Quick Contact

Your Name (required)

Your Phone (required)

Your Email (required)

Your Message


Type this number below.

Posts Tagged ‘home’

6 must-haves for mortgage approval

Even trade-up buyers, owners of multiple properties hit roadblocks

Interest rates fell to new lows in September. Low interest rates increase affordability and should make it easier for buyers to qualify. Yet stories of buyers waiting months to gain loan approval and home purchase transactions not closing on time due to lender’s strict underwriting are all too common.

Some buyers are turned down for illogical reasons. For instance, if you have investments — even if they’re performing well — an underwriter might deny the mortgage because your portfolio doesn’t fall into the underwriter’s risk assessment model.

One couple was turned down because the husband had worked at his current job for less than a year — even though he was making more money at the new job than he was before.

These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.

Generally, it’s more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. For the lowest interest rates, your credit scores need to be in the 700 range. You need to have verifiable income and cash reserves in addition to your down payment and closing costs.

You could run into underwriting problems if you’re self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won’t lend to buyers who have more than three or four residential properties.

If you’re buying a new home before selling your current home, you’ll need to have 30 percent equity in your current home. This needs to be verified by the lender’s appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month’s rent to verify rental income if needed to qualify.

HOUSE HUNTING TIP: As soon as you’re serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don’t make your selection based on interest rates alone. A good track record counts for a lot.

Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you’re not turned down at the last minute, it’s worth it.

Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you’ll need to do to satisfy the underwriter.

Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won’t be included as livable square feet.

If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.

As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. In some cases, conforming jumbo lenders have moved into the market to pick up some slack. You can expect to pay about 0.25 percent more for a 30-year fixed-rate conventional jumbo loan, in some cases. However, today’s lower interest rates will help boost affordability.

There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.

THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Contact Dian Hymer: Email Letter to the Editor

Copyright 2011 Dian Hymer

 

Posted at Yahoo.com

Top reasons to sell home in winter

Aside from less competition, low borrowing costs give buyers incentive

We’re getting close to the end of the year, which begs the question of whether it’s worthwhile trying to sell your home now. Is it a waste of time? Will it sit on the market and become shopworn? Should I take my house off the market for the holidays? Will the home-sale market be better for sellers in 2012?

The first question you need to ask yourself is: Are you emotionally prepared to sell? Selling is a challenge for most sellers, although some markets are better than others. Unless you bought more than eight to 10 years ago and preserved your equity, you may not be able to sell for enough to pay off the mortgages secured against the property and the other costs of selling.

For sellers who have no additional assets, a short sale or foreclosure may be the only option. If so, first look into government programs that might help you out financially. Also, talk to your attorney and tax adviser.

Sellers who have the resources to make up the difference between the sale price and the amount they owe need to ask themselves if they are willing to pay the additional cash in order to sell and move on.

There are two reasons why you might prefer bringing cash to closing. One is that your credit will not be negatively impacted, as would be the case with a short sale or foreclosure. The second is that many buyers shy away from short sales because of the lengthy and uncertain process involved.

The next thing to consider is the condition of your home. Is it ready for the market? The most salable homes are those that are in move-in condition.

Before racing to the hardware store, ask your Realtor about how much competition there would be for your home if you put it on the market before the holidays. Some areas are shy on inventory of good homes on the market. If so, now could be a good time to sell.

HOUSE HUNTING TIP: The supply/demand ratio plays a significant role in the health of a local real estate market. No matter what is said about the housing market nationally, it’s the local picture that tells the tale in terms of the possibility of selling your home at any given time.

Most sellers don’t put their homes on the market during the last or first couple of months of the year. The inventory of homes for sale tends to dwindle during the winter months. Interest rates are low. So, if there are buyers in your local market, you may be at an advantage selling when most sellers are waiting.

Some sellers feel that if they’ve waited this long to sell, they should put the process on hold until spring and get the house ready in the meantime. Certainly, it’s not a good idea to put your house on the market until it looks great. But if you and your house are ready to sell, move ahead.

The market in general tends to slow down over the holidays. But rather than pull your house off the market and miss a likely prospect, change the showing procedure to require advance notice. And enjoy your holidays. A sale before year end could be a great holiday gift.

There is a lot of pent-up demand, on both the buyer and seller sides. Sellers have been waiting for a better time to sell. Buyers have been waiting for more quality inventory and a sense that prices have bottomed or are close to it.

THE CLOSING: Recent projections call for another five or so years of bouncing along close to the bottom of this market cycle. Many experts believe that the big price declines are behind us.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Contact Dian Hymer: Email Letter to the Editor

Copyright 2011 Dian Hymer

 

Posted at Yahoo.com

November buying advice: Is it better to buy a new or existing home?

Find out whether it’s worth it to fork over extra for a home with up-to-the-minute features and fixtures.

By Melinda Fulmer of MSN Real Estate

 

Given the rock-bottom pricing on existing homes these days, why would a buyer want to fork over a lot more for a new home?

In this month’s edition of Buying Advice, we’ll look at the pros and cons of buying a new home, as well as some tips for making it more affordable. We’ll check out the latest housing statistics and answer a reader’s question about whether it’s a good idea to bundle your mortgage, tax and insurance payments.

Why buy new?
Those model homes in new-home communities sure are enticing, with up-to-the-minute flooring, fixtures and appliances, but are they worth paying a premium?

That depends on the community, its location and design, experts say.

“They can bring a lot of benefits, assuming you can find a location you like,” says John McIlwain, the Urban Land Institute’s senior fellow for housing.

However, you will likely pay much more upfront for these perks: The median price of new homes sold in the U.S. in August 2011 was $204,400, according to the Commerce Department. That’s far more than the median existing home’s $165,400 price tag, which has been pulled down by the flood of bank-owned property. (See more on these stats in the “Housing snapshot” below.)

And that new-home price is far less negotiable than that of a comparable existing home. Builders say they are reluctant to discount the price and bring down the value of future sales in a community.

However, they will often throw in upgrades, such as a free fence, appliances or upgraded flooring to buyers who press for incentives. And they will often pay for closing costs to seal the deal.

What you do get in a new home – if you buy from the right builder – is a house that will need fewer costly repairs, will cost you less for updates and will have greater energy efficiency.

“The difference (in energy savings) between a new Energy Star home and even a 10-year-old home can be dramatic — as much as 30% to 50%” says Todd Frederking, sales manager for the Houston division of First Texas Homes. “These dollars per month should be considered in choosing a home.” These homes can also bring more at resale.

You won’t have to pay thousands to swap out old single-pane windows or add insulation. You won’t have to spring for new cabinets, countertops or flooring, as you might with the purchase of a 1970s or 1980s-era home. You get a home built with materials that suit your taste, and you don’t have to clear out or otherwise inconvenience yourself to get it that way.

More buyers appear to be interested in new construction; sales climbed 5.7% in September from the previous month, according to the Commerce Department.

The downside is that appraisals in new-home communities can come in low, especially if there aren’t many other new-home communities in the area to compare it with, says Ken Chitester, spokesman for the Appraisal Institute.

“Far fewer new-home communities are being built,” Chitester says. That’s putting pressure on appraisers to make tricky adjustments. Indeed, with fewer solvent builders, new-home sales are running at levels that are a third of where they were at the peak of the housing market, McIlwain says.

 

New homes can also be harder to appraise if they have a lot of special features. In many cases, an independent appraisal might be required to get lender approval.

And there can be a tradeoff in size. As homebuilders have worked to bring down prices post-bubble, many have had to cut lot sizes and room dimensions. In the best case, that means efficient floor plans with less to clean. At worst, it means a bedroom that barely accommodates your furniture, a backyard as small as a postage stamp and a view straight into your next-door neighbor’s window.

With so many builders cutting corners, you’d be wise to check out a builder’s reputation first and look for any pending lawsuits against the company. McIlwain also suggests going through that newly built home with a home inspector — and possibly even a contractor — before you close and move in.

But if you are comparing two homes — one new and one existing – and both are fine options, you have to go with your gut and ask, “Where do I really feel comfortable? Will I be happier here or there?” McIlwain says.

That, he says, is how you find a home that you can live in for a decade or two, rather than a house that you might regret.

 

Housing snapshot
Despite record-low mortgage rates, existing-home sales declined 3% in September to 4.91 million from the 5.06 million the previous month. However, they were 11.3% higher than in September 2010, the period immediately following the expiration of the housing tax credit, according to data from the National Association of Realtors.

Lawrence Yun, NAR chief economist, looked on the bright side, noting that the housing market has been relatively stable, although at low levels. “The irony is that affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010.”

 

Contract failures are sale cancellations caused by declined mortgage applications and other failures in underwriting, such as appraisal values coming in below the negotiated price.

The national median sale price declined 3.5% to $165,400 from September 2010, despite distressed homes making up a smaller share of sales – 30% versus 35% in the same period last year.

Investors continued to make up a large part of the market, with 30% of all sales being cash deals.

The biggest sale drop-off came in the West, a higher-cost area where lenders had lowered mortgage loan limits over concerns about the expiration of higher conforming-loan limits at the end of September.

Bundle your bills?
We received this question from reader “Atma” who asks: “Is there any advantage to have your mortgage, home insurance and property tax all included in one monthly payment?”

We asked Ilyce Glink, author of “Buy, Close, Move In!: How to Navigate the New World of Real Estate — Safely and Profitably — and End Up with the Home of Your Dreams.”

The best reason to pay your mortgage, real-estate property taxes and homeowners’ insurance together is that you’ll never forget to make those payments and possibly lose your home, Glink says.

Many folks have trouble coming up with enough cash to make that big tax bill once or twice a year. “It’s a big payment, and you’ve got to be pretty smart about making sure you put enough cash away so that you have enough savings at the right time,” Glink says.

Some folks don’t want to give the bank all of that money and deal with the possibility of it taking more than it needs to make the payments. The good news is that you can opt out of a tax and insurance escrow, she says, if you have enough equity in the property. We’re talking at least 30% before lenders will allow you to pay your own taxes and insurance, and some require even more.

Moreover, if you decide to place your own taxes and insurance premiums in escrow, you’ll have to pay the lender for the privilege, in the form of an upfront fee of as much as several hundred dollars.

Is it worth it? “If you’re sure you can save enough to make these payments and won’t forget to actually write the check, I’d probably try to get around having a mandatory tax and insurance escrow. I’m a big believer in maintaining as much control over your money as possible,” Glink says.

Questions?  Comments?  Do you have a question about buying real estate or a suggestion for a future topic in this column? Submit either in the comments section below or on Facebook, or emailrefdback@microsoft.com. Brief questions have the best chance of being selected.

 

Posted at MSN.com

 

10 ways to winterize your home

Don’t forget about exterior grading, indoor air quality

Fall is in the air already, which means that another chilly winter can’t be too far behind. So before the cold weather arrives, here’s your annual checklist of things to do to get your home ready for the change of season.

Inside your home

Check smoke detectors: Don’t neglect that smoke detector any longer! Take some time right now to check the operation of detectors, and to change the batteries. If you have an older house with a limited number of smoke detectors, install additional ones at each sleeping room, and make sure there is one centrally located on each level of the home as well.

Install a carbon monoxide detector: As houses get closed up for winter, the chances of carbon monoxide poisoning from malfunctioning gas appliances increases substantially. If you have a furnace, fireplace, water heater, or other appliance that’s fueled by propane or natural gas, or if you have an attached garage, install a carbon monoxide detector. They’re available inexpensively from many home centers and other retailers, and offer easy, plug-in installation.

Service your heating system: Perform a complete system check of your furnace annually, either by yourself or by a trained furnace technician. Check for worn belts, lubrication needs or other servicing that might be required; refer to your owner’s manual for specific suggestions, and follow any manufacturer safety instructions for shutting the power and fuel to the furnace before servicing. Check the condition of duct joints and insulation, and of course, change the filter.

Upgrade your thermostat: An older thermostat that’s a couple of degrees off can result in a lot of wasted energy, and so can forgetting to set the thermostat down at night. You can take care of both of those problems with an upgrade to a programmable thermostat. Programmable thermostats are digital and typically very accurate, and they allow for easy, set-and-forget programming of temperatures for different times of the day, including energy-saving nighttime and workday setbacks.

Outside your home

Trim trees: Trees that are overhanging your home can be a real hazard. They can deposit debris on your roof, scrape against shingles during wind storms, and, worst of all, snap off with potentially devastating results. Have a professional tree trimming service inspect the condition of overhanging tree limbs, and safely cut them back as needed.

Check the gutters: Clear the gutters of leaf and pine needle debris, and check that the opening between the gutter and the downspout is unobstructed. Look for loose joints or other structural problems with the system, and repair them as needed using pop rivets. Use a gutter sealant to seal any connections where leaks may be occurring.

Break out the caulk: A few hours and few tubes of caulking can make a big difference in both your heating bills and your comfort levels this winter. Caulk around windows, doors, pipes, exterior electrical outlets, and any other exterior penetrations where cold air might enter. Use a good grade of acrylic latex caulk, either in a paintable white or, if you don’t want to paint, use clear.

Drain sprinkler systems: In colder areas, now is the time to be thinking about having your sprinkler and irrigation systems blown out. You can rent a compressor and do this yourself, or contact a landscape or irrigation system installer and have them handle this for you. This is also the time to shut off outdoor faucets and install freeze-proof faucet covers as needed.

Adjust exterior grade: Fall is also a great time to look at the grade around your home, and make sure that everything slopes away from your foundation to avoid costly problems with ground water. Add, remove or adjust soil grades as necessary for good drainage.

Change light timers: If you have exterior lights that are controlled by timers, including low-voltage ones, check the timer settings. Change the “on” times to an earlier hour to reflect the earlier winter darkness, so that you always have adequate outside light available.

Remodeling and repair questions? Email Paul at paulbianchina@inman.com . All product reviews are based on the author’s actual testing of free review samples provided by the manufacturers.

Contact Paul Bianchina: Email Letter to the Editor

Copyright 2011 Paul Bianchina

6 must-haves for mortgage approval

Even trade-up buyers, owners of multiple properties hit roadblocks

Interest rates fell to new lows in September. Low interest rates increase affordability and should make it easier for buyers to qualify. Yet stories of buyers waiting months to gain loan approval and home purchase transactions not closing on time due to lender’s strict underwriting are all too common.

Some buyers are turned down for illogical reasons. For instance, if you have investments — even if they’re performing well — an underwriter might deny the mortgage because your portfolio doesn’t fall into the underwriter’s risk assessment model.

One couple was turned down because the husband had worked at his current job for less than a year — even though he was making more money at the new job than he was before.

These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.

Generally, it’s more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. For the lowest interest rates, your credit scores need to be in the 700 range. You need to have verifiable income and cash reserves in addition to your down payment and closing costs.

You could run into underwriting problems if you’re self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won’t lend to buyers who have more than three or four residential properties.

If you’re buying a new home before selling your current home, you’ll need to have 30 percent equity in your current home. This needs to be verified by the lender’s appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month’s rent to verify rental income if needed to qualify.

HOUSE HUNTING TIP: As soon as you’re serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don’t make your selection based on interest rates alone. A good track record counts for a lot.

Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you’re not turned down at the last minute, it’s worth it.

Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you’ll need to do to satisfy the underwriter.

Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won’t be included as livable square feet.

If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.

As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. In some cases, conforming jumbo lenders have moved into the market to pick up some slack. You can expect to pay about 0.25 percent more for a 30-year fixed-rate conventional jumbo loan, in some cases. However, today’s lower interest rates will help boost affordability.

There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.

THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Contact Dian Hymer: Email Letter to the Editor

Copyright 2011 Dian Hymer

The Necessity of Full Home Inspections on Townhouses

There’s a prevailing myth in the real estate industry that a townhouse inspection is far easier than a single-family home, takes less time, and uncovers fewer defects.  False, false, and false.  When we quote a price for a townhouse inspection, we always quote the inspection fee exactly as we would for a single-family home. Why? Because townhouses are usually just as much work to inspect as a single family home, and they have all the same problems. We conduct townhouse inspections in the same manner as single family homes… including the common areas.

We often hear: “But you don’t need to inspect the common areas, they’re owned by the association.”

That’s a common objection given by home buyers or real estate agents.  It’s true, the common areas are typically owned by the association, but who owns the association? If the roof needs replacement and the association isn’t aware of this or hasn’t budgeted funds for the roof replacement, who is going to pay?

It’s also very difficult to properly inspect the components that only belong to the individual property owner without inspecting the exterior of the building.  For example:

  • How would the home inspector know if the damper for the bathroom exhaust fan opened at the roof rap without climbing on the roof?
  • How would the home inspector know that the vent terminals for the high-efficiency furnace were properly installed at the exterior without inspecting the exterior?
  • How would the home inspector inspect the dryer damper at the exterior?

If the common areas aren’t inspected, the fee for the home inspection will be less, but it’s not worth the difference in price.  There are far too many components that don’t get fully inspected.

Below are a few photos of some “common area” defects at townhouses that I’ve identified in the past year or two while inspecting the townhouses the exact same way that I would inspect a single-family home; I inspect the whole thing.

Roofs

Roof defects are huge on townhouses.  Many times, nobody knows about the defect yet, or in some cases, such as in the next two photos below, someone knew about a problem and made several unsuccessful attempts to repair the problem.  See all caulking used at these shingles in the photo below:

This caulking will do nothing to fix the problem; the issue was improper flashing, and it still hasn’t been fixed.

What happens when the shingles have reached the end of their serviceable life, but no one knows about it yet? Be sure to find out if the townhouse association has funds allocated for roof replacement.

Ice dams have been a major problem for townhouse associations the past two winters.  Who is responsible for ice and snow removal – the owners or the associations?  This is an issue many townhouse associations had to determine this year, and in most cases the associations determined that it was the owner’s responsibility to have snow and ice removed.

While at first this might seem unreasonable, imagine you’re the owner who just spent $2,000 to have their attic re-insulated.  You don’t have any ice dams over your unit, because you don’t have a problem with your attic.  Why should you have to spend more of your own money fixing everyone else’s problems?

If there is no snow on the roof, how does the home inspector know there were ice dams?  They look for clues.  When a townhouse owner or the townhouse association hires a bunch of hacks to remove ice dams, the removal typically consists of people literally “hacking away” at the ice dams with tools that will permanently damage the shingles, as seen in the photo below.

If you’re buying a townhouse, these are things you’ll want to know about ahead of time.

Exterior Maintenance

On townhouses, exterior maintenance is obviously the responsibility of the townhouse association, but again, is the association aware of the big projects that are going to cost a lot of money?  If not, this means an assessment for the owners.

Home inspectors can’t fully inspect the interior components of a home without also inspecting the exterior.  For instance, where does the dryer exhaust to?  At this particular townhouse, the dryer exhausts underneath the back porch, which is a terrible location.  It’s not accessible, and it’s completely clogged with lint.  This is a fire hazard, and the dryer probably takes forever to dry clothes.  The repair for this is to have the dryer duct re-located, which probably won’t be cheap, considering the fact that the entire basement is finished.

Again, home inspectors can’t fully inspect the interior components without also inspecting the exterior components. If the home inspector doesn’t inspect the exterior, how will they know the combustion air intake for the furnace room is blocked shut with dirt and debris, as shown in the below photo?

Stucco

Stucco problems can be ridiculously expensive.  Just because it’s a townhouse doesn’t mean the individual owners will be protected from huge expenses related to stucco repair.  I strongly recommendinvasive moisture testing on stucco townhouses built since the late 1980′s.

Decks

Home inspectors find more problems with decks than with any other component of a home.  With townhouses, decks are often the sole responsibility of the homeowner; if you see a bunch of different decks in various states of repair, it’s usually a dead giveaway that the deck is the owner’s responsibility, not the townhouse association’s. Improperly attached decks are the number one cause of deck collapses.

When a townhouse buyer absolutely doesn’t want to have the exterior inspected, we’ll skip that part of the inspection and discount our inspection fee by about 20%, but we don’t recommend it.  Townhouses should be inspected inside and out, just like single-family homes.

Reuben Saltzman, Structure Tech Home Inspections, Minneapolis, Minn., is a second-generation ASHI Certified Inspector whose experience with home remodeling and construction began at age four when he helped his father steam wallpaper. He has worked for Structure Tech since 1997 and joined ASHI in 2004. Visit his blog at www.structuretech1.com/blog/.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Posted at Zillow.com

Best Times to Buy

A Conventional wisdom says that you need to stay in a home a minimum of five years to ensure that you recoup your purchasing costs. But with some markets soaring, this advice doesn’t always apply.

It’s All About the Market

Market conditions play a huge part in any decision about when to buy. Housing market values have varied widely from region to region in recent years. While the Florida market has seen meteoric rises in home values, Ohio has seen its real estate prices go into negative territory in the last year.

Do not buy high and sell low – if your market is softening or has hit its peak and is heading south, you may want to wait on your purchase.

The magazine Smart Money has created a worksheet to compare the costs of renting vs. buying using market appreciation calculations to determine at what point you come out ahead. Plugging in the price, down payment, your income bracket, interest rate, and current market appreciation rates, the worksheet will break out what you will gain.

For example, say you were to buy a $400,000 house in Boulder, Colorado and you estimate the market will soften from the current 11% appreciation to about 9 percent annually. If you stayed in the house three years, you would recover $88,750 in equity at the end of that period; if you stayed five years, you’d realize $120,360.

It’s All About You

The top three reasons people file for bankruptcy are change of job status, divorce, and unforeseen health expenses. If you face any of these challenges and don’t have a financial cushion, this may negatively impact your ability to pay a mortgage. Big life events dictate your readiness to buy now or to wait for a little more stability.

Signs you should not buy right now:

 

  • Will you be moving within the next five years?
  • Will you be having kids soon?
  • Will you be making a job change?
  • Have you recently filed for bankruptcy or is your credit score below 630?

 

If you answered yes to any of these questions, or you are experiencing other life-changing events like illness, marriage, divorce, or breakup, you may want to wait.

Your Financial Future

Aside from life events contributing to your decision, getting your financial house in order before you begin your home search is key. Even with all the programs available for buyers with a low-or-no down payment, if your debts are growing steadily and you don’t foresee an increase in your income, you are putting yourself in greater financial risk by taking on a mortgage.

With only a few exceptions, many loans for people who are still repairing their credit or recovering from bankruptcy carry higher rates than those available once your credit is in better shape. So the question comes down to this: Do you buy now, before prices appreciate higher than you can afford, but do so with an expensive loan? Or do you wait and repair your credit, then get a favorable loan, and pay more for your home?

That’s the sort of analysis you need to go over with a financial counselor or mortgage broker before you start hitting open houses.

Ways to Cushion the Blow

On the other hand, if you are willing to buy a home that needs a bit of work and, over time, you can afford to get it done, your home could appreciate faster, strengthening your financial position. If you are willing to take on a roommate or renter, you can also soften the expense of a mortgage, which almost always costs more than rent. Buying a home is a risk, and it’s worth asking yourself hard questions about what you’re willing to do to protect yourself from getting in over your head.

If you answered “no” the life-change questions, and have the down payment or equity from your current home, you still need to look at interest rates and at how buying affects your taxes. You can’t time the stock market, but you can time interest rate hikes, as they are a little easier to predict. If they are going up fast, you can jump in before they rise too far; if they are already high, you will have to calculate how refinancing in the future affects your budget.

What to Do First

If you are anxious to get moving, be patient. You have a few things to do first:

 

  • Go to open houses – get the lay of the land
  • Talk to a mortgage broker to get pre-approved
  • Interview agents (You may want to find an agent at the same time as you look for a mortgage broker – a good agent can recommend reputable brokers and help you make sense of the terms of the loan)
  • Review credit report and scores with mortgage broker to determine if any repairs are needed
  • Use Zillow.com to find info on neighborhoods that interest you and then use the Home QandA feature to ask current homeowners

 

Posted at Yahoo.com

What’s the First Step in the Buying Process?

While you may have been home shopping for a while— either perusing neighborhoods, looking at real estate web sites or perhaps using a real estate app— before you jump fully into the home buying process there are two important things to do before you choose your agent:

First— Speak to a Lender

Even before you choose your real estate agent, you should touch base with a lender and discuss your mortgage options. You want to ensure that your payments are affordable and that you will feel comfortable with the home-buying process.

Additionally, most agents, if not all, want their clients to speak to a lender to verify the price range they can afford. This makes it so agents can focus their time showing their clients homes that actually fit within their price range.

Get pre-approved

When you speak to a lender, ask to get pre-approved.  Getting pre-approved is important so you can demonstrate to real estate agents and sellers that you are a credible buyer. It means you are:

  • Credit-worthy
  • Closer to locking a mortgage rate
  • Able to act fast when you find the home you want to buy!

And when you do find a home, you’ll often need a pre-approval letter from your lender to submit with your offer so it’s a good idea to get pre-approved in advance so that you’re prepared with your letter when you decide to submit an offer.

Overall, the more you learn from your lender early on – about what you can afford, and what to expect from mortgage application process, the less anxiety you will feel regarding the overall home-buying process.

Then Choose an Agent

Once you’ve spoken with a lender, learned about your financing options, and have been pre-approved, you’ll be more prepared to shop for homes with you agent.  A real estate agent not only will be able to provide information about a specific home that interests you, but can also arrange home tours as necessary and assist in the final negotiation process.

Doing these three things in order will make the home-buying process easier for you and your agent. Once you have these things checked off, then you can enjoy searching for your dream home.

Posted at Zillow.com

5 Things a Realtor Looks for When Listing a Home for Sale

After having toured thousands of homes over 10 years of selling real estate, there are certain things I look for immediately when assessing a property. In general, I’m looking for qualities that will help the home sell quickly — or warning signs it may be a tough sell.

Whether the property is in New York, New Haven or Nevada, here are 5 things I look for when evaluating a property. Keep in mind that these days, first impressions — a real estate agent‘s as well as those of buyers and sellers — are often formed online.

1. Location

When I see a new listing hit the market, the first thing I consider is its location. I know that if the property is on a prime block in a good neighborhood, it will automatically get a lot of credibility and attention from potential buyers. Conversely, if it’s on a bad block, or even a so-so, or good block in an undesirable neighborhood, it’s going to be a tough sell.

2. Period charm

The next thing I consider is if the property was built during a historic or earlier time period and if so, if it evokes the charm and style of its era. In San Francisco, for instance, you’ve got lots of peaked roof Victorians. In Los Angeles, there are mid-century modern-style homes. And in New York City, brownstones continue to be desirable.

Many buyers will pay more for a property with Old World charm and a type of construction that isn’t done anymore. It’s just not possible to rebuild in, say, the Art Deco or Victorian style, and expect the rebuild to have the same desirability as the original. Bottom line; If you own a piece of history, it will always hold more value than another property that lacks period character or charm, even if the historic property isn’t in the best condition.

3. Curb appeal and first impressions

Curb appeal, in the form of landscaping, the front door, and a front-yard flower garden, used to be the first impression most people had of a home for sale. Nowadays, many people get their first impressions of a home through a property listing or an email from their real estate agent. They may take a virtual tour of every room in the house, look up the sales or permit history, or even Google the seller before setting foot inside the home. And so, curb appeal has gone online, in a sense.

However, many times real estate agents will list a property online before they take photographs or without taking photographs. Or the agent may take pictures of the property with their phone’s camera — which often produces low-resolution images — and post these photos online. And so, prospective buyers get their first impressions of the property by looking at old pictures or low-quality photos. That’s why it’s so important to have sharp, high-resolution, professional photographs of your home taken before it’s listed. Those pictures are, in essence, the new curb appeal, and if done improperly, you may discourage prospective buyers from even driving by your home.

4. Fixtures and finishes

Let’s say you’ve got an attractive property in a desirable location. Excellent; you’re way ahead of the game. The next thing I look for is how up-to-date (or not) the fixtures and finishes are.

Many buyers tell me they can’t imagine renovating. They want a house that’s already “done done done.” Or they might say they’re OK with a small renovation over time, but that they want a property in move-in condition. Maybe they want to add value to the property by making more substantial upgrades on their own. I factor all of this in as I look closely at a property’s fixtures and finishes.

Do the bathrooms have high-end or cheap fixtures? Is the kitchen outfitted with modern Caesarstone countertops or older granite? Is the stove electric, the refrigerator a relic of the 70s? For kitchens and baths, I look to see if this property is move-in ready, if there’s room for a buyer to add value by updating or if the property needs a gut renovation.

The worst-case scenario is when I see a property that’s been recently renovated, but the fixtures, finishes or style of renovation aren’t appropriate to their particular market, or that obvious corners were cut to save money. A buyer isn’t going to pay top dollar for a renovated property if they have to re-do the second-rate renovations.

5. Layout

How the property is laid out makes a big difference to buyers. You can have an awesome renovated home in the best location. But if the layout of the house doesn’t fit the profile of buyers in your area, that can be a problem.

For example, many families in San Francisco look for homes with all bedrooms on one floor. This makes it easy to check on the kids or to have everyone nearby. A small mid-century home, in which the previous owners added a basement bedroom and bathroom, would therefore be a tougher sale in a San Francisco neighborhood popular with families.

Another example: Many people today like to entertain at home (a trend that’s likely to continue, especially during tough economic times), with guests hanging out in the kitchen together as the host cooks. As a result, a floor plan with an open living/kitchen/dining area will be more attractive than one in which the kitchen is tucked away at the end of a hallway, far from the living or entertaining areas.

Adding it all up

Of course, every market is different and every buyer has different needs, wants and requirements. There may be buyers out there who want to be in a less-desirable, but up-and-coming neighborhood. That buyer may also hate older homes and only wants something new and modern. Regardless of the buyer’s particular interests or needs, these five qualities will always be among the first things a realtor looks for when reviewing properties.

A seller can’t physically move his house to a better neighborhood or transform a 1980s home into a 1880s Victorian. Even so, the more you can do to make your property as attractive as possible in these five categories, the easier it will be to sell your home.

 

Posted at Zillow.com

5 Home Projects to Finish Before Labor Day

If the back-to-school radio or television commercials haven’t clued you in yet, summer is nearly over and with that, so will be the longer days and warmer temperatures.

Now is the time to finish up those home improvement projects sitting at the top of the to-do list before Labor Day and the beginning of fall.

Curb Appeal Projects

Get going on outdoor projects that can increase your home value and up your curb appeal, such as exterior painting, landscaping or installing a new front door. Paint won’t cure in cold or wet weather, so tackle this big project before the weather takes a turn.

Clean and Caulk Windows

Make things a bit clearer by taking time to clean the outside of your windows. While you clean them, take note of any cracks or any places that may need caulking. Sealing your windows (and doors) well will ensure your home stays warmer and your utility bill stays lower during the colder winter months.

Scrub and Seal Your Deck

Your deck gets a beating year-round from rain and snow and freezing temperatures during the winter and sun and dry air during the summer. Give it a scrub with approved deck cleaner to get rid of mold, then apply a stain or sealant to protect it from rain and snow during the upcoming months. 

Clean out the Garage (or other spaces)

It’s no fun to labor in a garage in the dead of winter, so get de-cluttering and organizing now when the weather is nicer. Donate unwanted items to charity or host a garage sale.

Seal the Driveway

If you’re seeing cracks or holes in your driveway this summer, they will most likely get worse with winter weather. Seal or repair your driveway to prevent further damage. Additionally, asphalt pavement doesn’t cure as well in cold weather; if you are considering a paved driveway, summer is the time to do it.

Posted at Zillow.com