Avoiding Mortgage Loan Roadblocks

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There are some common misconceptions floating around about there not being enough money in the bank when it comes to mortgages.  This could not be further from the truth.  Lenders have plenty of money.  Sure, they are being more careful about who they lend it to and yes they are definitely making sure all i’s are dotted and t’s crossed.  But here’s the thing:  do you want to have to jump through hoops of fire or would you rather sail through the mortgage loan process smoothly?

 

With our special report that shares with you the real estate industry’s insider information on the top reasons loans go awry, you can avoid having to go back to the drawing board over and over again and ultimately risk losing your loan (and your dream house) in the end. 

Accuracy of Information is Key

As you sign your loan application you will notice that there is a mountain of paperwork.  One of the most damaging things to a loan app however is when there are discrepancies within the paperwork.  As long as you can vouch for your information, provide accurate and updated data and support it with plenty of documentation – your loan application should not suffer any major delays or cancellation.  This applies to basic information such as names and aliases to employment history to past judgments or other negative financial factors that you need to report.

Incomplete forms and less-than-adequate supporting documentation such as W2s or payroll stubs are just one of reasons a loan officer will move on to the next borrower’s paperwork.  It is important not to be offended if you have to provide a lot of details.  When it comes to things like the source of your extra income, where and from whom you received cash gifts or other sensitive information like that, a lot of homebuyers get squeamish.  In fact, borrowers should be prepared to do a lot of “explaining” through what loan officers call Letters of Explanation for things that are not crystal clear or cut and dry.  And there are a lot of things that simply do not add up without an explanation at hand.

Processing Makes Perfect

Anyone that has gone through the process of applying for a mortgage knows that it takes time.  Even if every single aspect of the app were perfect it would still take time.  Some delays can be avoided, all of which can be done by making sure there are no outstanding liens on the home, providing and being able to confirm the source for all funds used in the transaction and ensuring all necessary repairs are done in advance. 

One of the most frustrating aspects of going through a mortgage loan process is when a step adds days and days to the timeline.  With each item that needs further clarification, additional investigation or more, more time is added and more frustration ensues.  The single best way to avoid this problem is to provide as much information as possible from the start. 

 

(Almost) Everything Can Be Fixed

By working with the right Realty and mortgage team you can turn around most of the issues that come up as roadblocks in the process.  It takes time but it can be done.  To find out more about what may go wrong with your loan, email us and we’ll send you a copy of our free report with the top reasons loans go bad and how you can avoid each.

5 Things to Do When Moving Into a New Home

 

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Moving into a new home can be an extremely exciting time in a person’s life.  However, it can also be incredibly hectic.  There are some things that can be placed on the back burner during the move in process.  With these five easy tips on moving into a new home, you can be sure to have your house as safe and cost efficient as possible.
 

Change the Locks

At closing time, the seller of a house turns over the keys to the new owners.  Many times, though, the previous owner will have given a spare key to a friend or neighbor in case of emergency.  Enlist a locksmith to come to the house and change all of the locks and get new keys made.  This final transition from one owner to the next will give the new homeowner peace of mind.  

Reprogram Your Garage Door Remote

Along with changing the locks of your home, reprograming your garage door remote will ensure the safety of your house.  Depending on the brand of remote, steps in reprograming it may differ, but the process is simple for nearly all brands.  Most remotes have a “Learn” button, which you must hold until the indicator light blinks.  While the indicator light blinks, press the button on your remote.  This should reprogram your garage door opener remote.  If this does not work, contact your remote manufacturer or local hardware store for assistance.  

Change Your Home’s Air Filters

Most air filter manufacturers recommend that you change the HVAC air filters once every month. Due to the increased amount of activity of moving furniture in and out of the house, a larger concentration of dust will collect in the ventilation system.   In order to improve the air quality in your home and increase heating and cooling efficiency, make sure you change your air filters right when you move in.

Install New Batteries in Smoke Alarms

When a person is selling their home, there are many different procedures they must do to ensure that it is ready for sale.  Often times, during the stress of the home selling process, the smoke alarms are forgot about.  Ensure the safety of your home and family by changing the batteries in the smoke detectors when you move into a new house.  This cheap and quick home improvement has the potential to save your family’s life. 

Replace Toilet Seat Covers
We probably don't need to go into specific details. but most people insist on swapping toilet seats.

What's the One Unbreakable Law of Real Estate?

 
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“Perform due diligence!” is the one law you should never break in any kind of real estate deal – residential, multi-occupant, or commercial!

What is due diligence? It’s a common phrase for the evaluation of a property and its surrounding environment before you commit to buying it.

Due diligence has two objectives. First, you want to reduce or eliminate risk! Needless to say, you’ll be assuming a large loan and will want to know exactly what’s right or wrong with a property before you sink any money into it.

Two, due diligence allows you to uncover real bargains, especially for investors. On the surface, one property may look like a “loser,” but a closer inspection may reveal that the building is structurally sound and requires only minor and inexpensive maintenance and repairs.

One part of due diligence is what you’d expect – the physical inspection of the property and inspection of all documents and records concerning that specific property. The other part is the inspection of the documents and records concerning that property.

In this article, I’ll just talk about the physical inspection portion of due diligence.

Physical Inspection of Properties

Below, I’ve listed all the inspection tasks which should be performed by a professional inspector. Of course, you should visit the property as well. Many times, a quick “eyeballing” can reveal any obvious signs or poor maintenance or decay - a leaky roof, wet basement, foundation cracks, cracks in the walls, plumbing leaks, etc.. In those cases, you’ll know you don’t need to waste any further time on that property.

As I mentioned earlier, such an inspection may reveal that you’ve actually got a bargain on your hands instead of a “dog.” In such a case, you’ll want to purchase or invest in that property quickly.

What happens when you find problems in a property and still like it? Well, then, you can require that the seller correct those problems or reduce the price before you sign any contract.

In general, defects fall into two categories. One category contains the obvious defects – wet basements, peeling paint, broken windows, leaky plumbing, warped floors, etc.

The other category contains the more expensive and dangerous hidden defects. These can include corroded pipes in the walls, roof or window leaks that don’t show up until it rains or snows, subtle cracks in the foundation.

Obviously, you want to make sure these hazards are spotted before you ever sign a purchase agreement. They can cost you a lot of money in the long run, not to mention the fact that they can send your blood pressure through the roof!

What Do Professional Inspectors Look For?

Below are the items inspectors examine when they check a property:

• Overall structural integrity
• Property drainage/landscaping
• Walks and drives 
• Foundation, footings, crawl space, basements, sub-flooring, decks
• Exterior walls, siding, trim 
• Windows, doors, cabinets, counters 
• Gutters, downspouts 
• Roof, roof shingles, roof structures. chimneys, attic
• Floors, walls, ceilings, etc.
• HVAC systems 
• Plumbing systems, (fixtures, supply lines, drains, water heating devices, etc.)
• Electrical system (wiring, service panel, devices, and service capacity
• Energy conservation/safety Items 
• Insulation & ventilation 
• Moisture intrusion/mold

And, of course, we can’t forget the voracious appetites of….bugs!

Pest Control Inspection

Depending on the area of the country in which you live, insects can cause a heckuva lot of damage to a property!

I’m talking about such bugs as termites, carpenter ants, powder post beetles, and any other insect that likes to munch on wood. Then, there’s fungus, in the form of “dry rot.” It can also cause a lot of destruction.
In such cases, you’ll need to hire the services of a specialist (pest control inspector) to examine the property.

If the operator identifies any problems, he or she should provide you with a diagram that pinpoints the location of the infestations. If serious problems exist, they need to be corrected immediately! The expense is usually paid for by the seller.

To protect yourself against any of the problems I mentioned above, ensure that the purchase contract provides for cancellation without penalty or loss of money if the physical condition of the property doesn’t meet standards.

Dreaming of Homeownership?

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Owning a home can be a daunting undertaking for first-time homebuyers. But if you are like countless others right now wanting to get in on the action and move into the home of their dreams, you have to be ready to take on the task.  During the current ideal market conditions that make it a great time for buyers there are a few things you can do make sure your experience is as fruitful as possible.  Here are three insider tips on how you can secure a great place, for a fantastic price – without making any serious mistakes in the process.

Make Sure the Price Is Right

Nothing can be more disheartening than to find out you have overpaid on a home.  With today’s rollercoaster real estate market the best way to be sure you are not overpaying – is to have a professional appraisal done and to ask your Realtor to do some comps.  By comparing like-kind properties that were recently sold in the same neighborhood, you can get a good idea of what your property should be priced at.  And at the negotiation table, both the home’s appraisal and comps will work to corroborate your offer.

Do Your Home (Inspection) Work

Inexperienced homebuyers stand to risk getting more than what they bargained for if they do not take the proper precautions before signing on the dotted line that makes them homeowners.  Even though it may seem tedious and at times feel like an unnecessary expense, the importance of having one or more home inspections done is pivotal to the home purchase process.  The last thing you want to do is to forego an inspection only to learn when it is too late that there were too many serious problems to contend with.  Depending on where you are doing your home search, any number of inspections should be completed prior to going under contract.

It is standard procedure to have a regular home inspection completed.  In fact, many lenders require an inspection as part of the lending process before they will grant you a mortgage.  But there are several areas of a home that do not fall within the parameters of a normal home inspection.  Wood infestation, for example, can be a major hazard and if there is a serious problem it can be very costly to manage it.  Radon gas is extremely unsafe, hazardous gas that can wreak havoc on the health occupants of a home or surrounding areas.  Find out from your home inspector what is and what is not covered and after consulting with your Realtor to investigate other potential hazards in the area, it is a good idea to have additional testing conducted as well. 

 

Carefully Choose Who You Want To Owe Money

There are myriad lending choices out there but only a handful of companies that provide professional, timely and effective lending services.  At a time when mortgage processes are heavily scrutinized, it is important that you find a reputable lender that values you as a client and simultaneously values your time.  Even though some companies may try to lure you with lower interest rates and low fees, at the end of the day they get that money somewhere in the process but the homeowner usually ends up paying the price.

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Regardless of where you are searching for your dream home, what your budget is or how you plan on financing the purchase – it is essential to work with an experienced Realtor.  Not only will you benefit from their knowledge but also you will be able to avoid making any major mistakes when fulfilling your dream of homeownership.

Most Frequently Asked Questions About Refinancing Your Home

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Many people tend to oversee the fact that when interest rates are low, they have a significant impact on more than just people buying a home.  Low interest rates, in fact, have a HUGE impact on the overall cost on a mortgage so when people refinance their existing properties under lower rates it translates to thousands and thousands of dollars in savings.  Not only that, if these same homeowners who opt to have their homes refinanced also reduce the term on their mortgage, the savings are unprecedented.  

To help explain some of the most widely asked aspects of the refinancing process, here is a list of questions and answers that shed light on the issues that will help you in determining whether refinancing is right for you.


What Are Some Reasons To Have Your Mortgage Refinanced?

The current real estate market today is experiencing all-time low, historic interest rates on mortgages.  For many professionals in the industry, this is the first time they have witnessed rates at this level.  Reasons for obtaining refinancing on a property include reducing interest rates, reducing the overall term on the mortgage i.e. going from a 30-year loan term to a 20-year term and also to be able to leverage equity that is held up in an existing property.

How Does A Term Reduction Look On Paper?

When the number of years of a mortgage loan is reduced, also called a term reduction, payments may or may not remain the same but the time within which the loan must be paid off is significantly less.  For example, a previous mortgage at 6% for a 30-year term can be refinanced at 3.5% payable in 15 years, which adds up to a savings of hundreds of thousands of dollars and reduces many years off the loan repayment schedule.

What Factors Go Into Eligibility For No Closing Costs Refinancing?

Many mortgage companies are now crediting closing costs.  Though this is a facility that is scrutinized based on an applicant’s eligibility, the savings add up. Eligibility is determined based on specific criteria including the applicant’s credit report and credit score, plus whether or not there is a second mortgage.  Credit score expectations are within the low to mid 700 range, with the higher score translating to better concessions.

How Does A Loan Officer Decide On A Refinance Application?

Each borrower’s situation is different.  Mortgage lenders consider what the loan’s value is, the credit scores, home value and how the market is performing such as in a depreciating market. 

What Is PMI And Can I Avoid It In A Refinance?

Private Mortgage Insurance, or PMI, is required by lenders of most homeowners that borrow at least 80% of the home’s value.  It works as a protective measure in case of default. In cases where the current mortgage is owned by Fannie Mae or Freddie Mac, there is a provision for appraisal relief that can result in exemption from PMI.

What Is The Typical Time Frame For A Refinance Process?

Most applications take about 4-6 weeks if it is a straightforward case. If there is a second mortgage it involves another bank and entails coordination and additional time for processing.

Can I Use Refinancing For Leverage In The Market?

Refinancing would unlock any equity in your home, allowing you the leverage to use those funds in a new purchase.  Not only will it boost the sale process on a new home but it could also eliminate the need for PMI if you put at least 20% down.

What Documents Are Required For The Initial Consultation?

In order to initiate the application process, people applying for a refinance should produce the last two paycheck stubs, W2 statements from the previous two years and the previous two months’ bank statements.

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Regardless of if you are selling, refinance should be considered to be able to reduce monthly payments on a home.  This is also a good time for investors to cash in on the opportunity. For a customized assessment, it is advisable to consult with your Realtor.

Top Home Improvement Projects; Understanding How Enhancements Impact Your Bottom Line ROI

 

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Everyone needs to value and protect his or her assets, especially with the current economic situation. One of the best ways to do this is to maintain, manage and make strides toward constant betterment. In a house this can mean any number of things. Whether you choose to enhance an existing bedroom, extend your kitchen, install new flooring in the basement or even replace the garage door – all these and significant others – are excellent ways to strengthen the value of your property. With these home improvement projects, you will enjoy continued returns on the investment that you make in your most cherished asset.

How Does ROI Work?

In real estate it is the formula that is used to compare the cost of remodeling projects with the value those projects will retain at resale. With a little time, energy and effort, you will undoubtedly get back lasting value, increased enjoyment and an enhanced return on your investment. In terms of home improvements, making adjustments to outdated areas of your home, will not only make the space more enjoyable to live in, but it will also increase the resale value of the property. So while it may seem costly to redo the entire kitchen cabinetry and countertops, the chance that you will recover most of the monies spent on the improvement are very high.

Home Improvement Projects Yield Great Returns
Kitchens

Since the kitchen is usually the area in a home that gets the most traffic, it is often one of the first aspects of a home that is judged during evaluation by buyers. Updated, modern and functional kitchens are an important selling feature. If yours is lacking in any of these areas, by embarking on a kitchen remodel project you will could see significant ROI. While the cost of improving a kitchen can be relatively high, the returns of as high as 72% make the initial investment bearable.


Doors and Windows

One of the easiest ways to change the look of a home while increasing its value at the same time is to update the doors and windows. Considering the growing penchant for energy-efficiency in homes, the installation of doors and windows with high-end, energy-efficient sealing and construction will be a welcome addition to any home. When you look at the amount of money saved each year on energy bills, that alone makes the decision to update this aspect of your house an easy one.

Also with the growing security concerns many people are feeling these days, the confidence level of homeowners (and prospective buyers) will soar with the inclusion of solid, quality entry-exit points and windows. While there is a fluctuation based on the type of doors and windows on costs recouped from the initial expense, in general the returns are significant.

A new and improved garage door is a significant change for the better in most homes and one that has seen a ROI of as much as 84%.

Systems Upgrades

In many cases the core systems of a house, like the heating/cooling system or plumbing – tend not to be changed until they break down. When considering ways to improve a property, examine the condition of these systems and, if applicable, maintain or manage them to a level of improved function. If possible, replace parts or entire ensembles. The returns on these investments will be impressive.

Cosmetic Changes

A fresh coat of paint can do more than just spruce up the look of your home. If you are in the market to sell your house, a simple yet highly impacting project like repainting the walls or installing new flooring in your home, can have an immediate impact on prospective buyers. The additional bargaining power you will get from making such adaptations will be more than worth it.

Outdoor Elements

Not surprisingly, many people give great important to the quality and condition of decks and other outdoor spaces in a home. Whether this means your patio and recreation area, the landscaping or even the type and style of boundary fence – an often underestimated aspect of properties is outdoor care. According to Realtor Magazine, a deck addition can yield as much as nearly 73% return on investment.

Structural Enhancements

This is an often overlooked part of a home since it’s not really visible as much as the elements inside the house. As is the case with system-wide functions, the structural aspects are usually tended to when there is a need for major repairs. Prevention is one way to keep a roof, for example, in top condition and ready for any sudden burdens that may arise such as a storm. Siding is also important when determining a home's overall condition and one that cannot be ignored, especially when you plan to put your house on the market. The difference between having quality vinyl siding installed versus a less-than-desired state can be significant. With an ROI of as much as 70-80%, there is an excellent financial incentive to improve these areas as well.

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No matter which area of your home you decide to improve, the results are unmistakable. Not only will the quality of your life be greatly enhanced but also when it does come time to sell, the value of your home will be significantly increased, giving you an exceptional ROI as a result of those home improvements.

Effectively Selling Your Property Through the Use of Four Winning Marketing Strategies

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Everyone knows that when a seller puts a property on the market, they expect it to sell quickly and yield the best price possible.  But just how simple is that anyway when you’re dealing with the sort of market we are experiencing these days?  Unless carefully planned and well-thought out marketing techniques are not put into action, the chances of realizing the success you set out to achieve in this endeavor can be very shaky.  In this article, we’ve gone through the four “P’s” of Real Estate Marketing and outline each so you can see how together with your Realtor you can achieve phenomenal results despite the weak market.

THE FOUR “P”S OF REAL ESTATE MARKETING

With these four elements, real estate marketing cannot go wrong – Product preparation, Price, Place and Promotion.  With careful synergy of all four, a property will be attractive prior to sale, it will appeal to buyers as realistically affordable, get ample exposure to the market through relevant channels and be well promoted. 

Product – Your House

If you want to sell any big-ticket item, it has to be attractive to potential buyers.  When it comes to a house, you need to go the extra mile to make sure to accommodate a host of varying tastes and style preferences.  The walls of a bedroom painted very bright may not appeal to every possible buyer, for instance, plus also not everyone may appreciate pets and the accompanying environment that goes along with them. 
You should work to repair all loose ends, complete any outstanding maintenance that may be needed.  Also fix up the house so that when walk-throughs happen buyers are not distracted.  Clutter, personal items or other things that would get in the way of their ability to see themselves living in the home can be very distracting.

Price – How Much Are You Asking?

It is essential to price your home appropriately.  In today’s market especially, buyers have a plethora of choices and if they are put off in the least by your pricing then you stand to risk losing that sale altogether. Instead, have your Realtor conduct a Comparative Market Analysis to determine exactly where your property stands in terms of housing value.  A CMA will also provide you the basis to provide potential buyers with the solid backing of how you arrived at your price and can be especially useful during negotiations.
In addition to conducting CMAs, Realtors also perform a thorough analysis of your property, how it relates to other properties in the area, they look at an appreciation schedule and also gain insight on how your property performed overall in the market during your ownership.  This helps to center on a reasonably accurate price to sell your home.

Placement – Who Is Being Exposed To Your Property Listing?

Buyers hire Realtors to assist them in finding the home that is exactly right for them, based on their formula and expectations.  Agents who represent these buyers rely on being exposed to the properties that are out there.  Aside from their own channels, a seller’s agent should work to expose the property for sale to any and all available channels so that buyers who may be interested are aware of your property for sale.  If a Realtor shortchanges a client on this aspect of the selling process, it can severely affect the chances of success merely because other homes will be in the forefront of those buyers instead.

Promotion – What Are The Most Effective Ways of Promotion?

The final step to effective real estate marketing is promotion.  This is not the same as placement, in that promotion works from all sides of the equation.  An experienced listing agent will bombard dozens and dozens of websites with your home’s details, enticing possible buyers with professional photographs and colorful language.  Highlighting the best features of your home while downplaying less-than-desirable aspects are all tools used by an effective real estate marketer and one who understands the buyers’ market as well.

Promotion is not just limited to listing a home on listing services.  Effective promotion, particularly these days utilizes technology like Facebook, real estate websites and more.  Also, word of mouth plays an important role in the success of a sale. 

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As with anything that entails professional analysis, it is important to select someone who has plenty of experience, is local and familiar with the area on a first-hand basis and someone you trust.  Realtors are not all created equal.  While some have been boasting sales for years and years, they may not have particular expertise in the areas that you need as a seller.  It is important to choose someone you know, trust and has a reputable background that is reliable and proven.