Home Owner/ Buyer Help article!
Five Common Homebuyer Mistakes You Should Avoid
Buying a home is often a very exciting time, as it represents a significant life achievement and financial success. However, new homebuyers can overlook some important considerations in all of the excitement, leading them to make potentially costly mistakes. The best way to avoid these mistakes is to be aware of them right from the beginning. If you are looking to buy a home, here are some common homebuyer mistakes to avoid:
1) GETTING A HOME AT THE TOP OF YOUR BUDGET
When buying a home — especially your first home — it may be tempting to go all out and get your dream house. You will start rationalizing more expensive properties to yourself because you fall in love with them, even if they are over your budget. Breaking your budget is a bad idea, and the best way to keep yourself from doing so is to get preapproved for a mortgage first. Even then you should strive to come in at least 15-20 percent under your preapproved amount. Just because you can afford something right now doesn’t mean that your financial situation might not change in the future. It is always better to play it safe.
2) FORGETTING ABOUT ADDITIONAL HOMEOWNERSHIP COSTS
One of the main reasons why you should always stay within your budget is that homeownership comes with many hidden costs which can really add up. You need to be aware of the property taxes, utility costs, insurance and maintenance costs that are going to come with your new home. If you don’t take these costs into account when coming up with your budget, you will have a difficult time making all of your monthly payments on the house.
3) FORGOING A PROFESSIONAL INSPECTION
The importance of getting a professional inspection before finalizing a sale on a home cannot be overstated, as it can save you from unexpected costs in the future. A house may look like it is in great shape and worth every penny, but a professional inspector can tell you if you will be looking at needing to make major and costly repairs after your purchase. This information can help you back out of a bad deal in time, or, if you’re willing to make the repairs, negotiate the price of the home.
4) NOT CONSIDERING THE RESALE VALUE OF YOUR HOME
When in the processes of buying a new home, one of the last things you are probably going to consider is the home’s potential resale value. If you love the home and you plan to stay there forever, then why give any thought to selling it one day? Any number of life changes could mean needing to move again in the future. The time may come when you will want or need to sell the house, so ensuring that it has good resale value before you buy may help you out immensely in the future.
5) RELYING ON VERBAL AGREEMENTS
When buying a new home, you should never rely solely on verbal agreements. It is in your best interest to get everything in writing before agreeing to the sale. Failing to get a seller to agree to your offer in writing can also open the door for another buyer to come in with a lower offer at the last minute and steal the property out from under you! Getting everything in writing is a must. Review the contract carefully with your real estate agent. Homebuyers are sometimes shocked to walk into their new home only to find that there are no kitchen appliances or light fixtures, for example.
Seven Tips You Need to Know
Selling a house isn’t easy. In fact, it’s something that many families dread. Chances are that you’ve heard horror stories about houses that sat for years on the market without selling, gradually decreasing in price. If you’ve been thinking about selling your home and you want to ditch your house as quickly as possible, there are a few ways that you can help your house sell fast. There are some factors you can’t control, like location or noisy neighbors. Fortunately, there are seven important things you can do to give your house the best shot at selling.
1. FIX WHAT’S BROKEN
Buyers are always looking for the perfect move-inready home, so fixing your home is key. If your house needs a lot of help, focus on the major problems in your home. Need a new roof? Buy one. A new owner will not want to put a new roof on the house unless you’re offering the home at a serious discount. Remember that most families want something they can move into right away without spending months working on. If there are problems with the home that you can easily fix, whether it be chipping paint or a broken fence post, try to fix them before you list your house.
2. UPDATE YOUR APPLIANCES
It’s important to remember that homebuyers have specific items they look for in a home. For many buyers great appliances are number one on their wish list for a home. That’s where you come in. While you probably can’t afford to update every one of your home’s appliances, take a hard look at what your current setup looks like. Is the stove outdated? Is the fridge about to die? Dropping a few hundred dollars on a new fridge,dishwasher or oven might not be the way you want to spend your money, but it could help you sell your house. If someone sees an old stove sitting in the middle of the kitchen that looks like it’s about to break, they may wonder what else is going to break if they buy the house.
3. TAKE BREATHTAKING PICTURES
You probably know that you need to take pictures of your house. Pictures are one of the most important ways that you can draw in potential buyers. If someone is looking for a new home, they’ll typically take a look at real estate websites before setting up showings or attending open houses. Because so many shoppers look online before they decide to explore a house in person, it’s important that your pictures look great. Consider hiring a professional photographer to really showcase your home. Make sure that you take pictures of both the home’s interior and exterior. If you have a large yard, try to showcase that. If you just planted roses, take a few pictures. If your master bathroom is enormous, take a picture. Highlight the best areas of your home and skip the ones that are less attractive to buyers.
4. DITCH YOUR CLUTTER
Clearing out junk is easier said than done, but if you want to sell your house quickly, you need to ditch your clutter. Get rid of extra papers, magazines or memorabilia that is sitting around your house. Clean out beneath your beds. Get rid of that pile of clothes next to your dresser. When people walk through your house, they want to imagine what it will be like to live in the home. Even if you can’t get rid of all of your home’s clutter, try to at least minimize the amount of things you have on shelves and on counters to present a clean, neat appearance to buyers.
5. ADVERTISE, ADVERTISE, ADVERTISE
Your agent will be the first to tell you: you need to focus on advertising. Remember that buyers probably won’t drive by your house and see the “For Sale” sign in your yard. Rather, they’ll find your house online, in a newspaper or on a brochure. List your house on as many real estate websites as possible, share it on Facebook and try to promote it as much as possible for the best results.
6. PRICE FAIRLY
You’ve spent years developing memories in your house, so it’s normal to want to attach a price tag to those. Unfortunately, the reality is that you can’t afford to ask too much for your house. Remember that buyers are looking for a good deal. They want to know that they’re getting their money’s worth when they buy a house. Take a look at what other houses are selling for in your area and price your home accordingly. If you aren’t sure how much to ask for your house, don’t be afraid to contact a real estate agent to ask for help.
7. DON’T BE CHOOSY
One mistake that many sellers make is to turn down offers because they don’t like the family. Even if you don’t like the person that offers to buy your house, realize that you don’t have any control over what happens to your home once you sell it. If the buyer wants to tear down walls, paint everything green or add a bunch of garden gnomes to the yard, that’s their decision. For a quick sell, don’t be choosy about your offers. Sell your home to the first person who makes an offer that is reasonable and that you’re comfortable with.
What Do Mortgage Lenders Really Want?
If you are in the market for a mortgage, you might think that lenders use some arcane formula to make their decisions — one that your average consumer simply cannot understand. The criteria mortgage lenders use is actually much simpler and down to earth.
Understanding what mortgage lenders are really looking for is essential for all homebuyers. Banks and other mortgage lenders have tightened up their lending standards in recent years. They are taking a much harder look at their applicants’ finances and job prospects, and they are reviewing all submitted documents more carefully. That does not mean that you will not qualify for a mortgage, but it does mean you need to have all your ducks in a row before you start shopping for a new home.
UPGRADE OR FIRST-TIME BUYER?
Whether you are a first-time buyer or in the market for an upgrade, you can be sure the lender will scrutinize your credit history carefully and take a close look at your credit score. While a credit score on the lower end of the spectrum does not necessarily doom your chances of getting a mortgage, that low score could mean a much higher interest rate.
Some lenders do set minimum credit scores for the mortgages they write, so it is a good idea to boost your credit score as much as possible before you start shopping. Paying down high credit card balances and avoiding taking on new debt are both smart moves if you are in the market for a home. Homebuyers with lower credit scores may also benefit from working with a mortgage broker. A good mortgage broker will know the policies of the lenders he or she works with and select the ones with the friendliest terms.
HOW’S YOUR CREDIT SCORE?
Even if you have a stellar credit score, the mortgage lender will want to make sure you can afford the monthly payments. The lender will carefully analyze your income, fixed expenses and discretionary income. The results of that analysis will tell the lender how easy (or difficult) it will be for you to afford the monthly payments.
This analysis will include not only the monthly mortgage payment but all housing-related expenses — things like property taxes, mortgage and homeowners insurance and any homeowners association fees. Your own analysis should include those same factors. You may find that shopping for a less expensive home makes sense, especially if the monthly payments would be a stretch financially.
Last but not least, the lender will want to make sure the value of the home justifies the size of the mortgage you plan to take out. Many banks and mortgage companies were caught off-guard when home values suddenly dropped during the Great Recession, and they are working hard to avoid making the same
mistake again.
ANALYZE AND APPROVE
You can count on the lender to review and carefully analyze the appraisal for the property you have in mind. In some cases, the lender may require a second independent appraisal before approving the loan. No matter what type of home you are looking at or what size mortgage you need to make it happen, it is important to gather as much information as you can. Knowing what mortgage lenders are looking for can improve your chances of getting the loan you need and make the entire homebuying process a lot easier.
The Best Time to Refinance a Home Mortgage Loan
Refinancing provides an opportunity to save money on a home loan. Whether a borrower wants to pay off several debts or to obtain a lower mortgage payment, refinancing could be a favorable solution. Choosing the ideal time to refinance might significantly impact a borrower’s terms on a new loan.
MARKET TIMING FOR A HOME LOAN
Subtle changes in the marketplace could enable you to save money on your mortgage loan. Waiting for several months to refinance could be costly. If interest rates trend higher, you might miss out on a great deal.
Timing the market for mortgage interest rates is extremely difficult to accomplish. Paying attention to financial publications and financial websites could position you to lock-in an attractive home mortgage rate. Speaking with a financial professional or a mortgage loan officer could provide some insight about the current state of mortgage interest rates and certain financial trends.
PERSONAL CREDIT HISTORY
Ideally, you should strive to refinance when your credit rating and score are suitable for the loan terms that you desire. Having a solid payment history on your existing mortgage should increase your ability to secure an attractive mortgage rate. The best time to refinance is when you have at least a two-year credit history that reflects zero late payments on your mortgage or other consumer debts. Borrowers who maintain a high credit score are generally offered more attractive mortgage loan terms. If your credit score is above 740 points, you might be a candidate for a prime mortgage loan. However, if your credit score is around 728 points, you should speak with a loan officer to determine whether now is the best time to refinance your mortgage.
CONSIDERATIONS
To get the best mortgage rate for your situation, you should speak with a loan professional. An assessment of your credit and your home equity may enable a loan officer to find an attractive mortgage program for your needs. Waiting to accumulate financial reserves might improve your chance of qualifying for a home loan. A savings account, retirement funds or investments that reflect your ability to pay for a new home loan for more than six months could be instrumental toward a mortgage loan approval. Contact a mortgage lender for more information about refinancing your home loan.