New Year, New Me: How to Become a Qualified Homebuyer

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Key takeaways:

  • Whether this is your first home or your fifth, there are steps you can take to become a more qualified homebuyer.
  • Your ability to find the best deals on your mortgage depend on it.
  • Follow these 4 C’s and our list of pointers to get started in the New Year.

Buying a home in the new year? Whether this is your first go-around or you’ve purchased before, there are steps you can take to make sure you’re a qualified homebuyer —and being a qualified homebuyer is the key to getting the best deal you can on your mortgage.

Remember the 4 C’s as you get started: Cash, Credit, Capacity, Collateral. Here’s more:

CONSIDER YOUR CASH

Often referred to as “Capital,” the amount of cash you have can make or break a mortgage deal. But, your ability to become a qualified homebuyer doesn’t only depend on how much is in the bank —it’s also about where the money came from and where it’s going.

Here are a few tips when considering your cash:

#1. Save for a Down Payment

The bigger the down payment you make, the more likely mortgage providers are to approve you at a great interest rate. For most conforming loans, a down payment equal or greater to 20% of the purchase price is required, but there are some programs (like FHA and VA loans) that will allow for a smaller down payment. Learn how some new are homebuyers working with a lower budget for a downpayment here.

#2. Don’t Forget Closing Costs

Most mortgage professionals agree that closing costs are typically equal to 2-5% of the home’s purchase price. As with your down payment, your mortgage lender will want to verify you have the funds to cover these expenses. It’s important to understand how to save and calculate closing costs before you dive in.

#3. Manage Gifts

If you’re accepting a cash gift from a family member as part of your down payment, make sure this is well explained and documented. Your bank statements will be reviewed for any large deposits (anything over a few hundred dollars), and any unusual deposits could derail your ability to be a qualified homebuyer.

CATAPULT YOUR CREDIT

Also referred to as “Character,” your credit is your history of debt repayment and credit score. In most situations, 580 is the minimum for a low down payment FHA loan, while 620 is the minimum for most conventional loan programs.

Here are a few tips when trying to catapult your credit:

#1. Review Your FICO

Most lenders will request your FICO score from the three credit reporting agencies, but will then toss out the high and low score to use the middle for assessment. Before shopping your mortgage, make sure you have a clear picture of your FICO score and that your report is free from errors.

#2. Improve Your Score

Not everyone has perfect credit. In fact, the U.S. average is 687. If you’re trying to up your creditworthiness to become a qualified homebuyer there are some simple things you can do —from paying down debts to making on-time payments— to see some positive increases.  

CREATE THE CAPACITY

Your “Capacity” is your ability to make monthly payments on your mortgage and to repay your loan over time. Lenders will look at your income to determine if you have the capacity. Here are two of the big ratios they will look at:

#1: Calculate Your Housing-to-Income Ratio

This number is what percentage of your gross monthly income (verified via pay stubs, W2s, tax returns and other documentation) will be spent on your monthly housing expense. Your total housing expense includes principal and interest, property taxes, homeowner’s insurance, and any mortgage insurance and homeowner’s association dues. To get the best terms, you want this number to fall below 30%.

#2: Keep Your DTI Low

Your debt-to-income ratio is called the “back-end ratio” and is the percentage of your gross income spent on housing (like above) plus your other monthly expenses. These additional expenses could be credit card payments, student or car loans, or any other debts. Child support and alimony are part of this equation. In most cases, you cannot qualify for a mortgage with a DTI of more than 43%. How can you figure out where to start on debt-to-income? Read up on how much house you can afford.

CHECK THE COLLATERAL

Regarding the home being purchased, the collateral confirms to your mortgage provider that they have a way to recover their losses should you default. To ensure the collateral is worthy of the loan you’re taking out, there are a few ways the lender will “check the collateral.”

#1. Get an Appraisal

Your lender will almost always require an appraisal to ensure the amount loaned does not exceed the value of the home. An independent appraiser will consider factors like recent sales, a home’s location, its condition and other factors. If the appraisal comes in below the purchase price, the borrower will only be approved for the lower amount.

#2. Get an Inspection

The inspection will help your lender determine the condition of the home and that it is safe and structurally sound. While this inspection is not always required, it is strongly recommended.

Putting it into Practice

When it’s time to shop your mortgage, reach out to a Sindeo Mortgage Advisor. With the recent release of SindeoOne, homebuyers can shop and compare over 1000 loan programs by filling out a single application in just 5-minutes. You’ll find the best deal for your specific situation in no time! Connect today.

 

3 New Year’s Resolutions for Homeowners (and How to Achieve Them!)

Start the New Year Right

A new fitness routine? More time spent with family and friends? A conscious effort to remove a certain habit from your life? With the start of the new year, resolutions and goals (and how you plan to achieve them) are likely on your mind. If you’re a homeowner, you might want to consider some house-related goals for the next 12-months.

Here’s a list of 3 New Year’s resolutions for homeowners, tips on how to make them happen, and the results you could see if achieved:  

Resolution #1: Save More at Home

Who doesn’t want to save more money? In 2017, watch for places around the home to save more. Here are a few hiding places where you may find some savings:

By refinancing … Depending on when you took out your current mortgage and how much your overall finances have improved, refinancing your home loan at a lower rate could help you see considerable savings on interest. Here are 5 signs that it might be time to refinance your mortgage. If you think refinancing might be right for you, contact a Sindeo Mortgage Advisor. And, be sure to check out our newly released SindeoOne, where you can shop more than 1000 loan programs simply by filling out a single application that takes less than 5-minutes.

By being aware … When you own a home, it’s easy to focus on all the big costs —the mortgage, the insurance, the maintenance. But, with a bit of creativity and focus, there are quite a few smaller ways that you can save money in a big way. These 10 creative ways to save during the summer and 8 simple ways to save on your energy bill articles are a great place to start.

By doubling up … Making extra payments or paying a bit extra on your mortgage every month can help you shorten the time until your loan will be paid in full and can enable you to build home equity quicker. Just remember that some mortgages have hidden costs that sneak up when you pay off your mortgage early, so be sure to read the fine print and discuss this strategy with your lender.

Resolution #2: Improve Home Safety

From home break-ins to accidents around the house, home safety is an important part of homeownership. In 2017, make the resolution to improve your home’s safety and you can sleep better at night knowing you’re protected. Here’s how:

By reducing fire hazards … Hidden dangers like outdated wiring or lint buildup from your dryer can increase the risk for home fires. Have a professional inspect these areas and don’t forget to test your smoke and carbon monoxide alarms monthly.

By rethinking security … You don’t have to install a costly alarm system to increase your home’s safety. Take a walk around your home —both inside and out— and rethink your security. Perhaps you need to switch to deadbolt locks or add more light outside your home at night. There are just two small changes that could deter would-be burglars. You might also consider wi-fi enabled doorbell cameras like Ring.

By checking coverages … Not only can you save money when you re-shop your insurance coverages, but it gives you the opportunity to audit your coverages to ensure you’re protected when it counts. Make sure you have enough coverage and consider purchasing flood or earthquake coverage if you live in an at-risk area.

Resolution #3: Practice Good Maintenance

As a general rule of thumb, homeowners are encouraged to set aside at least one percent of the purchase price of your home each year for ongoing maintenance. In 2017 —in addition to setting aside a maintenance emergency fund— set aside some time to practice good maintenance and your home (and wallet) will thank you. Here are some tips:

By monthly check-ins … Create a checklist of home maintenance items you’ll commit to doing each month. This can range from checking the smoke alarms to cleaning the gutters and replacing the HVAC filter.

By hiring help … Home maintenance is one of the many hidden costs of homeownership, but DIY projects gone wrong can be even more costly. When tackling a home maintenance project that might be out of your league —think roof repairs or plumbing projects— be sure to hire a professional.

Make 2017 a Great Year!

These are just a few of the ways you can make 2017 a great year for homeownership. What resolutions will you add to your list? Share your favorite “homeowner resolutions” with us on Facebook! And, don’t forget to check out SindeoOne.

Here’s to a great New Year!

The Housing Market

Whether you are buying or selling real estate, it is important to know the state of the housing market. This way, each side knows where the advantages lie. For sellers, the market is at its best when there are fewer homes up for grabs. Less competition makes for an easier time getting your property viewed by the right individuals. On the flip-side, buyers will find top deals when there is a saturation of listings. When sellers are competing for your business, you end up the winner!

The housing market can give us a list of relevant information, such as: the number of homes for sale, the average selling price for real estate in the area, and the amount of homes sold during a specific period of time. With this data, both buyers and sellers can formulate a strategy on when to make a move. Perhaps more homes are sold during the summer. Maybe the average cost is lowest at the beginning of the year. Whatever the housing market shows, it is important to take the information into consideration.

New Year, New Me: How to Become a Qualified Homebuyer

Key takeaways:

  • Whether this is your first home or your fifth, there are steps you can take to become a more qualified homebuyer.
  • Your ability to find the best deals on your mortgage depend on it.
  • Follow these 4 C’s and our list of pointers to get started in the New Year.

Buying a home in the new year? Whether this is your first go-around or you’ve purchased before, there are steps you can take to make sure you’re a qualified homebuyer —and being a qualified homebuyer is the key to getting the best deal you can on your mortgage.

Remember the 4 C’s as you get started: Cash, Credit, Capacity, Collateral. Here’s more:

CONSIDER YOUR CASH

Often referred to as “Capital,” the amount of cash you have can make or break a mortgage deal. But, your ability to become a qualified homebuyer doesn’t only depend on how much is in the bank —it’s also about where the money came from and where it’s going.

Here are a few tips when considering your cash:

#1. Save for a Down Payment

The bigger the down payment you make, the more likely mortgage providers are to approve you at a great interest rate. For most conforming loans, a down payment equal or greater to 20% of the purchase price is required, but there are some programs (like FHA and VA loans) that will allow for a smaller down payment. Learn how some new are homebuyers working with a lower budget for a downpayment here.

#2. Don’t Forget Closing Costs

Most mortgage professionals agree that closing costs are typically equal to 2-5% of the home’s purchase price. As with your down payment, your mortgage lender will want to verify you have the funds to cover these expenses. It’s important to understand how to save and calculate closing costs before you dive in.

#3. Manage Gifts

If you’re accepting a cash gift from a family member as part of your down payment, make sure this is well explained and documented. Your bank statements will be reviewed for any large deposits (anything over a few hundred dollars), and any unusual deposits could derail your ability to be a qualified homebuyer.

CATAPULT YOUR CREDIT

Also referred to as “Character,” your credit is your history of debt repayment and credit score. In most situations, 580 is the minimum for a low down payment FHA loan, while 620 is the minimum for most conventional loan programs.

Here are a few tips when trying to catapult your credit:

#1. Review Your FICO

Most lenders will request your FICO score from the three credit reporting agencies, but will then toss out the high and low score to use the middle for assessment. Before shopping your mortgage, make sure you have a clear picture of your FICO score and that your report is free from errors.

#2. Improve Your Score

Not everyone has perfect credit. In fact, the U.S. average is 687. If you’re trying to up your creditworthiness to become a qualified homebuyer there are some simple things you can do —from paying down debts to making on-time payments— to see some positive increases.  

CREATE THE CAPACITY

Your “Capacity” is your ability to make monthly payments on your mortgage and to repay your loan over time. Lenders will look at your income to determine if you have the capacity. Here are two of the big ratios they will look at:

#1: Calculate Your Housing-to-Income Ratio

This number is what percentage of your gross monthly income (verified via pay stubs, W2s, tax returns and other documentation) will be spent on your monthly housing expense. Your total housing expense includes principal and interest, property taxes, homeowner’s insurance, and any mortgage insurance and homeowner’s association dues. To get the best terms, you want this number to fall below 30%.

#2: Keep Your DTI Low

Your debt-to-income ratio is called the “back-end ratio” and is the percentage of your gross income spent on housing (like above) plus your other monthly expenses. These additional expenses could be credit card payments, student or car loans, or any other debts. Child support and alimony are part of this equation. In most cases, you cannot qualify for a mortgage with a DTI of more than 43%. How can you figure out where to start on debt-to-income? Read up on how much house you can afford.

CHECK THE COLLATERAL

Regarding the home being purchased, the collateral confirms to your mortgage provider that they have a way to recover their losses should you default. To ensure the collateral is worthy of the loan you’re taking out, there are a few ways the lender will “check the collateral.”

#1. Get an Appraisal

Your lender will almost always require an appraisal to ensure the amount loaned does not exceed the value of the home. An independent appraiser will consider factors like recent sales, a home’s location, its condition and other factors. If the appraisal comes in below the purchase price, the borrower will only be approved for the lower amount.

#2. Get an Inspection

The inspection will help your lender determine the condition of the home and that it is safe and structurally sound. While this inspection is not always required, it is strongly recommended.

Putting it into Practice

When it’s time to shop your mortgage, reach out to a Sindeo Mortgage Advisor. With the recent release of SindeoOne, homebuyers can shop and compare over 1000 loan programs by filling out a single application in just 5-minutes. You’ll find the best deal for your specific situation in no time! Connect today.

 

Real Estate

Real estate is one purchase that buyers will never regret. The investment always pays off, whether you use or sell it. While you can be sure that land will always be in demand, it will not always be available. That is why we suggest that real estate investors purchase now instead of later. If the supply and demand model of economics teaches us anything it’s that prices rise when supply goes down.

When purchasing real estate, it is important to assess your needs. For example: those that have the intentions of constructing a commercial building will want to select an area that is visible to their target audience. Success begins with the right location, so choose wisely. After all, you wouldn’t want to put luxury condominiums in a rural town.

Those that are in the market for real estate will want a real estate agent by their side. The agent is familiar with every aspect of the area. From the neighborhood’s demographics to its history, there are important factors to take into consideration when selecting real estate. Starting off on the right foot begins with going to those with the experience.

Buying a Home

Buying a home is both an exciting and scary venture. With the status of homeowner comes the costs of maintaining the property you are now tied to. If you are going to take on a lot of added responsibility it is your right to be selective when choosing a home. While your search may start out with enthusiasm, it can quickly grow tiresome as their are so many listings to browse.

Our question would be: why do all of the work when there is someone willing to help? The process goes a lot smoother with more that one set of eyes scouring the housing market for your perfect property. This is where our team truly shines, as we make it our duty to get our clients the keys to their ideal abode! Simply tell us what you are looking for and our superior team of agents will go to work searching through our database of available homes. From there, we will give you a list of residences that most accurately match your requirements. With a list that is narrowed down to a handful of properties, your decision will be much more manageable.

Selling a Home

Selling a home can be a difficult task for even the most seasoned of sellers. There is so much that goes into the process of placing a property on the housing market. First, the owner needs to get the home in condition to present it to potential buyers. From there, taking proper pictures that display your residence in its best light is a must. These are the images that are going to grab the attention of those that are searching through the housing market. Unfortunately, even the best pictures don’t ensure that your property will be seen. After all, you are competing with your neighbors for the attention of a select few.

As with any competition, it is important to find an edge. This is where an experienced realtor can be your ace in the hole. With an extensive list of interested buyers, as well as the knowhow to market your listing to a greater audience, real estate agents make it their mission to get the most money for your property. When you have a team of skilled agents on your side, the competition gets left in the dust!