The SCOOP! Blog by ChangeMyRate.com®

In a real estate boom, buyers will clamor for almost any house that hits the market. This is great while it lasts, but unfortunately when the party's over, the homebuyers who chose the best locations will be left holding property that depreciates at a much slower rate. This discrepancy is largely a result of a home's location.

"Location, location, location" is a common mantra in real estate. And it's good advice – except for one thing: most people have no idea what this really means.

A "good location" can mean different things to different people, but there are also subjective factors that determine a home's value. Depending on your personal needs and preferences, you may not be able to buy a home with all of these factors. And that's OK – after all, a home is much more than just an investment. However, next time you're shopping for a new property, keep the following factors in mind.

Centrality

What part of a city you choose to live in will undoubtedly affect how much you pay for your home. Land is a finite commodity, so cities that are highly developed and are bound from large amounts of additional growth, such as San Francisco, tend to have higher prices than cities that have too much room to expand. For example, many suburban communities have become what the media has dubbed "slumburbs" because such a large number of homes are uninhabited that the areas have fallen into disrepair. In most cases, this urban sprawl occurs as a result of population growth, according to the U.S. Bureau of Census Data on Urbanized Areas. When sprawling cities experience a population exodus, it's the outlying areas that tend to suffer the most sever declines in property value. (See also: Making Money In Residential Real Estate.)

Neighborhood

The neighborhoods that appeal to you will largely be a matter of personal choice. However, a truly great neighborhood will have a few key factors: accessibility, appearance and amenities. Your neighborhood may also dictate the size of the lot on which your house is built.

In terms of accessibility, you should look for a neighborhood that is situated near your city's major routes and that has more than one point of entry. Commuting to and from work is a big part of many people's day, so a house with easy access will be more desirable than one that is tucked away and can only be accessed by one route.

The appearance of the neighborhood is also important. Large trees, landscaping and nearby green or community spaces tend to be desirable. You can also judge the popularity of the neighborhood based on how long homes in that area tend to stay on the market; if turnover is quick, you're not the only one who thinks this is a desirable place to live.


A great neighborhood should also include important amenities such as grocery stores, shops and restaurants. Most people like to frequent places that are convenient – if you need to drive a great distance to get to anything, this is likely to make your house less attractive. Schools are another important amenity – even if you don't plan to have kids, if you want to sell your home this is something many buyers will be on the lookout for. The distance from and quality of local schools both play into this. (See also: 8 Signs Your Neighborhood Is On The Upswing.)

Development

It's not just present amenities that matter, but future ones as well. Plans for schools, hospitals, public transportation or other public infrastructure can dramatically improve property values in the area. Commercial development can also improve property value. When you're shopping for a home, try to find out whether any new public, commercial or residential developments are planned and consider how these additions might affect the desirability of the surrounding areas.

Lot Location

The next thing you need to consider is where the house is actually located. In this instance, there are a few things you should watch out for.

For example, if your home is on a busy road, you will probably get it for a lower price, but it will also be more difficult to sell down the road. The same may hold true for houses that stand next to or back onto commercial property, such as a grocery store or gas station, or houses on streets that get an unusual amount of parking traffic and parked cars, such as those near large churches or community centers. This is why a large number of such homes are rentals.

The House Doesn't Matter

Suppose that you have narrowed your choices to two homes that stand side by side in a great neighborhood. One needs repairs and updates, but has a huge lot. The other is in tip-top shape but sits on a lot half the size. The prices of the two homes are similar. Which do you choose? This is one aspect of house hunting that surprises many people. In most cases, the beat up house is the better investment.

Why? Your house is a depreciating asset. The lot, on the other hand, will maintain its value (or likely appreciate) relative to the house. If you bulldozed both houses, the larger lot would sell for more. So, if you can, choose a bigger, better shaped or better situated lot over a nicer house. A less attractive house can always be updated, added on to or replaced altogether while the lot can't be changed. (See also: Top 4 Things That Determine Your Home's Value.)

Location isn't entirely subjective – in fact, it's based on a fairly static set of criteria. So, when you set out to shop for a new home, make sure the neighborhood isn't just desirable to you.

By Tara Struyk – To view the original article click here

Posted by Jackie A. Graves, President on October 18th, 2017 6:08 AM

Conventional wisdom says that spring is the best time to buy a house. But if you’re in the market for a starter home, you may be better off ignoring that wisdom. A recent report from Trulia.com, an online resource for homebuyers and renters, found that during the autumn months, starter-home inventory actually increases by about 7% compared to the spring. That extra inventory helps push listing prices lower by about 4.8% and 3.1% in the winter and spring, respectively, compared to summer prices. With that in mind, it looks like now may be a good time for first-time homebuyers to step up that house hunt. (For a guide to the whole process, see How to Buy Your First Home: A Step-by-Step Tutorial.)

Peak Season for Inventories

Trulia’s Inventory and Price Watch report examines the supply and affordability of starter, trade-up and premium homes on the market. The most recent edition of the report concludes that fall (which Trulia considers the fourth quarter – Oct. 1 through Dec. 31) is peak season when it comes to starter homes.

Out of the 100 largest metros in the U.S., 70 see peak levels of inventory for starter homes during the fourth quarter of the year (based on Trulia Inventory and Price Watch data from 2012 to 2017). And it’s not just the peak inventory that should interest starter homebuyers: Starter-home listing prices drop each year between January and March, probably in response to the previous quarter’s sharp rise in inventory. See also: Are You Ready to Buy a House?)

Location Matters

Since inventory tends to peak in the fall, that’s a good time of year for starter homebuyers to intensify their hunt – especially in Western markets, as it turns out. According to Trulia, seven of the top 10 metros with the largest seasonal swings in inventory are in the West. The largest inventory swing happens in San Jose, Calif., where starter-home inventory is 42% greater, on average, during the fall than it is during its lowest inventory quarter – typically January through March.

Colorado Springs, Colo.; Portland, Ore.; San Francisco and Phoenix round out the top five metros, with average seasonal inventory swings ranging between 32.8% and 34.7%. All but Phoenix see their inventory peak in the fourth quarter of the year.

Not surprisingly, seven of the top 10 metros with the largest seasonal swings in starter-home listing prices are also out West. Wichita, Kan., tops the list, and median starter-home listing prices there are an average of 18.6% lower during the first quarter than in the third quarter, when prices are at their peak. Rounding out the top five are Seattle; San Jose, Calif.; Oakland, Calif. and Denver, where average seasonal price swings range between 9% and 12%. All of these metros see their lowest starter-home prices in the first quarter of the year.

The Bottom Line

Starter homebuyers are likely to find a better selection of homes at the end of the year. Trulia admits it can’t say for certain why individual markets see large or small seasonal swings for starter-home listing prices, but it has found a “strong and statistically significant correlation between seasonal swings in listing prices and seasonal swings in inventory.”

According to Trulia, “Markets that witness bigger seasonal swings in starter home inventory tend to experience bigger seasonal swings in starter home listing prices.” This suggests that homebuyers in markets with significant inventory seasonality stand to benefit the most by house-hunting during the fall and winter. Still, the majority of markets across the U.S. see higher levels of inventory and lower listing prices during the fall and winter – which means the best time to buy that first home is right now. (You may also want to read: 10 Worst First-Time Homebuyer Mistakes.)

By Jean Folger – To view the original article click here


Posted by Jackie A. Graves, President on October 17th, 2017 6:44 AM

Home improvement loans sound pretty sweet: Imagine, someone actually gives you money to fix up your house! And these loans are actually plentiful if you know where to look. Here are some options to explore, and how to tell whether they're right for you.

FHA 203(k) loan

The FHA 203(k) loan is a loan from the Federal Housing Administration—so that means you can put as little as 3.5% down! Homeowners can use the money to redo a kitchen or bathroom, finish a basement or attic, change out the floors, buy appliances, or add a room.

The loan can even be used to rebuild a tear-down as long as the original foundation remains, explains Suzanne Caldeira, a finance expert at Shamrock Financial Corp. The only no-nos are upgrades that are deemed "luxury" items, like adding a pool or fire pit.

How it works: To qualify for a 203(k) loan, homeowners have to provide a bid from an approved contractor to make the upgrades they want with their loan paperwork. An appraiser reviews the home and the submitted bid, and appraises the estimated value of the home postrenovation. That appraisal must be in line with local comps—if it's not, you could be required to scale back the reno you're proposing.

Once the loan is approved, the money for the renovation is put into escrow. After the work is completed—the deadline is six months—an inspector visits to determine that it's been done correctly, then the money is released to the contractor.

Like traditional FHA loans, you can pay it back over 15 or 30 years. Although the interest rate can be fixed or adjustable, you can expect to pay a rate that’s about 1% higher than a standard loan, as well as private mortgage insurance for the life of the loan.

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Fannie Mae HomeStyle loan

The HomeStyle loan is similar to the 203(k) loan, but it requires at least a 5% down payment. Another difference: There's no limit to the kinds of renovations you can do, as long as everything is permanently affixed to the home and adds value.

How it works: As with the 203(k) loan, you have to hire an approved contractor and submit a bid for the project with your loan paperwork. You then have an appraiser determine what your home will be worth after the renovations. Once you've got that number, you can borrow up to 50% of that appraised value to do the renovation.

Similar to a 203(k) loan, the money for the renovation is held in escrow until the work is completed and inspected and is then released to the contractor. However, with the HomeStyle loan you get 12 months to complete the renovation instead of six. You then pay it back over a period of 15 to 30 years at either a fixed or adjustable rate. As with any loan, you must pay PMI if you put down less than 20%.

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Section 504 Home Repair Program

This government initiative helps qualified homeowners improve their homes, but not in a "I'm dying for a new backsplash" way. Rather, the renovations must make your home safer (e.g., replacing dangerous electrical components), more energy-efficient (e.g., repairing the insulation, furnace, or ducts), or more accessible to the elderly or people with disabilities (e.g., adding ramps and bars).

To qualify for a Section 504 loan, you have to have a household income below 50% of the area's median, and be unable to obtain affordable credit elsewhere. There's also a grant program for people over the age of 62 to add accessibility features, which is ideal for homeowners aging in place.

How it works: The maximum loan amount is $20,000, which can be repaid over 20 years with the interest rate fixed at 1%. You apply for the loan, then after determining that you are indeed eligible, a loan officer comes to your home to figure out which repairs would qualify. After that, you get at least three bids from approved contractors. The loan originator signs off on the contractor and the work, and you can get started with the improvement. Here's more on Section 504 home loans.

By Audrey Ference – To view the original article click here

Posted by Jackie A. Graves, President on October 16th, 2017 8:06 AM

Buying your very first home can be overwhelming. There’s all the financial jargon and the mountainous mortgage paperwork, not to mention the dollar amounts that can make you dizzy.

Money issues often stand in the way of homeownership. A survey by rental service Apartment List found that 80 percent of millennial renters want to buy a home, but most say they can’t afford to.

What you may not realize is that many first-time homebuyer programs and grants offer financial help, and you may be eligible for various types of assistance.

Here are nine first-time homebuyer programs and grants designed to help you land a great mortgage and get a place of your own.

1. FHA loan

In an FHA loan, the Federal Housing Administration insures the mortgage. The FHA is an agency within the U.S. Department of Housing and Urban Development (HUD).

The FHA’s backing offers lenders a layer of protection, meaning that your lender won’t experience a loss if you default on the mortgage.

FHA loans typically come with competitive interest rates, smaller down payments and lower closing costs than conventional loans.

If you have a credit score of 580 or higher, you could be eligible for a mortgage with a down payment as low as 3.5 percent of the purchase price. If your credit score is lower than 580, you still might qualify for an FHA mortgage, but the down payment would be at least 10 percent of the purchase amount.

2. USDA loan

While not well known, the U.S. Department of Agriculture (USDA) has a homebuyer assistance program.

While the program focuses on homes in certain rural areas, you don’t need to buy or run a farm to be eligible.

The USDA guarantees the home loan. There may be no down payment required, and the loan payments are fixed.

Applicants with a credit score of 640 or higher typically get streamlined processing. With a credit score below 640, you still can qualify for a USDA loan, but the lender will ask for extra documentation about your payment history.

Keep in mind that there are income limitations, which can vary by region.

3. VA loan

The U.S. Department of Veterans Affairs (VA) helps active-duty military members, veterans and surviving spouses buy homes.

The VA guarantees part of the loan, making it possible for lenders to offer some special features. VA loans come with competitive interest rates and require no down payment. You aren’t required to pay for private mortgage insurance (PMI), and a minimum credit score isn’t needed for eligibility.

If it becomes difficult to make payments on the mortgage, the VA can negotiate with the lender on your behalf.

4. Good Neighbor Next Door

The Good Neighbor Next Door program, sponsored by HUD, provides housing aid for law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12th-grade teachers.

Through this program, you can receive a discount of 50 percent on a home’s listed price in regions known as “revitalization areas.”

Using the program’s website, you can search for properties available in your state. You must commit to living in the home for at least 36 months.

5. Fannie Mae or Freddie Mac

Fannie Mae and Freddie Mac are government-sponsored entities. They work with local lenders to offer mortgage options that benefit low- and moderate-income families.

With the backing of Fannie Mae and Freddie Mac, lenders can offer competitive interest rates and accept down payments as low as 3 percent of the purchase price.

Fannie Mae also provides homeownership education for first-time homebuyers through its “HomePath Ready Buyer” program.

6. Energy-efficient mortgage (EEM)

An energy-efficient, or “green,” mortgage is designed to help you add improvements to your home to make it more environmentally friendly. The federal government supports EEM loans by insuring them through the FHA or VA programs.

The key advantage of this mortgage is that it lets you create an energy-efficient home without having to make a larger down payment. The extra cost is rolled into your primary loan.

Some improvements you can make include installing double-paned windows, new insulation or a modern heating-and-cooling system.

7. FHA Section 203(k)

If you’ve run the numbers to see how much house you can affordand have determined a fixer-upper is best for your budget, the Section 203(k) rehabilitation program may be a good fit.

This type of loan, backed by the FHA, takes into consideration the value of the residence after improvements have been made. It then lets you borrow the funds you’ll need to carry out the project and includes them in your main mortgage.

The down payment for a 203(k) loan can be as low as 3 percent.

8. Native American Direct Loan

Since 1992, the Native American Veteran Direct Loan program has helped Native American veterans and their spouses buy homes on federal trust lands. The VA serves as the lender.

If you’re eligible, you won’t be required to make a down payment or pay for private mortgage insurance (PMI).

This first-time homebuyer loan also offers low closing costs and a 30-year fixed-rate mortgage.

9. Local grants and programs

In addition to the various programs provided by the federal government, many states and cities offer help to first-time homebuyers.

Before buying a home, check your state’s or community’s website for information on housing grants and programs available in your area.

You also might consider contacting a real estate agent or local HUD-approved housing counseling agency to learn more about programs in your area that might apply to your situation.

By Rachel Hartman – To view the original article click here

Posted by Jackie A. Graves, President on October 15th, 2017 10:58 AM
For all of us, there are tasks for which we need professional help to complete a home improvement project. Whatever help you require, here are some guidelines for hiring professionals.

Finding good tradespeople can be difficult. Seek out help through personal recommendations or through professional organizations, and preferably view their previous work before hiring them. Always insist on a "price." This should be the amount you pay for the job specified — no less and no more. The only reason a price should change is if you alter the specifications of your particular job or if the professional discovers "unforeseen problems." Both should be clearly defined in the contract.

Architects
An architect will draw plans required for construction, if you are seeking a building permit, for example. Architects generally charge a flat fee for drawings, and then extra to oversee work being carried out (normally a percentage of the final building bill, ranging from 5 to 25 percent). If the architect is going to oversee work, check what this entails and get it in writing.

How to Install Stone Pavers

Masons and Bricklayers
Bricklayers tend to solely lay bricks and blocks, whereas masons will also build natural stone walls and construct special stone features. Charges for stone and masonry work are normally based on every 1,000 bricks laid, or a lump-sum price for a specific job, such as building a chimney. If you hire a bricklayer, specify the brick type and insist on seeing samples.

Builders
Large building companies manage trade contractors to do the work on your behalf. Smaller building companies or general contractors will normally have trade skill sets themselves, such as carpentry or bricklaying, but may also become the project manager for part or all of the work being carried out. The builder may include this cost in the submitted price, or charge a further percentage on top of the final cost. Get this in writing before work starts.

Carpenters and Joiners
Finish carpenters assemble custom-made, wood-based items such as doors and windows, whereas rough carpenters or framers will fit these items into your home, and tackle structural tasks. There are overlaps between the two. A good carpenter can be invaluable in complex tasks, such as calculating complex roof layouts. With a finish carpenter, be clear on specifications for any items that you have commissioned him to make. If he is making custom cabinets, for example, make sure that he specifiesthe type of wood and the finish detail. The difference in quality and price, can vary greatly.

Repairing HVAC

Electricians
An electrician will carry out all types of electrical work, usually for the wiring of outlets, light switches, phones, and televisions. Most states require electricians to be certified but specific requirements may vary by county and state jurisdictions. Check with the city building department about the specific type(s) of required certification and/or licenses and verify that your electrician meets those requirements.

Flooring Installers
General flooring companies can tackle any floor requests, ranging from initial leveling to waxing a hardwood floor, for example. However, make sure they have the relevant experience in all areas. You can also employ carpet installers, wooden floor specialists, or floor tilers.

Excavators
Before a building starts to go up, excavators generally do all the preparatory work, including digging for foundations and routes for drainage and utilities. Many are employed by a builder, but some work independently. It can save time and money to employ an excavator and his equipment for the day to carry out all of the heavy earth-moving requirements on a project.

Laborers
Skill and experience in this trade vary greatly. Good laborers are skilled at helping another trade to finish a job. General laborers will price themselves based on knowledge and experience, and hourly rates will vary widely. Personal recommendation is essential.

Painters and Decorators
A good decorator will carry out all aspects of decorative coatings, including painting, papering, and, in some cases, tiling. Specialist tilers sometimes tile both walls and floors as a full-time occupation. Good decorators can provide very-high-quality finishes-a preferable option when looking to hang expensive wallpaper, for example. Make sure that the number of coats, type of paint, and general quality of materials is specified in any painting job. Decorators can be an excellent source of ideas for new effects and finishes.

Drywall Repair
Minimal drywall repair is easily done by the "do-it-yourselfer" but large scale jobs require skill. Pricing for repair work is usually set according to square footage or estimated time. Check that the price includes all coats required and whether painting is included. They may also offer "tacking" services-cutting and fixing drywall before repair.

Plumbers and Heating Contractors
There is often an overlap in expertise between plumbers and heating contractors. When installing, servicing, or maintaining a gas- or oil-fired furnace, they must have the relevant county and state certification/licensing. If you do not have experience in working with gas or propane piping, hire a professional. For general plumbing work such as installing tubs or toilets, the law is less exacting but most often also requires state or local licensing. Always find out what is required by your area before you hire one of these specialty trades.

Project Managers
A general contractor may be the best choice for project management. He can schedule the job, coordinate the various trades, and communicate on your behalf with everyone involved in the project. If you are employing an architect on new building work, it may be best for them to project-manage. If the size of job warrants a professional project manager, be certain of their credentials based on proven experience.

Roofers
Usually, roofers only deal with roof coverings, such as tiles, shingles, felt, and finishing and any mortar work on the roof. A carpenter will deal with any structural elements. Large companies have carpenters working with the roofers. Smaller firms subcontract out structural carpentry. Roofing bids or prices can be complicated. If weather delays work, this can have effects such as increasing the price of scaffolding rental. On large jobs, a roofer may actually scaffold over the top of the house and provide a waterproof "tent" so that work can continue in most weather. This increases cost and is only worthwhile on larger jobs. Check samples of materials, such as tiles and felts, before they are bought and make sure your choices are specified in writing.

Other Installers
This category includes all those trades and services that offer a product with their own installation service. This can be anything from new windows, to garage doors, blinds, or custom kitchens. Make sure the product you receive is the same as the specification you were sold to avoid problems with your installers. As the number of different installers a project involves increases, more vigilance is required to ensure that the job runs smoothly. Make sure that you specify each installer's individual responsibilities. For example, a company that installs blinds only has to supply what you ordered and use relatively basic skills to install them. A company that offers a custom kitchen installation service needs to supply carpenters, plumbers, electricians, and possibly heating engineers, decorators, and tilers. 

Structural Engineers
As their name suggests, structural engineers assess the structural and load-bearing issues of a building and provide specifications. For example, they can calculate requirements for headers and for foundations. They are often consulted by architects when plans are being made, and generally charge a flat fee. Many municipalities require a stamp from structural engineers for new or remodeling jobs and ignorance of this requirement could cost you serious money in fines or replacing work in place.

Payment and Extras
On small jobs, never pay the entire fee up front. It's not uncommon to pay a deposit but be clear on what your recourse is. Pay the full amount only when you are satisfied that work has been completed to specification. On larger projects, it is common to stagger payments through the course of the project. Link these to clear stages, such as the completion of excavation, for example. On large projects, a builder may require some money up front. This acts as a deposit and allows the builder to order and buy materials. The builder usually has a clear "progress schedule" for payments and you should feel comfortable with the requirements. It is standard practice to retain a portion at the end until all work is complete to satisfaction. Any payment in addition to that originally estimated, or quoted, should be backed up by reasoning agreed between both parties, in writing.

Building Permits
As building materials, environmental protection policies, and health and safety standards change, so do planning and building regulations. Local authorities deal with most planning issues under an umbrella of national policy and rules. Further rules apply to listed buildings and conservation areas. If you are considering structural work, always contact the local building department first. They are there to help, not hinder. A quick phone call can often put your mind at rest about what does or does not need a permit. Construction is supervised by an inspector. Again, a quick phone call can often solve many problems. If you are carrying out work, the inspector will often need to check various stages to ensure that regulations are being adhered to. Insulation, ventilation, electrical wiring, water supply, and drainage systems have all recently become more stringently regulated. Use these highly trained professionals as allies.

They offer excellent advice and help.

Tradesperson Checklist

  • Always use personal recommendations for tradespeople.

  • Always get estimates or prices put in writing with a detailed job specification.

  • Check that heating, plumbing, and electrical contractors have the required qualifications.

  • Check that any tradesperson has the appropriate insurance.

  • Ask for samples of any materials that will be used, such as bricks, blocks, shingles, or finish material.

     

    DIY Network - To view the original article click here

Posted by Jackie A. Graves, President on October 14th, 2017 11:07 AM

These errors can cost you the chance to buy your dream home, and they can set you back financially.

Don't blindly listen to advice from family and friends when searching for a new home. (Getty Images)

When you're buying a home, a lot can go wrong. Your seller, the lender, the appraiser or your real estate agent could do something to inadvertently sabotage the purchase of your new home.

 

And, yes, even you could make a mistake. Homebuyers make plenty of them.

 

And in today's homebuying market, where demand is high and supply isn't, you can't afford to make any mistakes. This doesn't even begin to scratch the surface of what could go wrong, but if you're looking to buy a house, do what you can to avoid making these classic homebuying blunders.

 

Not having your financing ready when you make an offer. If you want a house, and you love it, you don't have any time to waste, says Ryan Critch, chief executive officer of Ocean400 International Realty in Fort Lauderdale, Florida.

 

"In today's environment if you love the house, don't leave without putting in your offer, or the next family will," he says. "Countless times over the last year families have experienced heartbreak by thinking about it. Get your offer in fast, and think about it during the negotiation. Don't lose your dream home."

 

Critch also says that when you make your offer, you shouldn't suggest you pay less than what the homeowner is asking. "In today's seller's market, we're often in multiple offer situations, and sellers have little patience for low offers," he says.

 

Not looking at homes before you're ready to make an offer. This is the period of homebuying where you're window shopping and learning about buying a house. But many homebuyers skip this stage, says Kate Ziegler, a realtor in Boston.

 

She recommends going to open houses as soon as you know you're in the mindset that you want to buy a house. Just know that even if you fall in love with a home, you won't make an offer since you haven't lined up the financing yet.

 

"The more properties you can visit in the early stages of a search, the more confident you'll feel signing the offer when you do find – the one," Ziegler says.

  

By looking at a lot of homes early in the process, "it will help you learn what you're really looking for, give you practice evaluating potential homes with some emotional detachment, since you're not ready to offer anyway, and motivate you to keep moving forward as you see things come on and off the market," she says.

And this goes for any homeowner, and not necessarily first-time buyers, Ziegler says, adding: "If you've been off the market for more than a year, you're out of practice."

 

Skipping or skimping on the home inspection. Many real estate agents say this is happening more and more, especially in a climate where homebuyers are trying to close a deal before anyone else does.

But don't do that, says Daniel Gyomory, a realtor with Century 21 Town & Country in Northville, Michigan.

 

"Some buyers want to save a few hundred dollars by not having an inspection done or by having their family member who isn't a licensed inspector do the inspection. This is a very big mistake," Gyomory says.

 

The reasons why it's a mistake should be obvious – if there are roof leaks you don't know about, foundation problems, mold issues or any number of reasons you might not want to buy a house, an inspector will probably find them. Otherwise, you'll find them – someday.

 

Blindly listening to advice from friends and family members. So you think you've found a house, but this is your first one, and you think it'd be a good idea to bring in Mom and Dad to take a look at the home with you. That can be a bad move, says Joshua Jarvis, a real estate agent and owner of Jarvis Team Realty in Duluth, Georgia.

 

"This one is common with first-timers," says Jarvis. "They go see 10 homes after eliminating 50 on the internet, and they invite the parents or Uncle Joe to see the home."

 

Because your parents and uncle care about you, any potential problem that they spot, they'll share with you. And while that's admirable that they're looking out for you, they didn't look at 50 homes on the internet or go to those other homes, Jarvis says.

 

"They're basing their decisions on their current perspective of their living situation. If you're going to rely on advice, then make the person go through as much of the process as you can," Jarvis says.

 

And, sure, Jarvis is speaking from the perspective of an agent who has often been close to a sale, only to have a well-meaning relative sabotage it. But chances are, if you start talking to friends who are homebuyers, they'll tell you stories of how a parent or in-law once talked you out of buying a home, and how ever since they've wistfully wondered if they made the right decision.

 

Buying too expensive of a home. Gyomory says that this happens a lot.

 

"Some buyers get their preapproval letter and want to look at houses that are at the very top of their price range, without thinking it through," he says.

 

Gyomory says that you should be thinking about not just those monthly mortgage payments but the cost of owning a home.

 

That is, you need to be thinking about how much it'll set you back when you buy a lawn mower or pay a service to cut your grass. You'll want to keep in mind that when you buy a home, you'll soon be making the owner of a local furniture store very happy. If you plan on having kids, someday you'll be begging them to turn off the lights and asking, "Do you think I'm made of money?"

 

In other words, to have a better future, think about those future costs.

 

By Geoff Williams – To view the original article click here

Posted by Jackie A. Graves, President on October 13th, 2017 8:55 AM

The challenge of buying a home for the first time can seem so daunting that it's tempting to either just go with the first house that falls in your price range or continue to rent. To help you demystify the process and get the most out of the purchase, we'll examine what you'll need to consider before you buy, what you can expect from the buying process itself, and some handy tips to make life easier after you purchase your first home.

Considerations Before You Buy

The first thing you'll need to determine is what your long-term goals are and then how home ownership fits in with those plans. It could be that you're simply looking to transform all those "wasted" rent payments into mortgage payments that actually give you something tangible. Others see home ownership as a sign of their independence and enjoy the idea of being their own landlord. Narrowing down your big-picture homeownership goals will point you in the right direction. Here are five questions to ask yourself:

  1. What type of home best suits your needs?

You have several options when purchasing a residential property: a traditional single-family home, a townhouse, a condo, or a multi-family building with two to four units. Each option has its pros and cons, depending on your homeownership goals, so you need to decide which type of property will help you reach those goals. You can also save on the purchase price in any category by choosing a fixer-upper, although the amount of time, sweat equity and money involved to turn a fixer-upper into your dream home might be much more than you bargained for. (To examine your options, check out Does Condo Life Suit You? and Is A Housing Co-op Right For You?)

  1. What specific features will your ideal home have?

While it's good to retain some flexibility in this list, you're making perhaps the biggest purchase of your life, and you deserve to have that purchase fit both your needs and wants as closely as possible. Your list should include basic desires, like neighborhood and size, all the way down to smaller details like bathroom layout and a kitchen that comes with trust-worthy appliances.

  1. How much mortgage do you qualify for?

Before you start shopping, it's important to get an idea of how much a lender will actually be willing to give you to purchase your first home. You may think you can afford a $300,000 home, but lenders may think you're only good for $200,000 depending on factors like how much other debt you have, your monthly income and how long you've been at your current job. (For an introduction to the terminology and structure of a mortgage, read our tutorial Mortgage Basics.)

  1. How much home can you actually afford?

On the other hand, sometimes a bank will give you a loan for more house than you really want to pay for. Just like with the purchase of a new car, you'll want to look at the house's total cost, not just the monthly payment. Of course, looking at the monthly payment is also important, along with how much down payment you can afford, how high the property taxes are in your chosen neighborhood, how much insurance will cost, how much you anticipate spending to maintain or improve the house, and how much your closing costs will be. (For help deciding what mortgage type is best for you, read Shopping For A Mortgage and Make A Risk-Based Mortgage Decision.)

  1. Who will help you find a home and guide you through the purchase?

real estate agent will help you locate homes that meet your needs and are in your price range, then meet with you to view those homes. Once you've chosen a home to buy, these professionals can assist you in negotiating the entire purchase process, including making an offer, getting a loan, and completing paperwork. A good real estate agent's expertise can protect you from any pitfalls you might encounter during the process. (Keep reading about this in Finding A Listing Agent and The Benefits Of Using A Real Estate Attorney.)

The Buying Process

Now that you've decided to take the plunge, let's explore what you can expect from the home buying process itself. This is a chaotic time with offers and counter-offers flying furiously, but if you are prepared for the hassle (and the paperwork), you can get through the process with your sanity more-or-less intact. Here is the basic progression you can expect:

1) Find a home.

Make sure to take advantage of all the available options for finding homes on the market, including using your real estate agent, searching for listings online and driving around the neighborhoods that interest you in search of for-sale signs. Also put some feelers out there with your friends, family and business contacts. You never know where a good reference or lead on a home might come from.

2) Consider your financing options and secure financing.

First-time homebuyers have a wide variety of options to help them get into a home, including federally-backed loans and loans for homebuyers who don't have the standard 20% minimum down payment. Your state may also have its own programs for first-time homebuyers. Your mortgage interest rate will also have a major impact on the total price you pay for your home, so shop around. It will really pay off. (To learn more, read Understanding The Mortgage Payment Structure.)

3) Make an offer.

Your real estate agent will help you decide how much money you want to offer for the house along with any conditions you want to ask for, like having the buyer pay for your closing costs. Your agent will then present the offer to the seller's agent; the seller will either accept your offer or issue a counter-offer. You can then accept, or continue to go back and forth until you either reach a deal or decide to call it quits. If you reach an agreement, you'll make a good-faith deposit and the process then transitions into escrow. Escrow is a short period of time (often about 30 days) where the seller takes the house off the market with the contractual expectation that you will buy the house - provided you don't find any serious problems with it when you inspect it. (For more on the escrow process, read 10 Hurdles To Closing On A New Home.)

4) Obtain a home inspection.

Even if the home you plan to purchase appears to be flawless, there's no substitute for having a trained professional inspect the property for the quality, safety and overall condition of your potential new home. If the home inspection reveals serious defects that the seller did not disclose, you'll generally be able to rescind your offer and get your deposit back. Negotiating to have the seller make the repairs or discount the selling price are other options if you find yourself in this situation. (For tips on coming out ahead in any negotiation, read Getting What You Want.)

5) Close or move on.

If you're able to work out a deal with the seller, or better yet, if the inspection didn't reveal any significant problems, you should be ready to close. Closing basically involves signing a ton of paperwork in a very short time period, while praying that nothing falls through at the last minute.

Things you'll be dealing with and paying for in the final stages of your purchase may include having the home appraised (mortgage companies require this to protect their interest in the house), doing a title search to make sure that no one other than the seller has a claim to the property, obtaining private mortgage insurance or a piggyback loan if your down payment is less than 20%, and completing mortgage paperwork. (For more on the pitfalls of private mortgage insurance, check out Six Reasons To Avoid Private Mortgage Insurance and Outsmart Private Mortgage Insurance.)

Congratulations New Homeowner ... Now What?

You've signed the papers, paid the movers and the new place is starting to feel like home. Game over right? Not quite. Let's now examine some final tips to make life as a new homeowner more fun and secure.

  1. Keep saving.

With homeownership comes major unexpected expenses, like replacing the roof or getting a new water heater. Start an emergency fund for your home so that you won't be caught off-guard when these costs inevitably arise. (To make saving for your emergency fund a breeze, read Build Yourself An Emergency Fund.)

  1. Perform regular maintenance.

With the large amount of money you're putting into your home, you'll want to make sure to take excellent care of it. Regular maintenance can decrease your repair costs by allowing problems to be fixed when they are small and manageable.

  1. Ignore the housing market.

It doesn't matter what your home is worth at any given moment except the moment when you sell it. Being able to choose when you sell your home, rather than being forced to sell it due to job relocation or financial distress, will be the biggest determinant of whether you will see a solid profit from your investment.

  1. Don't rely on making a killing on your home to fund your retirement.

Even though you own a home, you should still continue to save the maximum in your retirement savings accounts each and every year. Although it may seem hard to believe for anyone who has observed the fortunes some people made during the housing bubble, you won't necessarily make a killing when you sell your house. If you want to look at your home as a source of wealth in retirement, consider that once you've paid off your mortgage, the money that you were spending on monthly payments can be used to fund some of your living and medical expenses in retirement. (To learn how to get the most for your house when it is time to sell, check out Fix It And Flip It: The Value Of Remodeling.)

Conclusion

This brief overview should help put you on the path towards filling in any gaps in your home-buying knowledge. Remember that the more you educate yourself about the process beforehand, the less stressful it will be, and the more likely you will be to get the house you want for a price you can afford - and with a smile on your face.


By Amy Fontinelle – To view the original article click here

Posted by Jackie A. Graves, President on October 12th, 2017 1:09 PM

Buying a house is a life-changing process that requires lots of upfront financial planning.

When looking for a home, keep certain factors in mind, including your financial situation, types of available loans, your credit score, the price of the house and your down payment so you can navigate the process smoothly.

1. Your financial situation

Before you buy a house, make sure that your monthly budget can handle such a large expense. Unless you’re one of the few people who can pay cash for a home, you’ll likely be paying it off for 15 or 30 years, depending on the length of your loan.

In addition to the mortgage payment, you’ll want to factor in expenses like property taxes, homeowners insurance, property taxes and routine maintenance.

Use Bankrate’s calculator to see how much house you can afford and estimate the mortgage amount that fits your budget.

2. Types of mortgages

When buying a home, you have a few options for the type of loan you want to use. Two of the most common mortgage types are fixed-rate and adjustable-rate mortgages.

Fixed-rate mortgage: The interest rate on a fixed-rate mortgage stays the same over the life of the loan, with payments divided up into equal amounts that you pay on a monthly basis. The longer the loan term, the less you have to pay each month. However, you’ll likely pay more in interest than you would with a shorter-term loan.

Adjustable-rate mortgage: An adjustable-rate mortgage, or ARM, has a fixed interest rate for an initial period, followed by a period when the lender may periodically adjust the interest rate. For example, a 5/1 ARM has an introductory rate of five years. After that five-year period, the interest rate can change annually. With an ARM, you need to consider how much your monthly payment could increase and your ability to pay if it does go up.

3. Your credit score

You also need to review your credit score before buying a house. Your credit score helps creditors determine your creditworthiness. Borrowers with credit scores of 740 or higher generally qualify for the best mortgage deals.

It’s still possible to buy a house if you have bad credit. You likely will have to accept a higher interest rate on your mortgage, which could cost you hundreds of dollars extra per month.

If your credit score drops too low, though, you might not qualify for a mortgage at all. Consider improving your credit score first before trying to buy a house. You can check your credit report and scorefor free at myBankrate.

4. The price of the home

The higher the price of the house you want to buy, the more you can expect to pay on a monthly basis. When looking at houses, consider your budget and how much you can afford to spend.

Remember to consider your needs, too. Do you have a new addition to the family and need the room? Have your kids moved out and you want a smaller home?

Also, take a look at the price range of the houses available in the area where you want to buy. Compare the prices you find to your budget and determine what home you can afford.

5. The down payment

A large down payment represents one way to reduce the monthly cost of your mortgage. As a matter of fact, a down payment of 20 percent gives you access to better interest rates and prevents you from having to pay private mortgage insurance. So, in addition to lowering the amount you owe initially, a down payment also can get you a lower interest rate, making a house more affordable.

There are also mortgages that require no down payment or a small one.

By Cheryl Knight - To view the original article click here

Posted by Jackie A. Graves, President on October 11th, 2017 5:51 AM

The mortgage process can be intimidating, especially to first-time homebuyers, but it doesn't need to be. As long as you know some of the basics about mortgages Opens a New Window.before you start the process, and choose a good lender to guide you through the process from the offer to closing, getting a mortgage can be relatively painless.

With that in mind, here's what you should know before you start looking for a lender, including how to compare different lenders and their mortgage offers.

Know your credit score and do damage control if necessary

To be clear, you don't need to know your credit score Opens a New Window.before you start shopping for a mortgage lender. However, checking your score beforehand can give you an idea of what sorts of terms mortgage lenders may offer you (more on that later) -- and whether you're even ready for a mortgage in the first place.

Many credit card issuers offer a free FICO score as a perk, but if you want your complete Opens a New Window.(three-bureau) credit report, you'll probably have to pay for it. MyFICO.com Opens a New Window.is one popular website that sells FICO scores from all three credit bureaus.

 

Certain loan programs require certain minimum credit scores. Just to name one example, a conventional mortgage requires a minimum FICO credit score of 620, while a low-down-payment FHA mortgage Opens a New Window.can be obtained with a score as low as 580. So if you check your FICO score and find that you have a 600, you'll know to focus your search on lenders that specialize in FHA loans.

On the other end of the spectrum, some lenders offer their own unique terms, such as 100% financing for borrowers with excellent credit scores Opens a New Window.. So if you know your FICO score (and how to interpret it), you'll know which loan programs you can realistically qualify for.

It can takes months or years to boost your credit score significantly. However, there are some ways you may be able to boost your score quickly Opens a New Window., and you should consider them before applying for a mortgage.

Know the difference between interest rate and APR

One major distinction you should know before you begin comparing lenders is the difference between interest rates and APR.

An interest rate is simply the price you pay for borrowing money, expressed as a percentage of the principal amount you're borrowing. As a basic example, if you're borrowing $1,000 for one year, a 4% interest rate implies that you'll pay $40 in interest to the lender.

On the other hand, annual percentage rate Opens a New Window., or APR, is the total cost of borrowing money. In addition to the interest, or finance charge, APR also includes certain fees you'll pay to borrow the money, such as a mortgage origination fee charged by the lender.

The point is that APRs and interest rates are often slightly different, and APR is the number you should consider when comparing lenders' offers. You may be surprised how different the APR can be between two loans with the exact same interest rate.

Know what other consumers are paying

As a final pre-shopping item, you can use national average mortgage rates along with your credit score to get a rough idea of the APR you can realistically expect to obtain for a mortgage.

One tool that is very useful is the Loan Savings Calculator Opens a New Window.provided by myFICO.com. This breaks down the national average APRs, as well as state averages, for various types of mortgages (30-year, 15-year, adjustable-rate, etc.) into credit tiers.

For example, let's say I have a FICO score of 730 (Note: Lenders typically look at your FICO scores from all three credit bureaus and use your middle score to determine your rate). If I plan to get a 30-year mortgage in Florida, I can see that the average APR obtained by other borrowers in my credit tier is 3.808% as of Oct. 4, 2017.

Look beyond the APR

In addition to interest rates, there are some other to ask prospective lenders about.

For starters, ask how they communicate with clients (phone, email, etc.) and how quickly you can expect them to respond to messages. Having been through the mortgage process three times myself Opens a New Window., I can tell you firsthand that it can be infuriating to have to wait several days when you ask your lender for a status update.

You can also ask about turnaround times, fees you'll be expected to pay, and how much of a down payment they'll require. There are minimum down payments for certain loan programs (such as 3% for a conventional mortgage), but some lenders require more.

Shop around

By far the smartest thing you can do is shop around for a mortgage lender. Talk to lenders at national banks, regional banks, credit unions, and others. Ask your real estate professional for recommendations. And be sure to check out online reviews, as they can tell you a great deal about each lender's reliability, customer service, and other qualities.

"Shopping around" doesn't just mean speaking with a few lenders. It means taking the time to complete the pre-approval process Opens a New Window.with at least a few lenders in order to compare the loan terms each one offers you.

A mortgage pre-approval is essentially a thorough mortgage application that doesn't have a particular home in mind. The lender will check your credit, verify your income and employment, and give you a firm commitment to lend a certain amount of money at specific terms.

Finally, don't worry about your credit suffering from completing several mortgage applications and credit checks. There's a special provision in the FICO formula that allows for "rate-shopping" Opens a New Window.for mortgages and auto loans. As long as all of your applications occur within a two-week period, they will count as a single credit inquiry for scoring purposes.

 

By Motley Fool - To view the original article click here

Posted by Jackie A. Graves, President on October 10th, 2017 6:59 AM
Just because you have been approved does not mean the process is finished.

Getting approved for a mortgage is not the same as getting a mortgage. Until your lender has transferred the money to your buyer's bank, it's still possible for the process to be derailed.

That means that once you have received a "yes," you still have to be careful. Your lender will be watching you and will continue to monitor your credit and your general financial well-being.

Sometimes issues like inspections or caveats about the seller finding a new home can delay your closing. Be diligent about your finances until you actually own the home and avoid doing these things that can derail your approval.

YOUR MORTGAGE IS NOT FINAL UNTIL THE MONEY HAS BEEN TRANSFERRED. IMAGE SOURCE: GETTY IMAGES.

1. Don't make a big purchase

When a lender decides whether to give you a mortgage, it looks at your ratio of debt to income. If you take out a loan for another major purchase -- say, a car -- you change that ratio substantially. Paying cash won't prevent a mortgage snafu, either, because your lender will see the sudden hit to your bank account, and lenders don't want you to be short on cash after making a down payment.

Even if the purchase isn't enough to prompt the lender to deny your mortgage, it could lead to higher borrowing costs. It's possible your lender may change the terms of your mortgage, handing you a higher interest rate because you've taken on more debt or lowered your assets before your loan closes.

2. Don't get fired or quit your job

The amount of income you have coming in is one of the key factors banks consider when determining whether you qualify for a loan. Generally, you have to provide two pay stubs to prove your income, but if a closing gets pushed back, your lender may ask for continued proof of employment.

Even if you have an offer for a better job and would simply be trading one income stream for another one, it's always best to ask your lender before making a move. In the case of a job switch, you may need to provide an offer letter, and your new employer may have to verify your start date and salary.

3. Don't open a credit card

Another factor in whether you qualify for a loan to buy a home is how much credit you have available to you. There's a sort of "sweet spot" where your lender will believe you have enough available credit but not so much that you can run up debt that will impact your ability to pay your mortgage.

In addition, opening a credit card requires a credit check. That can lower your credit score, which your lender may continue to monitor through your closing.

4. Don't make any major money moves

When my wife and I bought our current home, before we closed, I received a fairly significant payment from a company I then owned a piece of. Given that it was money coming in, not going out, it was generally viewed as a positive by our lender, but it still needed to be explained.

We had to prove that the money was earned and was not a loan of any type. That's because the mortgage company does not want anyone making a down payment with money that must be paid back. That's why any non-paycheck income should be declared and explained, as should any expenditure that's outside the norm.

In addition to your pay stubs, your mortgage lender will ask for bank statements -- usually 90 days' worth. If your mortgage closing gets delayed, the lender may want to see new statements as they come in.

5. Don't get ahead of yourself

Basically, while you wait to close on a house, consider your finances to be in a state of suspended animation. Don't do anything that changes the picture your potential lender sees. Even a move as small as getting a store credit card from a home improvement store -- something many new homeowners do -- should wait until after you actually own the house.

Remember that the most important thing is closing on the house and owning your new home. Everything else can, and should, wait.

By Daniel B. Kline - To view the original article click here

Posted by Jackie A. Graves, President on October 9th, 2017 6:58 AM

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