Dec 3 2014

Stop Renting Your Router and Modem

By |December 3rd, 2014|Blog, Personal Finance Tips|Comments Off|

I wrote earlier about how I’m breaking up with my cable company. As of December 11th, my monthly cable bill will drop from about $110 per month to $37 per month. Oh yeah!

I am adding Netflix at $10/month, but that still $47 versus $110, which saves $63 a month. That’s $756 a year. It’s amazing how expensive it is to watch a bunch of crap on TV.

Anyway, now that I’m down to just internet, I had the option to either pay $37 per month for just internet service or about $50 per month for the internet service plus a router/modem combo from the ISP. They want me to pay $13 a month just to rent their crappy equipment.

Of course I’m not just going to take that kind of a fee, so I looked up how much it would cost to buy my own equipment. The answer: $107.98 plus tax. I got a nice $20 router with fantastic reviews and an $88 modem that was on the approved list from my new ISP.

$11 per month is $132 per year, and that is just to rent the stupid equipment. You don’t even own it. On the other hand, you can pay $108 up front (less than 10 months of rental fees) and avoid that charge forever.

How to Set Up Your Modem and Router

When you have your own modem, the only thing you needs to do is to give the ISP the MAC number on your modem. It should be right on the bottom of the hardware so it’s easy to find. Once the ISP has authorized your modem then you are good to go. Either plug your computer in directly with an ethernet cord or don’t be cheap and buy a $20 wireless router.

The router is what sends the wireless signal throughout the house. You plug this directly into the modem and then follow the router’s instructions to set up your network. I strongly recommend putting a password on your network unless you want people stealing your wifi and potentially your identity as well.

The best thing about owning your router is that you get to set the password yourself and no one else knows it. When the cable company sets everything up for you, the installer dude knows your password. Call me paranoid, but I don’t like strangers knowing my passwords even if they do wear a beautiful Time Warner Cable logo on their polo.

It’s pretty easy to set up your own modem and router at home, and this way you can avoid the $3 or $8 or $11 or whatever monthly charge to rent the equipment. It will save you hundreds of dollars in the long run.

Dec 3 2014

Improve Your Mortgage Approval Chances Before Applying

By |December 3rd, 2014|General Personal Finance|Comments Off|

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Buying a home is an exciting moment and a major milestone for new buyers.

But the process of applying for a loan can be downright confusing. Lenders have strict criteria when evaluating an application. Factors from credit history to employment and even how much you can put down on the loan all affect the rates you can quality for.

A mortgage will likely be your largest expense. So it makes sense to prepare your finances and take steps to put your application in the best possible light. It can mean the difference between getting approved or denied.

So how can you improve your mortgage approval chances?

The key is to be well prepared. Here we look at steps to take before applying for a home loan.

1. Review Your Credit Report

Lenders take on a degree of risk when taking on new borrowers.

To minimise risk, lenders will look at your credit history to assess your ability to repay a loan. Anything from late payments to delinquent accounts will negatively impact your credit rating which will likely affect your ability to secure financing. This is why you should first check your credit report to see if there is anything hurting your credit.

You can obtain a copy of your report from the following credit reporting bodies:

  • Veda
  • Dun & Bradstreet
  • Experian

You will be asked to provide your personal information for them to identify you. Any inaccurate information should be immediately disputed. Providing proof of the mistake will help to remove the error from your records.

Your lender will question your ability to repay a loan if you have a history of late payments or delinquent accounts. Pay off any accounts that are delinquent and continue making timely payments on other accounts. If you have any recent late payments, wait for at least six months before applying for a home loan and avoid taking on any new debt.

3. Establish Savings

A way to demonstrate financial responsibility is a genuine history of savings.

It shows lenders you are able to put aside a set amount each month and likely able to handle regular loan payments. Both of these reflect positively on your mortgage application as your savings can form part of your contribution. The more you have saved, the less you need to borrow.

Many lenders now require evidence of savings if you are borrowing more than 80% of a property’s purchase price. Savings will typically need to be around 5% of the purchase price although this depends on the lender. So on a $200,000 loan, you will need up to $10,000 saved to meet the minimum requirement.

Having more saved is better and could mean avoiding fees like Lenders Mortgage Insurance. LMI is designed to protect lenders if borrowers require more than 80% of the purchase price. Saving at least 20% not only means avoiding this fee altogether but could qualify you for more competitive rates.

3. Have a Steady Income

Employment stability is incredibly important.

Lenders will closely examine your financial capabilities which means looking at your employment history. Demonstrating a steady source of income shows lenders you are able to repay the loan. Being with the same employer for several years is a huge plus.

Most lenders typically prefer income from a current employer for at least six months. If you have recently changed jobs, then the lender will look at where you were employed previously. Be prepared to provide details to show stable employment.

Lenders closely examine every detail about new borrowers to minimise risk.

The good news is you can start taking steps to improve your chances of getting approved. This involves reviewing your credit report, establishing savings early on, and having steady employment. Working with a mortgage broker can help point you in the right direction to secure a loan for your dream home.

Photo courtesy of TaxCredits.net

Dec 3 2014

Home Buying Tips – What You Should Know Before You Buy a Home

By |December 3rd, 2014|General Personal Finance|Comments Off|

Owning a home is still a goal that many Americans wish to accomplish. However, if the collapse of the housing market taught us anything, it’s that home ownership is not for everyone. Buying a home is a huge decision that requires an extensive review of your current and future financial circumstances. Essentially… it’s an investment. While there are instances in which you can refinance your mortgage for financial relief, starting off on the right foot is your best option. With that being said, being well informed about the home buying process and your personal finances is a must to prevent financial hardship down the road. In order to do this you will need to:

  • Understand Your Current Financial Status
  • Apply for a VA Home Loan
  • Hire a Real Estate Agent/Being Home Shopping

Understanding Your Current Financial Status

Purchasing a home requires a significant amount of finances and the continued means to pay for the property. Interested veteran home buyers should start by assessing their current financial status to ensure that they are in fact ready to buy a home. In assessing your current financial status you will need to:

  • Know what you can afford
  • Know your credit standing

What Can You Afford?

It might seem very self explanatory when purchasing a home. However, many first time buyers make the mistake of underestimating the true costs of homeownership. This is in no way to deter you from purchasing a home, but to ensure that you’re purchasing a home that you can enjoy and not fall into debt with. Your monthly mortgage payment is not the only costs that you will incur once you sign on the dotted line. You will be responsible for closing costs, down payments, homeowners insurance, property taxes, utilities, and maintenance. It is ideal to get a general understanding of how much you’re looking at paying each month for the home. This will help you to factor what you can really afford.

What Does Your Credit Look Like?

Even if you intend to apply for a VA home loan, having a decent credit score and history are ideal. Good credit scores open the doors for more mortgage programs and allow you to get a better interest rate on your mortgage (which saves you money each month). You should pull your credit report to determine exactly what you’re dealing with. If you notice that you have a low credit score, you may want to clean things up before you begin searching for a home loan. Try to pay off old and outstanding debt and dispute any negative ratings that should not be on your report.

Applying for a VA Home Loan

American veterans have an abundance of programs and options out there for homeownership. Selecting the right mortgage provider will require a basic understanding of home loans as well as knowing a bit about the mortgage provider you intend to work with. As such, it is recommended that you do research on at least two to three mortgage providers before making a final decision. When looking at various VA mortgage programs, be sure to review information such as:

  • Down payment amounts – While may VA loan programs offer a no down payment incentive, it is not offered by all providers. Therefore, find out what the down payment percentage is and what the eligibility requirements are for qualifying for a low or no down payment offer.
  • Government guaranty – No one plans to default on mortgage payments, but in this recovering economy, there is always a chance. As such, the government often offers assistance for veterans which state they will pay a percentage of the home loan should you default for certain reasons.
  • Credit requirements – VA loans don’t have such strict credit requirements but are still worth looking into. Find out what the minimum credit score is for qualifying for a VA loan.
  • Interest rates – Lastly, check the interest rates of various mortgage providers based on your current credit score. You ideally want to find a mortgage provider that also offers good rates. This will save you money each month and allow you to pay off your home loan a lot faster. The Low VA Rates blog contains numerous resources on this subject, including a free Low VA Rates Buyer’s Guide E-Book.

After assessing the above information, you can then select the best mortgage provider. Once you’ve applied for the mortgage, you will be given a pre-approval letter which is necessary to begin viewing homes for sale.

Once you’ve gotten an approval notice, you are ready to begin shopping for your new home. Be sure to secure a real estate agent that understands the area you’re looking to buy in and also has an understanding of VA home loan regulations. From there, it’s just a matter of waiting until you find that place that you want to call home.

 

Dec 3 2014

Qualities of Successful Entrepreneurs

By |December 3rd, 2014|General Personal Finance|Comments Off|

A successful entrepreneur has to have much more than a great idea for a business. Starting a business is full of challenges that can be discouraging and cause a person to doubt the validity of his or her idea. A successful entrepreneur has what it takes to follow through with an idea for a product or service despite the challenges. Sukanto Tanoto is one example of a business person who has experienced success as an entrepreneur. Take a look at some of the qualities that help to make entrepreneurs successful in what they do.

Persistence

Most successful entrepreneurs are persistent. They thoroughly believe in their idea for a business. This makes it possible for them to push forward with a business regardless of the hurdles. Businesses can face challenges such as a loss of funding, construction delays, inventory issues and product flaws. If the person is not persistent in solving these problems, the business begins to suffer. The quality of persistence can also help an entrepreneur convince others such as investors that the performance of the business is going to exceed their expectations.

A Solid Education

An entrepreneur doesn’t necessarily have to have several degrees from a university to be successful with a business. The person does have to be knowledgeable about the industry that he or she wants to work in. For instance, a person who has worked her way from dishwasher to waitress to manager has a lot of knowledge and experience when it comes to the operation of a restaurant. This knowledge can help her become an entrepreneur who starts her own unique restaurant. Someone who knows the facts about a particular industry is more likely to be successful in starting a business within that industry.

A Desire to Keep Learning

Another important quality in a successful entrepreneur is a desire to keep learning. An entrepreneur can make adjustments and changes in his or her business by staying aware of trends in the industry. Also, he or she can run a business more efficiently by learning about current technology and methods of operation. In short, an entrepreneur who is always open to learning is able to sustain success in his or her chosen industry.

Excellent Communication Skills

An entrepreneur must be able to communicate well with others. Whether it’s talking with an employee, a franchise owner, a customer or a vendor, an entrepreneur should have great people skills. When an entrepreneur is easy to talk to, people are more anxious to work with the person to achieve the goals of the business. In fact, the best entrepreneurs are people who are inspiring and enthusiastic about what they do!

Finally, an entrepreneur must be dedicated to the success of the business. Even if the business starts out making lots of profit, the person must continually look for ways to make it better. This means that the person has a lasting dedication to the fundamental idea of the business.

Dec 3 2014

Rights and Responsibilities: The Essential Landlord Checklist

By |December 3rd, 2014|General Personal Finance|Comments Off|

Some people become accidental landlords simply by letting out their existing home when they have to move out for work or other reasons, and others set out to try and build a property empire.

Whether you are letting one or numerous properties, you are still a landlord and with that job title comes a set of rights and responsibilities that need to be observed and regulations that need to be adhered to.

This landlord checklist takes a look at what is involved in letting your property and what rules and regulations that you need to ensure compliance with.

Getting started

Preparation is everything when it comes to letting your property and there are a number of things that you need to address before you hand over the keys to your new tenant.

Take a look at addressing any minor repairs or maintenance issues before letting your property, such as fixing leaking taps, replacing light bulbs clearing any clutter that is unsightly and could also be a potential safety hazard.

In addition to the physical standards of the property being acceptable there are also safety standards that need to be met relating to gas and electrical services and also things like making sure any furniture like sofas, are flame retardant compliant.

Keeping your tenants safe

It is your responsibility as a landlord to make sure that any tenants in your property are protected to the best of your ability and that they are safe and free from any potential health hazards.

This will mean that all the gas and electrical equipment that you supply in the property has been safely installed and maintained according to current regulations.

The frequency of the safety checks will depend on whether your property is classified as an HMO, which is a House in Multiple Occupation. In England and Wales, your property will be considered as an HMO if at least 3 tenants live there from different families, or it is occupied by more than 5 people in total. Seek to verify the status of your property with your local council if you are unsure in any way.

Health and Safety

Local authorities operate a Housing Health and safety Rating System (HHSRS) which was introduced under the 2004 Housing Act and it may be that the council decide to carry out an HHRS inspection on your property at some point, to establish if you are compliant with these regulations.

This normally happens when a tenant contacts them to ask for an inspection because they feel it is not safe or it might be down to the fact that your rental property is situated in an area where other similar properties have been shown to be hazardous, so they will want to check that your is not in the same condition.

If you follow the rules relating to fire safety and have the gas and electrical equipment checked on an annual basis, you will not only be maintaining a good standard of health and safety in your rental property, but you will also be helping to keep the property fully rented with happy tenants who feel safe and comfortable in their surroundings.

Tenancy deposit

Rules came into place after April 6th 2007 that are designed to protect tenants deposits and if you rent out your home under an assured shorthold tenancy, you must use the tenancy deposit protection scheme.

This government-backed scheme is designed to provide a framework for receiving deposit monies and provides a system for releasing the money at the end of the tenancy subject to certain conditions being met.

You have to return the deposit to the tenant within 10 days of agreeing the figure to be returned and provided that they have met the terms of your tenancy agreement, there was no damage caused to the property and there are no rent arrears outstanding.

If you have a dispute with the tenant at the end of the letting period, you are entitled to keep the money within the scheme whilst you resolve any issues and agree on a final settlement figure if there are to be any deductions for damage or repairs etc.

Getting repairs done

If there are repairs to be carried out or faults that need rectifying whilst there are tenants in the property, you will need to give at least 24 hours’ notice of your intention to enter the property to inspect or carry out the work required.

You might be able to obtain immediate access in the case of an emergency, but the key to getting repairs done and keeping tenants safe is to maintain good dialogue with them and listen to any reasonable complaints or issues that are raised.

Being a landlord can be financially rewarding but it also comes with a set of responsibilities, which you ignore at your peril.

Tyler Cooper is a property investment consultant and researcher. He has also built up his own portfolio of buy to let properties. His articles mainly focus on the challenges of being a landlord.

Dec 1 2014

It’s Time for a Road Trip

By |December 1st, 2014|Blog, Personal Finance Tips|2 Comments|

What’s more fun than a great vacation with a bunch of friends? How about a great vacation with a bunch of friends that doesn’t cost a lot of money?

My wife and I just spent the Thanksgiving holiday weekend with my family in St. Louis. Since we live in Dallas, it obviously takes a little bit of time and money to get from here to there.

A quick check of flight prices and it looks like it costs about $250 for a single round-trip ticket from Dallas to St. Louis. That makes it a $500 trip (not to mention renting a car), which would have priced us out of the trip entirely since we are saving as much money as possible for our house.

However, we were able to make the trip for just $120 by turning it into a road trip.

Okay, so this isn’t ground-breaking personal finance advice here, but it’s worth mentioning because gas prices just keep falling. It certainly helps that Missouri has the cheapest gas prices in the country, and Texas isn’t far behind at #5 according to Gas Buddy. For my geography majors out there, about half of our driving was in the state of Oklahoma, which has the 4th cheapest gas in the country.

Overall we paid about $2.50 a gallon for the 1,200 mile trip. That comes to $120 in a car that gets 25 miles a gallon on the highway, which is pretty darn cheap when you compare it to the plane ticket costs. We saved $380!

With gas prices so low it might be worth it to get a few friends together and plan a road trip. Maybe you want to go skiing in Colorado or hit beach in Florida while the rest of the country freezes their buns off.

Obviously Christmas is just around the corner, and if you haven’t bought plane tickets by now then you’re going to be looking at paying huge premiums to fly around the holidays.

My suggestion: take a road trip. Here are the benefits of driving to your next vacation destination:

  • Cheap gas = save money!
  • Avoid getting molested by TSA agents
  • Don’t have to rent a car once you reach your destination
  • Stop at exciting roadside attractions like the World’s Largest Rocking Chair
  • Did I mention it saves money!?

If you’ve been meaning to get a bunch of friends together to go somewhere fun and do something crazy, now seems like a great time to make it happen!