It wasn’t long ago when all you needed to get a mortgage was to be living. Not so today. The credit crunch is real and it has hit the mortgage market especially hard.

If you had a credit score of 680, you were considered a good risk for a conventional mortgage with the lowest interest rate. Today, your credit score needs to be above 720 in order to avoid additional fees that lenders are adding to their loans in the form of higher interest rates. And even a high score doesn’t guarantee that you will get the best rate. The location of the home you want to buy, the amount of your down payment, the total amount you own on credit are only a few of the underwriting criteria being scrutinized by lenders.

Because of the growing number of criteria that a lender uses to assess risk, interest rates will vary more greatly from mortgage broker to mortgage broker and from bank to bank. You will need to invest much more time  shopping for a mortgage than in the past.

So if a new home is in your immediate future, you might want to get your credit house in order first. Start by getting a copy of your credit report from all three credit bureaus. The middle score of the three is what lenders use to qualify you as a borrower. If this score is below 720, you might want to think about ways to boost your middle score. CnnMoney offers  some credit boosting tips.

With home prices falling in many markets across the country, now is a very good time to buy. First-time buyers or second-home buyers are sitting in a catbird seat because they don’t have a home to sell and can bargain for the best price. You’re in luck also if you’re being transferred by your employer that offers a home buy-out  as part of the relocation package. If you have a home to sell, you may have to wait awhile.

In any case, always get your mortgage lined up before ever looking or a new home. There’s nothing worse that making an offer on a home only to discover that you don’t qualify for a loan.

 Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.SaveMoneyOnAutoInsurance.com
www.Save-Money-On-Groceries.com

Looking for a way to simplify your retirement plannning? Target-date mutual funds are becoming increasingly popular. You pick the year in which you want to retire or the year in which you want to start withdrawing funds. Depending on the length of time between then and when you set up the fund, it will automatically go from growth mode to more conservative as your retirement date approaches.

There are more than 285 target-date funds to choose from that now hold more than $180 billion in assets. Just seven years ago there were only 31 funds with $7.8 billion in assets. And their popularity will continue to grow since the US Dept. of Labor has deemed the investment category an appropriate default option for employers who automatically enroll employees in a 401 (k) plan.

Not only must you choose a target-fund whose investment risk suits your personal toleance level, but you need to choose a target date that corresponds to your plans and needs. For example, most people in their 50’s who are planning to work another 10 - 15 years might select a 2020 fund. But if you have a pension or other big source of income that you plan to draw on first, you might choose a 2025 or even a 2030 fund. This allows the fund to be more aggressive for a longer period of time before you start drawing on the assets.  You also might want to buy more than one target-date fund to prolong the growth of the funds so that they don’t go conservative on you all at the same time.

Three popular target-fund choices are Fidelity Freedom 2020 (FFFDX), T. Rowe Price Retirement 2020 (TRRBX) and Vanguard Target Retirement 2020 (VTWNX).

Click here to find out more about target date funds and if they’re right for you.

Happy Savings,

Candee Lynn Wilson
The Saving Lady
www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com

Before investing in bonds, you must understand some things about bonds. Understanding what kind of bonds to purchase, what maturity date to purchase, is necessary before you begin to invest in them. Par value, maturity date and coupon rate. These three characteristics of a bond are the most important things to consider before purchasing a bond. Buying a bond without thoroughly studying these characteristics of a bond is the surest way to make the wrong decision.

The par value of a bond refers to the returns on your investment once the bond matures. It is the amount of money that you will receive at the maturity date. In other words, when buying a bond, it is important to note that you will be receiving your entire investment plus interest only at the maturity date. This is the bond’s par value.

Naturally, the maturity date refers to the date that your bond reaches its full value. This is the date that you receive all the returns of your investment. However, when purchasing corporate, state and local government bonds, you do not need to wait until the maturity date before you obtain the money back. Such bonds can be ‘called’ before they reach the maturity date. When the bond is called, the corporation or government issuing the bond will return your investment as well as any interest your bond has earned up to that point in time. However, federal bonds are unable to be ‘called’.

The coupon rate refers to the interest rate. This determines the amount of money that you will receive when the bond matures. This is specified as a percentage. For example, a bond with a $1000 par value with a coupon rate of 10% will earn an annual interest of $100 until the bond matures. Similarly, a bond with a $2000 par value and a coupon rate of 5% will also earn an annual interest of $100 until the bond matures. This is important to note as the different bond value means a different initial investment, even though the annual interest is the same.

However, many people still do not understand how to purchase a bond. This is because bonds are not sold by banks, but rather by the government. This makes things slightly more confusing for most people. However, there are two ways of buying a bond.

The first way, is to go to a broker or a brokerage firm. The broker is able to make the purchase from the government on your behalf. However, you are likely to be charged a commission fee. Shopping around for the lowest commission fee is prudent if you want to use a broker.

On the other hand, you can purchase bonds directly from the govnerment. This process, although more troublesome is not nearly as difficult as it used to be. With the introduction of the program called Treasury Direct, all your bonds can be purchased and held in one single account that you have easy access to. If you choose to buy directly from the government, you can avoid using a broker and thus saving on the commission.

By Ryan Ginster

Learn how to avoid the most common investing mistakes at: Free Investing Articles Find more articles at: Free Web Content
 

Did you ever notice how much easier it is donating to a cause about which you are passionate than doling out dollars for another magazine subscription to support the local high school band’s trip to the state band playoffs?

The same thing applies to saving for big purchases or long-terms goals like retirement. It’s much easier to save when you choose what you’re willing to sacrifice for than if it’s something you simply should do. It also helps to be convinced of the worthiness of the cause in order to be able to link today’s deprivation with tomorrow’s payoff.

To save big, you need to determine just what it is you’d like to achieve. If you’re renting, you might decide that you’d like to buy a home in three years. Then you need to set a short-term goal to help you achieve your desire. As an example, “I’ll need approximetely $20,000 for a down payment and closing costs, so I need to put away around $550/month.”  In addition, you may need to take steps to put your plan into practice. It might require that you complete paperwork with your employer that will automatically deposit a portion of your paycheck each period into a savings account. You may also need to set up a high interest account for this purpose. Or perhaps you don’t have $550/month extra in your paycheck to save. Your next step may be to find a second job that will pay you the extra money.

If the financial goal is important enough to you, you will almost always find a way to save for it. You will probably have to make sacrifices or jeopardize not achieving your goal. These sacrifices are what make the reward so sweet.

Happy Savings,

Candee Lynn Wilson
www.101WaysToSaveMoney.com

They are simple steps anyone can take to help manage money smarter. Yet the vast majority of people are guilty of five financial mistakes that rob them of the ability to save.

1. Not paying your credit card bills in full every month, which means you pay huge amounts of interest. (If you can’t pay off your debt each month, you’re living beyong your means.)
2. Not putting as much as you can into a 401(k), IRA or other retirement plan. (You can never put enough into a retirement plan.)
3. Withholding too much for income tax, thinking that the money you get back is a “gift.” It’s your money that’s been sitting in Uncle Sam’s account. (See my post, “Do You Have ANo-Interest Savings Account?”)
4. Sticking with an investment that’s producing a poor return just because you’re not sure what else to do with your money. (Like letting money pile up in your checking account that earns no interest or a sum so paltry that the earnings are negligible.)
5. Letting yourself be talked into schemes that make a lot of money risk-free. (Think lottery tickets.)

Are you making any of these mistakes? If you are, better take a break and change direction before it’s too late.

Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.SaveMoneyOnAutoInsurance.com
www.Save-Money-On-Groceries.com

The last place you would expect to find help when you have a problem with the IRS is within the bureaucracy itself. Yet, that’s exactly where you should turn.

The Taxpayer Advocate is a representative of taxpayers within the IRS that has the authority and the resources to act on behalf of the taxpayer facing unfair collection actions or impossible-to-solve problems. There is a Taxpayer Advocate in every IRS District and in each of the 10 Service Centers across the country. They are completely independent of other IRS officials, and report directly to the National Taxpayer Advocate.

I can personally vouch for this service which I had an opportunity to use two years ago. The IRS kept sending me a bill for $129.02 which I knew I didn’t owe, but we just couldn’t communicate with each other. After multiple attempts to resolve the problem, I contacted the Taxpayer Advocate. Not only was the problem handles expeditiously and graciously, but I actually received $246.00 back because of an unfound error on the part of the IRS.

Anyone can use the services of the Taxpayer Advocate, but it is especially useful if you face an imminent adverse action on the part of the IRS such as a lien, levy or property seizure that you believe is improper, unfair or that will be costly or damaging to you.

The Taxpayer Advocate handles administrative problems only. It will not intervene in legal disputes. In addition, non-emergency problems with the IRS, such as a misapplied payment or missing refund, you must first try to resolve through normal channels with letters and calls to the IRS branch that contacted you. Always keep detailed records of any contact you have during this process.

If you fail to resolve the problem in at least two attempts, or the IRS fails to resolve the problem by a specific date, you can go to the Taxpayer Advocate.

To get help, call toll-free 877-777-4778 to obtain the phone number of your local Taxpayer Advocate, or visit their Web site at www.irs.gov  and click on “Individuals.” You will also find other useful information on the site.

Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.SaveMoneyOnAutoInsurance.com
www.Save-Money-On-Groceries.com

If you own a home in most parts of the country today, chances are your home has decreased in value — but your property taxes still keep going up.

Many locales re-assess property to its true-market value only every few years. With home prices spiralling over the last 5 years, nobody complained much if the value of their home went up but property taxes didn’t.

Oh how times have changed. The value of your home may have sunk, but I’ll bet your property taxes didn’t come down. It’s estimated that over 60% of properties are over-valued by assessors, but fewer than 1 in 50 homeowners try to appeal assessments. Yet, if you file an appeal based on more than just a grudge, you could stand an excellent chance of success as long as eveyone else in town isn’t lined up at the assessors office doing the same thing.

Filing a claim for tax relief will take some time, so prepare yourself. You’ll be in for a learning experience. You’ll have to learn you system, get our assessor’s evidence, and then build your case before presenting your claim.

For more help, you might want to check out the Property Tax Toolbox.

Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnInsurance.com

Disturbed by how much you pay in taxes?

When trying to reduce their taxes, most people focus on their federal and state taxes.

While that is a good idea, there is another way to stop paying many taxes- a way that has nothing to do with the IRS or April 15.

Have you ever considered all the taxes you’re forced to pay on utiltiy and phone bills?

Check out your recent phone or cell phone bill- look at all the taxes! The city, state and federal government all feel they have a right to make you pay them for having a phone. If you have a second phone line for data purposes, the taxes likely exceed the cost of the line.

Most people merely sigh and unhappily pay these taxes, thinking there is nothing that they can do about them.

Remember that you are paying those taxes with hard-earned money that you have already been taxed on once. This is essentially double taxation!

Add up those cumulative taxes, month after month, year after year. You are unnecessarily paying is a lot of money! Eliminating all those taxes could save you several hundreds, if not thousands of dollars over time.

Now, you can eliminate virtually all those taxes on your phone bill.

The answer is digital phone service or VoIP (Voice Over Internet Protocol). This is using a broadband (high-speed) Internet connection for the regular phones in your home. You don’t have to sit at the computer with a headset on. You use the phones you now have. The difference is that the signal is now carried over the Internet to the other person’s phone.

This also eliminates need for the regular phone company.

The good news and savings is that the Internet is not taxed. There are usually just a few ($2-3) dollars a month taxes on VoIP service, but it is far less than what you are paying on your traditional phone service. You’ll also save because most VoIP services cost much less than regular phone service. They also include free almost every feature imaginable that the other phone companies charge you separately for as add-ons.

You will also have free long distance with VoIP.

89% of U.S. households are broadband capable, so they could easily try VoIP. Even if you upgraded your Internet from dial-up to broadband to try VoIP phone service, you would still be ahead on savings. The cost of the broadband plus VoIP service likely will be less than you are now paying for your old phone service. This way you would gain high speed Internet for essentially free.

A few VoIP providers also have the added capability of using a video phone on their service. Imagine actually seeing your loved ones or business associates when you talk to them on the phone. You can have all this for less cost than traditional phone service.

For more information about how you can save on your taxes, and learn about selecting a VoIP carrier, please visit our site at:

http://www.video-phone-home.com/voip-service-provider.html

About the Author

Paul Myers is President of Ph.Developments USA, Inc. and webmaster of

http://www.video-phone-home.com/

a site dedicated to helping people discover video phones and save money on telecommunication services.

I was astounded when I read this week that the cost to attend college is increasing by an estimated 8% per year. At this rate, one better pray for some big scholarships or start saving today for those future costs if you intend to see that your children get a college education. And with more blue-collar jobs moving overseas, a college education is more important than ever.

 One of the best ways to save  is with a 529 plan — a tax-advantaged savings plan designed to encourage saving for future college costs. The account is funded with after tax money so funds in the account grow tax free. Fund withdrawals are also tax free for qualified educational expenses and can be used at any eligible college.

These plans are sponsored by states, state agencies and educational institutions and are authorized under Section 529 of the Internal Revenue Service Code.  You can invest in any state’s fund, but some states offer residents an incentive to invest in their fund.

For a better understanding of 529 plans, check out How 529 Plans Work to see if one might be right for you.

Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com

If you purchased a home last year and had less than a 20% down payment, you are probably paying for mortgage insurance. The good news is that the mortgage insurance premium may now be tax deductible.

If your income is $100,000 or less, you can deduct all of your private mortgage insurance premium or mortgage insurance you purchased through the Veterans Administration, Federal Housing Authority (FHA) or Rural Housing Administration.

This deduction could amount to a fair chunk of change. For example, if you purchased a home for $250,000 with 5% down and a 30-year fixed mortgage, your loan amount would be $237,500. Your private mortgage insurance premium would typically be 0.78% of the loan amount or $1852.50 for the year.

The IRS has added a line to the lender’s Form 1098 to show how much mortgage insurance you paid in 2007. If you do your own taxes, don’t overlook this additional tax break.

Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com