Why Your Kitchen Features Matter

Why Your Kitchen Features MatterIf you are interested in purchasing a house in the near future, you need to pay close attention to your kitchen. The kitchen is considered to be the heart of the home, and you need to make sure the kitchen is laid out appropriately. You need the kitchen to match your expectations, but you also need to pick a kitchen that will help you maximize the value of your home if you decide to sell it down the road. What are a few of the most important examples of kitchen features you need to pay attention to?

The Cabinets 

Always take a close look at the cabinets. Look at the inside of the cabinets for signs of water damage, and make sure the cabinets are aligned appropriately. If the cabinet doors do not open and close properly, it can be a significant problem when you are trying to cook in the kitchen. Cabinets are often the most expensive part of a kitchen remodel. 

The Backsplash

You should also pay close attention to the backsplash. You need the backsplash to completely cover the area between the counters and the cabinets. You do not want the backsplash to be too short. Otherwise, you expose the wall to additional stress when you are cooking. 

The Kitchen Island

A kitchen island is often the gold standard when it comes to a kitchen. This additional feature can significantly increase the value of your home, but you need to make sure the island is in the right location. For example, you need the island to be close enough to the workspaces in your kitchen, such as the stove and refrigerator. You also want it to be centered in the kitchen itself.

Think About These Key Kitchen Features

These are just a few of the most important examples of kitchen features that you need to think about when you are interested in purchasing a house. Remember that these features need to match your needs, but you also need to think about how much money you can get for the house if you sell it down the road. Pay close attention to these kitchen features when you are looking for a new house.

 

3 Tips To Consider When Buying A Home With An FHA Mortgage

Tips to Sidestep Common FHA Loan Problems

FHA loans are becoming increasingly popular these days as potential homeowners may not able to qualify as easily for conventional mortgages.

The FHA insures some higher-risk loans, in turn allowing borrowers with low down payments and less than perfect credit to purchase homes and bolster the housing market.

However, while getting through the loan process with an FHA mortgage loan is not necessarily more difficult than with a conventional or conforming loan, there are some issues that you will want to be aware of.

Property Condition

You can’t buy just any property with a FHA loan, or any other loan for that matter. All lenders are concerned with the condition of a property, especially as it relates to livability and safety. 

Major deficiencies in a home will almost always be noted when the home is seen by the FHA appraiser. The appraiser must deem it to be livable, without any conditions that could jeopardize health or safety. 

Sometimes you can get the seller to make the needed repairs to pass the lender requirements. In other cases, you may want go an alternate route. The FHA 203K streamline loan allows you to borrow up to $35,000 for home repairs to bring the house up to code.

Low Appraisal

The primary role of the appraiser is to estimate it’s market value. These estimates are based on the property’s features and a comparison to similar properties that have sold recently. If the appraisal is low, the loan funding could fall through because the FHA underwriting guidelines (along with almost all conventional guidelines) will not let you borrow more than the home’s appraised value. You can, however, add to the amount you bring in to closing if you prefer to compensate for a low appraised value.

Rather than trying to scrape together a bigger down payment, you may want to take the information to the seller to renegotiate the purchase price. The seller will likely recognize that other buyers would be in the same boat, leading the seller to agree to a lower purchase price.

High Debt-to-Income Ratio

Debt to income ratios are a concern with virtually every type of mortgage loan on the market today. Your FHA loan may encounter a snag in the underwriting process if your total debt payments, including your new mortgage, would be a high percentage of your income.

FHA has an automated underwriting program called TOTAL Scorecard which uses an algorithm to determine a borrower’s qualification. The process is quick, and often you can make up for a high debt-to-income ratio with other compensating factors, like a larger down payment or a cash reserve of several months of mortgage payments.

If you have any questions regarding FHA loans or any other home financing questions, please give us a call!

What You Need To Know About A Closed-End Second Mortgage

What You Need To Know About A Closed-End Second Mortgage

A home is probably one of the most expensive purchases you will ever make. It is important for you to understand all of the options available to you, particularly if you need a quick source of cash, and you might be thinking about taking out a second mortgage. You can use a closed-end second mortgage to cover the cost of repairs, medical debt, and even consolidate your other sources of debt. How do you know if this option is right for you?

An Overview Of A Closed-End Second Mortgage

If you decide to take out a second mortgage, you will typically withdraw the cash you need. Then, if you need more cash in the future, you can take out more down the road. In contrast, with a closed-end second mortgage, you will receive the entire loan amount upfront. Then, you will not be able to withdraw any additional cash if you need more because you have already withdrawn the maximum limit. Generally, you can withdraw up to 80 percent of your home’s equity value, but there are many factors that will dictate your limit.

The Pros

Before deciding whether this is the right option for you, you must weigh the benefits and drawbacks. The biggest benefit is that it gives you access to a quick, large, lump sum payment. You can use this to cover home renovations and pay off debt. You also get access to a fixed interest rate. Unlike other options, you don’t have to worry about the interest rate changing.

The Cons

On the other hand, there are some drawbacks you might notice. You have to use your home as collateral, so you risk losing your home if you can’t meet the payments. In addition, you will probably incur higher closing expenses, and you may have to pay a higher interest rate. This is particularly true if you are taking out a large amount of money.

Weigh Your Options Carefully Before Deciding On A Second Mortgage

If you are looking for a second mortgage, you need to think about all of your options carefully before you decide which one is right for your needs. Consider reaching out to an expert who can help you.

Getting A Mortgage When Self-Employed: What You Need To Know

getting-a-mortgage-when-self-employed-what-you-need-to-knowThere is a common misconception that someone who is self-employed will not have the tax records or income necessary to qualify for a mortgage; however, that is not necessarily the case. In reality, if you are self-employed, there are a lot of home loan options available to you. It is true that it might require some additional paperwork and planning, but as long as you have the necessary information, you should be able to qualify for a mortgage. 

What Is Necessary To Qualify For A Self-Employed Mortgage Loan?

If you are interested in taking out a mortgage when you are self-employed, you will be held to the same standards as everyone else. This means that the lender is going to require a solid credit score, a long credit history, a favorable debt-to-income ratio, and enough money to cover the down payment. In addition, you will also have to demonstrate a solid income history, just like everybody else. 

That is where the difference comes into play. A W-2 employee may be able to provide a few pay stubs, but someone who is self-employed may be required to provide up to two years of self-employment income. 

How Do I Maximize My Chances Of Getting Approved?

If you are self-employed and want to maximize your chances of getting approved for a self-employed mortgage, there are a few steps you should take. First, you need to make sure your debt-to-income ratio is as low as possible. That way, you can reduce the risk to the lender. You can also improve your chances by preparing financial documents ahead of time. That might mean including profit and loss statements, two years of tax returns, and 2 years of business taxes if you have them. Do not forget that improving your credit score and putting more money down can improve your chances of getting approved. 

Lengthen Your Income History

Finally, if you are serious about getting approved, lengthen your income history. Show that you are willing to provide a longer track record of income, and the bank will feel better about providing you with a self-employed mortgage loan. That way, you have the financing to purchase the house of your dreams. 

 

What Is A Loan Contingency: An Overview

What Is A Loan Contingency: An OverviewIf you are in the process of looking for a new home, you need to find the right one to meet your needs. Sometimes, you want to learn more about specific properties before you decide if it is right for you. As a result, a lot of prospective buyers will include contingencies in their home offers that may allow them to back out without losing their earnest money. What are a few examples of loan contingencies, and how can you use them to protect yourself during the process? 

Examples Of Common Loan Contingencies

Even if you have agreed on a purchase price for the house, the closing date is probably not going to be for one or two months. This will provide you with time to complete your due diligence and make sure no issues come up. For example, there may be a contingency that allows the closing date to be extended if there are any issues with the financing process through the lender. 

You might also decide to include a contingency clause in case something develops with the home inspection. If something is wrong with the home inspection, you may provide yourself with an opportunity to pull out of the deal without losing your earnest money. 

How A Loan Contingency Clause Protects The Buyer

It is important for buyers to work with real estate agents who understand how loan contingencies work because this is an important protective measure. A contingency clause can protect the buyer because it provides the buyer with a way to back out of the contract without losing his or her earnest money. 

Typically, if the buyer backs out of the contract, he or she will lose his or her earnest money; however, if the buyer backs out for a reason that is protected by the contingency clause, then his or her earnest money might be protected. 

Some Buyers Waive Their Loan Contingency

If the housing market is particularly competitive, and you know you are going to purchase the house no matter what, then you might want to waive your loan contingency as a way to strengthen your offer. On the other hand, keep in mind that waving your loan contingency means sacrificing this important layer of protection. 

 

An Often-Overlooked Trick Can Help You Afford A Second House

An Often-Overlooked Trick Can Help You Afford A Second HouseThe whole idea of investing is to use a portion of your money now to get more down the road. It is important for everyone to diversify their investments, and you might be thinking about buying a second house to do so. Investing in real estate is a goal that a lot of people have, but how can you get started? It was challenging enough to buy your first house, so how can you afford a second one? 

Use A Cash-Out Refinance To Buy Your Second House

One trick that many people overlook is that they can actually conduct a cash-out refinance to purchase a second house. In general, your lender will allow you to cash out up to 80 percent of the value of your home during a cash-out refinance. This can give you a tremendous amount of flexibility that you can use to purchase a second house. For example, if your house is worth $300,000, you may be able to withdraw tens of thousands of dollars in equity.

What To Consider When Using A Cash-Out Refinance

When you apply for a cash-out refinance, there is a chance that the interest rate on your new loan might change. This might mean that you end up with a higher interest rate than before. You must make sure you can afford this new interest rate. Furthermore, you will be required to pay closing expenses. You need to have enough money set aside to cover those closing expenses. Keep in mind that the term of the loan might change as well. If you were close to paying off your house, this type of refinance might reset that clock. It might take you longer to pay off your mortgage than it did before. Consider these factors carefully before conducting a cash-out refinance.

A Cash-Out Refinance Might Be Right For You

In the end, a cash-out refinance could be a great way for you to withdraw equity from your home, using it to purchase an investment property. On the other hand, you need to ensure you can still afford the new loan after you take that equity out of your home. Work with an expert who can help you find the right option to meet your needs.

 

How Do You Actually Write The Check To Buy A House?

How Do You Actually Write The Check To Buy A House?After you have found the right house to meet your needs, you need to make the down payment to complete the transaction. Can you show up at the closing table with a suitcase full of cash? Of course, that would be a bit suspect, so that is not actually how it happens. What do you need to do to actually hand over the funds to buy the house? 

The Down Payment Is Verified Beforehand

First, understand that the down payment is usually verified before you agree to the deal. Your real estate agent will work with you and the seller’s agent to ensure that you actually have the funds needed to buy the house. For example, you might need to send screenshots of your bank balance or investment portfolio as proof that you have the money. Your agent will work with you to ensure your confidential information remains so.

The Funds Are Typically Given Using A Wire Transfer

When it is time for you to complete the actual transaction, the real estate attorney will handle just about everything. The attorney will be responsible for collecting the money from the sale and ensuring that everyone gets the money they are owed. The attorney will provide you with the account information for where you need to wire the money. Prior to the closing date, you need to go to the bank and work with one of their experts to ensure the money is in your account and wired to the correct account destination.

The Real Estate Agent Will Confirm The Process Is Done

It is best not to wait until the last minute to wire the money into the account. Try to do this process ahead of time, and make sure either the attorney or your real estate agent says that the process has been completed. You do not want to run the risk of missing your closing date. If you have questions about the process, make sure you give the attorney’s office plenty of time to respond to you.

Determine Your Budget With The Help Of Your Real Estate Agent

This process is important for making sure you can afford the house you want. Work with your real estate agent to ensure you have the necessary funds for the down payment.

 

House Poor: What It Means And How To Avoid It

House Poor: What It Means And How To Avoid ItThere is a good chance you have heard someone described as being house poor. What exactly does it mean? It is important to understand what it means to be house poor and how you can stay away from it.

House Poor Means Spending A Significant Chunk Of Your Income On Housing

Being house-poor means different things for different people. In general, it means spending a significant amount of your monthly income on recurring expenses related to your house. A few examples include your mortgage, the interest on your mortgage, your property taxes, and HOA expenses. Owning a house can be expensive, and it is important for you to budget carefully. In general, you could not spend more than one-third of your monthly pay on your rent or your mortgage. If you are spending significantly more than this recommendation, you might qualify as house-poor. 

How To Avoid Becoming House-Poor

Fortunately, there are several strategies you can follow if you want to avoid becoming house-poor. First, make sure you budget ahead of time. Understand exactly how much money you can spend on your home, and make every effort to stick to that number. Furthermore, before you purchase a house, make sure you get a home inspection completed. There are a lot of people who have their savings wiped out by unforeseen expenses. If you get an inspection before you buy a house, you can plan for those ahead of time. Finally, make sure you reduce your debt-to-income ratio before you buy a house. That way, you can qualify for the best home loan possible.

Do Not Spend More On Housing Than You Can Afford

In the end, it is critical for you to avoid spending more money on your house than you can afford. Remember that you should not spend more than one-third of your monthly pay on housing. If you do, your budget may be stretched thin and other areas, and you might have a difficult time covering other expenses. Do not hesitate to reach out to an expert who can help you find the right house for yourself and your family.

 

The Most Commonly Forgotten Item On The Home Budget List

The Most Commonly Forgotten Item On The Home Budget ListIf you are in the process of purchasing a home, it is critical for you to make sure that you budget appropriately. Unfortunately, there are a lot of people who commonly overlook closing expenses. Even though it is important for you to have enough money for your down payment, you need to make sure you cover closing costs as well. What is included in closing costs, and how much money do you need to budget?

The Recommended Amount

Even though it is tempting to focus on the cost of your house, it is also critical to think about closing expenses. Usually, closing expenses are approximately two percent of the value of your home. For example, if you are planning on purchasing a house for $250,000, your closing expenses will probably be about $5,000; however, there is also a chance that your closing costs could be more or less than that. You should work with a professional who can help you estimate your closing expenses. 

Examples Of Items Included In Closing Costs

As you go through the process of buying your house, there are a lot of moving parts that have to come together to complete the transaction. There are several examples of items that could be included in your closing expenses. For example, you may have to pay an origination fee attached to your loan, and you will have to cover attorney’s fees for the closing attorney as well. You will need to purchase title insurance and conduct a title search, and you might also have to pay for the home inspection and home appraisal. If there is an HOA in the area in which you are buying your house, you may have to pay those when you close on your house as well. You should get a breakdown of these expenses ahead of time.

Ensure You Have Money For Closing Costs

You have worked hard to find the perfect house. You must make sure you have enough money to cover not only the down payment but also your closing expenses. If you have questions about how much money you will have to pay for closing costs, reach out to a professional who can help you. 

 

Pet Safety Checklist

Pet Safety ChecklistMany people view their furry friends as members of the family. If you have pets at home, you need to make sure they are well taken care of. That means taking a closer look at an important pet safety checklist. What are a few of the most important items you need to include on this checklist if you want to make sure your dogs and cats are safe?

Regular Checkups Are Critical

First, you need to make sure that you take your pets to the veterinarian at least once per year. Just as you go to the doctor once per year, your pets need to go to the doctor once per year as well. Regular check-ups are important because the veterinarian could identify issues that you might not otherwise have noticed. In addition, this gives a veterinarian an opportunity to make sure your pets’ vaccinations are up-to-date.

Spay Or Neuter Your Pets

Unless you plan on having kittens or puppies, you also need to make sure that your dogs and cats are spayed and neutered. There are already far too many animals in animal shelters, so if you are not planning on breeding dogs and cats, you do not want to add to the population unnecessarily. There might be opportunities for you to get this operation financed, which could make it more affordable.

Lock Up Unsafe Items

Keep an eye on your home environment as well. Keep a close eye on how much human food you give your dog or cat. There are certain items that are simply not healthy for dogs and cats, and some items could be poisonous. You should also make sure that any cleaning supplies are locked behind a cabinet door. That way, your pets do not ingest anything that could poison them.

Protect Your Furry Friends

These are a few critical steps that you need to take to make sure your dogs and cats are safe. If you are interested in learning more about the steps you can take to protect your furry friends, consider reaching out to a veterinarian who can help you.