Tag: Mortgage

Buying A Home Post-COVID? Here’s What You Should Know
A Changing World

Let’s rewind the clock a bit.

It’s December 31st, 2019, and New Year’s Eve is in full swing.

The fireworks are blasting off, the champagne is popping, and people are happy. If you had listened in on others’ conversations, you would hear a general air of hopefulness. Everybody had high expectations for 2020, and they weren’t afraid to let the world know.

If you were anything like most people, then you probably had the same level of optimism.

Instead, the universe decided to prove us all wrong. January got off to a rocky start, February was okay, and by early-March, everybody had heard about COVID-19.

At first, nobody expected this virus to have the effect that it did. But after another 30 days passed and the entire world was still on lockdown, all of the optimistic people realized what was happening.

No matter what you do, the virus has likely impacted you and your family in at least some small way. Despite all of the unexpected ups and downs that 2020 threw out, though, families are still searching for buying a home.

Owning A Home Is Smart

When apartments started evicting people who couldn’t pay their rent, owning a home suddenly seemed a lot more secure. After all, mortgage payments are usually cheaper than apartment renting (for a similar-sized space), and apartments are ridiculously overpriced. All of this goes to say that even though the world is still amid a pandemic, homeownership is steady.

In today’s article, we’re going to be looking at everything you should know about the changing real estate market, how you can prepare, and how to ensure that you get a good deal. We’ll also be talking about the holy grail of home loans (at least as far as banks are concerned)- your debt-to-income ratio (or DTI, for short).

Let’s dive in!

Understanding Debt-To-Income Ratio (DTI)

Before you start shopping for a house, the most important thing to know about is your debt-to-income ratio. Every bank you go to, every lender you speak to, and even some real estate agencies will want to know this number.

Most of these organizations will do the math on your DTI for you, but it’s a good idea to know before you get turned down for the loan required to purchase your dream home. It will also save you time spent at the bank going through all of your expenses line by line.

Save Your Credit Score!

Another great reason to have your DTI calculated before you start applying for loans is that it will save you from unnecessary “hard checks” on your credit.

When a major lender has to run a credit check, this counts as a hard check and can reduce your overall credit score by a couple of points. These negative marks stay on your credit score for two years, and there’s no way to get them removed sooner.

Obviously, if you want a home loan, you’ll have to consent to at least one credit check. But it’s a lot better than getting denied for multiple credit checks because you were applying for a larger loan than you could get approved for.

How To Calculate Your DTI For Home Loans

Your debt-to-income ratio is a number that compares your monthly debt (bills, loans, expenses, rent) to your income. If you’re single, only your income matters. If you’re married, they’ll also count your spouse’s after-tax income towards your income, which can significantly boost your DTI.

Calculating your DTI ratio is simple- divide your monthly income by your monthly debt and expenses.

This is where you’ll have to do a bit of inventory. You must itemize all of your debts and expenses, not just the big payments.

Include how much you spend on groceries, entertainment, gym memberships, subscriptions, phone bill, internet, and even your pets. The bank will go through your bank statements anyway, so you’re not going to be able to hide anything.

So, let’s say that your total monthly expenditure is $3,000, and your monthly salary (or business income) is $10,000. Divide your income by your debt, and you’ll get a DTI ratio of 33%.

A 33% DTI is excellent, but most Americans have a higher DTI- especially after COVID. The higher your DTI ratio is, the worse it is. In general, banks and lenders like to see a 43% DTI ratio or lower.

You might be able to get a loan with a higher number, but you’ll likely have to make a higher down payment or be required to pay a higher interest rate.

Looking For An Easier Way?

One of the easiest ways to calculate your debt-to-income ratio is to head over to MortgageCalculators.info. The site is 100% free to use, and their DTI calculator is second to none!

All you need to do is enter your pre-tax income, your spouse’s post-tax income (if applicable), expenses, and mortgage details (if you know them). Once you’re finished, press ‘Calculate,’ and you’ll have all of your numbers. You can then screenshot or save all of the information.

If you’re looking for other essential real estate calculators, the site developers have created an excellent line-up of tools, including:
- Monthly payment calculator
- Minimum income requirement calculator
- Home loan limit calculator
- Repayment charts
- Closing cost calculator
- Reverse mortgage calculators
- …and a lot more!
Overall, MortgageCalculators is an excellent resource for anybody who wants a simple way of calculating all of their numbers. The writers have also included in-depth guides on how to apply to federal FHA loans, how to refinance your home, and more.

The best part of it all- it’s 100% free!

Don’t Stretch Yourself Too Thin

One thing that COVID taught almost everybody in America is that you should never stretch your resources too thin. Before this happened, there were a lot of people who had high DTI ratios, and as soon as they lost their job, they lost everything.

If you’re shopping for a home or trying to get a home loan, then the best thing you can do is reduce your monthly expenses as much as possible.

Real Estate Changes After COVID-19

Pretty much everybody can agree that things aren’t the same as they used to be; this also applies to the real estate market. Possibly one of the biggest changes we’ve seen is one of the most iconic- no more “Open House” signs.

In the past, this was one of the easiest ways to go house shopping. You could hit up all of your favorite neighborhoods and just drive around until you saw an “Open House” sign, walk in, drink a soda, eat one of those grocery store cookies that the real estate agent puts out, and see if you liked the place or not.

Today, though, things are a bit more impersonal. In some states, where the virus isn’t as bad, you may be able to schedule an in-person visit with an agent. However, more agencies are switching to virtual tours, at least for first-time showings.

These usually involve a video or Facetime call where the agent walks around the house and shows you all of the important interior and exterior features.

Although they’re not quite as inclusive, these virtual tours are a great way to do a preliminary examination of a house. If you indicate that you like the house, then the agent will typically be able to schedule a short personal visit. The virtual tours are a good way to get a feel for the house, but ultimately, you really won’t know whether you want to buy it or not until you see it in-person.

Sales Are Down

The biggest change to the real estate market is that sales are down, meaning that it’s not the best time to be an agent. Since money is tight, many people who planned on buying a home this past year decided to wait a bit longer.

… But You Might Get A Deal

The flipside of that is that you could stand to get a better deal on your home. There are still a number of people who are desperately trying to sell their home. With sales down, many sellers may be willing to reduce their home price to sell it faster.

Final Tips For Buying A Home

There’s no need to cancel your plans to purchase a house in 2021, even with a pandemic going on. Although the real estate market is undoubtedly going through some changes, home prices and loan rates have stayed steady throughout most of 2020. If anything, you may stand to get an even better deal since fewer people are shopping.

Ultimately, owning a home is the ultimate security. You’ll be able to reduce your monthly living expenses, and you’ll actually get to own the house. In the future, you can use the house to help you get business loans, and owning a home looks great on your credit!

Remember, though, before you start shopping, check out MortgageCalculators.info to calculate your DTI ratio (and anything else you might need). As long as you know your numbers, you’ll know exactly how much home you can afford, and finding a lender will be much easier.
February 15, 2021
Is Investing In Property A Good Idea?

Investing is one of the biggest ways people prepare for retirement; be it in the stock market, 401(k) plans, precious metals, business opportunities, you name it. However, one particular category of investments that has been gaining traction lately is real estate property investing. It has become so popular because it typically enables your current funds to follow the rate of inflation and even appreciate beyond inflation in some cases. Everyone can agree that some forms of investment are better than others — except that perception depends on your interpretation of the term “better.” To some, “better” is relative to the chance of a greater return, but to others, it is simply dependent on the stability of the investment for its duration. Let’s look at how these definitions compare to determine whether an investment in real estate is the right choice for you.

“Saving vs Investing” by ota_photos

Getting Started

In order to dive into how investments in real estate stack up in comparison to other areas of investment, we need to start from the beginning and evaluate the process.

Many misinterpret real estate investment to mean you will be buying multiple houses or properties and flipping them or renting them out. While that can be your plan of action in investing, that’s not the only way to do so.

Also, prospective investors commonly assume that in order to invest in real estate, you need to have immediate access to the funds to afford multiple properties. However, you can actually take advantage of your lending options as well. There are a variety of loans that allow investing or renting with a low-rate down payment. In fact, the idea of a standard 20% down payment for a loan is woefully outdated and the average percentage has been trending downward. In recent years it has dropped below 10%, meaning that homeownership has started to become more accessible.

While you may still require a chunk of change to make the down payment on a home, different loan options require varying down payments and credit scores. For example, loans from the Federal Housing Administration require down payments as low as 3.5% with a credit score of at least 580. These loans are ideal for people purchasing their first home, which can still be an investment since real estate values appreciate in tandem with inflation. Meaning your invested money will retain its purchasing power whenever the home is sold.

What if you don’t qualify for an FHA loan, but would like to invest in property despite still not having a large mass of funds? There are options for the property title that may be useful to you, such as joint tenancy or tenancy in common. Although it’s commonly discussed in relation to renting, tenancy in property investment allows for multiple individuals to share the ownership and financial burden of a property. Using the joint tenancy and tenancy in common title options, you and others that you trust can all chip in to purchase a property. This approach can make homeownership that much more accessible and can also be handy for those just starting out in property investing without significant capital.

Lastly, there is the standard means of investing in real estate — buying a home. As you may guess, this is done by simply taking out a mortgage with upfront closing costs and a higher down payment. Some people can even afford to buy a property outright without the assistance of a lending institution. Regardless of which entrance to real estate investing best fits your situation, it’s time to consider whether or not investing in property is actually right for you.

Who Should Invest

Whether or not it’s a good idea to invest in property depends on what you are looking for in an investment and how you intend to invest. To cut to the chase, if you are looking for a quick, high return investment, then real estate probably isn’t the best place to start unless you are looking to fix and flip houses. Real estate properties see their best returns and greatest effects in long-term conditions for a few different reasons. One reason is simply the appreciation of property which, as mentioned earlier, usually follows the rate of inflation. Looking at real estate strictly in terms of appreciation, it’s not a great investment, but rather more of an asset — something to be leveraged when money is needed. Property rarely becomes an investment on its own due to upkeep costs and the rate of inflation of a little over 2% a year for the past 25 years. Since it requires more attention, property investment is not as turnkey as other forms of investment, such as stocks. However, real estate is a much more secure investment as it has a significantly lower chance of depreciation. Real estate investing is therefore most effective in two focuses: renting as a landlord and fixing and flipping.

Landlords

Being a landlord is a relatively straightforward way to secure a passive income. With current rent prices being so high, it’s easy to profit off of rent even after accounting for the expenses of the building itself. While this alone may sound simple, as a landlord you still have to be accessible at all times in case of an emergency and coordinate schedules for routine maintenance of the property. Becoming a landlord is still possible even for individuals in a hindered financial situation because some loan options will allow the purchase of multiunit properties, with FHA loans being an example of this too. The only stipulation is that the borrower must reside in one of the property’s units, and there can’t be more than four units in the property. All that considered, you are still presented with a great opportunity to have your taxes, mortgage, utilities, and general maintenance paid for you, or to even just lower your out-of-pocket costs while earning experience as a landlord.

As your experience with being a landlord increases, you can hopefully start to own more properties, eventually surpassing the need for a typical job. Since most of the maintenance can be performed by hired hands, it’s possible to retire at an early age as a landlord and even continue being a landlord past retirement. Finally, if you ever decide that you are done being a landlord, you can sell the properties and essentially get a full, inflation-adjusted return on your investment.

Fix And Flip

Fixing and flipping houses is a much less stable investment in property, but it also presents the opportunity to receive much greater returns on your initial investment. The returns also have a much shorter turnaround time than renting or simply holding on to a property and selling it off later in life. This style of investing has, arguably, been popularized by a multitude of television shows, starting with the first most successful show, “Flip This House” in 2005 on HGTV.

Much like what is depicted in any of the television shows, house flipping requires a lot of knowledge in different trades and an understanding of interior design. If the flipper doesn’t have these skills, it’s possible to hire helping hands to perform these jobs. However, that will diminish the amount of the return and will also require immediate access to funds to pay for the help. So to avoid this, most people tend to do the work themselves or with business partners. The bottom line is that this form of investing is significantly more hands-on and therefore is close to outright being a full-time job rather than a passive investment. Many people working with the fix and flip style of investing have likely spent a great deal of time working in a profession that already required those same skills.

Conclusion

Investing in property is a good idea for individuals who are looking for stability, passive income, or assets to add to their financial portfolio. If you are looking for a significant, short-term payoff, but are not skilled in the trades and are not looking to become well-versed in them, then investing in property may not be the most feasible investment type for you. Due to the nature of property being a physical asset that is exposed to the elements and subject to age, it’s not much of a possibility to have a hands-off approach like you can with the stock market.

November 28, 2020
How To Use Financial Calculator Online For Financial Planning
It is hard to really identify anything that the Coronavirus disease has not affected. The COVID-19 has spread across countries and continents and declared many lives. Because of nation-wide lockdowns, people have become unemployed and are trying to find ways to stretch and sustain their budgets. The declining economy, unreliability of markets, and massive unemployment have rendered chaos and tension among the public.

These unrivaled times have brought concerns about the narrowed income and the future.

Nonetheless, as Einstein said, “in the middle of difficulty, lies opportunity“, there are ways to deal with the current crises. To tackle these hard times, individuals and families carry out some steps to manage their budgets wisely. Although COVID-19 will continue to affect the world, a few smart measures can aid people to maintain their finances better.

Websites like Calculator.me have tools that help customers manage their finances and budget by using free financial calculator tools. You can use the tools to sort out financial planning, clear off debts, manage your savings, and more.

How To Use Financial Calculator

Consider the following steps if you are looking for ways to making your finance handling more clever and sustainable-

Budgeting and frugal living

Frugal living doesn’t have to do with being stingy, depriving, or compromising yourself to save a few bucks here and there. It is more about living smarter and being ingenious. Frugal living focuses on saving your money wherever possible so that you can utilize it in more valuable things. You can make a frugal living with these methods:

Improvise your food budget

Cooking your meals instead of eating outside is far less expensive, and it can help in stretching your budget even more. You can also grow your own vegetables; buy less-expensive parts of meat, and try to minimize the expenses while eating out.

Save money by embracing DIY.

Dare yourself to create the things that you usually buy or to adjust with what you have, as opposed to buying new. Although it is more convenient to head to the shop, DIY is much cheaper. There are many online tutorials that can teach you DIY skills.

Control your household expenses

By getting frugal at home, you can save monthly electricity, water, cable, or phone bills. Also, you can be your own handyman when the need arises by consulting YouTube or other sites. The more money you save on these expenses, the more you can save for what is more valuable to you.

There are many other factors like using coupons and freebies, taking care of your health, timely maintenance of your vehicle, and more that make your frugal style of living more effective.

To keep track of your budget and lifestyle, you can also use calculator tools from websites like Calculator.me.

Use calculators for paying off loans early

Some loans can be a real burden on one’s shoulders if they are not appropriately managed. Borrowing money from the wrong lender and at high interest rates and not repaying in time can cause a lot of trouble too.

You can take the help of a Loan Calculator to calculate your loan’s regular payment and total interest paid during the loan period. It is a tool that will guide you to keep track of your existing personal loans and help you clear them fast.

If you are having a hard time managing your loans and clearing payments, it’s time for you to allow a calculator tool to take the wheel for loan amortization. The tool also shows the time and interest rates it will take for you to clear off a loan if you are opting for a new one.

With a loan payoff, calculator handling a loan makes it easier for you, which directly affects your overall finance management.

Various salary conversion tools

Earning a good salary often misleads people into not thinking about their financial future. Sadly, people realize that their salary isn’t permanent only when their earning years come to an end. Guilty or not, you can always be aware and avoid this kind of situation by taking care of your finances and building a secure financial future.

While you can be determined to manage your salary on your own or with someone’s help, you can also opt for a tool like a salary conversion calculator. It is used to calculate and convert your wage or salary of one period into equivalent periodic terms.

For example, you can keep track of how much you are earning hourly, daily, weekly, monthly, or yearly by calculating your salary of a periodic term. The tool can also help you if you want to compare your present salary or wage to previous ones.

With a salary conversion tool, you can know everything about your salary, calculate quick estimates, convert annual salary from hourly wage, and vice versa. There are a lot of other benefits when you are well aware of how much you earn versus how much you spend. So consider using a salary conversion tool.

Money-saving and investment calculators

Saving money is a process most people find difficult, although it shouldn’t be when you’re doing it the smarter way. Here are some simple tips to help you save money:

Limit your credit card usage– This is an essential factor as many people tend to over-use credit cards and build up their debts. Make sure you don’t get caught in that web and regularly pay the dues in full amount.

Don’t delay paying your bills– You can avoid late fees and other unnecessary charges if you pay your bills on time.

Clear your debts– The lesser debts you have, the less interest you will have to pay so that you can save more money.

Make a shopping list– While going for groceries, be sure you have a list of all the items you need for some time so that you won’t have to take extra trips to the store. Also, avoid buying things just because they are on sale.

You should also negotiate prices when you can, lessen your phone expenses, and do many more small changes that can really affect your money-saving process. Above all, you need to set your mind into saving money to make the process a long-term habit.

The money-saving and investment calculator can show the benefits of saving-money.

You can calculate how much money you’re saving by replacing expensive products that you habitually buy with the less expensive one of equivalent quality. This Calculator also helps you see how much you could earn (interest) if you invested the money you are saving.

Through the money-saving Calculator, you can estimate the future value of your investment at different compounding terms. There is so much you can benefit by using a money-saving calculator as you can keep track of all your savings and investments and decide what to do best.

Retirement planning calculators

Retirement may not sound serious when you are young; it is something you can easily ignore and think about later. But the problem with that is, life doesn’t always work according to your plans, and without a retirement plan, you put you and your loved ones in a compromised situation.

Retirement could mean merely relaxing at your home, an afternoon nap, or for some, it is going on a trip with friends. And yes, these years are most-anticipated by hard-working people who work 8-10 hours every day.

The thing about retirement is, it is an end to the regular struggle for wagers and salaried people. For you to be financially independent even after you retire, you need to have a pension plan. Everyone who wishes to enjoy a joyous and financial tension-free retired life will know why retirement planning is vital.

What is retirement planning?

Retirement planning is a life-long process of setting income goals post-retirement and taking necessary actions to achieve those goals. It includes studying sources of income, approximating expenses, and devising a savings plan for the future. You can start planning your retirement anytime, but it is best if you do it sooner.

Uses of retirement planning calculators

Using a retirement planning calculator helps you figure out how much money aggregation is needed to maintain a financially comfortable retired life. It is a simple tool that lets you determine the amount of money you will require after you retire from work to enjoy a stress-free life.

It takes personal details like your present age, current income, savings, life expectancy, and the desired retirement age. The money you need in the future to achieve your retirement goals is based on these details by the Calculator. The Calculator then helps you choose the ideal plan for you to invest in to grow your wealth for post-retirement plans. If you haven’t planned your pension plans and want to now, you can check out websites like Calculator.me, which provides the best savings and retirement plans.

Loan calculator tools for personal loans, auto loans, mortgages, and mortgage refinance

For you to deal with personal loans, auto loans, and mortgages, there are calculator tools that can make it easier and more systematic.

Personal loan calculator

A personal loan calculator makes it easy for you to determine the monthly installments on your loan. Monthly installment is the key component that decides the tenure of your loan.

The benefit of using a loan calculator is that you can calculate your pay-offs and EMI better, thus, having better loan planning. Calculator.me has user-friendly calculator tools that anyone can use easily. It shows loan options you can opt for and how to estimate the EMI annually or monthly, calculate the interest rates, in case you are planning to take a loan.

Mortgage Calculator

A mortgage calculator works out your mortgage’s monthly repayments built on the principal amount, balance, the interest rate, and the tenure of the loan. It also calculates your associated mortgage costs like taxes and insurance. Mortgage calculation can be done by handheld calculators as well as free software programs and online calculators.

Another benefit of using a mortgage calculator is that you can amortize your loans. Different types of loans depreciate in different ways, although the most common and general style is that loans amortize first with interest and later with the principal. Meaning, the borrower will eventually pay more interest than the actual borrowed amount.

If you have an opportunity to shorten the time of the mortgage, you should take it, as you can save a lot of interest while doing so. You can easily create your schedule for amortizing principal and interest with Calculator.me. By knowing the schedule and where your loan stands for the remaining period, you will have the advantage of budgeting and saving for the long run.

Auto loan calculator

If you are interested in buying a car, you will have to make a variety of conclusions as you prepare to purchase it. Apart from choosing the right models, finance is also an important factor of concern.

Unless you have enough extra cash, you need to borrow money to capitalize on big purchases. Before buying, you need to think about the cost of the vehicle, how to keep it running, and the timely servicing expenses.

Some people might be able to pay for the automobile at its entirety out of their pockets, but it is not the same case with everyone. The rest of us will need some financing options. So the things you need to consider while buying a car are down payments, loan term, rate of interest, and so on.

An auto loan calculator’s job is to help you choose the right car loan. You can calculate the monthly payment, interest rates, and the term of the loan with this calculator. Hence, it keeps you aware of the expenses and your investment in the automobile so that you can efficiently estimate and manage your overall budget.

As you finance and stretch your budget in these difficult times and try to save money, the factors mentioned above and points will help you make the best of what you have and lead a sustainable life.

It is crucial to have a calculator to aid you while you try to cut costs and save money in every possible way as it can help you determine your financial status better. So consider giving it a try.

While continuing your money-saving process, you might want to treat yourself from time to time. When you do so, keep your goals in mind so that you don’t over-spend. Saving money and controlling your finance is all well and good, but it all comes down to you- the way you think about spending. If you have set your mind to your goals, everything will pay off eventually.
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May 9, 2020
Money Saving Tips For Homeowners
Money Saving Tips for Homeowners

Being a homeowner is a rewarding experience. However, it can come with extra expenses that you may not have been prepared for when you signed your mortgage. Don’t let routine maintenance and other regular expenses break the bank. Use these money-saving tips to help you out around the house.

Do an Audit

Did you know that many HVAC companies will conduct a free or low-cost home energy audit on your home to see where you are doing well and where you have opportunity to improve? They don’t take long to complete and can shed light on areas around your home where you may be able to improve energy costs. Home audits can potentially save you thousands of dollars down the road.

Be Prepared

Your home is an investment, and if you’re like most homeowners, you want to protect that investment. Purchasing homeowners insurance to protect your home in the event of fire, theft, or other damage can not only save you money in the event of an emergency, it can also provide you with peace of mind knowing you’ll be taken care of. Additionally, you can install home security systems too.

Replace Bulbs

Incandescent bulbs aren’t as energy-efficient as you may think, and in fact, could be costing you. Make the switch to LED bulbs around your home, and you should see significant savings— sometimes up to 20% on your monthly energy bill.

Insulate

Providing your home with the proper insulation can keep your home warm in cooler months by trapping excess heat and preventing it from escaping your home. In warmer months, insulation can also keep your home cool by preventing the sun’s rays from passing through into your home. While it can be expensive to insulate your home up front, it can save you quite a bit of money down the road.

Use Less Water

Each day, we waste thousands of gallons of water. However, you can take measures to prevent the amount of water you waste by installing low-flow shower heads and energy-efficient toilets which use much less water than traditional fixtures. Making these simple moves can reduce your water waste and your monthly bill.

Lower Temperatures

At night and when you aren’t home, you likely don’t need to have your thermostat turned up very high. Program your thermostat to automatically adjust its temperature to lower levels when you aren’t around to help save on your heating bill. You can also invest in a smart thermostat, which will let you monitor your thermostat from your phone or even learn your habits and adjust itself based on your family’s activity.

Replace air filters

Your HVAC system should have its filters replaced twice a year or more if you have pets. When your filter gets too clogged, it can’t run at max efficiency which may cause your unit to malfunction and your monthly energy bills to skyrocket. Have your filter replaced regularly to keep your system running at optimum efficiency and to reduce the likelihood of an HVAC repair.

When you use these money-saving tips, you should have not only fewer repairs to worry about making, but you should also have a thicker wallet as a result. With all your savings, you can focus on other projects, like the home renovation you’ve had your eye on.
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March 4, 2018