"If you have been patiently savng for a down payment or had your eye on some local move-up properties, you may wonder if it's time to make a move. Keep these tips in mind as you ponder your nest Boulder County home.
Why You Shouldn't Worry about Rising Interest Rates
When mortgage interest rates rise, you may be tempted to put your home buying plans on hold, but there are three reasons you shouldn’t let higher interest rates deter your home buying plans.
Solution? When you shop for rates, shop at least three lenders using the same type of loan – 30-year fixed rate, adjustable, hybrid and so on. Do so at the same time because rates can change as much as several times daily.
Solution? Talk with your lender about ways to improve your credit profile. If you’re stretching to buy a home, expect to pay higher interest rates.
The solution? Have some perspective. Home buying conditions change constantly. Focus on building equity with the lifestyle you want instead.
Interest rates fluctuate. Mortgage interest rates rise and fall based on the lender’s viewpoint toward the economic outlook. News that suggests a slowing economy tends to bring rates down, while a rosy manufacturing or jobs report can send them back up.
You have some control over rates. The rates you see advertised aren’t what you’ll necessarily pay. They’re available only to those with the best credit histories, those who are able to put at least 20 percent down, and those borrowing well within their means.
Rates are currently a bargain. Between 1972 and 2008, mortgage interest rates averaged about nine percent annually. Today, they’re around four percent. A 1/8th point translates to about $25 or less a month in monthly payments on a conforming loan, or $9,000 over 30 years in tax deductible costs.
HOMEBUYERS' ADVICE
How Much Home Should You Buy?
To buy the home that’s right for your household, you have a lot of decisions to make including, location, size, bedrooms and baths, and features. That’s when you should ask yourself: How much home can you really afford?
Nearly every buyer compromises on something, like getting a fixer-upper house instead of a new home, or buying a smaller home in a more expensive neighborhood. But you have to know how much you can spend before you make those decisions.
Lenders qualify you for a mortgage with a conforming loan standard that uses two ratios – income to mortgage debt, and income to total debt.
To qualify for a federally -insured 30-year fixed rate conforming loan, your income to mortgage debt can be no higher than 31% of your gross annual income, and your debts plus mortgage payment can be no higher than 43% of your gross monthly income, according to FHA.com.
If you make $5,000 gross income per month, under a conforming loan standard, your house payment (principal, interest, mortgage insurance, hazard insurance and taxes) should be no larger than $1,550.
If you’re carrying credit card debt, student loan debt, or paying child support, the monthly debt service must be factored in. To get the income- to-debt ratio, multiply your monthly income by 43%. With an income of $5,000, your total debt including your house payment can be no larger than $2,150.
Once you know how much home you can comfortably afford, it’s easier to choose the neighborhoods and homes that are within your range.
To refresh the smell of plastic storage containers, toss a ball of newspaper into the container and seal the lid- the smell will be gone in a few days.
Handy Landscaping Tips
Turn a long-handled tool into a measuring stick by marking inch and foot marks on it. Use this when planting flowers and bushes that need to be seperated by suggested distances.
