Exploring different financing options for buyers

by Real Estate

Hey there, home buyers! If you’re in the market for a new home,

you’ve probably realized that financing can be a bit

overwhelming. There are so many options out there, from

traditional mortgages to government-backed loans to alternative

financing. So, let’s take a closer look at some of the most

popular financing options and find the one that’s right for you!

1. Traditional Mortgages: Let’s start with the most common

financing option – the traditional mortgage. With a traditional

mortgage, you’ll put down a certain amount of money as a

down payment, and then make monthly payments over a

set period of time. These loans can have fixed or adjustable

interest rates, and the terms can range from 10 to 30 years.

2. FHA Loans: If you’re a first-time home buyer or have a

lower credit score, an FHA loan might be a good option for

you. These loans are backed by the Federal Housing

Administration and often have lower down payment

requirements and more flexible credit score requirements.

3. VA Loans: If you’re a veteran or active-duty service

member, you may qualify for a VA loan. These loans are

backed by the Department of Veterans Affairs and often

have lower interest rates and no down payment

requirements.

4. USDA Loans: If you’re looking to buy a home in a rural area,

a USDA loan might be a good fit. These loans are backed by

the U.S. Department of Agriculture and often have low

interest rates and no down payment requirements.

5. Alternative Financing: If none of the traditional options

work for you, there are a variety of alternative financing

options out there, including private lenders, crowdfunding,

and even seller financing. Just be sure to do your research

and understand the risks involved with these options.

Investing in Rental Properties: The Pros & Cons You Need to Know!

by Real Estate

Hey there, fellow money-makers and future landlords! Welcome
to another fun, chatty, and enlightening blog post. Today, we’re
diving deep into the rollercoaster world of investing in rental
properties. If you’ve ever wondered whether it’s a worthwhile
endeavor, buckle up! We’re about to spill the tea on the pros and
cons you need to consider before taking the plunge.


🏡 Pro #1: Passive Income, Baby!
Who wouldn’t want to kick back and watch the dough roll in
while someone else pays off your mortgage? Rental properties
are a great source of passive income, and as long as you have
tenants, you’ll be enjoying that sweet, sweet cash flow.


🌪 Con #1: Oh, the Maintenance!
Just like owning any property, rental homes come with a side of
wear and tear. It’s important to budget for maintenance and
repairs, as well as the time and effort you’ll need to invest in
keeping your rental property in tip-top shape. Because let’s face
it, not all tenants will treat your property like their own.


📈 Pro #2: Appreciation Appreciation!
Here’s a fun fact: real estate tends to appreciate over time. So,
while you’re raking in the rent, the value of your property may
also be going up, up, up! In the long run, you could be sitting on
a goldmine when you decide to sell.


🚪 Con #2: Knock, Knock. It’s Tenant Turnover.
Finding great tenants can feel like trying to find a needle in a
haystack. Tenant turnover can be a major headache and a drain
on your wallet. Prepping your property for new renters and
dealing with vacancies can add stress to your landlord life.


💰 Pro #3: Tax Benefits Galore!
Rental property owners, rejoice! You can potentially benefit from
tax deductions for things like mortgage interest, property taxes,
insurance, and depreciation. Cha-ching! Of course, always
consult a tax professional for advice tailored to your situation.


🔍 Con #3: Market Research Required
Investing in rental property isn’t as simple as buying a house and
renting it out. You’ll need to do your homework on the local
market, property values, and rental rates. This can be time consuming,
but it’s essential for success.


🏠 Pro #4: You’re the Boss!
Being a landlord means you’re in control. You make the decisions
about your property, from setting the rent to choosing the
tenants. It’s a great opportunity to flex your entrepreneurial
muscles and build something you’re proud of.


🕰 Con #4: Time Investment
While rental properties can be a fantastic source of passive
income, they do require a substantial time investment. From
finding and managing tenants to dealing with emergencies and
keeping up with legal requirements, being a landlord is not
always a walk in the park.


So, there you have it, folks! The pros and cons of investing in
rental property. As with any investment, it’s important to do your
research and weigh the potential risks and rewards before diving
in. If you have the time, resources, and patience to manage a
rental property, it can be a great way to generate passive income
and build long-term wealth. But if you’re not up for the challenge,
there are plenty of other investment options out there. Happy
investing!

5 Reasons your Mortgage can Fall Through

by Real Estate

Your mortgage isn’t a ‘sure thing’ until you sign the closing papers. Until that point, anything can
happen, which is why it’s so important to keep your financial and employment situation status
quo.

If you’re thinking about buying a home or are in the middle of the process, here are five things
that could make you lose your loan approval.

Changing Jobs
When lenders approve you for a mortgage, they do so based on your employment and income.
They assume your employment will remain the same, even though we all know that’s not
always the case.

While changing jobs after you close on your loan isn’t a big deal, changing jobs mid-loan process
could cause a delay in processing or even cause you to lose your loan approval.

Hurting your Credit Score
Lenders pull your credit when you apply for a mortgage and again before you close. If your score
changes drastically during that time (for the worse), you could lose your loan approval. Once
pre-approved, try keeping your credit the same by not opening new accounts, missing
payments, or racking up too much credit card debt.

Making Large Purchases
After you apply for (and are approved) for a loan, hold off on any large purchases until after you
close your loan. Making large purchases, especially on credit, can cause you to lose your loan
approval.

Here’s why.

If you bought on credit, you either opened a new credit account or increased the debt on an
existing account. This can hurt your credit score and increase your debt-to-income ratio, which
can hurt your chances of approval.


Making Large Deposits or Withdrawals in your Bank Account
Large deposits or withdrawals in your bank account are red flags to lenders. A large withdrawal
means you spent money and might have more debt or less money to put down on the home
than you were approved for.

Large deposits could signify that you borrowed money from someone or took out a loan. A new
loan (even if from friends or family) is a debt that affects your debt-to-income ratio. Therefore, if
you increase your DTI, you could lose your loan approval.


Not Providing Requested Documentation
Even if you’re pre-approved for a mortgage, underwriters always need more information. If they
ask for documentation you can’t or don’t provide, they won’t be able to clear your loan
conditions. This could cause them to decline your loan.

Final Thoughts
Mortgage approval isn’t official until you close on your loan. In the meantime, it’s crucial to keep
your information as stable as possible. If you can help it, make sure your credit score doesn’t
change, your bank account stays the same, and you don’t change jobs or income.

With everything status quo, you have a better chance of qualifying for and closing your loan. If
you have questions about what might affect your loan or are ready to look at homes, contact
me today.

Everything you Should Know About the Down Payment Assistance Programs

by Real Estate

Everything you Should Know About the Down Payment Assistance
Programs
You might think you can’t get a loan if you don’t have a 20% down payment. The good news is
there are options to secure a loan, including programs with lower down payment requirements
and down payment assistance programs.

Not everyone will qualify for a down payment assistance program. But, here’s what you should
know.

What is a Down Payment Assistance Program?
There are many down payment assistance programs you can consider. Some are run by the
federal or state governments, local charities, and some lenders offer them too.
The program may be a grant, meaning you don’t have to pay the money back, or it could be a
second mortgage that you pay back in the future. To qualify, most borrowers must prove they’re
buying a home as their primary residence and promise to live in the home for a certain amount
of time.

Who Qualifies?
The government and charitable organizations offer down payment assistance to borrowers in
need. Typically, the programs are available to borrowers with income below 80% of the area’s
average income, but each program differs, with some states offering help for families with
income as much as 120% over the area’s median income.

Some lenders will determine your eligibility on your credit score and debt-to-income ratio. They
typically reserve the down payment assistance funds for borrowers they know will qualify for a
loan.

How Much can you Get?
Each down payment assistance program has a different amount of money it can fund. Some
have a fixed amount, and when the funds are gone, they’re gone. Others have more funds
available and base the assistance on your loan amount and financial need.

What if you Move?
If you get assistance from a fund that requires you to live in the home for a certain amount of
time and you move early, you may have to pay the difference for the time you left early. If you
stay in the home for the whole time, however, they will usually wipe the slate clean, meaning
you don’t owe anything.

Questions to Ask
Before you accept down payment assistance, make sure you understand the terms. Must you
pay it back? If so, on what terms? Is there a way to waive the payback requirement, such as if
you live in the house for a certain amount of time?

Some programs are just grants. No one has to repay them, but they are harder to qualify for
because they are based purely on need.

Final Thoughts
Don’t let a lack of a down payment stop you from buying a home. If you’re short the down
payment, check out your options in your local community, state, and charitable organizations.
There are many opportunities to get funding to help you buy a home, even if it’s just enough for
the minimum down payment.

If you need help figuring out how to get your down payment assistance or you are ready to look
at homes within your budget, contact me today.

Does an Impending Recession Hurt the Housing Market?

by Real Estate

The word recession is enough to send chills down anyone’s spine, especially homeowners and
homebuyers.

What will happen to the housing market? Will we see another housing crisis like 2007?
Fortunately, the answer is ‘no, we will not see another housing crisis.’ Here’s why.

Home Prices remain High

If you’ve monitored the housing industry over the last couple of years, you know home prices
are wildly inflated. That was due to the crazy high demand and much lower supply. It was a
natural turn of events.

Buyers were desperate to buy homes and willing to pay more. Some even spent more than a
home’s value, which drove up the market prices.

If the recession happens and home prices fall, they won’t fall to levels as we saw during the
housing crisis, causing homeowners to be upside down on their loans. Instead, the values may
fall back to where they ‘should’ be, which doesn’t leave most people owing more than their
home’s value.

Supply is Still Low

A recession may cause lower demand for housing, which isn’t bad. Right now, demand still
exceeds supply, keeping prices elevated. If demand falls, it will equal the supply or close to it,
evening out the playing field.

When supply is much lower than demand, it causes problems. In this case, the recession could
help the housing inventory, giving the market a larger supply and equalizing the market.


It Would Still be a Good Market for Buyers

You might wonder, should you hold off on buying a home if a recession hits?
In some cases, homeowners should hold off on buying a home, but today’s recession is
different. The Fed normally floods the economy with money to stop the recession. This time,
however, the recession is a good thing because it will stop the crazy inflation we’ve had the last
year.

So should buyers buy a house in a recession?

Here’s what to consider:
• Do you have the money to put down? A decent down payment is the key to loan
approval today.
• Do you plan to stay in the home for at least a few years, so the market has time to
settle?
• Is your employment steady, or are you at risk of losing your job?
• Do you qualify for an affordable interest rate?


Final Thoughts
A recession isn’t necessarily a bad thing for the real estate market. On the contrary, it might
make housing prices more affordable for more buyers and keep the bidding wars to a minimum.

If you’re in a good financial position and know you want to invest in a home for at least a few
years, this could be a great time to get into the market without the excessive demand driving
prices too high.

If you’re ready to explore your options for buying a home, contact me today. Together let’s
create a plan to help you achieve your dreams of owning a home.

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.