How Student Loan Debt Impacts Homeownership for Millennials

A recent report by Freddie Mac looks at the how student loan debt impacts homeownership for millennials.

“The low home ownership rate among millennials is still something of a puzzle—it cannot be explained solely by the increase in student loan debt,” says Sean Becketti, chief economist, Freddie Mac.

“However, student debt plays a role—higher balances are associated with a lower probability of home ownership at every level of college and graduate education.”

Data confirms that not all student debt is created equal. Students who attended schools with less-certain educational benefits have not fared well. Borrowers who did not complete their studies have fared worst of all. These groups are likely to continue to affect the pattern of homeownership among millennials.

Moreover, a recent change in Federal Housing Administration policy will make it more difficult for some student loan borrowers to qualify for a mortgage.

If you have questions about how your student loan or any other debt impacts homeownership, contact me.

I also recommend that any first-time homebuyers, or anyone with questions about the homebuying process consider taking a free homebuyers class offered by Credit Counseling of Arkansas.

Save $1,000 By the Holidays

Ideally you should be working on your holiday savings throughout the year, but sometimes that doesn’t work. With these changes, you should be able to save $1,000  by the holidays.holiday savings

Of course, how much you can actually save depends on your specific situation and which moves you make. Still, these examples show that you can save a grand in just two months with a few simple budget adjustments—whether you need the money for holiday spending or other financial goals.

Reshop Your Auto Insurance

The cost of car insurance can vary greatly for each driver, and you’re likely paying more than necessary. Make sure you’re getting the best deal possible by comparing plans from different insurers using tools from Insurance.com, InsWeb or Nerdwallet.

Eat At Home

Brown-bag your lunch and trade restaurant dinner dates for romantic nights this fall to cut those meal costs by two-thirds or more. This could save on average $233 per month.

Drive Less

Leave your car in the garage on workdays throughout the fall to cut daily costs on parking, gas, tolls and even the occasional ticket. Cycling, public transportation or car pooling are money-saving options.

Cut the Cord

You don’t need to pay for cable to enjoy watching television. Most of your favorite shows are likely available online or through streaming services for little to no cost.

Lower Your Home Insurance Costs

There are some simple steps you can take to lower your home insurance costs.

Shop around

You can’t buy a home without purchasing insurance first, but that doesn’t mean you’re stuck with the insurance provider you’re currently with. Make sure you compare different companies and find the best deal. Check consumer guides, ask friends and neighbors and search online insurance quote services, which will give you an idea of price ranges and tell you which companies have the lowest prices.

Bundle your insurance

Many insurance companies will offer discounts if you package multiple policies, such as your car, boat and home insurance. On average, one can save 5 to 15 percent.

Safety first

Installing carbon monoxide detectors, smoke detectors and alarm systems can reduce your monthly bill, but you need to let your insurance agent know about any changes you make. Also, ask your insurance agent what steps you can take to make your home more resistant to natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials.

Increase your deductible

By raising your deductible, your monthly costs can decrease as much as 5 to 10 percent.

Rethink value

It’s not necessary to insure a house for the amount it was purchased for. Even if your house were to completely burn down, you’d still have the land, so consider that when deciding the total amount you need to insure. A good insurance agent will be able to help you calculate the proper replacement cost of the house.

It’s also wise to talk with your real estate agent and see if they have any thoughts on how to lower the cost.

5 Ways to Quickly Raise a Down Payment

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Of course the best way to come up with a down payment is to save for it. But what if you happen upon your dream home? Here are 5 ways to quickly raise a down payment, as well as the pros and cons of these options.

Continue reading 5 Ways to Quickly Raise a Down Payment

Solutions to 7 Common Mortgage Problems

In June, the Consumer Financial Protection Bureau (CFPB) launched an enhanced version of its database of consumer complaints about financial companies–mainly lenders, banks and credit card issuers.

Nearly 8,000 complaints were posted, a tiny fraction of the 627,000 complaints it has fielded since 2011. Of those, more than one-fourth were from mortgage borrowers, revealing a bottomless pit of frustration with lenders and servicers. If you have a complaint, the CFPB can help.

Meanwhile, MSN has compiled a list of seven recurring mortgage problems that borrowers face, according to the complaint files and includes suggestions for how to address them.

Read their findings here.

Buy a Home Now Instead of Renting

A home is probably the largest single purchase that most of us make in our lifetime. It’s a huge expense. But, there’s an interesting story out on realtor.com that says even with the expense involved, you still could save more than $200,000 over the next 30 years if you buy a home now instead of renting.

I know, that’s over 30 years. What about your money now?

Continue reading Buy a Home Now Instead of Renting

Free New Homebuyer Class

For people who are purchasing their first home, I highly recommend they attend a free new homebuyer class. new homebuyer class

Purchasing a home is the largest transaction that most people make in their lives. If you’ve never been through the process, there are a lot of moving parts that you might not realize.

Credit Counseling of Arkansas offers a free new homebuyer class each month. The next one is 9 am – 5 pm on June 6 at the Washington County Extension Building.

Qualified instructors from the real estate, insurance and mortgage and lending fields will walk you through the process and answer your questions.

Topics covered during the new homebuyer class include factors to consider before purchasing, home much home you can afford, the value of working with a realtor, current loan programs and down payment assistance and more.

Download the flier for more information. No reservation is required for the course.

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Check Your Credit Score Regularly

IMG_2367I can’t tell my clients this enough – check your credit score regularly. Your credit score is partially derived from the information on your credit report, and it is one factor that a mortgage lender will use in determining whether you qualify for financing. 

While it’s pretty easy to check your credit score, we sometimes get lazy about doing it.

I was working with a client recently who knew their credit score and didn’t think it allowed them to qualify for a home loan. I encouraged them to go ahead and pull the full credit reports and review them.

In doing that they found a number of issues in their credit history that did not originate with them. This happens sometimes, and it’s one of the reasons you need to check your credit report, not just your credit score.

They were able to work with Credit Counseling of Arkansas to get the discrepancies removed from their credit history. This resulted in an dramatic improvement in their credit score.

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7 Must-Do Steps to Buying A Home

There are a few mandatory preparations or steps to buying a home. It’s never too early to start preparing, and crossing these items off your list will make it easier to find and finance the home of your dreams.

Continue reading 7 Must-Do Steps to Buying A Home