Wednesday, May 17, 2017

Why get Pre-Approved for a Mortgage?

In a seller’s market, starting the loan process before your home search may help you stand out from the rest of the potential buyers for a home. Certain steps and materials will be necessary to begin the loan process. Ultimately, this will also help the buyer discover what they can afford in the current market.
Getting StartedFind a lender that will help walk you through the process and get you started on the path towards what type of loan works best for you. The loan officer will need some information from you which includes an assessment of your income, assets, debts, and credit history to determine the loan
amount for which you would qualify. Your lender can give you an idea of how much you will need for a down payment based on the type of loan you want to enter into at the time. He or she will also show you the amount that you will have to pay towards mortgage insurance, hazard insurance and
property taxes which typically is added to your monthly mortgage payment.
You will need to pull some of your financial information. You will need to provide the lender with your gross pay before taxes and deductions, savings and other liquid assets available for the down payment and closing costs. You also need to figure in any debt that you currently have such as
outstanding loans, student loans, credit card debt, car payments, personal loans and other home loans if you have them.
It is important to know your credit score as well. Your credit history and rating will be taken into consideration when determining the principal amount you can borrow and the interest rate that you will pay. As a consumer, you are entitled to one free credit report per year from each of the 3 major credit report bureaus (Equifax, Experian and TransUnion). Make sure that all information is accurate on each report and that you can explain any items that may appear on the reports before starting a conversation with your lender.
What is Included in a Mortgage Payment?A payment typically consists of up to 6 items:
1. Principal: Dollars used to pay down the mortgage balance.
2. Interest: Charge on money borrowed from the lender which is also tax-deductible.
3. Taxes: Property taxes that are paid to the county where your home is located. These are also tax-deductible.
4. Mortgage Insurance: This is money that goes to the insurance company to protect the lender from losing money if you default on the loan (not always required, depends on the loan type and loan to value).
5. Hazard Insurance: Insurance covering home and belongings.
6. HOA: Fees for the administration of your homeowner’s association to pay for community-shared responsibilities. (Note: Lenders do not collect these fees in the mortgage payment. If borrower is buying a condo, lenders will require content coverage insurance).
What is Pre-Approval?A pre-approval is an actual written loan commitment by a lender after applying for a loan. This can give you an advantage over other prospective buyers interested in a property. Some offers may be contingent upon a buyer getting pre-approved first.
Lenders employ underwriters who assess your risks and approve your loan. There are numerous mortgage loans available with specific guidelines for approval but the basic criteria reviewed by the underwriter is very similar.
The underwriter will look at the following:
  • Credit Score and Credit History - Focus on having a good solid 12-month payment history with no 30-day late payments.
  • Employment History and Method of Income - Underwriter will look for 2 years of consecutive employment with “little” to no “unexplained” job gaps. Self employed borrowers should consult their lender for further details.
  • Monthly Debts Compared to Monthly Income (Debt to Income Ratio or DTI) - This is calculated by dividing your monthly credit debts by your monthly gross income.
  • Assets and Liquid Ability to Repay- Enough assets to pay for the down payment, closing costs,and pre-paids. Assets include checking and savings, CD’s and Money Markets, Stocks and Bonds, 401K and IRA’s, gifts from family and grants or loans from the government.
  • Type of property you are buying.
  • Use of the property such as owner-occupied, investment or second home.
Types of MortgagesFixed Rate: Same interest rate for the duration of the loan. You will have the same payment due each month until the loan is paid back entirely. Available in 30 year, 25 year, 15 year and 10 year loans.
Adjustable Rate Mortgage: This type of rate has fixed rate terms prior to the adjustment. The interest rate on this loan will adjust according to an index that goes up and down based on economic factors. It can be
set up with fixed rate periods ranging from monthly to 3, 5, 7 or 10 year terms, but is generally still a 30 year loan. Consult your lender for further details.
It is best to consult with your loan officer to find the best mortgage type that works for you and your current circumstances.

Sunday, May 14, 2017

Happy Mother's Day!

Real estate agents often use the word “home” instead of “house” when speaking with clientele.

Some people may think they’re the same thing, but they aren’t.
A house is a structure… something you can buy, sell, or rent.

Something you can live in.

Something that will give you shelter from a storm.

But a house is not always a home. Home is where the heart is, as they say.

And, it’s the heart of a mom that often makes a house a home. The love of a mom is the shelter from the storms of life that no house alone can protect from.

So, here’s to you on this Mother’s Day!

May your day be blessed, happy, restful, and fun. And know that it’s you that makes a house a home.

Happy Mother’s Day! (Even if you're not a MOM!)

Friday, May 12, 2017

Mesa County Colorado Real Estate Report for April 2017

Check it out!! Listings are down 6% while sales are up 6%!! Prices are up and inventory is WAY down!! I just had a home go under contract in 5 days!! Thinking of selling?? Now is a great time! Contact me for more information on how I can sell your home quickly while keeping more of your hard earned equity in your pocket!!

Monday, May 1, 2017

Why You Shouldn’t Let A Website Tell You Your Home’s Value

Picture this... There's an inexperienced real estate agent in your town. He hasn't sold any homes yet. He wants to drum up some business. So, he climbs up onto your roof and paints what he estimates to be the value of your home. He feels like this could be a win-win: YOU get to know the value of your house, so he was helpful to you, without even having to meet with him... ... and HE gets to show you how that he knows his stuff. Hopefully you'll turn to him for help once you want to sell your home. But you're kind of ticked off, aren't you? First off, this guy painted on your roof. That's just vandalism. Beyond that, he wasn't even close to accurate! The value he painted up there is tens of thousands of dollars off.

He didn't even see inside your home

You notice he did the same thing to all the other houses in the area. He seems off on the value of all of them. It's still kind of intriguing, though, because you're like, "Hmm, I always felt like Bill's place was worth less than mine. Looks like I was right. But there's no way Gary's house is worth more than mine, that agent is craaaazy. Unless maybe Gary did some major remodeling inside..." But how would the agent know? He never even went inside your neighbor's house. Or your house. Or anyone else's house. He just eyeballed everyone's house from outside, and took a quick peek at some data available to the public. Then slapped his estimate up on your roof for everyone to see. His estimates are all over the place. Some high. Some low. Once in a while he seems to be somewhat in the ballpark.

His "value" affects your actual value

Beside the fact that this guy vandalized your roof, now you have people sizing up the value of your home based upon a number he came up with, without even seeing inside your home. It was careless and thoughtless. He lacked respect for your privacy, your equity, and ultimately your wealth. The value of your home can now be viewed by anyone, for whatever reason they feel. It would be even worse if you were in the middle of trying to sell your home, and now you have buyers pulling up, seeing your painted roof, and considering his estimate when (and if) they make an offer.

Can you imagine if a real estate agent actually did this?!

You'd probably want to report him to the police, his real estate broker, the real estate commission... and all of your friends, family and neighbors. You'd want everyone to know not to trust this guy, or give him any business.

Online valuation sites are basically doing this to you

You've probably seen or heard about websites where you can look up the value of your house (or anyone else's house) for free. It seems great because there's no need to even talk to a real estate agent. Just pop in the address, and voila, you get to see the value of the home. You might figure that it's super accurate, since they use fancy algorithms and stuff. However, these online real estate valuation sites are all basically painting a number on your roof, without ever having gone inside, and without ever having sold a house. And they're definitely not experts in your local market. Unfortunately, there isn't much you can do about it. They're using public data to come up with their estimates. They didn't steal anything. They didn't actually paint on your roof (they just hover a value over it digitally). They post disclaimers about their accuracy (or lack thereof), at least if you really, really look for them. Plus, who would you even report them to anyway?!

Start valuing real estate agents' values

The thing is, these sites exist because people tend to like them, and look at them. They wouldn't exist if people didn't continue to click on them. But people do. They certainly are convenient, and entertaining, even if they are not accurate. Many people just don't want to deal with real estate agents, until and unless they have to. But that's actually what you should be doing if you want an accurate value of your home. Great real estate agents take a lot of time and pride in estimating the value of a home. This is not something you can do remotely by simply reviewing public data and algorithms. In order to be accurate, even a local real estate agent needs to see inside of your home. So, instead of encouraging these online valuation sites to exist, by visiting their sites and clicking around... on a local real estate agent's site, and invite him or her in to take a look at your house, and come up with an accurate value. Don't rely on an online valuation. And, whenever possible, spread the word about the inaccuracy of these online valuations because they can affect the perceived value of your home... and beyond. And they will exist as long as people continue to pay them any attention. Pay attention to real estate agents instead.

Want to know what your home is actually worth!! Call me for a free, NO OBLIGATION, home value estimate and then let me tell you how much of your equity you could keep by using my services!

Friday, April 28, 2017

6 Reasons Your Agent Wants You Pre-Approved Before Showing You Homes

Ever had an agent deny to show you a home because you weren't pre-approved for a mortgage? It's not because they're mean, or they don't value your business... it's actually because they're looking out for your best interests. Let's face it, shopping for a home before getting pre-approved for a mortgage is like walking into a grocery store without a wallet. You may have the desire to buy, but you lack the ability. Let’s cover some basics...

What is a mortgage pre-approval?

In a nutshell, a mortgage pre-approval is written assurance from a lender or broker that you’re able to borrow money to purchase a home up to a certain amount. It’s based on the income, employment and asset documentation you supply at the time of application, in conjunction with your credit history. So let's look at the 6 reasons you should get pre-approved.

1. It carries more weight than a “pre-qualification”.

A pre-approval differs from a pre-qualification. With the former, the lender has actually checked your credit and verified your documentation to approve a specific loan amount (usually for a particular time period such as 30, 60 or 90 days). A pre-qualification can be useful as an estimate of how much you can afford to spend on your home, but it’s a less accurate indicator of your ability to purchase. A pre-approval always carries more weight.

2. You’ll know how much house you can afford.

Getting pre-approved before you begin house hunting allows you to know how much house you can realistically afford. Knowing this narrows down the options and makes the selection process more efficient. Not to mention, it protects you from the unpleasant surprise of realizing the home you fell in love with doesn’t fit your budget.

3. It adds clout to your offer.

In many markets, homes attract more than one offer. If the sellers are weighing one offer against another, they may lean towards the one accompanied by a pre-approval letter. That’s because pre-approvals instill confidence that the buyer is financially capable of purchasing their home.

4. It could increase your negotiating power.

In addition to strengthening your offer when compared to buyers who haven’t taken this step, getting pre-approved may give you the upper-hand when negotiating the price. If the homeowner is eager to sell, they may be more willing to accept a lower offer from someone they’ve been assured is financially capable of purchasing their home.

5. It saves time.

Obtaining a mortgage is a lengthy process. Getting pre-approved ahead of time shortens the time between contract to close -- this way you’re ready to proceed with finalizing the mortgage once you’ve found the home you want to purchase.

6. Without it, most agents won’t work with you.

Makes sense, too. Right? Think about it: when you hire an agent, he/she will invest countless hours showing you homes over the course of your house hunt. If you were in their shoes, wouldn’t you want assurance that your hard work would lead to a favorable outcome for both you and your client?

Looking for a great lender!! I have some amazing ones to recommend!! Contact me!