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You Don’t Need 20% Down To Own A Home In Boston

There are many would-be homeowners out there that have been misled about their ability to afford a home in Boston. We have some of the highest real estate prices in the country and the misconception that you can’t purchase a home without 20% down has led a lot of people away. Here are five mortgage programs that require significantly less out of pocket money.

Mass Housing Home Mortgage

Mass housing loans is a state-funded program to help homebuyers within Massachusetts. Mass housing allows buyers to purchase a home with a minimum of 3% out of pocket.  The big benefit of mass housing is that you do not pay PMI on these loans. The downside to mass housing, is that there are income qualifications and you do have to take a first-time home buyers course to be eligible for the loan.

FHA Mortgage Loans

FHA (Federal housing administration) home loan programs are probably the most popular throughout the country for individuals who are not capable of placing a 20% down payment. The FHA loan program allows for a 3.5% down payment and a minimum credit score 580. If you’re purchasing a home for $400,000 the down payment or an FHA loan would be roughly $14,000, opposed to $60,000 if 20% was required. You do however pay a little more for the ability to put less down. An FHA loan requires you to pay PMI (or private mortgage insurance). This is insurance the government makes you pay for not having a loan to value of 80/20. Once your home appreciates, or your debt is paid down to a point we are mortgage is 80% or less of your home’s value, you can refinance out of the FHA loan and remove the PMI requirement. Another positive of the FHA program, is that it allows family members to help you contribute to your down payment.

203K HomeLoans

A 203k loan is similar to an FHA loan with an added bonus. The 203K loan allows you to borrow additional funds to make repairs to the property you purchase. For example, you can purchase a home for 300,000, and borrow an additional 30,000 for a kitchen and bathroom makeover.

5% Down Conventional Mortgage

There are also conventional mortgage programs that allow for a 5 to 10% down payment. There are no homebuyers courses,  income restrictions or PMI to pay, that you may receive a slightly higher interest rate.

VA (Veterans Administration) Home Loans

VA helps  Service members, Veterans, and eligible surviving spouses become homeowners. VA does not require a down payment to purchase a home. If your income qualifies you can finance 100% of the cost of your home.

Click Here to Find Local Lenders

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In this video, Patrick Wheeler of the Mandrell company shows you how to easily determine whether your real estate investment is profitable. He takes you through a simple to use rental property deal analyzer that allows you to determine return on investment, cap rate, cash on cash return and several other investment measures. Great investors know that your money is made during the purchase. Use this terrific calculator to make sure you fully understand your investment on the way in. Download now with the link below.

http://mandrellco.com/dealanalyzer

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How To Think Like An Investor When Purchasing Your Home

How To Think Like An Investor When Purchasing Your Home

Friends and family come to me all the time asking my advice on how to make sure they are making a good investment when they buy a new home. Some home buyers inadvertently luck out, buy in an area that happens to explode within a few years of their moving there, make a few improvements, and sell their home for twice what they bought it for just a few years prior. This is wonderful when it happens, but it is largely due to luck and timing. Other buyers get the short end of the stick and find that their home has not gained any significant value in the last 4 years and they are hardly going to break even after closing costs.

Many people don’t realize that buying a single family home to occupy is not likely to be an investment per se, meaning you are not likely to actually make much money on it, unless you are smart about it. You can’t control the market, but you can try to avoid making a bad purchase by following a few simple guidelines.

1) Plan to live in it for more than 6 years. If you are not sure you are going to stay long term, it might not make financial sense to buy unless you are doing so simply because you want to have your own place where you are the boss and might have a better quality of life than in a rental property. However, you shouldn’t count on making any money when you sell. Depending on appreciation in your area, your home might not gain value fast enough to make up for the large chunk of money you will spend on closing costs when you sell. Plus you will be spending money on maintenance and up-keep while you are living there—if you don’t, you can certainly expect your home to lose value due to wear and tear. Depreciation is just as real a factor as appreciation.

2) Never buy a $500k home in a town with a median home value of $200k. If you want your home to sell quickly and for a good price, buy at or below the median value for your area. There is nothing more frustrating than trying to sell a home that is too expensive for the average homebuyer. If most buyers in your neighborhood are looking for a 3 bed 2 bath home in the $200k range and yours is a 5 bed 3 bath home for twice as much as the typical buyer in your town can afford, it is probably going to take longer to sell. When you get farther out of the big cities, real estate markets are not so fast and furious and salability becomes a real concern.

3) It is always better to buy the worst house on the best block, than vice versa. As the old adage goes “location, location, location”: if you want your home to gain value and sell quickly for a good price when you move, buy somewhere everyone wants to be. Even if I am a hundred miles away and have never been to any of the towns my friends are considering moving to, I can pull some data on crime rates, appreciation rates, median home costs, school ratings, types of architecture and how educated the population is within a couple minutes and tell you which town is a better bet in terms of resale value.

4.) Finally, buy a house in which value can be added. If a house is perfect already, someone else is making money on you. If you want to think like an investor, buy a house in need of cosmetic updates, or a foreclosure. Plan to do some projects, and while you might have a few more headaches than the buyer of the move-in ready home, you will be glad you did when you make money on the other end.

Happy House Hunting!

 – Liz Newcombe, Sales & Leasing Consultant | Liz@MandrellCo.com

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You Should Buy An Investment Property Before Your Primary Home. Here’s Why:

VIDEO: Many would be investors start thinking about investing in real estate too late in the game. Here are a couple few why you should start thinking about real estate investing long before you buy your dream home.

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Save Cash & Do Your Own Home Inspection 1st – 5 Things You Must Look For!

Willie Mandrell of The Mandrell Company breaks down 5 red flags that you can uncover on your own while searching for a home or investment property. You don’t need to spend money on a home inspector if you know what to search for. Discover the 5 “big money” elements of any New England home and how to avoid buying a bad piece of real estate! Hit play and listen in!

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Many people think they can’t buy a home because they don’t make enough money. I honestly believe you can accomplish almost anything you put your mind to with hard work, sacrifice and some thorough research on your options. I am a fan of real estate as a tool to building wealth because it is tried and true…tested for centuries and when executed correctly (which isn’t that hard), it can really propel your financial trajectory. 

Let’s say you are looking for your first home purchase…. what are some sacrifices you are willing to make to get into the game? I’ll tell you what I would do in this aggressive Boston market, especially if I HAD TO stay in Boston.

  1. I would research the most inexpensive yet safe and inviting neighborhoods in the city…. currently, Mattapan is wide open but picking up steam, some parts of Dorchester, and Hyde Park, however, the prices in these areas are constantly being pushed to a new limit. 
  2. See you qualify for any city programs. There are numerous options available to first time homebuyers through the city. Although you may have money saved for a down payment, if there is free money available… utilize it.
  3. I would research streets within these neighborhoods to identify where I could see myself living for 3-5 years. Select multi-family homes in decent condition. Depending on the time of year and your pre-approval amount, the property condition could be a little worse and you can utilize a rehab loan. 
  4. Screen ALL tenants to ensure they are most likely to pay rent on time monthly. If the place comes with tenants, when do their leases expire? What is their payment history? Are they paying market rent? (sidetone: I am for giving a discount to great tenants but still keep within reach of market rents; not more than $200 discount. If you are providing a larger discount, this WILL hurt your resale value.)
  5. Occupy one unit for 3-5 years which will allow the market to possibly rise and therefore increase your equity; you can start saving again for the downpayment to your second property (now at 20-25% down)
  6. Be smart…run this like a business. Set aside 3-5% of rent toward long term maintenance and repairs (water heater, furnace, plumbing, roof). Budget for incidentals, things break down in every home over time. The income generated from your 1st property will be utilized to calculate your pre-approval amount for your second property.
  7. Depending on which home you like more, decide which you will live in and which will be 100% investment property.
  8. Rinse, and reuse. The key is knowing the numbers of how much to spend. Our agents are trained to evaluate the numbers to ensure you buy at the right price point for your goals.

To connect with one of our real estate specialists, please click on the link

Below is a story of a gentleman who followed the steps above and owns 9 properties while working full time. 

Full Story

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Break These Habits To Get From Paycheck to Paycheck TO Owning Your First Home (Pt. 3)

Over the past few days, we’ve reviewed some habits to get from living paycheck to paycheck to owning your own home. Below are some more habits you should consider altering if your long term goal is to build wealth. I think everything in moderation is okay but it is human nature and especially American nature to sometimes go a little over board.

11. Throwing Your Child a Huge Birthday Party

Your child will forgive you for not throwing them an expensive birthday bash. Children are as simple as you help them develop to be. I you keep their lives simple… why would they want the extravagant? I never understand the expensive 1st birthday parties… the baby has NO IDEA what is happening, it is simply an opportunity for the parents to have a party.

TRUE STORY: I know several people who throw their kids lavish birthday parties yearly so that their instagram/facebook/twitter is filled with photos/comments/likes yet… they are still renters and always complain that the market is expensive. Can you imagine how much you could save toward a down payment if you made the sacrifice for 2-3years? In addition to your regular savings, opt for a no party or low cost party. The money you save should go toward your down payment fund and NOT toward gifts There is a prize at the end of this sacrifice, I promise.

12. Shopping Impulsively

If you’re considering making an impulse buy, wait 14-30 days and ask yourself if you still want or need that item. You might even forget about the item completely, which pretty much answers the question for you. There is hardly anything in the world you need immediately (except maybe necessary food and water), Resist the temptation. If you do not need it… walk away. Always keep the big picture in the back of your mind.

TRUE STORY: To help me save, I put all extra cash (minus living/survival expenses) in a savings account that I do not have a card for and the bank does not have a physical branch (online only). If I wanted money… I had to transfer it into another bank’s checking account, this process took 3 days. The urge to purchase something dies when you have to wait 3 days to have the funds. It was my tool that helped me save $10,000 in a year and pay off my first car. You never realize your shopaholic tendencies until you start “rehab.”

13. Skipping Breakfast

Eating breakfast gets your day started on the right foot and can keep you from buying a huge, expensive lunch. Try filing breakfast foods, like oatmeal or eggs, which will likely keep your stomach (and wallet!) full. When you skip breakfast, you are starving by lunch time and become quite ravenous. This seemingly insatiable hunger leads to purchasing larger lunches and thus less savings toward your home.

TRUE STORY: There was a period in 2016 that I purchased breakfast everyday for my 2 children and myself (hangs head in shame.) This usually occurs during winter when it is cold and you crave the extra 10 minutes of sleep which then makes you late and breakfast has to be on the go. Easily, I spent $15/day that works out to $75/wk on BREAKFAST ALONE. Do not skip breakfast and DO NOT BUY breakfast either.

14. Paying Multiple Student Loans

Interest rates are still relatively low for student loans, and I presume mid range for credit cards depending on your score.  If you have the discipline to not take on additional debt, it could be a good time to consolidate your debt. By consolidating student loans, you might even be able to lower your monthly payments and extend your repayment period. For credit card and other debt, pay attention to the interest rate. The goal is to utilize a balance transfer, consolidate debt and pay as much as you can OVER the minimum payment monthly. Generally, most cards provide 12 months interest free. Plan to pay off this debt within 12 months. note: your interest rate when the promotion ends, should still be less than your current credit cards.

TRUE STORY: I was able to pay down $5,000 credit card debt by consolidating. I saved on interest, that I would have paid out monthly AND I received a lower interest rate than my current card. I hen went to my initial card and stated I wanted my interest rate lowered because I have good credit and guess what… they lowered my credit. YOU HAVE TO ASK! They will NOT tell you this information.

15. You Focus on Saving More — But Not Earning More

Millionaires aren’t in the business of wasting money, but they also recognize the greater importance of earning additional income as a way to attain financial goals faster. “[Wealthy people] understand that while there is a limit on how much you can save, there is no limit to how much you can make,” Tardy says.

In other words, even though slashing your expenses by $50 or even $100 a month will boost your bottom line a little bit — raking in thousands more from a salary bump will have a much greater effect.

Invest your time more wisely by seeking out ways to earn more. An obvious place to start is by examining your current salary. If you haven’t asked for a raise recently, and know you’re delivering value to your company, schedule a meeting with your boss to make your case for earning more.

The key is figuring out what skills you have that can be of value to others and then determining how to charge for that value.

 

We hope you found these suggestions helpful! For more tips on how to save for a down payment, please connect with us on:

Dorchester Real Estate Agent

 

Excerpts from full article.

 

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Avoid These Financial Sins When Applying For a Mortgage

If you are planning to buy a home soon, make sure that you are aware of all the factors that can affect your ability to qualify for a mortgage approval. Many people think it is as easy as walking into a bank and saying ” I want to buy a home.” Banks are in the business of lending and making money… they need to ensure you are financially responsible and able to repay possibly the most money you have borrowed to date. To allow for a higher probability for an approval and the best terms, follow these 10 home buying commandments.

Thou shalt not change jobs, become self-employed, or quit your job.

Changing jobs resets the clock. You need 2 years of full time employment or employment within the same field to be a god candidate for a mortgage. Any sudden changes raises a red flag. 

Thou shalt not buy a car, truck, or van.

Do not incur any additional debt when you plan to purchase a home. This not only affects your debt-to-income ratio, it also affects your credit score. You essentially just borrowed against your home loan. BAD IDEA

Thou shalt not use credit cards excessively.

I think this is a no brainer but again, do not incur any additonal debt. It shows that you are not responsible financially.

Thou shalt not miss payments.

Your credit score is made up of history of payments. If you show lenders you cannot repay your current debt… do you think they are more or less likely to approve you to take on more debt?

Thou shalt not spend money you have set aside for down payment and closing costs.

Purchasing a home is expensive, let’s be honest. Do not spend ANY money until you have keys to yout new place. There are usually surprise costs so be prepared. 

Thou shalt not buy furniture.

Again, NO SHOPPING until you are the legal owner of the property.

Thou shalt not originate any inquires into your credit.

Do not apply for any other credit, loans etc until AFTER you own your home. Inquiries raise red flags.

Thou shalt not make large deposits without checking with your loan officer.

EVERY DOLLAR needs to be accounted for. Do not make deposits or large withdrawals from your account without checking with your loan officer. They can advise on what to do, how to “source” your money etc. This goes back to money laundering, they need to ensure it is your money and not someone using you to “clean” their money.

Thou shalt not change bank accounts.

DO NOT CHANGE ANYTHING that affects your finances in any way until you take ownership of the home. 

Thou shalt not co-sign a loan for anyone.

DO NOT and i repeat DO NOT co-sign for anyone for anything. I have 2 kids and I already let them know… I will not be co-signing for student loans, car loans, nothing. If they laps on payment, it affects your credit score. Their debt also becomes your debt and impacts your debt-to-income ratio.

 

I hope these commandments help you as you start thinking of purchasing a home. Check back on our site for more information on how to make yourself the best candidate for a mortgage approval. 

Email us your questions and we will create a blog post on them to assist others searching for the same information. CONTACT@MANDRELLCO.COM

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What’s a Good Offer?

We are in the peak of the 2016 real estate season.  Buyers are getting out bid and sellers are sometimes overwhelmed with the multiple great offers they have to decide on.

As long as we are in a multiple offer market there will be one winner and many disappointed losers for every listing…. So how do we submit the best offer?

Other than price, what matters to most sellers?

Timing – look at date flexibility, find out what the sellers need and deliver those dates. Consul with your mortgage professional to ensure they dates you select are actually doable on his/her end.

Down Payment Size – The greater the down payment, the more attractive the offer! I think that goes without saying. Offers with extremely low/ zero down payment, usually have a better chance in the winter that in the summer.

Cash – Cash is King! Pay cash if you can, you can finance the property at a later date. This is why investors are cleaning up shop in Boston.

Speed –Most agents will not show you property without first obtaining a copy of your pre-approval. The process is not difficult but it does require gathering a lot of documents. 

What about contingencies?

Financing – I am against waiving a mortgage contingency because I think you have to protect your client at all costs. You never know what could happen or be found and you have no just cause to break the contract without financial penalty. This is not the same as paying cash – what it means is that buyer’s cannot get the deposit back if denied the loan. Buyers with complicated self-employment income or other unusual financial circumstances need to be cautious when considering waiving their mortgage contingency. 

Inspections – Some people remove the inspection contingency and some people have the inspection at or even before they make an offer. We have seen other offers accepted with the condition that they would have the inspection right away, but that the results of that inspection could not be used to cancel the contract on the house or to renegotiate the agreed upon price. Some buyers conduct an inspection and specify a dollar amount above which, the seller would have to repair anything above that value.

 

Our agents are well versed in negotiations and understanding the best offer terms given the specific market season.submitting significantly below asking price in the summer is a poor choice. 

Call us today: 617.297.8641 to learn more!
 

 

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Break These Habits To Get From Paycheck to Paycheck TO Owning Your First Home (Pt. 2)

We discussed some habits to get from living paycheck to paycheck to owning your own home last week. Let’s review some more habits you should consider altering if your long term goal is to build wealth. 

6. Buying Brand-Name Products

Consumers find comfort in using brands they know and love, but oftentimes generic brands work just as well as their brand-name counterparts. Step away from brand names, and try a few generics. For example, you can save money by buying store-brand medications. I love hunting for a good deal and saving money, medication, oatmeal, rice, milk, frozen vegetables, plates, plasticware, among others, all taste the same (or close enough) and are of similar quality. What is the real reason you purchase brand name? If you TASTE the difference, then do not switch, but if it’s all about the “name” then you are missing the point. 

TRUE STORY: I purchase the above stated items in the generic store brand from Stop n Shop, CVS or Rite Aid. I am a frequent shopper at these retailers and I have come to trust their brand as much as I would the actual brand name product. If I were blind folded… couldn’t tell you the difference. My friend can taste the difference in water… so when she visits, I have to purchase Evian. 

7. Buying Lunch or dinner nightly

You’ve heard it before, but buying lunch at work is a huge waste of money. Buddy up with your co-workers, and try “brown bagging” it at work. You can end up saving a good chunk of cash. Having dinner at a restaurant is a great luxury, but it can wreak havoc on your finances. Be mindful about how often you eat out. Even something as simple as eating dinner earlier in the evening can help you eat less and save more.

TRUE STORY: Become friends with sites like Groupon, you can find great deals on ready prepped food to cut your cooking time in half. Not only do you get home cooked meals, you don’t need to be creative….they do it for you. Saves time, saves money (with coupons). Save the recipes to use again later without the company mailing you ingredients. 

8. Requesting Faster Shipping

It’s hard waiting for your online purchases to arrive, but paying extra for expedited shipping is a waste of money. Patience is a virtue, but if you really just want everything now, sign up for a service such as Amazon Prime, which includes free two-day shipping on most items. If you do not want to spend the $99 for membership, consider sharing an account with a friend. If you are a student, you get 1/2 off yearly membership. I think it’s worth it

TRUE STORY: I’m an amazon junky… I would do Amazonaholics Anonymous but it’s too good to quit. My family understands… if I can’t buy it on Amazon… you probably won’t get it from me. My life is hectic, I don’t enjoy shopping in stores, I need fast, economical and FREE shipping lol. PRIME is my BFF. 

9. Spending More Money on Snacks

According to The Huffington Post, Nielsen data showed Americans spend more on snacks such as protein bars, chips and beef jerky than they do on real food. If you plan your meals and shop with a grocery list, then you won’t need to fill up on unhealthy and expensive snack foods. It’s hard and no one expects you to perfect this over night but starting is better than not even considering it an option

TRUE STORY: My friend is obsessed with potato chips. She eats several bags a day. I’ve been working on getting her to cut it down to 3 small bags a week and to pack vegetables and fruits for snacks. She’s had more failed days than successful ones but she’s not giving up and neither will I. Anything worth having (a savings account, a healthy heart) is worth fighting for. 

10. Signing Up for a Gym Membership

Once January hits, many of the treadmills at the gym are usually occupied, and the Zumba classes are bumping. But just a few months later, the place looks like a ghost town — what a waste of money. Skip the pricey gym membership, and try joining an exercise club. Or, download a cheap fitness app to get in shape. I think this may be the worst New Year’s resolution idea EVER! Man I wish I owned a gym franchise… FREE Money because people never come back.

TRUE STORY: I fell victim 2 years ago and signed up for a gym membership because it had free babysitting… I figured, it took care of one obstacle. Well… 2 years later and I have been to the gym ONCE. I thought I cancelled the membership until I actually scrutinized my credit card statement and saw I was STILL paying for it. Thats $500 over 2 years I will never get back, never see a return on my investment and hang my head in shame over daily (well… when I remember… it’s so out of sight out of mind, it’s embarrassing) 

 

For more strategies on how to break bad habits and start building wealth please join www.urbanmoneymatters.com. If we do not have a seminar in your area, please let us know a good location and we will try to get something on the calendar. 

 

 

 

Excerpts from full article.

 

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Break These Habits To Get From Paycheck to Paycheck TO Owning Your First Home (Pt. 1)

 I don’t think the majority of Americans willingly blow their paycheck weekly/monthly. It’s hardly ever a big purchase but several smaller, seemingly insignificant purchases that keep us living paycheck to paycheck. Let’s take a look at some of the obvious and not so obvious suspects that prevent us from saving to purchase our first home or investing in real estate to build wealth.

1. Paying Too Much on Housing

Since housing is likely your biggest monthly expense, this is where you can really make or break your budget. Personal finance experts recommend spending no more than 30% of your income on housing. You can spend even less and save more by getting a roommate or moving to a different neighborhood or a city where it’s easier to save money. Of Course this is easier said than done in Boston and surrounding towns. TRUE STORY: Consider living with family if roommates are not an option. Don’t try to live for free but rather, share the expenses so that you are helping with their financial burden but it is still cheaper than renting on your own. Give yourself a HARD deadline on when you need to  move out to hold you more accountable. 

2. Spending Too Much on Car Costs

Aside from housing, transportation is likely your next biggest expense. Buy a reliable and affordable used car, try to live close to where you work, and consider taking public transportation to cut down on gas and maintenance costs. If you work downtown, living close to work is an unlikely solution. Consider living close to public transportation, carpooling, biking?

TRUE STORY: My cousin realized he was paying more owning a car (car payments, insurance, gas, maintenance, parking) than utilizing public transportation. He sold his car and takes the train to work daily and utilizes Uber and zip car on the weekends if he has a lot to do. This strategy helped him save for an engagement ring and wedding.

3. Not Planning Meals Ahead of Time

Keep your grocery budget under control by planning out your meals and shopping accordingly. One of my favorite meal-planning apps comes from Food.com. It combines meal planning and money saving all in one app. If you like to live on the adventurous side, consider Daily Table, a non-profit grocery store that has discounted food items to help you stick to a tight budget; the catch… food items vary weekly so you will have to cook based on what you buy as opposed to buy what you plan to cook. 

TRUE STORY: A friend purchases prepared meals from Daily Table and says it is really good. The price works for her budget where she can have a nutritious meal (not prepare lunch herself) for a lot less than cooking when she considers her time and money to prepare a meal for herself. 

4. Buying Coffee or any other vice

America’s love affair with coffee shows no signs of slowing down. ABC News reports that the average American worker spends $1,100 a year, or $14.40 a week, on coffee. I don’t know about you…but that’s a lot of money spent on a drink. That’s down payment money or debt reduction money in the mind of someone who’s actively trying to build wealth.

TRUE STORY: Be real with yourself, maybe don’t quit cold turkey but try to reduce the number of coffees you buy by 2 each week until you are bringing all beverages from home. I weaned myself off of Orange Fanta… that was my vice. Saved a lot of money, water with lemons was my alternative. Now, I don’t crave drinks when I eat out, I can have a water with lemons alongside my meal. 

5. Carrying Credit Card Debt

Credit card debt is one of the most expensive types of debt you can carry. Those minimum payments might seem low now, but they can cost you hundreds to thousands of dollars in interest. If you have credit card debt, make a debt reduction plan. For example, try transferring your balance to a low-interest credit card, and commit to paying it off for good. Even if you can’t pay more than the minimum EVERY month… whenever you are able, try to make additional payments.

TRUE STORY: Even paying $20 extra a month helps you save. Also consider calling your credit card company every 6 months (if you have a history of on time payments) and request a rate reduction. I do it yearly and it makes a difference in the long term.

Be sure to sign up for our blog newsletter to stay informed on quick tips for a better financial future.

 

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Boston Investment Specialist

 

 

 

 

 

 

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The majority of Bostonians hate writing a check to their landlord every month, particularly if you live in Roxbury, Jamaica Plain, and Lower Mills areas. Sometimes you are cursed with noisy neighbors, or a super strict landlord who is looking for any reason to push you out so he can get the next highest paying tenant.

If any of the above applies to you, you probably want to buy a home…yesterday! Wanting to buy a home and being ready to do so are two different things. Are you financially ready for the monthly mortgage payment and budgeting for repairs?

Here are five signs that you’re not ready to buy a house just yet. But don’t fret; even if you are struggling with these financial issues, you can still become a homeowner. You’ll just need a bit of patience and improved financial skills.

Buying a home is expensive. You’ll need money for a down payment. If you are buying a home with an FHA loan, you’ll need a down payment of 3.5% of your home’s final purchase price, depending on your credit score. For a $300,000 home, that comes out to a down payment of $10,500. Thanks to Mass Housing, we have a 3% down payment program, but that still equates to $9,000. These numbers do not include closing costs, moving costs and other miscellaneous costs associated with moving into a new home. 

Closing costs are the fees that mortgage lenders, title insurers, attorneys and others charge you to originate your mortgage loan. We generally tell people plan for an additional 2% to cover these costs which equals $6,000.

It’s true that you can get help with some of these costs. You can use gift money from relatives, for example, to pay for all or part of your down payment. You might be able to convince a home’s seller to pay for all or part of the closing costs. In our current market, sellers are not inclined to do closing cost assistance unless you plan to purchase well above asking. 

What to Do

It’s best to start searching for a home only after you’ve saved enough money to cover a down payment and your estimated closing costs. Another option would be to look into programs available by your municipality that encourages home ownership by providing financial assistance. There are also some non-profits and other organizations that allow you to purchase with 0% or a rate lower than industry standard. (NACA.com)

Sign 2: Your Credit Score Is Bad

Your credit score is a key number when you’re applying for a mortgage. The best interest rates go to individuals with the best credit scores (above 740). The lower your score, the higher your interest rate and subsequently, the higher your monthly mortgage payment. You can purchase a home with a 580 credit score according to FHA guidelines but there are only a few lenders willing to accept a score this low. 

What to Do

First, order at least one of your three credit reports from AnnualCreditReport.com. You are entitled to one free copy of each of your three credit reports — maintained by the national credit bureaus of Experian, Equifax, and TransUnion — once every year. Once you get your report, read it carefully. It will list how much you owe on your credit cards and how much you owe on student loans and car loans. It will also list whether you have any late or missed payments during the last seven years. Those late or missed payments will send your credit score tumbling.

Next, order your FICO credit score. You can do this from the credit bureaus, too, but you’ll have to pay about $15 to do so. If your score is low, and there are negative marks on your credit report, it’s time to start a new history of paying all your bills on time. You also need to pay down as much of your credit card debt as possible. Both of these actions will steadily increase your credit score, though it could take months or even more than a year before your score recovers enough to make you a good candidate for a mortgage loan.

Sign 3: You Have Mount Everest of Credit Card Debt

Your debt-to-income ratio is another key number when it comes to buying a home. Lenders want your total monthly debts, including your estimated new mortgage payment, to equal no more than 43% of your gross monthly income. If your debt-to-income ratio is too high, you’ll struggle to earn approval for a mortgage. Some lenders will go as high as 50% due to the high cost of rent but generally, they want to see that you are not up to your eyeballs in debt.  

What to Do

I would say pay off your credit card debt but if you could have, you probably would have by now. I will STRONGLY recommend you always make more than your minimum monthly required payment. 

Sign 4: You Routinely Miss Your Monthly Payments

Making late payments, or missing payments completely, is a sure sign that you’re not ready for the financial responsibility of owning a home.

If you miss a mortgage payment by more than 30 days, your credit score will fall by 100 points or more. If you miss enough, you could lose your home to foreclosure. This is not like a landlord where you get warnings before it affects your credit… this is immediate. 

What to Do

Learn better financial habits before you apply for a mortgage. Set up reminders on your phone or computer alerting you when bills are due or use my favorite method… automatic payment. You could set aside one day each month dedicated to paying bills if you prefer the old fashioned paper method. Don’t apply for a mortgage until you’ve broken the habit of regularly missing your monthly payment due dates. 

Sign 5: You Don’t Have a Stable Job

You’ll need a steady, reliable stream of income if you use a mortgage to finance the purchase of a home. If you’re worried that you’ll lose your job, or your income is sporadic with no real pattern, you should probably NOT purchase a home. Generally, you need 2 years of full time work history. If you are self employed, you will need other documentation to help qualify you for a loan. 

What to Do

Find a job that is reliable and that pays you a stable income each month. Don’t take the risk that everything will work out. You don’t want missed mortgage payments on your credit reports. And if your job is unstable? You’ll greatly increase the risk of these red marks. If you are self employed or you operate on seasons… then you should think of yourself as a chipmunk… get good at storing away for the slow months. 

I hope this advice was helpful. We strive for our clients to be responsible home owners and want to ensure you will not be putting your home up for sale due to foreclosure. We want to help you BUILD WEALTH THROUGH REAL ESTATE!

 

For More information, please contact one of our agent specialists for your area or connect with us on… 

Dorchester Real Estate Agent

 

 

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8 Simple Ways To Save Up Down Payment Cash

One of the largest obstacles between you and home ownership is coming up with enough money fund the required mortgage down-payment. Let’s assume that we’re looking for the average single family home in Massachusetts which is roughly $350,000. Let’s also assume you are like the majority of home buyers in this state and qualify for an FHA Loan, which is a 3.5% down payment or roughly $12,250. This isn’t amount of money most people have sitting in there bank accounts. So how do you find the cash to fund your dreams of home-ownership? Here are a list of things most buyers do to save up some cash:

Side Job or Temp Work –  Can you pick up a side job or work for a temp agency?  It’s may not be something you  ant to do permanently, but it’s worth it to reach your home-ownership goals.  Let’s assume you can pick up a part time job working 10 hours per week at $15 per hour. If you worked 48 of 52 weeks in the year you’d have an extra $7200 (before taxes) to add to your home savings account.

Cut Cable & Phone Bill – Many of us have Comcast or Verizon packages that consist of every movie channel, sport package and various other upgrades. Are these things we can live without for a little while?  The same goes for many phone bills. Many of us are paying $40 per month or more for data packages while the only thing we do with our phone that require data is posting to Facebook. If you can reduce one of these bills by $50 or two of them by $25 each, you would be saving a total of $600 for the year.

Cut Gift Spending – We all love our family and friends but could you cut back on birthday and holiday gifts for one year? I think your friends and family would stand by you if your gift were less expensive this year because you’re saving to purchase a home. Statistics show cutting this spending out entirely can put another $600 in your pocket for the year.

Work Overtime – Are there overtime hours available at your current job? Maybe it’s time to stay late or come in early. It may be a good idea to approach your manager and see what extra hours he/she can offer you.

Save Your Tax Returns – Getting a nice check back from the government this year? Don’t view this influx of cash as discretionary spending. Many Americans look at this check(s) as chance to buy a bigger TV or various other luxuries. Be smart and save this money for your down payment. The big screen will look better next year in your new home.

Hang At Home – Let’s assume that you’re like most of us and you love to hang out on the weekends. If you’re spending an average of $100 per weekend (drinks, food, movies etc) and your going out every other weekend, you’re spending an average of $2600 per year on entertainment. Can you cut than down this year to just 1 weekend per month? If so you’re saving $1300 per year and you’re that much closer to you saving goals.

Cut Your 401K Contributions – I’m a big believer in saving for your retirement, but I believe even more that every individual should own their own home. It may be a good idea for you to speak with your HR department and cut down (or cut out) your retirement contributions and add those additional funds to your savings.

Ask Your Family For Help – When your family sees all the lifestyle adjustments you’ve made to save for home ownership, they will see how important it is to you and will become important to them as well.  Can they help you with your down payment?

Are you looking for more helpful home ownership tips? Like us on  Boston Investment Specialist

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In our next topic of conversation with Elizabeth Newcombe, we asked her what the first step in the home buying process is. Liz is involved in this process on a regular basis so getting her perspective on the topic is very beneficial. For anyone looking to purchase a home in the near future, this is a great short video on how to get started with the home buying process and what to expect throughout.

For more information on homes for sale in Attleboro, contact Elizabeth Newcombe at 413-834-8052

 

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What Is Your “Commitment Day” When Purchasing A Home?

Many first time homebuyers are unaware of the timelines and deadlines associated with purchasing a home. They understand the list in that there is a close date on their offer but as real estate professionals we must inform our clients that sometimes, these dates are flexible depending on a few different factors. 

If there are delays in the checklist of items lenders, attorneys, inspectors, appraisers, buyer/seller documentation, then there can be a delay of the closing date in which we would request an extension.

On every offer submitted, we have a mortgage commitment date and a closing date. 

The mortgage commitment date is the date by which the bank says YES, you have truly satisfied all requirements and we are granting you permission to purchase this home. In order to issue a commitment letter, banks need current information on the following items which all have expiration dates as well. Here are 4 items that are good for 90 days, after which you will need to supply new documentation:

  • Income: Pay Stubs
  • Assets: Checking, Savings, Investment, Retirement
  • Credit: Must be re-pulled after 90 days but should not be re-pulled until needed (communicate with loan officer)
  • Appraisal: Good for 120 days before a new appraisal is required

The timing on these documents can create issues.  

If there is any change in employment status, let your loan officer know immediately. This is a MAJOR issue that will need to be addressed so you know what your options are moving forward.

Statements for your assets vary in terms of dissemination. A lot of real estate is about timing. Speak with your loan officer regarding the current statement for your investment and retirement funds. Checking and savings generally comes out monthly.

ALL loan approvals are at risk if the borrower ruins their credit, loses or quits their job or if they spend their down payment money.  This is true whether their Commitment Letter is issued 3 weeks prior to the closing or 3 months. Essentially, we advise our clients not to change anything in their life until the transaction is complete. Do not make any major purchases to alter your credit (I have seen client’s credit score drop as a result of a purchase and the reduced score disqualified them from purchasing. thankfully, the seller was flexible and we were able to extend the dates but this is few and far between)

We hope you found this little tidbit helpful.

As always – if you have questions, thoughts or concerns about the timing of a transaction, give us a call and we will coordinate with your loan officer to walk through the scenario with you to find a solution that is beneficial for everyone. Please feel free to reach out at 617-297-8641 or Contact@mandrellco.com.

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Recently we sat down with our very own Elizabeth Newcombe to cover a series of topics. One of these topics was about what is happening currently in her local real estate market, Attleboro. As most of you know, the real estate market for the greater Boston area is very competitive right now and it is even making its way down to Bristol and Norfolk counties. Liz provides a firsthand look into everything you want to know about the market in Attleboro right now.

For more information on homes for sale in Attleboro, contact Elizabeth Newcombe at 413-834-8052

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Buying A Home? What Is An Offer & What Is A Contract?

We have officially entered the crazy season of real estate. Home prices are high, inventory low, buyers anxious and it seems innumerable… spells recipe for a gladiator scenario of only the strong survive!

To be competitive, buyers make concessions on things that I strongly advise against unless they are prepared to pay more for their home that it may be worth. 

Buyers want homes so badly they are willing to waive mortgage contingencies, inspections, add escalating clauses (the seller can accept a higher offer at a later date even though they’ve already accepted your offer). All these sound great but when you do any of the above… you risk losing your deposit. That’s a lot of money. I questions agents who advise any of the above on homes that we foresee issues. The only time I would forego an inspection would be in new construction… other than that… you have no idea what is behind those walls or if the electric output is adequate for your future needs. 

If you forego a mortgage contingency and your loan is denied… you lose your security deposit. I have seen buyers get cold feet and ask the lender to deny their application in hopes of making the mortgage contingency work in their favor but it is not that simple. Lenders have rules and regulations they have to follow. They have to document everything including the reason they deny a loan. Do not place offers out of fear. This is a 30 year commitment of ALOT of money. You can always sell your home sooner but always remember that it is a huge financial commitment so you should not take it lightly. 

Our agents are trained to assist you throughout the process and help you make the best decision for your family. You want to ensure you choose an agent who will not put your best interests at risk. We will ensure we find the best home for you and work closely with your loan officer to ensure it is a smooth transition/transaction. To select one of our highly qualified agents, please click here.

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The last topic that we covered in our sit down with Anastasia Tacewicz from GMH Mortgage Services was some of the things you want to be considering when choosing a mortgage professional. This is a key individual throughout the home buying process so you will really want to do your due diligence when selecting someone to work with. Anastasia is a great reference as she is someone who we have worked with in the past and have had great experiences with.

Need more info about mortgages or about getting pre approved? Contact us at 617-297-8641

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Another topic that we covered in our sit down with Anastasia Tacewicz from GMH Mortgage Services was the process of purchasing a condo vs. a single family and how the two differ. For those potentially in the process of looking at both options right now, there is some good information in this video from the perspective of someone who would actually be involved with you when considering your purchase.

Need more info about mortgages or about getting pre approved? Contact us at 617-297-8641

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Recently I was finally able to go to my first Boston Wealth Builders event, “Building Wealth Through Multifamily Investing” and it was everything I hoped it would be. A big thing for me when deciding to go to any real estate meetup is to not have to sit there and listen to a bunch of sales pitches from whatever guest speaker they decide to have attend that day. Instead, this is event was purely educational, covering topics such as evaluating your target market, determining property values, calculating cash flow, etc. As a beginner investor it was great to be educated on so many different topics involving multifamily real estate investing.

Another aspect of the event that I really enjoyed and thought was powerful was the several guests that attended to also speak. There was a mortgage broker from Sierra Pacific Mortgage, an attorney from Mahoney Law Group and a real estate agent from The Mandrell Company. No, they were not there to sell, but to cover their own topics as well as reinforce the organizer’s presentation.  The mortgage broker went into great detail about all the different loan options that are available to people, along with several that some people may not be aware of. Also, he explained some of the qualifications that his company goes by that may present an easier option to obtaining a loan that could help you fund your deal. The attorney provided a handout which essentially documented a step by step walkthrough of what you need to be doing throughout the process of purchasing a multifamily property which was incredibly helpful. Lastly, the real estate agent supplied a ton of additional information as well as his own personal experience of what he is noticing in these current markets and where some of the best places might be to look for multifamily properties.

At the end of the event they had allowed plenty of time for questions to be answered and even let people talk individually with any of the speakers that were there. This was a great opportunity to start networking with the type of people that you need to establish relationships if you want to be successful in this business. Ultimately this was the biggest take away from that day’s event. The importance of networking cannot be stressed enough and to be a part of a group that prides itself on creating an environment in which you can connect and build relationships with like minded people is something that I definitely look forward to continuing.

 

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A lot of my friends comb through craigslist for apartments that do not have realtor fees. I completely understand as I used it as my primary search engine a few years ago as well. The problem with craigslist is that there are few checks and balances which therefore leads to rental scams posted. A new report from New York University explores just how common these scams are. Spoiler alert: they are everywhere.

How the Scam Works:

You are looking for a new place to live on the very popular Craigslist apartment listings. You know that scams are common on the site, but just how prevalent are they? Very! Craigslist fails to identify more than half of rental scam listings, and suspicious posts linger for as long as 20 hours before being taken down.

Researchers reviewed more than 2 million for-rent posts and found 29,000 fake listings in 20 major cities. Yes, Boston was on the list for researchers and I have discovered a few myself within 10minutes on the site. Of those, there were three key types of scams. In the first, a fake post instructs a would-be tenant to purchase a credit report. The scammer gets a commission from the credit reporting site, even though there is no property for rent.

In another scheme, con artists duplicate rental listings from other sites and post on Craigslist at a lower price. Prospective renters pay a deposit via wire transfer. Another pervasive scam is “realtor service” companies. Targets are asked to pay fees to access listings of pre-foreclosure rentals or rent-to-own properties. In the majority of cases, the companies leading the scams have no connection to the properties listed. Realtors do not ask for fees up front nor should you pay, especially when the information is public knowledge. There is NO SECRET PRE-FORECLOSURE LIST… ITS PUBLIC INFORMATION! You find them in your newspaper, local search engines, Zillow, RealtyTrac, your city’s public records database. If someone is asking for money before they prove themselves… RUN!

How to Spot a Rental Scam:

Don’t wire money or use a prepaid debit card: You should never pay a security deposit or first month’s rent by prepaid debit card or wire transfer. These payments are the same as sending cash – once you send it, you have no way to get it back. Real Estate professionals ask for checks which are held in escrow and you receive a deposit receipt. Realtors are held to a code of Ethics and you know who they are, you can track them, report them, not so with online tricksters.

Watch out for deals that sound too good: Scammers lure in targets by promising low rents, great amenities and other perks. If the price seems much better than offered elsewhere, it may be a scam. Many people search for rent-to-own opportunities… while these do exist, they are usually MORE EXPENSIVE than market rent and not thousands cheaper. You will never find a 3 bedroom for rent at $900 in Boston. We all know that is unrealistic..why would you fall for that scam on craigslist? Even if it was rent-to-own…where is their profit? Think like a business and you won’t get got!

See the property in person: Don’t send money to someone you’ve never met for an apartment you haven’t seen. If you can’t visit an apartment or house yourself, ask someone you trust to go and confirm that it is what was advertised. Call their bluff… You will show up with check in hand if you like the property…scammers generally never have access to the property so they will find an excuse as to why they can’t get you in on a specific date or ever.

Search for the same ad in other cities: Search for the listing online. If you find the same ad listed in other cities, that’s a huge red flag.

 

The moral of the story is…. feel free to use craigslist for finding apartments and homes but understand there are ALOT of scammers out there. Do your due diligence (research) before handing over your hard earned cash. Sometimes paying a realtor fee is worth it not to have the stress or risk losing your money. For assistance in finding an apartment in the greater boston area…be sure to connect with one of our agents

Source: PR Newswire
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Unrealistic Buyer Expectations (Pt I)

As real estate professionals, we hear A LOT about about what’s happening in the market and how to do our job. Fortunately for us, most of this “advice” and “input” comes from individuals with no knowledge of real estate or how to truly evaluate it… They watch a couple commercials, read a few blog posts and think that they are the expert. No hard feelings, I smile and nod, then I have a real conversation. Many times its a matter of educating people on our current market and what is actually happening versus what they think is happening. This is pretty easy to do since I work with DATA and FACTS that I have access to, which allows me to track trends. Short of the story…  Listen to your Realtor!

Below are some misconceptions real estate professionals hear all the time. Please do not be offended by my honesty. It is this same honesty that will get you the right home at the right price at the right time.

1. Buyer: “It’s a Buyer’s market.  The Sellers need me more than I need them.  My neighbor’s boyfriend’s cousin who has his real estate license but works at Star Market told me so.”

Realtor:  I can understand why you might think that but the market has flipped the other way, inventory is low, and we are seeing multiple offers out there, often over asking price… i.e. Seller’s market. Boston, particularly Jamaica Plain, West Roxbury and Roslindale are seeing offers sometimes $50,000 over asking because of bidding wars. That screams SELLER’S MARKET to me.

Everyone and their brother has got a real estate license these days… go by the FACTS they present and not just their opinion. 

2. Buyer:  “I can get a mortgage with no problem. Let’s go see these 10 houses first, and then I will get a pre-approval letter once I have found the one.”

Realtor:  We are about efficiency and results! How will we know the price range of homes you can actually look at without a pre-approval? It’s also gotten tougher these days to get a mortgage if you have some flaws on your credit report or high debt-to-income ratios, so its best to find out what’s on your credit report by doing the mortgage pre-approval up front.  Then you’ll be able to make an offer on the spot if you find “the one”. You would be pretty upset if you drove around to 25 homes, finally found “the one” then realized you had to get pre-approved and someone else put in an offer before you that was accepted… or worse…you could not afford it. My job is to get you into homes you can buy now if you wanted to. EFFICIENCY AND RESULTS!

Sell My Problem Property Quickly

3. Buyer: “What do you mean there are closing costs on top of the down payment for my mortgage?!  Can’t the Seller pay that?  I have $1000 saved – that’s enough, right?”

Realtor: Yes, there are closing costs too!  No, $1,000 is not going to cover it!  You’ll want to talk to your mortgage professional about how much you have saved towards closing costs and down payment.  Sometimes the Seller can contribute a portion towards the closing costs, but it depends on what type of loan you are getting, and generally Buyers will up their offer if they expect the Seller to pay closing costs.  The lowest down payment option available is on an FHA loan – 3.5% of the purchase price, plus closing costs can be several thousand additional. (Currently, Mass Housing has a 3% down program)

4. Buyer: “I would like to make the Seller an offer 50% of the asking price and don’t plan to go up a whole lot.”  

Realtor: If this is your strategy for every home moving forward… I can refer you to another great agent. (code for… get the heck outta here! Time is money honey!!) Most Realtors will not waste their time with a buyer who wants to make such lowball offers. Boston is largely a sellers market. Your offer gets laughed at and immediately discarded! Don’t be “that” buyer… give competitive offers. (Unless it’s an “ugly house” in which case… game on)

5. Buyer: “I want a rent-to-own home in Hyde Park. Preferably in the Fairmount area. Can you help me find a Seller that won’t ask me to put much money down?”

Realtor:  Probably not.  Lease options and Rent-To-Own scenarios are, in this Realtor’s opinion, not really beneficial in this market to the tenant and generally require a sizable deposit.  It can work if you find a seller who is not completely aware of the process and charges less than the normal fee for such transactions. Typically you pay an “option” fee of between $5,000-$30,000 that is NOT REFUNDABLE. In a Seller’s Market, you are losing for sure… why would I sell my house to you on a rent to own basis (collect small monthly payments over time) when I could easily sell to a ready and willing buyer with cash or a pre-approved mortgage (Fat wad of cash within months vs years).

There are many more “reality check episodes” to come but these are a few that we hear regularly. Let The Mandrell Company help you get into the home that is right for you today.

Schedule your consultation with one of our real estate agents.

 

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East Boston Real Estate Prices Are Shocking | Check Out What’s Selling

Are you in the market to buy, rent or sell property in East Boston? Before you make a move, understanding the local market condition can make all the difference. We’ve outlined below exactly what’s happening with Single Family, Multifamily, and condos in the area. All these number reflect what’s taken place over the last 6 months.

Single Family Listings
Total Homes SOLD: 13
Average Living Area by Square Feet: 1,623.57
Average Listing Price: $431,750
Average DOM (Days on Market): 49.15
Average Sales Price: $419,577

Condominium Listings
Total Condos SOLD: 53
Average Living Area by Square Feet: 933.04
Average Listing Price: $349,240
Average DOM (Days on Market): 49.15
Average Sales Price: $346,577

Multifamily Listings
Total Multifamily Buildings SOLD: 41
Average Living Area by Square Feet: 2,701.04
Average Listing Price: $602,240
Average DOM (Days on Market): 33.15
Average Sales Price: $595,438

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Debt Buster Tip: Attacking your Credit Card

Never assume that you can’t improve the terms of your credit card payments. Many people are unaware of the power they possess inside of them! Our job is to tell you…you can do it… we have…we’ve suggested it to others…they have and they’ve seen results. Here are 2 tips to help you start chipping away at your credit card debt. 

Get Your Interest as Low as Possible

If you have a solid track record of paying on time and your card is not close to the limit, renegotiate the interest rates on your cards. Tell the companies that you’ve been a valued customer for X years and you have never missed a payment. You would like to see if they can give you a better interest rate on your card for being a valued member.

I promise you it works! It may not work overtime, but I’ve done it and other clients have done it and it works. The trick is not to bother them. Call once every 6-12 months to request a better interest rate.  Usually they decrease your interest rate by 1/2-1 percent. Although this amount does not sound like a lot…you are starting the process of saving more money.

Side tip: If you are given a decrease, calculate your payments based on the higher interest rates and pay that amount… you will be lowering your balance and climbing up the ladder toward financial freedom.

Pay off Debt from Highest Interest Rate to Lowest

There are different strategies to paying down debt. Some need small victories to motivate them to larger victories. This would be, for example, paying off the credit card with the smallest balance first. Once this card is paid off, you feel accomplished and energized to move on to the next. While I like this method, and use it depending on my mood, I think the best strategy is to pay the highest interest card first.   This is the mathematically correct way of doing things. You may end up spending thousands of more dollars in interest because while you paid off your $1000 card at 10% interest, you still have a $5,000 card with a 15% interest accruing over time. Interest is pretty much you giving away your hard earned money. Go with the mathematically correct way! Do not go with your emotions. Paying off small debts may feel nice but it’s a superficial feeling. Superficial feelings get people in trouble. Trust math. It has no emotions.

Financial Freedom requires determination and strategy. Pick which works best for your discipline level and for your wallet.

Our goal is to help our clients, improve their credit worthiness in preparation for a home purchase. For more information, please contact us and schedule your free no obligation consultation.

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Assessed Value Vs. Market Value – Do you know the difference?

When searching for properties many first time home buyers often get confused about how the value of real property is determined. It’s falsely assumed that the assessed value (on a listing sheet) is also the “market” value of that particular home. Here in the city of Boston and throughout Massachusetts that couldn’t be further from the truth.

The “assessed” value of a home is the value the local municipality places on the property for the purposes of assessing taxes. The government (simply put) looks at the size of the lot, the square footage of the home and any improvements recently done and determines the value for assessing taxes. The total tax bill given (annually) to that particular property is determined by dividing the total amount needed for the municipality by the local homes and the associated values.

The “market value” or true value of a piece of property is determined by supply and demand and a few other factors. Market value is based on what the market (or able and willing buyers) are willing to pay for that home. The market value can be higher or lower than the assessed value.

In Massachusetts the market value is often much higher than the assessed number. Taxes can be paid on an assessed value of $200,000 while the home recently sold for its market value of $300,000. Local governments typically review assessed values annually and adjust accordingly.

One last point. The “listing price” for a home is not always an indication of the property’s value. A seller’s real estate agent can list a property for any number they want. Unless they can find a buyer to pay that price, the listing price is just a seller’s wish.

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