Buying A Home With Bad Credit

Buying A Home With Bad Credit

When it comes to buying a home, having bad credit is not the end of the world. Your future doesn’t have to be defined by your past. Whether you have suffered from a bankruptcy, foreclosure or some type of financial hardship that resulted in late or missed payments, there are lenders who specialize in financing for those with less-than-perfect credit. You will likely have to produce a larger down payment and/or pay higher interest rates than someone who has good credit, but the important thing to know is that buying a home is an option for you.

Bankruptcy & Foreclosure

If either a bankruptcy or foreclosure is on your credit report, it could take some time before you can qualify for a good interest rate on a mortgage. FHA loans, which are especially desirable for those with past credit problems and first-time home buyers, are backed by the government and offer a low down payment and interest rate option for those who qualify. Although the notation remains for up to 10 years, individuals with a bankruptcy or foreclosure on their credit report may qualify for an FHA loan after two years. Some mortgage lenders may approve a loan sooner, but the interest rates will be higher and the required down payment may be as much as 35 percent of the purchase price of the home.

Cleaning Up Your Credit

Even if you have bad credit, it’s important to check your credit report from each of the three major credit reporting agencies – TransUnion, Equifax and Experian – before applying for a loan. If anything is inaccurate, file a dispute with the reporting agency and request a correction. You can request a free copy of your credit report every 12 months.

In addition to correcting any inaccuracies on your credit report, it’s important that you know what can help or hurt your chances of obtaining a loan. You can start improving your credit by avoiding the temptation to apply for new credit right before submitting a mortgage application. Multiple inquiries will cause your FICO score to drop, and lenders will rely on this information when deciding whether or not to issue your loan and how to calculate your interest rates. With past credit problems, most lenders will want to see that you have rebuilt your credit history with 1-3 major credit cards and timely payments over a two-year period.

Money Matters

When it comes to obtaining a home loan, a healthy bottom line will help the lender to see you as being creditworthy. It’s important that you have sufficient income, along with the ability to prove steady employment for at least one year (longer is better) preceding your loan application. Most lenders will request a copy of your tax returns for the two most recent years, along with current pay stubs. If you have money for a down payment, this will also work in your favor.

Creative Financing

In some cases, a conventional mortgage loan may not be available no matter how hard you try. Owner financing is one way that individuals, who may not otherwise qualify for a traditional mortgage loan, can purchase a home. This type of financing is offered by the owner and may include interest rates comparable to other loans, flexible down payment options and no credit check. Your REALTOR® can assist you in finding homes that offer alternative financing options.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

A Single Woman’s Guide To Home Ownership

A Single Woman’s Guide To Home Ownership

The traditional view of home ownership usually includes a married couple, but times have changed, and more and more single women are entering the housing market. In fact, almost twice as many single women are purchasing homes than single men, and almost one in five homes purchased today are purchased by single women. So why are single women making up such a large part of the housing market, and what are the special considerations single women should make when purchasing a home?

What Women Want!

The demographics of single women buying homes are quite diverse. From young professional women in their 20s to divorced mothers in their 40s, there are really no typical single women making home purchases, and their needs are just as diverse. Overall, however, there do appear to be a few trends in the market, and here is a list of what the average single woman is looking for in a new home.

Most spend less than $200,000
Prefer two bedrooms or more
Less likely to choose new construction
Will compromise size and cost to get other amenities, but not location
Smaller spaces are acceptable, and many prefer condos
Desire security and safe neighborhoods with a strong community feel
Look for close proximity to stores, shopping, and fitness centers

Things To Consider

If you are a single woman looking to enter the housing market, or know someone who is, then what should be considered before making the leap into home ownership?

Essentially the considerations are much the same as those of any homeowner. Taking a realistic look at your financial situation is always important. Seeking out the advice of a qualified financial advisor and a REALTOR® can make the process less difficult. It is also important to be sure you are not entering into any unwise loan agreements that may not be wise down the road, such as no-money-down deals. It is also important to have a clear picture of what your needs as a homeowner are, and that you don’t settle for something that will not work with your particular lifestyle.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

Calculating Your Monthly Mortgage Payments

Calculating Your Monthly Mortgage Payments

One of the most important factors to consider when buying a new home is affordability. As a general rule, mortgage payments should not exceed 25-30 percent of your monthly take-home pay. The best way to know what you can afford is to determine the possible payment range by comparing the price of the home with other essential ingredients.

Figure Out How Much You Want To Borrow

Your first step to calculating your monthly mortgage payment is knowing how much you want to borrow. This can be determined by subtracting your down payment amount from the purchase price of the home, which will give you the amount that you will need to request from a lender.

Know Your Rates

The next step is to determine the current interest rates for the purchase of a home. Rates vary and may change often, so check with your lender for current rates. It’s worth noting that the interest rates you receive will, in part, be based on your credit history. This means that knowing your FICO score and credit rating will give you a good idea as to how your interest rates will be calculated.

Choose Your Loan Term

Your monthly mortgage payments will be determined by a number of factors, including the term of your loan. If you were to borrow $250,000, your monthly payments would be less with a 30-year mortgage than with a 15-year mortgage. The reason is because it would take larger monthly payments to get the loan paid off quicker, which is why you will need to select a loan term before calculating your payments.

Additional Costs To Consider

Your total mortgage payment will include taxes, homeowner’s insurance and possibly even private mortgage insurance (PMI) if you provide less than 20 percent down and your loan requires it.

Just The Facts & Figures

Now that you know how much you need to borrow, have chosen your loan term and are familiar with the current interest rates, it’s time to calculate your payment. Most lenders offer a mortgage calculator on their Web site or you can get an estimate by speaking with your lender.

If you still need help in calculating your potential monthly mortgage payments, don’t hesitate to ask your REALTOR®, mortgage broker or lender.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisiors, and are not providing any financial advise, you should consult with a licensed financial advisior prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

December Income and Spending

NAROFF ECONOMIC ADVISORS, Inc.

Joel L. Naroff

President and Chief Economist

 

INDICATOR: December Income and Spending

KEY DATA: Consumption: +0.7%; Disposable Personal Income: +0.4%

 IN A NUTSHELL:   “Households open their wallets wide in December.” 

WHAT IT MEANS:   All the stories about a strong holiday shopping season turned out to be correct.  Consumers threw caution to the wind (okay, maybe that’s a little over the top) and bought all sorts of goods and services in December.  Yes, they purchased a ton of durable goods led a strong rise in vehicle sales, but it was not just new shiny electrical Volts.  Critically, purchases of services, which constitute about seventy percent of spending, are starting to come back.  People are buying the little things that make them happy and that points to rising confidence a better future spending ahead.  The outflow from wallets, though, was not matched by an inflow of income.  Disposable personal income, the money left after the government puts its hand into everyone’s pockets, rose nicely but not nearly as fast as consumption.  Wages and salaries increased somewhat faster than in November but not at a really strong pace.  Indeed, interest and dividend income gains outpaced increases in workers’ pay.   The savings rate eased back but still remained above five percent. 

 MARKETS AND FED POLICY IMPLICATIONS: This was a solid report that fills in the details of Friday’s GDP report.  We knew then that consumption was strong and helped power the quite decent 3.2% overall gain.  The question is: where do we go from here?  With energy costs surging and the depressingly cold and snowy winter possibly keeping people indoors, we could see a slowdown in demand.  In addition, we really do need greater increases in wages and salaries if consumers will keep going back to the malls and showrooms.  It is likely that the savings rate will fall some more but there is only so much of future consumption growth that can be funded out of savings given the cautious nature of households.  Thus, it is still all about jobs since more employees means more income and more spending.  While investors should like this report, it was not really a great surprise.  More importantly, international concerns will likely play a major role in short-term market behavior.  As for the Fed, the decent fourth quarter growth rate is not strong enough to lead to significant declines in the unemployment rate and thus I don’t expect any change in attitude for a while.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advise, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com