This month, our blogs have been focused on getting yourself a new home. We started with the younger generation talking about the idea of moving out and all that it entails. From there, we spoke about the basics of getting a mortgage and what you need to know. And then, we asked a tough question. "How do YOU know YOUR ready to buy a home?" Each topic covered a different area of getting your new home. But nothing beats the feeling of hearing your offer has been accepted!
Now, it's time for the fun part. The application process. But, what does it entail? How do you know what to provide? All questions that we here at Tropical Financial are prepared to assist you with.
If you've already been pre-approved a lot of the documentation needed will have already been provided, but just in case here is a list of what you'll need:
Last 2 years of documented income (tax returns, W2s, and/or 1099s)
Last 2 months of bank statements (checking, savings, and retirement)
Last 30 days of paycheck stubs
Explanation for any credit inquiries or letters explaining negative ratings
Proof of downpayment or gift funds
Home appraisal fee
Signed executed purchase contract
That's it! Just a few simple steps and you are on your way to your new home! Note of caution: Do NOT make any large purchases or apply for any new credit while you're going through the mortgage process. Credit is pulled one more time just before closing and anything new on your credit report could upset your debt-to-income and potentially prevent the deal from closing. So wait until you have those keys in hand before you buy the new furniture.
If you were to ask me what my all-time favorite hobby is,
the answer would be simple, traveling. I love to pack my bags and see new
sights. Although I like planning for my next big adventure, money can be the
deciding factor on whether or not I can take the trip. So, like most of us I’ve
turned to the internet to see how I can get the best deal.
I have found some great tips and tricks along the way, for
instance with some cruise lines, if you book a cruise while on board their ship
you are likely to get a better deal than if you book while at home. I’ve also
learned that booking airfare at 2 am on Tuesday doesn’t give you the best deal
but in fact a horrible deal! Trust me, I know from experience.
There is one option I haven’t had the change to explore but
I plan to check out, that’s Groupon and Living Social’s travel deals.
When it comes to Groupon and Living Social, I love their
deals. I have purchased great dinner deals, fun activities and even some great
deals on health and beauty. Plus, they have great ideas for birthday gifts!
Whenever I have a birthday or even a bridal shower, I tend to turn to Groupon
and Living Social for gift ideas! Not only are the services and products
awesome, but the cost helps me and my budget.
But, what’s the truth with travel?
When it comes to using discount sites like groupon and
living social for travel, you need to put a little leg work into the
experience. Sometimes the cheapest deals are not the best experiences and the
same goes for the most expensive trips, those can lead to terrible
experiences. But, there are a few things you can do and look for to plan
for a great getaway.
Research!
I have traveled a lot and I’ve done a lot of research too!
When you find a trip that looks out of this world on Groupon or Living Social,
do some research off the site! Check out the hotel through sites like Yelp or
Trip Advisor and see what others are saying about the resort. This will help
give you a good idea of what the resort has to offer as well as a variety of
experiences from people that have first-hand experience. Also, check out
social media sites associated with the resorts, you would be surprised at the
good information available via social media including reviews of the resort.
Ask Questions!
When it comes to booking a trip, it’s important to ask
questions. I know that deals are limited on Living Social and Groupon but pick
up the phone and talk to a representative, see what they have to say about the
trip, ask about insurance policies and their individual policies. If a
representative from Groupon or Living Social can’t help you out, then maybe you
should look for another way to take your big trip!
Likewise, when looking for travel options, call the resort
directly. Ask them questions about the deal they have posted, talk to them
about what the resort offers and even speak with them about the upkeep of the
resort and their resort rating. This is a great time to get more information
and more details on the offer.
This is also a great time to speak to the hotel about
getting “walk in” pricing. Find out what the rate would cost you to book the
same room directly with them, you may save $500 or $20, either way it could be
a savings.
Book local and smart!
I’ve read several articles that talk about the good and the
bad with booking through Groupon and LivingSocial. I can see the point on both
the good and the bad reviews but keep in mind people have different standards
or expectations, other times something like bad weather might cause someone to
give a bad review. If all we read is the end result, we won’t know the details.
So, be your own judge! If you want to take a big trip like
Europe or Asia, try taking a local trip first. Find an affordable beach
vacation, or if you know you’re going to see family, try booking a trip that
includes airfare so you can see firsthand the experience from start to finish.
If you book something local and cheap for the beach and you hate it, you can
drive back home. Likewise, if you fly out to see family, just stay at their
place if you are unhappy.
This is a great way to try it out, see the experience and
make up your own mind and hey, it forces you to take a vacation or a staycation
if you didn’t have one planned.
Budget Friendly
Another important thing to keep in mind when booking any
trip is that it’s budget friendly. There are a few things that you want to be
able to account for with your vacation. If you are flying be sure to account
for the cost of luggage. You also want to be sure to account for transportation
cost and any additional taxes or fees that might come with your stay. If you
budget for a 5 day vacation with airfare for $1,000 a person you should try to
find something a few hundred dollars less. This will help you from going over
budget with the fees you didn’t think about… like luggage.
Good deal or not?
This is something that only you can decide! Everyone has
different expectations when it comes to travel and price. What I think is a great
price you might think is too high or what I think is a nice getaway you might
not. It’s all in the eye of the beholder.
I have personally booked vacations through discounted websites
which included airfare and the resort stay and I will say, it was an amazing
trip! I had no problems or issues with my resort, in fact, the resort was nicer
than the photos. When I read the reviews before paying for my trip they were
50-50 with positive and negative and I will tell you I had a 100% positive
experience. The negatives that I read about didn’t exist and the trip was
beautiful. I can’t wait to book my next trip and be proud of my savings!
Tis the season... To throw a party! Growing up, my house was
the party house. Any occasion was a good occasion for my parents to have people
over. Memorial Day, July 4th, graduations, birthdays, sports events, even
hurricanes were a reason to party. My house was the place to be and my parents
were always amazing hosts. So, naturally, I love to entertain too. But I've
come to the realization that party planning is an expensive venture. There is
tons of planning involved, many shopping trips and lots of time needed to
ensure your guest have a great time.
Logistics:
First things first, the planning! Creating the perfect party
not only requires money but time. It's important to plan things through so that
you have enough food, space and your guests enjoy themselves. If needed, gather
a few of your close friends to help with the party planning.
Invites:
When it comes to celebrating anything from a graduation, to
a birthday or even just the holidays, sending out invites is a nice touch, but
it can be costly. So, use resources that are free. Evite is a great site for
sending invites and keeping track of the RSVP’s. Another free and great site is
Facebook events, you can make the invite private and share details with just
your friends. You can also create a PDF invite and e-mail that out to all of
your friends.
There are many ways save money without compromising
style
Decorations:
Presentation is key at a party. Everything from the
appearance of the food to the appearance of the tables is key when planning a
fun party, but like everything decorations can get really pricey. Luckily for
you, there's Pinterest. I know you might be thinking "I'm not crafty",
don't worry I'm not either. But there are fun and cute decorations you can
create online and print out like food titles or printable banners and even
printable gift wrap if you're giving away party favors. But more than that, you
can use Pinterest to get clever ideas that won't cost a lot. Like making candle
centerpiece (you can buy these from the dollar store) or creating simple collages
with photos you already have framed. This is great if the party is for a
graduation or birthday. Flower arrangements also make for great center pieces
and are also fairly cheap at the dollar store or can be found on sale at many
stores. Bowls of candy also make for great center pieces and are cheap to
supply.
Pinterest is full of great ideas to help spice up your
party while keeping within your budget. You'd be surprised at what ideas you
can find off of the Internet that are easy to create and easy on your
pocket.
Food and drinks:
First things first, if someone ever asks to bring
something... say YES! Because that means one less thing you have to worry
about. Whether it's something as simple as cups, or something as fancy as
dessert. If you have a theme, ask them to bring an item that fits with the
theme. Otherwise, when it comes to food and drinks for your guests, buffet
style is always great and the more variety the better. It's important to know
your guest and the time frame too this will help when deciding on what to serve
and how much. Great food ideas are pasta bars, all things mini (sliders, mini
Mac and cheese...) or do a taco bar or even my favorite a fajita bar. Fajitas
are easy to put together, you marinate meet overnight and set up the station
and people can come and go as they please. Add a dish of rice and maybe some
chips and let your friends enjoy a cheap but yummy Mexican themed party. You
could also go the pot luck route. Pot lucks are a great way to try various
foods and a great way for you to stay within your budget.
Likewise, when it comes to beverages for the party, buy
store brand products, they will save you money and they taste the same. If you
feel shy about asking guest to bring beverages, buy in bulk. Go to wholesale
stores and buy from them, the cases of soda will be cheaper as will the various
other beverages you are looking to supply.
Entertainment:
Music is always a must at parties but sometimes hiring a DJ
can really put you over your budget. My trick for playing music is my mini jib
speakers. I love these things, I got them from Amazon for under $20 and they
play such great quality music. I pair it up with my phone and caLiving Social and Groupon, talk to friends
and even ask on social media. See what people can recommend. Hey you never
know, a co-worker might be a DJ on the side.
n place the
speakers in two different locations so that all my guest can hear the music.
There are many wireless speaker options that play great sound and allow you to
pair up more than two speakers. This is a great alternative to spending a lot
of money on a DJ. But, depending on the party setting a DJ might be the best
option, so shop around. Check out
There are many ways to have a great party and stick within a
budget! It's all about being resourceful and using what's available to
you.
It doesn't matter if you’re throwing a high school
graduation party, a house warming party or even a wedding. There are things you
can do to help with the cost but still give your guest an amazing time!
I think it’s time for a summer bbq/pool party... I better
start planning!
Making the decision to become a
homeowner is emotionally and financially complex. Here are some key things to
ask yourself if you're considering whether
buying is right for you.
Do you
have a good reason to buy?
Sometimes switching from renting
to buying is a no-brainer. Maybe you live in a modern one-bedroom
apartment in a chic part of town, but you have a baby on the way. If you want a
place in a good school district, with more square footage and a yard, buying
may well be your best bet. Other times, the urge to buy is
driven by emotion: You see a house you like and you “just know.” There's
nothing wrong with that reaction, but take time to check out the property
before you make any commitments. If it's too far from work, near a noisy road
or the best house on a bad block, it may not be as good a deal as it first
appears. And remember: Houses go on the
market all the time, and there are tens of millions of single-family homes and
condos in the U.S. So there's no need to worry if your first choice doesn't
work out; your home is out there.
Can you
make the upfront investment?
Buying a home requires an initial
investment that you can't ignore. First, many lenders require a
down payment of 20% of the home price. That's $40,000 for a home that costs
$200,000, about the median price in America. You'll also owe closing costs,
which could include loan-origination fees, discount points, appraisal fees,
survey fees, underwriting fees, title search fees, and title insurance. Those
could total another few thousand dollars. The expenses don't end there.
You'll want to hire an independent inspector to look for defects in a home
before you buy. This will cost several hundred dollars, but could save
you thousands in repairs. And then there are moving costs, state or city taxes,
utilities installation and the costs of changes you might want to make to the
home — such as new flooring or painting — that are easiest to do while it's
empty. This isn't meant to scare you
off; buying a home is still a smart choice for many people, despite the costs.
But it does take a lot of cash.
Can you
afford the upkeep?
Your mortgage payment might be
fixed for the next 30 years, but your property taxes and insurance rates can
rise. And if you didn't make a 20% down payment, you'll have to buy private
mortgage insurance, or PMI, until you have 20% equity in your home. It costs
about $165 per month on a $200,000 loan. Once you're a homeowner, you'll
also have to pay certain utility bills that might have been included in your
rent. And you'll be responsible for maintenance: double-pane windows one year,
a new garage door the next, fixes to the roof five years up the road. It adds
up.
The house buying process is both exciting and scary. I am
not there yet… mostly because I can’t afford it. But becoming a homeowner can
be one of the most rewarding life experiences. Just think about it for a
second, you start saving for a place of your own, not a house but a home. Then
you go on the hunt and view house after house to see which one makes you say;
“This is it!!”. Next thing you know you are off to complete the buying and
mortgage process and finally you are given a set of keys… your keys… to your
home. How could you not smile? How could you not be proud that you set out to
achieve something, and you did it!
So, what are the steps we need to take to achieve this
amazing feeling? First things first, we need to know and understand what the
road to being a homeowner is, so we need to know the basics.
Save!
For starters, when looking to become a homeowner it’s
important that you start the saving process earlier rather than later. The more
money you can save, the more it will help you later on down the road. For
instance, many buyers want to have a down payment is at least 20% of the
purchase price in order to avoid monthly mortgage insurance fees. That could be
a lot of money depending upon what you are looking to buy, so the more you
save… the more you can put down which will in turn help lower your monthly
payments.
Another cost you should be saving for are the closing
costs. These fees vary with every mortgage but is needed in order to transfer
the ownership from the previous owner to you. One of the many great perks about
being a member at Tropical Financial is that if you get you use our Home
Advantage program and get your mortgage loan from us, we will give you a rebate
at closing that will help with those closing costs. But, I say you save anyway
and then the money left over can be for the new home!
Always be prepared for the extras! You never know how your
purchase deal is going to go and you never know which fees might pop up during
the process. Be sure that you are saving more money than you anticipate so you
are not left at the closing table counting pennies.
Prepare yourself!
You need to be prepared! That means before you start the
home purchase process, check out your credit report and your credit score and
see where you can improve. Do you have bills in collections? Pay them off. Do
you have tons of late fees? Get up to date on those payments. Did you find
fraudulent activity reported? Dispute that and get it cleaned up! By taking the
time to view your credit report you can keep the home buying process smooth and
easy. Oh and during the home buying process NEVER EVER apply for a new auto
loan, or take out a loan or even open up a store credit card. These things can
prevent you from closing on your new home.
Mortgage Types!
There are several types of mortgages to know and be aware of
before you start the home buying process. The most common ones are fixed-rate
and adjustable mortgages
Fixed-rate mortgages come with an interest rate that remains constant over
the life of the loan. 30-year mortgages are the most common, but you may also
choose a 20-year, 15-year, and even 10-year fixed-rate mortgage. In certain
high-cost areas some mortgage lenders are even offering 40 year-loans. Though
the mortgage interest rates tend to be higher than for other loan types, the
rate is fixed and your payment won’t change. This stability makes them the most
secure type of mortgage for buyers.
Adjustable-rate mortgages (ARMs) have a period of
fixed interest, but after that the payment changes with whatever index the loan
is based on. The period of fixed interest may be three, five, or seven years.
With a 5/1 (the first number stands for the number of years in the initial
fixed period, while the second indicates how often the new rate will adjust)
ARM, for example, the initial interest rate remains fixed for the first five
years, and then adjusts annually for the remaining term.
There are several types of caps that may apply to an ARM: an
overall cap limits how much the interest rate can increase over the life of the
loan; a periodic cap limits the amount the interest can increase from one
period of adjustment to the next; and a payment cap limits the amount the
monthly payment can increase at each adjustment.
While ARMs are less secure than fixed-rate mortgages, they
tend to have lower initial rates and therefore lower monthly payments. They can
be a good option if money is tight in the early years, as long as you are
confident you can meet future interest and payment increases.
What’s next?!
You’ve taken the time to start saving and preparing for the
mortgage process but what’s next? The first thing you should do is speak with a
Tropical Financial Mortgage Loan Officer. They will sit down with you and
explain the home buying process as well as what type of mortgage is best for
you and your budget. They will also help you find a qualified Real Estate Agent
with our Home Advantage program. But more than anything, they will be there for
you throughout the entire home buying process.
Contact a Tropical Financial Mortgage Loan Officer today to get you started on
the home buying process and be sure to check back as we share ways to help you
make your dream of owning a home come true!
Happy Mother’s Day to all the beautiful moms out there!
Mother’s Day is a time to thank our beautiful mothers and
to celebrate them for all that they do!
But how?
This Mother’s Day give your mom something from the heart,
show her that you put time and thought into something to honor her.
Unfortunately I won’t have the opportunity to spend Mother’s Day with my mom
this year as she will be out of town, but I started to think, “How can I make her
Mother’s Day special even though I am not there?” I decided to send her
flowers, yes I know it’s ordinary but I know she will feel so happy and loved
when she gets her flower delivery all the way in Mexico.
Sometimes it’s the simple things just flowers and a card with three words, “I
Love You!” To make Mother’s Day one-of-a-kind.
Another great way to show your love for your mother this Mother’s
Day no matter how close or far you might be is to make your mom something! Go
through a bunch of old photos and create a photo calendar of all the fun times
you’ve share with your mom and your family. Or create a photo book of one of
your favorite family vacations. Mom’s love photos and looking back on all the
wonderful memories!
For my mom and I, It’s all about mother daughter days and
spending quality time together, whether its lunch, getting our nails done or
even spending a day at the pool. Anything as long as we are laughing and
chatting we are happy!
If your mom is the one who does all the cooking in the
household, try taking over for the day and allow your mom to rest with her feet
up as you prepare breakfast in bed or lunch by the pool and even a nice dinner.
There are tons of ways to show your mom how much you
appreciate her this Mother’s Day. Be sure to do something special to spoil her
and be sure to tell her Thank you and I Love you. Words that all mothers love
and deserve to hear.
Whatever it is that you decide to do for your mother,
make it a special Mother’s Day!
Living on
your own for the first time can be empowering. It means having independence and
all the things that come with it. Some of those things—like not having to share
a bathroom—are wonderful. Others—like killing spiders yourself—are not so fun.
And leading the pack in the not-so-fun category: bills.
Bills tend
to sneak up on us because they don’t fit nicely into a routine. They all have
different due dates, some are delivered to your mailbox and others to your
inbox, some need to be paid monthly and others yearly, and some have amounts
that fluctuate. It takes a lot of wrangling to get them all under control.
The
importance of “bill time”
Bills may
not stick to a routine, but you sure can. No matter how you keep track of
your bills, you still need to take the time to manage them. It can be as
simple as 15 minutes, once a week. “Bill time” lets you:
•Gather up any bills received that week (especially the ones that
like hiding under your junk mail)
•Locate and/or print out any e-bills received that week
•Input the bill totals and their due dates into your calendar (or
notebook, or spreadsheet, or budgeting app)
•See what bills need to be paid that day
•Pay those bills (this could be a combination of paying them online
and/or writing out checks and addressing envelopes)
•Mark those bills as paid (and revel in your self-satisfaction)
•Look ahead to see what your payment schedule looks like the
following week and month
Sticking to
the same day and time for “bill time” is important:
•It creates a routine that’s easy to follow
•It saves time by allowing you to tackle several payments at once
•It keeps you organized and aware of your payment schedule
•It’s the best way to eliminate the “out of sight, out of mind”
problem that so many of us have with our bills
So, you have
your regularly scheduled “bill time” and you have a stack of bills. Now you
need a system to keep track of it all. Luckily, there are so many ways to
manage your bills that it’s easy to customize a system that works well for you.
DIGITAL
Dedicated
personal finance apps
If your
smartphone is basically an extension of your body, using an app might be the
best way to manage your bills. Although there are several stand-alone bill
payment apps to choose from, you might also consider looking into more
comprehensive budgeting apps that include bill management as a feature. If the
apps are free, download a bunch of them and take a quick tour to see which one
you like best. If you have to pay for an app, do some research to understand
the extent of its features before you buy it.
These
questions may help you in your search:
•Is it a calendar-based, spreadsheet-based or list-based app?
•Can you pay bills from within the app?
•Does the app use a notification system to remind you of upcoming
bills? Can you customize those notifications?
•Is the app secure? (This is specially important if you need to input
your personal or banking information.)
•Is the app supported by your financial institution?
•Is the app compatible with other apps you use (e.g., your digital
calendar)?
Digital calendars
Personal
finance apps can be helpful, but when it comes down to it, a generic calendar
app is enough to help you stay on track. If you’re already a calendar app user,
consider creating a sub-calendar with your bill payment schedule. Or, if you
don’t like the idea of mixing “bill time” with leisure time, you can use a
completely separate calendar app to manage your finances.
Digital
spreadsheets
Spreadsheets
are typically more of a laptop or desktop solution than a smartphone solution
(although some software packages let you access your spreadsheets from
anywhere). Most top budgeting programs include custom-designed spreadsheets,
but there are also tons of free spreadsheet templates available for download
that work with your default spreadsheet software—even Pinterest is full of
them!
Reminders/alerts
A reliable
reminder app can give your bill management system a powerful boost. If your
bill payment app is lacking when it comes to notification options, a dedicated
reminder app can make up for it. If you prefer organizing your finances on
paper, you can still set up digital alerts to make sure you stay on track. And
don’t forget to set up a recurring reminder for your weekly “bill time”!
ANALOG
On paper
Using pen
and paper to manage your bills might sound completely old school—especially
when there are so many digital alternatives available—but some people have much
more success creating a payment schedule the analog way. There’s just something
about writing things down and physically ticking items off a list that can make
the process feel more “real” and tangible than doing the digital equivalent on
your phone or laptop. So if you find yourself slipping on your payments no
matter how many apps you download, give paper a try.
Paper
calendars
If you’re a
visual person, a calendar system is a great way to go. Wall calendars and
agenda-style calendars work equally well (the dollar store and free printable
templates are the cheapest way to get started). Mark down your paydays and your
bills in your calendar, and come up with a consistent way to note when bills
have been paid (like highlighting them).
Paper
spreadsheets
Some people
feel more organized if they have their spreadsheets printed out and sorted in a
binder or notebook. A quick search on Google or Pinterest will connect you with
tons of free, beautifully designed and printable spreadsheets that you can use
to build your bill payment system.
Pro tip
No matter what system you end up using, this tip
can help you avoid getting hit with a late fee. If you’re using a
calendar-based system, write down your bills and their due date on the day
on which you plan to pay them (not on their actual due date). It helps you
stay ahead of the game and buys you a little extra time if you do happen to
slip up Living on your own can be a big step, keep up to date with our blogs this month as we share how the mortgage process works! ^Alysha
