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chicago real estate lawyerFor many people and families, homeownership is an important goal. Owning your own home not only ensures that you and your family will have a place to live and call your own, but it is also a good investment that can provide you with a number of financial benefits. However, if you are planning to buy a home, you will want to be aware of some mistakes that could affect your ability to obtain a mortgage or make a good offer on a property. These include:

  • Failing to get preapproval for a mortgage - The first step to buying a home often involves understanding what you can afford. By looking at your income and expenses, you can determine an amount that you will be able to put toward a mortgage each month. With this information, you then work with a bank or other mortgage lender to get preapproval for a loan of a certain amount. With this preapproval, you will be able to make an offer once you have found the home you want to buy, and this will show a seller that you will be able to pay the amount offered.
  • Not saving for a down payment - Being able to put down a certain amount of the home’s purchase price at the time of the sale will provide you with equity in your new home, and it will lower the total amount owed, resulting in lower monthly payments. It is often a good idea to take some extra time to save up for a down payment before proceeding with buying a home. You may also be able to receive assistance with your down payment through federal or state programs.
  • Harming your credit score - As you prepare to sign the paperwork for your home loan, any major changes to your finances could affect this process. You will want to avoid doing anything that could result in a lower credit score, such as missing payments on any bills, canceling credit cards, or taking out a new loan for a car or appliance.  
  • Failing to consider costs and expenses - You will want to make sure you understand all of the closing costs you will be required to pay when buying a new home. You will also need to obtain homeowner’s insurance, and you will need to be prepared to pay property taxes. You may also want to consider the costs of utilities at your new home, including electricity, water, sewer, gas, phone and internet service, and garbage disposal, as well as homeowner’s association fees, landscaping, and any other ongoing expenses.

Contact Our Gurnee Real Estate Attorneys

When buying a home, you will not only need to consider multiple types of financial issues, but you will need to address any legal matters related to the transaction. At Newland & Newland, LLP, we can provide you with representation, ensuring that your rights will be protected at all times. To get the legal help you need, contact our North Chicago real estate lawyers at 847-549-0000 and set up your free consultation today.

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Lake County foreclosure lawyersRegardless of who you are, how much money you have, and the types of property you own, the word “foreclosure” is likely to generate feelings of fear, anxiety, and stress. If you are struggling to make the mortgage payments on your family home, the idea of foreclosure is likely to be especially frightening.

Most people understand the basic steps of foreclosure, even if they do not know all of the details. In short, they know that the lender will eventually force a homeowner who is in default to leave the property. Then, the lender will reclaim possession of the home and attempt to sell it in an effort to recoup some of the losses incurred. What many people do not realize, however, is the effect that a foreclosure will have on the borrower’s credit score.

Your Credit Score

Your credit score is a statistical rating that lenders and other institutions use to evaluate how well you manage debt. Credit scores can range from 300 to 850, and higher scores indicate stronger creditworthiness. A credit score above 740 is considered to be “Very Good,” and above 800 is considered “Excellent.” Between 670 and 739 is “Good,” while 580 to 669 is “Fair.” Anything below 579 is considered “Poor.”

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Filing for bankruptcy can be an overwhelming decision. However, according to the Wall Street Journal, it is one more than 1.6 million Americans made in 2010 alone.

It is important to remember — despite popular opinion — that filing for bankruptcy is not innately bad. Also, it does not mean the filer was financially irresponsible. Often, an unexpected event, such as a company shutdown or injury, can leave a person with insurmountable debt.

Whether you file for chapter 7 bankruptcy, which involves the liquidation of assets, or chapter 13 bankruptcy, which involves a payment plan that restructures debt, this decision may be a step toward financial stability. However, you should be ready for the challenges that come with bankruptcy; these may include living without a credit card and following a strict budget.

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Several respected financial analysts predict that the U.S. will continue to experience a decline in the number of bankruptcy filings in 2015. Some data suggests an estimated 800,000 bankruptcy petitions will cross the judicial bench of district bankruptcy courts across the U.S. this year. For those individuals or families considering joining the ranks, understanding the advantages and disadvantages of bankruptcy or debt consolidation is the first step in either process. Consulting with a debt counseling professional or experienced bankruptcy attorney is highly advisable.

Before scheduling a consultation, the following brief summary of both options may prove helpful.

Debt Consolidation

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Becoming familiar with your spending habits, debt ratio, and understanding how lenders view your financial snapshot may very well be your best defense against future bankruptcy or foreclosure action. It all begins with fiscal responsibility, supported by a sound credit report, but how many Americans actually request and review their credit report on an annual basis?

Under the Fair and Accurate Credit Transaction Act (2003), all American citizens are entitled to request a free annual credit report from each of the three leading credit reporting agencies: Experian, Transunion and Equifax. Unfortunately, according to American Trust Escrow, a full-service, licensed and independently owned real estate escrow leader, only 44 million people out of approximately 200 million request and review their credit report each new calendar year.

Establishing an annual credit report review practice, especially if you are planning on purchasing a home, is essential. By doing so, you may find incorrect reporting items or come to the realization that it may not be the opportune time to begin house hunting.

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