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4 Numbers to Know for a Successful Second Half of the Homebuying Season

By U.S. News & World Report

Throughout most of the United States each year, the homebuying season traditionally kicks off at the start of spring, and sales climb up through the summer and start to decline in the fall as the school session starts. One way to look at buying a home during the summer is that it’s half-time — time to pause, regroup and check your homeownership plan.

The best coach to have on your side as you plan your move for second-half homebuying is a professional who works at a housing counseling agency approved by the U.S. Department of Housing and Urban Development, a free or low-cost service provider that has been evaluated and approved by the department.

A housing counselor is equipped with a variety tools and offers a range of services that could make the homebuying process go more smoothly. For one thing, a housing counselor can walk a customer through what many Americans admit is a very complicated process. Taking the time to make the right decision is important, especially with a purchase as significant as a house.

When buying a home, there is a lot to talk about with a housing counselor — just look at mortgage rates, for example. According to recent weekly surveys from mortgage giant Freddie Mac, the rate for a 30-year, fixed-rate mortgage recently hit a low point not seen in three years. A lot of factors have driven the rate to recent lows, and some analysts are suggesting that it could drop even further. Should a homebuyer wait for rates to fall again? Should he or she think of something other than a 30-year, fixed-rate mortgage?

All of these questions are important, and a housing counselor is an impartial source to help consumers make the best decision. They’re not economists, but housing counselors are equipped to help a buyer understand the choices that are available.

[Read: Finding the Right Mortgage for You.]

The homebuying choice should start with knowing the right numbers. Mortgage rates are just one of four key numbers a homebuyer should know well before “signing on the dotted line.” Here are three others:

What is an affordable monthly payment?

Consumers who only have a vague idea about how much home they could afford may find themselves falling in love with a home that is out of reach. Homebuyers who work with a housing counselor can identify how much they could afford each month and own a home comfortably.

There is more to owning a home than the monthly mortgage payment — maintenance needs to be factored into the budget along with utility and commuting costs, which could be very different when renting.

Not having a good sense of these monthly expenses could lead to financial trouble. A housing counselor helps a buyer develop an eyes-wide-open, realistic budget and not go into homeownership wearing rose-colored glasses.

But affordability doesn’t stop after the purchase has closed. A housing counselor works with consumers to prepare and stick to post-purchase budgets that helps them stay successful homeowners.

According to the National Association of Realtors, there are fewer homes on the market this season than one year ago. That could lead to intense price competition, especially at the entry level end of the market. Having a firm grasp of what mortgage payment is affordable will protect a buyer from getting into hot water this summer.

[See: 10 Ways to Save Energy and Reduce Utility Bills at Home.]

What is a “good” credit score?

Summer is when most people take vacation, generally reducing the number of buyers looking at homes. However, summer is also when a majority of people overextend themselves with credit.

According to data from credit bureau Experian, 68 percent of people spend more during vacation than they anticipated. While overspending doesn’t mean the person will necessarily miss a payment, not adhering to a budget could lead to extra stress when bills come due. A single 30-day late payment could damage a credit score by as many as 100 points, making homeownership extra expensive despite today’s low mortgage rates.

Different mortgage programs require different credit scores. A housing counselor who knows the range of mortgage products available in the market can explain the various programs and how a consumer’s credit score opens the door to one or more different programs.

[See: 10 Foolproof Ways to Reach Your Money Goals.]

Has enough money been saved for a down payment?

Even with today’s low mortgage rates and a good credit score, many people believe homeownership is out of reach because they lack sufficient down payment funds. For one thing, too often consumers think that a 20 percent down payment is required. The truth is, a down payment as low as 3 percent is enough for some lenders to make a mortgage. But if down payment is a problem, housing counselors may be able to help.

One way a housing counselor could help a buyer bridge the down payment gap is by providing information on down payment assistance programs. Downpayment Resource, a Chicago-based databank of homebuyer programs, has gathered information on more than 2,000 of these programs, and many housing counselors around the country have access to this vast database.

However, most people are unaware of down payment assistance programs available to middle-income consumers. A strong housing counselor can tailor a homebuying plan that helps a consumer identify the right program that provides access to these financial options, and that enables the buyer to get closer to affordable and sustainable homeownership.

The traditional home buying season is at its halfway point, but with the help of a housing counselor coaching a consumer through the process, the challenge of finding a great home against tough competition is that much easier.

More from U.S. News

The Best Apps for House Hunting

10 Ways Millennials Are Changing Homebuying

10 Tips to Sell Your Home Fast

4 Numbers to Know for a Successful Second Half of the Homebuying Season originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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