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The Most Effective Ways to Avoid Identity Fraud

Due to the ever-increasing presence of social media, the general public is far more open about sharing their personal information and experiences. While this is an excellent opportunity to grow and enhance empathy among like-minded individuals, it also puts millions of people at an increased risk of identity theft. According to a recent study released by the Federal Trade Commission, the number one complaint made my consumers involves identity theft. In fact, the number of identity theft cases continually reaches new heights year-after-year.

Trying to untangle the web of complications that can arise from identity theft is a complex and frustrating experience. In fact, it can take well over a year to fully clear your name and receive the money stolen from you. While digital safety nets and safeguards are stronger than ever, identity theft is not going away – and it never will. Therefore, you must take an active role in preventing such terrible instances.

Tip #1 – Limit the Release of Personal Information

The most important step in preventing identity theft is to keep vital personal data safe and secure by limiting the number of people and institutions who have access to it. Your social security number is among the most important pieces of information a criminal needs to begin the identity theft process. According to various financial and security experts, all a criminal needs to steal your identity is your social security number, address and date of birth. Unfortunately, these are also some of the easiest pieces of information to uncover. Never give out your SSN over an unsecured website or over the phone. NEVER write out your SSN in an email.

Tip #2 – Use Caution on Websites

Criminals have become quite good at making websites appear official. In fact, there are many cases where a website looks and interacts the same as an official financial site. This is especially true when it comes to filing legal documents, such as federal tax returns. The most effective way to prevent falling prey to a criminal is to only utilize websites that belong and are operated by trusted, established businesses. When it doubt, immediately leave the website.

Tip #3 – Shred Personal and Financial Documents

While many people are turning to digital documents, there are still millions of Americans who turn to traditional paper documentation. While you may think when you throw something away its safe, this couldn’t be further from the truth. Any piece of paper that has your identification on it, such as your SSN or account numbers, should be immediately shredded before throwing them into the trash. There are even some people who burn these documents to completely protect themselves from thieves.


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How to Get a Mortgage The Most Effective Steps

If you’re seriously considering buying a home, then one of the most important first steps you must make is making sure your credit score/report is cleaned up. Once you’ve gone through your credit report and made sure all of the information included within its sections is correct, then you must start the sometimes frustrating process of applying for a mortgage. While there are many elements that go into obtaining a mortgage, there are several essential and effective steps you can take to help make this process a little easier.

Step #1: Become Pre-Qualified for a Mortgage

This is perhaps the best-case scenario for many aspiring home buyers. In order to become pre-qualified for a mortgage, you must meet with a financial lender and provide them with detailed information regarding your liabilities, income and assets. Based upon this surface-level information, the financial lender can then estimate how much money you can feasibly borrow.

It’s important to know that this is an entirely informal process, and the lender typically doesn’t verify the information you provide or charge for this service. Moreover, just because you’re pre-qualified for specified amount of money doesn’t actually mean you’ll be approved for that amount. Many home buyers are confused as they think a pre-qualified amount is a loan guarantee ñ this is incorrect. Rather, the sum that’s delivered to you is a rough estimate of what you can expect a lender to provide.

Step #2: Become Pre-Approved

Unlike the pre-qualification duties, in order to become pre-approved you must provide detailed documentation to a financial lender, which is then verified. This is an important step to obtaining a mortgage as it provides you with a stronger position when it actually comes time to making an offer on a home. Generally speaking, home sellers are more likely to accept your offer should you already be pre-approved for a specific amount. This clearly demonstrates you have the financial ability to purchase the home.

Step #3: Selecting a Mortgage Lender

While it’s not possible to clearly state one lender is better than another, it’s important to work with your mortgage broker to help obtain a good choice for your specific financial situation. Traditionally, banks are the primary lenders for mortgage loans. Take some time to review offers from several different financial institutions. While this may be the easiest step, there’s little negotiating room when it comes to fees. Regardless of where you choose to obtain a mortgage loan, make sure the loan clearly details fees, interest rates and any other variable that’s important when it comes to this important and long-term financial decision.

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The Easiest Ways to Boost Your Credit Score

If your low on cash and are having a difficult time paying your bills or keeping food in your cabinet, then your likely not concerned about improving your credit score. While this may not be the first financial goal in your mind, improving your credit score can ultimately save you thousands of dollars over time. In fact, the latest studies have found those with higher credit scores generally experience greater financial freedom as their offered various savings and financial benefits those with lower or bad credit scores are unqualified to receive.

Whether your looking to establish your credit for the first time or rebuild your credit after years of neglect, there are several easy methods you can adopt to swiftly boost your credit score and attain the level of financial stability you crave.

Tip #1: Add an Extra Payment to Outstanding Debts

While this may seem impossible for those who are living pay check to pay check, adding an additional payment to your credit card or mortgage payments can significantly boost your credit score. Did you know that roughly a third of your overall credit score is determined based upon the utilization of your lines of credit? Known as your credit utilization rate, the more credit you utilize, the lower your credit score will be.

If you’re looking to quickly, and easily, boost your credit score, you should actively strive to keep your credit utilization rate between 10 and 30 percent. For example, if you have a $1,000 line of credit you should actively try to keep your outstanding balance between $100 and $300. Therefore, if you need to add an extra payment throughout the month to keep your debt in this magical range you’ll experience a significant boost to your credit score.

Tip #2: Never Miss a Payment

This is perhaps the easiest way to keep your credit score strong. However, when you’re working with a limited budget, it may be easy to forgo a credit card payment. When you’re struggling to make ends meet, the first thing you should do is contact your creditors. In many cases, you can lower your minimum payments. By doing so, you can keep your payment history clear without having to spend all your cash on bills.

While paying the minimum payments isn’t advisable for long-term, as you’ll ultimately end up paying significantly more with interest payments, making a minimum payment is far greater than missing a payment. Because you can make payments on your account at anytime throughout a month, scatter your payments throughout the month to keep your utilization ratio low and your interest payments at a minimum.

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The Most Common Mortgage Mistakes

During the recent financial crisis of 2007 through 2009, the United States faced a significant problem when it came to the number of mortgage foreclosures. The inability to repay their mortgages was a significant problem faced by millions-upon-millions of homeowners throughout the nation. In fact, during this time period eight out of 10 homeowners with an active mortgage were seeking out ways to refinance their original loan. While the dust as settled since this terrible time, this time period has taught us many things when it comes to handling mortgages. The following are the most common mortgage mistakes the average homeowner makes. By reading this article, you’ll have a better understanding of what to avoid when your either seeking out a new mortgage or seeking to refinance your current mortgage.

Mistake #1: Agreeing to Adjustable Interest Rate Mortgages

On the surface, an adjustable rate mortgage may seem like a dream come true. These mortgages generally being with a very low interest rate for the first several years, typically between two and five years. Generally, these mortgages give you the buying power to purchase a much larger house than you originally think and have much lower payments, which frees up your monthly budget. However, after the introductory period, the real nightmare sets in. With an adjustable rate mortgage, your interest rate fluctuates with the industry. This can mean your monthly mortgage payments can fluctuate by hundreds of dollars each month.

Mistake #2: Not Putting a Down Payment on the House

During the crisis that plagued the United States financial industry, the majority of lenders were offering no down payment loans. While this allowed millions of people to afford to purchase a home, without paying a down payment, your setting yourself up for disaster. A down payment is important for several reasons. First, it allows you to instantly increase the volume of equity you have within the home and ultimately reduces the total amount of money you owe on the loan. Secondly, a down payment gives you negotiation power within the actual loan. Because your already financially invested in the loan, lenders are more than willing to work with you when adjusting payments or determining your overall interest rate. If you have no money invested in the property, its easier for you to walk away something that is disastrous for lenders and borrowers alike.

Mistake #3: Liar Mortgage Loans

This unique phrase came into popularity during the boom that caused the financial crisis. With this type of loan, a lender requires little if any financial documentation from borrowers. With no documentation needed, the loan amount is based upon the income and assets the borrower states they have. This means a borrower can borrow more money then they can actually afford to repay. Typically, when this happens, the borrower is forced to file bankruptcy and have their home foreclosed on as they are unable to actually afford the monthly payments. Liar loans are generally closely associated with adjustable rate mortgages.

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How to Get a Mortgage When You’re Self Employed

Throughout the United States, more and more Americans are choosing to become self-employed rather than working for someone else. While there are many advantages of taking charge and becoming your own boss, there are also many drawbacks. Perhaps one of the most noteworthy disadvantages of becoming self-employed is trying to obtain a mortgage. While the steps associated with this process can be slightly more difficult when compared to a traditionally-employed individual, it’s not impossible.

What to Expect When Obtaining a Mortgage

Perhaps one of the most common elements you should expect when it comes to securing a mortgage when you’re self-employed boils down to interest rates. You should expect to pay a higher interest rate than someone who features a traditional job. In general, if you see an advertised rate, you should expect to pay a higher rate. These advertised rates are generally meant for borrowers who have verifiable, regular income ñ as well as super ideal credit scores. Because you may be a less attractive borrower, you may have to spend a decent amount of time shopping around for a mortgage lender and negotiating terms. Be prepared to demonstrate your financial security and ability to pay by providing several years worth of financial documentation.

Mortgage Options for Self-Employed Individuals

Although obtaining a mortgage when you’re self-employed can be slightly more difficult, it’s not impossible. In order to increase the likelihood of securing a mortgage loan, you must be prepared to think outside of the box and seek out a mortgage from unlikely sources. Some of the most common mortgages for those who are self-employed include:

Stated Income/Stated Asset Mortgage: This type of mortgage is primarily based upon what you tell the financial institution what your income is. Unlike a traditional mortgage, the bank won’t actually verify this income. These are also called low-documentation loans. If you choose to go this route, be prepared to provide the banking institution with a variety of documentation such as invoices and other paperwork that proves your cash flow. You may also be required to showcase your recent tax returns.

Alt-A Mortgage: This type of mortgage may be your ideal choice if your tax returns display a significant business loss or little profits. Because financial institutions take on a significant risk when it comes to lending to those with unverified income, you should expect to pay a high interest rate throughout the duration of your loan. These loans generally land between subprime and prime loans when it comes to interest rates. The reason for this is because you’re considered a more risky investment than someone who has a traditional job with more solid income verification.

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