Home Showing Tips: How to Stress the Positives Without Sounding like a Used Car Salesperson

September 30th, 2016

Home Showing Tips: How to Stress the Positives Without Sounding like a Used Car SalespersonSelling a home is a difficult enough task as it is, but the longer a home stays on the market the easier it is to fall into the trap of sounding like a used car salesperson and accidentally pushing people away.

There are ways to make sure potential buyers see the positive aspects of the home without coming on too strong and leaving them skeptical.

Proper Staging Will Show Off The Best Parts Of A Home

Many sellers rely on the imagination of the buyer to sell aspects of a home. Why tell somebody to imagine all the things they could do with the back yard when proper staging can show them?

An empty deck will never look as appealing as one with beautiful patio furniture and a bland living room will never seem as inviting as one that has been properly staged. Allowing buyers to see the rooms at their best will give the seller a chance to step back and not have to push the rooms on them.

Avoid Being Too Personal

One rule of thumb when showing a home is to de-personalize as much as possible. The goal is to have potential buyers image themselves and their family living in the space, which can be hard to do when there are reminders of the family currently residing there.

It’s easy to become caught up in the moment when talking about personal lives and telling stories, so when a seller tells stories about their own upbringing in the home or how they raised a family there it can seem pushy and put people off.

Guide The Flow Of Traffic

Placing furniture in a certain way can actually dictate the flow of traffic through the rooms of a home. By clearing out bulky pieces of furniture or decorations that hinder foot traffic from flowing properly, a seller can help guide people through the space.

If there is a particular area that a seller wants people to spend more time in, they can accomplish this by giving that room a more open floor plan when compared to previous rooms. This acts as a traffic stop for people who have been naturally flowing towards that particular selling point.

Have you been having problems when showing your home? Reach out to your local real estate professional today.

Investing in a Vacation Property? Learn What You’ll Need to Have to Get A Mortgage Approved

September 29th, 2016

Investing in a Vacation Property? Learn What You'll Need to Have to Get A Mortgage ApprovedWith approximately one million people having purchased vacation homes in the last year, this type of residence is gaining popularity for those who are interested in a home in a beach setting or a vacation hot spot. However, while a second home can seem like a great purchase and solid investment opportunity, there are different requirements that go into this type of purchase. If you’re considering a vacation home, you may want to be aware of the following financial factors.

The Down Payment Amount

If you currently have a primary residence, you may be aware that you don’t need to put down 20% or even 10% in order to make a home purchase, but things are different when it comes to a vacation home. Because you will be taking on an additional mortgage, there is greater risk involved, and this means you will likely have to put in at least 10 percent. Because of this, many homebuyers utilize the equity they have in their first home to make up the down payment.

About The Credit Score

Most people that have a credit score of more than 500 have the ability to use a mortgage product and purchase a home, but if you’re buying a second property, you’ll need a higher credit score in order to facilitate the purchase. Because there is more risk involved, lenders will want to make sure you’re a good bet. In addition, if you do have a lower credit score, lenders like Fannie Mae may also expect you to put more down to decrease the risk involved for them.

The Income Required

Since you’ve been through the mortgage process for your first home, you’re probably aware that you debt-to-income (DTI) ratio needs to be a certain amount in order to qualify for a mortgage. While your DTI for a primary residence may be a little bit higher since it’s your only payment, this ratio will be lower for your vacation home since it’s higher risk. This means you’ll require a slightly higher income than for your primary residence in order to get approved.

Deciding to purchase a vacation home can be a very exciting concept for many people, but there are a number of different financial requirements that go along with buying another residence. If you’re in the market for a vacation property and are curious about what’s involved, contact your local real estate professional for more information.

The Pros and Cons of Mortgage Rate Locks

September 28th, 2016

The Pros and Cons of Mortgage Rate LocksIf you’re just jumping into the game of home purchasing, you are likely considering all of your loan options and may even have heard the term mortgage rate lock. For those who don’t like to gamble, a mortgage rate lock can offer a bit of reassurance, but there are also some downsides to this type of protection. Before signing off on this, here are the details on rate locks so you can make an informed decision.

What Is A Rate Lock?

For many people who are buying a home in such a tumultuous market, the idea of interest rates can make the heart race a little faster, but this is the purpose of rate locks which offer consistency in a market in flux.

Instead of having to deal with day-to-day fluctuations of the rate which increases or decreases what you owe a rate lock is a lender promise that you will be held to a specific rate or your rate will not rise above a certain number.

Easy Balancing Of The Budget

The easy thing about utilizing the rate lock, especially for a buyer who is less familiar with the market, is that it will enable you to instantly determine your monthly payments based on that rate. Instead of having to pay more per month, you’ll be able to estimate exactly what your payment will be and it won’t rise above the limit you’ve set for yourself. While daily fluctuations can be a drag, a mortgage lock takes the guesswork out of the day-to-day.

The Added Cost Of Security

It might seem like a rate lock is an option that everyone would utilize, given the stability, but lenders charge for this type of offer because of the risk factor. While lenders can certainly stand to gain if your rate lock is higher than the interest rates, in the event that they rise beyond this point, they will end up losing money. So, while a 30-day rate lock may not end up costing you, this type of lock stretched over a longer period may actually end up costing you more than fluctuating rates.

If you’re not familiar with the world of investing and interest rates, a mortgage rate lock can sound like a great idea; however, there are downsides to this offer and they’re worth considering before getting locked in. If you are currently on the hunt for a home, contact your local real estate professionals for more information.

Understanding ‘Disposable Income’ and How This Will Impact Your Mortgage Approval

September 27th, 2016

Understanding 'Disposable Income' and How This Will Impact Your Mortgage ApprovalThere are few things more exciting than finding your ideal home, but with the rising cost of housing, a person’s dream home can often come with a very high purchase price. If you’re wondering how much home you can truly afford and how your cost of living will fare for your mortgage approval, here are some of the details on what you can expect when it comes to finding a home at an affordable price.

What Is Your Debt-to-Income Ratio?

Before deciding if a home is right for you, it’s important to calculate what your debt-to-income (DTI) ratio is to determine how much house you can afford. The debt amount will include any credit cards, existing mortgages and other loan payments that you pay down each month. To determine your maximum monthly payment, multiply your gross income by 0.36 and divide it by 12. This will give you the expenditure of debt, including your housing payment, that you should not exceed each month.

Determining Your Down Payment

There’s a lot of talk around the ideal amount you should put forward for a down payment, but this percentage can directly impact the amount of the house you can afford. If you are able to put down 20% of the purchase price of your home, this means your monthly mortgage payments will be minimized and this will decrease your DTI ratio. While a home may be out of your reach if you can only put 10 or 15% down, 20% down will ensure a higher amount of disposable income on a monthly basis, making your application more feasible.

Determine Your Lifestyle

While a lender may not reject your application outright if your debt-to-income ratio is higher than suggested, it’s important to know what kind of spending choices make sense for you so that you can make your monthly payments. If you have limited expenses above your mortgage and enjoy a Spartan lifestyle, it’s entirely possible that you’ll be able to manage a higher monthly amount. However, if you don’t have stable employment and are struggling each month, it may be a good idea to consider a less expensive property.

The monthly mortgage payment for your dream home may look like it’s manageable on the surface, but if your DTI ratio exceeds what is suggested, there may be issues with acceptance of your application. If you’re currently in the market for a new home, contact your local real estate professionals for more information.

What’s Ahead For Mortgage Rates This Week – September 26, 2016

September 26th, 2016

Last week’s economic news was abundant with releases on home builder sentiment, housing starts, building permits, sales of previously owned homes. The Federal Open Market Committee of the Federal Reserve released its customary statement at the conclusion of its meeting; Fed Chair Janet Yellen also gave a press conference. Weekly readings on new jobless claims and mortgage rates were released as usual.

NAHB: Builder Sentiment Increases in September

Home builder confidence in housing market conditions increased in September according to the National Association of Home Builders Housing Market Index. Builder confidence rose five points to 65; analysts expected a reading of 60 based on August’s reading of 59. NAHB said that September’s reading was boosted by more “serious” buyers entering housing markets.

Components used to determine NAHB HMI readings were also higher. Builder confidence in current market conditions rose six points to 71; builder confidence in housing market conditions over the next six months rose by five points to 71. Builder confidence in buyer traffic in new housing developments rose four points to 48. Buyer traffic readings have not reached 50 since 2005; 50 is a neutral benchmark for NAHB HMI readings.

Home prices continue rising at a higher pace than wages; this is pressuring first-time and moderate income buyers out of the market. An ongoing shortage of available homes is pressing prices higher as demand increases. Analysts pay close attention to the NAHB HMI as building more new homes is a key factor in easing the shortage of homes for sale.

Housing Starts, Building Permits Lower

Commerce Department readings on housing starts and permits issued were lower for August Housing starts were lower in August at 1.142 million starts on a seasonally-adjusted annual pace. Analysts expected 1.182 million housing starts based on July’s reading of 1.212 million starts. Regional readings showed a dip in starts in the South. Severe flooding in Louisiana contributed to the lower reading for housing starts. August’s reading for housing starts was 5.80 percent lower than July’s reading and 0.90 percent lower than for July 2015.

Building permits issued were nearly flat in August; this was likely due to the prime building season winding down 1.139 million permits were issued as compared to 1.144 million permits issued in July. Single-family starts were six percent lower than for July and were 1.20 percent lower year-over-year.

Existing Home Sales Dip: High Demand, Low Supply Cited

Sales of pre-owned homes fell by 0.90 percent in August to a seasonally-adjusted annual rate of 5.33 million sales. Analysts expected a reading of 5.48 million sales; July’s reading for sales of pre-owned homes was 5.38 million sales.

Low inventory of available homes continues to impact housing markets as demand for homes increased and prices rose; the national average home price was $240,000 in August. Rising home prices continued to be driven by high demand and low supplies. These conditions also impacted first-time and moderate income home buyers who were pressured to keep up with rapidly rising home prices.

While mortgage rates remain relatively low, higher home prices and tight mortgage credit requirements remain obstacles for first-time buyers.

Mortgage Rates, Weekly Jobless Claims Lower

Freddie Mac reported lower mortgage rates last week. The average rate for a 30-year fixed rate mortgage fell by two basis points to 3.48 percent; the average rate for a15-year fixed rate mortgage fell on one basis point to 2.76 percent. The average rate for a 5/1 adjustable rate mortgage was lower by two basis points at 2.80 percent.

Analysts expected new jobless claims to remain flat at the prior week’s reading of 260,000 new claims, but 252,000 new claims were filed for the lowest reading since July. The four-week rolling average of new jobless claims fell by 22250 claims to 258,500. The four-week reading is considered a less volatile reading than week-to-week readings.

Federal Reserve: No Increase in Fed Rate

The Federal Open Market Committee said in its post-meeting statement that the target federal funds rate would not be raised. In a press conference given after the FOMC statement, Fed Chair Janet Yellen said that although the economy continued to improve, the Fed had concerns over the labor market and decided not to raise rates. Any increase in Federal Reserve rates triggers increases in consumer lending rates.

What’s Ahead

This week’s readings include Case-Shiller Home Price Indices, readings on new and pending home sales and weekly readings on mortgage rates and new jobless claims.

Understanding Home Seller Disclosures and What Information You Need to Share When You Sell

September 23rd, 2016

Understanding Home Seller Disclosures and What Information You Need to Share When You SellWhen people buy a new home they have a right to be informed of the problems that they may face on the property and any issues that the home previously experienced.

However, as a seller it can be difficult to know whether the required information is being disclosed. Nobody wants to appear misleading, especially when it can impact a sale, and making sure all the proper information is finding its way to the buyer is imperative to make the deal go through.

What Needs To Be Disclosed?

Disclosures are not handled at the Federal level except for the Lead-Based Paint Hazard Reduction Act, which requires all sellers to have their home inspected for lead paint if it was constructed before 1978.

Other possible disclosures include any legal issues with the property title, mold and water leaks, problems with the plumbing or sewage on the property, and issues with the roofing, air conditioning and heating systems.

Disclosure Laws Differ From State To State

While it is best to err on the side of caution when dealing with home seller disclosures, every state’s laws are different and some are more stringent than others. A seller may believe they are disclosing everything that is required and still find themselves on the wrong side of a lawsuit.

When deciding what to disclose to a buyer it’s best to always consult a local real estate agent. Any professional will know the specific laws to their area and will be sure to let you know if you have left something vital off the list.

When Disclosing Can Be A Positive

All disclosures are not created equal and in some situations they can even work in the favor of the seller. When the seller tells the buyer about an issue from the home’s past that has been repaired it can be a huge benefit.

Not only is the buyer being informed about the home’s history, they are being shown that the seller was a responsible home owner who took care of the property and fixed the issues as they came up. This can give them a sense of security and confidence that the home was well maintained.

If you are in the process of selling your home but can’t figure out what you need to disclosure legally and what you should disclose morally, speak with me about this.  I will be able to walk you through the process so nothing is left off the list.

Mortgage Myths: Here’s Why You Don’t Need a Full 20 Percent Down Payment

September 22nd, 2016

Mortgage Myths: Here's Why You Don't Need a Full 20 Percent Down Payment If you’re just getting into the real estate market, you may have heard that 20% down is the ideal percentage in order to lower your monthly payments and get your mortgage application approved. However, while 20% is often suggested, many people struggle to come up with this amount of money. If you’re staving off home ownership, here are some reasons you may not need to hold off as you long as you thought.

Minimizing Your Insurance Costs

Putting down 20% of the total purchase price of your home is often suggested, but it doesn’t definitively mean that your application won’t be approved if you don’t. If you have a good credit score and are in good financial standing, putting less than 20% down means you’ll have to pay Private Mortgage Insurance (PMI); however, it can be worth paying the extra funds in order to get into the real estate market sooner and start paying into your most significant investment.

Mortgage Programs For Less Than 20%

It may seem less possible to buy a home if you only have 5 or 7% of the purchase price, but there are many programs in the United States that enable those with limited funds to apply for a mortgage. From the Federal Housing Administration (FHA) to Fannie Mae and Freddie Mac, there are many lenders that can offer you mortgage programs that will work for your situation. While higher rates come in tandem with a lower down payment, there are options out there for those who haven’t saved quite enough.

Why Put Down 20%?

Putting down 20% is not a necessity for mortgage approval or purchasing a home, but it can be a great means of saving money in the long run and reducing your interest rates. If you’re raring to get into the real estate market and don’t want to wait for the bills to stack up, that’s OK, but if you want to hold off and save up additional funds before diving in, this can mean more money and a more solid investment in the future.

20% is often the magic number when it comes to a down payment on a home, but you don’t require this percentage of your home’s price in order to get approved for a mortgage. If you’re currently considering diving into home ownership and would like to know more about the opportunities in your area, contact me for more information.

What Types of Coverage Are Included in Standard Home Insurance Policies? Let’s Take a Look

September 21st, 2016

What Types of Coverage Are Included in Standard Home Insurance Policies? Let's Take a LookEvery insurance policy is different and can provide certain levels of protection tailored towards the needs of the policy holder. However, there are some standard types of coverage that are included in most basic home insurance policies.

Basic Levels Of Protection

Most homeowner insurance policies will include some basic levels of protection and coverage. The main dwelling will be protected from many forms of damage and the insurance company will pay to repair the damaged dwelling. This will extend to other smaller structures on the property, like sheds and separate garages, but the level of coverage will differ.

Damage is one important aspect of insurance, but protection for personal belongings is equally important and is also included in a standard home insurance policy. The monetary value of items in the home will be covered in case of damage or theft, so it’s a good idea to keep track of valuables. Every insurance company will have a different limit on the amount covered, so it’s wise to compare the value of belongings against the level of coverage.

The third aspect of home insurance policies is liability protection. This will cover any personal injuries that are incurred on the property by people who do not live there. It may seem silly, but having protection in case of a lawsuit can go a long way to saving a family financially as attorney fees and medical bills add up.

What Is Not Included?

Although each insurance company has different policies that cover different parts of the home, almost all of them do not include one important aspect in their policies. Damage caused by floods, earthquakes and war will not be included in most standard home insurance policies and may be important depending on the geography of the area.

Another important note is that flood damage does not just apply to natural flooding in the region, but will also include water damage from broken pipes or backed up sewage lines. It’s an important distinction because many first-time home owners assume this water damage will be covered under their basic insurance policy.

The right insurance policy can be difficult to figure out for first-time home owners. There are many questions to ask about the property to determine the right policy and it’s a good idea to consult me to get my insight into what additions may be needed.

5 Mistakes That Will Instantly Turn a Home Buyer Away – and How to Avoid Making Them

September 20th, 2016

5 Mistakes That Will Instantly Turn a Home Buyer Away - and How to Avoid Making ThemIf you’re preparing to sell your home you’ve likely heard many tips and tricks to help close quickly, however few people will ever tell you what you’re doing wrong.

Don’t be your own roadblock to success! Avoid these common seller-mistakes to ensure that your home leaves a lasting impression on buyers, instead of sending them running for the hills.

1) Dirt: It’s A Don’t

Perhaps one of the biggest turn-offs in real estate, dirt gives the impression that your property is not well maintained. A dirty home is simply not aesthetically appealing and can often be the root cause of other turn-offs, such as bad odors. Keeping a clean, clutter-free home will show potential buyers that your property is a beautiful, healthy place where they can live comfortably without any foul surprises.

2) It’s Nothing Personal

While you may love looking at family photos, funky trinkets from travelling, or your colorful assortment of bath products, personal items such as these should be stored away during an open house. Showings are for buyers to see if they can see themselves living in your home, which is difficult to imagine when there are someone else’s belongings scattered throughout the house. If you’re serious about selling, pack away any items that send the message that this is your space.

3) Old News

Most often when people are looking for a new home they’re looking for just that: a NEW home! Having old, dated fixtures in your house tells prospective buyers that your property is stuck in the past, rather than prepared for the future. Make your property a place that anyone can move forward in.

4) Street Style

You may have spent so much time and effort making the inside of your home immaculate for a sale that you’ve completely forgotten that the outside is equally as important. Curb appeal is the very first impression that your home will have on buyers, and it’s essential that your property looks just as nice from the street as it does inside.

5) Snoopy Seller

You know your home better than anyone else, and you want to sell it to someone who genuinely cares about your property. While this statement may be true, it is counterproductive for you to participate in showings, pointing out all the great features of your home to interested buyers and grilling them on their intentions for when they purchase it. Give buyers space they need to see if your home is the right fit for them, and you’ll be selling it in no time.

Interested in receiving more advice on selling your home? Contact me today!

What’s Ahead For Mortgage Rates This Week – September 19, 2016

September 19th, 2016

Last week’s economic news included reports on retail sales, inflation, and weekly reports on mortgage rates and new jobless claims.

Retail Sales Slip as Consumer Prices Inch Up

Retail sales dipped into negative territory in August with a reading of -0.30 percent as compared to expectations of -0.10 percent and July’s reading of +0.10 percent. Retail sales excluding auto sales were better at +0.30 percent. Analysts expected a reading of +0.20 percent based on July’s reading of -0.40 percent. August’s negative reading for retail sales was the first negative report since March.

Inflation fared better than retail sales with August’s Consumer Price Index reading at 0.20 percent. Analysts expected a reading of 0.10 percent; July’s reading was flat. Core Consumer Price Index readings for August are less volatile, as the Core CPI does not include readings for food and energy costs. August’s Core CPI reading was 0.30 percent. A reading of 0.20 percent was expected; July’s reading was 0.10 percent. It appears that inflation is creeping upward, but remains well below the Fed’s target reading of 2.0 percent.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates across the board last week. The average rate for a 30-year fixed rate mortgage rose six basis points to 3.50 percent; the average rate for a 15-year fixed rate mortgage rose one basis point to 2.76 percent and the average rate for a 5/1 adjustable rate mortgage rose one basis point to an average of 2.82 percent. Average discount points were 0.50 for 30 and 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Low mortgage rates have helped home buyers, especially first-time and moderate income buyers, meet affordability challenges. Home prices have risen due to low numbers of available homes and high demand for homes. If mortgage rates continue to rise, fewer buyers will be able to qualify for mortgages and or afford asking prices for available homes.

Next week’s meeting of the Fed’s Federal Open Market Committee is expected to bring news of a Fed decision on raising the target federal funds rate. If the Fed raises its rate, consumer interest rates for mortgages, vehicles and other goods can be expected to increase as well.

Whats Ahead

This week’s economic news includes the NAHB Housing Market Index, Commerce Department reports on housing starts and building permits issued and a Fed Statement at the conclusion of its Federal Open Market Committee meeting on Wednesday. Fed Chair Janet Yellen is also slated to give a press conference after the FOMC statement. The National Association of Realtors will also release a report on sales of previously owned homes.