Get Out of the Rent Rut

Renting an apartment isn’t always a bad idea, given your financial situation, but sometimes we find ourselves stuck in place without the proper information to get out of the rent rut. Many first-time home buyers have no idea they can qualify for an affordable mortgage. So how does one get out of the rent rut? Here are five ways to get on the path to buying a home of your own.

1. Check your credit score. Your credit rating has a direct effect on your interest rate. Work on improving your credit by paying down credit card debt and making timely payments on your bills.

2. Make a list of your assets. Sometimes people don’t realize they have more than they think. Apart from money in the bank, you can also count as assets items like your 401(k), mutual funds, profit sharing and other financial means.

3. Length of lease. Work backwards from the end of your lease. You may find that you can pre-qualify for a mortgage long before your lease is up. That means you should start this process as soon as possible. If your lease is up soon, you may convince your landlord to go month-to-month or offer a six-month lease to make it easy for you to move when the time is right, without getting locked into another long-term obligation.

4. Measure income vs. expenses. If you make a good salary but have a significant amount of debt that accrues monthly, you’ll need to see how much you’re left with after making your payments. Having a positive cash flow after the bills are paid each month is critical.

5. Ability to raise funds. Do you have the resources to raise funds for your downpayment if necessary? You may have good credit and some money in the bank, but you’ll need to be able to show your ability to pay over time. Barely squeaking by won’t fill the bank with confidence that you can comfortably make your loan payment each month. Look to family for financial support. If that’s not an option, consider borrowing against your 401(k). You’ll want to see what the penalty is for it, but sometimes it’s well worth borrowing against the future to build wealth today. Remember that apart from living in the home you thought you would never own, you’re also making a solid financial investment that could pay huge dividends when you sell it years from now,

Getting out of the ren rut is not always easy, but it absolutely can be done. If you are a first-time homebuyer or know someone who may be ready to buy without even knowing it, please get in touch or ask them to call me at 617-965-1236. I would be happy to answer any questions and give sound advice on how to secure a mortgage without breaking the bank.

Home Improvement Do’s and Don’ts

When it comes to increasing your home’s value, certain projects will instantly do the trick while others are risky and can have an adverse effect on buyers. Here’s a list of do’s and don’ts for home improvement.

Do Remodel Your Kitchen The kichen is one of the first rooms that buyers look at when making a decision on buying, According to HGTV, you can expect to recoup 60%-120% of your investment on a kitchen remodel.

Don’t Go Too Far with Your Kitchen Remodel If you go way over-the-top and your kitchen doesn’t fit with the rest of the house, this can make the other rooms look less impressive.

Do Improve Your Back Yard. Curb appeal from all angles of the house is a huge plus when it comes to selling your home faster. A manicured lawn, proper fencing for pets, and a fresh coat of paint on the garage goes a long way.

Don’t Install an In-ground Swimming Pool Have you looked outside? This isn’t Miami. A new pool can cost as much as $75,000 to install and would be used for only a fraction of the year. Don’t forget about maintenance costs: you’ll need to spend at least $1000 in insurance, not to mention maintenance costs to keep the pool clean and safe for swimming.

Do Install Energy-efficient Windows Energy Star claims that adding Energy Star-rated windows can save you up to $500 a year in heating and cooling costs. This is a big factor to home buyers given the high expense of keeping out drafts in the winter and keeping your home cool in the summer.