Navy Fellas Realty Group

Real Estate, Residential sales and purchase

The Quick and Easy Guide to Determining How Big of a Mortgage Your Family Can Afford

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The Quick and Easy Guide to Determining How Big of a Mortgage Your Family Can AffordAre you shopping around for a new house or apartment? One of the key considerations you will need to make is figuring out how much you want to invest in your new home. Below you’ll find our quick and easy guide to determining just how much “house” you can afford. Let’s get started!

Start By Making A Proper Budget

The first thing you’ll want to do is sit down and get a full budget put together. The easiest way to get the process started is to begin with two lists: income and expenses. For the income list, write down the amount of money your family brings in each month after taxes. If you have side income sources or extra income that tends to fluctuate over time, use the average amount for the past six months.

For the expenses list, write down all the spending that you do each month. Start with the major, stable items like rent, utilities and the like. Then work your way through to discretionary spending like dining out and other sources of entertainment. If it helps, go through your bank and credit card statements to ensure that you are not missing anything.

Once you have an accurate budget, you’ll know exactly how much you can afford to pay toward your mortgage payments each month.

Figure Out How Much You Can Put Down

Next, you’ll need to think about how much cash you want to pay as a down payment on your home. The larger the down payment you can afford, the smaller amount of mortgage financing you’ll need. While it might seem like a good idea to put as much as you can down, there are some things to consider. Any money you put against your down payment is going to be unavailable to you, which reduces your financial options. You’ll also lose the opportunity to invest it, which means missing out on potential returns over time.

Determine How Much House You Actually Need

Finally, give some thought as to how large or luxurious a home you want to buy. For example, if you have a small family and don’t need a large four- or five-bedroom house, you can instead opt for a smaller but more luxurious home. Conversely, if space is a priority, you may want to forego the high-end options to ensure you have enough room.

When you’re ready to explore your options, we’re ready to help. Contact your trusted real estate professional at your convenience. We’re committed to helping you purchase the home of your dreams.

Thinking About a New Home? 3 Reasons Why a Mortgage Will Be the Best Money You Ever Borrow

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Thinking About a New Home? 3 Reasons Why a Mortgage Will Be the Best Money You Ever BorrowIn these days of low interest rates, it can be a great idea to get into the real estate market and invest in a home. However, if you don’t have the funds saved up to buy a home outright, it may seem like more of a burden than it’s worth. The good news is that you might qualify for a mortgage loan, which tends to come with more favorable terms than a traditional bank loan. Here are three reasons why a mortgage might just be the best money you ever borrow.

Taking Advantage Of Low Interest

Interest rates have been relatively low for a number of years, which can be a definite financial boon when it comes to your monthly mortgage payment. Unfortunately, though, the predictions forecast that rates are on the rise and that means home ownership may be a more difficult dream in the coming years. If you’re interested in getting a home at a lower price with a better interest rate, it may be worth getting a short-term loan for the long-term gain.

Begin To Invest

It will certainly improve your financial outlook if you have a financial plan and a monthly budget you stick to, but few things will help your money grow like investing. Fortunately, real estate is still one of the best investments you can make in terms of helping your money grow and ensuring your future fiscal success. While stocks and mutual funds can be a bit topsy-turvy if you’re not knowledgeable about investing, real estate can be a more reliable asset that’s easier to understand.

Giving Up On Rent

When investing in a home, there are few things more rewarding than not having to pay rent anymore. Instead of effectively tossing away money each month that you’ll never see again, you will be able to see your equity grow in the home and property you purchase. Plus, this equity can be used as leverage for investment in another home. It also means that no matter the downturn in the market, you’ll have a solid investment in something.

You may not like the idea of borrowing money for your mortgage, but it can be a good fiscal choice with interest rates on the rise and the opportunity to say goodbye to rent forever. If you’re currently considering borrowing and are planning on buying a home in the near future, contact your trusted real estate professional for more information.

Understanding Your FICO Score and Why Small Credit Mistakes Can Cause Huge Headaches

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Understanding Your FICO Score and Why Small Credit Mistakes Can Cause Huge HeadachesMany people all over the world are dealing with issues involving debt or poor credit history, but most aren’t necessarily aware of what exactly makes up their credit score. Unfortunately, it might seem like it’s the big stuff that counts when it comes to credit, but little things can have a significant impact on your financial health. If you’re looking to improve your understanding and your finances, here’s what you need to know about small mistakes and your FICO score.

Making Late Payments

The due date on your bills might seem like an advisory, but whether we’re talking about a student loan, a credit card payment or your telephone bill, late payments can add up. Your payment history constitutes 35% of your total FICO score, which means that even a couple of late payments can have a marked impact on your overall credit. Instead of leaving this to chance, set aside a day each month before your bills are due to ensure they’re all paid off.

Applying For New Credit

It’s often the case that a store will offer special deals if you sign up for their own in-house credit card, but this can cost you big since the amounts you owe make up 30% of your credit score. Also, because lenders will often assume that you’ve run out of credit if you apply for a new card, applying for new credit can be a red mark against your FICO score. 

Forgetting Credit Altogether

It might seem like the best possible option for avoiding credit issues is to avoid using credit altogether, but your credit history constitutes 15% of your FICO score. This means that you should have at least one credit card in your possession so that you can use it to build a history of lending success. While you won’t want to use more than 30% of your credit limit, it’s important to show proven experience in paying back your lenders.

Many people think that bad credit is the result of overspending and huge debt amounts, but your FICO score is largely determined by your payment history and your available credit. If you’re trying to buy a home in the near future, contact your local real estate professional for more information.

With Mortgage Rates This Low, Should You Dive In? 3 Reasons Why Now Might Be the Time

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With Mortgage Rates This Low, Should You Lock In? 3 Reasons Why Now Might Be the TimeWhether you’ve just finished school or are about to start a family, investing in a home can be one of the biggest financial decisions of your life. But as you’ll soon discover, there are a number of considerations you’ll need to make. It can be difficult to know whether to get a short-term or long-term mortgage, or how long of an amortization period you’ll need. Read on below for three questions that will help you to make your decision, as now is the best time to dive into the market.

Do You Have A Down Payment?

There are a lot of numbers mentioned when it comes to the down payment, from 5% to cash only offers, but 20% is the ideal percentage to put down when it comes to buying a home. Because putting 20% down will enable you to avoid having to pay Private Mortgage Insurance (PMI), you’ll be able to lower your costs of home ownership over time. While 20% isn’t the be-all-end-all if you’re really ready to hit the market, it’s worth re-tooling your budget to save up.

Will You Struggle To Make Ends Meet?

Lower mortgage rates can certainly improve your overall outlook for investing in a home, but buying a home can be financially debilitating for many people. While you’ll be required to make your monthly mortgage payment, there will also be insurance costs, property taxes, home maintenance and other associated fees that add up. If you feel it’s going to be a huge financial risk to sustain home ownership, it may be worth sitting down with a mortgage professional to go over the numbers.

Are You Ready For Ownership?

Home ownership is often considered a rite of passage as one gets older, but it’s important to determine how a new home will fit into your current lifestyle. The costs of home ownership are usually higher than renting and you’ll have to take care of things like the yard and general home maintenance yourself. It might not be the best time if a home strongly imposes on your lifestyle, but if you’re looking forward to domestic duties, it can be a step in the right direction.

Mortgage rates have been hovering relatively low for a few years, but it’s important to know that home ownership is right for you before moving forward. If you’re currently contemplating a home in your area, contact your trusted real estate professional for more information.

Forget About the Bank of Mom and Dad — Here’s How You Can Save Your Own Down Payment

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Forget About the Bank of Mom and Dad -- Here's How You Can Save Your Own Down PaymentAre you considering buying a home for the first time? For some, it can seem nearly impossible to come up with the funds for the down payment. Fortunately, there are a few ways that you can save a little over time and not have to borrow from the “Bank of Mom and Dad”. If you’re looking to invest in a home in the short-term and are looking for solutions to save up, here are some tips on how to get to your down payment amount more quickly.

Create A Budget

Most people don’t like the idea of a budget, but few things are going to help you reach your financial goals like having one. Instead of sticking your head in the sand, add the numbers up and see approximately how much you’re spending each month. It may not seem like it, but getting a sense of what your monthly costs are can help you get a good idea of your overall financial picture and how much you really should be spending.

Get An Extra Job

Whether you want to do a freelance job on the side or get some part-time work, there are few things that are going to help you achieve your goal of home ownership like a little extra money. It may seem like a drag to go to a part-time gig from your full-time job, but it can be well worth it when you begin to see your bank account fill up. It’s just important that your part-time gig pays enough that it’s going to make up for the extra time you’ll be giving up.

Trim The Excess Costs

Now that you’ve got some extra money coming in and you’ve crafted a budget, you’re certainly on the right track. However, indulging in life’s little luxuries can eat away at your savings. While you’ll want to keep a little aside for meals out or entertainment, if you have other sizeable costs you’ll want to eliminate these in order to save for your greater goal.

It can take some time to save up for a down payment, but you may be able to avoid borrowing money if you bring in more each month and get rid of excess costs. For more information, contact your local real estate professional and we’ll be happy to help.

Can I Qualify for a Mortgage After Declaring Bankruptcy? Yes — and Here’s How

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Can I Qualify for a Mortgage After Declaring Bankruptcy? Yes -- and Here's HowIt may feel like a daunting task to consider buying a home after you’ve declared bankruptcy, and there’s no doubt that it’s an uphill battle. Fortunately, while you’ll have hard work ahead, there are things you can do in order to make your dream of home ownership a possibility. Whether you’ve just declared bankruptcy or some time has passed, here are some things you should consider before getting into the market.

Wait It Out

It might not be what you want to hear, but you’ll have to wait before you purchase a home following bankruptcy. Since lenders will not want to take the risk on someone that has proven to have poor financial habits, they will require a waiting period in order for the credit risk you pose to improve. While this may seem like a long time, take the opportunity to improve your financial habits so you can be amply prepared when the time comes.

Build Up Your Credit

In order to own a home, you’ll need to develop some solid financial habits, and that means getting on top of your finances even in times when it feels like you have no leverage. Ensure you get a copy of your credit report and, if you notice any errors, reach out to the credit bureau for corrections. It’s also a good idea to consider applying for a secured credit card and ensure that you pay all of your bills on time. While it might feel like a lengthy task, developing good habits will have a positive impact on your credit over time.

Prepare For Your Payment

When it comes to a poor credit history, you’ll need to pull out every stop you can to convince lenders that you’re a solid financial bet. Write up a budget for yourself and save a sizable sum for your down payment each month. It’s possible that 10 or 15% down will do, but a 20% down payment will help you avoid private mortgage insurance (PMI) and will go further in convincing lenders of your reliability.

It’s more than a little disheartening to have to deal with bankruptcy, but by waiting it out and developing good financial habits in the interim, you’ll be well on your way to buying a home. If you’re currently preparing to purchase, contact your trusted real estate professional for more information.

The 10-year Mortgage: Why a Shorter Amortization Period Can Be Your Best Option

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The 10-year Mortgage: Why a Shorter Amortization Period Can Be Your Best OptionFrom ‘down payment’ to ‘adjustable rate’ to ‘debt-to-income’ ratio, there are so many terms involved in the mortgage process that it can be hard to learn them all and keep them straight. However, whether or not you’ve heard it, the term ‘amortization period’ might be one of the most important ones associated with your financial well-being. If you’re currently considering the period of loan you should choose, here are some things to think about before taking on a term.

What Is Amortization?

Used to refer to the length of time it takes to pay off your mortgage loan, a typical amortization period is 25 years. However, there are many periods over which homebuyers can choose to pay off their mortgage. While many homeowners opt for what works best for them, it can be the case that a shorter mortgage period will actually be more financially beneficial in the long run. It may not only mean lower overall costs, it may also mean financial freedom from a loan much sooner than originally anticipated.

The ‘Principal’ Of The Matter

It’s important to have a monthly mortgage payment amount that’s sustainable, but a shorter amortization period means that you will be paying a higher amount on the principal and paying more on the actual loan amount. While a longer amortization period will add up to more interest payments and less paid on the loan cost each month, a shorter period can end up costing you less for your home when all’s said and done.

Considering Your Loan Period

It goes without saying that a shorter amortization period will pay down the principal sooner and cost less over time, but that doesn’t mean that it’s the best choice for you. Because your monthly payment will be taking a sizeable chunk out of your salary, it may be difficult to swing a higher payment in order to pay off your loan in 10 years. If it’s doable without compromising your quality of life, you may want to choose this option, but if there’s too much sacrifice you may want to opt for a longer loan period.

Everyone has a choice in the amortization period that works for them, but it’s important to make your decision based on what works for you and will be beneficial for your finances. If you’re currently getting prepared to invest in a home, contact your trusted real estate professional for more information.

3 Classic Credit Mistakes to Avoid If You’re Trying to Secure a Mortgage Loan

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3 Classic Credit Mistakes to Avoid If You're Trying to Secure a Mortgage LoanThe mortgage application process can be fraught with a lot of stress on its own, but if you’ve experienced issues with your credit in the past it can be even more taxing. While there may be a lot of things you may not be aware of when it comes to their impact on your credit, here are some things to watch out for if you’re planning on purchasing a home in the short-term future.

Applying For Extra Credit

Whether you’ve just been offered a great new deal by a department store or you’re not even thinking about it, new credit cards can pop up with deals that are quite enticing in the moment. Unfortunately, applying for new credit can actually signal to lenders that you’ve run out of credit on your other cards. Not only that, it will also have an adverse impact on your credit score each time you apply for new credit. If you’re considering a mortgage in the near future, it’s a good idea to hold off on any additions to your wallet.

Not Paying Your Bills

It may seem straightforward enough that not paying your bills is going to land you in hot water with your credit score, but many people think paying the minimum at any time will do. The truth is that if you want to keep your credit in line and improve your odds, it’s important to pay your minimum before the due date and always pay your bills. The only thing deferring payments will do is add marks against your credit, and this will be damaging come application time.

Don’t Avoid Your Credit Report

Many people who have a poor credit history are aware of the situation, but they’re also unwilling to address it. While it may be difficult to approach your credit report if you’ve had some hiccups in the past, it’s important to know what point you’re working forward from so you can move beyond it. Instead of ignoring it, get a copy of your credit report and review the numbers. Not only will this enable you to address any errors, it means you’ll be facing your issues head on.

There are a number of factors that can adversely affect your mortgage application, but by avoiding new credit and paying your bills on time you can have a positive impact on the result. If you’re currently in the market for a new home, contact your trusted real estate professional for more information.

Dealing With a Tight Housing Market? 3 Tips to Ensure You Get the Mortgage You Need

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Dealing With a Tight Housing Market? 3 Tips to Ensure You Get the Mortgage You NeedIn many cities around the country, real estate prices are on the rise and potential buyers are working hard to find a home they can feel good about. However, finding the right home in a tight market can be even more of a challenge when it comes to striking the right balance. If you’re hedging around the market in the hopes of finding the perfect home, here are some things you should do to ensure you don’t miss out on a good opportunity.

Keep An Open Mind

When wading into the real estate market, it can be very easy to get so enamored with the kind of house you want that you don’t see what’s in front of you. However, not paying attention to the potential of a particular house can mean a missed opportunity that will end up costing you down the road. Instead of waiting around for your dream home, make sure you take a look at homes you might not have thought about as they may end up being a welcome surprise.

Be Confident, But Not Too Confident

Since many homeowners have history with their home, they want a homebuyer who’s going to be just as invested in their property as they were. On the other hand, though, it’s important not to be too excited about a home as the seller may use your interest to get a higher offer. Instead of playing on opposite poles, show your interest and get into the game with a respectable offer, but be willing to back off if the seller isn’t interested.

Don’t Demand Too Much

Many potential homebuyers have been told to be aware during the home inspection and ensure they get the repairs they’re requesting, but in a tight market you may want to let a few things slip. While ignoring certain items like foundation or roof issues can be a major misstep, letting small things like a broken doorknob or peeling paint slide may be something you can easily remedy that won’t push you out of the game.

It can be complicated to get into the real estate market as a new buyer in a competitive market, but by letting the small stuff slide and being open-minded, you may just find the home you’re looking for. If you’re currently getting prepared to dive into the real estate market, contact your trusted real estate professional for more information.

3 Ways to Earn Some Spare Cash to Help Pay Your Mortgage Down Faster

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3 Ways to Earn Some Spare Cash to Help Pay Your Mortgage Down FasterA mortgage is one of the most expensive purchases you’ll make in your life, and for many, the idea of being indebted to it for years can seem like quite a burden. However, while you won’t necessarily be able to pay off your home with instant savings, there are ways that you can pay it down more quickly. If you’re wondering how to drum up some extra money for your mortgage, you may want to consider the following options.

Refinance Your Mortgage

One of the best ways to get a hold of extra funds is by lowering the amount you owe, and refinancing can be a way to do this. Since the interest rate on your mortgage adds up to additional money spent over time, getting a lower rate can easily minimize your monthly mortgage payment. It’s just important to be aware of all the costs associated with refinancing beforehand so that you can be sure the choice will result in money saved and an improved financial outlook.

Review Your Budget

Budget may be a dirty word for many people, but when it comes to scrimping for your home, it may be one of the best weapons you have in paying down your mortgage. Instead of looking elsewhere, sit down and review your budget to ensure your expenditures aren’t out of line with your income. It may seem too good to be true but, in all likelihood, you’ll be able to find a few places you can cut back for a little extra money each month.

Get A Second Job

It may not be the best option if you’re already working hard at your day job, but getting a job on the side can end up being a great way to find extra cash without limiting your lifestyle. Whether you decide to work in a restaurant or pick up a freelance gig on the side, there are plenty of options that may quickly add up to a more-rapidly reduced principal. You may even want to find something you already enjoy so it feels less like work.

The idea of paying down your home more quickly may seem out of reach, but by re-considering your budget and considering other employment, you may be able to hustle up some additional funds for your investment. If you’re preparing for home ownership, contact your trusted real estate professional for more information.