Tag Archives: divorce and home ownership

How Long Does It Take to Improve Your Credit Score Enough to Buy a Home?

How long does it take to improve your credit score? If you’re hoping to buy a home, having a good credit score is key, since it helps you qualify for a mortgage. So if your credit score is low, knowing how long it takes to raise it to home-buying range can help you plan.

While raising a credit score can’t happen overnight, it is possible to raise your credit score within one to two months. However, it could take longer, depending on what’s dragging down your score—and how you handle it. Here’s what you need to know.

How long does it take to raise a credit score?

First off, what’s considered a good score versus a poor one? Here are some general parameters:

  • Perfect credit score: 850
  • Excellent score: 760-849
  • Good credit score: 700 to 759
  • Fair score: 650 to 699
  • Low score: 650 and below

While it varies by area and type of loan, generally lenders will look for a score of 660 or higher to grant a mortgage (here’s more on the minimum credit score you need for a home loan).

If you’re looking to boost your credit score fast, here are some actions you can take.

Correct errors on your credit report

Correcting errors on your credit report is a relatively quick way to improve your credit score. If it’s a simple identity error—like a credit card that’s not yours showing up—you can get that corrected within one to two months.

If it’s an error on one of your accounts, though, it could take longer, because you need to involve your creditor as well as the credit bureau. The entire process typically takes 30 to 90 days. If there’s a lot of back-and-forth between you, the credit bureau, and your creditor, it could take longer.

The first step to correcting errors is to get a copy of your credit reports from TransUnion, Equifax, and Experian (the three major credit bureaus), which you can do at no cost once a year at annualcreditreport.com. Next, review them for errors. If it’s an error on one of your accounts, you must refute that error with the bureau by providing documentation arguing otherwise. For example, if you paid a credit card on time and the card issuer is reporting a late payment, find a bank statement showing that you paid on time.

Credit bureaus typically have 30 days to investigate the error. If they agree that it’s an error, they will remove the item. The credit bureau may also ask for additional information or ask you to discuss the information with the creditor involved. If that’s the case, stay on top of communications with your creditor so you can get things resolved as quickly as possible.

Deal with delinquent accounts

Bringing delinquent accounts current and settling accounts that are in collections can also boost your score fairly quickly. Once the creditor or collection agency reports your account update, you should see a positive bump in your score. Keep in mind, though, that your late payment history will remain on your credit report for seven years.

If you have bad accounts that have been on your report for six years or more, you may not want to worry about settling them or bringing them up to date. This can re-age the account, and if you fall behind again, it will stay on your credit report for another seven years.

“Make sure you don’t re-age these accounts, because they’re going to drop off soon,” says Nathan Danus, CDMP and Director of Housing and Community Development at DebtHelper in West Palm Beach, FL. Negative information typically “falls off” your credit report after seven years, so if you’re close, it’s best to just wait it out.

Lower your credit utilization

Credit utilization refers to how much you owe compared with the amount of credit you have available. For example, if you have a $10,000 credit limit across all your credit cards and you have balances totaling $9,000, you’ve utilized 90% of your credit. This drags down your credit score.

“What these consumers often need to do is pay down the balances on their existing credit accounts, which can be a challenge if they’ve allowed the balances to creep up over time,” says Martin H. Lynch, compliance manager and director of education at Cambridge Credit Counseling of Agawam, MA. “The ratio of what’s owed to the amount of credit available represents 30% of the consumer’s score, so rapid improvement is possible if there’s a large amount of money available to pay down balances.”

Linda L. Jacob, a financial counselor at Consumer Credit of Des Moines, IA, recommends paying down balances to below one-third of your credit line. Any payments you make will be reflected on your credit report as soon as your creditors report your payment to the credit bureaus. Credit scores are updated on an ongoing basis, and creditors typically report once per month, so if you make a payment that lowers your credit utilization, that should be reflected on your credit score within two months.

If you’re regularly using your credit card but you want to keep your utilization low so you can apply for a mortgage, you may want to pay down your credit-card balance on a weekly or biweekly basis. This ensures that your balance is as low as possible whenever your creditor reports your payment history to the credit bureaus.

You can also decrease your card utilization by getting more credit, but this approach can backfire. Consumers sometimes assume that by getting more credit, their credit score will improve. If you have a $3,000 balance on a card with a $4,000 credit limit and you’re approved for a new credit card with a $1,000 limit, you now have $5,000 in total credit lines. Instead of using 75% of your available credit, you’re now using 60%. That’s better, right?

Not necessarily. “Just applying for credit lowers your credit score, and that effect lasts for months,” warns Mike Sullivan, personal finance consultant at Take Charge America in Phoenix, AZ. “For the first few months after you apply for credit, your credit score may actually go down.”

You can try getting around this by asking a credit limit increase on a card you already have. Be sure to ask whether they do a “soft” credit pull rather than a “hard” credit pull, though, since hard credit inquiries are the ones that impact your credit. A creditor may be willing to give you a credit line increase with a “soft” pull, which will not hurt your credit score.

Soft inquiries are for background purposes only. For example, a credit card company may do a soft pull to see if you’re eligible for certain credit card offers, or an employer may do a soft pull before offering you a job. Soft pulls can be done without your permission and do not impact your credit score. Hard pulls require your permission, and are done when lenders or credit card companies are assessing whether to grant you a loan or line of credit.

How to raise your credit score for the long haul

Once you’ve corrected errors, settled your delinquent accounts, and brought your credit utilization under control, the only other things that will improve your score are time and developing good payment habits. For example, if you tend to forget to make payments, you can set up automatic payments so you don’t forget.

And here’s some good news for people with bad credit: Generally, people with the lowest scores will see the biggest gains the fastest.

“It’s a lot like dieting,” says Sullivan.

For instance, if your score is 550, “you could probably get it up 30 points in a matter of a couple months, if you’re really dedicated and really careful,” he explains.

On the other hand: “If your credit score is already a 750 and you’re trying to get it to 780, that can take double or more the time.”

Still, it’s worth doing whatever you can to get the best interest rate possible.

For more smart financial news and advice, head over to MarketWatch.

Source: Realtor.com –   | Nov 28, 2018 Melinda Sineriz is a writer living in Bakersfield, CA. She writes about personal finance and real estate for several websites and businesses.
The realtor.com® editorial team highlights a curated selection of product recommendations for your consideration; clicking a link to the retailer that sells the product may earn us a commission.
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Second mortgages in Canada: 6 reasons you may need one

We’re living in a world where certain financial obligations must be settled on time. It could be college tuition, renovation costs, emergency repair bills, debt consolidation or even paying for a wedding. Whatever it is, it can’t wait, and it needs to be resolved as soon as possible.

As the saying goes, time waits for no one. And, neither do the bills lurking around the corner.

So what are your options? You may think of getting another credit card, but you’re past the limit or have a poor credit score. Traditional lenders have turned you down too, and you couldn’t be more disappointed.

However, if you’re a Canadian currently paying for a primary mortgage, you could have an ace in the hole to sort out your financial hurdles. This is where a second mortgage comes in.

What are second mortgages?

A second mortgage is a secondary loan held on top of your current mortgage. A different mortgage lender will typically provide this product. It’s important to note that second mortgages have their own rates and terms, and is paid independently of your primary mortgage.

In layman’s terms, second mortgages are loans that are secured by your home equity. Usually, you can acquire up to 80 percent of your home equity through a second mortgage and if you’re in a major city, up to a maximum of 85 percent.

In contrast to the primary mortgage, a second mortgage has its own terms and conditions. Hence, the second mortgage is paid separately with different rates from the first mortgage. Nonetheless, in case of a default, the second mortgage will only be repaid after the primary mortgage has been sorted out.

So what are some of the reasons you may need a second mortgage?

1. You want to pay off high-interest consumer debt

A recent report released by Statistics Canada shows that for every dollar of disposable income, Canadians owe $1.68 in credit market debt. In fact, Statistics Canada estimates that the accumulated consumer credit is $627.5 billion; not including mortgages. If you’re an average working Canadian, it is very likely that you have consumer debt.

Keep in mind that the average credit card interest rate in Canada is 19.99 percent. Of course, the longer you delay the payment, the more you keep paying higher interest rates. No wonder, most Canadians prefer low-interest credit cards.

However, there is another option. Even though the interest rate of a second mortgage is higher than the primary mortgage, it is lower than the accrued interest on credit cards and personal loans. A minimum payment of a second mortgage can be much lower than that of a credit, creating better cash flow for the borrower.

That means you can acquire a second mortgage to pay off high-interest consumer debt and save a lot of money in the long-run.

2. You have a poor credit score

According to the Huffington Post, the average Canadian credit score is 600 points. If you’re a Canadian, anything below 650 points is considered a bad credit score and you will probably find it challenging to obtain new credit.

Maybe it was that single loan that you defaulted for a month or that credit card charge-off—as long as you have a poor credit score, you will likely be the last in line when applying for loans.

The good news is that you can get a second mortgage even with a poor credit score. The lender can overlook the poor credit score based on your consistency on paying the primary mortgage and if you have a lot of home equity, albeit the interest rate will be higher due to the risk involved.

If you can pay off bad credit loans and defaulted debts by leveraging a second mortgage, you can start to repair your credit.

3. You’ve been turned down by traditional lenders

You never know when mortgage rules will change. Since the recent strict new rules on mortgage lending, more Canadians have been turned down by traditional lenders. In fact, mortgage brokers reckon that the rejection rate has increased by 20 percent. Even those who were approved for a mortgage before 2018 can have their mortgage renewal or refinance request turned down due to the stress test.

So what should you do if you’ve been turned down by traditional lenders? Simple; apply for second mortgages offered by private lenders. Unlike traditional banks, private lenders don’t have their hands tied down by the new OSFI rules.

4. You need funds quickly

There are many reasons why you would need quick funds. Perhaps you’ve experienced an unexpected tragedy or looking for a new job, and you need quick cash until you’re back on your feet.

You could go for an unsecured loan, but you don’t want to end up paying high-interest rates. Payday loans are even worse, the fees and interest rates are exaggerated. Even if you did get a payday loan, the credit limit is $1500, and you probably need more than that.

What about RRSP withdrawal? Well, you will get penalty taxes for making that early withdrawal. For instance, if you withdraw $30,000, you will only receive $21,000 after the bank remits $9000, or 30 percent, to the government.

On the other hand, second mortgages will give you liquidity to your home equity without too much interest rates or taxes especially if the amortization is short-term.

5. You want to avoid high mortgage penalties

Prepaying the remaining balance of a closed low fixed rate mortgage loan can be expensive for Canadians. Most lenders will impose a breakage fee if you decide to walk out of the contract before the term expires. Sometimes, the mortgage lenders can overestimate the liability and proceed to double or triple the penalties, leaving you in a tight spot.

Nevertheless, instead of pre-paying the first mortgage early and selling the house to gain funds for investment capital or debt relief, you could apply for a second mortgage to access the funds and wait a little longer. A short-term second mortgage would prove to be cheaper than paying the high mortgage penalties.

6. You want to outsmart PMI

Canadians who can’t afford 20 percent down payment of the property’s value when applying for a mortgage are required to pay private mortgage insurance (PMI). There are also borrowers who don’t want to give out the 20 percent down payment so they can have funds for renovation and repairs. Even so, PMI premium rates aren’t cheap especially if you’re putting up 5% to 9.99% down payment.

But did you know taking a second mortgage could lower the overall mortgage expenses than going the PMI route? Despite second mortgages having higher annual payments than first mortgages, they cost less than PMI.

Consult a professional to find a convenient second mortgage

As much as applying for a second mortgage seems like a straightforward process, finding a second mortgage without professional assistance is like climbing a slippery mountain without a harness.

Every situation is different, and there are always details in the contracts that you need to understand clearly.

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New mortgages up 63% among Canadians aged 73-93: TransUnion

NEWS: MONEY 123: WEIGHING THE COSTS AND BENEFITS OF REVERSE MORTGAGESX

https://globalnews.ca/video/embed/4359268/#autoplay&stickyiframe=video_4359268&mute

WATCH: Reverse mortgages have recently increased in popularity as nearly one-third of Canadians are approaching retirement with little or no savings.

– A A +

The volume of new mortgages across Canada has been slowing down in recent months, amid rising interest rates and tougher federal regulations, a new TransUnion report shows. But the country’s oldest homeowners are bucking that trend – big time.

Among Canadians aged 73 to 93, the so-called silent generation or pre-war generation, the number of mortgages issued between January and March of 2018 was up a whopping 63 per cent compared to the same period last year, TransUnion data shows. Baby boomers are also getting new mortgages, although the increase in loan originations among Canada’s 54- to 72-year-olds is a more modest 18 per cent.

 

That stands in stark contrast with what’s happening with the country’s first-time homebuyers and younger generations in general. Mortgage originations were down 19 per cent among millennials (ages 24-38) and 22 per cent among gen-Z (18-23).

 

Overall, the number of new mortgages issued between January and March was down 3.4 per cent compared to the same period last year. This follows at eight per cent drop in the last three months of 2017 compared to the last three months of 2016. (New mortgages include brand new loans, loans renewed at a different lender and refinancing.)

Older generations could be re-mortgaging or borrowing against their home equity in order to “support retirement or to financially support younger generation family members,” the TransUnion report reads.

Research shows that retirement expenses tend to skyrocket around age 80, due to health care and long-term care costs.

WATCH: Why women need to save more for retirement

But the pre-war generation is also joining forces with boomers to help the younger kin.

“We hear of parents and grandparents supporting their children and grandchildren, whether it’s student loans or buying a house,” Matt Fabian, director of financial services research and consulting for TransUnion Canada, told Global News.

 

That said, as large as the six-fold surge in new mortgages issued to Canada’s 70-to-90-year-olds may seem, the volume of mortgages in that age group remains very small, Fabian said. (The data does not include reverse mortgages, TransUnion said.)

Still, the numbers do suggest that the stricter mortgage rules introduced on Jan. 1 of this year are having a much bigger impact on newer generations.

“The stress-testing rules are about affordability,” Fabian said. Younger mortgage applicants may be either finding out that they don’t qualify or that they can’t get the amount and loan type they want, he added.

Older Canadians who have enjoyed remarkable home-equity gains in the last few years don’t have to worry about stricter standards on things like loan-to-value ratios, Fabian said.

The data also shows significant variations across cities. While new mortgages dropped by almost 18 per cent in Toronto, they remained virtually flat in Vancouver, with growth of less than one per cent in the first three months of 2018 compared to the previous year.

But new mortgage volumes rose in Ottawa (up 8.4 per cent) and Montreal (up 5.2 per cent), where relatively low real estate prices have been attracting an influx of buyers.

WATCH: How mortgage stress tests are affecting millennials

More credit cards and higher balances

Canadians may be having a harder time getting a mortgage, but they aren’t giving up their credit cards.

TransUnion reported a “surge” in the number of credit cards issued in the first three months of 2018, which was up 5.6 per cent year-over-year across all age groups.

“This represents a dramatic shift compared to an approximate 10 per cent decline year-over-year from [the first quarter of] 2016 to [the first quarter of] 2017,” the report said.

The average consumer now carries a balance of $4,200, the data shows. Collectively, Canadians now owe $99 billion through their credit cards.

READ MORE: Here’s what happens to $1K in credit card debt when you make only minimum payments

Total non-mortgage debt still rising, although at a slower rate

Overall, the average Canadian had almost $29,650 in debt excluding mortgages in the period between April and June, an increase of almost four per cent compared to the same three months in 2017, TransUnion said.

“This is the third consecutive quarter where the quarterly change is less than the change seen in the previous year,” the report noted.

In other words, Canadians continue to borrow more, but at least the pace at which they’re piling on debt has slowed.

Source: Global TV – 

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Benefits of Homeownership Reaffirmed in New Study

Despite deteriorating housing affordability across the country, buying a home is still the more affordable option when compared to renting.

A new report from Mortgage Professionals Canada has determined that, despite the rapid rise in home price, those who are able to invest in a home would end up “significantly better off” in the long term compared to renting.

The report, authored by the mortgage broker association’s chief economist Will Dunning, found that while upfront monthly costs are in fact cheaper in most locations, the “net” cost of ownership is less than the equivalent cost of renting in a majority of cases, and becomes even more cost effective over time.

“The costs of owning and renting continue to rise across Canada,” Dunning noted. “However, rents continue to rise over time whereas the largest cost of homeownership–the mortgage payment–typically maintains a fixed amount over a set period of time – usually for the first five years. The result is that the cost of renting will increase more rapidly than the cost of homeownership.”

Additionally, the costs of ownership include considerable amounts of repayment of the mortgage principal. “When this saving is considered, the ‘net’ or ‘effective’ cost of homeownership is correspondingly reduced,” Dunning added.

On average, the monthly cost of owning exceeds the cost of renting by $541 per month. But when principal repayment is considered, the net cost of owning falls to $449 less than renting.

Interest Rate Scenarios

The analysis compared the cost of renting vs. owning both five and 10 years into the future, with higher interest rates factored into the equation. In all cases, owning comes out ahead:

Scenario #1: If interest rates remain the same (using an average of 3.25%), after 10 years the average net cost of owning is $1,014 less than the monthly cost of renting.

Scenario #2: If interest rates rise to 4.25% after five years, the average net cost of owning falls to $1,295 less than the monthly cost of renting.

Scenario #3: If interest rates rise to 5.25% after five years, the average net cost of owning is still $726 less than the monthly cost of renting.

“By the time the mortgage is fully repaid in 25 years (or less) the cost of owning will be vastly lower than the cost of renting,” the report adds, noting that the cost of owning, on average, would be $1,549 per month vs. $4,655 for an equivalent dwelling.

Canada Still a Country of Homeowners

Despite rising home prices and deteriorating affordability, Canada remains a nation of aspiring homeowners.

The study pointed to the continued strong resale activity as one indicator of this.

Resale activity in 2017 was still the third-highest year on record, at 516,500 sales, just off the peak of 541,2220 sales in 2016.

But other polls have also found a strong desire among younger generations that still dream of owning.

RBC’s Homeownership Poll found a seven-percentage-point increase in the percentage of overall Canadians who planned to buy a home within the next two years (32%), and a full 50% of millennials.

Similarly, a RE/MAX poll found more than half of “Generation Z” (those aged 18-24) also hope to own a home within the next few years.

Perhaps the biggest question is whether those aspiring homeowners will have the means to surpass the barriers to homeownership, namely larger down payments and the government’s new stress test.

“While recent changes to mortgage qualifying have made the barrier to entry higher, those who can qualify will be much better off in the long term,” Paul Taylor, President and CEO of Mortgage Professionals Canada said in a statement. “Given the economic advantages of homeownership, Mortgage Professionals Canada would recommend the government consider ways to enable more middle-class Canadians to achieve homeownership.”

Despite its affordability benefit over renting, Dunning addresses some of the impediments of homeownership, namely the longer timeframe needed to save for the down payment. Despite higher home prices and larger down payments required, first-time buyers still made an average 20% down payment.

Additional Tidbits from the Report

Some additional data included in Dunning’s report include:

  • Average house price rose 6.2% per year from $154,563 in 1997 to $510,090 in 2017
  • Average weekly wage growth was up just 2.6% per year from 1997 to 2017
  • The average minimum interest rate for the stress test during the study period: 5.26%
  • The average annual rates of increase for the following housing costs:
    • Property taxes: 2.8%
    • Repairs: 1.9%
    • Home insurance: 5.4%
    • Utilities: 1.6%
    • Rents: 2.4%

Source: Canadian Mortgage Trends – STEVE HUEBL

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5 questions every first-time homebuyer should ask their mortgage advisor

MortgageAdvisor1

Photos: James Bombales

Between considering mortgage terms and insurance to viewing properties with your realtor, buying your first home is a busy and stressful time. And when you’re talking about the biggest financial commitment you’ll probably make in your life, it can be pretty intimidating too. While there are mortgage professionals available to provide advice on your home purchase and help find the best mortgage solution for your specific situation, you’ll still need to go into the meeting with your advisor prepared with questions. So even if you’re totally mystified by the mortgage process, these five questions will help set you on the right track.

1. How do I know if I’m ready to buy a home?

“Knowing if you’re ready to buy a home could mean a lot of things and ultimately depends on the person’s own situation,” Wan Li, Mortgage Specialist at TD Group Financial Services, tells Livabl. “Potential homebuyers need to consider how much they’ve saved up for a downpayment, whether they have stable, continuous income and if they anticipate any large purchases or major life events in the future.”

MortgageAdvisor2

2. What factors determine my eligibility for a mortgage loan?

Unless you’re rolling in cash, most homebuyers will need to apply for a loan from a bank or mortgage broker. However, whether or not you’ll be approved for a loan and the amount you’re eligible for depend on many factors.

“Even if you have a large down payment and have cash available, a bank will not lend you money without a job and stable income.” says Li. “It’s also better if you’ve worked for the same company for over half a year or at least have passed your probation period.”

Your credit rating is another important factor that can mean the difference between getting approved or denied for your loan. Credit scores range from 300 to 900 and are affected by late payments and debt level. The higher your score, the better chance of being considered for a mortgage.

“Ideally, you’ll want to have a credit score of at least 600 to be approved by a bank,” explains Li. “Any less and you’ll likely need to go to a private B-lender which aren’t as strict, but have higher interest rates and charge administration fees.”

MortgageAdvisor3

3. How much do I need for my down payment?

Depending on where you live and the total cost of the home, the minimum down payment you need can vary from 5 per cent to 20 per cent. However, if you have less than 20 per cent, you’re going to have to pay for mortgage insurance which protects your lender in the event that you can’t pay your loan.

“In Canada, those who put less than 20 per cent down will have to pay for the Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance,” says Li. “It’s typically calculated as a percentage of your mortgage and is added to your regular mortgage payments.”

MortgageAdvisor4 (1)

4. What does pre-approval mean and should I get pre-approved?

Before you head out and start viewing properties for sale, it’s highly recommended that you first get pre-approved. A mortgage pre-approval will help you determine your maximum budget for your new home and can also give you an edge on the competition should you find yourself in a bidding war. Plus, once you do find your perfect home, you’ll be able to move on it quickly since you know you’re already pre-approved on your finances.

“Getting pre-approved involves filling out a mortgage application and providing documents on your financial history to your bank or lender,” says Li. “The bank will then look at your current income and credit history to determine if you qualify for a mortgage loan. The assessment will usually include a specific term, interest rate and mortgage amount depending on your situation.”

MortgageAdvisor5

5. What’s the difference between the term and the amortization?

The mortgage term and amortization period are two common phrases in the homebuying process that often cause confusion for first-time homebuyers. The mortgage term refers to the period of time that you have locked in the agreed upon terms and conditions, including the interest rate and monthly or bi-weekly payments towards your mortgage. Five-year mortgage terms are the most common, however they can range from three to 10 years. By contrast, the amortization period is the total number of years that you choose to pay off your mortgage and can be up to 30 years depending on your down payment.

“If you put less than 20 per cent down, your maximum amortization period is 25 years, but if your down payment is more than 20 per cent, you can have an amortization period of up to 30 years,” says Li. “However, while a longer amortization may result in lower monthly payments, you’re also going to end up paying a lot more in interest.”

Source: Livab.com –  

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So Now You Own a Home. Do You Know How to Maintain it?

Althea Sandiford took a seven-week home maintenance course to help her tackle projects around her Long Island home.© Heather Walsh for The New York Times Althea Sandiford took a seven-week home maintenance course to help her tackle projects around her Long Island home.Home maintenance classes can help you save money and be smarter about what needs to be done to keep your new home in shape.

After the heady early days of homeownership wear off, first-time buyers often quickly realize that they lack even the most basic skills needed to take care of their new home.

For New Yorkers accustomed to calling the super for every repair, using a drill to hang drapes or an Allen wrench to fix a leaky faucet can be nearly as daunting as the idea of performing brain surgery.

You can get all the inspiration you need from do-it-yourself shows and videos, but what if you don’t know how to properly hammer a nail and don’t even own the right tools?

This is where home repair classes can help, giving uninitiated homeowners hands-on training. Courses cover a range of skills, from basic home maintenance to more elaborate tasks like tiling a bathroom, installing locks and repairing or replacing drywall.

A skilled labor shortage that makes it increasingly difficult to find a reliable handyman is what drove Mary McCabe to take a series of home repair classes at the New York City College of Technology, at the City University of New York.

 

First, she was irked when a tiler took five days to tile her small kitchen floor; then an electrician disappeared after disconnecting the electricity in her two-family home in Bayside, Queens. That is when it dawned on Ms. McCabe: “I trust myself, and I am handy,” she said. “I can learn to do some of this on my own.”

Comfortable around tools, because her father had been a carpenter, Ms. McCabe has taken five classes this year and has used her newfound skills to re-grout her bathroom tiles and fix a lawn mower.

“Most people are intimidated with using tools, but taking a hands-on class really boosted my confidence,” she said. She estimated that she has saved about $3,000 so far, just by learning how to do simple home repairs herself.

Most of the home repair classes in the city are offered through housing-related nonprofit organizations and the continuing education divisions of community colleges, including Bronx Community College. The Home Depot also offers free classes in several Manhattan, New Jersey and Long Island locations.

Just as learning how to save for and finance a home is important to financial literacy, educating yourself on how to maintain your home will not only give you a sense of mastery, but can also help you save money on repairs. And you’ll have a better sense of when you need to call a professional.

a man standing in front of a building: John Rearick has taken classes to learn basic carpentry skills, as well as how to use a circular saw and repair Sheetrock.© Tony Cenicola/The New York Times John Rearick has taken classes to learn basic carpentry skills, as well as how to use a circular saw and repair Sheetrock.

The beginners’ repair classes at City Tech — which include Homeowner’s Basic Tool Kit and Everyday Electricity You Can Do Yourself — cost $70 for a one-time, three-hour night class at the school’s Downtown Brooklyn location. That is not a lot of money when you consider that it could save you hundreds of dollars a year, said Debra Salomon, a City Tech program director in the division of continuing education.

A July 2018 HomeAdvisor survey found that, on average, homeowners spent $6,649 on home improvement projects per household over the previous 12 months. Understanding the need for extra financial reserves to pay for repairs should be part of the educational process of becoming a homeowner, said Yoselin Genao-Estrella, the executive director of the nonprofit organization Neighborhood Housing Services of Queens CDC, Inc.

The Woodside-based community development corporation has classes on first-time home buying and financial literacy, offers foreclosure service and, for about 20 years, has offered an eight-week home maintenance course. The course costs $175 and is held on the second floor of a Sterling National Bank branch in Woodside.

“Knowing how to fix simple things in your home empowers you,” Ms. Genao-Estrella said, especially if you are a low- or moderate-income homeowner. “What’s the point of finally being able to own your home, but you go into debt because you’re always hiring someone to fix everything?”

Ms. Genao-Estrella has taken the course herself. When her home in the Canarsie section of Brooklyn was damaged by Hurricane Sandy almost six years ago, she hired a contractor to fix the structural damage and a plumber for other repairs, but the plumbing problems kept reoccurring.

“I’m not saying I need to become a plumber myself, but I felt I was getting the short end of the stick every time I was having a conversation, especially as a woman,” she said. Knowing how your house works is important, she added, because you can be more specific about repair requests when hiring someone.

And that doesn’t just apply to homeowners: Among the students who have taken the class have been a number of renters, she said: “I think some people have landlords that don’t fix things right away.”

Althea Sandiford, who owns a single-family home in Brentwood, Long Island, said she was able to patch up some holes in her basement and clear a clogged drain in her shower after taking a seven-week home maintenance program at the nonprofit Community Development Corporation of Long Island.

The class size was small — between three and six people, depending on the week — said Ms. Sandiford, an insurance auditor. Classes are held at the organization’s headquarters in Centereach, N.Y., and the fee depends on a family’s size and income, but is never more than $80. Ms. Sandiford’s instructors were licensed contractors who taught her how to repair and replace Sheetrock, how to lay tile and the basics of plumbing.

Before taking the class, she said, she felt like she was “throwing money out the window” on small repair jobs: “It’s just good to have the knowledge of how the small things in your house work. Now I want to do more.”

Tricia Gleaton, vice president of the organization’s homeownership center, said many of the students who sign up for the class have never picked up a hammer, and students include both singles and couples, some of whom have bought fixer-uppers nearby.

Cable channels like HGTV and DIY Network have turned home repair projects into entertainment, but the do-it-yourself industry is extensive in online platforms too. In addition to the content available on YouTube, websites like Hometalk and Terry Love Plumbing and Remodel DIY and Professional Forum and podcasts like Fix It Home Improvement and Fix It 101 have solid followings.

But there is no point in watching and listening to all that content if you don’t know how to use a simple power drill, said Stephanie Lombardi Werneken, director of new digital products at Trusted Media Brands, publisher of the magazine Family Handyman.

Trusted Media started the online Family Handyman DIY University in 2015, so people could take quick classes to learn things like how to buy and use a table saw, or how to drill into materials like wood or masonry. Each class can be completed in one to three hours, and the fee is less than $20. “These basic classes are there so you can be safe, and not burn down the house,” she said.

Premium courses are being offered for the first time this year, for $89 to about $200. They last a few weeks, and students can ask their instructors specific questions online. The courses include kitchen cabinetry making and building your own tiny house, and some courses come with blueprints and other materials.

About 70 percent of the nearly 4,000 students who have taken DIY University’s online classes have been male, and students range in age from 35 to 70, Ms. Werneken said. Some of the older students have taken the class to fix up their homes before selling them, she said, but the younger students seem to have embraced a “DIY holistic-homeownership lifestyle” to mirror that of the popular hosts of some DIY television shows.

Raya Fliker, a homeowner in Port Monmouth, N.J., took a class on wood-finishing at DIY University, and also learned how to tile a kitchen backsplash. With her newfound knowledge, Ms. Fliker built a simple bench to fit into a small nook in her back entryway. She also built a plywood countertop to cover up a granite top on a kitchen island that she didn’t like.

Ms. Fliker, a nurse and mother of three, preferred taking classes online, she said, because she could do it whenever she had time, and the instructors taught her specific tasks that she wanted to learn. “I have loved how every project has turned out, and my husband is now buying tools for me,” said Ms. Flicker, who recently refurbished a mudroom for a friend’s house.

Not every project has gone smoothly, of course. Although she wanted to install a new kitchen backsplash, the granite border on her kitchen counter was extremely difficult to remove, she said. When she pried off a small portion near the refrigerator, Ms. Fliker ended up with a big hole.

“It was too hard for me to handle, so I fixed the hole and painted over it,” she said, after watching a YouTube tutorial. Then she abandoned the backsplash project.

John Rearick, a high school English teacher, took two home repair classes through Neighborhood Housing Services of Brooklyn, a community development corporation with locations in East Flatbush and Canarsie. Mr. Rearick said he took his first class almost 10 years ago after hearing about it from a friend.

He learned basic carpentry skills, as well as how to use a circular saw, repair Sheetrock and build mock flooring. His instructor, Mark Whittingham, a licensed general contractor, owner of M.W. Enterprise and project manager at Thor Helical USA, a masonry restoration firm, taught him how to build things and then take them apart.

“Understanding the mechanics of things helped a lot,” said Mr. Rearick, who lives in a single-family house in Kensington, Brooklyn.

He has since patched up a large hole in his third-floor hallway, damage that happened years ago, after his son and a friend had an impromptu basketball game there. More recently, he replaced a leaking water valve in the basement, which cost him about five dollars. “I did wonder, if I hadn’t fixed that myself, would I have paid someone to do it for me for $200?” he said.

Mr. Rearick repeated the same class this spring — a seven-week course currently held at the Flatbush YMCA, for $175 — as a refresher. “Besides saving money, there are emotional benefits of being able to fix things yourself,” he said.

Both he and Ms. McCabe, in Queens, said they were eager to take more advanced classes. Ms. McCabe said she was interested in hanging a new chandelier in her dining room, installing other light fixtures and changing out some old doors.

Making mistakes in the classroom was key, she said. Her instructor, Peter Grech, who has worked as a superintendent for residential buildings in the city for more than 40 years, reminded her that screwing up the installation of one 20-cent tile “is no big whoop.”

As she put it, “He taught us in a way that made me believe I can do it, and it worked.”

Mr. Grech, who also trains superintendents, makes a point of teaching his students when they should call a licensed professional. One example: You can fix leaky faucets and clogged drains yourself, he said, but you shouldn’t try to move pipes.

“There’s a fine line of being confident and doing things yourself, but you shouldn’t get in over your head,” he said. “And if you’re afraid of doing your first project in your own home, I tell all my students to do it at your in-laws’ house first.”

A list of tools every homeowner should have for basic maintenance.

To be prepared for basic repair tasks, homeowners should arm themselves with a few essential tools. Peter Grech, an instructor at New York City College of Technology, City University of New York, who has worked as a superintendent for various residential buildings, suggested investing in the following:

  • Hammer
  • Phillips and straight-blade screwdrivers
  • Utility knife
  • Speed or combination square
  • Channellock pliers
  • Electrical pliers
  • Electrical tester
  • Circular saw or handsaw
  • Battery drill, at least 18 Volts
  • Set of high-speed drill bits
  • Set of masonry bits
  • Level tool
  • Flashlight
  • Measuring tape
  • Safety goggles

Source: NY Times – By KAYA LATERMAN

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Smart strategies for single women trying to buy a home

Shop during the right seasons, when prices traditionally are more negotiable and inventory is better.

The real estate website Estately recently conducted a study showing how the continued gender wage gap in America affects home affordability and ownership for women.

To answer this question Estately used 2016 U.S. Census data to compare men’s and women’s median salaries in the 50 most populated U.S. cities.

Based on those salaries (and assuming a monthly mortgage payment of 28% of the gross monthly income) the site used a mortgage calculator to determine the maximum home price each salary could afford.

Armed with all of this information and after a review of the homes currently for sale in major cities across the country, Estately identified what percentage of homes men versus women could afford by city.

The results in some urban centers were bleak. Seattle for instance, has the biggest wage-based housing gap. Men can afford nearly 150% more homes than women. Colorado Springs, Miami, San Diego and San Jose also topped the list with significant gaps. For instance, in Colorado Springs men can afford 122.5% more homes than women, while further down the list in San Diego, the difference is still a significant 68.5%.

With these results in mind, we asked real estate and personal finance experts to share their top tips for single women seeking to purchase a home.

Don’t let the down payment scare you away

Coming up with the funds to make a down payment on a home can often seem impossible, particularly when so many Americans have sizable student loan bills and more.

Andrina Valdes, division president at Cornerstone Home Lending, urges buyers not to let this part of the process discourage them.

“Over and over again, potential home buyers report saving for the down payment as the biggest hurdle to homeownership. When you’re relying on one income to save up for it, the problem can seem insurmountable,” says Valdes.

Read: As house prices rise, this is how much more you need to save for a down payment

The good news is there are all kinds of down payment assistance programs that can help individuals get into a home for less money down.

The Federal Housing Administration loan is popular among first-time and single-income home buyers thanks to its 3.5% down payment requirement. There are also programs offered by the Department of Veterans Affairs and USDA loans that may require no down payment at all, says Valdes.

Line up a guarantor or co-purchaser

The reality is that many single income households, whether they’re run by men or women, need assistance buying a home in today’s market.

Experienced agent Julie Gans of Triplemint suggests lining up a qualified guarantor, co-purchaser or someone who might be able to gift money for your home purchase.

“These three options help buyers with lower income, lack of reserve funds or the total overall funds to purchase properties,” said Gans. “Finding the right [property] that will allow these options are important and help women and single income families be successful in their purchases.”

Consider a fixer upper

A growing trend among home buyers with limited means has been buying older properties and rehabbing them, says Ralph DiBugnara, president of Home Qualified.

“There are a few mortgage products in the market right now that make that easier,” said DiBugnara. “Fannie Mae has a loan called Home Style and FHA has what’s called a 203k loan. They both allow you to not only finance the purchase price but also construction costs in the loan to help your home look new. This is one way women can buy less inexpensive homes and make them new, also giving them a much higher valued property at completion.”

Look at homes well below your means

Real-estate analyst Julie Gurner, of FitSmallBusiness.com, says it’s critical that single income households buy properties that are well below the amount they’ve been preapproved for.

“You see that gorgeous home at the top of your range? Pass on it, and you’ll be glad you did,” said Gurner. “Single women and single income families have to be especially mindful to buy a home below their means…It gives them an additional expense cushion every month. Things come up. Doctor visits, your car breaks down, or your furnace breaking can be a big financial hit if you don’t have the ability to absorb it. On months where nothing goes wrong, you have the ability to save.”

As a single income earner, it’s important to protect yourself financially and be able to provide the necessities that make life stable. Having a home below your means can give you both and a great place to live.

House hunt during the right season

When it comes to finding an affordable home, time of year can make a big difference.

That means shopping during the right seasons, when prices traditionally are more negotiable and inventory is better, says Valdes.

Also read: How to get certified as a woman-owned business

Recent data from Trulia shows that there’s a 7% spike in starter home inventory during the fall, making it an ideal time to find a good deal. On the flip side, starter home inventory drops by more than 20% during the summer, making the warmer months a less appealing market.

Minimize credit card debt

As you embark upon your housing search, it’s critical that you reduce existing debt. This helps on a variety of levels.

You might like: One big reason it’s so hard for first-time buyers to find the right starter home

For instance, not only does it make you a better mortgage applicant, it will also help once you’re in your new home dealing with a whole host of new expenses.

Gans, of Triplemint, suggests tackling credit card debt in particular.

“Pay off all credit cards prior to purchase to lower your income to debt ratio,” advises Gans. “This reduces your liability and makes you look more appealing to a seller.”

Source:  Credit.com –  MIA TAYLOR

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