Hanging on to Your Sanity While Working From Home

 

At first, it may have seemed like a dream come true; sleep a little later…skip the commute…work in your pajamas if you feel like it.

But working from home can quickly outstay it’s welcome. You miss the routine – the coffee breaks and kibitzing, the face-to-face meetings, all those busy, ringing phones – and given the uncertainties of the COVID-19 crisis, there’s no way to know how long your work-at-home status will continue.

Psychologists and productivity experts provide these tips for making the most of the time you are working remotely:

Choose a permanent workspace. It may be tempting to work on the living room sofa. Don’t do it. Create a workspace at a desk or at the dining room table and make that your dedicated workspace. It will help keep you on track and may even help remind family members to avoid unnecessary disturbances.

Get dressed for work. Whether it’s office casual or shorts and a t-shirt, getting dressed rather than working in your PJs can help signal your brain to be productive.

Take regular breaks. Keep to a familiar routine, taking regular ‘coffee breaks’ and lunch hours. Those are the times to eat, snack, listen to music or tune into the news if you like – to take a few minutes to check in with family or phone a friend.

Stay in close touch. It’s likely there will be plenty of virtual meetings scheduled by your office during this time – and feel free to telephone managers or co-workers as needed in between meetings, just as you would if you were at the office.

Separate work time and personal time. Time off is important, so don’t extend your regular work hours. Spend a ‘coffee break’ playing with the kids or the dog if you like. It’s one of the perks of working from home. When you wrap up your work day, take some time to make a mental transition, then enjoy the evening with family or on a Zoom chat with friends.

Exercise and stretch regularly. You may be missing your gym workouts, but getting some exercise while sheltering in place should still be part of your daily routine. Stretch regularly during the workday. Take a walk before or after work, or during your designated lunch hour. 

 

Alternatives to Traditional Down Payments

 

The idea of putting a minimum of 20 percent down on a home is a myth that can keep some people from trying to buy a home.

While it can be a great way to lower your mortgage payment and convince sellers that you’re serious about buying, coming up with 20 percent of a home’s purchase price can be difficult.

Here are some other options:

A lower down payment is acceptable. Lenders know that the 20 percent rule is a myth, and will often accept much less if you have good credit and a steady job.

The average down payment on a home purchase in 2016 was 11 percent, according to a report on aspiring homebuyers by the National Association of REALTORS®. For borrowers under age 35, the average down payment was just under 8 percent. The largest share of loans for buyers under 35 were for people putting down less than 5 percent or about $3,500. Coming up with 10 percent down, however, can allow you to have a lower credit score—sometimes as low as 500 for an FHA loan—to qualify.

Around 3 percent is common. A few government agencies require only 3 percent or so down. Loan programs backed by Fannie Mae and Freddie Mac require 3 percent down, while the FHA mortgage that targets first-time buyers asks for 3.5 percent down. The FHA mortgage allows the down payment to be a financial gift or from an approved down payment assistance program.

The Fannie Mae HomeReady program allows non-borrowing household members to contribute toward qualifying income. So, if you have an aunt or roommate, their income can be included when qualifying for a home loan.

The programs don’t require perfect credit. The average FICO credit score was 713, but borrowers with a 639 score can still be approved.

People who don’t qualify for such programs can still buy a home with a 639 FICO score, but may need to increase their down payment to 5 percent.

There are no-down-payment options. VA mortgages require no money down for current and former military service members, and most lenders offer them.

Some loans for less than 20 percent down require private mortgage insurance, or PMI, which can add $100 or so to a monthly mortgage; however, VA loans don’t require mortgage insurance.

USDA home loans also don’t require a down payment. These loans are backed by the U.S. Department of Agriculture, and aren’t for farms but for single-family homes that are in less-dense areas of the country.

Piggyback loans are available. These require 5 – 10 percent down and are two mortgages that work best for people with good credit. The first mortgage funds 80 percent of the cost and the second is a 10 percent mortgage—the final 10 percent is a down payment. This eliminates the need for mortgage insurance.

You can find other assistance programs. Down Payment Assistance programs, or DPAs, are run by the government and nonprofits. They offer gifts or no-interest loans to increase homeownership. Nearly 90 percent of all single-family homes in the U.S. are eligible for some kind of DPA.

All of the major loan types listed above allow DPA funds to be used toward a down payment. Your lender should be able to help you find DPAs in your area.

How to Avoid Becoming a Victim of Predatory Lending

 

Some unscrupulous lenders use abusive practices, known as predatory lending, to trap borrowers in loans they can’t afford. Those lenders target vulnerable groups, make misleading claims and conceal the true cost of their loans.

Types of Predatory Lending
It’s legal for lenders to charge borrowers with bad credit high interest rates since they’re riskier than customers with good credit. Predatory lenders deliberately target people with bad credit and charge them exorbitant interest rates.

Redlining is the illegal practice of denying loans to residents of low-income or minority neighborhoods. Reverse redlining means predatory lenders aggressively push unaffordable loans on residents of those areas.

A bait and switch is when a lender approves a borrower for one type of loan, then changes the terms without adequately disclosing future changes up front.

Asset-based lending is a practice in which a lender offers a customer with assets, such as home equity, a large loan that they know the borrower can’t afford. A borrower who defaults can lose those assets.

A balloon loan has small payments at the beginning, then a large payment for the remaining balance due. Those loans can be legitimate, but predatory lenders don’t clearly explain the terms to borrowers.

A negative amortization loan has payments that don’t cover the interest due or any of the principal. Borrowers make payments each month, but their balances keep growing.

Loan flipping is taking out a new loan to refinance an unaffordable loan. Predatory lenders often set up customers so they move from one unaffordable loan to another while the lender keeps collecting fees.

Loan packing means a lender tacks on fees for services the borrower doesn’t need or want. Those services may be legitimate, but predatory lenders may tell customers they are required, even though they’re optional.

Legitimate lenders often charge prepayment penalties to discourage borrowers from paying off loans early. Predatory lenders may charge exorbitant prepayment fees to discourage refinancing.

How to Spot a Predatory Lender
Several laws are designed to protect consumers from predatory lending, but they aren’t always strongly enforced. That means you need to be on the lookout.

Get quotes from several lenders. Verify that they’re licensed in your state, check their Better Business Bureau ratings and read reviews.

Make sure you understand all the loan terms, including the fees, interest rate and monthly payments, and how any of those terms could change in the future. If a lender won’t provide those details up front and in writing, don’t sign a loan agreement.

A lender that doesn’t check your credit should raise a red flag. The company doesn’t care if you can afford to repay a loan because it can get money through high interest rates and fees or take your car or home if you default.

Don’t sign a contract with blank spaces. Someone could add other information later and you’d have a hard time proving you didn’t agree to those terms.