Preparing To Buy A New Home: 7 Financial Tips

Buying a house is a huge step for many individuals or families. The task can be nerve-wracking at times because it is most likely the biggest purchase of your life. How do you know how much you can afford? Will you be approved at the rate you want? Don’t let financial stress hinder your experience, bypass the surprise expenses and be completely prepared to navigate the home buying process with these seven financial tips.

1. Check Your Credit Score/History
Your credit score is a major component when it comes to securing a mortgage. It is basically an overview of how much you spend and if you are able to pay your bills in a proper amount of time. Don’t spend more than you earn, lenders are typically looking for 12-18 months of positive history, which includes no late or missed payments and modest balances on credit cards. A good credit score is key to getting approved for a loan. If you don’t want any surprises, make sure to check your score.

2. Pay Your Bills On Time
Paying your bills on time directly affects your credit score. Your credit score is crucial to procuring a mortgage, so it is absolutely critical to pay all of your bills on time. If you think you might have trouble, set up a plan to pay off your bills and get your credit score up.

3. Don’t Open New Lines of Credit
Opening new lines of credit in a short period of time is seen as a risk and can actually lower you credit score. Many lenders will look for this and determine whether you are a high risk. Also, if you know you are applying for a mortgage, avoid making big purchases using your credit card. This can be seen in a negative light by a lender.

4. Research Mortgage Options
When it comes to your mortgage rate, it is important to figure out what loan type is right for you. Is a 30-year, fixed rate the right choice or could you afford larger monthly payments at a lower interest rate in a 20-year or 15-year fixed loan? Alternatively, you could apply for an adjustable-rate mortgage, which comes with a lower interest rate for the first few years but is considered slightly riskier. Crunch some numbers and determine what is the best fit for you before you borrow.

5. Determine How Much You Can Afford
Like researching mortgage options, look into your personal finances and determine what you can afford. Most of the cost will be towards your mortgage. However, don’t forget to add up all the other costs that come with moving as well as your other everyday finances. Make sure to crunch the numbers and figure out what will work best for you, and don’t forget the taxes that come with home ownership! You’ll get an interest deduction when you file, but taxes in some locations can be very costly.

6. Save Your Money!
This seems like a given, but there are a lot of surprise costs when buying a house. Don’t be taken aback by these costs, be prepared. There will always be a down payment when buying a new house. It is typical to put 20% down, but you may be able to put down less. However, that isn’t always the best move. The bigger the down payment, the less you need to borrow and pay monthly. This can be a hefty price and can be the hardest part for many homebuyers. So be sure to start saving early. Despite a hefty down payment, there are other costs to prepare for when buying a home. It’s easy to forget about closing costs, which is usually 3-6% of the loan amount, as well as move-in and after move-in expenses. That’s why you should save your money early so you are prepared for these costs and budget correctly so that you can start off on the right foot.

7. Buy a Home for Tomorrow
Most people look for a home they want now, but they don’t think about what they’ll need for the future. It’s important to meet your current needs, but the future is just as important, if not more important than the present. Buy what works for the future you and you’ll be guaranteed to stay in love with your new home.

7 Ways to Lower Your Heating Bill

With fall in full effect and the impending winter close behind its smart to start thinking about your heating bill. Heating your house in essential for these colder months, but it can get rather costly. Here are seven ways to lower your heating bill, yet still keep your home warm and cozy.

1. Use a Programmable Thermostat
One of the easiest ways to lower your heating bill is to use a programmable thermostat. Or if you don’t have a programmable thermostat, at least use the one you already have properly. Turn down the thermostat 10 degrees when you go to work and bed or leave the house for an extended period of time. The U.S. Department of Energy says for every eight hours you turn your thermostat down, you can possibly save up to 15 percent on your heating bill.

2. Bundle Up
Lower your thermostat by bundling up. That’s right, layer on warm clothing when your home and you won’t feel the difference when you lower your thermostat. Don’t forget about socks! If your feet are cold, the rest of your body will also feel cold.

3. Check For Drafts
Windows and door are the biggest culprits for creating drafts in your house. In order to check for them use a candle or incense and hold it by the windows and doors. If there is a draft you will see the candle light flicker or the incense smoke will escape where the air is being let in.

4. Change Your Filters
Most people forget to change their filters and it is a costly mistake when it comes to your heating bill. A dirty filter can make costs skyrocket. The type of heater you have will affect when and how many times you should change your filter. If you have a gas heater, check the filter every other year. If you have electric or oil, check it once a year.

5. Close Your Fireplace Flue
If you have a fireplace in your house make sure to close the fireplace flue. This seems straightforward, but many people forget about it. If you don’t close the flue, it’s like having a huge hole in your roof letting the cool air in.

6. Use a Space Heater
Some people avoid using a space heater because they think it will make their electric bill higher. However, if you use the space heater properly you can still save on your heating bill without increasing you electric bill drastically. Keep the space heater where your family gathers and turn down the thermostat. Every degree below 70 can save you three percent on your heating bill. An electrical space heater that uses 1500 watts costs approximately 14 cents per hour to use. So your electric bill will go up, but the costs you save from heating will offset the cost of using a space heater. Check out these space heaters and find the perfect one for you!

7. Keep Heating Registers Clear
Don’t block your heating vents with furniture and rugs; make the most of the heat by moving any furniture and rugs away from vents. Also, if you aren’t using a room in your house close the door. There’s no sense in heating a room that isn’t used. So keep the heat where it’s absolutely necessary and stay warm all fall and winter long.

Steps To Choosing The Right Mortgage With Your New Home

For those who are ready to purchase a new home within the next year or two, it’s important to know the steps in the home buying process to not only save money on your home, but also save money on your mortgage. Here are some factors to consider before choosing the mortgage that is right for you and your new home:

  1. First things first, how much do you want to borrow? Mortgage calculators are available online and can even tell you how much you can be borrowing. Ultimately, it’s good to know how much you want to be spending a month or how much you want to give as a down payment. After you know your maximum monthly payment or down payment, you can decide what you feel comfortable with spending and choose a mortgage loan that works best for you.
    Need to know how much home you can afford before you start your home search?Check Judd Builder’s Mortgage Payment Calculator:
  2. The most common mortgage is the conventional loan and majority of buyers choose the 30-year fixed rate option. Conventional loans cannot be used by a home that is more than 4 units and a popular conventional mortgage program is the Conventional 97, which allows for a minimum down payment of just 3% on a home. FHA loans are insured by the Federal Housing Administration and are more popular due to the flexible approval standards and low down payment requirements.
  3. Fixed or adjustable rate? Depending on your financial situation and goals, either rate could be a good fit. For people planning on living in their home for a shorter period of time, adjustable- rate mortgages (ARMs) may be more beneficial. ARMs usually have lower interest rates in the first years and then can fluctuate to match current market trends. Fixed mortgage rates do not change. Homeowners keep the same interest rate for the entire life of the loan, which enables them to create a consistent housing budget.
  4. Your credit score is important to know before choosing a mortgage for your home. People with high credit scores get additional mortgage options and people with low credit scores get more aggressive mortgage rate options. Spending your money responsibly and paying your bills on time account for majority of your final credit score, along with the type of credit you use and how much credit your using at a time.

Having all the information you need as well as knowing as much as you can will help you obtain the mortgage that will be most suitable for you for you to live comfortably in your new home!

The Tax Advantages of Buying a Home

Holding house keys on house shaped keychain in front of a new home

Aside from having your own place and setting it up exactly how you want it, there are other benefits of buying a home, financial benefits. As a homeowner, taxes become more complicated than if you are renting but it is worth it when you see the money you will save at the end of the day.

How deductions work:

There are deductions and credits in the tax world. Credits are like a coupon, they are taken off of your bill. A tax deduction reduces your adjusted gross income, which then reduces your tax liability. So, if you’re in the 25% tax bracket, your tax liability will be reduced by 25% of the total claimed deduction. If you claim a $2,000 deduction you can expect your tax liability to drop by about $500.

The most common types of deductions include mortgage interest, real estate taxes, points and private mortgage insurance (PMI).

For the most part, you can probably deduct all of your home mortgage interest. There are some exceptions such as there being a $1 million yearly cap on the amount you can deduct but that probably doesn’t apply. You can even deduct late fees in many circumstances.

The money you pay in property taxes is deductible also. You’ll find the amount on your 1098 form if you pay for your taxes through a lender escrow account. If you pay directly to your municipality, you have personal records in the form of a check or automatic transfer.

With a new loan, you may have paid points to your lender. Points are normally priced as a percentage of the total. As long as you actually gave the lender money for these points, you will get a deduction. If you refinanced your loan, you get a deduction for points over the lifespan of the loan. Ever time you give a mortgage payment, points are put into the loan which can be deducted each month you made payments.

Private mortgage insurance: If you took out a loan in 2007 or later, you may be able to deduct your PMI. If you’re single and your gross income is less than $50,000, you’re eligible for the deduction. For those who are married, the starting point is $100,000.

For the full article on tax deductions when buying a home, click here.

Why Your Credit Score Matters

Inspector, document is my design and artwork. Thanks. Credit scoring expressed by a numerical formula based on an analysis of an individual’s credit files to assess the creditworthiness of that person. A score of 970 suggests that there is only a small degree of risk involved in approving any loan.

Your credit score: 3 simple numbers that largely determine quite a few important financial aspects including what type and how much credit you obtain, what interest you’ll pay and sometimes even if you are eligible for the job you want.

Here are some important things you need to know about your credit score:

  • The large three credit bureaus mainly focus on what you owe and your repayment history
  • The most commonly used credit score (a FICO score) has a range from 300 to 850
  • Standards can change, and for some lenders have increased as to what is seen as a good score
  • Experts have agreed on 720 being a good score and 740 will typically get you the lowest interest rates as well as the best terms

Your FICO score is based on five factors, weighted as follows:

  • Your payment history is 35 percent
  • Amount of debt you owe is 30 percent
  • Length of you credit history, where typically longer is better, is 15 percent
  • Amount of new credit you request is 10 percent. Too many requests, especially in a shorter period of time, is a negative
  • Types of credit you use is 10 percent

Checking your credit:

  • Consumers are entitled to one free credit report every 12 months
  • The three credit bureaus support the website
  • Your credit report will have detailed information: be sure to check for errors and fix them
  • Your actual credit score may cost a nominal fee, such as $10, but its an advisable investment

To improve your credit score over time; pay your bills on time, reduce debt, look out for errors in your credit report and pay off your bad debt and ask for it to be mark as paid on your credit report. Patience is important in improving your credit because it doesn’t happen fast but these steps are known to help your score.

Determining How Much You Can Afford to Borrow

Stamp printed on the approved loan application approved.

How can you be certain how much you can afford when applying for a loan? Many home shoppers find a quick fix answer on websites that provide an online calculator. Simply entering your monthly income, expenses and what you believe to be your credit score in a computer program won’t accurately predict what a specific lender will actually agree to lend you. More important, it won’t give you insights into the often flexible, case-by-case factors that lenders can use in order to get your loan application approved.

Here’s what really matters to lenders and how you can more accurately foresee whether or not you’ll qualify for a given loan amount.

1. Ratios are important: Every mortgage lender uses debt-to-income (DTI) ratios to judge your financial capability to repay a loan. It is used to measure your gross monthly household income and compare it to two types of debt: The money you spend each month on core housing-related expenses combined and the amount you spend on non-housing debts, such as credit cards, auto loans, student loans, etc.

2. Your Housing Ratio:

How much will your top housing-related costs be per month and what percentage of your income will they represent?

These housing costs include

  • Principal, interest, property taxes and hazard insurance on the loan you’re applying for
  • Homeowners association, condominium or cooperative fees that you are required to pay
  • Any additional fees required for your mortgage or property, such as flood insurance or mortgage insurance premiums.

3. Your total debt ratio: This ratio is the most significant. A lender will take your total housing expense and add all other recurring debt payments that you have, including credit cards, auto loans or leases, personal installment loans, student loans, child support and alimony payments.

4. Loan types matter a lot: For majority of new buyers, the type of mortgage they choose will have a large impact on what they can afford. There are four major types of mortgages:

  • Conventional: loans intended to be sold to Fannie Mae or Freddie Mac, the giant mortgage investment companies. These loans generally require higher down payments and stricter underwriting standards than government agency-backed loans.
  • FHA: Federal Housing Administration-insured loans are designed for first-time buyers and those with less-than-perfect credit histories.
  • VA: Provided by the U.S. Department of Veteran Affairs, these guaranteed mortgages are reserved for active duty and retired military personnel.
  • USDA: Also called a Rural Development Loan, these mortgages are intended to serve buyers in rural and small towns, where credit availability can be tight.

For more details on loan tips along with mathematical examples, click here.

5 Surprising Homeowners Insurance Facts

home insurance

Although necessary, Homeowners insurance can be rough on your budget, but there are smart ways to get high-quality insurance and save money too. Below you will find 5 surprising facts about what affects homeowner insurance quotes.

1. Credit Is An Important Rating Factor: Your credit history plays a role in things such as the interest rate you pay for credit accounts, and whether you can rent an apartment, but it also affects your insurance premiums. A past study from study found that if you have fair or median credit, you pay 29% more on average nationwide for home insurance than someone with exceptional credit. But if you have poor credit, your premium will almost double!

2. Making A Claim Affects Your Rate: No one wants to ever have to use their homeowners insurance, but it’s there just in case. In the unfortunate event that you have to turn to your homeowners insurance, not only is it a hassle to repair your home, but making a claim can make your rates shoot up! Depending on the type of claim you make and what area you live in, your annual premium could increase about 9% on average nationwide from just one claim.

3. A Previous Owner’s Claim Can Affect Your Rate: When it comes to claims history on a home, even any prior owners’ insurance claims made over the previous 7 years can affect the homeowner insurance rate that you have to pay. The reasoning for this is, an insurer sees a home/property with multiple claims as a higher risk for having more claims in the future, and may charge you more because of that.

4. Some Dog Breeds Are Blacklisted: Surprisingly, your loving pet can possibly cause problems with your home insurance. Since dog bites make up one third of claims and on average are $30,000 per claim, insurers may be particular about the breeds living in your home. Some are blacklisted all together and others you will have to pay an inflated rate. A few of the most commonly blacklisted breeds include Boxers, Great Danes, German Shepherds, Pit Bulls, Siberian huskies and Rottweilers.

5. Not Everything Is Covered: It is important to know that a lot of policies state in order for something to be covered by home insurance, it must be sudden and accidental such as natural disasters. Examples of things that may not be covered include mold or sewer backups. Also, some personal items have coverage caps. Jewelry, artwork, computer equipment, silverware or firearms may only be covered from $5,000 to $10,000. You should raise the coverage of any expensive belongings to make sure your policy pays out enough in the event that they are damaged.

To refer to the original article, click here!

Housing in the Second Half- Buyers, Renters & Homebuilders


According to CNBC, the second half of the year is mainly about affordability for buyers and renters. Housing prices still continue to rise, but at a slower pace than they were this time last year. Mortgage rates; however, on a straight path going up. The short supply of homes for sale will continue, which is keeping prices elevated. Fortunately though, at some point higher mortgage rates will hit affordability and could outdo that short supply.

Homebuilders  are struggling themselves by tight credit and a shortage of labor. They have not increased production much this year and it does not look like they are going to in the next six months. Builders are also only building for contract buyers. There will be an increase in new construction, but not enough to fix the supply issue.

It’s not getting any easier for renters in the near future and the demand continues to grow. The demand for occupancy is at a new high, which gives landlords the upper hand with pricing. As new homes form, majority of these occupants are renters. Renters do not tend to be turning into buyers, which will not change in the second half since high rents make it harder to save for a down payment.

The biggest change in the second half will most likely be a larger emphasis on mortgage credit availability. Lenders are seeing new regulations that will force them to be more careful but rising rates will make them want more business. Independent lenders will tend to be more flexible and creative with credit as they strive to get more business.

Reverse Mortgage Seminar at Meadow View Farms


Can a Reverse Mortgage really help Active Adults?

Now is your chance to find out – We’re holding a Reverse Mortgage Seminar on Saturday, March 21st at 11 am. Learn the pros and cons BEFORE you decide!

  • Laws have changed. Reverse mortgages aren’t like what they used to be.
  • Frees up money to provide an income.
  • Must be over the age of 62 to qualify.
  • Let your home equity work for YOU!
  • All questions will be answered by experienced senior specialists.

Please RSVP to Karen: by calling 610-987-0422 or email her at