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Remaining in Control While Selling Your Home

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Be in Control When Selling Your HomeWhen selling your home, there are many things that can cause stress that are out of your control. As a seller, you cannot control the market, the number of offers placed on your home, or how many other houses are for sale in your area. With so much out of your control, it becomes of utmost importance that you tip the scale in your favor by taking control of the things you can.

Controlling Your Home Sale

To control your sale, approach the following with care:

  • Selecting Your Agent – When choosing your agent, don’t make a hasty decision. After all, this is the person that can truly dictate the success of your sale. They will have an influence upon foot traffic, marketing, and the pricing of your home. You need a qualified professional to advice you throughout the process so it leads to a positive outcome.
  • Preparing Your Home for Sale – Insure that your home present itself well by cleaning up your yard, and decluttering your home in the very least. If there are obvious home repair jobs needed, complete the inexpensive ones that act as red flags. You do not want these things to tell buyers you take no pride in your home, or they may expect even bigger problems they can’t see. Your agent can also give you feedback on what areas of your home need attention.
  • Your Expectations on Price – The market controls what your house will realistically sell for. You can control how open-minded you will be about the process. Be willing to bend (but not break) as having a random figure in mind will not be beneficial if it is not realistic to the market you are in. What you purchased your home for or what homes sold for a year ago play no role in what your home may be worth today. If you’ve chosen a qualified agent, they can give you up to date market data on what your home is worth and what you should ask for it.

There are a number of factors in a home sale that are left up to chance – don’t be a passive observer as you work to sell your home – take control over the things you can control!

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Qualifying for a Better Mortgage Interest Rate

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Mortgage Qualification BasicsYou may not know it, but the interest rate you’ll pay for your home loan depends on a number of different factors. Changing any one of these factors can help not only make you a better candidate for a loan, but also ease the financial burden that comes from a major purchase like buying a home. We’ve outlined some of these things below:

1. Your Credit Score

Your credit score plays a major role in the type of interest rate you’ll qualify to receive. While different programs have different credit requirements, the rate you pay may increase or you may be disqualified altogether if you do not meet a specific program’s minimum or preferred credit score standards. If you find that you are having trouble qualifying for a mortgage, you might qualify for federally supported loans from Fannie Mae or similar institutions.

2. Available Liquid Assets / Reserve Cash on Hand

The amount cash reserves you can show to the lender are also important. Cash reserves help show that in case there is a disruption in your income, you will be able to maintain your monthly payments.

3. Your Down Payment Options

Another aspect to consider when applying for home loans is your down payment. Different lenders will require certain amounts in order to agree to giving you a loan.The higher a down payment you can afford to make  will not only help you in the long run, but give you an edge when applying for financing. Most financial institutions would prefer a down payment of anywhere from 10 to 20 percent in order to assure a good interest rate although this can vary by program. In difficult economic times, more and more banks are asking for the buyer to put more money down. Government-backed loans allow you to put less money down initially, but also carry higher monthly rates.

It’s important not to be discouraged if your credit score is lower than you anticipated, or if you can’t afford a large down payment. You can investigate other loan options, or even try to find ways to improve your credit. Improvement won’t happen overnight, but it can happen if you have patience. In fact, we can help you improve your credit score and help educate you on how to improve and maintain high credit scores in the future.

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Tips for Paying Down Your Motgage Fast

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Pay Your Mortgage Off Faster!Whether you have an FHA loan or a private mortgage from the bank down the street, the idea of paying off your loan is no doubt attractive. If you’re in a good place financially, there are ways to take your 30 year mortgage and pay it off in half, or even a third of the time, without breaking your budget.

1. Increase Your Monthly Payments

The quickest way to chip away at your mortgage is to increase the amount you pay each month. Even if it’s just by a little each month, you’ll be getting ahead of the game. If possible, try to make an extra full payment once in a while, thus reducing the number of payments you’ll owe. While this is often a money management issue, if you’ve been given a bonus at work, or added income to your home, consider devoting more of these funds to your mortgage payment and less to other spending.

2. Renegotiate the Terms of the Loan

Depending on your loan, you may be able to renegotiate certain terms in order to facilitate faster repayment. If you are able to get a lower interest rate, this will lower your monthly payment. The trick is to continue paying the same amount as before. This acts in the same vein as increasing the amount you pay each month. Additionally, speaking to a financial consultant can help you understand bank-specific tricks to pay off your mortgage faster.

Keep in mind, the goal of these tips isn’t to encourage you to live beyond your comfort level. Even if you can only afford to put a little more toward your mortgage each month, that’s okay, you’re still working to pay off your loan sooner rather than later. Working to paying down your mortgage earlier may just allow you to live with limited housing costs during your retirement.

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What To Expect When You Take on a Mortgage?

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Mortgage BasicsThe mortgage application process can be daunting for first-time home buyers. Knowing what to expect can help them to prepare for it. The mortgage process should begin as soon as you start looking for a home and it does not end until you take possession of your new home.

Step One: Applying and Getting Pre-Approved for a Mortgage

In order to shop for a home, you need to know how much you can afford to spend. The mortgage pre-approval process gives you that estimate, but it also gets a lot of the legwork out of the way. You will need to bring proof of income, and other appropriate documentation when you get pre-approved for a mortgage. This is only needed once, so when you actually need to finalize your mortgage, your lender does not need to go through that part of the process again.

Step Two: Finding and Assessing the Home

Once you find the right home, there is a step in the mortgage process that must take place. Your lender must approve the mortgage and they want to ensure that the value of the home is worth their loan. This means that a property appraisal will be done. Depending on the lender, arranging it may be up to the home buyer or they may take care of it. In either case, the home buyer often has to assume the cost. Provided the home is valued as high as the bank is being asked to lend based on your offer price as a buyer, the loan should be issued.

Step Three: Closing On Your Home

If anything changes between the time you have put an offer on your home and closing, a lender can choose not to honor a loan. Substantial changes in income, major purchases and more can all be problematic if it may impact a buyer’s ability to afford the home according to lender’s requirements. Home buyers should be aware of this so they proceed cautiously with their finances before closing as nothing is final until that pen has been put to paper.

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Mortgage Mistakes Responsible for Foreclosure

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Foreclosure mistakes to avoidWith foreclosures occurring in record numbers across America over the past few years, many borrowers wonder what they can do to avoid ending up in a similar situation. The recent housing crisis can be in part attributed to lender mistakes and in part due to the mistakes of borrowers, these include the following:

Foreclosure Mistakes by Borrowers

Common borrower mistakes that can lead them to foreclosure include:

  • Not Checking the Interest Rate – Some buyers do not pay attention to the interest rate that they’ve signed up for. They may calculate their affordable mortgage amount based on an online approval amount or calculator. If they’re a higher risk borrower, they may end up with a higher interest rate by the time they actually have a mortgage commitment.
  • Not Understanding What an Adjustable Interest Rate Means – Buyers often get caught up in the idea of a adjustable interest rate when interest rates are low and don’t think about the fact that rates could go up again. They can also end up in an adjustable loan with an inappropriate time frame for their needs. When this occurs, home owners may no longer be able to afford their mortgage.
  • Buyers Have To Borrow Their Down Payment – Individuals that require a down payment, but don’t have the cash may choose to borrow the funds. This means that they will struggle to pay back a loan as they pay a mortgage they can only just afford.

Foreclosure Mistakes by Lenders

There have been times when lending criteria has been too flexible, especially when sub-prime loans are concerned. Lenders may not pay appropriate attention to debt ratios, the source of cash that home buyers use for a deposit, or they may not thoroughly explore a buyer’s credit history. As the wave of foreclosures has hit in the past couple of years, many lenders have also been overwhelmed with the amount of work and paperwork associated with the foreclosure process, this has led to lender mistakes which often create a lose / lose scenario for lenders and borrowers alike.

Buyers cannot control the actions of their lenders, but they can inform themselves and make smart decisions to insure that they protect their investments. If you have questions about how to avoid foreclosure or which type of loan is the best for your scenario, we can help inform you so that you make the right decision armed with the knowledge you need.

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Is a Home Warranty Worthwhile?

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Home WarrantiesThe addition of a home warranty in a home buying contract can be a very attractive thing. To buyers it means they’re protected if something happens to their appliances within the time frame of the warranty. For sellers, this investment might save thousands of dollars. However, tricky fine print and the age and functionality of the appliances in the home often leave people questioning if a home warranty is worth the price.

Home Warranties: If It’s Not Broken…

For new houses or homes with new appliances, heating and air conditioning systems, or with other recent repairs, the probability of a catastrophic failure occurring is very low. In these cases if something does need repair or replacing, it’s usually covered by a manufacturer or installer’s warranty. If this is the case, a secondary home warranty might not be necessary.

On the other hand, if there is less than a year on any particular warranty when you purchase the house, it might be a good investment. At the very lease it would be something to consider asking the seller to pay for as part of the purchase price. Should you decide to take the home warranty though, understand the process of making claims and what exactly the policy covers.

Read the Fine Print of a Home Warranty

Like all insurance policies, there are stipulations as to how you can use a home warranty. Some policies will only cover repairs versus full replacements, and some policies will only pay for replacements that fall in a certain price point. Find out if your policy allows you to choose the repair service, or requires you to go through the warranty company.

A home warranty can have its benefits for both buyer and seller, as long as you’ve done the research and know what to expect.

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Should You Try to Pay Off Your Mortgage Early?

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Whether or not to pay off your mortgage early is a highly debated subject, some mortgage professionals say “no” while others in the industry say “why not?”.

The correct answer really depends upon a number of different factors. You need to evaluate what is most important to you before making a decision. Ensure that you consider the following first:

Factors to Consider When Deciding to Pay off Your Mortgage Early

  • You Have Other Debt – Your mortgage is one of the lowest interest debts that you can possibly have. If you have other debts or loans outstanding then the logical thing to do is pay off those first.
  • You Could Increase Your Retirement Contributions – Ideally, you want to get to a place where you are contributing the maximum amount possible to your retirement savings plan. If paying off your mortgage would allow you to do that, then it is something to consider.
  • You Lack Liquid Assets – In today’s economy, having at least 24 months worth of living expenses saved is recommended. It is much easier to reach that goal when your home is fully paid for. However, you do not want to put all of your cash into your home to pay it off if you don’t have other assets available.
  • The Debt Bothers You – Some people are okay with having the debt of a mortgage for the rest of their lives. They are happy to continue to upgrade to larger homes, even if it means never making significant strides with paying off the mortgage.

At the end of the day, paying off the mortgage on your home could be a smart choice, but you have to decide whether it’s the right choice for you as there truly is no right or wrong answer. We can help you look at your own financial goals and consider the above to make your decision.

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Making a Smart Home Purchase

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Many dream of owning their own home. With the proper preparation, you’ll be able to start your home search and find your perfect place with as little stress as possible. This is by no means a comprehensive list of ways to prepare for home buying, but it can be a step in the right direction.

Get Your Finances in Order

As gung-ho as you may be to start the home search, if you don’t know your budget, you’ll likely waste time looking in the wrong price point. A good first step in home buying is to talk to a lender about financing, and decide if it’s the right time for you to buy. Getting pre-approved for a home loan isn’t mandatory, but it allows you to not only know your budget, but can also help show you’re a serious buyer when the time comes to purchase. In other words, getting pre-approved is highly recommended.

Identify the Extra Costs Affecting Your Possible Home Purchase

Extra costs are a major part of the home buying process. It’s important to factor the possible costs of insurance, closing fees, and taxes into your budget. If you choose a house in a neighborhood that’s governed by a homeowners association, there will likely be extra HOA fees each month. Even extra costs for repairs should be factored into your budget, especially if you choose a home that needs a lot of work. Ask questions to be sure you are fully understanding the costs involved with a possibly transaction.

Home Inspections Are Mandatory!

Even if your seller makes it clear that they will not foot the cost of repairs, getting a home inspection is vital. You’ll be able to see if there are health and safety issues with the house, and you’ll know what needs to be fixed immediately instead of leaving it to chance. A home inspection is one of the smartest choices you can make in the home buying process.

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Preparing Your House for Sale on a Budget

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When you are putting your house up for sale in this tough economy, you are wise to not spend anymore than you have to when you are getting it ready to sell. However, to increase the chances of success for selling your home, it does still need to be in showing condition to impress potential buyers.

Budget-Friendly Home Improvements

Real estate professionals emphasize the importance of focusing on the following when preparing your home to show:

  • De-clutter – With too many of your personal belongings in the home, potential buyers may struggle to picture themselves in it. They may also have trouble seeing some of the positive details with all of the distracting clutter.
  • Fix the Visual Problems – Touch up paint that is chipping and fill in holes. If there are screens that are broken they should either be removed or replaced. Clean up grout in the bathrooms and re-caulk where necessary. These tasks will help ensure that your home doesn’t automatically create a red flag that there is work that needs to be done.
  • Correct Issues that Will Audibly Tell buyers There Are Issues – This means that you need to lubricate squeaky doors and fix leaky faucets and running toilets.
  • Modernize Cabinets – You don’t need to fully refinish cabinets, you can simply replace the hardware in your kitchen and bathrooms to spruce up their look.
  • Clean Up Your Lawn – Make sure your lawn is well-manicured by cutting the grass, pulling out the weeds and pruning the trees.

When your potential profit may already be affected due to the current state of the market, you want to keep as much money in your pocket as possible. These changes can be made with a minimal investment and give you a better chance at a strong sale because appearances will help you win over prospective buyers.

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Remaining on Good Terms with Your Agent

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When buying a home using a real estate agent, you need to remain on the same team despite the stresses that can occur during the home purchase process. The agent you are working with can be your greatest asset as you go through the process and it is important that you keep all channels of communication open with them. It is rare that a real estate agent will fire a prospective buyer, but there are things that you can do that will insure your agent stays on your team and works hard for you.

Annoy your agent, and he or she may want to wash their hands of you as quickly as possible. Work with them and they will be happy to help place you in the right home.

Buyer Actions That Realtors Don’t Appreciate

Real estate professionals do not appreciate it when buyers do the following:

  • Keep Them in the Dark – If you have a strategy as a buyer, tell them. Don’t spring any surprises on your agent as you want them to be able to appropriately advocate for you the whole time.
  • Waste Their Time – If buying a home is not in your immediate future, do not monopolize your agent’s time. If you just want to get a feel for homes in a certain area, for example, let your agent know that is your intention. Most will be more than happy to show you a few properties, but they won’t spend additional time doing too much in-depth research and work if buying may not happen for a couple of years.
  • Never Make an Offer – An agent can only spend so much time with you exploring the option of a home before an offer needs to be made. If you have a longer time frame in which you plan to make an offer, communicate this to the agent. Agents will be much more willing to work with you if they consider you an legitimate candidate to purchase a home. They can help you with questions you may have but it is important that you don’t misrepresent yourself as a potential buyer in the long run if that is not in fact the case and you don’t intend to make an offer.

Following these simple steps can help you negotiate for your potential future home more smoothly with a stronger advocate for your offer in your agent.

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