Considering Making a Move?
When you're thinking about making a move, the first steps in the home buying process are:
1. Deciding when you want to make your move
2. Considering how much money you would like to spend
3. Thinking about what type of home you would like
4. Deciding where you would like to live
The next step is usually finding out how much loan you can qualify for and deciding the type of financing will work best for you.
If you're in the "thinking about it" stage, you will want to speak with a lender about receiving pre-qualification. If you choose to become pre-qualified, the lender will determine how much you can borrow based on financial information you provide to the lender. Pre-qualification is useful for making preliminary decisions about how much home you can afford, but does not assess your creditworthiness.
You will need to fill out a loan application and go through the lender's loan approval process at a later date. When you decide to buy a home, you will want to become pre-approved for a loan prior to beginning your home search.
Please don't hesitate to call or email me for additional information about the buying process. Our goal is to provide you with practical information as you consider your next move. And, when you're ready to make your move, we'll help you find your dream home and handle all the details of the transaction, so all you need to do is pack
Showing posts with label Home Buying Process. Show all posts
Showing posts with label Home Buying Process. Show all posts
Tuesday, September 23, 2008
Friday, February 29, 2008
Richmond Real Estate - Buy versus Rent!
Nearly a full third of households are still renting...but if you are one of them, you could be paying a hefty price. Additionally, the children of the baby boomer generation are close to or at the home buying age, but these "echo boomers" could mistakenly decide to put off the purchase of a home because of all the noise about a "bubble" in home prices.
Is there a "bubble"? The simple answer is "no". Even if interest rates move a bit higher, it won't be enough to cause a nationwide slide in home prices. The key to a healthy housing market is the job market. If the payment on a new home might be slightly higher due to increased interest rates, it generally won't stop someone from purchasing the home of their dreams...but if they feel their job is in jeopardy, it might be enough to stop them from making a move. So with the currently low levels of unemployment and the beefy gains in job creation, it looks like the housing market will remain vibrant. Although it will be difficult to sustain the double-digit appreciation, perhaps closer to the historical 6-7% range, which is still very good.
It is important to note that housing tends to be localized. So if the job market in your area is weak, housing prices could under perform the rest of the country.
But this talk of a housing bubble has been going on for a few years now, and those who were unfortunately victimized by continuing to rent instead of purchasing a home are painfully mulling over their missed opportunity. But is it too late?
Let's look at an example. If you are paying rent at $1,500 per month and you landlord increases your rent by a modest 5% each year, you would wind up paying just about $100,000 over a 5-year period! Worse, after forking over $100,000, you still would have nothing to show for it.
And speaking of having nothing to show for it-how about any improvements you might make to rented property? It's uncommon for renters the freshen up the pain, install new light fixtures or plant flowers outside, but guess what...all your efforts, labor and the benefit of the improvement belongs to? Your Landlord, not you.
With an extensive variety of programs to help buyers obtain a mortgage with little to even zero down payment, the very same money could have been used towards home ownership. Even using a standard fixed program, a mortgage of $300,000 could be obtained with a total monthly mortgage payment - in property taxes and insurance - of around $2,200. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on renting during the same period after your tax benefit.
And the benefits of home ownership are quite considerable. Because the mortgage is being paid down every month, equity is being built. After 5-years, the $300,000 mortgage would be reduced to $279,000, adding $21,000 to your net worth. Home appreciation can add an even bigger chunk. If your home appreciates a modest 5% per year, the value of a $300,000 would increase to $383,000 after 5-years. Subtracting the remaining mortgage of $279,000 and you have a whopping $104,000 of additional net worth! Even if the appreciation level were at 3.5% or half the historic norm, the result would be $77,000 of additional net worth.
But if laying out the initial increase in monthly payment and having to wait for your tax benefit to show up April is a tough nut to crack, the IRS wants to help. Instead of waiting to file for the tax benefits derived from your new home purchase, you can simply adjust the amount of your withholding. This allows you to have tax withheld from each paycheck so you can handle the new mortgage payment more comfortably throughout the year. In essence, you are taking your tax refund as you go instead of letting Uncle Sam hold it all interest free.
Visit www.irs.gov and use the IRs withholding calculator. This handy tool can quickly show you the change in withholding will do to your net paycheck.
Don't be victimized by the bubble hype. Buying a home is a big step, but it is almost always one in the right direction !
For additional local real estate information, information about me and my services, to request home listings by E-Mail, to request a market analysis on your current home, or to tour the MLS Listings please visit my web sites at www.RichmondVAHomes4Sale.com or www.e-RichmondHomes.com.
Is there a "bubble"? The simple answer is "no". Even if interest rates move a bit higher, it won't be enough to cause a nationwide slide in home prices. The key to a healthy housing market is the job market. If the payment on a new home might be slightly higher due to increased interest rates, it generally won't stop someone from purchasing the home of their dreams...but if they feel their job is in jeopardy, it might be enough to stop them from making a move. So with the currently low levels of unemployment and the beefy gains in job creation, it looks like the housing market will remain vibrant. Although it will be difficult to sustain the double-digit appreciation, perhaps closer to the historical 6-7% range, which is still very good.
It is important to note that housing tends to be localized. So if the job market in your area is weak, housing prices could under perform the rest of the country.
But this talk of a housing bubble has been going on for a few years now, and those who were unfortunately victimized by continuing to rent instead of purchasing a home are painfully mulling over their missed opportunity. But is it too late?
Let's look at an example. If you are paying rent at $1,500 per month and you landlord increases your rent by a modest 5% each year, you would wind up paying just about $100,000 over a 5-year period! Worse, after forking over $100,000, you still would have nothing to show for it.
And speaking of having nothing to show for it-how about any improvements you might make to rented property? It's uncommon for renters the freshen up the pain, install new light fixtures or plant flowers outside, but guess what...all your efforts, labor and the benefit of the improvement belongs to? Your Landlord, not you.
With an extensive variety of programs to help buyers obtain a mortgage with little to even zero down payment, the very same money could have been used towards home ownership. Even using a standard fixed program, a mortgage of $300,000 could be obtained with a total monthly mortgage payment - in property taxes and insurance - of around $2,200. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on renting during the same period after your tax benefit.
And the benefits of home ownership are quite considerable. Because the mortgage is being paid down every month, equity is being built. After 5-years, the $300,000 mortgage would be reduced to $279,000, adding $21,000 to your net worth. Home appreciation can add an even bigger chunk. If your home appreciates a modest 5% per year, the value of a $300,000 would increase to $383,000 after 5-years. Subtracting the remaining mortgage of $279,000 and you have a whopping $104,000 of additional net worth! Even if the appreciation level were at 3.5% or half the historic norm, the result would be $77,000 of additional net worth.
But if laying out the initial increase in monthly payment and having to wait for your tax benefit to show up April is a tough nut to crack, the IRS wants to help. Instead of waiting to file for the tax benefits derived from your new home purchase, you can simply adjust the amount of your withholding. This allows you to have tax withheld from each paycheck so you can handle the new mortgage payment more comfortably throughout the year. In essence, you are taking your tax refund as you go instead of letting Uncle Sam hold it all interest free.
Visit www.irs.gov and use the IRs withholding calculator. This handy tool can quickly show you the change in withholding will do to your net paycheck.
Don't be victimized by the bubble hype. Buying a home is a big step, but it is almost always one in the right direction !
For additional local real estate information, information about me and my services, to request home listings by E-Mail, to request a market analysis on your current home, or to tour the MLS Listings please visit my web sites at www.RichmondVAHomes4Sale.com or www.e-RichmondHomes.com.
Thursday, November 1, 2007
Mortgage Tips for a Tight Lending Market!
Even home buyers with good credit may have trouble getting a mortgage these days.
Here are three tips for home buyers in search of the best deal.
* Conforming loans win. Keeping the loan below $417,000, the most that Freddie Mac and Fannie May will buy, saves big money since the rate on nonconforming loans is now a full point higher than for lesser loans. If getting the cash together is a challenge, Greg McBride, senior financial analyst with Bankrate.com, suggests taking out a small second mortgage or tapping an existing line of credit.
* Don’t rock the boat. "Anything that might disrupt your credit history will be seen with a more jaundiced eye," says Keith Gumbinger, a vice president with mortgage research firm HSH Associates. He says avoid big credit card purchases or, if possible, major life changes.
* Get multiple approvals. McBride urges borrowers to get advance approval from more than one lender, just in case the lender – not the borrower – goes under.
Source: Smart Money, Brad Reagan (11/1/07)
Here are three tips for home buyers in search of the best deal.
* Conforming loans win. Keeping the loan below $417,000, the most that Freddie Mac and Fannie May will buy, saves big money since the rate on nonconforming loans is now a full point higher than for lesser loans. If getting the cash together is a challenge, Greg McBride, senior financial analyst with Bankrate.com, suggests taking out a small second mortgage or tapping an existing line of credit.
* Don’t rock the boat. "Anything that might disrupt your credit history will be seen with a more jaundiced eye," says Keith Gumbinger, a vice president with mortgage research firm HSH Associates. He says avoid big credit card purchases or, if possible, major life changes.
* Get multiple approvals. McBride urges borrowers to get advance approval from more than one lender, just in case the lender – not the borrower – goes under.
Source: Smart Money, Brad Reagan (11/1/07)
Sunday, October 21, 2007
Why Use a REALTOR®?
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Source - realtor.com
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Source - realtor.com
Monday, October 8, 2007
Rent-to-Own Deals: Smart Questions to Ask!
Sellers who can’t unload their properties through a conventional sale are proposing rent-to-own deals more frequently these days.
For sellers, the advantage of rent-to-own is the likelihood that the renter will eventually permanently take the property off their hands. For buyers, rent-to-own can provide the credit-challenged or cash-strapped a route to homeownership.
But for buyers and sellers, there are also many potential drawbacks. If your customers are considering a rent-to-own deal, here are some smart questions they should consider.
For Buyers:
Source: Milwaukee Journal Sentinel, Joanne Cleaver (09/22/07)
For sellers, the advantage of rent-to-own is the likelihood that the renter will eventually permanently take the property off their hands. For buyers, rent-to-own can provide the credit-challenged or cash-strapped a route to homeownership.
But for buyers and sellers, there are also many potential drawbacks. If your customers are considering a rent-to-own deal, here are some smart questions they should consider.
For Sellers:
- Who will tend to the property and pay for routine maintenance?
- Who pays for major repairs?
- What are the costs of setting up and managing an escrow account for the portion of rent allotted to the down payment?
- Will you manage the property yourself, or hire an agent?
- What if the renters change their minds? Who keeps the money in the escrow account?
- If the buyers change their minds, what will be required to put the property back on the market?
For Buyers:
- How much of the rent is going to the down payment?
- How locked in are you if change your mind? What will it cost you to get out of the deal?
- How long will it take to accumulate enough of a down payment that you are likely to qualify for a mortgage?
- What happens if you don’t qualify for a mortgage by the specified deadline? Can you continue to rent?
- Who will be responsible for routine maintenance?
- Who will pay for major repairs?
- Do you hope to strengthen your credit rating by paying rent on time? If so, will the owner report your good habits to credit bureaus?
Source: Milwaukee Journal Sentinel, Joanne Cleaver (09/22/07)
Saturday, October 6, 2007
Tips for Buying a Fixer-Upper!
Buying a basically sound house and updating the cosmetics is a profitable thing to do in almost any market. But be careful what you buy or it may end up costing you later on.
Here are 10 things to consider when selecting a fixer-upper:
1. Purchase homes that are at least 30 percent below the market value of comparable nearby homes.
2. Choose a location with a low crime rate, good schools, and quiet streets. There isn’t anything you can do to cure a poor location.
3. Choose a house with three or four bedrooms. Smaller homes are unlikely to have enough buyer appeal.
4. Avoid homes that need major unprofitable repairs, include wiring, major plumbing, foundation repairs, major kitchen and bathroom renovation, room additions, and/or a new room. Spending money on these basics doesn’t add value. Buyers expect them.
5. Find a home that needs profitable cosmetic improvements like fresh paint inside and out, new light fixtures, new carpets and flooring, and fresh landscaping.
6. Look for affordable, low down-payment financing, such as taking over an existing mortgage, lease with option to buy, seller carry-back financing, or a combination.
7. Avoid obtaining new bank financing until the fix-up work is completed and the home’s market value has increased.
8. Don’t buy a fixer-upper that is more than 60 minutes from your current residence because it is important to visit everyday while the renovation work is being done.
9. Make sure that the seller or tenants will vacate immediately upon transfer of title.
10. Look for sellers who are motivated to sell and who want to make the sale happen.Source:
Inman News, Robert J. Bruss (09/01/07)
Here are 10 things to consider when selecting a fixer-upper:
1. Purchase homes that are at least 30 percent below the market value of comparable nearby homes.
2. Choose a location with a low crime rate, good schools, and quiet streets. There isn’t anything you can do to cure a poor location.
3. Choose a house with three or four bedrooms. Smaller homes are unlikely to have enough buyer appeal.
4. Avoid homes that need major unprofitable repairs, include wiring, major plumbing, foundation repairs, major kitchen and bathroom renovation, room additions, and/or a new room. Spending money on these basics doesn’t add value. Buyers expect them.
5. Find a home that needs profitable cosmetic improvements like fresh paint inside and out, new light fixtures, new carpets and flooring, and fresh landscaping.
6. Look for affordable, low down-payment financing, such as taking over an existing mortgage, lease with option to buy, seller carry-back financing, or a combination.
7. Avoid obtaining new bank financing until the fix-up work is completed and the home’s market value has increased.
8. Don’t buy a fixer-upper that is more than 60 minutes from your current residence because it is important to visit everyday while the renovation work is being done.
9. Make sure that the seller or tenants will vacate immediately upon transfer of title.
10. Look for sellers who are motivated to sell and who want to make the sale happen.Source:
Inman News, Robert J. Bruss (09/01/07)
Monday, June 4, 2007
Home Buying!
Buying a home can be stressful, but it doesn't have to be! I’ll work hard to make your experience exciting and fun. While we are working together I’ll be like your new best friend! I promise to help you: Save time, Money, and Stay Informed.
Here is the step by step guide. But please don't feel like you need to understand everything right away. And I will be there for you every step of the way.
Here is the step by step guide. But please don't feel like you need to understand everything right away. And I will be there for you every step of the way.
- Decide that buying vs. renting is best for you.
- Determine how much you can afford.
- Get Pre-Approved, Shop for a loan
- Review a preliminary MLS list.
- Find your dream home.
- Making the offer.
- Negotiate the contract.
- Changes to the contract.
- Formally apply for a mortage loan.
- Inspection phase.
- Inspection issues and resolution.
- Appraisal & Insurance.
- Loan commitment.
- Preparing for the move.
- The closing.
- Possession.
- Post closing.
Remember, I will be there to support you during these very important steps! If you have a comment or question regarding these buying steps, please feel free to call or e-mail me.
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