mortgage
BUYING YOUR DREAM HOME? DON’T DO THIS!
Buying a home is an immense purchase, most likely the largest you will make during your lifetime. Avoid self-sabotaging and ensure your journey to home ownership goes smoothly every step of the way. Here are three things you may want to avoid:
1. For Sale by Owner
Trying to sell your home by yourself is sheer madness. Your real estate agent will have your best interest in mind, gearing you in the right direction. This professional will guide you through the process including the piles of paperwork that can seem extremely overwhelming. Please contact GreenTree Properties and we will represent you all the way home.
2. New Lines of Credit
Your credit score can be a game changer. During contract you do not want to do anything that will impact your credit score. That includes buying a car, boat, or any other large purchase that has to be financed. Along the same lines, your credit score needs to remain stable during the closing process. Opening new lines of credit can make your FICO score drop and send up a red flag to your lender. Avoid doing this at all costs!
And here is a great tip from Realtor.com
3. Saying too much—and undercutting your negotiating power
Be careful what you say when you’re viewing a property at an open house or home showing. For instance, if the listing agent hears you say to your spouse, “I love this house, and it’s way under our budget,” the seller might try to play hardball when you try to negotiate on price. Keep private conversations private.
Questions? We are happy to help. Please get in touch with Greentree Properties at (949) 492-0090 or here.
Happy National Home Ownership Month!
Celebrate your home by spending some QT (quality time) on it and maximize the return of your sale by completing these top cosmetic updates. The good news is that summer is just around the corner and that means plenty of sunshine to get these projects done.
Here are upgrades ranging from small bathroom remodels to large-scale expansions that often yield high returns.
- Minor Bathroom Remodel: Use a softener like CAULK-BE-GONE to get rid of the old caulk. Fill the tub with water after you’re done to stretch caulk while it dries. For damaged walls, you can do a quick coverage by using spray-on texture provides quick coverage. Add illusion of space by replacing old shower doors or remove them all together.
- Attic Bedroom Conversion: Do you have an attic just sitting there? Consider converting this space into a bedroom. That is if your existing HVAC system can handle the load of another room. If not, factor in the cost of a second unit. A solar-powered attic fan is an efficient way to save on cooling costs. The attic fan exhausts heat from above your home and is powered by a solar cell on the roof.
- Minor Kitchen Remodel: If your home is worth more than $500,000, go with stone or trendy glass countertops. Cover old vinyl with floor leveler so the pattern doesn’t bleed through. You can’t put a second layer of vinyl on if the subfloor is below-grade concrete. “Brighten up the kitchen by sanding and painting existing cabinets. It’s much less expensive than buying new ones. Add decorator detail without the cost by changing drapes and window molding.” – HGTV
- Curb Appeal: You know what they say, first impressions count and curb appeal is all types of first impressions. A charming focal point like a walkway and fountain adds major value to your property. Roll a sealant on flagstones for a permanent wet look that enhances the color.
Replacing roofs and windows are also high on the list and home offices tend to be lower in return. Remodeling may be a labor of love, but consider this investment that can seriously boost the value of your home. Questions? Please get in touch with Greentree Properties at (949) 492-0090 or here.
Sell fast with these home selling tips.
Are you ready to enter the housing market? According to a recent study by Zillow, the BEST time to list your home is on a Saturday between May 1st and 15th. While timing isn’t everything, it can definitely be an important factor in selling as fast as possible.
Sell your home faster with these tips:
- Use great photos: Today, 95% of homeowners use the internet for their home search and photos play an important factor. Visually stimulating images can show off the lifestyle of the home, including beautiful features and encourage prospective buyers to schedule a tour. Poor photos can discourage buyers and many may reject your home without even considering it.
- Clean everything and depersonalize your home: A dirty home can be a deal breaker for most buyers. Make sure you take the steps to clean your house inside and out. In addition, remove personal photos as you want homebuyers to envision the house for their family as opposed to yours.
- Let the Light in: Before showing your home, brighten up the space by opening up the curtains and blinds, turn on the lights and let your house shine!
- Curb appeal matters: Simple things like repainting your front door, or replacing a mailbox can really spruce up your house. Redoing the landscape can also help improve your home’s first impression. Make sure all bushes and trees are trimmed and looking their best.
When your home is on the market, the little things can make all the difference. These simple steps can help enhance your home and get it off the market so much faster! If you are considering selling, talk to your GreenTree Properties agent about a custom strategy to get your home sold in the timeframe you desire at (949) 492-0090.
Upgrading to an energy efficient home just got easier!
Summer is around the corner, can you feel it? Before the season heats up, have you considered upgrading your home to a more energy efficient flow? You are in luck as it might just have become less expensive to do so.
For years, California has seen an increase in energy efficient upgrades as homeowners have tied them to property tax bills. Fannie Mae has recently started a HomeStyle Energy Program which is a mortgage option that will “allows borrowers to finance clean energy upgrades equal to up to 15% of the as-completed appraised value of the home” –Green Tech Media. Essentially, in turn for making energy upgrades to your home you will be able to lower your mortgage and save money on energy bills. What’s not to love?
There are a few important details to remember though. The upgrade to your home must be completed within 180 days after you have been issued a mortgage note. In addition, you must provide an energy report which indicates how much the borrower is saving monthly. If you’re willing to file all the paperwork and make your house energy efficient then you can expect to see your monthly costs drop dramatically!
What do you think of this program? Do you think it will encourage more people to make their homes energy efficient? Comment below. If you’re thinking of making your home more energy efficient, let us know, we’d be happy to share our experiences with you.
Trends to Watch in 2017
The past year has shown us a multitude of trends in the housing market—higher home prices, housing shortages, developer confidence and rising rent prices. For 2017, we’re thinking three things: locations, appreciation and interest rates.
Urban areas are appreciating much faster than suburban areas, accounting for growth, and small homes have seen much sharper price growth than larger ones. Nationally, home prices are expected to keep rising by 3.5% according to Moody’s Analytics projections. If you have a smaller home in, say, a downtown area, your equity is going to take you further. As home prices rise, more buyers will inevitably move to the suburbs to find affordable housing.
If you’re looking to trade for a larger home, you’re in the market’s sweet spot, and the first part of 2017 is going to be the best time to strike for that. The equity from your small house will get you more—the average price on a two-bedroom house climbed 59% nationwide, while four-bedroom houses rose by about 41%, according to more of Moody’s Analytics. Developers have also continued to add new inventory to the market by building new supply in demanded areas with price points between $500,000 and $750,000. So, if you’re selling a smaller home in the first part of 2017 for an upgrade, you’ll want to choose higher priced offers over offers with quicker closing times. The more cash you have to put towards that down payment, the better off you’ll be.
Following the housing market crash, mortgage rates remained at record lows for years. Rates are expected to rise to more normal levels, levels seen before the market crash. The Federal Reserve has already indicated that three more increases to its benchmark rate are coming in 2017. It’s only advantageous to act sooner rather than later if you’re thinking of buying or selling, especially since future housing policies remain unclear.
The Largest Group Entering the Market Right Now
They’re called boomerang borrowers, and they could be changing the housing market in the coming months and years.
The timeframe for borrowers who were significantly hit after the Great Recession between 2007 and 2010 to improve their credit score is about the happen, opening the door for a lot of consumers to re-enter the housing market.
Foreclosures, short sales, and bankruptcies remain on a credit report for seven years, which means these items are due to fall off the credit files of 2.5 million consumers by June 2017, the largest of the group over that time frame.
With millions of borrowers coming back into the housing market, should this be the time to sell?
Consider low inventory. There is a shortage of homes for sale in many markets throughout the country in relation to buyer demand. This is economics 101 and happens to create a highly desirable atmosphere for sellers to obtain the best possible sale price and terms. According to Redfin, buyer demand rose by 13.3 percent over the month in September, it’s highest level in three-plus years. We’ve seen buyer demand gain momentum since Labor Day, when a pop of fresh listings hit the market.
Home prices are on the rise after several years of dealing with distressed and foreclosed inventory. As of August 2016, foreclosure inventory included only 0.9 percent of all homes with a mortgage. As foreclosures drop, home values rise, which could mean higher appreciation for home owners.
Low interest rates hovering around the 3.5 to 3.7 percent range make the cost of borrowing money extremely attractive, especially for those boomerang borrowers who are re-entering the market with now above average credit. Modern day loan programs offer a wide variety of options to buyers at various price points and stages to purchase property, so you know that when you accept an offer, the loan process isn’t going to diminish on your buyer, thus securing your sale.
Chances are, it’s been a while since you’ve sold your home—at least 7-10 years. Predictive analytics help optimize buyer searches. Social Media marketing brings visibility to a whole new level. Drones and video tours help create powerful story telling campaigns. All done to attract buyers across the market and secure sales. Welcome to modern day real estate!
Make yourself ready for boomerang borrowers by preparing your home to show in the best light possible. Talk with one of our real estate professionals if you’re thinking of selling your home and find out what they can do for you.
This Simple Plan to Boost Your Credit Score May Surprise You
We’ve all been there. Well, hoped we be there. We’ve all set timelines for ourselves and thought, “I should have xyz by now” or “I thought I would be in a position to do xyz.”
One of those variables may have been buying a house this summer. You’re hoping to stop wasting your money on rent and start putting money into your own asset, but a few hurdles got in the way. One of them may be your credit score.
Of course, there are many steps to take before you even begin looking for a home and for most of us, that’s going to be obtaining a loan of some sort and finding out how much you can borrow. This will be heavily determined by your current income, down payment and credit score—which is where some people fall short and give up.
To get a loan, and to get a loan quickly, you as a potential homebuyer need to keep an eye on your finances and credit.
Our experience over the years of working with preferred and qualified lenders has supplied us with a list of basics for you to refer to when monitoring and building your credit.
- Always, always pay on time. No lender likes to lend money knowing that an individual has a repeated record of skipping payments. This indicates a lack of discipline and poor financial management. If it’s just a matter of discipline, enroll in AutoPay, set a calendar and keep track of what you owe and when. This can account for up to 40% of your FICO score.
- Keep a good debt-to-income ratio. Someone with a good ratio has unsecured outstanding credit that is below 50 percent of their annual salary. Try keeping your credit card balances within half of the allowed limit. If your limit is $10,000, restrict your statement to $5,000.
- Pay high interest loans first. Typically, personal loans have the highest interest, so it’s wise to pay those off first since they don’t create any type of asset for you. Home loans, on the other hand, are an asset and can be paid off over a longer period of time.
- Check your credit report. This can be done at minimal cost or you can obtain it from the official FICO site. Checking at least once a year will help you seek any clarification that is needed or allow you to correct any mistakes that have been made.
- Let them know if you can’t pay on time. Most often, people know in advance if they’re going to be late on a payment. If you do, taking action to notify the institution can reduce any penalties or late fees and make a good impression.
This will all take time, but if home ownership is your goal, use these tips to help build your credit and obtain a loan more easily.
Getting the Right Representation When Buying A Home
So, you’ve decided to do it. You’ve set a goal, set your budget and location, got pre-approved and you’re ready for it. You’re doing it. You’re going to buy a home.
Now what? A home purchase is a significant and expensive transaction with long-term implications. You want to buy wisely, at the right price and on good terms. But if you overpay for a home or buy one that involves more upkeep than you can manage, you may end up with buyers remorse.
In order to make the best decision on buying your home, you need to have the best possible information and guidance to make a well-informed decision from someone who’s fiduciary duty is to you solely. Using an Exclusive Buying Agent provides you with the level of representation you need to make sure you aren’t overpaying, overlooking the upkeep, or buying on bad terms. This also helps to avoid any conflicts of interest.
An Exclusive Buyer’s Agent is just that: a real estate professional branded towards representing homebuyers exclusively. Compare this with a dual agent, or sellers agent, who’s vested interest lays across multiple platforms—to the seller and to the homebuyer.
An Exclusive Buyer’s Agent will:
- promote and protect the interests of the buyer with the utmost good faith, loyalty and fidelity, by law
- educate you on local market conditions and the home buying process in general
- perform cost comparisons to protect you from overpaying
- negotiate price and terms exclusively on your behalf
If an agent gives you dual agency disclosure, they aren’t representing you. Conflicts of interest arise when a selling agent represents both the buyer and the seller, and still carries a fiduciary duty to the sellers, which means you don’t get the best deal possible. If you meet a seller’s agent at an open house, for example. and mention to them your need to relocate in one month’s time, that agent must promote the interests of the seller by law and inform the sellers of your situation, thus diminishing your negotiation power.
How Much Do I Need to Put Down?
If you’re like us, you have a list of resolutions this year. A lot of people we’ve spoken with lately tell us that buying a home in 2016 isn’t necessarily their New Year’s resolution, but planning to buy a home is–with one thing in their way: the down payment.
Most of us often feel anxious and overwhelmed at the idea of saving for a down payment. The good news is that first-time home buyers can purchase a home with as little as 3 percent down in some programs. There are a few stipulations to this, but we’re giving you the lowdown below.
The less you put down, the higher the mortgage balance, and the more you’re going to pay. Typically, homebuyers who don’t make a minimum down payment of 20 percent will be required to pay private mortgage insurance (PMI).
What is PMI and how much does it cost?
PMI protects the lender in the event you default on your loan. The cost is most often added to your monthly payment if you’re taking a conventional loan, while loans offered through the Department of Veterans Affairs, the U.S. Department of Agriculture and the Federal Housing Administration handle PMI differently.
The less you put down, the higher the mortgage insurance is. With say, 5 percent down, your PMI is quite high. The total cost of PMI depends on your credit score, and is calculated in terms of risk in tandem with the size of your down payment. For each $100,000 borrowed, PMI typically runs between $30 and $70 per month. If you’re buying a home worth $500,000, with say, 10 percent down, with a 30-year-fixed rate at 4.25 percent, you could expect to pay up to $200 per month in private mortgage insurance.
You have options. If you need to pay PMI, the size loan you can get will be slightly smaller, to allow for the bigger payment. If you get a conventional mortgage, you can get an appraisal and write to your lender and ask to have the PMI removed once you have more than 20 percent equity in the house. FHA loans, on the other hand, have PMI attached for the life of the loan.
So how much should you put down?
Depends on your personal circumstance. You’ll want to make sure you have enough on hand for closing and upfront costs, such as a years worth of taxes and insurance. We suggest speaking with a mortgage broker who can examine your current situation and make a plan that’s in line with your goals. A good mortgage broker can help you weigh your options and help you decide how large of a down payment you’ll need.
There are a few popular programs you can get with a low down payment, which may be particularly appealing to first-time home buyers.
Conventional mortgage: Fannie Mae and Freddie Mac can back loans with as little as 3 percent down. To qualify for this type of loan, you’ll need good credit. If your credit isn’t in good shape right now, talk with a broker than can put you on a good trajectory to start the repair process.
Federal Housing Administration loan: This can be more expensive than a conventional loan, but the FHA has backed loans with as little down as 3.5 percent. They’re also more willing to back loans with buyers who have lower credit scores and thinner credit records. PMI will certainly be factored into this, making the size of the loan you’ll be able to afford a bit smaller due to the monthly payment.
U.S. Department of Veteran Affairs: If you served in the military, you can get a loan backed by the VA with no down payment at all. You’ll have loan origination or funding fees but those can be financed in. This is a really good program, though you’ll still need to qualify based on credit and income. The interest rate is low, there’s no PMI and you may find some extra perks along the way.