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A new home is a significant milestone in the lives of all those who are fortunate enough to get the opportunity to reach this. However this also means that those people who are about to embark on the process of getting themselves a home they had always wanted have a lot of preparation to do since buying a new home is one of the major investments and not an activity that people do over and over again. One of the best ways to make sure you make the most out of any such investment is to plan out all the various aspects of the entire process beforehand. Everything from obtaining the clearances required from the relevant legal and municipal authorities or sourcing the required finances which will be needed in this entire time must be done before the process begins since there will be lots to do later. Many people can opt for a home loan offered by a bank of their choice and get the home they want.

Credit score is a term people generally overlook till the time they plan to make a major financial decision, like buying a home or starting a business. Your credit score determines your chances of being approved for any type of loans or obtain credit. Lenders use your three digit credit score for determining the risk associated with approving you for a loan or credit card. The impact of bad credit score might not be apparent right now, but it can cost a lot in the long run, especially in the form of interest rate you are required to pay for a mortgage, car loan, student loan or home equity loan. Here is an example to clarify the crucial role played by credit score in your financial future. Imagine you borrow a fixed rate mortgage of $200,000 for a period of thirty years. Considering your current credit score falls between 760-850, which is excellent, you will be charged an interest rate of 3.6% on the loan. So you will be making monthly payments of $909. For a credit score of 620-639, the interest rate will be 5.2%, thus requiring you to pay $1,098 as monthly payment. The difference of $189 in monthly payments will sum up to $68,040 when added for the entire loan term of thirty years. Example mentioned above makes it clear how a small difference in your credit score can impact your finances considerably. So make sure that you improve your poor credit score by taking timely steps or if you already have a good credit score, then maintain it by keeping a check on your earnings and expenditures.

Credit has become a prominent aspect of our lives, having a major impact on our financial freedom. Incidents like late or missed payments might seem minor but these can drop your credit score and prove to be a hassle, especially when: Applying for a loan - When applying for a loan, low or poor credit is clearly linked to high risk. As lenders are becoming more aware and strict when approving new loans, they expect the borrower to make a substantial down payment, besides having an excellent credit score. Thus your poor credit score can lead to trouble when determining your suitability to get or repay a loan. Determining interest rate - Credit score impacts the interest rate you pay on your current home loan, college loan or auto loan. Interest rate is generally calculated considering the condition of your credit report. In case your credit report shows bankruptcy or late payments, then you will be required to pay higher rate of interest, in comparison to what you might have paid if you had a high credit score. Looking for employment - Not only lenders, but even employers these days look into the credit history of their prospective employees as it shows how responsible and credible an individual is. In today’s competitive job market, employers do not want to take a risk by hiring a person who is not even responsible enough to handle his finances. Whether you plan to repair your credit on your own or hire a professional company to handle it for you, credit repair is a crucial step that should be taken at the earliest to ensure a pleasant and stress free financial future.

You plan to make a major purchase or enjoy holidaying at some exotic location but do not have enough funds for it. Taking a personal loan might be just the right thing for you then. Primarily, it is the flexibility, in terms of how the loan amount can be used, which makes personal loans such a preferred choice. Buying a luxury item, paying medical expenses, college fee or any other outstanding debts are some other reasons why people might consider applying for a secured or unsecured personal loan. Secured loan can be taken by an individual against any asset he owns. It is aptly called secured loan because the lender is rightfully entitled for taking possession of that asset in case of non-repayment of loan. This is the reason that secured loans are easier to get at lower interest rates, even for people who have less than perfect credit rating. Unsecured personal loans, on the other hand, although does not require you to use any assets as collateral but the rate of interest is generally high. Besides, the paperwork and time involved in getting an unsecured loan is also more, which can prove problematic if you need money urgently. There is no chance of losing an asset in case of not repaying the loan in time; however it can reflect badly on your credit score. Once you have carefully assessed your financial condition and requirements, as well as understood the pros and cons associated with both these types of personal loans, you can definitely make a much better and well informed choice.

"Your credit score can have a more significant impact on your insurance premium than you might imagine. This is because insurance companies these days are taking into consideration credit scores, besides other usual factors, to determine someones insurability. Primary reason why your credit score is given so much importance when you apply for insurance is to determine your chances of making an insurance claim. The correlation between poor credit history and likelihood of someone filing a claim has been proven time and again through various studies. It has been found that people with bad credit are more likely to claim insurance as compared to those with good credit. A possible explanation behind this belief is that if someone is not careful with his money, then he might show same carelessness in other aspects of his life as well, such as driving. Depending on credit scores people are divided into high and low insurance risks and then accordingly charged a premium which is equal to assumed risk. Generally five categories are included to evaluate your credit score, which can give insurance company a fair idea of whether you fall into the category of high or low risk. These include your previous payment history, total credit amount, time period since the credit is established, any new credit and types of established credit. While the topic of whether credit information should be a decisive factor while approving or denying insurance coverage or setting premiums is up for debate, it is true that insurance companies are striving hard to lower the associated risk while approving anyone for insurance."

With property prices rising, it is becoming difficult for average homebuyers to pay enormous down payments and this is where mortgage insurance emerges as an ideal option. In case a buyer is unable to make a high down payment, then mortgage insurance keeps him covered and also protects investors and lenders from possible default in case of non-repayment of mortgage. It is definitely a safe and useful option for both borrowers and lenders, however varying insurance rates can make it difficult for people to choose the best mortgage insurance available. Primarily insurance rates vary depending on lender, the amount of down payment, as well as other factors which individual insurance companies take into consideration. A recent addition in this list is the credit score of the borrower which can also have a major impact on the mortgage insurance rate, as good credit score is considered equal to better rate. The repayment options you select can also be a reason why insurance rates can vary. Mostly borrowers opt for monthly payments, while others decide to either pay in full or up front. Keeping a track of all these factors can sometimes prove difficult, especially for first time home buyers deciding to opt for mortgage insurance, so professional assistance might be helpful. The best way to assure that you are getting the best insurance rate possible is to stay updated with current rates, as well as get a quote from the insurance company, as they will give you a detailed estimate of how much premium you will pay over the term.

The importance of financial planning cannot be emphasized enough, as it offers you better control over your finances, helps to set reasonable financial goals and understand the impact of your financial decisions. However, rather than concentrating on just cash flow and expenditures, taxes should also be given due consideration, as they can affect your financial plans considerably in following ways. Taxes are considered such an integral part of your financial planning as they cost money and form one of the biggest expenses you will incur throughout your life. So during financial planning your emphasis should be on better management of your taxes and minimizing payments by taking the benefit of tax deductions so that saved money can be spent on other financial goals. During financial planning people give importance to their income which is expected to increase over time, however completely ignore the raise it will bring in the tax rate. Growth in your income level, as you gain experience in your job, is expected, but so is the rise in your tax payments. Overlooking this factor can make your financial planning less accurate and effective. Another crucial aspect generally ignored during financial planning is the fact that you might be required to make tax payments even after your retirement, as majority of retirement funds are included in the tax deferred segment. As the taxes need to be paid on money which was deferred earlier, thus it will add to your expenses after retirement. Financial and tax planning goes hand in hand and good planning can definitely secure your future by offering better financial stability.

Personal debt is debt that an individual owes. As the trend of taking personal loans is catching up, whether for buying a car or house or deal with sudden problems like medical bills or job loss, so is the number of people complaining of being in debt, and this mostly happens in the absence of a good financial plan. If you are already facing the issue of personal debt then a workable and effective financial plan is what you need to avoid the situation from getting worse. You can start by noting down your income and monthly expenses and then compare the two. If your expenses exceed your income then it is essential to adopt immediate measures to reduce your expenses and tackle your debt. Areas where you can cut the expenses include clothing, food, transport and entertainment. The next step is to determine your financial goals for long term and short term. You can keep aside some savings each month for achieving those goals or act as a cushion in emergency situations. Following the above mentioned steps will help you determine a fixed amount you can take out each month for repaying your debt and live a debt free life. Once you have figured this out, you can get in touch with your creditors and decide upon a plan for repaying the outstanding amount. Getting rid of personal debt is easy and can be done without any outside help, provided the amount of debt is not much and you are ready to work on the financial plan without relapsing.

Buying a vehicle is definitely a liberating decision, which brings along its own set of traps and tricks. If you are planning to take this plunge then get ready to spend your days looking for a good car with desirable features at low price. Besides these, searching for auto loan should also be on top of your priority list in order to get the required finance. If you are worried about the high interest rates charged by auto loan lenders, then consider the helpful tips mentioned below to make your search for an affordable auto loan easier. First of all get your credit history from credit bureau. It is important in order to assure your creditworthiness, as well as find out any shortcomings which can be rectified to increase your chances of getting an auto loan at lower interest rate. Being equipped with such knowledge can also help you in avoiding the traps and tactics used by dealers for luring uninformed car buyers. After you have gone through your credit report and found a car in your desirable price range, you can get in touch with your nearest credit union or bank to get an idea about interest rates being offered on auto loans. Being pre-approved by a bank is a good option in order to know how much money you will be paying in the form of monthly payments and interest rate. Other than following the above mentioned tips it is crucial that you spend time understanding the options being offered by auto loan lenders, as well as keep yourself updated with the latest changes in interest rates and payment options.

Why do I need auto insurance? This is a question repeatedly asked by many who consider themselves good drivers with no chances of being involved in an accident ever. However, they fail to realize that while their driving skills might be incomparable, there are plenty of bad drivers out there. And auto insurance is a reliable way to keep yourself and your car safe, in case of a collision, theft or damage. The first and foremost reason why you should have auto insurance is because it is mandatory by law. Driving a vehicle without insurance can lead to fines and penalties, depending on your state law. Besides adhering to law, auto insurance is required as it keeps you and others protected financially when involved in an accident, by paying for any damage caused to the vehicles, property and medical bills. Once you are aware of the reasons why auto insurance is so important, next step is to determine how much and what type of coverage you require. Determining the auto insurance package ideal for you depends on factors like amount of coverage you require, your past driving record and personal insurance, if any, you have currently. You might want to avoid monthly payments by not getting your vehicle insured now, however, what if you have to pay for car repair, an expense that can run into thousands, after a collision. Even paying the expensive medical bills can leave you financially drained. Whether the accident was caused by your fault or someone elses negligence, auto insurance can prove to be a life saver by offering the required financial help when needed.

The thought of retirement evokes different emotions in different people. While some look forward to their retirement as the beginning of a new chapter of their lives, there are some who are constantly worried about the financial challenges that their retirement will bring along. However, the challenges of retirement can be minimized to a large extent by avoiding some common mistakes. People, in the initial stages of their career, usually overlook their retirement savings and focus more on paying student loan or supporting a family. Although they might consider it is too early to think about their retirement, but they should try to cover at least the minimum amount required even if their employer and company are taking care of their retirement funds. Many parents are usually seen to let go their retirement savings for supporting the college education of their children. They definitely want to make life easier for their children but they do not realize that they are exhausting their savings which can be problematic at the later stage of their life. In todays uncertain times, it is not wise to think that you will be able to retain your job for as long as you want. That is why so much emphasis is given on planning and research to look for an ideal retirement plan for you to keep you secure and financially independent even when you are no longer working. A little planning and avoiding a few common pitfalls can go a long way in helping you avail maximum retirement benefits and assuring a comfortable and financially secure future for you and your family.