Category Archives: Finance

6 Hidden Costs to Consider When Buying a Home

Six Hidden Costs of Buying a HomeYou’ve saved a down payment, chosen an experienced local Realtor, set your budget, and you know how much you can afford to pay for a home. But your mortgage is not the only cost you need to consider when buying a home. There are many other costs. Here are six expenses you might not think about but should plan for:

  1. Transportation costs: In the greater Seattle area, transportation costs can be quite expensive, especially if you have a long commute, use the toll lanes or take the ferry to and from work each day. Mass transit is also an option, but it isn’t free. Regardless of your method of transportation, you’ll want to budget for transportation expenses, including parking, car insurance, fuel and car maintenance if you’ll be driving yourself to and from work.
  2. Taxes: There are many kinds of taxes (e.g., property taxes, income taxes, personal property taxes, etc.), and they will vary by state and local jurisdiction. Before moving to a brand new area, especially if you are moving out of state, make sure you know what all of the taxes are that you will be responsible for paying.
  3. Utilities: The types of utilities you’ll pay will depend on where you’re located and the types of services you need (e.g., gas, electric, water, sewer, stormwater, etc.) In addition to the monthly expenses, some utilities will require a deposit, especially if you are moving from outside the area.
  4. HOA fees: If the home you are buying or building belongs to an HOA, there will be HOA dues. Find out what these are in advance and under what circumstances the fees can be raised.
  5. Moving: Are you hiring a moving company to help you get from home A to home B? Are you moving yourself? Consider the costs of a moving company or truck rental, packing materials, gas, mileage, etc.
  6. Cleaning: If you are moving from a rental apartment or home, you may have cleaning or repair fees to cover.

 

8 Ways to Boost Your Credit Score in the New Year

8 Ways to boost your credit score in 2018Whether you are planning to buy a home in 2018, or are considering refinancing your mortgage, you’ll want to make sure your credit is in tip top shape to get the best interest rate possible. Here are 8 ways to boost your credit score in the New Year to help you reach your financial goals:

  1. Pay your installment loans like car loans and student loans on time every month. Even paying them a day late can wreak havoc on your credit. Pay on time, every time. If you have to be late, call your lender before the payment is due to explain and to see if there are any options to pay later that won’t affect your credit.
  2. Do not close old credit cards. You haven’t used that department store credit card in awhile, but you have a $1,000 credit limit. Closing that card will actually reduce the amount of total credit you have available which can count against you. Keep it open. Just don’t use it, particularly if it carries a high interest rate.
  3. If you don’t have credit, establish it. Not having credit is a problem because you haven’t shown a lender, credit card company or other creditor how you’d handle credit. Apply for a small department store card, a secured credit card, a secured loan or a combination of these accounts to begin establishing credit. Start by charging a small amount and paying it off at the end of each month. Credit history will be based on how timely you pay but also how long you’ve had credit, so this strategy will take time but it is worth it.
  4. It’s OK to pay off loans early. Paying your loans on time is critical, but if you are in a position to make payments early, to add extra money to the principal portion of the payment or pay it off early, you will help your credit.
  5. Review your credit score for free annually. Correct any obvious errors and follow up on items that may not be your, the sooner, the better.
  6. Pay off collection accounts as soon as possible. Have an old dentist bill from three years ago you didn’t pay? This can stay on your credit report for up to seven years, even longer if the original creditor “sells” the debt to another credit agency for collection.
  7. Don’t open a bunch of new accounts at once to increase your amount of available credit. This can lower your average account age. Instead, open accounts as you need them and use them responsibly.
  8. Keep your credit balances low on revolving accounts. Having a lot of debt negatively impacts your credit.

 

Facebook Testimonial: Treated like a priority client!

Testimonial: Exceeded our expectations!Thanks so much to Erik Swanson for this five-star testimonial on Facebook! We love helping clients like this get into their first home. We’re so glad you love your new home, Erik!

“Man, we only could get an FHA loan and, in this market, it wasn’t pretty for what we were looking for. Marti was a true fighter and got us an awesome house that we truly feel like it was the best home that we could have possibly gotten, without relying on a massive bank heist or waiting for the prince of Nigeria’s check to clear (still waiting!)

Marti was quick to respond to concerns and never gave up on us! You will be treated like a priority client If you are a first time home buyer who just smashed open the piggy bank to get your first home or got the budget for a Lake Meridian house. I’m quick to recommend Marti any time I hear someone murmur buying or selling a house!

~ Erik Swanson, November 25, 2017

Read Erik’s review and others on Facebook here.

5 Tips to Help You Survive the Holiday Shopping Season

4 Tips for Surviving the Holiday Shopping SeasonShopping for the holidays can turn the most wonderful time of the year into the most stressful time, but a little planning and creativity can turn the season’s most dreaded task into a bearable (even a pleasant) one…and these tips will help you save money! BONUS.

(1) Do Your Homework

Before the start of the holiday season, compile a list of the people in your life you need to buy gifts for. When your loved ones start dropping hints about electronics they would love to own or start admiring a sweater in the store window, you can make note and start your shopping early. Also, if you buy gifts for clients or business associates, plan those well in advance, so you are ready and are not “panic shopping” which can lead to overspending.

(2) Avoid Overspending

Decide how much money you want to spend this holiday season, and divide that amount among the people on your list. Be sure to leave some of your budget for those holiday extras that take so many people by surprise, like holiday dinners and clothes for work parties. Once you have your budget set, stick to it.

Check the app store for apps that will comparison shop for you, and sign up for your local retailers’ e-newsletters—insiders will often get access to sales and coupons not offered to the public. And when you’re shopping—whether online or in person—keep your focus. Buy only what’s on your list, and avoid the holiday displays and Instagram feeds meant to tempt you into breaking your budget.

(3) Personalize Gift Cards

Gift cards are a popular present, because they are easy  and suit all ages, budgets and tastes. They can, however, seem impersonal, especially when you tuck one into an envelope and hand it over at the holiday party. To personalize a gift card, include a small extra present with it. Tuck a gift certificate for a movie pass for two into a tin of gourmet popcorn, or wrap a gift card for a clothing store in a scarf.

(4) Skip the Presents; Give Experiences Instead

Do your children really need another gaming console? When the kids can’t figure out what they want, skip the stores and give them an experience instead. A day’s adventure can cost less than the newest electronic gadget, and it will still be remembered even when the gaming console is collecting dust in the basement.

For a sports enthusiast, try a day’s pass on a ski slope. A daredevil would love a trip to a treetop obstacle course. And if you have a teenager into culture, take them into the city for a tour of a museum and dinner at a high-end restaurant. Wrap up a lift ticket, a flyer for the adventure park, or a museum brochure to hint at what’s to come.

(5) Bonus Shopping Tips:

  • Don’t wait til the last minute. This can cause you to “panic shop” which is expensive and often leads to your buying any gifts, not necessarily the ones you want to buy.
  • Go during off-peak hours – maybe during your lunch hour, later in the evening, or first thing in the morning, before the mad dash of shoppers hits your favorite stores.
  • Subscriptions are an easy gift to buy (and give) online, allowing you to give a gift that truly keeps on giving.
  • Online shopping has become so much easier. While this is helpful in many cases, it can also lead to overspend. We recommend filling your shopping cart of items you want to buy, checking it against your list to be sure you aren’t buying too much, and then “sit” on the shopping cart for a day. Go back and if you still want to buy those gifts, go ahead! If not, delete unwanted items from your cart before checking out.
  • Make sure you get gift receipts and know what store return policies are before you inadvertently buy a gift that can’t be returned!

7 Financial Habits That Will Make Buying A Home Easier

Buying a Home: Homebuyer FAQs re Mortgage Costs and Closing CostsGood credit is important in qualifying for a mortgage, but potential homebuyers with less-than-perfect credit can still get a mortgage. No matter what your score, these seven financial habits will make buying a home much easier:

  1. Paying your bills on time or early. This means paying all of your bills on time, not just the ones on your credit report. In addition to credit cards and loan payments, this means utility bills, rent and other regular payments that show you are a responsible adult. Ideally, pay your bills early. This is much easier now that we can access our credit card and loan accounts online.
  2. Pay more than the minimum balance due. If your minimum payment on your Target card is $50 a month, pay $75 or $100. This will reduce your total debt faster as well as the amount of total interest you are paying.
  3. Use less than 30 percent of your available credit. While it is helpful to have credit cards for emergencies, you want to keep your total balances under 30 percent of your total credit limit. For example, let’s say you have a Visa card with a $1,000 credit card limit. Don’t charge more than $300 on that card.
  4. Review your credit report for errors. This is a good habit to get into no matter how good your credit is. If you check your credit report annually, you’ll be able to identify mistakes and get them corrected before it is time to apply for a mortgage loan. See a mistake? Contact the original creditor right away and contact the credit bureau to dispute the information. It could take several months to clear a mistake, so staying on top of your credit report is helpful.
  5. Start building a credit history early. If you are in your early 20s, you ideally have established some credit already, whether it is an introductory credit card or a student loan. Start small by applying for a low limit credit card or getting a car loan with a parent as a co-signer.
  6. Keep paid off accounts open. The length of your credit history is important to a mortgage lender. Even if you don’t use that Visa card you got in 2010, and the balance is zero, keep the account open. It shows a seven-year credit history, and it will help lower your total debt-to-credt ratio (see #3 above).
  7. Set a budget and stick to it. With credit cards so readily accessible, it is easy to treat yourself with a nice dinner, a manicure/pedicure or furnishings for your man cave. But is this the best use of your money? Probably not – unless you budget for it. Set a monthly budget and only indulge in those little luxuries when you have the money to do so without charging it to a credit card.

These good money habits will help you position yourself to qualify for a mortgage loan when you are ready to buy your first – or next – home!

9 Steps to Take Now to Buy a Home Next Year

9 steps to buying a home in 2018You and your family are thinking of buying a new home – or your next one – in 2018. There are things you can do now to prepare yourself. Here are seven steps to get you ready for this exciting move!

  1. Check your credit score. Target a credit score of 740 or higher to get the best mortgage rate. See mistakes on your credit report? Because this process can sometimes take months, you’ll want to start doing that now.
  2. Follow the real estate market and interest rates. What is the market doing in your area? Is inventory low? What about interest rates – are they inching up? You’ll want to lock in the lowest interest rate you can to lower your monthly mortgage payments and long-term financial outlay.
  3. Save, save, save. We can’t stress this enough. Make sure you have enough to cover a down payment, closing costs, moving expenses, etc. Read our article on closing costs to get a better idea of what those might run.
  4. Don’t use your credit cards or rack up more debt. Obviously, you don’t want to open any new credit cards before you apply for a mortgage, but it is just as important not to use the existing credit you already have. Banks will look at your debt to income ratio, so you want that debt figure to be as low as possible.
  5. Don’t overspend during the holidays. It can be tempting to spoil your loved ones during the holidays, but this could make it harder to get a mortgage – particularly if you use your credit cards for holiday shopping. Instead, get creative. Offer services (e.g., dog walking, babysitting, home organizing, handyman skills) or experiences (gourmet meals, outings, etc.)  instead of giving gifts.
  6. Meet with two to three potential Realtors. We say “Realtor” instead of “real estate agent” because “Realtors” have different and a code of ethics to abide by. Real estate agents are held to a lesser standard. Talk to friends, family and co-workers to get recommendations, and do your research before scheduling no obligation appointments to interview. In addition, check their online reviews on Facebook, Zillow, LinkedIn and other sites to see what they’re clients are saying about them.
  7. Shop for a lender. Just like you would shop for a Realtor, explore your mortgage lending options. Check with your bank, local credit unions and mortgage brokers to see where you can find the best deal and the best long-term relationship.
  8. Gather your documents. When you meet with a mortgage lender, you’ll need to provide tax returns and W-2s for the last two years, pay stubs for the last few months, proof of your current living expenses, a list of debts and other expenses, etc.
  9. Get pre-approved for a mortgage. Once you’ve selected a mortgage lender and have pulled together all of your documentation, it’s time to get pre-approved! This will help you determine what your interest rate will be and how much home you can afford. Read more about getting pre-approved here.

Not sure what’s next? Have questions? Call Team Marti  at 253-859-8500. We’d be happy to help you prepare to buy your next home in the New Year!

 

8 Ways to Save Money for a Down Payment on Your Dream Home

8 Ways to Save for a Down Payment on Your Dream HomeImagine never having to pay rent again. Instead of paying a landlord every month, your monthly housing budget could go toward owning your dream home. Unless you’ve got rich relatives or a trust fund though, coming up with a down payment of 3 percent to 20 percent can seem a bit overwhelming. It doesn’t have to be. Here are 8 ways you can start saving for a down payment today!

  1. Reduce your current housing expenses. Your monthly rent is your most costly expense each month. Cut that bill by getting a roommate, moving to a smaller or less expensive place, or moving in with a relative for the short-term, and save the difference in a dedicated account for your down payment.
  2. Get a part-time job or a freelance gig. Increase your income by getting a part-time job or doing freelance work on the side. You could get a traditional part-time job in fast food or retail, but think beyond that to earn some extra cash. Are you good with technology, pets, words or art? Become a consultant, dog walker, blog writer or Etsy artist.
  3. Cut daily living expenses. Do you get a $7 latte each morning? Are you paying for a gym membership you rarely use? Do you spend a lot on take-out? Those costs add up. If you cut non-essential expenses, you could yield a few hundred bucks each month.
  4. Shop for your new insurance. Car insurance can be pricey, particularly if you are young. If you work with an insurance agent, ask if there are discounts available, or if they can get you a better price. For example, you can usually get a discount by getting your car insurance and renter’s insurance from the same carrier. You can also shop online for different types of insurance at an online site like Esurance.com. Caution: Be sure you are comparing coverages, not just price.
  5. Set up automatic savings deductions. To help you discipline yourself, set up an automatic deduction into your savings account with each paycheck. This is an easy way to save your money before you get a chance to spend it.
  6. Get rid of unwanted stuff. Whether you’ve got college textbooks you don’t need or slightly outdated electronics you’ve already replaced, there is a market for your unwanted stuff. There are lots of online marketplaces – Facebook, OfferUp, Craigslist, etc. – where you can sell your items online. Just be careful and always transact business in a safe, public place.
  7. Save your tax refund and bonus checks. If you get a refund at tax time, bonus checks at work or a birthday check from your parents, put that money in the bank!
  8. Pay down debt. High interest rates on credit cards or paying interest on multiple student loans can eat into your budget. Pay down your credit cards with the highest interest rates first, and consider consolidating your student loans to reduce the total interest paid.

With good planning, budgeting and discipline, you’ll be ready to start home shopping before you know it.

 

3 Reasons to Buy a Home This Fall

3 Reasons to Buy a Home This FallBuying a home can be a difficult decision, particularly in a hot real estate market, but research shows that buying a home is a great investment — and is more financially advantageous than renting. Here are three reasons to consider buying a home this fall:

  1. Prices will keep going up. According to CoreLogic’s latest Home Price Index, homes have appreciated by 6.7 percent in the last 12 months. They are expected to increase another 5 percent over the next year, so the home you are looking at buying today will be 5 percent more this time next year.
  2. Mortgage rates will also go up. Mortgage and banking experts project that interest rates for 30-year mortgages will go up, which means your monthly mortgage payment will also go up. Buy now and lock in an interest around 4 percent.
  3. You’re paying someone’s mortgage; it might as well be yours. Even if you are renting, you are paying your landlord’s mortgage. Why not take that same amount of money to buy your own home.

If you aren’t sure if this is the right time for YOU to buy, let us know. We’d be happy to meet with you to discuss your circumstances.

5 Reasons to Sell Your Home This Fall

5 Reasons to Sell Your Home This FallThis summer was a great time to list your Kent, Covington, Maple Valley, Auburn or Black Diamond home, but if you missed your window, don’t despair. Fall is in the air, and in our current market, it is still a good time to sell. In fact, here are five reasons to consider selling your home this fall.

  1. Demand remains strong. According to the National Association of Realtors, buyer demand is strong across most of the country. In our area, home inventory is low, so buyers are competing for homes on the market, so sellers often get multiple offers once they list.
  2. There is less competition now. While inventory is low, experts anticipate that a new wave of homes on the market is coming. Why? The average number of years a homeowner would stay in their home was six, but it is now now, so homeowners who bought in 2008-2010 will have accumulated equity, giving them the freedom to put their homes on the market. If you wait until that happens, demand will drop, and so will prices.
  3. The selling process is quicker than normal. Because the housing market is competitive right now, buyers are doing their part to stand out from the crowd, so sellers will choose them. This includes getting pre-approved for a mortgage, so when they are ready to buy, they’ve already got a tentative commitment from their mortgage lender. This speeds up the process for closing.
  4. Now is the time to move up! According to CoreLogic, prices are expected to appreciate by 5.2 percent over the next year. That means if you want to upgrade to a larger home or purchase a luxury home, you will get a better price on that home now than you will a year from now. The longer you wait, the higher that luxury home will cost.
  5. It’s time to move to the next stage of your life. Right now buying a home makes more sense than renting one, so selling your home to purchase another one with appreciating value makes sense. Is your family growing? Did you just get married? Are you downsizing because you’re now an empty nester? These are all good reasons to sell your current home and to buy one that better suits your changing lifestyle.

If you have questions or would like to discuss whether or not this is the right time for you to sell your South King County home, let us know. Team Marti would love to help you understand your options!