When I first started buying real estate, I couldn’t afford the house I wanted so I bought the condo I could live with for a few years. It was 1700sq ft and it worked for 8 years. We had three kids when we sold for a huge profit. Buy and Hold is the holy grail of smart and low risk investments—including real estate.

We weren’t about to be landlords but we were also hating the last three we had so we were willing to get a condo we owned instead of the one we were renting. We bought it and over time made affordable changes of our own. I learned a lot of DIy skills and also the magic of paint and decor. Switching out colors, fixtures, and adding a little decor made the place so much better and it was enough. It was meant to be our five year plan until we built enough equity to sell and trade up. It ended up being our 8 year plan but it gave us a substantial cash out when we sold. We made every penny back we put into it and much more. It had doubled in value and we put that down into our next house, also a light fixer, and we had barely a mortgage payment yet over 6,000 square feet now with almost 5 acres of a back yard. We barely had a yard beforehand in the condo. We also bought in a different state because it was worth it to give our kids an amazing life. Happiness isn’t state specific to us, it’s situational and we were willing to do what was best. Good jobs are everywhere so don’t let that hold you back and bad jobs even more so.

Our current home currently has equity but if we hold a couple of years and make simple improvements like paint, refinishing the floors, and giving the kitchen and bathrooms affordable makeovers, it will double soon. You don’t need to gut renovate to make your home a buyer’s delight and in some markets, like our current one, it isn’t even lucrative. We did laminate in our last house and we’re refinishing the hardwood in this house ourselves. It’s easier than you think, and we paint ourselves too. It makes a massive difference to buyers and what offers you’d get, and time, builds equity in the meanwhile so don’t rush at all. Take your time and make the changes slowly. When we got the deposit from our first home sale, it was nearly $300k in our bank after closing! That was our down payment in our new home and we avoided PMI so we got a lot of home for little money. What a way to live rich when you’re not!!

But how? Don’t buy the house you dream of yet. Buy a two or three bedroom (we actually converted our condo den into a third bedroom just by making the wall a little longer and putting in a closet and door. It was cheap and easy with instant equity added. We knew our kids could share a room and we knew short term goals made long term goals a reality. It was better than an apartment and we could make it our own without any more bad landlords not fixing things and showing up at 6am unannounced. It’s like flipping property but living in them and making lemonade with lemons to get you to your dream home. You don’t have to live in a reno zone either.

If that’s not possible in your area, consider moving somewhere cheap for a couple of years or buying a rental to make some cash flow while that house holds equity over time. Then sell and take the money for a down payment on a house you can afford thanks to the investment you made in a home you want.

Buy a house in the south or Midwest to live or rent for 3-5 years while you keep working and when you sell, you’ll have plenty down to qualify for what you couldn’t before. You can also rent out a room and save that in an HYSA for a down payment. There are more ways too and places that are affordable and bring equity growth. It takes just a little research.

I help clients achieve the impossible so email me your situation and I can help if you’re open to suggestions and open minded to long term solutions. 📧 jenniferlarsonent@yahoo.com

What’s wrong with your bank account? It’s cheating you! Your standard checking and savings accounts at Bank of America and Wells Fargo aren’t paying you more than a penny or two for every $100 while a high yield savings account HYSA at banks such as: SoFi, Ally, UFB Direct, Marcus by Goldman Sachs, Capital One, American Express, and more are paying dollars on those Benjamins. They’re paying you nearly $5 per hundred bucks for the same services and free accounts as the big banks that have been robbing Americans a hundred ways for decades. The HYSAs are basically the same thing but better for consumers. They don’t have branches but you can get debit cards and checking with some of them and SoFi even has cash deposit locations across the country as well as Zelle integrations, B of A, Capital One, and more. I can do automatic deposits into ETFs at fractional prices for no cost, and I can attend a multitude of free finance webinars every month. The app tracks my credit for free and helps me improve it. It’s by far my favorite with my Capital One a close second and that one is the same place as my credit cards. Their app is also simple and so easy to manage everything so that’s why I like them. Two second payments and lots of features that also tracks credit and rewards are key features important to me. Capital One also has cash deposit locations in places like Walgreens and CVS! (Not sponsored but I love them and use my referral links also which give you free money if interested!)

When you’re researching HYSAs, check out the deposit rules, account balance minimums, fees, transaction withdrawal costs if any, and the APR. They’re all pretty similar though so it’s just mostly choosing the right company for you and which you trust most. For me, the tools and integrations are the absolute most important and because those two apps let me automate and put my money to work without any effort in two clicks and without hassle, they won my vote. I don’t personally care about check writing abilities much and we do have a bit in our B of A account still for that; but we rarely write one anymore and it’s been years since it was our primary payment for bills. Because we love to travel, we also use our credit cards (paid in full almost every night) for every day expenses for the travel rewards because we love earning flights to Europe! There are cash back rewards too but debits are available just fine through SoFi and it’s easy to use as a typical bank account with checking and savings automatic with sign up. They’re free too.

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Nowadays, many loans are best geared for buyers with an 800 credit score or more if you’re looking for the best rates and programs. FHA and lower-down Conventional loans are certainly attainable for buyers not even at 700. Still, they’re also more expensive because of higher rates and additional PMI costs upfront that are paid at closing or added to your mortgage payment with existing PMI.

Rates and fees are always lower when your credit score is high and you can qualify for better loan terms that don’t have two forms of PMI and added risk factor costs lenders charge for those buyers. If you want to save hundreds on your mortgage every month, you need an 800 credit score. I know how hard it is to get there so I developed a simple program to help buyers, and financial situations, from any score get started. Building credit takes time and for some, it could take two years to see any progress. This is not a quick-fix scheme. These are legitimate and proven strategies that help you achieve and keep an 800 credit score or better; while saving buyers money on their journey and getting their finances in top shape to buy.

This is a self-paced program and FREE to anyone looking to improve their credit and get their money in order. If you’re interested in The Road to 800 please email Jennifer agentofparadise@gmail.com and type 800 in the subject line.

Forget interest rates or anything else. Those are fluid and they’re here today, gone tomorrow. Literally. They fluctuate every single day. The number that is constant is your number of affordability and likelihood of getting approved based on that number–if you even want too. So what is that number?

Lenders use this as a preapproval gauge and as a bonus, I’m going to give you another one if you’re someone who likes to eat out a lot, has a lot of expenses with their kids, or just wants to be frugal on their mortgage.

The main number is 36. That’s the DTI percentage an MLO will immediately look at when preapproving your file. If you can’t pass this test, you’re not ready. But that’s not all––let’s say you can pass that 36% test. What then? You tell me. Take your current income right now and multiply it by .36. That’s your estimated preapproval amount. Do you like what you see? No? Then don’t buy! Seriously, if this number isn’t appealing to you it doesn’t matter the rates or the market are, if you’re not comfortable paying that much for a mortgage, then you shouldn’t. If you’re not desperate for a bigger place, a yard, a garage, a safer neighborhood, parks nearby, being closer to work, better schools, etc.; then don’t. Not everyone has those needs and that’s fine. Not everyone is lacking those. If you’re in a place that isn’t a hinderance on your lifestyle more than that mortgage would be, you can stay put and plan for the future in case circumstances change–and rates. You don’t buy based on market. Buy based on what you feel good about affording. ONLY.

What’s the second numbers? If you didn’t like the first, don’t bother with this one. It’s 28. 28% is a basic preapproval calculation for conventional mortages and for those who have a lot of expenses not calculated in their DTI. Many things aren’t because they’re not credit related but can make affording what you’re approved for near impossible in reality. Multiply your income by .28. That is the amount you’d approximately pay per month. Is it more comfortable once you add up all your other expenses and total bills? Is it realistic in the market or somewhere you’d consider moving? These are the numbers that matter. Even when rates drop to 5% prices will soar because so many people will be buying again and bidding wars will create stupid demand that drives prices way beyond their list value so don’t focus on that. Focus on AFFORDABILITY. Regardless of rates, lenders approve you on the same amount. Your approval is the same per month regardless what home prices and rates are doing. Yes, that dollar stretches more when rates and prices are down but that doesn’t happen much so stop waiting for it. Some people have been waiting since the last crash in 2008!!!! They’d have half a million dollars in equity to cash out if they had bought then!! It’s insane. The reason the market crashed was because of loans that no longer exist and are illegal so good luck with that. That kind of crash is NOT happening. Even when half the country wasn’t working during COVID people were buying like crazy and paying way over list price. Stop believing what you read on social media. Most of it is lies by people who can’t afford to leave their parents and never will because they can’t hold a job. That’s who trolls on IG really are so don’t listen to them.

The only number you ever need is the number you can afford. If you can find a home you like at the monthly mortgage you can readily afford, that’s all that matters. The rest is just society blabbing about what they don’t know. Agents and lenders can’t decide for you. Only you can decide what’s best and smart for you to buy and that number is always what makes you comfortable to pay each month in comparison to what you’re paying and getting for that amount now. That’s it. The rest is a distraction. The only number you need to know is the number that makes you feel good about buying and using these calculations to help you understand how that approval can happen and where your current finances need to be. Understand if you have car payments and such, that affects approval and your own comfort level so if you’re not ready to pay, just focus on paying those down as early as possible and building a savings. Don’t stress on trying to buy when it’s really not right for you at this time.

When your home sells, typically it’s being sold for more than when it last sold, especially if the previous owners lived there for some time. What happens next, the process and amount is different for every state and city, you will get a notice stating your home’s value has been reassessed based on the recent sale price and your tax bill will reflect now this new value, which is usually included in your monthly payment. That means your payment will now go up based on that rise in tax revenue.

Lenders and agents often forget to mention this so it’s important you research current tax rates and how they’re allocated when they rise and how high they can go up. You can call your local city and your agent should be able to pull up records for you from MLS and public records, as can you, and go over the numbers to calculate and estimate the rates you will pay. Your approved payment on your home will be different within a couple of months after closing so be prepared and consider that when purchasing. Your lender and you can discuss this so you can make decisions to buy or not before it’s too late in the transaction.

This is purely information and differs from one home and area to the next. Have the conversation with your lender and agent and talk to your county assessor so you understand how your payment will be affected sooner rather than later. If the sale price isn’t far off from its last, then likely the change won’t be as dramatic. If the home hasn’t previously sold for a long time, then understand you could see a jump of a few hundred dollars in your monthly mortgage payments. Know your numbers and do your due diligence right away!

Be aware of any impending tax hikes too. I have seen this happen with people who weren’t aware of upcoming town council meetings that were planned to discuss a 12% hike and many were blindsided just months after buying so before buying, research the town board and how they’re planning things for the future. Usually meeting notes and news is on their website as well as upcoming events seeking public comment. Know before you buy!

Every headline is telling you it’s a must these days so let’s do some basic math and check out some current houses on the market to see what’s true and if it’s true for all areas.

Let’s look at multiple states that are notoriously expensive and affordable.

The answer depends where you live. In expensive states, yes. In the midwest for a modest home that’s cute and cozy, no. How much you actually need depends on many factors but the average rule is that your total DTI should not exceed 36% of your income however there are loans and clients who can qualify for even 45% of total DTI with their new payment.

For example: If buyer comes to me for a loan and they make about $80k per year combined income, each making about $40,000 for the year, then I can preapprove them based on the simple calculation of 75k/12 which is $6,250 per month and with an estimated DTI of .36, they’re mortage payment goal is about $2,250. This amount is regardless of rate so how much of a home price depends on rates. Lenders do not approve on home price but total monthly payment so if rates are high, this won’t be much of a home, but if they’re low this could be an expensive home. A $385,000 house with 5% down with rates around 7% is about $3344 but if rates were say 5%, then the house could be around $450,000 which is a $65,000 difference for almost the same payment and credit file. It depends on current rates.

Keep in mind though this is for a preapproval. We still have to pull a complete credit file for score, deliquincies, other bills, foreclosures, etc. and then we dig deep for all of your debts, current payments, loans, etc and look into alimony, judgements, and more in the actual approval process. This can really change your numbers and why there is a back end ratio, which factors all of your major monthly obligations and mortage amount, to determine your DTI and final approval amount. This is underwriting and it’s an in depth analysis of your job, history, future, and so much more. This same client could get approved at 45% and be approved for around $2,812 but so much goes into final approval. If you have car payments and an averaged score under 750, then you might not get approved as high of a ratio. Remember too, many buyers get approved for MORE than they could afford which is why you may have heard of lenders recommending you don’t surpass 28%. For this client, that’s only a payment of $1,750 but judging by their other expenditures not considered in approval, this might be far more comfortable for them and more realistic when they have 3 kids to feed who are also in sports and they like to go do things like eat out and go to Disneyland.

The best thing to do is always look at your own bills, and see what your comfort zone. Can you afford $2,500 without being strapped every month? If it makes you even wince, don’t do it. That’s a tough payment for many Americans and you have to remember quality of life, emergencies, inflation, insurances, other bills, fun stuff, kids, etc. The reason many lenders suggest not shopping for a home more than 28% of your income is because of all the other life expenses to still calculate and we don’t want you living so tightly you are stressed every single month. That’s not a way to live. But let’s say you live in an expensive area where houses are selling for an average of $650,000 and payments are around $5700, then yes, you would need to make nearly $16,000 per month, which is almost $200,000 per year!

If you have average credit and income, expect to pay up to 7.5% interest and you need to currently shop for homes under $300,000 which can be done in many places. This includes property taxes, PMI, insurance, and total payment regardless of state.

Millions are debating about selling but hesitate because of their rate and millions are debating buying but hestitate because of the rates. That is the wrong way to thing about life, money, and your home. Whenever you’re moving, the APR shouldn’t be your greatest determining factor but your LIFE should be. Your happiness, your quality of life, your future, your present, your kids, your future kids, your ability to live a full life should absolutely be the biggest reason you move or don’t in a home. That’s why so many are stuck in the wrong home to begin with; they bought because of rates instead of needs. Stop doing that!!

If you’re a potential buyer in the market and worried I understand because the rates are high. I bought in January at 7% and it hurt but it was the best decision I ever made because the home I sold at a 4% rate last August could never bring the freedom, space, happiness, land, view, and quality of life that this one as brought us. The house was cheaper but payment the same even with a bigger down, but it absolutley was the smartest change for us. We went from being central to everything and pracitcally in a downtown locale to move out rural but we were able to get a home four times the size with character and acreage, the kids all have their own rooms that are huge, plus playrooms, a home theater, a huge yard and swing set, multiple other rooms for family use, and such a beautiful location around us. We don’t have buildings and businesses around us but we have our own forest, views, and a huge house that gives me a nice sized gym, home office, spare rooms for guests, and more. THAT is why we moved. Our interest rate never determined our move; life did. Our future was our greatest reason for moving. If your home doesn’t suit you, don’t keep it! Spending thousands on a place that doesn’t fit your needs or happiness, no matter how good the rate, is just silly and it’s going to ruin your life and happiness very soon if it’s not already. Choose you over rates every time.

The reason to not sell could also come down to equity and total net gain. That is absolutely a reason to wait on the market more than rates. Let’s say you purchased two or three years ago at a 3% rate and now you’re realizing your home isn’t going to be as suitable as the homes on the market but your total equity gain is “only” $100k. Well, do the math. If you list, you have agent fees, closing costs, taxes, and closing costs on the house you buy, lending fees for that new house, down payments, and such for your next home purchase also. Before you know it that money is gone. Even if you listed as a For Sale By Owner FSBO you have to then pay title, escrow, and real estate attorneys on your own which is practically the same cost, and sometimes you still have to pay a buyer’s agent or you won’t get showings, and then you have closing costs for this house and your next. After all that, what is your available down payment to purchase a new home and what will that leave as your payment? Will you even have enough for a decent down payment? These are the numbers you should be running.

THIS is the number that matters: Net Proceeds. After all is said and closed, how much did you make (hopefully not lose) to make the move happen? For some a loss or break even is worth it if other circumstances have also changed and the move or sale is necessary. For me, as another example, if I were to sell because maybe my husband hates the longer commute to work, or my teenage son who is now working also doesn’t like being so far from the college and work, etc or we want to be closer to better schools because we don’t like these ones anymore, those are legitimate reasons to sell and move for my family that far and wide supersede whatever rates are doing right now. Those are matters of family, future, quality of life, and practicality that are most important above anything else. Let’s say all of those are topics of discussion in our home in 2025 and we are discussing if this house really makes sense after all despite how much we love it. The factors I need to consider from a numbers standpoint are how much net will I have after buying and selling for the move that I can have left over for the down payment of the next house.

When we bought in January, we had a $236k down payment and paid the rest for everything else. We got some seller concessions and our all in after selling our previous home was $251k. We made I think $268k but had other costs to buying and selling and paying things off, so fast forward to this new house. We saved on PMI because our house was half paid off already and we financed $211k. To sell and see that money ever again, we’d need to sell our house for a profit again and enough to get that money back also. Basically, if we were to move again, we would not sell unless all of our moving and closing expenses from selling here and buying somewhere else would still leave us with $300k as a down payment on the next house and we can buy a $500k house which is a very nice home where we are now. We just don’t want to LOSE money and it’d be nice to have even more down and even less in a payment. What you need to focus on is what you will GAIN, not lose in terms of interest rates. Have standards for the home itself when deciding to move and focus less on that rate. That is exactly how you got into a house that doesn’t work to begin with. If you keep buying, or not, because of rates, you’ll always be in limbo and never where you want your life to be because the rate has nothing to do with what the home provides for you. Stop moving for rates and move for life.