Blog – CTeBockhorst's Blog

House Poor: What It Means And How To Avoid It

January 12, 2023 by Coleen TeBockhorst

House Poor: What It Means And How To Avoid It There is a good chance you have heard someone described as being house poor. What exactly does it mean? It is important to understand what it means to be house poor and how you can stay away from it.

House Poor Means Spending A Significant Chunk Of Your Income On Housing

Being house-poor means different things for different people. In general, it means spending a significant amount of your monthly income on recurring expenses related to your house. A few examples include your mortgage, the interest on your mortgage, your property taxes, and HOA expenses. Owning a house can be expensive, and it is important for you to budget carefully. In general, you could not spend more than one-third of your monthly pay on your rent or your mortgage. If you are spending significantly more than this recommendation, you might qualify as house-poor.

How To Avoid Becoming House-Poor

Fortunately, there are several strategies you can follow if you want to avoid becoming house-poor. First, make sure you budget ahead of time. Understand exactly how much money you can spend on your home, and make every effort to stick to that number. Furthermore, before you purchase a house, make sure you get a home inspection completed. There are a lot of people who have their savings wiped out by unforeseen expenses. If you get an inspection before you buy a house, you can plan for those ahead of time. Finally, make sure you reduce your debt-to-income ratio before you buy a house. That way, you can qualify for the best home loan possible.

Do Not Spend More On Housing Than You Can Afford

In the end, it is critical for you to avoid spending more money on your house than you can afford. Remember that you should not spend more than one-third of your monthly pay on housing. If you do, your budget may be stretched thin and other areas, and you might have a difficult time covering other expenses. Do not hesitate to reach out to an expert who can help you find the right house for yourself and your family.

The Most Commonly Forgotten Item On The Home Budget List

January 10, 2023 by Coleen TeBockhorst

The Most Commonly Forgotten Item On The Home Budget List If you are in the process of purchasing a home, it is critical for you to make sure that you budget appropriately. Unfortunately, there are a lot of people who commonly overlook closing expenses. Even though it is important for you to have enough money for your down payment, you need to make sure you cover closing costs as well. What is included in closing costs, and how much money do you need to budget?

The Recommended Amount

Even though it is tempting to focus on the cost of your house, it is also critical to think about closing expenses. Usually, closing expenses are approximately two percent of the value of your home. For example, if you are planning on purchasing a house for $250,000, your closing expenses will probably be about $5,000; however, there is also a chance that your closing costs could be more or less than that. You should work with a professional who can help you estimate your closing expenses.

Examples Of Items Included In Closing Costs

As you go through the process of buying your house, there are a lot of moving parts that have to come together to complete the transaction. There are several examples of items that could be included in your closing expenses. For example, you may have to pay an origination fee attached to your loan, and you will have to cover attorney’s fees for the closing attorney as well. You will need to purchase title insurance and conduct a title search, and you might also have to pay for the home inspection and home appraisal. If there is an HOA in the area in which you are buying your house, you may have to pay those when you close on your house as well. You should get a breakdown of these expenses ahead of time.

Ensure You Have Money For Closing Costs

You have worked hard to find the perfect house. You must make sure you have enough money to cover not only the down payment but also your closing expenses. If you have questions about how much money you will have to pay for closing costs, reach out to a professional who can help you.

What’s Ahead For Mortgage Rates This Week – January 9, 2023

January 9, 2023 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - January 9, 2023 Last week’s economic reporting included readings on minutes of the most recent Federal Open Market Committee meeting and its customary post-meeting press conference, labor-sector data on public and private-sector jobs, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also released.

FOMC Meeting: Policymakers seek a balance between high inflation and rising rates

The minutes of the Federal Open Market Committee meeting held on December 13 and 14 reflect committee members’ concern over controlling rapidly growing inflation while avoiding a recession. While committee members said that they made “significant progress” in raising rates to cut inflation, members said they needed to avoid raising rates too fast and creating a recession. Policymakers asked for “flexibility” from investors and consumers.

The Fed’s monetary policy actions depend on economic developments; if high inflation persists, policymakers will likely continue raising the Fed’s target interest rate range. If inflation eases, so will the Fed’s pace of raising its target interest rate range. The Fed re-asserted its goal of achieving two percent inflationary growth. The meeting minutes emphasized that the Committee’s decision to slow the pace of interest rate growth did not indicate any changes to the Fed’s goal of two percent inflation.

Mortgage rates rise, jobless claims fall

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by six basis points to 6.48 percent. The average rate for 15-year fixed-rate mortgages was five basis points higher at 5.73 percent.

204,000 new jobless claims were filed last week, which fell short of the expected reading of 223,000 initial claims filed and the previous week’s reading, also of 223,000 first-time claims filed. Continuing jobless claims fell to 1.69 million claims filed as compared to the previous week’s reading of 1.72 million ongoing claims filed.

The national unemployment rate fell to 3.5 percent in December as compared to 3.6 percent n November and the expected unemployment rate of 3.7 percent.

What’s Ahead

This week’s scheduled economic reporting includes readings on month-to-month and year-over-year inflation and weekly readings on mortgage rates and jobless claims.

Pet Safety Checklist

January 6, 2023 by Coleen TeBockhorst

Many people view their furry friends as members of the family. If you have pets at home, you need to make sure they are well taken care of. That means taking a closer look at an important pet safety checklist. What are a few of the most important items you need to include on this checklist if you want to make sure your dogs and cats are safe?

Regular Checkups Are Critical

First, you need to make sure that you take your pets to the veterinarian at least once per year. Just as you go to the doctor once per year, your pets need to go to the doctor once per year as well. Regular check-ups are important because the veterinarian could identify issues that you might not otherwise have noticed. In addition, this gives a veterinarian an opportunity to make sure your pets’ vaccinations are up-to-date.

Spay Or Neuter Your Pets

Unless you plan on having kittens or puppies, you also need to make sure that your dogs and cats are spayed and neutered. There are already far too many animals in animal shelters, so if you are not planning on breeding dogs and cats, you do not want to add to the population unnecessarily. There might be opportunities for you to get this operation financed, which could make it more affordable.

Lock Up Unsafe Items

Keep an eye on your home environment as well. Keep a close eye on how much human food you give your dog or cat. There are certain items that are simply not healthy for dogs and cats, and some items could be poisonous. You should also make sure that any cleaning supplies are locked behind a cabinet door. That way, your pets do not ingest anything that could poison them.

Protect Your Furry Friends

These are a few critical steps that you need to take to make sure your dogs and cats are safe. If you are interested in learning more about the steps you can take to protect your furry friends, consider reaching out to a veterinarian who can help you.

Owning vs Renting: Why High Rents Are Worse Than a Mortgage over the Long Term

January 5, 2023 by Coleen TeBockhorst

Owning vs Renting: Why High Rents Are Worse Than a Mortgage over the Long Term If you’re at the stage in life where home ownership is nearly within your reach, you’re probably wondering whether you should start looking for a home or whether you should just keep renting. Renting is easier, people say, and it gives you more mobility. But over the long term, all that rent money can really add up – and it eventually reaches a point where buying a home is a better deal.

So why is paying a high rent a worse option than buying a house and getting a mortgage? Here’s what you need to know.

Renting Doesn’t Generate Equity

One of the single biggest sources of wealth in the United States is home equity – as you pay down your mortgage, you invest more and more of your money into your property, and it appreciates in value. When you eventually sell that home, you make a profit. The monthly payment is something you’d have to make anyway, whether you rent or own – but when you rent, your monthly rent money lines someone else’s pockets, while when you own, paying down your mortgage actually creates wealth for you.

Renting Doesn’t Give You Access To Homeowner Tax Credits And Deductions

There are all sorts of tax benefits available to homeowners that renters simply can’t access. As a homeowner, you can deduct your mortgage interest from your taxes owing, reducing your taxable income – but there’s no such deduction for renters. You can also deduct property taxes and some closing costs when you buy a home – there are no corresponding tax benefits for renters.

There are also several tax credits available to homeowners that aren’t available to renters. Things like renovations or simply buying a home for the first time can give you tax benefits that renters can’t access.

If You Can Muster Up A Down Payment, Owning Is Cheaper In The Long Run

One of the biggest hurdles keeping young people out of the real estate market is the down payment. It’s not easy, but if you can save up enough money for a down payment, you’re actually better off buying a home than continuing to rent.

According to Trulia, the median home price in metro Houston in Texas is just under $163,000, while the median monthly rent for an apartment is $1,550. That means renting would cost $18,600 per year, while buying a home (assuming a 20% down payment and 30-year term) would cost $9,384 per year in mortgage payments. In other words, owning is about half as expensive as renting in the long run.

Renting may be a good short-term solution, but over the long haul, owning is almost always better. Call a local mortgage professional to learn more.

How To Keep Your Address Private

January 4, 2023 by Coleen TeBockhorst

How To Keep Your Address Private There are not many parts of your life that are private anymore. Today, it is relatively easy for someone to go online and look up your address in just a few minutes. At the same time, there are some people who have an easier time keeping their lives private. Celebrities, public officials, and other people who are frequently in the public light are able to conceal their addresses. Even if you aren’t famous, what do you need to do to hide your address?

Talk To A Real Estate Agent

If you want to keep your address private, the first thing you should do is talk to your real estate agent. There is a great chance that they have worked with someone who wanted to keep their address private in the past, and they can provide you with a list of steps you should take. Make sure the home you purchase is pulled off the MLS quickly. That way, someone has to go to the local Town Hall if they want to look up your home.

Use A Trust

You may also want to consider placing your home in a trust. A trust will specify how your assets are distributed after you pass away. You can use a trust to hide real estate purchases, meaning that only the name of your trust is going to be listed in public records. That way, people cannot find your address by simply looking it up online, as they will simply see your trust represented.

Form An LLC

You may also want to consider forming an LLC, also known as a limited liability company. The vast majority of locations do not restrict LLC ownership. This means that you can set up an LLC, specify the LLC as the owner of the property, and keep your name out of the public light. You may want to reach out to an attorney who can help you form an LLC.

Keep Your Address Hidden

The internet is a powerful tool, but you should not resign yourself to having your address listed online. Consider checking out a few of these options, and reach out to a professional if you would like help hiding your address after you purchase a new house.

Creative Holiday Storage Solutions

January 3, 2023 by Coleen TeBockhorst

Creative Holiday Storage Soluttions Every holiday season when you get out the decorations, there always seems to be a period of organization where you need to untangle lights, sort out the broken ornaments and just get all of the trimmings in order.

Next year, skip the hassle of sifting through everything. The year-to-year holiday storage strategies below will help make next December’s decorating easy.

Hide Paper Up High

Utilize a space that is always vacant — the ceiling of your closet. Attach two strings of wire from the front wall above your closet door to the back wall. Make them parallel to each other and about two feet apart. Then you can slide your wrapping paper tubes across the two wires. No more crinkled or torn paper!

Bag Your Lights

The hassle of untangling holiday lights every year can become a dreaded tradition. A smart solution is to invest in inexpensive gallon-sized sealable bags. Label what each bag’s lights are for, such as the tree, mantel or outdoors.

Wrap individual strands around your arm and them place them inside the appropriate bag. Put all bags in one holiday storage container.

Recycle Wrapping For Your Breakables

After you’ve ripped off the wrapping and gotten to the goods, don’t just throw your pretty paper out. Reuse it! Run it through the shredder to create fun filling for the boxes that hold your ornaments and breakable decorations.

Get Crafty With Labels

Instead of writing straight onto the holiday storage bins, tape or glue festive envelopes to the side. Then you can write a list of everything in that box and put it in the envelope.

For those who like everything clean and organized, this means that if you switch out anything in the box, you don’t have to mark it out on the side — just change the paper inside the envelope.

Display Holiday Cards Creatively

Receiving holiday cards is a great way to keep in touch with distant family and friends. Instead of throwing the cards away each January, use a hole punch to create two holes in the sides of the card.

Then insert jump rings to make little picture memory books that you can display on the coffee table every year. For more around the home tips or if you are looking to buy a home with plenty of storage space, contact your trusted real estate professional.

What’s Ahead For Mortgage Rates This Week – January 2, 2023

January 2, 2023 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - January 2, 2023 Last week’s economic reporting included readings on U.S. housing markets, pending home sales, and weekly readings on mortgage rates and jobless claims.

S&P Case Shiller Home Price Indices: Month-to-moth home prices fall in October

U.S. home prices fell in October for the fourth consecutive month. Wavering demand for homes was caused by rising mortgage rates and high home prices in many regional markets. The 20-City home price index showed the top three cities with the highest month-to-month home price declines were Miami. Florida with a -1.0 percent decline, Tampa, Florida where home prices declined by -0,8 percent, and Charlotte, North Carolina where home prices dropped by -0.9 percent month-to-month in October.

Year-over-year home prices rose by 21 percent in Miami, Florida; year-over-year home prices rose by 20.5 percent in Tampa, Florida. Charlotte, North Carolina reported a year-over-year home price gain of 15.0 percent as of October.

The Federal Housing Finance Agency reported that home price growth was flat from September to October as compared to a month-to-month gain of 0.10 percent in September. Analysts said that high home prices and mortgage rates have decreased demand for homes as would-be buyers face affordability issues and strict mortgage credit requirements.

Mortgage Rates Mixed, Jobless Claims Rise

Freddie Mac reported higher fixed mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by 15 basis points to 6.42 percent. Rates for 15-year fixed-rate mortgages fell by one basis point to an average of 5.68 percent.

New jobless claims rose last week to 225,000 initial claims filed as compared to 216,000 initial claims filed in the previous week. Analysts expected a reading of 223,000 first-time jobless claims filed. Ongoing jobless claims rose last week with 1.71 million continuing jobless claims filed as compared to 1.67 million continuing jobless claims filed in the previous week.

What’s Ahead

This week’s scheduled economic news includes readings on construction spending, minutes of the most recent Federal Open Market Committee meeting, and public and private-sector jobs data. Weekly reports on mortgage rates and jobless claims will also be released.

4 Financial Benefits of Home Ownership

December 30, 2022 by Coleen TeBockhorst

4 Financial Benefits of Home Ownership Home ownership may be one of the most familiar goals of adulthood, but there’s more than one reason why so many people flock towards this type of investment and leave the rental market behind. If you’re trying to decide if you should make the big plunge towards buying, here are some benefits of saving up for a down payment and finding the right place to settle in.

It’s More Economical

Many people eschew home ownership simply because it can be hard to wrangle together the funds for a down payment. However, while a monthly rental is money you’ll never see again, the money you put down on a mortgage is being invested back into your home, making for a solid investment you can capitalize on later.

Instant Tax Deductions

The interest that you pay on your mortgage payment can be one of the most tumultuous aspects of purchasing a home, but you may not know that you actually have the ability to deduct many associated costs on your taxes. From origination fees to property taxes, there are plenty of costs that go along with your home that can be claimed for a refund when tax time comes!

Paying A Lower Price

The real estate market fluctuates every day, but one thing is for the certain: the median price of a home is on the rise. While low inflation rates may not be ideal if you’re selling, they can mean a better deal if you’re delving into the market for the first time. Just remember, it’s important to buy a home you can afford as anything that goes beyond your budget is not a solid investment.

A Built-In Savings Account

It may be important to have liquid assets outside of the equity you have in your home, but many people struggle to pay off their home and save money at the same time. While saving outside of your monthly mortgage payment is still important, putting money down on a home is an act of investing, and it’s one you’ll likely make a solid profit on when you decide to sell.

There can be many financial benefits to renting in the short term, but purchasing a home is a more solid financial decision when it comes right down to it. If you’re considering a home and would like to know more about your options, you may want to contact one of our mortgage professionals for more information.

Graduating From College? 3 Things You Need to Know About Mortgages and Student Loans

December 29, 2022 by Coleen TeBockhorst

Graduating From College? 3 Things You Need to Know About Mortgages and Student Loans Are you thinking about buying a new home using a mortgage loan? If you’ve just graduated from college, you’re probably wondering how your student loans will impact a mortgage and what your options are. In today’s post we’ll share three things that you need to know about mortgages if you’re still working on paying off your student loan debt.

#1: Yes, Your Student Loan Will Affect Your Application

You might as well embrace the fact that your outstanding student loan is going to cause some questions to be asked during the mortgage application process. Mortgage lenders have a responsibility to understand the risk involved in lending a significant amount of money to you. And because of this, any mortgage provider is likely to dig into your financial background to ensure that you are responsible and can afford to make the mortgage payments.

Don’t take it personally. In fact, it’s best to be up front about your existing student loan or other debts and your plan for managing them.

#2: It’s All About Your “DTI” Ratio

Your debt-to-income ratio is going to be a significant factor in the success of your mortgage application. This figure helps to determine how much money you need to send out to balance your debts each month versus how much you’re bringing in from working. If this ratio is too high, it’s a signal that you may not be able to juggle all of the payments you’re responsible for making. Also, keep in mind that over time, your job and income situation will change and this can affect your DTI ratio as well.

#3: Missed Payments Can Cause Serious Problems

Finally, you’ll want to ensure that you don’t miss any student loan payments. Even one missed payment – for any reason – can cause significant damage to your credit rating or FICO score. Successfully managing a higher-than-normal debt load means being strict with your budget and responsible with your payments. If possible, try to have your student loan payments taken out from your bank account automatically. That way you won’t forget or miss the payment deadline.

While it may be a challenge to manage multiple types of debt, it’s not impossible. Juggling student loans with a mortgage can be done and offers the benefit of building your net worth while paying off your past loans. For more information about getting a mortgage when you have student loans, contact your trusted mortgage team today. We’ll be happy to share our insight and make recommendations that fit your situation.

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