Stuck in traffic much?

What are other commuters doing in your neighborhood?

A typical commute to work is an important part of “location, location, location,” the real estate mantra that says where a home is situated contributes to its value. For a look at typical commutes in your neighborhood, click on the image below.

I hope you find this information interesting and useful. If I can ever answer home financing questions or offer assistance, please reach out.

 

Do you have obstacle insurance?

The “insurance” starts with knowing you’ve anticipated future needs such as maintenance, repairs, improvements, additions or even paying for your children’s education.

Better still, a good plan provides sufficient flexibility. When life confronts you with the unexpected, you already have resources in place.

A mortgage plan can be simple or sophisticated. It’s based on your needs and risk tolerance. It takes into consideration your overall financial well-being instead of focusing on just your home.

Want to learn more? Reach out, and we’ll be happy to help!

The Benefits of Mortgage Pre-Approval

When you’re shopping for a new home, it’s important to leave as little to chance as possible. Mortgage loan pre-approval allows you to act quickly when you find the right property, and the seller will take your offer more seriously.

When you’re pre-approved, you can:

•    Make an offer with confidence, knowing the lender is already on your side.
•    Save time by looking at homes you can afford.
•    Negotiate a better price for the home you want to buy.

You don’t need to spend a lot of time researching finance options; that’s my job! I’d love to help you find the loan that’s best for you and complete the pre-approval process, so you’re one step closer to homeownership.

How Much Can You Afford?

Do you know how much you can afford to buy a new home?

Lending standards have become more stringent over the past few years, but what hasn’t changed is the formula that determines the loan amount that you can afford.

Things to consider are the loan program, your credit score, your debt-to-income ratio and other financial information.

Please give me a call so I can help you crunch the numbers. Once we know what price range works best for you, we can work on getting you pre-approved to make your new home purchase much easier!

Understanding Your Credit Score

As you might expect, payment history is the most influential component in your credit score, followed closely by the amounts you owe. To lesser degrees, the length of time you’ve utilized credit, the number of new accounts or inquiries you have, and the various types of credit accounts you hold also impact your score. Overall reporting also looks at how these factors relate to each other in the context of your personal usage.

To help achieve or maintain a healthy score, always remember the following:

Have a system to assure your bills are always paid on time.

Avoid late payments or the excessive use of credit by maintaining a cash “cushion” to pay for unexpected expenses. Don’t “max out” your cards. It’s better to have a high credit limit with a low balance.

Never close old accounts as the age of these can actually help your score.

If you shop for credit, do so in the shortest time period possible to minimize inquiries counted against you.

Don’t be afraid to use credit. You need several accounts in order to have a credit score. Just be sure to keep corresponding payments within your means.

If you have established credit, don’t open new accounts solely for the sake of earning a discount on a new purchase. In the long run, you may spend more than you save up front by paying higher interest rates due to a lower score. Having more accounts also increases the task of making payments and the possibility of missing one.

If you have questions about managing your credit, give us a call. We’re happy to help.

What’s the potential cost of waiting?

First time home buyers currently have a historical advantage with both low rates and prices. What happens when the trend begins to shift?

You might not qualify to purchase the same house.

Unless your income keeps pace with price and/or rate increases, you may not be able to qualify for the same home you could purchase today. In the example above, the income to qualify increases from $4,038 per month to $5,127 (assuming a debt-to-income ratio of 35%). The 27% increase is much higher than the typical salary increase of about 2% or 3% per year.

In a rising market, you usually can’t out-save appreciation.

When prices are rising, it can be difficult for your savings to outpace the market. For example, if a $300,000 home appreciates by 5% in one year, that’s $15,000 or $1,250 per month. Can you add that amount to what you’re already saving each month?

If interest rates are rising, too, required payments and income increase even more.

Given the recent environment, some may discount the possibility of the 2% increase in the example above, but the 50-year average for a 30-year, fixed-rate conventional loan is approximately 8.375%. That’s almost 4% higher than rates at the time of this writing and would equate to a payment increase of more than $663 per month in the example.

Qualified borrowers have the ability to lock in today’s prices and rates. Buyers who have not yet accumulated a large down payment may find that using a small down payment and paying mortgage insurance is wiser than missing out on low prices and historically low rates.

We’re here to help when you’re ready to learn more. 

What Opportunities Have You Missed?

Buying Stock in Apple Computer for less than $10 per share. Buying up farmland during the Great Depression. Building a website to connect your friends before some kid from Harvard did it first.

“I was seldom able to see an opportunity until it had ceased to be one.” – Mark Twain

The world is full of opportunities missed. Funny thing is, at the time they were readily available or begging for attention, no one seemed to care. Those who actually took action were often dismissed as crazy.

What opportunities have you missed recently? With uncertainty and negative sentiment surrounding the real estate market for several years, some recognized opportunity and secured very good deals. Now, the market has undergone a fundamental shift. Home prices are rising, and many sellers are again in the driver’s seat.

There’s still time to act. If you feel safer taking action only once the direction of the market has been established, then that time has come. Buying when values are rising can add great comfort and peace of mind to the process.

There’s still time to choose. We all need a place to live, and we usually have just two choices—to rent or own. Over the long haul, owning has proved to be one of the most fruitful paths to prosperity. Renting has done the same—for the landlord!

Still, the choice is yours. If you’re ready to seize the moment and secure your future now, opportunity looms large. A home purchase may not make you tomorrow’s next multi-billionaire. But it can do wonders for your pride, long term prosperity, comfort and stability.

Falling in Love with a House

In the housing market, the best deal doesn’t always come with the lowest price.

Price vs. Payments – If you’re financing your purchase, you’ll probably never come close to paying the actual price. You’re making a comparatively small down payment and then paying interest on the loan until you refinance or sell. Yes, you will have a higher payment if you pay more for the home, but an extra $10,000 of mortgage money can add less than $50 per month on a low-rate, 30-year loan.

Relative Prices – Our natural tendency to pay as little as possible is not as meaningful for an investment, such as a home, as it is for a consumable. In this case, what you pay now can affect your sales price later. There may be little difference in total earnings if you pay less and sell for less or pay more and sell for more.

Influencing Value – For appraisers, the last sale or “comp” in an area sets the value for similar homes. Whatever you pay helps to establish what your home and comparable properties are considered to be worth.

Setting the Trend – If you pay less for your home than was paid for the last similar home, you may be contributing to a downward price trend, which can be difficult to reverse. Conversely, helping to maintain a trend of price appreciation can end up paying you back many times over.

One Chance – No two homes are ever exactly the same. Even when structure matches, your land, your view, your address and your immediate neighbors will always be different. You truly may have only one chance at just the right house. Industry professionals have all seen buyers lose out on what they really wanted. We don’t want that to happen to you. Nor do we want you to pay more tomorrow for something less than what you could have had today as a result of increasing prices and rates.

Reach out, and we’ll be happy to help you weigh your options for the home you would really love to own today.

Are you ready to take the leap to home ownership?

For a while, many people were challenging the value of owning a home.

In the midst of the “financial crisis,” some used history instead of the headlines as a guide for purchase decisions. They have now been duly rewarded.

But not everyone was ready to take advantage of the opportunities when uncertainty was at its peak. Those who waited are likely to create increased demand for homes, and values are likely to continue moving higher.

Most recent home buyers have already seen the value of their properties rise and are safely locked in with rates that reached record lows.

If you’re thinking about your next move, rates are still low and affordability has rarely been better. This combination is tough to beat and will not last forever.

Let us know when you’re ready to jump, and we’ll be there to help you land safely on the other side.

First Time Buyer Tips

 

Are you ready to buy your first home? Here are some helpful tips to consider when you come to apply for your loan.

1. Know what you can afford and how much cash you will need. Knowing what you qualify for before looking at any homes will save you the disappointment that can come from falling in love with a home that’s out of reach. We’ll be happy to “pre-qualify” you now so you’ll know what will work later.

 

2. Know where you want to be. Learn about the neighborhood before you make an offer to buy. Sample the commute. Talk to would be neighbors. See the schools, shops and services before you start negotiating.

 

3. Choose your property type. Consider your range of choices: single family, multi-family, townhome, condo, co-op, new construction, etc. Know the pros and cons of each. Decide which is best for you, and define your search accordingly.

 

4. Obtain a valid pre-approval before you make an offer. This entails document verification, a credit check and automated or actual underwriting. If all is in order, you will receive the equivalent of a loan commitment that’s subject to a contract, appraisal and title work. Your pre-approval gives you and the seller confidence in your ability to close the deal once you find your perfect home.

 

You will probably buy a home only a few times in your life, but we’re laser focused on the process every day. We know how important proper preparation can be to making the process easy and rewarding. Now, so do you.