The SCOOP! Blog by ChangeMyRate.com®

Interest rates for mortgages are low __ really low.

As of the first week of June, long-term mortgage rates were down for the sixth consecutive week. The 30-year fixed rate average was below 4 percent, its lowest point since September 2017. If you're a homeowner, you may be wondering if now's the time to refinance.

Here's what to consider:

REASON

It's important to know why you want to refinance.

Some people simply want to take advantage of lower rates so they pay less over the course of their loan or to pay it off faster. Others want to lower their monthly payment. Some desire a better product, such as getting out of an adjustable rate mortgage into a fixed loan. Others may have seen their financial situation improve since they bought their home and now qualify for better terms. And some may want to cash out some equity from their homes.

Before you agree to refinance, make sure it meets that goal.

RATES

Yes, rates are low but they were very low in the years following the recession too.

So some homeowners may have already refinanced once already. If you are considering another round, remember that unless you move into a shorter-term loan, you are essentially starting the clock anew on paying off your home, warns Sarah Mikhitarian, a senior economist at Zillow.

However, she notes that people who bought in the past year or two when rates started to climb may want to run the numbers on refinancing.

Another note on rates: It's tough to know where things are headed so you may want to act quickly if it makes sense for you.

"These rates and this moment are fleeting and unpredictable," said Rick Bechtel, head of US Residential Lending at TD Bank.

Bechtel said that lenders are busy with both an uptick in refinancing and completing loans for the spring home-buying season, so make sure your lock-in period allows enough time to complete the process, around 45 to 60 days.

COSTS

Refinancing comes with some expenses, typically between $2,000 and $3,000 in various closing costs. You can pay those out of pocket or have them rolled into the balance of the new loan. Some banks may waive the cost of the fees in exchange for a slightly higher rate on the loan itself. You may face added costs for certain state taxes that might not be factored into all mortgage calculators either, Bechtel noted.

It's up to you how to pay for it but consider your break-even costs. This is basically how long it would take for the savings from the refinance to pay for the cost to refinance itself. For example, if you paid $2,000 to refinance but saved $200 a month, it would take you 10 months to break even.

If you aren't going to be in the house longer than that, it doesn't make sense.

"Ultimately it's a very personal finance decision," Mikhitarian said.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 17th, 2019 9:08 AM

Real estate agents are an important member of your homebuying team. Like housing counselors, they play a vital role – helping you find the right home at the right price - and will be with you every step of the way during your homebuying process.

Because they're local experts, your agent should have the inside scoop on available homes and possibly those about to be listed and will negotiate on your behalf when you're ready to make an offer.

Choosing an Agent

First-time buyers should look for a licensed real estate agent with experience in their desired location-- one who works with buyers like you and is willing to patiently explain the homebuying process.

A good way to find this person is through personal referrals or, if you're new to an area, read their online reviews from previous clients, says Susanna Haynie, a real estate agent for 10 years in Colorado Springs.

Working with Buyers

Haynie says it's important that agents understand each client's needs in terms of location, house size, and other expectations. She provides information about the area and current listings, and previews homes that might be a good fit.

She also suggests that her clients get pre-approved by a lender. This involves submitting a loan application and having the lender verify, among other things, your income and credit. Based on the lender's assessment, they will provide a letter indicating how much they're willing to loan you for a home purchase. Going through this process gives you a good idea of your price range and lets sellers know you're a serious buyer, she says.

Making an Offer

After Haynie helps her clients to find the right home, she works with them to structure an offer to present to the seller. Your agent will manage the negotiations and all related paperwork with the seller, always working in your best interest. 

This June, we're celebrating all the people who help make homeownership possible, including real estate agents like Haynie, who will be with you throughout the home-buying process to help you achieve your homeownership goals.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 16th, 2019 9:47 AM

Mortgage insurance protects the lender. You’ll have to pay for it if you get an FHA or USDA mortgage or put down less than 20% on a conventional loan.

The traditional target for a home down payment is 20% of the purchase price, but that’s out of reach for many buyers.

Mortgage insurance makes it possible to hand over a much smaller down payment and still qualify for a home loan. It protects the lender in case you default on the loan. 

 

With a conventional mortgage — a home loan that isn’t federally guaranteed or insured — a lender will require you to pay for private mortgage insurance, or PMI, if you put less than 20% down. With an FHA or USDA loan, you’ll pay for mortgage insurance regardless of the down payment amount. VA mortgages require a “funding fee,” rather than mortgage insurance.

How does mortgage insurance work?

You bear the cost of mortgage insurance, but it covers the lender. Mortgage insurance pays the lender a portion of the principal in the event you stop making mortgage payments. Meanwhile, you’re still on the hook for the loan if you can’t pay, and you could lose the home in foreclosure if you fall too far behind.

This is different from mortgage life insurance, which pays off the remaining mortgage if the borrower dies, or mortgage disability insurance, which eliminates the mortgage if the borrower becomes disabled.

PMI vs. MIP and others

Mortgage insurance works a little differently depending on the type of home loan. Here’s a look at the coverage for conventional and government-backed mortgages.

PMI for conventional mortgages

Many lenders offer conventional mortgages with low down payment requirements — some as low as 3%. A lender likely will require you to pay for private mortgage insurance, or PMI, if your down payment is less than 20%.

 

Before buying a home, you can use a PMI calculator to estimate the cost of PMI, which will vary according to the size of your home loan, credit score and other factors. Typically, the monthly PMI premium is included in your mortgage payment. You can ask to cancel PMI after you have over 20% equity in your home.

 

FHA mortgage insurance premium (MIP)

FHA loans, which are insured by the Federal Housing Administration, feature minimum down payments as low as 3.5% and have easier credit qualifications than with conventional loans. FHA home loans require an upfront mortgage insurance premium and an annual premium, regardless of the down payment amount. The upfront premium is 1.75% of the loan amount, and the annual premium ranges from 0.45% to 1.05% of the average outstanding balance of the loan for that year.

You pay the annual mortgage insurance premium, or MIP, in monthly installments for the life of the FHA loan if you put down less than 10%. If you put down over 10%, you pay MIP for 11 years.

USDA mortgage insurance

USDA loans, from the U.S. Department of Agriculture, are zero-down-payment loans for rural and suburban home buyers. Some USDA loans charge for mortgage insurance via two fees: an upfront guarantee fee you pay once and an annual fee you pay every year for the life of the loan. The 2019 upfront guarantee fee is 1% of the loan amount. The annual fee is 0.35% of the average outstanding loan balance for the year, which is divided into monthly installments and included in your mortgage payment. The federal government evaluates the fees each fiscal year and can change them. But your fee amount will not fluctuate. They are fixed when the loan closes.

VA mortgage insurance

VA loans, from Veterans Affairs, require no down payments and feature low interest rates for active, disabled or retired military service members, certain National Guard members and reservists, and eligible surviving spouses. They don’t require mortgage insurance, but most borrowers will pay a “funding fee” ranging from 1.25% to 3.3% of the loan amount for purchase loans. This fee depends on a wide variety of factors, including whether you’ve applied for a VA loan before and how much money you’re putting down, if any.

How to avoid mortgage insurance

To avoid mortgage insurance or the VA’s funding fee, you’ll need to get a conventional mortgage and put at least 20% down toward a home. If that’s not possible, then budget in the cost of mortgage insurance or VA funding fee when you’re calculating how much home you can afford.

 

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 15th, 2019 9:30 AM

A mortgage origination fee adds to a lender’s profit. But all lender fees can be negotiated — another good reason to shop more than one lender.

A mortgage origination fee is any fee that adds to the profit a lender can make on a loan.

Mortgage lenders are going to charge fees one way or another; that’s why it’s important to shop for a loan from more than one mortgage provider. But it’s a bit of a shell game: Are the fees included in the interest rate, as an extra charge over on the fee sheet — or both?

And it’s not as simple as being just on the lookout for something called an “origination fee.” There are dozens of names for these bolted-on costs that can show up in your Loan Estimate as part of the loan’s closing costs.

How mortgage lenders make money

A loan’s interest rate already comes with some built-in markup for the lender. To help make their interest rates appear more competitive, some mortgage companies will charge additional lender fees instead of profiting only from the rate.

“It’s one way of framing the [loan] product to make it appear more attractive than it is,” says Casey Fleming, a mortgage advisor who works in Silicon Valley.

When comparison shopping lenders, the key is identifying the fees that are valid, perhaps even negotiable, and the fees that are tacked onto a loan to pump up a lender’s profit.

How to spot junk fees

You can find these fees by reviewing the Loan Estimate that lenders are legally bound to provide you after applying for a loan. It’s just three pages long, but the section we’ll focus on is on the left-hand side of page two.

Look for anything that’s listed in Section A, Origination Charges, of the Loan Estimate beyond the discount points you can buy to lower your interest rate. This is where we’ll find the “junk” fees — the add-ons a lender uses to make more money.

“Those are the fees like origination fee, administration fee, underwriting fee, processing fee, document preparation fee, appraisal review fee — all of these kinds of fees,” says Carolyn Warren, a mortgage broker in Kirkland, Washington. “Some lenders like to split out their fees into three or four categories so that no one fee looks very high.”

Warren says lenders think that keeping fees under $1,000 may seem palatable enough that borrowers won’t object to them, especially when they appear legitimate.

But that doesn’t mean the fees can’t be scrutinized or that you, as a borrower, should feel uncomfortable about asking to have them removed.

All ‘origination charges’ are negotiable

Remember, any fee in Section A “Origination Charges” is negotiable and part of the lender’s profit strategy. And the larger the loan you’re seeking, the more leverage you have to haggle fees — origination, junk or otherwise.

You can even start negotiations before you get an official Loan Estimate. To do that, ask each lender you’re considering: “If we proceed, what are all of the ‘origination charges’ that I will find listed on the Loan Estimate under Loan Costs, Item A?” Use those exact words and get their response in writing.

“When enough people reject overpriced loans and junk fees, then they’ll go away,” Warren says. “As long as they can get away with it, [lenders are] going to do it.”

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 14th, 2019 9:16 AM

Making your monthly mortgage payment is an important task if you wish to keep a roof over your head. There are different ways to tackle this so you don’t miss the payment date.

If you’ve been mailing checks, there are other ways to pay your mortgage that are convenient, reliable and cheap. Here are the pros and cons of the various methods of how to make a mortgage payment:

How to pay your mortgage with online banking

The easiest option for most homeowners is to pay for their mortgage through either through their bank or mortgage lender’s website. Paying online means consumers can decide when they want to make the payment, maintain a record of when it was made and ensure that it is paid by the due date.

Depending on the lender or the bank, payments can also be automated without the homeowner having to log into the their bank’s website each month. Online payments are fast, free and efficient way to maintain your budget.

“Going to your lender or loan servicer’s website and making the payment puts you in control of the timing,” says Greg McBride, CFA, chief financial analyst for Bankrate. “The downside is that this is something else each month you need to do or be reminded to do.”

How to pay your mortgage with automated withdrawals

Choosing automated withdrawals pulled from your checking or savings account is another easy option to make sure your mortgage is paid on time each month.

This option is set up the lender’s website and it means the lender will automatically withdraw the mortgage payment from your bank. Once this is set up, the payments will repeat each month. This works especially well if you have recurring deposits on a set day such as a payroll or government check.

“Automatic payments via ACH withdrawal are the easiest way to make the monthly mortgage payment,” McBride says. “It happens without the homeowner needing to take any action and it can happen even if you’re away on vacation and completely unplugged. The only downside is for those that have trouble with overdrafts as you need to make sure the money is in the account and available for immediate withdrawal each month when the payment is taken out.”

You can begin by going to the lender’s website and creating an account. Choose the date when you want the withdrawals to occur every month.

You can log into your lender’s website to see when the payment was credited. The one disadvantage is that you may not be able to easily change the date the payment is withdrawn from your bank account, especially at the last minute.

Setting up automated withdrawals helps homeowners who want to make additional or semi-monthly payments to pay off a mortgage early to cut their interest outlay. Paying off a mortgage sooner makes sense for people who do not have other debt such as credit cards or are planning on retiring soon. Before doing this, check with your lender to make sure the extra payments are credited correctly.

If you have other debt that has high interest such as credit cards, it’s wise to tackle that debt first before making extra mortgage payments.

Homeowners who have a low interest rate for their mortgage should consider putting their extra money into a retirement account or towards emergency savings since the money will not be liquid. Instead of paying off a mortgage that only has a 4 percent interest rate, socking away your money in an IRA that is generating 6 percent or more may be a better financial decision.

If you are not sure you will be living in the same house five or 10 years from now, reconsider paying off your mortgage early.

How to pay your mortgage using a credit card

Problems and emergencies can crop up such as an illness or a loss of a job. Until you get back on your feet, paying your mortgage with a credit card could be your only option for the short-term.

Other people think it’s an easy way to gain some points on their rewards credit card, but the fees involved with this method can be substantial.

Paying for a mortgage online with credit card is an option, but not all credit card networks such as Discover, American Express, Mastercard or Visa permit mortgage payments. In addition, many mortgage lenders are not fans of this option and most do not accept credit cards.

Check with your credit card issuer first. While Mastercard allows mortgage lenders to accept debit and credit cards for payments, Visa has only given the green light for mortgage companies to take Visa debit and prepaid card payments.

As a last resort, some third-party companies allow you to make a payment, but charge you a hefty fee that will likely erase the value of any points or cash-back you gained.

“Most lenders won’t accept credit card payments for the mortgage and the services that do offer the ability to pay via credit card tend to charge a service fee that offsets the value of any rewards you’d be earning,” McBride says.

How to pay your mortgage by phone

Making a mortgage payment over the phone is another option to avoid paying a late fee, especially if you forgot to mail in your payment before the deadline or have not set up a payment process online.

The phone number will be on your monthly bill or found online.

The process is typically fairly straightforward – be prepared to have your mortgage account number handy and your bank account information such as the routing and account number.

The payment is typically credited to your account quickly. Before you make the payment, ask the mortgage servicer if there is a charge for this convenience.

How to pay your mortgage in person or by post

If your mortgage servicer is located in your hometown, the company might accept payments in person. You can make a payment by check or even using a money order. Money orders are secure payments since they do not include any personal information, but they have one major drawback. The amount of a money order is often limited to $700 or $1,000.

Another option is to use a certified check or a cashier’s check, which do not have a limit.

Mailing a check is an old tried and true method. Make sure you include your account number on your check. Just having your home address on the check may not be sufficient, even if it matches the address your mortgage provider has on file.

Sending a payment by mail means you have to take into account the time it takes to mail your payment and for it to be processed by an employee at the mortgage company.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 13th, 2019 7:37 AM

For those buying their first home, the single biggest challenge is coming up with needed funds for a down payment, closing costs and cash reserves. One of the primary reasons FHA loans are so popular with first time buyers is the low down payment of only 3.5 percent. Of that, the 3.5 percent can be a financial gift from a family member. FHA loans are also a bit more lenient as it relates to credit qualifying. Sometimes though that’s not enough help.

Sometimes first time buyers don’t yet have enough income to qualify for a mortgage. This is common when someone first gets out of school and has yet to find a permanent job or the entry-level job doesn’t pay enough. When that happens, the would-be buyers would either have to wait, save up more money or get someone to co-sign the note.

When co-signing, it needs to be clear to those helping out that the payment history on the new mortgage will be reflected on their own credit report along with the buyers. If payments are made on time, or at minimum no more than 30 days past the due date, a positive entry on both credit reports will be logged. This will raise credit scores for all involved. Conversely, should there be a late payment made more than 30 days past the due date, that negative mark will show up on both credit reports and drive down scores. This can happen without the knowledge of the co-signers until its too late.

Co-signing also hits both parties with the same debt. If the total monthly mortgage payment is $2,000, then both the primary borrowers and the co-signers can expect the monthly debt to appear on a credit report. This could potentially affect the ability of the co-signer to take on new debt such as qualifying for a new mortgage to buy a home or even when refinancing. Deciding to co-sign demands some serious consideration.

As it relates to funds needed to close, family members can provide financial assistance in the form of a gift. This is common when parents want to help their kids buy a home. Parents can give the needed funds to close on a home with no expectation or requirement to be paid back. Gift funds must be accompanied by a letter stating as much along with a solid paper trail of where the funds came from and their ultimate delivery. Parents can decide to provide a certain amount up to and including needed funds to close on a property.

Funds can also be provided to pay off outstanding debt of the primary borrowers. Perhaps paying off an automobile loan or student loan. In doing so, monthly debt ratios will be reduced enabling the buyers to qualify for the mortgage they want. A family member might also agree to provide a second mortgage on a property. Borrowing from a family member means making sure the note is valid in the state its executed and properly spells out the terms of the note. The first lien lender will also want to take a look at the new second lien note to make sure it complies with state law and indeed subordinates to the new first lien.

Co-signing is one of the more common ways family members can help first timers buy a home but they can also help in other ways that doesn’t obligate the parents to be a responsible backup to more debt.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 12th, 2019 8:48 AM

For those buying their first home, the single biggest challenge is coming up with needed funds for a down payment, closing costs and cash reserves. One of the primary reasons FHA loans are so popular with first time buyers is the low down payment of only 3.5 percent. Of that, the 3.5 percent can be a financial gift from a family member. FHA loans are also a bit more lenient as it relates to credit qualifying. Sometimes though that’s not enough help.

Sometimes first time buyers don’t yet have enough income to qualify for a mortgage. This is common when someone first gets out of school and has yet to find a permanent job or the entry-level job doesn’t pay enough. When that happens, the would-be buyers would either have to wait, save up more money or get someone to co-sign the note.

When co-signing, it needs to be clear to those helping out that the payment history on the new mortgage will be reflected on their own credit report along with the buyers. If payments are made on time, or at minimum no more than 30 days past the due date, a positive entry on both credit reports will be logged. This will raise credit scores for all involved. Conversely, should there be a late payment made more than 30 days past the due date, that negative mark will show up on both credit reports and drive down scores. This can happen without the knowledge of the co-signers until its too late.

Co-signing also hits both parties with the same debt. If the total monthly mortgage payment is $2,000, then both the primary borrowers and the co-signers can expect the monthly debt to appear on a credit report. This could potentially affect the ability of the co-signer to take on new debt such as qualifying for a new mortgage to buy a home or even when refinancing. Deciding to co-sign demands some serious consideration.

As it relates to funds needed to close, family members can provide financial assistance in the form of a gift. This is common when parents want to help their kids buy a home. Parents can give the needed funds to close on a home with no expectation or requirement to be paid back. Gift funds must be accompanied by a letter stating as much along with a solid paper trail of where the funds came from and their ultimate delivery. Parents can decide to provide a certain amount up to and including needed funds to close on a property.

Funds can also be provided to pay off outstanding debt of the primary borrowers. Perhaps paying off an automobile loan or student loan. In doing so, monthly debt ratios will be reduced enabling the buyers to qualify for the mortgage they want. A family member might also agree to provide a second mortgage on a property. Borrowing from a family member means making sure the note is valid in the state its executed and properly spells out the terms of the note. The first lien lender will also want to take a look at the new second lien note to make sure it complies with state law and indeed subordinates to the new first lien.

Co-signing is one of the more common ways family members can help first timers buy a home but they can also help in other ways that doesn’t obligate the parents to be a responsible backup to more debt.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 11th, 2019 2:32 PM

VA loans were part of the original Servicemen’s Readjustment Act of 1944, more commonly referred to as the G.I. Bill. In this act were various entitlements provided soldiers returning from WWII designed to help them more easily assimilate back into civilian life. Funds for college and job training was available as well as the new loan program to help buy a home.

Today, for those who are eligible, the VA loan is the best option for those seeking to buy a home with as little cash as possible. The VA loan does not need a down payment but at the same time limits the types of closing costs the veteran is allowed to pay. No down payment and reduced closing costs make for a powerful combination.

Your loan officer will provide a list of expected closing costs you’ll see at the settlement table. These costs are close estimates with little to no variance allowed. For services which the borrower can choose the provider independently there are no restrictions on how much the initial estimate varies from the final settlement statement. Which closing costs the veteran can’t pay for?

There can be many but it’s probably easier to identify the ones the borrower is allowed to pay. Any other charge must be paid for by someone else such as the sellers in the form of a seller contribution or even the mortgage company by issuing a lender credit.

The veteran can pay for an appraisal, credit, title insurance and title-related charges, origination charges, recording and a survey where needed. Many loan officers use the acronym ACTORS to remember which fees are allowed to be paid for by the sellers.

Sometimes there can be an issue where the lender wants another appraisal completed beyond the initial one. The veteran is allowed to pay for the extra appraisal as well. Common fees the veteran can’t pay for might be an escrow fee or an attorney charge or document preparation. Again, your loan officer will provide this list.

Still, that leaves the third party fees the veteran isn’t allowed to pay for. Who pays those? The seller can contribute as much as 4.0 percent of the sales price to go toward buyer closing costs, which should more than cover what’s left over. The lender can also contribute by adjusting the interest rate on the loan slightly higher and then provide a credit at the closing table. Or, a combination of both. The better option is to have the seller pay the necessary charges in lieu of taking a higher rate. But that’s completely between you, your agent and the seller’s agent.

All mortgage loans, VA included, come with needed closing costs. There are multiple third party services and documents needed to close a mortgage. The difference is who’s going to pay for them. Veterans are restricted from paying certain types of closing costs, but without the additional third party services needed, the loan won’t be able to be approved.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 10th, 2019 11:52 AM

Home ownership is a cornerstone of the American dream. Unfortunately, there are many ways that the American dream can turn into your family’s personal nightmare.

These hazards include purchasing more house than you can really afford (becoming house poor), unexpected surprises that weren’t identified during the home inspection, and finding out that your pre-approval for financing is about as flimsy as the paper it’s written on.

In a market inundated with realty advertising, let’s look at 4 critical areas where first-time homeowners run into trouble.

1. Pre-Approval is Not Approval

Homebuyers are inundated with commercials on TV and the internet telling them that they can get pre-approved for a certain amount and shop with the confidence of a cash buyer. This is a bit of an exaggeration. Pre-approval is a good first step. But, it’s important to understand that a pre-approval is different from an approval.

Pre-Approval is when a lender tells you that you are approved for a certain loan, with general terms, but does not require you to provide paperwork and other supporting documentation.

Approval is when the lender has completed the underwriting process and offers you a firm loan offer that can be executed.

The easiest way to know the difference is to consider what information the bank has required of you at this stage. First time homebuyers are understandably upset when they select a home based on what they thought was an approval, only to find that some information came up during the underwriting process that cancelled out their pre-approval.

2. Digital Verification vs. Manual Verification

In the final stages of becoming approved for a mortgage, you’ll need to provide proof of income and other financial disclosures. Most mortgage lenders offer homebuyers the option of enrolling in digital verification. This means that the lender can digitally access your required documentation on your behalf. Some of this information will need to be manually uploaded, but the ability to digitize these records will allow the entire underwriting process to be expedited.

Manual verification involves a loan officer giving you a long checklist of documents they’ll need in order to verify your identity, income and existing financial obligations. Manual verification can take three-times as long because you need to gather the documents, submit them to the lender and then the lender needs to manually verify their authenticity.

If you are given the option, enroll in digital verification.

3. How much home can you really afford?

If you’re used to paying rent, the idea of a less-expensive mortgage payment may seem appealing. After-all, landlords price-in the various additional costs they have into your monthly rental payment. If you could just pay the mortgage, it seems that you’d lower your overall housing costs.

This is not exactly true. Just because you can afford the mortgage payment does not mean you can afford the full cost of homeownership. Be sure to inquire into the real costs, including:

• PMI: Private Mortgage Insurance

• Homeowner’s Insurance Premiums, Deductibles and Coverage Limitations

• Maintenance Costs: While renting, your landlord took care of all the costs associated with your residence’s maintenance. As a homeowner, if a major appliance fails, or there’s structural wear and tear, it’s your financial responsibility.

• Natural Disasters: Hurricanes, tornadoes and forest fires can cause substantial damage to your home. Homeowner’s insurance can help with this, but there are policy exceptions. The average ranch-style home would require an investment of $6725-$9000 in order to replace it after major damage.

• Property Taxes are often rolled into the monthly mortgage cost, but it’s important to understand the various fees and assessments you’ll be required to pay for your property.

Just because it’s on the internet, doesn’t make it true.

Most homeowners turn to their smartphones or laptops when home shopping. Online listings for homes and properties are filled with heavily enhanced photos of the property - from the best angles, of course.

Future properties, or areas that are still being developed are impossible to see in-person. But, it’s important to dig deeper than an architectural rendering or an artist impression. This article about off-plan purchaseshighlights a few examples where the mock-ups provided to potential residents were way off the mark. This includes:

• Amenities, like pools, which are far smaller once constructed - an important consideration for apartment buildings with hundreds of residents.

• The perspective is enhanced to make a future high-rise look far larger than other surrounding buildings - implying that views will be more breathtaking than they will be in reality.

To avoid getting taken advantage of, they recommend visiting the construction site yourself, viewing the surrounding area on Google Maps and take advantage of Google Earth’s features that show building shadows and other factors that could impact your future home.

In conclusion, there are many pitfalls for first-time homebuyers. A pre-approval is a great first step, but it’s only the beginning of the actual approval process. Don’t make the mistake of selecting manual verification when digital verification is available - especially if timing is a factor. And just because you can get a loan, does not mean you can afford the total cost of home ownership. And, as always, trust but verify. If you’re looking at an online listing or prospectus, nothing can substitute an in-person visit to the construction site.

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 9th, 2019 9:45 AM

According to The Truth About Mortgage, the “sale fail” rate of homes is rising. “More than four out of 100 sales look as if they’re going to close, and then fall out of escrow for one reason or another,” they said.

So how do you protect your purchase and make sure you get to the finish line? These four tips will help.

1. Prepare yourself for the inspection

Especially if you’re buying an older home, there are bound to be some surprises in the inspection report. The sale fail trend is particularly pronounced for older homes. “Homes built from 1959 through 1969 had the highest sale fail rate at 5.2%, compared to homes built in 2016, with a dropout rate of only 2.6%, which is among the lowest proportion of failed sale bands,” said The Truth About Mortgage.

While you can’t be prepared for everything, you can go into the process with a realistic understanding that the condition of the home may reflect its age. Expecting everything to be in tip-top shape will probably leave you disappointed.

2. But…don't be afraid to negotiate

That being said, the defects and recommended repairs that end up on inspection reports can be a lot to digest, and you have every right to expect a renegotiation for anything major. Your real estate agent should be able to provide guidance on how much seller cooperation is reasonable so it doesn't put your home purchase at risk.

3. Don’t be cavalier with your credit

You’ve been pre-approved for a loan. Yay! Maybe you should celebrate by buying a new car or a house full of new furniture. No! Your preapproval is based on a number of factors, but credit score and debt-to-loan ratio are two of the big ones. Any change to those figures during escrow and you could find yourself with no financing.

“The underwriter—employed by your mortgage lender—will check your credit score, review your home appraisal, and ensure your financial portfolio has remained the same since you were pre-approved for the loan,” said Realtor.com. Since underwriting typically happens shortly before closing, you don’t want to do anything while you’re in contract that’s going to hurt your credit score. That includes buying a car, boat, or any other large purchase that has to be financed.”

You may think it’s rare that a financing issue hampers a closing, but, “In fact, 32% of settlement delays come from buyer financing issues which can crop up at the very last minute,” said Homelight.

4. Make sure you have all the required documents when you go to close

The last thing you want is to get to your closing and realize you forgot one of the documents you need. Don’t leave the house without:

• A driver’s license, passport, or some other government-issued photo ID
• Proof of your homeowner’s insurance
• A copy of your sales contract
• Any and all home inspection reports
• Any other paperwork the bank used for loan approval (double-check with your lender in plenty of time)
• A notarized document giving you power of attorney if your spouse won’t be present at closing
• A bank check or wire transfer for the full amount of your closing costs (check with your lender on the means of payment and final amount)

Source: To view the original article click here

Posted by Jackie A. Graves, President on June 8th, 2019 10:59 AM

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