Posts tagged: mortgage interest rate

Common Mistakes to Avoid When Selling a Home

Selling a home is no simple task. It requires planning, strategizing, and a bit of market understanding to get the best deal. But even the most seasoned home sellers can occasionally trip up. So, to help you navigate the process with ease, here’s a list of common mistakes to avoid when selling your home.

1. Overpricing Your Home: Pricing your home correctly is a delicate balancing act. Sellers often inflate their property’s price due to emotional attachment or simply overestimating its value. However, an overpriced home could scare off potential buyers and languish on the market. To avoid this, conduct a thorough comparative market analysis (CMA) or hire a professional appraiser. Set a competitive, realistic price to attract the right buyers.

2. Neglecting Repairs: Before listing your property, make sure it’s in prime condition. Small defects like a leaking faucet, damaged flooring, or faulty appliances can deter buyers. It’s a common mistake to assume buyers will overlook these issues. Instead, invest in necessary repairs and consider a professional home inspection to reveal any hidden problems.

3. Failing to Stage the Home: Your home should be a blank canvas that allows potential buyers to envision themselves living in it. Clutter, personal mementos, and over-the-top décor can be distracting. Neglecting to properly stage your home may make it appear smaller or poorly maintained. So declutter, depersonalize, and neutralize your décor. This could involve hiring a professional stager to enhance your home’s appeal.

4. Not Investing in Professional Photography: In our digital age, first impressions are often made online. Yet, many sellers underestimate the power of quality photos. Blurry, poorly lit, or unflattering pictures can instantly turn off potential buyers. Investing in professional photography can dramatically improve your home’s online listing and draw more prospective buyers.

5. Trying to Sell a Vacant Home: A vacant home can feel cold and uninviting. Furniture helps to define spaces and offers a sense of scale, making it easier for buyers to imagine themselves in the home. If you’ve already moved out, consider virtual or physical staging to help your property feel lived-in and welcoming.

6. Ignoring the Market: It’s essential to understand your local real estate market. Is it a buyer’s market or a seller’s market? What types of homes are selling quickly, and at what price? Ignoring these factors can lead to unrealistic expectations and strategies that don’t resonate with buyers. Work with a real estate agent who can help you navigate market trends and set a competitive price.

7. Going It Alone: Selling a home is a complex process that involves legalities, negotiations, and a lot of paperwork. It’s a common mistake to try to sell your home independently to save on commission. However, without the expertise and resources of a real estate agent, sellers can make costly mistakes. An experienced agent can help you price your home, market it effectively, and negotiate a higher selling price.

Selling a home is a significant financial transaction that requires careful planning and execution. By avoiding these common mistakes, you can ensure a smoother, more successful home sale. Remember, preparation and knowledge are your best allies in the home selling journey. And, don’t hesitate to seek professional guidance to navigate through this complex process.

If you’re in the market for a house, you might think about the features the house has or the price, but how often do you think about the mortgage rate?

Many buyers I work with don’t realize the importance of the mortgage rate, so I’m here to clear the air so you make an informed decision.

What is a Mortgage Rate?

The mortgage rate is the fee the lender charges you to borrow money. You borrow principal, or the amount of the loan and the interest is the fee they charge you. Your monthly mortgage payment includes both the principal (loan amount) and interest (the bank’s fee).

How Much of a Difference Does the Mortgage Rate Make?

You might not think the mortgage rate makes that much of a difference. After all, if it’s just 1%, how much more could you pay?

The difference is tremendous, especially if you’re talking about a 30-year loan. When you borrow funds for 30 years, you keep the bank’s money for that time. This means they charge you interest over 30 years versus 10 or 15 years on a shorter term loan.

Here’s an example:

You borrow $230,000 at 4% for 30 years. Your principal and interest payment are $1,098 and over the life of the loan, you’d pay $165,299 in interest. That’s in addition to the $230,000 that you pay back (the money you borrowed).

Now, if you borrowed $230,000 at 5% for 30 years, your principal and interest payment would be $1,234 per month and over the life of the loan, you’d pay $214,488 in interest.

That’s a difference of $49,189! I’m sure there’s a lot you’d rather do with that amount of money instead of paying the bank, right?

How to Lower your Interest Rate

So how do you make sure you get the lowest interest rate? While every lender is different, here are some ways to ensure you get the best rate possible.

Pay your bills on time
Don’t overextend your credit lines, keep your credit balances at 30% or less of the total credit limit
Dispute any incorrect information on your credit report
Keep a stable job and income
Make sure your monthly debts including the new mortgage are 43% or less of your gross monthly income
Don’t have any collections on your credit report
Make a large down payment

Lenders like it when borrowers are a low risk of default. You can be this by providing great credit, a large down payment, and solid employment and income histories.

Final Thoughts

Your interest rate makes a big difference in your mortgage payment and even what house you can afford. Sometimes even an interest rate that ½ point higher can make you ineligible for a mortgage loan.

Don’t take a chance. Shop around and get the best interest rates possible all while ensuring that you present lenders with the least amount of risk as possible.