If you’re buying your first home, it might seem like going from paying rent to paying a mortgage is merely switching out one monthly bill for another.
But rents and mortgages differ on a couple of levels. For one, mortgage payments contribute to your stake in the home. The more payments you make, the more of the home you legally own.
The other major difference is what a mortgage includes. While rent is simply a once-a-month fee, a mortgage payment comprises what is known as PITI.
That acronym stands for:
- Principal: This portion of your payment goes toward the total balance of your mortgage loan, without any other charges.
- Interest: This is the extra cost of financing your home. Your interest rate (which is set when you apply for the loan) determines how much interest you pay annually.
- Taxes: As a homeowner, you’ll need to pay property taxes. These are typically paid monthly as part of your mortgage, and they could be included in your escrow account.
- Insurance: Your homeowners insurance policy, which can also be paid using escrow, protects your home from weather damage, theft and other potential issues. If you require private mortgage insurance, that will add to your monthly costs as well.
If you’re considering buying your first home, it’s essential that you understand what goes into a mortgage payment — as well as how you pay off that loan year over year.
And don’t assume that all of the monthly fees add up to more than your rent, especially when you consider the equity you’ll be building.
Want to learn more about the costs you can expect when purchasing a home? Get in touch today if you have questions.
Want a fast and easy homebuying process? Of course you do. So how do you set yourself up for success? Start gathering your paperwork.
It may not be the most exciting part of buying a home, but it’s necessary to see where you stand and what you qualify for. Having your current financial records pulled and ready to go is the first step.
Here’s what you and any co-borrowers will need for a smooth loan process:
- W2s or 1099s for the past two years
- Pay stubs for the two most recent pay periods
- Income tax returns for the past two years (especially if you’re self-employed)
- Bank statements for any checking, savings or investment accounts (including 401(k)s, IRAs, etc.) for the past two months
- Records of any other forms of income you receive (Social Security payments, child or spousal support, etc.)
- Statements for assets, including stocks and bonds
Will you be receiving a financial gift from friends or family to pay for your down payment or closing costs? Then you should also have a gift letter to disclose that amount of money. And don’t forget to bring a copy of your driver’s license, as well as that of any co-borrowers.
Keep in mind that you may be asked for additional proof of income and assets. It will depend on the loan you’re applying for, as well as your employment status, income, debts and other unique financial factors.
Five years ago, you’d be hard-pressed to find wallpaper in any design magazine or model home. But today? That tried-and-true wall covering is back.
Don’t mistake its resurgence for a nod toward vintage styling, though. Today’s options are modern and sleek. From bold metallics and geometric shapes to elegant botanicals and exposed stone (or concrete or brick) effects, there’s something for everyone.
No longer just a way to cover barren walls, wallpaper is now cropping up in every area of the house.
Are you thinking of using wallpaper to upgrade your home’s style? Try one of these creative uses:
Cover the ceiling. Wallpaper on the walls? That’s expected. But wallpaper on the ceiling? Now that’s a way to add visual interest. You can even use it strategically to highlight a light fixture or other overhead feature.
Line shelves and cabinets with it. Give your built-in shelves, bookcases, cabinets and drawers a pop of color by lining them with swatches of patterned or solid-toned wallpaper.
A nice little bonus? It will help keep them clean, too.
Frame it and hang it on a wall. A bright, bold wallpaper can make for a beautiful piece of artwork. Cover a canvas and attach a complementary frame, and it can pull together the color palette in any room.
Use it on the furniture. Forget sanding and staining your wooden furniture to give it a new look. Instead, line the top with a textured wallpaper to make it more eye-catching. It works on tables, dressers, entertainment centers and more.
Your credit score plays a big role in the homebuying process. It can influence what interest rates you’re eligible for, as well as what options you have for loans in general.
If your current score isn’t as high as you’d like, don’t lose hope. You can boost your score and improve your chances of qualifying for a mortgage or a better rate. Here are a few ideas that can help:
- Check your credit report. Credit reporting agencies collect data from a variety of sources, and this info may contain errors. Plus, there’s always the possibility of identity theft. Request a copy of your annual credit report from one (or all) of the three main agencies — Experian, Equifax and TransUnion — and make sure everything is correct. If you see something that looks off, report the issue to get it resolved.
- Settle any debts in collections. Having an account in collections hurts your credit score. Pay these off as soon as possible, or work with the creditor to set up a payment plan.
- Work toward paying off other debts. Start paying down your debts as much as you can, focusing on high-interest ones first. Your total debt balance has a big impact on your score, so reducing even one account can help immensely.
Additionally, don’t open any new credit cards, take out a new car loan or put extra purchases on your existing cards when gearing up for a home purchase. Though this won’t improve your score, it will keep it from getting worse — and that’s just as important.
What if you could save money and make money at the same time? With the right home improvements, you can. Lower your utility bills and increase your home’s resale value in one fell swoop when you make smart energy-saving updates to your home.
If you’re investing in renovations this year, make sure these three money-saving upgrades are on your radar:
- Replace your windows. Over time, window frames loosen, allowing air to flow in and out of the home more easily. Consider replacing your older windows with new, double-paned ones to cut down on drafts.
You can even opt for tinted windows to reduce the energy needed to cool your home, possibly saving you hundreds of dollars each year. This has the added benefit of refreshing your home’s look, making it more appealing to future buyers, who might in turn make a larger purchase offer.
- Switch to Energy Star-approved appliances. These use less water and electricity, and are designed to operate more efficiently on the whole. Energy Star offers rebates on particular products, saving you even more money.
Another plus? Green certified homes with Energy Star appliances may sell quicker and for more money than comparable homes that are non-certified.
- Add more insulation. Upgrading the insulation in your home helps keep inside air from escaping and lowers your energy bills. You can also use spray foam insulation in smaller areas, like walls, crawl spaces or around ducting.
In addition to these improvements, make sure to learn about any green tax credits, rebates or utility discounts you can receive in your area. Municipalities and utility providers often offer incentives to homeowners who make energy-efficient upgrades to their properties. Those programs can help you save even more.
If you’ve got a mortgage, you probably want to pay it off sooner rather than later. But how do you do that when you’re busy just getting by? More importantly, how do you do it while also saving for the future?
It takes the right planning, tools and mindset. But paying off your loan and saving for retirement at the same time is an attainable goal. Start with these steps:
1. Use windfalls strategically. Are you expecting a bonus or a big tax refund? Don’t spend it all on new clothes or a fancy vacation. Instead, use that windfall to get one step closer to your goals. Put at least some of the money in a high-interest savings account, or use it to make an extra mortgage payment.
2. Make realistic savings goals. Everyone would love to have millions in the bank, but that isn’t always possible. Instead of shooting for the stars, set realistic, incremental savings goals. That way you can reach them while still supporting your household.
3. Create a budget. Planning where your money goes ahead of time can be super useful. You should create an overall budget, mapping out how much to spend on items like entertainment and groceries. Again, make sure the budget is reasonable for your family’s needs.
4. Find helpful tools. You don’t have to go it alone. Money-saving tools and budgeting apps can help you cut costs and save more. Best of all, they’re conveniently available on your phone.
When it comes to saving and paying off debts, staying the course is crucial. And you might even be able to make it easier by refinancing your mortgage. Reach out today for more information.
Are you thinking of refreshing your home’s decor? Or prepping to buy and decorate a new home?
When it comes to home design, color choice is everything. Not only can color affect mood, but it can also impact the perceived size and brightness of your space.
According to designers, here are five fashionable colors you might want to throw into the mix:
Pewter is a neutral beige-gray. It’s a functional choice that works virtually anywhere in the house. Thanks to its muted tones, it goes well with just about any color or accent, from bright and bold shades to lighter pastel ones.
Which hue is great for drawing in the eye? Mustard. It’s perfect for highlighting decor or accenting a specific part of your home. This one is best used in smaller doses because it’s so strong.
Light blues are naturally soothing. That makes them an appropriate option for bathrooms, bedrooms and powder rooms — places that could use the calming effect of these tones.
Nature-inspired deep greens are an excellent choice for large rooms. That goes double for ones with lots of windows and natural light. These dark hues aren’t great for smaller spaces — they often make the area feel more cramped.
Simple, muted pastels are perfect for places where a minimal feel is best. They also evoke cleanliness, making them well-suited to kitchens, laundry rooms and bathrooms.
These are just a few of the shades that designers are predicting will be hot in 2019. Test out swatches, consider your decor and think about how you use each space. Your home’s interior will be refreshed in no time.
Reach out today if you’d like a referral to a local interior designer.