What Are Tenant Screening Services?
March 23, 2011
If you’re looking to rent an apartment, you may be wondering why the application process is so lengthy, and why you had to pay a fee to apply. The reason for the fee is most likely because the landlord is using a tenant screening company.
Tenant screening companies are companies that landlord and property management companies use to determine whether they want to rent to a prospective tenant. If a prospective tenant has evictions in their past or a criminal record the landlord may not want to rent to them. So how do these companies work?
Most tenant screening companies use a variety of sources to get their information about people. Public record information such as court records of evictions and state courts are usually where they start. From there they can go on to check sexual offender and terrorist databases. Then they’ll usually check credit reports to see if you have any outstanding bills or collection accounts. They can also check with utility companies to check payment history of past accounts.
That’s a lot of checking! It can be extensive but most landlords want to be sure they are not renting to someone with questionable character. If you feel you’ve been denied an apartment unfairly, you do have rights as a consumer. The Fair Housing Law requires that landlords give a written notice of denial to rejected tenants, and the reason for their denial. Most landlords and property managers are not aware of this fact. If you’ve been denied ask why and see what you can do to fix the problem.
New Factors For First Time Home Buyers
March 8, 2011
Many first time home buyers have experienced great success over the last two years. Due to government incentives and the depressed housing market it has been easier than ever to get that first home loan.
However with some of the government incentives expiring and interest rates beginning to slowly rise the window of opportunity may be closing. There are also new rules and regulations making that first home purchase a little more difficult and expensive. Several changes are out there and it pays to be aware of them before starting a mortgage application.
The first change to consider is the amount of your down payment. Insurance fees on government-insured mortgages that require a 3.5% down payment have doubled to up to 1.15% in the last 7 months. This means that on a 30 year $300,000 mortgage a current buyer can expect up to $30,000 more in fees than if you would have gotten that same loan back in September. Low down payment incentives were being used to get people into homes, but without the government incentives it makes the loan much more costly to the consumer. So if you’re thinking of purchasing a home with a small down payment you may want to think again.
Another factor to consider is how long you plan to stay in the home. Most realtors will tell current potential buyers that you should be planning on staying in the home you buy for at least 10 years for a couple of reasons. As mortgage fees are currently rising, this means that it will take a buyer longer to recoup those fees. Many long term forecasts also show home prices rising quite slowly over the next 10 years which means it could take a while for the potential buyer to realize a profit.
There is also greater competition in purchasing homes now than before which can make things more difficult for a first time buyer. There has been a recent increase in cash purchases of homes which most sellers will take first because they don’t have to wait for the buyer to get financed. A first time homebuyer can reduce the chance a seller will sell to someone else by not asking for too much up front. By only asking for a home inspection and appraisal, you would likely be more desirable to sell to than a cash buyer with a lot of requirements.
So if you’re considering purchasing your first home consider these factors first. They may end up saving you a lot of money in the long run.
Home Prices
January 21, 2011
Despite the doom and gloom news that has persisted in the housing market for months there are still many homeowners out there who think that their home is impervious to the declining home values that are affecting nearly every part of the country.
The reality is that many homes have lost value in the past year or two. Yet, a fairly high percentage of homeowners don’t think that reality applies to them.
According to Bankrate.com, a study shows 62 percent of homeowners believed their home had their appreciated in value or held steady in the past year. In reality, 77 percent of homes have lost value.
I can understand why some people may think their home hasn’t lost value. Many of us are emotionally attached to our homes. Homeowners who have put money into the restoration or upkeep of their home did so believing it would increase the value of their home. It would be very disheartening to realize that your money and hard work isn’t paying off, literally.
People who are not planning to sell their homes any time soon will eventually see their home values rebound.
People who need to sell their homes are in a more delicate situation. The Bankrate article offers some good advice for sellers who have their homes on the market during the down turn.
There has been some improvement in the housing market recently and prices are starting to climb a bit, but the best advice is to take the advice of professionals who know what they are talking about. If your realtor makes a suggestion about the listing price of your home, take what he or she says into serious consideration. This is probably not the time to be stubborn if you want to sell your home.
Mortgage scams
December 14, 2010
This is a topic I’ve addressed before, but it bears repeating.
If you are struggling to pay your mortgage, or if you know someone who is, please remember that there is reputable, free help out there.
For the past few years since the mortgage crisis hit, scammers have been luring desperate homeowners in with false promises that they can save their home. These scammers often charge large, upfront fees for their “service.”
There are some things to watch out for if you are contacted by someone claiming to work for a home rescue or home loan modification company.
First of all, if a company contacts you out of the blue, it’s likely not a reputable service. Agencies that offer foreclosure prevention counseling do not randomly contact homeowners.
If a company asks you for money upfront, that is another red flag that you may not be dealing with a reputable company. Again, the agencies that offer help for homeowners are typically non-profit agencies that provide housing counseling for free.
If you’re having a hard time paying your mortgage, your best bet is to find a non-profit agency that is approved by the U.S. Department of Housing and Urban Development (HUD) to offer foreclosure prevention counseling. You can find a list of approved agencies in your area on HUD’s website.
Advantage CCS also offers foreclosure prevention counseling to Pennsylvania residents.
How much should you spend on your first house?
November 15, 2010
How much should you spend on your first home?
It’s a question that doesn’t have a one-size-fits-all answer because every homebuyer’s situation is different. But there are some things to consider if you’re thinking about buying a house.
Many lenders use a general guideline that your housing costs (including mortgage, interest, insurance and taxes) shouldn’t be more than 28 percent of your gross income. Gross income is how much you earn before taxes are taken out.
I have a different opinion. I am a firm believer that you should base your housing costs on your net income, which is your take-home pay after taxes.
The fact is that the banks don’t have to live on what’s left of your paycheck after the taxes come out and your housing expenses are paid. You do.
My husband and I really lucked out when we bought our house. It’s our first home. I was insistent that we determine how much we could afford based on our net income. We were approved by the bank for a loan at a certain amount. We told our realtor to only show us homes at a certain price point, and we made it clear that we didn’t want to see anything above that price. We set that price at almost half of what the bank approved us for.
How we lucked out was that we found a home that had been recently remodeled and was within our price range. It’s not a huge “dream home.” But it’s perfect for us. It was move-in ready and we have the option to add on, finish the basement, etc., as time goes on.
When looking at your housing costs, you should also think about your personal and financial situations.
- Is your credit good? If not, you will likely be faced with higher interest rates, which can substantially increase your housing costs. It may be better to wait until your credit improves.
- Can you afford the home on one income? If not, do you have a backup plan if one spouse would lose his/her job?
- Do you have children? If you don’t but you plan to, or you plan to have more children, how will the costs of raising those children impact your budget?
- Are you contributing to a retirement plan? If you do not have a company subsidized pension and your housing costs will be so high that you can’t contribute to a retirement plan, you should rethink the cost of your home.
These are just some of the things to take into consideration when looking at the cost of the home. It is very important that you make sure you can afford your home.
If you have questions about your finances and buying a new home, Advantage CCS offers free pre-purchase counseling sessions. For more information visit: http://www.advantageccs.org/pre-purchase-counseling.html.
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