Get Your Finances in Order: To-Do List

1. Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries.

2. Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.

Continue reading this post…

Loan Related Closing Costs

Here are some fees and closing costs you should be aware of when you decide to purchase a home. Consult with your mortgage broker for more details on these and how you can minimize your closing costs.

Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.

Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

Continue reading this post…

Your Buying Power

Experienced home buyers know that one of the first-steps in beginning a successful search for a new house is taking a hard, objective look at finances. Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home – including how we write the offer, which mortgage programs you will qualify for, shopping for the best mortgage loan and which homes are truly in your price range.

Continue reading this post…

Environmental Issues

It seems that we hear a lot about environmental concerns these days. Much of it is simply the result of a greater awareness than in the past. And even though there isn’t anything to be concerned with in most homes, there are still a number of potential home environmental issues that buyers should be aware of.

Water quality is probably the most common concern and the one most often tested for. Typically, a basic water quality test will check pH, water hardness, the presence of fluoride, sodium, iron and manganese, plus bacteria such as E-coli. Additionally, water may be tested for the presence of lead or arsenic.

Continue reading this post…