I’m a Real Estate Agent: These Are 8 Factors That Are Preventing You From Owning a Home – Yahoo Finance

Being able to purchase residential property and finally have a home of your own is a dream come true for many people. But no matter how excited you are about the prospect of buying a house, or how ready you think you are, certain financial factors and money habits can keep you from getting to that point. At the very least, they can cause delays — sometimes adding months or even years to your homebuying timeline.
Housing Market 2023: The 10 Most Overpriced Housing Markets in the US — 5 Are in Florida
See: 3 Things You Must Do When Your Savings Reach $50,000

GOBankingRates recently spoke with Erin Hybart, a licensed real estate agent in Louisiana; Nicole Beauchamp, a licensed associate real estate broker at Engel & Volkers; and Scott Bergmann, a realtor with Realty ONE Group Sterling, about the top financial factors preventing people from buying a home.
Here’s what they said.
“Two hurdles to homeownership that keep people from owning a home are ‘Lifestyle Inflation’ and the ‘Debt Trap,'” Hybart said.
Lifestyle inflation is essentially when your pay increases, so you start spending more money. Or, as Hybart put it, “You get a pay bump, and it’s tempting to upgrade your car or take a vacation instead of saving it for a financial goal.”
The debt trap is another major complication that can delay homeownership.
“Then, there’s the debt trap of borrowing for today for instant gratification at the expense of your future,” Hybart said. “The world loves to market the zero interest and small monthly payments on items that are not necessities. Those small monthly payments all add up and increase the debt you owe.”
The more debt you have, the harder it is to find a lender willing to work with you and give you the best rates on your mortgage. Plus, having more debt means you have less money for a down payment or other upfront costs when getting a house.
Housing Market 2023: These 15 Cities Are Poised for the Most Stable Growth and Are Likely To Keep Their Value
If you’re buying a house with a partner, communication is essential to ensure you’re both on the same page and can realistically afford the purchase. But many people skip this step or don’t have solid communication skills, thus delaying their homebuying journey.
“Communication will be key for any couple when discussing finances,” Hybart said. “One of the best ways to make easier financial decisions is to ask yourself if this purchase aligns with your long-term goals before you splurge on the newest smartphone or a luxury vacation. Instituting a ‘wait-and-reflect’ period for large purchases can add invaluable perspective and curb the ever-so-easy impulse spending.”
However long you choose to wait, it should be based on what works best for both parties. This could be a week, or it could be a year. Whatever the case, it’s important to be clear and realistic about your expectations and goals.
A person’s credit score and history go a long way in determining whether they can qualify for a mortgage loan. The better your credit score, the better your approval odds and interest rates. Having good credit could also help you get approved for a larger loan amount — though it’s still important to make sure you can realistically afford whatever loan you take out.
Unfortunately, many people neglect their credit score. So, when they go to apply for a loan, they don’t qualify or they qualify for a smaller loan amount than they need.
“My number one tip is to check your credit score often as it’s like taking your financial pulse,” Bergmann said. “It’s the best way to keep constant tabs on the health of your finances.”
Along with credit, your income and savings are also vitally important when determining whether you’re ready to get a house — or if you’re bound to experience delays.
“One of the major factors that keeps people from owning a home is not feeling (and not being) financially ready to take on home ownership,” Beauchamp said. “In some cases, this means that they do not have good credit, or do not have sufficient [savings] for down payments and closing costs.”
If you don’t have enough money to manage the monthly mortgage payments, or if you don’t have at least the minimum down payment saved up, you might not be able to get a house when you want to. This doesn’t mean it’s impossible, though.
“At times, [poor credit and insufficient savings] keeps people in the cycle of renting,” Beauchamp said. “However, sometimes buyers can make use of creative ways of financing [their] purchase, or can look at ways to improve their credit, or [they can] borrow (at a higher cost) because of their credit profile.”
Having accounts in collections can seriously impact your credit score and make it harder to qualify for a loan.
“First and foremost, one of the worst financial habits is not closing or resolving any accounts in collections,” Bergmann said. “I always advise my clients that accounts [in] collections are a lot like open wounds — they’ll keep bleeding out until you close them.”
By closing your accounts, you can improve your odds of getting a mortgage loan.
“An unresolved collections account is one of the worst things to have on your credit history, but if you have a strong credit score and get those accounts closed, most banks will approve you even if you have faction accounts from the past,” Bergmann said.
There are two different ways to resolve your open accounts in collections.
“One is, of course, paying it in full, which is obviously the preferred method but may be challenging,” Bergmann said. “But there’s also the option to negotiate for a settlement amount that is usually between 60 to 70% of the overall account balance. Ensuring an open collection account gets closed, either by paying in full or settling, could benefit you by quite a bit in the long run.”
Keep in mind that settled accounts will still show up on your credit report and bring down your credit score. But once you’ve settled your debts, you can start working on bringing your score back up and increasing your approval odds for future financing.
Another key factor that not only delays people from buying a home but can also bring down their credit score is their credit utilization ratio. This is essentially the percentage of your available credit that you’re using. The higher your credit usage, the harder it is to get approved for a loan.
One money habit that often leads to a high credit utilization is the misuse of credit cards.
“Your credit utilization is very important, so try to avoid going over 30% utilization, especially around the time when you’re trying to apply for a loan,” Bergmann said. “The banks typically don’t mind credit card use as long as loan applicants are using them responsibly.”
Even if you have good credit and a steady income, you should still prioritize your own financial education when making a major decision like buying a house. Otherwise, you could end up blindsided by the true cost and commitment of homeownership.
“Couples should also become educated together on finances, budgeting, and debt in general,” Hybart said. “Learn the difference between constructive debt, which can improve your financial standing like a mortgage or education, and destructive debt, which depreciates and adds no value, like credit cards and personal loans.”
More From GOBankingRates
How To Get Free Money: 13 Proven Ways
Successful Retirees Master These 7 Money Moves To Keep Their Retirement Funds Secure
3 Things You Must Do When Your Savings Reach $50,000
How to Save $200,000 Cash By Improving Your Credit Score
This article originally appeared on GOBankingRates.com: I’m a Real Estate Agent: These Are 8 Factors That Are Preventing You From Owning a Home
Managing your taxes can be one of the most complex aspects of estate planning and a new IRS rule change continues that trend. The rule, published at the end of March, changes how the step-up in basis applies to assets held in an irrevocable trust. If you need help interpreting the IRS rule change or setting […] The post Want to Leave Assets to Heirs? IRS Rule Change Should Have You Rethinking Your Irrevocable Trust appeared first on SmartReads CMS – SmartAsset.
Charles and Kathleen Moore are about to have their day in the Supreme Court over a $15,000 tax bill they contend is unconstitutional. The couple from Redmond, Washington, claim they had to pay the money because of their investment in an Indian company from which, as Charles Moore, 62, said in a sworn statement, they “have never received a distribution, dividend, or other payment.” The Moores are the public face of a high court case backed by business and conservative political interests that could call into question other parts of the U.S. tax code and rule out a much-discussed but never-enacted tax on wealth.
When making an estate plan, using a trust is a way to make passing assets – including both cash and physical assets – a bit easier. In fact, when using a trust, you can often allow your family to avoid … Continue reading → The post Do You Have to Pay Taxes on a Trust Inheritance? appeared first on SmartAsset Blog.
The teenagers and elderly walkers at Crossgates Mall might not realize it, but they are standing on a Wall Street battlefield with potentially hundreds of millions of dollars on the line. Four years ago, legendary Wall Street investor Carl Icahn made a huge bet against the future of the U.S. shopping mall in what was called the Big Short 2.0. The bet used credit-default swaps, essentially insurance policies insuring bonds against losses, tied to an index tracking bundles of loans to malls and other commercial properties.
The IRS recently announced a major tax enforcement initiative that will increase scrutiny on high-income earners, partnerships and people with foreign bank accounts. The agency said the effort would “restore fairness to [the] tax system” by focusing on wealthy taxpayers who have seen sharp declines in audit rates over the past decade. A financial advisor […] The post The IRS Is Cracking Down on These High-Income Earners. Are You One of Them? appeared first on SmartReads by SmartAsset.
When you leave a job where you had a 401(k) it's important to understand what your options are for rolling over your tax-advantaged plan. Cashing out is another option but can result in significant taxes. Many choose to roll their … Continue reading → The post How to Roll Over Your 401(k) Into An Annuity appeared first on SmartAsset Blog.
September saw 62 bankruptcy filings, bringing the year-to-date total for 2023 to 516, more than all of 2021 or 2022.
About 65% of working Americans say they frequently live paycheck to paycheck, according to a recent survey of 2,105 U.S. adults conducted by The Harris Poll, asking questions supplied by Barron’s. About 30% of households report that they run out of money at the end of every month, while 35% say they don’t have money left at the end of most months. While the number of people living on the edge financially has an immediate effect on household well-being, there are also longer term economic costs, including higher debt levels and uneven retirement readiness. Living paycheck to paycheck is a fairly “ubiquitous” circumstance, says Fiona Greig, Vanguard’s global head of investor research and policy.
Deciding between a traditional individual retirement account (IRA) and a Roth IRA can be difficult. Choosing when or if you should convert your IRA funds to a Roth account can be even more daunting. Experts commonly recommend that investors compare … Continue reading → The post When Should You Consider a Roth Conversion? Vanguard Has an Answer appeared first on SmartAsset Blog.
Homes are even less affordable now than they were before the 2008 crash. Low supply will drive prices even higher, according to Goldman Sachs.
When you inherit property, the IRS applies what is known as a stepped-up basis to that asset. Here's how capital gains are taxed on inherited property.
Novo Nordisk (NVO) shares are surging, up 51% in 2023. While the company recently raised its guidance due to Ozempic and Wegovy, mega demand for the stock is powering the surge.
(Bloomberg) — Bond traders got a glimpse this week of what the eventual end of the Federal Reserve’s hiking cycle may look like.Most Read from BloombergIsrael Latest: Blinken Confident Border Will be Opened for AidIsrael Latest: Biden and Abbas Talk as Gaza Invasion NearsYour Guide to Understanding the Roots of the Israel-Hamas WarUS in Frantic Bid to Avert Wider Israel War After Iran WarningStanford Suspends Teacher as Mideast Conflict Roils CampusAmid volatile trading conditions, Treasuries h
(Reuters) -Pfizer on Friday slashed its full-year revenue forecast by 13% and said it will cut $3.5 billion worth of jobs and expenses due to lower-than-expected sales of its COVID-19 vaccine and treatment. Pfizer earned record revenue in 2021 and 2022, topping $100 billion last year, after developing its vaccine Comirnaty with German partner BioNTech SE and antiviral treatment Paxlovid on its own. But annual vaccination rates have dropped sharply since 2021 and demand for treatments has dipped as population-wide immunity has increased from vaccines and prior infections.
Discounts for paying cash are now on the menu at coffee shops, restaurants and other stores as businesses search for ways to skirt rising credit-card transaction fees. The share of all cash purchases that came with a discount climbed 66% between 2015 and 2022, according to research by the Federal Reserve Bank of Atlanta. Others offer cash discounts, but those deals might not be as good as they seem.
Renaissance Capital LLC’s passive IPO-focused ETFs loaded up on Palantir, Rivian, and Kenvue stock, and exited an investment in Li Auto in the third quarter.
Foreclosure filings jumped 34% over the past year, according to ATTOM data, attesting to growing financial pain among US homeowners.
Insurers have been hit by a one-two punch of natural disasters and lackluster financial markets. But there’s a silver lining: the profits and surpluses that come with rising premiums.
Medicare premiums will rise by 6% in 2024, taking a bite out of Social Security's 3.2% cost of living adjustment. See what you'll be paying.
In the largest tax audit in U.S. history, the IRS rejected Microsoft’s efforts to assign profits to a small factory in Puerto Rico.


(Visited 1 times, 1 visits today)