Sept. 19, 2021

5 Things You Need to Be Pre-approved for a Mortgage

While looking for a home can be thrilling and enjoyable, serious homebuyers should begin their search at a lender's office rather than at an open house. Most sellers anticipate buyers to have a pre-approval letter and will be more likely to work with those who can demonstrate that they can get financing.

To be pre-approved for a mortgage, potential buyers must provide papers proving their assets and income, strong credit, and employment verification, among other things.

Here are the things you need to get pre-approved for a mortgage.

1. Proof of Income

Buyers generally must produce W-2 wage statements from the past two years, recent pay stubs that show income as well as year-to-date income, proof of any additional income such as alimony or bonuses, and the two most recent years' tax returns.

2. Proof of Assets

The borrower needs bank statements and investment account statements to prove that they have funds for the down payment and closing costs, as well as cash reserves.

The down payment, expressed as a percentage of the selling price, varies by loan type. Many loans come with a requirement that the buyer purchases private mortgage insurance (PMI) or pay a mortgage insurance premium or a funding fee unless they are putting down at least 20% of the purchase price. In addition to the down payment, pre-approval is also based on the buyer's FICO credit score, debt-to-income ratio (DTI), and other factors, depending on the type of loan.

3. Good Credit

Most lenders require a FICO score of 620 or higher to approve a conventional loan, and some even require that score for a Federal Housing Administration loan. Lenders typically reserve the lowest interest rates for customers with a credit score of 760 or higher. FHA guidelines allow approved borrowers with a score of 580 or higher to pay as little as 3.5% down.

Those with lower scores must make a larger down payment. Lenders will often work with borrowers with a low or moderately low credit score and suggest ways to improve their score.

4. Employment Verification

Lenders want to make sure they lend only to borrowers with stable employment. A lender will not only want to see a buyer's pay stubs but also will likely call the employer to verify employment and salary. A lender may want to contact the previous employer if a buyer recently changed jobs.

Self-employed buyers will need to provide significant additional paperwork concerning their business and income. Typically, self-employed borrowers need to produce at least the two most recent years' tax returns with all appropriate schedules.

5. Other Documentation

The lender will need to copy the borrower's driver's license and will need the borrower's Social Security number and signature, allowing the lender to pull a credit report. Be prepared at the pre-approval session and later to provide (as quickly as possible) any additional paperwork requested by the lender.

Consulting a professional at this stage is necessary. Let me know if you need assistance. Send me a message now

Sept. 15, 2021

5 Tips to Make Your Offer Stand Out

In today’s sellers’ market, standing out as a buyer is critical. Multi-offer scenarios and bidding wars are the norm due to the low supply of houses for sale and high buyer demand. If you’re buying this fall, you’ll want every advantage, especially when you’ve found the home of your dreams.

Below are five things to keep in mind when it’s time to make an offer.

1. Know Your Budget

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. As Freddie Mac puts it:

“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”

Showing sellers, you’re serious can give you a competitive edge. It enables you to act quickly when you’ve found your perfect home.

2. Be Prepared To Move Fast

Speed and the pace of sales are contributing factors to today’s competitive housing market. According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the average home is on the market for just 17 days. As the report notes:

“Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.”

When homes are selling fast, staying on top of the market and moving quickly is key. After you’ve worked with your agent to find the home that suits your needs, they’ll help you put together and submit your best offer as soon as possible.

3. A Real Estate Professional Can Lead You to Victory

No matter what the housing market looks like, rely on a trusted real estate advisor. As Freddie Mac says:

“The success of your homebuying journey largely depends on the company you keep. . . . be sure to select experienced, trusted professionals who will help you make informed decisions and avoid any pitfalls.”

Agents are experts in the local real estate market. They have insight into what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller may need can help your offer stand out.

4. Craft a Strong, Fair Offer

In the past, offering at or near the asking price was enough to make your offer appealing to sellers. In today’s market, that’s often not the case. According to the latest Realtors Confidence Index from NAR, 50% of offers are above the list price.

In such a competitive market, emotions and prices can run high. Having an agent to help craft a strong, fair offer is critical in these situations. Your agent can help you understand:

  • The market value of the home
  • Recent sales trends in the area
  • Current buyer demand

5. Understand the Seller’s Needs, but Resist Waiving Certain Contingencies

When crafting an offer, you’ll want to keep both your best interest and the interest of the seller in mind. Your trusted real estate advisor will help you consider which levers you could pull, including contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Of course, there are certain contingencies you don’t want to give up, like the home inspection.

Freddie Mac explains:

“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

In today’s competitive housing market, it’s more important than ever to make a strong offer on a home. Connect with a local real estate professional to make sure your offer rises to the top. Send me a message here if you need assistance.

 

Sept. 11, 2021

How to Finance Your Home Improvements

Homeowners around the country are looking to make the most of their houses, from simple home improvement projects to large-scale remodels. The National Association of REALTORS® (NAR) reported in 2019 that a whopping 74% of homeowners are more eager to return to their homes when restoration projects are completed. Even the most basic house upgrades, however, come at a cost.

Here’s how to finance your home improvement projects, regardless of size, scope, or budget.

Home Improvement Personal Loan

If you're looking to finance a small home repair project, a personal loan tailored to those expenditures may be the best option. For example, if you want to update your HVAC system or get new siding, this loan could help. Because loan rates normally range from 3 to 36 percent, you'll need to locate alternative financing for larger projects (Bankrate, 2021).

Banks, credit unions, and other financial organizations offer personal loan choices. The lender, and your financial position, including your credit score, will determine the interest rates, fees, payback terms, and allowed payout amount. To qualify, you'll usually need a credit score of at least 640, and interest rates often decrease as credit improves (Investopedia, 2021).

Home Equity Line of Credit

If you’re planning longer-term home improvements, like renovating multiple rooms in your home or completing a project whose scope or cost is variable, you may want to explore a home equity line of credit or HELOC. These open lines of credit allow owners to repeatedly borrow against their home equity as opposed to providing one payout in a set dollar amount. In other words, with a HELOC, you can borrow what you need when you need it, up to a pre-determined limit.

Home Equity Loan

If you’re more confident that you know just how much your planned improvements will cost, a home equity loan (HEL) could be right for you.

Interest rates are also typically fixed, meaning that monthly repayment amounts will not change over the life of the loan. Keep in mind, though, that your home will be up as collateral. In cases of default, you could potentially lose the property. These loans can also come with a wide range of upfront costs and fees, so you may want to shop around for the right option.

If you want to find out more about this topic or you have more real estate-related questions, just send me a message here

 

Sept. 7, 2021

Tips for Young Homebuyers

For many young or first-time homebuyers, purchasing a home can feel intimidating. A recent survey shows some homebuyers ages 25 to 40 may be unsure about the home buying process and what they can afford. It found:

  • “1 in 4 underestimated their buying potential by $150k or more”
  • “1 in 4 underestimated the increase in value by $100k or more”
  • “47% don’t know what a good interest rate is”

Because they feel uncertain, many young homebuyers have given up on their search, or worse, they’ve decided homebuying isn’t for them and never started on their journey to begin with.

If you’re interested in buying but aren’t sure where to begin, here are three key concepts about homeownership you should understand before you get started.

1. What You Need To Know About Down Payments

Saving for a down payment is sometimes viewed as one of the biggest obstacles for homebuyers, but that doesn’t have to be the case. As Freddie Mac says:

“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

According to the most recent Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. That number is even lower when we control for age – for buyers in the 22 to 30 age range, the median down payment was only 6%.

2. You May Be Able To Afford More Home Than You Think

Working remotely, exercising, and generally spending more time than ever in our homes has changed what many people are looking for in their living space. However, some young homebuyers don’t feel they can afford a home that suits their growing needs and have decided to continue renting instead. That means they’ll miss out on some of the long-term benefits of owning a home. As an article recently published by NAR points out:

“Many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years…”

Knowing how much home you can afford when starting the buying process is critical and could be the game-changer that gets you from renting to buying.

3. Homeownership Will Become Less Affordable the Longer You Wait

Finally, with mortgage rates starting to rise along with home prices appreciating, putting off buying a home now could cost you much more later. Sam Khater, Chief Economist at Freddie Mac, notes:

“As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”

Most experts forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying power. If you’ve been on the fence about buying a home, there’s no time like the present.

If you feel overwhelmed by the prospect of starting your home search, you’re not alone. Connect with a real estate professional to learn more about the process, what you’ll need to start your search, and what to expect.

Sept. 4, 2021

12 Things to Do Before Selling Your House

Getting ready to sell your house? Then it’s time to roll up your sleeves and get to work! Here's a checklist before selling your house. 

1. Find a great real estate agent

Your real estate agent should be someone you feel comfortable working with, whom you trust to sell your house for top dollar. Don’t be afraid to talk to a few real estate agents before picking one. 

2. Consider your curb appeal

By investing some effort in relatively easy fixes, like planting colorful flowers and repainting your front door, the outside of your house can beckon prospective buyers to come on in. If you’re not sure how to improve your home’s curb appeal, ask your real estate agent for advice on how others in your area have improved the exterior before selling their houses.

3. Declutter living areas

Less is more when it comes to getting your house ready to show. Do a clean sweep of counters, windowsills, tables, and all other visible areas, and then tackle behind closed doors: closets, drawers, and cupboards—since virtually nothing is off-limits for curious buyers. If the house is overflowing with stuff, buyers might worry that the house won’t have ample space for their belongings. They won’t sign up to pay a mortgage if they think they’ll also have to rent a storage space.

4. Depersonalize your space

Sellers should remove personal items and family photos, as well as bold artwork and furniture. It might make the home less appealing to the general public. The goal is to create a blank canvas on which buyers can project their visions of living there and loving it.

5. Repaint walls to neutral tones

You might love that orange accent wall, but if it’s your potential buyer’s least favorite color, that could be a turnoff. It’s the seller’s job to help buyers picture themselves in the house. If they don’t feel at home, they’ll probably look at other real estate options.

7. Fix any loose handles

It’s a small thing, sure, but you’d be surprised by the negative effect a loose handle or missing lightbulb can have on a buyer.

8. Add some plants

When staging your house, remember that green is good: Plants create a bright and more welcoming environment. You might also want to consider a bouquet or bowl of fruit on the kitchen counter or dining table. Some plants and natural elements will impress buyers by bringing some extra color and life to your decor.

9. Conduct a smell test

Foul odors, even slight ones, can be a deal-breaker, and the problem is that you might not even notice them. Invite an unbiased third party to try to detect any pet smells or lingering odors from your kitchen. If the smells are pervasive, prepare to do some deep cleaning.

10. Clean, clean, clean

When selling your home, it’s important to keep everything tidy for buyers, and you never know when a buyer is going to want to schedule a last-minute tour. Remember to take special care with the bathroom, making sure the tile, counters, shower, and floors shine.

11. Hide valuables

You can’t trust everyone who comes into your house, even when you’re trying to sell it. Sometimes things disappear during an open house, and there’s little the seller can do to get those things back. Take care to hide your valuables or move them to a safe space away from your home.

12. Consider staging

Home stagers will evaluate the current condition and belongings in your house. They might recommend you buy or rent some items, or they might just reorganize your house.

Got more questions about these tips or any real estate-related topics? Send me a message and we'll be glad to assist you.

Sept. 1, 2021

6 Most Popular Kitchen Island Styles

Extra storage, seating, and workstation are just a few of the benefits of having a kitchen island. There are a lot of styles you can choose from. L-shaped, galley, curved, or furniture-style? Find out which type of kitchen island is right for you

1. Rolling

If you don't have room for a built-in island, rolling islands are a convenient alternative. It's versatile and you can whisk them around your kitchen. Depending on its size, it may or may not have the storage you needed.

2. U-Shaped

U-shaped islands may be a chef’s dream. Three walls of cabinetry and appliances are enough to increase the efficiency of any kitchen. It's functional and spacious. However, these islands are bulky and can close off your kitchen from the rest of your home.

3. Furniture-Style

An unconventional choice, furniture islands can make your kitchen feel like your home’s premier hangout spot. Wide-ranging options can include a custom piece designed by a local carpenter and an antique table or chest of drawers.

4. Circular or Curved

A circular island may be the answer if you want to add uniqueness to your kitchen design. A full circle or a half-moon might be used in the design. It adds an interesting visual dynamic to kitchens but the storage can be harder to access because your counter is spread out and curved.

5. Galley

With fewer frills and a straightforward design, galley islands are built to be workhorses. They can be a good fit for any type of kitchen layout, assuming that there’s enough space for one. Yes, galley islands are simple and efficient, but some homeowners may think they’re boring.

6. L-Shaped

This type of island can ebb and flow with the shape of your kitchen or fill in the blank space with more storage and prep space. The L-shaped island is large with correspondingly generous storage. However, this style may be too spread out for some homeowners, and it doesn’t always maximize storage space since corners tend to decrease accessibility.

Which is your favorite style? Share your thoughts and let us know in the comments section. 

Aug. 26, 2021

Real Estate Experts: Your Essential Guide through this Extreme Market

In a typical market, having an expert adviser lead you through the process of purchasing or selling a home is beneficial. That person can help you with crucial matters such as effectively pricing your house or the initial actions to take when you're ready to buy. The current market, on the other hand, is far from typical. As a result, having an expert on your side isn't just beneficial; it's necessary.

There are several extremes in today's property market. High buyer demand is being fueled by mortgage rates near record lows. On the other hand, a lack of sellers has resulted in historically low housing inventory levels. Bidding wars are escalating as a result of the supply and demand imbalance, with more homes selling for more than the asking price. As a result, property prices are rising and home equity is increasing.

These market conditions aren’t just extreme – they can be overwhelming. Having a trusted specialist guide you through the process of buying and selling a house ensures that you have clarity, confidence, and success at every turn.

Here are just a few of the ways a real estate expert is invaluable:

  • Contracts – We help with the disclosures and contracts necessary in today’s heavily regulated environment.
  • Experience – We’re well-versed in real estate and experienced with the entire sales process, including how it’s changed over the past year.
  • Negotiations – We act as a buffer in negotiations with all parties throughout the entire transaction while advocating for your best interests.
  • Education – We simply and effectively explain today’s market conditions and decipher what they mean for your individual goals.
  • Pricing – We help you understand today’s real estate values when setting the price of your home or making an offer to purchase one.

A real estate expert can be your essential guide through this unprecedented market, but truth be told, not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding the right agent should be your top priority when you’re ready to buy or sell a home.

So, how do you choose the right expert?

It starts with trust. You’ll have to be able to trust the advice your agent is going to give you, so make sure you’re connected to a true professional. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. A true professional expert can, however, give you the best possible advice based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will help you plan the steps to take for success, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions toward your goals. That’s exactly what you want and deserve.

It’s crucial right now to work with a real estate expert who understands how the market is changing and what that means for home buyers and sellers. If you’re planning to make a move this year, send me a message here and I will be happy to guide you. 

 

Aug. 22, 2021

6 Essential Repairs to Make Before Selling a House

There are some important repairs to make before selling a house. Don’t be in too much of a hurry to get your home listed. If you move too fast, buyers see right through the fact that you skipped important home renovations. And this might end up costing you time and money. 

Check out these six important repairs to make before selling a house

1. Spruce up the grounds.

Good landscaping can add up to 28% to overall home value. This is one of the easiest and cheapest tricks. If you don’t have time for a full overhaul of your front yard, small changes can still have a big impact.

2. Love the hardwood.

One of the biggest turnoffs for buyers is dirty old carpets. It is worthwhile to invest in wood floors. Right now, carpeting isn’t just an aesthetic choice—it’s a choice that can actively turn away buyers who can’t see beyond it. Instead of noticing what a wonderful, light-filled living room you have, they can think only about just how much money it will cost to get rid of that nasty old carpet.

3. Fixing windows and doors are one of the most important repairs to make before selling a house.

You’re not just irritating buyers by refusing to fix broken windows and doors. Ignoring basic repair work might actually cast a pall on your entire home. 

4. Paint and/or wash the walls.

If any of your rooms are doused in a dark shade, cover it up with a coat of light or neutral paint. Buyers find it easier to picture themselves living in a home with neutral walls—plus, they’ll make your home seem larger, cleaner, and far more appealing.

5. Clean the cabinets.

Check for any loose drawers, hardware, or shelving so buyers don’t wonder what else might be amiss. And hide those strange or semi-incriminating items that aren’t at all meant for public display.

6. Update the lighting.

Modern lighting can make your home go from old to new and stylish in no time. The ROI can be pretty impressive.

If you have more real estate-related questions, don't hesitate to send me a message here.

Aug. 19, 2021

Tips on How To Prepare To Make a Down Payment

One of the biggest hurdles in buying a home is coming up with a down payment—the large chunk of cash that’s typically required to secure a mortgage for a house.

Fortunately, most lenders today offer a wide range of down payment options for 5%, 10%, 15%, or 20% of the price of the house. For many first-time homebuyers, a government FHA loan can be obtained, for as little as 3.5% down. If you are a military member or veteran, there are even more budget-friendly options available to you.

Many home buyers tap their savings to procure the funds for a down payment, and often postpone large outlays to save money. But here are some other ways to come up with a chunk of money.

1. Gifts from family or friends

Some types of loans allow “gift” funds—money that is given to you—for a down payment. The person who gives the money must have no financial interest in the property and the funds must be a true gift, backed up by a letter. Banks won’t allow “gift” funds if the gift is a loan that has to be repaid.

2. Down payment assistance

Many local and state government programs offer down payment assistance for borrowers in need, so check with your lender or state housing commission for more information.

3. No-PMI home loans

There are a few loan options that allow you to put down less than 20% without the added PMI cost. Check with your lender to see if it offers a low-down-payment, no-PMI product if a 20% down payment seems too challenging

4. Make saving a habit

The surefire way to make your down payment is to start a fund for it now.

Looking for other ways to make your mortgage process easier? Or do you have any other real estate-related questions? Click here and I will be happy to help you. 

Aug. 14, 2021

4 Things To Consider Before Buying a Condo

Buying a condominium is quite different from buying a single-family home.  Apart from sharing walls and perhaps lowering maintenance expenses, acquiring a condominium (or condo) differs greatly from financing a traditional single-family home. In truth, the wide range of logistics, financing possibilities, and extra fees may astound you. If you're looking for a condo soon, these four things are essential to consider before signing on the dotted line.

Condos are not for everyone

Some buyers will prefer to live in a single-family house, while others will prefer to live in a condominium. Before you buy anything, you should figure out what your needs and preferences are.

Your preferred neighborhood is a big decision. The majority of flats, particularly the more extensive ones, are found in urban or suburban areas. So, if you're looking for rustic charm, an apartment complex might not be the place for you.

You should also think about the type of community you want to join. Traditional homeowners have more privacy than apartment inhabitants, who share walls, shared areas, and amenities. There is no one-size-fits-all solution to your living condition. Every homebuyer will have a unique experience.

Finally, when it comes to home maintenance, think about your preferences. From sweeping driveways to clearing gutters, condos frequently require less care. As a result, they may appeal to senior shoppers or those who prefer not to get their hands dirty.

The mortgage process is different

Financing a condo also looks a bit different (Money Under 30, 2019). Lenders tend to employ stricter standards, including the number of units, the number of investors after ownership, and the occupancy rate. You can opt for a conventional, FHA, or VA loan, but be prepared to jump through additional hoops, including FHA approval, Department of Veteran Affairs approval, or outsized down payment amounts. The requirements will depend on your loan type, property of choice, and personal financial situation, so be sure you understand the specifics.

While you may face stricter standards in obtaining a condo, keep in mind that lending discrimination is illegal. If you suspect you are a victim of lending discrimination, start by reporting the issue to your mortgage professional. If needed, you can also hire an attorney, take legal action or report the incident to the Federal Housing Administration (FHA).

There may be additional costs

In 2018, the average home price was $241,700 while the average condo cost $231,600 (Money Under 30, 2020). Lesser down payment will, in most situations, result in a lower monthly payment and more potential savings. While a condo may be less expensive, there are often hidden charges to consider. You may still need to join a homeowners association (HOA), buy homeowners insurance, pay monthly fees, or manage parking or pet costs, for example. Get a good sense of the overall cost, including any fees, before you make a purchase.

All condos aren’t created equal

Of course, just like when buying a house, you'll want to discover the appropriate condo for you, not just any condo. Get a good understanding of the rules, HOA, neighborhood, and building. You should also ask about the noise level, measure the amount of natural light in the apartment during the day, and evaluate all amenities and common areas extensively. If you have a car, you may also want to consider safe and secure parking. After all, a standard driveway and garage are unlikely to be available to you.

There are numerous advantages to condo living, but you should gain a thorough understanding of the process before making a decision. These places differ significantly from regular single-family homes in terms of finance and costs. If you can't decide, send me a message and let's talk more about it.