Pam Spiros' Blog
If the thought of getting a mortgage and being in that much debt is stopping you from buying a home, plan to pay it off. Here’s how you can do it in just five to 10 years.
- Live well below your means. If you can keep your mortgage payment to below twenty percent of your take-home pay, you’re on your way. That means that instead of buying a larger house in an upscale community, buy the nicest one you can in the neighborhood you can afford. When you do this, you’ll not only save on the payment but your energy and maintenance costs will be lower, as well.
- Take a 15-year mortgage. Instead of the typical 30-year loan, opt for the 15-year choice. Your payments will be slightly higher, but they won’t be double. Use an online mortgage calculator to see the difference in the payment. You’ll be surprised at how much more affordable cutting the loan length in half can be.
- Use an early mortgage pay-off calculator. Try plugging in different payment amounts to see how quickly you can pay it off. Adding as little as $100 extra each month can massively reduce the years to completion.
- This next idea is easy if you get paid weekly or bi-weekly. Instead of making your mortgage payment once a month, pay half of it every two weeks. Using this trick allows you to make an entire extra payment each year, cutting months and years off your mortgage. If you do it to match your bi-weekly payments, you won’t even notice the additional payment out of your household budget.
Your Agent Can Help
When you’re looking for just the right house to put your plan into action, your knowledgeable real estate agent can find you the perfect one. Let them know what you’re trying to accomplish so that they match you to the right house at the right time.
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For those who want to acquire a house, it helps to get your finances in order. That way, you can quickly and effortlessly navigate the homebuying journey without having to worry about how you'll afford your dream house.
There are many quick, easy ways to straighten out your finances before you embark on the homebuying journey, such as:
1. Assess Your Credit Score
Your credit score ultimately can play a major role in your ability to secure a great mortgage. If you understand your credit score, you may be able to find ways to improve it prior to conducting a home search.
It is important to remember that you are entitled to a free copy of your credit report annually from each of the credit reporting agencies (Equifax, Experian and TransUnion). Request a free copy of your credit report today, and you can take the first step to evaluate your credit score.
If you find that your credit score is low, there is no need to worry. You can always pay off outstanding debt to improve your credit score over time.
Also, if you identify any errors on your credit report, you'll want to address these mistakes immediately. In this scenario, you should contact the agency that provided the report to ensure any necessary corrections can be made.
2. Look Closely at Your Monthly Expenses
When it comes to buying a house, it generally helps to have sufficient funds for a down payment. The down payment on a house may fall between 5 and 20 percent of a home's sale price, so you'll want to have enough money available to cover this total for your dream residence.
If you evaluate your monthly expenses, you may be able to find ways to save money for a down payment on a house.
For example, it may be beneficial to cut out cable TV for the time being and use the money that you save toward a home down payment. Or, if your dine out frequently, cooking at home may prove to be a substantial money-saver that could help you speed up the process of saving for a down payment.
3. Get Pre-Approved for a Mortgage
With pre-approval for a mortgage, you can enter the housing market with a budget in hand. Then, you'll be better equipped than ever before to narrow your search to houses that fall within your price range.
To get pre-approved for a mortgage, you'll want to meet with banks and credit unions. These financial institutions can teach you about different mortgage options and help you assess all of the options at your disposal.
Furthermore, don't hesitate to ask banks and credit unions about how different types of mortgages work. This will enable you to gain the insights that you need to make an informed decision about a mortgage based on your financial situation.
If you need extra help as you prepare to pursue a house, you may want to hire a real estate agent as well. In fact, a real estate agent can help you find a high-quality house at a budget-friendly price in no time at all.
Is your house leaky? According to the EPA (US Environmental Protection Agency), household water leaks account for up to a trillion gallons of water wasted each year. According to their calculations, the average home leaks about ten thousand gallons annually or more than 90 gallons every single day. So how do you tell if your home is leaking?
First, pull out your water bills from the past year. Organize them by the months of colder weather when you’ll use less water for landscaping purposes and hotter weather when you’ll use more. In the winter months, December through February, the monthly average for a family of four should be under 12,000 gallons. If it’s more than that, you may have a leak.
Where does the leak come from?
The most common source of leaks is a worn toilet flapper or a dripping faucet. When you hear a hissing sound from the toilet tank, or it flushes randomly, you need to update the flapper. Dripping faucets start slowly, but unless you correct the problem, the leak only gets stronger. In fact, homeowners can save around ten percent on their water bills by merely fixing a few leaking fixtures.
How do you find them?
Turn off all the running water in your home, then read your water meter. Wait for two hours with no water use and then reread the meter. If the meter changes, it’s likely that you have a leak. Note that some water utilities have electronic meters with smartphone apps so you can track water leaks while you’re away from your home.
To determine if your toilet leaks, you’ll need some food coloring. Add one to two drops to your toilet’s tank. Wait for about 10 minutes to see if any of the colored water appears in the bowl. If you see it, that means your flapper does not seal properly and needs replacing. Once you’ve determined if it’s leaking, you should make sure to flush your toilet right away to completely expel the colored water from the tank to avoid staining your toilet bowl. A leaky faucet or showerhead is more straightforward. Often, you’ll see the drip coming from the fixture. Other times you’ll see a rust stain on the sink bowl or tub from the slowly dripping water. Other leaks can come from the connectors under sinks and behind toilets. If the valves are damp it could merely be condensation, so wipe them dry and leave them exposed to the air (leave cabinet doors open). Recheck them in an hour or two. Also, check for mold or mildew build-up since damp, leaky areas promote their growth.
Another area to find a hidden leak is in your landscaping. If your grass is greener in one area, or the ground sinks in when you step on it, you may have a broken sprinkler pipe. Landscaping and sprinkler professionals can trace the leak for you so that you can have it dug up and repaired.
How do you fix them?
If you’re handy, you can purchase a new flapper seal at your local hardware or DIY store. You’ll find instructions on YouTube, other websites or you can inquire about it while in the store. Leaky showerheads and sinks might need new gaskets, so start there. If your faucet’s fittings are inside walls, or it’s a complex system such as a touchless fixture, seek professional help in tracking down the leak and replacing seals and gaskets. Some leaks in valves and pipe joints only need plumber’s tape or pipe glue, but others might require replacing. To avoid flooding your home, let a professional handle the more complicated repairs.
For a referral to a plumbing or landscaping professional near you, ask your knowledgeable real estate agent.