Category Archives: Pre-Approval

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!

 

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!

 

Team Marti’s Top 10 Tips for First-Time Homebuyers

Team Marti's Top 10 Tips for First-Time HomebuyersA seller’s market can be a tough place for first-time homebuyers to purchase their first home, but don’t despair. It is certainly doable. Educate yourself on what’s needed to succeed in a seller’s market and work with an experienced Realtor who will give you world-class, 24/7 service. Here are our top 10 tips for first-time homebuyers. Good luck!

  1. Get pre-approved for a mortgage. We recommend doing this before you begin shopping a home, so you know how much home you can afford and what type of credit you have, which will ultimately impact your loan terms, including the interest rates.
  2. Begin your home search online to get an idea of what’s available. Check out Realtor.com, Zillow, Northwest MLS or your favorite Realtor’s website.
  3. Work with a Realtor early on in your process. A talented Realtor can help guide you through what can be a very complex process, and offer advice specific to your situation. Get recommendations from friends and colleagues, and be sure to check out the referrals online before you meet with them. Read their online reviews and testimonials and their LinkedIn profile to see how long they’ve been selling real estate. You might also interview a couple of different agents to see who might be a good fit for you.
  4. Know the difference between your wants and needs in a first home. List all the features you want in a home and categorize them as ‘must haves,’ ‘should haves,’ and ‘absolute wish list.’ Learn more here.
  5. Check out the neighborhood and schools. The features of your home will be very important to you, but the neighborhood where you want to buy should also play a factor. Are there similar homes in the neighborhood? Are they well maintained? What amenities are nearby (e.g., parks, restaurants, shopping)? If you have a school-age child, or will be starting a family, what schools will your child attend? Visit the neighborhood at different times of day, if possible.
  6. Attend open houses. This is a great way to tour homes on the market to see what’s available. Keep in mind though that in a HOT real estate market like this one, a new listing may receive multiple offers the day of the open house. If you fall in love with a house you are touring, you’ll want to act on it right away.
  7. Write a winning offer. In a seller’s market, you need to bring your best offer to the table with as few contingencies as possible. Work with your Realtor to offer a fair but attractive price.
  8. Understand that your offer might get rejected. Competition is tough these days, so you may not get the first home you put an offer in on. Be patient. It will happen.
  9. Be prepared to cover closing costs. In a seller’s market, the seller tends to have control, so prepare to cover your own closing costs which will be on top of your down payment. Here are some additional guidelines.
  10. Don’t expect any home to be perfect. Sure, you have your heart set on a dream home with all of the desired features, but that is unrealistic. Realtor.com suggests you focus on three main factors: price, size and location. If you get all three, great, but getting two is more likely.

Good luck, and let us know if Team Marti can help!

[Sources: Inman, Realtor.com and CNN Money]

Real Estate Lingo for Homebuyers: Part 2

Continued from May 15, 2017

Freddie Mac Real Estate GlossaryBuying a home can be a daunting and complex process, but it doesn’t have to be. With the right Realtor, you can feel confident that you are being well represented and that she has your back. It can also help to understand real estate lingo. Here is part two of a Freddie Mac real estate glossary you can use to educate yourself on the home buying process.

Margin: A percentage added to the index for an ARM to establish the interest rate on each adjustment date.

Market Value: The current value of your home based on what purchaser would pay. An appraisal is sometimes used to determine market value.

Mortgage: A loan using your home as collateral. In some states the term mortgage is also used to describe the document you sign [to grant the lender a lien on your home]. It may also be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage is usually the purchase price of the home minus your down payment.

Mortgage Broker: An independent finance professional who specializes in bringing together borrowers and lenders to complete real estate mortgages.

Mortgage Insurance (MI or PMI): Insurance needed for mortgages with low down payments (usually less than 20% of the price of the home).

Mortgage Rate: The cost or the interest rate you pay to borrow the money to buy your house.

Net Monthly Income: Your take-home pay after taxes. It is the amount of money that you actually receive in your paycheck.

Offer: A formal bid from the homebuyer to the home seller to purchase a home.

Points: 1% of the amount of the mortgage loan. For example, if a loan is made for $50,000, one point equals $500.

Pre-Approval Letter: A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. It also shows a home seller that you’re a serious buyer.

Pre-Qualification Letter: A letter from a mortgage lender that states that you’re pre-qualified to buy a home, but does not commit the lender to a particular mortgage amount.

Principal: The amount of money borrowed to buy your house or the amount of the loan that has not yet been repaid to the lender. This does not include the interest you will pay to borrow that money. The principal balance (sometimes called the outstanding or unpaid principal balance) is the amount owed on the loan minus the amount you’ve repaid.

Real Estate Professional: An individual who provides services in buying and selling homes. The real estate professional is paid a percentage of the home sale price by the seller. Unless you’ve specifically contracted with a buyer’s agent, the real estate professional represents the interest of the seller. Real estate professionals may be able to refer you to local lenders or mortgage brokers, but are generally not involved in the lending process. [Note: A real estate agent and a Realtor are not the same thing. Click here to learn the difference.]

Refinance: Getting a new mortgage with all or some portion of the proceeds used to pay off the original mortgage.

Title: The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land.

Title Insurance: Insurance that protects lenders and homeowners against legal problems with the title.

Truth-In-Lending Act (TILA): Federal law that requires disclosure of a truth-in-lending statement for consumer loans. The statement includes a summary of the total cost of credit, such as the APR and other specifics of the loan.

Underwriting: The process a lender uses to determine loan approval. It involves evaluating the property and the borrower’s credit and ability to pay the mortgage.

Click here to read Real Estate Lingo for Homebuyers, Part 1.

[Source: Freddie Mac]

 

5 Tips for Getting a Mortgage in 2017

Special Home Financing Programs: FHA, VA and USDA LoansUnless you’ve got a trust fund or buckets of cash lying around, if you want to buy a home this year, you’ll need a mortgage. Here are 5 tips to help you find a mortgage that meets your needs:

  1. Find out how much of a down payment you need to save. Down payments vary from 0 percent to 20 percent down, and everywhere in between. Talk to your mortgage lender – or an experienced Realtor – to find out how much you need to save.
  2. Check your credit score. To determine your credit worthiness, you’ll want to review your credit score with a mortgage lender. If you are going for an FHA loan, the average qualifying credit score in 2016 was about 686. The average credit score for a conventional homebuyer was about 753, according to Bankrate.com.
  3. Get pre-approved. While pre-qualification does not guarantee you will get a mortgage, getting pre-approved does. When you get pre-approved by a mortgage lender, it means that lender has checked your credit, verified your income and assets and agreed to lend you money to buy a home, assuming everything else lines up (value of the home, etc.). Learn more about pre-approval here.
  4. The 4 Cs. When seeking pre-approval, a mortgage lender will look at the 4 Cs – Capacity (your current and future ability to make mortgage payments), Capital or Cash Reserves – how much money, savings and investments you have, Collateral – the home you want to purchase, and Credit – your credit history. Learn more about the 4 Cs here.
  5. Decide what type of mortgage is right for you. Before you apply for a mortgage loan, you’ll want to know the different types available to you. For example, if you are a veteran, you might be able to get a VA loan. If you are a first-time homebuyer, an FHA loan might be right for you. Talk to your Realtor and your mortgage lender to see what type of mortgage best fits your situation.

Home Sales at Highest Pace in 10 Years

Home buyers: If you want to buy a home now, the demand is strong, so you’ll have to differentiate yourself from other buyers to make your offer stand out. Ideally, you’ll get pre-approved so you know how much you can afford to spend – and how much you can offer on your dream home.

Home sellers: If you’re a seller, demand for available homes for sale is strong, and you’re in the driver’s seat. You’ll likely get your asking price, or perhaps more, and your home may sell faster than it would in a “normal” real estate market.

Have questions? Team Marti can help! Contact Team Marti today.