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Meeting Your Home’s Former Owners Before and After the Sale

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Meeting Your Home's Former OwnersBuying and selling a home can be a strange combination of very personal feelings and very impersonal relations. Both the buyer and the seller usually have strong emotional connections to the house, but in the course of making the sale, the two parties don’t always meet in person.

If you don’t get an opportunity to met the current owners before you buy, there are important questions you need answers to that you should ask the selling agent. That being said, an unexpected visit from a former owner can give you the chance to ask lingering questions and learn more about the house from before it was yours.

What to Ask the Home Owner or Realtor Before You Buy

  • How recently were the plumbing and other systems updated?
  • Were there any problems during the updates?
  • Are there other issues with the neighborhood, area, or the home?
Sometimes you don’t get an opportunity to met the sellers before the transaction is complete, but come face to face with their seller some time later when the seller chooses to return to their old home.

What To Ask a Former Owner After the Sale

Undoubtedly, when a stranger comes to your door, it can be a little disconcerting. When it’s the former owner of your home, however, you can take advantage of the fact by asking them questions your home inspector might not have elaborated on, or about things that weren’t disclosed during the actual sale. Some of these questions can include:

  • How receptive were the neighbors to renovations and updates to the home?
  • Do they have any favorite contractors they can suggest?
  • Do they have any thoughts for upgrades that they were considering before they sold. They may have ideas and thoughts about improving the home that hadn’t occurred to you? 
  • Do they have any stories about the home’s history? 

Of course, the former owner may wish to ask you questions too. Many sellers often still feel a personal connection to the house and want to share that with you.

What Former Owners Might Say

It isn’t uncommon  for former owners return for sentimental reasons. They may have had children grow up in the home, or it might have been their first major purchase. Ultimately, they often just want to make sure you’re caring for their former residence. They even may ask you questions about your family, or how you plan to change the house to fit your tastes. In any case, meeting your home’s former owners is a chance to learn more about your home and learn about your home’s history.

 

Strategies for Paying Off Your Mortgage Faster

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When taking out a mortgage, buyers often consider how they will get a rate that will enable them to pay off their mortgage as quickly as possible. In other words, they want the lowest rate possible, as we all do. Many times it is often only those that are approaching retirement that actually start to think about how they will pay off their mortgage. With careful planning, paying off your mortgage faster can be a realistic goal regardless of what your rate is.

Paying Down Your Mortgage

  1. Pay your Mortgage More Than Once Per Month – Setting up a bi-weekly or weekly payment schedule can help you pay of your mortgage many times faster than by making a standard monthly payment. If you pay bi-weekly, you end up paying one or two extra mortgage payments per year which automatically reduces your amortization period.
  2. Increase Your payments When You Have More Money Coming In – Instead of using additional funds from a raise or bonus at work for something else, put it towards your mortgage every time you make a payment.
  3. Get a Reasonable Interest Rate – It goes without saying that it is important that you do your due diligence when shopping for a mortgage. While rate is only one of the factors to consider when choosing a mortgage professional, it is important that you choose your mortgage professional and rate carefully.
  4. Consider an Adjustable Rate Mortgage – While an adjustable rate mortgage may not offer the security of an unchanging mortgage payment, it can provide for a smaller rate and payment due than a fixed rate mortgage. This lower rate / payment will enable you to make larger payments towards the principal, which can help you pay off your mortgage significantly faster. Keep in mind that an adjustable rate mortgage may or not make the most sense for your needs, we can help you understand the options and which ones fit your needs the best.

If you abide by some of the above strategies, it may be possible to pay off your mortgage up to a decade earlier. Not having to pay substantial housing costs later in life can help ease a major financial burden and can free up money for retirement, college education for the kids, investments or other financial needs.

 

Before You Buy: Home Hunting Tips

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Buying a home can be an exciting and somewhat stressful experience. When shopping for your new home, keep in mind that one of the most important aspects of home ownership is often neglected, finding the right mortgage.

Your mortgage is the backbone of the entire purchase, but without doing proper research, you might not be getting the best deal you can. Before you begin the home search process, consider the following ways to increase your chances of a speedy, stress-free home buying experience.

1. Get Pre-qualified Before You Start Home Hunting

Getting pre-qualified means you will better understand how much home you can afford and which mortgage program(s) best fits your needs. By giving yourself options, you’ll be able to find a lender you’re comfortable working with and a mortgage you’ll be able to afford. Once you’ve done this, you can begin your home search without worry. You will also save yourself time as shopping for homes that you can’t afford only takes up time you could be spending finding the right home you can afford.

2. Know Your Personal Finances

Knowing your financial situation prior to speaking with a lender can help speed up the process when you do seek financing to buy a home. Budgeting for your current expenses and using a mortgage calculator can help predict what you’d pay with a mortgage. From there you can make a choice about how much you feel comfortable borrowing. A secure, steady working situation will also help make you more appealing to lenders since you’ll be able to prove stable income.

With a little bit of preparation before you speak with a lender, your lender can help you make an informed decision about how much house can afford to purchase and which loan program is the best fit for your needs.

 3. Understand All the Costs Involved With A New Mortgage

When you pick a financial institution to work with, you will submitting your information, checking your credit, and being given a mortgage quote.  While your monthly payment is a vital part of your mortgage, you’ll also be responsible for paying interest, insurance and lender fees, which your lender will help you understand. Many borrowers forget about these extra fees and instead of consulting with a mortgage professional, use a mortgage calculator as their guide in how much they will have to pay for a given loan size without taking these extras fees into consideration.

Top Mistakes of Home Buyers

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Home Buyer Mistakes to AvoidThe process of buying a home is one that you need to engage in with your head as well as your heart. You can’t make impulsive decisions when buying a home or you may find that you make a poor investment that will cost you time, money and frustration down the road.

Insure that you are a smart first-time home buyer by avoiding some common mistakes:

Mistakes to Avoid as a First-Time Home Buyer

  • You Can’t Get Over the Decor – Don’t allow the paint colors or the furniture in a home to sway you either way. The current home owners will take their furniture with them, and paint can be easily changed. Try to picture yourself in the home to determine if it’s the right fit.
  • Skip an inspection – It doesn’t matter how the home looks on the surface; you need a home inspection when purchasing ANY home. You don’t want to be surprised by issues down the road that may have been deal breakers.
  • Rely on Verbal Promises – The only agreements in a real estate transaction are those put in writing. Just because there is an unwritten agreement that you ‘may’ be able to occupy the home before your official closing date, does not mean anyone is obligated to abide by that. Put the important details in your offer and subsequent contracts and you will have better guarantees.
  • Get Approved For a Mortgage After You Make an Offer – It is important that you get pre-approved for a mortgage before you actually start shopping for a home. We can help you get pre-approved in minutes.
  • You See the Home Only One Time – Make sure you schedule a walk-through of the home before you take possession. You never know what condition it will be in when time has elapsed between the initial viewing and the closing date.
  • You Jump on the First House You Like – Seeing a number of houses will help you get your priorities in order. Visiting multiple homes even when you find one you like will help you to think with your head as well as your heart.

Using Gift Money for Your Down Payment

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Gift Money BasicsWith minimum down payment requirements for the purchase of your first home, coming up with the funds can be a challenge. Many new home buyers find themselves in a position to afford the carrying costs of their home, but can’t seem to come up with the cash to put the required money down.

The specific amount required can vary from one lender to the next. It can also vary by state but the general range is between 5% and 20% at a minimum. What first-time home buyers may not know when they are struggling to come up with the money, is that it is possible to use ‘gift’ money if they have a family member with sufficient financial resources.

Gift Down Payment Guidelines

The specific regulations for the use of gift money do vary by state. However, the basic guidelines are as follows:

  • Money can be provided to buyers by family or friends. However, it must truly be a gift and not simply money loaned. Often, mortgage lenders will require the person giving the gift to sign a notice guaranteeing the money is a gift. Sometimes, the source of those funds must be proven as well.
  • The individual providing the gift does not have to pay taxes on the gifted amount, provided it is under the state mandated maximum.
  • Often, the mortgage lender will require that the gift money be available to the buyer 30 days before closing.

Taking some or all of your down payment as a gift can help you get to the first rung on the property ladder. However, it is very important that you only use gift money when it is legitimately that – a gift. If you try to take advantage of this system and claim a loan as a gift, you are not only engaging in fraud, but you may find that you are in over your head financially even if you do obtain the loan.

What to Look For When Searching For a Quality House to Buy

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Home Inspection 101Houses, like people, can be all shapes and sizes. What you choose to buy might not be what someone else chooses, but the thing nearly all home buyers look for is a well-made house. Home inspectors, builders, and previous owners can all help by informing you of the condition of a potential purchase, but knowing what to look for with your own eyes is important since you are the ultimate decision maker.

Not every house is perfect and you can sometimes use this to your advantage. Cosmetic issues like paint and finishes are often some of the most glaring, but are also typically the easiest to fix. A house that has serious issues, however, is not. Insure that you evaluate the following:

Look Structural and Foundation Issues

When you’re touring a home, look for significant cracks in the walls or the ceiling or possible areas where such cracks may have been repaired. These can be signs of settling, structural, or foundation issues, and may be costly to repair if they’re deemed serious. Also be vigilant to the presence of bugs, especially termites, because they can cause significant structural damage.

Look For Water Damage

Be sure to look for signs of water damage that might imply a leak in the roof, windows, or plumbing. If there are cracks in the foundation of the home, water can come in that way as well, causing wood to rot, mold to grow, and general damage to flooring or drywall. Depending on the extent of the damage, these repairs can be cosmetic or costly. Mold can also have serious health implications, which means it is important to check for, especially if you have children.

Other Issues To Watch Out For

While the basic structure of the house is the most important thing, home buyers should also take note that a builder or previous owner’s cost-cutting measure can result in more money spent in the end. Some of these things are a matter of comfort, and some can be a distinct issue, including:

  • The quantity and quality of insulation used.
  • Proper installation of rain gutters, shutters, and accent details.
  • Any drafts coming from windows and doors.
  • How water drains outside.

Just remember, your new home doesn’t have to be perfect, you may save money if there is work that needs to be done, just be sure that you know about existing issues before purchasing. Always do your due diligence!

 

Remodeling Your Home the Right Way

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Remodeling TipsWhen you approach remodeling in the right way, you can bring value to your home, both in the monetary and enjoyment categories. There are mistakes, however, that you can make when renovating your home for the first time that can significantly increase the costs involved. Keep these in mind when you are ready to take on your first big remodel!

Tips for Successful Home Remodeling

  1. Hire the Right People – You need trustworthy, reputable contractors to work on your home. After all, remodeling a house for the first time and leaving it in the hands of contractors means that there is a significant amount of trust required. Ask friends and family who they have used for their projects and do your research online before hiring. Remember, the cheapest option for a contractor is not usually the best one. The costs involved in fixing work that was done incorrectly will usually be higher than those of paying a reputable contractor to do the work correctly the first time.
  2. Make Versatile Choices – There are always trends in home remodeling. Things like tile size and color, for example, change in popularity on a regular basis. Although a certain option may be in today, in 5 years from now, too trendy a selection will just appear more dated. You’re likely to tire of a trendy option quickly, as a result, or struggle to sell your home. Select classic designs when making more expensive changes. Reserve the trends for disposable decor and paint color.
  3. Maintain Flow – Your home’s structure and overall style should mesh well together. If you have a century home and over-modernize it, the home may lose some of its appeal to buyers, and decline in value.

Your home is a big investment, and it can work well for you provided you make careful choices before relying on impulse to renovate it.

Remaining in Control While Selling Your Home

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Be in Control When Selling Your HomeWhen selling your home, there are many things that can cause stress that are out of your control. As a seller, you cannot control the market, the number of offers placed on your home, or how many other houses are for sale in your area. With so much out of your control, it becomes of utmost importance that you tip the scale in your favor by taking control of the things you can.

Controlling Your Home Sale

To control your sale, approach the following with care:

  • Selecting Your Agent – When choosing your agent, don’t make a hasty decision. After all, this is the person that can truly dictate the success of your sale. They will have an influence upon foot traffic, marketing, and the pricing of your home. You need a qualified professional to advice you throughout the process so it leads to a positive outcome.
  • Preparing Your Home for Sale – Insure that your home present itself well by cleaning up your yard, and decluttering your home in the very least. If there are obvious home repair jobs needed, complete the inexpensive ones that act as red flags. You do not want these things to tell buyers you take no pride in your home, or they may expect even bigger problems they can’t see. Your agent can also give you feedback on what areas of your home need attention.
  • Your Expectations on Price – The market controls what your house will realistically sell for. You can control how open-minded you will be about the process. Be willing to bend (but not break) as having a random figure in mind will not be beneficial if it is not realistic to the market you are in. What you purchased your home for or what homes sold for a year ago play no role in what your home may be worth today. If you’ve chosen a qualified agent, they can give you up to date market data on what your home is worth and what you should ask for it.

There are a number of factors in a home sale that are left up to chance – don’t be a passive observer as you work to sell your home – take control over the things you can control!

Qualifying for a Better Mortgage Interest Rate

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Mortgage Qualification BasicsYou may not know it, but the interest rate you’ll pay for your home loan depends on a number of different factors. Changing any one of these factors can help not only make you a better candidate for a loan, but also ease the financial burden that comes from a major purchase like buying a home. We’ve outlined some of these things below:

1. Your Credit Score

Your credit score plays a major role in the type of interest rate you’ll qualify to receive. While different programs have different credit requirements, the rate you pay may increase or you may be disqualified altogether if you do not meet a specific program’s minimum or preferred credit score standards. If you find that you are having trouble qualifying for a mortgage, you might qualify for federally supported loans from Fannie Mae or similar institutions.

2. Available Liquid Assets / Reserve Cash on Hand

The amount cash reserves you can show to the lender are also important. Cash reserves help show that in case there is a disruption in your income, you will be able to maintain your monthly payments.

3. Your Down Payment Options

Another aspect to consider when applying for home loans is your down payment. Different lenders will require certain amounts in order to agree to giving you a loan.The higher a down payment you can afford to make  will not only help you in the long run, but give you an edge when applying for financing. Most financial institutions would prefer a down payment of anywhere from 10 to 20 percent in order to assure a good interest rate although this can vary by program. In difficult economic times, more and more banks are asking for the buyer to put more money down. Government-backed loans allow you to put less money down initially, but also carry higher monthly rates.

It’s important not to be discouraged if your credit score is lower than you anticipated, or if you can’t afford a large down payment. You can investigate other loan options, or even try to find ways to improve your credit. Improvement won’t happen overnight, but it can happen if you have patience. In fact, we can help you improve your credit score and help educate you on how to improve and maintain high credit scores in the future.

Tips for Paying Down Your Motgage Fast

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Pay Your Mortgage Off Faster!Whether you have an FHA loan or a private mortgage from the bank down the street, the idea of paying off your loan is no doubt attractive. If you’re in a good place financially, there are ways to take your 30 year mortgage and pay it off in half, or even a third of the time, without breaking your budget.

1. Increase Your Monthly Payments

The quickest way to chip away at your mortgage is to increase the amount you pay each month. Even if it’s just by a little each month, you’ll be getting ahead of the game. If possible, try to make an extra full payment once in a while, thus reducing the number of payments you’ll owe. While this is often a money management issue, if you’ve been given a bonus at work, or added income to your home, consider devoting more of these funds to your mortgage payment and less to other spending.

2. Renegotiate the Terms of the Loan

Depending on your loan, you may be able to renegotiate certain terms in order to facilitate faster repayment. If you are able to get a lower interest rate, this will lower your monthly payment. The trick is to continue paying the same amount as before. This acts in the same vein as increasing the amount you pay each month. Additionally, speaking to a financial consultant can help you understand bank-specific tricks to pay off your mortgage faster.

Keep in mind, the goal of these tips isn’t to encourage you to live beyond your comfort level. Even if you can only afford to put a little more toward your mortgage each month, that’s okay, you’re still working to pay off your loan sooner rather than later. Working to paying down your mortgage earlier may just allow you to live with limited housing costs during your retirement.

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