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If you’re shopping for a home loan, you’re likely focusing on interest rates. Below are a handful of questions you may have about the art of the interest rate.

How are interest rates determined?
Interest rates are influenced by shifting economic indicators in your financial market. This type of fluidity means they can change daily, or even hourly. This is why it’s important to shop around.

What does it mean to “lock in” a rate?
Since interest rates are so fluid, many buyers choose to combat this by locking in a rate when they find a good one. A locked rate is a contractual agreement between the lender and buyer that offers the buyer protection from financial market fluctuations that could affect the range of the interest rate. There are four major components to a rate lock: loan program; interest rate; points; and the length of the lock. If your interest rate range is locked and there are no subsequent changes to your loan, the interest rate range on your application generally remains the same; however, if changes are made to your loan, your final interest rate at closing may be different.

What does it mean if your rate is “floating?”
If your interest rate is floating, it means it’s not locked. Instead, it’s fluctuating with the up-and-down movements of the market. The benefit of this is if interest rates decrease, you will have the option of locking in at a lower rate, but if the rates rise, you will lose access to the lower rates.

Published with permission from RISMedia.

Here are a few key characteristics that are often found in a stylish, contemporary kitchen.

Matte Finishes

The smooth, flat texture absorbs light and is better at hiding smudges than other common alternatives.

Monochromatic Color Scheme

For a sophisticated ambiance, all-black or all-white are both popular.

Sleek Lighting

Lights add a stunning design element while properly illuminating your kitchen.

Concealed Appliances

Customizing the panels on your refrigerator and dishwasher to match the cabinetry lends a modern and integrated look.

Striking Countertops

Marble, wood or stainless steel countertops are popular statement pieces.

Clean Lines

Sharp vertical and horizontal angles will contribute to an aesthetic thats effortlessly minimalist.

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A mortgage is likely the largest debt you will ever have to repay. The idea of having a mortgage hanging over your head for up to 30 years can feel daunting. With some sacrifices and discipline, you might be able to pay off your loan years ahead of schedule.

Make Extra Payments
Some mortgage lenders allow borrowers to make extra payments to repay their loans earlier. Some financial institutions accept additional payments at any time, while some dont accept extra payments at all, only accept them at specific times or charge penalties. Check with your lender.

If your financial institution will allow you to make extra payments, you could erase years from your repayment period. You can make an extra payment if you have additional funds from a bonus or the sale of property. If you mail an extra payment, include a note asking the company to apply it to the principal, not to the next months regular payment.

Another option is to make half of your regular payment every two weeks. That will result in 26 half payments, or 13 total payments, at the end of the year. Making one extra payment every year could help you pay off your mortgage several years ahead of schedule.

Find Extra Money in Your Budget
Making simple changes to your habits could help you save money to put toward your mortgage. For example, taking your lunch to work and making coffee at home instead of eating out and buying coffee on your way to work could help you save quite a bit of money over the course of a year.

Consider Refinancing or Downsizing
Refinancing your mortgage could help you pay it off sooner. Switching to a loan with a shorter term could lower your interest rate, which could save you thousands of dollars over the remainder of the repayment period.

If you are struggling to pay your mortgage, you might want to consider downsizing. If your kids have moved out, it doesnt make sense to make expensive mortgage payments for a house with empty bedrooms. Moving to a smaller home could save you a lot of money. You might even earn enough from the sale of your house to pay cash for a new, smaller one, thereby completely eliminating a mortgage.

Dont Get in Over Your Head
The best way to avoid being overwhelmed by a mortgage is to make careful decisions before you buy a house. Build an emergency fund to cover several months expenses. Pay off debt and save enough to make a significant down payment. Limit your mortgage payments to a relatively low percentage of your monthly income. If possible, opt for a mortgage with a shorter term to save money in the long run.

Work to Pay off Your Mortgage Early
The satisfaction of paying off a mortgage can be liberating. By making some changes to your lifestyle and setting small but reasonable goals, you may be able to repay your debt years ahead of schedule.

Published with permission from RISMedia.

Shopping for a home loan? It’s best to do it within 30 days of a credit pull so your score doesnt drop.

When you apply for credit, such as a car or home loan, you authorize lenders to inquire for a copy of your credit report from a credit bureau. Too many inquiries could lower your credit score and result in higher interest rates when you borrow, which can translate into paying more over the life of the loan.

If youve ever looked at your credit report, you may have seen credit inquiries by businesses you dont know. Some of them count toward your credit score and others dont.

Hard Credit Inquiry
Hard inquiries happen when you apply for a loan. They affect your credit score, though not by much.

Hard credit inquiries show up when youve applied for credit: car loan, mortgage, student loan or credit card, for example. Each is a credit check that indicates a lender has reviewed your credit because youre applying to borrow money through them.

Applying for credit affects your credit score because opening several credit accounts in a short period of time represents greater credit risk, according to My FICO, a credit scoring company.

If youre rate shopping for a single loan, such as a home loan, it will be treated as one request on your credit report as long as the inquiries are made within 30 days. You may be shopping at multiple mortgage lenders, but those numerous credit requests will count as one and wont affect your credit score if done within 30 days. Some newer credit scoring companies allow up to 45 days of shopping, and some drop it to 14 days.

Soft Credit Inquiry
These arent generated by shopping for credit, and they dont affect your credit scores. Soft credit inquiries include:

Checking your own credit score.
Receiving pre-approval offers you didn’t apply for.
Additional credit checks by a lender you already do business with.
Credit checks by your employer.
Credit checks by your insurance company.

Impact on Credit Scores

While soft credit inquiries don’t affect your credit score, hard inquiries do. New credit makes up 10 percent of a FICO credit score, and inquiries and new credit accounts are part of that.

For most, a credit inquiry will take less than five points off their FICO score, according to My FICO. Having few accounts or a short credit history, however, can cause a credit inquiry to have more of an impact.

Many inquiries can mean greater risk. People with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than those with no inquiries, according to My FICO.

Inquiries remain on credit reports for two years. Only those within the past year count toward most scoring models; the older ones are ignored.

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When inheriting a home, some people have mixed feelings about what to do with the property, especially if it has sentimental value.

You could move into the home if it meets your familys needs, but beware of maintenance costs.

If you have a small business, the home might be an ideal place to run operations without interruption.

You could even sell the home and invest the money in your future.

To hold onto the property, cover maintenance costs and earn some money, you could rent the house out.

Ultimately, choosing what to do with an inherited home depends on your current situation and overall goals.

Published with permission from RISMedia.