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John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

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8 Ways First-Time Homebuyers Can Prepare for a Mortgage

March 27, 2015 12:27 am

(BPT) - When it comes to buying your first home, a lack of knowledge and experience can lead to costly mistakes. One in four first-time homebuyers say they are completely unfamiliar with the mortgage financing process, according to a report by the Consumer Financial Protection Bureau (CFPB). Even among those with an understanding of the overall process, the report found that many first-time homebuyers still had significant knowledge gaps in important areas such as available mortgage rates, closing costs, down-payment requirements and income required to qualify for a loan.

First-time homebuyers can become mortgage-ready with these tips.

1. Adjust your budget. A mortgage payment can increase your monthly housing expenses, so prepare by calculating what that amount will be and begin saving that same amount every month so you can get used to the budget change in advance.

2. Plan for a down payment. Nearly all home loans will require you to put some money down as a down payment. Some home loans may require as much as 20 percent of the purchase cost as a down payment, although some Federal Housing Administration (FHA) loans may require less. Decide on the amount you think you'll need and create a savings plan to help you reach that goal.

3. Consider the location and type of home you want to buy. Many factors influence the cost of a home, including its location, size, style and more. A larger home in a high-income area will generally cost more, and property taxes will be higher on a bigger, newer, well-located home. Many first-time homebuyers find manufactured or mobile homes are a good option. Knowing the estimated cost of the type of home you want to purchase can help you better manage your budget.

4. Stay on top of your credit. Lenders will consider your credit score and report history when determining your mortgage eligibility and the interest rate they may offer you. Make sure to review your credit report in advance. You can download a free credit report once a year from all three major bureaus at www.annualcreditreport.com. If you're planning to apply for a mortgage, it's a good idea to review your report more frequently and to consider paying to obtain your credit score from at least one major bureau. If your report contains errors, work with the credit bureaus to have them corrected before you apply for a mortgage.

5. Keep current on monthly bills. While it's important to save toward a down payment, don't let monthly bills slide. Paying your bills on time every month can help increase your credit score, and a good payment history is something lenders look for when reviewing your credit report. Use online tools like email reminders and automatic payment options to help ensure you never miss or make a late payment.

6. Work on your debt. If you have delinquent balances, bring them up to date as quickly as possible. If you carry a lot of revolving credit card debt, you may want to work to reduce it by paying more than the monthly minimum payment. While it helps to have a report that shows no late payments, the most important thing is to not have any delinquent balances before you apply for a mortgage.

7. Plan for escrow. In addition to the amount you will need each month toward repaying your mortgage, you'll need escrow - an amount added to and collected with each monthly mortgage payment that is applied toward annual homeowners' insurance premiums and/or taxes. Estimating taxes and total insurance costs can help you better understand how much your escrow will be each month, and you'll be able to budget more accurately as you prepare for homeownership. Don't forget that this amount may adjust every 12 months if your insurance premium or taxes change for the next year.

8. Take advantage of educational resources. Check out resources like the Consumer Financial Protection Bureau (CFPB), the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA).

Published with permission from RISMedia.


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Protect Your Identity from Tax Fraudsters

March 26, 2015 2:24 am

As identity theft claims continue to rise, consumers must take extra precautions to prevent tax fraud when preparing and filing their tax returns, warn the experts at CreditSesame.com. Consider the following tips when filing taxes this year:

1. File Early
The best defense is to file early. The sooner you file your taxes, the less chance a thief has to file ahead of you and claim a refund. Victims of tax-related identity theft say they now have to wait a year or more to get their refund.

2. Monitor Your Mail
Watch your mailbox closely – identity thieves will be watching it, too. As the IRS increases its vigilance for detecting identity theft and bogus returns, thieves need as much information as possible about you to fool the IRS. The easiest way to get that information is from your mail.

3. Choose a Tax Preparer Carefully

Choose your tax preparer carefully. You risk handing over your most personal financial information to an individual or company whose commitment to security and privacy might not be what you expect.

4. Write Out ‘Internal Revenue Service’ on Checks

If you have to send a check to the IRS, make sure you spell out the words ‘Internal Revenue Service’. A common scam is to steal mail looking for checks made out to the IRS, change the ‘I’ to an ‘M’ or ‘T’, and simply deposit the check in an account opened in that name. It may be months before you discover the check has been stolen, and only after the IRS pursues you for non-payment.

5. Check Your Credit Report
If an identity thief has enough personal information to file a fraudulent tax return in your name, they also have enough information to open new accounts and take out loans in your name. Check your credit reports regularly.

Source: CreditSesame.com

Published with permission from RISMedia.


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