What financial ratios are the most important to a homeowners association?

Regarding an individual homeowner’s financial ratios in order to qualify for a mortgage or to refinance, the same criteria apply as for loans for any single family residence. Lenders generally like to see monthly PITI (principal, interest, property taxes, and insurance) payments no higher than 25% to 29% of a loan applicant’s monthly gross income. This is called a front-end ratio. In addition, lenders generally require monthly payments for PITI and all consumer debts (e.g., loans and credit cards) to …

What happens if you can’t pay your timeshare maintenance fee? Selling is not an option because there is no market.

This document from the Timeshare Council provides a detailed analysis of options available to timeshare owners who are unable to make their payments: http://timesharecouncil.net/selling/walk-away-from-a-timeshare/.

Bottom line: In good times and bad, timeshare owners who want “out” generally need to sell their timeshare for less than its original purchase price. As the article notes, selling a timeshare is tough, and you will be lucky if you sell it for half of what you bought it for. Perhaps you may want …

How much does private mortgage insurance (PMI) on a home mortgage cost?

PMI is extra insurance that lenders require from most home buyers who obtain loans that are more than 80 percent of their new home’s value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI. PMI premiums, which protect lenders against loss if borrowers stop making their mortgage payments, typically cost between 0.5% and 1% of the mortgage loan amount.

For example, if you borrow $150,000 and the PMI premium rate is …

How much should I budget for home maintenance expenses?

Housing experts recommend budgeting about 1% of the purchase price of your home per year for home maintenance and repairs. Of course, the actual amount spent will vary from month to month and year to year.

For example, if someone owns a $240,000 home, they should plan to spend around $2,400 per year or about $200 a month on home maintenance.

Ideally, this money should be set aside in an earmarked account so that it is available as needed.

We’re …

What were some of the causes of the 2008-2009 economic crisis?

In a sentence, causes of the 2008-2009 economic crisis include subprime mortgages gone bad that were packaged into risky securities gone bad compounded by lax regulatory oversight, a credit crunch (i.e., reduced lending by financial institutions), and lack of consumer confidence. The financial crisis started to unfold in 2006-2007 when large numbers of homeowners started to fall behind on their monthly mortgage payments.

Many subprime mortgages with artificially low initial payments had been made to people who couldn’t really afford …