Tag Archives: First-Time Home Buyers

4 Tricks to Buying a Home in a Crazy Hot Market

Key Takeaways:

  • Despite the ongoing pandemic, the real estate market is more competitive than ever before—and that means buyers have to do more to get their offer accepted.
  • Want to stand out from the competition and score the home of your dreams? Our four tips can help you achieve real estate success in no time.
  • If you have any questions about buying in today’s hot market, just give us a call for even more personalized advice!

The 4 Tips Every Buyer Needs to Know in 2021

If you’ve been house-hunting for a while, you’ve probably noticed that today’s real estate market is more than just a little competitive. Low mortgage rates, high demand, and dwindling inventory have created ideal conditions for sellers—but it’s still very possible to score a fantastic deal on a home.

Want to know the secret to buying a home in 2021? Here are four tips that can help you take back control in a seller-driven market.

Get your finances in order

Calculating mortgage payments

First and foremost, you need to get your finances in order before you even consider looking at homes. Start by paying off as much debt as you can and increasing your credit score. It’s also a good idea to keep track of just how much you have saved for a down payment. Sellers are more likely to choose buyers who can put down at least 15% or pay cash.

Want to strengthen your offer even more? Get preapproved or attach a higher earnest money deposit to show a seller you’re serious about buying their home.

Know what you want

Buying a home is one of life’s most exciting milestones. However, it’s easy to get caught up in the little details—which is why it’s crucial to do your research in advance. Connect with a local agent early on to discuss your home-buying goals. A good agent will help you hone in on your budget, wants, and needs, as well as the right area or neighborhood.

Prepare for a bidding war

Negotiating a deal

According to a recent survey by Redfin, more than half of all buyers found themselves in a bidding war last year. And while the idea of competing against other home-seekers might seem overwhelming, there are a few things you can do to stand out. 

If you’re trying to score a house with multiple bids, send in your best and final offer up front. You may also want to include an escalation clause, which automatically increases your purchase price by certain increments (like a few thousand dollars at a time) so you avoid getting outbid.   

It’s also a good idea to consider homes below your budget, especially if you have your heart set on a popular neighborhood. This gives you some flexibility if you end up in a bidding war. 

Appeal to the seller

Talking about real estate

Even if you find yourself in a bidding war, it’s still possible to come out ahead. Believe it or not, sellers don’t always choose the highest offer, even if it far exceeds the original asking price. 

You can appeal to a seller’s peace of mind by limiting your contingencies, offering to pay closing costs, and letting them choose the closing date. Adding these extra bonuses might seem minor, but they can really impact a seller’s final decision.

Only Buy with the Best

Working with a top-notch agent can help you navigate 2021’s crazy real estate market with ease. So if you’re looking for some guidance, it’s time to give us a call!

Whether you’re at the beginning of the buying process or are already searching for a home, you can trust us to help you find your perfect place. Contact us today to get started; we look forward to working with you.

3 Reasons All Buyers and Sellers Should Use Listing Alerts

Key takeaways:

  • Listing alerts send new homes straight to your inbox as soon as they hit the MLS, and they’re the easiest way to keep up with the competitive market.
  • Listing alerts aren’t just useful for buyers—they can also help sellers stay up-to-date on other current and sold properties in their neighborhood.
  • Signing up for listing alerts only takes a minute, and you can always contact us to schedule a tour if you see a property you love!

Why Every Buyer and Seller Should Sign Up for Listing Alerts

Today’s real estate market is more fast-paced than ever—in fact, it’s not uncommon for a home to sell above asking price not long after it’s listed. So if you’re serious about buying, you need a to-the-minute resource to help you stay ahead of the competition.

This is where listing alerts come in handy. Just use our fully customizable filters to narrow down your search, and you’ll receive an email right when a home matching your criteria hits the market. And if you’re thinking about selling, you can also use listing alerts to scope out the competition in your neighborhood. 

Want to learn even more about the benefits of signing up for listing alerts? Here are three additional perks that every buyer and seller should know about.  

You’ll immediately see listings that match your criteria

Couple searching for a home online

Your home is likely one of the biggest investments you’ll ever make, which means it’s okay to be a little picky. Our listing alerts can be customized to your exact parameters, so you’ll know as soon as the right property becomes available. Take a look at our easy-to-use search tool to get started—we have filters for price, size, neighborhood, and even specific home features!  

You can create a portfolio of your favorite homes

Couple using a tablet to search for a home

When you sign up for our listing alerts, we’ll automatically create a personalized property organizer to help you keep track of all your favorite homes. Not only is this feature easy to use, it also allows you to save the listings you want to see in-person. You can even use your property organizer to schedule a showing, take a virtual tour from the comfort of your couch, or get in touch with a local agent for more information.

Sellers can keep up with sold listings, too

Recently sold home

If you’re like most buyers, you probably have an existing home you need to sell before you make a move. That’s why we designed our listing alerts to work with both active and sold homes. All you have to do is set your desired criteria, and we’ll send over listings right when they go under contract.

Wondering how listing alerts benefit you as a seller? By scoping out sold homes in your neighborhood, you’ll get a better idea of how fast and how much your home could sell for—you might even pick up some staging tips along the way, too. As if that isn’t enough, you can also browse other current listings to get a better idea of your competition!

Get the Latest Homes Sent Straight to Your Inbox!

Ready to sign up for listing alerts? We’re here to help! Contact us today to set up your first alert—we’d be happy to guide you through the process if you have any questions. And if you’re thinking about buying or selling soon, drop us a line for even more helpful information. We’re always here to lend our expertise.

3 Reasons You Shouldn’t Use Zillow to Search for a Home

Key takeaways:

  • For years, Zillow has been one of the most popular real estate sites for buyers, sellers, and daydreamers—but it might not be the most reliable option for serious house hunters.
  • If you want to shop the hottest deals and see homes before they hit the market, it’s better to work with a local agent.
  • Need help finding the perfect home? Reach out to us today to get a head start on your search!

Why Zillow Isn’t the Best Option for Serious Homebuyers

We’ve all probably spent more time than we care to admit scrolling through listings on Zillow. While this popular real estate website might be good for daydreaming, it’s not always the best resource for buyers who are searching seriously for a home. In fact, according to a report by the Washington Post, some of Zillow’s “listings” aren’t actually on the market at all, and they could potentially contain inaccurate information.

Looking to stay ahead of the competition in today’s fast-paced market? Here’s why you should work with a local agent instead…and maybe even avoid Zillow altogether.

Zillow doesn’t always list Coming Soon or Pre-MLS homes

Coming soon home

Did you know that some homes are sold before they officially go on the market? If you’ve ever searched for listings online, you’ve likely seen at least a few properties labeled “Coming Soon.” This means they aren’t available for showings, but you can still make an offer and purchase them sight unseen. Sellers can take things a step further by advertising their home as “Pre-MLS,” which means the house might not even make it online before going under contract.

Because these types of homes don’t usually stay on the market for long, there’s a good chance they won’t be on Zillow. And if they are, they could already be sold by the time you see them! If you want to see homes before everybody else, your best bet is to ask your agent—they’ll be able to show you local listings that you can’t always find on national real estate sites.  

Zillow’s information is often inaccurate

Searching for a home on a tablet

One of Zillow’s biggest (and most infamous) claims to fame is the “Zestimate”—an algorithm-based guess of a home’s potential selling price. While the company asserts that most Zestimates fall within 10% of a home’s actual market value, that 10% can be a difference of tens of thousands of dollars. 

Some buyers use Zestimates to determine how much they should offer for a home, but this isn’t a surefire way to score a great deal. Because Zillow relies on government records and user-reported data, their Zestimates aren’t always as accurate as you might expect.

For example, if a property has undergone recent renovations or has incorrect property tax records, Zillow could price it higher or lower than what it’s really worth. Although Zestimates sometimes take into account a home’s condition, location, or other unique features, the evaluation process is entirely automated—and that could lead to even more inaccuracies.

If you ever have any questions about how much a home is worth, your agent will be able to offer more personalized (and reliable!) advice.

Real estate agents have better local connections

Real estate agent helping a couple

Countless home buyers start their search on Zillow simply because it’s one of the biggest real estate websites out there. While Zillow does have a broad reach, it lacks the personal touch and local expertise you get from working with a real estate agent in your area. 

Real estate agents know the market better than anyone else, which means they can help you gauge whether or not a listing is priced fairly. In fact, many agents offer customized search tools that can give you a better perspective on homes for sale in your target area. And if you team up with a well-connected agent, they might even be aware of off-market properties you won’t see on Zillow. 

Only Buy with the Best

Real estate has and always will be a hyper-local industry. So if you’re thinking about buying a home soon, we’d love to offer you a better experience than you’ll have on Zillow. Take a look at our handy search tool to start browsing the latest listings, and let us know if anything catches your eye. You can even sign up for customized listing alerts to get properties sent straight to your inbox!

Mortgages Made Easy: How to Choose the Right Home Loan

Key Takeaways:

  • As mortgage rates continue hovering near historic lows, many potential buyers are eager to make a move—but it can be hard to know which type of loan is best.
  • There are dozens of different mortgage options available today, and some even have low down payment or credit score requirements. This can help a variety of buyers finally achieve their real estate goals. 
  • Need help finding a lender or choosing the right mortgage for your needs? We’d be more than happy to offer a few recommendations.

Home Financing 101: The Most Common Types of Mortgages

Let’s face it—understanding mortgages can be the most complicated part of buying a home. Even experienced buyers sometimes have trouble deciding between lenders or shopping around for the best interest rate. And because there are so many options, it can be difficult to track down the mortgage that best meets your needs.

There are a variety of factors you should consider before committing to a loan, such as your income, debt, financial history, and how long you plan on staying in your new home. But if you play your cards right, you could end up scoring a great deal. Here are some of the most popular types of mortgages, as well as their pros and cons.

Fixed-rate mortgage

Mortgage scrabble tiles

A fixed-rate mortgage is the most basic and reliable type of home loan you can get. Your interest rate and monthly payment will stay the same for the entire duration of the mortgage, and you’ll likely have to put at least 20% down and have an established financial history to get approved.

Typically, fixed-rate mortgages are broken down into 15- or 30-year terms. If you want predictability and don’t plan on moving for a while, this is probably the best option for you.

Adjustable-rate mortgage

house, coin stacks, and clock

Unlike their fixed-rate counterparts, adjustable-rate mortgages offer the initial benefit of a lower rate and down payment. However, ARMs fluctuate with the market, which means your interest rate and monthly payments could increase or decrease over time.

While there is more risk involved with an adjustable-rate mortgage, it can be worth it if you plan on living in your home for a shorter period of time. Generally, ARMs have a capped introductory interest rate for the first few years, which can save you quite a bit of money compared to a fixed-rate loan.

VA loans

Member of the military

If you or your spouse are an active, retired, or veteran member of the military, you could be eligible for a VA loan. Backed by the US Department of Veterans Affairs, this unique type of mortgage lets you buy a home with little to no down payment or mortgage insurance.

Because VA loans are guaranteed (but not financed) by the government, they do have stricter requirements than other mortgages. The loan can only be used towards a primary residence, and the house you intend to buy has to meet minimum property requirements. This means you’ll have to undergo additional inspections and appraisals. 

FHA loans

Couple moving in

Backed by the Federal Housing Administration, the FHA loan is designed for first-time or lower-income buyers. While most mortgages typically require a down payment of 20% or more, the FHA loan allows buyers to put down as little as 3.5%; that equals out to around $9,000 for a $250,000 house.

FHA loans come with a fixed interest rate and can offer a path to homeownership for buyers who don’t have enough saved for a traditional loan. However, you will be required to pay for private mortgage insurance (PMI) every month, which typically costs around 1% of your total loan amount. It’s also important to remember that the government does not issue your loan—you’ll still have to shop around for the right FHA-approved lender.

USDA loans

Farmland

The USDA loan is a government-sponsored mortgage program that targets buyers in more rural areas. While the USDA does have stricter credit and income requirements than the FHA, they’ll fund up to 100% of the purchase price for an eligible home. That means you won’t have to put any money down, and you may even enjoy a lower-than-average interest rate. 

Additionally, USDA loans require mortgage insurance, and you won’t be approved if your debt-to-income ratio exceeds 41%. Before applying, you should also check the USDA’s eligibility map to see if your area qualifies for the program. 

Other loans

House on a calculator

This is hardly an exhaustive list of all the mortgages used by today’s home buyers! Depending on your financial situation, you could qualify for a more niche loan, such as a balloon mortgage, bridge loan, or jumbo loan. Many banks, lenders, and state governments also have their own programs or incentives that are worth exploring. You can even combine different types of loans to create a financing plan that’s tailored to your needs.

If you don’t have time to research all of your options, it might be beneficial to work with a mortgage broker or ask your agent for recommendations. They’ll have the knowledge to guide you in the right direction!

Want to Learn More About Mortgages?

If you’re in the market for a new home, we’d love to discuss your financing options or recommend some top-rated lenders. Contact us today to learn the ins and outs of the home buying process, from finding a loan to finally getting the keys to your new place. We look forward to helping you start your next chapter!

Buyer Beware: 6 Red Flags That Could Spell Trouble for Homebuyers

Picture this: you’ve found a seemingly perfect home in just the right neighborhood. It has every single one of your must-haves, plenty of space, and even all of the features you want. But on the tour, your agent spots a few big problems, like a crack in the foundation or signs of water damage. Should you walk away from what seems like your dream house?

Unless you’re looking to tackle a fixer-upper, you may want to proceed with caution if you run into any of these red flags during a showing.

Watch Out for These 6 Red Flags During a Showing

As you tour homes, it’s important to remember that a seller may not always disclose (or know) the whole truth about their house. If you ever have any questions about a home’s condition, make sure to ask your agent. They’ll often be able to spot problems that you may not see yourself, and they can also help you decide whether or not a certain issue is a dealbreaker. 

And even though a property may appear well-maintained, there could be some lingering imperfections that aren’t visible to an untrained eye—here are a few examples.

Foundation issues

Foundation crack

A faulty foundation is one of the biggest and costliest problems you can encounter in a home. If you spot any foundation cracks (both outside or inside) bigger than one third of an inch, it could mean a property has major structural defects.

Other signs of potential foundation issues include sticking doors, gaps around window frames, or sagging floors.

Outdated electric and plumbing systems

Tools and electrical supplies

A leaky faucet or ungrounded outlet may seem like a quick fix, but they could signal a much larger problem. If you’re touring an older home, have your agent ask about the age of the plumbing and electrical wiring. It’s essential (and expensive) to bring these systems up to code to prevent potential floods or fires.

An old roof

Old roof shingles

Typically, roofs should be replaced every 12 to 15 years. So if you notice some missing or curling shingles, it could mean that a home’s roof has reached the end of its lifespan. If you’re not sure about a roof’s age, be sure to ask your agent—they can get in touch with the seller’s agent for more information.

Water damage

Water damage on a ceiling

Take a look at a home’s ceiling and floors—do you see any dark spots? If so, this could be a sign of water damage, which is often a pricey fix. Be sure to check out a home’s drainage situation, too. A yard that isn’t properly graded could cause water to seep inside after a heavy rainstorm.

Homes that have basements are more prone to leaks than those that don’t, so don’t forget to head downstairs to look for water damage!

Unwelcome critters

Mouse trap

Bugs, mice, and other pests can spell big trouble for a house, especially if the infestation is widespread. Termites in particular should be a huge red flag, as they can destroy a home’s entire structure before being detected.

If you see an overwhelming number of critters wandering around during your tour, you may want to move on right away. You should also check for mud tubes, hollow or rotting wood, and bug droppings, as these are common indications of termites.

Unpleasant odors

Spraying air freshener

Notice a less-than-pleasant scent during a showing? These aromas could be signs of mold, mildew, water damage, pests, improper ventilation, and countless other issues. You should also be wary if a seller seems to be covering up smells with heavily scented candles or air fresheners.

Bottom line: Always have a home inspection

Home inspection report

Even if you don’t spot any of these problems, it’s always best to have an inspection after your offer is accepted. A qualified inspector can spot problems both large and small and will provide a detailed report of everything that needs to be fixed.

From there, you can try to renegotiate the price of the home with the seller or ask them to complete the repairs. However, if a home is being sold “as-is,” you may be stuck doing the work yourself. 

Thinking About Buying Your Next Home?

When it comes to finding the right home, it pays to have an expert agent on your side to handle all the details. Give us a call today to learn more about the premier services we offer to our buyers. We’d be more than happy to answer any of your real estate questions, and we can also help you sell your current home, too!

4 Tips to Ace Your First Home Purchase

If you ask a homeowner what it was like to buy their first home, they’ll probably mention a few things they’d change if they could do it all again. While it’s impossible to know everything about the home-buying process beforehand, you can still prepare yourself for what lies ahead—and figure out how to avoid some potential pitfalls. Not sure where to begin? Here are some key pointers to keep in mind before starting your search.

You’re Buying More Than a House

Neighborhood

We all know the phrase “love at first sight,” and it can certainly apply to homes, too! Even if you step inside a home and instantly fall in love, it’s crucial to step back and consider the whole picture before making a purchase.

When you buy your first property, you’re investing in more than just four walls. It’s worth paying attention to things like a home’s location, neighborhood, and physical condition, too. Even if you find that open concept kitchen you’ve been dreaming of, it might not be the right fit if it’s in the wrong community or if the rest of the house requires out-of-budget repairs. It’s best to stay realistic and listen to your agent’s (and home inspector’s) advice. Remember, this is likely one of the biggest investments you’ll ever make, so spend your money wisely!

Down Payments Are Different for Everyone

Piggy bank and house figure

So many would-be buyers are scared of homeownership for one reason: the down payment. Traditionally, you’d put down around 20% on a home and spend anywhere from 10 to 30 years paying your lender back. However, you actually have more flexibility than you might expect. 

Depending on your credit history, location, and occupation, you could be eligible for loans that require as little as 0% down. However, making a larger down payment means you’ll pay less interest to your lender in the long run. Be sure to shop around for the right fit and reach out to your agent with any questions—they’re always available to help you out. 

Prepare for Extra Expenses

House fund coin jar

Homeownership often comes with unexpected expenses, especially right after you move in. When you’re setting a budget for your big purchase, consider adding some wiggle room to allow for any additional and long term costs. You don’t want to realize that you can’t afford your home after you’ve purchased it!

Wondering what kinds of expenses can come up? Inspections, homeowner’s insurance, prepaid taxes and other various closing costs, HOA dues, and repairs are just a few possibilities. You’ll pay for some of these before or at the closing, but certain recurring costs will have to be factored into your monthly budget. 

Get Pre-Approved Before You Start Searching

Tax forms with phone and coffee cup

Once you’ve made the decision to buy, it’s tempting to start looking at listings right away. However, you might want to press pause and complete an essential step before you start scheduling showings. Getting pre-approved for your loan will show sellers and agents that you’re serious about buying—and it can tell you exactly how much you can afford to spend.

Ready to start the pre-approval process? First, you’ll want to get your finances in order and shop around for the right lender. Be sure to have all of your important documents on hand, such as your W-2 tax form, paystubs, and social security card. Most lenders allow you to apply online, and within a few business days, you’ll know whether you’ve been approved or not, as well as the conditions of the loan. 

Are You a First-Time Buyer?

Buying your first home is a big deal, and it’s important to have the right agent by your side throughout the process. If you’re ready to start your search, feel free to reach out to us with any questions. We can’t wait to help jumpstart your journey to homeownership!

Here are 4 Tricks to Choosing a Neighborhood You’ll Love!

Aerial shot of neighborhood

If you’re thinking about buying a home, you’ve probably heard, “location, location, location!” on repeat. Finding the perfect city or town is one thing, but you’ll need to take it a step further. The right neighborhood matters more than you think, so before you start your search, we have some tips to help you find the perfect spot!

Do Your Research

Man exploring neighborhoods on tablet

Before you start driving through prospective neighborhoods, you’ll want to do some research at home first. Finding the right place to live can be time-consuming, but some quick online searches can help narrow down your options. Many agents also spotlight certain neighborhoods on their website and tend to offer more in-depth guides—as well as more listings and home-buying tips.

After doing your initial research, you’ve probably narrowed your list down to a few neighborhoods. Now it’s time to delve deeper and look at these places by the numbers. It’s worth looking at stats like crime rate, HOA fees, and average property taxes. You might want to start your search with sites like Neighborhood Scout and City-Data—these sites give you localized data on demographics, schools, and more.

Scope Out What’s Around

Man researching on laptop

While the actual neighborhood might seem perfect, what’s around matters a lot, too. Remember, you’re buying more than just a home—you’re finding a new place to thrive. If you’re looking for convenience, a community far-removed from amenities you love might not work. Be sure to take your commute into account, as well as the driving distance to places you go all the time.

School districts also play a big factor in which area you choose, especially for your kids. Even if you don’t have children, home prices in good districts are consistently higher than others, so it’s still something you should take into account. Want the inside scoop? Compare options by looking up which schools serve a community and exploring their ratings on sites like Niche.com.    

Take a Stroll

Couple walking around a downtown area

Now it’s time for some field research! Once you’ve picked some neighborhoods that seem like a good fit, go do some exploring—you’ll want to do more than just drive around, though. Get out of the car and take a stroll during different times of the day! This is a fantastic way to meet potential neighbors and see the condition of homes. 

You’ll want to ask yourself some crucial questions during each visit. How well do residents maintain their homes? Do you see a lot of people outside, or does everyone seem to keep to themselves? Is there any common space or amenities you’ll want to use? This is the best way to picture yourself living in an area before actually committing to a home.

Narrow Down Your Options

Person listing out pros and cons in  a notebook.

If you don’t have a clear winner in your head after you visit each community, it’s time to down and weigh the pros and cons. You should also evaluate the market—there might not be a home for sale that suits your needs in the neighborhood you love, so consider all of your options. 

If you have any other questions, be sure to reach out to a real estate professional. They’ll use their expertise to help you make an informed decision, and can also show you spots you might have missed!

Ready to Find the Neighborhood of Your Dreams?

Two women discussing real estate.

No matter where you are in your home search, we’d love to help make the process easier. We’ve got you covered, whether you’re still searching for the right community or are ready to look at homes. Give us a call today so we can chat—we can’t wait to be your local experts!

Is a Home Inspection Really Necessary? Why You Shouldn’t Skip This Important Step

Picture this: you’ve finally found the home of your dreams. It’s got all the features you’ve been searching for, and it’s in the perfect neighborhood. There can’t possibly be anything wrong with it…right? 

Though technically optional, a home inspection is highly recommended by most realtors, as it can save you thousands of dollars—or even prevent you from making a costly mistake all together. Here are some reasons why you need a home inspection before you move in—even if you don’t see anything wrong on the surface.

You Could Avoid Expensive Repairs

Person making repairs with an electric drill.

This is probably the biggest advantage of a home inspection. Certain problems can cost thousands to fix and may not be immediately visible. Wondering what kind of issues a home inspector can find and how much they’ll cost? Here are some of the biggest issues uncovered during home inspections (and typical costs to fix):

HVAC replacement: $4,000 – $12,000

Leaky roof: $300 – $2,000 for basic repair, $4,000 – $20,000+ for advanced repair

Foundation issues: $4,000 – $10,000

A great home inspector will fully sweep the home and point out any problems or potential issues. If there are any big-ticket expenses, you may want to reevaluate your purchase.

You’ll Protect Your Wallet

Person calculating expenses and creating a graph.

Buying a home is one of the biggest investments you can make, and a good investment will generate more capital than what you initially paid. While a well-maintained home in a prime location can be a fantastic investment, expensive repairs can turn it into a financial disaster.

Once you have an inspection report detailing all of the issues with the home, you can evaluate the cost of repairs to determine if it’s a good deal. If you aren’t satisfied, you can walk away without losing much money.

You Gain a Negotiation Tool

People with laptop exchanging a folder.

While not all properties will require major repairs, even new construction homes may have issues you’ll want to take care of before moving in. You can use your inspection report as a negotiation tool to potentially lower the price of the home. 

There are a few directions you can go from here. One option is to ask for money off of the price of the home so you can complete the repairs yourself. On the flip side, you can also ask the sellers to make the fixes as a condition of the sale. Either way, you’ll be saving yourself money in the long run. 

You Get the Full Picture 

Roof of red house with window.

While you may be in love with a home, it’s hard to know what potential issues to look for if you’re not a licensed professional. Think of a home inspection like a check-up, and the home inspector like a doctor—it’s the perfect opportunity to learn about the health of a home, from the roof down to the foundation. 

The inspector can diagnose all kinds of problems and tell you what needs to be fixed (and for how much). After the inspection, you’ll be handed a comprehensive report that gives you a full picture of the home’s condition, allowing you a more realistic look at the details that you might not have noticed before. 

Ready to Buy Your Next Home?

Buying a home can be a difficult decision, so make sure you have the tools you need to make a well-informed decision. For tips on smooth sailing during the buying process, give us a call so we can chat. We’ve got the resources you need to make the right choice.

Haven’t started the buying process yet? Check out our specialized search tool to find the home of your dreams, and let us know when you’re ready to get started.

Mortgage 101: What To Know Before You Apply

Everybody loves talking about mortgages. They’re fun, easy to understand, and a great icebreaker, right?….Wrong. Thanks to their lengthy process, technical jargon, and confusing options, mortgages have a bit of an intimidating reputation—but it doesn’t have to be that way!

If you’re in the process of buying a new home and dreading the mortgage application process, here’s what you need to know to keep things running smoothly. 

Know How Much You Can Spend

A person holding up money.

If you’re feeling antsy about getting started and want a general idea of how much loan you might qualify for, consider the 28/36 rule, or the Debt-to-Income ratio—AKA what most lenders use to help calculate your mortgage. 

Essentially, the 28/36 rule means that your monthly mortgage payment shouldn’t be more than 28% of your gross income. Additionally, your outstanding debts—like mortgage, car loans, student loans—shouldn’t account for more than 36% of your gross income.

Get Your Finances in Order

Statistics on a laptop.

Not seeing the numbers you were hoping for after calculating your Debt-to-Income ratio? Then, hopefully, you’ve given yourself a little time to shift things in your favor. Paying off loans, improving your credit score, avoiding big purchases—these will all help you change those numbers. 

Of course, completing those tasks is a little harder to do in practice than in theory, so you may have to take a look at your budget and see where you can cut out some extras—at least temporarily!

What You’ll Need to Apply

Paperwork.

In the weeks before you plan on applying for a mortgage, you should start collecting all of the documents you need. Since a lender will be telling you exactly how much money they’re willing to loan, they’ll need a comprehensive understanding of your finances beforehand. Start gathering things like:

  • W2s/tax returns
  • Photo ID
  • Your two most recent pay stubs
  • Current and prior addresses
  • Asset information (retirement funds, 401(k), stocks and bonds, other investments) 
  • Gift letters

Depending on the lender you choose, you may need additional documents, so consider calling in to double-check beforehand. 

Find the Right Mortgage

Three women pointing at a laptop.

Once it’s time to start thinking more concretely about applying for a mortgage, you have several options to consider. While all the mortgage options out there could easily fill a whole blog post on their own, here’s a quick rundown to give you a general idea:

  • Conventional/Fixed-rate:  The interest rate of a fixed-rate loan won’t change over time, making it a popular choice for its predictability. Conventional loans typically require a 20% down payment or mortgage insurance for smaller down payments.
  • Adjustable-rate: The interest rate of adjustable-rate mortgage will fluctuate over time, sometimes lower than fixed-rate, sometimes higher. There is a cap in place so the rate doesn’t get too out of control, but ARMs are typically more popular with those who plan to refinance.
  • FHA: If you are struggling to come up with a down payment, you may have options with an FHA mortgage. Provided by the Federal Housing Administration, these loans come with a low down payment requirement and built-in mortgage insurance.
  • USDA: Live in a rural area? Then check out your USDA eligibility! A surprising amount of areas qualify for USDA loans, even if you aren’t living in the countryside. Plus, USDA loans don’t require a down payment and offer lower insurance premiums.

These aren’t the only options you’ll have, just the most common. If none of these sound right or you aren’t sure which to choose, just ask your lender!

Choose the Right Lender

When it comes time to decide who to work with, you’ll have to do your research. Each lender is different, meaning they’ll likely offer you different rates, charges, and loan options. 

Luckily, we’ve been working in real estate around the area for years, so we know exactly which lenders are right for which buyers. If you need a few suggestions before you kick off your search, just let us know! 

Still Have Questions?

That’s okay—we get it. Applying for mortgage is confusing and challenging, especially if it’s your first time. If you have any questions about the process, we’re here to help. 

Ready to start looking at a few homes in your price range? We can help with that, too! Check out our specialized search tool to narrow down your options, and give us a call to start seeing a few in person!

The Four Most Common Red Flags to Look for During Your Walkthrough

A new home is a big financial investment. Not only will you likely be pouring a lot of your savings into the purchase, but you’ll also be choosing a place to call home for years to come. The last thing you want is to spend all of that time and money only to discover a costly maintenance or structural issue.

Even though you’ll get a professional inspection done, there are certain red flags that you should specifically be looking out for during the first walkthrough. By recognizing these problem areas right away, you can put emphasis on them during the inspection. Save yourself time, money,  and stress, and know these major home-buying warning signs.

Foundational Flaws

A vase of flowers in front of a cracked window.

It’s not like you can pull the house up from the ground and get a closer look at the foundation, so how do you tell if there are any issues? A few surefire signs of a faulty foundation include sloping floors, swinging and sticking doors, visible cracks above window frames, and cabinets separating from the walls.

Faulty foundations can go on to cause major damage in the home, and like most problems, the longer it goes unrepaired, the worse it will get. Minor cracks will only cost around $500, while major repairs could total up to $10,000. These are expenses you don’t want—and shouldn’t have—to get saddled with, so keep an eye out during the walkthrough and get a professional opinion from the inspection.

Signs of Amateur Repairs

A man patching up a wall.

Lots of homeowners choose to DIY repairs for a variety of reasons, from budget issues to scheduling conflicts. If they know what they’re doing (or the project is something relatively simple), then there shouldn’t be any issues. But if they, say, looked up a video tutorial on how to wire electricity to a new outlet—having never done electrical work before—then you might have some problems down the road. 

Even small things that seem unimportant, like light switches wired to the wrong lights, leaky faucets, or shoddy tiling work, can be signs of larger problems elsewhere in the home. If you run into things like this, then you might ask your home inspector to take a deeper look into other areas of the house that have been recently repaired.

Concealed Damage

A half-painted wall.

Speaking of amateur repairs, some problems might seem a little too big (or expensive) to fix. That’s when homeowners might try to cover it up instead of paying for repairs. For example: a fresh coat of paint is to be expected in many homes on the market. But if the paint only covers a small section of the wall or is dotted around the ceiling, that could mean the owner is trying to hide water damage. Depending on how extensive the damage is, it will cost hundreds or thousands of dollars to repair. And if it sneaks past the inspection, it could be on your dime. 

In the same vein, things like candles and air fresheners are also expected during showings. But if you notice that the scents are a little too strong, then the sellers could be trying to cover up mold or mildew odors, smelly pets, or damage from smoking. A home is a huge investment, so don’t be afraid to really look into that dry wall and make sure it’s mold-free.

Roofs in Disrepair

The roof of a house.

Remember those spots of fresh paint? If you notice those in a house, then there’s a pretty good chance that the water is coming from the roof. Other major signs of a damaged roof include curling or missing shingles, signs of buckling, discoloration or stains, and leaning or loose chimneys and gutters. 

While a home inspector will likely check the roof, if you notice any of the above signs, you may want to ask for an extra in-depth look. After all, roof repairs can cost anywhere from $200 to several thousand dollars, so even though the roof is out of sight, always keep it in mind. 

Need Some Help Searching?

Buying a home is a huge investment, and you want to make sure you’re spending your money wisely. If you’re feeling overwhelmed by the walk through process, don’t worry—we’re here to help. Not only can we point out any issues we see with the home right away, but we can also recommend top inspectors and help with negotiations for repairs.

Explore a few more of the home-buying resources we have to offer, and give us a call when you’re ready to see a few homes!