You 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!
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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!
Buying 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:
- 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.
- 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.
- 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.
Facebook Testimonial from Trudy Hoeks, September 8, 2017
‘Thanks, Team Marti, for finding us our new home. We absolutely LOVE it. Everything went so smoothly, thanks to your care and concern for your clients. We appreciate you all!’
~ Trudy Hoeks
Read more testimonials on Facebook on Marti’s Facebook page.
Facebook Testimonial from Cheryl Anderson, July 27, 2017
“Selling the family home of 50 years is not an easy task. I must say, Marti and her team made the process go so smoothly. It was amazing and so easy. Marti definitely knows what she is doing! She got us a great price for our home and very quickly. If you are looking for a trustworthy, knowledgeable agent to buy or sell your home…I highly recommend Marti and her team! You won’t be disappointed!”
~ Cheryl Anderson
See other reviews like this one on Marti’s Facebook page.
Home buying and selling are complicated, detailed processes and, because they are often the most significant financial commitments of your lifetime, they can be highly stressful too. However, with a real estate professional on your side, buying or selling a home can be manageable, even enjoyable. Here are 5 reasons to hire a real estate professional when buying or selling a Kent, Covington or Maple Valley home.
- Rules, regs and paperwork. Each state regulates the contracts needed to buy or sell a home and these regulations change all the time. However, a real estate professional – ideally a Realtor – is up-to-date on the latest rules and regulations, and she can streamline the process for you.
- 180 steps to closing. According to the National Association of Realtors (NAR), there are 180 steps a full-service Realtor follows in return for their sales commission, including everything from pre-listing activities and entering a home into the MLS database to the home inspection and post-closing follow-up. Yes, 180! Let your real estate professional focus on those steps, while you focus on selecting the right home and getting ready for your move.
- Negotiation. Even if you enjoy a good negotiation, it can be very stressful, particularly when you are talking about a transaction worth hundreds of thousands of dollars. A real estate professional like me can take the emotion out of that process for you while putting years of negotiating experience to use.
- Home value. A real estate professional has the experience to price your home correctly, based on its true value and how current market conditions will affect the value. While you may know what you paid for your home and what you need to get out of it, a real estate professional can provide an objective value and her recommendations for putting a price tag on your home.
- Market conditions. The Seattle real estate market is one of the hottest in the country right now. An experienced and trusted real estate professional will stay on top of selling trends and know the ins and outs of the local real estate market to ensure you get the best deal possible.
If you are thinking of buying or selling a home this summer, contact Team Marti now for a no-obligation consultation of your situation.
Thank you to SWillen for the great Five-Star Review on Zillow! Team Marti helped this homebuyer purchase a home in 2015 for approximately $275,000 in Maple Valley.
“Marti is amazing at what she does. The entire home buying experience was exceptional. The appraisal on the home we were purchasing was being held up, and she made all of the necessary phone calls to get the appraiser back out to the house asap so we could move forward.
The process was seamless, and we didn’t have to do any work. She truly cares about her clients and always goes above and beyond. I definitely recommend choosing her as your agent!”
There are all kinds of terms thrown around when it comes to buying a home. Two of these terms are “pre-qualified” and “pre-approved.” While these terms are similar, they are, in fact, very different. Let’s talk about the differences.
Being pre-qualified for a mortgage does not guarantee that you will get a mortgage. A lender will talk to you while you’re still a prospective buyer and ask you questions about your credit, assets and income. During this meeting, you will not be required to show proof of income, and a credit check will not be run. There’s no harm in being pre-qualified, but focusing on pre-approval should be your priority.
Pre-approval from a lender means your credit check has been approved, and that your income and assets have been verified by the lender. The mortgage lender has made a decision to lend you money to buy a home.
There is a time frame to use your pre-approval for the purchase of a home, generally 120 days, according to Realtor.com. For pre-approval, you will need at least two years of tax documents, several weeks of paystubs, your two most recent tax returns, and any other proof of your income. A credit score of 740 or higher will help you get the lowest interest rates and a minimum credit score of 620 to be approved for an FHA loan.
In short, pre-qualification means a lender will have an overview of your financial history, without pulling a credit report or verifying your income. Pre-qualification will not help much when it comes to buying a home, but it will help you learn where you stand and if there are areas you need to work on. Pre-approval, on the other hand, is vital to getting a mortgage.
For more information, please contact your mortgage lender or an experienced Realtor®. Good luck!
Credit is an important factor when buying a home, whether it is your first home or your fifth. Here’s how credit can affect your getting the home of your dreams.
- Credit scores affect interest rates. Your credit score will determine the interest rate you receive. The lower your score, the higher your rates will be. High credit scores make lenders see you as a lower risk than someone with a lower score. With the lower risk factor, you’re likely to get a lower interest rate. Even a 1% difference in the interest rate can make a difference in your monthly payments.
- Interest rates affect what you can afford. Talk with your lender to see what you’ll spend per month, and see how that will work out for you. It’s dependent on your income, your credit, the price of the home, etc.
- Know what credit factors a lender will review. Lenders consider a lot of information when determining your creditworthiness. They like to see borrowers with low balances, a low debt to income ratio, a mix of credit utilization, and a long history of on-time payments. When shopping for pre-approval, ask the lenders you talk to what factors are most important to them.
- Most lenders won’t lend at all to those with a credit score of 620 or lower. A score of 740 will qualify you for some of the best rates available. Try your best to pay off any outstanding credit card dues before you apply for a loan.
For tips on how to improve your credit score, see my November 2014 post. Have additional questions? Need more information? Consult with your local lender, or ask an experienced Realtor® for a referral to a mortgage broker or lender who can walk you through your credit questions.
Thanks for reading!
~ The Marti Reeder Real Estate Team
This is a funny way of getting the facts to my buyers about the do’s & don’ts of successfully getting their mortgage so they can actually BUY the house they want!