What You Need To Consider When Buying A Home

Buying a new home can be one of the most stressful things you do in your lifetime. You are forking out a lot of money for this place, so it has to be right on many levels. The whole buying process can be emotional from start to finish. The house search, the viewing, the phone calls and the anticipation of waiting for things to go through. It’s certainly not as easy as heading to the store buying something and that’s the end of it. So with that in mind, I thought it would be a good idea to share with you some of the things to consider when buying a house.
 
Putting the emotions aside can be difficult. But embracing them is just as important because your emotion will help you to make the right decision overall. It’s not an easy thing to do, buying a home. So cut yourself some slack and prepare yourself as much as you can. It can be a rollercoaster ride.

Location, location, location

One of the of first things you have to consider is the location in which you are buying your new home. It may need to tick a lot of boxes. What you have to consider are yourself and your family. So the location must be close enough for your to commute to your job. There Is no point moving far away as a long commute to work will only eat into your day. If you don’t drive into work, then you will need to find out whether the location has good transport links. 

Other factors to consider will be the local schools if you have children to think about. Do they have good reports? Are they close enough to get to? Sometimes it’s the more practical things we forget to think about. Things like whether there are supermarkets or shops close by. Perhaps local restaurants or entertainment. All of these things need to be factored in to decide whether the location is right for you and your family. Pinpointing the locality in which you want to search will make things much easier. It means that you know the place works, so when you begin your viewings, you only have to focus on the property.

Speak to an agent you trust

An estate agent is one of the people you will talk to most when it comes to buying a new home. So it’s essential you have confidence in them, and you feel you can trust them. This is the person you will speak to in regards to what you want out of a place. So you will trust their judgement when the provide you with options. You could get in touch with this office at Entwistle Green nor others like it. 

Having confidence in the people that will be helping you through this process is important. You are spending a great deal of money on this property. It’s an investment as well as a home, so it has to be handled right from start to finish. The process is already difficult enough without having people involved you don’t trust or have no confidence in. 

The type of property you need

Once you have decided on your location and made contact with some agents the next thing to do is decide on the type of property you want and need. The first thing to do is decipher the things you need to have. So this is the number of bedrooms you need as a minimum. Whether you require off road parking. If the house has a garden or yard. These are things that you can’t do without. The fundamentals. The next thing you then do is add the nicer details. An extra bedroom would be great, for example. Or a garage would be a nice bonus. Things like that. It’s important to communicate all of this with the agents looking for your property. They need to know what you must have and what you would like to have. This will make their search much easier. You also need to determine the type of property you want. You may only want a house, but you might consider a bungalow. Or perhaps you are looking for a more modern living arrangement so would consider an apartment. Ask yourself all the hard questions and if it is easier, make a list, so you stick to what you want.


Will you consider a project?

Another big question to ask yourself is whether you would consider a project or not. A project can be one of two things. It could either be something that needs a lot of work. Perhaps a complete renovation that may not allow you even to live in it before some work has taken place. Or it could mean something that requires modernising. That is totally liveable but just needs bringing up to date. Or if any of those are not an option then you need to specify that you want something that is done and ready. 

What you will find is that there will be a range of properties available. Ranging from the derelict to the pristine. You need to decide where your cut off point would be. The less work that needs doing, the more money you will pay upfront for the privilege. But there are other factors to consider. Things like whether you have the time, patience and funds in place to carry out any necessary work. Again it’s about asking how far you will go for the right place and communicating that to your agents. 

Have you got the financials in place?

The big money question is whether or not you have the finances in place to go ahead with a sale. Mostly this tends to be an agreed mortgage in principal, and your deposit saved up and ready. It’s a good idea to know all of this and have it in place before you begin your search. It will determine your budget and what you have to spend. However, it also means that if you do see something that will cost that bit more you can easily go back and ask whether or not you can stretch to it. 


Use your head as well as your heart

It is so easy to get drawn into the emotional side of things when it comes to buying a property. But this is where you have to reign yourself back a little. While the emotion will always determine whether or not you love a place or hate it. Your head will be able to tell you whether or not it’s the right decision or the wrong one. It can be easy to fall in love with a quaint cottage with a rose garden. But if it needs more money than you have spent on it then it won’t be the right place for you. 

Listening to both will be conflicting at times, which is why buying a new home will never be a snap decision you make. There are a lot of factors to consider. Some sensible and some emotional. But they are equally important to the decision making process. You also have to consider the other parties involved. You partner, or kids, for example. Will they like it, do they love it? Will they live there?

Be aware that the home search can take longer than you think

Searching for a new home can take longer than you think. It is very evident that it is rare to buy the first house you see. Unless you are lucky enough that it happens to tick every box. It may, at times, become a little soul destroying seeing place after place and none of them being quite right. But patience is important when it comes to buying a home. What you have to remember is that you are spending a lot of money. This place has to be right, the location, the type of property. It all has to work for you and anyone else involved. 

Try and enjoy the process and learn where you can. You will find that each viewing gets easier, that you know what you are looking out for. You will certainly refine exactly what you want as time goes on. It may take longer than you want it to, but it will be worth it in the end. 

I hope this helps you if you find yourself in the buying process. Keeping a level head throughout it all will be important. But making sure you are clear on what you want from the start will be the best thing you can do.

source: 20smoney.com

Understanding Settlement Statements: How to Decipher Yours Before Closing on Your Home

One of the most important documents you’ll receive as you draw closer to closing on your new home is called Good Faith Estimate, which is a precursor to the settlement statement that defines the financing of your home closing. This detailed piece of paperwork may seem like it needs its own decoder ring to understand, but you can use this simple guide to understand your Good Faith Estimate.

 Property Information

When you receive your Good Faith Estimate, double-check that the information about your new home is accurate, including the address, purchaser name and date. The date is especially important because estimates of the closing costs like interest and taxes can vary based on this date.

The other important date to review is the deadline to lock in the offered interest rate. Your lender may require you to pay a fee to lock in that interest rate and may also requires you to close the loan by another deadline to guarantee that rate.

Costs and More Costs

While applying for your mortgage, you probably discussed potential monthly costs with your broker. Under the “Summary of Your Loan” area, actual interest and recurring costs are further defined. Verify whether your interest rate can change over time or if you will face any penalty for making early payments. In this area, you’ll also learn if your mortgage lender will require you to pay a portion of your homeowners insurance and property tax every month with your housing payment — called escrow charges — or if you can independently pay these charges.

Origination Charges

Your mortgage company may charge you fees for originating a loan on your behalf, including fees to lock in rates or process your paperwork. Some of those fees may be collected up front, while others are included in your closing costs. You may also agree to pay additional charges called “points” to lower your interest rate. Your mortgage company may provide several rates: in general, lower rates cost more to lock in at closing, while higher rates reduce your closing costs.

Settlement Charges

Settlement charges often include

    Surveyor fees
    Legal recording fees
    Title fees
    Prepaid insurance and taxes
    Appraisal fees
    Credit report fees
    Courier fees
    Attorney fees

An estimate of these fees will be included under your settlement charges. As a buyer, you can request that the seller pay certain fees entirely or that they pay a percentage of the total settlement cost as part of your price negotiation.

Homework

On the final page of your Good Faith Estimate, you’ll have room to do more homework. Although you may have talked to only one lender, you can still investigate other interest rates or options. Take the time to go through these numbers. Refinancing can be expensive and time consuming, so locking in the loan with the best available rate and lost costs can save time and money in the long run.

Now that you better understand your Good Faith Estimate, you will be well prepared to review your HUD Settlement Statement at closing and know what fees and costs you will bear.

source: totalmortgage.com

What’s Your Outlook on the Real Estate Market?

So here’s a true story. Yesterday, a good friend of mine asked the following question via text message: “What’s your outlook on the real estate market…we are looking to buy a place soon.”

That’s the exact message he sent over last night; there weren’t any emoticons by the way, sadly.

I saw the message but did my best to avoid answering it for about half an hour. Then I finally cracked and responded with the following:

“In a word, overpriced. But if you really want to buy a home that’s your deal. It’s not always about the investment.”



Now in the past I may have just left it at “overpriced,” but I’ve learned that such remarks are often met with resistance. I also don’t want to ruin anyone’s grand plans.

And it’s true, buying a home isn’t just about the investment. It’s not simply about timing the market and making a killer profit, that is, unless you’re a real estate investor.

For most people it’s a home. It’s a place to live. There are reasons to buy other than turning a profit.
So my outlook has changed, or perhaps broadened, to include benefits beyond making money.

But my point was basically that it’s not an ideal time to buy in terms of investment, but it could be a great time to buy a home if there’s one you really like and want to own.

At the end of the day, if he gets the home he wants, he’ll probably be happy, even if it doesn’t double in value in five years. Even if it flat lines or drops, he’ll probably still be happy if he truly loves the home.

And over time, he’ll surely build equity and come out ahead as home prices reach new heights.


National Median Sales Price Reaches All-Time High


Yesterday, the National Association of Realtors reported that the national median sales price reached an all-time high.

The price of a median existing home climbed to $236,400 in June, a 6.5% increase from a year earlier, enough to surpass the previous peak median sales price reached in July 2006 ($230,400).

For the record, the median sales price has increased year-over-year for 40 consecutive months, so yes, home prices have been on a tear.

Home sales have also been white-hot, with existing sales hitting their highest level in over eight years (February 2007).

Properties are also being scooped up faster than ever, with the average time on market only 34 days in June, down from 40 days in May, making it the shortest amount of time since NAR began tracking in 2011.

I also got word from a real estate agent friend that new home sales are picking up again. Recently, builders were offering discounts, but now that inventory is so low, they’re increasing prices and slashing discounts.

This is basically a testament to the supply/demand imbalance that is causing home prices to keep rising, and making bidding wars a common situation.

It’s for these reasons that I don’t love the current market as a buyer. At the same time, selling isn’t ideal either because there’s a good chance home prices will continue to increase.

In fact, if you look at real prices adjusted for inflation, home prices aren’t really at new all-time highs. In today’s dollars, the median would have to be closer to $260,000.

So buying because you love a home still makes sense today, as it always will. And you’ll probably do just fine if you can afford the home and stay in it for several years.

But if I had to take a side, I’d say that home prices are bloated and the competition is fierce. That certainly makes it a lot less attractive to buy today than in the very recent past. I’m taking a wait and see approach.

source: thetruthaboutmortgage.com

6 Reasons Your Mortgage Was Rejected

You might be eager to jump into homeownership. Unfortunately, several things can derail a home purchase.

A mortgage rejection is frustrating and discouraging, but it doesn’t mean you’ll never be able to buy your own place. Here’s a look at six of the biggest threats to homeownership.

1. Co-Signing loans

Whether it’s your child, your sibling or your best friend, cosigning a car loan, a student loan or any other loan for another person can threaten homeownership. This is because the loan shows up on your credit report and you’re listed as a joint borrower.

Understandably, you’re not the primary account holder. However, you are held responsible for the loan if the primary borrower defaults. Cosigning a loan increases your debt-to-income ratio, and unfortunately, the more debt you have in your name, the less you’re able to borrow when buying a home. And sometimes, cosigning a loan can push your debt-to-income ratio over the limit allowed by a mortgage lender, which means you’re unable to get a mortgage until this debt is no longer in your name.

2. Job hopping

You might be a free spirit who

3. Not having a large enough savings account

Nowadays, lenders don’t only ask to see paycheck stubs and tax returns. They also request bank account statements. They’ll look at your savings accounts and other assets to see whether you have enough funds for a down payment and closing costs. And unfortunately, if you don’t have a sizable savings account, a lender might reject your application until you’re able to build your fund.

4. Not enough credit activity

If you get a credit card to build your credit history, make sure the bank issuing your card reports to the credit bureaus on a regular basis. When applying for a mortgage, the bank will check your credit history. And if you have non-existent credit, this can be just as damaging as having bad credit. Before applying for a credit card or any line of credit, speak with creditors and make sure they’ll report your credit activity to the bureaus every single month.

5. Credit report mistakes

The worst thing you can do is fully trust your creditors to report accurate information on your credit report. Creditors make mistakes, and sometimes they report a late payment or a collection account in error. So you need to check your own credit report at least once a year for accuracy.

If you notice an error, contact your creditor immediately to resolve the issue, or file a complaint with the credit bureaus. Credit report errors can reduce your credit score. And depending on the severity of an error, your credit score might be too low to qualify for a mortgage.

6. Poor credit habits

Mortgage lenders have relaxed their guidelines, and you can get a conventional mortgage with a credit score as low as 620 and an FHA mortgage with a credit score as low as 500. But although lenders have lowered their credit score requirements, your recent credit activity must be positive. For that matter, some banks will reject your mortgage application if you have more than one or two late payments in the past 12 months.

The Bottom Line?

Buying a home is a major accomplishment. Instead of wasting money on rent every month, you can start building equity and increasing your net worth. However, several things can put the brakes on buying a house. If you can identify potential threats to homeownership, it’ll be easier to make decisions that will help you reach your goal.

loves to change jobs every six months to 12 months. But unfortunately, job hopping is a sign of instability. And from a lender’s viewpoint, you’re not stable enough to buy a home. Lenders want to see steady income and employment. Ideally, you should stick with the same employer for at least 24 months before applying for a mortgage. If you must switch jobs, remain in the same field. Additionally, your new income must remain the same or increase.

source: totalmortgage.com

Credit Card Mistakes That Can Keep You From Getting a Mortgage

If you’ve worked consistently for the past two years, and you’ve been saving your pennies for a downpayment and closing costs, you may feel nothing can stand in your way of qualifying for a mortgage. And in all likelihood, you’re the ideal candidate.

However, what you may not realize is that certain credit card habits can stop a mortgage approval in its tracks. Not to say you can’t get a loan, but a bank may hold off approving your application until you get a handle on your credit cards. Here’s a look at five credit card mistakes that hurt your chances of buying a home.

1. Maxing out your credit cards

Unfortunately, making minimum credit card payments might not be enough to qualify for a mortgage loan. The lender looks at your entire credit history, and if you have maxed out credit cards, this raises your debt-to-income ratio and impacts whether you’re able to qualify for a mortgage, or how much you receive from a bank.

Basically, the bank calculates the percentage of your monthly debt payments and compares this figure with your gross income. If your credit card payments are higher due to maxed out accounts, your debt-to-income ratio may exceed what’s allowed by the lender, and the bank may not approve your application until you’ve paid off some of your accounts.

To avoid this problem, pay off credit cards every month, and make sure your balances do not exceed 30 percent of your credit line.

2. Past due accounts
You credit history might be stellar today, but if any credit card accounts have been 30 days or more late in the past 12 months, a mortgage lender may not approve your application at this time. It only takes one or two recent delinquent accounts to delay a home purchase.

Lenders are cracking down on late payments, and they typically allow no more than one or two 30-day late payments in a 12 to 24-month period (based on the type of mortgage).

3. Closing credit card accounts

If you’re weaning yourself off credit cards, you might close accounts to avoid additional debt. In hindsight, this is a good plan. But unfortunately, closing a credit card account can increase your credit utilization ratio, which can also drive down your credit score.

Credit utilization ratio is your total available credit in relation to your total credit lines. Let’s say you have two credit cards each with a $1,000 credit line (a total credit line of $2,000). One credit card has a $1,000 balance, and the other card has a zero balance. In this case, your credit utilization ratio is 50 percent, since you’re using half your total available credit.

In an effort to control spending, you might decide to close the account with a zero balance. Unfortunately, closing this credit card account increases your credit utilization from 50 percent to 100 percent — in other words, you’re now using 100 percent of your available credit, and your credit score will suffer as a result. The way credit scoring models work, the wider the gap between your balances and available credit, the better. Even if you decide not to use a credit card, it’s often better to keep accounts open.

4. Applying for too many accounts

Applying for too many credit cards doesn’t look good from a lender’s standpoint. When lenders check your credit history, the bank also looks at your number of recent credit inquiries. If you’ve applied for multiple credit cards in the span of just a couple of months, the bank may think you’re experiencing some type of financial hardship and in desperate need of credit.

Plus, each inquiry can reduce your credit score by approximately two to five points and they stay on your credit report for two years.

5. Being an authorized user

As an authorized user, you have permission to use another person’s credit card. The problem is that this credit account also appears on your credit report. Any action by the primary accountholder person—whether good or bad—affects your credit.

So, if the primary account holder pays the statement late or maxes out this credit card, this can hurt your credit score and make it harder to qualify for a mortgage. If you’re thinking about purchasing a house, request to have your name taken off any accounts where you’re an authorized user. Unfortunately, this doesn’t work if you’re a joint owner on the account.

The Bottom Line?

Buying a home is a big step. If you’ve spent years preparing for this move, don’t let bad credit card habits wreck your dream. If you use credit wisely and avoid maxing out your accounts, you’ll have a better chance of qualifying for a mortgage.

source: totalmortgage.com

5 Things Every Renter Should Know Before Buying

Buying a home can be financially rewarding, but it also has its challenges. Many renters can’t wait for the day when they’re able to get the keys to their own house. Ownership can provide a sense of stability, giving you full control to decorate and remodel as you like. But before buying, it’s important to know exactly what you’re getting into. Some people start the homebuying process with rose-colored glasses, or they feel the experience will be far better than renting—and sometimes, it is. At the same time, you need to be realistic and understand that buying might be more expensive and time-consuming than renting.

1. Profits aren’t guaranteed

Some people buy a home because they’re tired of wasting money on rent. Rather than put money in a landlord’s hand each month, they purchase a home to build their own net worth. Unfortunately, there’s no guarantee that buying a home will be financially beneficial.

If you purchase at the right time, your property may appreciate a little each year, which increases your equity, and you can earn a profit when you’re ready to sell. But sometimes, home prices go backwards. Rather than appreciate, property values depreciate. In a bad market, you could end up owing more than you paid for the house. And if you sell before home prices recover, you can lose money and pay out-of-pocket to sell the property.

2. Maintaining a yard takes time and money

If you lived in an apartment before buying a house, your landlord’s maintenance department likely handled the landscaping. As a homeowner, you’re responsible for your exterior, which involves mowing your lawn, pulling weeds, seeding, and fertilizing. Maybe you always dreamed of having a beautifully landscaped yard, but it takes money to maintain an outdoor masterpiece. You’ll also sacrifice your free time. According to the Bureau of Labor Statistics, the average American spends about 1 1/2 hours a week maintaining their lawns and gardens — but as a newbie, it might take you longer.

3. You might pay more for utilities

If you’re moving from an apartment to a single-family home, anticipate an increase in monthly utilities. The amount you pay for electricity depends largely on the size of the property. And if your apartment was smaller than your new home, you can realistically pay an extra $20-$30 every month. You’ll also pay more for utilities if your new home has natural gas, whereas your apartment was electric. Plus, homeownership means paying your own water and sanitation bills.

4. Your mortgage may slightly increase from year to year

Some people purchase a home because they’re tired of yearly rent increases. However, just because you buy a home with a fixed-rate mortgage doesn’t mean your mortgage payment will never change. Your property taxes can increase, which can increase the monthly payment a little each year, and if you file a claim with your homeowner’s insurance, your agency may raise your rate. Since both of these expenses are included in your mortgage payment, any increase or decrease affects your monthly payment.

5. Homeownership can slow your savings efforts

Saving money might be a priority, just know that buying a house can slow your efforts. Ownership can be financially beneficial in the long run, but in the beginning, you’ll drain your savings account buying the property, plus there’s ongoing repairs and maintenance which can cut into your disposable income.

If you’re ready to own your own place, buying can be rewarding and satisfying, but there are things you should know before you even think about starting the process. If you know what you’re getting into, you won’t have unrealistic expectations or be caught off guard.

source: totalmortgage.com

How to Keep Moving Costs Low

Buying a new house usually means spending a lot, and not just on a down payment and closing fees. Moving the contents of your live from one place to another can get expensive, especially if you don’t know where to start. If you need to move on the cheap, consider these tips:

Plan ahead. This is just common sense. There’s a reason last minute costs are always the most expensive. When you wait until days before the move to call a moving company, not only are you missing out on an opportunity to gather quotes, you can end up paying a premium for speed.

Do it yourself. This is always an option, and depending on your individual situation, it may even make more sense than hiring movers. If you’re moving a short distance or with limited belongings, odds are you can manage it on your own for a reasonable price. Try taking it in stages, and remember to be gracious to the friends and family members who pitch in.

If you’re on the fence about moving on your own, there are also some middle ground options, where you pack yourself, and a service or movers ship your belongings to your new location. This is where all that planning comes in handy.

Avoid high moving season. If doing it yourself isn’t an option thanks to a cross-country move or a tight deadline, there are still some things you can do to minimize costs. Waiting to move the bulk of your possessions until fall and winter can make a big difference, for instance. Because these seasons are slow for movers, many companies cut rates, giving you the chance to save. Some moving services are also willing to haggle with you, especially in the off season.

Check for free packing materials. If you’ve ever worked retail, then you know just how many cardboard boxes get broken down and trashed (or recycled) daily. Many stores will have no problem unloading their unneeded boxes on you. One of the best places to ask? The liquor store. Their boxes have to be extra strong to carry glass bottles.

Sell, give away, or pitch everything you can. There’s no sense in paying to pack or move something (especially a large something) that you don’t need, or may not even like.  Moving is the perfect time to turn a critical eye to your junk drawers and closets with that old rule of thumb in mind—if you haven’t used it, worn it, or needed it in over a year, you might as well get rid of it.

Some even advocate selling everything. That’s not quite as crazy as it might sound—it allows you to make money off the things you don’t like anymore or need and save on moving so you can buy what suits you in your new place.

source: totalmortgage.com

Five Reasons to Buy a House Right Now

You might go back and forth on whether to buy a house. However, if you’ve been on the fence for years, now might be the right time to purchase.

Buying a home is a huge investment that can pay off in the long run. You can build equity and add to your personal net worth, plus you can enjoy predictable monthly payments and the possibility of living house-payment free in the future.

Since buying a home has become much harder in recent years, some people don’t apply for financing for fear a lender will reject their application. However, given present conditions with the housing and mortgage market, there are five good reasons to buy a house right now.

1. Mortgage Rates are on the Move

About three years ago, mortgage rates hit a new all-time low. They have increased over the past two years, yet still remain relatively low. And since the interest rate plays a role in how much you pay monthly, getting a low-rate mortgage results in a cheaper house payment and increases purchasing power. However, rates won’t remain low forever.

Some money experts predict mortgage rates will continue to increase throughout 2015. There’s no way to know exactly how much they will increase, but some experts believe rates will rise to 5.5 percent by the end of 2016.

2. Greater Inventory of Houses for Sale

The demand for housing has calmed down in several housing markets, causing prices to stabilize. And since there’s a greater pool of houses to choose from, it’ll be easier to get what you’re looking for at an affordable price.

“Inventories are at their highest level in over a year,” said Lawrence Yun, Chief Economist at the National Association of Realtors.

Additionally, some markets maintain a steady supply of foreclosures and short sales. These properties often sell below market value, so it’s an opportunity to purchase more house for your money. Just know that it takes longer to close on a foreclosed or short sale property. And in most cases, you’re buying these houses as-is, so be prepared to spend money on improvements or repairs.

3. Home Prices are Starting to Increase

Home price gains have been steady over the past couple of years, but prices are beginning to inch upwards in some areas as the housing market improves. If you’re looking to get in a property while prices are stable and affordable, now’s the time to submit your application. The longer you postpone ownership, the greater the chance homes will appreciate in value, driving up sale prices.

4. Renting Isn’t Getting Any Cheaper

Renting offers flexibility and you’re not responsible for major repairs. However, rent prices aren’t stable. In some areas, renting is more expensive than buying. Take San Francisco for example. According to Realtor.com, the average renter spends approximately 42 percent of their monthly income on rent. And nationwide, rents are rising at about four percent a year.

At this rate, an affordable apartment today might not be so affordable in just a few years. Buying, on the other hand, is the chance to lock in a fixed rate and enjoy predictable payments for the life of the mortgage.

5. Lenders are Softening their Requirements

After 2008, lenders imposed stricter credit requirements for mortgages. Some banks only approved applicants with minimum credit scores of 680 or 700. And unfortunately, this excluded many would-be homebuyers. More recently, some lenders have started relaxing their credit requirements, providing a borrower has sufficient income, a down payment and a cash reserve.

Additionally, a survey conducted by the Federal Reserve in the third quarter of 2014 says, “14 percent of banks reported an easing of mortgage loan standards.” According to the report, “banks are reducing FICO requirements, lowering qualification hurdles and helping more loans get to closing.”

Bottom Line

If buying a home is your goal, don’t give up. It’s not as easy to get your foot in the door nowadays, but it’s possible. The key is education and knowing what to expect from the lending process.

source: totalmortgage.com

Why Close a Mortgage Before the End of the Year?

With End-Of-Yearthe holidays inching closer and the New Year not far behind, you may be thinking it’s too late to close on a new loan by January 1st—or that it’s not worth the hassle during an already hectic time of the year.




There’s still time. Get pre-approved by the end of November, and we’ll close your loan before January 1^st with as little stress as possible, thanks to our 30 Day Purchase Guarantee.* Plus, there are some upsides to getting your loan closed and your new home bought before the year ends:



Tax benefits. This is the big one, the reason most will advise you to close quickly, if you can. Buying a new home entitles you to tax deductions that can save you tons. Here’s a quick rundown: 

• Closing cost deductions let you claim the points or origination fees on your new loan, but it only applies for the year you closed the loan. Close now, or wait a whole year.
• Mortgage deductions allow you to deduct your mortgage interest. This works out well for newer home owners, since early mortgage payments tend to be mostly interest anyway.
• Property taxes are deductible, too. That means that from this point forward, you will be able to claim property taxes on your income tax.

Don’t forget the non-financial positives to closing soon:

Get into your home before the holidays. Okay, so depending on the timing, “getting in” may not be quite the same as being completely unpacked and settled in, but once the keys are in your hand and the boxes have been delivered, the pressure’s officially off. Unpack at your own pace and enjoy the holidays.

It’s only going to get colder. Winter doesn’t officially start until December 21^st, so if you live in a chillier part of the country, you may still have some time to get into your new house before the worst of winter hits and moving turns miserable.

A fresh start in a new home for the New Year. Sure, you could have your fresh start on January 17^th, or 28^th, or even in February, but it’s just not the same as waking up on January 1^st in a new home.

If you’re thinking about taking us up on our offer, take a look at our rates and consider giving us a call or filling out an online form. We’d love to hear from you.

*Terms and conditions apply.

source: totalmortgage.com

Home buying tips for people over 40

LOS ANGELES - It's often the most daunting and emotionally taxing item on one's financial to-do list: Buying a home.

Most people wade into homeownership for the first time in their 20s and early 30s, when they still have the bulk of their working years ahead of them and a long runway to build equity — a key asset for eventually moving up to a bigger home.

But what if you've reached midlife and still envision buying a home one day? Tackling that first home purchase after 40 can be easier in some ways than when you're just staring out in your career, but it also brings its own set of financial factors.


"It's important to consider the financial work you have left," says Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards based in Washington D.C. "The financial hurdles you still have over the rest of your life and how homeownership and debt in particular are going to impact that."

A National Association of Realtors survey of people who bought a home between July 2011 and June 2012 showed that nearly 80 percent of first-time homebuyers were 32 years-old or younger.

In the next age bracket, those age 33-47, 36 percent were first-time buyers; between the ages of 48 to 57, only 19 percent were first-time buyers. The rates of first-time homeownership generally declined as buyers got older, according to the survey, which featured 8,500 respondents.

Even so, the last decade's economic downturn and housing crash has forced many to put off that first home purchase.

Here are some things to consider if you're over 40 and eyeing homeownership:

LENDING RULES DON'T CHANGE FOR OLDER BUYERS

Good news: Being closer to retirement age than someone in their 20s and 30s can't legally be held against you by a lender when they consider you for a home loan, regardless of the loan period.

"So if somebody was to walk in today, and they're 114 years old, and they ask for a 30-year mortgage and qualify for it, we have to give it to them," says Tom Jarboe, regional manager at lender Primary Residential Mortgage Inc.

The decision on whether one qualifies for a loan hinges on the borrower's income, assets, credit history and other factors.

Banks generally look back two years to establish a borrower's income history and also look to evaluate the likelihood that the borrower will continue to make the same level of income for at least another three years.

If you're in your late 50s or early 60s and disclose that you're planning to retire within three years, a lender will evaluate your projected earnings from Social Security, retirement accounts, dividends on investments and other sources.

CONSIDER BENEFITS OF PAYING OFF LOAN

Most banks operate under the assumption that even a 30-year fixed mortgage will be swapped out for another loan within eight years, if not sooner. That's because many homebuyers often end up refinancing, or moving for work or due to family considerations.

But paying off a home and owning it free and clear by the time one retires is a smart play, particularly as the cost of housing is a significant expense for a person relying on a fixed income.

That can be tougher for someone who puts off that first home purchase two decades into their prime working years, assuming they haven't saved up money to make a hefty down payment — think at least 30 percent.

But it's doable.

Blayney recommends that even older borrowers who take on a 30-year mortgage take steps to pay off the loan or lower the monthly payment significantly by the time they retire.

That could mean making extra payments during the early years of the loan, or putting up more than the minimum down payment so the borrower is financing a smaller amount. A 15-year mortgage, which typically translates into lower interest, but higher monthly payments, is another route to a quicker loan payoff.

LOOK INTO FIRST-TIME BUYER ASSISTANCE

One of the biggest obstacles to homeownership is coming up with a down payment to qualify for a loan.

Federal and state housing agencies offer assistance for first-time homebuyers, including in many cases former homeowners who haven't owned a home for at least three years. You can find a list of some programs by state at www.hud.gov .

Remember though, while some loan programs allow homebuyers to make a down payment of as little as 3.5 percent of the purchase price, experts say you'll need to save enough for at least a 20 percent down payment in order to get the lowest interest rate and avoid having to pay private mortgage insurance, or PMI.

And they can come with hefty fees and restrictions.

ASK YOURSELF IF THIS IS THE RIGHT TIME TO BUY?

You may want to own a home, but are you financially ready to take on the financial commitment that comes with a home loan?

Experts recommend borrowers consider the implications of buying a home in their later years, as well as taking on a large loan

"This isn't the situation where if you happen to time your purchase incorrectly when you're 25 and you buy at the top of the market, you still have most of your life left to recover financially," says Rick Sharga, executive vice president at home auction site Auction.com.

CONSULT WITH A FINANCIAL PLANNER

Buying a home in midlife or beyond has direct implications on retirement.

Homeownership can bring stability to one's monthly housing costs, versus rental housing, as well as tax benefits, but it also carries with it a trove of costs, including property taxes, insurance and maintenance.

A good way to evaluate all the ways buying a home, whether in cash or through financing, will affect one's retirement finances is to enlist a financial planner to go over one's retirement goals.

"You have to sharpen your pencil, sit down and do all the math," Blayney says. "There's no one answer."

source: newsday.com