Loan forgiveness and listing agreements

Student loan forgiveness boosts buyer budgets

If you’re trying to buy a home, Biden’s student loan forgiveness plan could improve your chances of getting approved for a mortgage. Here’s how:

Debt is one of the key variables lenders use to determine how safe or risky it would be to approve your loan. Specifically, lenders look at your debt-to-income (DTI) ratio, which is measured by balancing your income against how much you pay every month to creditors. Wiping $10,000 - $20,000 of debt out of the ledger can significantly improve your DTI.

To find out exactly how much your DTI would be improved, divide all your current monthly debt payments by your gross (pre-tax) income, and then multiply that number by 100. This will give you your current DTI percentage. Now do the same calculation, adjusting for your reduced monthly debt after that student loan debt forgiveness.

How long should a listing agreement last?

The moment you sign a listing agreement with a real estate agent, the clock starts on your race to the closing table. A listing agreement outlines agreed-upon terms like asking price, commission fee, and any property included in the sale.

In a market where houses aren’t moving as fast as they once were, the expiration date of the listing agreement is another important factor to consider: how much time should you give an agent to sell your home before you move on?

Houses aren’t going like hot cakes anymore—in fact, homes sat on the market for an average of 42 days in the past month. (That’s 5 days longer than the same month last year, but still 22 days less than pre-pandemic levels.)2 Generally a listing agreement lasts for about 90 days, although this can vary based on your local market conditions.

End-of-summer maintenance tips

As the seasons change and we officially say goodbye to summer, homeowners may benefit from a systems check—take stock of current issues that could cause trouble as we move toward cooler weather. It’s much easier to make small updates and repairs before the fall and winter set in.

• Seal all window and door air leaks with a tube of exterior caulking
• Schedule HVAC, fireplace, & chimney maintenance before the fall rush
• Remove twigs, leaves, and other debris from clogged gutters
• Check your roof for missing shingles, tiles, or other damage
  

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This newsletter does not constitute an endorsement or recommendation of Better Mortgage Corporation; Better Real Estate, LLC; Better Cover, LLC; Better Settlement Services, LLC; or their services. Better Cover is solely responsible for homeowners insurance services. Better Mortgage is solely responsible for making all credit and lending decisions with respect to mortgage loans.