Dear Penny: Can I Buy My 14-Year-Old Her Dream Home on My $45K Salary?

Dear Penny,

I am a 37-year-old mail carrier and make $45,000 a year. With overtime, I hit around $50,000. My salary increases slowly every year until I max out at $71,000, which takes 13 years to reach, and I’m only two years in. I live in Massachusetts which is incredibly expensive and not livable on my salary. 

I have a daughter and have been promising her a house for a few years now. She’s 14. I’d like to buy one before she’s 15, or at least before 16. At the moment, it’s not possible. 

I know that “get rich quick” schemes don’t work. But there has to be something! 

I’ll be honest: I’m not exactly talented or skilled at anything. I am a former personal trainer, but that path isn’t lucrative unless you’re training sport teams. I’ve thought about teaching fitness online, but due to my job, I’d only be available after 5 p.m. most nights. Plus, it’s a very tricky venture. 

I’ve tried to learn how to make apps, but I’m technology-illiterate. I’ve invested a few hundred in crypto and stock, but those aren’t exactly quick ways to build income. 

Also, I should mention that I have about $30,000 saved up in the bank. It’s supposed to be for a house. But now I know I could use that somehow to invest in making more money. I’m scared to lose the money, and I have zero idea of what to invest it in. 

With that said, what can I do to drastically increase my income within a six-month period? You constantly see everyone saying, “Start your own business” or “Start an online business.” OK, but what!? Everyone makes it sound like the easiest thing in the world. I don’t have products to sell.

What can I do to start making a second stream of income and give my daughter her dream of a house?


Dear P.,

If I knew of ways to get rich quickly, I’d be sunning myself on a yacht in Turks and Caicos right now instead of writing this column. Or at the very least, I’d already be a homeowner. But like you, I’m grappling with the fact that homeownership feels ridiculously out of reach right now, even compared to a couple of years ago.

I think you need to be honest with your daughter. Tell her that home prices and living costs are rising way faster than your salary. That means you’ll have to save longer to reach your goal. You also may need to readjust your expectations for what your dream home may look like.

The fact that you’ve been able to save $30,000 on a $45,000 salary tells me you’ve done a good job of budgeting your money. It really doesn’t take talent or skill to be a successful investor.

What it takes is patience. The most surefire way to build wealth is to consistently invest a small amount each month in an S&P 500 index fund. Over long periods of time, the S&P 500 has always delivered positive returns. Any “opportunity” that allows you to amass a fast fortune is highly risky at best. In any such venture, you’re a lot more likely to lose everything than you are to double or triple your money.

That said, you typically don’t want to invest money in the stock market for shorter-term goals like buying a home. Instead of trying to drastically increase your income over a six-month period, aim for a more realistic goal. How about if you start with the goal of earning an extra $100 a week?

That seems doable if you’re able to make a go of online personal training — even if you’re only available a few evenings a week. If that’s not viable, look for a side gig that’s flexible and doesn’t require a big upfront investment, like delivering groceries for Instacart, driving Uber or doing small jobs on Taskrabbit. Once you’re consistently earning $100 a week, then aim a bit higher.

Put the extra cash you earn somewhere safe, like a savings account or CD. Meanwhile, check with a local lender about whether you qualify for down payment assistance.

Your daughter may be disappointed that you can’t buy a home as quickly as she’d like. But you’d be hard-pressed to find any teenager who isn’t disappointed with their parents sometimes. I suspect that at least part of her eagerness for you to buy a home reflects the FOMO of the adults around her.

Use this as an opportunity to teach your daughter a lesson in patience and persistence. Even if she’s not happy that you can’t buy a house right away, be the adult. Any home purchase you make will be determined by what you can afford, not what your 14-year-old wants.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.

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5 Common Reasons for Being Denied Homeowners Insurance

Buying a home is a complicated process, especially for first-time homebuyers.

Yet, purchasing a property is one of the landmark moments in many peoples’ lives, and a home is often a family’s most valuable asset. Therefore, it’s incredibly important to make sure that it has the proper insurance coverage. Some homes, however, can be more difficult to get homeowners insurance for than others. Being denied homeowners insurance is likely to scuttle the deal with a mortgage company.

There are several reasons why obtaining homeowners insurance can be difficult, from where the home is located to who occupies it and what it is being used for. In addition, issues like flooding, wildfires, construction, and renters can all factor into whether or not you can receive homeowners insurance coverage.

5 Common Reasons Insurance Companies Deny a House

This article will lists five of the major factors why obtaining a policy can be difficult (or impossible) for certain houses and how to prevent or resolve these issues so that you can have success with an insurance provider.

1. The House Is Structurally Unusual

The first major category and the hardest to resolve problems for home insurance coverage relate to homes that are structurally unusual. Structural issues involve questions of what type of home it is or what it is made out of. Alternative homes are becoming increasingly popular as buyers seek to find ways around high home prices.

However, homes made of unconventional materials or unusual construction fall under this category and create hurdles to getting a home insurance policy. It includes houses like barndominiums, or barndos, which are barns that have been converted into a residential home. Other unusual home construction includes cloth or canvas homes like yurts, A-frames, dome houses, and even mobile homes and trailers. Tiny homes can also fall under this category making the hunt to find coverage more painstaking.

For some of these types of homes, there are special policies that cover them. In other cases, you may have to find the right homeowners’ insurance company that will underwrite a policy because of the house’s unique status.

Older homes, properties under construction, and homes with severe flaws that need fixing may also be difficult to insure. Typically, houses that are over 50 years old have to be updated by having rewiring, plumbing, and other updates done. Houses under construction need a special type of insurance called “course of construction” insurance. Sometimes this is called builder’s risk insurance.

Remember, the purpose of purchasing homeowners insurance is to mitigate risk. Married couples may find they also need joint life insurance as additional protection.

It is good to be aware of these issues and to make sure to discuss them with a real estate agent or better yet, talk to mortgage lenders or an insurance company before you make an offer. Ensuring you can obtain insurance is as important as having your financing in order.

2. The House Is in a Risky Location

It’s hard enough to find a home in 2022, but it’s important you find a home in the right place. Some homes may be located in an area that puts them at a particular type of risk, like hurricanes, flooding, and forest fires. Houses in dense bush or forest areas may be deemed too high-risk as well. Houses in a flood zone can often only buy insurance if they purchase a separate flood policy.

Location, location, location has always been the driving mantra when looking for a home but that usually had to do with its proximity to work and schools, not so much about insurance requirements. There are now other factors to thinking about a home’s location in the house hunting process.

Finally, if your home is inaccessible or difficult to access, you may have trouble becoming insured. Houses that are difficult for emergency services, like police and fire, to get to may have higher premiums or be denied homeowners insurance.

Ensuring you select an area without some of these risk factors will make acquiring homeowners insurance far easier than elsewhere.

3. The House Is Being Used for a Business

Third, some buyers forget to consider usage issues when purchasing their homes. Some types of uses will not be covered under a homeowners insurance policy or may result in you being denied coverage.

Special uses include things like businesses, such as daycare, or even farming and ranching. If you are planning on incorporating an LLC and running a business out of your home, then it’s important to make sure that your homeowners’ policy permits this use. You certainly don’t want to find this out by getting denied insurance claims after the fact.

Working from home for another company is not likely to affect your ability to get a policy, especially if you are sitting at a computer most of the day and clients are not regularly coming to the house.

Agricultural business uses that occur on a property can also make you ineligible for standard homeowners insurance. Other home-based businesses, like caring for others in your home, require their own type of insurance. Home daycare insurance is required if you plan to run a daycare out of your home and a reputable insurance company can help you with this.

4. The House (Or Part of It) Will be Rented

Another usage issue for the insurance company is whether or not you will rent out your home. Renting is a great way to earn additional income, especially now as national rent prices are hitting all-time highs.

Rental issues encompass long-term renting as well as short-term renting, like listing your home on websites like Vrbo or Airbnb. It’s critical to double-check your property insurance policy before you rent out your home — or even a bedroom — because it may end up voiding your coverage in many cases.

5. The House Has Maintenance Issues

The final set of issues is related to how you occupy your home. Most homeowners insurance policies require the home to be “owner-occupied.” This means that you have to live in your home. Periods of vacancy or living elsewhere, like in another home, can all potentially undermine your efforts to acquire or maintain homeowners insurance.

Additionally, it is important to be mindful of how you live in your home. A frequent issue is a home that does not show “pride of ownership.” It means that the property is not being maintained. Hoarding is a common issue in this category, but so is failing to maintain your lawn and landscaping. or failing to repair property damage caused by natural disasters. These things represent a risk to insurers.

Other issues may relate to keeping the house in good repair. For example, if your property has broken windows, a collapsing porch, or shabby paint, these factors may all contribute to whether or not you can acquire an insurance policy. Even if the lack of maintenance is a product of the previous homeowners, you could bear the consequences.

As the price of gold slips to $1,803 per ounce, it’s important to think about how you protect the value of your home as an investment. Keeping it in good condition and making home improvements plus ensuring you have the right insurance are both steps in the right direction.

Analyze Your Situation and Find the Right Insurance Company

These are just the main considerations to keep in mind when trying to find a home that will be covered by homeowners insurance. Remember that if one company does not write you a policy, another might.

More often than not, avoiding unique homes, older homes, properties in potentially dangerous areas, and houses that require updating is one of the best ways to make sure you can get homeowners insurance.

New York contributor Kiara Taylor specializes in financial literacy and financial technology subjects. She is a corporate financial analyst who also leads a group affiliated with University of Cincinnati that teaches financial literacy to Black students and helps them secure employment and internships.


Let’s Calculate: How Much House Can I Afford?

Closing costs cover a litany of things such as lawyers and title fees and taxes on the transaction.
Mortgage Term: 30 years
Interest rate: This is the amount charged by your lender to finance your home loan as a percentage of your loan balance. Mortgage loans use compound interest, which is calculated every month based on the remaining balance of the loan. Obviously, the lower the interest rate, the lower your mortgage payment, and the less you’ll pay over the length of the loan.
In general, your salary refers to the full amount you earn (your gross income) rather than the amount you take home (your net pay). There are several deductions taken out of your paychecks for things like taxes, insurance and retirement contributions, depending on your workplace.

Calculate Your Housing Budget

And nothing down at all would result in a ,381 monthly payment, plus for PMI. Total: ,448.

  • Your monthly income and take-home pay.
  • The size and terms of the mortgage loan you’ll take out.
  • The size of your down payment.
  • The ongoing costs of homeownership.

How Much Money Do You Actually Take Home?

Monthly Taxes: 0
Principal and Interest: 2/month
When calculating for budgeting purposes, you’ll use your net monthly pay – the amount on your paycheck after taxes and withholdings. That’s your consumer DTI. Source:
Interest rate: 3.8%
Adjustable rate: If you opt for an adjustable-rate mortgage, then after a set period of time with a fixed rate, your interest rate can change if the market does. There are very few situations in which this is a better option than a fixed-rate loan.

How Lenders Evaluate Your Income and Monthly Payments

Interest rate: 2.9%
Monthly Insurance:
Property Taxes: Cities and counties set their own property tax rate for services like road upkeep, libraries and parks. Annual taxes are calculated based on the value of your house. Many lenders pay the taxes for you, then roll them into your monthly loan payment.
Here’s how that can affect your monthly payment:
So what’s a good DTI? Most experts agree 35% is a healthy ratio, meaning your debts are under control and you’re a good candidate for a loan. For mortgages specifically, 43% is generally considered the upper limit for getting approved.
Regardless, it’s a good approximation, and if you divide it by 12, you can get a sense of how much it will add to your monthly payment.

Determine How Much Down Payment You Can Make

Robert Bruce is a senior writer at The Penny Hoarder.
Scenario 3: A standard 30-year mortgage with no down payment.
Monthly Taxes: 0
Buying a home is the biggest financial decision many people ever make. So it’s not a decision to be taken lightly.
DTI = Monthly debt obligations/Monthly pay
Homeowners Insurance: You should never go without homeowners insurance. It protects your home and possessions from disasters, damage and theft, and provides liability protection for you in case of an accident on your property. If you have a fire in your house, your insurance will pay to repair it and may even pay for your housing costs elsewhere while your home is being fixed.
Monthly Insurance:
Home repairs and maintenance: A good rule of thumb is to save about 1% to 2% of your home’s value each year for future maintenance and costs for things like the HVAC, roof, major appliances and so on. For a 0,000 home, this is about ,000 to ,000 per year, which comes to about 7 to 3 per month.
When you think about how much house you can afford, you should think about your net pay, because that’s the real number you’re dealing with.
Interest rate: 3.8%
A 10% down payment would make your monthly payment ,243 per month, plus at least another a month for PMI, for a total of ,310.

How to Line Up Your Financing

Monthly PMI: Monthly PMI: 8
Knowing your take-home pay will help give you an idea about what size monthly house payment you’re comfortable with. You’ll need to factor in other debt payments, like a car loan or student loan payments. You’ll also need to think about other variable expenses, like how much you spend on entertainment or eating out, to see how much breathing room you have in your monthly budget.

Understanding How Your Mortgage Works

(Keep in mind that all of those figures don’t account for property taxes or homeowner’s insurance.)
So let’s break it all down into four different scenarios for a couple who has an annual gross income of 0,000 with a monthly take-home of ,660. Twenty-five percent of their monthly income comes to ,415, so that’s how much they have to work with on a monthly mortgage payment.
Monthly PMI: In addition to the standard 30-year and 15-year loans, you might have other options.
While it can be tempting to immediately start browsing the listings, the first step in this process is knowing your housing budget. To figure that out, take these into consideration:

The Difference Between Adjustable and Fixed Rates

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Total Monthly Payment: ,265
Term: The loan term is how long it will take you to pay back both the principal and the interest. The average term of a U.S. mortgage is 30 years, but you can also get 20- and 15-year loans — though those will come with higher monthly payments since you’re paying the loan back in less time.

FHA Loans, VA Loans and USDA Loans

You’ll also need to think about other monthly expenses, such as HOA fees, lawn care, pest control and home security, when factoring in the total monthly costs of your home.
But to really reduce your monthly payments, you should aim for at least a 20% down payment. By doing that, you won’t have to pay for private mortgage insurance, or PMI. Mortgage insurance is required by most lenders as a protection against you defaulting on the loan. It typically costs between 0.5% and 1% of your entire mortgage value, and it’s added onto your monthly payments.
The more your down payment, the less you’ll have to borrow. With that in mind, most experts recommend 10% as a minimum down payment.
When you shop for a mortgage loan, you’ll find several different types. Here’s what to look for in fixed and adjustable rate loans as you determine how much house you can afford:

Closing Costs: How They Work and Who Pays Them

Scenario 4: A standard 15-year mortgage with no down payment.
When you’re looking for a new home, you will generally see an annual tax rate included on the listing. That number is just an estimate and can change each year when your city or county sets new tax rates.
Ready to stop worrying about money?

Keep in Mind the Ongoing Costs of Homeownership

USDA Loans: These loans are backed by the U.S. Department of Agriculture and are mainly for rural borrowers who can’t qualify for traditional loans. No down payment is required, although there are income and property value limits.
Interest rate: 2.9%
Total Monthly Payment: ,224
Let’s say you put a 20% down payment on a 0,000 house. That leaves your total loan amount at 0,000. On a 15-year loan with a 3% interest rate, your monthly payment (principal and interest) would be ,105.
Like the down payment, they often need to be paid in cash, and will cost between 2% and 5% of the price of the home. So if you’re buying a 0,000 home, you can expect paying somewhere in the neighborhood of ,000 to ,000 in closing costs.
Principal and Interest: ,371/month
Monthly Insurance:
So, by making a 20% down payment, you’re financing less, which results in long-term savings on interest, but also keeps your monthly payment down by exempting you from paying mortgage insurance.

A calculator on a phone is held in front the door of house.
Chris Zuppa and Sherman Zent/The Penny Hoarder

How Much House Can You Afford? 4 Scenarios

The first order of business when making a budget is to determine how much of your income is available to you.
Principal and Interest: ,371/month
Monthly Taxes: 0
They’ve locked in on buying a beautiful home for 0,000 with annual property taxes of ,000 and insurance of ,000.
They’ve locked in on buying a beautiful home for 0,000 with annual property taxes of ,000 and insurance of ,000.
Down Payment: And don’t forget — an emergency fund will be more important than ever when you own a home. Financial experts advise having at least three to six months worth of expenses saved up so you can cover your bills in the event of a job loss or other crisis.
And don’t forget — an emergency fund will be more important than ever when you own a home. Financial experts advise having at least three to six months worth of expenses saved up so you can cover your bills in the event of a job loss or other crisis.
You’ll be more attractive to lenders if you can prove at least two years of continuous employment, have a good credit history over the last 12 months, and have enough funds on hand to afford a good down payment.
VA Loans: These loans are available for military service members and veterans and are backed by the Department of Veteran Affairs. VA loans require no down payment or mortgage insurance. However, these loans do require a VA funding fee that changes annually.
Mortgage Term: 15 years
Down Payment: ,000 (20%)
Mortgage Term: 30 years <!–


Your monthly mortgage payment is the installment you pay every month for the length of the loan, determined by the loan term, interest rate and principal:

7-Step Guide to Home Maintenance Will Help You Save Money

If you’re ready to dive into the world of home ownership or move into a new home, don’t get so caught up in the excitement that you make a big mistake.

Ready to stop worrying about money?
Your house can’t talk but it can send you messages. If it’s crying for help, ignoring the messge could cost you money later.
Maintenance is usually cheaper than repairs, so keeping up with checkups around your home can help you avoid a repair bill later. It’s smart to figure out how much to budget for home maintenance. Here are the things you should consider:

7-Step Home Maintenance Plan for 2022

When deciding to DIY or hire a pro, ask yourself how much experience you really have. Things often look easier to do on TV or in a YouTube video than they really are.
You can save on other utility bills, too, with attention to your consumption habits. For instance, some simple reductions in water use could mean saving money on water bills.

1. Don’t Ignore Your House’s Cries For Help

Sometimes it’s necessary to call in the pros when tackling home maintenance or home improvement projects.
All homeowners policies are not created equal, and they can also vary widely based on where you live and in what kind of dwelling. It’s important to understand when it can help you out — and when it can’t. Here’s an article that will help you learn what home insurance covers.

  1. Anything involving water. A small wet spot can be the sign of a leak somewhere. Eventually that leak will grow and possibly destroy floors, walls, furniture, and more. A leaky faucet, running toilet, or dripping water heater can cost more in water bills than the repair would.
  2. Anything involving electricity. Flickering lights, bad outlets or switches, tripping breakers, and GFI outlets that won’t reset can be signs of electrical problems, which could lead to fires.
  3. Pests. Rodents and bugs can do lots of damage if left alone.
  4. Peeling caulk and paint. Once the protective caulk or paint is gone, water gets in and causes damage.
  5. Broken or malfunctioning HVAC. Problems with your heating, ventilation and air conditioning (HVAC) could means you’re too sweaty or too chilly. But temperature swings inside the home can lead to problems. Additional humidity could cause mold and cold temperatures could cause pipes to freeze.
  6. Cracks. Small cracks are normal. Big or changing cracks aren’t.
  7. Smoke alarm and carbon monoxide detectors. Working detectors save lives. Change the batteries regularly.
  8. Darkening ceilings near fireplaces. Dark places or a sooty smell can mean the fireplace isn’t drafting properly, which can let deadly gasses inside.

2. Keep Up With Home Maintenance

You can save some pennies with some home maintenance and repair tips we Penny Hoarders learned in 2021. We’ve gathered them into this seven-step guide to home maintenance and repairs.

  • Prevent moisture problems. Water can be evil when it shows up in places it shouldn’t. Routinely check your gutters, sump pump, water heater, faucets, drains, septic tanks, and irrigation systems.
  • Maintain appliances and equipment. Do annual HVAC maintenance and change filters regularly. Check the connections in the laundry room and clean the dryer vent. Change filters and clean the range hood in the kitchen.
  • Keep up the exterior. Keep dirt away from the house so water can drain correctly. Inspect the paint and siding to make sure they’re looking good and doing their job of protecting your house. Maintain caulk around openings. Inspect chimneys. Service the electric garage door.

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3. Know When To DIY and When To Use a Pro

Financial experts recommend putting away about 0 a month for home maintenance. That way, you’ll have ,400 a year, which can hopefully cover the maintenance and possible repairs.
Are you among the people planning home maintenance and repair projects? If so, chances are you don’t have a huge stash of cash sitting in your home maintenance budget.
Judging by the amount we’re spending on home maintenance and remodeling, we must be noticing a lot of flaws.
A professional handyperson can handle a wide variety of jobs like caulking, painting, gutter cleaning, patching drywall, installing tile, hanging objects, and installing fixtures. Making a list of what you want done can be helpful so you can prioritize if you only have a handyperson hired for a few hours. .

4. Get Bids for Home Projects

Do you really want to DIY and regret it?
Some simple things can help you get a lower electric bill each month.
Disasters or repairs can ruin your budget. Homeowners insurance can help protect your property and belongings from damage and losses. It also provides liability coverage.

  • Learn about the project by watching videos. This will help you know if someone’s time estimate seems way off.
  • Ask for recommendations. Neighbors, friends, and family often know good people who do good work. Also, real estate agents will be able to tell you who they recommend to get homes ready for sale.
  • Websites and apps make it easy to research who can do what you need. Some even allow you to post a request for someone to bid on your project.
  • Read reviews before you hire someone.

Don’t ignore home repairs, and you’ll save in the long run. Here are eight you can’t afford to put off.

A man hangs his clothes out to dry on a clothesline in his backyard.
Getty Images

5. Do What You Can to Lower Electric Bills

If you need professional help for your home, getting bids on home projects can save you lots of money and time.

  • Seal cracks and leaks.
  • Upgrade to more energy-efficient equipment.
  • Use fans.
  • Air-dry laundry as much as possible.
  • Change to LED lighting.

Experts say to avoid DIYing anything involving electricity (especially 220 circuits) or water unless you have experience. Things can go bad very quickly.

6. Know What Your Home Insurance Covers

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.
When looking for the right expert for your home project:
Inspectors look at more than 1,000 things throughout a house. In general, those things are:

7. Home Buyers: Don’t Skip Home Inspections

Following this eight-point home inspection checklist could end up throwing cold water on your plans, but it will also prevent buyer’s remorse if you’ve fallen in love with a money pit.
For many people, having to spend lots of time at home can highlight the flaws in their living situations. Either we need to do a bit of remodeling to bring things up to date or we need some maintenance to keep things running smoothly.
Don’t be afraid to ask questions and discuss exactly what the estimate includes and what the payment terms are. It’s your home.

  • Structural components
  • Roof
  • Attic and insulation
  • HVAC systems
  • Plumbing and water
  • Electrical and wiring
  • Outside the house
  • Appliances

In today’s crazy real estate market, forgoing the inspection could make your offer more attractive to the seller, but the average inspection cost of 0 could save you thousands of dollars down the line.
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But it isn’t always easy to know what is covered and what isn’t. And when is it worthwhile to file a claim?

Homeowners — Stop Wasting $3,600/Year. Helps People Save Thousands

Buying a house is expensive. Like, so expensive. Between down payments, taxes, insurance and more, getting your name on a deed likely costs more than anything else in your life.

And while it no doubt will continue to be your biggest monthly payment, people are still overpaying just to have their own roof over their heads — sometimes by as much as $3,600 a year.

But a website called can help you put that cash back into your pocket. Whether you’re refinancing or buying a new home, it can save you an average of $300 a month.

See How Much You Could be Saving on Your Mortgage

Homebuyers and homeowners can get some of the lowest interest rates available — as low as 1.997% for a 15 year fixed refinance — from some of the most trusted lenders in the country on

That comes out to an average savings of $200 to $300 a month — sometimes more. That’s thousands of dollars to use toward upgrading your home, padding your emergency fund or even taking a well deserved vacation after only seeing the inside of your home for the last few years. works directly with lenders across the country. That means they know exactly what the lenders need — and what they don’t. In other words, home buyers and owners can simply get a quote for a mortgage or refinance (cash outs, too) in just minutes.

Just fill out a quick one-minute form, including your email and phone number, and will match you with multiple lending options side-by-side. You’ll be able to see the rates, APRs and monthly payments for different types of loans.

Plus, you can see if the lender will be charging any fees. Some lenders use fancy terms like “origination” or “processing” to disguise fees that aren’t necessary. shows how much — if any — a lender would charge, sometimes saving you more than $1,000.

Rates are some of the lowest they have ever been, so if you’re buying a home or looking to refinance yours, makes it easy to compare your options.

It takes just one minute to answer some questions and see how much money you could be saving on your mortgage.

Kari Faber is a staff writer at The Penny Hoarder. 




Dear Penny: Should I Be Mad That My Husband Left Me Off the Mortgage?

Dear Penny,
I hope this dilemma has prompted you to set some ground rules about how the two of you make decisions about money. Financing a purchase in one spouse’s name makes sense in some circumstances. But both spouses need to be comfortable with that arrangement.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
But you didn’t ask how angry you should be at your husband. Your question is: How mad should I be about the repercussions?

Of course, this is a decision that spouses should make together. I trust that you’ve asked your husband why he didn’t talk this through with you and that you’re satisfied with the answer.
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Aside from being mad that he made the decision unilaterally, how mad should I be about the repercussions of this decision? Rather, what are the pros and cons about not being named on our home loan?

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Sometimes a married couple can save money by only financing a home purchase in one spouse’s name. This typically occurs when one spouse has a low credit score or has substantial debt that’s in their name only. Obtaining a mortgage in the more creditworthy spouse’s name only could result in a lower interest rate, provided that they qualify based on their income alone.
I don’t see any dire consequences for you as the result of his decision. Theoretically, this could even work in your favor. Because you’re on the deed of the house, you own 50%. But because you’re not on the mortgage, you’re not liable for this debt.
Realistically, though, I’m not sure how much that matters. Since the two of you bought the house while married, it would probably be divided up in court with other assets and debts you acquired during the marriage should the two of you divorce.
The second is that even if you’re both contributing toward mortgage payments, he’s the only one who’s on record as making those payments in the eyes of the credit bureaus. If you’re trying to improve your credit, you’ll have to do so with an account that has your name on it.
Otherwise, I can think of two possible drawbacks for you. The first is that you’ll probably need to go through your husband to communicate with the lender since only his name is on the account. He should give you his log-in credentials so you can confirm that payments are being made on time.
Regardless, it’s essential that you maintain a credit history in your own name. If you don’t already have one, you should open a credit card in your name and pay off the balance in full each month.
If not having your name on the mortgage bothers you, you could always look into refinancing it in both of your names after at least six months have passed. But that will be up to the bank’s discretion. Since your name is on the deed, I’m assuming your husband went the solo route for the interest savings. I doubt you’d want to refinance if it results in paying more — and keep in mind that by the time you’re able to refinance, interest rates could very well be higher.

Ready to stop worrying about money?



My husband and I recently bought a house. In the flurry of paperwork, I didn’t realize that he had applied for the loan in his name only until it was all settled. I’m on the title with him, but not the loan.

Dear Penny: Can I Refuse to Inherit My Mom’s Dump of a Property?

Dear Penny,
My siblings and I are being bequeathed our family home in my mom’s will when she passes. My siblings currently live in apartments on the property. They are several years in arrears for rent they owe and do not maintain the property. 
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Not wanting to own a poorly maintained property with potentially hairy family issues is as good a reason as any. In fact, you don’t need to provide any reason for disclaiming.
Dear D.,

You can’t get your name out of your mother’s will, but you’ll be able to disclaim your inheritance when your mother dies. By doing so, you’re simply refusing to accept your stake in the property that she bequeathed to you.
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Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.
When your mom dies, you’ll have to disclaim the property in writing within nine months. You’ll need to provide a copy of the disclaimer to the executor of your mother’s estate and the IRS, as well as file a copy at the courthouse in the county where your mother is living at the time of her death.

Disclaiming an inheritance isn’t that unusual. People choose to do so for a host of reasons: They’re buried in debt and they don’t want creditors to seize the asset, or they’re worried that the asset could make it harder for them to qualify for college financial aid, Medicaid or other benefits. Wealthy people sometimes disclaim an inheritance to reduce the size of their taxable estate.
I have clearly stated for several years that I do not want to be a part of the shared property due to what I’ve witnessed over the years and the resulting personal and financial exposure that comes with it. Unfortunately, my mom didn’t remove my name. She now has a cognitive impairment that prevents her from doing so.
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There’s really nothing for you to do right now since your mother is still living and unable to revise her will. You’ve been clear about the fact that you don’t want this property, but if you do decide to disclaim it, you may want to communicate that plan to your siblings. That way, at least they’ll know upfront that they’ll be on their own for taxes and long-deferred maintenance. They can also plan accordingly in case inheriting a larger share than they expected jeopardizes any assistance they receive.
Is there a way of removing my name from the asset and/or limiting the potential financial and personal liability that comes with it?

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Because the rules can get complex, I’d suggest consulting with an estate planning attorney when your mother dies. You want to make sure everything is handled appropriately so that you can be confident you’re in no way liable for the property.

3 Questions to Ask Real Estate Agent Before Signing Contract

Real estate is a rapidly evolving industry, and unless you’re an old hand at buying and selling a house, you might need guidance about how to find the right real estate agent.

Where do you start looking for an agent, and how do you go about interviewing them?

We’ve compiled the top three questions to ask a real estate agent that will help you find the best one for the job. These are essential questions to ask any agent before you hire them, plus a few tips on where to find the most qualified agents in your zip code.

1.What’s Your Relevant Experience?

While you may have heard that it’s important to find an agent with X many years of experience or X many sold houses in the last year, there’s a better way to find out if an agent is the right fit for you. Ask about their experience.

“Do you have experience working with my type of buyer?” That’s the No. 1 question people should ask prospective agents, according to James McGrath, co-founder of the NYC real estate brokerage Yoreevo.

“Every agent is presumably doing deals, but if they usually work with retired couples, they might not be a great fit for a first-time home buyer,” said McGrath.

“Probe deeper and ask about the last two buyers (like you) that they worked with,” he added.

This is important because high sales and years on the job can be largely irrelevant if the agent hasn’t worked with a client like you before.

“Years of experience does not translate into deals of experience,” McGrath said. Buyer or seller, be sure to ask prospective agents about their last clients. It’s sure to quickly give you an idea about their ability to meet your expectations.

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2. How Do You Plan to Market My Home?

If you’re a seller in today’s market, plan on asking your agent how your listing will be promoted. This isn’t simply a matter of advertising in all the right channels, but also making sure your home looks really good online.

According to a study from the National Association of Realtors, 97% of buyers search online for homes — which makes having a strong digital presence a must.

“A house being marketed today needs to be similar to a magazine layout,” said home stager Karen Gray-Plaisted of Design Solutions KPG. “The key is to find an agent who believes in ensuring the house is presented well in all the marketing they do.”

This might mean finding an agent who works with stagers and photographers, and quite possibly even a few marketing gurus. Since most agents offer marketing services on one level or another, focus on finding out exactly how their team operates, and use that info to gauge their ability to make your home irresistible to buyers.

3. How Has the Pandemic Changed the Way You Do Business?

This one isn’t so much about the coronavirus as it is about finding out what’s permanently changed in your area with regards to buying and selling, and if you and the agent are on the same page as far as health precautions. Depending on your pandemic experience, you may not want a bunch of strangers stomping all over your house to check it out. On the contrary, you might hate online meetings — something a lot of agents are still doing.

“While the number of precautions has gone down here in Wisconsin, you’ll still see a lot more virtual services, like listing appointments, closings, etc. happening online,” said Realtor Al Wisnefske of the Land & Legacy Group.

Another change that seems to be sticking around? Appointment-only open houses. This is a good one to know about, since you may not be able to just “pop in” and see a house whenever you want.

“We are in NYC where COVID is under control, at least for the moment,” said McGrath. “Everyone is still wearing masks (more out of courtesy than an actual requirement), but one big change that happened during COVID is that 90% of open houses are still by appointment only.”

Depending on the current restrictions in your area, it’s a good thing to ask any agent you interview what their process looks like, and be sure you’re comfortable with that protocol.

A real estate agent smiles.
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How to Find the Right Agent

Now that you know the key questions to ask, here are a few ideas for finding the ideal agent.

Get a Referral

Referrals are hands-down the best (and easiest) way to find a real estate agent who will make you happy. Why? Because if they made your friends happy (and your situation is anything like theirs) then chances are they can help you too.

“Word of mouth is a great place to start,” said Christopher Totaro of Warburg Realty. “Having a referral from a person who has worked with an agent gives you the ability to get real insight as to how that agent performed.”

It will also help you find out how they handle marketing strategies, and if recent enough — how they’re helping clients navigate deals during the pandemic.

Check Online Reviews

This might sound too easy, and that’s because it is. Just like your favorite restaurants, Yelp and Google Maps are both really great places to find out if people like working with certain agents or not.

“The best way to find an agent is to ask friends for a referral,” said John Gluch, founder of the Gluch Group. “The second-best way is searching Yelp. Yelp does a great job of ensuring reviews are legitimate and that the recommended agents on Yelp have truly earned it.”

Before hiring an agent, do a quick online search to see what others have to say about them.

Other Considerations

A lot goes into buying or selling a home, and the process will get easier the more prepared you are. If you’re planning to buy a home in the near future, then you might want to consider things like your credit score, and if you’ll qualify for the mortgage you need. If you’re selling, be sure to ask your agent how saturated the market is, and how to make your listing a competitive one.

As always, take the time to consider all of your options before diving into anything— and don’t be afraid to stay put if the timing doesn’t feel right.

Contributor Larissa Runkle specializes in finance, real estate and lifestyle topics. She is a regular contributor to The Penny Hoarder.  




What Is Escrow? How It Keeps Home Buyers and Sellers Safe

What is escrow? In real estate, an escrow account is a secure holding area where important items (e.g., the earnest money check and contracts) are kept safe by an escrow company until the deal is closed and the house officially changes hands. Escrow is also a contractual arrangement in which a third party—usually the escrow officer—maintains money and documents until the deal is done and escrow is closed.

How escrow works

The escrow agent is a third party—perhaps someone from the real estate closing company, an attorney, or a title company agent (customs vary by state), says Andy Prasky, a real estate professional with Re/Max Advantage Plus in Twin Cities.

The third party is there to make sure everything during the transaction proceeds smoothly, including the transfers of money and documents, and to hold assets safely in an escrow account until disbursement.

Escrow protects all of the relevant parties in a real estate transaction, including the seller, the home buyer, and the lender, by ensuring that no escrow funds from your lender and other property change hands until all of the conditions in the agreement have been met. Along the way, proper documentation is filed with the escrow agent or the escrow company as each step toward closing is completed.

Contingencies that might be part of the process could include home inspection, repairs, mortgage approval, and other tasks that need to be accomplished by the buyer or seller. And every time one of those steps is completed, the buyer or seller signs off with a contingency release form; then the transaction moves to the next step (and one step closer to closing).

Once all conditions are met and the transaction is finalized, the closing costs are paid and the money due to the sellers is disbursed from your lender. Meanwhile an escrow officer clears (or records) the title, which means the buyer officially owns the home.

How much does escrow cost?

That varies—as well as whether the buyer or the seller (or both) pays—with the fee for this real estate service typically totaling about 1% to 2% of the cost of the home.

The earnest money deposit

Earnest money—also known as an escrow deposit—is a dollar amount buyers put into an escrow account after a seller accepts their offer. The escrow company holds the money in an escrow account for the duration of the transaction.

Another way to think of it is as a “good-faith” deposit into an escrow account, which will compensate the seller if the buyer breaches the contract and fails to close.

Can you borrow earnest money from your lender?

Most home buyers come up with cash for escrow and deposit it into the escrow account from their own funds. The payment amount is small compared with the cost of the home and the loan, and the home buyers may not even have a mortgage lender yet when they make an offer on a home.

However, earnest money can be borrowed from your lender, but there are certain rules involved. First-time buyers are most likely to need to go to their mortgage lender to make this escrow account deposit. Your lender will ultimately count the deposit toward closing costs and the down payment on the house.

How escrow protects you during the real estate buying process

Escrow may seem like a pain, but here’s how it can work in your favor. Let’s say, for example, the buyer had a home inspection contingency and discovered that the roof needed repairs. The seller agrees to fix the roof. However, during the buyer’s final walk-through, she finds that the roof hasn’t been repaired as expected. In this case, the seller won’t see a dime of the buyer’s money until the roof is fixed. Talk about a nice safeguard!

Sellers benefit from escrow, too: Let’s say the buyers get cold feet at the last minute and bail on the transaction. This may be disappointing to the seller, but at the very least, buyers have typically ponied up a sizable chunk of change for their earnest money deposit. This money, often totaling 1% to 2% of the purchase price of a home, has been held in escrow. When buyers back out with no legitimate reason, they forfeit that money to the seller—a decent consolation for the sale’s failure and the expense of making mortgage payments and other expenses while the home was off the market.

Escrow, in other words, is the equivalent of bumpers on cars, keeping everyone safe as they move forward in a real estate transaction. Odds are, no one’s trying to swindle anyone. But isn’t it nice to know that if something does go wrong, escrow is there to cushion the blow?

What is an escrow account on a mortgage account?

When a homeowner makes monthly payments to the mortgage servicer, part of each payment goes toward the mortgage and part of it goes into an escrow account for payment of property taxes and insurance premiums such as homeowners insurance or mortgage insurance. When those bills are due, the escrow service uses the funds in the escrow account to make payment to your insurance company and to the county for property taxes.

If more money accumulates in your escrow account from monthly payments than is necessary to pay property taxes and insurance, the mortgage company sends you a refund check, and may lower your monthly mortgage payment. On the other hand, if insurance premiums and property tax expenses go up, your mortgage holder may send you a bill for the difference, or raise your monthly loan payments.