Why Every Home Buyer Needs A Pre-Approval Before Home Shopping

Why Every Home Buyer Needs A Pre-Approval Before Home ShoppingThere are many people who are considering buying a home because the current market is so attractive. With the ability to carry out virtual tours, this makes it even easier for people to find the home of their dreams.

While the fun part is looking at houses, it is important to get pre-approved for a home loan first. There are a few reasons why everyone must get pre-approved before they start the process of shopping for a home. 

This Provides A Chance For People To Get Their Finances In Order

Buying a home is a major decision. For many people, this is going to be their biggest investment. For this reason, it is critical for everyone to have their finances in order.

Of course, some people might think that their finances are fine when, in reality, this might not be the case.

For example, someone might be self-employed and think they are doing well; however, many lenders will not accept self-employment income as “reliable” unless they see at least two years of tax records. Furthermore, because those who are self-employed often take large tax deductions (due to business expenses being deductible), their gross taxable income is also lower.

This can be a problem for lenders who want to make sure their borrowers have a high gross taxable income to pay back the loan.

Increases The Attractiveness Of An Offer

If someone finds a house they love, there is a strong chance that someone else has fallen in love with the home as well. The seller wants to make sure that whoever is providing an offer on a home is a serious candidate. With a pre-approval letter, this makes the offer far more attractive.

This is because the seller knows that nothing is going to hold up the sale. If someone isn’t pre-approved, there is a chance that they might make an offer on the home only to have it stonewalled by the lender. This can be frustrating for someone who is trying to sell a home.

Avoid These Problems By Getting Pre-Approved

In order to avoid these problems, everyone must get pre-approved before they start the process of searching for a home. By getting pre-approved, people can expedite the home buying process.

4 Surprising Things That Might Increase Your Home’s Value

4 Surprising Things That Might Increase Your Home's ValueYou’ve probably heard that living near excellent schools or having curb appeal can boost the value of your home. However, a home’s value is dependent upon a lot of different factors. Some of these things are more obvious than others. Things that might seem insignificant can have an impact on your home’s worth. Here are some surprising things that can affect the existing value of your home or how much a buyer is willing to pay for it.

#1 A Blue Kitchen or Bathroom

Painting your home is an easy and cost-effective way to update your home. Just make sure that you select the right colors. Based on recent research, walls that are painted cool neutral colors like blue are more likely to appeal to buyers. According to a 2017 study by Zillow, homes with blue bathrooms sell for an average of $5,500 more than expected. Houses that had blue kitchens sold for $1,809 more compared to similar homes that had a white kitchen.

#2 How Close You Are To A Supermarket

Being next to a well-known supermarket can increase the value of your home. If the supermarket is considered upmarket, then the increase in value is even higher. According to “Zillow Talk, The New Rules of Real Estate,”  homes that are near a Trader Joe’s or Whole Foods grocery store appreciate up to 40 percent faster than other homes. The presence of a popular store like Trader Joe’s has a positive effect on market values over time.

#3 A Joanna Gaines’ Aesthetic

Joanna Gaines’s urban farmhouse aesthetic is more than just chic; it can have a surprisingly positive effect on the value of your home. According to a Zillow analysis of home sale descriptions from 2016, houses that had the keywords “farmhouse sink” and “barn door” sold quicker and at a premium compared to similar homes. Listings that had the words “barn door” sold 57 days quicker and for 13.4 percent more than similar homes. For sale listings that included a “farmhouse sink” sold for 8 percent more. So, if you plan to make interior updates in your home, you might want to watch a couple of episodes of “Fixer Upper” for inspiration.

#4 Your Proximity to Starbucks

Do you live within a quarter of a mile from a Starbucks? If so, then you are in luck? A study released by Zillow in 2015 found that homes that were within a quarter of a mile from the Seattle-based coffeehouse increased by 96 percent on average from 1997 to 2014. This number is well above the average of 65 percent of all U.S. homes.

Whether you are in the process of buying a new home or updating your existing home, think about the above factors as they may play a role in the value of your home.

How Does A Home Appraisal Work?

How Does A Home Appraisal WorkWhether you’re a buyer or a seller, a home appraisal is a critical component of the home selling process. An appraisal is also required in situations where a home is gifted to a family member, so it’s important to have a clear understanding of what it entails. 

What Is A Home Appraisal?

A home appraisal is an unbiased estimate of a home’s fair market value conducted by a professional appraiser. All 50 states require that appraisers be licensed and/or certified and demonstrate knowledge of the specified area. The purpose of a home appraisal is to determine whether the home’s asking price is appropriate based on its location, condition, size, and amenities.

Appraisals are done in almost all purchase, sale and refinance transactions, with the exception being when a buyer uses cash and doesn’t have a mortgage. They are typically coordinated by the mortgage lender to ensure the loan isn’t too large in relation to the home’s value.

How Are Appraisal Values Determined?

Licensed appraisers calculate a home’s value based on comparable recent sales in the area and current market trends. Factors such as the home’s floor plan, size, number of rooms, and any upgrades or amenities are also considered. Upgrades and amenities could include things such as a pool, an expanded garage, or a remodeled kitchen.

The appraiser conducts a visual inspection to appraise a home, noting the home’s condition and whether any major repairs are needed. It’s important to note that this differs from a home inspection in that the appraisal assesses a home’s value, while an inspection assesses its condition. In an inspection, the home inspector actually makes repair recommendations. During an appraisal,the appraiser notes any necessary repairs but does not make recommendations.

When Is An Appraisal Done?

After an offer is made, an appraisal is one of the first steps in the closing process. Everything will proceed as planned as long as the appraisal value comes in at or above the price in the contract. If it appraises for below that amount, closing can be delayed or canceled altogether.

What Does A Home Appraisal Cost?

Costs vary based on the mortgage type, but a home appraisal generally costs $300-500. It is almost always paid for by the borrower as part of closing costs.

First-Time Buyers’ Guide: How To Get A Mortgage And Buy A House

When you are in the process of buying a home, there are a lot of moving parts that need to work together. It can be hard for you to keep track of everything that has to happen, particularly if you are going through this process for the first time. With this in mind, there are a few basics that you should remember when you are looking for a home loan.

Work With A Professional 

It is critical for you to work with a real estate agent who can act as a guide during this process. A real estate agent has taken plenty of individuals and families through the process of finding a home loan and purchasing a house. Therefore, he or she will be able to work with you from start to finish as the home loan process unfolds. 

Find A Loan Officer

Once you have found a real estate agent, the next step is to find a loan officer. Your real estate agent might have connections throughout the industry and can recommend a loan officer. Many real estate agents will recommend that you use a mortgage broker. A mortgage broker often works with multiple loan companies. This means that you may have multiple home loan options at your disposal. Ideally, you will be able to leverage these options against each other and find the best deal for you.

Understand The Basics Of A Home Loan

When you are evaluating your home loan options, there are a few factors that you need to consider. The most important part of a home loan is the interest rate. You want to make sure that you get the lowest interest rate possible as this is going to impact the amount of money you pay over the life of the loan. Then, you want to make sure that you can afford the down payment required. If you can’t put enough money down, you might have to purchase mortgage insurance. You want to avoid this cost if possible. 

Work With An Experienced Real Estate Agent.

During this process, it is important for you to follow the advice of your real estate agent. Once you have found the right home loan, you will be able to complete your home purchase.

How To Save Big Money On Your Next Home Renovation Project

Every year, homeowners spend billions of dollars renovating their homes. It almost seems expected that homeowners are going to end up going over budget on any project. On the other hand, this doesn’t have to be the case. In reality, there are a few tips and tricks that homeowners can follow to help them save big money on that next home renovation project.

Serve As The General Contractor

Many homeowners hire a general contractor to control the staffing of each individual project. While this might reduce stress levels, it also costs more money. Hiring a general contractor adds an additional middle man to the project who might charge a premium for each individual project.

Homeowners that need to renovate the kitchen, replace the roof, and find a new water heater should hire professionals to handle these individual projects; however, they don’t necessarily need to hire a general contractor. Skipping this step can save money.

Seek Out Multiple Bids On Each Project

Some homeowners don’t like making phone calls and filling out paperwork to collect bids for various projects; however, collecting multiple bids can help homeowners save money. On any given home renovation project, try to collect at least three bids. For larger projects, it is better to collect even more. 

Then, once all the bids are collected, they can be leveraged against each other for a lower price. Homeowners are often surprised by the wide range of bids on a project. Some proposals might even be thousands of dollars apart.

Take Advantage Of Sales

Just as food goes on sale at the grocery store, the materials needed to complete a home renovation project might go on sale from time to time as well. Taking advantage of sales at department stores can be a great way to reduce overhead costs. There might even be cheaper options online. 

Reduce Home Renovation Costs

These are a few of the most important tips for reducing the cost of that next big home renovation project. Home renovation projects don’t have to break the bank! Be sure to collect multiple bids and leverage inventory sales. 

4 Things Not To Do When Buying A Home

4 Things Not To Do When Buying A HomeThere is a long list of things that people need to do when they are looking to buy a home; however, it is also important for people to know what to avoid as this process unfolds. There is a lot for people to remember and it is easy for people to get carried away when they start looking at their dream homes. Even though it is great to look at a bunch of houses and imagine living there, it is critical for people to stay grounded and know what to avoid.

Do Not Make Any Large Purchases During The Home Buying Process

One of the biggest mistakes people make when they are looking at buying a home is they open their wallets too big. If people end up taking on other big purchases, they end up accruing more debt. This is going to mess up their debt to income ratio and will make it harder for people to qualify for a home loan. Therefore, try to avoid making any other large purchases during the home buying process.

Do Not Take Out Multiple Credit Inquiries

While this might not sound real, the truth sometimes hurts. The more times people pull their credit report, the worse it looks. Therefore, by making multiple credit inquiries, people could actually hurt their credit score. It is important for people to pull their credit score at least once to fix any inaccuracies that might be present; however, people should not get carried away.

Do Not Skip The Pre-Qualification Process

Many people want to avoid filling out excess paperwork; however, the pre-qualification process is a good idea. When someone pre-qualifies for a mortgage, they get a budget ahead of time and immediately look like a serious buyer. This means that their offer looks more competitive to a potential seller. Finally, the pre-qualification process could also help someone qualify for a lower interest rate.

Do Not Be Anxious

The process of buying a home can be stressful even for those who have been through it before. Just remember to ask questions along the way and individuals will be set up for success. There are trained professionals who are willing to lend a helping hand to those in need.  

How To Pay Off Your Mortgage Early: 4 Methods That Work

How To Pay Off Your Mortgage Early 4 Methods That WorkWhile a mortgage is a necessity for many people who have the dream of owning a home, it is also a form of debt. Most people do not like owing money to someone else. Therefore, homeowners might be looking for ways to pay off their mortgage early. The reality is that people are charged interest for having a mortgage. If a mortgage is paid off early, this is less money than the bank will take and more money in the pockets of homeowners.

There are a few methods people can use to pay off their mortgage early.

Make Extra Payments

At the beginning of a mortgage, the vast majority of the money that people send the bank goes toward interest. In the end, most of the payment covers the principle of the loan. If someone is willing to make extra payments, these added payments are going to directly attack the principle. When the principle shrinks, there is less interest that accrues. Making extra payments is the most direct way to attack a home loan and pay it off more quickly.

Refinance The Mortgage

Another option people should consider is refinancing the mortgage. Essentially, a homeowner takes out a second home loan that pays off the first home loan; however, the new home loan has a lower interest rate. This may allow people to pay off the loan more quickly. Furthermore, people can refinance to a shorter-term, allowing them to pay off the loan more quickly.

Recast The Mortgage

Recasting the mortgage is a little bit different than refinancing. In recasting the loan, people throw a lump sum at the principle in exchange for a new amortization schedule based on that lump sum. This means that people will have a new schedule that reflects the principle that is left, often resulting in a shorter payment schedule.

Split The Monthly Payment In Two

Finally, many people are paid biweekly. Therefore, it might be easier for people to pay their mortgage biweekly. If someone pays their mortgage biweekly, they are making 26 half-payments per year or 13 monthly payments per year. The effect is that someone makes one extra monthly payment per year. This payment attacks the principal directly, helping people pay off their mortgage faster.

3 Signs It Is Time For You To Refinance Your Mortgage

3 Signs It Is Time For You To Refinance Your MortgageIf you are looking for ways to save money on your mortgage, refinancing might be a good option. For those who might not know, refinancing can help a homeowner reduce monthly mortgage payments by switching to a lower interest rate. 

Basically, the homeowner takes out one loan at a lower interest rate to pay off the old loan, which is at a higher interest rate. While the homeowner may have to pay closing costs a second time, this could save someone hundreds of thousands of dollars over the life of the loan. Furthermore, those who want to pay off their loan more quickly may be able to do this as well. There are a few signs that someone should refinance their home loan immediately.

1. Current Mortgage Rates Are Significantly Lower

One of the biggest signs that someone should refinance is that current home loan interest rates are way lower than what they have. While everyone’s financial situations are different, if the current average interest rate is more than a point lower than your current interest rate, you should consider refinancing

While not everyone is going to qualify for the current average interest rate, some people might. This means that this is a possibility worth examining. If you can qualify for a much lower interest rate, it is time to refinance.

2. Your Credit Is Good

In order for you to qualify for home loans with lower interest rates, your credit has to be in good shape. There are ways for you to improve your credit score. Paying off credit card debt, paying your bills on time, and fixing errors on your credit report are all great ways to raise your credit score. If your credit score is good, it might be time to refinance.

3. You Are Not Moving Any Time Soon

As mentioned above, you may have to pay closing costs when you refinance. Therefore, if you plan on staying in that house for a while, this could be a good time to refinance. On the other hand, you don’t want to pay closing costs just to move again next year.

These are a few of the biggest signs that indicate it is time for you to refinance. Don’t pass up this chance to save money! 

Qualify For A Larger Mortgage With A Co-Signer

http://bringtheblog.com/i/3_Great_Reasons_to_Use_an_Experienced_Mortgage_Professional_for_Your_Next_Mortgage.jpgThere are numerous steps involved in the process of buying a new home. It is important to go through the mortgage qualifying process before looking at dream houses. This gives people an idea of how big a house they can afford. Sometimes, individuals looking for a house might not get a loan that is big enough to cover their dream house. There are ways to qualify for a larger loan; however, one of the fastest methods is to use a co-signer.

What Is A Co-Signer?

A co-signer is someone who signs onto a potential home loan with the homebuyer. Essentially, the co-signer is saying that he or she is willing to be on the hook for the loan in the event that the primary homeowner is unable to make his or her mortgage payments.

This is a big commitment from the co-signer because he or she is exposing himself or herself on behalf of the primary borrower. On the other hand, the co-signer is also providing a vote of confidence on behalf of the primary borrower. Parents often act as co-signers for their children when they purchase their first home.

Vetting The Co-Signer

When someone is going through the home loan process, they are asked to produce tax returns, proof of income, credit reports, bank statements, and more. The co-signer is going to go through the same process. The bank wants to make sure the co-signer is actually adding something of value to the buying process.

The income and debt of the co-signer will be added to the primary borrower. Then, the two will be combined to be approved for a larger home loan. This can help someone purchase the home of his or her dreams.

An Important Note On The Co-Signer

If the co-signer goes to apply for a home loan or car loan in the future, the loan for which they co-signed will show up. This could limit the ability of the co-signer to qualify for a loan down the road. Even though having a co-signer can increase the size of the loan for the primary borrower, this is not without risk to the co-signer. Consider this carefully!

COVID-19 Relief Programs For Homeowners

COVID-19 Relief Programs for HomeownersFederal housing agencies and government-sponsored enterprises Fannie Mae and Freddie Mac are responding to the COVID-19 outbreak with multiple relief programs for homeowners experiencing hardship due to illness and job loss.

60-Days Forbearance on Home Mortgages Owned or Backed by Fannie Mae or Freddie Mac

Many U.S. home loans are owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners can determine if your loan is connected with Fannie Mae here.here. Please check here to check if your mortgage is affiliated with Freddie Mac.

CARES Act Provide Relief for Eligible Homeowners

The federal Coronavirus Aid, Relief and Economic Security Act provides two protections for homeowners:

  • Payment forbearance for homeowners impacted by the COVID-19 emergency. Forbearance periods up to 12 months may be approved based on individual hardship.
  • Foreclosure and other legal actions are stopped for 60-days. 

Forbearance may require a lump sum payment of deferred payments after the forbearance period or deferred payments may be added to the back of a mortgage, but fees may not be added to the loan balance.

Loan Modifications

Mortgage servicers may provide modification of loan terms to assist homeowners impacted by COVID-19. Modification terms can include:

    Reduction of mortgage interest rate

  • Extension of the loan repayment term.
  • Capitalization of unpaid principal and/ or interest to principal balance; this means adding unpaid amounts to the mortgage balance.

Contact your mortgage servicing company as soon as you know you will miss a mortgage payment or payments Relief programs usually require documentation verifying financial hardship. Mortgage servicers are experiencing high volumes of calls; you may need to call multiple times for assistance.

Mortgage Assistance for Non-Government Owned Loans

If you have a conventional mortgage that is not owned or backed by a government agency, please call your loan servicing company and ask about mortgage relief provisions. If your loan is covered by private mortgage insurance (PMI), ask your loan servicer if that company can help with relief options.

State and local agencies may offer housing relief options to homeowners and renters. Certified credit counseling agencies can also help with determining budgeting needs and local resources in addition to working with unsecured creditors toward reducing payments on credit card debt and personal loans.