From robot dogs to a $5,000 massage chair, the Consumer Electronics Show featured some cool George Jetson-y smart home tech that is becoming all the rage. Check out this video of some of the best and brightest for your home at CES this year. Sign me up for a laundry folding machine! Which invention would make your life easier?
For many Americans, coming up with a down payment for their first home can be a major roadblock—and quite often the reason for renting, rather than owning a home.
A down payment is the difference between the home’s purchase price and its mortgage amount. This percentage of the sale price must be paid up-front and can vary by lender, location, and loan program. A higher down payment generally translates into lower loan interest rate requirements.
Typically, a down payment comes from personal cash savings, but it can also be a gift that is not to be repaid, or a borrowed amount secured by assets.
While conventional loan down payments may be close to 20% of the sale price, government loans typically have lower down payment requirements. This allows potential homebuyers who normally cannot meet down-payment requirements an opportunity to qualify for a mortgage. Keep in mind that down payments that are less than 20% of the sale price typically require mortgage insurance payments.
10 things to know before buying a home
Before you start looking for a home, get pre-qualified for a loan. This will help you determine how much home you can afford and will give you an advantage over buyers who do not have their financing setup in advance.
If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit.
You will need a down payment. Down-payment requirements vary depending on the type of loan.
You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to: Escrow fees, title policy issuance fees, mortgage insurance fees, fire, flood, and homeowners insurance, county recorder fees, and loan origination fees. Consult your lender for an actual estimate of these costs.
Some loans have “points” and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate, they constitute the yield on your loan for the lender.
Mortgage rates can be fixed or adjustable. Which one is right for you depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in the home.
There are two main types of loan categories. Conventional mortgage loans are available with fixed or adjustable interest rates. Government loans include FHA fixed and adjustable rate mortgage loans, and VA fixed rate mortgage loans.
If you are a low-to-moderate-income homebuyer, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies.
You may have to pay mortgage insurance. Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Mortgage insurance is always required on FHA mortgage loans.
Many organizations offer home loan counseling to prospective homebuyers. They will cover home selection, REALTOR® services, lenders, loan programs, homeownership responsibilities, saving for a down-payment, and other important pieces of information.
Since you’re in the market for a new home, you’re probably in the market for a new mortgage. Here are 3 critical shopping tips for anyone looking for a new loan.
Know the Terms
All the terms of a loan matter. Unfortunately, shopping for a mortgage is not as simple as finding out how much a lender will let you borrow and at what interest rate. You’ll want to get a complete breakdown of what any offer your receive means to you on a monthly basis as well as how much money you’ll be spending over the life of the loan.
Not all Mortgages are the same
There are several mortgage types available to residential home buyers. Most people will shop for a traditional fixed rate mortgage, but other options are available including adjustable rate loans (ARMs), Federal Housing Administration loans (FHAs), and Veteran’s Administration loans. You’ll want to be sure to understand what kind of loan a lender is offering you.
Fees, Fees, Fees
Most loans have fees associated with them in additional to the principal amount bowered to buy the home. You can sometimes borrow the money need to cover these fees, but that will obviously increase the overall amount of debt you undertake. Some fees are paid up front, and others are not due until closing.
If you’d like to chat with personally about how to shop for a mortgage and what other questions you can ask lenders to find the best deal, give me a call at any time. I’m happy to get you started on the right path so we can start looking for your new home!
If you are looking for ways to refresh your kitchen this spring, here are some helpful tips that you can use if you are on a budget. When should you tackle certain items yourself; or are they best left the professionals? You might not need to replace everything. Consider refinishing or re-staining cabinets and flooring to save some money…Find more tips here: Kitchen Remodeling Ideas on a Budget (from $1,000 – $10,000)
It’s time to fall back!! Daylight Saving Time ends on Sunday, November 2, 2014 at 2 a.m. Make sure to set your clocks. I’ve also attached some fun events for the month of November ( November Events Calendar). Hope you have a safe and fun Halloween!
Nicole Emanuel (Culbertson)
CA DRE# 01899594
I hope you and your family continue to enjoy the season.
By the way, if you are thinking about buying or selling your home or know someone who is, now may be the time. Please contact me today so we can discuss your real estate needs.
Want to get an idea where the real estate market is headed in 2014? Check out this recent article (Housing Outlook for 2014: Steady Sales and Higher Prices) which discusses the speculations of NAR®’s Chief Economist Lawrence Yun who forecasts existing home sales to hold fairly even in 2014 and the median sale price of homes to increase nearly 6% with inventory shortages being felt again this year.
Meanwhile, the Kiplinger Letter, in its annual economic forecast issue, calls for a 4% increase in existing home sales. The publication says new home sales are likely to jump about 16% next year after soaring 36% in 2013 and 20% in 2012.
That’s great news for sellers again this year and means that buyers may breathe a little easier in the search for a home with a slight increase in inventory.
If you have questions about the market and are considering a move in the new year, give me a call today to discuss your options!
Welcome Home! Recently remodeled craftsman-style home incorporates original charm with modern day finishes! Features bamboo flooring, french doors, gourmet kitchen with granite, remodeled bath, renovated back yard and 2-year old roof! Third room can be used as an office, baby’s room or a sitting room. Home is approximately 1,000 square feet – permits unknown (assessors office 884). Located across the street from a park and a short walk to Japantown and Watson Dog Park!
When you are buying a home the first thing you need to do is get pre-approved. This is different from pre-qualifying as it is a full loan approval instead of simply an opinion letter of your creditworthiness. Its is best that you take this step before looking at homes as finding out what you qualify for will help you look in the right price range and avoid disappointment. On the flip side, you might be able to look at more expensive homes than you originally thought possible.
Here are some things your lender will need (and need you to do or not to do) during the application and escrow process):
1) All funds used for the downpayment and closing costs need to be carefully scrutinized by your lender.
You must provide detailed and accurate information to show which accounts the funds are in and where the funds are coming from.
You must document the source of any funds that have been in your accounts for less than 2 months.
Any changes that occur to your financial condition will need to be explained to the lender.
Changes to your assets, employment, income or credit scores during the escrow process could jeopardize your ability to obtain a loan.
Provide complete documents – all pages!
Provide documents with names, addresses and account numbers.
2) Things not to do during the escrow process:
Do not transfer funds from one bank account to another.
Do not make unusual large deposits into your bank account or you will need to provide documentation for the source of any deposits.
Do not buy a car just prior to buying a house of during the escrow process.
Do not spend large sums of money buying furniture or appliances.
Do not change jobs.
Do not apply for new credit cards.
Do not close existing credit cards.
3) The lender is going to require a letter of explanation and/or support documentation for:
Recent inquiries on your credit report.
Derogatory items on your credit report.
Recent deposits into your bank account.
Recent transfers of money from one account to another.
Evidence earnest money deposit has cleared your account.
4) If you are receiving gift funds the lender will require:
A gift letter signed by you and the gift donor.
Evidence of the donors ability to gift the funds – a bank statement.
Evidence of the receipt of the gift funds – a copy of the check or wire.
Evidence of the funds being received into your account.
If you have questions or are looking for a wonderful lender, give me a call today at (408) 410-2060!