Buying A Home: 6 Things You Must Do Before Becoming A Homeowner

Home buying tips

Buying a home is a huge investment—probably the most significant purchase of your life. It’s not something you should do without preparation.

Before you start on the road to homeownership, make sure you are ready. Do these 6 things:

1-Improve your credit score.
A high credit score snags you the best deals. “Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment,” says Barry Zigas, director of Housing Policy for the Consumer Federation of America.

A score of 700 to 720 can get you a good deal, and 750 and above can garner the best rates on the market.

Pull your credit reports and make sure you’re not penalized for old, paid or settled debts.

Stop applying for new credit a year before you apply for a mortgage. Keep the moratorium in place until after you close on your home.

2-Figure out what you can afford.
There are various ways to determine how much house you can afford. If you’re using an FHA loan, your monthly payment can’t exceed 31 percent of your monthly income. The FHA will let you go higher under some circumstances.

For conventional loans, home expenses should not exceed 28 percent of your gross monthly income, says Susan Tiffany, retired director of Personal Finance Publications for adults for the Credit Union National Association, or CUNA.

Use Bankrate’s calculator to figure out how much house you can afford. Add to that other housing expenses, such as taxes, insurance, and utilities. Then, bank the difference between that total and what you’re paying now.

3-Save for a down payment and closing costs.
You’ll need to save between 3 percent and 20 percent of the house price for a down payment. Your credit history and loan terms help determine how much you’ll need to come up with.

For example, with an FHA loan, the down payment requirement can be as low as 3.5 percent. You’ll need a credit score of at least 580. Home loans backed by the Department of Veterans Affairs, or VA, require no down payment.

Another cash expense will be closing costs. The national average for closing costs for a $200,000 mortgage is $2,084, according to Bankrate’s latest survey.

If a big down payment is a hardship, look for down payment assistance. Search online using the city name, the county name and keyword combinations such as “down payment assistance,” “first-time homebuyers” or “homebuyer’s assistance.”

Down payment assistance often is based on location or reserved for particular buyers, such as first-time buyers. In a buyer’s market, you can negotiate to have the seller pay a portion of the closing costs.

4-Build a healthy savings account.
Building up your savings—not just for a home—is very important. Your lender wants to know that you’re not living paycheck to paycheck. If you have three to five months’ worth of mortgage payments set aside, you’re a much better loan candidate. Some lenders and backers, like the FHA, will give you more latitude on other criteria if they see that you have a cash cushion.

That money will also help pay for maintenance and repairs of the home. Most repairs are sporadic, but big-ticket fixes such as a new roof or water heater can come up suddenly and drain your budget.

A good rule of thumb is to assume that you’ll spend 2.5 to 3 percent of your home’s value each year on upkeep and repairs. If you buy a $250,000 home, aim to save $520 to $625 per month.

5-Get preapproved for a mortgage.
Before you start house shopping, you should get your financing in place.

“The No. 1 thing is (homebuyers) better have everything in order,” says Dick Gaylord, of RE/MAX Real Estate Specialists in Long Beach, Calif., and a former president of the National Association of REALTORS®.

Gaylord says you should get a mortgage preapproval “before you walk through the first house.” Otherwise, “How do you know how much you can afford?”

6-Buy a house you like.
Short-term homeownership can be expensive, depending on how much you put down and what it cost you to sell your old house and move.

To get a home that will make you happy, don’t count on a quick purchase. Step back and make certain the house you’re considering is one that will fit the needs of you and your family.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home: Prepare For A Competitive Spring Home-Buying Season

home buying in the spring

With housing inventory far lower than demand and mortgage rates poised to rise, it’s going to be a competitive market for home buyers this spring.

If you’re looking to buy a home this season, here’s how to prepare yourself to enter the fray:

1-Get your financial house in order.
Unless you plan on paying for the home in cash, you’ll need to apply for a mortgage. No matter how streamlined the process is, you’ll still need to gather a significant amount of documentation to give an accurate financial picture to the lender.

Before you even begin home shopping, look at your credit report to make sure there are no errors that could affect your score. Also, pay off any delinquent bills and reduce any other debts you owe so that your debt-to-income ratio (DTI) is favorable. Use a calculator to figure out your DTI and see if you need to make changes. Your goal is to look as attractive to lenders as possible so that you are you approved and can get the best rate on a loan.

2-Make sure you’ll qualify for a mortgage.
In order to get a mortgage, lenders want to know you’ll be able to meet your monthly obligations no matter what. This means they’ll ask to see your entire financial situation including employment history, salary, savings, investments, debts and anything else that makes up your net worth. Use a prequalifying mortgage calculator to get an idea of what size loan is right for your needs.

Even if you think you’re a strong candidate, never assume you’ll automatically qualify with the first lender you contact. Lenders’ guidelines have become stricter since the housing crisis of 2008, and you could lose out on the home you want if you can’t close on a loan. “Sometimes one deficiency can be offset by another strength. For example, if you have a higher DTI ratio, saving up enough to put a bigger down payment can help,” says Bill Banfield, executive vice president of Capital Markets for Quicken Loans.

3-Choose the right REALTOR®.
Unless you’re a seasoned pro, having a REALTOR® on your side can make a big difference.

“An experienced agent will know what could happen that might make a deal fall apart and how to keep that from happening,” says Dori Summer, a real estate agent with Keller Williams Realty in Coral Springs, Fla.

Making an offer on a home in a competitive market can require more than just a willingness to pay the price. If a seller has to choose between multiple buyers, they’re likely to choose the one that’s coming to them with the best overall package. A good agent will present your offer along with other information, including your ability to get a loan, how much you’re able to put down and anything else that might make you more appealing than someone else vying for the same property.

4-Be prepared to pay the price.
Home prices in close to two-thirds of the housing market are at an all-time high, according to a February 2018 report by the National Association of REALTORS®.

“Sellers in this current market get at least 95 percent of their asking price,” says Samona Rosenberg, a licensed real estate agent with Stein Posner Real Estate Services in Boca Raton, Fla.

If you see the house you want and you know it’s in your budget, it may not make sense to hold out to see if the price will drop.

“The best properties all have multiple offers,” says Erik Williams, a REALTOR® with Keller Williams Realty in Cambridge, Mass. “If it’s a desirable property, it’s desirable to buyers. The people that I see get places under agreement are the most prepared people and the most aggressive.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home: 5 Essential Home-Buying Considerations

Buying A Home

Buying a house is a life-changing process that requires lots of upfront financial planning.

When looking for a home, keep certain factors in mind, including your financial situation, types of available loans, your credit score, the price of the house and your down payment so you can navigate the process smoothly.

1- Your Financial Situation
Before you buy a house, make sure that your monthly budget can handle such a large expense. Unless you’re one of the few people who can pay cash for a home, you’ll likely be paying it off for 15 or 30 years, depending on the length of your loan.

In addition to the mortgage payment, you’ll want to factor in expenses like property taxes, homeowners insurance and routine maintenance.

2- Types of Mortgages
When buying a home, you have a few options for the type of loan you want to use. Two of the most common mortgage types are fixed-rate and adjustable-rate mortgages.

The interest rate on a fixed-rate mortgage stays the same over the life of the loan, with payments divided up into equal amounts that you pay on a monthly basis. The longer the loan term, the less you have to pay each month; however, you’ll likely pay more in interest than you would with a shorter-term loan.

An adjustable-rate mortgage, or ARM, has a fixed interest rate for an initial period, followed by a period when the lender may periodically adjust the interest rate. For example, a 5/1 ARM has an introductory rate of five years. After that five-year period, the interest rate can change annually. With an ARM, you need to consider how much your monthly payment could increase and your ability to pay if it does go up.

3- Your Credit Score
You also need to review your credit score before buying a house. Your credit score helps creditors determine your creditworthiness. Borrowers with credit scores of 740 or higher generally qualify for the best mortgage deals.

It’s still possible to buy a house if you have bad credit. You likely will have to accept a higher interest rate on your mortgage, which could cost you hundreds of dollars extra per month.

If your credit score drops too low, though, you might not qualify for a mortgage at all. Consider improving your credit score first before trying to buy a house.

4- The Price of the Home
The higher the price of the house you want to buy, the more you can expect to pay on a monthly basis. When looking at houses, consider your budget and how much you can afford to spend.

Remember to consider your needs, too. Do you have a new addition to the family and need the room? Have your kids moved out and you want a smaller home?

Also, take a look at the price range of the houses available in the area where you want to buy. Compare the prices you find to your budget and determine what home you can afford.

5- The Down Payment
A large down payment represents one way to reduce the monthly cost of your mortgage. As a matter of fact, a down payment of 20 percent gives you access to better interest rates and prevents you from having to pay private mortgage insurance. So, in addition to lowering the amount you owe initially, a down payment also can get you a lower interest rate, making a house more affordable. There are also mortgages that require no down payment or a small one.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Home Buyers: 5 Crucial Questions To Ask Sellers Before Moving In

home buyer questions

Moving into a home you’ve just bought is exciting—and sometimes exasperating.

That’s because, although you might love your new place, you don’t know it all that well—which means that sooner or later, you’re bound to end up in a situation where you’re floundering cluelessly with the circuit breaker, or petting a neighbor’s seemingly adorable Pomeranian who nearly nips off a finger. Home, sweet home, right?

Yet you’d be surprised by how many of these unfortunate surprises home buyers can circumvent merely by asking the person who sold them the home some pointed questions before moving in. Sure, you’ll also be soaking up intel from the seller’s disclosure agreement, the home inspector who gave a thumbs-up to the place, and eventually even the neighbors. But truth be told, there’s nothing better than hearing about a home straight from someone who’s been living there for umpteen years. So go ahead and ask!

Just keep in mind that some sellers might feel tight-lipped if they think your questions might jeopardize the sale. As such, many of these questions are best asked near the end of the process—like during your walk-through or at closing.

1. Are there any special quirks about the house?

A thorough inspector will point out any oddities that are unsafe or devalue the house, but only someone who’s lived there will have a handle on all the unique characteristics worth mentioning—light switches in unexpected places, doors and windows that stick up or down, poltergeists, you name it.  This question is most effectively asked during the final walk-through.

“A buyer might ask, ‘I’m wondering if you can tell me anything I might need to anticipate moving forward?’” says Bill Golden, a Realtor® with Re/Max Metro Atlanta Cityside in Atlanta, who’s spent more than 30 years nurturing buyer-seller relationships. Be subtle but persistent.

2. Have you had any past problems with the house that you’ve fixed?

True, sellers are often required to disclose most existing problems or issues related to the home. But what about past problems that have since been repaired?

“Here in Georgia, anything significant that has happened—whether it was repaired or replaced—needs to be disclosed in the seller’s statement,” says Golden. However, it varies by state and sellers aren’t always required to fess up.

As a buyer, Golden suggests saying, “I’ve read the disclosure statement. Is there anything else that has happened or that you’ve done that would be helpful to know?” Use the disclosure as a jumping-off point to learn about what’s not listed.

3. Where are the water shut-off valve, sump pump, circuit box, and more?

“Hopefully, the home inspector will locate all of these things and point them out to the new buyer as part of educating them about their new house,” says Golden. “But not all inspectors do that, so these are important safety questions.”

Ask the seller to show you not only the location of these valves, switches, and pumps, but also how they work. If you’re moving into an older home, chances are that many of the utility features will be unique in their operations, so rather than fumble around blindly, it’s a no-brainer to lean on the seller.

4. How is the neighborhood?

This is a great question to help establish rapport between buyer and seller, and is also best asked near the end of the buying process. Keep it light: You might simply ask the seller, “Tell me about the neighborhood.”

“I’ve found that the good, the bad, and the ugly will often tumble out if approached conversationally,” says Golden. While you’re at it,  if you’re new to the area, consider asking the seller for recommendations for everything from grocery stores to their favorite restaurants.

5. Is there anything you want to leave behind?

This one doesn’t so much help you get to know your home, but it might result in a few nice bonuses. Got your eye on that deer head mounted on the den wall? Or those gorgeous ferns by the window? It’s worth a shot to see if the seller is willing to part with large items he or she might not want to bother moving.

“Most things that are being left, such as appliances, are dealt with in the original contract,” Golden says. “But, as it gets closer to closing, sellers are often wanting to unload some other things, too. You might get lucky and wind up with something great.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com