Ready to Relocate? 3 Tips on How to Set a Moving Budget That Won't Break the Bank

Relocating to a new area can be exciting, but it can also be expensive. There are many resources to help, but most cost money. However, if you take your time and plan carefully, you can reduce the expense so you don't start your new life with new debt. Here are three tips to controlling your moving budget.

1. Find Out What's Free

Nothing is better than paying nothing, right? Don't assume you have to fork out money for everything you need to move. If you have accepted a new job, ask your new employer whether the company can cover any of your moving expenses.

When it comes to moving supplies, see what you can get without having to pay for it. Stock up on free moving supplies by asking your workplace, local grocery stores, and friends and family for unneeded, sturdy boxes. Instead of paying professional movers, see if you can barter with friends or family for help in moving boxes to and from the truck.

2. Focus On Essentials

After you've pursued every possible angle to cover your needs for free, you will likely need to pay for something. The trick is to only do so for what is absolutely necessary. Many providers will offer you help along the way, but you should only sign up for basic services. This could include moving big items such as a piano, paying for gas and tolls, or buying cartons for oddly-shaped or particularly valuable items. If you are not able to move things yourself, this could include hiring professionals.

3. Do It Yourself

If you have the time and are physically fit, start long before moving day and pack everything yourself. Rent or borrow a truck and move your boxes yourself, perhaps with the help of a friend. Take care of disconnecting old utilities and signing up for new ones. Handle both cleaning your old home and preparing your new one. Anything you can do with a little elbow grease will mean less money out of pocket.

Remember that you are in charge of your move, so don't automatically sign up for every service available. By using free goods and services when available and doing much of the work yourself, you can set and follow a moving budget you can afford.

Understanding Lower FHA Mortgage Insurance Premiums and How They May Help You Save Money

FHA loans are designed to help individuals take advantage of the benefits of home ownership, and these loans have low down payment requirements. However, for borrowers who choose to make a down payment that is less than 20 percent of the sales price, the borrower will be required to pay a mortgage insurance premium with the monthly mortgage payment.

This premium is in place to minimize the risk that the lender takes when making a low down payment loan, but it does result in a higher monthly mortgage payment for the homeowner. Recently, the FHA has announced a lower rate for FHA mortgage insurance premiums, and this can help home buyers save money.

A Closer Look At The Reduced Premium

In January 2015, the FHA announced that the FHA premium rate would decline from a current level of 1.35 percent of the loan value to 0.85 percent. This has the potential to save home buyers hundreds of dollars per year in reduced mortgage payments, making home ownership more affordable. In fact, the FHA stated that it believes this reduction will help as many as 250,000 home buyers who currently do not qualify for a mortgage to purchase a home.

Calculating the Savings For You

The mortgage insurance premium is in place on low down payment loans until the home equity has accrued to at least 20 percent of the home's value. This equity is essentially built up between principal reduction with regular monthly payments and increasing property values, but homeowners typically will need to prove that the equity is present before the mortgage insurance premium can be removed from the monthly payment.

As a home buyer, it is important to know that you may be responsible for the mortgage insurance premium for several years or longer. Therefore, this reduced premium can result in considerable savings for you over time. You can use an online calculator to determine your actual savings and to calculate your monthly payment based on the new rate.

If you have not qualified for a mortgage in the past due to the addition of a mortgage insurance premium, you may consider contacting a mortgage representative about your current options. The reduction in the premium rate will help many to qualify for the loan amount that they need, and you can speak with a representative about your financing needs and to request an estimate for your mortgage payment.

Real Estate Investing: Why Buying Raw Land Can Be an Excellent Long-Term Strategy

When many people think about investing in property, they think about purchasing income-producing real estate such as a residential property or an office building with tenants. There are indeed many benefits associated with investing in income-producing property. For example, these properties may produce rent that can offset your ownership expenses. However, buying raw land can also be an excellent long-term investment strategy.

By learning more about the benefits of investing in raw land, you may be ready to start searching for real estate to invest in soon.

Minimal Ownership Expenses

Raw land will not have as many ownership expenses as land. This property may not produce rental income for you, but you also will not have to maintain or repair a building or pay for property insurance. Property taxes and a mortgage payment may be lower as well. Typically, your main expense will be the mortgage payment, and this may be far less than what a mortgage payment on developed land may be.

You essentially will be able to pay for the property outright to have no expenses or to leverage your investment and make affordable mortgage payments to pay for your investment.

Significant Potential Gain

There is a significant potential for long-term financial gain with your purchase of raw land. Consider that you can adjust the zoning or subdivide the property as desired. You can also wait for urban sprawl to reach the area to drive up demand and value for the property. It can be difficult to predict when the property value will increase. However, when you select a property in an area that seems to be growing, you may expect there to be some demand for that property in the coming years. Many who have invested in raw land may realize a significant gain when they make plans to hold onto the property for several years or longer before selling it.

Before you make any financial investment, it is important that you consider the amount of time that you wish to hold the investment before seeing a return on it. With raw land, you generally need to anticipate hanging onto the asset for several years or even decades before seeing a financial gain. Make sure to talk with your trusted loan officer about what would be best for you and your financial situation. 

Keep in mind that land is a limited resource, and there is increasing demand for it as populations rise in many areas. With this in mind, you can generally expect most property values to eventually rise over time.

Save Some Additional Cash with Our Guide to Lowering Your Monthly Mortgage Payment

If you are like many other homeowners, your home mortgage payment is the single largest expense in your monthly budget. This is a fixed expense that you will typically be responsible for until your loan is paid in full or until you sell your home, and you may have a 15, 20 or even 30 year term on your mortgage.

If your home mortgage payment has become unaffordable or burdensome for you to manage with your current financial situation, rest assured that you may be able to save some additional cash each month without selling your home. Refinancing your existing mortgage can provide you with important financial benefits to help you better manage your budget.

How Refinancing Lowers Your Mortgage Payment

Refinancing your existing mortgage essentially will replace your existing loan with a new loan, but you may not understand how this will result in a lower mortgage payment. When you initially applied for your current mortgage, your payment was fixed based on the interest rates at the time as well as the original loan balance. Since that time, you likely have reduced your loan balance considerably, and interest rates may be improved as well. In fact, some homeowners are able to refinance to a lower rate as well as pull equity out of their home in the process.

How Home Equity Could Further Reduce Monthly Expenses

While your main goal for refinancing a home mortgage may be to reduce the large monthly mortgage payment that you are responsible for, the fact is that you may be able to use your home equity to further reduce your monthly expenses. For example, you can use extra funds provided to you through a refinance to pay off an outstanding student loan, a car payment or a credit card balance. Some homeowners may even be able to pay off most or all of their debts by tapping into their home equity.

It is common for homeowners who have a high and unmanageable mortgage payment to feel overwhelmed and even trapped by their financial situation. However, as you can see, lowering your mortgage payment and even reducing some of your other expenses may be easier to do than you might think. If you are interested in learning more about how refinancing your mortgage may help you to improve your financial situation, you can speak with an experienced mortgage professional today.

What's Ahead For Mortgage Rates This Week - May 4, 2015

Last week's economic news included S&P Case-Shiller Home Price Index reports, the Fed's FOMC meeting statement and pending home sales. Freddie Mac mortgage rates and weekly jobless claims were also released as usual. The details:

Case-Shiller: Denver Leads Home Price Gains in February

The S&P Case-Shiller 20-City Home Price Index showed that home prices continue to appreciate, but at a slower rate than in previous years. Home prices increased at a seasonally-adjusted year-over-year rate of 4.20 percent in February as compared to the February 2014 reading of 4.40 percent.

Denver, Colorado led February's year-over-year home price appreciation rates with a reading of 10.00 percent. San Francisco, California followed closely with a year-over-year reading of 9.80 percent and Miami Florida reported year-over-year home price gains at 9.20 percent.

FOMC Statement: Fed Expects Moderate Economic Growth

In its customary post-meeting statement the Federal Open Market Committee (FOMC) the Fed repeated its projections for moderate economic growth, but again kept its options open for raising the target federal funds rate, which currently ranges between 0.00 and 0.250 percent. The Fed noted that inflation remains below its goal of 2.00 percent, largely due to earlier decreases in fuel prices. FOMC indicated it will be monitoring inflation data closely.

FOMC members agreed not to raise the target federal funds rate, but said that FOMC will closely monitor data on its dual mandate to achieve maximum employment and an inflation rate of 2.00 percent. Labor market conditions, readings on expected and actual inflation rates and domestic and international economic developments will be considered before the FOMC raises the target federal funds rate. When the Fed does raise rates, mortgage rates can also be expected to rise.

Mortgage Rates Rise, Jobless Claims Fall to 15 Year Low

Average mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose by three basis points to 3.68 percent; the average rate for a 15-year fixed rate mortgage rose by two basis points to 2.94 percent. The average rate for a 5/1 adjustable rate mortgage increased by one basis point to 2.85 percent. Discount points for fixed rate mortgages were unchanged at 0.60 percent and rose from 0.40 to 0.50 percent for 5/1 adjustable rate mortgages.

Weekly first-time jobless claims were lower than expected with a reading of 262,000 claims filed against expectations of 287,000 new claims filed and the prior week's reading of 296,000 claims filed. This was the lowest reading for new jobless claims in 15 years. The four-week rolling average of new jobless claims fell by 1250 claims to a reading of 283,750 new claims filed. Analysts typically rely on the four-week rolling average reading as it softens the effects of volatility that can occur from week to week.

What's Ahead

Next week's scheduled economic reports are dominated by employment related data including the National Unemployment Rate, Non-Farm Payrolls and the ADP Employment report. Weekly jobless claims and Freddie Mac's Primary Mortgage Market Survey will be released as usual on Thursday.