Top 10 Financially Stable Cities in America

san-francisco-(2)

The global economic outlook is strong, according to recent information from Goldman Sachs. The firm predicts that global growth will reach 4 percent in the next year. The U.S. economy as we head into the new year is showing strong momentum and the unemployment rate is already below what the Federal Reserve deems as sustainable. Overall, the current economic environment is about “as good as it gets,” according to Jan Hatzius, Goldman Sachs’ chief economist.

Of course there are U.S. cities that are more financially stable than others. Here, we’ll take a look at 10 that are expected to top the list in 2018 based on growth, employment, and business opportunities. This list can help you gauge where you’ll have the best shot at getting your credit and finances in shape, and ideally, getting ahead with your personal finances.

  1. Provo, Utah

    This city was recently ranked as the best-performing city by the Miliken Institute, thanks to its robust high-tech sector and broad-based job and wage growth. The Provo/Orem region added 5,500 high-tech jobs between 2011 and 2016. San Jose, California-based Adobe has a major presence there and the region’s flagship college, Brigham Young University also accounts for a considerable amount of employment opportunities.

  1. Raleigh, North Carolina 

    Thanks to its low business costs and thriving research and development-driven industries, this city presents those looking for a new place to call home with big opportunities. Job growth over the next 10 years is predicted to be 42.66 percent. Raleigh’s competitive business climate continues to attract employers looking to relocate operations away from rising rents in major metro cities.

  1. Fort Collins, Colorado 

    This northern Colorado city is home to Colorado State University and it’s growing fast with many job opportunities in the tech sector. The average annual salary for one of the city’s major tech companies, Agilent Technologies, is $81,050. In fact, the whole of northern Colorado is growing right along with the rest of the state, with expectations of growing its population an additional 30,000 residents by 2040.

  1. Dallas, Texas 

    There are many Texas cities that could also make the list of financially stable cities, including Austin and San Antonio. But the Dallas/Plano/Irving region ranks in the top 10 thanks to its significant employment gains and overall strong economy. The region added 50,000 jobs in the high-skill professional, scientific, and technical service industries between 2011 and 2016. Dallas also has a stronghold in the housing market and is expected to lead in home sales in 2018. The median home price in the region is $339,950.

  1. San Francisco, California 

    The Golden City ranks high thanks to its steady increase in wages over the past seven years. Not surprisingly, the region’s tech growth continues to far outpace the rest of the country at 60 percent higher than the national average. Despite higher-than-average median salaries, extremely high housing prices make this city out of reach when it comes to a place to call home. In 2016, the median sales price for a single-family home was over $1 million.

  1. Bradenton/Sarasota, Florida 

    If you’re looking exclusively for string job growth, the Brandenton/Sarasota/North Port area is the place to be. It tops the chart in 12-month job growth. Last year the state of Florida’s unemployment fell to 3.7 percent, its lowest level in more than a decade. The current median salary is $40,592 and the median home price is $279,000.

  1. Nashville, Tennessee 

    Music City continues to outpace many other major metros in job and wage growth, with wages growing 36 percent from 2010 to 2015. Some 8,000 jobs were added across the professional, scientific, technical services, administration and support services industries in 2015 and 2016. Home to Vanderbilt University, Nashville also produces a large pool of employment talent and itself employs some 60,000 people. The salary average is $50,913.

  1. Charlotte, North Carolina 

    Like its eastern counterpart Raleigh, low business costs continue to attract employers to the Charlotte region. The professional, scientific, and technical services industries grew about 9 percent from 2015 to 2016, adding some 5,800 jobs. Median housing prices in the region — which was so hard hit in the housing crisis a decade ago — rebounded to $245,000 in 2016.

  1. Atlanta, Georgia 

    Known as the Empire City of the South, Atlanta grew its job economy by 45,000 people in 2016, spanning industries including dining, health, construction, and film and television. While salaries in the region aren’t exceptionally high (averaging $58,899), that is balanced by a lower median home price of $218,350 as compared to booming housing markets like those in Denver, Seattle and San Francisco.

  2. Seattle, Washington 

    While the city has always been a popular tourist destination, it has recently gained attention for a consistently strong job market over the past decade. With both Amazon and Microsoft headquartered in the city, software developers continue to flock there where they can earn an average salary of $132,000. For those looking for tech and software opportunities, Seattle presents a much more affordable option than San Francisco. The median sales price for existing single-family homes at the end of 2016 was $468,785, compared to $1,056,561 in the San Francisco Bay area.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

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10 Tips for Doing Your Taxes Yourself

W-4 Tax Form

If you’re planning to file your own tax returns this year, you’re in good company. Approximately 33 percent of Americans file their own taxes each year.

As you’re gathering all of your 2017 tax documents and preparing to file your taxes there are some important things to keep in mind. Following these tips will help you avoid common pitfalls and mistakes and ensure you keep as much of your own money in your pocket as possible. After all, the less money you have to give to Uncle Sam, the more you can put towards reaching your financial goals, paying off debt, or otherwise positively impacting your credit score.

Know the filing deadline

We all have April 15 burned in our brains as the last day to file taxes. But if that date falls on a weekend or a holiday the due date can be different by a couple of days. Of course, this is always to the taxpayer’s advantage, as no calendar occurrence move the due date prior to April 15 in any year. If the date is different it will always be later than April 15. For example, the filing deadline this year is April 16, 2018.

Make sure you need to file

If you’re not sure whether or not you need to file, you can find out using the IRS’s online Interactive Tax Assistant. By answering some basic questions about your filing status, gross income and whether you had federal income tax withheld, you will be able to determine whether or not you need to file for a particular tax year.

Review last year’s tax returns

Reviewing the information from the previous year’s federal and state tax returns will make the current year’s filing much simpler. Much of the information will be the same, including employer federal ID numbers, children’s social security numbers, etc.

Gather all necessary income documentation

Make sure to gather all forms that include income information, specifically those from employers and financial institution. These includes:

  • Form W-2 (wages)
  • W-2G (gambling winnings)
  • 1099-INT (interest)
  • 1099-DIV (dividends)
  • 1099-B (investment sales)
  • Combined 1099 (brokerage combined tax statement)
  • 1099-MISC (independent contractor work, royalties)
  • 1099-R (retirement distributions)
  • K-1 (MLP, Partnership or S-Corp share of income)
  • SSA-1099 (Social Security benefits)
  • 1099-G (unemployment benefits and state tax returns)
  • 1099-C (forgiven debt).
  • Income Adjustment Documents, including Form 1098-E (student loan interest); 5498 (IRA contributions); 5498-SA (HSA/MSA contributions); and 1098-T (tuition).

Determine whether or not you should itemize deductions

Itemizing deductions is only beneficial of those deductions will exceed the standard deduction. If you’re using a tax software program it will guide you as to what you should do. If you do opt to itemize your deductions, you will need forms including 1098 (mortgage interest) as well as receipts for expenses such as charitable contributions, unreimbursed employer business expenses, and medical expenses.

Don’t forget your state taxes

Most states require a separate state tax return to be filed. There are seven states that don’t collect state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

Check and double-check your return

Before you drop that tax return in the mail or hit submit when e-filing, make sure that you’ve checked the figures you’ve entered when filing your return. A mistake can mean a filing error that could give you an overinflated refund you’ll have to pay back later.

File on time

Even if you owe an amount you cannot pay in full by tax day, it’s important to file on time and to pay as much as you can. Doing so will allow you to avoid a late filing penalty and to minimize interest charges on any unpaid balance. If you cannot pay your taxes in full, you can request an installment agreement from the IRS.

Tax advantage of free filing

The IRS offers Free File to file your federal taxes without paying any fees. The amount of your adjusted gross income determines the version you will need to use. If it’s $66,000 or less, you can use the free filing software. If your adjusted gross income is higher, you will use Free File fillable forms that are the electronic version of its paper forms.

File electronically

You can still file paper returns and many filers do so because they’re uneasy sending their personal and tax information over the Internet. However, e-filing via the IRS website is very safe and it will expedite your refund if you’re getting one.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

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16 Cities Where it’s Cheaper to Buy than it is to Rent

chicago

January is a natural time to take stock of your financial life, and to dream big dreams about 2018. Could this be the year you make the leap to homeownership? Or will you make a big change and trade in your mortgage payment for a landlord? While the housing market has slowly recovered from its dip in the 2000s, blind faith in housing gains has not. Home ownership rates hit a 50-year low in 2015, and first-time home buyers are now waiting a record six years to move from renting to buying. In fact, young adults looking to upgrade out of their one-bedroom apartments are increasingly renting single-family homes rather than buying. Single-family rentals — either detached homes or townhomes — make up the fastest-growing segment of the housing market, according to the Urban Institute.

In the complex calculus that’s required for the renting vs. buying decision, one variable stands out: Which is cheaper? If that seems like a tough question to answer, there’s a good reason: crunch the data from America’s largest cities, and you’ll learn it’s a perfectly split decision. Home buying is a better option for those who plan to stay in one place for 3-5 years or more. It’s also a good investment in many housing markets. According to an Urban Institute analysis, among 33 top metropolitan areas in the U.S., there are 16 where buying is cheaper.

  1. Miami

    While it’s cheaper to buy than rent there, it would be a stretch to call the Miami housing market a bargain. A median-priced home still consumes 32 percent of a median earner income, above the recommended 30 percent.

  2. Detroit

    Not long ago, it was possible to buy a home in Detroit for well below the median home price in the U.S. The Detroit area has seen some revitalization in recent years, however, and while housing prices have gone up, it’s still a better value to buy a home there than it is to rent one.

  3. Chicago

    Rent in Chicago is on the rise faster than home prices. While they may level out in the near future, it’s a good time to buy while you still can.

  4. Philadelphia

    Renting is significantly more expensive than buying in the City of Brotherly Love. In fact, the average wage-earner would need a 36 percent raise to afford the average rent there. Buying, however, is more affordable.

  5. Tampa, Florida

    For roughly 90 percent of Tampa communities, renting is more expensive than buying.

  6. Pittsburgh

    The average rent in Pittsburgh is $1250 per month, whereas the average home price is just over $145,000. Broken down, it’s cheaper to buy in Pittsburgh, as your monthly mortgage will be much less expensive than the average rent.

  7. Cleveland

    In this popular college town, a homebuyer will save an average of $200 a month if they pay a mortgage instead of rent.

  8. Cincinnati

    Historically speaking, it’s been cheaper to rent than buy in Cincinnati based on the percentage of a person’s income that went to housing costs. That number is now lower for buyers and higher for renters.

  9. Orlando

    In the home of Disneyworld, the average monthly rent will will cost you roughly double what the average comparable monthly mortgage payment will.

  10. Houston

    Even though median rents are falling in Houston, it’s still cheaper to buy, especially if you plan on staying in your home for three years or more.

  11. San Antonio

    Average monthly rent for an apartment in San Antonio will run you $1,226 (estimated as recently as December 2017). The price of a home in the area is $232,000. While the housing market is trending upward, it’s still more advantageous to buy a home, especially if you plan to stay in the area for a long period of time.

  12. New York

    It’s no secret that home prices in the New York City area (including Newark and Jersey City) are well above the national average. However, rental prices are even higher, so if you can afford to buy property here, you’d be better off doing so rather than renting.

  13. Minneapolis/St. Paul

    The Twin Cities are becoming an increasingly popular to destination for young families to move, so it’s a good time to invest in property here instead of renting it.

  14. Kansas City, MO/KS

    Both rents and housing prices are low in the Kansas City area (average rent will cost just under a thousand dollars, while the average home price is $126,100), but buying is better long-term, as it offers more benefits, including potential tax write-offs.

  15. Columbus, Ohio

    Many market experts consider Columbus a “no-brainer” metro area as far as buying over renting. With affordable housing on both sides, the advantage goes to buying.

  16. Boston

    While a buyer may need a large income (or two above-average incomes) to buy here, they’ll need a slightly larger one to rent long-term.

If you’re looking to rent or by and are concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

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10 Ways to Get a Jump Start on Your Taxes

Taxes

Tax season is fast approaching, with everyone’s employer due to send their W-2s by the end of January. Even though we’re still in the middle of the holiday season, it’s never too early to start getting ready to file your taxes.

It’s helpful to be mindful of your taxes throughout the year, which will help you stay organized and avoid scrambling every year when tax season rolls around. Here are 10 ways to get a jump start on your taxes now, or anytime of year:

Figure out which forms you’ll need

Since everyone’s financial situation is different, there are many different tax forms that suit these different situations. If you’re unsure which tax form to use, visit the IRS’s website or consult a professional.

Keep all receipts in the same place

If you’re someone who itemizes deductions instead of standard ones, you you already know how important it is to store all of your receipts together in the same place. If you lose any, it could cost you. Sort and store them throughout the year to avoid a last-minute scramble.

Store all tax returns together 

Since we often have to reference the previous year’s return when preparing the current one, it’s a good idea to make sure you store them all in the same place, whether it’s a desk drawer, filing cabinet, or even a shoebox under your bed.

Consider filing an extension

It might seem counterintuitive to suggest an extension in a list about being prepared. However, if you file an extension and wait until later in the year, accountants will be less busy and you’ll end up filing in less time. This is also helpful for anyone experiencing any kind of stressful life event, such as those who were involved in any of the hurricanes in Texas, Florida, or Puerto Rico this year.

Review/revise your W-4

If you’ve experienced any life changes from the previous year (adding or losing any family members), ask your employer if you can review your W-4. The IRS actually recommends doing this every year.

Do your research

Are you going to prepare your taxes yourself, or are you going to hire an accountant or tax-preparation service? If you plan to do them on your own, make sure you educate yourself about the deductions you’re entitled to. If you plan to hire someone, check around and make sure they’re reputable.

Save your money

Unless you fill out the 1040EZ form and mail it in yourself, it’s going to cost you money to file your taxes. Some people are happy to pay this to ensure that they’ve done it correctly. You may also still owe taxes in addition to what you’ve already paid in. If you’ve saved for it, it shouldn’t be a problem.

Check your deductions

If you’ve had any major life events this year (bought a house, gotten married, had a child, etc.) you may be entitled to some sizable deductions. It’s a good idea to research all possible deductions to avoid overpaying your taxes.

Choose between itemized and standard deductions

Depending on what type of work you do and your financial situation, you may need to do itemized deductions, where you get credits for everything you’ve spent, rather than taking the standard deduction as dictated by your filing status. If you need to know more, consult a professional.

Track all charitable donations

Charitable donations are tax deductible, so if you have any monthly or one-off donations, make sure to keep track so that you can deduct these expenses from your taxes.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

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10 Ways to Manage Your Student Loans

Manage Student Loans

Student loans are a hot topic these days, with everyone wondering the same thing: How are current college students or recent college graduates going to repay theses debts?

While millions of Americans have been navigating these waters for years, new graduates may be nervous about the total bill for their degree. Education is still a wise investment to make, and paying these loans back is very doable.

Here are a few tips to help you manage your student loans and keep them from overwhelming you:

Choose a career field that will pay you back

For those who aren’t 100 percent sure what line of work they want to go into, a career in public service can be rewarding, in more ways than one. No only will you get the benefit of the opportunity to improve your community, but working for a local, state, or federal government agency makes you eligible to apply for the Public Service Loan Forgiveness Program. If you qualify, some of your student loan debt may be forgiven. Additionally, since the public sector is about to experience a mass exodus in the form of baby boomer retirement, there’s predicted to be millions of vacant jobs in the coming years for millennials to fill.

Add a little to your monthly payment

If and when you can afford it, add $10-20 to each monthly payment you make. This amount will be applied directly to your principal amount, as opposed to paying off some of your interest. This also creates a small avalanche effect of its own, since reducing the principal amount also reduces the interest accrued.

Get a part-time job

It’s not ideal, but if you’re already employed full-time, and your loans are still overwhelming, there might be some part-time jobs out there that can help ease that burden. The side-hustle economy is booming, and there are hundreds of jobs out there that can be done on your own time and at your own speed.

Expand your job search

If you’re not finding full-time work in your area that pays enough to help you manage your student loans, consider expanding your job search… across the ocean. A lot of other countries, such as Japan, Korea, and China, are looking for native English speakers to educate students. These jobs pay well and often offer paid room and board, so you can send as much money home to your student loans as you want.

Cut out wasteful spending

Instead of buying a morning cup of coffee every day on your way to work, make your coffee at home instead. At the end of each month, calculate the money you didn’t spend on daily coffees (or other similar luxuries) and consider adding that amount to your student loan payment that month.

Consolidate your loans

Professional loan consolidation or credit repair may be a good option for those who have multiple loans from various lenders, and may be paying several different interest rates. Loan consolidation can be done in a variety of ways, but if you’re not sure where to begin, a specialist can help you.

Find employers that offer tuition assistance

Many different industries that didn’t exist twenty years ago have taken root in America, and they’re looking for the best talent, which makes them competitive with their benefits packages. Many employers will now offer tuition assistance or reimbursement. Try asking a new or prospective employer if they would consider putting this in your benefits package. The worst they can do is say no!

Apply the ‘avalanche’ method

If you have multiple loans, make the largest payment to the one with the highest interest rate each month, paying it down in a shorter amount of time. When this is paid off, move to the next highest interest rate, then the next, and so on. While already a popular method of paying off large sums of credit card debt, this can also help those who have multiple loans at varying interest rates.

Refinance through a different lender

If all you want is to simply lower the monthly amount of your student loan payment, try refinancing through a different lender. New loans generally get lower interest rates, so take advantage of this.

Bump your payments incrementally

During the first year of student loan repayment, you may not be able to pay more than the bare minimum due, and that’s ok. But if you get a raise, and you can afford it, use the raise to bump up your payment a small amount. Do this every year and before you know it, you’ll cut months or even years of repayment off your loan.

 

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

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10 Ways to Approach the Credit Talk When You’re Getting Married

Credit Discussion

Financial matters can be an uncomfortable or touchy subject to discuss with friends and loved ones. However, if you’re about to walk down the aisle with someone, it’s important to have an honest discussion about credit. After all, “till death do us part,” means you’re essentially inheriting each other’s credit for that long, too.

Since you have chosen to marry this person, however, chances are that you have a good idea of their preferred communication style. Use this to your advantage when you decide to bring up this all-important discussion. If you’re still uneasy about approaching the subject, here are some tips and guidelines to help.

Just ask

While this scenario isn’t ideal for everyone, it works for some couples. If you’re curious about your future spouse’s credit history and outlook on credit, just ask them. You may be surprised to realize that they’re relieved to have the conversation as well. At the end of the day, you need to know where each of you stand.

Take a marriage course

Many people who practice specific religions and wish to get married in their preferred place of worship may be required to undergo a “marriage course.” If this is the case for you and your soon-to-be spouse, ask your church leader if he or she plans to work finances into the discussion at some point. If not, request to do so. The purpose of a marriage course is to set boundaries and identify potential obstacles ahead of time, eliminating the possibility of more serious issues down the road.

Enlist a neutral third party

If you’re uncomfortable with this topic of discussion, try enlisting the services of a mediator. They often offer more services beyond civil disputes and divorce. They’re trained in conflict resolution, so if this has been a topic you’ve broached unsuccessfully at some point, they can help you resolve it in a calm manner.

Schedule a “credit discussion”

If you haven’t yet talked to your future spouse about this all-important subject, he or she will likely suspect the discussion is coming. Try asking them over dinner one night if the two of you can schedule a meeting to discuss your individual finances, and decide if joining accounts is right for you both.

Try premarital counseling

Many couples like the idea of being well-prepared for the challenges of marriage beyond just the financial aspect. Many counselors specialize in couples therapy and can serve a similar role as that of a church leader mentioned above in helping you to navigate a constructive discussion. Visiting a couples therapist doesn’t mean your relationship is in trouble. We often see doctors for preventative care; why should your relationship be any different? Plus, as a neutral third party who will be dedicated to the health of your relationship, they can help you outline a plan that works for everyone.

Determine your financial compatibility quiz

If you want to approach the subject of credit, but are unsure of how to do so, try asking your partner to take a financial compatibility quiz. There are many quizzes online that can help you judge your compatibility when it comes to matters of credit and how you manage your finances. This is a great way help you get on the same page with your soon-to-be spouse.

Email them an informative article to open the discussion

There are many credit repair resources online that offer tips on giving your credit a boost before a major life event. Consider using one of these to your advantage by sending an article to your future husband or wife as a catalyst for starting the conversation.

Bring it up casually

The ads and events we’re subjected to every day actually offer a perfect opportunity to introduce the topic of your current financial standing and hopes for your future together. There are certainly plenty of credit-related issues in the news and in mainstream media these days. The next time you hear a story about a credit breach or see a commercial related to obtaining a home or car loan, use this as an opportunity to start a conversation. Or next time you’re driving and see a billboard for a credit repair company, point it out and get the ball rolling.

Talk about your personal financial goals

Talk to your betrothed openly about your lifetime goals and how your finances and credit will impact them. Maybe you’d like to buy a home, make different types of investments, or set yourself up to travel the world in your retirement years. Sharing these goals and dreams may prompt your partner to open up about their own financial vision for the future.

End on a positive note

Whatever comes of your discussion, make sure to end it on a good note. You’re getting married! So pop a bottle of champagne and share a toast. There’s always a reason to celebrate such a happy event and look forward to the endless possibilities the future may hold.

 

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

 

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10 Ways Divorce can Affect your Credit

how-does-divorce-impact-credit-score

As nearly half of the American population already knows, divorce is a difficult, emotional process to go through. This difficulty can be compounded depending on the number of years a couple has been together, the dollar amount of their acquired assets, and whether or not they have any children.

Divorce can also have an impact on your credit, though the proceedings themselves are not the reason for this. In other words, couples shouldn’t expect their credit scores to plummet the second they file for divorce. However, there are things that occur during divorce that can have a negative impact on credit. Here are 10 ways in which a divorce could affect your credit score:

  1. Having to refinance your home

    In order to move a property into one person’s name, it may be necessary to refinance your mortgage. As with any refinance situation, this will require a hard credit inquiry, and may also potentially add a great deal of new debt for one person.

  2. The splitting of the debt was uneven

    When assets are divided, one person may get to take more of the income, property, or assets, but also more of the debt. It all just depends on how the debt is divided.

  3. Going from two incomes to one

    If possible, it’s helpful to examine finances before a divorce and determine new budgets for both parties, so as to avoid falling behind on any bills or payments. Many divorced individuals report that losing another person’s income made the single greatest impact on them financially. Setting up a new budget early on can help avoid this issue.

  4. Not disclosing all debt during the proceedings

    At some point during the divorce process, both parties are required to disclose their financial accounts. However, as former spouses sometimes learn, not everyone is truthful about these assets. Running a credit report is the best way to ensure you’re aware of every account bearing your name.

  5. One party doesn’t pay his or her agreed-upon share

    Most courts are willing to work with couples to help them discuss and agree on a payment plan for shared assets, such as a home or any jointly-owned property.

  6. One party still has access to the other party’s accounts

    In the event that divorcing spouses do not split their joint accounts, both parties will still be responsible for any additional charges. It’s best to split any joint accounts as soon as possible.

  7. Credit limits are decreased

    Many creditors regularly check up on their clients to see if there has been a salary change, and most credit card agreements state that limits can be decreased at the creditor’s discretion. If one spouse was making more money than the other, and the accounts are separated, a credit card company can choose to lower the limits for one or both spouses. This can, in turn, affect credit scores, as well as catapult credit card holders to their maximum limits very quickly.

  8. The divorce turns ugly

    While no one enjoys going through divorce, the best solution is to try and remain civil to one another, lowering the risk of spouses doing financial harm to one another out of spite.

  9. There is confusion over the divorce decree

    People can often be confused about their financial responsibility as stated in the divorce decree. If you are unsure of where you stand or what you must pay, consult your attorney, family court facilitator, or mediator.

  10. Spouses don’t work together

    Sometimes, electric bills can be overlooked or go unpaid. Keeping the divorce process as amicable as possible helps parties communicate with one another over their shared financial responsibility after the households have been completely separated. Working together ensures everyone’s credit remains in good standing.

 

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10 Tips to Secure the Best Interest Rate on your Mortgage

guarantee-a-mortgage

The process of buying a home is a very involved one, and can be daunting, especially for first-time buyers. It’s often a whirlwind of paperwork, credit reports, and scrambling to tie up loose ends.

One of the biggest factors that goes into calculating your monthly mortgage payment (other than the size of the loan itself) is your interest rate. Some of this is determined by the Federal Reserve, but it is mostly determined by you and where you stand financially, and many factors are considered. Here are ten tips on securing the best interest rate on your new mortgage.

Choose between a fixed or adjustable rate mortgage

While many people might be wary of an adjustable rate mortgage (ARM), it can be a better option for those who plan to pay off their mortgage in a short amount of time. For the introductory period of an ARM loan, the interest rate will be lower than that of a fixed rate mortgage. Just make sure you’re prepared to see an increase in your monthly mortgage payment after the introductory period is over.

Make the biggest possible down payment

The larger your down payment, the less money the lender will have to give you, and the lower your interest rate can be. Your interest rate is partially based on your home’s loan-to-value (LTV). For example, if a home is worth $200,000, and the loan is for $199,000, that would be considered a high LTV and is more risky for a lender. If this ratio is lower, however, you might be rewarded with a lower interest rate.

Make sure your credit is in excellent shape

While there is no one credit score needed to buy a house, those with higher credit scores have usually demonstrated good financial competency, and those are the types of consumers to whom lenders can offer lower interest rates.

Pay for points 

It it possible to pay extra directly to your lender in order to lower your interest rate. For every one percent of your loan amount you are willing to pay extra, it could amount to as much as half a percent off your interest rate. Essentially, you are just paying a larger amount of interest up-front.

Have a long employment history

Even if you haven’t been at the same job for several decades, demonstrating that you have no (or minimal) periods of unemployment shows lenders they can count on you to pay your mortgage in full every month. This can help lower your interest rate.

Prove income stability

If you can prove that your line of work is in high demand with no sign of slowing down, or if you work for a large, profitable company, your lender may take this into account when processing your paperwork. Income stability will help show that you won’t be likely to miss any mortgage payments.

Lower your debt-to-income ratio

Even with a high credit score, it’s possible to accumulate a lot of debt. Lenders don’t want you using more than roughly 40 percent of your monthly income on your mortgage, car payments, and credit card bills. The lower your debt-to-income ratio, the lower your interest rate will be.

Build up cash reserves

Most people know they should have enough savings to cover about six months worth of bills. Proving to your lender that you can still pay your mortgage in the event of a job loss will help you score a lower interest rate.

Shop around

Different lenders have different criteria for their loans. Finding the one that suits you best can help ensure you get the best possible interest rate for your financial situation.

Close on your loan as quickly as possible

Some buyers need 30 days to close; others might need as much as 60 days. If you can close within the initial 30 day window, however, you might pay as much as a half a percent point less than those who need 60 days to close.

 

Image: iStock

The post 10 Tips to Secure the Best Interest Rate on your Mortgage appeared first on Credit.com.

10 Tips to Secure the Best Interest Rate on your Mortgage

guarantee-a-mortgage

The process of buying a home is a very involved one, and can be daunting, especially for first-time buyers. It’s often a whirlwind of paperwork, credit reports, and scrambling to tie up loose ends.

One of the biggest factors that goes into calculating your monthly mortgage payment (other than the size of the loan itself) is your interest rate. Some of this is determined by the Federal Reserve, but it is mostly determined by you and where you stand financially, and many factors are considered. Here are ten tips on securing the best interest rate on your new mortgage.

Choose between a fixed or adjustable rate mortgage

While many people might be wary of an adjustable rate mortgage (ARM), it can be a better option for those who plan to pay off their mortgage in a short amount of time. For the introductory period of an ARM loan, the interest rate will be lower than that of a fixed rate mortgage. Just make sure you’re prepared to see an increase in your monthly mortgage payment after the introductory period is over.

Make the biggest possible down payment

The larger your down payment, the less money the lender will have to give you, and the lower your interest rate can be. Your interest rate is partially based on your home’s loan-to-value (LTV). For example, if a home is worth $200,000, and the loan is for $199,000, that would be considered a high LTV and is more risky for a lender. If this ratio is lower, however, you might be rewarded with a lower interest rate.

Make sure your credit is in excellent shape

While there is no one credit score needed to buy a house, those with higher credit scores have usually demonstrated good financial competency, and those are the types of consumers to whom lenders can offer lower interest rates.

Pay for points 

It it possible to pay extra directly to your lender in order to lower your interest rate. For every one percent of your loan amount you are willing to pay extra, it could amount to as much as half a percent off your interest rate. Essentially, you are just paying a larger amount of interest up-front.

Have a long employment history

Even if you haven’t been at the same job for several decades, demonstrating that you have no (or minimal) periods of unemployment shows lenders they can count on you to pay your mortgage in full every month. This can help lower your interest rate.

Prove income stability

If you can prove that your line of work is in high demand with no sign of slowing down, or if you work for a large, profitable company, your lender may take this into account when processing your paperwork. Income stability will help show that you won’t be likely to miss any mortgage payments.

Lower your debt-to-income ratio

Even with a high credit score, it’s possible to accumulate a lot of debt. Lenders don’t want you using more than roughly 40 percent of your monthly income on your mortgage, car payments, and credit card bills. The lower your debt-to-income ratio, the lower your interest rate will be.

Build up cash reserves

Most people know they should have enough savings to cover about six months worth of bills. Proving to your lender that you can still pay your mortgage in the event of a job loss will help you score a lower interest rate.

Shop around

Different lenders have different criteria for their loans. Finding the one that suits you best can help ensure you get the best possible interest rate for your financial situation.

Close on your loan as quickly as possible

Some buyers need 30 days to close; others might need as much as 60 days. If you can close within the initial 30 day window, however, you might pay as much as a half a percent point less than those who need 60 days to close.

 

Image: iStock

The post 10 Tips to Secure the Best Interest Rate on your Mortgage appeared first on Credit.com.