Mortgage mistakes to watch out for

In the world of mortgages there are some pitfalls. First of all, the top priority for anyone looking to buy a home is to repair credit. Order copies of all three of your credit reports and read them thoroughly. A good time frame to order them is six months prior to buying. That way you can challenge any errors and have sufficient time to get them fixed. It also gives you time to pay down your credit balance on any credit card. You want your open-credit-to-available-credit ratio to be as low as possible. This can increase your credit score considerably.

Next, you want to get pre-approved for a loan. There is a difference between being pre-qualified and pre-approved. Being pre-qualified doesn’t mean a whole lot. All it means is that a lender tells you how much you most likely could qualify for in terms of a loan. If you read the fine print on your pre-qualification letter, you most likely will find some wording that tells you that the amounts are “estimates only.” On the other hand, a pre-approval is when you submit your information and have a lender tell you exactly how much you can get. It’s a thorough investigation into your finances that is a perfect gauge of what your loan will look like.

Additional costs you should think about

You also should consider the money it is going to cost to move in. Sure you are going to have closing costs and a down payment, but there are additional costs every potential homeowner should think about. Moving costs, storage costs and repair costs are all additional expenses that some homeowners don’t budget for. Short term loans can come in handy to have a little extra cash for unforeseen costs. Ted Grose, president of the California Association of Mortgage Brokers, stated, “It costs so much just to move in, and then the water heater breaks. Some people are so stretched that they may not be able to make their first mortgage payment on time.”

Borrowing what you need

Another issue to be aware of is making the mistake of borrowing too much money. A lot of people get duped into accepting a loan that is way more than they actually need for the home they want. Just because you can get a loan for $400, 000 doesn’t mean you should. Think about the size of home you really need, and then decide how big a loan you want to repay. Grose added, “Mortgage money is way too easy to get. People tend to overbuy and that can really stress family life. It’s also a formula for foreclosure trouble in the future.”

Buying the home should be fun

Buying a home should be one of the most fun activities of anyone’s life. You are moving onto the next stage of life in new surroundings, and that should afford a lot of good times and build some happy memories. Be sure to fix your credit score, get pre-approved, build up a cash surplus, via short term loans if needed, and target exactly how much you want to borrow. By doing research, you can rest easy as you move into your next dream home.

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Everyone was affected by the recession. Times were difficult and regardless of economic status, Americans suffered greatly due to the financial difficulties of 2008-2009. Now that the recession is officially over, many consumers are still trying to return to their normal lives. One of the biggest complaints is that it is difficult to save. Holly Blakefield, economist for BankRate.com said, “When the recession was at its height, people realized that credit wasn’t the savior it was believed to be. What saved most people were liquid assets.”

It’s no secret that “Cash is King.” People are trying harder than ever to build up their coffers for emergencies, stability, and investments. The biggest way consumers can start saving is by looking at their homes. If you are trying to save, look at these ways to monitor your household and make necessary changes. It could mean a more efficient household and more cash in your pocket.

Heating and Cooling Expenses

Some of the biggest energy draws are running a home’s heating and cooling systems. Estimates are showing that 40% of residential energy bills are for either heating or cooling of a house. The best way to tap into that for efficiency is to have a good system for monitoring your temperature. Remember that even if your home is new, that does not mean it’s efficient. Frank O’Brien-Bernini, CEO for Owens Coming, said, “There is a huge gap between what is in the building code and what is needed for optimal energy efficiency.” Consumers have to take matters into their own hands when it comes to making a home efficient.

The primary thing a homeowner can do to help their heating and cooling system is to close up any leaks. Caulk, expandable sealant, weather stripping and foam board can all work together to stop air from escaping. Attics can be the most troublesome. Remember that heat rises and if your attic is windy with a lot of openings, you are losing hot air. That brings the temperature of your house down and, in turn, causes your heat to turn on.

Another tip is to always get your heating and cooling unit checked annually. It may cost $65 for a basic check, but preventative maintenance can pay off in the end. Coming added, “Paying a small fee to have your system checked can be much more inexpensive than waiting and having to replace a unit for thousands.”

Be aware of how much water costs

The next thing to watch out for is your water use. New studies are showing that over 80% of states anticipate having water shortages by the year 2013. This means that most likely there are going to be heftier costs and fines for excessive use. It’s good to get your home in order now, so you don’t find yourself in trouble in the future.

When it comes to water consumption, the best thing to do to conserve is to upgrade to water-efficient fixtures. Use low-flow showerheads. Charlie Szoradi, of Green and Save, said, “A $30 showerhead can save more money than $3,000 worth of solar panels.” It’s an easy fix and the payback is notable. In addition to fixtures, also check out the water heater and make sure the temperature is at 120° F. You can also insulate your water heater pipes to stop heat from escaping.

Electricity plays into Big Costs

The last large contributor to high house costs is electricity. While 40% of household expenses involve heating and cooling, another 40% involve electricity. Experts agree that this is relatively easy to manage though. One of the simplest things to do is replace lightbulbs with CFLs. You can also upgrade appliances to energy-efficient models. Not only are they more efficient, they also save you money. Take advantage of tax breaks, too. Many energy-star rated appliances can reduce your tax liability. Be sure to check with the rules in your case, but in most states you can take the cost, up to $1,500, off on your tax filing.

How to Find Savings

It may sound like a small amount if you end up saving just $40 a month in heat, but over the course of one year, that’s $480. Never underestimate the small changes that bring small savings. In the end, they all add up to notable savings. Take a look at your house and see where energy drains are. It’s the best and fastest way to keep money in your pocket.