Home Financing Tips

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.

The countdown to buying your first home is innately defined by one thing: the balance in your savings account. Unlike car loans and the too-expensive shoes you put on your charge card, you can’t exactly buy a home with zero money down, so most people who have their sights set on homeownership begin by saving for a (sizeable) down payment.

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.

Will they or won’t they? Several times this year, the Federal Reserve System raised the benchmark interest rate and seemed gung-ho to do it again by the end of the year. If you’re about to get a new mortgage, these interest rate hikes will directly affect you, meaning you’ll pay more over time for that new house. And if you’re not in the market for a new mortgage, federal interest rate hikes will still hit you, albeit indirectly.

The last time you got a raise, did you potentially daydream of moving to some far-off amazing place? Well, your options may be limited, because that amazing locale might come with a super high price tag—especially if you want to live abroad. The Economist recently updated their list of most expensive cities in the world, and surprisingly, pricey American cities didn’t even crack the list this year.

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.

Beloved family sitcom “Full House” ended back in 1995, but thanks to reruns and a spinoff that debuted on Netflix in 2016, fans continue to be enamored with the Tanner family. Almost as iconic as the show’s characters is the beautiful San Francisco home they lived in.

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.

A debt forgiveness program for student borrowers sounded promising: Work in a public service sector for 10 years while making on-time loan repayments. Then—after a decade of working as, say, a nurse, police officer, teacher, social worker, first responder, or in some other public sector service job—have your remaining student loan balance erased.

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.

Buying a home is a huge financial decision, and, if you’re about to do so, your life advisory panel (family, friends, that opinionated co-worker…) is probably eager to weigh in. While well-intentioned, not all mortgage advice is good.

According to the Wall Street Journal, Amazon will soon announce that their long-awaited HQ2—home to 50,000 new jobs—will be built in not one, but two metro areas: Crystal City, Virginia—in the D.C. metro area; and Long Island City (LIC), Queens—in New York City. As a New Yorker (albeit a Brooklynite), this news wasn’t super exciting. I know by now that a new hot tech headquarters means more people and higher rent prices.

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.

Congrats, America, your credit score has gone up. At last count, the average credit score in the United States was 704, an all-time high, according to FICO, a credit scoring company. If you’re below that score, though, don’t freak out: The average credit score incrementally goes up with age, which makes sense as credit history is one of the big factors layered into your score. Suffice to say, there’s a difference of 88 points between young adults and those aged 60 and up.

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’re on the hunt to buy a home, chances are you’ve been saving up for that down payment for quite some time—and while you may think you can get away with putting down 10 to 15 percent for your first home, in some states that might not be competitive enough. According to a new study performed by online loan marketplace LendingTree, prospective buyers in five American states can expect to plunk down more than the standard 20 percent.

It’s no surprise college grads make more money than those with just a high school diploma. To get specific, a college degree can boost your lifetime earning potential by $1 million. But what often gets lost in this 101 discussion about college degrees and earning potential is the fact there’s a wealth gap—and it’s a huge one—between those who have student loans and those who don’t.

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?

You pay your rent on time every month, keep your savings account padded with at least a few hundred bucks, and don’t overdraw your checking account. While these are all responsible money management habits, they haven’t actually been helping you build your credit–but that could change soon.

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.

Saving money for a down payment on a house may seem like a monumental task, but it doesn’t have to be. By taking baby steps toward your goal and giving yourself enough time to reach it, you can make the entire process more palatable. And, if you’re not the most motivated person, these five tips and tricks from real estate and financial experts are so easy that even the laziest among you will likely approve. It’s difficult to spend money when you don’t have access to it.

We’ve all heard it before: Before you can take the leap into the housing market, you need to start saving up to make a sizable down payment. For years, putting down 20% of a home’s purchase price was held up as the gold standard. While many still consider this figure to be their goal, rising housing prices are causing others to look for alternatives. Ultimately, only you and your financial advisor can decide on the best path for you to take.

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.

Most homebuyers and renters have experienced that chill when a real estate agent asks them that one question: How is your credit? But as of August 14, 2018, that question will be haunting fewer potential homebuyers. A recent study from the New York Fed’s Center for Microeconomic Data found that the number of collections accounts and the number of individuals with a collections account on their credit report shrank between June 2017 and June 2018.

After years of renting in San Francisco and Oakland, we bought a home in Walnut Creek (a small city in the Bay Area) for $545,000 in 2010—when the market was relatively slow. The house was the smallest model in a 1960s neighborhood at 1,445 square feet with three bedrooms and two bathrooms. But it sat on a spacious 9,375-square-foot lot. It was a dream cosmetic fixer. Over seven years, we made it our own.

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.

After my husband and I got married, we quickly started to think about the impending doom/joy (whichever way you want to call it) of “possibly” starting a family sometime in the future. To add to it, we both started to work from home: My project management position had recently gone mobile and my husband worked as a music producer in a home studio.

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.

When it comes to buying a house, the financials can be overwhelming. That’s why a little bit of preparation or saving goes a long way—and a lot of preparation and saving goes even further. If you’re thinking about buying a home, one of the biggest costs you’ll be hit with is the down payment.

While buying a home is one of the most exciting and rewarding things you’ll do in your life, it can also undoubtedly be one of the most stressful. This is due in no small part to the mortgage approval process which, at its best, is tricky and, at its worst, downright perplexing. When I purchased my first home, I felt like I had sufficiently done my research.

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.

If your interest on this site is any indication, buying your first home is a milestone you’d like to achieve in your future. But for many millennials in the United States, the American Dream has been postponed by towering student loan debt, stagnant wage growth, and exorbitant rental costs. All that being said, millennials are still buying homes more than other generations and in 2017, 38 percent of single-family home purchases were made by first-time homebuyers.

In 2015, my grandmother became gravely ill. She was living with my parents, very close to the house my husband and I had purchased in 2005. Grandma needed full-time care, and since I had just made the transition to a stay-at-home mom, I was more than happy to venture to my parent’s house to help take care of her during the day. But a year later, my mom was required to move two hours north for her work.

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.

Last year, I packed up my belongings, converted my first home into a rental property, and chose to settle 50 miles away to be closer to my parents. My husband and I chose a $179,000 house in Hellertown, Pennsylvania, as our second home. This wasn’t our first time buying, so we were aware we’d spend a bit more money over the sticker price.

Even the shiniest silver spoon and the very best intentions aren’t enough to guarantee immunity from financial problems, because, well, sh*t happens. And while you can’t control all the variables that can lead to hard times, you can have command over your response, which, ideally, should look more like a plan than panic.

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.

It seems quite absurd now that this sealed the deal for us, and lead us to close on the biggest single purchase of our lives.

So you want to make a cool $100,000? Popular HGTV shows lead you to believe the secret to getting rich quick is to start flipping houses. From Chip and Joanna Gaines, to Tarek and Christina El Moussa, there are plenty of everyday people making a name for themselves this way. So a few years ago, after I got married, my husband and I said to ourselves: We could totally do this. He works in construction.

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.