How Big of a Mortgage Can I Afford?

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.
The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.
Rent: _________________________
Multiplier: x 1.32
Mortgage payment: _________________________
Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.

Pros and Cons of Going Condo

Condominiums and townhouses offer an affordable option to single-family homes in many markets, and they’re ideal for those who appreciate a maintenance-free lifestyle. But before you buy, make sure you do your legwork. These are some of the important elements to consider:

• Storage. Some condos have storage lockers, but usually there are no attics or basements to hold extra belongings.
• Outdoor space. Yards and outdoor areas are usually smaller in condos, so if you like to garden or entertain outdoors, this may not be a good fit. However, if you dread yard work, this may be the perfect option for you.
• Amenities. Many condo properties have swimming pools, fitness centers, and other facilities that would be very expensive in a single-family home.
• Maintenance. Many condos have onsite maintenance personnel to care for common areas, do repairs in your unit, and let in workers when you’re not home — good news if you like to travel.
• Security. Keyed entries and even doormen are common in many condos. You’re also closer to other people in case of an emergency.
• Reserve funds and association fees. Although fees generally help pay for amenities and provide savings for future repairs, you will have to pay the fees decided by the condo board, whether or not you’re interested in the amenity.
• Resale. The ease of selling your unit may be dependent on what else is for sale in your building, since units are usually fairly similar.
• Condo rules. Although you have a vote, the rules of the condo association can affect your ability to use your property. For example, some condos prohibit home-based businesses. Others prohibit pets, or don’t allow owners to rent out their units. Read the covenants, restrictions, and bylaws of the condo carefully before you make an offer.
• Neighbors. You’re much closer to your neighbors in a condo or town home. If possible, try to meet your closest prospective neighbors.

Free Money for Underwater Homeowners

By Gino Blefari President & CEO Intero Real Estate Services, Inc.  More help is out right now from the federal government for a small portion of the millions of homeowners who have fallen behind on mortgage payments. What is it this time? In a nutshell, free money. But struggling homeowners need to act fast as they're only accepting applications until July 22. The Emergency Homeowners Loan program is a $1 billion program that offers loans up to $50,000 to homeowners who have lost their jobs. The kicker? For those who qualify, the loans don't have to be repaid. How it works: The program – operated by the Department of Housing and Urban Development and the nonprofit housing group NeighborWorks America – is making loans with better terms than anything a local bank can offer. The loans are interest-free, and payments go directly to the lender to cover a portion of a borrower's monthly mortgage. Borrowers can get assistance for up to two years. Once assistance ends, 20% of the loan is forgiven with each passing year. So qualified borrowers who stay in their homes for at least five years after the assistance period don't have to pay this money back – as long as they don't fall behind on their mortgage again. What's the big catch? We know there's always one that seems to derail the intent of these programs to help millions of homeowners out of bad situations. Well, for one thing, if borrowers decide to sell their home before the entire loan is forgiven, they'll have to pay the remaining amount back. Some say that this potentially creates an even worse situation for these borrowers as they're further in debt than they were before taking the loan. Also, if borrowers fall behind on their mortgage payments and either sell or refinance, they'll also have to pay back the remainder of the loan. Because of this, some critics have already said that taking these loans may actually put some homeowners more in debt and make their situations worse. Another catch? HUD says these loans will only be made available to 30,000 people. That's a pretty small portion of the millions who face foreclosure due to missed mortgage payments. To be eligible, a borrower needs to have experienced income loss from either losing a job, a medical condition or some other economic problem. Details are available at this link: http://ehlp.nw.org/. If you or someone you know is facing foreclosure, it's worth checking out whether you can get assistance from this program. But, first make sure you have a long-term plan for staying in your home.