The Best Mortgage Loans for First-Time Homebuyers

by Real Estate

Buying your first home can be exciting and overwhelming at the same time. You’re fulfilling the
American dream but at the same time, taking on the largest debt of your lifetime.

Fortunately, there are many great mortgage loans for first-time homebuyers. Here are our top
choices.

FHA Loans
FHA loans used to be known as a ‘first-time homebuyer’s loan.’ While today anyone can use the
program, it is a great program for anyone that hasn’t owned a home before because of its
flexible guidelines and low down payment requirements.
FHA loans require mortgage insurance for the life of the loan at a rate of 0.85% of the loan
amount. Your insurance payment decreases each year as you pay your balance down, but you
pay it for the life of the loan.


How to Qualify
• Minimum 580 credit score
• Maximum 43% – 50% debt-to-income ratio
• At least 3.5% of the purchase price as a down payment
• Stable income and employment for the last 2 years
• No recent bankruptcies
• Proof you’ll occupy the property as your primary residence

Conventional Loans
Conventional loans are reserved for borrowers with good credit, but it doesn’t have to be
perfect. We’ve seen borrowers get approved with a credit score of 660 which isn’t in the ‘good
credit’ range.
Conventional loans are different from FHA loans because you can cancel your Private Mortgage
Insurance once you owe less than 80% of the home’s value. This means your mortgage payment
will decrease once you eliminate PMI.

How to Qualify
• Minimum 660 credit score
• Maximum 36% – 43% debt-to-income ratio
• At least 3% down payment (5% if you owned a home before)
• Stable income and employment for the last 2 years
• No recent bankruptcies

VA Loans
VA loans are for veterans that served or are serving our country. This flexible mortgage program
doesn’t require a down payment and has the most flexible guidelines for veterans.
The program is only for owner-occupied properties and is a great option for veterans right out
of the military looking to buy their first house.

How to Qualify
• Minimum 620 credit score (this varies by lender since the VA doesn’t have a minimum
credit score requirement)
• Maximum 43% – 50% debt-to-income ratio
• No down payment required
• Adequate disposable income according to your location and family size according to VA
guidelines
• Stable income and employment or proof of future employment if you just got out of the
military
• Proof you’ll occupy the property as your primary residence
• Certificate of Eligibility to prove you are eligible for a VA loan

Final Thoughts
If you’re a first-time homebuyer, you have many mortgage options available to you. Compare
your options and get quotes from at least 3 lenders. Each lender has different requirements and
charges different rates and fees.
I’m happy to help you figure out which loan is right for you as well as help you find the house
that’s perfect for your needs. Together we’ll make your dream of homeownership come true.

How to Get a Mortgage with Bad Credit

by Real Estate

The first thing lenders look at when you apply for a mortgage is your credit. If you have a bad credit score, it could be harder to secure financing, but not impossible.

Many lenders offer loans for borrowers with bad credit. Here’s how to get the financing you need.

What do Lenders Consider Bad Credit?

Bad credit is subjective. There isn’t a specific credit score that you can say would stop you from getting a mortgage. However, most lenders draw the line at 620, while some allow lower scores.

If your score is around the 620 range, you’re likely at risk of not getting approved or if you do, you’ll pay higher rates and fees. Knowing how to get a mortgage with bad credit will help you get the best deal.

Steps to Get a Mortgage with Bad Credit

1.Know your credit
Pull your credit report here and/or find out your score by using the free credit scoring services from your credit card company or bank. See where you stand.

If you have a score much lower than 620, you have your work cut out for you. If it’s around 620, you can use traditional lenders but should shop around.

2. Think outside the box Big box banks will turn down your application if you have bad credit. Instead, work with a credit union, mortgage broker, or online lender. Each of these entities has more loan programs available, including niche products the lenders keep on their books, so they call the shots when it comes to underwriting.

3. Have explanations Lenders like explanations. Create a written statement about why your bad credit happened, what you’ve done to fix it, and how you’ll prevent it from happening in the future. If you prove it was a one-time deal or that you’ve picked up the pieces and are moving forward, you could have a higher chance of approval.

4. Shop around
No two lenders offer the same loan programs or have the same guidelines. Shop around to find the best deal including the lowest interest rate and fees given your circumstances.

Tips to Improve your Chances of Approval

To improve your chances of loan approval, use these tips.

  • Improve your credit
    See what you can do to bring your credit score up. Bring late payments current, pay high debt balances down, and don’t open new credit while you are trying to improve your credit score.
  • Save as much money as possible for a down payment
    The more money you invest in the home, the less risk the lender takes. If you have bad credit, showing that you’re willing to invest your own money in the home can help your chances of approval.
  • Try Experian Boost
    Experian Boost is a free program that helps increase your credit score by tracking your payments to services that don’t report to the credit bureaus. They report payments to your utility companies, streaming services, and phone services to help you build a better credit score.

Final Thoughts

Getting a mortgage with bad credit isn’t impossible, especially today. Work on your credit, save money, write a letter of explanation, and shop around to find the best deal. Even if you can’t get the most attractive terms today, you can always refinance when your credit improves so you can secure the attractive terms you desire.

Housing Market Predictions for 2022

by Real Estate

After a couple of years of short demand and crazy high sales prices, everyone wants to know, what will the 2022 housing market look like?

While they are just predictions, here’s what the experts believe we will see as we enter the New Year.

Housing Prices will Increase

As we’ve seen with prices on just about everything lately, housing prices will increase with inflation too. Experts believe we’ll see an estimated 3% increase in home prices throughout the year.

This could affect affordability especially for first-time buyers, so it’s important to save as much money as possible for your down payment if 2022 is the year you plan to buy a home.

First-Time Homebuyer Demand will Increase

Millennials are the prime market for buying homes this year. We’ll likely see the largest demand from those ages 26 to 35, most of which have had plenty of time to save money for a down payment because of the higher prices and crazy bidding wars we saw that pushed millennials from the housing market the last couple of years.

Suburbs will be the Fastest Growing Markets

As we continue with remote jobs and entrepreneurship, millions of people will still migrate from the cities to more suburban areas. Until now, there’s been a lower demand for homes in the suburbs, but expect 2022 to be the year it gets a little more competitive in those areas.

Homebuyers Want Bigger Homes

Because most people work from home at least part-time, most people want bigger homes with plenty of room for everyone to spread out and do their thing rather than being crammed in tight spaces, as is the case in more urban areas.

Mortgage Rates may Increase

Experts also believe mortgage rates will increase, making it harder to afford a mortgage. Since rates have been so rock bottom low, though, they won’t see the heights we’ve seen in years past, but it’s an important metric to keep in mind as you create your housing budget.

How to Make the Most of Buying a House in 2022

If 2022 is the year you want to buy a house, here’s how to best prepare:

  • Save money – Have a large down payment if possible. Even though many loan programs require just 3% down, you’ll have a much lower monthly payment with a larger down payment, making your loan more affordable.
  • Think long-term – Buy the house that will last you and your family many years, and account for any changes such as working from home, having more kids, or even starting your own business.
  • Get pre-approved – Always get pre-approved before shopping for a home. You’ll have a much better chance of winning the bid if there are multiple people interested in the property and you’ll know what you can afford.
  • Work with a licensed real estate agent – Don’t try to navigate the housing market yourself in 2022. Having a real estate professional by your side ensures you’ll get the home you want this year.

Final Thoughts

2022 can be a great year to buy a home. Make sure you plan for the down payment, monthly costs, and even for the higher demand that can cause higher prices or bidding wars. Working with the right real estate agent is the best way to make 2022 the year you buy a home.

Which Home Renovations Generate the Highest ROI?

by Real Estate

Which Home Renovations Generate the Highest ROI?
Did you know that not all home renovations affect your home’s value? In other words, your ROI could be next to nothing on some renovations. Even if you do see a return on your investment, it’s sometimes less than half of what you paid.


Was it worth it?


Fortunately, many home renovations provide an exceptional return on your investment. Knowing what they are and how much of a return you’ll get can help you decide.

Why Home Renovations Affect your Home Value
Before we get into the list of renovations you should consider, let’s look at why home renovations affect your value.

When you improve your home, you improve its features or its quality, both of which affect the home’s value. Buyers are more likely to pay more for a home that’s recently renovated than one that needs repairs and/or is outdated.

But which home renovations should you do?

The Top Home Renovations to Consider
Focus on the areas of your home that need major improvement, especially if safety or stability is an issue. Other than that, consider these renovations to improve your home’s value.

Garage Door
You may not think of the garage door when renovating your home, but it can provide almost a 95% ROI. With an average expense of $3,500, you can improve your home’s value by almost $3,300 with this change. Think of it as improving your home’s curb appeal.


Minor Kitchen Remodel
The kitchen is the heart of the home. Renovating it doesn’t have to mean tearing down walls and reinventing your kitchen. Painting the cabinets, switching out appliances, and updating the faucets or light fixtures may provide an ROI of 77% or more.


New Windows
Windows are another great way to improve your home’s curb appeal, but they also affect the home’s energy efficiency. They can be a hefty investment, but you’ll typically recoup almost 75% of your investment. As a bonus, you’ll likely reduce your energy usage in the home which may further increase the return on your investment.


New Siding
New siding is another exterior project that can increase your home’s value. This is especially true if your siding is damaged or you have vinyl siding and replace it with something more stable.
Most siding investments provide a 75% ROI, plus it increases the curb appeal of your home if you choose a color that’s trending right now.


Final Thoughts
Before you make any home renovations, talk to a professional (like myself) to see how much of an ROI you’ll receive from the renovations.


Some homeowners renovate their home just to make the home look how they want or to give it features they want. But, you should always have your ROI in mind so you get the most out of your investment. You probably won’t be in your home forever, so why not get the most out of it by improving its value with the renovations you choose?

How to Improve your Credit Score to Get a Mortgage?

by Real Estate

How to Improve your Credit Score to Get a Mortgage

If you’re in the market for a mortgage, it’s important to look at your credit score first. Many potential buyers don’t realize they can check their credit or improve it, but you can do both.

First, pull your credit report here. Everyone gets free weekly access to all three credit reports, so don’t hold back. Once you know your credit history, you can take the necessary steps to improve it.

Why your Credit Score is Important

You may wonder why your credit score is so important.

Here’s why.

It’s the first thing lenders look at when you apply for a mortgage. If your credit score isn’t high enough for the chosen loan program, they’ll decline your application without looking at it further.

Think of it as your first impression to a mortgage lender. You want it to be as good as possible or you risk not getting approved.

Here’s how.

How to Increase your Credit Score

Your credit score changes monthly. With these simple changes, you can increase your credit score and your chances of approval.

Bring your Accounts Current

If you have any late payments reported on your credit report, get them current fast. Late payments can hurt your credit score the most since your payment history makes up the largest portion of your credit score.

Pay your Debts Down

The next largest part of your credit score is your credit utilization. This refers to the amount of your credit lines you have outstanding. Any amount over 30% of your credit line or $300 for every $1,000 in credit line, hurts your credit score. Work on paying your debts down and watch your score increase.

Don’t Close Old Credit Card Accounts

It sounds odd, but keep your old credit card accounts open. They help your credit age. Your credit score improves when you have older credit accounts. New accounts don’t have a history and can make you a higher risk.

Don’t Apply for New Credit

If you’re in the market for a mortgage, avoid applying for any new credit. New accounts bring your credit score down and increase your credit utilization.

Wait until after you close on your mortgage to open up a new credit card to furnish your home or to buy that new car. New credit will only decrease your score and your chances of mortgage approval.

Final Thoughts

You don’t need a perfect credit score to get a mortgage, but the higher your score is, the more likely you are to get approved. Working on your credit score before you apply increases your chances of approval. It also helps you get better terms and interest rates.

It may take a few months to see a change in your credit score, though. Don’t expect changes overnight. If you want to apply for a mortgage, I suggest pulling your credit 6 to 12 months before you apply for a mortgage to give your score enough time to improve.

Is the Housing Market Going to Crash anytime Soon?

by Real Estate

What goes up must come down, right? At least that’s what everyone is saying about the real estate industry. It can’t possibly stay this hot forever, or can it?

If history repeats itself (and it usually does), the housing market will change. The housing industry goes through phases – meaning one phase won’t last forever and that’s a good thing. If housing prices kept increasing at the rate they are now, it would become near impossible for most people to afford a home.

Does that mean the housing market will ‘crash’ soon, though? We don’t think so, and here’s why.

Reasons the Market Won’t Crash

While no one can predict the future, here are the top reasons we feel the housing market won’t crash.

Prime Rate Remains Steady

The Fed has already announced that the prime rate will remain close to 0% throughout 2022. That’s reassurance right there that the housing market isn’t going anywhere anytime soon. With rock bottom rates, people will buy houses. This will keep up the demand and ensure that a housing crash doesn’t happen anytime soon.

High Lumber Prices Keep Building Rates Low

We all aren’t anywhere near the pre-pandemic building levels we were at a few years ago. It’s too expensive for builders to build like they were, so they’ve had to taper back. This means less. Inventory in the market. When there’s less inventory, but plenty of demand, it keeps pricing rising like they have been this year.

Demand is Still High

As long as the demand for housing is still high, the market won’t crash. It’s when the supply greatly exceeds the demand that prices start to fall and sometimes even plummet. Experts don’t see this happening for the rest of 2021 or even 2022. That’s good news for the economy as there’s no housing crisis looming in the background yet.

How Buyers can Compete

So how do you compete in such as competitive environment with low supply and high demand? You have to be prepared. Here’s how:

  • Work with a reputable real estate agent so you always know about new listings immediately. If you drag your feet at all, you’ll lose your chance.
  • Get pre-approved by a lender. Don’t look at houses until you are pre-approved. Sellers

want that letter stating you can afford a mortgage. They’ll accept your bid a lot faster if you have it.

  • Know your budget. Don’t get caught in a bidding war and outbid yourself. Know how

much you can afford and stick to that number.

  • Do your research. Know where you want to live before looking at homes. If you find a home and then research the area, you could lose it to another buyer.

Final Thoughts

Bottom line, the housing market isn’t going anywhere anytime soon. If you’re ready to take advantage of the low interest rates and to find the perfect home, contact me. I’ll help you find your dream home and win the bid in the competitive market we’re experiencing today!