7 Steps to Take Before You Buy a Home
By: G. M. Filisko Published: February 10, 2010
By doing your homework before you buy, you’ll feel more content about your new home.
Most potential homebuyers are a smidge daunted by the fact that they’re about to agree to a hefty mortgage that they’ll be paying for the next few decades. The best way to relieve that anxiety is to be confident you’re purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.
Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.
Be honest about which features you must have and which you’d like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top-five must-haves and top-five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.
Make a list of your top-five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR® to help you identify three to four target neighborhoods based on your priorities.
Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies.
However, the lower your downpayment, the higher the loan amount you’ll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get.
Finally, if your downpayment is less than 20%, you’ll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.
A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area—including home inspections, attorneys’ fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.
A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 for a home mortgage.
You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn’t up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.
Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.
If you’re self-employed, you’ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.
Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.
Learn how Fannie Mae and Freddie Mac mortgages can help you save on financing
Learn more about the costs of homeownership
Homebuyer counseling resources
Get a free credit report from each of the three credit reporting bureaus
G.M. Filisko is an attorney and award-winning writer who has thrice survived the homebuying process. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
Scott Snyder Bring You – 5 Tips to Prepare Your Home for SaleBy: G. M. Filisko – Published: February 10, 2010
Working to get your home ship-shape for showings will increase its value and shorten your sales time.
Many buyers today want move-in-ready homes and will quickly eliminate an otherwise great home by focusing on a few visible flaws. Unless your home shines, you may endure showing after showing and open house after open house—and end up with a lower sales price. Before the first prospect walks through your door, consider some smart options for casting your home in its best light.
1. Have a home inspection
Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.
2. Get replacement estimates
If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.
3. Make minor repairs
Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.
4. Clear the clutter
Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.
5. Do a thorough cleaning
A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.
If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.
Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.
G.M. Filisko is an attorney and award-winning writer who has found happiness in a Chicago brownstone with the best curb appeal on the block. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
By: G. M. Filisko Published: February 25, 2010
Here’s how to clean up your credit so you get the least-expensive home loan possible.
Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.
Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You’ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms.
You’re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. Access all three versions of your credit report at www.annualcreditreport.com. Review them to ensure the information is accurate.
If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there’s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.
You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You’ll also save money because you’ll keep the money you’ve been spending on late fees. Credit card or mortgage companies probably won’t report minor late payments, those less than 30 days overdue, but you’ll still have to pay late fees.
Another good way to boost your credit score is to pay your credit card bills in full every month. If you can’t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.
Credit rating agencies also consider the length of your credit history. If you’ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you’re not using them.
Credit scores are also based on how much credit you use compared with how much you’re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.
It can take time for your credit score to climb once you’ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you’ll do to your credit score.
How FICO scores are calculated
Answers to frequently asked credit report questions
G.M. Filisko is an attorney and award-winning writer who keeps a close eye on her credit scores. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
Knowing what appeals to today’s homebuyers, and considering those trends when you remodel, can pay off years from now when you sell your home. Read
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Please enjoy this article that Penny Kice found for you on www.keepcurrentmatters.com
Many sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now.
At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers’. The lookers are at the mall or online doing their holiday shopping.
Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don’t wait until the spring when all the other potential sellers in your market will put their homes up for sale.
One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers. <<MORE>>
Penny Kice Welles Bowen Realtors2460 N Reynolds Rd Toledo, OH43615
By: Dona DeZube Published: February 21, 2014
Home prices are rising in many U.S. markets, but headwinds from winter storms, tight inventory, tough credit standards, and rising mortgage interest rates continue to hold back sales.
A lack of houses for sale continued to lift home prices in much of the country, but also pushed down the number of existing homes sold in January, data from the NATIONAL ASSOCIATION OF REALTORS® shows.
The weather wasn’t helping either. “Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception,” said NAR Chief Economist Lawrence Yun. “Some housing activity will be delayed until spring.”
He also blamed slower home sales on headwinds created by tight credit, limited inventory, rising home prices, and higher mortgage interest rates. “These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts begin to make an impact,” Yun said.
The median existing-home price in January was $188,900, up 10.7% over the past year. The median home price is the point at which half of homes sold for more and half sold for less.
The number of existing single-family homes, townhomes, condominiums, and co-ops sold in January dropped 5.1% from a year ago. Last month’s level of activity was the slowest since July 2012.
Flood Insurance Woes
NAR President Steve Brown said that in addition to disruptive weather, higher flood insurance rates are affecting the market in areas designated as flood zones, which account for roughly 8%-9% of all markets.
“Thirty percent of transactions in flood zones were canceled or delayed in January as a result of sharply higher flood insurance rates,” he said. “Since going into effect on Oct. 1, 2013, about 40,000 home sales were either delayed or canceled because of increases and confusion over significantly higher flood insurance rates. The volume could accelerate as the market picks up this spring.”
Congress is considering legislation to halt new flood insurance rates so the FEMA can complete an affordability study and determine the full impact of the law.
Related: Should You Buy Flood Insurance?
Fewer Foreclosed Homes for Sale
One factor that’s helping boost prices is a decline in the number of distressed homes — foreclosures and short sales — on the market. Distressed homes typically sell at a discount.
Related: Foreclosure FAQs
How Long Does It Take to Sell?
Even though the number of homes for sale rose a slight 2.2% in January, there’s still only a 4.9-month supply of homes for sale nationally at the current sales pace. A supply of 6.0 to 6.5 months represents a rough balance between buyers and sellers.
Median time on market:
Thirty-one percent of homes sold in January were on the market for less than a month.
Who’s Buying Homes?
NAR noted some important changes among the population of homebuyers:
1. First-time buyers accounted for 26% of purchases in January. That’s the lowest market share for first-time buyers since NAR began monthly measurement in October 2008. In the past, about 40% of home sales involved first-time buyers.
2. One-third of sales were to cash buyers.
3. Individual investors, who account for many cash sales, purchased 20% of homes in January, compared with 21% in December and 19% in January 2013. Seven out of 10 investors paid cash in January.
Other data from the NAR’s existing home sales survey showed:
Up or Down
Jan. 2014 Median Price
|Median Price Compared
with Jan. 2013
|Single-family home sales||Down 5.8%||$188,900||Up 10.4%|
|Condo and co-op sales||Up 1.8%||$188,700||Up 13.0%|
|Northeast home sales||Down 3.1%||$241,100||Up 6.6%|
|Midwest home sales||Down 7.1%||$140,300||Up 7.6%|
|South home sales||Down 3.5%||$161,500||Up 9.4%|
|West home sales||Down 7.3%||$273,500||Up 14.6%|
Fax: 419 592-7021
By: G. M. Filisko
Published: March 11, 2010
Ask detailed questions about their experience and skills to help you find the right agent for your home sale.
1. How long have you been selling homes?
Mastering real estate requires on-the-job experience. The more experience agents have, the more likely they’ll be able to handle any curveballs thrown during your home sale.
2. What designations do you hold?
Designations like GRI (Graduate REALTOR® Institute) and CRS® (Certified Residential Specialist), which require that agents complete additional real estate training, show they’re constantly learning. Ask if agents have designations and, if not, why not?
3. How many homes did you sell last year?
Agents may tout their company’s success. An equally important question is how many homes they’ve personally sold in the past year; it’s an indicator of how active and aggressive they are.
4. How many days on average did it take you to sell homes?
Ask agents to show you this data along with stats from their local Multiple Listing Service (MLS) so you can see how many days, on average, their listings were on the market compared to the average for all properties in the MLS.
5. How close were the asking and sales prices of the homes you sold?
Sometimes sellers choose their agent because the agent’s suggested listing price is higher than those suggested by other agents. A better factor is the difference between listing prices and the amount homes actually sold for. That can help you judge agents’ skill at accurately pricing homes and marketing to the right buyers. It can also help you weed out agents trying to dazzle you with a lofty sales price just to get your listing.
6. How will you market my home?
The days of agents putting a For Sale sign in the yard and hoping for the best are long gone. Look for an agent who does aggressive and innovative marketing, especially on the Internet.
7. Will you represent me exclusively?
In most states, agents can represent the seller, the buyer, or both in a home sale. If your agent will also represent buyers, understand and consent to that dual representation.
8. How will you keep me informed?
If you want weekly updates by email, don’t choose an agent who plans to contact you only if there’s an offer.
9. Can you provide references?
Ask to talk to the last three customers the agent assisted. Call and ask if they’d work with the agent again and if the agent did anything that didn’t sit well with them.
10. Are you a REALTOR®?
Ask whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS® (NAR). NAR has been an advocate of agent professionalism and a champion of homeownership rights for more than a century.
Other web resources
More on choosing an agent
G.M. Filisko is an attorney and award-winning writer who’s worked with many real estate agents in the past 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
Published: December 16, 2013
If you’re hallway-challenged, we’ll show you how to make those odd spaces work harder and look brighter.
In fact, Cofield designed my four-bedroom house with nary a hallway to be found.
He placed two bedrooms (including the master suite) on the main floor at the end of the dining and living rooms. He put two bedrooms on the second level at the head of the stairs, so the landing is the only mini-hallway in the house.
The flow is fantastic because it wastes not — just what we wanted.
Related: Do You Need an Architect for Your Remodeling Project?
Dream Up New Space
Even though you may be stuck with hallways, your hallways don’t have to be stuck in the narrow, dark past. A little rethinking can make those passages work a lot harder and look a lot better.
If you still have books: Install floor-to-ceiling bookcases with a rolling ladder in hallways that are at least 4 feet wide. You can build them between studs or mount them on the drywall. Oak shelves are strong but expensive (5-shelf bookcase: $135); particleboard is a better value (5-shelf: $59) though you’ll sacrifice some strength.
If you’re an art lover: Hall walls are perfect spots for family photos and third-grade artwork lit by recessed lights. To display and appreciate large art, you’ll need a hallway that’s at least 5 feet wide. If you have a blank wall at the end of the hallway, hang artwork there; it’ll draw the eye down the hall, making the trek down that runway less boring.
If you have hallway linen closets: Convert them into:
More is better, and combining different types of lights is better still:
Another way to bring in light is to widen doorways and replace wood doors with full or partial glass doors. This works best with doors to laundry rooms, dens, bathrooms, and other non-bedroom spaces.
Used etched glass or frosted glass, which adds a visual punch while protecting privacy and letting light shine through.
Do Away with Walls
In some instances, you may be able to eliminate hallway walls. For example, eliminate the wall between a hallway and a kitchen and you can annex the space to your kitchen.
You can replace load-bearing walls with support beams hidden within a chase or with posts hidden within columns. Make sure you consult a structural engineer or architect who will determine the best way to open space and keep your house from caving in.
Fax: 419 352-2654
VM: 419-354-4871 ext. 114
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