5 STAR LOAN

Our Home Loan Guide

Thinking about buying, selling or refinancing a home? Start here for answers to common questions, helpful tips and online calculators to help you navigate the journey ahead.

Buying A Home

Am I ready for home ownership? Learn more on how to prepare yourself for it.

A soft real estate market that is ripe with all the conditions that should entice people to purchase a home still has some renters asking, “Why own my own home?”

Low interest rates, lower home prices and an improving job market still have some buyers sitting on the fence fearful of an uncertain real estate market. Real estate agents and even sellers are finding that prospective buyers (current renters) may need a little more “emotional” attention in these market conditions. They may need a little more explanation to ensure that they understand the benefits of purchasing your home rather than renting another.

While deciding to own a home or rent one is very personal, many tend to let fear of the unknown be the driving force in making their decision and that can later create an unhappy decision.

Here are five top reasons to at least consider owning your own home.

 

  1. No more landlords: This may be a highly influential factor depending on a potential buyer’s experiences. Many renters have poured a ton of money into a home that they’re living in to keep it at the standard of living they enjoy, only to find that their landlord is soon planning to sell the home. Their hard-earned cash and money invested into their rented home will then only benefit the seller.
  2. Making a home your style: This is much more difficult to do in a rental. Yes, as I just mentioned, you can make some modifications, but many things that can be done to a home you own can’t be done to one you’re renting. Taking into consideration Homeowner’s Associations or planned community development restrictions, owning still provides more control and flexibility over renting.
  3. Weighing the costs of homeownership: Of course, with homeownership you won’t be calling the landlord to come fix your toilet or dishwasher. So, having a financial reserve is important to carry you through the months when you run into unexpected troubles. Websites such as GinnieMae.gov offer price charts that help you compare how much you’ll save by buying or renting. It’s a helpful tool that allows you to analyze factors such as how much tax savings you’re likely to receive, how much possibly equity you’ll gain, and how much your rent may increase.
  4. Long-term plans tilt the scale toward owning: In a recent Tampa Bay article, Walter Molony of the National Association of Realtors said, “For people with long-term plans, the rent vs. buy equation is tilting heavily toward buying because housing affordability is at record highs dating back to 1970,” he explains. “Homes are undervalued in many areas—selling for less than the cost of replacement construction—and rents are rising at a faster pace. Many people are considering ownership now as a hedge against inflation.”
  5. Low interest rates and affordable homes will not last forever: If you’re not ready to buy or simply can’t afford to own a home, even the historically low interest rates and exceedingly affordable, home prices might not move you to take the leap into homeownership. However, understanding that these conditions won’t last forever is important. Sometimes when conditions persist, we tend to think they’ll always be this way.

Distressed sales will begin falling in 2013 and that would then cause home prices to creep upward, predicts Moody’s Analytics. With little activity on the homebuilding front, and still a heavy supply, it’s not expected to increase much more. Also, the number of new households each year is rising, which is expected to help alleviate the oversupply in the coming years.

by Phoebe Chongchua

If you are ready to buy your first house, congratulations! This is an exciting time that can bring you sweet rewards. It’s also a time, however full of questions. Here are a few do’s and don’t to get you started.

Before you shop, you must decide what type of home is best. Are you looking for a condo, with a strong sense of community, extra amenities, easy maintenance, and willing to pay a monthly HOA fee? Would you prefer a larger house in the suburbs, even if it means a longer commute? Are you looking for older charm or newer construction?

After you’ve decided this, write down a list of your wants and needs. This is a time to be honest with yourself. Rarely does a homebuyer get everything they “want” in a home. You will need to compromise. For example, you may need 3 bedrooms, but want a fenced backyard. If push comes to shove, you may have to forgo the fenced yard to get the bedrooms.

When you begin to shop, have a budget in mind. While prices are always negotiable, you don’t want to waste your or a seller’s time. Be realistic about a home’s price. Let your real estate agent compile a list of homes to visit that fit your criteria, as well as your budget. As you make your way to and through the homes, be sure you don’t judge a home until you’ve been through the entire place. There are homes that seriously lack curb appeal, but with a few cosmetic enhancements can be real show-stoppers.

Pay close attention to what repairs the home may need. Don’t get swept up by fantastic staging. Keep your list of criteria in mind the entire shopping process.

Once you have decided on a home, it is time to begin negotiations. Do not hesitate. Desirable homes don’t sit on the market for long. Hesitation may translate into missing out on a property that you really love. That said, you must be confident with your decision. This is not a time to buy a house simply because you feel pressured.

Your agent will help you put in an offer. By researching area comparables (that’s other homes that have sold or are selling in the area), they can come up with a reasonable amount to pay. How much are you willing to pay for this home? Set a top number in your mind and don’t let emotion push you to buy past your budget. And leave room in your coffers for closing costs, a down payment, initial repairs, as well as a home inspection.

Home buying can be a stressful process, but keep the end goal in sight and you’ll do great!

By Carla Hill

It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices.

Here are 10 steps that buyers can take to make home dreams a reality!

  1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a down payment and closing costs.

  2. Down payment options. Do you qualify for down payment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a down payment gift? Many financial experts recommend a down payment of 20 percent, so be sure to explore your options!

  3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

  4. Get Prequalified. It’s time to talk to a lender! Pre-qualification will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?

  5. Get Preapproved. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are preapproved.

  6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

  7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from “must have 3 bedrooms” to “hardwoods” or “granite”.

  8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.

  9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

  10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you’ll be in good company.

by Carla Hill

Few things strike more fear into the hearts of people than setting up a budget. We all know we need one, a few of us actually have one, and fewer still manage to live within it. Why is it so intimidating?

Maybe it seems like such an overwhelming task that you don’t even want to start thinking about it. Maybe you don’t actually know where to start. Maybe you think that it will require hours and hours to do.

Maybe you’re afraid of your money; after all, it seems to pretty much rule your life-you may get up thinking about it and go to bed thinking about it. Whatever your reason, now is the time to start!

Step 1: Where to Start

There are two essential things that you need to know when preparing a budget: what comes in and what goes out. Now that’s an oversimplification, of course, but that’s all a budget is-income and expenses.

Start by assembling past paycheck stubs, dividend receipts, etc., to determine your income. A survey of the previous three months is usually good enough to establish this.

Next assemble two to three months worth of expenses. Get all of your bills together, your checkbook register, receipts, etc.

Step 2: Determine the Time Frame

Decide if you want to budget weekly, by the paycheck, monthly, quarterly, etc. How often you get paid may heavily influence this decision. Most people just budget by the month. Remember that you may have some expenses that happen quarterly, semi-annually, or even annually, things like insurance or car registration. You’ll need to plan accordingly (see Step 5).

Step 3: Choose a Tracking Method

Choose a method for tracking expenses (and income, if desired). Simple Joe offers the Expense Tracker PC software as an easy and user-friendly way to track expenses (see http://www.simplejoe.com/expensetracker/index.htm).

Quicken and MS Money are also good tools if you are pretty computer literate. You can also set up a spreadsheet program, if that’s something you enjoy doing.

You can even use good old pencil and paper. Do whatever will be easiest for you to maintain.

Step 4: Establish Categories

Select categories that fit your needs. Some people like just a few categories, some use a multitude of categories, others use subcategories. It really depends on how detail-oriented you want to be. General categories might include: auto, house, food, medical, insurance, utilities, etc. Specific categories (usually best as subcategories) could include: auto-insurance, fuel, maintenance; food-groceries, takeout, dining out; etc. You can always add or remove categories or subcategories later.

Step 5: Establish Spending Amounts

Review the income and expenses that you gathered. Put the expenses into the categories you have established so you can see where you’ve been spending. Total them and compare them to your income. How have you been doing? If you’re overspending, determine where you can cut.

Establish new budget amounts for the time period you have chosen based on past expenses. Remember also to budget for quarterly, semi-annual, or annual expenses. (Example: you pay your car insurance every 6 months; divide that payment by 6 and budget that amount every month; put it aside where it won’t be spent!)

Try to be flexible in your budgeting. Budgeting every last penny you earn may not be the best course because there are always unpredictable expenses that pop up. Be sure to budget some savings, even if all you can save is $5 a month. It’s great to get into the habit of paying yourself first.

Step 6: Track Your Income And Expenses

Whether it’s daily or weekly, or just every few days, you need sit down and enter your expenses into your tracking method. If you put it off too long it will become too overwhelming and you’ll give up.

Devoting just a few minutes a day is a lot better than three hours at the end of the month! Keeping close track of your expenses will also help you to stay in line with your budget. You’ll be more aware of your money and more careful not to spend what you don’t have.

Remember to collect receipts for everything, especially things you buy with cash. This will make tracking a lot easier. If a receipt has purchases that fall into more than one category, divide them up accordingly.

Step 7: Revisit the Budget Often

Revisit your budget periodically. Review your expenses. See what’s working and what isn’t. Rework the numbers as necessary. If you are single, this should be pretty easy. However, if you are married, you may have one or two incomes in your household; both people should know where the money is going, regardless of who is earning it.

Finally, remember that budgets are not set in stone. You are in control, not your money. Make it a goal to live within your budget. You can do it!

Have you ever wondered what makes up your credit score? The three major credit reporting agencies, Experian, TransUnion, and Equifax, use a number of factors to calculate your score.

Credit scores range from 300 to 850 and are a buyer’s key to attaining loans. From cars and homes to everything in-between, if you need a loan, you need good credit. The way it works is simple. A high score is a door to lower interest rates and larger sums of credit. The higher your score, the less of a risk your pose to a lender, and therefore the more likely they’ll be to approve you for a loan.

The score is compiled by analyzing the following:

1. Length of Credit History

The longer you’ve had credit the better. The agencies will be looking at the time that’s passed since accounts were opened, the time since account activity, and then the time passed since accounts were opened based on what type of accounts (myfico.com).

2. Payment history

Do you make your payments on time? Have you missed payments or filed for bankruptcy? If you’ve defaulted on an obligation, your credit score will drop. On the other hand, if you pay faithfully each month, your credit score will rise to reflect it!

3. Percent of Credit Used

Think of it this way. You have two lines of credit open with credit limits of $5,000 each. That means you are able to use a total of $10,000. If you have a $2,000 balance on one card and $3,000 on the other, you are using 50 percent of your available credit. The smaller percentage you are using the better. Fifty-percent is very high.

Many people ask if they should close an unused card. If you are paying monthly or yearly usage fees to the credit card company for a dormant card — then the answer is probably yes. But keep in mind, if you close one of those $5,000 credit limit cards, your new credit limit is just $5,000. If you now are using $3,000 of your $5,000 limit, you are using 60 percent of your available credit. This is bad news for your score.

And on top of this, how much do you owe total? If you are carrying a large amount of debt, banks and lenders may see you as at risk for default. This means no new loan for you.

4. New Credit

Have you recently opened several new accounts? This is a red flag of risk to lenders. They’ll wonder if you’re on a spending spree and about what other lines of credit you’ll be opening alongside theirs.

5. Types of credit

According to some experts, it is good to have more than one type of credit open. This means to have some credit cards, a mortgage, and installment loans.

6. Settlements

Did you default on a loan? Have you filed for bankruptcy or foreclosure? Did you reach a settlement with a credit card company? These factors will lower your score dramatically, as they show you are a risky borrower.

7. Errors

From identity theft to clerical errors in reporting, mistakes on your report can cost you. You are allowed to view your report three times a year at www.annualcreditreport.com. Check it often to ensure accuracy.

Will a low score haunt you forever? Have no fear, your credit score changes over time. It will rise if you are a responsible spender and make your payments on time. Your credit score truthfully reflects your credit history. So, the power to change it is in your hands.

Find home advice and tips to make your house hunting a success.

If you are in the market to buy your first home, you may have already realized that the process involves many different levels of knowledge and understanding. Chances are many steps of the process are completely foreign to you.

By arming yourself with an arsenal of important questions, as well as with a team of professionals, you are sure to avoid some of the most common first-time homebuyer mistakes.

1. Hire the Right Agent

Personalities and experience levels range greatly, just as with any profession. Consider interviewing several local agents before deciding on which one to hire. Do you want a new agent who is sweet, patient, and ready to answer lots of questions? Or would you prefer a seasoned agent who gets you the best deal, but has less than stellar people skills? The choice is entirely yours, neither one being better than the other, but will make a big difference on how you feel about the process.

2. Ask Your Lender Questions

It’s important to be sure you understand exactly what your mortgage will entail, so feel free to ask the questions that come to mind. Be sure to compare rates with other lenders to be sure you are getting the best rate.

3. Be Ready To Act

In many markets, highly desirable areas come with a large amount of competition. Many buyers may be looking at the same homes as you. If you hesitate, you may very well lose out on your dream home. The best advice? Don’t begin the process of viewing homes unless you are really ready to buy.

4. Think Long Term

You love the house, and you can deal with the small bedrooms and laundry room in the garage, but will the next set of buyers? If you are planning on selling the home in the next few years, you must remember to consider the resale value of a home. Is this neighborhood appreciating quickly, or are homes losing value?

5. Be Competitive

We all want to buy a home for the best bargain price possible, but a careful consideration is respecting the seller. You may view a low ball offer as a starting point, but a seller may view it as an insult and refuse to answer your offer. If you really want a home, be reasonable with your starting bid.

Use these simple tips to avoid some of the most common buyer mistakes!

Low interest rates, lower home prices and an improving job market still have some buyers sitting on the fence fearful of an uncertain real estate market. Real estate agents and even sellers are finding that prospective buyers (current renters) may need a little more “emotional” attention in these market conditions. They may need a little more explanation to ensure that they understand the benefits of purchasing your home rather than renting another.

While deciding to own a home or rent one is very personal, many tend to let fear of the unknown be the driving force in making their decision and that can later create an unhappy decision.

Here are five top reasons to at least consider owning your own home.
  1. No more landlords: This may be a highly influential factor depending on a potential buyer’s experiences. Many renters have poured a ton of money into a home that they’re living in to keep it at the standard of living they enjoy, only to find that their landlord is soon planning to sell the home. Their hard-earned cash and money invested into their rented home will then only benefit the seller.
  2. Making a home your style: This is much more difficult to do in a rental. Yes, as I just mentioned, you can make some modifications, but many things that can be done to a home you own can’t be done to one you’re renting. Taking into consideration Homeowner’s Associations or planned community development restrictions, owning still provides more control and flexibility over renting.
  3. Weighing the costs of homeownership: Of course, with homeownership you won’t be calling the landlord to come fix your toilet or dishwasher. So, having a financial reserve is important to carry you through the months when you run into unexpected troubles. Websites such as GinnieMae.gov offer price charts that help you compare how much you’ll save by buying or renting. It’s a helpful tool that allows you to analyze factors such as how much tax savings you’re likely to receive, how much possibly equity you’ll gain, and how much your rent may increase.
  4. Long-term plans tilt the scale toward owning: In a recent Tampa Bay article, Walter Molony of the National Association of Realtors said, “For people with long-term plans, the rent vs. buy equation is tilting heavily toward buying because housing affordability is at record highs dating back to 1970,” he explains. “Homes are undervalued in many areas—selling for less than the cost of replacement construction—and rents are rising at a faster pace. Many people are considering ownership now as a hedge against inflation.”
  5. Low interest rates and affordable homes will not last forever: If you’re not ready to buy or simply can’t afford to own a home, even the historically low interest rates and exceedingly affordable, home prices might not move you to take the leap into homeownership. However, understanding that these conditions won’t last forever is important. Sometimes when conditions persist, we tend to think they’ll always be this way.

Distressed sales will begin falling in 2013 and that would then cause home prices to creep upward, predicts Moody’s Analytics. With little activity on the homebuilding front, and still a heavy supply, it’s not expected to increase much more. Also, the number of new households each year is rising, which is expected to help alleviate the oversupply in the coming years.

by Phoebe Chongchua

There are millions of homes for sale across the country. How do you know which is the right one for you?

The key to getting just the right fit is to develop a wish list. From the lifestyle you want to live to the style of home that best fits your needs, a wish list is a great way for you and your real estate agent to be clear on your objectives.

1. Fixer-upper vs. Move-in ready

Many buyers look at homeownership as a way to make their mark on a property. They are confident in their renovating skills, or are eager to hone them. Part of the appeal may also be that many fixer-upper homes cost considerably less than comparables which are move-in ready. Be sure to sit down and consider what you want homeownership to mean for you.

2. Location

Are you needing to be near public transportation, rail lines, and subways? Keep in mind that in larger metro areas, close proximity to transit can send prices sky high. You’ll also want to think about entertainment, restaurants, and night life. Is it important to be near the hustle and bustle, or away from it?

3. Schools

It’s no secret. The quality of various public and private schools range widely. Be sure to research school districts before starting your home search.

4. Architectural Style

Some people are drawn to the clean lines and light and bright spaces of a modern design, while others enjoy the cozy charm of a Victorian home. Leaf through magazines, do searches online, and read up in architectural books to decide on what style of home best fits your aesthetic.

5. Upgrades

Are you geared towards granite? Do you marvel at marble? There are certain upgrades that buyers covet. Make a list of what upgrades you would most like to see in your dream home. This can include professional-grade appliances, luxury tiles, or energy efficient upgrades.

6. Interior Styling

If you have allergies, wood or tile floors may be a better option over carpeting. And while replacing flooring isn’t a budget breaker for some, it can be for others. Interior stylings can be changed, but time and money are always a factor. By having in mind the type of interior you most desire, you can cut out homes that will be too much work.

7. Great Yard Expectations

For some buyers, the perfect yard is one that requires zero maintenance (hello, condo owners). For others, however, the ideal yard is large, private, and landscaped. Be sure to contemplate on what best fits your lifestyle.

8. Old vs. New

Old homes can carry a lot of charm, but they can also require hefty maintenance. New homes are not maintenance free, but they may come with certain warranties from the builder to protect you for a few years down the road.

9. To Garage or Not Garage

Do you want a detached or attached garage? Detached garages are perfect for homeowners who work on noisy or smelly projects. This way the house maintains a distance. Other buyers prefer to have a warm walk from the kitchen to their car each morning. What works best for your lifestyle?

10. Detached or Attached

Single-family detached, condo, or income property? There are many choices when it comes to homes. Condo owners love the ease and convenience of living in a community with extra amenities. Single-family dwellers love the privacy and space their homes provide. And income property owners love having a renter that helps pay part of their mortgage.

It’s important to remember that chances are you won’t get all of the items on your wish list, but having a solid list written out will help guide you in the right direction during the search for your dream home.

By Carla Hill

“A home is not an island. The surrounding neighborhood is just as important because it can have a big impact on your lifestyle – safety, available amenities, and convenience all play their part” according to the National Association of Realtors (NAR).

NAR also says you can keep your home value buoyed if you find the right neighborhood.

And you can find the right neighborhood by getting information direct from the best sources — rather than from second hand and often incomplete data bases professing to offer you one stop shopping for all your neighborhood checking needs.

  • Make a list of the activities — movies, health clubs, churches — you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you’re considering to engage in your most common activities.

  • Check out the school district. The education department in your town can provide information on test scores, class size, percentage of students who attend college, and special enrichment programs. Even if you don’t have children, a house in a good school district will be easier to sell in the future.

  • Check crime. Ask the police department for neighborhood crime statistics — not only the level of crime, but also the type — burglaries, armed robberies — any trends of increasing or decreasing crime and the location of crime.

  • Look for economic stability. Your local city or county economic development office can tell you if income and property values in a neighborhood are stable, rising or falling, the percentage of homes to apartments. Apartments don’t necessarily diminish value, but they can indicate transient populations. Check for vacant or blighted businesses or homes.

  • Consider resale value. A local real estate agent or trade association can give you information about price trends, inventories, selling times and other information that can indicate how well your home’s value will hold up.

  • Hit the streets. Narrow your focus to several neighborhoods and do a “walk-through” of each. Pick a warm day when people are out and available for chatting. Look for tidy, well maintained homes, quiet streets and other indicators of neighborhood stability.

by Broderick Perkins

The process of buying a home can be overwhelming –  from the growing paperwork to the house-hunting search for a home, buyers sometimes feel a little intimidated.

But today, searching for your perfect home is easier than ever. There are many real estate agents to choose from, a large inventory of homes in many areas, and technology that makes checking out a home as easy as clicking on a few Internet sites. Of course, that’s just for a quick look. Getting in the car with an agent and exploring the properties in person will give you better ideas of what you want and, perhaps more importantly, what you don’t want.

Now, there are even apps designed to help you keep track of the homes you visit. And there are many to choose from. Take for instance, CrumbTracks, a free app designed by a husband-wife team (Bobby and Eileen Beckmann). It’s an iPhone app aimed at helping you stay organized while viewing many different homes. The couple built the app based on their own need to keep information all in one place while house hunting.

“I was looking for an app that would allow me to record things in different homes that I liked and kind of keep a journal,” says Eileen.

The app has four different icons that offer a variety of features to assist you with your real estate search. One is a wish list. It lets buyers create a list of what they’re looking for in a home. They can choose from items on the list or add their own. The design gallery allows the app to take pictures or video of the home and store it in their design gallery.“They can also share their videos… via email,” says Beckmann. My listing allows buyers to store the physical address and its specifics about the home. The fourth section houses a mortgage calculator to help buyers calculate the cost of buying a home.

Because the market for apps can be stiff competition, the couple decided to offer their app for free to gain consumer interest as they continue to enhance it. “We want to try to get some Realtors involved with it,” says Beckmann.

Realtor.com introduced its app, Home Search, earlier this year. The app takes data from about 933 of the nation’s Multiple Listing Services, updating the content rapidly for the app. It allows you to make notes inside the app and even give a home you see a “star rating.” It then saves the home so that you can refer to it again.

Apps have been around for quite a while now; Trulia launched a real estate app back in 2008 and there are so many more today. Do a search, just on the iPhone, and you’ll find plenty.

Beckmann sees the apps as critical to helping with the long, and sometimes tedious, process of finding that perfect home. “It’s nice to be able to have a tool to store information in one spot and communicate it with others,” says Beckmann.

The average house-hunting process takes about 12 weeks and buyers visit sometimes 20 homes or more before deciding which one is “just right”.

Tools and resources for understanding the loan process.

It can be difficult to know where to start when considering buying a home. Last month, we focused on tips for first-time homebuyers, explained how credit works and shared steps for setting budgets. This month, we’ll continue with mortgage basics, dream home wish lists, what you’ll need for a loan application and what documentation to keep after your loan closes. Let’s start with some basic mortgage terms. Mortgage terminology can feel like a foreign language. You may be wondering what “amortization,” “discount points” or “escrow” means.

Points, fees, and adjustable rates. If you are brand new to home buying, then mortgage terminology can be like reading Greek. But as the saying goes, knowledge is power. So use the following glossary of terms to raise your own awareness.

Adjustable Rate

Your interest rate is adjusted periodically, based upon an index.

Amortization

Paying off a debt over time. Part of each payment goes toward the loan principal and part goes toward interest.

Appraisal

The process of developing an opinion of a home’s market value, conducted by a licensed, professional real estate appraiser. Appraisals are used to determine if a home’s sale price (and the borrower’s requested loan amount) are appropriate.

Closing Costs

Expenses over and above the price of the property. Common closing costs can include origination fees, discount points, appraisal fees, title insurance, escrow fees and mortgage insurance.

Closing Disclosure

A Closing Disclosure is a five-page document that includes all final details about your mortgage, including your terms, monthly payments, fees and all other costs. Lenders are required to provide this document three business days before your scheduled loan closing.

Discount Points

Discount points are essentially one-time, pre-paid interest charges on your loan. Each point is equal to 1% of the total loan amount. Discount points can reduce your final interest rate and are tax deductible.

Down Payment

A portion of your total home cost that is paid up-front. A larger down payment can result in a smaller monthly payment and a lower principal balance.

Escrow

Your earnest money deposit is held in what’s known as an escrow account by a third party until the closing of your transaction. While this account is open, the borrower is considered to be in escrow.

Fixed Rate

Your interest rate will remain the same throughout the life of the loan.

Loan Estimate

Lenders are required to provide borrowers with an estimate of the fees that will be due at closing. Lenders must provide this estimate within three days of taking a completed application that includes the proposed property address.

Origination Fee

An origination fee is paid to the lender for the costs of processing the loan.

Refinancing

There may come a time during the life of your loan that you will wish to refinance. Perhaps you want to take advantage of lower interest rates or to consolidate debt. If you are eligible, in good credit standing, and with sufficient equity, you may be able to do just that.

For more information the mortgage process, be sure to talk with a lender or your real estate agent.

Underwriting

This lender process is used to determine how much of a risk you and your mortgage would be to their company. An underwriter will evaluate such things as your credit history, assets, as well as your employment, income and current debts. They’ll also evaluate the value and condition of the purchase property.

5-Star Loan is here to help you be prepared for anything you might encounter during the loan process.

Here’s a list of what to bring when you would like to start your loan.
  • Schedule of real estate owned, including type of property, type of loan, monthly principal and interest, taxes and insurance amounts and rental agreements.

  • If you were a full time student at any time in the past 2 years, please be prepared to verify by diploma or transcripts.

  • If you rent, supply landlord’s name and address (cover a 2 year period).

  • Year-to-date pay stub and W-2 forms for the past 2 years.

  • Self-employed and commissioned borrowers: Signed copies of federal tax returns (all schedules) for the past 2 years and a year-to-date profit and loss statement and balance sheet.

  • Account numbers for each bank account where deposits are held, plus the name, address, and zip code for each depository, and two months bank statements for each account.

  • The name(s) and addresses of present and any previous employers to verify a full 2 years.

  • Sales Contract and a copy of your earnest money check.

One of the first steps to take as a potential home buyer is to get pre-qualified for a loan. This step helps both you and your lender learn just how much home you can afford. And you should begin this process before you even start looking for a home.

According to the Federal Housing Administration (FHA), their pre-qualification essentials include:

  • Having a steady employment history, covering at least two years.

  • Consistent or increasing income over the past two years.

  • Credit report reflecting a good repayment history with creditors.

  • Any bankruptcy must have been discharged at least two years prior (one year for a Chapter 13), with good credit since the discharge.

  • Any foreclosure must have been completed at least three years prior, with good credit since the completion of the foreclosure.

  • Mortgage payment – including taxes, homeowners insurance, mortgage insurance, and HOA dues (if applicable) should be no more than approximately 30% of your total gross monthly income.

  • Total monthly debt payments should not exceed approximately 45% of total gross income.

To determine pre-qualification, mortgage lenders will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.

Why is pre-qualification important?

Pre-qualification for a home loan typically costs you nothing, but gives you a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a downpayment.

During the pre-qualification process, you will be expected to provide the following information:

  • Your gross monthly income

  • Your total monthly payments (car payments, credit cards minimums, child support payments, student loan payments, any other monthly debts)

At the end of closing, a large stack of papers sits in front of you. How do you know which ones to file away for future use?

To make your job of sorting through the papers a little easier, here are a few “be sure to save” items.

  1. Loan Estimate: The initial estimate of the terms and costs of your mortgage loan, provided by the lender.

  2. Closing Disclosure: A five-page form that provides the final details about your mortgage loan, including the loan terms, projected monthly payments, and itemized closing costs.

  3. Note. A written promise to repay a specified amount of money plus interest at a specified rate and length of time.

  4. Deed of Trust/Mortgage (including any riders): The document that secures the Note. The Deed is recorded with the county recorder for the county in which the property is located.

  5. Appraisal. A detailed report providing an estimate of the value of your property.

  6. Purchase Contract. The document containing the final agreed-upon purchase price and terms between buyer and seller.

  7. Homeowners Insurance Policy: Not only does it serve for proof of coverage, but just in the case you need to make a claim, you will have contact and coverage information on hand. 

Be sure to keep all of your paperwork in an organized filing system and in a fire-proof safe.

Refinancing

What to consider when refinancing, is it right for you?

Lower interest rates may be tempting, and as part of a sound financial plan you should consider whether it makes sense to refinance your current mortgage but don’t forget to factor in the costs of the new home loan in your calculations.

 

The costs of the new loan could negate potential savings, particularly if you intend to sell before your monthly savings can make up for the costs of refinancing a home–so it pays to estimate costs and shop carefully before proceeding.

 

Don’t be surprised if your new mortgage carries most of the same costs as your initial purchase mortgage–including an appraisal, processing fees, and other loan closing costs.

 

Some of these costs and fees may include:

 

  • Appraisal fee
  • Land survey fees
  • Attorney’s fees
  • Title search and insurance
  • Points to lower rate
  • Recording fees

 

Closing costs vary city to city but might be 2% to 5% percent of the home’s value. Often, homeowners can wrap their closing costs into the new mortgage, but doing so will increase the loan amount.

 

An Additional consideration for refinancing may include:

 

Early payoff penalties: Some mortgage companies charge a fee if you pay off your current mortgage in full. Check to see if your home loan carries a prepayment penalty before obtaining a mortgage refinance–this could change the calculation.

 

Several factors influence the overall cost of refinancing and how you think about them. When evaluating your application and estimating your fees, the following may be considered:

 

  • The value of your home in today’s real estate market. This will be one of the key elements to determining your refinancing costs and your ability to refinance. Your current home value can be much higher or much lower than the original purchase price, with implications for your level of home equity.
  • The length of time you have owned your home. Your past record of payment reflects your ability to pay on time. Some lenders even place guidelines on how long you must be in your home before refinancing.
  • The remaining balance on your original mortgage. The typical rule of thumb is the higher your remaining balance, the higher the refinance cost will be.

 

As with your purchase mortgage, financing costs vary according to individual circumstances. Each geographic area, housing market, and lenders will have different policies and fees.

 

When deciding if a mortgage refinance is right for you, it is important to calculate closing costs and fees. Find out if you can wrap costs into your loan or if you have to pay the costs upfront. Most of all, calculate how long it will take before your monthly savings surpass the costs of refinancing – while you may not be able to predict the future, are you planning to still be in your home at that point?

Many homeowners ask themselves, “Should I refinance my mortgage?” Especially when market interest rates are at historic lows, homeowners should evaluate their current mortgage and see if it makes sense to qualify for a new home loan.

 

Refinancing can potentially save you money each month, making your budget easier to handle–but in some cases, it can also save you hundreds and perhaps thousands of dollars in interest payments by the time your entire mortgage is paid in full.

 

Whether your current mortgage is a decade ago or just a few years, your circumstances and your lifestyle may have changed. Your income may have changed or you may have different priorities. An annual budget evaluation should, at least, include a quick review of your mortgage to see if a refinance makes sense.

 

Even if your current home loan payments are affordable, there are many reasons to consider refinancing. Here are some of the main reasons why homeowners may choose to refinance:

 

Save on Interest Payments

 

You might be able to refinance your home loan to a lower interest rate than your current mortgage rate. A mortgage lender can help you determine whether the interest savings are enough to offset the cost of the refinanced mortgage — with a significant rate drop, you can potentially save thousands of dollars over the full term of your loan.

 

Lower Monthly Payments

 

Many homeowners refinance in order to ease their monthly payments. Refinancing to a lower interest rate is one way to do this, but in addition, homeowners can extend the term of their loan to reduce their monthly payments. You can choose a 30-year fixed-rate loan for the remaining principal on your current loan.

 

Pay off Home Mortgage Sooner

 

Would you like to own your home free and clear as soon as possible? Consider refinancing your home to a shorter term, such as 15 years. While 15- and 30-year home loans are standard, mortgage lenders are also willing to consider home loans on your terms.

 

Increase Financial Security

 

If you have an adjustable-rate home loan, you might want to refinance to a fixed-rate loan so that you have predictability in your budget — your mortgage payments will stay the same for the entire loan period. This is particularly helpful if you expect interest rates to rise.

 

Consolidate Your Debts

 

If you feel overloaded by high-interest debt on your credit cards or car loans, you may be able to consolidate all your debt into your mortgage payment. For example, if you have a $100,000 mortgage and $20,000 in credit card debt, you may qualify for a $120,000 mortgage and use the extra $20,000 to pay your other debt. Mortgage loans typically carry a significantly lower interest rate than consumer debt such as credit card debt, so refinancing can help in decreasing debt more quickly. Best of all, mortgage interest, unlike credit card interest, is usually tax-deductible. There are many rules about ratios of a loan amount to home value so consult your loan advisor to see if you qualify.

 

Provide Spare Cash

 

One of the best reasons to refinance is to make home improvements or repairs. Such improvements may add to the value of your home, and you can wrap the costs into your monthly mortgage payments. Some homeowners choose to refinance into one mortgage, while others opt for a home equity loan or a home equity line of credit as the best way to access the equity value in their home.

 

Freed-up cash can also be used for other purchases or for college tuition. The best expenditures are investments rather than frivolous purchases–remember that you are reducing the equity in your home when you take out some of the value in cash. And, again, loan amount to home values ratios apply, so consult with your loan advisor to see if you qualify.

 

While there are seemingly as many reasons to refinance as there are homeowners, every decision to refinance should be based on solid calculations. Test out different refinancing scenarios to see how long it will take to recoup your costs. Use our refinance loan calculator to see if you will benefit from refinancing your mortgage.

Understanding your refinance options. Learn what mortgage programs are available.

For those new to real estate, there are a hundred different terms to learn. It can be overwhelming, but if you take it a term at a time, you’ll be just fine.

We are going to examine the term “Adjustable Rate Mortgage,” better known as an “ARM.”

There are very few buyers in the market that can pay for a house outright with cash, thus avoiding a mortgage loan. If you are one of those lucky few, congratulations! You can quit reading. If you will need to finance your home purchase, however, let’s continue.

An adjustable rate mortgage is just that. You will have an interest rate that is adjusted by your lender over the life of the loan, depending on a variety of factors. This means that while you may start out with a low monthly payment of $1,000 it could easily rise by hundreds, or even thousands, of dollars.

What are the benefits of an ARM?

You will generally enjoy a lower initial rate. Additionally, these loans may be available for shorter loan periods. This is especially beneficial to buyers who plan on staying in a home for only a short period of time.

ARMs can also be a good option for those who expect a rise in their salary in the future. If a raise is in your future, you may be able to rest easier knowing your rate could rise.

What are the risks of an ARM?

Your rate could rise so high you would be unable to make your payments. Be sure to ask if there are caps on your loan. Another risk is prepayment penalties. Some, but not all, adjustable rate mortgages will charge you to pay off your loan early.

If interest rates remain low, then the risk from an ARM remains low. But by signing an ARM loan, you are gambling that rates won’t rise. If they do, you will see your payments rise as well.

For more detailed information be sure to speak with a mortgage lender.

By arming yourself with an arsenal of important questions, as well as with a team of professionals, you are sure to avoid some of the most common first-time homebuyer mistakes.

1. Hire the Right Agent

Personalities and experience levels range greatly, just as with any profession. Consider interviewing several local agents before deciding on which one to hire. Do you want a new agent who is sweet, patient, and ready to answer lots of questions? Or would you prefer a seasoned agent who gets you the best deal, but has less than stellar people skills? The choice is entirely yours, neither one being better than the other, but will make a big difference on how you feel about the process.

2. Ask Your Lender Questions

It’s important to be sure you understand exactly what your mortgage will entail, so feel free to ask the questions that come to mind. Be sure to compare rates with other lenders to be sure you are getting the best rate.

3. Be Ready To Act

In many markets, highly desirable areas come with a large amount of competition. Many buyers may be looking at the same homes as you. If you hesitate, you may very well lose out on your dream home. The best advice? Don’t begin the process of viewing homes unless you are really ready to buy.

4. Think Long Term

You love the house, and you can deal with the small bedrooms and laundry room in the garage, but will the next set of buyers? If you are planning on selling the home in the next few years, you must remember to consider the resale value of a home. Is this neighborhood appreciating quickly, or are homes losing value?

5. Be Competitive

We all want to buy a home for the best bargain price possible, but a careful consideration is respecting the seller. You may view a low ball offer as a starting point, but a seller may view it as an insult and refuse to answer your offer. If you really want a home, be reasonable with your starting bid.

Use these simple tips to avoid some of the most common buyer mistakes!

Low interest rates, lower home prices and an improving job market still have some buyers sitting on the fence fearful of an uncertain real estate market. Real estate agents and even sellers are finding that prospective buyers (current renters) may need a little more “emotional” attention in these market conditions. They may need a little more explanation to ensure that they understand the benefits of purchasing your home rather than renting another.

While deciding to own a home or rent one is very personal, many tend to let fear of the unknown be the driving force in making their decision and that can later create an unhappy decision.

Here are five top reasons to at least consider owning your own home.
  1. No more landlords: This may be a highly influential factor depending on a potential buyer’s experiences. Many renters have poured a ton of money into a home that they’re living in to keep it at the standard of living they enjoy, only to find that their landlord is soon planning to sell the home. Their hard-earned cash and money invested into their rented home will then only benefit the seller.
  2. Making a home your style: This is much more difficult to do in a rental. Yes, as I just mentioned, you can make some modifications, but many things that can be done to a home you own can’t be done to one you’re renting. Taking into consideration Homeowner’s Associations or planned community development restrictions, owning still provides more control and flexibility over renting.
  3. Weighing the costs of homeownership: Of course, with homeownership you won’t be calling the landlord to come fix your toilet or dishwasher. So, having a financial reserve is important to carry you through the months when you run into unexpected troubles. Websites such as GinnieMae.gov offer price charts that help you compare how much you’ll save by buying or renting. It’s a helpful tool that allows you to analyze factors such as how much tax savings you’re likely to receive, how much possibly equity you’ll gain, and how much your rent may increase.
  4. Long-term plans tilt the scale toward owning: In a recent Tampa Bay article, Walter Molony of the National Association of Realtors said, “For people with long-term plans, the rent vs. buy equation is tilting heavily toward buying because housing affordability is at record highs dating back to 1970,” he explains. “Homes are undervalued in many areas—selling for less than the cost of replacement construction—and rents are rising at a faster pace. Many people are considering ownership now as a hedge against inflation.”
  5. Low interest rates and affordable homes will not last forever: If you’re not ready to buy or simply can’t afford to own a home, even the historically low interest rates and exceedingly affordable, home prices might not move you to take the leap into homeownership. However, understanding that these conditions won’t last forever is important. Sometimes when conditions persist, we tend to think they’ll always be this way.

Distressed sales will begin falling in 2013 and that would then cause home prices to creep upward, predicts Moody’s Analytics. With little activity on the homebuilding front, and still a heavy supply, it’s not expected to increase much more. Also, the number of new households each year is rising, which is expected to help alleviate the oversupply in the coming years.

by Phoebe Chongchua

Points — or discount points — are essentially one-time, pre-paid interest charges on your loan. The more points you pay, the lower the interest rate on the loan and vice versa. Borrowers typically can pay anywhere from zero to 3 or 4 points, depending on how much they want to lower their rates. Discount points are tax deductible.

 

Each point is equal to 1 percent of the total loan amount. For example if you had a loan amount of $150,000, 1 point would be equal to $1,500.

 

In contrast to points, an origination fee is a fee charged by the lender to cover the costs of making the loan. The origination fee is not tax deductible.

 

How do you decide whether to pay points, and how many? That depends on several factors, such as how much money you have available for a down payment, and how long you plan on staying in your house. Points reduce the interest rate, an advantage if you plan to stay in your home for a while. But if you need the lowest possible closing costs, choose a lowest possible point option on your loan program.

Fixed Rate Mortgages mean exactly that – the rate and monthly mortgage payment are fixed for the term of the loan. The biggest question when considering a fixed rate mortgage is what term to choose: 15-year or 30? For some, a 30-year loan makes more sense. For others, a 15-year one does. Here are some pros and cons of each.

 

30-year fixed rate

 

Advantages

 

  • Offers the chance to borrow money on a long-term basis without having to worry about the interest rates or payments changing.
  • Monthly payments are lower than those on 15-year loans because the interest is amortized over a longer period.
  • Lower monthly payments free up money that borrowers can pour into investments that yield more than their homes.
  • Higher interest bill increases the amount consumers can deduct at tax time, potentially reducing or eliminating their federal income tax liabilities.*

 

Disadvantages

 

  • Borrowers build equity at a very slow pace because payments during the first several years go largely toward interest rather than principal.
  • The overall interest bill is much higher because of the long amortization term.
  • The interest rates are higher than on 15-year loans.

 

15-year fixed rate

 

Advantages

 

  • Borrowers build equity much more quickly due to shorter amortization schedules.
  • Overall interest bills are dramatically lower than those on longer-term loans.
  • Interest rates are lower than 30-year loans.

 

Disadvantages

 

  • Monthly payments can be significantly higher than those on 30-year loans.
  • Restricts homebuyers to smaller houses than they might be able to afford with longer-term loans.

 

*Always consult a Tax Accountant regarding any tax deductions.

The low initial cost of adjustable-rate mortgages, or ARMs, can be very tempting to home buyers, yet they carry a degree of uncertainty. Fixed-rate mortgages offer rate and payment security, but they can be more expensive, especially if you are not planning to stay in your home for a long period of time. So when it comes to Fixed Rate or Adjustable, here are some pros and cons:

 

Adjustable Rate Mortgages (ARMs)

 

Advantages

 

  • Feature lower rates and payments early on in the loan term. Because lenders can use the lower payment when qualifying borrowers, people can buy larger homes than they otherwise could buy.
  • Allow borrowers to take advantage of falling rates without refinancing. Instead of having to pay a whole new set of closing costs and fees, ARM borrowers just sit back and watch the rates — and their monthly payments — fall.
  • Offer a cheap way for borrowers who don’t plan on living in one place for very long to buy a house.

 

Disadvantages

 

  • Rates and payments can rise significantly over the life of the loan.
  • Long-term budgeting becomes difficult once an adjustable loan moves into the adjustable phase.
  • ARMs are difficult to understand. Lenders have much more flexibility when determining margins, caps, adjustment indexes and other things, so unsophisticated borrowers can easily get confused or trapped by shady mortgage companies.

 

Fixed Rate Mortgages

 

Advantages

 

  • Rates and payments remain constant. There won’t be any surprises even if inflation increases and interest rates rise.
  • Stability makes budgeting easier. People can manage their money with more certainty because their housing outlays don’t change.
  • Simple to understand, so they’re good for first-time buyers.

 

Disadvantages

 

  • To take advantage of falling rates, fixed-rate mortgage holders have to refinance. That means a few thousand dollars in closing costs, another trip to the title company’s office and several hours spent digging up tax forms, bank statements, etc.
  • Can be too expensive for some borrowers, especially in high-rate environments, because there is no early-on payment and rate break.

Selling a Home

What you need to know when preparing to sell your home.

It is no secret. 2010 was a hard year for home values. According to Zillow.com, homes were expected to lose $1.7 trillion in value. This is an even greater loss than what was seen in 2009.

 

They report that “the bulk of the total value lost during 2010 was in the second half of the year. From January to June, the housing market lost $680 billion. From June to December, Zillow projects residential home value losses will top $1 trillion.”

 

Some of the largest losses in value were seen in the West. Los Angeles’ values fell by $38,000 over the course of 2010. And they are down a whopping $676,000 from the peak in the second quarter of 2006. Phoenix, Arizona, saw values falls by $36,000 in 2010. This is down $222,000 from peak times.

 

There were exceptions to this loss trend. The Boston metropolitan statistical area (MSA) gained $10.8 billion in value, while the San Diego MSA gained $10.2 billion.

 

Now, while you cannot protect yourself against market corrections such as these, you can take small steps to help increase your home’s value and make it more marketable. The following tips are meant to inspire and motivate you to treat your home like the investment it was meant to be.

 

1. Make Repairs

 

Homes require regular maintenance and repairs are a necessary component of homeownership. Procrastination gets you nowhere when it comes to home value. Stay on top of repairs as they are needed. And be sure to address large projects before placing your home on the market. For example, roofs are expensive to replace or repair. Many buyers will pass up your otherwise wonderful home when faced with roof issues.

 

2. Curb Appeal

 

Curb appeal is about first impressions. It is also about neighborhood values. Drive down a street lined with manicured lawns and well-maintained homes and the values are sure to reflect the care their owners take. On the other hand, streets with overgrown trees, junky yards, and chipped and faded paint are fighting an uphill battle in the values game.

 

3. Community Involvement

 

The classic quote from Chinese philosopher Lao-tzu says, “A journey of 1,000 miles begins with a single step.” This is especially true for improving the health and wealth of a community. Change starts with yourself. By becoming an active member of your community, you can inspire the change you desire. Family, friends, and neighbors will follow your lead of civic duty. How can you get involved? Run for city council, join the PTA, volunteer, and help organize fund raisers and events that inspire community togetherness.

 

4. Updated Kitchen

 

Kitchens are a real selling point. Outdated cabinets, counters, and appliances will stick out like a sore thumb to buyers. Be sure, however, that you research your comparables before beginning a remodel. You don’t want to price yourself out of the running. This means if while you love granite and travertine, other homes in your area are selling with laminate, you will probably not be able to ask for a drastically higher price that covers the price of the granite.

 

5. Updated Bath

 

Bathrooms also hold much of a home’s value. New low-flush toilets cost as little as $100. And tubs and showers can be easily replaced or resurfaced. Be sure, above all else, that your bathrooms are clean for showings.

 

6. Energy Savers

 

Buyers are looking for homes that are energy efficient. Low-flush toilets, solar panels, water filtrations systems, and insulated windows are all inexpensive fixes for energy zappers.

 

Consider these simple tips and decide for yourself what may help your home retain its value

It happens to all homeowners. Rooms that once looked fresh and contemporary have aged themselves into drabness.

 

For some it’s an excuse to redecorate. For others it’s a chore. Either way homeownership is an ever-evolving process. As one project ends, another peaks its head around the corner.

 

To bring your rooms current, as well as to update worn and disheveled items, consider these five room freshening tips.

 

1. Paint

 

Paint is number one on the list because it is relatively cheap and easy to do yourself. Getting a professional finish is simple, thanks to the myriad of products now on the market for do-it-yourselfers. From tape to edgers to color changing paint, you’re sure to get a quality finished product. “In” colors change every few years, so be sure to do some homework on what hues are happening.

 

While you’re at it, research zero-voc (volatile organic compound) paint before starting your project. Traditional paint leaches fumes into your home for years. Zero-voc paint, however, exposes you to fewer odors during the painting process and fewer risky fumes in the years to come. This is well worth the effort of searching out zero-voc.

 

2. Trim

 

The current trend is for trim to be white instead of natural wood. It is contemporary and clean. If your trimwork is in good repair, simply puttying holes, sanding scuffs, and painting can update the look. Dated trim that is too thin for your large rooms can be replaced with new baseboards. Amateur handyman can tackle this task with table and coping saws. Trim is all about getting the angle cut correctly. Already have current looking trim? Upgrade your room with crown molding. These beauties can be real show-stoppers!

 

3. Cabinet Hardware

 

From oil-rubbed bronze to beautiful vintage pieces, old is in. Hardware can easily be added to any existing cabinetry or changed to bring a new feel to a tired room. Shop in your local home improvement stores, online, and at local auctions to find the pieces that speak to you.

 

4. Decorative Accents

 

Curtains are the frame to any well-designed room. Choose colors and patterns that fit the scale of your room. Heavy curtains made from chenille or jacquard work best in large rooms with tall ceilings. Lighter weight fabrics, such as silk and chiffon, are great choices for small or airy rooms. Decorative pillows and throws are also an inexpensive way to change the accents of your room. Have a teal room but want to go contemporary? Bright is in. Don’t be afraid to play with color!

 

5. Flooring

 

While flooring is not a simple fix and may require the help of a professional, it can make all the difference in a dated room. Scratched and worn wood floors should be sanded and refinished to show the natural beauty of the wood that lies beneath. Laminate wood flooring is a cheap and easy solution for budget conscious homeowners who want a clean and modern update. It can be a wonderful solution for worn out carpet.

 

If your rooms are looking tired, be sure to wake them up with a few new colors, paints, or accents!

Today’s market presents some very unique opportunities for buyers. With affordability near record highs and interest rates near record lows, many homeowners are making the decision to move up or on. Here a few simple tips to take into consideration when you list your home for sale.

 

1. Curb Appeal

 

Buyers make snap judgments about each home they view. These judgments are drawn largely from first impressions. Be sure your home has impressive curb appeal. Fresh flowers and mulched beds, along with trimmed hedges and grass are a must. If your home needs a fresh coat of paint, now is the time. And even if your paint or siding is in good repair, consider painting your front door an eye-catching color, such as red or blue.

 

2. Inspection

 

An inspection can make or break a deal. Even after they’ve fallen in love with your house, a buyer may decide foundation issues or faulty electrical are too much of a headache. The benefits of having an inspection done prior to listing can be two-fold. First, your buyers will be aware of what repairs are needed before they make an offer. Second, you can choose to address these repairs and therefore have them removed from the scenario altogether.

 

3. Repairs

 

Buyers are turned off by long lists of needed repairs. This goes double for time-consuming and costly repairs, such as roof work or foundation issues. By identifying and addressing the issues, you may be able to yourself save time and money in the long run.

 

4. Organize Paperwork

 

There may be contracts or warranties you have on your home that will transfer to a new buyer. These can include appliances, builder warranties, and even contracts with lawn and pool companies there were paid up-front.

 

5. Talk to your lender

 

How much new home can you afford? Are you able to sell your home for enough to cover the remaining balance of the loan? These are important questions to get answered prior to listing!

 

6. Prepare for showings

 

Staging a home for sale has multiple different layers. First, you should clean and organize. Have carpets cleaned and repaint dirty or loudly colored walls. Next, remove large and bulky furniture, as these make rooms appear smaller. And finally, take down personal pictures, trophies, and memorabilia that could distract the buyer from what they are actually interested in … your house!

 

Every seller needs a competitive edge in today’s market. By being prepared for selling prior to listing, you can gain an advantage. Talk to your real estate agent for more tips!

In a tough market, sellers need all the competitive edge they can get. Home staging is a great way to make your home appear to its best advantage.

 

Staging is about appealing to a broad range of buyers. It’s about creating an image of a lifestyle that buyers can’t resist. They need to be able to imagine themselves living in your house.

 

Staging doesn’t require a big budget either. Although, if you have the budget to make your home a showpiece, go for it! In general, though, successful staging means paying attention to the details.

 

Here are 10 secrets of staging that can help your home sell.

 

1. De-clutter

 

Clutter can be one of the most distracting aspects of showing a house. Instead of a buyer focusing on the unique architectural details of your room, they focus in on your trinkets and trash. You don’t have to toss your decor, just put it away for now.

 

2. Furniture

 

Large, oversized furniture can makes rooms look smaller than they are. The converse is true as well. Small furniture in large rooms looks disproportionate.

 

3. Room true to purpose

 

You may have your dining room set up as an office or a second bedroom set up as a craft room, but buyers need to see homes true to their purpose. They want to see the formal dining room that was advertised on the MLS. They want to see 2 bedrooms, not one and a craft room.

 

4. Proper lighting

 

Good lighting makes everything look better. CFL lights in “daylight” color makes rooms look light and bright even during the evening hours. Be sure all rooms are well lit, including laundry rooms, garages, and closets.

 

5. Repairs

 

Most buyers aren’t interested in fixer-uppers. They want homes that have been well-maintained. You may have to spend a little time and money to fix broken doors, drawers, and windows. Buyers will notice every loose board and trim piece. Fix it before you start showings!

 

6. Keep it neutral

 

It is much easier to imagine putting your mark on a neutral room than it is to imagine yourself living in someone else’s Moroccan paradise. Paint is relatively inexpensive. Play it safe and pick out neutral tones.

 

7. Fresh flowers

 

It’s all about things smelling fresh and clean. Flowers add life and fragrance to a room!

 

8. Thorough Cleaning

 

Clean from top to bottom. The basics mean having dishes and laundry done. Deep cleaning means cleaning carpets, removing stains, and scrubbing that bathroom until it sparkles.

 

9. Staged Dining Area

 

You can really make a room pop by setting a formal place setting. Outdoor dining spaces also look great set with placemats, chargers, and proper plates and glasses.

 

10. Hotel Inspired Bedrooms

 

Boutique hotels do a great job of making bedrooms feel luxurious. You can do the same by updating your bedding and having a liberal use of pillows.

 

Staging can make your home stand out from your competition. It may mean the difference between selling and not in this tough market.

Making the move, learn how to make a successful transition to your new home.

Relocating for a job or personal reason is not easy. Relocating these days can be even more difficult especially if you have to sell your home first.

 

According to USA Today, “The leap is especially big for the nearly 25 percent of U.S. mortgage holders who owe more than their homes are worth–or will likely bring at sale.”

 

However, the housing slump may not have as much of an impact on employee mobility as some may think. The U.S. Census Bureau reported that moves associated with job opportunities remained steady from 2007 to 2009.

 

With a high unemployment rate, people are opting to take a job even if it means relocating or taking a loss on their home.

 

The good news is that companies are realizing how difficult it can be to relocate. About a third of 100 companies in various industries throughout the nation changed their relocation programs in 2009 and 2010 to help with the move, according to a survey by Worldwide Employee Relocation Council (ERC), a national trade group.

 

In the past, it was common for companies to cover real estate commissions and closing costs, but today’s companies might have to fork out more cash for quality employees. Due to today’s market conditions, there are companies that will pay some of the loss of a home sale. According to USA Today, depending on the employee’s job level, that can range from $10,000 to more than $100,000.

 

However, the “buyout” programs that were more common before the recession are not as popular today. These programs, offered by some companies, helped get the relocating employee’s home sold. Typically, there would be a time period of 60 to 120 days and after that if the home didn’t sell the company would use a private third-party firm to initiate the buyout. Then the employer’s mortgage service would sell the home. This is not common today.

 

It’s much more common for companies to review each employment situation and then decide. It’s no longer a blanket relocation policy; benefits are decided on a case-by-case basis.

 

If you’re facing a possible relocation, then knowledge and action are two key ingredients for a stress-free relocation.

 

Here are a few tips:

 

  • First, understand that companies want to help valuable employees make their move. The majority of companies surveyed believe that the relocation policies/benefits in place in their company help retain quality employees.
  • Be sure to ask about the specific relocation policies/benefits. Don’t think that just because something wasn’t mentioned it doesn’t exist. Companies now have policies that accommodate short sales “while others have increased the cap on their loss-on-sale assistance,” according to the Worldwide ERC.
  • Negotiate with the company and make sure your needs and wants are known. Companies are customizing benefits to fit their relocating hires. Make sure that you are clear about your financial picture so that you can accurately negotiate with the company to get your needs met.
  • Weigh your options carefully before agreeing to accept the relocation. Find out about any tax benefits of a move. Some moving expenses are tax deductible.
  • Consider renting your home instead of selling it. Using a qualified third-party can make the process successful.

 

Relocating doesn’t have to be stressful. Be sure you understand a company’s relocation offer and then carefully think through the entire process.

Are you getting ready for a big move? It can be one of life’s most stressful events. For children this effect is amplified. It can be intimidating, confusing, and even scary.

 

Here are 10 things you can do to make moving fun for the family.

 

1. Movie night

 

Watching one of your family’s favorite movies can make your new house feel familiar. Order pizza and have root beer floats! Forget about the day’s stresses and enjoy each other’s company, along with a meal that is easy to clean up.

 

2. Indoor camping

 

Turn a negative into a positive. When beds are still packed, camp out on your living room floor. This can be a great adventure for the kids. Plus, sleeping in the same space can be reassuring to young children.

 

3. New family favs

 

Most families have a favorite restaurant, park, or place to hang out. Search out your new favorites in your new neighborhood. You may not be able to have the exact same hamburger or shake, but maybe you’ll find something that fits your family even better!

 

4. Positive attitude

 

Being upbeat about the move and changes will put your children at ease. “The new park has such fun equipment!” “The neighbors are so nice!” Your attitude has a big effect on your kids’ state of mind.

 

5. Routines

 

Bedtime, mealtimes, playtimes, and favorite things are what keep the wheels on most days. Moving can temporarily disrupt these beneficial habits. Do your best to keep routines throughout a move. Pack favorite snacks, toys, and security objects in your overnight suitcase so that they’re ready for use as soon as you arrive.

 

6. Pet Project

 

Most rooms need personalizing. Let your child have a hand in this! Their age will dictate the level of their participation. Younger children could help pick a favorite accent color or a few new accessories. Older children could pick design styles, new bedding, and even paint color. Their involvement will help them feel ownership of their new space.

 

7. Exploration

 

Your new neighborhood has so much to offer! The best way to experience it is on foot. Take a walk with the whole family. This also gets your kids acquainted with where they are and where your house is in case they are out by themselves and get lost.

 

8. Happy Travels

 

Long road trips mean it’s time to pack lots of games, dvds, and snacks. Nothing is worse than a bored or hungry kid on a road trip! Bring blankets and pillows for nap time as well!

 

9. Open Communication

 

Your children should be given the opportunity to voice their fears and frustrations. Be sure to sit down with each child individually and talk about the move to get a feel for what it means to them.

 

10. Acceptance

 

Even the most planned of moves will be stressful. Moving is a disruption of our daily lives, and we humans are very routined beings. It will serve you well to simply accept that challenges will arise, but know that you will get through them. What a great life lesson to pass on to your kids.

 

Moving doesn’t have to be scary time for kids. Use positive attitudes and a fun-loving spirit to turn this experience into the adventure that it is.

Transitioning to a new home and routine can be difficult for many pets. The stress and worry can cause out of character behavior, as well as lowered immune responses.

 

In order to ease your pets into a move, it’s important to consider what makes them feel safe, secure, and stable.

 

First, if you are moving out of the area, be sure that your pet is current on all of their vaccines and treatments. Refill any prescriptions and consider microchipping your pet, as moves are a common time that pets become lost.

 

Be sure that you are well-stocked on their normal food and treats. Changing diets can cause upset tummies and general unrest. In fact, it may be best to pack a Ziplock bag of dry food in your overnight bag. This way there is no scramble to find food at the last minute.

 

On the day of the move, when doors are left wide open and strangers are coming and going, consider dropping your pets off with a friend or leaving them at doggy day care. This is as much for your benefit as it is for your pets’.

 

Before you introduce a dog to your new home, create a space that is all their own. Choose a room and set up their bed, food, and toys. Cats will want to check out their entire “”kingdom.”” Just be sure they know where their litter box, food, and water are.

 

Cesar Milan, known as The Dog Whisper, recommends that when traveling with your dog you do the following:

 

  1. Prepare. Have a game plan ahead of time. Are you going to need food, water, or medication on the drive? When and how often will you take breaks?
  2. Bring along a favorite blanket or toy. Dogs love their stuff. Blankets and toys can bring comfort to an otherwise stressful situation.
  3. Don’t feed your dog for 6 hours before a plane ride.
  4. Use Lavender scents. This great scent can be calming to both you and the dog. Consider mixing a small spray bottle with water and a few drop of natural lavender essential oil.
  5. Take a long walk. It’s always good to stretch your legs!
  6. Take breaks. This is especially true for long rides.

 

Falling back into routine quickly is a great way to comfort your pets. This is easier said than done after a big move, but at the very least, take walks and have meals at the usual time. Our pets are members of our families. By taking a few simple precautions, you can make your next move as seamless and possible.

Packing can be stressful time for every member of the family. To ensure that your move goes as smoothly as possible, try the following tips!

 

Pack a “Red Box”

 

Since one in five American families moves every year, that means 22 million families may be searching for their TV remote controls!

 

One of the pitfalls of packing for a move is you can’t always anticipate what you’ll need when you arrive at your new home, and movers typically list only the obvious such as dishes, glasses, bedding, etc. The miscellaneous items you need in the first few hours invariably wind up on the bottom of a random box.

 

To start, you may want to create your own “red box” as some moving companies (“Removers”) do in Great Britain. This is the last box loaded and the first one off the truck. The one universal item in the red box is the tea kettle (perhaps this would be the coffee maker in the U.S.). This is also the place for miscellaneous but crucial items such as scissors, pens, paper, hammer, nails, hooks, screwdriver and tape measure.

 

Packing a suitcase for each family member as though you were going on a short vacation is another good idea. Include a few sets of clothing and sleepwear, footgear, outerwear, personal toiletries, medications and eyeglasses. Make sure to bring starter family toiletries like soap, toilet tissues and paper towels as well.

 

Children’s Toys and Play Dates

 

New York child psychologist Dr. Cindy Linde placed the school directories from both their old and new schools in an important box when she moved with her own young children. That way they could keep in touch with their old friends and classmates, and she could make play dates with her children’s new classmates.

 

Carol O’Leary recently relocated from London to New York with her family. She found she urgently needed her children’s immunization records, and had no idea which box of papers they were in. While her husband’s relocation liaison had told her to carry school records, no one had told her the children could not begin school without proof of immunizations. She also found that while she always remembered foreign currency for a vacation, it hadn’t occurred to her to carry American dollars to tip the movers and buy pizza.

 

While your children’s most cherished toys go at the top of a box, you may want to bury outgrown toys they just can’t give up at the bottom. Hopefully, out of sight will mean out of mind!

 

Comforts of Home

 

Framed photos may not seem like the first thing to unpack, but familiar photos scattered around your new home can reinforce a feeling of family. Parents of young children may want to keep some samples of their artwork handy to immediately hang up on the refrigerator.

 

One mom found that her teenage daughter was horrified to sleep with uncovered windows the first night. If there are no shades or curtains in your new home, an easy trick is to bring spring rods (like those in many showers), over which you hang sheets for temporary privacy.

 

Perhaps Dr. Carol Pluzinski, a college professor and the mother of two small boys said it best in reference to her own move “we never could have done it without the help of my sister and teen niece who came from Chicago to assist before, during and after the move. I guess that’s what parents need to pack first,a loving, fun aunt and cousin to help!”

 

Entertainment Issues

 

Hopefully, the whole family can to relax together the first night in your new home, so remember to pack TV cords, remotes, and manuals together in a box that is clearly marked. Computer cords, attachments, etc. should be packed together as well.

 

Use these tips to help transition after your move and good luck on your new start!

Seller tips and tools for quickly selling your home.

It can be a tough market for selling a home, but those conditions can get even worse if sellers aren’t careful. While a seller doesn’t control the real estate market, their actions can significantly contribute to how long and how much their home is sold for.

 

1. Underestimating Cleaning Up

 

It may seem obvious, but I can tell you real estate agents everywhere are nodding their heads in agreement as they read this. Inviting potential buyers in to see an unkempt home is like going on a job interview without freshening up after you cleaned your garage. How can the employer notice your fantastic talents and skills if they’re hidden underneath a sloppy exterior? How you show your home tells the buyer what type of care you, the seller, has put into it.

 

If you can’t take the time to wipe the grime off the refrigerator doors, tidy up the kids’ rooms, take out the messy diapers, put away the food, and take the dogs out of the house for a while, then you’ll likely find buyers will quickly move on to the next home on their list.

 

2. Lingering During Showings

 

Yes, we all want to know how the open house or showing went, but hanging around during either of those events is not a good idea. Sellers who tend to linger during showings often make the buyers uncomfortable. Buyers like to have time to explore the home at their own pace and without feeling any pressure. Sometimes buyers want to sit on the porch or out in the backyard as they discuss the home’s possibilities. And if buyers are willing to sit for a bit and talk about the home, that’s a great sign. However, the chances of them doing that with the seller present is unlikely. Many times buyers will say, “Let’s skip the home if the sellers are there.”

 

If you’re selling your home, do yourself a favor and hit the road for a bit. Take a walk or head to the coffee shop. As soon as the showing is over, you can get all the details from your agent. That’s what you’re paying your agent for! Let them do their job. Just make sure that your agent has all the home’s selling points and any additional features that make this home standout.

 

3. For Sale By Owner (FSBO) Trap

 

Some people are convinced that they can do it on their own. Maybe they can sell their own home, but it likely won’t happen without some headaches. Trained specialists are called “experts” for a reason. An expert real estate agent knows the market, has connections, guides you through the process, negotiates on your behalf, and will make the process of selling your home simpler.

 

One potential land mine that FSBOs face is the flood of people popping in to see their home. It sounds great that there’s so much traffic, but the problem is many times the people who pop into FSBO properties aren’t actually qualified for a mortgage or may not be serious buyers. Instead they’re just looking and satisfying their curiosity at your expense. Agents know to ask the right questions to make certain the lookers are truly potential home buyers.

 

4. Not interviewing agents

 

If you have kids, chances are you interviewed the nanny or babysitter. Taking time to seek out top real estate agents in your area and then setting up interviews with them is equally important. Choosing the wrong agent for the job will be a headache and slow the process down. There must be a connection, understanding, and good communication between the seller and the agent. There are lots of things that go on during the sale of a home, communicating with the agent should be one of the easier tasks.

 

5. Pricing a home incorrectly

 

This could be the worst mistake sellers make. Yet, this is where so much help can be found. Real estate agents see homes every single day. They know the neighborhoods and the comps. They are there to help you understand what homes have sold for in the recent past and what they’ll likely sell for during the current market conditions. Get a market evaluation from your agent and understand that what is a fair price for your home in today’s market.

The most popular real estate slogan has always been “location, location, location.” Well, folks, there’s a new slogan in town, and his name is “price, price, price.” You can have the most fabulous Malibu beach house, but if you are overpriced, you won’t sell in today’s market.

 

How do you know where to price your house? How do you know that your real estate agent has priced accurately to sell?

 

Here are a few tips to steer you in the right direction.

 

Appraisals

 

Your real estate agent or brokerage will have a list of local appraisers. You can also visit The Appraisal Institute online at appraisalinstitute.org. Simply click on “find an appraiser”. An appraisal costs just a few hundred dollars, but it affords you a clear idea of the amount for which a buyer can be approved.

 

Comparables

 

What are homes like yours selling for? Comparables can be found by analyzing homes in your neighborhood, or in nearby neighborhoods, that have similar square footage, upgrades, and amenities. If a comparable home sold for $150,000 there’s little chance you’ll find a buyer willing to pay $180,000 for your overpriced home. You always want to be the least expensive home in the neighborhood, when it comes to selling, not the most! Everybody loves a deal.

 

Be Competitive

 

Underpricing a home is a strategy that some agents employ to garner interest and to create a bidding war through multiple offers. A well-priced home is sure to get more showings than a home that costs more than the competition. More showings mean more exposure, which ups the chances of you receiving an offer.

 

Lender Communication

 

Lenders will only allow a buyer to borrow up to the amount a home appraises for. That means if you are overpriced, even an eager buyer may hit a lending road block.

 

Consider Leasing

 

If you’ve been caught in a depreciating market, you may have more money in your home than you can sell it for at this time. A reasonable option is to lease your home. Your real estate agent should be able to work out the specifics of any contract for you.

 

How Bad You Need to Sell

 

This is the real kicker. Some homeowners want to sell, but they don’t need to. That means they can wait out a down market, or even wait for the “perfect” buyer. If, however, you find yourself needing to move across town, or across the state, then you will have to be more willing in today’s market to compromise. And compromise is all about price when it comes to real estate.

 

Buyers Are Savvy

 

Technology allows them to search the local MLS, research the latest trends, and even see how your neighborhood’s prices have changed over the last 30 days. They will know if your home is overpriced. It is best to error on the side of too little than too much in this numbers game. If you price your home right, however, you’re sure to find a ready and willing buyer.

It is recommended that you have a real estate agent help you with your transactions. But how do you know which agent to select? The choice can be difficult, but here are some questions to ask during potential agent interviews.

 

Do you have references from past clients?

 

Ask their past clients if they were pleased with the service the agent provided them. Did they communicate in a timely manner, and were they kind and courteous?

 

What does being an agent mean to you?

 

By asking this question you’ll be able to see what their work ethic and business philosophy are. You want an agent that puts their priority on your happiness first, and their commission check second.

 

How long have you been in real estate?

 

This is not to say that someone new to the business would not be a great asset. However, depending on the nature of your transaction, you may feel more comfortable with an agent with a proven record of success.

 

How many homes did you sell last year?

 

Just because an agent has been in the business for a while doesn’t mean they’ve been successful. You don’t want to have your home on the market for months, when a savvy agent could have it sold in weeks.

 

What designations and certifications do you hold?

 

Beyond holding a real estate license, agents can opt to expand their education and skills. There are a multitude of courses and programs available. In general, these certifications mean a more specialized agent.

 

What is your marketing plan?

 

In an ideal world a house would just sell itself, right? But the market swings back and forth on a constant pendulum between being in favor of sellers and then buyers. If you are selling a house in a buyers market, then you need a solid marketing plan to make your home stand apart. Open houses, email campaigns, webcasts, and brochures are just a few of the items your agent may use.

 

Do you do dual agency?

 

Dual agency is when the agent represents both the buyer and the seller. This is legal, as long as disclosed, but it may not be something you’re interested in signing up for. Be sure to ask.

 

What are your home sales stats?

 

It is important to ask them how long it takes them on average to sell a home. And then ask what the area average is. They should know this information off the top of their head, or at least have the statistics readily available.

 

How do you communicate with your clients?

 

There is nothing worse than not being able to get ahold of your agent, with questions, for updates, and for feedback. In today’s modern world of technology, there is no excuse for them not to stay in constant contact. There is email, texting, cell phones, and a myriad of other options. Ask what they use to stay in touch with their clients.

 

Do you have other connections?

 

Meaning, will they be able to refer you to contractors, mortgage lenders, banks, landscapers, pool maintenance crews, and the like. This will be especially important if you are new to the area.

Disclaimer : The information contained in these articles has been prepared by an independent third party and is distributed to consumers for education purposes only. The information is not guaranteed to be accurate and does not represent the opinions of 5 Star Loan.