real_estate_prep36291d23

How I Save More Money Monthly

missjoshlyn1@gmail.com (Jos Ross) — Wed, 05 Apr 2023 18:35:30 GMT

How I Save More Money Each Month, Passively

A high-yield savings account is one of the best ways to save money each month. And for many reasons. It’s passive, which means you don’t have to trade your time for the money (i.e. getting another job). It’s not investing, which often has a heavy learning curve if you’ve never invested before. I’ve had a high-yield savings account for a few years now and each month, I am earning money on the balance that I leave in the account.

But I have also been contributing more because as I make more, I want to save more so that I can eventually live off my savings and investments. Until then, I continue to use it to save for future investment purchases as well as my emergency savings. However, I've seen people use high-yield savings for many other things such as a car, a vacation, or a big purchase that doesn’t fit into those categories.

In this post, I’m going to break down:

What a high-yield savings account (HYSA) is
Is it worth it to open a high-yield savings account (i.e. the benefits)
How long you should leave money in a high-yield savings account
How I make money off a high-yield savings account (my Jan-Feb 2023 review)
How often Marcus by Goldman Sachs pay interest (the account I use)
What a high-yield certificate of deposit (HYCD) is (and how it differs from a high-yield savings account

What is a high-yield savings account?

A high-yield savings account (HYSA) is very similar to a traditional savings account that you will find at any major financial institution. The difference is solely in the annual percentage yield (APY) which is similar to interest. This percentage reflects what you have the opportunity to earn by letting the bank hold your money.

Usually, these major financial institutions offer very low APYs (think 0.005%) which means that your money is earning pennies on the dollar. However, with HYSAs, you can earn APYs as high as 4% and allow your money to earn MORE money for you.

So imagine this: you have $5,000 in savings and the average financial institution’s savings account is 0.10% APY. You would earn just $5 over the course of a year. But if you put that same $5,000 in an account earning 2 percent, you'd earn $100. A savings account major hack.

Is it worth it to open a high-yield savings account (HYSA)?

Absolutely! I’ve been screaming about this for the last couple of years. We all work very hard for our money and it’s very important to save for anything that could happen. My preferred way to save is with a high-yield savings account because it’s hands-off (meaning I don’t have to log in and manage my account like an active investment), it doesn’t impact any of my other investments (because it’s not an investment, it’s a savings account), and it allows me to earn more money than I could have for simply saving my money in a bank like I would have done anyways.

I earned $564 in interest last year which I would not have earned in my traditional savings account. That money was accumulated via compounding interest and I leave it in the account until I need it so it can continue to grow. So if you’re wondering if you can make money off a high-yield savings account, there’s your answer.

How long you should leave money in a high-yield savings account?

This is at your discretion. I’ve assigned my dollars responsibility. I have a certain amount that I contribute to emergency savings, I have a certain amount I put aside for travel expenses, and I have a certain amount for future investments (real estate and stock market). If I don’t need the money, I leave it in the account so it can continue to grow.

The more money I leave and continue to depo sit into the account, the more I earn. A balance if $30,000 is going to provide more interest than a balance of $5,000.

How I make money off a high-yield savings account

My money comes from the interest that my money earned. As of March 17, 2023, the annual percentage yield (APY) is 3.75%. This means that my $10,000 balance has an opportunity to earn 3.75% in interest on that amount. Imagine if it was higher!

The APY is variable though, meaning that it changes according to what’s happening in the economy. But since 2023, it’s been consistently trending upward. I actually earn 4.75% because I am referral partner. I told you i’ve been talking about this for a while! I’ve encouraged many of my people to sign up so that they can get an additional 1% APY on whatever is advertised. That takes the APY from 3.75% to 4.75%.

For January and February, i’ve earned $258 dollars in interest. I’m earnin g more and more quickly because of the increasing APY and the increase of deposits I’m making in the account. It’s basically another passive income stream that I don’t touch!

How often does Marcus by Goldman Sachs pay interest?

The interest is paid out monthly. You can log in to your account to see it, but they’ll also issue a statement that has the information.

Marcus is also very good with informing you of whe n the APY changes on a high-yield savings account. As of lately, it’s only been going up.

What is a high-yield certificate of deposit (HYCD) and how it differs from a high-yield savings account?

A high-yield certificate of deposit (HYCD) is basically a high-yield savings account but with two major differences:

It’s a fixed APY for however long your term is.

So let’s say you sign up for a 6-month rate term and the APY is 4%. That means that you will consistently get 4% in interest every month for 6 months. It doesn’t matter what the economy is doing. This is based on the balance you leave in the account. The more you leave, the more opportunity you have to earn more money.

You cannot withdraw money without penalties

Unlike a high-yield savings account (HYSA) which allows you to withdra w money whenever you need it, a high-yield certificate of deposit (HYCD) has early withdrawal fees. It’s like signing a contract and not adhering to the rules.

When should I use a high-yield certificate of deposit (HYCD) vs. a high-yield savings account (HYSA)?

It’s best to use a high-yield certificate of deposit (HYCD) if you want to put money away for at least 6 months. If you take it out before then, you’ll have to pay - which defeats the purpose. So for example, if I knew I wanted to buy another home in 12-15 months, I would open a high-yield certificate of deposit (HYCD) for 12 months because it’s a place where I can save for my down payment and earn a fixed APY that never changes. So I’m guaranteed that 4% APY on whatever balance I leave in the HYCD.

On the flip side, if I wanted to buy a home in 6 months or less, I would opt for a high-yield savings account because I can access my money without penalties. The downside is that the APY will likely change but I would just hope that it’s going up. It did go down during the start of COVID-19 but so did the rest of the economy. Nothing was certain then and that’s a great indicator that your accounts may suffer.

Check out my YouTube video where I dive even deeper into benefits of both and when to choose which.

Like, comment, subscribe and share to stay connected!

4 Facts Every First-Time Homebuyer Should Know

missjoshlyn1@gmail.com (Jos Ross) — Tue, 15 Dec 2020 21:30:13 GMT

4 Facts Every First-Time Homebuyer Should Know

As a first-time homebuyer, there was so much that I didn’t know. It didn’t matter that my mom was a homeowner and that I came from a family of real estate investors. Unless you are actively searching for a home, it’s pretty normal to not know about the nitty gritty of the industry.

But i’m here to help you jumpstart your knowledge journey. The more you know, the better position you’ll be in when it’s time to purchase your home. So let’s jump right into it!

#1 Your debt matters

It doesn’t matter if you make $100,000 a year or $50,000. Debt will impact your home buying journey and it’s up to you to determine how much it will cost you. You see, lenders use a ratio called debt-to-income ratio which is where they take your income (job, child support etc.) and divide it by your debt (car note, student loans etc.) to determine exactly how risky you are. The higher your DTI ratio is, the more risky you are as a homebuyer. This is what impacted me the first time around.

I was making close to 6 figures but my student loan debt was around $70,000 at the time. I quickly learned that I couldn’t out earn my debt. It impacted my DTI ratio, it impacted what I was pre-approved for and ultimately impacted the homes I grew fond of. As a result, I didn’t get those dream homes but I did pay off my debt , which has positioned me as a much more attractive homebuyer.

#2 Better credit can help you get favorable interest rates

There’s not much explanation needed here. Your credit score will impact every major purchase you make and a home isn’t excluded. Your credit score is a big reflection of your money habits and lenders take it into consideration when it comes to assigning you a loan interest rate.

A lower interest rate can reflect in a lower mortgage payment--which means that you are saving money by doing the work beforehand. Granted, you will not need an 800 credit score, but the closer you are to it, the better. Check out my other blog post to learn more the credit score requirements amongst the 3 common home loans for first-time home buyers.

#3 You aren’t required to pay your real estate agent

This is applicable to homebuyers only. Sellers do have to pay their agents. Your buyer agent is being paid by the home seller by providing them with a buyer of their home.

This isn’t to say that you should just choose any ol’ person though. Your real estate agent will make or break your homebuying experience so make sure you vet them properly. I have a full checklist of recommended questions for you to ask potential real estate agents. Grab your copy here .

#4 Save for more than just the down payment

One of the biggest mistakes I made when shopping for my first home is mistakenly assuming that I had saved enough money. When in fact, I was focused on the down payment when there are other things known as closing costs. These include inspections, appraisals, title fees and everything else that will confirm that you are making a smart investment. Without these elements, you could end up with a poorly designed home, a hefty repair or worse, you could inherit liens that the previous owner should have covered.

Learn more about 3 common closing costs that you should be saving for here .

If you are looking for a resource that will allow you to keep all this data in one place, I have just what you need. “Ready To Own” is a book that I wish I had when I was searching for my first home. So you already know, I go all the way in which is how it ended up over 100 pages.

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In this book, I dive into:

-The pros and cons of homeownership as well as 4 important things to consider before you take the leap from renting to owning

-The hidden AND unhidden costs of homeownership and how to determine which financing option(s) are best for you

-What to look for in your next home (it’s more than just design and location)

-What it looks like to submit an offer on a home (+ how to prepare for beforehand)

-What happens after closing on your home (+ a breakdown of the common fees associated with closing)

-Tons of checklists that will help you as you meet with real estate agents, tour potential homes and more!

Grab your copy here .

What are some other important things that you’d like to learn about? Comment below!

Myth: Your First Home Isn't An Investment

missjoshlyn1@gmail.com (Jos Ross) — Tue, 15 Dec 2020 21:15:25 GMT

Myth: Your First Home Isn't An Investment

The more you hear something, the more likely you are to believe it.

But this is one thing I want to debunk, like ASAP. Your first home is absolutely an investment. When I think of how much I endured during my first home buying process, I remember why real estate and home ownership is so coveted in this country. If it were easy, everyone would have a home. If it wasn’t so important, the government and racists wouldn’t have implemented predatory lending, redlining or even the slums.

There’s a reason why there’s a lack of education/knowledge around first-time home buying. Everything I learned, I had to learn through experience and I would never want anyone to walk in blindly the way I did.

It’s an investment, and it’s not going anywhere. In fact, if done right, it could serve as an asset for your future generations.

The #1 reason that it’s an investment is because there are wins you can collect as a homeowner that renters can not. These come in the form of tax write offs (such as a portion of your mortgage interest or property taxes being deducted).

The #2 reason is because it helps you build equity. Now granted, equity isn’t a guarantee. How you manage the home and how the property surrounding yours is very important. But this is why education and the right team are so crucial. My grandparents purchased our family home before I was born and my mom (+her siblings) just sold it like two years ago. They sold it for more than it was originally for and she used a portion of her earnings to help me pay off my student loan debt. That is the power of generational wealth and smart investments.

The #3 reason is because the home you buy, will more than likely NOT be your last. I did a poll on Instagram this weekend and asked my audience if they would stay in their first home forever. 70% of them said no which made me happy. This showed me that they have a plan. A plan to stay for a while, refinance and then rent out. Or, to stay for a while, build equity and then sell. Whichever path you choose, is based on your goals. But tenants = rental income and selling hopefully = earnings.

That’s why I created Ready To Own, my 100+ page workbook for first-time homebuyers . Everything I learned, I had to learn through experience and I would never want anyone to walk in blindly the way I did. The more you know, the better prepared you’ll be to ask the right questions, find the right realtor/lender for you, locate a home with your needs on display (vs. what society tells you is important), improve your credit/debt scenario so that you aren’t limited in your home search or purchase amount and so much more.

So the next time someone tells you that your home isn’t an investment, hit them with these facts.

4 Real Estate Terms That Every First-Time Homebuyer Should Know

missjoshlyn1@gmail.com (Jos Ross) — Tue, 01 Dec 2020 22:00:32 GMT

Are you new to the world of real estate? If so, welcome!

I have spent the last few years studying this industry and over time, i’ve realized that unless you are actively planning to purchase a home, it’s likely that you aren’t aware of the common terminology used.

Not only will knowing them help you, but they will also help you confidently speak the language of lenders, agents and everyone else that will help make your home buying dreams a reality .

So let’s dig in!

1. Appraisal report

What is an appraisal?

An appraisal assesses the value of a home. This is when a licensed professional (appraiser) comes out to provide an unbiased opinion of the home. They will walk on and through the property to determine it’s worth based on the current condition. The appraiser will then compile all of their findings into a report and generate the home’s appraised value.

Why is an appraisal important?

Well, for starters, lenders require buyers to get an appraisal because that’s what they use to determine how much to lend you. One common misconception is that lenders loan to you based on the listing price but it’s actually the value of the home.

Now if the appraisal comes back at a lower price than the current listing price, you can use this as leverage to renegotiate the purchase price with the seller.

Otherwise, you can make up the difference in price by increasing your down payment. However, my recommendation is to re-negotiate with the seller first or simply walk away from the deal.

I wrote about this and other closing costs here .

2. Loan-to-value ratio

What is a loan-to-value (LTV) ratio?

The LTV ratio is the ratio between a loan amount and the value of the asset purchased by the loan. The higher your down payment, the lower your LTV ratio.

Why is loan-to-value ratio important?

The higher the score, the higher risk of the loan. For example, if you get an $90,000 mortgage to buy a $100,000 home, then the loan-to-value is 90%, because you got a loan for 90% of the home's value. Lenders like to see ratios between 80% - 90% but will still work with buyers in the 91% and up range.

This is why lenders like to work with buyers who can put down larger down payments. Anything less than 20% for a downpayment will require private mortgage insurance, which increases your monthly mortgage payment.

On the other hand, with an LTV of 80% or lower, you can become eligible for lower mortgage rates, i.e. lower monthly payments. You can take several steps to lower your LTV, including working with me to boost your savings and make a larger down payment.

Click here to learn more about 3 common loans that first-time homebuyers use and which ones require private mortgage insurance.

3. Closing costs

What are closing costs?

Closing costs are defined as fees associated with you obtaining financing (i.e. your loan) for your home. These can include but are not limited to loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges. These are fees you as the buyer are responsible for, in addition to the downpayment and help you to determine if the investment (your home) is worth it. It’s important to note that sellers also have closing costs that they are responsible for.

How much do I need for closing costs?

This number will differ according to what and where you buy, but it’s recommended to have 3-5% of the purchase price saved.

4. Pre-Approval Letter

What is a pre-approval letter?

Obtaining a pre-approval letter is one of THE MOST important components to the homebuying process. It tells you exactly how much money you are approved to borrow for a home.

The mortgage lender will use your income, credit score, savings and a combination of other personal finances to determine this number.

Why is this important?

This is important because it will give you and your agent a ballpark range of how much you can afford to spend on a home. That way, you aren’t looking at homes that are out of your price range. I dive into all of this in my book , which is something you can take with you as you talk with lenders, real estate agents and even look at potential homes. Grab yours ASAP.

Which of the above are you most familiar with or have more questions about? Comment below.

3 Strategies I Used To Pay Off My Student Loan Debt

missjoshlyn1@gmail.com (Jos Ross) — Mon, 19 Oct 2020 15:02:08 GMT

3 Strategies I Used To Pay Off My Student Loan Debt

Paying off your debt is like giving yourself a raise. At least that is what I felt when I paid off mine. It wasn’t that I had more money that was coming in, it was that I had more money staying in and I could do more with it like save it and invest it. However, like most Americans, I didn’t always desire to pay them off. I went to a private institution (a Historically Black College at that) and those fees can be through the roof. So when it was time for me to graduate, I had accumulated well over $70,000 in student loan debt.

At the time, it wasn’t that big of a shocker but overtime, I grew in my career and felt prepared enough to buy my first home. This is where the loans came back to haunt me. There’s this thing called debt-to-income ratio (DTI) (link IG post) and it has a big deal with what you qualify for from a mortgage amount & interest rate perspective.

So though I had just landed a high-paying job, my DTI was above 36% (the max that lenders prefer) so it impacted the purchase price that I was approved for. This then limited the amount of homes that my realtor and I could shop around for.

I never found my home during that search because none of my offers were competitively priced enough for the area. It didn’t matter that my income was more than my student loan balance at the time. I needed to do more. I needed to tackle the debt. I asked my lender how much I needed to pay off and he calculated a number. That wasn’t enough for me though. I never wanted to be in this situation again of being “ghosted” by sellers. So I told him and my realtor that I was going to pay my student loans off in full. And I did in less than 2 years!

Keep reading for 3 Strategies I used to pay off my student loan debt:

1. I Made A Complete Lifestyle Change

When I made the decision to face these demons (my loans haha), I knew that I wouldn’t be able to do it living in my high-rise apartment. Rent was a beast but because I was only paying the minimum (i.e. interest) on my loans, it was doable. I decided that I needed to remove rent from the line item in my budget so I left my independent living to move back in with my mom. Insert all the tears here because I had them. I had been living on my own for 7 or so years at the point so the idea of moving back home and having to “answer” to my mom (black kids know what I mean here) just reverted me back to childhood. To be clear, I love my mom and would do anything for her but I was grown grown!

Let’s just say, the experience humbled me. Though she had raised me (well), we had to go through a new set of growing pains as there were now 2 adults in the house who had continued to evolve over time. So we did everything you could imagine a mother and daughter would do: argue a lot haha. Eventually, after like 3 months, we found our groove and actually started spending time together peacefully.

Now I realize that I am privileged because I don’t have kids and my mom welcomed me back home with open arms. I think if either of the above was my scenario though, I would still pursue changes if paying off the loans were important. If you have children, you can re-adjust your budget, ask to work remotely (if your job allows it) so that you can reduce babysitting fees, rent out a portion of your home, bring on a roommate or even take up a second job. These are just ideas that i’ve seen others do but I recommend you find a lifestyle change that works for you. Also, stick to a timeline that is realistic. Don’t let anyone rush your process.

2. I Tackled high-interest rate debt first

Everyone has their own recommendations for this but I am telling you what worked for me: tackle the high-interest rate debt first. For me, that meant going after the private loans first. These are the loans that we’re backed federally. They were at the discretion of the private lender who had the power to adjust the rates as wanted.

So in order for me to see some real progress, I wanted to see those numbers drop drastically and that meant going after the big ones. Once I paid off my private loans, I saw my balance drop drastically because I was no longer paying that high interest rate. This gave me peace and encouragement to tackle the federal loans which had more favorable interest rates. This method is known as the debt avalanche method. I paid the minimum on all of my debt but made extra payments toward the high-interest debt.

However, if you would rather see the number drop more consistently, you can do the debt snowball method. This is where you still make the minimum payments across all but pay down the smallest debt first. Then work your way up, regardless of the interest rate. I talk more about this in detail on episode 2 on how I went from denied home offers to debt freedom .

3. Create a fun money account

Now this is a tip I learned from The Budgetnista . Fun and paying off debt were not synonymous for me. I didn’t have a life at the beginning. I went to the gym, went to work, worked on my side consulting gigs and then went to sleep. Rinse and repeat. But my mom was actually the one who called me out. She didn’t feel like I was maximizing my time at home with her and our family. We like getaways, wine tasting, festivals etc. and those cost money.

So when Tiffany the Budgetnista mentioned that she had a “fun money” bank account, I knew I needed to create one. This is money that I would manually transfer to another account from every check. It was the same amount from my consulting invoices and my direct deposits from work. It was around $300 per month. So whenever I was out eating, wine tasting, or looking to getaway, I used that account only. Once the money was gone, I was out of fun.

It actually worked perfect and it’s something I still use today, even with me being out of my mom’s home and into my own. I highly recommend it but be sure to set up alerts so you don’t overdraft.

The bottom line:

Paying off debt requires you to be strategic. Find the strategies that work for you and keep implementing.

I also redirected all of my dividends from Fundrise into this new account. They came quarterly and sometimes I forgot they were coming. I highly recommend investing in REITs via Fundrise. Not only is it a great introduction to real estate, but it also is a great source of passive income. Learn more about my experience in this ebook .

What are some of your tried and true tricks or what have you heard that works? Comment below.

3 Passive Ways That I Saved For My Downpayment

missjoshlyn1@gmail.com (Jos Ross) — Mon, 12 Oct 2020 14:18:17 GMT

3 Passive Ways That I Saved For My Down Payment

Most people are familiar with a downpayment. This is what you as the homebuyer must put down in order to secure a property. This can sometimes be covered by select programs (if you are a first-time homebuyer or a veteran) but some people won’t qualify. Others will prefer to pay their own down payment so that they have full control over the future of the property (some of those programs have strict regulations around who can stay in the property and for how long). So that’s why I want to talk about how you should save for your down payment, whether you opt for down payment assistance or not. There will be other closing costs that you are responsible for so the money will be used.

Also, what you pay in a down payment will be determined by your loan type and purchase price. I wrote about 3 of the common loans that most buyers utilize where I broke down the difference between each loan and how much you should expect to pay.

So if you know that you’re ready to buy, let’s start saving for your down payment. This is Part 1 of 3 ways that I have passively saved for a down payment and you can too:

Open a high-yield savings account or certificate of deposit

Most people have existing savings and checking accounts but those aren’t the best options if you want your money to make more money via interest. This is where high yield savings accounts (HYSA) and certificate of deposits (CD) shine. They work very similar to your traditional savings account but the interest rate is higher.

How does a high-yield savings account work?

For example, when I opened my HYSA, the interest rate was 1.70%. Since then, it has increased and decreased. Right now, it is 0.60% and that’s because it responds to the market. HYSAs have variable interest rates, which means they can change whenever. However, it still provides me with money because that means my money is earning an interest of 0.60% aka free money. I miss the days when it made 1.70% but I know that’s coming back. Either way, it’s better than a traditional savings account which can earn an average of 0.002% for you. Yep, that’s pennies on the dollar.

If you’re saving for a big purchase, like a home, it’s a good idea to keep your money in a separate account and let it accumulate interest over time so that when it’s time to withdraw, you are walking away with $10,400 vs. $10,000 that you initially deposit. That extra $400 is because of interest. The longer you keep your money in the account, the more opportunity you have to grow it. So a year, 2 years or even five years of holding is good.

How does a high-yield certificate of deposit work?

It works the same way as a HYSA but with a fixed interest rate. Remember when I told you that a HYSA had a variable interest rate? That’s not the case with CDs. Your interest rate will never change as long as you keep the money in until the maturity date of whatever you opted for.

How does the high-yield savings account differ from the high-yield certificate of deposit?

For example, I opened by CD with an interest rate of 2.00% and a maturity date of 12 months. This means that for 1 year, my money will earn 2% monthly interest but I can't withdraw it until the year is up. Otherwise, I'll face penalties - meaning they’ll charge me to withdraw the money.

I also had to deposit my first minimum amount of at least $500 in order to get the published rate. This may not be required for all CDs but it was for mine. However, my HYSA didn’t require a minimum deposit. I was able to open it without putting money in immediately, though I did because I wanted to start earning interest ASAP.

Can I continue to add money to my high-yield savings account?

Yes, that’s the beauty of the account. The more money you add, the more your money has an opportunity to grow. I also love that most of these HYSA offer calculators so you can project how much money your money will earn. This is called compound interest and it always works in favor of the lender (i.e. you).

Can you lose money in a high yield savings account?

No you cannot. It’s not an investment. It’s a savings account and you’ll always be able to get back exactly what you put in. You might see a fluctuation of interest earned though, particularly if you opt for a high-yield savings account. This is due to it being a variable interest rate vs. a fixed interest rate which is what a CD account is great for.

Can you lose money in a high yield certificate of deposit?

No, you will always get back what you put in and then some due to the interest accumulated.

The bottom line:

If you’re looking for more helpful home buying tips, listen to my podcast episode 4 where I had my wealth manager, Phillip Washington of StoneHill Wealth Management on the show to discuss how to financially prepare for homeownership.

You can also join the waitlist for Homebuyer Prep School , my 8-week program for women who are overwhelmed with the homebuying process and are looking for simple strategies that will help them purchase their first home within 12-24 months.

What else do you want to know about HYSA, CDs or savings tactics? Comment below.

4 Different Types of Inspections That Every Homebuyer Should Be Aware Of

missjoshlyn1@gmail.com (Jos Ross) — Sat, 03 Oct 2020 17:06:36 GMT

4 Different Types of Inspections That Every Homebuyer Should Be Aware Of

As a homebuyer, you are responsible for paying for your inspection(s).

A home inspection is a visual review of a home to determine the condition of the home. This is always done by a trained professional.

How do home inspections work?

It can take several hours to complete, as the inspector is often taking photos, making notes and will organize it all to present to the buyer (or seller) in the form of a final report.

Inspections must be done prior to purchase to determine if there are larger issues (such as dry rot or a faulty foundation) that are not immediately visible to the untrained eye, but that would cost a lot of money to resolve. On the contrary, these can also be used by sellers to identify concerns that should be fixed prior to putting the home on the market.

While it may seem like this is a one-stop shop, it’s actually very intense. Not only are there different types of inspections, but there are also specific inspections that should be done by home type.

Take a listen to episode 8 where I had De'Andre Henderson of Systemized Inspections on to talk about what inspections are and how they protect you. They are a lot more complex than you think!

Keep reading to learn more about 4 of the main types that you should be familiar with as a first-time homebuyer.

Home Inspections To Be Aware Of: Foundation or Structural Inspection

This is probably the most common inspection. It usually includes foundation, roof and various structural elements that are visible without moving things around, or removing them. This will provide the buyer (or seller) with the overall condition of the home so that you can make the best decisions based on the current condition of the home.

Structural or foundational inspections are normally used for homebuyers, home sellers and homeowners (for refinancing).

How much do Foundation or Structural Inspections cost?

Inspection costs are the discretion of the inspector and the state which you reside in. However, the average cost can be between $500 - $800.

Home Inspections To Be Aware Of: Roof Inspection

Roof inspections check for things that impact the top of your home, such as leaks, wind-related debris, organic growth issues and unusual wear and tear that may occur over the course of the home’s existence.

In short, they check for the integrity of the roof and when it will need to be replaced. These require special procedures as the inspector will not pull apart your roof to complete the inspection. They usually last a little less than an hour.

How much are roof inspections?

Again, this is at the discretion of the inspector and the state. However, the average is between $200 and $400.

Home Inspections To Be Aware Of: Mold Inspection

Mold inspections are exactly what they sound like. They determine if there is water damage present that contributes to the mold. The inspector will come in and perform a visual review for moisture mapping (for hidden leaks), surface sampling, possible faucet or pipe leaks and more. Mold inspections are looking for mold within the building, inside walls and in other areas where mold growth is undesirable.They will differ by home due to each home being different.

These must be completed by a qualified mold inspector who has formal experience with mold inspections. They are trained on finding evidence of past or current mold growth.

How much are mold inspections?

These are at the discretion of the inspector and home size, but you can expect to pay $500 - $100 on a 2000-2500 square foot home.

Home Inspections To Be Aware Of: Electrical Inspection

An electrical inspection provides a comprehensive review and will check on the adequacy, suitability and serviceability of your electrical appliances. Your inspector will ensure that there aren’t any fire hazards so they’ll check the switches, sockets and light fittings and more. They will also assess whether the home includes any faulty wiring, note the functionality of smoke alarms and scan for anything that doesn’t comply with state/local/national regulations.

How much are electrical inspections?

Electrical inspections range from $100 to $400 but is at the discretion of the inspector.

The bottom line:

While inspections can be costly, they will save you headache, time, money and your life. As a buyer, be sure to follow the direction of your inspector(s) and real estate agents so that you are investing in a hoe that will generate an Return on investment (ROI).

Listen to Episode 8 where De'Andre of Systemized Inspections will dive deep into each of these and more.

Are any of these inspections new to you? Comment below.

3 Home Loans To Consider For Your First Property

missjoshlyn1@gmail.com (Jos Ross) — Fri, 25 Sep 2020 22:42:47 GMT

3 Home Loans To Consider For Your First Property

There is a lot of chatter online about home buying and I love it! This signifies to me that people are interested in building wealth through real estate and that’s where I come in.

The reality is, most people will utilize financing to purchase their homes - which means that loans will more than likely be what you used to purchase. Not many have 200,000+ to purchase and that’s okay because your home is an investment. And if you manage it right, it will provide you with a strong return on investment.

One of the biggest challenges that my followers share with me is centered around finances. They want to know how much they should save for a down payment and ultimately, that will be impacted by which home loan you decide to go with.

Keep reading to learn more about the top 3 loan types around as well as the pros and cons of each.

What is the FHA loan and who is it best for?

Federal Housing Administration (FHA) loans have been around since 1934 but officially became affiliated with the U.S. Department of Housing and Urban Development in 1965. This mortgage loan was created to help homebuyers with lower credit scores and lower income to spend. In fact, most homebuyers today can put down as little as 3.5% for their down payments if their financial report card is in good standing. That downpayment can come from grants via state/country programs, gifts from family members and/or your savings. If you are a first-time homebuyer though, I urge you to look at first-time homebuyer programs in your state, county and city. A lot of them offer down payment assistance and some of it you won’t have to pay back.

It’s also important to note that there are various mortgage options under FHA such as FHA 203(K) and Energy Efficient Mortgage Program. However, we will focus on the traditional option that is reserved for those who will occupy their residence.

What are the advantages of the FHA loan?

The FHA loan has many benefits. The main one is the down payment amount. Before the FHA, you didn’t have the opportunity to put down as little as 3.5% on your future home. This helps to level the playing field and allow more people to purchase their homes.

Another huge benefit of the FHA is the minimum credit score. Before 2020, the required score was 580 but I have been reading reports around it increasing soon. This opens the door for those who may not have their ideal credit score yet, but they have moderate scores that they are constantly improving.

Lastly, FHA borrowers have the most flexibility around down payment assistance. 100% of your down payment can come from family gifts and/or you have the freedom to utilize grants from local/national first-time homebuyer programs. These are designed specifically for you. So take advantage!

What are the disadvantages of the FHA loan?

While the FHA loan does offer financial benefits, there is one main drawback: private mortgage insurance (PMI). FHA loans aren’t technically given from the Federal Housing Administration, which means that they are not the ones lending you the money. They actually keep a list of approved lenders (think banks for example). This is where private mortgage insurance comes into play.

Your private mortgage insurance is paid directly to FHA and provides your lender with a sense of peace, knowing that the FHA will pay the lender if you default on the loan.

Also, you cannot utilize the FHA loan as an investment property. You must live in the home and it must be your primary residence.

What is the conventional loan and who is it best for?

The conventional is not backed or secured by the government. They are actually available through various sources such as private lenders, credit unions, mortgage companies and more. These are investor-friendly loans that can be utilized for primary and secondary homes. Lenders also have tighter regulations for lenders, such as ensuring that they can handle not only the down payment (without assistance) but also that they can comfortably handle other closing costs such as loan origination fees, broker fees etc.

What are the advantages of the conventional loan?

The main benefit is that there is no private mortgage insurance. This is not to be confused with homeowners insurance, which is required for everyone. This is only applicable if you put down 20% for your down payment. Anything less than 20% will require private mortgage insurance.

Furthermore, conventional loans typically have a fixed interest rate, which means that it will not change over the course of the loan. This provides a sense of peace to the borrower so that you know what is coming month after month.

What are the disadvantages of the conventional loan?

There are more strict lending requirements for the conventional loan. A few things that you’ll have to provide upfront, besides downpayment and closing costs, are proof income, assets, employment verification and more. FHA requires this as well but the guidelines differ slightly.

Lastly, interest rates tend to be higher on conventional loans but this can technically be a pro since it is fixed.

What is the VA loan and who is it best for?

The VA loan is like the creme de la creme. It’s amazing in my opinion! VA loans are backed by the U.S. Department of Veteran Affairs and reserved exclusively for veterans and military family members. Some lenders require a minimum credit score, but a lot of them actually don’t. This is at the discretion of the lender. However, VA loans offer better terms than with a traditional loan from a private bank, mortgage company, or credit union. According to the VA website , nearly 90% of VA-backed loans are made with no down payment.

What are the advantages of the VA loan?

The biggest benefit of VA loans is that there is no downpayment. Like wow! However, this is only applicable if the sales price is at or lower than the home’s appraised value (which an appraiser will confirm).

Furthermore, there is no private mortgage insurance (PMI) or mortgage insurance premiums (MIP), which saves you money.

What are the disadvantages of the VA loan?

I honestly don’t know of any besides the strenuous process of completing the process. The VA requires you to get a certificate of eligibility and utilize their resources (approved realtors, lenders etc.). This can make the process longer, but to me, it’s worth it. Take a listen to Episode 12 where Latoria (a veteran) details her experience of using the VA loan to purchase her first home.

The bottom line:

Your home is an investment, whether it’s a primary residence or not. So don’t skip or try to be cheap with these fees. They can hurt you in the long run. If you want to learn more about how to prepare your finances for homeownership, join my free Homebuyer Goals Challenge . In 7 days, you’ll have a clear understanding of what your finances need to look like prior to your home purchase.

Which loan do you think is best for you? Comment below with your thoughts and questions!

3 Closing Costs That You Should Budget For Now

missjoshlyn1@gmail.com (Jos Ross) — Thu, 17 Sep 2020 22:26:32 GMT

3 Closing Costs That You Should Budget For Now - Guide

When I tell you I wasn’t prepared to buy my first home, I really mean that I wasn't prepared for closing costs.

I thought I knew a little bit though. My aunt is an agent and my mom is an investor. However, I feel like they didn’t really give the game that I needed. I thought it was as simple as finding the home, putting in the offer, sending the down payment over and dancing into closing. However, it was AND is so much more. Everytime my agent told me about something new, I would always respond with “I have to pay for this too?” I’m sure she was over me but she is also a pro at working with first-time buyers and did a great job of breaking down and classifying all of these as closing costs.

What are closing costs?

The moral of the story is that there is much more that you need to save for when it comes to closing. These things are called closing costs , which are defined as fees associated with you obtaining financing (i.e. your loan) for your home.

How much do I need for closing costs?

This number will differ according to what and where you buy, but it’s recommended to have 3-5% saved.

Keep reading for 3 things that need to be included in your budget as you prepare to buy a home.

#1 Component of Closing Costs: Inspections

Inspections give you an overview of the status of the home. It ensures you, as the buyer, that your future home is structurally sound and in good enough shape to live in.

The biggest myth that I hear is that you only need one inspection. Lies! There are tons of different types of inspections and in some cases, you may need more than one. It really depends on where you’re buying, what type of home you’re buying (new construction vs. old model) and so much more. Take a listen to Episode 8 where I invited Deandre of Systemized Inspections on to give a crash course on inspections. He is very knowledgeable and gave me a lot to think about as I prepare to purchase a multi-unit property.

How do inspections benefit me?

Inspections can also be used as negotiation tactics. If you find something that makes the home non-livable, both you and your agent can use that as leverage to knock the price down. Or, you can have the seller make the changes within the respective time frame. Learn more about time frames on the episode. They do exist when it comes to inspections.

#2 Component of Closing Costs: Title Search

Please don’t move into a home until you are sure that it’s owned free and clear by the seller. A title search gives you as the buyer a peace of mind. It officially confirms that the person selling the house actually owns it and that there are no unpaid liens against the property.

There are various types of liens but the most common one is a tax lien. This means that the seller is behind on property taxes and/or hasn’t been paying at all. This is not good for you or them.

How does doing a title search benefit me?

A title search confirms that the owner is indeed the owner and that they have kept up with payments associated with the home. This search is run through public records so that you aren’t just relying on what the seller or the seller’s agent is telling you.

Furthermore, once you become the owner, you will be responsible for the title and taxes associated with the property. This is where title insurance comes in, but we’ll talk about that in part two of this blog post.

#3 Component of Closing Costs: Appraisal fees

Appraisal fees are fees that you pay to an appraiser who will tell you how much your future home is worth.

You will definitely need one prior to buying but you’ll also probably get one again after you are in the home. The reason is because there are changes being made in the home, in the neighborhood and everything else in between.

How does an appraisal help me?

Prior to buying, an appraisal confirms that whatever the asking price is, matches the actual value with backed up research.

After living in the home, an appraisal can help you reassess the value to sell or to lower your property taxes. This usually comes into play when there are improvements to home and/or the community. Those improvements can help you in certain situations so you definitely want to be aware of them.

The bottom line:

What are some of the “hidden” closing fees that you want to learn more about? Comment below!

What Is Compound Interest And How Has It Helped Me?

missjoshlyn1@gmail.com (Jos Ross) — Sat, 12 Sep 2020 21:41:07 GMT

What Is Compound Interest And How Has It Helped Me?

Have you heard of compound interest but still unsure of what it actually means or how it works? I’ve been there. By definition, compound interest is “interest on interest” which means that it is applied to both the loan and deposits made. You would do this by reinvesting the interest, rather than collecting it or withdrawing it. That way, you are gaining interest on your accounts existing principal sum AND the previously added interest.

How can compound interest help you?

This is how investors make more on the money they initially invested. This is attractive to investors because it means you not only earn a return on the initial amount of your investment, but also earn a return on your earnings. On the flip side, though, it also means that if you borrow money, you're charged interest on your interest.

A few examples of investments that compound overtime are:

1. CDs

Certificates of Deposits (CDs) is similar to a savings account but the difference is that it is time-sensitive and carries a higher interest rate than your traditional savings account. That interest rate is also fixed which means that it won’t change over the course of the account. My mom has been a long time advocate of CDs and has greatly benefited from the fixed rate that it offers. I recently decided to open a CD of my own for the purchase of my future multi-unit property. The time component is dependent on you but the longer you keep the money in, the more time you have to earn additional interest on your account.

Because I'm looking to buy next year, I didn’t want to sign up for an account that had a time limit of 1 year. After that, I can withdraw the money and use it for another investment. However, most banks have CDs that can last as short as 1 year or as long as 5 years.

2. Real Estate (REITs, rental homes)

Real estate is land and land isn’t disappearing anytime soon.

The one thing I love about real estate is that you can invest in multiple ways. The first way that I want to talk about is real estate investment trusts. Real Estate Investment Trusts (REITs) is a publicly traded company that owns, operates or finances income-producing properties. Think of large commercial buildings (like your job's office) and large apartment complexes (like the one you might be staying in now). Those are known as REITs and you can own a portion of them, just like you would own a portion of shares in Disney, Amazon and Apple.

For example, I have been investing in REITs since 2018 and it would have been smart for me to reinvest the income (also known as dividends) I received but I needed the cash asap. I was paying off my loans and building up my savings so I can purchase a home. The next ideal move for me, after I purchase my multi-unit property, is to reinvest the dividends. I will miss getting those quarterly returns but I know that when it is time for me to use the money, it will be more because I invested it. I wrote a whole guide to REITs here and tell you how they changed my life. The biggest misconception that I debunk is that you can invest in REITs and property (i.e. primary homes, investment homes) at the same time.

Now from a rental property owner perspective, let’s think about rent. Even if an investor decides not to reinvest the income from tenants, they can still win. For example, if a $400 weekly rent rises by 4 per cent a year, after 10 years it becomes almost $600 a week — helping the investor pay down their loan principal faster.

PS. Start investing in REITs now and pay $0 in advisory fees for 3 months with my link .

3. High-Yield Savings Accounts

High-yield savings accounts (HYSAs) are the intersection of traditional savings accounts and CDs, which we discussed earlier. The only difference is that the interest rate is variable, meaning that it can fluctuate according to the economy. Another important difference is that most HYSAs allow quicker access to your money in case of an emergency. I started with a HYSA and it was 1.20% APY. It’s now around .80% due to the market fluctuations. It sucks! But atleast i’m still earning something.

4. Stocks and bonds

Lastly, stocks and bonds work very similar to REITs which we discussed earlier. Some companies offer dividends to their shareholders while some don't. The great thing I like about REITs is that they are required to pay 90% of its revenue to investors (like me and maybe you) . It is then your decision to keep the returns or you can reinvest them. For my REITs, I am keeping the profits (for now) but for my retirement account, I reinvest with my wealth manager so that I can take advantage of the compound interest. For my buy and holds, I manage them through Robinhood and M1 Finance . Robinhood is the most mobile-friendly and user-friendly platform and M1 Finance allows me to peak at other portfolios and set goals according to what I want to accomplish (i.e. Retirement, saving for a big purchase, collecting dividends etc.).With both, I reinvest my dividends so that they can compound overtime.

NOTE: If you use my Robinhood link , you get a free stock if you sign up for a new account. On the contrary, if you use my M1 Finance link above, you get $10 added to your new account to invest in. Don’t say I don’t give you free game or free money! It’s right there.

How can compound interest work against you?

In the complete opposite way. Compound interest works in the interest of the lender. This can include student loan companies, banks, credit card companies etc. When you use credit and don't pay off the entire amount by the initial due date, you are setting yourself up to pay compound interest. That is one of the many reasons why I was eager to pay off my debt, car note and anything else that was “borrowed” to me. I urge you to do the same sooner than later because if your initial loan was $1,000, you could end up owning double of that if you never touch it or pay on it.

What questions or concerns do you have about compound interest? Comment below!

Why There's No Perfect Time To Start Investing (Start Now!)

missjoshlyn1@gmail.com (Jos Ross) — Tue, 01 Sep 2020 02:18:34 GMT

Why There's No Perfect Time To Start Investing (Start Now!)

Missing out on IPOs is like learning about your friend’s birthday party that you weren’t invited to.

It hurts! I missed out on Netflix’s, Spotify’s and Uber’s, but I definitely won’t be missing out on Fundrise’s IPO announcement. I've been investing with Fundrise since 2018 and when I tell you I am ready, I mean it. I actually set aside a separate account for investments so that I am ready when the time comes.

You see, investing is kind of like dating. You want to do it but you’re also kind of fearful of wasting your time (and money). You also have family and friends involved but still a little hesitant on IF it’s for you.

The fact is, there is no perfect time to start investing. The time is now.

Just to put things into perspective, let’s take Netflix for example. Netflix went public on May 23, 2002, with an initial public offering (IPO) price of $15 per share. It is now holding a share price of $492.31 (as of 8/21). You do the math. Imagine trying to buy Netflix now for $15. It's nearly impossible unless you want to go the fractional shares route. (Which is actually how I started investing, my first fractional share was with Nike. I've since bought full shares.)

That’s a lot of money attached to a lot of value.

I will never consider myself an investment expert but I can tell you more about my experience and differences between the platforms I use to buy, sell and trade. Check out my other blog where I offer my recommendations.

Also, if you've been following me for a while, you know that I am team REITs (real estate investment trusts) . Think of these as shares of real estate vs. company stocks. REITs can be residential (like large apartment buildings) or commercial (like the offices that we used to work in prior to the pandemic) . They actually perform better than traditional stocks for me and have generated the most returns (i.e. dividends a la free money). I talk about my experience with those in my eBook .

When did you start investing and what has your experience been like? Comment below!

3 Myths That Keep You From Purchasing A Home

missjoshlyn1@gmail.com (Jos Ross) — Sat, 29 Aug 2020 20:49:05 GMT

3 Myths That Keep You From Purchasing A Home

I have come across a few myths that people believe when it comes to home buying. Let’s talk about it:

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Myth 1: You have to have a perfect credit score to qualify for a home

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This is false! A lot of financial gurus will encourage you to reach the 800 club but for what? Just to have a perfect score? Well, here’s a secret: most first-time home buying programs will accept you with a score as low as 620. Now i’m not saying aim to stay there. I personally think getting to and maintaining a 700+ score will help you not only qualify, but stand out as a top applicant for all types of loans (FHA, Conventional and VA loans included).

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Myth 2: You should have a ton of money saved

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False. You don’t need to have a million dollars or even $50,000 saved as a first-time homebuyer. It depends on what type of home you plan to buy and what program you plan to participate in. In fact, there are programs like NACA that will cover your down payment BUT you WILL need to have something saved in case of repairs and other costs (inspections, earnest money deposit etc.). Do your research on sites like Zillow, Redfin and Movoto to find out what is in your area.

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Myth 3: You must get a traditional loan

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False! While most homebuyers opt for the traditional loan, there are other options to purchasing a home such as seller financing. Check out episode 3 where Sierra and I talked about her experience of buying her first home via seller financing. It’s a good one!

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Also, sign up for my Free Homebuyer Goals Challenge where we will dive into what you need to do financially to prepare for your home purchase.

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Which myths have you heard or did you originally believe? Comment below!

5 Money Moves To Make Before You Purchase A Home

missjoshlyn1@gmail.com (Jos Ross) — Tue, 21 Jul 2020 01:38:34 GMT

5 Money Moves To Make Before You Purchase A Home

Purchasing a home is not something you can just wake up and decide on. It takes strategy, mentally and financially.

If you haven't heard my story on episode 2 , definitely take a listen so you can learn more about my experience and avoid the mistakes I did.

However, that experience also taught me the importance of preparing financially for homebuying success. Now I can confidently share these same tips with you.

Below are 5 Money Moves I Made Before Purchasing That I Recommend You Do As Well:

1. Invest in the stock market

This is where most people say: I am not an investment advisor. So here it is. I am not an investment advisor. I can only recommend what i've done and that's simply get started. I spent years trying to research every little thing when it comes to investing until I just decided to start small. My first step was to find an online brokerage account. I settled on M1 Finance and I still use it to this day.

A few of the benefits to M1 Finance include fractional shares (meaning you can purchase a portion), trading, joint accounts, retirement-based investments (Roth, Traditional, SEP IRA) and most importantly, expert portfolios. This means that you can see other portfolios that people have created based and copy what's relevant based on your goals.

If you want to see what's in my portfolio, check it out here .

For those that want to minimize risks, I recommend ETFs (exchange-traded funds), which is where you can invest in more than one stock at a time. Most of my portfolio is representative of this.

If you're ready to get started and need an incentive, use my code here to sign up and get $10.00 deposited into your account for investment purposes.

BONUS: Did you know that real estate investment trusts (REITs) are required to pay 90% of its income to investors (i.e. me and hopefully you)? There's no minimum credit score, no large downpayment and no headaches. Get started today with my recommended platform and my eBook . When you sign up with my code, you'll receive 3 months of zero advisory fees, which means more money is staying in your pocket.

2. Open a high-yield savings account

When was the last time you logged in to your bank account to check your interest rate? Well, I can save you time and let you know that it's less than 1%. That's where high-yield savings accounts shine.

These accounts work very similar to your traditional savings account.The main difference is the interest rate and maturity.

For example, the interest rates on most high-yield savings accounts that I know of are at least 1% -- which means that while your money is sitting in the account, it's making money for you. If you deposit $500 into a HYSA with an interest rate of 1.05% for a 12 month term, you could earn $58 in interest if that interest rate remains the same.

A few that I recommend are Ally and Marcus for research purposes.

This is a great option for those that want to save money for that big home purchase, just like I am doing for my multi-unit home.

3. Create a new income stream

The one thing I learned while shopping for my first home, is that I grossly underestimated how much I would spend before I even submit the official offer on a home.

Money is needed, trust me and now that most of us are at home, it's time to get creative with how we are generating income. A few of my new streams have included securing affiliate partnerships for my podcast, selling my eBook on REITs (real estate investment trusts) and the launch of Homebuyer Prep School .

If you're looking for more ideas, check this list out.

4. Pay off some or all of your debt

Your debt will impact your homebuying process. The question is, how much will it impact the process. When I was looking for my first home, my debt to income ratio was over the preferred amount of 36%. This impacted me from qualifying for the best of the best.

This is what I want you to avoid. So use this calculator to calculate your debt to income ratio. If it's above 36%, then create a plan to pay down as much debt as needed to get to the preferred percentage.

5. Automate your savings

If saving money is a challenge for you, then it's time to get comfortable with it. Once you become a homeowner, there will be tons of new expenses that may come unexpected.

So in addition to HYSA's, I recommend automating your emergency savings to accounts like Qapital . One of my favorite benefits is their spending sweet spot. This feature helps create a budget for your weekly expenses, as well as providing insights into your spending patterns. They also have some other cool features that can help you save as you spend with their automation tools.

If you want $25 to start, use my code to sign up and it'll be automatically deposited once your account is funded.

Bonus!

If you need a one stop shop to keep all of this information, I

recommend my friends Jazzy's Ultimate Budget Binder . I recently purchased it and it's page on pages of gems. A few include:

★ Setting and achieving financial goals

★ Creating a budget

★ Tracking your spending

★ Preparing for emergencies

★ Paying off debt and living financially free

Have you tried or utilized any of these tips? What was your experience? Comment below!