Josh's Mortgage Report

00775-172When applying for a mortgage, lenders must review your financial situation in order to assess your ability to repay. Some of the most important qualifications that mortgage lenders need to see in order to approve a borrower for a loan includes steady income, low debt, a high credit score, job stability, and savings for the down payment.

The biggest red flag for lenders when it comes to approving a mortgage is a high Debt-to-Income Ratio (DTI). The suggested DTI by the Consumer Financial Protection Bureau (CFPB) is a maximum of 43%. DTI is measured by dividing your monthly debts by your gross income. The lower your DTI is the larger the loan you will be eligible for.  You can improve your DTI by paying down your debt or increase your income.

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00775-176A homeowners association (HOA) is probably not on your mind when you’re thinking about buying a home. But if you do choose a home that has an HOA it’s important to calculate those fees into your budget.

What is an HOA?

An HOA is a legal entity that manages a shared housing complex. All condos and almost all townhomes fall under the jurisdiction of an HOA. An HOA collects monthly dues from its members which are used to fund activities. You will need to find out how much the dues are when you’re trying to figure out how much home you can afford.

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Once you become a homeowner, you have more freedom to make renovations and to personalize your home. Some of the changes may be small, but they still make an old house more modern. If you plan on selling your house in the future, you should avoid some of the below projects before you start remodeling. They just aren’t worth the money. When you calculate your project budget, keep the total no more than 10% of the current value of your house. If you spend more, count the profit in terms of personal enjoyment.

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Over the next decade the entire baby boomer generation will be in retirement age. According to a study done by Harvard University, 60% of those between the ages of 50 and 64 had a mortgage in 1992 and by 2010 that number past 70%. Income levels generally start to peak in one’s late 40s and as retirement nears the costs of homeownership can consume a growing percentage of their income.

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If you purchased your home over a year ago, have a mortgage with mortgage insurance, or are thinking about doing some home improvement, then you may want to consider a refinance. The reason to refinance doesn’t always have to be for a lower rate than you currently have – but because you are thinking big picture. This may also be a good time for a cash-out refinance to do home improvements or pay off debt.

If you are looking to lower your interest rate, even a slight drop in rates can produce significant savings over time. For a median home worth $220k, a half percentage point decline can save you an estimated $600 a year.

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Buying versus renting is a tough dilemma for a lot of people. This predicament doesn’t only face young people just starting out, but it also puzzles professionals relocating for a job and empty nesters who want to sell the big family home and get something smaller.

According to the real estate website Trulia, new research shows that homeownership is less expensive than renting in all of the country’s 100 largest metropolitan areas. Their data shows that the average cost of homeownership, including insurance, taxes, mortgage and maintenance is 38 percent less than the cost of renting.

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There are many things in your home such as your carpet or your choice of cleaner that may be harming your health. It’s time to protect yourself from potential toxins that could be in your home.

Air Filters – Homes aren’t built to have much ventilation; they’re designed to be energy-efficient. This leaves a lot of room for irritants like dust mites, mold, and pet dander to get trapped inside which could aggravate conditions such as allergies and asthma. To filter the air in the rooms in your house, get a disposable high-efficiency filter for your furnace and air-conditioning system. You should change your filters every three months, and leave the fan on your air conditioner so substances such as pollen don’t get stuck indoors.

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The number of homes for sale is growing which means it is no longer a seller’s market. Homes are staying on the market much longer than they did only six months ago. Home values are starting to cool as limited inventory and widespread investor demand are no longer driving price gains.

Markets, including Chicago, where the housing recovery was slow and the crash less dramatic, have seen better price gains in the past year than in 2012. On average property prices increase 3.5% per year, and since around the summer of 2013, they’ve gone up 6-8% each year.

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As the cold air moves in there are many projects and repairs that can be done to prepare your home for winter. Taking care of small problems now could save you a lot of money down the road in repair costs for things like water damage.

Speaking of water damage, as the leaves fall it is important to keep your gutters free of debris so water can flow to the correct place. When gutters are clogged water will spill over the sides and can cause flooding which can end up seeping into your house. When the water starts to freeze even more damage can ensue. Also, it is important to remember to shut off the water on your hoses when the time comes to prevent the pipes from bursting.

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Even though it’s a major financial move, owning a home has many advantages. Along with pride of ownership, more privacy and control over your own home there are also great financial benefits to owning.

Building Equity: Unlike renting when you own a home you’re paying down the mortgage each month instead of a landlord. As you pay your mortgage each month your equity grows. When it comes time to sell your home, depending on how long you plan to live in the property, you may have enough equity to sell for a profit.

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