5 New Year’s Resolutions to Get You into the Best SHAPE … to Purchase a Home

 1. Save, save and save some more. At minimum to qualify to purchase a home, you will need:

• 3.5% of the home’s price or higher for a down payment.

• An extra 2-4% for closing cost.

• And some loans require 6 months cash reserves in savings

And once you purchase a home don’t forget about the moving cost and other expenses that typically follow.

2. Hone in. Do your research on different areas you would like to live. This can be as easy as doing a property search online. Eliminate those areas you can’t afford or are too far from work. Narrowing your search will make it easier to gather information about school districts and other things that are important to you.

Helpful tip: Consider getting a real estate agent before you’re ready to go tour houses. An agent’s services go way beyond “showing and selling” houses. They can guide you through the entire home buying process, from well before to well after the actual purchase. If you are open and honest about your time frame you won’t have to worry about being “sold” too until you are ready to buy.  Learn more: 4 Busted Myths about Using a Real Estate Agent

3. Assess your credit. Obtain your credit report now. Don’t wait to be surprise by your credit score when your lender pulls it six months from now. Know in advance if there are some areas you need to improve. Working to bring up your score could save you thousands later on. Also, review your history for any discrepancies. Resolving an error on the report can take some time but may help your score.

Helpful tip: The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies (Equifax, Experian, & TransUnion) to provide you with a free copy of your credit report, at your request, once every 12 months. Here is the website for a free annual credit report. Be wary of other free credit websites advertised on TV. They almost always have hidden fees or gimmicks.

4. Plan. Consider your time frame. When do you want or need to move? What factors will affect your time frame?

Do you have a lease? If so, look into the cost of breaking a lease or extending it month to month. Knowing the cost will help you determined how much “pressure” there is to move by a certain date.

Are your financials in order? Once you have a time frame determined you can work backwards to allow the appropriate time to save or correct your credit.

Are you considering short sales or foreclosed homes? . Short sale homes can run into complications when it comes time to close and may take longer than expected, a month or so longer. Consider these few extra months from the beginning.

5. Educate. Take time to learn about the home buying process before you start it. Between envisioning your dream home and the constant media message of “Buy, Buy, Buy!” it is easy to get sucked into the emotional whirlpool of buying a home. Arm yourself with knowledge.

Helpful Tip: There is a lot of real estate information out there and it is easy to get over whelmed. Remember that housing trends should be considered locally, not on a national level. Break away from the generic News headlines and get local with Market Minutes Reports.

Photo Credit: by ~ggvic~

Showing your home during the Holidays

Each year as we head into the Holidays, potential Sellers always ask if they should list or keep their home on the market over the Holidays.

First, there is no right or wrong time to list and sell your property. Buyers buy 365 days a year, and they are very motivated if they are looking in December. These buyers can fall into several groups. The top two are those who are relocating, and those who need to close before the end of the year for tax reasons. Even though there is always a seasonal drop in January, December will frequently see a little upward “bump” as buyers get the end of the year push. If you keep your home on the market during a time that normally sees a drop in inventory, you can capitalize on these conditions.

If you decide not to show your home, we suggest you take it off the market and re-list it in January. This is a simple, but effective strategy to have your property appear as a “New” listing and will also help reload any marketing your agent plans for the New Year.

If you plan to keep your home on the market, then we suggest you not go overboard with holiday decorations. Seasonal staging almost always is a turn-off for buyers. Simple is best if you do plan to decorate. Some of the most successful holiday sales actually have no decorations. As with other times of year, you must depersonalize and declutter. Be sure to keep any decorations secular and ethnically neutral. You should put away things like nativity scenes and any family heirlooms.

As for showing times, be very careful at using “blackout times”. You will certainly lose buyers if you make it difficult for an agent to schedule a showing. Give your listing agent clear instructions like – no showings one 12/24, 12/25, 12/26, and 1/1.

Be flexible this time of year. Plan on there being some crazy times and showings and be prepared to have dirt tracked in, sidewalks to shovel and late notice on showings.

Lastly, do not leave fires or candles burning. This is a must. You should have your home well lit and homely and even allow some of those holiday smells – cookies and pies – to remain.

Good luck!

photo credit: raiosunshine

Mortgage Loan Approval Denied, Now What?

As previously stated in the “5 must haves for mortgage approval” article; the 5 factors to a loan approval are down payment, job history, debt ratio, credit score and paper work. Other than the required documentation the other 4 factors play off each other. Borrowers with less than perfect credit can put down a larger down payment to keep interest rates low. Or those with short job histories can bring a co-signer to gain credibility. Mortgage applications aren’t as cut and dry as some would think.

Most lenders are willing to play the what if game.  If a borrower is denied the loan officer can easily revisit their application and attempt to tweak the application to the borrower’s favor. This is not mortgage fraud. They can only tweak the loan terms not the borrowers’ information.

For example, adjusting the loan amount lower or considering longer loan terms.  Or running a what-if scenario of how much more of a down payment is needed to offset a weaker factor like credit score.  This gives the borrower the opportunity to step back and weigh all options. And thanks to the AUS ( automatic underwriting system) this can be done in a matter of minutes not days like in the past.

If the buyer cannot or chooses not to meet the adjusted requirements this is when the loan application is denied.  The great thing about the tweaking process is that the borrower now has a roadmap detailing exactly what the borrower has to do to be approved in the future, to the dollar amount. “If you save $10,000 more or bring your credit score up 20 points then we can do this deal.”

So “now what?”  Well that depends on each borrower’s particular situation, be it fixing a credit score or saving additional funds.  The silver lining is with interest rates projected to remain low for the next year and market pressure keeping prices down, time is on the borrower’s side.

Source: Mortgage Confidential: What you need to know that your lender won’t tell you

Benefits of Buying a New Home

From Guest blogger: Connect Utilities

 

Whether buying new or resale homes, choices abound in today’s home buying market. Buying a newly constructed home may be top of mind as many factors come into play.

Choice: One reason buyers go the new home route is that they are given plenty of choices and options in the level of customization of their home. These options may range from being able to choose color schemes, upgrades like trim moldings, kitchens finishing’s, selection of flooring options throughout the home, home automation and more. New home buyers can have their builder add their personal touches that satisfy their personality, personal tastes and needs.

Home repair cost: This is a significant factor when buying new. Home repairs on a new home are kept at a minimum. And even if repairs are needed, today’s builders include warranties for certain period of time. Most builders cover home repairs for the first year you live in the new place. Resale homes in other hand, can offer warranties, but often are limited in the items it covers. Many times these warranties need to be purchased separately by the buyer.

Best Neighborhoods to “Trick or Treat”

We at Long and Foster want to recognize 3 cities in our area that made the Zillow’s 2011 “Best cities to trick or treat” list.  Congratulations to #7 Washington, D.C. ,  #18 Virginia Beach and Baltimore close behind at #19.

The index is calculated based on 4 factors; home values, walk score, population density and local crime data. See below for the 5 best neighborhoods in each city.

Washington, D.C.: West End, Kalorama, U Street Corridor, Georgetown, Dupont Circle

Virginia Beach: Alanton, Thoroughgood, Great Neck, Bay Colony, The North End

Baltimore: Roland Park, Homeland, Guilford, Hampden, Mount Washington

We would be happy to show you a home in any of these neighborhoods. Reach us by email or by phone (855) 235- 7926. Have a safe and Happy Halloween from your friends at Long and Foster.