Why You Should Start Home Shopping Now!!

Why You Should Start Home Shopping Now!!

Buying a home is for most the biggest purchase they will ever make. With that being said, a lot of consumers really think long and hard before signing on the dotted line and becoming homeowners. While I always suggest that you should think and weigh your pros and cons, waiting currently can ultimately cost you more money and get less house. Your monthly mortgage is effected by your interest rate which is the price the bank charges you for borrowing the money to buy. Currently the national average is roughly 5% (credit, loan type, and other factors will determine where each buyer ultimately lands). National finance forecasters are expecting the rates to continue to rise, which makes buying a home a little more costly. What that means for you is that the same house, at the same purchase price can result in a higher monthly payment should interest rates rise in the future. Its no guarantee that rates will rise but it also isn’t a guarantee that they wont. Just to give you a quick example of what this would mean for you. (Again, these are just estimates that I’ve seen with clients I work with. I used a home with taxes of $5000 for the year and insurance of $1200 for the year, going with a FHA loan with 3.5% down) Purchase Price              Interest Rate                    Monthly Payment  $200,000                            4.25%                         ...

What are the requirements to get started in the home buying process?

Owning a home is the American dream, that most people want to achieve at some point in life. Do most people know what the basic steps are to begin? Here they are. 1. Decide if owning is for you Owning is a big difference as compared to renting. You have all the responsibility for maintenance and costs that go with owning a home. Whether you go single family or multifamily, the responsibility is there. What i would advise doing is using a online calculator to determine what a mortgage and if you can cover those costs. 2. Sit and discuss with Myself/Lender Once you decide to pursue owning a home, meeting with a Realtor (me, lol) should be your next step. I will paint the picture and let you know what will be needed to make this happen and answer the many questions a first time home buyer would have. I work with several reputable lenders who can get you the best loan product for your particular situation. You are more than welcome to contact your own lender and/or bank, but working with a lender that has a relationship with your Realtor will ensure the process is as smooth as possible. 3. Get Pre approved Once you speak to the lender and they check your finances and credit, they’ll  be able to supply you with a pre approval. Most cases they will give you a maximum amount, that fits what you’re comfortable paying monthly. Once you have this, we can start home shopping. Here are the basics needed to get a mortgage pre approval. -Credit score of above a...
Why You Shouldn’t Do A Rent To Own Contract To Become A Homeowner

Why You Shouldn’t Do A Rent To Own Contract To Become A Homeowner

I come across many prospective home buyers that often don’t have the credit or funds to become a homeowner in the immediate future.  While most of us do plan to own our own home and think of creative ways to, I quite often am asked do I handle rent to own situations or contracts. Rent-to-own is when a tenant signs a rental agreement or lease that has an option to buy the house or condo later — usually within three years. The renter’s monthly payments will include rent payments and additional payments that will go towards a down payment for purchasing the home I personally wouldn’t recommend and actually don’t work the situations, but here are my top reasons why you shouldn’t consider going this route. Not As Cut and Dry As You Think While it sounds easy and ideal it often can get tricky. The first person you should contact once you find a seller that is willing to enter into this agreement is a attorney. The attorney will really put together the terms in a contract, lease or an intent to sell. The monies aside from the normal rental income typically will go towards the down payment of the purchase. Staying on top of that is a job in itself and hoping that the seller/landlord is responsibly handling the money paid aside from rent. What Happens If Things Don’t Work Out In your agreement, you’ll have a term in which you start the process of purchasing, but what happens if you aren’t ready at that time. What happens if your credit or finances aren’t up to par to obtain financing to purchase?  Will the seller try...

5 First Steps To Improving Your Credit Score

When it comes to improving your credit there is no “instant” fix to make it happen overnight. The best and fastest way to make sure that your credit stays great is to never let it go bad. Life happens to us all, and things happen. Here are the first 5 steps I direct my clients to do to improve their credit scores: Get a copy of your credit report and address errors According to a recent poll, 1 in 5 consumers have an error on their report. You should visit annualcreditreport.com and download your report (every citizen gets a free copy once a year), and see that everything is accurate and up to date. 2. Write a letter, or have credit repair company handle the errors found If errors or maybe a late payment is found, contacting the company that reported it should be your next step. It isn’t easy to get a creditor to remove a late payment, but there is a dispute process. Most lenders really only factor in the late payments within the last 12 months. Removing a negative account from your report can drastically improve your score once done. 3. Lower your credit card usage 30% of your credit score is your outstanding and current debt. Lowering that (under 30% of your limit on each card and overall) balance will definitely help your score within 30 days as well once the creditor next reports. Another option, is to request a balance increase from your creditor, which will lower how much is being used if increased. 4. Don’t apply for any credit Seeking new credit in...

Buying Vs. Renting where you live

Here is a comparison of buying vs renting your residence. Buying Purchase costs are the costs you incur when you go to the closing for the home you are purchasing. This includes the down payment and typical closing costs. Yearly costs are recurring monthly or yearly expenses. These include mortgage payments, condo fees (or other community living fees), renovation costs, maintenance costs, property taxes and homeowner’s insurance. Property taxes, the interest part of the mortgage payment, and in some cases, a portion of the common charges, are tax deductible. The resulting tax savings is accounted for in each item’s totals. The mortgage payment amount increases each year for the term of the loan because the tax credit shrinks each year as the interest portion of the payments becomes smaller. Lost opportunity costs are tracked for the initial purchase costs and for the yearly costs. The former will give you an idea of how much you could have made if you had invested the down payment instead of buying your home. Selling costs are the costs you incur when you go to the closing for the home you are selling. This includes the broker’s commission and other fees, as well as the remaining principal balance that you pay to your mortgage bank. “Proceeds from home sale” is the money that you receive from the person who is buying your home. This amount is equal to the value of the home that year and is shown as a negative number since it is not something that you spend money on, but rather, it is money you receive. If your cumulative buying total is negative, it...
Reasons You Should Buy A Home This Fall

Reasons You Should Buy A Home This Fall

Buying a home in the spring is the popular thing and time to purchase as many consumers and buyers have done in the past. The Fall is just as if not a better time to buy a home. Here are the top reasons why you should buy a home this fall. Houses That Have Been On Market Awhile May Be Better Deals As stated many people think spring is the best time so sellers usually list around that time. So those sellers that have been on since then are more eager to get that home sold. Usually if the home was listed all summer with no sale, the seller and agent may be desperate to get it sold. Less Competition As the weather starts to change, the market does indeed slow down. So that means there are less buyers which means less competition for you.  In the spring its normal to want to offer on a property and find out there may be multiple other buyers that offered on the same home. In the fall there is often less of that. Sellers Want Done By End Of Year We may not know the sellers situation individually but most owners typically don’t want a home to carry into a new year. Most may want to take advantage of the gain/loss by getting sold by the end of the calendar year. Often you may see a new job opportunity beginning in the new year and that may be the motivation. Holiday Craze Many people want their homes to be sold before Thanksgiving and Christmas. as you’re looking to entertain family and...
What will it take to qualify for a home loan with no money down?

What will it take to qualify for a home loan with no money down?

In Connecticut there are a few programs in which you can buy a home with a no money down loan (100% financing). The one which I would recommend and have done the most work with for my clients personally is through CHFA (Connecticut Housing Finance Authority). They allow you to purchase a home with no money down on the loan. You do still have some other costs that are involved with a purchase but its ideal for a first time buyer whom maybe doesn’t have the normal 3.5% or 5% down payment. So what are the qualifications for this loan? Here are the basics* Minimum credit score of a 650 (no active collections) 2 years of employment at same job or in same field/position 2 years of tax returns/W2s 60 days of bank statements and paystubs When buying a home, you do still have the buyer inspection (average of about $400) and appraisal (average of about $500). These costs will need to be paid by the buyer and are not included in the loan. The time frame on these loans is slightly longer as you have to get a bank and CHFA final approval. You can expect about a 60 day closing (from time your offer is accepted until the day you get keys).   I hope this give you a better idea of whats needed and what 100% financing entails. As always, if you have any questions or would like to begin the process, we are here to help you. If credit is an issue and you need help in that area, please hit the “Credit Repair Assistance”...
The Guide To Getting a Mortgage

The Guide To Getting a Mortgage

Buying a home is no easy task, but being informed and having the right professionals helping you will make all the difference in your experience. I pride myself on educating all my clients on the entire process and what they need to do to make it happen.  If you are unfamiliar as far as what to do to get the ball rolling on obtaining a mortgage, here are a few simple steps to make it happen: DETERMINE YOUR AFFORDABILITY Before you even start working with a Realtor or house hunting, you want to determine exactly what you can afford. This will greatly help you and your agent find and target what your options are. This is a big purchase, and you want to make sure that you will get a payment that you can comfortably afford, along with your normal household expenses. You can figure this out by using an affordability calculator and also a payment calculator to determine your buying power. GET STARTED ON THE MORTGAGE PROCESS The next step will be actually speaking with a lender/loan officer. I suggest speaking with a mortgage company rather than an individual bank. Companies have more flexibility and resources for different situations, as they work with more banks. You will need the following to get the process started in working with a lender/loan officer. Personal Info– Name, DOB, Marital Status Residence History– Rent payment or all mortgage, insurance and tax figures for at least the past two years. Employment and income– Documentation showing wages and employment history for at least two years. If you receive commissions or bonuses, you’ll need two years of...
4 Things To Do While Saving To Buy A Home

4 Things To Do While Saving To Buy A Home

Being a first time home buyer, you do have some homework to do outside of just choosing a realtor. The realtor can explain and direct you to the best of their abilities in purchasing your home. Aside from the obvious step of saving money, here are 5 things you can do to make the process that much easier. Understanding the full cost of home ownership When you rent, the one payment covers just about everything (utilities excluded). You’re not fixing the broken sink, appliance, or any taking care of the grounds, its the owners responsibility. These are things as a new homeowner you need to brace and prepare for. Luckily, in most first time home buyer situations, taxes and insurance are included in your monthly mortgage due to the type of loan product most popular with first timers. If you’re pursuing a condo, you’ll have to factor in that condo fee (HOA) as an additional expense. These are all things you need to factor in and decide if you will be able to afford as well as the new mortgage. Know the Buy Vs Rent Pros and Cons Renting may actually be a better option for some individuals. Maybe somebody that isn’t completely set on living in a certain area due to career or personal factors. Some people aren’t able to own a home because they don’t have the time or funds to maintain it. Buying is becoming cheaper than renting in most areas of the country due to the tax breaks at the end of the year set for homeowners. This is something that you and a realtor...
First Time Home Buyer Frequently Asked Questions

First Time Home Buyer Frequently Asked Questions

Buying your first home can be a tough process and be confusing. Knowing the ins and outs of whats needed and what you have to do as a home buyer is vital to the process. Whether you’re in the process, thinking of beginning it, or in the middle you should know the answers of whats going on next. Here are some popular questions and their answers: What Credit Score Do I Need To Buy A Home? In recent years things have changed and lenders are a little more lenient on credit scores. I personally work with lender whom can get you into a home loan with as low as a 620 credit score (no active collections). How Much Money Do I Need To Buy A Home?  There is really no right answer to this question as its a case by case basis. Some loans require no money down on loans and some buyers put down 20% of the purchase price on the loan. It will all depend on which route you choose to go but most first time buyers typically go between no money down or 3.5% of the purchase price down. How Long Do I Have To Be Employed To Buy A Home? Most lenders like to see 2 years of consistent employment at the same job or same field. What Documentation Do I Need To Buy A Home? 2 years tax returns, 2 years W2s, 60 days bank statements and paystubs When Is The Best Time To Buy A Home? Most will say that the best time to buy a home is the spring. Reason being is...

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