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Variables affecting how much you need to save for a home include your income, debt-to-income ratio, home price, appraisal, inspection, and closing costs.

To stay within your means, spend no more than 30% of your household income on your mortgage (principal, interest, taxes, and insurance). Secure the best terms by maintaining high credit scores, providing a 20% down payment, and having cash for a good faith deposit, inspections, and closing costs.

With a gross annual income of $100,000 ($8,333/month), your mortgage payment should be $2,333 or less, and total debt payments no more than $667/month. Together, mortgage and debt payments should not exceed 36% of your gross monthly income, or $3,000, allowing you to buy a $400,000 home.

Consider these calculations:

Down payment: $80,000 (20%) or $12,000 (3%)
PMI: 0.22% to 2.25% of the loan balance
How to navigate the homebuying process.
Out-of-pocket: Earnest money (1%), appraisal $200-$600, inspection $300-$450, closing costs 2%-5% of purchase price, moving costs $1,250 (local) or $4,890 (long distance), home insurance $2,601
Reduce costs by buying a less expensive home, getting a no-closing-cost mortgage, and applying for down payment assistance.

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As we enter into this Labor Day weekend, I just want to celebrate the hard work and dedication of workers everywhere!   Thank you for all you do! 

Jane At The Lake

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Back in the day, you could make moving simple by saving old newspapers and retrieving boxes left behind your local grocery store. Today, you’ll likely have to order packing supplies for your move from somewhere online. Which is better—packing paper or bubble wrap? Actually, the answer is both.

Packing paper can take less space than bubble wrap, and it’s useful to tuck into corners to keep packed items from moving around in their boxes and breaking. You can wrap breakables in packing paper, but bubble wrap may be better for precious breakables, even if it takes up more space and raises moving costs. Bubble wrap is also water-resistant and non-abrasive, says the USPS store.

According to USpackingandwrapping.com, you can buy blank recycled newsprint paper inexpensively in either rolls or sheets. Rolls are 1,440 feet long and vary in width from 12 to 48 inches. A 30” newsprint roll is $51.14. You can get 1,200 20” by 30” sheets for $68.88. You can also try to get old newspapers for free from gas stations and grocery stores, or go to your local newspaper and ask to buy “end rolls” which are too short to be reused for printing standard quantities.

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Many aspiring homeowners cannot afford to buy a home where they want, especially in expensive inner cities. So, they’re turning to a new concept: rentvesting. It’s a clever way to enter the property market and start building personal wealth, giving you the freedom of renting coupled with the financial benefits of homeownership.

Rentvesting means renting a home where you want to live while buying an investment home somewhere else. While it may seem ironic, rentvesting can make sense. You rent a home where you can’t afford to buy, and then charge rent on a nice, less expensive property in the suburbs or a nearby town. The trick is to buy a home that’s right for your budget so you can earn a profit. Take the profit and save it, spend it to lower your rent, or best of all, reinvest it into your rental property so you can pay off your mortgage faster and build equity.

Of course, there are pros and cons. Some things to consider:

• You can live wherever you want
• You can buy a home anywhere you want
• As a homeowner, you can deduct the interest on your loan, depreciate the property, manage property expenses, and more. However, as a renter, you do not receive these tax benefits
• You can increase the rent on your property, but your rent payments may also increase
• You aren’t responsible for maintenance when you rent, but you’ll be responsible as a landlord.

Ask your Berkshire Hathaway HomeServices network professional to help you become a rentvestor.

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o make it easy to compare homes, the real estate industry supplies lots of data for each listing, including number of stories, type of home (condo, single-family, etc.), building materials (brick or siding), size of lot, number of bedrooms and baths, and so on. Nearly all homes listed for sale provide square footage to indicate overall size, but there are several reasons why square footage can be misleading, causing you to either overpay for a larger home or pass up a smaller home that’s actually more comfortable and livable.

First, there’s no single universal means of measuring square footage. Differing state rules and customs make calculating square footage somewhat subjective. Insurers, tax authorities, lenders, and real estate professionals typically use square footage numbers as determined by licensed property appraisers, but this data can conflict with tax roll figures if improvements to the home were made without permits.

Some states exclude attics, basements, garages and detached structures, while others allow them to be included if they’ve been finished out as living space. In high-rise buildings, square footage often includes balconies, even though they’re open air and not enclosed.

As a homebuyer, use square footage as a guide, but pay more attention to the home’s living spaces. Does foot traffic flow easily from room to room? Does the floorplan make sense? Are the rooms the right proportions for their purposes? Do you have the right spaces for your family’s needs? These questions will help you prioritize factors like flow, layout, and functionality over square footage alone.

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You may think you don’t need a first-time homebuyer’s certificate, but it’s a good idea to take a few hours to obtain one. A certificate shows you’ve completed educational requirements to prepare you mentally and financially to buy a home. Plus, completion of a course may make you eligible for some first-time homebuyer assistance or income qualified programs such as grants, down payment assistance, and zero interest loans.

Getting certified is easy as long as you make certain that the course you’re taking or the counseling you’re receiving meets the National Industry Standards for Homeownership Education and Counseling. Coursework will typically include:

• How to budget for a home you can afford.
• Learning all about mortgage loans and interest rates.
• How to navigate the homebuying process.
• Property maintenance, taxes, and other ongoing costs.
• Local, state and federal housing laws.
• How to avoid foreclosure.

Supported by major banks, Fannie Mae, Freddie Mac, the National Association of REALTORS®, and numerous community service groups, the recommended curriculum is standardized to provide high-quality, trustworthy advice. You can take first-time homebuyer or income qualified courses online through:

• Mortgage lenders and insurers
• State, local or national housing authorities
• Community development financial institutions
• HUD-approved counseling agencies
• Fannie Mae and Freddie Mac.

Grants are offered by The U.S. Department of Housing and Urban Development (HUD). Down payment assistance requirements may or may not include completing a homebuyer course, meeting income limits, purchasing a home in an approved location, staying below a price limit, and contributing some of your own money.

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Refinancing your mortgage is expensive, especially if you just want to lower your monthly payments. Closing costs can be in the thousands of dollars because you’re essentially applying for a new loan. Is there another way to lower your monthly payment? Yes: You can recast your mortgage.

In simple terms, a mortgage recast involves making a lump-sum payment toward the principal balance of your loan which the lender uses to create a new amortization schedule which will lower your monthly payments.

Every mortgage has an amortization schedule that directs part of your payment to reducing principal or toward paying interest. These amounts change slightly every month, until your payments go from paying mostly interest to paying down your principal. With a recast, your interest rate and term remain the same, but your monthly payments are lower because you paid a lump sum toward the principal.

To qualify for a recast, you’ll need a minimum of $10,000 and you’ll pay a service fee of approximately $250. Though the recast isn’t a new loan, you must qualify to get one:

1. Lenders may have differing requirements and fees, from the amount of the lump-sum payment, to how many on-time payments you’ve made, to how much equity you have in your home.
2. Recasts are not available on government-guaranteed loans such as FHA, VA, or USDA.

When you receive a bonus at work or decide to close out your savings, it’s a great idea to build equity in your home.

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Fabrics in your home are important to both your comfort and budget, so knowing the grams per square meter(GSM) is helpful when choosing textiles for bedding, furniture, and fabric accessories. GSM only measures the weight of any fabric. The higher the GSM, the denser and more durable the fabric.

A fabric’s GSM rating helps you better evaluate the performance you should expect, but it’s also important to consider fiber composition, weave and finishing. You want to choose the right type of fabric that will last, remain attractive, and feels good to the touch, so you won’t have to replace it sooner than you’d like. Towels need to be absorbent, so they range from 300 to 900 GSM, with 600 to 900 GSM in the premium luxury range.

Fabric weight is measured by both the thickness of the threads and the density of the weaving and helps determine its suitability for a given purpose. You’ve heard of thread count for sheets which is the number of threads per one square inch. Fiber composition is more important. For sheets, flax linen at 170 GSM is best for temperature regulation and moisture wicking. Cotton may be less expensive but improves in softness with repeated washings and use. Microfiber is soft and durable, but it’s also less breathable and absorbent than linen or cotton.

Bolt fabrics will state the GSM number, or you can figure it yourself with this free online calculator.

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A rain garden isn’t as complex an idea as it sounds. You can just use a small depression in your yard—the one where a puddle always forms when it rains. According to LifeHacker.com, the goal of a rain garden is to “temporarily hold and absorb rain water runoff coming from roofs, driveways, patios or lawns.”

Instead of putting up with a puddle that turns into a muddy mosquito haven, you can plant shrubs, perennials, flowers, and native grasses into the slope and make it look intentional and attractive. BirdsandBlooms.com maintains that rain gardens can soak up as much as 30% more water than a conventional lawn. They can also provide a natural habitat for birds, butterflies, and other helpful insects, says the site.

If you really want to get scientific about it, rain gardens serve an environmentally sound purpose. The technical phrase for rain gardens is bioretention facilities, which refers to a number of practices that helps soil reabsorb rain runoff, slows the flow rate of runoff, and filters pollutants from roofs, driveways, and walkways. Rain gardens help reduce the “heat island effect” which makes cities much hotter than rural areas.

Plant your rain garden on a slope, at least 10 ft. from the house. The garden should be twice as long as it is wide. Use plants that absorb nutrients and water and release water vapor back into the atmosphere, such as small trees, shrubs, rushes, wildflowers, and sedges, explains FamilyHandyman.com. Click here to find suitable plants.

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When you take out a conventional mortgage loan (not insured by the U.S. government), with a down payment of less than 20%, your lender will require that you pay monthly private mortgage insurance (PMI) which protects the lender in case you default.

PMI costs can vary between 0.58% and 1.86% of the mortgage amount. According to Nerdwallet’s PMI calculator, if you buy a home for $350,000, put down $35,000 or 10% with a 6% interest rate on a 30-year note, and with a credit score of 620 to 639, you’ll pay 1.50% PMI, or $394 per month. It’ll take 7.40 years for your loan balance to get to 80% loan to value (LTV). The earliest you can get a PMI cancellation is two years of ownership and an LTV of 75%.

You can ask your lender to remove PMI when your loan balance reaches 80% LTV. At 78%, PMI should be canceled automatically, but there are steps you can take to get it canceled more quickly.

1. Make extra payments to reduce the principal.
2. Make payments on time—no late payments in the previous 12 months, no 60-day late payments in the previous 24 months.
3. Don’t have any other liens on the property, including a second mortgage.
4. Show proof of value with a professional appraisal or broker price opinion.
5. Make improvements to the home that add value.
6. Refinance the mortgage and get a home equity line of credit to pay off the PMI.

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