In each new installment of the Sum180 Webcast, we discuss issues around your money and share tips to help you reach your goals.
We’re talking about the issue of declining home ownership.
The issue: Decline in Home Ownership
The issue is the decline in home ownership and why that’s important for so many of us trying to build financial security. Home ownership is down 64% according to a recent report from Harvard University, for a number of reasons. One, we haven’t yet recovered fully from the 2008 housing crisis. Other reasons, particularly for Millennials, are concerns around their job prospects and even their level of student loan debt, which is something we’ve discussed before.
Shannon, a Sum180 client who’s a 34 year old living in Chicago, put it best. “How much home can I really afford?”
Shannon’s Sum180 Plan told her to back into the answer from her income. Her combined income with her husband was $82,000. After tax, around $65,000. And the answer is you can generally afford about 2.5 times that take-home income, or about $162,000 in Shannon’s case. Another check on that is that her total cost of home ownership should not exceed 30% of her income, which is around $20,000.
Please watch the video to hear the rest of my advice for Shannon.
The question: “What are the best steps to take to refinance our home without it costing too much out of pocket?”
Let’s break down how to make refinancing easy and as cost-effective as possible. First, get to know what is a good rate in your area. Bankrate.com is a good source for that. Then, contact your bank to start negotiations. Alternatively, a mortgage broker may have access to a wider range to a wider range of loans. Third, start negotiations on closing costs. There are aspects of closing costs that can be negotiated.
Please play the video to hear the rest of my advice for Melissa.
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