When to Buy Your Retirement Dream Home

January 28, 2013 By Leave a Comment

Couple in retirement on bike ride. Info on why people are not saving for retirement.If retirement is in your near future, you may be wondering whether or not you should begin looking at your future housing options. With home prices inching upward nationwide and inventory remaining low, some people may be considering making a purchase now so that, come retirement time, they will already have their dream home secured.

But how do you know if it’s really a good time to buy? The truth is, knowing the best time to buy real estate is tricky. It takes a little bit of industry knowledge, but you don’t have to be a professional real estate agent or economist to make an educated decision. Start out by doing a little research. Think about the area you’d like to retire to and check the real estate stats for that area. Are prices appreciating at an accelerated rate? Are foreclosures swamping the local market? What are the projections for the area’s future? These things can be found by doing some digging online, but don’t be afraid to hire a professional real estate agent to help you find even more information. [Read more...]

Filed Under: Home Buying, Real Estate Tagged With: , , ,

3 Reasons a Real Estate Sale Won’t Go to Closing

May 27, 2012 By Leave a Comment

Agent handing new house keys to owner.Closing on a real estate deal can be an extremely gratifying experience. Whether you’re purchasing a new home or handing the keys over to the next owners, finalizing the sale of a home is something that every buyer and every seller hopes for. Unfortunately, there are a few things that can seriously hinder the closing of a real estate deal. Here are three major snags you could run into while attempting to seal the deal:

Disagreement on repairs
A home inspection is required for a home sale to go through. While having a home inspected is a relatively easy task, dealing with unpleasant surprises or uncovering hidden problems could result in the deal being halted. For example, say a home inspector discovers the stucco on a home’s exterior is in bad shape and will cost about $3,000 to repair. The potential buyers are still willing to purchase, but only if the sellers foot the bill. The sellers, on the other hand, just sank about $5,000 into remodeling the kitchen and aren’t exactly eager to spend more money on a home they aren’t going to be living in much longer. No one steps up to the plate, and the deal is off. Because this is a serious issue that could greatly reduce the home’s value, the sellers would be smart to go ahead and make the repairs themselves. Either that, or lower the price of their home. Naturally, any future inspections will discover the same issue and it would probably be unwise to wait around for a buyer who’s willing to pay for such a major repair project.
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Why wasn’t I approved for a certain loan amount even though I can easily afford it?

August 10, 2011 By Leave a Comment

Large family at home.When considering your application for a mortgage many things are considered such as your income, assets, other debts, and your credit history. Each program has very specific criteria that must be met in order to qualify for the loan. Though you may feel confident that you could fit a certain monthly payment into your budget there are several reasons why you may only qualify for a lower loan amount.

A few of these reasons could include:

  • Some of your income can’t be taken into consideration. For some types of income such as rental income from an investment property, commission, bonus income, or pay from work when you’re self employed you must be able to show that you have been receiving it for a certain period of time (for example, for two years) before it can be considered by many mortgage programs.

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Filed Under: Home Buying, Q & A, Refinancing Tagged With: , , ,

Why was I pre-approved for a higher loan amount than I can likely afford?

August 10, 2011 By Leave a Comment

Mother and Daughter on HammockEach mortgage program has a maximum percentage of your income that can be allocated to debt payments. For example for loans sold to Fannie Mae the limit is 45%, and for FHA loans it is 41% (as of the time of this writing – guidelines can and do change all the time, so check with your mortgage representative about current debt to income limits.) This means that when you add up your mortgage payment and any other debt payments (student loans, car loans, credit card payments, etc.) it must amount to 45% (in the example of a Fannie Mae loan) of your monthly paycheck or less.

There is also a restriction on the amount of your income that your mortgage payment alone can make up, currently 29% for an FHA loan.

If you have an excellent credit profile you might qualify to borrow an amount that would make your mortgage payment the maximum allowed by the guidelines. This may however be more than you can comfortably afford. When you look at your additional expenses which aren’t debt related such as groceries, utilities, child care, entertainment, travel, cell phone, medical and insurance costs, plus what you like to save and contribute to charity it might amount to more than 55% of your monthly income. If you were to take out a mortgage that pushed your debt payments to the 45% max there just wouldn’t be enough money to go around each month. This is why it makes sense to take a look at your budget, not just your mortgage pre-approval when deciding how large a mortgage you can truly afford.
Please note: The content on AFRMortgage.com is for informational purposes only. It is not a substitute for the advice of a mortgage professional, real estate agent, attorney, tax advisor, or other professional.

Additional mortgage questions that may interest you:

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