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How to Successfully Navigate the Mortgage Process (A Simple Guide)



The mortgage process includes a number of steps that can easily overwhelm any home buyer.  The prospect of homeownership can be exciting, but as homebuyers try to find their way through this uncharted territory, they don’t want to be left feeling lost and uncertain.

Luckily, there are ways for homebuyers to successfully navigate the mortgage process.

Finding a Lender

Navigating the Mortgage Process

Between banks, credit unions, online lenders and more, homebuyers have a lot of options to choose from when searching for the perfect mortgage lender. When considering a lender, buyers should review loan product availability and lending criteria, especially the credit score requirement.

For example, a buyer with a low credit score may find a conventional home loan is difficult to secure, so a lender that offers a home loan product designed for people with low credit scores would be ideal. In that case, an FHA would be a viable option for a buyer. If the lender offers FHA loans, or at least another type of loan product designed for someone with more than a few blemishes on their credit report, that lender would be the ideal fit.

Pre-qualification/ Pre-approval

Many lenders offer home buyers the chance to get pre-qualified or pre-approved for a home loan before they actually apply for the loan. These two steps are important because they will give the buyer a better idea of their buying power; however, pre-approval requires a more thorough look into the buyer’s finances, so these results are more accurate than what is provided when a buyer pre-qualifies.

Buyers should note that although a lender may pre-qualify or pre-approve them for a specific rate and amount, this doesn’t mean the buyer has to spend this amount on a house. Buyers have a better understanding of their finances than lenders do, so calculating how much they can afford for their monthly mortgage payments would be helpful.

Finding a Home

This is the home that they will live in for the next 20 or 30 years, so home buyers should be realistic when selecting a home. What is the first impression of the home? Does it satisfy their wants and needs? Is it in the ideal location? Is there anything they would change about the house?

After finding a home, buyers can put in an offer with the seller. Getting pre-approved for a loan prior to shopping for a home will allow the buyer to come prepared and be taken more seriously by the seller.

Completing an Application

When submitting an application for a home loan, there will be several documents that will be requested from the home buyer. The goal would be for the lender to collect documents that can be used to verify the home buyer’s income, debt and any assets they may have. It is recommended that buyers confirm which documents are needed to apply for a home loan so they can submit them along with an application as soon as they find a home and put in an offer.

Third-party Services

Just because an offer has been accepted by the seller, this doesn’t necessarily mean that this is what the buyer will pay for the home. Hiring third parties for various services can reveal things about the home that were unknown to the buyer. If there are issues with the home, buyers can make arrangements with the seller to lower the cost of the home.

For example, a home inspection, which is an examination of a home’s structure and systems, can be done on the home before closing. If the roof needs to be replaced, the buyer can request that the seller covers the cost of the repair or adjust the price of the home to account for the money the buyer will spend getting the roof replaced or repaired.


Once a buyer finds a home and is approved for a home loan, they still aren’t quite ready to get the keys to their new home. Closing is the final step to officially becoming a homeowner, and this is when all parties sign documents, the buyer pays closing costs and the seller transfers ownership of the home. Buyers may be required to present certain documents at this meeting, so inquiring about the necessary documentation can ensure closing goes smoothly.

Each step of the mortgage process is an important one. Something may seem small and unnecessary, but even the smallest of things can make a big difference when navigating the mortgage process. Some buyers find the mortgage process to be stressful and overwhelming, but it doesn’t have to be.


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Financial advice

How to Repair Your Credit Following a Divorce



Repairing Credit after Divorce

While divorce proceedings can be stressful and time-consuming, there’s a huge amount of relief that comes after everything is said and done. After all, divorce marks the end of one chapter and the start of a new one.

There’s only one thing that might be holding you back from your new life – your credit history. It might be overwhelming to deal with the aftermath of a divorce, but every good financial decision will put you one step closer to your goals.

  1. Review Your Financial Standing

First and foremost you want to know where you stand financially after a divorce. Take some time to review your accounts. Request a credit report from all three credit bureaus and find out exactly what is affecting your credit. This will give you some perspective of both the good and the bad and enable you to start forming a plan for repair.

  1. Take Care of any Remaining Joint Accounts

You’ll never have complete control of your financial standing while you still have open accounts with your former spouse. Your ex’s actions – or lack thereof – will only continue affecting your score following a divorce. Make a note of all personal accounts as well as joint accounts that weren’t addressed in your divorce decree. Consider refinancing, consolidation, and balance transfer options to separate accounts into the responsible parties’ names. This will take some cooperation between you and your former spouse. If necessary, talk with your lawyer about seeking mediation on separating joint accounts.

  1. Balance Your Budget

After a split, it may take time to adjust to your new income-to-expense story. During this adjustment period, it’s important to stay current on all your current accounts. Maintaining good credit history is the key to saving your credit after a divorce. If you weren’t previously responsible for bill pay, this may take some getting used to. Identify your priorities, create a budget, and start tracking your spending. This will give you an idea if you need to cut back in certain areas or start exploring what’s out there in the workforce to prevent you from falling behind.

  1. Establish Credit Independently

When it comes to building credit on your own, you want to start small and build up. Start by getting a credit card with a small limit. Only use your card for bills that you’ve already outlined in your budget and always pay them on time. Be careful of running up any debt that you can’t afford to pay. After 6 months, apply for another car and continue paying bills consistently. If you’re not ready for a card on your own, try applying for a secured credit card. Secured cards are typically backed by your savings account, therefore more financially secure than an open line of credit. Build a positive credit history for a few months before venturing out on your own.

  1. Rebuild a Positive Credit History

After a divorce, you can pick up the pieces and start fresh over a positive credit report. Your most recent bill-paying behavior (18 to 24) is the most important to decide whether you are a good credit risk. Even a single late payment can affect your ability to get a mortgage. Keep your credit balances low (less than 30%) and always make more than your minimum payment. This shows responsibility and reliability when it comes to your accounts, which lenders love to see.

  1. Bankruptcy – A Last Resort

If you are simply in over your head consider bankruptcy, but only as a last resort. Bankruptcy is not an easy way out and there’s no guaranteeing a judgment will be granted in your favor. And even if you do a bankruptcy has implications on your credit score for up to 10 years. During this time you may find it difficult, or even impossible to find a new mortgage or personal loan.

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How Bankruptcy Works & When it’s a Good Idea



Bankruptcy offers a way out of debt by either eliminating it or repaying part of it. The decision on whether or not to file for bankruptcy is however not an easy one. You may end up losing most of your assets or none at all. At the same time, some debts are not covered by bankruptcy. To help you in making the right decision let’s look at how bankruptcy works and when it’s a good idea to file for one.

Which Debts are Discharged by Bankruptcy?

Filing for BankruptcyBefore filing you have to decide on the type of personal bankruptcy that is unique to your financial situation. The process covers consumer debts such as credit cards, personal loans, mortgages, and medical debts. Non-consumer debts cannot be forgiven through personal bankruptcy. These include alimony, taxes, child support, and criminal restitution.

It’s advisable to have a bankruptcy attorney go through your finances to ascertain which debts qualify as consumer debts and which ones do not. For example, a student loan can be either depending on how it was used.

Types of Personal Bankruptcies

In the United States a person can file for either one of the following personal bankruptcies;

Chapter 7 is also known as liquidation bankruptcy. It involves the sale of assets that are not protected by bankruptcy and the distribution of the proceeds to creditors. The proceeds can cover your debts in as little as 3 months. Chapter 7 bankruptcy will be ideal if you don’t have a lot of assets that need protection.

Chapter 13 is also referred to as debt repayment or reorganization. It’s ideal for debtors who have many or valuable assets and don’t want to lose them. Basically, the debtor tables a proposal that shows how he/she plans to clear amounts owed within a given time frame. One gets the chance to clear all debts either partially or in full. You can also have others dismissed entirely.

Your attorney does a “means test” to determine which bankruptcy you are eligible for. In a nutshell, you may not be eligible for Chapter 7 if it’s evident that your income can settle debts under Chapter 13. Similarly, a Chapter 13 bankruptcy may be denied if your debts are too high in comparison to your income.

When is Bankruptcy a Good Idea

When is Bankruptcy a Good IdeaBeing eligible for bankruptcy doesn’t necessarily mean that you need to file for one. It could be that all you need is a little professional advice on how to manage your finances.

You also have to contend with the fact that bankruptcy stays on your credit report for seven to ten years. That said, there are some circumstances that call for bankruptcy;

#1 When debt management programs don’t work

Credit counseling is a service offered by most financial advisors and organizations. You may be advised on how to reduce personal expenses in order to free more of your income to clear debts. Other measures include renegotiating terms with credit companies or other creditors.

When debt management fails, whether it’s due to non-commitment on your part or refusal by creditors, then bankruptcy could be your only way out.

#2 When you are being sued

A lawsuit filed by creditors can be tricky when you have no means of repaying and remaining liquid. The judgment could lead to the sale of assets or foreclosure on your properties. When faced with such eventualities, filing for bankruptcy could be the only way for you to remain afloat. The process offers you the chance to retain some of your property that would otherwise be auctioned.

#3 When faced with overwhelming medical bills

Most financial woes result from making wrong decisions on investments and credit lines. You may however find yourself faced with bills that are not of your own making. Such include medical bills that are not covered by insurance and are beyond your financial reach. In such circumstances, filing for bankruptcy is advisable; the bill will be discharged without over-tasking your income or your family’s finances.

#4 Insolvency Due to Industry Crisis

More often than not you will find yourself contemplating mortgage as an investment. When the industry is in a boom, then you are all set to make a profit on resale in the foreseeable future; that is however not always the case. Upward adjustments on mortgage repayments can leave you deep in debt. Filing for bankruptcy could be the only way of salvaging your property from mortgage lenders.

The takeaway

Bankruptcy is a federal court-protected financial tool that gives you a “fresh start” from the debt burden. The process becomes part of your credit report for 7-10 years. It can also lead to loss of assets hence should be done as a final result. If you are facing foreclosure, hefty medical bills or a creditor’s lawsuit then filing for bankruptcy could be your only way out. The above information gives you an overview of how to go about it.

Related Article: Life After Bankruptcy

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Tips for Recovering Financially After Divorce



If life was a fairy tale, every marriage would last ‘until death’. Couples would spend their lives sharing not only love but co-depending on all matters including finances. Unfortunately, the reality is sometimes not kind and some marriages end up in divorce.

This new phase leaves some spouses unscathed while others are left with massive debts, new financial responsibilities, or a lack of enough know-how on how to manage personal finances. Finding your way back to financial freedom is not easy; it takes time and dedication. To put you on the right path, here are five tips for recovering financially after divorce. 

#1 Start by Dealing with Your Emotions

Repairing Finances After Divorce

Divorce comes with grief and anger from the lost love, emotional support, shared dreams, and so on. This has a draining effect on your quality of life and spiraling into depression is a common occurrence.

If the depression goes unchecked, you risk falling into irrational behavior like going off-budget leading to more financial ruin; to avert this, seek counseling. This could be from a therapist, joining a support group, or even opening up to a trusted family member or a religious leader.  

#2 Create a Plan

Now that your assets have been split, you have to take care of all financial obligations that come with your share. List every asset and debt to know exactly what you are dealing with. This will help you in coming up with a detailed expenditure plan that addresses your income against debt repayments and future goals.

Identifying your financial limits will also come in handy in ensuring that your expectations are realistic and achievable. Create a formal plan, complete with an investment program that takes current income into account and one that is tailored to help you meet your set goals.

#3 Check your Credit

During the marriage, your credit score may not have mattered, especially if your spouse was the sole breadwinner and paying off bills never concerned you. Being alone means your creditworthiness will now come into play; you have to know your credit score which will greatly affect this.

A low score may result in adjustments on mortgage payments, difficulty in getting a job, or even an apartment. Immediately after the divorce is finalized or better still during the proceedings, check and start improving your credit score.

#4 Increase your Savings and Income

Divorce may call for cutting back on your expenses or a complete lifestyle downgrade. That said, being divorced should not mean being miserable. If you are unemployed, start looking for a job to supplement your alimony check. You can also look for a second job, if you already have one, to increase your current earnings.

A successful financial rebound is pegged on the size of your savings. With meager savings, you may be forced to over-rely on credit cards and personal loans to maintain your lifestyle. This can be avoided by adopting a savings plan; stow away as much money as your income allows, this will shelter you during emergencies or unexpected expenditures.  

#5 Seek Expert Advice

Securing your finances is not an easy task even for the rich or staunch savers. This is where the services of financial advisors come in: They guide you in completely separating your finances from those of your ex and making sustainable plans for the future. 

You will receive expert advice on how to; close joint accounts, transfer house and other asset deeds to your name, update beneficiary information on your will and insurance, balance your accounts, prioritize savings, file taxes, and how to go about any other money-related task that your ex used to handle.

Bottom Line Divorce is stressful, but the pitfalls can be reduced by adopting ways to keep your finances healthy. These five steps will not change your financial situation overnight but are a good place to start. In a nutshell, you should start by accepting your situation and dealing with the emotional turmoil. Once your mind is in the right place, come up with a plan on how to increase savings and income, and improve your credit score. Lastly, don’t shy away from engaging an expert to help you in making divorce settlement less complicated and guiding you through your financial projections.    

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