What Do First-Time Homebuyers Need To Know?

What Do First-Time Homebuyers Need To Know?If you are purchasing a house for the first time, you are probably excited to imagine what your life might look like in a bunch of different houses. At the same time, the process can be a bit overwhelming. The housing market is competitive right now, the financing process can be confusing, and you might not know exactly what you are looking for. What are a few of the most important tips first-time home buyers need to know?

Reach Out To Experts For Help

First, you need to reach out to professionals who can help you during the process. For example, you should always reach out to a real estate agent with local knowledge. That way, they can help you figure out what house is best for your needs. You should also reach out to a local loan officer for a pre-approval letter. This will make your offer more competitive, and it will give you a budget with which to work.

Figure Out Your Down Payment

You need to figure out how much money you have for a down payment. If you are buying a house for the first time, you might be able to qualify for an FHA backed loan, which may allow you to purchase a house for less than 20 percent down. You may want to talk to an expert about how much money you should put towards your down payment versus how much money you should use to pay off other sources of debt. 

Keep Your Finances Stable During The Closing Process

After an offer has been accepted, you must make sure you keep your finances stable during the closing process. You do not want to pull money from your down payment for other big expenses, and you should not open any new credit cards. You should also try to avoid switching jobs during this time. Your loan officer will do a deep dive into your finances, and you must make sure everything is stable.

Get Ready To Buy A Home

Even though purchasing a house for the first time can be daunting, there are experts who can help you. As long as you have the right team behind you, you should find the right house to meet your needs.

 

The Top Tips To Get Your Offer Accepted

The Top Tips To Get Your Offer Accepted In A Seller's MarketThe housing market today is very competitive, and you might be wondering how you can get your offer accepted. If the seller has multiple offers on the table, it can be a bit of a challenge. Many people assume that the best way to get an offer accepted is to offer the most money. Even though that is certainly helpful, there are several other tips you should follow to make sure your offer is the one the seller picks.

Get Pre-Approved For A Mortgage

First, you must make sure that you get pre-approved for a mortgage. Unless you are paying cash for the home, you should talk to a local loan officer to get a pre-approval letter. You don’t have to go with that company once the dust settles, but you need to get a pre-approval letter from a lender. That way, the seller will know that you have a high chance of getting approved for the loan.

Offer More Earnest Money

If you are willing to offer more earnest money, that will make the seller more comfortable. The seller is always worried that the buyer might pull out on the offer, meaning that their home will go back on the market. If you increase the amount of earnest money you put down, the seller will feel more confident that you are serious about buying the home.

Give The Seller The Option To Rent Back

If the seller accepts your offer, you will have between four and six weeks before your first mortgage payment is due. Therefore, you won’t have any payments after closing for a while. If the seller is not ready to move yet, or if the seller has not found a new home, offer the seller an opportunity to rent the home back for free. This will give the seller more time to get everything in order before they move. 

Increase The Strength Of Your Offer

In a seller’s market, you need to make your offer stand out. Otherwise, you may have a difficult time finding a house, particularly if you cannot pay cash. If you follow these tips, you can increase your chances of having your offer picked by the seller. 

 

The Quick and Easy Guide to Determining How Big of a Mortgage Your Family Can Afford

The Quick and Easy Guide to Determining How Big of a Mortgage Your Family Can AffordAre you shopping around for a new house or apartment? One of the key considerations you will need to make is figuring out how much you want to invest in your new home. Below you’ll find our quick and easy guide to determining just how much “house” you can afford. Let’s get started!

Start By Making A Proper Budget

The first thing you’ll want to do is sit down and get a full budget put together. The easiest way to get the process started is to begin with two lists: income and expenses. For the income list, write down the amount of money your family brings in each month after taxes. If you have side income sources or extra income that tends to fluctuate over time, use the average amount for the past six months.

For the expenses list, write down all the spending that you do each month. Start with the major, stable items like rent, utilities and the like. Then work your way through to discretionary spending like dining out and other sources of entertainment. If it helps, go through your bank and credit card statements to ensure that you are not missing anything.

Once you have an accurate budget, you’ll know exactly how much you can afford to pay toward your mortgage payments each month.

Figure Out How Much You Can Put Down

Next, you’ll need to think about how much cash you want to pay as a down payment on your home. The larger the down payment you can afford, the smaller amount of mortgage financing you’ll need. While it might seem like a good idea to put as much as you can down, there are some things to consider. Any money you put against your down payment is going to be unavailable to you, which reduces your financial options. You’ll also lose the opportunity to invest it, which means missing out on potential returns over time.

Determine How Much House You Actually Need

Finally, give some thought as to how large or luxurious a home you want to buy. For example, if you have a small family and don’t need a large four- or five-bedroom house, you can instead opt for a smaller but more luxurious home. Conversely, if space is a priority, you may want to forego the high-end options to ensure you have enough room.

When you’re ready to explore your mortgage options, we’re ready to help. Contact your trusted mortgage professional at your convenience. We’re committed to helping you purchase the home of your dreams.

Important Things To Know Before Signing Your Reverse Mortgage

Read This Before Signing Your Reverse MortgageThere are many reasons people take out reverse mortgages. However, this option is usually considered by cash-strapped seniors who own their homes and are looking to ease the burden of their golden years.

The beauty of reverse mortgages is that you’ll receive money as long as you are current on property taxes and homeowners insurance.

While this seems like an appealing opportunity, it’s a decision that should not be made lightly. Not only is the reverse mortgage complicated in itself, but homeowners make all sorts of mistakes when they’re too quick to sign the dotted line. So if you’re considering one, be wary of the common pitfalls below.

Buying Into A Scam

With reverse mortgages becoming a more common option for those over 62, mischievous opportunists are searching for ways to solicit seniors in need of help. Scammers will take advantage by charging high fees, funneling off parts of payments, creating fake loans or committing identity theft. Ensure you use a lender approved by the Federal Housing Association.

Confusing Your Payment Options

Reverse mortgages come in many forms. You can get the amount in one lump sum. Tenure payments are another option that give you a certain amount each month until you die or move out. There are also term payments, lines of credit, and modified tenure and term payments. You need to take the time to research your options and decide which one will be best for you in the long run.

Compromising Government Assistance

There are several government assistance programs that set asset limits on your monthly spending. These programs provide aid for low-income and disabled individuals. If any assistance programs financially support you, then be sure to consult their advisers before determining your reverse mortgage plan.

Disregarding Other Options

Reverse mortgages are extremely expensive and many people see them as their only option. However, there are other alternatives. Consider taking out a personal loan, downsizing or even taking on roommates. The Golden Girls always seemed to have fun.

A reverse mortgage could be just the thing to give you the extra cash flow you need and ease your mind. However, make sure you’re consulting a trusted home financing specialist, reading the fine print and have carefully considered all your options.

Advice For Purchasing A House On A Single Income

Advice For Purchasing A House On A Single IncomeEven though a lot of people have two incomes they can use to purchase a house (theirs and their partner’s), this is not necessarily required. There are lots of people who want to take advantage of current interest rates to purchase a house, and some people are trying to do it on their own. Even though it can be a challenge to buy a house with only one income, it is certainly not impossible. There are several tips that can make it easier for everyone to afford a house with just a single income. 

Always Check Your Credit Score

If you want to buy a house on a single income, make sure you check your credit score first. Your credit score is a reflection of your financial health. The higher your credit score is, the better your chances of having your loan application approved. You can check your credit score for free once per year from any of the major credit bureaus. You need to know what your credit score is and you need to correct any inaccuracies on your credit report before you apply for a home loan. 

Explore Government Loan Programs

Next, if you are buying a home for the first time, you should explore government loan programs. For example, you might be able to apply for an FHA loan, which could allow you to purchase a home for as little as 3.5 percent down. That way, you do not necessarily need to save up a 20 percent down payment to buy a house. Depending on your location, there could be other government loan programs that can make it easier for you to buy a house.

Ask For a Co-Signer To Help 

Even if you plan on paying for the mortgage yourself, you may find it easier to buy a house if you have someone who can co-sign for your loan. This is particularly helpful if your credit score isn’t quite high enough to qualify for a loan. As long as your co-signer has a solid credit score, they might make it easier for you to get your loan application approved. Furthermore, you might be rewarded with a lower interest rate than you could otherwise get on your own. 

 

Eliminate These 5 Barriers To Saving For Your Down Payment This Month!

Saving Up: 5 Barriers to Saving Money That You Can Eliminate in Just One MonthWith all the expenses that go into monthly living and the temptations that come along with life, saving money for the down payment on your new home can be quite a struggle for many people. If you’re having a hard time saving and are wondering what you can do to ensure a higher bank balance next month, here are a few things that may pose a risk to getting the home of your dreams.

Forgetting To Take Lunch

One of the things most likely to defeat your bank balance is the daily office trip to the deli or diner. Instead of opting for an easy but expensive $10.00 lunch, take a few minutes at the end of each day to put together a sandwich or salad so you don’t have to spend extra funds on your lunch break.

Relying On Cable Television

With all the available options for streaming services, many people are switching out their packages for something a lot more economical. Cable can easily add up to $100.00 a month to your expenses, but a streaming service may only be a fraction of the cost and will provide savings you’ll soon notice.

Splurging On Morning Coffee

Grabbing the familiar cup of joe on the way to the office is certainly a way to ease yourself into the day, but one coffee can add up to a huge expense by the end of the month. If this is a vice you crave, try taking your own coffee to work and opt for a treat once a week if you really can’t resist.

Impulse Buys At The Grocery Store

Food certainly counts as a necessity, but there are many things that end up in the grocery cart at the end of a shopping trip that aren’t really staple items. If your cart is filling up with chips and chocolate, you might want to stick to your list or review your cart before the final purchase.

Avoiding Your Budget

Unless you’re taking to a spreadsheet to balance out your expenses and earnings, you may not see any significant savings at the end of each month. Budgeting will give you a better idea of what you can and can’t afford consistently, so make sure you’re writing everything down.

The idea of cutting back on spending is rarely a popular one, but there are things you can do every day that will make for a better bank balance at the end of the month. If you’re looking for more tips on buying your own home, contact your trusted mortgage professional today!

Making Sure You Are Ready To Take On A Mortgage

Making Sure You Are Ready To Take On A MortgageThere is so much to know when it comes to homeownership that even wading into all of the information can seem overwhelming, but if there’s one thing you need when the time comes to purchasing a home, it’s to be prepared. Here are a few ways that you can ensure you’re ready for what a mortgage entails so that buying your dream home will be a positive experience you won’t regret.

Consider All Of Your Options

Instead of accepting the mortgage that your bank is offering you, it’s very important to do some research and determine what some of the best options out there are for you. While it’s entirely possible that the option pushed forward by your bank will work out, in the days of so much information online it’s silly to go into your biggest purchase blindfolded. Take some time out and read about the products available so that, when the time comes, you can make an educated decision.

Know Your Credit History

Lenders will most definitely be digging through your finances and credit history for anything that might make them leery of your financial state, but you’ll want to be aware of your own standing so that you can be prepared for what this might entail. By getting your credit report and score before going through the process of acquiring a mortgage, you can fix any errors that might be on your credit report so that you’ll be prepared for the result when the time comes for pre-approval.

Plan For The Future Possibilities

If the mortgage amount you are planning on paying seems feasible on a month-to-month basis, it’s certainly a good place to start, but if you not on a fixed rate mortgage, you will need to consider the ever-fluctuating state of interest rates, and you need to prepare for this reality at the same time. It’s important to base the amount you’ll be spending each month off of the income and expenditures that you’ve worked out in a budget, but you’ll want to add in some wiggle room so that a jump in the rates won’t sink your dream of home ownership.

There are many things to be aware of when starting the process of purchasing a home, but delving into your credit history and doing the necessary background research can make for a smoother experience. If you’re looking for advice on purchasing a home, contact your local mortgage professional for more information.

An Overview Of Electronic And Smart Locks

AAn Overview Of Electronic And Smart Lockslmost everyone has been locked out of their home before. If you do not have a hidden key or someone else with a key, it can be stressful to wait for a locksmith to come and open the door. Fortunately, there are ways homeowners can address this issue, and one of the options is to get a smart lock or an electronic lock instead. 

How Smart Locks And Electronic Locks Work

Every smart lock is different; however, they have a few themes. Basic electronic locks have a combination that someone has to enter before the door unlocks. Other electronic locks use fingerprints, RFID, or Bluetooth recognition to allow someone to enter. Many smart locks also allow the owner to give out digital keys that allow friends, children, and other people to come and go. The combinations are stored and act as a digital log of who has entered the home. 

The Benefits Of Using Smart Locks And Electronic Locks

There are a number of benefits that come with using smart and electronic locks for homes. First, homeowners never have to worry about getting locked out of the house, as they don’t have to worry about losing manual keys. Second, homeowners can keep track of people, including their children, as they come and go. Finally, smart locks do not necessarily have to be rekeyed or replaced. Homeowners can change the combination when they feel it is nessesary..

Choosing The Right Electronic Lock

Even though smart locks and electronic locks have a variety of benefits, it is important for homeowners to think carefully about which option is best for them. Homeowners need to make sure whatever lock they choose is compatible with their phone. They also need to select locks that have security measures in place that prevent people from cracking the code or getting through the keypad. Finally, take a look at how many combinations the lock can handle. Sometimes, homeowners like to assign people specific codes so they know exactly who is coming and going. Some locks can even be customized so that certain combinations only work on certain days. This can be helpful if there is a maid or tutor who comes from time to time. 

Understanding How Home Equity Works and Why Buying a Home Can Be Your Best Investment

Understanding How Home Equity Works and Why Buying a Home Can Be Your Best InvestmentWhen delving into the world of real estate and investment property, there are many terms that will come up that require further explanation. Whether you’ve never heard the phrase ‘home equity’ before or you have a little familiarity, here are the ins and out of what it means and how this asset can help your financial outlook.

All About Home Equity

Essentially, home equity refers to your portion of the value of your home, and the amount of this figure is important because it is included among your assets when determining your net worth. If this sounds confusing, think of it this way: if you have completely paid off the cost of your home, the value of your home equity is this total amount. Of course, because most people seek a lender to borrow money from when they purchase a home, their home equity would consist of their down payment and whatever amount they’ve paid down on the mortgage since purchase.

An Example Of Home Equity

To provide further clarification, let’s use the example of a house that has been purchased for $300,000. In the case that a down payment of 20% has been provided at the time of purchase, the equity in the home would be $60,000. Since this amount is the percentage and cost of the house that’s been paid down, this is the amount of the house that is actually owned and this will be figured among an individual’s assets.

How Home Equity Works

As you pay the amount that you owe on your home each month, you are paying off your total debt and thereby increasing your equity. Since this amount of money is considered an asset that belongs to you, it can be used down the road to buy another home or invest in other important things like education or retirement. While paying off the amount owed on a home is a considerable investment, if the value of your home increases, this means that you’ll still owe the same on it but your home equity will have automatically increased.

As an asset that is part of your financial net worth and can be used down the road to fund other investments, home equity is a very useful term to know when it comes to purchasing a home. If you’re on the market for a home and are considering your options, you may want to contact one of our local real estate professionals for more information.

The ‘Debt to Income’ Ratio and How It Affects Your Home Purchase

Real Estate Terms: The 'Debt to Income' Ratio and How It Affects Your Home PurchaseThe real estate market is rife with terminology that can make a home purchase seem more than a little complicated. If you’re currently looking for a home and are considering your loan options, you may have even heard the term ‘Debt to Income’ ratio. In the interest of simplifying things, here are some insights on what this term means and how it can impact your home investment.

Determining Your ‘Debt to Income’ Ratio

It’s important to consider what exactly your DTI ratio is before your home purchase as this will quickly determine how much home you can actually afford. To calculate this number, take your monthly debt payments – including any credit card, loan and mortgage payments – and divide them by your monthly gross income to get a percentage. In the event that your monthly debt is $700 and you make $2800 in income, your DTI is 25%.

What Your DTI Means To The Bank

The DTI is a very important number when it comes to a home loan because it enables the bank to determine your financial situation. A DTI of 25% leaves some wiggle room, as most banks will allow a DTI percentage that runs between 36-43%. In the case of the above example, this means that the most debt this person could take on per month is about $1200. While banks vary on this percentage, credit history plays an important part in the DTI that will be allowed.

Paying Down Your Debt Or Purchasing A Home

In the event that you have a DTI ratio that exceeds what your bank will allow, you will need to consider your debts before moving on to investing in a home. If you’re planning on purchasing a home in the next year, it’s a good idea to tackle high-interest debt first. However, if you happen to have a chunk of money saved up that you’re planning on putting into a down payment, it’s worth considering that putting more than 20% down may slightly increase the DTI percentage your bank will accept.

There are many fancy terms that go along with the world of real estate, but it’s important to understand what they mean so you can make them work in your favor. If you’re calculating your DTI ratio and are planning a home purchase down the road, you may want to contact your trusted mortgage professionals for more information.