Co-Signing a Mortgage: Is It Worth The Risk?
/in Divorced Women, Finances, NewslettersThere are several circumstances that require co-signing for a mortgage. The most common scenario involves a married couple. The two incomes combine to sufficiently cover the cost of the monthly mortgage payment. Other cases include parents co-signing for their child’s first home; adult children co-signing for their aging parents whose income has diminished at retirement; siblings or friends helping each other out. The fact is, most people with good credit and assets can co-sign for someone else. Whether the co-signer feels a familial obligation or they just want to help someone, the question remains: Is the risk worth the reward?
Let’s look at that married couple. What happens if they divorce in a few years and the wife remains in the home? While she has now taken over paying the mortgage, her ex-husband’s credit is still at risk, even though he is not making the payments. If she is late with her payment or defaults on it, they will equally share in the liability. There is an option to refinance, but what happens if the ex-wife does not qualify on her own? The ex-husband may choose to keep his name on the mortgage, especially when children are involved.
In the case of friends or family co-signing, it is important to understand that what began as an act of kindness can quickly turn into a regrettable decision. When it comes to your hard-earned credit, you must consider the history as well as the potential of the person you’re signing for: Why is their credit low? Do they have a stable job history? Will their income increase over time? Do you trust that this person with poor credit and/or limited assets will take on and consistently pay a monthly loan over 15 or 30 years?
Worst case scenario: As the co-signer, you are responsible for the loan if the homeowner defaults on the payment. If you already have a mortgage of your own to pay, you now have two. In addition, because the homeowner defaulted on the payment, your credit has taken a hit in the process.
None of this is meant to say that all co-signed mortgages are a mistake. Many of them work out perfectly with no issues. The point here is understand your responsibilities as a co-signer and if you choose to proceed, be ready to take on the full responsibility of the mortgage.
If you are recently divorced and need information about refinancing or if you have further questions about co-signing for a mortgage, please contact me at 617-965-1236 or email me.
April’s Home Library Improver
Marijuana: The Unbiased Truth About The World’s Most Popular Weed by Kevin P. Hill, M.D.
The Harsh Truth About Women and Finance
/in Divorced Women, Finances, NewslettersOne of the more memorable acceptance speeches delivered at this year’s Academy Awards was from Best Supporting Actress, Patricia Arquette. Her remarks about gender equality and the pay gap between men and women struck a chord that lasted beyond the show, and she recently spoke at an event sponsored by the United Nations on the same topic.
In 2015, it is shocking — though not surprising to some — that women would be paid less for doing the same job as men. Yes, times are changing but perhaps not fast enough in this case. Ms. Arquette made the comment that change starts with women.
I mention this because of a Boston Globe article written recently about how women lag behind men in financial literacy. This is another example where there should be gender equality. The gist of the article says that women scored lower than men in answering questions related to money and finances.
It also goes on to say that the women who were polled were more financially vulnerable than their male counterparts.
Whether or not a gender pay gap is a factor, the truth is that women today need to understand their finances as well as men for a number of reasons.
In the case of a divorce, a woman who may have relied on her husband now bears the full responsibility for her financial well-being.
Among married couples, we know that women tend to outlive their husbands and at some point they need to have a solid grasp of their financial situation.
Obviously there are many exceptions to the rule and plenty of women are both the breadwinner and the decision-maker of the family when it comes to finances. However, it is important that all women (and men, too!) learn and understand how their finances work so that they can make informed decisions at critical moments in their lives.
Here’s the link to the quiz to test your financial capability.
March’s Home Improver
Crocus Focus
There are a few sure signs of spring. First is the end of snow (which may or may not be the case after this record-setting year). Next, there are the clocks “springing ahead” to Daylight Saving Time. Finally, there is the emergence of the beautiful crocus plant.
The crocus is a perennial bulb that is a member of the iris family. It blooms in several colors, including purple, white and saffron. In fact, the spice saffron is made from crocus flowers.
Why does the crocus tend to bloom before other plants? One thing we know is that the crocus will bloom at the first reasonably warm day and will remain unharmed even with a few remaining snowstorms left in the season.
The crocus is also resistant to insects, though a hungry squirrel may have its way with it. Its hardy nature makes it a plant you can expect to see growing in your yard for many years to come.
If you plan to plant crocus bulbs, the best time to do it is in the fall. The bulbs settle in for a long winter’s nap before poking up through the soil at the first sign of spring. Some varieties of crocus actually bloom in the fall and should be planted in late summer. Clearly, this plant enjoys a change in seasons.
The crocus looks best when it grows under trees and in large flower beds. Your blooming crocus will display its stunning colors as its delicate leaves sway in the breeze. Following a brutal winter, this amazing flower offers hope for a warm and beautiful spring.
This Home’s Just Not That Into You
/in Divorced Women, Newsletters, TipsShopping for a new home is like starting a new relationship. At first, you’re attracted to the neighborhood, then you become infatuated by the beautiful bathroom and the extra closet space. You love that it’s near the local market and the dry cleaner. At first glance it’s so perfect, you forget to factor in any of the cons while going all-in on the pros.
Oops, it’s a pretty long commute to work. That’s OK, you tell yourself. It’s still worth it. Oh, and there’s only a tiny backyard. Well, you can always buy your produce at the market rather than starting that garden you’d always dreamed of — and forget about parking your new car in the garage that doesn’t exist. No worries, you think, at least I have that whirlpool bath. While soaking in the tub you realize that you’re not in the best school district and the mortgage payment doesn’t leave much room to make improvements.
Regret starts to creep in. Why did I dive head-first into this relationship? Why did I choose a home that didn’t meet all of my needs? Why didn’t I make a list of non-negotiables? Noisy traffic on busy streets, parking on an icy hill during winter — or trying to find a place to park anywhere in Boston, for that matter. If it was a nuisance in small doses, it could drive you crazy on a daily basis.
This is, sadly, a common situation for first-time homebuyers. It’s the one of the primary reasons why people rarely, if ever, stay in the first home they buy. A good home relationship starts when you temper the emotion of owning a new home with the practicality and long-term usefulness of it. So what should you look for in a rock-solid relationship with your home? Here are a few tips.
1. Shop Around. There’s no need to choose a home under pressure. It’s a rash decision that you may regret for years. Better to take your time with your decision, even if it means renting or living at home a little longer.
2. Never Settle. This is a tricky one. Depending on your financial situation, you may not be able to afford the perfect house in the perfect neighborhood with the perfect school system. That does not mean you should be happy with the first couple of homes you check out. Making a compromise should only happen after you feel you’ve seen the best of what is offered and you are comfortable accepting the terms of your mortgage. It is not uncommon for buyers to spend a year or more searching for the home that they can love for the next 30 years.
3. Work At It. People change. Lives change. Your home shouldn’t be a museum showing how you lived 20 years ago. Expect to improve your kitchen and bath, expand a room, or add an addition. These are financial considerations to make before the baby comes or your mother-in-law moves in or the kids go off to college.
4. Leave When It’s Time. Empty nest. Divorce. Aging. These are just three reasons to consider leaving your home and finding one that works for the person you are today. It can be a difficult situation, but too many people stay in home relationships that have soured — and that only leaves them bitter. Better to accept that it’s time to move on and remember what it was like when you fell in love with your first home.
The best place to start the process is with a mortgage professional who can answer all your questions. Call me today at 617-965-1236.
February’s Home Improver
Ice Dam Damage
Ice dams form on snow-covered roofs. The snow that melts first is the layer closest to the roof, due to the rising heat in your home. As the snow melts it runs down the side of your roof and freezes again, forming those scary-looking icicles and creating a frozen dam that prevents water from running into your gutters. The water prevented from the dams can find its way in through small holes in your roof, which can lead to damage of your walls, ceilings and basements.
Preventing ice dams starts with removing snow from the roof. Use of a roof rake is the best method. Shovels can damage tiles and create water seepage sites. Keeping gutters clear is also important, and removing dangerous icicles is necessary. If you feel the slightest bit uncomfortable on a ladder or on a roof, contact a professional. Too many falls and injuries have occurred this winter by non-professionals who thought they could handle the job.
In the spring — in advance of next year’s winter weather — consider a new roof or fixing the existing roof. Heating coils may also be installed on the roof to prevent ice dams from forming.
Stay safe and warm. Spring is just around the corner!
Age and Term-Related Mortgage Myths
/in Divorced Women, Newsletters, Refinancing, TipsWhen it comes to selecting the length of your mortgage, certain factors apply. There are some misconceptions about length due to age and income that don’t necessarily apply. Let’s bust some myths about mortgage term lengths.
Myth No. 1: A 15-year mortgage is always better than a 30-year mortgage. False. When you’re younger, you should expect your income to increase over time. If you have kids and enough money to afford paying down your principle quickly, then take on that 15-year mortgage — especially if you plan to tackle another major financial obligation: your children’s college tuition. On the other hand, as you move closer to retirement age, your income will probably level off or decline. In this case, playing it safe makes the most sense. Go with a 30-year mortgage with payments that you can make comfortably over time.
Myth No. 2: People over age 60 will not be approved for 30-year mortgages based on the fact that they could die before the mortgage is paid off. Yikes! Not true. A borrower’s age is never a consideration, thanks to the Equal Credit Opportunity Act. This is a protected category and is not to be considered during the application process. Your loan is determined by your income, savings, assets and credit history.
Myth No. 3: A 15-year mortgage will lower your monthly payment. Complete myth. While you will pay less interest over time, your monthly payment will be higher due to the fact that more of it goes to the principle reduction. If you are newly divorced or single, you’re working with only one income. A 30-year mortgage may work better for you in the long run.
Making these decisions can be difficult. There are so many factors to consider. The best thing you can do before making such a significant financial commitment is to call me at 617-965-1236. We’ll discuss all of your options so that you can make an informed decision that makes sense for you. I look forward to your call.
DIY Winterizing Tips
Stay warm and safe with these do-it-yourself fixes.
Although winter doesn’t officially arrive until next week, freezing cold temperatures have been invading New England for weeks. If you’re feeling a chilly draft or just want to prepare for when it gets reallycold in the next month or so, follow these easy, inexpensive ideas to keep the cold outside and the warmth inside.
1. Buy or make a door snake. Remember when you were a kid and your parents had a stuffed snake that you couldn’t play with because it was keeping the cold out? You can still find them. If you know how to crochet or know someone who does, a door snake will block out drafts for the price of a skein of yarn.
2. Switch the direction of your ceiling fans. Ever wonder why your ceiling fan moves in either direction? It’s not a lefty-righty thing. Because hot air rises, the ceiling fan should run in reverse (clockwise) at a low speed during the winter. This will cycle the warm air back down from the ceiling to where you are.
3. Seal gaps in windows. If you have old drafty windows, you should expect a big heating bill if you do nothing about it. Finding and caulking the gaps will accomplish two things: It prevents cold air from seeping in, but it also avoids wood rot by keeping moisture out. Here’s a tutorial.
What Is a PLA and How Can It Be Used for a Downpayment?
/in Divorced Women, Mortgage Tools, Newsletters, TipsOctober’s Home Value Improver
Outdoor Lighting for Safety and Curb Appeal
At this time of year, you may find yourself driving to work in the dark and driving home in the dark. This is a good time to view your home when the sun is not shining on it. How is the lighting? Are the walkways safe? Does your home have good curb appeal? Is it lit well enough to keep intruders away? These are important questions to ask, especially for divorced women who are single moms. Good lighting is used for more than beautifying your home. It’s also an important safety measure that all homeowners need to consider.
Here are some creative tips for outdoor lighting:
1. Pathway Lights. If there is a pathway to your front door, be sure to properly light it to avoid tripping on uneven pavement or avoiding ice that can cause slip-and-fall accidents. You don’t need very bright fixtures, but enough light to safely guide people to your door.
2. Patio Lights. Use indirect light for outdoor gatherings. Cool bulbs rather than harsh light make for a more comfortable outdoor event.
3. Doorway Lights. Install two small lanterns on either side of your door frame. For larger entryways, consider this option, but add a hanging lantern, centered above the door.
4. Landscape Lighting. If your home is set back from the street, it is recommended to have landscape lighting. A well-lit home without any landscape lights can look isolated and appear standoffish to your new neighbors. A few simple lanterns emitting soft white light will make a noticeable difference.
If you are looking for an outdoor lighting expert, I am happy to recommend one of my most trusted contacts. Call me at 617-965-1236.
The Diminishing Value of PMI and MI
/in Newsletters, RefinancingThe Spooky Truth About Candy Corn
Assembling Your Home Buying Dream Team
/in Mortgage Tools, Newsletters, TipsSeptember’s Home Value Improver
In case you hadn’t noticed, humans are amazing beings. We have immune systems to help us fight off sickness and recover quickly if we do come down with a cold, flu or other illness. Today we’re focusing on fungus, something that is not always detectable in your home, but can lead to a variety of illnesses.
The best advice to combat fungus is to keep your home clean. Wipe down surfaces, check your plants carefully, clean carpets and air ducts and replace filters regularly. If you notice any of the symptoms mentioned above, have them checked out by your doctor if they persist. Your body’s amazing immune system will fight off as much as possible, but a clean home and a visit to your doctor is the best defense from fungus-related sicknesses.
Don’t Take No for An Answer
/in NewslettersAt a social gathering last month, I met a young couple who, when they found out what I do, told me with glum faces that they were still renting. They were sure they would qualify for a mortgage, but instead they were turned down by their bank. After speaking with them the following week and assessing their ability to qualify for a mortgage, I was able to give them good news. I had found the right financial institution that would accommodate them.
It is typical for first-time homebuyers to think they’ll need to rent for several more years based on one response from one bank. After all, that kind of news can be devastating, and few if any banks will encourage them to look elsewhere.
When I tell my prospective clients never to take “no” for an answer, they immediately perk up. “You mean we still have a chance at owning a home?”
Of course they do, and here’s why: certain banks have very strict guidelines and lack the flexibility that is sometimes needed to get a mortgage approved. Just because they turned you down, it doesn’t mean you can’t secure a loan with someone else. All you need to do is call me to find out.
Some lenders have less flexibility when it comes to debt-to-income ratios and credit scores. Others factor in certain income calculation rates differently.
A bank may require 30% down, based on their assessment of your credit and ability to pay your mortgage. While that may be their standard, I may find a boutique lender that may require only 20% down. Because I work with multiple resources, I don’t have to accept the restrictions that certain banks are bound by–and that allows me to find the mortgage that is right for you.
This is why I ask anyone considering a new home buy to contact me rather than heading over to the bank. However, if you’ve already been turned down by a bank, give me a call at 617-965-1236. I’m in the business of saying “yes.”
August’s Home Value Improver |
The Truth About Earwigs There’s a long-standing urban legend that talks about the earwig, a devilish bug that crawls into your ear while you sleep and lays its eggs in your brain. Once the eggs hatch, the young earwigs feast on your grey matter. Gross! But, thankfully, untrue. There have been no documented cases of young earwigs feasting on an unsuspecting person’s brain. The earwig, however, can cause trouble, but nothing related to your brain or other body parts. Earwigs are nocturnal bugs that eat other insects and lots of plants. Reddish-brown in color, they have a pair of pincers jutting out the back of their abdomen. They prefer cool, damp hiding places. Ever lift up a flower pot and see one of those ugly things scurry away? They’re probably resting after eating a leaf or two of your favorite plant. How do you control your earwig population? You can find most of them outdoors or in your basement, near the coolest, dampest things in the area. Outside, leave it to the birds to dine on these scavengers. In your home, it’s best to eliminate moisture, particularly in the basement and around crawlspaces, leaky pipes and the foundation. In the unlikely event that your basement is overrun by earwigs, your local pest control agent should be able to take care of it with one visit. Now that you know more about earwigs and aren’t afraid of them eating your brain, you should check for insects living in your basement and decide if an exterminator is needed to keep your home free of pests. |
Why National Mortgage Trends Are Irrelevant
/in Newsletters, Tips, TrendsYou may have read an article in The Wall Street Journal or watched Diane Sawyer on ABC talking about housing market trends and alerting you of the best times to buy or sell your home. While the trends may be accurate on a national level, they may be entirely different when you consider them from a local — or even regional — perspective.
There are a few factors that cause these incongruities between national and regional trends. This past winter was so oppressively cold that only a few brave souls were diligently working on buying or selling their homes. This left the northeast region behind some other regions in home sales. Now that the weather has improved, we’re seeing a market correction, of sorts. More people are aggressively vying to buy in a market with limited inventory. According to the National Association of Home Builders, the Housing Opportunity Index (HOI) for a given area is defined as “the share of homes sold in that area that would have been affordable to a family earning the local median income, based on standard mortgage underwriting criteria.” HOI is a good indicator of determining trends because it takes both median income and affordability into consideration. Statistics show that Boston’s HOI has been in decline since 2012, largely due to a decrease in median household income combined with an increase in the median price for home sales. Nationally, the average percentage of affordable homes is 66%. Locally, the percentage is just 51%, a full 15% lower than the national numbers. We can conclude from this that national numbers can’t be assumed to coincide with the local Massachusetts housing market. So when Diane Sawyer tells you to buy, sell or hold tight, it’s best to contact me for advice that comes from a locally informed source. I will gladly discuss all the concerns you have about timing your new home purchase and give you the best advice for your individual needs. |
July’s Home Value Improver |
Garden Pest Terminator: The Ladybug Are you fighting a losing battle in your garden? Are the bugs eating your vegetables before you get a chance to enjoy them? It’s no wonder farmers turn to pesticides to eradicate those flying and crawling garden pests. But half the fun of raising your fruits and vegetables yourself is to enjoy your own completely organic, toxin-free foods. So what’s an enterprising gardener to do? The solution: Ditch the pesticides and order up a big batch of ladybugs. The ladybug is a natural, cost-effective eliminator of common garden pests. They especially love aphids, but will consume other bugs, worms and mites. They may come in a cute package, but they are a generalist predator and will keep your unwanted bug population under control. You can pick up your ladybugs at some garden centers or you can simply order them online from Amazon (yes, they really have everything at Amazon, including boxes of 1500 live ladybugs, costing under $20). Once your ladybugs arrive, wait until evening. Watering your plants before releasing them is a good idea, as the ladybugs may feel dehydrated from being in captivity. Doing this at night gives your ladybugs the best chance to remain in your garden as they acclimate themselves quietly overnight. Will your ladybugs fly away? Yes, many will. However, the ones that stay will almost immediately start laying eggs, keeping your ladybug population flourishing. If you happen to notice a small black and red insect that looks like a spiny little alligator, that’s a ladybug larva. They may start off homely, but they hatch ready to eat your unwanted bugs. Put those ladybugs to work and enjoy the harvest of your own organic garden. |
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