The American dream has long been to become a homeowner, but as with anything of a financial nature, requirements can vary between institutions, lenders, and brokers. While one bank may ask for 20 percent down, a mortgage broker may only require 10 percent. Since loans vary in requirements, stipulations, and types of homes available as family dwellings, it is good to know what you may face before you begin the hunt for the perfect house. Here are six things you should know before purchasing a home.
Purchasing Expenses
The percentage the lender requires is not the only cost associated with purchasing a home, so it is wise tounderstand all relevant fees – including closing costs. Also, check out monthly insurance rates, property taxes, and association fees before you put every penny you have saved into a mortgage. You must also consider expenditures you will need in the first few months, such as appliances, furniture, and maintenance.
Knowing Credit
Although it is not a widely broadcast fact, your credit score can be one of the most critical factors in what will determine the terms of your home loan. Most people with a score of 750 or over can usually find good terms and low interest rates that can save them up to 10 percent of the loan costs over the loan’s life. However, if you have a score of less than 700, it is important to find a way to raise the score quickly, so find a credit repair company and work with them to raise your credit score.
Knowing Requirements
It is easy to get lost in the search for a home and fall in love with a house that doesn’t fulfill your needs unless you are firm and set the requirements with your realtor. To make sure you don’t wander into something you really don’t want or can’t afford, know what type of home you require, where it needs to be located, and what restrictions must be included. For example, you may want a condo with a garage that is located in an area near a park. If you tell yourself what you want, repeating it out loud several times, the chances you will get lost in a property search will diminish.
Getting Pre-Approval
Most first-time home buyers don’t know they have an option to get a pre-approval before searching for a house.A pre-approval is a letter or notice from your lender that states the institution will back you for a certain amount of money. That letter lets the homeowners know you can afford to purchase the home and won’t get turned down during the process. This is not the same as a pre-qualification, rather your lender will verify your income, credit score, and employment history before issuing the pre-approval letter.
Understanding HOAs
More than ever before, homes are being built in neighborhoods that are an inclusive unit covered by a homeowner’s association. Condos are almost always a part of an HOA, too. These associations often take care of property maintenance, pools, and parking areas using the dues you will be required to pay. If you areconsidering an area with an HOA, ask neighbors about how the neighborhood is run and what that person thinks about the HOA requirements.
Inspecting Importance
One of the most critical things you can do before purchasing a home is have an inspector check the property. The problem is that not all inspectors are created equally, and some are terrible at what they do. Make sure you have a certified and qualified inspector that is bonded and licensed in your area, and a professional that works for you – not the seller. If you are uncomfortable with the report you receive, ask for a second inspection by someone you hire and feel you can trust. There is nothing wrong with obtaining a second opinion.
Buying a home is a huge decision and may be the largest and most expensive purchase you will make in your lifetime. That is why it is important to take your time and make sure you know what you are getting into before you sign on the dotted line and commit yourself to 30 years of monthly payments. Knowing what you are committing to can help you make a wise financial investment in your future.
Message me if your thinking about buying a Fort Collins or Loveland home at m.me/EdPowersRealEstate
Ed Powers Real Estate 970-690-3113 [email protected] www.EdPowersRealEstate.com
Home buyers intent on purchasing a Fort Collins or Loveland home now can benefit from three significant advantages:
1. Less Competition: The pandemic continues to keep people home and job loss is at record highs. For these and other reasons, the 2020 spring real estate market is not the mass buying frenzy of past years. Home sales are down significantly in most markets. 2. Low Interest Rates: Interest rates are at historic lows which means buyer purchasing power is strong. Mortgage pre-approval will assure each buyer—and the respective seller—of exactly how much the buyer has to spend. 3. Homebuyer Education Courses: Established to prevent a repetition of the 2008-9 housing disaster, most courses are available online. The wide range of topics is designed to help buyers achieve short- and long-term real estate goals and plans.
Our key question remains: “Is now the right time?”
Whether you must or want to buy now or you’re determined to be ready when the time is right, there’s less room for error in these uncertain times. The more you learn about the buying process and homeownership in advance, the better prepared you’ll be to improve your current situation through a real estate purchase.
To avoid second guessing yourself about the decision to buy now, commit, in advance, to making a confident decision that you can live with during this economic upheaval and beyond. That does not mean making a quick buying decision nor over-researching your choices. What works here is improving your real estate confidence, so that you understand exactly how to buy and how to protect yourself and your home at the same time.
Make FIVE confident decisions from the start, so you end up with confident decision making you can live with:
#1. Set practical expectations
• Rarely, if ever, are home buyers 100% certain about their selected property or it’s price, except in hindsight. When asked to sign an offer to purchase, you’ll be excited and nervous, but aim to be more sure—much more sure—than unsure.
Spending all that money on a property you have only visited for an hour or two is bound to make you nervous. Worry if it doesn’t. What you want is confidence that the property meets your criteria and budget and that it is as presented (a clause in the offer calling for a home inspection will determine the home’s condition).
• Let go of searching for a “dream home” or “forever home”
Attempting to decide today what you’ll want or need two, three, or more decades in the future puts undue pressure on you. The pandemic has taught us how unpredictable tomorrow is. Search in the very best location you can afford for what you need now and in the foreseeable future.
#2. Plan the work and work the plan
Focus your search instead of trying to view a huge number of homes.
(1) Who is the buyer?
Who is or are making decisions?
• If you’re buying solo, who will act as a sounding board, problem-solver, and property “detective”—along with your real estate professional—to help you take a long hard look at each potential home? • Too often couples view properties before they decide what they are looking for. Squabbling, fighting, or competing during the buying process distracts both buyers from assessing the true value of each property.
If you love modern and your partner loves traditional, investigate the two styles so you both understand the compromises involved before viewing property. Often design differences are cosmetic, not structural. Decor issues can unnecessarily distract buyers from expensive-to-fix problems, like a worn-out roof, a cracked foundation, or signs of water leaks. Remember, you’re both on the same side!
(2) Where is your best location?
Location is what you are really buying. Oh, there may be a lovely house or condominium unit included, but it’s location that cannot be changed and that will determine future value. Buy the best location you can afford, even if the property needs some TLC or cosmetic changes, since a great location will usually translate into steadily-increasing value.
Saying “no” to a great location because of someone else’s bad decor is a rookie or a pretentious mistake. Your real estate professional can help with your search by explaining the location-based value of each property. That is, within your budget, value is tied to which end of which street, proximity to what, which school etc.?
(3) How secure is purchasing power?
At the top of the list of your strengths is your purchasing power. What’s the source of the money to purchase, maintain the home, and pay off the mortgage? Many buyers are hesitant to take on a home purchase now when employment, income, and savings circumstances are very unsettled and becoming more so. Why are you confident you can provide the down payment, qualify for financing, make monthly mortgage payments, and meet closing and moving costs without compromises? “Hope” and “wish” are not realistic real estate strategies.
(4) What will be improved by the move?
If you must move now, this will be an easy question to answer. Just be sure you haven’t overlooked other solutions or new housing issues in the chaos that passes for everyday life right now. If you aim at improvements to your quality of living, that should also improve your standard of living. The reverse is not equally true.
#3. Build your confidence with real real estate knowledge
Explore what’s important in your next home: Research substance, not merely cosmetic items like stainless steel appliances and a kitchen island.
Investigate the costs of homeownership and maintenance. Learn about cutting costs to prevent becoming “house rich and cash poor.” Get the facts! For instance:
• Heating and cooling costs can take a big chunk out of your paycheck, so consider an energy efficient, cost-effective home. You’ll find information galore online. Take care you are not reading marketing pitches, but scientific information like A Consumer’s Guide to Energy-Efficient and Healthy Homes
If you pay attention, you can learn a lot from real estate professionals, but their job is not to teach you what to buy. They answer questions and follow your instructions. It’s up to you to decide which property to buy. Your professional will help you make the purchase successfully.
The last real estate crisis led to Homebuyer Education Courses and Counseling Services designed to help prospective homebuyers “think critically about the benefits and risks of homeownership, understand how to choose affordable homes and appropriate mortgage products, and build the financial knowledge, resources, and behaviors needed for sustainable homeownership and long-term financial health.”
Homebuying Courses are intended to provide assistance navigating the homebuying process and to help owners keep their homes over the long run. The directory of HUD-approved housing counseling agencies at US Department of Housing and Urban Development (HUD, hud.org) will introduce you to local housing counselors and to specialty counselors like those for reverse mortgages or for foreclosure avoidance.
Since each Homebuyer Education Course is different, determine the sponsoring organization and what each covers before you sign up. Most programs are available online, like these popular versions:
Once you have a clear idea of your needs and wants, interview local experienced real estate professionals to match your criteria against available listings. Professionals are not limited to selling off MLS. They can contact suitable unlisted property owners to discover who is ready to sell now.
If what you want is not currently available, don’t abandon your plans or goals without re-examination. If you have to change direction or priorities to achieve what you decided on, stop and verify that now is still the right time.
COVID & Housing UPDATE: To provide the most up-to-date and accurate housing assistance information during the COVID-19 national emergency, the Consumer Financial Protection Bureau (CFPB, consumerfinance.gov), Federal Housing Finance Agency (FHFA, fhfa.gov), and HUD recently launched the new mortgage and housing assistance website: cfpb.gov/housing. The site consolidates the CARES Act mortgage relief, protections for renters, warnings about COVID-19-related scams, details on student loan payment suspension, and much more.
Message me if your thinking about buying a Fort Collins or Loveland home at m.me/EdPowersRealEstate
Ed Powers Real Estate 970-690-3113 [email protected] www.EdPowersRealEstate.com
As mortgage rates continue their freefall, more and more homeowners are opting to refinance. With the recent dips, experts are saying that even those who refinanced in 2019 should take a look to see if they can save money.
“Millions of homeowners could benefit by refinancing their mortgages, even if they bought or refinanced as recently as May 2019,” said NerdWallet. “A typical refinance could save more than $150 a month.”
But the rates are just one of the considerations. If you’re thinking about looking into a new loan, here are some other things to consider.
How much is it going to cost you?
Yes, refinancing to lower your rate and your payment is typically a good idea. But refinancing isn’t free, and the fees you pay can add up. Make sure you take a good look at all of the fees, negotiate where you can, and figure out how long it’s going to take you to break even.
“Estimate your break-even period: the time it takes for the accumulated monthly savings to exceed the loan fees,” said NerdWallet. “For example, if you pay $3,600 in fees to save $100 a month, it will take 36 months to break even ($3,600 divided by $100 equals 36). If you believe you’ll stay in the house beyond the break-even period, it might be worthwhile to refinance.”
Think about the terms
Who says you need to stick with a 30-year loan? With rates this low, it might be time to look at a 15-year term. Maybe you want to consider an adjustable rate. Perhaps it’s time to refinance out of your FHA loan into a conventional loan to get rid of that private mortgage insurance (PMI), which will save you even more money per month. Be sure to look at all of your options, and not just the one that seems the most obvious.
How’s the service?
“On the service side, getting your questions answered in a timely and accurate way is an important element of the process,” said Investopedia. “Getting a loan requires quite a bit of paperwork, as well as the collection and dissemination of a significant amount of personal information. Having a single, reliable point of contact for your questions can make the difference between a smooth, easy process and a tough experience.”
A conventional loan isn’t your only option.
One of the lesser known refinancing options is called an FHA streamline. The benefit of this type of refinance is that you don’t have to jump through many of the typical lender hoops. “If you currently have an FHA mortgage, the FHA Streamline Refinance is the easiest way to get a lower rate and monthly payment,” said The Mortgage Reports. “The FHA Streamline is a ‘low-doc’ refinance with limited paperwork required; the lender doesn’t have to verify your income or credit, and there’s no home appraisal. That means a Streamline Refinance closes faster than other loans and has slightly cheaper closing costs.”
This type of refi is also available through the VA and USDA.
Did you get a second opinion?
“Even if you go back to your current mortgage lender for your refinance, shop at least a couple of other lenders to see how interest rates and terms compare,” said NerdWallet. “You might believe that going to your existing lender will save you time and hassle. ‘They know us, they’ve already got all of our paperwork,’ you may think. If only that were true. It’s a new loan for them, just like it’s a new loan for any lender. The paperwork will be the same. When lenders know you’re shopping around, they are more likely to compete.”
With baby #3 on the way, you’ve decided your Fort Collins or Loveland home is just too small for your growing family. You’ve loved our home and our neighborhood, but there’s no way five fit into a 1200 square foot home and still be sane. Luckily, the inside of your home is in excellent condition with one-year-old carpeting, custom paint, and even upgraded counters. It’s absolutely beautiful inside! The yard, however, is another story…
Unfortunately, this is often the case. The money runs out before landscaping is ever completed or the landscaping already in place is just too hard to maintain. Not everyone has a green thumb, right?! It may not seem like that big of a deal since you don’t live in your yard. Maybe you’ll just let the next owner deal with it… But is that really the best solution? Your real estate agent informs you that even with an amazing interior, your house–if it sells–will come in at a much lower price than you had hoped. First impressions are very important, and the curb appeal of your home will be the difference between someone taking a look or driving by. So the bottom line is if you’re serious about getting top dollar, you may have to spend a few dollars first.
When sprucing up your yard to appeal to prospective buyers, what are the most important areas to concentrate on?
1. Your lawn.
Prospective buyers will overlook a lot of landscaping issues if your yard is well-maintained. If it’s summer, they are looking for a well-maintained, freshly mowed, lush, green lawn free of dandelions and other weeds. If there are large dead spots, you’ll need to plant grass seed or sod to fill them in.
If you don’t have a green thumb, this is the time to call a professional lawn care service to get your lawn in parade-of-homes condition. A lawn service will be able to deal with your trouble spots and make sure that it makes a great first impression to those potential buyers.
2. Your flower beds.
When sprucing up flower beds, a little dirt under the nails is required–whether it’s your own nails or the teenaged neighbor’s nails–someone is going to need to get dirty. Weeding comes first. Next, comes fresh mulch, wood chips, or colored rock to spread across the flower beds for a clean, fresh look that will provide contrast to your main flower bed attraction: the flowers.
When choosing flowers, pick flowers that will bloom or stay bloomed throughout your projected timeframe for selling your home. Annuals are generally cheapest and stay bright and cheery through most of the growing season. If you already have annuals that have bloomed and dried up, replace them if possible.The splash of color that the flowers bring will go a long way in bringing beauty to your yard.
3. Your trees and shrubs.
Trees and shrubs are additional areas where professional lawn care services can help. If you don’t think you can safely climb a ladder and handle a chainsaw in one hand while holding a branch in the other, you shouldn’t attempt to cut down dead or stray branches or shape scraggly bushes yourself. Instead, you should spend the money to stay safe and have the job done properly.
Beautifully shaped shrubs and well-trimmed trees add an extra pizzazz and show prospective buyers that you care about your yard.
4. Special yard features.
You may have special features in your yard such as planters, waterfalls, and ponds. If these features don’t add much to your overall landscape design, you may want to consider removing them altogether. If they were hard for you to keep up, they may be hard for future owners as well. In fact, these types of features sometimes turn future owners away for fear of future upkeep.
If these features add beauty and personality to your yard, refill planters with fresh plants after cleaning out the dead material, make sure waterfalls are clean and functioning properly, and be sure that ponds are clean and stocked with fish if desired.
You may also have playground equipment in your backyard. Ask your real estate agent on advice concerning whether or not playground equipment should stay or go; it may be that future owners will welcome it, but there is also a chance they won’t. The final decision will most likely depend on its condition. If it is rundown or detracts from the home and the rest of your yard, consider taking it down and moving it to your new house where your own kids can continue to enjoy it for years to come.
Getting your lawn professionally taken care of, sprucing up your flower beds, trimming your trees and shrubs, and taking a hard look at any special features in your yard are great places to focus your attention when trying to sell your home. None of these fixes require major changes nor are they too expensive, but taking the time and money to focus on them will go a long way toward increasing your curb appeal and helping you sell your home faster and at a more competitive price.
Message me if your thinking about selling your Fort Collins or Loveland home at m.me/EdPowersRealEstate
Ed Powers Real Estate 970-690-3113 [email protected] www.EdPowersRealEstate.com
Getting your Fort Collins or Loveland home appraised is a necessary step in putting it on the market and the appraisal will influence your asking price. This means you want your home in its best possible condition, so it will be appraised at the highest potential value. While undertaking massive renovations may not be an effective process, there are smaller things you can do to raise the market value of your home.
Start Small with a Little Spackle
If you’ve lived in your home for any length of time, you’ve probably hung things on the walls, put up shelves, or simply had accidents that resulted in minor damage. Now is the time to repair those blemishes. By filling these holes and crevices with a little spackle and painting over the area, you can leave your walls looking like new. While this may not boost the value of your home, it will keep the appraiser from deducting for the damage.
As Long as You’re Painting…
After you’ve touched up your walls, you might want to consider freshening up the paint in other areas. For instance repainting worn borders and moldings around the home can give it a newer look. Additionally, take the paint outside and touch up the trim around the windows and doors. This will boost curb appeal and help you add value to the home. Any area where the paint is peeling, chipping, or simply has lost its luster should be retouched with a fresh coat.
Update Your Crawl Spaces
Something that’s receiving more attention in home updates is crawl space encapsulation. Crawl spaces are essential for providing homeowners and contractors with access to the deepest recesses of the home. However, these spaces are vulnerable to moisture and water damage caused by humidity, warmer temperatures, and harsh weather conditions. To protect crawl spaces, homeowners have started encapsulating, or sealing, the spaces in moisture-resistant materials. Similar to a swimming pool liner, a polyethylene barrier is added to keep the crawl space dry.
Do a Deep Clean
This is also the time to really clean your home from top to bottom. Especially if you have young children and pets, there may be odors and damage that you might not be noticeable to you. Yet, a strong pet odor, or your child’s scuff marks on a hard wood floor will be the first things your appraiser notices. Consider hiring a professional cleaning crew to wax the floors, shampoo the carpets, and conduct an intensive cleaning of the entire home.
Conduct Other Repairs
At some point, you should tour your home with the mindset of a home buyer. This will open your eyes to problems that you live with every day, and just don’t notice anymore. Look for things that need to be repaired, such as a loose handrail, dripping faucet, or shorted electrical outlet. Repairing these problems ahead of time will ensure you won’t lose money on the appraisal.
Get an Early Home Inspection
Even after you think you have done everything that can be done to boost your home’s appraised value, consulting an expert is wise. Getting a home inspection at this time will help you uncover issues that you may not have the expertise to notice. This gives you the time to get these items fixed ahead of putting the home on the market, while also ensuring you can ask a more competitive selling price. It’s better to uncover these problems now than to have them affect the sale of the home in the future.
In selling your home, you want to ensure you get close to its value, including the money and time you invested in updating its features. By taking the time to spruce up the home ahead of the appraisal, you may be able to increase the value by thousands of dollars. The suggestions offered here can give you a start, and your real estate agent may be able to offer more tips to help you get the most out of your home.
Message me if your thinking about selling your Fort Collins or Loveland home at m.me/EdPowersRealEstate
Ed Powers Real Estate 970-690-3113 [email protected] www.EdPowersRealEstate.com
