2023 Study: Majority of Renters Priced Out of Homeownership in 78% of All US Metros

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Key Findings

  • 63% of renters across the biggest U.S. metropolitan areas are priced out of home ownership (up from 61% last year)
  • The majority of renters can’t afford to own a home where they live in 205 out of 260 metros (78%)
  • At least 90% of renters are priced out of home ownership in 16 American metro areas, nine of which are in California
  • In two metropolitan areas, Prescott, AZ and San Luis Obispo-Paso Robles, CA, less than 1% of renters would be able to afford buying and owning a median-priced home
  • Kalamazoo-Portage, MI, Jackson, MI, and Johnstown, PA are the only three metros where more than 80% of renters could afford to own a home

In 2022, a study by Porch, a nationwide home-service company, found 61% of renters in the U.S. were priced out of homeownership, meaning they were not able to afford to buy and own a home in the same city where they rented. 

In 2023, applying that study’s same methodology to the most recent home-owner data resulted in an estimate of 63%. In other words, today, nearly two-thirds of renters can’t afford to buy a home in the metro where they live.

To gain a better understanding of this huge number, we examined housing affordability by comparing renter incomes to home prices using the most recently available data for 260 metropolitan areas in the United States.


Home Prices Have Dropped, Why Aren’t Homes More Affordable?

home ownership study porch hireahelperEven though home prices have been falling for the better part of last year and then continued their decline in 2023, housing affordability hasn’t improved. In fact, things have gotten worse for prospective homeowners over the last year. 

At the end of last year, the National Association of Realtors’ Housing Affordability Index reached its lowest point since 1965. It hasn’t been this hard for a family with an average income to qualify for a mortgage loan on an average-priced home in over six decades.

Why hasn’t a drop in home prices led to greater affordability? 

For starters, mortgage interest rates are at 6.65% according to Freddie Mac — the highest they’ve been since the Great Recession. This means potential mortgage repayments for buyers would be a lot higher than they would have been even just a few years ago.

 

“It hasn’t been this hard for a family with an average income to qualify for a mortgage loan on an average-priced home in over six decades.”

 

Secondly, there aren’t enough affordable starter homes. In part, that’s because there are simply not enough homes for sale in general after a pandemic buying frenzy. On top of that, there is simply put, a lack of cheap new homes. Roughly 63% of all U.S. homes were selling for over $400,000 by the end of 2022.

Finally, there’s the pervasive issue of inflation and the increasing cost of goods, services, and rent, leaving less money in Americans’ pockets. Despite dropping to 6.5% in recent months, it’s still way higher than the pre-pandemic 1-2% rate.

Now that we know more about why housing is less and less affordable, let’s get into where all this leaves American renters wanting to buy a home in 2023.

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Further Out of Reach: The Majority of Renters Can’t Afford To Own a Home in 205 out of 260 Metros

To estimate the percent of renters priced out, we assumed a scenario where a first-time buyer put down 6% of the home value, obtained a 30-year fixed-rate mortgage with a 6.65% interest rate (an average rate), and aimed to keep mortgage repayments to a maximum of 30% of the household income, as per the famous Housing and Urban Development guideline.

 

“…in two major U.S. metropolitan areas, the share of renters priced out of home ownership is a staggering 99%!”

 

With current income levels and home prices, this scenario is completely unattainable for the majority of renters in 205 out of 260 metropolitan areas in the United States. That’s in nearly eight out of the ten (78%) most populated areas in America where renters have no realistic chance at home ownership.

 

In the Porch study from 2022, there were 184 metros where home ownership was unaffordable for 50% or more renters living in them. 

This overall increase seems to suggest the affordability crisis isn’t just deepening in areas already struggling with affordable homes, but is actually expanding to more metropolitan areas across the country.

Mission Impossible: In Two Metros, Home Ownership Is Unachievable for 99% of Renters   

Last year’s study uncovered 13 major U.S. metro areas where at least 90% of renters wouldn’t have been able to afford home ownership based on their income. This year, there are 17 of them!

What’s different about this year’s findings, however, is that in two major U.S. metropolitan areas, the share of renters priced out of home ownership is a staggering 99%!

Those areas are San Luis Obispo-Paso Robles, CA and Prescott, AZ, where the home prices are prohibitively high to be affordable for the absolute majority of people who rent in these areas. Homes in San Luis Obispo and the area being unaffordable is nothing new, but affordability dropping in Arizona and Prescott, AZ specifically is something that’s started happening recently, according to local reports.

 

Of the 17 places in the U.S. where the income of 90% of renters would prevent them from being able to afford a home, nine are in California with cities like Los Angeles (94.3%), Salinas, CA (92.9%) and San Diego (92.6%) all with an appearance on the list.

Hawaii and Colorado each have two metros on this list, but, rather surprisingly, so does Charleston-North Charleston, SC, where some 91.6% of renters are priced out of home ownership. Turns out, housing has been too expensive in the area for a while, but the local government does seem to be stepping in and building more affordable homes, according to reports.

The Modest Midwest: Two Michigan Metros Among Three Most Affordable Places for Renters

Like last year, Johnstown, PA leads the pack in terms of affordability of local housing for those on typical renter incomes. Nearly 90% of people who rent in the area earn enough to cope with the costs of home ownership if they were to buy a home in the area.

The only two other metropolitan areas where owning a home without repayments crosses the affordability threshold of 30% of the household income are in Michigan. Those places are Jackson, MI, (11.9%) and Kalamazoo-Portage, MI (13.3%).

Looking at the 10 most affordable areas for renters looking to jump onto a housing ladder without it breaking the bank, five are either in Michigan or Illinois, while a total of three exist in Pennsylvania.

See All the Data for Yourself

To see how affordable homeownership is for renters in your city or metro, check the table below. 


Methodology, Data Sources, Calculations and Assumptions Made

Income levels of renter households and their % of all households in each metropolitan area were taken from the 2022 release of the Annual Social Economic Supplement to the Current Population Survey, as available via Integrated Public Use Microdata Series (IPUMS). Home prices were taken from Zillow.
% of renters “priced out” was calculated as the percentage of renters in each metropolitan area whose income wouldn’t be sufficient to keep potential mortgage repayments to 30% of gross monthly income (Source: United States Department of Housing and Urban Development). 
Mortgage repayments were estimated using the following assumptions:

Illustrations by Daniel Fishel

2021 Study: Renting Versus Buying, and How Both Are Impacting You

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Key Findings

  • The average rent across the United States is $1,050 a month
  • The average mortgage payment in the U.S. is $992/month 
  • At $2,600/month on average, Sunnyvale, CA has the highest rent in the country
  • Gadsen, AL has the lowest rent in the U.S. at $430/month on average
  • Mortgage repayments are highest in and around Washington, D.C., at more than $2,000/month on average
  • Property taxes, utilities, and insurance add an average of $563 to the cost of owning a home 
  • Homeowners tend to make 90% more than renters ($98,700 versus $51,700, on average)
  • Renters spend an average of 32% of their disposable income on housing, while homeowners spend an average of 20%
  • In 333 out of 335 cities studied, homeowners spend less of their income on accommodation than renters

 

It’s a question at the heart of many debates and countless articles: Is it better to buy (if you can afford it) or to rent (if you can’t)? Which is more financially beneficial? Which is actually more affordable, and why?

One way to think about this debate is to take the average home price in each state, then estimate your repayment based on some assumptions (e.g., 20% down payment, 3% interest over 30 years, etc.), then finally, compare that number to average rent prices.

But that comparison alone doesn’t tell us the true value of renting.

What does? We looked at 335 of the biggest cities and metropolitan areas in the United States and broke down how rent levels compare to mortgage rates, how they stack up against typical incomes in each of these areas, and more.

$400 in Alabama, $2,500 in California: How American Cities Compare on Rent

The average cost of rent across the country is $1,050 a month. Cities where rent is nearest the nationwide average are Modesto, CA ($1,047), Iowa City, IA ($1,057), and Houston, TX ($1,058).

(Note: Most of the housing data in this article come from the U.S. Census American Community Survey.) 

Among the 335 major metropolitan areas we profiled, where is rent cheapest? That would be Gadsden, AL, where typical rent was around $400 per month. Among areas with the lowest rent in the country are towns in Missouri and North Carolina

And then you have the other extreme. Places bemoaned for the high cost of living are mostly situated in California, with Sunnyvale, CA grabbing the top spot with an average of $2,600/month. San Jose sits closely behind, featuring rents around the $2,300/month mark.

City Avg. Rent City Avg. Rent
Gadsden, AL $400 Sunnyvale, CA $2,600
Johnstown, PA $430 San Jose, CA $2,400
Decatur, IL $495 Cambridge, MA $2,300
Rocky Mount, NC $500 San Francisco, CA $2,000
Joplin, MO $500 Hayward, CA $2,000
Hickory, NC $500 Napa, CA $1,900
Youngstown, OH $500 Huntington Beach, CA $1,900
Monroe, LA $500 Ventura, CA $1,800
Lima, OH $500 Pasadena, CA $1,800
Decatur, AL $500 Rancho Cucamonga, CA $1,800

Only one of the top 10 places with the highest rent in the country is not in California. Surprisingly enough, it’s not New York City, but rather a little college town in Massachusetts we call Cambridge. Rent in the city that’s home to Harvard and MIT is the third highest in the country, averaging $2,200 per month.

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$992 a Month: The Typical Mortgage Repayment in the United States

How much is a typical monthly mortgage repayment? Excluding utilities like electricity, water, heating, the national average of a U.S mortgage is around $992/month. 

But it’s not that simple of a figure. Needless to say, buying a home requires putting a substantial amount of money towards the down payment, and fulfilling a set of financial requirements more stringent than those usually applied to prospective renters.

 

“Only one of the top 10 places with the highest rent in the country is not in California.”

 

Whether due to these factors, declining mortgage interest rates, or even the impact of COVID on the real estate market, mortgage repayments tend to come in lower than rents.

Being somewhat proportional to the home values, mortgage repayments are usually highest in cities, where homes cost more. However, since we decided to look at actual mortgage payments rather than estimating these figures from home prices alone, our results look somewhat different than you might expect.

The two cities with the highest mortgage repayments are in or near the capital of the U.S.: Alexandria, VA ($2,367) and Washington, D.C. ($2,077).

The rest of the top 10 is mostly made up of cities in the San Francisco Bay Area, with exceptions being Seattle, WA, Stamford, CT, and another satellite location Washington, D.C., Arlington, VA, where a typical mortgage repayment is $1,863.

City Avg. Mortgage Repayment City Avg. Mortgage Repayment
Flint, MI $223 Alexandria, VA $2,367
Detroit, MI $283 Washington, D.C. $2,077
Johnstown, PA $369 San Jose, CA $2,064
Charleston, WV $396 Seattle, WA $2,035
Brownsville, TX $398 Sunnyvale, CA $2,024
Homosassa Springs, FL $413 San Francisco, CA $1,985
Gadsden, AL $420 Stamford, CT $1,978
Edinburg, TX $431 Hayward, CA $1,971
Youngstown, OH $436 Arlington, VA $1,863
Bangor, ME $453 Oakland, CA $1,844

Cities where home prices and mortgage payments are lowest are mostly situated in the Midwest or the South of the country, including cities like Flint and Detroit, both in Michigan, and Brownsville and Edinburg, both in Texas. 

Rent or Buy: How Rent and Mortgage Payments in Each City Compare

Now that we’ve established how much renters and homeowners pay in different parts of the country, let’s look at how rent and mortgage payments compare in each city. Where do renters outspend homeowners and which cities are typical mortgage payments higher than rents?

Based on our analysis, typical rent is higher than a typical mortgage payment in more than half of the cities we looked at (56%, or 187 out of 335 cities analyzed), with the average rent being about 6% higher than the average mortgage payment.  

Compared to homeowners, renters pay the most in cities in Michigan and Florida. In Flint and Detroit, renters pay more than twice as much in rent as typical homeowners pay in their mortgage payments.

Rent in cities like Homosassa Springs, FL and Sarasota, FL tends to be about 1.6 times higher than a typical mortgage payment in the same city.

City Avg. Rent Avg. Mortgage Payment % difference
Flint, MI $535 $223 +140%
Detroit, MI $650 $283 +130%
Flagstaff, AZ $1,100 $620 +77%
Homosassa Springs, FL $700 $413 +69%
Allentown, PA $930 $567 +64%
Sterling Heights, MI $1,100 $677 +163%
Sarasota, FL $1,200 $744 +61%
Bangor, ME $730 $453 +61%
Punta Gorda, FL $900 $575 +57%
Cape Coral, FL $1,100 $720 +53%

Conversely, here are the cities, where payments on mortgages are higher than rents. Top among them is Stamford, CT, where homeowners pay almost a third (30%) more than renters!

In cities like Chicago, IL and Little Rock, AR rent is around 20% lower than a typical monthly payment on a mortgage. Two of the cities where homeowners pay more than renters are in the political capital of the U.S.: Washington, D.C. and Alexandria, VA.

City Avg. Rent Avg. Mortgage Payment % difference
Stamford, CT $1,400 $1,978 -29%
Alexandria, VA $1,800 $2,367 -24%
Sioux Falls, SD $760 $988 -23%
Auburn, AL $670 $851 -21%
Chicago, IL $1,000 $1,263 -21%
Little Rock, AR $700 $870 -20%
Fayetteville, AR $700 $867 -19%
Newark, NJ $1,000 $1,231 -19%
Yuba City, CA $880 $1,080 -19%
Washington, DC $1,700 $2,077 -18%

 


Wondering what the average rent is like where you live? Want to find a typical mortgage repayment in a city you’re interested in? 

See the full results of our study, check the interactive table below, where you can see how much people in the 335 cities we profiled pay in rent, mortgage payment, and how the two compare.


More Than Just a Mortgage: The True Cost of Home Ownership

So, which is ultimately cheaper: renting or owning a home?

If you were to take mortgage repayments as we listed above and simply compared that to rental prices, you’d notice that a lot of the time, they’re not super different. On average, across the 335 cities we profiled, rents are only 6% higher than mortgage repayments. And in almost half the cities (44%), rents are lower than typical mortgage repayments.

 

“Homeowners make about twice as much as renters, roughly $98,700 a year before taxes, as compared to an average income of $51,700 a year before taxes for renters.”

 

However, as most homeowners might tell you, your mortgage might be the biggest cost… but it is only one part of all the expenses that go towards owning and maintaining a home. And they would be 100% right.

According to the figures from the U.S. government census’ American Community Survey, insurance, real estate tax, and utilities contribute an average of $563 to living costs every month. With all this considered, a truer average cost of owning a home in the U.S. is around $1,556 a month.

You can argue that renters pay utilities out of pocket too. But even if we add those up, the average amount renters pay every month rises by $185 to $1,143 a month, which is still some 26% lower than homeowners fork out each month.

A Tale of Two Incomes: Honestly Measuring Housing Affordability in the U.S.

renting vs buyingLooking at the figures so far, owning a home does appear to be more expensive than renting, and not just in up-front investment, but on an ongoing basis, too. 

With the average utility bill, taxes, and other typical costs included, the average cost of homeowning in the U.S. is about $1,556 a month, while renting is $1,143 a month.

True as that may be in nominal terms, there’s one critical aspect to consider in deciding which is more affordable: household income

Even without looking at the data, you can easily imagine that the income of renter households is likely lower than those of homeowners. Renters tend to be younger, earlier in their careers, more likely to be single, etc. 

But the real kicker is just how much lower the income of those who rent tends to be. Homeowners make about twice as much as renters, roughly $98,700 a year before taxes, as compared to an average income of $51,700 a year before taxes for renters.

 

“…a typical homeowner spends only about 20% of their income on housing costs. For renters, that estimate is 32%!”

 

When you consider this fact, the $400 “premium” homeowners pay in housing costs doesn’t seem that large. In fact, when you account for taxes and average the income out by month, a typical homeowner spends only about 20% of their income on housing costs. For renters, that estimate is 32%!

That means renters spend over almost one-third of their estimated take-home pay to cover their accommodation costs, despite the oft-repeated personal finance mantra of spending “no more than 30%” on your total living costs.

It’s worth noting that among the 335 cities we profiled, only in two of them is renting more affordable than owning a home: Jersey City, NJ and San Francisco, CA. And in both cases, the difference between what renters spend is merely about 1% under what homeowners spend.

Most and Least Affordable Cities To Rent, Based on Average Income

Now, instead of looking at rent levels and mortgage repayments in isolation, let’s consider affordability as a relative measure. If we express housing costs of renters and homeowners as a percentage of their incomes, which cities would be most and least affordable?

The cities with the most affordable rent with regards to people’s income are in the Midwestern states of Missouri, Wisconsin, and Ohio, with the most affordable being Jefferson City, MO. In most of the top 10, the rent and housing costs are under the recommended 30% of disposable household income.

City Rent as % of income City Rent as % of income
Jefferson City, MO 26.7% Waterbury, CT 62.3%
Sheboygan, WI 27.5% Antioch, CA 59.8%
Eau Claire, WI 27.5% Moreno Valley, CA 57.8%
Wenatchee, WA 28.6% Iowa City, IA 56.5%
Houma, LA 29.0% Newark, NJ 55.6%
St. Joseph, MO 29.4% New Haven, CT 54.6%
Mansfield, OH 29.4% Flint, MI 54.2%
Sioux Falls, SD 29.5% Allentown, PA 53.6%
Lima, OH 29.9% Jackson, MI 53.1%
Wausau, WI 30.4% Bridgeport, CT 51.5%

And the least affordable cities for renters aren’t what you may think. Sure, some of them are in California and more specifically in the Bay Area. For example, costs for renters in Antioch, CA average almost 60% of their estimated disposable income. 

However, among cities with unaffordable rent levels are cities not exactly known for their affluence, like Newark, NJ and Flint, MI, where housing costs for renters are over 55% of their household income.

Most and Least Affordable Cities To Buy, Based on Average Income

Turning back to homeownership, it seems to be most affordable in cities like Huntsville, AL, Decatur, IL, and Houma, LA, where housing costs account for less than 20% of the household income.

Among the least affordable cities for homeownership are Bridgeport, CT, Paterson, NJ, Miami, FL, and Los Angeles, CA. Homeowners in these four cities spend more than 36% of their disposable income on their homes.

City Ownership as % of income City Ownership as % of income
Huntsville, AL 19.6% Bridgeport, CT 36.9%
Decatur, IL 19.7% Paterson, NJ 36.3%
Houma, LA 19.7% Miami, FL 36.2%
Decatur, AL 19.8% Los Angeles, CA 36.1%
Parkersburg, WV 19.8% Salinas, CA 35.3%
Odessa, TX 19.9% Newark, NJ 35.0%
Jefferson City, MO 20.1% Glendale, CA 34.7%
Michigan City, IN 20.3% Providence, RI 33.7%
Green Bay, WI 20.3% Pomona, CA 32.9%
Grand Rapids, MI 20.3% San Diego, CA 32.8%

Curiously enough, Newark, NJ is among the least affordable cities for homeowners as well as for renters. The percentage of their income homeowners in this city spend on their home is 6th highest in the country—35%. As the city with a reasonable commute to New York City is undergoing gentrification, the incomes of local residents might be struggling to keep up.


Housing affordability is a tricky concept. While mortgage repayments alone are lower than rents, it’s worth considering all the extra costs associated with homeownership that don’t factor into rentals. That said, if your income allows you to buy a home, chances are you’ll be spending less of it on your housing.

We’re not in the position to give financial advice, but if you’re considering moving to a place looking for greater affordability, you should consider spending less on your move before you even settle in. 

Sources and Methodology
Unless otherwise stated, all the data used in this study came from the American Community Survey, a government survey that reaches tens of thousands of households in America every year. The latest available data covers the year 2019, and the results were released in January 2021.
Household income was taken separately for owner-occupied and renter-occupied households. Housing costs on top of mortgage/rent include utilities such as heating, electricity, and water. For homeowners, they also include insurance, homeowner association fees, and real estate taxes.
To estimate monthly disposable household income, 70% of the nominal household income was taken using an estimate that an average American pays ≈30% of their income in taxes, then divided by 12.
Illustrations by Meredith Miotke

The Home Buying 101 Guide for Millennials

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In 1970, the median age of first-time homebuyers was 30.6 years. Today, according to MarketWatch, the median age of American homebuyers is 47 years. Since the 2007-2008 financial crisis alone, the median age has increased by eight years, and that rise is largely attributed to the dramatic decrease of millennials entering the housing market.

The American Dream is changing, and with it, the fundamental desire to own a home.

Why Aren’t Millennials Buying Homes?

In 2019, only 43% of millennials owned the homes they lived in, compared to 66% of generation X and 77% of baby boomers. A combination of debt, high housing costs, and a generation with different priorities all contribute to millennials forgoing homeownership.

An important policy goal of the US government has long been to encourage homeownership. Historically, that’s been done through the federal tax code and residential mortgage regulation. But since these things benefit mostly higher-income, better-educated homeowners, these policies are no longer as effective as they once were.

The Brookings Institute points out that a better path to encouraging homeownership at a younger age would be implementing policies that create more opportunities for wealth-building. But until that happens, the median age is likely to keep increasing.

Here are the biggest factors contributing to the wealth gap.

Student loan debt

Student loan debt plays a massive role in millennials deciding not to buy a home. In a survey of student loan borrowers, 83% of non-homeowners cite student loan debt as the reason they haven’t bought a house. Indeed, the average monthly student loan payment is $393 a month, which leaves many unable to save for a down payment on a home.

The most recent student loan debt statistics show that in 2020, there were almost 45 million student loan borrowers who had an average debt of around $33,000.

Rent burden

Millennials are more rent-burdened than any other generation. Rent burden occurs if more than 30% of your income goes toward paying rent — and millennials spend 45% of their income on rent. And while the average living wage is $68,808 a year, the average millennial makes just $35,592 a year, and rent burden plus low wages create a double-whammy for many young people.

“Whether or not you can afford to buy a home depends on your income, the property prices in your location, how much other debt you have, and how good your credit score is.”

Delayed marriage

Marriage increases the chances of homeownership by 18%, and according to the Urban Institute, delayed marriage is one of the biggest factors for why millennials aren’t buying homes. In 1960, couples typically entered their first marriage in their early 20s, but today, the median age for a first marriage is nearly 30.

Delayed procreation

Having children is another important factor in people’s decision to buy a house — having kids increases a person’s chance of homeownership by 6%. But millennials are in no big hurry to have kids. In 1990, 37% of married couples aged 18 to 34 had children, but in 2015, just 25% of young couples were parents.

More diversity, more inequities

The millennial generation is far more diverse than previous ones. According to the Brookings Institute, the young adult age group was 73% white in 1990. In 2000, it was 63% white. Today, the millennial generation is around 56% white, with 30% of its population made up of Hispanics, Asians, and people who identify as two or more races. Historically, homeownership rates are lower among Black, Hispanic, and Asian Americans when compared with white Americans — and today, just 14.5% of Black millennials own a home, compared with 39% of their white counterparts.

What Does it Realistically Take to Buy a House or Condo?

rent a condo

Maybe you’re not interested in becoming a homeowner at a tender age, and that’s perfectly fine. Renting definitely has advantages over buying, and if you prefer the unencumbered life, apartment living frees you up to move wherever, whenever.

However, if you dream of homeownership — but feel like it’s only a pipe dream — you might want to look into homeowner rates to be sure. In many cases, a mortgage is less expensive than rent, and a number of federal and state programs exist solely to help first-time homebuyers like yourself. You might be surprised to find you can afford to buy a home, after all.

You have to use the “28/36 Rule”

Whether or not you can afford to buy a home depends on your income, the property prices in your location, how much other debt you have, and how good your credit score is.

A good starting point for figuring out whether you can afford to buy a house is to use the “28/36 rule”. This rule states that your total household expenses (including your mortgage, utilities, and property taxes) shouldn’t exceed more than 28% of your gross monthly income, and your total household debt (like credit cards and car loans) shouldn’t be more than 36% of your gross monthly income. So figure out those percentages, and you’ll have a rough idea of what you’re working with.

The lowdown on home loans: How do mortgages work?

Unless you’re loaded with cash, you’ll need to get a mortgage like most people. But what specifically is a mortgage, anyway?

A mortgage is an agreement between you and a lender (typically a bank but not necessarily) that says the lender will give you money to buy a house, but if you don’t make the monthly loan payments, they’ll take it away, and you’ll lose any equity (ownership) you’ve built up. A mortgage payment is like rent, but for homeowners. When you borrow money to purchase your home, you pay it back over, say, 15 or 30 years, with interest. The bank figures out how much this adds up to each month, and that’s your mortgage payment. Once your mortgage is paid off, you have full ownership of your home.

What’s the deal with interest rates?

Interest rates are calculated as a percentage of your mortgage loan. Each mortgage payment you make pays back a portion of the principal (the full amount you borrowed) plus the interest that accrued that month.

Fixed-rate interest means that your interest rate won’t change during the life of the loan, and you’ll pay back the same amount each month.

Adjustable-rate interest means that the interest rate may change under certain conditions, and if it does, your lender will adjust your monthly payments up or down until the next rate change.

The longer you take to pay off your mortgage, the more you’ll end up paying in interest. The best way to keep your interest rate low is to pay back the loan as soon as possible, never forget a payment, and pay more than your monthly minimum, if possible.

What Are ALL the Costs Involved in Buying and Owning a Home?

buying a home

Here is a list of important terms to learn and keep handy, even if you know them backward and forwards.

Down payment

Traditionally, people buying a home pay 20% of the price of the house up-front. It’s possible to buy a home with a smaller down payment, although that could mean increased borrowing costs and higher monthly payments.

Closing costs

Closing costs are lender and 3rd party fees and expenses that are paid at the close of the sale transaction. These costs run roughly 2-5% of the loan amount and could include things like appraisals, taxes, insurance, prepaid interest, and application, origination, and attorney’s fees.

Some lenders allow you to fold the closing costs into the loan, but that makes your loan payment higher, and you’ll end up paying interest on those costs for the life of the mortgage! Your lender will outline your closing costs in a Loan Estimate, which you’ll receive when you apply for the loan.

Monthly mortgage

Your monthly mortgage payment depends on the amount of the loan + your interest rate.

Property taxes

The Man’s gotta take his chunk, and property taxes is how it’s done. Your property taxes pay for things that make your community better, like schools and road repairs. Property taxes are based on the value of your home, and rates vary by location and fluctuate often due to changing needs and priorities in the community.

“In 2019only 43% of millennials owned the homes they lived in, compared to 66% of generation X and 77% of baby boomers.”

Homeowner’s insurance

Homeowner’s insurance covers losses and damages to your house and assets due to theft or damage. Rates vary by state and region, but the average annual premium in 2017 was about $1,200.

Hazard insurance

Hazard insurance is a more extreme homeowner’s insurance—it protects you from structural damage caused by natural disasters. Hazard insurance is determined by local risk factors such as fires, flooding and earthquakes, and it’s usually included in your homeowner’s insurance policy.

Mortgage insurance

Mortgage insurance protects your lender against loss if you default on the loan. This could cost up to 2% of your total loan amount per year if you didn’t make a down payment of at least 20%.

HOA/Co-op/Condo fees

These are monthly membership fees used to pay for improvements like landscaping and painting and for amenities like swimming pools and gyms. The fee varies dramatically based on the organization and where you live. Upscale condos and homes typically have higher fees and stricter rules than more modest digs.

Utilities

Electricity, gas, water, trash collection, recycling, internet, cable, and security monitoring are daily essentials that you pay monthly, and their costs vary depending on where you live. Bigger homes generally have higher utilities.

You better shop around!

You probably wouldn’t buy the first car you looked at, or the first pair of shoes you tried on, and so it is with the first lender you come across. Shopping around for the best mortgage takes time, but it’s time that can save you lots of money.

Mortgages don’t just come from banks—credit unions, brokers, and independent lenders also deal in mortgages. Know how much you can afford for your down payment, then choose a few institutions to approach for a loan. Ask for all of the costs involved in the loan, including all the stuff above. Compare the loans, and then approach the lender you like best. If you’re charming and savvy, you may be able to negotiate lower fees or better terms. Once you’re happy with what the lender is offering, get it in writing, or it’s not real!

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The Real Pros and Cons of Buying Vs. Renting

Studio apartment

Which is generally better, buying a home or renting? Millennials often don’t really get a choice. But let’s say you do, or are rising the economic ladder. Maybe you just want to know what your situation is affording you.

Buying a home is a big decision and a major financial commitment, but it offers more stability and the freedom to do what you please with your home. It also offers the opportunity to better accommodate lifestyle priorities, such as indoor and outdoor living and environmental sustainability.

Of course, renting is appealing because it comes with fewer responsibilities, yet you also don’t get as much autonomy or privacy as with homeownership. There’s no easier way to make sense of buying versus renting than with good, old-fashioned pros and cons lists:

The PROS of RENTING vs. buying

  • You don’t have to pay property taxes or spring for homeowners insurance
  • When the furnace breaks down or the roof leaks, you don’t have pay for new ones
  • You’re free to move out with a 30-day notice
  • You don’t risk foreclosure if you lose your job or take a pay cut
  • A rental deposit is far less expensive than a downpayment on a home
  • You have fewer responsibilities, including upkeep
  • Utilities are generally less expensive in an apartment, and some are even included in the rent

The PROS of BUYING vs. renting

  • Mortgage payments build equity in the home
  • Homeowners often enjoy more tax deductions than renters
  • Homeownership offers a sense of stability and putting down roots
  • You can do whatever you want with your space
  • Pets are always allowed
  • Monthly payments end once your mortgage is paid off
  • You have an asset to borrow against if you want to make improvements

The CONS of RENTING vs. buying

  • Rent often increases, unless it’s fixed
  • Renting offers no tax benefits
  • Less stability—if the landlord sells and the new one wants you out, you have to go
  • You generally can’t customize your space—painting, knocking out walls, etc.
  • You have to rely on someone else to get things fixed or improved
  • Rent payments never end
  • Pets might not be allowed

The CONS of BUYING vs. renting

  • It costs a lot upfront to buy a house
  • It’s more expensive to maintain a home you own than a rental
  • You have to be more responsible—making sure the mortgage is on time, your sidewalks are shoveled, you don’t alienate your neighbors
  • Your home price might lose value, making it a poor investment
  • It requires a long-term commitment, which may be scary for some people
  • It’s far more difficult to move, since you have to sell your home first
  • You may be liable for injuries sustained on your property (hence the homeowner’s insurance)
  • If something happens and you can’t pay the mortgage, your bank may foreclose on you
  • Ideally, you need to have a buffer in savings in case something goes wrong

The Pros and Cons of Buying a Condo vs. Buying a House

Well, what about condos?

Houses and condos are like apples and oranges—sure, they’re both a place you live in, but other than, that they vary quite drastically. Your lifestyle might be better suited to a house over a condo, or vice versa. Don’t just look at prices when choosing which housing situation is best for you—here are some of the differences to take into consideration.

PROS of BUYING A CONDO vs. a house

  • A condo is generally less expensive per square foot than a house
  • Many condos have concierge services
  • Landscaping and exterior maintenance and repairs are covered by the homeowner’s association or HOA
  • Amenities like a gym, pool, or clubhouse are usually included
  • Homeowner’s insurance is less expensive
  • You’re part of a community

PROS of BUYING A HOUSE vs. a condo

  • A single-family residence offers more privacy than a condo
  • A house is easier to sell than a condo
  • You have direct, easy access to a private outdoor space to build a garden or install a pool
  • You have more creative freedom with your space

CONS of BUYING A CONDO vs. a house

  • You have less privacy since other people live on the other side of your walls
  • Potentially strict HOA can make it impossible to customize your condo
  • HOA fees can be expensive, and you pay them on top of the mortgage
  • Many condos don’t allow animals
  • You can’t DIY your outdoor space

CONS of BUYING A HOUSE vs. a condo

  • You’re responsible for handling the exterior issues, like painting, landscaping, maintenance
  • Utilities are more expensive
  • Potentially strict HOA may limit what you can do with your home

Rev-Up Your Credit Score, and Drive Down Your Interest Rate

credit score

Alright, but what about credit scores? Do they matter?

Without good credit, it’s going to be virtually impossible to score a low-interest rate on your home loan. Before you embark on a home-buying journey, it’s a good idea to check your credit score and pull your credit reports. If your credit reports have incorrect information, getting mistakes resolved before you apply for a loan can raise your score and net you a better rate.

“And while the average living wage is $68,808 a year, the average millennial makes just $35,592 a year…”

Three credit bureaus maintain files on how you handle credit, including whether you pay bills on time, skip credit card payments, or have items in collection. Different lenders have different criteria for various interest rates, but even a few points on your credit score can mean the difference between half a percentage point—and thus dramatically affect your monthly payments.

Many lenders use the Fair Isaac Corp. (FICO) model for ranking your credit score. This system grades you on a scale of 300 to 850 points, with 800 points or more indicating exceptional credit and under 579 points indicating poor credit. It’s not super easy to increase your credit score—it can take a little time, but the time is well worth it if it means a lower interest rate on your loan.

If you’re worried about your credit, here’s what you can do

Find your current credit score

First, check out your current credit score so you know what you’re dealing with. Order your credit report, which will give you information on which factors are most heavily influencing your score, such as late payments, credit-to-debt ratio, and items in collections.

Focus on virtually nothing else but paying off your debts

Make a budget plan to pay off any outstanding debts you have. Pay off the most expensive debts first, and work your way down the line. Try to pay more than the minimum balance on loans and credit cards each month, and utilize low-interest, balance transfer credit cards to keep the interest low.

Make all your bills scheduled to be automatic

Everyone forgets to pay a bill now and then, but chronic lateness has a negative impact on your credit score. This goes for all of your bills, including utilities, credit cards, and loans. Set up automatic payments for your bills, or set calendar reminders to help you pay on time.

Maintain good credit card debt-to-limit ratios

Credit card companies look at your credit utilization ratio to see how well you manage credit. This is calculated by taking the total amount of all of your credit card balances and dividing that amount by your total credit limit. Keeping your credit utilization ratio low shows lenders that you’re good at managing credit.

Don’t apply for new credit accounts unless you absolutely must

As you’re remedying your old debt, try not to rack up any new debt. Avoid opening up more credit accounts unless it’s absolutely necessary. The more credit accounts you have, or the more you apply for new accounts, the riskier you appear to be.

Keep unused credit cards open

It sounds logical to close your unused credit accounts, but doing so actually increases your credit utilization ratio and lowers your credit score. Unless the unused accounts are charging you fees, keep them open.

Check your credit report at least once a year

Once you’ve got your credit score under control, make sure to check it at least once a year, and report any inaccuracies to the appropriate bureau.

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How to Save Money for a Down Payment Without “Giving Up Your Daily Latte”

You probably love it when people tell you that if you’d just quit your daily Americano or avocado toast habit, you’d be able to afford a house, but you don’t have to listen to them. With a little creativity, you can save money without giving up your favorite creature comforts.

First, set a goal. Figure out roughly how much you’ll probably spend on a house, then figure out how much a 20% down payment will be. If that amount makes you spit out your coffee, try 10%. But don’t go any lower than that. Then, open a savings account if you don’t already have one, and start socking away money as you can.

Here are a few hot tips to help you reach your goal faster.

Treat your savings like a bill

Instead of looking at your savings like an optional expense that you can put off until next month, think of it as a fixed cost that you must pay, just like your electricity and phone bills. Have the money deducted from your paycheck and sent directly to savings so it never crosses your path.

Cut recurring expenses from your budget

Look at your spending habits, and decide where you’re able to cut down. Can you cancel your $100-a-month gym membership for a few months and hit the running trail instead? Eat or drink at home most of the time instead of ordering in or going out? Pare down your digital subscriptions to just the essentials? A little here and a little there will add up faster than you think.

Find a side hustle

Make some extra scratch each month with a second job. Rideshare services or food and grocery delivery are great options for a little extra cash if you have a reliable car. Bartend one night a week at your local dive bar, or tutor online.

Focus on your high-interest debt

Start hacking away at your credit card or loan with the highest interest rate. After you’ve paid off the balance, move on to the next. Transfer your high-interest rate balances to your card with the lowest interest rate.

Try These Sweet Programs for First-time Home Buyers

first time home buyer

First-time buyers may be eligible for special grants and zero-interest loans through various state and local programs. Requirements for each program vary, so check with your state’s housing finance agency or the organization providing the loans to see what you’ll need to do. These are some of the loans available to first-time home buyers.

FHA loan

FHA loans are insured by the Federal Housing Administration and are for low-to-moderate-income buyers – they generally have lower credit score and down payment requirements than other loans.

Click here.

USDA loan

The US Department of Agriculture guarantees loans for some rural properties and offers up to 100% financing. These loans are for low-income folks who don’t qualify for traditional mortgages. USDA loans are low-interest and don’t require a down payment.

Click here.

VA loan

The Department of Veterans Affairs offers zero-down payment loans for veterans, military personnel, and their spouses. They have low-interest rates and don’t require a minimum credit score to qualify. These loans have the option of being used to refinance an existing mortgage.

Click here.

Good Neighbor Next Door

These loans are offered by the Department of Housing and Urban Development (HUD) for firefighters, law enforcement officers, teachers, and emergency medical technicians. Those who qualify receive a 50% discount off the listed price for homes located in “revitalization areas.”

Click here.

State and local first-time buyer programs and grants

States and cities provide down-payment and closing cost assistance through these programs and grants if you’re a first-time buyer. Look into your state’s housing authority program for more information on the type of assistance available to you.

Click here.

Native American Direct Loan

This is a VA-backed program that provides Native American veterans and their spouses to buy, renovate, or build houses on federal trust land. There is no down payment and the closing costs are low.

Click here.


While the average age of first-time homebuyers is rising, that doesn’t mean there’s no hope for young people to buy a house if they want to. If you’re thinking you’re about ready to put down some roots, maybe grow a garden, and stomp around all you want without disturbing your downstairs neighbors, start saving today, improve your credit score, and find yourself a little piece of the earth to call your very own.

How to Sell a House: A Guide from A to Z

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If you’ve ever sold something on Craigslist, you probably know how much work even just that can be involved. You’ve gotta take photos of the item, figure out a good price, and then post it online with a descriptive caption and details about the piece. Afterward, you’ve gotta field the emails and calls, then wait for a random stranger to come pick up your item.

Now, take that process and multiply it by 100 … that’s what it’s like to sell a house!

We’re not gonna sugar coat it; there is a lot of work and serious effort involved in selling a home. That’s why we wrote this post to outline the entire process for you. Understanding what you’ll be doing is the first step towards slapping “SOLD” on the sign in your front yard.

Craft a Selling Gameplan

Once you decide to sell your house, you probably would like if it all happened pretty quickly. But nothing good happens without a plan. So the first order of business is to make a selling gameplan. This is what that looks like.

Agent or No Agent?

The first major step in the selling process is figuring out if you’re going to hire a professional real estate agent or sell your home yourself. If you go the “For Sale By Owner” route, you could, in theory, save some money. But if you’re new to the home selling process, you may be way over your head if you DIY it. Ask yourself if you have the time, knowledge and marketing skills to sell your house all by yourself. If you come away with a resounding yes, it could be the right move for you!

Though if you decide to go with an agent, take the time upfront to find a good one. Ask friends for referrals, read reviews online and interview more than one agent before you hire the winner. A good agent should educate you throughout the process, and it ultimately should be someone you deeply trust.

This post outlines tips on who to contact, when, and how to do it.

Choosing the Right Time

The best time to sell is March through June. That leaves parents an entire summer to get their kids adjusted and ready for the new school year. So if you can wait until the spring and early summer months, do it! It’s always best to avoid selling during winter and the holidays, as most people aren’t looking to buy homes during that busy time of year on average.

Find the Right Price

The first 30 days of activity are crucial when it comes to selling your house, so price matters. You may assume that you should start high and then lower your price if you don’t get any attention, but if it sits on the market for too long, your listing can become stale. Buyers may stay away if you price too high or assume that you’re not serious about selling. Price it right from the start and you’ll probably sell your home much faster.

If you’re using an agent, they will work with you to figure out the best price for your home. You can also research other comparable homes in your area, and maybe even attend some open houses. Plus, there are many online resources that will help you track down the perfect number for your area. These things will all get you a good feel for the market and how your home compares.

Prep Your Home

Painting the House

Before you can officially get your home on the market, you need to get it looking it’s very best. If you fail to make your home look presentable, then you may not get the asking price you’re looking for, or even worse … it could sit on the market for far too long. You need to showcase your home in its best light, and the only way to do that is with some hard work and effort. Here’s how to prep your home for the market:

De-Clutter and De-Personalize In Six Steps

This first task will cost you literally zero dollars. Yep, you can already make your home look 10 times better without spending a dime. Here’s how.

  • Find a spot where you can store items out of sight. That could be an attic space, shed, or even a storage unit that you rent while you’re selling.
  • Remove excess bulky furniture. The more space to walk around, the better.
  • Try to pare down at least 10% in each room. Gather extra accessories and items that are taking up space.
  • Permanently clear all counters in your kitchen. And try to get rid of most items on surfaces (i.e., desks, dressers, etc.).
  • Donate everything you clear. (Or add them to your designated storage spot.)
  • Remove any personal items from around your home. This means things like picture frames and family knickknacks.

These six steps will have your home looking so much more sellable. Your space will be lighter and brighter for the photography and showings later on! Don’t forget about closets and drawers too. Buyers are nosy, and they’ll be checking out every nook and cranny in your house.

Make Small Home Upgrades

You don’t necessarily need to renovate your kitchen or bathroom to sell your house, but there are small upgrades you can make to improve your home. Here are some ideas that will instantly improve the look of your space (and potential home value!).

  • Give your walls a fresh coat of paint. Be sure to consult this list of paint colors with the best resale value first!
  • Upgrade your kitchen on a dime. Swap cabinet hardware, replace your faucet, and add new pendants for a quick and budget-friendly new look!
  • Boost curb appeal with a painted door. This post will help you pick the perfect hue. (Also helpful is a cleaned up yard and fresh flowers.)

Finally, if something has been broken (and on your to-do list for years), now is obviously the time to fix it!

Clean From Top to Bottom

There’s another essential (but free) task you’re going to be doing to make your home look a lot better: cleaning everything! Grime and dust can quickly deter buyers from truly considering your home, so get every nook and cranny sparkling. These posts will help you channel your inner Mr. Clean.

Marketing Your Home

If you’ve gotten to this step, your home is in tip-top shape from all of your hard work and it’s ready for its debut to the world! Marketing your home is by far the most important step of the home selling process. You can have the most gorgeous house on the block, but if no one sees the listing it’s never going to sell.

Stage and Photograph Your Space

You’ve already prepped for the staging when you got rid of personal items and removed clutter. Good work, that’s 90% of the battle. Now it’s time to add the finishing touches before your home’s photo shoot.

Make sure every room is clean, all beds are made, and blinds are open to let that natural light in! (Natural light is ideal for photos.) It’s important to keep accessories to a minimum, but if you do want to add a few we suggest opting for plants and flowers. This post has lots of tips on how to do it right.

Pictures are the most important part of a home listing, so it’s crucial to get these right. If you don’t think you can DIY it, then hire a pro! Investing in a professional photographer could potentially be the biggest money spent to money gained ratio in the entire process. If you’re using an agent, often times they will pay for this service. A professional is always a good idea because they will know how to photograph your home to make it look its best.

If you’re selling your house yourself (or just want to save some money), it’s possible to take your own pics. We suggest using a wide-angle lens, shooting during the daytime, and using a tripod. For more DIY photography tips, check out this post.

Promote Your Sale

Don’t solely rely on your agent to promote your listing. You can take some of the marketing efforts into your own hands and broadcast your sale to the world! Put your listing on social media sites, email your friends and family, and let neighbors know that you’re selling. You never know who might be looking to buy, so it’s worth it to use your own network to get the word out. Here are some of the most common sites people use for listing and/or real estate research:

Bring on the Showings

Simply put, homes that don’t get shown don’t get sold. So the first order of business is to make your home available for showings. That could mean a few open houses on the weekends and availability during the week. We highly recommend that you leave the house during showings so buyers can really feel comfortable checking out your space. It may be an inconvenience for you and your family, but remember that it’s only temporary!

You’ll also want to do these 10 things before any open house to get your home looking (and smelling) its best!

Keep It Clean

It’s hard to live in your home like a normal person and keep it ready for showings at all times. But you’ve gotta do your best to keep your home clean and organized. Whenever you leave the house, tidy up and wipe down all of your countertops. That way if you need to have a last-minute showing, your home is ready to go.

Get Everyone Out of the House

It’s important for buyers to check out an empty house. So that means that you, your kids, and any animals should make a plan to high-tail it out of there. That could mean taking the dog for a long walk or heading over to a friend’s house for the day. But no matter what, come up with a plan for where your family will go when those last-minute showings happen. And if you do have pets, be sure to remove their items (e.g., dog bowls, cat litter, etc.) from the home before buyers come in.

How To Get Ready For Closing

If you’ve made it this far, then congrats! You’re almost to the finish line. Here’s what happens now:

Appraisal and Inspection Time

After the listings and showings, you will (hopefully!) get an offer on your place. After you’ve accepted an offer, most buyers will do an inspection of your place within a week. You won’t need to be there for the inspection, and you’ll usually have the results within a few days. At that time, you’ll know if all went well, if you need to fix a few items yourself, or if you’ll offer the buyers a credit to fix things themselves.

Here’s our full guide for how to deal with a home inspection.

Next, it’s time for the appraisal. Appraisals usually happen within a week of the home inspection. You can do some homework before the appraisal to improve the chances of getting a higher price. Provide a list of recent home improvements and receipts to explain the value you’ve added to your home.

The results of the appraisal may take a few weeks. If your home appraises, you’re good to go! If not, you’ll have to negotiate with the buyer to find a price that works for all parties.

Prep to Move

After the appraisal, you’ll be on track for closing day. You can finally start to pack things up and get ready to move out of your home. This would be a good time to think about hiring some help for moving day. It’s also time to start packing! This handy checklist will keep you on task so you stay organized and on top of your move.

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Saying Goodbye to Your Home

Congrats, you sold your house! All that’s left to do is say goodbye and toast to all of the memories made in your place. As a bonus, you can also leave your buyers a little gift as you head out (like a booklet of your favorite restaurants or just a note with tips on their new house). It’s a great way to hand off your past experiences to the new homeowners. Onward!

Moving Paperwork 101: How to Organize, What to Keep, Who to Contact

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Listen, we are organized people.

At any given moment, our countertops are usually cleared of clutter, our files are neatly kept in labeled file folders, and our medicine cabinets are filled with colorful baskets of bathroom essentials. Organizing is our jam, mostly because we can’t take the stress that comes with living in a state of disorganization.

But recently when Bridget bought a new house and put her old house on the market, she became immediately bombarded with moving paperwork, emails and electronic files that quickly had someone who prides herself on her organization … feeling overwhelmed! All of the documents and information streaming into the mailbox and inbox were so important, yet it seemed like a whirlwind of information was getting lost in the shuffle. Not good.

With that in mind, today we’re diving into:

  • Who you can expect to hear from when you begin to move
  • What paperwork you need to keep tabs on, and
  • A few quick strategies that will help you keep track of your sanity (and those important docs!)

First, we go over the two different methods that helped me, then we get into the details about what you’ll be organizing (and with who!)

The Organization Must-Do’s

Create your official “Moving Binder” for the hard copies of paperwork.

No matter if you’re just moving, just selling, or possibly even both, the paperwork is bound to come streaming in right away. Heck, even when your home hits the multiple listings service (MLS) market or your name is given to a loan company, your address is often shared with businesses in the moving industry so they can start marketing to YOU. Some of these documents you receive in the mail are bogus and won’t really help you, but some coupons or information can be very helpful for your upcoming move. New furniture, carpet cleaners, deals on boxesyou name it and you’ll probably receive some type of paperwork for it. 

That’s why we think it’s important to set up a binder/folder system that will keep all of the hard copies of these important docs safe and together. You should immediately discard any information that is junk, but any paperwork that is important should be filed in this binder right away. We would also recommend adding a spiral or paper in the binder so you can take notes as you go. You can even add an envelope into the binder in order to save your receipts as you make purchases. Having this system in place before the paperwork gets out of hand is essential. Also keeping this binder out of the moving boxes and with you (even on moving day) will ensure you have access to paperwork up until, during, and even right after your move.

Start an official email folder for moving stuff.

Not only will your mailbox outside fill up quickly, so will your inbox! No one likes a cluttered inbox, yet sometimes it’s hard fielding all of these emails when they seem to never stop coming. Your lawyer, realtor and loan agency are going to bombard you with time-sensitive instructions for you to follow in order to move forward in the process. And if these emails get overlooked, you may have a serious problem!

We recommend starting a folder (at least one) in your inbox to start sorting out these important documents. You can always print the really important stuff to add to your binder, but also having the electronic copies of these items accessible and in one spot will be a lifesaver down the road!

But what exactly will you need to sort via email? Allow us to give you the heads up on which documents you’ll probably be receiving so you can have a better understanding of how you can manage your system accordingly.

Who Will be Contacting Me Before My Move?

The professionals that will be filling your inbox most frequently are your realtor, your real estate lawyer, your lender, and the insurance agent (and anyone from those respective teams of people). Although they will all eventually work on your behalf, communication with all of them is crucial for an on-time closing.

The Realtor

Right after the seller accepts your bid on a new house, you will most likely receive important documents from your realtorsuch as:

  • A copy of the home’s signed contract
  • Any correspondence about the property from the seller
  • A scanned copy of the receipt of earnest money
  • A timeline of the next steps (deadlines for the inspection, lender’s approval, home owner’s insurance, and written mortgage commitment)

Most of these documents can be saved and filed in the binder and/or electronic file folder. However, we would definitely suggest printing out the timeline for the upcoming deadlines. It’s imperative you meet the outlined deadlines so your closing isn’t delayed! Having these dates printed out and marked on your calendar will help you do this. We also want to remind you to ask your realtor about any questions you may have throughout the process because they are very familiar with this process and should act as your coach over the next 45-60 days. If your realtor is unsure of the answer, the next person on our list is the next best coach to guide you to your closing.

The Lawyers

Alongside realtor papers, you’ll probably simultaneously receive the following documents from your real estate lawyer and their team:

  • An introduction to the upcoming closing process, the timeline, and the fees associated with the attorney services
  • A request to sign and return a contract to work together throughout this deal
  • A request for you to send over additional information about the property including whether or not this is going to be your full-time home, the correct spelling of all buyers’ names as they will appear on the loan and/or title to the property, your current address, phone number, current marital status and your lender’s contact name/information.
  • Property Appraisal
  • Any negotiations that take place after the inspection with the seller
  • Any inspection problems that have been addressed by the seller (with receipts attached that identify proof of work)
  • Tax escrow information

Yep, it’s a lot! (That’s why you need to organize first!)

These steps need to be completed and returned almost immediately if you feel comfortable moving forward with this law firm. If you don’t, it is time to secure a new attorney immediately. You need this team right away, but you don’t want the time sensitivity of the process to force you to work with someone you aren’t comfortable with.

The Lender

While your lawyers are working closely with the realtor and the seller’s attorney, the lender is busy reviewing your finances in order to eventually approve your home loan. You can’t move forward with the contract on this property until your loan has been “cleared to close”, which is a process that can take up to (and even over!) a month. It’s a lot of stuff to cover, but here’s the information the lender will need over that month:

  • Permission from you to order the property’s appraisal (with fees associated, which is about $300-$500)
  • An itemized list of all of the updated documents he or she needs in order to update your loan and get that “clear to close” completed in time for your closing date. This paperwork will include (but is not limited to)
    • Copies of your 30 days most recent consecutive pay stubs
    • Copies of all of your W2 forms/1099 forms
    • Complete copies of your personal federal tax returns with all schedules/pages
    • Complete copies of your 2 months most recent consecutive bank statements for all assets
    • Copy of retirement funds
    • Copy of your most recent homeowner’s insurance renewal information, if you decide to purchase, non-contingent on the sale/close of your current home
    • Copy of Earnest Money Check
    • Proof of a homeowner’s insurance policy in the new home (needed two weeks prior to closing)
    • Copy of your Photo IDs for the Patriot Act
    • Signed and dated letter of explanation to confirm your intent to occupy the new property as your primary residence, if you are purchasing non-contingent on the sale/close of current home
    • Updated printout/activity of your bank account showing your Earnest Money Check clearing your account

Some of the paperwork you won’t be able to produce until right when the lender needs it (i.e., most recent paystubs, the Earnest Money Check, etc.), but some of this paperwork you probably already needed for the pre-approval process. We would advise you to put all of those documents into your moving binder system so they are easily accessible when your lender asks. This will save you tons of stress and will keep the process running as smoothly as possible.

The Insurance Agent

You’ll also need to provide proof of insurance on the new property around two weeks before your closing date. Therefore, you’re going to be in close contact with your homeowner’s insurance agent to secure this coverage.

You’ll need to send her the MLS information about the house. If you want to be considered for a few discounts, you may need to provide additional information (and proof) of the age of the roof or the home’s mechanicals. Make sure you ask your insurance provider about these opportunities so that you can save as much money as possible on your coverage!


Realtors, lawyers, lenders … oh my! The month before your move is a busy one that comes with a lot of paperwork, emails and new items on your to-do list. It can be overwhelming, even for an organized person like myself, so having a plan before the flood of information starts is key! Also knowing what to look for in your mailbox or inbox will help you get a better sense of how to stay organized and what you can have prepared in advance. The last thing you want is a delayed closing date because you missed a deadline. Use these tips so you avoid that at all costs.

4 Cases Where You Really Should Move to Save Money

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It’s true what they say: there’s never a “perfect” time to move. But sometimes making that decision is the best thing for you and your family.

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