Learning Center: Discount Mortgage Funding Articles

Learn About California Bad Credit Mortgages And More

14 Tips to Avoid Identity Theft Reducing Home-Buying Stress Turning Around a Spendaholic 8 Ways to Cut Honeymoon Costs All About Reverse Mortgages 10 Greatest Myths about Credit and Debt Beat the High Cost of Lawyers 7 Things Not To Do When Home Shopping

14 Tips to Avoid Identity Theft

Identity thieves rob more than 500,000 Americans every year. Credit can be damaged, and fixing it can cost you hundreds of dollars and take hundreds of hours of your time. These steps will help you reduce your risk of identity theft.

1. Guard your Social Security number. It is the key to your credit report and banking accounts and is the prime target of criminals.

2. Monitor your credit report. It contains your SSN, present and prior employers, a listing of all account numbers, including those that have been closed, and your overall credit score. After applying for a loan, credit card, rental or anything else that requires a credit report, request that your SSN on the application be truncated or completely obliterated and your original credit report be shredded before your eyes or returned to you once a decision has been made. A lender or rental manager needs to retain only your name and credit score to justify a decision.

3. Shred all old bank and credit statements and "junk mail" credit card offers before trashing them. Use a crosscut shredder. Crosscut shredders cost more than regular shredders but are superior.

4. Remove your name from the marketing lists of the three credit reporting bureaus to reduce the number of pre-approved credit offers you receive.

5. Add your name to the name-deletion lists of the Direct Marketing Association's Mail Preference Service and Telephone Preference Service used by banks and other marketers.

6. Do not carry extra credit cards or other important identity documents except when needed.

8. Do not mail bill payments and checks from home. They can be stolen from your mailbox and washed clean in chemicals. Take them to the post office.

9. Do not print your Social Security number on your checks.

10. Order your Social Security Earnings and Benefits statement once a year to check for fraud.

11. Examine the charges on your credit card statements before paying them.

12. Cancel unused credit card accounts.

13. Never give your credit card number or personal information over the phone unless you have initiated the call and trust that business.

14. Subscribe to a credit report monitoring service that will notify you whenever someone applies for credit in your name.

This article courtesy of BankRate.

Reducing Home-Buying Stress

Buying or selling a home ranks high on the list of stress-provoking situations. It's disrupting, uncertain, unsettling and time-consuming, not to mention expensive. Sellers whose homes sell quickly worry that they sold too low. Sellers whose homes take months to sell wonder if they'll ever sell. Buyers agonize over paying too much. And both buyers and sellers complain that the process takes too long.

People move for a variety of reasons, sometimes by choice but often not. Frequently a move is forced on a family because of a death, a divorce, a job loss or an unanticipated transfer. So the reason for the move can be stress-provoking. And since most people dislike change, the very act of moving is bound to be stressful. What can you do to ease the pain?

Pick your real estate agent carefully. A good agent will go out of his or her way to make the move easier for you. Make sure that your agent will communicate with you regularly, and will be available to consult with you on short notice. The unpredictability of the real estate experience can be unnerving. Your agent should review the buying and selling process with you so that you know what to expect.

Buyers moving to a new area should find an agent who has experience working with buyers who are relocating. Your employer can probably provide you with a good recommendation or ask the agent who is helping you sell your home to refer an agent to you. Be sure to ask for a relocation package. It should include information about your new community as well as sample listings of homes for sale.

The Internet is a great source of information. For example, Realtor.com (www.realtor.com) lists 1.3 million properties across the country that are for sale. It includes maps, photos and community facts. So it's possible to preview listings long distance. Buyers who are buying locally can also cut down the time they spend looking at new listings by viewing homes on the Internet.

Showing your home to prospective buyers is an invasion of your privacy. Furthermore, it's best to leave your house when it's shown. It may make life easier if you plan to eat out when the home is new on the market and is getting a lot of showing activity.

First Time Tip: If you're buying or selling a home with a partner, divide the workload so that you don't duplicate efforts. Perhaps one of you can preview new listings and the other can arrange the financing. Make good use of modern technology to lighten your load. Use email, voice mail and facsimile rather than lengthy telephone communications to exchange messages.

Moving always seems to come at an inconvenient time. But even though you feel pressed for time, don't eliminate stress-reducing activities like jogging or cycling from your schedule. Staying involved in your favorite hobbies and sports will add some semblance of order to your chaotic life, as well as provide needed relaxation.

Plan time outs for you and your family. Take day trips or go away for a weekend. If you've been looking for a home for months with no luck, take a break and enjoy yourself.

The Closing: There will undoubtedly be times when you feel stressed out or depressed. Understand that these feelings are normal and they will pass.

This article courtesy of BankRate.

Turning Around a Spendaholic

Dear Debt Adviser,

I have hit rock bottom with my spending habit. I am a wife and mother of two and a spendaholic. I have just about run us into financial destruction. My husband has a successful career, makes good money, yet none of our bills are paid, our truck was just repossessed and he is about to walk out on me. I need help and I don't want to lose my family. My husband has traveled for many years and I have kept all of this from him until now. He would always say, just make sure I have what I need and take care of the rest. I feel as though the void in my marital life and my self-loathing tendencies have put us where we are now. What kind of help is there for me and will I ever get our credit restored? The bill collectors are vicious and it's not like I can say, "I can't help it, I have a problem with spending," and then make it all better. Please help me find the help I need. I am desperate. Thanks -- Kate

Dear Kate,

All long journeys begin with small steps. You have made a great start by admitting that you have a problem with spending and being honest with your husband about it. Congratulations on coming this far. I know that both were extremely hard to do. However, these are the last kind words you will hear from me! You have serious work to do and here are my suggestions:

First, get control of yourself. Find a Debtors Anonymous meeting and attend. Debtors Anonymous is a 12-step program modeled after Alcoholics Anonymous. DA has helped many people in your situation come to terms with their spending and lead debt-free lives. DA has more than 500 meetings nationwide and in 13 countries. It doesn't matter if the meeting is too far, or at a bad time: Go! You can find some more information at http://www.debtorsanonymous.org.

First, get control of yourself. Find a Debtors Anonymous meeting and attend. Debtors Anonymous is a 12-step program modeled after Alcoholics Anonymous. DA has helped many people in your situation come to terms with their spending and lead debt-free lives. DA has more than 500 meetings nationwide and in 13 countries. It doesn't matter if the meeting is too far, or at a bad time: Go! You can find some more information at http://www.debtorsanonymous.org.

Second, help carry the load by finding employment or making extra income to help pay off the debt. No matter how small your contribution, you made the debt; you need to help get rid of it. This will go a long way with your husband to show that you are serious about your situation.

Third, get control of your finances. Both you and your husband should go to see a legitimate, traditional credit counselor to help create your debt payoff plan, open the lines of financial communication and set some goals you can both work toward. The unbiased professional advice could be just what you need to begin getting your financial lives in order and keeping them that way.

Fourth, about restoring your credit: Forget about it. Restoring your credit is so far down on your list of priorities right now that spending any time on it will just distract you from those things that are important in your current situation. Your credit history will take care of itself if and when you take care of your life and family. Stop thinking about using credit, start thinking about living each day as best you can, without borrowing on the future.

Kate, I know that you can turn things around with some hard work, rebuilt trust and some good advice. Don't forget to attend the Debtors Anonymous meetings and I wish you the best of luck!

This article courtesy of BankRate.

8 Ways to Cut Honeymoon Costs

It doesn't make much sense to weigh every dollar invested in your wedding if you're going to spend like a sailor on the honeymoon. But with the wedding-related stress behind you, it's easy to succumb to the temptation to indulge your every whim, leaving you and your new spouse with a big fat credit card bill on your homecoming.

The average newly married couple spends $3,400 on a one-week getaway, according to a Conde Nast Bridal Infobank survey. Favorite destinations include Hawaii, the Caribbean and Mexico, with more distant destinations such as Tahiti and Europe gaining in popularity, says Janet Hyman, founder of Travel Duet, a national travel agency based in Deerfield, Ill.

Hyman stresses that it's important for the couple to really think about what kind of trip they want before planning it.

"Figure out what activities you both enjoy and build those into the honeymoon," she says. "It's hard to plan a trip with lots of different types of activities."

Like most events in life, careful planning will help you stretch your dollars to accommodate what you and your spouse most want to do on your honeymoon while avoiding the extra charges that can quickly suck up your cash. Start with an idea of how much you want to spend, because without a budget or some type of spending limit, costs can escalate quickly.

When planning your honeymoon, consider these cost-saving tips:

1. Book way ahead. The farther you plan in advance, the better deal you'll get. Whether you purchase an all-in-one resort or cruise package or painstakingly put the pieces together yourself on the Internet, the earlier you start working, the better.

Booking early means a year or close to it; by even six months ahead of your trip, most of the deals evaporate. "The travel landscape has really shifted. A couple of years ago you could get a lot of bargains, but since last year, things have picked up and the planes and hotels are getting crowded," says Alan Fields, co-author of "Bridal Bargains."

Don't count on cutting costs by using frequent-flier miles. The frequent-flier market has gotten so tight, Fields says, that you have to figure on booking a year in advance to get anything, even an upgrade to first class.

"I know that United, for example, opens their flights for booking at 2 a.m. 330 days in advance, so if you want a hope of using your miles, especially on a prime destination, it's not a bad idea to stay up until 2 a.m. to try to book it."

2. Or wait until the last minute. If you are flexible in your travel plans and can live with some uncertainty, there's a lot to be said for booking travel at the last minute -- say two weeks before the wedding. "These days, the cheapest travel is to be had either 10 to 11 months in advance or at the last minute," says Fields. "Sign up for airline newsletters that advertise last-minute bargain fares and packages or visit travel Web sites for these types of deals."

3. Decoupling your honeymoon from your wedding. Since most weddings are in the summer and planned without a lot of thought for saving money on the post-wedding trip, you may have to fork out a lot more dough to get where you want to go. "Consider taking a post-wedding weekend trip, then doing the longer trip in the off-season, when rates are lower," says Leah Ingram, author of "The Complete Guide for the Anxious Bride."

This idea of decoupling the honeymoon from the wedding may be particularly attractive to career-driven couples who might have a hard time taking time off from a busy office for the wedding as well as an extended honeymoon. "You don't even have to wait that long," Fields says. "If you get married in June, you can do the trip in September and save significantly, especially on popular destinations."

4. Ask for freebies and barter for services. Everyone loves newlyweds, so take advantage of this nearly universal sentimentality by asking for discounts or freebies, suggests Ingram. If you tell your waiter that you're on your honeymoon, you may get a free dessert or bottle of wine. Ask the desk clerk at the hotel where you're staying for any free upgrades, as well.

Take this a step farther by thinking about what services you and your fiancee can offer that you can use to barter with a resort or hotel for a discount. "When I was planning my honeymoon, I was doing event photography," Ingram says. "I contacted the resort where we had booked our stay and asked if they needed any photography services. I was able to negotiate a 25 percent discount off our room rate in exchange for doing some photography."

5. Scout deals out in advance. If you're set on an adventurous honeymoon, check out official tourism Web sites and travel guides for discount-minded travelers in advance, Fields recommends. Most tour companies have Web sites these days and many offer coupons, especially if you're willing to commit to taking a tour on a less popular day such as Wednesday.

"Just remember, you can overschedule your honeymoon by packing in too many activities," Fields says. "You really don't have to do something every day. Extra tours and trips like snorkeling really add costs to your honeymoon, so be selective about the tours and special activities that you do commit to."

6. Plan a destination wedding. Destination weddings, where couples invite their guests to their wedding at their honeymoon destination, are gaining in popularity. The travel industry is just waking up to the concept of destination weddings, Fields says, and there are some great deals to be had.

For example, you could add a wedding to a honeymoon in Aruba for an additional cost of $500 to $1,000, far below the cost of a traditional full-blown wedding, he says. Since it's likely that far fewer guests will travel that far to attend the wedding, your costs for food, drink and other expenses will fall dramatically. Airlines are offering group discounts for parties of 10 to 15 or more traveling to destination weddings.

7. Consider a package or all-inclusive. If you've got enough on your hands planning the wedding, take advantage of package or all-inclusive trips. Many resorts offer packages that not only include meals, but also popular activities such as wind surfing or scuba diving.

Just make sure that you really want to take advantage of these opportunities, otherwise you'll be paying for things that you won't use, Ingram advises. Also, if you're the type who gets bored eating dinner at the same place every night, you may end up paying for meals both at the resort and at off-resort restaurants, which doesn't make a lot of sense.

You can book such trips yourself on the Internet or through a travel agent. Ingram notes that when you use a travel agent you have a safety net if something goes wrong because they can help you out if you have a problem. Whichever route you choose, consider buying travel insurance in case your resort is flattened by a hurricane the day before you're scheduled to arrive.

8. Cut back on the length of your trip. Couples who budget too tightly may be disappointed at the quality of their hotel, Hyman says. She recommends cutting down on the length of a trip, say from 10 days to seven days, and upgrading to a better hotel, rather than risk spending one of the most important trips of your life in a flea-bag.

This article courtesy of BankRate.

All About Reverse Mortgages

A reverse mortgage allows you to convert the equity in your home into a lump-sum payment, monthly income, or a line of credit.

Why would you want to do that?

Well, it can be a useful strategy in retirement (you must be at least 62 years of age to qualify for such a mortgage) if you want some extra income. It's called "reverse" because it reverses the direction of the payments: instead of building up equity in your house by putting the money in, you actually reduce equity in the house by taking money out.

No payments are made on the loan until you no longer occupy the home as your primary residence. When you move or sell your home, the loan balance is due and payable. However, the loan balance is never allowed to exceed the value of your home.

What are the eligibility requirements for a reverse mortgage?

You and all co-borrowers must be a minimum of 62 years old.
The home should have a very low mortgage balance or be owned free and clear.
The home must be owner-occupied. FHA-approved condominiums and two- to four-unit dwellings (owner occupied) are also eligible.

How is my equity determined?

The allowable equity is calculated based on three factors:
The youngest borrower's age
The appraised value of your home
The FHA maximum loan limit for your county

What fees are involved?

Like most loans, you will pay an origination fee, appraisal fee, title fee, escrow fee, recording fee, and a monthly servicing fee. These fees can be included in your loan balance, if there is enough equity available.
What happens when the loan balance exceeds the value of my home?

You must occupy the property, and are responsible for maintenance and payment of taxes and insurance. As long as you abide by the loan agreement, you cannot be forced to sell or vacate your home. No deficiency judgment may result from your reverse mortgage. FHA insurance guarantees against any loss to the lender.

This article courtesy of BankRate.

10 Greatest Myths about Credit and Debt

Myth 1: I'm a loser and a failure because I'm in financial trouble.
Reality: You have to accept responsibility for your actions and remember that you did accept the credit with the promise of paying it back. But most families and our schools do a poor job of teaching financial responsibility. How many classes did you take while growing up that taught you how much credit you should accept? Maybe the truth is that you made a mistake and got in over your head because you didn't know better. If you can learn from this mistake, you are neither a loser nor a failure. Accept your setback, learn from it, and move on.

Myth 2: My financial condition is so bad that my situation is hopeless.
Reality: Although your problem may not be solved in a way that you would envision, a resolution can always be found. Open your mind and be realistic about your options. Ultimately, you have to choose a solution you are most comfortable with.

Myth 3: The credit card companies wouldn't send me applications in the mail if I couldn't afford it.
Reality: Wrong. The credit card companies are simply making you an offer based on mailing lists or research they have performed. It is your responsibility to determine whether you can afford to accept their offer.

Myth 4: Everything is okay because I pay the minimum payment due each month.
Reality: By just paying the minimum payment on a debt, you extend your payments for many years. If possible, send more than the minimum payment. If that isn't possible, you are probably living close to the financial edge. What would happen if you were injured or sick or could not work? Simply being able to live from paycheck to paycheck is not a sign of financial well-being.

Myth 5: If my debts get to be too much, I'll just file for bankruptcy.
Reality: Bankruptcy is a very serious matter and should be a last resort, not an easy out. It is a legal case filed with the bankruptcy court that is a matter of public record, and it can be reported for the rest of your life if you apply for certain loans, life insurance or jobs. Many people who have filed bankruptcy wish they had tried other alternatives before filing. Once you file, you will always be ''a person who filed bankruptcy,'' and you can never take that back.

This article courtesy of BankRate.

Beat the High Cost of Lawyers

When Amy S. wanted to file for a divorce, she couldn't afford the $200 an hour legal fee one family law attorney had quoted her. With the assistance of the self-help center in her local courthouse, she purchased a packet of "Dissolution of Marriage with Dependent Children" forms and decided to represent herself.

"At first it was a very scary idea," says Amy. "Luckily, my husband and I had come to an agreement on most of the issues between us, and neither one of us felt we could afford to hire an attorney."

"I filled out all the forms with the help of the paralegal at the Self Help Center in the Palm Beach County courthouse. She told me exactly which forms had to be filed first, explained how the process works and went over the papers to be sure everything was filled in correctly.

"I paid the $273.50 filing fee and the $20.37 sheriff's fee to have my husband served with the divorce papers. We went to the court-ordered mediation where we worked out child support and visitation. The mediator wrote up the agreement. I filed that with the court and requested a final hearing."

"I can't say it was easy, I had to do all the legwork, but I am satisfied with the outcome and saved a lot of money in lawyer fees."

Billable hours add up
Amy is not alone. It's expensive to hire a lawyer. The median hourly billing rate for law firm partners is $250 an hour and a little less for associates, $170 an hour, according to the Altman Weil 2003 Survey of Law Firm Economics. Rates vary by region, with the highest hourly rates for partners and associates reported in the Middle Atlantic region.

Many people either can't afford the expense or want to handle some legal issues on their own. Whether it's in family law, small claims, bankruptcy, real estate or a landlord-tenant dispute, there are an increasing number of alternatives to the high cost of hiring a lawyer.

Here's a sampling of alternative services you might try when you are faced with a problem that requires legal assistance.

1. Mediation
Mediation is a voluntary and typically confidential process in which a neutral third-party facilitator helps people discuss difficult issues and negotiate an agreement.

The parties create their own solutions. The mediator has no decision-making power over the outcome.

Increasingly people are being encouraged to try mediation to resolve almost any dispute, says Gregory Firestone, Ph.D., director of the University of South Florida Conflict Resolution Collaborative.

According to the National Center for State Courts, 16 states require some form of mandatory mediation, 16 more have voluntary or discretionary use of mediation in cases involving divorce, child custody, small claims and landlord-tenant disputes.

"Mediation, when successful, is usually far less expensive and takes less time than litigation," says Firestone, who has been a family mediator for more than 20 years.

"The parties can maintain greater control of their lives and make their own decisions. This is especially true in family cases where parties can custom-tailor solutions to meet the needs of their own families.

"In many cases, mediation also serves to reduce the conflict between parties in comparison to litigation," he says.

"Agreements made by the people involved usually work better than those imposed by the courts. And, the mediated agreements are usually confidential, whereas what goes on in a courtroom is typically not," Firestone adds.

Costs: The costs of mediation vary widely, depending on the complexity of the case and the experience and training of the mediator. Mediators come from a variety of professions including law, social work, psychology, ministry and others. Most private mediator fees range between $100 and $300 per hour. Some courts offer mediation services at a reduced cost.

2. Self help or self service centers
A self-help or self-service center is a court-sponsored center designed to help individuals who have decided to represent themselves (pro se) without the assistance of an attorney.

These centers generally offer forms and instructions for filing family court petitions, such as divorce, modification of child support or custody, motions, complaints and responses for eviction and ejectment, as well as offer notary services and referrals to other court services.

In 1992, Maricopa County, Ariz., opened the first self-service center in the nation to assist litigants who were representing themselves, setting the model for other jurisdictions.

"We discovered that there were a significant proportion of people who were representing themselves in our courts," says Judge Rebecca Albrecht, who set up the Maricopa County project.

"It was a problem for the courts because self-represented people didn't understand the procedures and would come to hearings unprepared, expecting that we would guide them through the system, and we expected them to do what lawyers did."

"We wanted to find a way for the system to work for everybody," she says.

This article courtesy of BankRate.

7 Things Not To Do When Home Shopping

As you choose the path that leads to the home of your dreams, you can take either a pleasant Sunday stroll in the park or a gut-wrenching tiptoe through a minefield.

As with most minefields, the worst thing you can do is to plow ahead without knowing what you're doing.

Don't go it alone. It's wise to have your own buyer's agent and attorney. Don't rely on the seller's real estate agent, no matter how nice. Remember, that agent's loyalty is to the seller. Shop for an agent experienced in representing buyers, especially if you plan to look at homes for sale by the owner (FSBO). That owner may not know about certain restrictions and disclosure laws, is "conveniently" forgetting them, or just doesn't care about them. Buyers' agents often have such abbreviations on their business cards as ABR (Accredited Buyer Representative), CBR (Certified Buyer Representative), or CEBA (Certified Exclusive Buyer Agent). The secret is to retain the agent before the search starts. Shop also for an attorney, if you're going to use one -- and if you're a first-timer this is not a place to save a few hundred dollars. Get references from friends and neighbors and the real estate agent you've chosen. Meet with the attorney before you start house hunting. All too many buyers retain an attorney after they've already signed a contract. Bad move.

Don't go buying a lot of junk. Or even quasi-junk. Draining your savings or running up credit card debt to buying a new living room set, a big-screen TV or a new car could make a difference in your interest rate and whether you even qualify for a mortgage. Avoid spending money until after the closing is completed, whether by credit card or with cash. Keep debt down and as much money in your bank account as possible. The lender will check bank and credit card accounts.

Don't change jobs. Unless it can't be avoided through such things as drastic location changes, the experts say it's best not to change your employment picture until after closing. A worse move yet is to change from a salaried position to self-employment. Lending institutions like to see steady employment and generally insist that self-employers show two years of successful income.

Don't be too trusting. Just because the real estate agent seems caring and knowledgeable, don't forget, they work on commission. Don't put your life completely in someone else's hands. Only you can protect yourself. All too many home buyers place too much trust in others -- agents, the seller, title agencies, etc. Do your homework, become familiar with the entire home buying process and protect your own interests.

Don't mess up your credit. Don't go running around "fixing up your credit" without talking to a professional. You may think you're going to bump your score up a few notches by canceling a bunch of credit cards, for example. But canceling the wrong ones for the wrong reasons can seriously damage your credit score. Credit experts say it's important not to have too few or too many open credit accounts, and the best credit is old credit. Another possible pitfall is to transfer all your credit card balances to one card to get zero balances on the others. Your credit score actually will be higher in most cases if your balances are spread out across several cards.

Similarly, don't pay your bills -- at least not all of them. Paying credit cards down to below 50 percent of the your credit limit is generally helpful to boosting your score, but paying off all your debts is only wise if you still have enough cash when it's over to take care of your down payment, closing costs and prepays. In other words, don't deplete you entire savings to pay off your credit cards.

Don't think about lying. Lenders want to know how much cash you have to put into the house -- truthfully. If you're borrowing the money for a down payment and have to pay it back, it will have an effect on your ability to meet all your obligations. If it's a gift and doesn't have to be paid back, that's fine. But whatever you do, don't borrow it from your uncle and tell the mortgage banker it's yours -- the bank may ask you to document how long you've had it in that bank and where you got it from. A lie could backfire and ruin your whole deal.

Don't do any spring cleaning. Don't throw out bills, bank statements, or tax returns. A better idea than cleaning out is organizing all your important papers that may well be requested by a lender, such as W-2s, 1099 income statements, recent pay stubs and tax returns for the past couple of years if you're self employed. While you're at it, round up your prior title insurance policy, and any canceled checks, settlement statements or other proof that you paid collections or disputed accounts.

This article courtesy of BankRate.