Year: 2023

Today we are going to cover two terms we often hear used in the home buying process that are sometimes used interchangeably but there are some differences. So we will review "closing costs" and "predpaids" and what makes them different. The Basics of Prepaids in Home Buying Prepaids are the advance payments a homebuyer makes to cover specific future expenses before they come due. Typical examples include homeowners insurance premiums and property taxes. While they are paid at closing, they don't go directly to the vendor or provider. Instead, your lender will keep these funds in an escrow account. Over time, the lender will distribute payments from this account as required. Here's a closer look at standard prepaids: Mortgage Interest: This is applicable when you close on any day other…

A lot of people don't realize that it's a good idea to watch your financial P's and Q's before closing your mortgage. Here are five common mistakes to watch out for to avoid any closing crises. 1. Making a big purchase, including furniture If you’re about to close on a house, it’s not the best time to get a new car, boat or other expensive item. Even furniture or appliances — basically anything you might pay for in installments — is best to delay until after your mortgage is finalized. Depending on your credit score and history, these transactions can lower your score, which can impact the interest rate and loan amount you receive. This could result in a higher interest rate for the next 15 or 30 years, or…

You may have noticed more people moving to new areas lately – sometimes across the country, sometimes across town, either way here are ten things to look for when considering a new neighborhood. 1. Property Taxes – you should look at property taxes and also how much they’ve increased in the last five years and if any increases are planned. It’s a good idea to build this into your budget too. 2. Amenities – check what’s nearby based on your interests, restaurants, groceries stores, houses of worship etc. 3. Future development – it’s a good idea to check and see what future development is planned – it might be a good or bad thing but either way its worth checking. 4. Crime rates – you can check local crime rates…

If you are thinking about buying your first house, you probably have a lot of questions. Common ones are: how much can I afford, can I get approved, etc. It's also a good idea to organize and try to optimize your finances. However, even if you're starting with modest resources, you can still set yourself up for mortgage success. Here are some tips on where to start. Recognizing Mortgage Readiness Before diving into homeownership, it's essential to know if you're genuinely prepared for this commitment. According to a Freddie Mac study, the following signs indicate you might be in the right financial position: • A credit score of 661 or above. • A debt-to-income ratio (DTI) under 25 percent, focusing on mortgage debt. Including other obligations like student loans, the…

This week we saw the release of Consumer Price Index (CPI) for June 2023, which recorded a rise of 0.2 percent, a slight increase from May's 0.1 percent, according to the U.S. Bureau of Labor Statistics. Year-over-year, the all-items index experienced a 3.0 percent hike, a decrease from May's 4.0 percent, indicating a sustained deceleration in inflation for the past 12 months. With the inflation rate now standing just one percentage point above the Federal Open Market Committee's 2 percent goal, the inflation scenario, particularly its impact on the housing market, demands a closer look. The slowing of inflation, however, does not translate equally into the housing sector. The Bureau's data highlight the 'shelter' category, encompassing housing costs, as the most significant contributor to the CPI's all-items increase. However, he…

With housing prices pushing the affordability envelope for many Americans, some individuals are considering buying a fixer-upper. We've all seen the home makeover shows with astonishing before and after transformations, but should you take on such a project? Here are a few things to consider: 1. Know Your Limits: Assess how much of the work you can handle yourself. Consider how much time you have available for renovations. Ask yourself if you're prepared to live in a construction zone for a while. 2. Work Out Costs In Advance: Invite a contractor to join the inspection and provide a written estimate for the proposed work. If you're planning on doing the work yourself, calculate the cost of supplies. In either case, add an extra 15% to the costs to account for…

The image of homebuyers often conjures up young couples, freshly married or new parents, looking for a nest to raise their family. However, senior citizens and retirees also have valid reasons for house-hunting. Even with today’s higher home prices and interest rates, seniors maybe in need of a mortgage for a variety of reasons, here are options for qualifying and loan options. Applying for a mortgage as a senior entails meeting the same financial criteria as other borrowers, such as credit history, debt-to-income (DTI) ratio, income, and other assets. However, the documents required to qualify for a mortgage are slightly different for retirees. For instance, you'll have to provide forms to document income instead of pay stubs and W-2 forms. These might include Social Security award letters, retirement award letters,…

Navigating the home-buying journey with little to no credit history can seem daunting. However, FHA loans, insured by the Federal Housing Administration, can be a lifesaver for prospective homebuyers with such financial constraints. Their flexible financial prerequisites make them an excellent alternative for those dealing with debt or other personal finance challenges. The FHA loan program's forgiving nature makes it easier to obtain than traditional loans, helping more people join the homeowner's club. However, an easier application process doesn't mean a less serious commitment; diligent preparation is crucial to sidestep common errors in home loan applications. If the appeal of less stringent requirements entices you, stick around as we delve into how to secure an FHA loan with low credit. Understanding FHA Loan Eligibility and Requirements for Low Credit The…

When it comes to the decision between buying or renting a home, in today’s market, we have to look at number of market and individual factors. With rapidly increasing housing prices and a significant inventory shortage, the thought of purchasing a home may seem daunting with the US Census Bureau and the US Department of Housing and Urban Development reported the median sales price of $436,800 for homes at the start of 2023. Buying a home brings with it a set of unique advantages. The possibility of building equity, the tax benefits, and the freedom to customize your living space are all compelling reasons to consider homeownership. However, these benefits are balanced by potential drawbacks such as variable monthly payments, maintenance responsibilities, decreased flexibility, and the risk of your home's…

For first-time homebuyers, purchasing a home is a huge financial commitment and in today's pricing environment its also a considerable financial challenge for many Americans. However, homebuyer grants can significantly lighten the financial load, grants aren't available to all home buyers and are usually aimed at lower income buyers. Understanding Grant Eligibility Requirements vary between programs, several common elements are worth noting: • Income limits: Many programs consider households that earn 80 percent or less of the area median income (AMI) as “low-income.” Therefore, access to these programs is restricted to those within this income range. Moreover, the income limits adjust depending on the number of household occupants. • Home price limits: Certain programs may restrict your spending to a specific range of residence prices. These limits are largely dependent…