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Financial Don’ts When Getting Ready To Buy A Home

If you’re in the process of buying a home, you’ve probably already met with a lender who advised you on what to do and what not to do during the escrow process. But if you’re just getting ready to buy or plan on doing so in the near future, following a few financial tips can mean the difference between qualifying…and not, and also getting a decent rate. These are a few universal “don’ts” that will help you stay on track, even before you get a lender involved.

Don’t take out more credit

If you’re thinking you’re going to buy a house in a matter of a few months, forget that new laptop on the Best Buy card, forget that new car, and forget that Old Navy card. Sure, it’s only a $30 pair of pants. But, taking out more credit can harm your debt-to-income ratios, which can make you look like a credit risk. And that’s not worth it, no matter how cute the pants are.

Don’t pay off all your current credit cards

Your lender will tell you specifically what you should pay down and what you should leave alone, but banks tend to like responsible credit management. In some cases, that may mean carrying a small balance on one or more cards.

Don’t charge up all your cards to the limit

“Responsible credit management” does not mean running every available card up to the limit and/or only making minimum monthly payments. Banks will not look kindly on this when you go to get approved for a loan.

Be careful with old debts

You may think that in order to qualify for a mortgage or get the best possible rate you have to pull your credit and go back through every single entry to identify and take care of anything negative. You’re right about the first part. Pulling your credit so you know what you’re working with is critical, and financial experts recommend doing it annually, regardless of what you’re planning (or not planning) to buy. But be careful with old debts. It doesn’t hurt to ask a lender what should and should not be taken care of. But, in general, you’ll want to:

Pay in full instead of making settlement arrangements – It’s not uncommon for debt collection companies to send out settlement offers that allow you to settle debts for less than the total amount. While this can sound tempting, it likely won’t yield the results you’re looking for. Yes, it’ll stop the harassing phone calls and persistent letters. But if your goal is to get the debt to disappear from your credit report, you’ll be disappointed.


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“When you settle your debt, the activity usually shows up on your credit report as ‘debt settled’ or ‘partial payment’ or ‘paid in settlement.’ You can talk to the settlement company about the specific language they use, but the bottom line is: this is a red flag on your report,” said clearpoint. “FICO doesn’t reveal how much your score will drop, exactly, and your report doesn’t indicate how much of the original debt was forgiven; it simply shows you settled. Either way, it still points to the fact that you may be a credit risk.”

Stick to newer debts – Older debts that are getting close to falling off your report should be the last thing you pay. “You also want to consider the statute of limitations on your debt,” they said. “Most past debts remain on your credit report for seven years, so if you’re close to the time frame when the debt falls off, settling it may not make much of a difference. There’s an ethical argument to be made here, but practically, you might just be settling a debt that was about to disappear anyway.”

Be careful with debt consolidation

If you have a lot of outstanding debt, are in over your head with credit cards and store cards, and can only manage the minimum monthly payment on all your existing loans, you’re likely going to have a hard time qualifying for a mortgage. You may be tempted to lump your debt together into one payment through a credit consolidation company, but beware the consequences. There may be startup fees, interest rates on the consolidation loan could skyrocket after an initial teaser rate expires, and, in some cases, an improvement in credit is years away.

Don’t get lax with your payments

Your lender will reinforce this, but it bears repeating that even after you’ve been prequalified, you need to keep your payments current on your car, your Visa, etc. Your lender will do a recheck before closing just to make sure nothing has changed in your credit report, and if you have new issues, it could impact your loan.

Don’t move money around

“We know a story of one homebuyer who almost lost his home because he had stated on his application that the down payment was coming from a mutual fund account. Then, two days before closing, he decided to sell a baseball card collection instead,” said HSH.com. “The loan had to be underwritten all over, his ownership of the collection, its value and its sale had to be verified, the closing was delayed and the fees increased.”

Don’t change jobs before you buy your home

This is a big no-no don’t if you’re in the process of buying a home or are about to. Among all the other financial information your lender will be collecting in consideration of your loan, they will also be asking about your employment history. You’re obviously less likely to be approved if you’re unemployed (unless you’re independently wealthy, and, in that case, Congratulations!). A recent job change may also be problematic if the bank is feeling jumpy about your job security

Written by Jaymi Naciri

Source: https://realtytimes.com/consumeradvice/mortgageadvice/item/1005579-20170928-financial-donts-when-getting-ready-to-buy-a-home?rtmpage=null

April 9, 2018   No Comments

5 Reasons Why to Sell This Spring!

5 Reasons Why to Sell This Spring!

Here are five reasons listing your home for sale this spring makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory has declined year over year for the last 32 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

Historically, the average number of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 45 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

Prices are projected to appreciate by 4.8% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on With Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Written by KCM Crew

Source: https://www.keepingcurrentmatters.com/2018/03/26/5-reasons-why-to-sell-this-spring/

March 27, 2018   No Comments

Renovation Tips For A Classic, Not Trendy, Home

Here’s the dilemma. You’re getting ready to redo your kitchen and you want it to be stylish and modern but not trendy. After all, this is the only kitchen renovation you ever plan to do and you don’t want it to be outdated before you are even finished with the final touches.

If you’re paralyzed because you’re afraid of making the wrong decision, we get it. We’re facing a similar dilemma here, FYI, with floors that need to be done and so many options from which to choose and no winner (yet) because it’s not yet clear if what is currently hot is just a flash in the (floor) pan or will stick around for a while.

So how do you know how to choose? First, it depends on what your goals are. If you’re just looking to update and then sell your house, choosing materials that are trending now may be a good call. If you’re thinking, “I want to love this and have it still look good in 10 years,” that’s another story.

“You’ve probably taken on a renovation project because you want to update the style. While you’d like to give your home a modern look, choosing a short-lived style or personal design is a major fail,” said HomeAdvisor. “While a trendy design is sure to make your home stand out, it’s also going to quickly go out of style. This is a big problem if you want to resell your home in the future. Modernize the look of your kitchen or bathroom, but avoid bold styles that only appeal to those with specific tastes.”


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Go neutral

Yes, neutral can be boring. It’s true. (It can also be super chic when done right.) Making a bold choice with your kitchen countertops might feel like the right way to go right now, but you may turn around in a couple years and regret that choice, especially if you’re going to try to sell your home. You can always bring in pops of color with accessories or items that are easier to replace or redo.

For the last several years, grey has been the go-to color for homes. Prior to that, it was beige – a color that is currently seeing a resurgence even though grey is not gone – yet. Black and white is another currently hot option for color schemes, and, the bonus is, “black and white remains a classic combination,” said HGTV. Certain colors will never go out of style – House Beautiful has 10 of them. But remember that no matter what color you choose, it’s not permanent. Painting is one of the easiest ways to update your space and change the mood whenever you like.

Just keep in mind that high ceilings and other architectural features may make a DIY situation un-DIY-able and may make a redo more expensive because you have to hire someone. Key in on walls that don’t soar to a pitched ceiling or that can act as a focal wall for high-impact that’s easy to accomplish yourself.

Be smart about your kitchen

You may have a desired look cemented in your head for your kitchen, but are you making smart choices? Shaker cabinets, farmhouse sinks, and marble countertops are a few good options if you want something that looks modern but “will stand the test of time and still look as beautiful twenty years from now as it does today,” said Apartment Therapy.

Go eclectic with your furniture

An entire house full of mid-century modern furniture can begin to look like a showroom, and when the trend is over, it can be painful to replace it all. Creating a more eclectic look with an eye toward classic pieces creates staying power. Adding in a vintage piece or two can add another important layer. “A design rule that’s sure to remain true? Every room in your home needs a unique vintage piece,” said HGTV. “Even in newly-decorated spaces, distressed or worn pieces create a collected, designer look.”

Avoid hyper trends in larger items

Drapery, rugs, and bedding can be easily changed out to accommodate your fickle design taste. But when it comes to the larger pieces in the home – a couch or a set of chairs, perhaps, avoiding trends will give you longevity. “Timeless decor means fabrics that will stand up to years of changing trends! They transcend those changes,” said Stone Gable. “Don’t rush out and buy foundational furniture in the ‘color of the year’! It’s only the ‘color of the year’ for one year! Choose colors and patterns, especially when buying big ticket items, that will still look amazing when this year’s trends have come and gone. Add layers of accent decor like lamps, art, tableware, pillows, bedding, etc. in more updated colors and styles. They can be changed out easily when they get tired or are out of style.”

Written by Jaymi Naciri

Source: https://realtytimes.com/consumeradvice/homeownersadvice/item/1015236-20180219-renovation-tips-for-a-classic-not-trendy-home?rtmpage=null

February 27, 2018   No Comments