Is This Your Situation: Shopping for a Home Mortgage

For most of us, shopping for a new home also means shopping for a home mortgage. In both exercises, you'll want to be a smart shopper. Working together, we can find a house you'll love. And while it's not likely you'll actually "love" your new mortgage, here are 6 secrets to make sure your financing needs and the lender you're considering are a good match.

1. Mortgage Pre-Approval
A no-cost, no-obligation pre-approval before you start house hunting can save you big time. The seller knows you're a "cash buyer" and may favor your purchase offer over another. Find a lender who offers pre-approval. That's not the same as "instant approval," which is often an approval loaded with qualifications. Nor is it a how-much-can-I-afford "pre-qualification" estimate, which doesn't give you the same bargaining clout.

2. Quick Loan Processing
Some lenders offer actual mortgage approval in just 5 to 7 days, and electronic underwriting is sometimes even faster. Ask about it. This quick turn-around could get you to settlement sooner, which may make you the most attractive potential buyer to your seller and may mean less time in temporary housing.

3. Flexible Underwriting Guidelines
Some lenders count the earnings of a spouse who doesn't yet have a job in the new location but has at least a two-year work history. That kind of flexibility may make you eligible to purchase the home you want.

4. Variety of Mortgage Products
Perhaps you'll do best with a short-term mortgage or an adjustable-rate loan or two-step plan. Find a lender who offers a selection of mortgages and even unique mortgage products that suit your situation best.

5. Rate-Lock Options
Find out what rate-lock options are available from the lender. The shorter the lock time, that is, the less time between when you agree on a mortgage rate and when you actually go to settlement—the lower the interest rate you'll have to pay.

6. Negotiable Lender Fees
Go to a lender whose fees are reasonable. Question extra charges, such as a "commitment fee" or "underwriting fee" or "processing fee." Mortgage lending is competitive and lenders often will negotiate fees to get your business.


We can work together to find the house that's right for you, and we can talk about how to make sure the loan is right, too. Please give me a call or send an email.

 

Making Extra Mortgage Payments Can Help

Do you want to pay off your mortgage sooner? Whether you've bought a home recently or you've been paying your mortgage for a while, making extra mortgage payments is a smart way to save money over the long term. The effort you put into paying more now and saving later will benefit you in the future even though the process might seem overwhelming right now.

 
By saving your money and refining your repayment goals, you can take the next steps toward additional mortgage payments and experience your return firsthand. Your motivation for making as many payments within your spending limits as possible is knowing you'll be able to pay off your mortgage faster and bask in your return on investment sooner. In addition to taking years of interest off your loan, you'll also end up making fewer payments at lower prices over time.


How to Make Extra Mortgage Payments

Write down your mortgage value, your interest rate and the number of years you have to pay your loan; once you see the savings you'll make in the next few decades with these three tips, you'll want to start making extra mortgage payments today.

1. Add a Small Dollar Amount Each Month. Commit to adding a small amount of money like $10 or $25 to your mortgage payment every month. You won't notice the difference, and you'll also decrease the number of months you spend paying your mortgage while saving money in the long run.
2. Make Extra Payments Early in Your Loan Term. Execute your additional mortgage payments as frequently as you can early in your loan, depending on how much your current budget will allow. You'll end up paying your bills for a shorter amount of time and spending less money in the process.
3. Make Lump-sum Payments Sooner Rather Than Later. Carry out larger extra mortgage payments in the first few years of your mortgage term to pay more now and save a lot in the long term. You'll make an immense dent in the overall amount you contribute to your loan and avoid paying thousands of dollars in interest.

Because making one or more extra mortgage payments per year can help tremendously, keep these examples and tips in mind as you review your budget, set your goals and start saving. Cutting back on spending and putting effort into these additional payments will be worth it once you've finished paying off your mortgage and saved thousands of dollars along the way. If you're wondering about the other ways you can ease the burden of your loans as a homeowner, I'm always available to contact for more information.

Is This Your Situation: Wondering How You Can Buy a Foreclosed Home?

Maybe you’ve heard stories about people who bought rundown properties for little to nothing and turned them into palaces. You might be curious about how one acquires a foreclosed home. Is it difficult? Are the prices as good as they seem? Buying a foreclosed home is possible — you just need to know a little bit about the unique process of buying one. Keep reading to learn the first steps to buying a foreclosed property
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You work with a bank
You will likely be working with the bank’s broker. These agents work directly with the bank that owns the property. They often have long-standing relationships with the bank, so they also have insight on other foreclosed properties that are due to hit the market. When you find a foreclosed home that you’re interested in, you will contact the bank’s broker directly, and this is the agent you will be working with to purchase the home.


Pay in cash or get preapproved 
Many of these homes are cash-only. If they are in the auction stage or if they’re government owned, you must pay cash up front. If the property is REO (real estate owned — the bank now owns the property) you can get buyer financing, but you should come prepared with a letter from your lender stating how much money you are preapproved for. Since these properties are bank-owned, they come at a cheaper price tag — meaning they’ll sell quickly. If you’re not preapproved for a loan and you’re not paying cash, chances are, someone else will snag it before you.


Look at comparable properties before you make an offer
It’s hard to know exactly what to bid on a foreclosed home. The bank could price the home above market value or below. The only way to know how you should bid is to look at comparable homes. Also, take note of how long the home you’re interested in has been sitting on the market. If comparable foreclosed homes are selling quickly, you should bid high; but you might have some wiggle room if the home you’re after has been sitting idle for a while.
Keep in mind that there is no bargaining room when it comes to the condition of the property. Foreclosed properties are purchased “as is.” You will not be able to get a cheaper price by arguing that the floors need replacing or the ceiling is cracked.


Safest to buy when it’s REO
The safest time to buy a foreclosed property is when it’s REO. However, you might not be able to get as much of a bargain compared with when the house was still in auction. When the home is REO, it is owned by the bank and any liens or back taxes have been cleared. Sometimes the house is even cleaned up a bit, but no major repairs are performed. Below are other stages of the foreclosure process that typically offer more challenges to buyers.

• Pre-foreclosure – The homeowner is still in possession of the property. However, they have stopped making payments on the house and the home is selling for below market value. The lender must agree to accept an offer on the home that is less than what is owed on the mortgage loan.
• Auction – If the home doesn’t sell in pre-foreclosure, it goes to auction. This may be because the lender and homeowner couldn’t come to an agreement during the pre-foreclosure stage. 
• REO – Real estate owned, meaning that the bank takes possession of the property. 
• Government Owned – The home falls into the hands of the government if it does not sell in the REO stage. It takes a long time to purchase a home when it reaches this stage because of excess paperwork and other procedures. 

If you’re thinking of buying a foreclosed home, contact me today for more information.