Reasons You Could Lose Out on a Home Loan

If you are applying for a mortgage or plan to in the near future, you need to be careful with your funds. You know that having a steady income and good credit are important to being approved, but other factors could result in a denial.

Lending Money

If you have a family member come to you for a temporary loan, you could get turned down for a mortgage if you say yes. That may not seem fair, but you may be required to keep a certain amount of money in reserve for your application to be approved.

Your lender will ask what money you have in savings and checking accounts. That money may be used to calculate your down payment or reserve money for future payments. If it disappears or is reduced because you loaned to a friend or family member, you may no longer qualify.

The same holds true if you use the money to buy something. Most lenders recommend waiting to make large purchases until after you close on a home.

Changing Jobs

Getting a different job in the middle of a home purchase is also not a good idea. If you have received a salary increase, it may not lead to a denial, but it could still cause a delay. However, if you take a pay cut or even switch fields, your loan application could be denied if you are seen as an increased risk. You will need to show 30 days of income with your new job prior to closing. In addition, if part of your salary is based on commission, it won’t count with a new job.

Closing an Account

Don’t close out any accounts during your loan process. Even if you don’t use them, they can make big changes in your credit portfolio that could change your approval. Each open account impacts your total credit available and length of credit history. This can change your credit score and lower it to below the required number. Even paying off a balance is not a good idea without talking to your lender first.

Avoid doing anything to change your finances, income or credit until after you have closed on your home. It will make the process go much smoother and prevent your approval from being turned into a denial.

If you are ready to buy a house, contact me to help you find the right place.

Why You Need a Realtor to Price Your Home to Sell

You can easily go online and find out what price you should put on your home when you are ready to sell. However, that may not be the best way to get the highest or even the most accurate price for your property. Instead, it is best to work with a real estate agent who can go beyond automated systems and give you real numbers.

How Automated Systems Work

These automated sites don’t do a bad job in pricing properties. They have a solid method that calculates the value based on what other homes similar to yours have sold for in recent months. These sites, called automated valuation model sites or AVM for short, use information that is available publicly. They may come from listing services and other data from your region.

Why You Need a Real Estate Agent

While these tools are pretty interesting to use and provide a valuable service, you are selling yourself short if you rely on them. Instead, think of them as a starting point to give you an idea of what your home might be worth.

One reason you should not rely on the tool as your sole pricing agent is that it is not always accurate. They may be off as little as 5 percent or as much as 20 percent. If your house is priced off by that much, you could either lose out on money for being underpriced or on buyers by being overpriced.

Market data is an important of the pricing process. However, it is not the only aspect you should consider. For instance, these tools won’t take into account whether you have made major upgrades to your older home. It also won’t consider what work still needs done.

Bonus features for the area may also overshadow market value. For instance, if you live near one of the best schools in the state, your home may be worth more than market data reflects. Walkability of the neighborhood may also be reflected in the price.

Realtors know your home and others in the neighborhood. They actually visit your property and comparable homes in the area to prove their price is the right one. An agent can rely on past experience to help them make the right decision for your home’s price. While automated tools can be a valuable addition to selling a home, there is no replacing the real-world experience and past performance of real estate agents to help you get the best price for your home. Contact me if you are ready to price your home to sell.

Is Saving for a Home Impossible for Millennials?

One of the issues that have come about because of the housing crisis is the problem of saving for a down payment. Buyers got spoiled to the idea that they could buy a home with 100% financing. Of course, this was one reason they ended up underwater on their mortgages. With the crisis came stricter requirements from lenders to qualify for homes. One of those restrictions was a resurrection of higher down payments.

Back to the way it was

The idea of having 20% down to buy a home has halted a lot of buyers, especially first-timers. However, this is not a new restriction. In fact, back in the mid-20^th century, 20% was considered reasonable for a down payment. In fact, it was not uncommon for lenders to require 40-50% down for financing. It’s just quite a change from where buyers were five or ten years ago.

Fast forward to today

Today’s home buyers aren’t saving the money they need to buy the homes they want. At least not at the level you would expect. They aren’t ready to give up the other things on their list of must-haves or just “I wants.” However, saving for that big purchase of a home doesn’t have to be the impossibility that some people see. Here are some ways that you can start saving for the down payment without giving up your latte.

·         Sell stuff – find things you own that you no longer use, sell them and put the money in savings.

·         Delay other purchases – do you really need that new living room set right now? Wouldn’t it look better in a nice new home?

·         Freelance or take on a second job – find something you like to do and charge for it. It may be babysitting, designing brochures, or even teaching a class, but that extra cash can go into your house fund.

Start saving up money to buy your first home. Even if you could get a loan with no money down, just think about how far ahead of the game you are with 10-20% down. If you have been saving and are ready to make that big purchase, give me a call. I can help you find the right house to fit your lifestyle and budget.

Are You Ready for a Mortgage?

Everyone is telling you that now is the time to buy before interest rates go up and your dream home is unaffordable. But buying a house just because it is a good idea doesn’t mean it is right for you. While you may think of the benefits of home ownership, you have to be ready for the challenges, too. Here are a few indications that you are ready to take that next step.

You have a down payment.

You have been saving money for your down payment. Even if you don’t have a lot saved, the act of putting money aside shows you are ready to become a home owner. You can find some special programs like FHA loans that don’t require a huge down payment.

You are dedicated to your budget.

You have a budget that you faithfully follow and are willing to do without some things if they don’t fit in your calculations. As a homeowner, you are going to have costs related to upkeep and maintenance of the home, so you need to know how to live within your means.

You know what you want in a home.

While you do need to be flexible about the home you choose, certain things are non-negotiable and you know what those are. Buying a home is much different from renting; you can’t just pick up and leave. You can be sure that you are going to be happy in the neighborhood and home you select for at least five to seven years.

You know the difference between wants and needs.

Buying a home that fits your family is important, but many people have the wrong idea about what they really need. Enough bedrooms, a good school district and a location close to work are items that are needs, essential to your happiness. However, finding a home with stainless steel appliances, walk-in closets or the perfect paint job are just wants that you can do without. It’s important that you understand the difference.

You can accept less than perfect.

No house is perfect and you must accept that before you can find the house you are meant to have. You must realize that no house is going to have everything you want. Instead, it will be your job to make the house you choose into your home.

If you understand these five concepts, then you are ready to buy a home. Give me a call and I can help you find that place that fits you and your family.

The Biggest Problems Sellers Have with Buyers

Buying or selling a home can be a stressful time. For sellers, they often have to figure out how to buy and sell at the same time or out-do the competition down the street to get the best selling price. Buyers worry that they may not find the homes they want or the sellers won’t accept their offers.

Here is a list of things buyers need to be aware of to avoid irritating the seller and to have a better chance of getting their offers accepted.

Be Courteous at Showings and Open Houses

Often the seller isn’t present when a home is shown, but that doesn’t mean the buyer can act anyway he or she wants to. Treat the house like you are a guest – after all, it’s not your home yet. Take off your shoes if they are muddy or the seller has asked for this in the showing instructions. Close doors carefully and don’t mess up or rearrange items. Keep your kids under control and don’t let them bounce on the furniture or do other things they might at home.

Cancel an Appointment If You Can’t Attend

One of the biggest pet peeves of a seller or his agent is when buyers make an appointment to see the house and then don’t show up. Sure, they understand that things come up, but a phone call is expected. The seller takes a lot of time to clean up and get out of the way, so be considerate of their time and inconvenience you cause by missing an appointment.

Don’t Pick Apart a House

Sure, there’s bound to be some things wrong with a place, but if you plan to put in an offer, don’t start listing them. Skip the complaints about wall colors or carpet; those are easy to change out. Instead, focus on big issues if you find any and explain why you still want the house if you are requesting them to be fixed.

Be Reasonable with the Contract

Buyers may try to take charge of the negotiations and start asking for a bunch of concessions or changes. This annoys a seller, especially if the requests are troublesome or unnecessary. For example, pushing the closing date. Buyers must understand that the seller has to move out and find a new place to live and be flexible.

When buyers are considerate, reasonable and put themselves in the seller’s shoes, it makes the entire process go smoother for everyone.