Long-Distance House Hunting Tips

consumer1It pays to start with a solid strategy when you have to house hunt from afar.

Hunting for a house is stressful enough even if you are moving to another part of town. However, when you are searching for a house from afar, it can make the task of finding the right home for your needs seem almost impossible.

Fortunately, in today’s high-tech world, you have an array of tools available right at your fingertips that can make it easy to find the perfect house for your needs. So, even if you are looking for a home thousands of miles away, you can do so quickly and with minimal fuss.

Partner With The Right Real Estate Agent

The first thing that you should do when looking for a house in an area that you are unfamiliar with is to find a local agent. Find someone who has the expertise of the local market and buying process. The information that you garner from choosing a local agent can be invaluable. They know the market intimately.

Additionally, a local agent knows the community as they likely live there as well. They know which schools and neighborhoods are best. They can get to know what you are looking for in an area and help you find the right community for your particular needs. They might also have information on local gems that are not yet showing up on online listings.

Do Your Research

After you find a home or two that you are interested in, thoroughly research the area. Search for information about local schools, churches, shopping centers and more. You want to make sure that the neighborhood will meet your needs. Research crime rates in the area.

Also, determine how long your commute from work to home will be each day. Even if you don’t have children, research local school rankings. The rating and quality of local schools is paramount when it comes to the resale value of your home.

Visit In Person

There is just no amount of research that can substitute for an in-person visit to a potential home. If you are planning to hunt for a house from a distance, be prepared for the travel. Make sure that you have the money and time to visit. It is best to prepare for longer house-hunting trips so that you can take your time when walking through each showing.

Also, make it a point to pay a visit to local restaurants, parks, and businesses to get a feel for the local community.

Whether you are buying local or at a distance, one of the most important things to do first is to get a pre-approval in order. Contact your trusted mortgage professional today to get the ball rolling.

What To Know When Looking At Active Adult Communities

understanding-reverse-mortgagesFor many Americans, retirement age is fast approaching or already here: Baby Boomers account for nearly 75 million individuals in the United States.

Retirement can present a lot of opportunities, especially when it comes to relaxation, activities, and the enjoyment of life with those of a similar age. More and more Americans are looking to 55+ communities to fulfill those wants and needs.

Active Adult Communities

55+ communities, also known as an active adult or age-restricted communities, are becoming increasingly popular throughout the U.S. because of what they offer and can provide. Traditionally thought to be only in warmer climates, active adult communities can be found in almost every state, and with more people retiring, new communities are being added every year.

Just like buying in a regular neighborhood or a master-planned community, there are a number of things to know or understand when it comes to investing in an active adult community and lifestyle. If you’re considering selling your current home and relocating to a 55+ community, here are some important things to consider before the big move.

Location

Location is an important consideration. Active adult communities can be found all throughout the U.S. While Florida and Arizona are known for their 55+ communities, it’s very likely there’s a community close to where you currently live.

Location is more than just where the community is located – location includes the proximity to towns or cities. Some may want a community that is cut off from large cities; others may want to be close to large metropolitan areas for what they can offer.

Location also includes things like local taxes – some states are much friendlier to retirees than others when it comes to taxes.

It’s also important to note the community’s location relative to an international airport if you plan on traveling a lot, medical centers, and other amenities that may be frequented daily or weekly.

Size

The size of the community is an important part of the community experience for residents. Communities will range in size, from just a couple hundred residents to thousands. The larger the community, the more residents.

Larger communities may offer more activities and amenities while smaller ones may be able to offer more comfort and relaxation with the reduced number of residents. If you’re interested in maintaining an active lifestyle and making friends, a larger community may be a better choice than a smaller one.

It’s also important to note that a larger community may offer more deals or incentives to those looking to buy within the community.

Amenities

Amenities are incredibly important when considering buying a home in an active adult community. A larger community will likely have a number of amenities and events while a smaller community may be limited in terms of what it can provide to homeowners.

When looking at communities, ask about the amenities provided within the community: is there a golf course, tennis courts, clubhouse, rec center, or arts and crafts studio?

Are there any clubs, group activities, or social events?

Does the community provide ample amenities to maintain an active lifestyle?

It is important to ask whether a membership is required to partake in any activities (especially with things like golf, tennis or the use of a clubhouse or rec center). If so, a membership structure within the community may add extra costs to the community.

HOA

Homeowners Associations have become increasingly popular within planned communities, and 55+ communities are no different. An HOA may have additional say on things within the community than in a regular neighborhood.

While maintaining the general areas, an HOA in an active adult community may also dictate whether a homeowner can grill outside, park a car on the street rather than in a garage, and some may go as far as to dictate the time of day a homeowner can have a conversation on a patio or deck.

While an HOA helps maintain the look and feel of a community as a whole, an overbearing HOA or homeowners board can possibly make living in a retirement community not very enjoyable for some individuals.

Living In Place

Another option to consider is whether the community offers a “living in place” option. This is still a relatively new concept but it is becoming more and more popular.

Living in place options offer homeowners the ability to buy a home in a community when they’re still active and able to live without accommodations. Then, should one’s health change or it becomes more difficult to live independently, the homeowners are able to move to a fully furnished apartment or condo within the community where cleaning, cooking and other services are provided.

These options allow homeowners to stay in one community through each phase of their retirement. More expensive than traditional active adult communities, they are a viable option for those planning for the long run.

Retirement is an exciting time. Finding a community that supports retirees and provides a place for relaxation is important for many people. If you’re looking at active adult communities, reach out to your trusted real estate agent to get more information about local communities in your area.

A 55+ community can be a great choice for those looking to enjoy retirement with other retirees. Happy hunting!

What You Need To Know About Short Sales

home for saleOn the surface, a short sale seems like the perfect deal. However, before you take the plunge, you need to understand how this type of home purchase works.

What Is a Short Sale?

A short sale is a home sale in which the homeowner is selling the home for less than he or she currently owes on the mortgage. In most cases, this means that the buyer is paying less for the home than it’s worth, which leads to instant equity.

Short sales allow homeowners to get out from under mortgages without damaging their credit as much as a foreclosure. Lenders often agree to short sales because the foreclosure process is lengthy and expensive, so short sales can be more beneficial for both parties in the long run.

Advantages

When you buy a short sale, you can often get a nicer home for a lower price. In most cases, you will still be able to use financing to purchase a short sale.

A homeowner attempting a short sale also tends to be highly motivated, which means they will be willing to negotiate on almost any aspect of the sale.

Disadvantages

Although purchasing a short sale can be lucrative, the process isn’t easy. Short sales can take as long as nine months to complete, which is much longer than the time required for the typical home purchase.

Because the homeowner owes more on the mortgage than you will be paying, the bank must agree to the price. This means that even if the homeowner is willing to accept your offer, the bank can still reject it.

If the home secures more than one mortgage, all of the lenders must agree to the sale before it can close. This can lengthen the process even more.

Even though the bank will hold up the process, they will want you to be flexible. Banks are less likely to approve offers from buyers with multiple contingencies, such as a house that needs to sell before closing.

Should You Purchase a Short Sale?

The decision to make an offer on a short sale home is personal. Although there are many obstacles and potential disadvantages, you may be able to save money and build equity quickly if you are able to complete a short sale successfully.

Keep in mind that most banks considering a short sale will want to see a well-qualified borrower who offers flexible closing terms, so it’s best to contact your mortgage professional for a pre-approval before you make an offer on the home.

Pros And Cons Of Buying A Foreclosure

case-schiller-index-updateWhen a homeowner stops making regular mortgage payments, the bank can foreclose on the property. This means that the bank takes possession of the property in an attempt to recover the debt the homeowner owes. In some cases, the bank may try to recover this debt by selling the property at auction. In other cases, the bank will simply list the foreclosed home for sale.

Choosing to purchase a foreclosed home has both advantages and disadvantages for the buyer. Weighing these advantages and disadvantages carefully is essential.

Pros of Buying a Foreclosure

When you decide to buy a foreclosure, you will be working with a seller that is inherently more motivated. The longer the bank owns the property, the more money they lose. For this reason, banks are often more willing to negotiate on all of the terms of the sale, including the price, closing costs and other important factors.

Buying a foreclosure also ensures that you are getting a house that is already vacant, so you can move in whenever you are ready. In addition, you can be sure that the title on the home is clear.

In most cases, you will be able to finance a bank-owned foreclosure with a mortgage, and you will be able to obtain an inspection if you want one.

Cons of Buying a Foreclosure

Buying a foreclosure also comes with disadvantages. For example, banks usually require additional paperwork when you are purchasing a foreclosed home.

In addition, most banks will refuse to complete any repairs on the home before the purchase. Most foreclosed homes are sold as-is, which means you may have to repair some problems or do some updates after you buy the home.

Finally, because the bank has only owned the home a short time, they cannot provide comprehensive disclosures related to the property’s current condition or history. This means that you may end up purchasing a home without being fully aware of the problems you’ll need to address.

Making a Choice

Buying a foreclosure isn’t the right option for every buyer. However, if you are a careful shopper, potential benefits are available.

Before making an offer on a foreclosed home, be sure to consult an experienced mortgage professional to get your pre-approval in order so you can complete the purchase quickly if you choose to move forward.

Fixer Upper’? Understanding the Balance Between Purchase and Renovation Costs

dyi-investment-property-renovationsFixer uppers can come with huge price benefits and opportunity, as well as problems. Make sure you understand what you’re getting yourself into before you purchase a home that needs significant restoration.

Carefully Calculate
Do the math very carefully before jumping in. Add up the expected renovation costs based on a thorough evaluation of the property. As some of the expected costs will lie within a grey area, it is important that you base your estimation on the higher end of the price range. Be sure to account for all materials and labor.

Once you have calculated your expected renovation costs, subtract this number from the home’s projected post-renovation market value. It is important that you base this projection on comparable listings in the same neighborhood. Consulting a real estate professional can offer very valuable assistance with this step.

To be conservative, deduct at least another 10 percent for any unforeseen costs, mistakes, or issues that arise. That final number should be the highest offer you make on the property.

Work With The Right Team
When looking for a fixer upper that is a sound investment, make sure that you have a solid team of professionals to work with. Choose a real estate agent who is familiar with the area and type of property that you are interested in, and make sure that all laborers you hire are not only competent to deal with the problems that you’ll face during renos, but who won’t cut corners. Aesthetically appealing housing don’t always pass inspections – it’s important to make sure that the property is fit for sale or it may never close at your asking price.

Aesthetic Problems Are The Best Problems
If you’ve managed to find a home that’s in great condition but is visually unappealing, you may have found yourself an excellent fixer upper. Ugly carpet, old appliances, and tacky wallpaper are easy fixes that won’t eat up much of your budget or your time.

Asbestos, leaky water lines, a cracked foundation, or a rotted frame are examples of more significant issues that will require the help of a professional. Be wary when investing in a property that has one or several of these problems, as they are the kind of issues that snowball into larger costs and a longer timeline for repairs.

Ready to invest in a great fixer upper and tackle it as your next investment? Move forward with the help of your trusted mortgage professional today.

How To Qualify For An FHA Loan

blended-jumbo-mortgagesBorrowers who cannot qualify for a conventional mortgage are often able to obtain an FHA loan. However, to secure this type of loan, you must still meet certain requirements.

What Is an FHA Loan?

FHA loans are mortgage loans that are backed by the Federal Housing Administration. It is designed to help borrowers who are unable to meet the requirements for a conventional mortgage or other types of financing. These loans can be used to purchase single-family and multi-family homes.

What Are the Requirements for an FHA Loan?

When you apply for an FHA loan, the underwriter will consider many of the same characteristics considered when you apply for a convention loan, including:

Your credit rating
Your income
Your outstanding debts
Your down payment
The value of the home you intend to purchase
In order to qualify for an FHA loan, you must have at least a minimum credit score. However, the minimum credit score for FHA loans is much lower than the minimum imposed on conventional mortgage applicants. This allows more borrowers to qualify for financing.

Before approving your application, the underwriter will compare your revolving debts to your gross income to calculate your debt-to-income ratio. Your debt-to-income ratio must be below a certain threshold to qualify. However, this threshold is higher than the threshold typically imposed for conventional loans.

The underwriter will also want to see proof of your income, as well as evidence that your income is reliable and likely to continue. In addition, the underwriter will review an appraisal of the property to ensure that your loan amount is appropriate.

In general, FHA loans allow a much lower down payment than a conventional mortgage. Many borrowers will be able to obtain an FHA mortgage with only a 3.5 percent down payment. However, if your credit score is below a certain threshold, you may need a larger down payment.

Things to Consider

Although an FHA loan has less stringent qualification requirements than a conventional mortgage, there are also drawbacks. For example, you will be required to pay an upfront mortgage insurance premium and a monthly mortgage premium.

Like other mortgages, FHA loans offer a variety of loan terms, including 10, 15, 20 and 30 years. Both fixed rate and variable rate options are available as well.

To determine whether an FHA mortgage is right for your needs, contact your trusted mortgage professional.

Understanding Your Debt To Income Ratio

calculator-imageWhen you are filling out a mortgage application, the lender will be asking you for specific financial information. One of the reasons they ask for this information is to enable the underwriter to calculate your debt to income ratio.

The debt to income ratio is what most mortgage lenders use to determine the level of risk they are taking when they agree to provide you a mortgage. Most mortgage lenders will use your debt to income ratio to determine your interest rate, down payment requirements, and in some instances, escrow requirements.

How Lenders Calculate Debt to Income Ratio

When your loan is being underwritten, the lender will look at both a “front-end” and a “back-end” debt to income ratio. There are two separate calculations for these ratios which are:

Front end – this calculation is based entirely on your housing costs. The lender will add up all housing costs including mortgage payments, interest payments on your mortgage, personal mortgage insurance, and insurance payments. The total will then be divided by your current monthly income before taxes and other deductions to find the ratio. Ideally, a lender would not want this number to exceed 36 percent.

Back end – the debt to income ratio on the back end includes all expenses including housing. Your lender will likely use your open credit accounts showing on your credit report which could include car loans, revolving credit lines, and student debt. For most mortgages, your debt to income ratio should be no higher than 43 percent.
Current Rent and Housing Expenses

If you are currently paying more than 36 percent of your total income for rental expenses, the lender may consider this when calculating your front-end ratio. For example, if your current rent payment is 40 percent of your total gross income and you can demonstrate you have been making payments on time, as agreed for a long period of time, the lender may be more flexible with the terms of your loan. Keep in mind however, you could pay an interest premium if this is the case.

The back-end ratios are also important. This is because for a lender to have your loan backed by a Fannie Mae, or other approved mortgage backer, your ratio would have to be lower than 43 percent. There are exceptions to this rule but in general, a borrower would face challenges obtaining a mortgage if their debt ratios are too high.

Lowering Debt to Income Ratio

There are two ways to improve your debt to income ratio. The first is to earn more money and the second is to lower your debt. Lowering debt can be accomplished by paying off some of your outstanding debt, putting a larger down payment on your home purchase, or taking a mortgage with a lower interest rate. For most consumers, paying off debt is the best way to lower their ratio.

Keep in mind, even if you have open credit lines that are not being used, your mortgage lender may take them into consideration when calculating your debt to income ratios. Before closing an account however, talk to your mortgage lender about what options you should explore. In some instances, a lender may offer you a shorter-term loan or a loan with an adjustable rate to help you qualify.

Borrowers should be aware that their credit scores are not tied to their debt to income ratios. However, a lower debt to income ratio combined with a higher credit score can make a big difference when it comes to what loan programs a lender may be willing to offer to you.

Contact your trusted mortgage professional to find out more about debt to income ratio and other factors necessary to qualify for a home purchase or refinance.

Home Updates That Make Good Multi-Generational Sense

buying-a-new-construction-homeMulti-generational households and the growing preference on the part of many retirees toward “aging in place”have altered home design in recent years. Interiors are more open, more functional and more adaptable that they were even a decade ago. Spaces tend to be less formal; living space is better integrated with work space like the kitchen, and rooms tend to serve more than once purpose, both for quiet pursuits and for family gatherings.

Universal Design

Home design has gained a new dimension — planning for the future and for a changing lifestyle. Universal design features and amenities that were once off the radar are now very much the focus. Even younger buyers are tuned in to accessibility concerns. Wider doors and hallways, easy to navigate stairs or single-level living, doorless and curbless showers, motion-activated faucets and lighting — these are just a sampling of what may soon become mainstream in American homes.

Add the popularity of home automation and connectivity, and today’s home is uniquely suited for all ages. If you’re thinking of remodeling an existing home, some of these features are well worth the extra cost. Not only do they offer living options, but they also promise great ROI should you wish to sell.

The New Face Of Home

If you are currently looking for a home to buy, view the existing floor plan with an eye toward modifications that would make it more accessible and multi-generation-friendly. Consider the possibility that you might someday share the home with aging parents or with grown children and grandchildren.

Integrated “apartments”with separate entrances, “granny pods”or separate guest houses, dual master bedrooms, and “au pair”quarters are just some of the ways to offer future flexibility. They are common across the country, but also across price ranges, as sensible and cost-effective alternatives to home health care or retirement housing.

Renovate For The Future

Renovations that reflect the changing face of family life are always good choices for return on investment in remodeling. Because the traditional family is no longer the norm, any home that offers such options is desirable. If you have questions about what features are important to buyers in a specific market, speak to a real estate professional about trends that go beyond energy savings and sustainability.

No matter what choices you make about a home update, rely on professional advice and insist on reliable contractors. There is no substitute for quality materials and first-class work. Whether you’re adding space or rearranging it, planning for your future in the home or hoping to appeal to the right buyer, spending a lot or a little, you won’t go wrong with universal design features. Aging is, after all, a reality that we all face sooner or later.

Thinking About Buying A Fixer-Upper? Know These Top Resources To Make The Most Profit

builder confidence is upIf your financial situation is limited, yet you’re handy with a hammer and nails, then purchasing a fixer-upper home can be an attractive option. Fixer-uppers typically require a bevy of updates and repairs to bring the home up to current market conditions.

Because of this, the listing price is often considerably less than a move-in ready home. Your trusted real estate professional can help you find the best projects to buy and sell.

Getting Started

Fixer-uppers aren’t for everyone, but there are plenty of resources available if you plan to do most of the repair and upgrades yourself. Let’s take a look at a few top resources to tap into if you’re in the market for a fixer-upper or if you’ve already purchased one and you are ready to get started.

At Home: A Blog by Joanna Gaines: Chip and Joanna Gaines are well known HGTV personalities who’ve made it their mission to fix up homes. A visit to Joanna Gaines’ blog is a gateway to renovation and decorating tips, products and real-time photos of projects in action. It’s a great place to go for inspiration.

Hands-On Workshops: If there’s a Home Depot near your home, chances are you frequent it for many of your hardware needs. There’s another reason you should stop in: Hands-On Workshops. If you want guidance on things like installing bath vanities, tile backsplashes, hanging ceiling fans, or measuring and installing flooring, there’s likely an upcoming workshop at the store that can give you the know-how and confidence necessary to do it yourself.

Jeff Patterson’s Home Repair Tutor: This YouTube channel boasts almost 120,000 subscribers and its how-to videos have racked up more than 30.5 million views. Videos include everything from how to tile a shower floor to installing a motion sensor light switch. If you need detailed step-by-step instructions on how to perform a particular job, chances are good this channel has it.

The Craftsman Blog: Written by DIY fixer-upper and author Scott Sidler, this blog is packed with how-to advice for home improvement and restoration projects as well as general tips and information about repairs like painting, plastering and restoring windows. This is a blog for a DIY fixer-upper written by a DIY fixer-upper.

Your local hardware store: The big box hardware stores are great for finding just about any sort of tool you’ll need and for hosting how-to workshops. Generally, however, it’s your local, smaller hardware store that can really give you some great one-on-one advice as it pertains to your projects. These stores are typically family owned, and part of the reason they’re able to stay in business is because of their high level of customer service. This often includes guiding you on certain projects.

A fixer-upper can seem like a daunting project when you are getting started. Knowing where to look for the right resources can make a big difference. Your trusted real estate finance professional is available to assist you and offer additional advice on your new endeavor.

What’s Ahead For Mortgage Rates This Week – June 4th, 2018

rates-this-weekLast week’s economic reports included readings on Case-Shiller home prices, pending home sales and construction spending. Weekly readings on mortgage rates and new jobless claims were released, along with monthly labor-related reports on job creation and the national unemployment rate.

Case-Shiller: Home Prices Maintain Rapid Growth

S&P Case-Shiller home price indices for March showed home prices continued to grow at blazing rates. Seattle, Washington held on to first place with a seasonally-adjusted annual rate of 13.00 percent; Las Vegas, Nevada reported 12.40 percent growth in home prices in March.

Analysts said Las Vegas markets benefitted from homebuyers relocating from high-priced coastal areas. Las Vegas home prices were 25 percent below their housing bubble peak. San Francisco reported year-over-year home price growth of 11.40 percent

Home prices were driven by short supplies of homes for sale and high demand among buyers, which led to bidding wars in high-demand areas. Rapidly rising home prices sideline first-time and moderate-income buyers who face hurdles of affordability and strict mortgage approval requirements.

While real estate pros and economic analysts expected home price growth to reach a tipping point where demand for homes would slow down, it hasn’t happened yet. Strong economic conditions and jobs data provided first-time buyers incentives to transition from renting to owning.

Pending Home Sales Slow in April

Pending home sales, which are sales under contract but not yet closed, dropped by -1.30 percent in April as compared to the March reading of 0.60 percent. Severe winter weather contributed to the lag, but analysts said severe shortages if available homes squeezed would-be buyers to the sidelines as they waited for more buying options. The National Association of Realtors® said that April’s reading was the third consecutive month of lower pending home sales.

Construction spending rose by 1.80 percent in April and surpassed expectations of a one percent increase and the negative March reading of -1.70 percent. This could be a hopeful sign if accelerated spending is due to growing construction projects, but ongoing concerns over increased materials and labor costs may have contributed to builders’ cash outlay.

Mortgage Rates, Weekly Jobless Claims Fall

Mortgage rates eased last week, with average rates lower across the board. Freddie Mac reported the rate for a 30-year fixed rate mortgage fell by 10 basis points to 4.56 percent. The average rate for a 15-year fixed rate mortgage was nine basis points lower at 4.06 percent; rates for 5/1 adjustable rate mortgages averaged 3.80 percent and were seven basis points lower. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell last week to 221,000 claims filed. Analysts expected 225,000 new claims filed based on the prior week’s reading of 234,000 new claims filed. May payroll reports supported stronger labor markets as ADP reported 178,000 jobs added as compared to 163,000 private-sector jobs added in April. Non-farm payrolls, which measure private and public-sector job growth, rose by 223,000 jobs in May as compared to 159,000 jobs added in April. The highlight of May labor reports was an 18-year low of 3.80 percent national unemployment rate for May.