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Meet Your Mattapan, Hyde Park & Roxbury Real Estate Expert

Denisha McDonald is your local real estate specialist for Roxbury, Dorchester, Mattapan and Hyde Park areas. She has a deep understanding of the community, it’s people and the real estate in these particular neighborhoods. Watch Denisha’s short introduction video!

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What Does It Cost To Buy A Duplex Or Triple Decker In Roslindale?

Roslindale Multifamily & Rental Market Data

Are you a current or aspiring landlord in Massachusetts? No matter how many years you have in the rental business, fully understanding your local market is one the most important thing you can do to ensure your long-term success.  Receiving regular market updates will help you determine when’s it time to buy and when it’s time to sell. It will also allow you to see what your apartments rent for in comparison to your neighbors. Should you be increasing rents?

Here are Roslindale’s multifamily sales and rental market statistics for the month of September.  

Total Multi-Family Listings SOLD: 16

Average Living Area by Square Feet: 2,600.00   

Average Listing Price: $618,352  

Average DOM (Days on Market): 37.87 Days 

Average Sales Price: $628,680

Average Rent for 1 Bedroom Units: $1,753

Average Rent for 2 Bedroom Units: $1,858

Average Rent for 3 Bedroom Units: $2,334

Average Rent for 4 Bedroom Units: $2,675

Want to get a FREE Sales and Rental Market Report for your specific area(s)? Just send a quick email to Contact@MandrellCo.com to receive your monthly report. In the title put the words “FREE Boston Sales Statistics” and in the body, add the up to 3 areas you’d like to receive data for. Your name and email will be added to the next monthly reporting cycle. It’s that simple to stay up to date and ahead of the curve!  

Please call us directly at 617-297-8641, for custom reports or questions above the data provided.

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Learn How To Avoid Buying More House Than You Can Afford

If you’re looking at realtor.com. If you’re looking at Zillow or Trulia and you’re looking through homes and you … Or you’re looking on MLS through your real estate agent’s news feed and you’re wondering exactly how you could calculate the mortgage on this. You really don’t want to keep going back and forth to your mortgage broker. You really want to be able to calculate or get a good idea of what your mortgage payments may be on your own, then you can use this mortgage calculator.

This mortgage calculator can be found at the bottom of our website. This is mandrellco.com. Scroll all the way down to the bottom of the page, and one of the resources is the mortgage calculator. It will bring you to this page right here.

Let’s assume we’re going through a scenario, you are buying a $300,000 home. I’m going to put in $300,000. Again, there are so many different variations of this that you can go through. It’s really going to be something that you’ll have to discuss with your mortgage broker, with your real estate agent. Find out what program is best for you.

Let’s say you’re in a conventional mortgage and you are putting 5% down, 5% of 300,000 is $15,000. That’s the down-payment. In terms of the interest rate, they’re asking you, “What is your mortgage interest rate?” If you’ve spoken to a mortgage broker already, you should have a very good idea of what interest rates are currently and what you could expect.

If you have not and you just really want to play around with it, what you could do, and what I’ve done, is just basically went to Google and just typed in average mortgage rates. This is what’s come up in the search. I’ve scrolled down here and I’ve just basically seen 30-year fixed mortgage rate as of January 2nd, 2017, is approximately 4%, but a little more. You can click on that, it will bring up Zillow. You could see what interest rates are being offered through different banks.

Again, if you have stellar credit, your number, or your rate may go down. If your credit is less than stellar, that number may go up a little bit more. If you’re putting a substantial amount down, that number may go down. If you’re putting the minimum down, say, 3 or 3.5% in an FHA or mass housing loan, then that number may go up just a tad.

Let’s use a number of let’s say four and an eighth today just to see where we are, 4.125. We’re going to stick with a 30-year fixed. PMI is primary mortgage insurance. Again, when you speak to your mortgage broker, if you’re on a Federal Housing Administration loan or an FHA loan, you will have PMI and your mortgage broker would be able to tell you exactly what that is.

If you are purchasing a condo, most likely on your MLS listing or where you’re pulling the information from, you will be able to pull the condo fee. You can plug that number in as well. If it’s a single family home or a multi-family home, it probably will not have a condo fee.

The taxes are usually listed right on your listing sheet as well. For this example, let’s plug in $25,000. Insurance is not typically listed. Rule of thumb. Again, this is not a hard and fast number, but just to give you a general idea. In Massachusetts, I usually use a number of about a half a percent.

In this case, let’s say we’re purchasing a half a percent of the home value. In this case, it’s 300,000, we’re purchasing at 300,000. One percent would be 3,000. I’m going to say a half of that is 1,500 bucks for my home insurance. I’m going to take all these number, $300,000 purchase price minus my 5% down, which means I’m financing 285 over 30 years at four and an eighth. I’m going to pay taxes per year of $25,000, a little over $200 a month. I’m going to pay insurance of $1,500, or a little over a hundred dollars a month.

I calculate my payment. You’re going to have a principal and interest payment of 1381. If you escrow in. What that means, if you pay all your taxes and insurances with your mortgage payment, which is most common, you’re going to have taxes and insurance for a total payment of 1714.59.

If you bought a house for 300,000 and put 5% down over 30 years at this particular interest rate with these taxes and these insurance, this is what your total mortgage payment would be. This is an excellent way for you to play around with it. If you say, “You know what? I can afford up to about $2,000 on my own. I feel comfortable paying of about $200,000 on my own.” You can now adjust this and go 325, would put me up at about 1835. 375 may put you just over $2,000. Maybe 360 is somewhere where you really want to be.

Maybe you’re looking at homes in the 375 range with the idea of possibly negotiating your way down to a 360 mortgage payment hoping to land a total payment of no more than $2,000 a month where you’re comfortable.

Hopefully this was helpful. Again, you could access this calculator one of two ways. You could go to mandrellco.com, scroll all the way down the bottom of the page and capture the mortgage calculator, or click on the mortgage calculator. In the description of this video, there is also a link to this calculator as well. Hopefully this was helpful. Talk to you soon.

Thanks for watching our video. Did you find this information useful? If so, please remember to like the video and also subscribe to our channel for more useful information.

I would also encourage you to share this video with your friends and family. Thanks again and we’ll talk to you soon.

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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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West Roxbury Multifamily Sales & Rental Market Data

Are you a current or aspiring landlord in Massachusetts? No matter how many years you have in the rental business, fully understanding your local market is one the most important thing you can do to ensure your long-term success.  Receiving regular market updates will help you determine when’s it time to buy and when it’s time to sell. It will also allow you to see what your apartments rent for in comparison to your neighbors. Should you be increasing rents? Is now a good time to sell?

Here are West Roxbury’s multifamily sales and rental market statistics for the last 6 months.

Total Multi-Family Listings SOLD: 9

Average Living Area by Square Feet: 2,910.00

Average Listing Price: $675,735

Average DOM (Days on Market): 68.11 Days

Average Sales Price: $677,778

Average Rent for 1 Bedroom Units: $1,577

Average Rent for 2 Bedroom Units: $2,004

Average Rent for 3 Bedroom Units: $2,356

Average Rent for 4 Bedroom Units: $2,957

I Want To Know My Home’s Value!

Want to get a FREE Sales and Rental Market Report for your specific area(s)? Just send a quick email to Contact@MandrellCo.com to receive your monthly report. In the title put the words “FREE Boston Sales Statistics” and in the body, add the up to 3 areas you’d like to receive data for. Your name and email will be added to the next monthly reporting cycle. It’s that simple to stay up to date and ahead of the curve!

Please call us directly at 617-297-8641, for custom reports or questions above the data provided.

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East Boston Multifamily Sales & Rental Market Data

Are you a current or aspiring landlord in Massachusetts? No matter how many years you have in the rental business, fully understanding your local market is one the most important thing you can do to ensure your long-term success.  Receiving regular market updates will help you determine when’s it time to buy and when it’s time to sell. It will also allow you to see what your apartments rent for in comparison to your neighbors. Should you be increasing rents?

Here are East Boston’s multifamily sales and rental market statistics for the last 6 months.  

Total Multi-Family Listings SOLD: 44

Average Living Area by Square Feet: 2,462.00

Average Listing Price: $615,435

Average DOM (Days on Market): 66.98 Days

Average Sales Price: $610,560

Average Rent for 1 Bedroom Units: $1,677

Average Rent for 2 Bedroom Units: $1,943

Average Rent for 3 Bedroom Units: $2,307

Average Rent for 4 Bedroom Units: $2,875

I Want To Know My Home’s Value!

Want to get a FREE Sales and Rental Market Report for your specific area(s)? Just send a quick email to Contact@MandrellCo.com to receive your monthly report. In the title put the words “FREE Boston Sales Statistics” and in the body, add the up to 3 areas you’d like to receive data for. Your name and email will be added to the next monthly reporting cycle. It’s that simple to stay up to date and ahead of the curve!

Please call us directly at 617-297-8641, for custom reports or questions above the data provided.

http://www.EastBostonHomeValues.com

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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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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.

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Excerpt from Full Article
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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… 

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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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With mortgage rates remaining near historic lows, many financial experts are making the case that student-loan debt doesn’t have to hold back millennials from buying a home. But the message isn’t getting across: Nearly 70 percent of millennials say they are delaying a real estate purchase because of their student debt load, according to a new survey by CommonBond.

Forbes.com recently highlighted whether a person with student-loan debt was ready to become a home owner with the following assessment:

  • Debt-to-income ratio isn’t everything. Yes, the proportion of your income that goes toward paying your debt is a central determinant of whether you’re ready to buy a home. Most lenders require a debt-to-income ratio of 36 percent or less to qualify for a mortgage. But a buyer with student-loan debt shouldn’t worry that their number will automatically disqualify them. The key is that they pay their bills on time and still have enough income left over to compensate for their debt.
  • You can still handle more debt. Life is all about balance. Take a serious look at your monthly budget/income. You either need to have a large enough cushion (20% down payment) or calculate what your monthly expenses would be to own a home. If the cost of owning is around the same as renting (all included), then you should be adjusting and preparing to purchase. The best interest rates tend to go to those who can offer a 20 percent down payment, but loans are available that require as little as 3 percent down on a home.
  • Make a budget. To save for the down payment, would-be buyers need a budget in place. Katie Brewer, a certified financial planner in Dallas, suggests budgeting with broad buckets: fixed expenses, variable expenses, and longer-term goals (e.g. paying down debt, buying a home, or saving for retirement). Brewer recommends keeping fixed expenses to 50 percent or less of your overall budget. There’s no one budget style that is more effective, however. The important part is to just pick a method and then start working toward the goal — saving for a down payment, in this case. With the Boston rental market being as aggressive as it is… It may be a great idea to downsize for a bit so you can save. Get Roommates, Eat out less, Decrease leisure spending. You have to tweak your “budget” to what makes logical and financial sense to you. I am a firm believer in those who want something bad enough…will do everything in their power to make it happen. The question then becomes: HOW BAD DO YOU WANT IT?

If You would like more strategies on saving up for a home or would like to speak with one of our trusted mortgage lenders for more strategies on preparing for home ownership, please email us at Buy@MandrellCo.com.

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I have a confession to make, I was once a huge fan of real estate reality TV, house hunters, all the DIY shows but I’ve come to realize they paint a false picture for homebuyers.

If you’re a real estate newbie devoted to “House Hunters” or “Buying Alaska,” you may be left with some very wrong impressions about how the house searching and buying process really works. On TV, it seems that as soon as the idea of buying a home crosses someone’s mind—whether they’re a property virgin, serial home buyer, or any combination that a real estate agent swoops in and immediately, you find the home of your dreams! While I wish it were that simple, the process is a little more detailed than what they show you. 

In fact, 42% of all buyers and 38% of millennials say their first step in the home-buying process is looking for properties online. They utilize sites as Zillow or Trulia to begin their preliminary research. Contacting a real estate agent is next on that list. Buyers reported taking a median of two weeks as they are searching before contacting an agent. For millennials, the median was three weeks.

Moreover, websites are used throughout the process by 89% of buyers and 93% of millennials. Indeed, 71% of millennials are specifically using phones or tablets to access data during the process.This may not add up to compelling reality television, but it is actual reality.

What gets me roweled up is that  on TV, the TV camera-ready house hunters look only at the magic number of three houses before finding their perfect place. Every time! In real life, buyers look at a median of 10. Depending on your market and your budget this number can vary quite a bit. In Boston, the problem in our spring and summer markets is low inventory with a ridiculous amount of buyers. Homes are sold for well over asking in most cases due to bidding wars. They never show this on House Hunters but it is a reality in our market.

Let me tell you: Three houses just wouldn’t cut it. From my personal experience, I can attest that it is nearly impossible to grasp what is most important to you in a new home, and how to value the various trade-offs, without having real, honest-to-God examples in front of you. And there will be trade-offs: No two homes are alike, and what is available for sale at any given time is typically a subset of the features most buyers think are important. Your best chance to get your dream home within one of the 1st three homes viewed would be new construction or a home you customized yourself. 

You might think that being in a specific neighborhood, or having an open floor plan, or having the latest appliances seem most important—but when you actually walk through homes in various conditions, at differing prices, in a mix of locations and styles, suddenly you realize it isn’t so simple. Not even close.

Using a real estate agent is invaluable, especially in the Boston market because the process is complex, and buyers don’t want to make mistakes in what is likely the biggest purchase they’ve ever made. Your Real Estate Agent can walk you through the process, negotiate better terms on your behalf and provide feedback and draw attention to warning signs etc. highlight features or faults to a property and generally has a huge network of quality service providers to make the process less stressful.

In other words, it’s not about finding a home. It’s about finding the right home, making a good decision, navigating the entire process, and getting a good deal. And if you’re looking to buy a home, you’ve started in the right place here at The Mandrell Company.

We work with buyers and sellers throughout New England and our agents are trained to help you find the right home at the right price.

CONTACT US TODAY

WE WOULD LOVE TO ASSIST IN MAKING YOUR DREAM COME TRUE!

 

 

Source: Realtor.com
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5 Terrific Negotiation Tactics For The Massachusetts Home Buyer


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Unrealistic Buyer Expectations (Pt II)

I think I came down a little hard on some buyers the last time I discussed unrealistic expectations. Although I stand by my statements… I do understand that misinformation is the root of all of this. That being said… came across two other misconceptions we hear a lot in this business…

Foreclosure sale and Auction purchase as a first time home buyer.

Most people do not understand the auction protocol, and do not understand it is sometimes difficult to finance. Definitely not possible with traditional financing as auctions need money almost immediately, sooner than a traditional lender can provide.
Foreclosures are an awesome option for getting properties at a discount. Unfortunately Boston is extremely competitive and you are probably competing against cash buyers… you don’t stand a chance as an FHA buyer with these properties unless no investor wants it. 
 
Many first-time homebuyers have FHA pre-approvals, so they have other stringent property condition requirements to facilitate their lender. If you’re going conventional shoot for the stars. 
 
I think my favorite buyer is the one where every property is overpriced. I switch the question on them, and advise one day they’ll be there seller. Are they going to offer a deep discount. Probably not!
This is an off the cuff post so not as detailed as my last on this topic but still… let’s be realistic this  house hunting season.
 
Be sure to sign up for our blog alerts to stay current on what’s happening in the real estate world. 
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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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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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Via our FREE Financial Literacy seminars and our partners, we educate members of the community on strategies to improving their credit score in preparation for the biggest purchase one can make…. buying a home!

One question we get asked a lot is whether they should pay off their collections. You have the option to pay off your collection or settle the debt for a lesser amount with the lender but there is one step before handing over your debit card. In order to truly impact your credit score, the creditor needs to REMOVE or DELETE the collection from your credit report. If you pay in full or settle, the negative activity still remains on your credit report. You need to request IN WRITING that your creditor delete the collection from your report. Do not issue a pay in full or settlement amount until you receive a response IN WRITING that they have agreed to or rejected your request. 

After 7 years, the collection item is no longer visible but if you are planning to purchase a home or a car within 6 years… it may be worth it to have those negative items removed from your record. 

I strongly recommend people monitor their credit report monthly. CreditKarma is FREE and sends you alerts when there are changes to your report. Although it does not utilize the FICO score which is utilized by the credit bureaus, it helps you MONITOR your financial report card so to speak. You want to know if you are on track or what items to address because they are setting you back.

 

For more strategies to help you get on track to purchase a home in 1-2 years, please contact us for a free no obligation consultation.

Schedule Your FREE Consultation

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Know to Own

A recent Bankrate.com survey finds while 29 percent of renters say they can’t afford a down payment, nearly a quarter report they don’t have a clue how much they would put down to buy a home.

Only 9 percent of non-homeowners said they would put down 1 – 5 percent of the purchase price as a down payment. It’s possible to get an FHA loan with just 3.5 percent down, or a conventional loan with 3 percent down.

As real estate professionals specializing in multi-family properties, we come across a lot of rental clients. Many of them are unaware of what is required to purchase a home. They are uninformed about the various programs available to assist with down-payment costs. As the real estate market continues to rebound and home values increase, many renters are feeling the heat with rising rent costs, making it harder to save for a down payment. 

We take time to research programs and educate potential clients on what is needed to purchase a home and provide resources to assist them in setting goals, finding financial assistance programs and becoming more financially responsible to build wealth through real estate. For more information on our upcoming FREE seminars, please visit www.urbanmoneymatters.com or contact us at Contact@MandrellCo.com

We look forward to serving you. 

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