

Before the real estate crisis, banks gave loans to almost anyone. These days, that’s not the case. To get a mortgage in today’s market, you will need to meet some strict requirements. This means you will probably need to have a very good credit score, a solid job and enough money to put toward a hefty down payment. Most importantly, you must prove that you can afford the loan, or you will have no chance for approval.

Some Important Tips

Often, when prospective buyers approach a lender, they have no idea what they are getting into. Before you do anything, it’s important to get a free copy of your credit report to check for inaccuracies. If you find any, get them corrected. You should also use a mortgage calculator to figure out what you can actually afford. This will help ensure that you aren’t declined for applying for a loan that’s out of your reach.

Once you get involved with the loan process, don’t do anything that could hurt your chances. Don’t apply for any form of new credit; this can throw off your debt-to-income ratio and make you look bad in the eyes of lenders. Also, don’t change jobs, even if the new opportunity pays more. Banks want a long, stable history of employment and shiver at the thought of instability.

Finally, if you are struggling to get a mortgage, check out local and federal first time buyer programs. Their requirements are far more lenient than those imposed by private lenders. Many also offer second mortgages which can be used to pay for down payments and closing costs.

UBid, Happybidday, Pennygrab: Are All Online Auctions the Same?

Auction user (photo by Petar Milošević)

Penny Auctions have grown in popularity over the past year, thanks to widespread radio and television promotion. Unfortunately, they’ve also come under plenty of fire for bilking unsuspecting consumers out of their hard-earned money. Sites such as UBid, Happybidday, and PennyGrab pit users against one another in auction-style online formats that promise to deliver bargain prices on brand name products. That said, although these sites seem quite similar at first glance; they aren’t necessarily the same.

AARP Issues Warning

Recently the AARP issued a warning to its members regarding penny auction sites that take advantage of unsuspecting consumers. According to the organization, many people don’t realize that many of these sites are unlike traditional online auctions, such as eBay, because they require consumers to pay for the right to bid. Ultimately, it doesn’t matter whether bidders win an individual action or not; they must pay to participate. This means that any time an auction ends; numerous people have lost money, allowing the auction company to reap large profits at the expense of its customers.

Are They All the Same?

While most penny auctions work the same way, not all maintain the same level of credibility. For instance, while Penny Grab and U Bid are accredited by the Better Business Bureau; Happy Bid Day is not. Likewise, while pennygrab.com and happybidday.com require customers to pay money for the right to bid, ubid.com says it only charges a consumer’s credit card if he or she actually wins. Ultimately, this characteristic makes uBid a traditional auction site, which sets it apart from typical pay-to-play auction sites that force consumers to put money at risk just for the right to participate.

FTC Urges Caution

Like the AARP, the Federal Trade Commission has expressed concern about the way some of these bid-and-buy websites work. According to the federal agency, even when participants win a penny auction auction; the vast majority end up paying more than they expected. Additionally, the FTC warns that some sites use automated bots to make false bids on products, which helps drive up prices to encourage higher profits for the company.

How to Make Your Home Cooler

cooler-home

Every year, it seems new record highs are going on the books. Unfortunately, the relentless heat can send utility bills soaring, leaving many people forced to cut back on other necessities just so they can afford to pay their monthly cooling bills. If you’re interested in learning how to make your home cooler, our home improvement expert has some good advice.

Paint Your Home

According to our in-house home improvement expert, Jim Dugan, paint color can really make a difference in home energy efficiency.

“Most people tend to choose paint colors based on personal taste,” he said. “This may be alright for people who live in mild climates; however, it shouldn’t be your only consideration if you live in one of the hotter regions of the country.”

Dugan says light colors of paint tend to be the best choice for people who want to reduce their energy costs, because these colors reflect more sunlight.

“If your home is painted a dark color, it’s going to soak up a lot of heat,” he said. “This will make the interior much hotter, and your air conditioner is always going to be running. Invariably, lighter colors make your home cooler, while darker ones make it warmer.”

Cover Your Windows

When light invades your home, the temperature will rise. By keeping your glass doors and windows covered, you can drastically reduce your energy costs. That said, according to Dugan, curtains and window shades typically don’t prove as effective as reflective covers.

“Reflective solar shades send a lot of sunlight in the opposite direction, which can really help to make your home cooler,” he said. “Solar privacy shades have been proven to lower utility bills by as much as 30 percent in homes that have a lot of windows. Although they are a bit more expensive, in the end, they can save homeowners a considerable amount of cash.”

What to Do if You’re Struggling to get a Mortgage

real-estate

According to Freddie Mac’s latest survey, 30-year mortgage rates remain near record lows, while 15-year rates linger .74 points lower than what they were this time last year. Low mortgage rates have combined with rock-bottom home prices to create ideal buying conditions; however, most buyers have remained on the sidelines.

Why Few Are Buying

Currently, average 30-year mortgage rates flounder at around 3.66 percent, while 15-year rates average about 2.95 percent. Usually, low rates encourage buyer activity; this hasn’t been the case for the past several years.

“People just aren’t buying for a variety of reasons,” said business and financial expert, Nathaniel Hutchinson. “A lot of people are afraid to buy, because they don’t want to take on new debt. More often than not, though, prospective buyers just can’t get approved for a loan.”

In response to the foreclosure crisis, most lenders tightened their requirements for loan approval. These days, applicants must live up to some pretty lofty standards to qualify for a mortgage.

“Banks want people who have very good credit scores, a strong job history and a good chunk of money to put toward downpayments,” Hutchinson said. “If you don’t have all three of these characteristics, lenders will perceive you as somewhat of a risky investment, and you’re liable to be declined.”

You Can Still Get a Loan

According to Hutchinson, even if you don’t live up to modern lending requirements, you can still get approved for a mortgage.

“In many cases, if you are struggling to get a mortgage, you can get approved by a local first time buyer program,” he said. “These programs tend to have much more lenient standards when it comes to credit scores and downpayment requirements. Additionally, some will even let you take out a second mortgage, which can be used to contribute toward your downpayment and closing costs. Usually, you only need to invest around $1,000 of your own cash to get approved.”

Is TheSmartBid a Scam or Are Penny Auction Reviews Unfair?

penny-auctions

In our continuing report on bidding fee websites, we’ve taken a look at many different companies. While some have been accused of using misleading or unethical strategies to deceive consumers, others enjoy high ratings from the Better Business Bureau. Currently, you’ll find numerous online penny auction reviews complaining about a supposed TheSmartBid scam. Before you invest a single penny at this site, learn what our tech expert has to say.

A Little Background

Penny auctions have taken a lot of heat from some major consumer advocates. According to technology expert Sarah McDaniels, users should know that these sites can be risky.

“Recently, the AARP and Federal Trade Commission both issued troubling consumer reports warning that many penny auction websites use unscrupulous strategies to take advantage of customers,” she said. “The FTC warns that some of these companies use automated bots, known as shills, to make fake bids on behalf of the companies themselves.”

McDaniels says this unscrupulous strategy can drive up prices and prolong auctions.

“The longer an auction lasts, the more people can get involved,” she said. “This generally encourages bidder failure and increases profits for the companies.”

Are TheSmartBid Reviews Fair?

A quick online search reveals numerous reviews complaining about an alleged TheSmartBid scam. According to McDaniels, this company is not alone.

“It’s difficult for consumers to know who to trust, because many online reviewers are just mad that they lost money and want to slander the penny auction,” she said. “That said, many of these companies do use deceptive tactics.”

Recently, QuiBids conducted a third-party audit to prove it didn’t use shills to scam consumers. Ultimately, the Better Business Bureau awarded the company an A- rating because of this. On the other hand, TheSmartBid.com has not conducted a similar audit; however, it has also earned an A- rating from the BBB.

“If you are dead set on participating at a penny auction, your best bet is to trust the BBB’s ratings,” McDaniels said. “Just know that this type of bargain-hunting is high risk. You are probably going to lose money no matter where you play.”

Before You Buy a Home: Real Estate Tips

before-you-buy

Freddie Mac recently released its latest survey, and the news was good for prospective buyers. Record low mortgage rates have combined with descending home values to create a buyer’s paradise. Unfortunately, many borrowers are having trouble securing loans. Before you buy a home, consider the following real estate tips.

Why it’s So Hard Nowadays

Just a few years ago, banks were passing loans out to all-comers; however, that all changed when the foreclosure crisis hit. Now lenders have implemented very tough requirements that make it hard to get approval. These standards are centered on three big factors: your credit rating, your job and your cash flow. Before you buy a home, learn how to keep from hurting your chances.

Your Credit Report

Get the latest copy of your credit report to ensure that everything is accurate. Even a few minor errors could keep you from securing a mortgage. If something is amiss, file a written or online report to get it corrected.

Your Job

Lenders value economic stability above all else. If a new job opportunity becomes available, you’d be best served to stay put at least until you are able to close on your home. Job security is an important part of the borrowing process. Even if the new job pays more, the lender is likely to view the move as risky.

Your Cash Flow

Before the economic downturn, you could get a mortgage without much of a down payment. That has changed. Nowadays you will be asked to put up roughly 20 percent of the home’s worth. If you have this kind of money, you’re in good shape. If not, you may have to make other arrangements. Before you buy a home, look into local home buying programs. Not only do many of these require much lower credit scores and offer lower mortgage rates; they often allow borrowers to take out smaller, second mortgages which can be used to fund down payment and closing costs.