If you’ve ever wanted to live in a minimalist apartment, here’s your chance. New year, new home.
Have you looked at your closet, bookshelves and stacks of files, and thought, maybe there’s something to be said for a minimalist apartment? For many minimalists, it’s this defining moment that starts them on a journey in which less is more. Less clutter, less stuff and less relentless organizing often leads to more free time to enjoy the things that truly matter.
With spring cleaning a few short months away, now’s a perfect time to use these minimalist apartment tips to create a clutter-free environment. Less clutter, after all, means fewer things to clean.
Not only do you get a jumpstart on spring cleaning your apartment, Neuroscience News reports you’ll also enjoy the side benefits of reduced stress and anxiety. Sounds like a win-win!
Two things can sidetrack the best of intentions: perfectionism and procrastination. These tips will help you stay focused without feeling overwhelmed. And, as a brilliant, unknown author once said about perfectionism, “No one is perfect…that’s why pencils have erasers.” So, let’s get started with one room at a time.
Minimalist apartment tips for your bedroom
Peter Walsh, the international organizer and author of seven organizing and decluttering books, said, “Clutter isn’t just the stuff on the floor. It’s anything that gets between you and the life you want to be living.”
Keep that in mind as you go through the many items you’ve collected in your bedroom. And remember the lesson behind the story of the tortoise and the hare: Slow and steady wins the race. Take it room by room and one area at a time. When you’re down to that last area, possibly just in time for the big spring clean, you’ll feel a sense of renewal and freedom that’s hard to define until experienced.
The dreaded closet
Closets can quickly become storage central with clothes and shoes you never wear and boxes with who-knows-what in them. It’s time to change that.
Every item goes into a keep, donate or discard pile.
To help you decide, ask two questions:
When was the last time I wore or used this? The 90/90 minimalism rule suggests you only keep items you’ve used or will use within a 90-day timeframe.
Does it bring you joy or serve a purpose?
Now, while you have everything out of your closet, it’s a good time to vacuum and clean the baseboards. In fact, as you go through your home pre-spring cleaning, taking time to do the baseboards gives you a great jumpstart.
A natural cleaning solution for this sometimes hard-to-clean area is one part white vinegar to one part water plus several drops of your favorite essential oil, like lemon, lavender or pine. Note: If you have pets, these essential oils are considered toxic. Safer ones for your furry friends include cedarwood, frankincense and clary sage.
Nightstands and dresser
Dressers can be a go-to spot for objects that hold memories, which makes them one of the more challenging decluttering areas.
Start by taking everything off the top and placing it in one of your three piles. If something holds sentimental value, put it to the side.
Pick up each item that holds a memory and consider if you feel a sense of freedom by letting it go or a sense of loss. And remember, memories aren’t in things; they’re in you.
Sort through your drawers. Socks with holes? Discard. Shirts you’ll someday wear but never do? Donate.
Minimalist apartment tips for your kitchen
Stand back and take a look at your kitchen. Can you see the countertop? Now’s the perfect time to consider what kitchen gadgets you actually use.
Do you have an electric wok a well-intentioned relative gave you as a gift that you’ve yet to get out of the box? When deciding which items to donate, it’s helpful to consider that there’s someone out there who may really appreciate it!
Go through each drawer and cabinet one at a time with the same intention. Remove items, place them in one of three piles, clean the cabinet and make a specific spot for everything.
A mixture of two parts baking soda and one part water is great for cleaning spots on painted or laminated cupboards and drawers. Let it sit for a few minutes before removing it.
If you’re short on time, consider doing just one kitchen cabinet or drawer a day.
For the ultimate jumpstart on spring cleaning, consider deep cleaning your appliances one at a time. A good DIY mixture to remove grease is one part white vinegar and one part blue Dawn. This task may require your favorite upbeat playlist and some elbow grease.
Minimalist apartment tips for your bathroom
Pre-spring cleaning offers a great time to go through your bathroom’s often-ignored medicine cabinet and under the cabinet sink.
Check for expired products and items you haven’t used in the last three months. If throwing away old medicine, be sure to scratch any personal information off the label to protect your privacy, and throw the container and medicine away separately.
Go through each drawer and shelf. Are you finding makeup you haven’t used in who knows how long? The Mayo Clinic offers some good advice on when it’s time to say goodbye.
Mascara and liquid eyeliner: safe for three months.
Pencil eye and lip liners: safe for one year.
Water-based foundation: safe for one year.
Oil-based foundation: safe for 18 months.
Cream-based foundation and blushes: safe for at least six months.
Lipsticks and lip gloss: safe for six months to one year.
Minimalist apartment tips for your living room
Your living room should be a sanctuary from the world, a place to relax, rejuvenate and enjoy time with friends and family. Every item should speak to the heart of the matter or be so incredibly functional you can’t do without it.
Remember, fewer things to move means fewer things to clean. With that in mind, remove items from shelves (including bookshelves) and the tops of tables.
One by one, ask yourself, do you really need this item in your life, or is it simply taking up space?
Clean shelves and table tops.
If you need a space for magazines, books and games you’re not ready to part with, lift-top coffee tables provide a great storage area while reducing clutter.
While sorting through your living room, consider vacuuming out the window tracks and washing the windows to get an extra spring-cleaning jumpstart.
Jumpstart spring cleaning and create an intentional life
You’ll be amazed at how getting rid of stuff not only frees up your space but your mind as well. To keep things tidy until the spring cleaning session, ensure everything has a place to call home and finds its way back there after use.
The outcome? You’ll understand the sentiment behind less is more and find yourself living a more intentional life in your newly minimalist apartment.
Still looking for that clean slate? Browse our apartments and houses for rent here.
Today we’ll take a look at another home builder’s lender, K. Hovnanian American Mortgage.
They are the affiliated lender of K. Hovnanian Homes, which is a top-15 home builder nationally.
Like other builders, they created their own financing division to streamline their new home sales.
And to better control the customer experience from start to finish.
The biggest perk to using them is the financing specials you likely won’t find elsewhere. Read on to learn more.
K. Hovnanian American Mortgage Fast Facts
Affiliated mortgage lender for K. Hovnanian Homes
Provides home purchase loans for new home buyers
Founded in 2002, headquartered in Boynton Beach, FL
Parent company is one of the largest home builders nationwide
Licensed to do business in 14 states and the District of Columbia
Funded more than $1.1B in mortgages last year
Most active in the states of Arizona, California, Delaware, Texas, and Virginia
As noted, K. Hovnanian American Mortgage is the lending division of K. Hovnanian Homes, a top U.S. home builder.
Their parent company Hovnanian Enterprises, Inc. is a publicly traded company (NYSE:HOV), currently valued at nearly $1 billion dollars.
They’ve been around since 1959, and operate 128 residential communities across 14 different states.
Those states include Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, West Virginia, and Washington, D.C.
These are the places where K. Hovnanian American Mortgage is licensed to lend as well, since they only exist to serve their home buyer customers.
In fiscal year 2022, they delivered more than 6,000 homes to buyers across all markets, putting them in the top-15 largest homebuilding companies in the United States.
The lending unit got its start way back in 2002 and is headquartered in Boynton Beach, Florida. At present, they have 36 licensed mortgage loan originators working at the company, per the NMLS.
Because they are a home builder lender, they only offer home purchase loans. No mortgage refinances are available.
But they also operate a full-service title company called Eastern National Title Agency and Hovnanian Insurance Agency.
So you can get your new home, mortgage, title insurance, escrow services, and even homeowners insurance all from one umbrella company.
Of course, it can pay to shop around, so don’t overlook savings for convenience.
How to Apply for a Loan
To get started, you can visit a new home sales office or visit their website. Either way, you’ll be put in touch with a licensed loan officer.
They’ll be able to discuss pricing and loan options with you. If you like what you hear, you can proceed to the loan application.
It’s a digital app powered by ICE Mortgage Technology that can completed from any device, including a computer, tablet, or smartphone.
It allows you to link bank accounts and other financials, upload key documents, and eSign disclosures on the fly.
Once submitted, you’ll be able to check loan status 24/7 to determine what outstanding items still need to be completed. And you can get in touch with your lending team whenever you have questions.
Ultimately, they make it easy to apply for a home loan thanks to the latest tech, but also have a human lending team standing by.
Note that loans are sold off to a third party after closing because they are not a loan servicer.
Loan Programs Offered by K. Hovnanian American Mortgage
Home purchase loans
Conforming loans
Jumbo loans
FHA loans
VA loans
USDA loans
Fixed-rate loans: 30-year fixed, 15-year fixed
ARM loans: 5/6 ARM, 7/6 ARM
Buydown loans: 3/2/1 and 2/1 buydowns
State bond loans
Despite being a home builder lender, K. Hovnanian American Mortgage offers a good variety of loan programs, including conforming loans backed by Fannie Mae and Freddie Mac and jumbo loans.
They also offer all the major government-backed mortgages, including FHA loans, VA loans, and USDA loans.
In addition, you can get either a fixed-rate loan, such as a 30-year or 15-year fixed, or an adjustable-rate mortgage, such as a 5/6 ARM or 7/6 ARM.
Given the recent rise in mortgage rates, they also offer buydown loans, including a 3/2/1 buydown that discounts the rate a full three percentage points in year one.
You might also be able to get your hands on some homebuyer assistance via select state bond loans that offer lower down payments and government subsidies.
K. Hovnanian American Mortgage Rates
While some mortgage companies post their daily mortgage rates online, K. Hovnanian American Mortgage does not.
With regard to how their interest rates are, they simply say, “There is no way to accurately and honestly answer this question without first evaluating your individual situation and financing needs.”
In other words, mortgage rates vary by customer, based on loan parameters such as credit score, down payment, loan program, and so on.
The good news is they may offer special financing offers to their new home buyers, as is often the case with affiliated builder lenders.
Because builders often buy forward commitments in bulk, they can apply special discounts that are often hard for outside lenders to beat/match.
But these deals are often limited to certain homes in specific developments, and the funds are subject to running out.
They are also time-limited, meaning you must get under contract and/or close by X date to use these special funds.
When you speak to a new home buying rep or loan officer, be sure to inquire about deals such as permanent or temporary rate buydowns.
This may come in the form of a closing cost credit, which can be applied to a mortgage rate buydown.
These can make or break your decision to use the home builder’s lender or an outside bank/lender.
K. Hovnanian American Mortgage Reviews
There aren’t a ton of reviews for the lending arm of K. Hovnanian. But they do have a few kicking around.
They’ve got a 4.3/5-star rating from six reviews on Redfin, and a perfect 5/5 on a separate Redfin page from five reviews.
Meanwhile, their parent company has a 4.3/5 from nearly 4,000 reviews on NewHomeSource, which is a much better sample size.
And given the fact that most of the parent company’s home buyers are likely also mortgage customers, these should be relevant.
Of course, it’s not all perfect. Over at ConsumerAffairs they have a much more questionable 1.4/5 from over 250 customer reviews.
So a bit of a mixed bag, though some reviews may have to do with the properties themselves, not the mortgages.
Be sure to take the time to read through the reviews to determine potential hiccups that you might be able to avoid.
Lastly, they are an accredited company with the Better Business Bureau (BBB) and currently hold an ‘A+’ rating based on complaint history. Speaking of, they have zero complaints on file.
To sum things up, K. Hovnanian American Mortgage seems to offer a good mix of technology, a full loan menu for home buyers, and decent customer reviews.
They also have the huge advantage of offering below-market mortgage rates like other home builder lenders.
But always gather more than a single mortgage quote. While K. Hovnanian American Mortgage may offer the best pricing, there might be better deals out there.
And if you have competing quotes, they may be more willing to negotiate with you on rate and/or closing costs.
K. Hovnanian American Mortgage Pros and Cons
The Pros
Can apply for a home loan online
Digital mortgage application powered by ICE Mortgage Technology
Plenty of loan programs to choose from
Offer mortgage rate specials for home buyer customers
Lots of excellent customer reviews
A+ BBB rating, accredited company
Lots of free mortgage calculators on their website
With trends like “soft start” morning routines and cozy cardio becoming increasingly popular, I think it’s safe to say we’re all feeling the desire to slow down a little more and hustle a little less. Especially as the year comes to a close and we start spending more time inside, it’s only natural to want to settle into a calmer headspace, and that often starts with our homes. Enter: the blue home decor trend that’s poised to be huge in 2024.
Paint companies including Dunn-Edwards and Sherwin-Williams have selected soft, steely blues as their picks for the 2024 color of the year. According to the experts at Dunn-Edwards, these cool tones represent a collective desire to “achieve balance and tranquility in the year to come.” Similarly, Sherwin-Williams’ color of choice was intended to reflect that sense of peace found when you “slow down, take a breath, and allow the mind to clear.” All in all, it sounds like the perfect trend to try as we gear up for our annual New Year’s resolution-setting.
Interested in hopping on this tranquil trend? Read on for five ways you can incorporate blue into your home for a more calming, energizing space.
How to Try the Blue Home Decor Trend in Your Home
1. Mix and match patterns and textures
Some say there’s no such thing as too much of a good thing. When it comes to color, though, I have to disagree. Repeating the same color throughout your home without any variation will quickly make your home feel too matchy-matchy. The secret to bringing in color without going too monochromatic? Incorporate a variety of textures and patterns in your decor. Instead of adding multiples of the same solid blue pillow to your couch, for example, mix in a patterned pillow that’s accented with blue, or layer on one with a shaggy texture. This will create visual interest and prevent the room from looking too one-note while still maintaining a cohesive look.
2. Use different shades of blue
While Dunn-Edwards and Sherwin-Williams both selected muted shades of blue for their 2024 colors of the year, that doesn’t mean you can’t play around with other blue tones. Mix and match bold hues like deep navy and bright cerulean, or keep it muted with shades of slate blue and denim. Blue comes in so many different shades that you can easily create a whole palette using just this section of the color wheel. Whatever variations bring you the feeling of tranquility, lean into these shades as you refresh your home for 2024.
3. Start with small accessories
If you’re not ready to paint all your walls blue, start by dipping your toes in with subtle changes. You can’t go wrong with small accessories like candles, vases, and throw pillows to quickly and inexpensively try out a new color trend. Especially if your existing decor scheme is fairly neutral, these new pieces will fit in seamlessly.
4. Swap out artwork
One of the easiest ways to keep your home feeling fresh is to swap out your artwork. If you aren’t sure where to start, there are plenty of retailers on Etsy that sell digital prints you can download and print inexpensively yourself. Pro tip: Invest in high-quality frames that’ll make any kind of artwork look good, then find creative ways to save on the art itself.
5. Try out wallpaper
This may sound extreme when it comes to trying out a new home decor trend, but with so many peel-and-stick options on the market, it’s easier than ever to swap out your wallpaper or try it out for the first time. Wallpaper is a fun way to add texture, color, and pattern to an otherwise blank space. If you’re a renter, it’s also a great alternative to painting your walls since the paper will easily peel off when it’s time to move out.
Are you downsizing, moving or doing a major decor change in your home but don’t know what to do with your old furniture? Well, you’re in luck because many local nonprofit organizations make moving easy by offering free furniture donation pick up.
Donating furniture to your favorite charities is a chance to get rid of extra furniture and household items for free while giving back to your community. Here is how to get started in the process.
Where to donate furniture
When looking for furniture donation pickup, there can be so many options it’s hard to know where to start. Thankfully, we’ve got you covered with our detailed list summarizing nonprofit organizations, who your donation will help, items they accept and how to schedule your pickup.
The best part is that every organization in our guide is completely free of charge for their furniture removal services and your donations go to a great cause.
1. Salvation Army
When people start thinking about donating furniture, The Salvation Army is usually one of the first places to come to mind. The Salvation Army is an international organization that operates in over 7,000 U.S. towns and cities and assists 23 million Americans annually.
Their services help provide disaster aid, support the LGBTQ+ community, fight food insecurity, combat addiction, assist those living in poverty and more. With the number of people Salvation Army helps each year, you can feel confident that you are doing good by donating to this organization.
Who your donation helps: Your items are either brought directly to those in need or sold at one of their Salvation Army stores. The proceeds from their stores are used to fund their Adult Rehabilitation Centers that provide housing, food, counseling, community and employment for individuals suffering from drug and alcohol dependency.
Items they accept: The Salvation Army will accept furniture, vehicles, clothing, household items, electronics, mattresses, books, exercise equipment and more.
How to schedule a pick-up: You can schedule an appointment for furniture pickup at The Salvation Army website or call 1-800-SA-TRUCK. Salvation Army pick-up hours can vary depending on your location, but they are typically 8 a.m. to 4 p.m. They make the transition even easier by allowing you to leave items outside your home for them to pick up without you even needing to be home.
2. Goodwill
Goodwill is an organization that supports communities through job training and employment services. They also provide support services, language training, education assistance, access to transportation and child care to help people in their communities achieve success.
In 2020, Goodwill served nearly 22 million individuals worldwide and provided career support to 126,000 people. Items brought to one of Goodwill’s stores are sold at a discounted price and the money raised goes to their various programs and initiatives.
Who your donation helps: Donation funds go to their job training or community-based programs. Some of their community-based programs include classes for people with disabilities, senior resources and helping convicts reclaim their lives after prison.
Items they accept: Goodwill accepts furniture, toys, electronics, clothing, media items, electronics, vehicles, exercise equipment, dishware and tools. Something to note is that Goodwill will accept boats, cars, campers and RVs even if they aren’t in working condition.
How to schedule a pick-up: Goodwill stores provide a donation center to give easy drop-off access for donations you’re able to bring in yourself. Most stores also offer a free pick-up service for larger furniture items, making it perfect for those who are downsizing. You can schedule your free Goodwill pickup online on their website locator, but keep in mind that store hours will vary based on their location.
3. Habitat for Humanity
Habitat for Humanity is a global nonprofit that provides safe and affordable housing to families in need. Their initiative also assists older adults to improve their homes, puts efforts towards neighborhood revitalization projects, provides shelter during natural disasters and teaches classes focused on financial education. This organization has been in operation since 1976 and works in all 50 U.S. states as well as 70 countries.
Who your donation helps: Habitat for Humanity sells donated furniture, building supplies and appliances at their resale store called ReStores. Proceeds from sales go to home restoring and building projects for families in need of affordable housing.
Items they accept: Habitat for Humanity will accept furniture, building materials, appliances, vehicles and farm equipment.
How to schedule a pick-up: To schedule a free furniture donation pick up with Habitat for Humanity, visit their website and enter your ZIP code to see which stores are near you. Next, you can contact your closest store directly to schedule your appointment.
4. Green Drop
GreenDrop is a program on the East Coast that raises funds for popular charities by picking up used furniture, clothes and appliances to sell at thrift stores. Their proceeds go back to charities that help those in need. Some of the charities they support include the American Red Cross, Military Order of the Purple Heart and the National Federation of the Blind.
Who your donation helps: In 2018, GreenDrop raised $3.1 million for the charitable organizations listed above.
Items they accept: GreenDrop accepts various items, including furniture under 50 pounds, clothing, household items, electronics, tools and toys.
How to schedule a pick-up: Start by packing up all of your belongings in plastic boxes or bins. Next, decide if you want to make an in-person donation or if you can schedule a furniture pick-up online. After they receive a donation, they’ll provide you with a tax receipt.
5. The Arc
The Arc is the largest organization devoted to helping individuals with developmental and intellectual disabilities. It provides a wide variety of services, supports and advocacy for people with disabilities and their families. The organization has over 700 chapters and one of their key sources of fundraising comes from their thrift stores, which they stock with donated goods.
Who your donation helps: Their services vary based on each chapter and the unique needs of their community. Once your donation sells, it goes towards public policy advocacy, vocational programs, residential assistance, education services, financial planning and recreational activities for people with disabilities.
Items they accept: The Arc accepts furniture, clothing, electronics, toys, vehicles, books, decorations, kitchen items and more, depending on the chapter.
How to schedule a pick-up: You can also schedule via phone by calling The Arc at 1-800-283-2721. Another option is to head to their website to find your local chapter and schedule your pick-up.
6. AMVETS
AMVETS is an organization that represents the interests of 20 million veterans across the United States. This group helps veterans obtain their entitled benefits. They also work to improve the quality of life for veterans, their families and the communities where they live through leadership, advocacy and services.
Who your donation helps: AMVETS supports U.S. veterans, those who have been honorably discharged and active duty servicemen and women. They will sell your furniture in one of their thrift stores to raise money for their cause.
Items they accept: AMVETS accepts small furniture, clothing, toys, bedding, games, bikes, electronics, lamps, curtains, exercise equipment and kitchenware. AMVET requires donations to be 5-years old or less but is also open to accepting other items that are not on their list.
How to schedule a pick-up: Send an email through the AMVET site or call to schedule a furniture donation pick-up between the hours of 8 a.m. and 4:30 p.m. It’s important to check with this organization ahead of time to see if their services are available near you. AMVETS has branches across the United States, but only has free furniture pick up available in certain states.
7. Donation Town
This site is perfect for anyone feeling overwhelmed trying to find charities that provide furniture pickup in their community. Donation Town works with local charities all over the country to help put individuals in touch with nonprofits that will provide this service for free. Simply enter your ZIP code and they’ll give you a list of charities to choose from.
Who your donation helps: Your donation will help the charity of your choice. They currently have over 400 charities of all sizes in their directory and are adding more all the time.
Items they accept: Items they accept depend on each charity’s guidelines.
How to schedule a pick-up: Visit Donation Town’s website to plan your pick-up with your selected charity.
8. Furniture Banks
If you donate your items to Furniture Banks, then you’ll be playing an important part in helping vulnerable families get back on their feet. The furniture donation pick up organization encourages people to donate gently used furniture and transfer the items to those struggling financially to furnish their own homes. Furniture Banks operates in 36 states, so check their website to see if they are in your area.
Who your donation helps: The families served by this organization include the previously homeless, unemployed, victims of crime, battered women and children in retreat, immigrants, individuals with disabilities and victims of natural disasters.
Items they accept: Furniture Banks accepts good condition furniture of all sizes. They also provide a towing service to pick up cars and recreational vehicles.
How to schedule a pick-up: To schedule a pick-up with this organization simply schedule an appointment on the Furniture Banks website.
9. Vietnam Veterans of America (VVA)
The Vietnam Veterans of America are working to change negative beliefs towards Vietnam veterans and provides individual assistance in a variety of ways. This includes creating outreach programs for veterans experiencing homelessness, substance abuse, incarceration and more. The VVA furniture removal program operates through a program called Pickup Please.
Who your donation helps: The Vietnam Veterans of America promote and support the full range of issues important to Vietnam veterans and work to change public perception of Vietnam veterans.
Items they accept: The Pickup Please program accepts small furniture items, sports equipment, toys, kitchenware, electronics and lightly used household goods. Pick Up Please says that they will pick up “almost anything” in good condition, but the piece of furniture must be light enough for one person to carry.
How to schedule a pick-up: VVA operates in most states and they make it super easy to schedule a donation pickup online. You can also get to VVA by way of their Pick Up Please site.
10. Out of the Closet thrift stores
The Out of the Closet thrift stores chain is owned and operated by the AIDS Healthcare Foundation (AHF). This organization provides medical, preventive and educational resources for patients. AHF is the nation’s largest non-profit HIV/AIDS healthcare, research, prevention and education provider. The proceeds from Out of the Closet thrift stores directly benefit the AIDS Healthcare Foundation.
Who your donation helps: Donations and financial contributions to this organization fund AIDS Healthcare Foundation’s HIV/AIDS programs, free HIV testing and housing programs.
Items they accept: Out of the Closet Thrift Stores accept furniture, kitchenware, electronics, musical instruments, tools, books, vehicles, artwork and home decor.
How to schedule a pick-up: You can schedule your pickup by filling out your address and items in a form on their website. Something to note is that you must have at least two furniture items for them to complete a free pick-up. You can also deliver any pieces of furniture to their local stores.
11. PickUpMyDonation.com
PickUpMyDonation.com is an organization that works with independent non-profit thrift stores in their communities. They’re focused on making large item donations simple by getting your furniture request to a local charity in minutes. Although they are not a charity themselves, they put you in touch with smaller charitable chapters that support the area you live in.
Who your donation helps: Your donation will support the charitable cause of the thrift store you are put in contact with.
Items they accept: PickUpMyDonation.com accepts large furniture, large appliances, vehicles, tools, recyclable materials, outdoor recreation items and artwork.
How to schedule a pick-up: To schedule a pick-up, visit pickupmydonation.com to make a furniture removal request and fill out a form describing the items you want to donate. Next, they’ll put you in contact with the closest thrift store, and if they’re interested in your furniture, they will schedule a furniture removal pickup.
Tips for furniture donation pick up
Donating your furniture is a great way to get rid of furniture you don’t use anymore while also helping your community. Follow these tips for a seamless furniture pickup experience.
Schedule your donation pick-up in advance: Many charities’ free donation pickup spots fill up quickly, so it’s important not to wait until the last minute to make an appointment. Schedule as far in advance as possible to ensure you get the date and time that works for you.
Research different organizations: Instead of just picking the first charity on the list, make sure to do some research to make sure their values and methods align with your own. All of the charities listed do great things for their communities, but each has its own way of making an impact.
Prepare your furniture: Each charity will have individual guidelines for how they want your furniture packaged and prepared for pickup. Leave furniture uncovered to be inspected but make sure it is cleaned and houseware is boxed correctly.
Write off your furniture donation: Did you know you can write off your furniture donation on your taxes? Simply ask the charity picking up your furniture for a tax receipt or paperwork to file and you’ll be saving money this upcoming tax season.
Coordinate with neighbors: While many nonprofits allow you to simply leave furniture outside your home for them to retrieve, others might require you to be there. If this is the case, then it’s best to coordinate with a neighbor or friend to stop by when they’re scheduled to arrive.
If you follow these tips, you should have an easy transition and donation pickup day. Also, make sure to always check to see if the organization of your choice has any additional requirements.
Declutter with furniture donation pick up services
Finding a new apartment has never been easier with Rent.’s finder tool. Start your move off on the right foot by using a free furniture removal service to declutter your place and take care of any worries prior to moving into your new home.
Alex Heinz is a writer with experience in a variety of industries from tech to lifestyle. Her work has appeared in Business Insider, TechCo and PopSugar. She’s lived in a handful of large cities including New York and San Diego, giving her first-hand knowledge of the ins and outs of renting. In her spare time, you can find her exploring new hikes with her dog.
Inside: Balancing a shoestring budget is possible and provides great rewards. With savings and budget strategies, you will find genius tips to manage your finances smartly!
With the rise of economic inflation, a growing number of people are finding the need for shoestring budgets to effectively navigate through their expenses.
Whether it’s planning for a low-cost holiday, initiating a frugal home makeover, or launching a start-up business with minimalist funds, the concept of a shoestring budget comes into play.
Moreover, it’s not only limited to low-income families but also extends to larger households and entrepreneurs that need to strategically lessen costs to achieve their goals. This is how many people reach financial independence sooner.
Then, let’s talk about a shoestring budget – an effective tool used to stretch finite resources, manage money wisely, and achieve financial goals, all while minimizing expenses.
If you’re familiar with the feeling of every dollar in your wallet counting, then this blog post is for you.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What is a Shoestring Budget?
A ‘shoestring budget’ means to accomplish a task or a project within a very limited or bare minimum budget. The shoestring budget work strategy involves curbing discretionary spending dramatically to take care of high-priority expenses.
Understood across various contexts like travel, events, and lifestyle, the term implies an approach of resourcefulness and discovery of low-cost alternatives to achieve desired results.
Not exclusive to households with low incomes, working with a shoestring budget expresses the art of making what’s deemed impossible possible, navigating time constraints, and maximizing minimal available funds.
Shoestring Budget Idiom Definition
According to Merriam-Webster, the official definition of a shoestring budget is: 1
“involving a relatively small amount of money for planned spending.”
‘Shoestring Budget’ Origin
The phrase ‘shoestring budget’ has an intriguing origin story that dates back to the 1800s in the United States. Fact-checks reveal that this term is indeed a reference to the precarious nature of a thin and weak shoestring, metaphorically implying a scarce and strained budget.2
Several theories have been proposed regarding its original use.
One theory suggests that the term ‘shoestring gambler,’ meaning someone gambling with a limited budget, might be the precursor to the idiom.
Another theory, based on British history, suggests that prisoners would lower a shoestring out of their cell to collect small donations from passersby, symbolizing the idea of managing with few resources.
Despite the debates around the phrase’s exact origins, it is undisputed that it signifies a tight budget situation.
How to live on a shoestring budget?
Living on a shoestring budget can be challenging but doable with a bit of dedication and planning.
Start by reviewing your regular expenses per month.
Cut down on unnecessary expenses as much as possible.
Monitor your small, daily expenses as they can add up significantly over time.
Refinance any existing debt to reduce interest payments.
Renegotiate contracts with utility providers, subscription services (consider uninstalling unused ones), or insurance for better rates.
Shop at thrift stores or choosing used items over brand new can also help you save.
The key to surviving a shoestring budget is self-control and determination to avoid impulsive spending.
Your goal is to prioritize essential needs over wants – a no spend challenge will help you with this. Remember, regular tracking and analysis of your personal site usage can provide valuable insights to manage your budget better.
How to travel on a shoestring budget?
Embarking on an adventure while on a shoestring budget requires creativity and pre-planning.
Be flexible with your travel dates, destinations, and mode of transport to take advantage of the best deals available.
Consider options such as budget airlines, off-peak travel times, and less touristy locations.
Staying in budget accommodations, or even trying out housesitting, can significantly cut down your lodging costs.
Eating at local fresh markets rather than restaurants will not only save you money but also provide a more authentic experience.
Plan your daily activities; consider free local events, parks, and attractions.
Always carry a water bottle to avoid buying expensive drinks.
With careful planning, traveling on a shoestring budget can make your journey all the more rewarding and memorable.
How to Save Money on a shoestring budget?
Saving money while on a shoestring budget might appear challenging, but it’s not impossible. Begin by monitoring your expenditures and identifying areas where you can potentially save money. Also, consider substituting costly activities with more affordable or free ones.
Every small action counts when you’re on a shoestring budget, and these savings accumulate over time. Remember, consistent small savings can make a significant difference in the long run.
Starting a business on a shoestring budget
Starting a business on a shoestring budget requires careful financial planning and innovative thinking. Indeed, it may sound challenging, but numerous shoestring startups have surged to success by optimizing their business budgets. It is all about crafting a solid business plan that clearly delineates your budget and the efficient utilization of each dollar.
Maintain focus on essential expenses only. These expenses might include mandatory licenses, essential software for business operations, or even crucial industry-specific tools. Leverage your personal and professional networks for free advice and resources.
Also, make the most of free or low-cost online marketing strategies as these can be vital to shoestring business budgets. You can use effective strategies, like using different social media platforms for marketing or creating a blog, to broaden the reach of your business.
Remember, having the capital to start is important but it’s secondary to a truly novel idea, intense hard work, and a strategic approach. So, let your creativity thrive and work passionately towards growing your business.
Shoestring Budget Examples
Shoestring Vacation
Wedding or Honeymoon
Home Improvement
Business on a Shoestring Startups
Savings Goals
Financing your Next Car
A shoestring budget is not always related to bigger projects. It can also refer to the scenario where the money required for daily expenses, buying an item, or completing a project isn’t enough. Here, the person has to be creative and find ways to stretch the money to make ends meet.
Practical Tips for Surviving on a Shoestring Budget
In this section, we will present practical advice for managing a shoestring budget, derived from case studies of my readers and my own personal experience who have thrived despite financial limitations.
Whether you are budgeting on a low income or looking to reach FI number faster, this guide has you covered.
1. Starting with a Budget: Your First Step
Before you embark on your journey of living on a shoestring budget, the first step is to define a realistic budget.
Understand your total earnings and list all your monthly expenses.
Identify which expenses are necessary (rent, utilities, groceries) and which are discretionary (eating out, entertainment).
Now create a spending plan such that it covers all necessities, allocates some amount towards savings, and leaves a little for leisure.
A well-defined budget will be your roadmap to financial management success.
Remember, the goal is to live within your means but also to ensure you aren’t depriving yourself.
2. Make Saving Automatic
A proven way to save money on a shoestring budget is to make saving automatic.
In such a method, you can set up an automatic transfer when you get paid. Another idea is to use Acorns, which rounds up purchases made with your debit card to the nearest dollar and deposits the change daily into your savings account.
Essentially, you’re saving without even noticing it! These little amounts add up over a period and can really bolster your savings.
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3. Cut Back on Expenses
One of the most effective ways to operate within a shoestring budget is by reducing expenses. These can be small lifestyle changes, like cutting back on takeaways and preparing meals at home, walking or cycling instead of driving short distances or canceling unused subscriptions.
Specifically, you are looking to cut back your flexible expenses the most.
4. Look for Ways to Make Extra Money
Alongside cutting back on expenses, we continually stress the importance of finding ways to supplement your income. This could be from a side hustle, passive income, part-time job, or even a pay raise.
This additional income can help ease pressure on your shoestring budget. Also, it might provide an opportunity to explore new interests or passions. By diversifying your income streams, you make your financial situation more secure and flexible in unexpected circumstances.
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5. Utilize Free Resources
When it comes to saving money on a shoestring budget, the key is to utilize free resources and focus on essentials before spending money.
Thankfully, there are many vital ways to do this:
Find free things to do without spending money.
Use your local Buy Nothing group to find items before spending your hard-earned cash.
Learn and enhance your skills through free or low-cost online platforms like Udemy, Coursera, and YouTube.
Leveraging such resources can have a significant impact on your budget, leading to substantial savings for other meaningful expenses.
6. Look for Deals and Coupons
Another wise strategy when operating on a shoestring budget is seeking out deals and using coupons whenever possible. This game-changing approach can be applied to your grocery budget, dining, clothing purchases, and even travel.
Search for coupons in newspapers, magazines, or on coupon websites. Perhaps, subscribe to newsletters from your favorite retailers, a move that will provide straightforward access to information about sales and discount codes. Be mindful while shopping online or in stores, and always remember to rein in impulses, checking for any available discounts before purchasing.
Moreover, take advantage of holiday sales or Amazon Prime Day for larger purchases. Taking a little extra time to hunt for the best deals can significantly cut down your expenses and help you stick to your shoestring budget.
7. Utilize Household Resources
Leveraging what you already have in your household is another fantastic way to save money.
For instance, before running to the grocery store, take stock of what’s in your pantry and design meals around these items.
Also, consider repurposing and upcycling household items. An old ladder can turn into a chic bookshelf; jars can be used for storage.
Optimizing utility usage by switching off lights when not in use and limiting water usage can also reduce bills.
Start treating everything in your house as a resource with a specific purpose and value, including leftover food, old clothes, and used furniture. Every household item utilized efficiently can add up to visible savings over time.
8. Get Rid of Unnecessary Expenses
Perhaps the most crucial aspect of managing a shoestring budget is identifying and eliminating unnecessary expenses. These could include subscriptions to magazines or online services that you hardly use, dining out frequently, or buying expensive coffee daily.
Analyze where your money is going every month. You’d be surprised how the smallest changes can have a big impact on your budget. Eliminating even a few unnecessary monthly expenses can add up to substantial yearly savings.
Remember, the key is not to deprive yourself of everything but to find that balance between living comfortably and within your means.
9. Reduce Your Monthly Rent or Mortgage Payment
Want to slash a significant expense of your shoestring budget by considering ways to reduce your rent or mortgage payments? Could you move to a more affordable area or a smaller property?
For homeowners, look at refinancing your mortgage or negotiate better terms, resulting in lower monthly payments. Always remember to check if any fees would apply before proceeding with refinancing.
If relocation isn’t an option, consider renting out a spare room in your home or offering it on a vacation rental site.
If you are a renter, look at becoming a permanent housesitter.
Lowering these substantial expenses can make a huge difference in your budget, allowing you to allocate funds to other pressing areas, save, or even invest in building wealth.
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10. Be Creative When Paying Bills
When managing a shoestring budget, it can be helpful to get creative with the way you pay your bills. Sometimes, splitting payments between paychecks or paying on certain days can make managing your budget easier.
You could also consider bill negotiation services or check if you qualify for reduced rates based on your income. If meeting all payments becomes too strenuous, communicate with your service providers about it. They may have hardship programs or payment plans to assist during tough financial periods.
Remember, the key is to avoid late fees or penalties that could further strain your budget.
11. Leverage Technology to Save Time and Money
Make the most of technology to manage your shoestring budget. There are numerous mobile apps and online resources to help you track your expenditures, save money, pay bills, and even invest.
Budgeting apps can help you keep track of your income and expenditure, warn you when you’re nearing your limit, and provide valuable insight into your spending habits. Digital wallets can help you make secure transactions without the fear of losing cash.
Moreover, there are apps and websites to compare prices of different products, get the best deal alerts, apply instant coupons, or even earn cashback like Rakuten.
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12. Participate in a Mini Savings Challenge
As a fun and effective way to boost your savings, consider embarking on a mini savings challenge! These challenges break the intimidating concept of saving into manageable, small steps. They can vary based on duration and the amount you’re aiming to save.
For example, in a 52-week challenge, you save $1 in the first week, $2 in the second, and so on, until you’re saving $52 in the 52nd week. By the end of the year, you’ll have saved $1,378!
Not only does it make saving fun, but it also allows you to develop a consistent saving habit, crucial when budgeting on a shoestring.
Frequently Asked Questions (FAQ)
If you’re fortunate enough to have a budget that’s more than a shoestring, the principles discussed still apply. Having more resources doesn’t mean you should ignore opportunities to save and invest wisely.
So, whether your budget is minimal or ample, consider adopting these healthy financial habits to achieve your financial goals. Make sure to sock away any extra money into a savings or investment account so you aren’t tempted to spend it.
Starting to invest on a small budget involves several key strategies. You must pay yourself first each and every time you are paid.
Set up an auto savings plan through a high interest savings account to make sure you start earning interest.
Contribute enough to your 401(k) to take full advantage of your employer’s match, if available, and consider mutual funds with an initial investment as low as $500.
Pick one solid company wherein you believe data and financials are stable enough to invest in, and buy 1 share.
If you receive a work or tax refund bonus, allocate it towards your investments instead of immediate spending.
Key Takeaways: Managing Money Well on a Tight Budget
Managing finances on a shoestring budget can be a daunting task, but with the right strategies in place, it can become a way to achieve financial health.
This is something I did when I was a stay-at-home mom looking for ways to make money.
In the grand scheme of things, managing a shoestring budget is less about the money and more about your mindset. Yes, limited resources can present challenges, but your attitude and creativity can make a difference.
Embracing frugality, taking control of your financial choices, and building resourceful strategies can turn your constraints into opportunities.
Money comes and goes, but the ability to manage it effectively is a life skill that will always be beneficial. The real wealth lies in your ability to live within your means and make the most of what you have – turning your shoestring budget into a stepping stone towards financial independence and stability.
Remember, every journey starts small.
Day by day, these tips can help you improve your financial stability and achieve your goals, regardless of your budget size.
Source
Merriam-Webster. “on a small/tight/shoestring budget.” https://www.merriam-webster.com/dictionary/on%20a%20small%2Ftight%2Fshoestring%20budget. Accessed December 5, 2023.
Grammarist. “Shoestring Budget – A Creative Expression for Limited Money.” https://grammarist.com/idiom/on-a-shoestring-and-shoestring-budget/. Accessed December 5, 2023.
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NEW ALBANY — Sisters Kathy Proctor and Becky Sleith have incorporated their shared love of home decorating into a new small business in downtown New Albany.
Re-Homed Decor opened Nov. 1 at 151 E. Spring St. The consignment shop sells gently used and new home decorations.
“It’s actually something that we’ve always wanted to do,” Proctor said. “As sisters, we’ve always enjoyed decorating. We shop a lot at home decor stores, so we always said, we need to open something like this. We said it for so long, and finally, we just decided to go for it.”
It is the sisters’ first time as small business owners. Their venture has been challenging but rewarding, Proctor said.
“It hasn’t been real easy. It’s a lot of hard work, so we did put a lot of time and effort into it, but it’s different every day,” Proctor said. “We’ve got a lot of consigners now, and we just keep picking up more.”
Sleith said it has been “scary at times” to start a business, but she has enjoyed working with her sister to make their vision into a reality. She also enjoys meeting new people.
The shop frequently receives new items, so the inventory is constantly changing. The shop focuses on “more current” decor rather than antique items, and the used items must be “like new.”
“Since we are a small space, we have to keep things that are kind of going to move quickly,” Proctor said.
As Christmas approaches, the shop is filled with festive holiday items ranging from ornaments to reindeer decor. Last weekend, the shop participated in Develop New Albany’s Jingle Walk, and the sisters are now preparing for this weekend’s Small Business Saturday and Light Up New Albany events.
The small shop has received support from other downtown New Albany businesses, including Mariposa Consignments and the neighboring Madhouse boutique.
“That is something I’ve always wanted to do — getting involved with Develop New Albany and just reaching out to the other business owners to support each other,” Proctor said.
Proctor said they have received positive feedback since opening the business.
“Everyone has a lot of good feedback,” she said. [There are] a lot of return customers.”
The shop has stayed busy, and lately, it has been “nonstop” business.
“We never anticipated this,’ Proctor said. “It’s been remarkable.”
Re-Home Decor is open Wednesday through Friday from 10 a.m. to 5 p.m. and Saturday from 10 a.m. to 4 p.m.
Many people want to buy a home but think it isn’t possible because they don’t have money to put toward a down payment. Traditionally, lenders require a 20% down payment toward your mortgage.
But a 20% down payment adds up to a lot of money. For example, if you plan to purchase a $150,000 home, you’d need to come up with a $30,000 down payment. Many people cannot afford this, but fortunately, the 20% rule is a lot less common than you might think.
Is a buying a house with no money down possible?
The National Association of Realtors (NAR) reports that 39% of non-owners believe they need a 20% down payment or more and 22% believe they need a 10% to 14% down payment.
But neither of these are true. Many mortgage lenders will let you buy a home by putting down as little as 3%. And some lenders will let you skip the down payment altogether.
NAR also found that 61% of first-time homebuyers made a down payment between zero and 6%. So, it’s safe to say that a 20% down payment isn’t the standard anymore. But unfortunately, many consumers choose not to pursue homeownership because they believe this down payment myth.
Weighing the Pros and Cons of No Down Payment Mortgages
Is there any reason to aim for 20% down when most home buyers buy with a down payment less than 20%? If you can afford it, yes, the 20% rule is still a wise choice.
The more money you put toward your mortgage, the less debt you’ll have to repay and the less your monthly payment will be. Plus, there are several drawbacks to putting down less than 20%:
Less favorable rates: If you pay less than 20%, lenders will probably see you as a risky investment. And they will take this into consideration when calculating your mortgage rates. In general, you can expect to pay a higher interest rate if you put down a smaller down payment.
Higher closing costs: Closing costs are based on the size of your mortgage. So, the smaller your down payment is, the higher your closing costs will be. However, you may be able to get around this if you live in a state where it’s typical for the seller to pay the closing costs.
Private mortgage insurance (PMI): Private mortgage insurance is a type of mortgage insurance designed for borrowers who make a down payment lower than 20%. It protects your mortgage lender in case you end up defaulting on your loan.
PMI can cost as much as 1% of your total monthly mortgage payment. So for a $150,000 mortgage, you’ll end up paying $150 per month.
However, this may not be that bad, especially if you have a less expensive mortgage. And once you reach 20% home equity, you can cancel your PMI and get rid of these extra payments.
Check Out Our Top Picks for 2023:
Best Mortgage Lenders
How to Buy a House With No Money Down
Fortunately, there are several lending programs that do not require a down payment. Here are five payment assistance programs that will help you buy a home with little to no down payment.
1. VA Loans
VA loans are a valuable option for eligible military veterans, active-duty service members, and certain surviving spouses. These government-backed loans offer several benefits, making homeownership more accessible and affordable through the use of a VA loan.
100% Financing and No Down Payment
One of the most significant advantages of VA loans is the 100% financing, meaning you won’t need to make a down payment when utilizing a VA loan. This can save borrowers a substantial amount of money upfront, making it easier to enter the housing market.
No Private Mortgage Insurance (PMI) Requirement
Unlike conventional loans that require PMI for down payments less than 20%, VA loans do not require PMI. This can save borrowers hundreds or even thousands of dollars per year in mortgage insurance premiums when using a VA loan.
VA Funding Fee
While VA loans offer numerous benefits, there is a one-time funding fee charged to help offset the costs of the program. The funding fee is 2.15% of the total loan amount for first-time users of VA loans and 3.3% for subsequent uses.
This fee can be financed into the VA loan, reducing the out-of-pocket expenses for the borrower. In some cases, borrowers may be exempt from the funding fee, such as those with service-connected disabilities.
Certificate of Eligibility
To apply for a VA loan, borrowers need to obtain a Certificate of Eligibility (COE) from the Department of Veterans Affairs. The COE verifies the borrower’s eligibility for the VA loan program based on their military service or, in some cases, the service of their spouse. The COE can be requested online through the Department of Veterans Affairs website, by mail, or through an approved lender.
Additional Benefits
VA loans also offer competitive interest rates, more lenient credit requirements, and flexible underwriting guidelines compared to conventional loans. Additionally, there are no prepayment penalties, allowing borrowers to pay off their VA loans early without incurring additional fees.
2. Navy Federal Credit Union
Navy Federal Credit Union’s loan program is similar to what the VA offers. It offers a zero down mortgage and no mortgage insurance. And Navy Federal’s funding fee is only 1.75%.
Navy Federal offers a 30-year loan and a 30-year jumbo loan. 30-year loans have a loan limit of $424,100 while jumbo loans are available up to $1 million. However, you will have to be a Navy Federal member to qualify.
3. USDA Loans
If you’re looking to move to a rural area, you might qualify for a USDA loan. The United States Department of Agriculture Housing Program was designed to aid rural development and is aimed at low-income families. USDA loans offer 100% financing with low interest rates.
Here are the eligibility requirements you must meet to qualify for a USDA loan:
When buying a home it must be within the USDA’s boundaries: Although this loan targets rural areas, some suburban areas may still qualify. You can look at this map on the U.S. Department of Agriculture’s website to see if your location falls within the USDA’s geographical boundaries.
Your household income can’t exceed a certain threshold: This applies to everyone living in the household, even if they won’t be listed on the mortgage. For instance, if you have a parent living with you who collects Social Security, this counts toward the gross income of all members of a household. The maximum household income varies by state and county so you can find out if you qualify here.
See also: Best Home Loans for Low-Income Borrowers
4. Lease-Option
A lease-option (also known as rent-to-own) allows you to rent a home with the option to buy it at a predetermined price after a certain period. A portion of your monthly rent may be applied toward the purchase price or down payment. This can be a solid option if you need more time to save for a down payment or improve your credit.
5. Seller Financing
In some cases, the seller may be willing to finance the property for you, allowing you to purchase the home without a traditional mortgage. This arrangement typically requires a contract outlining the terms of the loan, including the interest rate, payment schedule, and any potential penalties.
Seller financing can be a viable option if you have a strong relationship with the seller or if the seller is having difficulty selling the property.
6. Crowdfunding
Crowdfunding is a method where you raise money from multiple individuals, typically through online platforms. You can set up a campaign to raise funds for your down payment or even the entire purchase price. This method may work best if you have a strong network of friends, family, and supporters who are willing to contribute to your home-buying goal.
7. Shared Equity Agreements
Shared equity agreements involve partnering with an investor who provides a portion or all of the down payment in exchange for a percentage of ownership in the property. When the property is sold or refinanced, the investor receives a return on their investment based on the agreed-upon share of equity. This can be an attractive option if you can’t afford a down payment but are willing to share future appreciation in the home’s value.
8. Housing Assistance Programs
There are numerous local, state, and federal housing assistance programs that offer grants, low-interest loans, or other forms of financial support to help eligible individuals purchase a home with no money down. These programs often have specific requirements, such as income limits, property location, or first-time homebuyer status. Be sure to research and apply for any programs for which you might be eligible.
Low Down Payment Loans
If you’re unable to buy a house with no money down but can afford a small down payment, consider these low down payment options that can help make homeownership more accessible.
1. 97% LTV mortgages
97% LTV mortgages is a loan program that is offered to first-time homebuyers by Fannie Mae and Freddie Mac. They require a 3% minimum down payment and private mortgage insurance.
Here are the guidelines for the program:
You’ll need a credit score of at least 680
One of the borrowers must be a first-time homeowner
Manufactured housing isn’t permitted
Gifts, grants, and other funds may be used toward the down payment
2. Federal Housing Administration (FHA) Loans
The Federal Housing Administration (FHA) was established in 1934 to reduce the requirements to qualify for a mortgage. This government-backed mortgage program offers flexible requirements, making it an attractive option for first-time homebuyers.
Here are the guidelines you’ll need to meet to qualify for an FHA loan:
Credit Score Requirements
The minimum credit score required to qualify for an FHA loan is 500. The specific down payment requirements depend on your credit score:
If your credit score is between 500 and 579, you’ll need to make a 10% down payment.
If your credit score is 580 or higher, you’ll have to make a 3.5% down payment.
Seller Contributions
FHA loans allow sellers to contribute up to 6% of the closing costs. This can help reduce the upfront costs for the buyer and make it easier to afford the purchase.
Mortgage Insurance Requirements
Mortgage insurance is required for an FHA loan, protecting the lender in case the borrower defaults on the loan. However, once you build 20% equity in the home, you can refinance to a conventional loan to eliminate the mortgage insurance requirement.
Debt-to-Income Ratios
FHA loans accept high debt-to-income (DTI) ratios, allowing borrowers with significant existing debt to still qualify for a mortgage. The FHA typically requires a maximum DTI of 43%, but exceptions can be made for borrowers with compensating factors, such as substantial savings or a history of making large payments on time.
3. HomeReady Mortgage
The HomeReady mortgage is a Fannie Mae program designed for low-to-moderate-income borrowers. It requires a down payment as low as 3% and offers flexible underwriting guidelines, making it an attractive option for first-time homebuyers or those with limited credit history.
4. Home Possible Mortgage
Similar to the HomeReady mortgage, the Home Possible mortgage is a Freddie Mac program that allows for a down payment as low as 3%. It is designed to help low-to-moderate-income borrowers achieve homeownership and offers flexible underwriting guidelines.
5. State and Local Homebuyer Assistance Programs
Many state and local governments offer homebuyer and down payment assistance programs that provide grants or low-interest loans to help cover down payment and closing costs. These programs typically have income and property location requirements, so be sure to research and apply for any programs for which you might be eligible in your area.
Each of these low down payment mortgage options has its own set of eligibility requirements and potential benefits. Be sure to research and compare these options to determine which one best aligns with your financial situation and home-buying goals.
Preparing for Homeownership
Before jumping into the home buying process, it’s essential to prepare yourself financially and mentally. This section covers tips for improving credit scores, creating a budget, and managing debt to make the home buying process smoother.
Credit Score Improvement Tips
Improving your credit score involves checking your credit report for errors and disputing any inaccuracies. Ensure that you pay your bills on time and reduce outstanding debt as much as possible. Keep credit card balances low, avoid opening new credit accounts, and consider requesting a credit limit increase without increasing your spending.
Creating a Budget
Creating a budget requires tracking your income and expenses to understand your spending habits better. Categorize your expenses and set realistic limits for each category. Allocate funds for saving and investing, including a down payment and emergency fund, and regularly review and adjust your budget as needed.
Managing Debt
Managing your debt effectively involves prioritizing high-interest debt and paying more than the minimum payment. Consider debt consolidation or refinancing options to secure a lower interest rate. Avoid taking on new debt before applying for a mortgage and create a debt repayment plan that you can stick to.
Understanding the Total Cost of Homeownership
Understanding the total cost of homeownership means factoring in property taxes, insurance, maintenance, and utility costs. Estimate homeowners association (HOA) fees if applicable and consider the costs of furnishing and updating the home. Prepare for potential increases in expenses over time, such as property tax hikes.
How to Choose the Right Mortgage Option
With various mortgage options available, it’s crucial to select the one that suits your financial needs and long-term goals. This section discusses factors to consider when choosing a mortgage, such as loan term, interest rates, and mortgage insurance.
Fixed-Rate vs. Adjustable-Rate Mortgages
Fixed-rate mortgages have a consistent interest rate for the loan’s duration, providing stability and predictable monthly payments. In contrast, adjustable-rate mortgages (ARMs) have an initial fixed-rate period followed by periodic rate adjustments, which may result in lower initial payments but potential rate increases over time.
Mortgage Term: 15-Year vs. 30-Year
The mortgage term plays a crucial role in determining the overall cost of your mortgage. 15-year mortgages typically have lower interest rates and allow for faster equity buildup, but require higher monthly payments. 30-year mortgages offer lower monthly payments, but result in more interest paid over the loan’s lifetime.
Mortgage Insurance Considerations
PMI may be required for conventional loans with less than a 20% down payment. Loans backed by the federal government, such as FHA, VA, or USDA loans, may have different insurance requirements or fees.
Assessing Your Long-Term Goals
When choosing a mortgage option, consider how long you plan to live in the home and whether your financial situation or housing needs may change. Evaluate the potential for home value appreciation and the impact on your future financial goals.
Planning Your Next Steps
Assess Your Financial Situation
The amount of money you choose to put toward a down payment is a personal choice. If you feel ready for homeownership but know that a 20% down payment isn’t feasible for you, there are many options available to help you.
The best place to start is by looking at your monthly budget and seeing what you can realistically afford. Use a mortgage calculator to reverse engineer your goal and find your ideal home purchase. Consider factors like property taxes, insurance, and maintenance costs, as well as any debts you currently have.
Get Pre-Approved
Get pre-approved for a mortgage before you start house hunting. This will give you an idea of how much you can afford, and it will show sellers and real estate agents that you’re a serious buyer.
To get pre-approved, you’ll need to provide your lender with documentation such as pay stubs, bank statements, and tax returns. They’ll then assess your credit score and financial history to determine how much they’re willing to lend you.
Shop Around for the Best Mortgage
Shop around for the best mortgage rates and terms. Don’t just settle for the first lender you come across. Compare different lenders and loan programs to find the best fit for your financial situation. Look for competitive interest rates, low fees, and flexible repayment terms.
Work with a Knowledgeable Real Estate Agent
A good real estate agent can help you find a home that fits your needs and budget. They’ll also guide you through the home buying process, making it less stressful and ensuring you don’t make any costly mistakes.
Attend First-Time Homebuyer Classes
Consider attending first-time homebuyer classes or workshops. Many local organizations and government agencies offer educational resources for first-time homebuyers. These classes can help you understand the ins and outs of the home buying process and give you the knowledge you need to make informed decisions.
Save for Unexpected Expenses
Even if you’re able to buy a home with no money down, it’s a good idea to have some savings set aside for unexpected expenses. These might include moving costs, home repairs, or furnishing your new home.
Build an Emergency Fund
In addition to saving for unexpected expenses, it’s also important to have an emergency fund in place. This should be enough to cover three to six months’ worth of living expenses in case you lose your job or face another financial emergency.
Be Patient and Stay Disciplined
Home buying is a complex process, and it can take time to find the right home and secure financing. Stay focused on your goals, be disciplined with your spending, and remember that homeownership is a long-term investment.
Conclusion
Buying a home with no money down is possible, but it may not be the best choice for everyone. Consider your financial situation, your long-term goals, and the various mortgage options available to you before deciding on a zero down payment mortgage. With careful planning and preparation, you can make your dream of homeownership a reality, even if you don’t have a large down payment saved up.
Lately, new home sales have surged as existing housing supply continues to be hard to come by.
This is partially because mortgage rates more than doubled in less than two years, effectively locking in existing homeowners.
With many of these homeowners unwilling to budge, home builders have gained a lot more market share.
After all, they need to move their inventory, and there isn’t a borrower living in the property with a low interest rate to worry about.
To boost sales in spite of high rates, many builders have offered impressive mortgage rate deals that everyday lenders just can’t seem to match. Does this mean there’s no need to look anywhere else?
Most Home Builders Have Their Own Financing Department
Despite being in the business of building homes, many home builders also operate financing divisions.
This means they are also fully-fledged mortgage lenders with the ability to offer home loans on the properties they sell.
And several of them are quite large. For example, D.R. Horton’s DHI Mortgage is a top-25 mortgage lender in the nation. The same goes for Lennar Mortgage.
Both companies originate tens of billions of dollars in mortgages annually to their home buyer customers.
On top of this, they also operate title/escrow companies and insurance agencies. This means a prospective home buyer can do one-stop shopping.
Convenience aside, these builder lenders are also able to offer aggressive financing offers that outside lenders often can’t beat.
So if you’re buying a new home, why look anywhere else?
It’s Wise to Speak with More Than One Mortgage Lender
Even if your home builder doubles as a lender, it’s always prudent to get more than a single mortgage rate quote.
There are studies that prove those who obtain 2-3 quotes (or even more) wind up with a lower rate and monthly savings for years to come.
So even if the home builder’s lender is offering you a spectacular deal, it’s still beneficial to shop your rate.
Sure, you might speak with a third-party lender (or two) and find that they just can’t come close. But if you don’t take the time to do that, you won’t know what else is out there.
In addition, having other quotes in hand allows you to negotiate your mortgage rate with the home builder.
If the builder knows you haven’t looked elsewhere, they might not offer you their lowest rate. With other offers in hand, their deal might get better.
You can also learn a thing or two by speaking to different lenders, mortgage brokers, and so on.
This can make you a more confident home buyer who knows the ins and outs of the process better than someone being led by just one company.
Home Builder Mortgage Rates Are Typically Hard to Beat
Now, from what I’ve seen lately, home builder mortgage rates are hard to beat. They’re buying down their rates aggressively to draw in buyers.
They’re also doing this out of necessity because home prices are so high. This allows more borrowers to qualify for a mortgage and keep their DTI ratio below maximum thresholds.
Remember, they have to move their inventory. Otherwise it sits and costs them money. At the same time, they don’t want to lower their prices.
If they sell homes for less, it could hurt appraised values on subsequent home sales. So it’s more beneficial for them to offer you a lower mortgage rate instead.
This allows them to keep the purchase price intact, while providing you monthly payment relief.
It’s a win-win for both home buyer and home seller. And it makes it very difficult for outside lenders to compete.
They’re able to sell the home more easily and win the loan at the same time.
Lately, home builders have offered both temporary and permanent buydowns, or even a combination of both.
For example, I’ve seen home builder lenders offer 30-year fixed rates as low as 5.5%, with a temporary 2-1 buydown for the first two years.
This means a home buyer gets a rate of 3.5% in year one, 4.5% in year two, and 5.5% for the remainder of the loan term.
Chances are an unaffiliated mortgage lender just won’t be able to compete.
Consider Using Credits from a Home Seller to Buy Down Your Rate
One strategy you can employ if you don’t want to buy a new home is to ask for a credit from the seller.
Known as seller concessions, these can be used to buy down the mortgage rate to something that resembles what new home builders are offering.
Instead of asking for a home price reduction, you can use these credits to pay discount points, which in turn lower the mortgage rate.
This is essentially what the home builder lenders are doing, and there’s really no reason it can’t be done on an existing home.
If you want to go a step further, you could also ask for a credit fro the real estate agent as well.
This may allow you to snag a lower mortgage rate and reduce your closing costs at the same time.
In the end, you might have a deal that resembles that of the builder’s, but on an existing home.
While home builders like to refer to existing homes as “used homes,” they are often located in more desirable, central locations. And they might be bigger too.
As such, it can be in your best interest to purchase a used home as opposed to a newly-built one.
So if the financing is holding you back, the use of seller concessions can make the deal pencil.
There Are Other Advantages to Using the Builder’s Mortgage Lender Beyond Price
While I’ve mostly focused on price, or mortgage rates specifically, there are other perks to using the builder’s captive lender.
For one, they are affiliated businesses, so communication should be strong. There should be a direct line between builder and lender throughout the loan process.
They should know each other’s timelines and processes in and out, which ostensibly means fewer hiccups and issues.
Conversely, an outside lender could have difficulty getting in touch with the builder to check status. And this could result in unnecessary delays and problems.
Of course, that’s how it’s supposed to work. In reality, this might not be the case given the many mixed reviews I’ve come across from builder lenders.
Despite their close relationship with the builder, somehow lots of customers still walk away upset. But this could just boil down to home buying being very emotional in general.
And it could be even worse when using an outside lender if the two companies don’t cooperate well.
In summary, if buying a new home you’ll likely be pushed to use their in-house lender. You are not required to do so. You can use any lender, bank, credit union, or broker you choose.
But there are certainly perks, including mortgage rate specials (the #1 reason to use them) and perhaps the convenience of one-stop shopping.
However, even if you like what the builder’s lender has to offer, you should still take the time to speak with outside lenders and gather additional quotes.
Pros and Cons of Using the Home Builder’s Lender
The Pros
The convenience of one-stop shopping
Get your new home and mortgage all in one place
Affiliated lender might communicate better with the builder
Can offer special mortgage rates to home buyer customers
Mortgage process is short-lived, rate stays with you for decades potentially
Long rate locks that match the longer home buying/building process
Often operate their own title/escrow and insurance agencies as well
The Cons
Lots of mixed/negative reviews for home builder lenders
Mortgage rate specials are often limited to certain homes
May be enticed to buy in an area because the financing alone
California-based Pennymac Financial Services’s broker division, Pennymac TPO,launched a home equity loan product as tappable home equity nears its 2022 peak.
“Pennymac’s broker partners can now offer their clients a home equity loan as a second lien solution to access more cash, while still preserving the low interest rate of their first mortgage,” the company said.
A home equity loan — also known as a second mortgage — enables a homeowner to borrow money by leveraging equity in a home. The borrower receives the loan amount in one lump sum, which is paid back in monthly payments, typically for a term of up to 30 years.
The product is eligible only for primary residences with fixed-rate term structures of 10, 15, 20 or 30 years.
Currently available in 11 states, the minimum loan amount is $50,000 and the maximum is $500,000 with an 85% loan-to-value (LTV).
Pennymac’s home equity loan for brokers comes as U.S. homeowners sit on some $16.4 trillion of home equity in the third quarter of 2023. Tappable equity – the amount that can be accessed after retaining a 20% equity stake – stood at $10.6 trillion, nearing the peak in 2022, according to ICE Mortgage Technology‘s mortgage monitor report.
While cash-out refinancing was a popular way to access accumulated home equity when mortgage rates were lower, that’s a lot less appealing with rates over 7%.
Even with higher levels of home equity, borrowers are more likely to take out a second-lien mortgage rather than lose a low rate on their first mortgage through a cash-out refi.
Pennymac reported a total of $19 billion in total acquisitions and originations to date in the fourth quarter, including $16.3 billion in correspondent acquisitions; $1.6 billion in broker direct originations; and $600 million in consumer direct originations, according to its latest 8-K filing with the U.S. Securities and Exchange Commission (SEC) on Monday.
Anyone eyeing mortgage rates, which reached above 8% in October, can be excused for longing for the pandemic lows of sub-3% mortgages. But it’s unlikely those rock-bottom rates will return anytime soon, according to Mark Zandi, chief economist at Moody’s Analytics. Instead, the veteran market watcher expects rates to hover at roughly double that level in the near future.
“Everybody should get used to 5.50% to 6%, because that’s where mortgage rates are going to settle in, [in the] long run,” Zandi told CNBCon Monday. Mortgage rates tend to trail the 10-year Treasury yield, which he suspects will hover around 4% to 4.50%; that generally puts mortgage rates at that 5.5% to 6% he’s expecting.
Asked to predict the magic mortgage rate that will have inventory flooding back into the housing market, Zandi said that obviously a 5% rate is better than 6%, but the long-term number will likely be somewhere in between.
In recent weeks, mortgage rates have fallen from their October highs, with the average 30-year fixed rate currently at 7.30%. But in today’s somewhat frozen housing market, that’s barely a start. With a 6% mortgage rate, things start to thaw as would-be buyers and sellers enter the market, but Zandi doesn’t think home sales will get back anywhere near levels seen during the pandemic, before the Federal Reserve began its interest rate hike cycle to lower inflation. Getting closer to that 5% mortgage rate would trigger more activity, he added.
“The other thing that’s got to happen here, obviously, is we do need to see some weakness in house prices,” Zandi added. “If house prices don’t come [down] to any degree, we’re going to have to see even lower mortgage rates to get sales up.”
Some forecasts, like that of Goldman Sachs, suggest home prices will continue to increase next year. So far, prices aren’t letting up; the national S&P Case-Shiller house price index increased 3.9% on an annual basis in September, according to figures released on Tuesday.
Meanwhile, existing home sales are at their slowest pace since 2010, when the housing market was reeling in the aftermath of the Great Financial Crisis. That’s largely because of the so-called lock-in effect, which keeps homeowners with low mortgage rates from selling their homes—constraining both buyers and sellers. New home sales, on the other hand, have outperformed existing home sales because homebuilders can offer incentives, like mortgage rate buydowns. Still, higher mortgage rates are curbing demand even there, with new home sales falling more than expected in October.
“Most of the weakness in sales is on the existing side,” Zandi explained. “Homeowners are much more reluctant to cut prices … Builders are doing what it takes to move those homes.”
There is some relief pushing its way through the housing market, and that’s on the rental side.
“Rents have gone flat to down, particularly at the high end of the market,” he said. “These big multifamily towers are going up in the big urban centers in the Northeast, Chicago, on the West Coast, and that’s putting downward pressure on rent—and, I think, is having some impact on new house prices, and at the high end of single-family housing markets.”
Realtor.com’s October rental report released on Tuesday showed median rent for studios and one- and two-bedrooms across the top 50 metro areas in the U.S. continues to trail its 2022 levels, experiencing a year-over-year decline for the sixth month in a row. As Zandi mentioned, a lot of that has to do with supply. There was a substantial increase in new multifamily construction in 2022, and that resulted in an uptick in new multifamily completions in 2023, “which significantly augmented the rental supply and exerted downward pressure on rental prices” this year, the report found.
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