Everyone knows a low credit score can hurt your chances of qualifying for a
mortgage, but here are 5 more things that can affect your mortgage
application:

• New debt. One of the last things you want to do before
  applying for a mortgage or refinancing is to take on any new debt soon before
  submitting your application. Buying a car, putting large purchases on a credit
  card, or applying for student loans will drive up your debt-to-income ratio
  substantially. Typically, you want your total debt payments to be no more than
  43 percent of your monthly income, with your mortgage at no more than 31
  percent. Also, be cautious about incurring any other debt obligations as well,
  such as cosigning a loan.

• Divorce. If you are currently involved in divorce
  proceedings or just recently filed for divorce, it may make the mortgage process
  a little more complicated. It definitely won’t automatically disqualify you from
  getting a loan, but you may want to wait until a divorce process is final before
  submitting your mortgage application. Also, never omit the fact you are in a
  divorce proceeding if you are. This is information that is easily obtained by
  your lender. Neglecting to include it will most likely get you turned down for
  the loan.

• Unnecessary inquiries on your credit report. If you plan on
  applying for a mortgage loan or refinancing, you want to be cautious about
  allowing multiple lenders or brokers pull your credit report. Unnecessary
  inquiries can drop your credit score, which could result in a higher interest
  rate.

• Recently changing your job. Employment stability is an
  important factor lenders consider when assessing the risk of your mortgage loan.
  Recently changing your job may complicate the mortgage process. Lenders want to
  see evidence of a stable employment history before approving your mortgage
  application. Typically, lenders like to see you in your current job for at least
  two years. Recently changing your job doesn’t mean that your application will be
  immediately denied, but it could, at the least, prolong the process.

• Being involved in a lawsuit. If you are currently a party
  in a lawsuit, lenders may be reluctant to approve your mortgage application. If
  you’re being sued, there’s a chance you may get stuck with a large settlement
  that may make it difficult to meet your monthly mortgage payments. If you’re
  suing someone and lose, you could end up with some large attorney fees. Keep in
  mind that being a potential beneficiary of a class-action lawsuit isn’t the
  same. To be involved in a suit, you either have to have filed a suit against
  someone in court, been served as a defendant, or have hired an attorney to
  represent you.

Affluent Manhattan professionals make their nests in the million-dollar townhouses that line New Jersey’s “Gold Coast.” Flirt with your neighbors in the organic produce aisle of the local Whole Foods or Trader Joe’s. Or tone your muscles and expand your social circle at one of the borough’s fitness centers. Hold hands as you gaze at the breathtaking Manhattan skyline. Or take a five-minute ferry ride across the Hudson River for all the nightlife New York City has to offer.

See complete data and interactive map for Edgewater

U.S. market sees traction in luxury sales | The Real Deal | New York Real Estate News.

The recent downgrade on the U.S. debt should technically raise interest rates on consumer loans; however, the cost to borrow has actually decreased. The average 30-year fixed rate mortgage hit a low of just 4.32% last week, according to Freddie Mac.

Many analysts believe that the worst of the price decline is likely over. While we won’t see a drastic increase in prices, we likely won’t see much more decrease either. Once there are clear signs of recovery, demand will pick up and your competition will increase, so now might be a great time for you to buy a house.

If you’re a potential homebuyer, this news alone might compel you to run out and start house hunting, but just because mortgage rates are at an all-time low and housing prices have declined, there are other financial factors you may want to consider.

Getting preapproved. Have you been preapproved for a home loan? Because home prices and interest rates have decreased, buying a home has become easier for some people. However, qualifying for a home loan has become increasingly more difficult. It takes a higher credit rating and more financial responsibility to own a home today than it did during the housing boom around 2005 when nearly anyone could qualify for a home loan.

Down payment and closing costs. Remember that buying a home includes upfront fees and costs. If you haven’t saved, now may not be the right time to buy a home.

Maintenance and repair. According to the guidebook Home Buying for Dummies, you should budget 1% of the home’s purchase price annually for maintenance.

Utilities. A single-family home is generally larger than an apartment. You will need to factor this into your monthly costs.

Property taxes. The median property taxes paid on homes in the U.S. is almost $2,000 per year, according to the U.S. Census Bureau. Aside from the mortgage itself, this is generally the biggest cost of home ownership. Taxes can increase as time goes on, so make sure you can be financially prepared for that.

Homeowners insurance. Your home has to be insured, so ensure you can afford it.

Homeowner association (HOA) fees. If you live in a condo, townhome, or neighborhood that is regulated by an HOA, you could pay up to several hundred dollars each year in HOA fees. These costs are not fixed and can increase over time.

As far as the market goes, now is a great time to buy. Many buyers are finding beautiful homes at affordable prices for less than what they’re paying for rent. If you feel that you are prepared, you’ve saved enough money, you qualify for a mortgage, and you know you can afford all the costs involved, then now is a good time for you to buy a home.

By: G. M. Filisko

Published: August 24, 2010

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.

1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house. 

• Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.

• Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer

• Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.

• If you’re doing the work yourself, price the supplies.

• Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs

• Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.

• Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.

• Factor the time and aggravation of permits into your plans.

4. Doublecheck pricing on structural work

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don’t purchase a home that needs major structural work unless:

• You’re getting it at a steep discount

• You’re sure you’ve uncovered the extent of the problem

• You know the problem can be fixed

• You have a binding written estimate for the repairs

5. Check the cost of financing

Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan:

• Get yourself pre-approved for both loans before you make an offer.

• Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

• Consider the Federal Housing Administration’s Section 203(k) program, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.

The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.

Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair. 

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

• Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.

• Radon, mold, lead-based paint

• Septic and well

• Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

More from HouseLogic

What you need to know about foundation repairs

Budgeting for a home remodel

Tips on hiring a contractor

Other web resources

This Old House remodeling cost estimates

Check the average return on different remodeling projects

G.M. Filisko is an attorney and award-winning writer whose parents bought and renovated a fixer-upper when she was a teen. A regular contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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