Home Financing Tips

Some people were born to fit in. Others were born to stand out. The same goes for homes. For every 100 cookie-cutter McMansions, you might find one home that breaks the mold–which makes such architecturally significant homes priceless in our book. However, you don’t actually have to break the bank to purchase a house that stands out from the crowd.

You can shop for just about anything online these days, from your groceries to shipping containers-turned-houses. So, when it comes to home buying, it only feels natural for digital natives to crack open the laptop to start shopping for a mortgage. Once you tell Google you’re in the market for a mortgage, oodles of comparison sites will pop up, eager to get to know you better with icebreakers like “what’s your credit score?”, “where are you looking to buy?

Checking your credit score regularly is smart, especially if you’re planning to buy a home. You shouldn’t have to pay for a monitoring service to help you keep your credit on track, either. Fortunately, you can choose from a variety of free credit score sites and apps to keep tabs on your numbers. But with so many options, which is the best? By law, you’re entitled to view your credit report once a year on annualcreditreport.

Imagine my surprise when my real estate agent gave me a simple appraisal number—and all additional information in a completely jargon-free way.

Now that we’re settled in the New Year, you may have noticed that your credit score has taken a hit after some overly joyous holiday spending. You’re not the only one: A recent report from Marcus by Goldman Sachs says almost half of the U.S. (48 percent) carries a balance or goes into credit card debt over the holidays due to travel, entertaining, and gift costs. While this can make for an exciting holiday season, it usually leaves our wallets—and credit scores—hurting.

If buying a home is living the dream, paying your mortgage off early could seem like a next-level fantasy. Just imagine what life would be like without forking over monthly mortgage payments. More money for investments! Retirement savings! Home upgrades! Silk bow ties for your dog! But is paying your mortgage off quicker than is required actually a smart financial move? While there’s no “one size fits all” answer, financial experts say it’s not always the wisest decision.

Some bad advice you receive is NBD, honestly. Those bangs your best friend swore would look great on you will eventually grow out after an awkward phase. And maybe one day Dad’s method of filling out a March Madness bracket based on team mascots will actually pay off. But then there’s some bad advice that qualifies as a VBD—yes, a very big deal because it concerns your financial well-being.

Have you ever scrolled through social media and secretly wondered “How the heck are my peers affording that lifestyle?” Yeah, we don’t know how they are funding those Bora Bora vacations, either. But a recent report from Zillow gave us some pretty good intel on how people are actually affording down payments for homes in big cities. We’ll give you a hint: It has nothing to do with skipping avocado toast or cutting Netflix from the budget.

Contrary to popular opinion, millennials are buying homes. According to a study conducted by the team at LendingTree, an online loan marketplace, nearly one-fourth of all mortgage purchase requests made on their website between January and November of 2018 came consumers under the age of 35. And three American cities managed to rake in millennial buyers—making up almost one half of total new purchase requests.

I'd managed to raise my credit score 30 points, and snagged a mortgage approval letter from my credit union. These experts agree with me.

When you’re house shopping, it’s easy to find faults with the homes you tour. Why is the master bedroom Cookie Monster blue? Whoever designed the kitchen didn’t know a thing about cooking. Did vampires live here; there’s hardly any natural light?! Sure, most design flaws could be remedied with renovations.

Thanks to social media, we can now turn to our friends (both online and IRL) for just about anything. Whether you’re looking for travel recommendations or advice on your high school reunion outfit, connecting is easier than ever. Another thing you can ask your friends for? Cold hard cash. Crowdfunding platforms like Fundly and Kickstarter have made it simple to ask for financial assistance for everything from unexpected medical bills to start-up seed money.

High-five, you did it! You paid off your student loans. While it takes a lot of financial discipline to get that balance to $0, your credit score unfortunately won’t be celebrating alongside you. In fact, after you pay off your student loans, you’ll probably see a slight drop in your credit score. Go ahead and file that in the “No fair, what gives?” category along with the fact that your credit will take a hit if you buy a house.

You’ve scrimped, saved, and spent more time on Zillow than you’d care to divulge, and you’re ready to add “homeowner” to your list of accomplishments. Now, to choose the right mortgage for you. When it comes to fixed-rate loan programs, there are several options—from five to 50 years. But it’s the 30-year mortgage that’s been most popular among Americans for decades.

Ask anyone about Waco, Texas, and most likely they’ll ask “Isn’t that where Chip and Joanna are from?” Thanks to Gaineses, the stars of HGTV’s “Fixer Upper,” interest in this central Texas community has skyrocketed over the last few years. As a result, Waco, Texas has not only become a huge tourist destination, but it has also sparked the interest of potential home buyers.

A lot of credit-boosting tips we hear are, frankly, pretty darn obvious. Don’t go over your credit limit, don’t pay bills late, check your credit score—yeah, yeah we got it already! So, my ears perked up when Brentnie Daggett, a rental expert at Rentec Direct, a property management industry website, dished a credit-boosting tip that falls into the “Oooh! Interesting” category.

Once you graduate college, you’re handed a diploma and—most likely—a mountain of debt. Your mission, should you choose to accept it, is to find a job where you make enough to pay off your student loans and then, maybe, move on to the next big investment of your life homeownership. Unfortunately, according to a study by Credit Sesame, the state in which you live may affect your ability to pay your student loans.

We know, everyone already harps on millennials. So, we hate to give bashers any more ammo, but… millennial credit scores aren’t great. They’re not good, either. They’re actually just “fair,” according to data from Experian, a consumer credit reporting agency. Experian’s credit system ranges from 300 (eek!) to 850 (wow!), and millennials, on average, are stuck in the “fair” category, which is a score between 580 and 669.

Don't want to spend a ton of money? There are more than enough small-scale kitchen repairs and replacements that can increase a home's overall value

If you’re a fan of NBC’s wildly popular drama, “This Is Us,” you probably know a thing or two about the Pearson family. Have you ever wondered about the beautiful (but doomed) home the family lives in? While the house is located in Pittsburgh on the show, it’s actually filmed at a home in the Eagle Rock neighborhood of Los Angeles—the place where Rebecca and Jack road-tripped to early on in their relationship, ironically enough.

Maxing out credit cards, falling behind on bills, going into foreclosure—these are all known villains that will slay your credit score. But did you know that buying a house will also most likely cause your credit score to drop? That’s right; after you’ve demonstrated utmost financial responsibility by establishing a solid credit score and saving for a down payment, taking out a mortgage will ding your score.

Certain areas of the country, like Seattle, Washington, and Denver, Colorado, are notorious for their influx of young folk—be it for their tech-hubs, Instagram-worthy walls, or to-die for food. But when it comes to putting down roots, where are younger people buying homes? A new report from LendingTree ranked America’s metropolitan areas by average age of homeowner, and not surprisingly, (with one exception) the coolest millennial cities didn’t fare too well.

You need a little creativity to make ends meet these days. With wages stagnating and housing prices skyrocketing, people are looking for ways to cut expenses and boost their income. And that’s especially true for anyone trying to save for a down payment on a house. This was all top of mind several years ago when Sam (my now-husband, then-boyfriend) and I decided to move in together.

I asked some experts about the smart way to buy a house with partner—both financially and emotionally—if you're not married. Here's what they said.

For those that don't know much about VA loans, you'll be surprised at how much it has affected the way many Americans live—even today.

The 800-and-up credit score club is an elite one: 20.7 percent of Americans have reached this upper echelon of credit worthiness, according to the latest data from FICO, a widely-used credit score rating system. But, finance experts explain that you don’t actually need to have a score in the 800 range to qualify for the best mortgage rates. In fact, the score you should really aspire for is… drumroll, please: 760!

Budgeting can be pretty hard—especially on a measly income. And some places, it’s nearly impossible to live a full life on your income alone—so you’re likely to slip into debt to pay the bills. Though it’s not ideal, for many it’s just the way it is. But in other places, it’s much, much easier—like in San Jose, California.

As the millennial job market becomes mobile, many twenty- and thirty-somethings are looking outside the big cities for places to settle down. If you haven’t been keeping score like I am, the Midwest is proving itself to be an increasingly attractive option with up-and-coming cities that offer millennials the lifestyle they’re searching for—and the price they want to pay.

It’s funny how buying a home became known as “The American Dream,” because for decades, it wasn’t a dream at all. Just a few generations ago (basically: your grandparents), buying a house in your 20’s was just reality. I love this story from Relative Realty about a couple of real first-time buyers in Toronto—Ron and Joan, both “in their early 20’s”—achieving The American Canadian Dream.

These days, actually using the phone to call people has pretty much fallen by the wayside. But here’s ample reason to pick up the phone: By making a few simple calls—and asking the right questions—you could save hundreds on your household bills. And the best part about living in 2018? You can actually pay someone to do it for you. According to U.S. News & World Report, there are several services that will lobby with your providers for better rates.

When you think of home upgrades that can save you money over time, are you imagining hefty investments like solar-powered roofs and native landscaping? Those projects certainly are the green goddesses in eco-friendly renovations. But, when it comes to upgrades, there are several smaller features that, over time, can pay for themselves, too—and they’re a lot easier to incorporate into your home. What we’re getting at?

If you were planning on winning the lottery and buying yourself a totally elaborate multi-million dollar mansion… all I can say is I’m sorry. (In full disclosure, I did win… $2.) But the time you spent swimming through listings and the feelings you felt for that perfect mansion don’t have to go to waste, right? Is it really so far-fetched that you could one day afford to live there?

So—you’re searching for an apartment on Craigslist. You click on “housing” and enter your search criteria: min bedrooms, max price, X miles from your zip code of choice, only show ads with pictures—GO! Aaaaaand you’ve already made a huge mistake. Not only did I do an annual housing hunt every five years while living in Brooklyn (I’m now in L.A.), I also worked as a real estate agent in Brooklyn for two years. I know the deal.

It took some deep digging to figure out which option best fit our needs right now and for the term of our loan. Here's how we made our decision.

When I was a kid, I used to dream of busting out of my hometown. I’d pine for shows in the mid-2000s that featured gorgeous locales like cities in California, or chic ones like New York City. I was convinced that once I made my big move, it’d be permanent: There would be no turning back to come home again. But while my husband finished up with the Army, I found myself needing to house hunt, find a job, and see about putting down roots.

Andrea Kaplan-Chambers and her husband have owned their Austin, Texas, home for a year now, but the path there wasn’t easy. The couple were both freelancers when they were applying for mortgages, (Kaplan-Chambers worked as a contract programmer and her husband owned a small sound design business) something they didn’t know was going to be as big of a problem as it ended up being.

Fact: The majority of people don’t have amazing credit. In fact, the median credit score, according to Experian, is only “good,” the average score hitting 700. But some people do blast their way into 800 territory—a tier known as “exceptional.

First, a disclaimer: You should, of course, live your life on your own timeline. But, if you were curious about the median age of homebuyers, a snapshot from the National Association of Realtors reveals that it’s 32. To get super specific… the average household income of the median homebuyer is $75,000, their homes were 1,640 square feet, and they spent $190,000 on their first property.

You’re trying to save 20 percent to put down on your first home, but do you know exactly why you’re striving for that amount? Though you don’t need to put down that percentage of your home purchase price in order to buy, it does help in two major ways: It saves you money in the long run by shredding off interest and makes you a more attractive loan applicant. And while all that sounds like a great goal, it can feel impossibly to many.

So your credit score is less than perfect and you’re doing everything in your power to improve it. The bills are paid on time and you’re only charging about $20 on your credit card every month (because the limit is only $500!). But, even with all of this, your credit doesn’t seem to budge more than a few points because your bills aren’t tied to your credit or you have just one measly credit card.

Many people feel that New York City is the center of the universe. And if that center had a center, it just very well may be Times Square. Though it’s often called “the Crossroads of the World,” many New Yorkers will tell you that Times Square itself is nothing but a tawdry tourist trap. But there’s no denying its proximity to many of the features that make New York City a major hub, including the Broadway theater scene and “restaurant row.

Tiny homes have had a big rise in the popularity over the last two decades, with television shows, books, and Instagram pages dedicated specifically to the under-400-square-foot abodes. And the next trend in these kitschy, wanderlust-style homes? Having a huge price tag.

Each year, millions of people flock to Disney World in Orlando, Florida for a magical vacation. But for those lucky enough to live in the area, a fun day at the parks can be more than just a once-a-year or once-in-a-lifetime experience. Have you ever wondered what it would be like to live close enough to Disney World to visit on a regular basis? If you’ve dreamed about making the Orlando area home, you’ve probably been curious as to how much it would cost to live there.

Sure, you already know a tiny home is likely to be a fraction of the cost (and size) of a traditional starter home. But you may be curious how the two home types compare when it comes down to day-to-day living costs—and which one shakes out to be a better investment in the long run. While expenses (often unexpected ones) are a common denominator in ownership for both home types, the things that will siphon money from your savings account can differ dramatically between the two.

They say that your home is your biggest investment–meaning you’re going to sink a good chunk of change into your new abode, both at the outset and over the years. With that kind of money on the table, it’s crucial to save some dollars wherever you can. With that in mind, I picked the brains of three real estate professionals to determine the easiest ways to save money when buying a home.

The terms pre-qualified and pre-approved almost sound like they could be synonyms. But when it comes to home financing, there’s actually quite a big difference between the two—and securing pre-approval for a loan is actually what brings you closer to the closing table. Think of it this way: Getting pre-qualified is like taking baby steps towards getting approved for a mortgage. You call up a lender, self-report your credit score, and relay information about your income.

Two years ago, I got divorced. Because I needed cash to pay my lawyer, I put my everyday expenses on a credit card. Before I knew it, between what I charged and the high interest rates, I was in considerable debt. I had a little over $17,000 on two cards. I looked into transferring my debt to an 18-month no-interest credit card and spending every penny I could to pay off my debt before that interest kicked in. But when I ran the numbers, I wouldn’t make it.

It’s common knowledge that owning a home is cheaper than renting (at least in the long term), but anyone who has ever sat down to try and figure out the numbers knows that finding out how much you’ll save is harder than it looks. There are so many factors to consider. To try and help you come as close to the real number as possible, we’ve outlined three ways your rent-vs-buy math might be wrong — and how to straighten things out to give you the best picture possible.

If you haven’t been furiously refreshing Zillow for the past couple of months, here’s a bit of news for you: It’s a seller’s market right now. Even if you’re not pining over a dream home currently, you might know that, well, because the thought of buying a home hasn’t even popped into your head anytime recently.

Getting ready to sell a house can be an intimidating prospect. As you prepare for your next move, you’re likely concerned about one question above all else: How much money will you make from selling your home? The profit from your home will determine your budget for your next home (or maybe it will determine your budget for the business you’re starting or your year traveling around in an RV).

In 2012, my husband and I decided to take the next big step together—investing in a starter home in Atlanta, Georgia. We had been married a little over five years, and my husband’s above-average credit score of 780 meant we would easily be approved for a mortgage. We sought a home in the $250,000 range with a mortgage of $1,200 per month that we could repay in 30 years. We decided to only look at foreclosed homes since they were the most affordable option.

My fiancé and I found ourselves approaching the end of 2013 with two goals in mind: 1. Make it through the wedding planning process and 2. Buy our first home. For a 26-year-old, these were both two exceptionally expensive activities—especially in northern New Jersey where we lived. But we’d been living at home and saving since graduating from college and our parents were very generous in their contributions to our wedding, so these two expenses were somewhat doable.

It’s not news that increased capital flowing into the San Francisco Bay Area has made the area’s housing market absurdly competitive. But it’s still shocking to see the already high numbers get even higher—and so quickly. Case in point: Zillow recently released a study stating that, by June 2019, a whopping nine cities in the Bay Area will likely have median home values of more than $1 million.

My husband and I can’t buy a home in L.A. because we’re spending too much money on avocado toast. Just kidding—fancy brunch isn’t the problem. The problem is that houses, even “starter” homes in decent neighborhoods, are too expensive. If we wanted to purchase a home in Highland Park, it would likely cost around $737,700 (the median home value for that neighborhood, according to Zillow). That would mean forking up close to $150,000 as a downpayment.

You’ll often hear the term “second mortgage” come up when watching a movie or TV show when a character isn’t in a great financial standing. “They had to take out a second mortgage on their house,” a gossipy character will whisper, describing how their frenemy has fallen on bad times. But second mortgages get a bad rap—though risky, they’re often a great tool to solve financial problems or even wisely get ahead.

I purchased a newly constructed three-bedroom, three-bathroom townhome for just under $200,000 in Westminster, Colorado.

Essentially we decided to buy the home, rent out the parts we weren't using, and cover our mortgage with the income. But then it got hard.

For many, the path to becoming a first-time homeowner is an uphill climb. Student debt, low wages, high housing prices, and massive down payments can mean putting home-owning dreams on the back burner. But a new report provides a flicker of light for wannabe home buyers: It’s getting pretty easy to land a mortgage again, regardless of these hurdles.

After watching our parents retire and still have to make mortgage payments on a fixed income, my husband and I decided we would do whatever to prevent that for ourselves. So we approached our mortgages with aggressive and out-of-the-box steps that aren’t for everyone, but definitely worked for us.

We spoke with real estate and home financing experts to get the full picture.

Good news first: It’s actually possible to purchase an apartment in Manhattan for under $300,000 or so. (Yes, an actual apartment—not a closet! And yes, purchase to own, not rent!) Every so often, a Housing Development Fund Corporation (HDFC) co-op unit hits the market, providing a rare, affordable option for prospective homebuyers. But the discouraging news?

It doesn’t matter how much you love your rental: The day your renewal notice comes in with a rent hike you never imagined, all those fuzzy feelings might just fly out the window. That said, how do you know if it’s worth it to move? From an economic standpoint, know that your next landlord will need the first and last month’s rent plus a security deposit, and for some apartments, a real estate broker’s fee.

Who had it worse when buying homes: the Boomers or Millennials? It might be a topic that makes Thanksgiving dinner tenuous, but now the argument has an answer. Well, sort of. According to a new report, home-ownership is technically cheaper than it was in the 1980s, but today it’s currently harder than ever to afford a home.

On Wednesday, the Federal Reserve raised its benchmark interest rate for the seventh time in two years, signaling continued economic growth and a low unemployment rate. While that might just sound like financial mumbo-jumbo, it could have serious effects on what you pay for your home in the near-future. The benchmark interest, or prime, rate is basically the minimum rate that non-Treasury lenders (a.k.a.

Buying a house is stressful enough, but when you add in the unfamiliar lingo and mounds of paperwork, it can be overwhelming.

As a savvy seller, you’ve spruced up the front yard to increase your home’s value and have been keeping an eye on how much homes are selling for in your neighborhood. You’ve done your research—so much, in fact, that you know exactly which day of the week is best to list your property. So, should you go full-on real estate star and try to sell your home on your own, too?

Want to build your dream home from scratch? Don’t want to wait forever and drain your savings? A prefabricated—or prefab—home is the way to go. They’re built in a factory and transported section-by-section to be assembled almost wherever you please—almost like the IKEA furniture of homes. There are many pro and cons to buying prefab homes, and many ways to go about it.

Property taxes, homeowners insurance, interest, HOA fees—when it comes to your monthly mortgage payment, your loan’s principal doesn’t lack company. Still, few of these additional costs and expenses draw as much ire from a homeowner than private mortgage insurance (PMI.) If you’re begrudgingly shelling out extra cash for a PMI premium, then private mortgage insurance needs no introduction.

While you’re in the process of house hunting, all you want to do is find a keeper, get the keys and settle into your new life. But it pays to think long-term when buying a home because you’re probably going to be selling it sometime in the future, and you want to get a good return on your investment. So, keeping certain factors in mind when purchasing a home is key to ensure that it has good resale value. Here, six things you should think about, according to professionals.

You hunted until your feet were sore, found your dream home and made an offer that was accepted. Time to exhale, right? Not quite. “The first rule of real estate: All contracts must be in writing to be binding,” says David Rosen, a real estate agent with Douglas Elliman in New York City. That means until you actually have a signed contract, your accepted offer is just a good faith agreement. But it all works out, right?

When my wife and I were looking to get pre-approved for a mortgage, we started at the most obvious spot: Bank of America, the longtime home of our checking and savings accounts. Turns out, that may not have been a smart idea. For starters, we were surprised to discover that their rates and terms were pretty unattractive, especially for first-time buyers like us. We were already scrounging for cash, and the bank was pretty inflexible about the down payment amount.

If you’re a homeowner, the threat of a big, unexpected expense might be keeping you up at night. But if that’s what you’re losing sleep over, you’re not alone. In fact, a recent study from NerdWallet found that the main anxiety shared among homeowners was financing (65%). The simple secret to maintaining a great-looking house without having it drain your bank account? Never falling behind in upkeep.