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If There’s One Thing We’ve Learned Here, It’s ‘Only Buy What You Can Afford’

by Mark Rieger, Mark Rieger Realty

 

As many Americans rearrange their lives due to the threat or execution of home foreclosure, most Americans are forced to take a better look at our financial practices.
 
Banks are holding tighter to their money. Lenders are looking closer at borrowers’ credit histories, assets, employment histories and overall ability to repay debt. The federal government is doing the same thing to banks. We’re all checking each other out. Now is the time for you to evaluate your own financial scenario and decide just what you can really afford to Buy.
 
Take off the rose-colored glasses. Let’s look at this realistically. Why not let us help you analyze your current financial situation? We’ll help you determine just how much you can afford to pay for housing-related costs each month. We’ll also help you determine how much you should be willing to pay for a home. If you’re not quite ready, but know you want to Buy a home in the future, we can help you take steps toward your next home purchase.
 
Even though homes are essentially on sale right now, this is no time to abandon all reason and take on a debt you can’t really afford. The real estate market - like every other financial market in the world - is fickle. we encourage only good, sound, sustainable investments for solid buyers.
 
How much home can you afford?
 
There are many different lending programs for homebuyers today. As the country goes through a recovery period, credit will be tight for awhile and a loan will be harder for some people to get. However, home loans are absolutely still available and lenders are eager to help people Buy properties.
 
Check Your Credit
 
When you begin shopping for a home loan, check your credit report for any potential problem areas. Your ability to get a home loan and the interest rate you pay will be directly impacted by your credit score. 
 
Federal law entitles you to one free credit report from each agency per year. Get your free reports at www.annualcreditreport.com or contact one of the following agencies:
 
Equifax: 1-877-576-5734; www.equifax.com
Experian: 1-888-397-3742; www.experian.com/fraud 
TransUnion: 1-800-680-7289; www.transunion.com
 
Debt-to-Income Ratio Important
 
In general, lenders want to see a total 41 to 45 percent debt-to-income ratio including your housing expenses. Housing expenses include the cost of  private mortgage insurance (PMI) if your down payment is less than 20 percent as well as taxes and homeowners insurance.
 
Make a list comparing your debt and income when you first start shopping for a home loan. How much do you think you can you comfortably afford to pay on a home loan? Never hide expenses that don’t show up on your credit report. False reporting when applying for a home loan could lead to foreclosure on your home loan. When researching the cost of your home loan, ask about:
 
required down payment 
monthly loan payment 
home loan term 
type of home loan 
interest rate and type of rate, fixed or variable 
annual percentage rate taking into account points, broker fees and other credit charges 
points quoted as a dollar amount instead of just the number of points 
 
Fees including: 
  
home loan origination fees 
underwriting fees 
broker fees 
home loan transaction, settlement and closing costs
 
I list homes in every price range. You can search for homes on My Website right now. You can even set your own search criteria to ensure you are looking at all of the properties within your price range! I am here to help.

30 Money Saving Tips

by Mark Rieger, Mark Rieger Realty

 

Do you want to Buy a new home, but you haven’t saved up quite enough money yet for a down payment? Are you already a homeowner on a tight budget? Do you just need to save more money so you have it for a rainy day? Here are 30 money saving tips to help you achieve your goals.

  1. Budget. Creating and sticking to a budget is the best way to start saving now.
  2. Sell the stuff you don’t need. Have a yard sale or place items in your local classifieds or on eBay, Craigslist, or Amazon.
  3. Limit eating out. By preparing your meals at home, you’ll not only save upwards of $200 each month, but you might also save some extra pounds from avoiding all the fast food you’d otherwise eat.
  4. Leave the plastic home. When you go shopping, only carry cash. Once the cash is gone, there’s no credit card to fall back on.
  5. Be thrifty. Don’t be afraid to shop at thrift stores or consignment stores.
  6. Save energy. Turn off and/or unplug your appliances and lights when you’re not using them.
  7. Skip Starbucks. Make your coffee at home instead of buying it at the coffee shop.
  8. Wash your own car. You don’t need the $20 interior/exterior cleaning. With soap, water, and a little elbow grease, you can save a lot by washing your car yourself.
  9. Consider eliminating cable or satellite T.V. Many people use Hulu, Netflix, and other online sources to watch T.V., movies, and sports.
  10. Buy generic brands. This includes over-the-counter medications, prescriptions, when applicable, all available grocery items, etc.
  11. Clip/Print coupons. Obtain coupons from newspapers, mailers, group coupon sites, etc. There are many classes offered around the nation - some of them free - to teach you how to save hundreds each month by using coupons.
  12. Know before you go (shopping). Create weekly menus and shopping lists and Buy only the items on the list when you go shopping.
  13. Carpool. Carpool to work with your colleagues or use public transportation.
  14. Stay healthy. Exercise, eat right, and wash your hands frequently. Healthier people spend less on medical expenses than unhealthy people.
  15. Use energy-efficient light bulbs. You’ll save on energy bills and since energy-efficient light bulbs last longer, you’ll Buy fewer bulbs over time.
  16. Use homemade cleaning supplies. Use old-fashioned vinegar and baking soda to clean your home.
  17. Avoid overpriced snacks. Avoid snacks and drinks from the gas station, convenience store, and vending machine.
  18. Filter and bottle your own water. You can purchase inexpensive filtering containers for your water, such as a Brita water filter, if you want filtered water. Also, if you have a filter in your refrigerator, you can use that water. Reuse BPA-free containers to carry your own water with you to avoid buying overpriced bottled water.
  19. Stay away from ATMs. If you need to get money out of the ATM, plan ahead and only withdraw it from your financial institution to avoid paying additional fees.
  20. Auto-withdraw savings. Automatically withdraw a predetermined amount of money from your checking account that goes into a separate savings account. When the money is automatically withdrawn, you generally don’t even notice it’s gone.
  21. Consolidate and pay off debt as soon as possible. Avoid paying too much interest by making additional payments each month or adding to your monthly payment. You may also be able to consolidate your debts to a lower interest rate.
  22. Avoid overdraft fees. Be aware of your checking account balance and when automatic payments are withdrawn. Sometimes banks will set up a line of credit if you qualify so you can avoid overdraft fees.
  23. Avoid credit cards with annual fees. The best way to do this is to not apply for credit cards with annual fees. The fees often don’t justify the rewards. Smaller banks and credit unions often offer credit cards with no fees.
  24. Do regular scheduled maintenance on your vehicles. Don’t forget your regular oil changes. Remember to check the air in your tires often, and use the grade of fuel that the owner’s manual recommends. These small acts can significantly lengthen the life of your car, giving you years of use.
  25. Cancel subscriptions. Don’t subscribe to newspapers or magazines. Almost everything we want can be found online for free.
  26. Borrow books from the library. You usually only read a book once, so why pay full price for books when you can check them out at the library.
  27. Drive your car as long as possible. Drive your car as long as you safely can.
  28. Pass on extended warranties. A $100 two-year extension on a $300 product is just not worth it. Warranties are insurance, and we rarely need to insure such a small amount.
  29. Agree to limit gift giving. Agree in advance to limit the gifts you exchange during birthdays and holidays and save everyone money.
  30. Find free local activities. Explore your town’s public parks. It’s likely that your town or a nearby town has free outdoor movie nights, museum days, greenways, libraries, festivals and so much more.

If you are looking to either Buy or Sell a home in Central Oregon, please give me a call today. I am happy to help!

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