Home Financing Tips

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.

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.

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.

A couple of weeks ago, we suggested “3 Totally Doable Mortgage Hacks That Could Save You Thousands,” which delved into the money you can save on interest by spending a little bit more money towards your principal over the scope of your home loan.

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?

Buying a house is easily one of the most significant purchases a person will make in his or her lifetime. But, for most people, it doesn’t happen quickly; in fact, it takes a lot of planning to make that purchase a reality. And one of the very first steps is saving enough money for a down payment. The general rule for home buying is 20 percent of the projected home price as a down payment (though in some cases, it can be less or more).

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.

Those trendy 500-square-foot tiny homes sure are cute and it’s a cool idea reduce your environmental footprint and embrace conscious “micro” living. But though these homes may be but little, they can be fiercely difficult to finance, since traditional home mortgages aren’t always an option.

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.

According to new research, a combination of the aesthetic influence of the hit HGTV show Fixer Upper and the design (and eco) priorities of millennial home buyers are now driving which premium features sell the most entry level units on the market — sometimes at a whopping 30 percent over asking price. By analyzing listing descriptions for millions of entry-level homes (defined as those priced within the bottom third of the market), a new report by Zillow Group and RealEstate.

More than half (57%) of new homeowners believe they could remodel an entire room without any help from a professional. Millennials are even more confident in their DIY abilities, with 64% ready to tackle a remodeling project on their own. That’s according to a Home Depot survey of 1,000 new homeowners, age 25 and up, who had purchased a home in the past year.

In order to combat its growing affordable housing issue the city of Tempe, Arizona is slated to break ground on a community of relatively low-priced tiny homes on city-owned land next spring. The desert city just outside Phoenix has seen an average rent increase of $200 per month since 2015. The community of 12 “micro-estates,” as the developers are calling them, will sit on approximately an acre of land with each home coming in at 600 square feet.

Mortgage marketplace Lending Tree recently ranked its best cities for first-time homebuyers, and the results are, well… let’s just say it’s great news if you’d like to live in Little Rock, Ark., which Lending Tree found to be the most hospitable U.S. city to first-time home buyers. Birmingham, Ala., Grand Rapids, Mich., Youngstown, Ohio, and Winston, N.C. rounded out the top five.

If you have any extra space in your home — a spare bedroom, guest house, a finished garage — chances are you’ve toyed with the idea of listing it on Airbnb. Pros: extra money for bills or savings, a fun way to meet cool people, and not a lot of real work. Cons: the potential for weirdos in your space, property damage, and near-constant mental labor in the form of requests and bookings.

If you’ve been keeping an eye on the real estate market recently, you’ve probably heard a few rumours about rising interest rates flying around. We’re sad to say that what you’ve been hearing is true — but that doesn’t mean you should give up hope on your dreams of becoming a homeowner. Keep reading to learn more about what’s happening with interest rates today — and what you can do to stay competitive.

For the first time, Airbnb hosts can now count their home-sharing earnings as additional income when refinancing their mortgage at three national lenders: Citizens Bank, Better Mortgage, and Quicken Loans (the company behind that Rocket Mortgage app you see each Super Bowl). That may sound trivial, but like Ron Burgundy, it’s kind of a big deal. Refinancing a mortgage isn’t exactly easy; it’s almost as tedious as taking one out in the first place.

The average interest rate on a 30-year fixed-rate mortgage has surged past 4.28% this week to its highest point in years, according to CNBC. That’s bad news for home buyers, because even a small rate increase can be enough to push an already difficult-to-afford house completely out of reach. After starting the year around 4.0%, average rates have been steadily creeping higher, with some lenders quoting best rates of 4.5% this week.

If you’ve ever written a monthly check to Sallie Mae, the findings of a new study on student loan debt and millennial homeownership shouldn’t surprise you: College graduates with loan debt have a harder time saving up for a down payment than those who graduate debt-free. That’s according to a study released Thursday by rental website Apartment List.

A shutdown of the federal government — which will occur if Congress can’t approve at least a temporary funding bill today, an increasingly likely scenario — could throw a monkey wrench into many corners of our economy. And if you’re getting ready to close on a house, look out, because one of those wrenches might be headed your way.

If buying your first home is among your New Year’s resolutions for 2018, you might be viewing the current real estate landscape with equal parts hopeful wonder and anxious dread. As a first-time buyer, you can expect plenty of company at open houses and a lot of headwinds in your search. Experts predict 2018 will be another seller’s market, with demand far outpacing the available inventory of homes for sale. But that doesn’t mean you have to sit on the sidelines.

Millions of American homeowners this week interrupted their lazy winter vacation days and post-holiday clearance shopping to frantically crowd their county or city tax offices, hoping to prepay next year’s property taxes and dodge a tax bullet. Now the IRS, for whom the Grinch is perhaps not just a seasonal foil but a year-round inspiration, says they may have been wasting their time. Let’s back up a bit.

The House and Senate both passed versions of a sweeping new tax bill in the past month. What happens now is a joyless legislative mashup as the two chambers try to resolve sticking points between the two bills and present the president with a final version to sign before year’s end.

Making an offer on a home isn’t like sliding a sticky note across the table. Your offer as a buyer is so much more than just a dollar amount. There’s no question that sale price is crucial, but it’s far from being the only important factor when making an offer on a home.

Before you can even start looking at homes, you need to know how much money you have to spend. Obtaining a pre-approval letter — a verification from a mortgage company that they’re willing to give you a loan — is both a great way to set your budget and to show sellers that you’re serious about making an offer. Read on for an overview of the pre-approval process.

A 20 percent down payment is the gold standard held up by every real estate resource ever. With less than 20 percent down, you’re on the line to pay PMI — private mortgage insurance — a fee that’s tacked on to your mortgage every month for no other reason than to protect the bank (not you) if you ever default on your loan.

Buying a home can be crazy expensive, and for most first-time buyers, the hardest part is saving up a sizable down payment. You’ve no doubt heard that the traditional down payment should be 20% of the purchase price — any less, and you’ll likely have to pay private mortgage insurance (PMI) or get stuck with a higher long-term interest rate. And who’s got 20% of, say, $300,000 just kicking around in their bank account? However, that 20% figure isn’t set in stone.

In 2008, the U.S. housing market was already cratering as the Great Recession took hold. To try and stop the bleeding, Congress passed a series of first-time homebuyer tax credits, each more generous than the last. First came a $7,500 tax rebate, to be repaid over 15 years with no interest. By early 2009, it had grown to $8,000, and required no payback whatsoever. And for most of 2010, even some repeat home buyers were eligible for a tax credit worth up to $6,500.

If you’ve been living in a major city the past few years, you’ve probably seen your rent go up — and up, and up — and thought about buying a home to escape the rent hikes. Problem is, you’ve likely watched helplessly as the prices of nearby condos and houses climbed out of your reach even faster. If you’re feeling priced out in the city you call home, should you consider moving to make your dream of homeownership come true?

Unless you have a fairy godmother or a cool half million sitting around, you’re probably going to need a mortgage if you want to buy a home. Here’s how to qualify for and choose a mortgage, and what to expect throughout the process. Let’s face it: You can go to as many open houses as you want, but you’re not going to be able to buy one without a mortgage. So get the ball rolling early and get pre-approved before you even start house hunting.

You know want to buy a home — you’re just not sure where to begin. And no wonder: Buying your first home can be a long, intimidating process, full of gross stuff like math, legal documents, and cutthroat competition. But have no fear: First-time buyers just like you do it all the time, and we’ll walk you through the process. First, you’ve got to make sure you’re emotionally and financially ready to buy a home.

For most of us, buying a first home is a pretty big deal. We’re all indoctrinated from a young age with the more romantic aspects of becoming homeowners, making it hard to imagine when we purchase that first abode that we’ll ever live anywhere else. But think of it this way: Wouldn’t it be nice to know that when it does come time to sell your beloved first home, you’ll be walking away with a nice chunk of change to put toward your next dream house?

Just because it’s your first time buying a home doesn’t have to mean you go into negotiations completely clueless. While the whole process may be new to you, there’s actually some benefits to having it be your first time around. Here’s some tactics for negotiating your first home purchase: It’s always a good idea to go with a buying agent that knows their territory. You know how it feels like everyone who went to summer camp knows each other?

If you’re hoping to buy a property in a competitive market, then you probably know that a bidding war with another hopeful buyer may be in the cards. But you don’t have to be a real estate tycoon to know how to negotiate; the key to surviving a bidding war is to be prepared. Here’s what you need to know before you head into battle: Cash is a universal language that everyone understands.

If you’re looking into buying a home, your mind is probably focused on things like your down payment and monthly mortgage costs, but those aren’t the only costs that come with owning a home—there are hidden costs you might not be thinking about, too.

You found the perfect home for sale, and even better, the monthly mortgage payment works out to almost exactly to what you’re paying in rent right now. Great! Now, simply add another $750 a month on top of that, and you’re golden! Wait, what? Yup, the “hidden” costs of homeownership tally up to $9,080 a year on average, according to a new report by Zillow and Thumbtack.

There’s so much to think about when buying a place of your own. From the house-hunting process itself to the price negotiations to the inspection, it’s almost instinctive to cut corners and take shortcuts wherever you can. But there’s one place where a little extra effort in your house hunt could pay off in major dollars. It’s a fact: 47 percent of homebuyers don’t shop around for mortgage lenders, and it costs Americans a collective 9 billion dollars per year.

Lately, social media is abuzz with Toronto’s insane real estate offerings: undesirable homes (in serious need of renovation and lacking ordinary amenities) selling at unbelievably high prices. Properties lacking everything from parking spaces to proper bathrooms have been selling at double and triple the asking price—with no signs of the area’s inflated costs slowing down anytime soon.

There’s truly nothing better, to me at least, than sharing your home with family and friends. That’s a big reason why my husband and I sought out a two-bedroom space when we went home shopping last year: We knew we wanted to use the extra space as a guest room to be able to host out-of-town family and friends when they visit. We’re not the only homeowners who made an “extra bedroom” a priority, either.

What item in your monthly budget do you spend the most on? Well, if you’re like most Americans, it’s housing. American families, no matter how big or small they are or where they might fall on the economic ladder, spend most of their money keeping a roof over their heads. But the very richest Americans spend way more money doing it than the rest of us.

The reality of owning a home isn’t as simple as it used to be decades ago. Many first-time home buyers are now waiting longer than they ever have, around six years, before shifting from being a renter to being a home owner. (And rates of homeownership are down further than they have been in nearly fifty years.) For many potential home buyers, unsurprisingly, the down payment is their biggest obstacle. Housing prices have gone up while household income has remained relatively stagnant.

If you’re looking to be one of the 52 percent of home buyers that make their first-ever home purchase in 2017, I feel like I could probably sum up your thoughts as this: “How the hell are we gonna make it happen?” I know this because I was in your shoes this time last year—wanting desperately to buy a place of my own but, after earnestly crunching the numbers, feeling more discouraged than ever. But we did it. We made homeownership happen.