When you enter a real estate contract on the property you are considering buying, the sale is subject to a due diligence period where, the buyer has the opportunity to terminate the contract if they decide the home isn’t for them. [Read more…]
When a deficiency judgment is being taken out against you, the collector may use a bank levy—a method where your bank account is frozen and funds withdrawn to pay off a debt. A bank levy is different from a wage garnishment in that the levy doesn’t touch your wages unless it is deposited into your bank account. [Read more…]
When making a big purchase decision, such as buying a home, it’s better to have more disposable income, the amount of money that you have for spending and saving after taxes and other expenses have been paid, than less. Many statistical measures and economic indicators derive from it, such as discretionary income and personal savings rates. These figures can determine whether or not you will be approved for a mortgage loan on your home.
Disposable Income & Applying for a Mortgage
Among these statistics, your debt-to-income ratio is one of the most critical ones regarding disposable income when you are applying for a mortgage. It is the main indicator to lenders of how dependable you are when it comes to making payments.
The lower your ratio, the better for lenders, and the more likely you are to get approved on a loan. A low ratio shows lenders that you are better at managing monthly payments and would be a reliable borrower that wouldn’t create any risk. Conversely, a high debt-to-income ratio conveys that you don’t have any disposable income and are unable to take on any additional debt, such as a mortgage, making you ineligible for a loan.
Disposable Income & Home Costs
Even though you may qualify for a mortgage, it’s important to remember there are costs beyond the mortgage, since keeping up with your home can be a major expense—from new appliances to a new roof. Sometimes people become house poor, meaning they only budget for the costs of their home and not much else like putting money into savings or luxury goods. Budgeting responsibly and not purchasing more house than you can afford can leave you with disposable income to use as you will.
Some people can handle the stress of living paycheck to paycheck, but nevertheless, maintaining financial stability before you purchase a home is key. Without a significant disposable income, it can affect events from the acceptance of your mortgage loan to your lifestyle after you purchase your home. Remember to consider all of the other costs there are before you become a homeowner and how crucial it will be to have a means of disposable income.
If you need to extend your closing date, there are specific rules you have to follow in order to be allowed to. If you live in Kansas or Missouri, know that there are very few differences in getting approval for extending your home closing date. Namely, who oversees the closing of the home. [Read more…]
Are you in default or about to default on your loan? There are many consequences like fees and damage to your credit score, and your loan is now considered non-performing. One of the fees you will come across are default-related fees. These fees typically come from default-related services, and are determined by default rates. [Read more…]
When it comes to closing on your home, lenders are required to give you an estimate of how much your closing costs will be. Typically, home buyers will pay 2 to 6 percent of the purchase price of the home in closing costs and since closing costs are third party fees, they can be different from your estimate.
If you aren’t prepared, these costs can end up being more than you can handle. Depending on your situation, there are many options available to help you get closing cost assistance. [Read more…]
When applying for a Kansas City home loan or insurance, your application is carefully researched and considered by an underwriter hired by the mortgage company. The underwriter has a very important job in making sure you are a good candidate and that all information presented is correct and complete before you can be approved for a home loan. [Read more…]
Purchasing a home is a huge investment and it’s important that your ROI (return on investment) will measure your investment’s profitability when it comes time to sell your home. However, many people expect their return on investment to be larger than what it actually ends up being. A variety of factors can explain why your ROI isn’t as much as you had hoped when you bought your house:
The condition of the housing market has the biggest impact on your ROI. However, this is a factor something you cannot fully control. In a thriving economy, real estate investments can be very profitable. The opposite is true for a recessionary economy. If the market experiences a downturn, you could even end up owing more money than what your home is worth. Markets can be fickle, and there are no guarantees. Given the choice, watch the market and try to sell at the best time and season. [Read more…]
When considering the offers from buyers who are interested in buying your home, who would you be more likely to choose; the buyer with a history of making their payments on time or the buyer who has a history of being unable to pay? Naturally, you’d prefer the buyer who has a good payment history. But does that mean you should never take into consideration buyers who have re-performing loans, even if they have a good offer? It depends. [Read more…]