Posted on 24. Apr, 2016 by Money Cactus.
If you’re planning to buy your own home soon, chances are you will need to acquire a mortgage. You have two existing options in doing so. One, deal with banks and other financial institutions directly. The other option is hire a mortgage broker to do the work for you. Here is what you need to know about them and why you should consider in hiring one.
When looking for a mortgage, a lot of real estate buyers research the services offered of a mortgage broker to ensure that they will be getting the best rates. Working with an experienced, competent mortgage broker can make your mortgage search much easier. A mortgage broker can help you find the right mortgage in a short amount of time.
WHAT IS A MORTGAGE BROKER?
A mortgage broker is a professional agent who acts as a middle person between the lenders and borrowers. Mortgage brokers earn by broker fees that fall around 1% to 2% range per loan. To make it easier to understand, think of them as a recruiter. They coordinate with people interested in securing a home mortgage and deal them up with a lender.
Their work includes knowing you and your financial capacity, calculating what rates you could be approved of, sending your application forms and discussing with you on-going applications. There are circumstances that mortgage brokers act as a middle person between buyers and big banks. More often than not, mortgage brokers can secure you a better rate than if you go to the big banks yourself.
- Saves time and effort
A broker saves you the time and headache from having to call up dozens of home lenders and compare all their mortgage rates. Sure you can apply mortgages by yourself. However, the problem with this is it can really be long and tedious. Whether you have a 9 to 5 job or managing your own business, mortgage applications can easily take a day or more. With a mortgage broker, all of this legwork is done on your behalf. Moreover, a broker also can help you get away from illegitimate home lenders trying to scam prospect buyers.
- Mortgage broker have more access to lenders
Mortgage brokers have access to a lot of lenders, even those you do not know about. A number of lenders rely to mortgage brokers to bring them good clients. There are instances that you cannot deal with lenders without a help of a mortgage broker.
Bear in mind is that every time you apply for a home mortgage and was disapproved, regardless of the reason, it leaves a mark on your credit history which is bad for your profile. With that being said, mortgage brokers use specialized software to gather the latest loan information offered by lenders and automatically match it to your financial situation and desired rates. The borrowing power of the clients becomes very clear in a short amount of time. This reduces the chances of being turned down for a home mortgage. No rejection equals to no heartbreak for you and your credit history.
- You May Save Some Fees
In acquiring a mortgage, several fees are involved. This includes original fees, application fees and appraisal fees. With the help of a mortgage broker, some, if not all of these fees can be waived thereby saving you thousands of dollars.
- They are more accessible than bank loan offices
Just like other agents, a mortgage broker doesn’t get paid unless the deal is closed. Thus, mortgage brokers tend to be more accessible and accommodating to potential home buyers than bank employees. Should you have any questions along the process, it is a lot easier to approach them.
In the end, whether you plan on hiring a mortgage broker or not, be wise in making decisions about your home mortgage. A small difference in monthly rates can mean saving thousands of dollars over a ten to thirty-year home loan.
Posted on 23. Apr, 2016 by Money Cactus.
Your first steps, your first love, your first job… Your first home. Life is full of joy giving firsts.
You just got married and can’t wait to co-own, you want to move out of your parents’ or you are simply just done with the renting spiral. For whatever reason, you are ready.
Not so fast ! Purchasing your first property is a big step. It’s a huge commitment that needs preparation.
Ideally, getting some professional help and sit down with a real estate agent and a financial advisor is your best move. But for now, you can already ask yourself some pointed questions to find out what you need and what you can have.
Here is to get you situated.
Can you afford it ?
Probably the most obvious one. If you came up with the decision to buy, it’s because you think you have saved enough for it. It’s where it all starts.
Are you financially ready to buy a property ? At this point, you need to be aware that this investment will have a significant impact on your overall finances. You also need to keep in mind that buying a property will involve other upfront costs : moving expenses, new furnitures, closing costs, down payment… So, make sure you can handle it.
Reviewing your financial situation is key before looking up for your dream house.
What if you can’t afford it ?
If you have saved enough, paying cash is always best. Otherwise, you will have to give up a certain percentage of your monthly income. In other words, credits.
Before making your mind about going for a bank loan, a private mortgage or any other option, you need to figure out what kind of monthly payment you can comfortably afford. A simple way to find out is by using an affordability calculator ( you can google it ) that will analyze and compare your gross income, your property taxes and borrowing payments with your down payment, interest rate and amortization. As a result, you will get your maximum purchase price, the maximum affordable mortgage amount and the monthly payment you can afford.
What’s your plan for the next five years ?
So, you want to buy a home. But how long would you be staying there ? Do you see yourself living there for the next five years ?
Real estate agents and finance experts will agree on this, if you are not planning on staying for at least five years, you might as well forget it right away. You simply would not recoup the expenses of buying even by selling back, and property depreciation will backstab you.
Are you buying with a partner ? If so, what to do ?
Before co-owning, you need to understand and master the concept of co-managing money ; as a couple, it is important to have a clear knowledge of your overall financial situation : how much money and / or debt your partner has. This will also help on determining whether you can have your dream house, a smaller version or just keep renting for now.
Sit down and expose yourself.
Is it worth it ?
What goes up, might come down. In the reality of today’s market, you need to keep in mind that the value of your property might decrease, look back on the housing crisis of 2007-2008. The depreciation rate varies depending on your area, the economy and some other factors. Call in mind you are buying a home not a house. If you’re plan is to stay there forever, this is irrelevant but if not, you should think about paying less than what you can afford. Why ? Big house equals bigger everything : expenses , repair, upgrades and bills.
Buying your first ever house can be either a dream come true or a nightmare. Jumping into the void and crossing your fingers won’t work. It is a lifetime investment. Do not rush.
Posted on 15. Apr, 2016 by Money Cactus.
Have you sometimes met people who walk into a room and just “own it”? Confident and professional, yet approachable and charming, someone who you’d love to get to know better? These people leave a lasting first impression that is also great for their careers, because it helps them stand out in the minds of interviewers, managers and colleagues. When promotions come up, there’s a good chance that these people will come to mind first!
“But I’m not naturally confident!” you might reply. Well, “fake it till you make it”. Soft skills are a SKILL: they can be learned. Focus on where you want to be, and you’ll be surprised how easily you can apply these lessons to your own first meetings.
So what can you do to “own” that room?
* Don’t be intimidated by new people. Don’t worry that somebody’s title, social standing, etc. make you lesser/different from them; we all have our own stories and insecurities. We all want to be heard.
* Strike a balance between talking and listening. Find common ground with your new acquaintance. Genuinely look forward to getting to know them as a person, not as an opportunity. Create a reciprocal relationship: it’s not just about what they can do for you. Instead of being someone with a “drive to succeed”, it’s better to be someone who also wants to help others succeed. You have more to offer than you think.
* Be authentically you. When you’re talking about your hobbies and interests, you’re probably at your most charming (although, read the room: don’t talk hunting to vegans, for example). There’s a lot of job opportunities where the hiring is done based on recommendations from friends and family, so quite often it really is more about who you know than what you know.
* Never underestimate the importance of personal appearance. This isn’t about “attractiveness”: you don’t have to be a supermodel, just take good care of yourself. (And let’s face it, even supermodels don’t look their best when they wake up in the morning!) You can be poised and presentable regardless of your looks; if you’ve got a nice haircut, an air of elegance, and a stylish wardrobe, you’re most of the way there. They say about some natural beauties that they’d look good even wearing a garbage bag, but really, it’s pretty unlikely that anyone wearing a garbage bag is ever going to get job referrals, or even a job, no matter how stunning they are.
Like it or not, people will draw conclusions about you based on the way you present yourself. There’s so many quick, easy ways to improve your appearance, and these can really be an investment in your future. For example, you could see a physiotherapist to improve your posture, a dentist for teeth-whitening, or a beautician to improve your skin. The latter isn’t just for women, either: we all have skin, so we may as well all have good skin! New technologies come out in beauty therapy all the time, such as IPL acne treatments which target the bacteria that cause acne. It’s worth keeping on top of the latest beauty trends to make sure that appearance-wise, you’re making the most out of what you’ve got.
It’s easy for success to overlook the quiet worker bee in the corner. Learning soft skills can be scary, but that’s true of many other skills as well, and the more you practice your social skills and present the best you that you can be, the more natural and confident you will become. So focus on that best you, and follow those dreams!
Posted on 12. Sep, 2015 by Money Cactus.
It’s often said that life insurance is one of those things that you often overlook and ignore until you actually need it. Unfortunately, once you need it it’s already too late. You have one shot to get it right with life insurance, and it’s as vitally important as leaving a will or trust for your family. There are several common myths that have continued to perpetuate in society, and they have given people a false comfort that they don’t really need insurance.
I have heard all too often that a couple without children has no need for life insurance and that the premiums would just be a waste of money. While every situation is unique, I would venture to say that there are plenty of times when a married couple would still benefit from some type of coverage despite having no kids. Consider that both are working full-time, and they make roughly the same salary each. It’s conceivable to think that they would have purchased a home together, or are pooling their money together for retirement. If one of them were to die could the other still afford the mortgage payment on their own? Then there is always the situation where the two incomes are disproportionate to each other and one makes significantly more than the other. In these situations, if the higher wage earner should pass, then it’s reasonable to think life insurance would be especially handy for the financial burden that would be placed on the surviving spouse.
Another common misconception is that a married couple with kids that has one stay-at-home spouse only has a need to take out a life insurance policy against the working spouse. This couldn’t be further from the truth. Consider all the responsibilities carried out by the stay-at-home parent like cooking, cleaning, and caring for the children. Should anything happen to them the working spouse would need someone to still handle all of those responsibilities. That means they would most likely need to hire a nanny, pay for day care, and even with help around the house. All of these things cost money, and were most likely not accounted for if they didn’t have an adequate insurance policy.
There is often quite a bit of debate about whether or not you should take out a term policy or whole life insurance. Truth be told, both have their pros and cons. A term policy is limited for a specific number of years and at time of expiration you need to renew. Then there is a whole life insurance policy, which basically means that the policy lasts your entire life. This can be beneficial a there is an investment option with these and health issues that arise cannot alter the coverage or premiums paid. In the end, I prefer to keep it simple and would advise you to obtain term life insurance quotes. Term is often easier to understand, makes more financial sense for a majority of people, and is more than adequate if you take out enough to cover you and your family in case of an emergency.
Posted on 22. May, 2015 by Money Cactus.
Sometimes it might seem like saving on your car insurance is impossible; after all, car insurance rates are what they are: there’s no flexibility afforded to insurance companies when it comes to pricing. Insurance companies file their rates with the government on a fixed schedule, so saving money falls to you and the decisions you make when shopping for your insurance policy.
Shop for the Best Rate
One of the most important steps in finding the cheapest car insurance rate is shopping around for the best price. Insurance companies have different risk pools and financial situations, so rates vary from company to company often by thousands of dollars. This is because the rates reflect how each company fared previously in the claims department: if there were a higher number of claims in the previous quarter, they might have to raise premiums this quarter in order to offset these losses.
Shop for a Safe Vehicle
A general rule of thumb is the safer the vehicle, the lower the premium, with obvious exceptions for more expensive or performance vehicles. Insurance companies face billions in litigation claims every year as a result of personal injury lawsuits, so if the insurance companies know the car is safe, they’re more likely to give you a lower premium.
Newer crash testing methods from the Insurance Institute for Highway Safety have forced manufacturers to make safety a priority. If it’s important to the insurance companies, it’s important for your wallet!
Shop for Home and Auto
It might seem obvious, but bundling all your policies together with the same insurance company usually means an instant 15-20 per cent discount on the combined policy. Furthermore, most insurance companies offer other added benefits, like a combined deductible, or increased liability limits free of charge. Bundling your motorcycle, ATV, snowmobile, RV, or boat with the same company will help you save as well, if the company insures recreational vehicles.
Shop for Discounts
Car insurance companies provide discounts for a wide range of clients, like the winter tire discount, good student discount, alumni association discount, or company discount. There are tons of discounts available, and it varies depending on the company. Be sure to ask your broker about any discounts you might qualify for!
Whatever type of insurance you’re looking for, it’s still important to shop around for the best rate and do your research.