Homebuyer Tips Archives - Shoreline Mortgage

6 05, 2014

How Will A Short Sale Affect Your Ability To Buy Another House In The Future?

How Will a Short Sale Affect Your Ability to Buy Another House in the Future? The last few years have been financially difficult for millions of homeowners, with job losses and decline in home values devastating families all over the US. As a result, a great number of homes have gone through short sales, which has had a detrimental effect on consumers’ credit ratings.

If you’ve considered or experienced a short sale, one of the biggest concerns you may have is how it will impact your ability to purchase another property in the future. Here are five key variables on how a short sale can impact your next home purchase.

Duration Of Delinquency Plays A Big Role

Short sale transactions take a long time to complete, depending on the state that you live in and the bank’s policies. During this process, homeowners in a short sale may have trouble continuing to make monthly mortgage payments. The duration of delinquency can have a major negative impact on your credit score, even before the final short sale is reported.

Deficiency Judgments May Have Long-Lasting Effects

A short sale usually with comes a large debt that is left unpaid that banks look to settle. In the case of short sale, this debt is the difference between the amount owed and the amount for which the home is sold.

When you’re on the hook to come up with this difference, a deficiency judgment is filed through the courts and is attached to your credit rating as a negative debt outstanding. This can have a lasting effect on your credit rating, and can hinder your chances of buying a home in the future.

Lower Credit Scores Often Mean Higher Interest Rates

The poorer your credit rating, the more likely you are to be charged a higher interest rate when borrowing money. With the large cost of a home purchase, a high interest rate over a long amortization period can prove to be extremely costly, which many home owners may find difficult, if not impossible, to pay for.

Larger Down Payments May Be Necessary

Many banks and credit unions have specific guidelines that require you to put more money down on a future home purchase if you’ve experienced a housing-related credit issue in the past. Certain banks may request as much 20 percent for a down payment. Many homeowners may not be able to come up with such funds, or may need a lot of time to build up such capital before being able to buy a house.

A Long Waiting Period Might Apply

Since the housing crisis in the US, many major mortgage insurers and investors, like Freddie Mac, FHA, and Fannie Mae, have implemented new rules on how long you have to wait after a short sale before you can purchase again. Depending on the type of loan, this can be anywhere between two to four years on a short sale.

It’s critical to stay informed and understand how these rules can impact your ability to buy a home in the future after a short sale. Speaking with a seasoned mortgage specialist can help you stay in the know, and help you assess your finances and credit health before you plunge into the real estate market in the future.

17 04, 2014

How You Can Get The Full Selling Price You Want For Your Home

How You Can Get the Full Selling Price You Want for Your Home When it comes to selling your home and getting the full selling price you want, there are certain tactics and methods you can employ to ensure that this wish becomes a reality.

Avoiding the commonly made mistakes that end up lowering the value of your home and discouraging people from viewing it is ultimately the key in getting top dollar, as well carrying out the showings and sale of your home in a professional manner.

Listen to the professionals, and make sure you employ these real estate sale methods to get your desired number on your home sale.

Listing Tactic: Adding A Buffer

Always dependent on the type of market you find yourself in, a common and successful tactic in getting the price you really want for your home is adding a buffer on the list price.

This means that if you want $500,000 for your home, you should list your home somewhere around $510,000 to $520,000 to allow for some negotiating room. Even if you’d prefer not to negotiate, the majority of buyers will always assume that you have room to come down on the price, and will put in their offers accordingly.

Overpricing: Avoid At All Costs

With that being said, you don’t want to overprice your home too much so as to discourage potential buyers from looking at it, or to put your home outside of a financial bracket. Make sure you speak to your trusted real estate advisor on exactly what the right list price should be to obtain your desired value.

Increase Desire: Have Your Home Staged

In order to get the price you want for your home, you need to make a good impression on the prospective buyers. Having your home professionally staged can dramatically increase the amount of interest you receive on your home, perhaps even creating multiple offers – which is the best situation a home seller can be in!

Appeal To Online Shoppers With Professional Photos

With so much of today’s modern real estate shopping happening online, you want to ensure that your home has a strong online presence with professional photos and a digital floor plan available to prospective buyers. Also make sure that all information online is full and complete, and presents your home in the best light possible.

Always Say Yes To Open Houses And Showings

Especially in a hot market, you want to ensure that you leave your home empty for your real estate agent on weekends so that they can hold it open to the public. This is especially important early on in your list date so that the buyers on the market who are ready to make a move can see your house right away.

You should also apply the same importance to showings, and ensure that each showing request is promptly responded to with an easy “yes.”

If you put these tactics into your home selling plan, you will find that it will be much easier to obtain more interest from buyers. And with more interest, it will be much more likely that you will be able to obtain the price you want for your home.

So don’t underestimate the importance of these factors, and discuss them today with your trusted mortgage professional.

15 04, 2014

The Ultimate Guide To Winning At Auction! Don’t Let Your Dream Home Slip Away

The Ultimate Guide to Winning at Auction! Don't Let Your Dream Home Slip Away While the traditional method of trawling for sale listings, making bids, and negotiating with the seller has been a popular rite of passage for many home buyers, buying a house at auction is swiftly becoming a favored way to purchase property.

Buying a home through auction can be tricky, so it’s best to do your research and keep your cool on auction day, lest you find yourself stuck with a less-than-ideal place to live for a price you didn’t expect to pay. If you’re in the market to buy through auction for the first time, here are some things you need to know.

How To Find Houses Up for Auction

Real estate agents will often use the same methods to sell a house by auction as they do in a traditional sale: adverts in newspapers and online, posters in their office windows, and signs outside the property.

Depending on the reason for the sale, a home auction may be held at a local courthouse, an auction house, or, in some cases, online.

Viewing A House Before Auction

It’s always best to try before you buy, so make sure you are able to view the house prior to the auction. Some real estate agents will insist on exterior views of the home only, but, if you’re a new buyer, this may not be enough.

Seasoned home buyers can often pick a house by looking at the exterior and reading a description; buyers new to the game should bank on seeing inside first.

Checking The Price Of An Auction

Look into the price that is offered for the home you seek to buy; sometimes, if a house is in foreclosure, the starting price of the home may be the balance of the mortgage, or a lower price to get people to begin bidding. Lenders, such as banks, are not permitted to make a profit from selling a foreclosure and may often sell homes at a loss; look out for these bargains when checking house prices in your local area.

Bidding At An Auction

On auction day, make sure you enter the auction knowing the general value of the house and the maximum amount you are willing to pay; having these parameters set out will help prevent you from getting swept up in the auction process and bidding more than what you have or what the house is worth.

On the day, bring a cashier’s check—auction holders ask winners to pay for auction fees, bidding fees, and a deposit on the purchase. If you are successful on auction day, you will then have to close the deal with the seller just like any other property purchase.

If you need financing, you may wish to be pre-cleared by your lending company before the auction. Also, be aware that your winning bid may not be accepted. Many homes have a reserve price, and if the reserve is not met, the house will not be sold on the day.

If you are interested in buying a home through auction, go into the process knowing that auctions can be riskier than buying a home via traditional means. Also remember that just because a house is up for auction doesn’t mean you are guaranteed a good price. Some houses sell for a lot of money, and others sell cheaply but have hidden costs, such as urgent maintenance.

When you’re ready to find your new home by auction and finance it, call your local trusted mortgage professional for information.

3 04, 2014

Millenials Have Great Homebuying Tools Available To Them

Millenials Have Great Homebuying Tools Available To Them The economy seems to be finally turning, and home loan interest rates are still historically low. Real estate values are starting to climb as well, all of which makes for a growing opportunity for new homeowners to get into the market before it gets too expensive again.

Millennials Don’t Seem To Be On Board

They represent the next generation of homebuyers, but a number of barriers can seem to be smack in the way, discouraging many. Yet there are ways around these issues.

According to the Boston Globe, only 32 percent of Millennials are homeowners in 2014, either with a house or a condominium. A number of factors contribute to this situation, and the big issue is finding a viable career. The general unemployment rate for young people is at 16 percent nationwide, almost double the regular average for all ages combined.

Add in the fact that many have large student loans eating up what income is earned in loan payments, and that doesn’t leave much for saving into a down payment or a mortgage payment. In fact, one out of three college graduates right now has moved back in with the parents.

The career-chase situation is not a new one. The previous bunch, Generation X, experienced the same thing in the early 1990s with just as high an unemployment rate. The big takeaway from their experience is that the dip and labor famine is temporary. Most Generation X folks now are well-employed and living in regular, affordable homes across the country.

Further, Some Very Helpful Tools Are Still Available For New Buyers:

Any homebuyer with military status can take advantage of Veterans Administration loans with far better rates than the normal market, making mortgage payments cheaper.
Those buying in rural areas can take advantage of rural homebuyer’s assistance programs provided by the U.S. Department of Agriculture to help people move to small towns and similar communities.
The Housing and Urban Development Agency provides HUD loans that make it very affordable for those with limited income to purchase HUD-owned homes as first-time buyers and get into real estate.
And the current market still has plenty of quality used homes from prior foreclosures that are marked well below their real value to move these units in sales.

Of course, the big response from Millenials is how do I earn more to even get started. Like Generation X folks before them, Millenials can’t wait for a job to be made available on a platter. While looking, many smart folks have started their own businesses on the Internet. If a current job is enough to cover current bills, a second income can be entirely dedicated to saving, which can generate thousands of dollars quickly. Even a part-time second job that creates $1,000 a month produces $12,000 a year and in two years enough for a sizable down payment.

Don’t give up, but definitely try smarter.

26 03, 2014

BUSTED: 4 Myths About Buying Your Home That Just Aren’t True

BUSTED 4 Myths About Buying Your Home That Just Aren't True It can be pretty intimidating to dip your toes into the realm of home ownership, especially if you’re a first-time homebuyer. To make things worse, there are a number of myths floating around out there surrounding the home buying process.

Such misconceptions have many kept many would-be homeowners from realizing the personal and financial rewards of owning a property. To clear things up, here are 4 myths about buying your first home that simply aren’t true.

Myth #1 – “It’s Cheaper To Rent Instead Of Own“

If you buy a property that is within your budget and your mortgage terms allow you to make comfortable monthly payments, the cost of rent can often be higher than mortgage payments.

Sure, there are other expenses associated with owning a property that you wouldn’t be responsible for if you were renting, but one thing that many people forget is the fact that renting does not allow you to build equity.

The ability to build equity into a property that you own is like paying into a savings account – if you buy a home for $200,000, and pay down your mortgage to $175,000 in 5 years, you’ll have $25,000 in home equity that can be tapped into later if you need a lump sum of cash to pay for other large expenses.

If you sell your property down the line, any equity that the property has accumulated will provide you with more profit from the sale of the home.

Myth #2 – “Whatever Shows Up On The Inspection Report Is The Seller’s Responsibility“

Most offers on a home usually come with a home inspection condition that makes the offer contingent on the acceptance of a home inspection report by the buyer. Many buyers, however, are under the impression that sellers are responsible for any issues that show up on the inspection report.

Although the seller is required to make certain major repairs as stipulated by the lender, everything is still negotiable. A buyer may ask the seller to fix a minor crack in the basement wall or repair any scuff marks on the hardwood flooring, but the seller can essentially refuse, leaving the buyer with the decision of whether or not to continue with the offer anyway.

Myth #3 – “The Perfect Home Is Out There – I Just Have To Wait For It“

Buyers have a tendency to focus too much on all the little things that may be wrong about a house rather than on the majority of the things that are right. Homes are much like people – they aren’t perfect. Even brand new homes might have a few minor flaws.

The goal of a house hunt is to find the perfectly acceptable home – one that may have a couple of quirks that you can either live with or fix, but is otherwise ideal. An experienced buyer’s agent can help you identify issues that are deal-breakers, and help keep some perspective by separating irritating details from the big picture.

Myth #4 – “I Don’t Need A Real Estate Agent To Buy A House“

Without the proper team behind you – especially if you’re a first-time homebuyer – you could potentially find yourself in a compromised position. Many buyers don’t take the time necessary to shop for an agent who can best represent them in their purchase.

Think about it this way – would you perform surgery on yourself? Do you feel comfortable filing your own income taxes, or do you opt to use the services of an accountant? Being represented by a licensed real estate agent will give you the benefit of professional skills and knowledge, including the ability to find financing and close the deal with your best interests put first.

It’s always in your best interests to have an experienced, knowledgeable agent representing you in a home purchase. With such a major investment on the line, you want to have someone who can help you complete a purchase leaving no stone unturned, and ultimately saving you money – and a lot of headaches.

A professional real estate agent will be able to sort the myths from the reality and make your first home-buying experience a positive one.

14 02, 2014

What To Consider When Buying A Fixer-Upper

What To Consider When Buying A Fixer-Upper In your imagination it seems like a great idea – you purchase an older run-down property and you have the chance to fix it up and turn it into the home of your dreams.

To Renovate, Or Not To Renovate

However, the renovation project that is simply a quick montage in your imagination will actually take several months or years and thousands of dollars in real life.

The concept of renovating a “fixer-upper” property is exciting, but the reality is a lot of work and investment. How can you make sure that you are making the right choice for you?

One of the main advantages of buying a fixer-upper property is that you will usually be able to get the property for a much cheaper price. But is it worth it for the amount of time and money you will need to invest in the property?

Here Are Some Questions You Should Be Asking Yourself When Making Your Decision:

Do you (or your friends and family members) have the skills to be able to perform most of the renovations yourself? If you do the labor yourself, you will be able to save thousands of dollars that you would have spent hiring contractors, which will make the renovation a much more profitable project.
Are you comfortable with the idea of living in a construction zone, perhaps for several months or more? There will be dust and noise everywhere and you might have to cope without a kitchen or a shower for a while.
Make sure that you have a thorough inspection of the home performed so that you can see whether the home has a sturdy foundation, good wiring and plumbing, etc. If your inspection reveals any structural issues or water damage, you might be in for more than you bargained for. You need to start with a house that has “good bones”.
If the home has serious structural, plumbing or wiring problems you should stay away – these repairs are very expensive but “invisible”, so you are unlikely to recoup your costs when you sell the home.
Add up the estimated costs for renovating the property along with the cost of the home – does it still work out to be a better deal or would you be better off buying a new property.
What is your strategy for financing the renovations? If your only option is putting it on the credit card, you might want to think twice because this is a very high interest option.

Buying a fixer-upper property can be a great investment and can give you the opportunity to transform a run-down old house into the property of your dreams. However, make sure you that you consider the choice carefully before making your decision.

For more information about home mortgage advice and how to get approved to buy a home, contact your trusted mortgage professional.

13 02, 2014

How A Mortgage Pre-Approval Can Help You Get A Better Deal On Your Home Purchase

How A Mortgage Pre-Approval Can Help You Get A Better Deal On Your Home Purchase Oftentimes, when you are searching for a new home, it may seem obtaining a pre-approval for your mortgage loan is a waste of time and energy. However, there are some significant benefits to a pre-approval which should not be overlooked.

In many cases, buyers can use a pre-approval for leverage when negotiating with sellers and may wind up buying a home for far less than what the listed price is.

Knowing Your Limitations

One significant benefit of a mortgage pre-approval is knowing exactly how much money you will be able to borrow. This means you will be looking at homes you know you can afford.

Whether you are working on your own or you’ve sought the assistance of a real estate broker, there will be no question in your mind how much money you can spend.

Approaching A Seller

When someone is attempting to sell a home, chances are they are either buying a new home or they are relocating. This means they may be facing certain time constraints which can be difficult when they list their home.

When sellers are faced with multiple offers, chances are the potential buyer who has a pre-approval will often be the offer that is accepted, even if it’s slightly lower than other buyers.

Benefits For The Seller

It may seem the seller has nothing to gain if they are taking less money for their home simply because you have a pre-approval. However, this is typically not the case.

Keep in mind the usual process is the buyer makes an offer, they search for a loan and they may eventually get turned down for a mortgage. This means the seller has to start the process all over again; typically 30 to 60 days after they received the first offer.

A pre-approval can give you a great deal of negotiating power simply because your lender has already validated your credit information, your employment, debt and income.

This means when you begin negotiating with a seller, the time from signing a purchase and sale agreement to closing your loan is typically significantly shortened.

6 02, 2014

Can I Get Cash Out From My Home Right After I’ve Purchased It?

Can I Get Cash Out From My Home Right After I've Purchased It? Generally when you are purchasing a home, you are buying below the appraised value and you are making a down payment. The good news is this means you have “instant equity” in your home.

For some homeowners, this means may be considering taking cash-out from your home equity in order to pay off credit card bills, purchase a car or pay for college for one of your children. However, it is important understand, this may not be as simple as it sounds.

Cash Out Refinance, Equity Loan Or Second Mortgage

There are three basic ways to access the equity in your home which are common these include:

Cash Out Refinance – you refinance your current mortgage and you request cash-out for the equity. For example, if your home is worth $200,000 and you have a current mortgage of $100,000 you may be able to access an additional $60,000 to $70,000 in cash depending on your lender’s requirements.

Home Equity Loan – a home equity loan is typically a line of credit that you take out with your local bank. These loans are typically what are known as “revolving” where you can access the funds over and over again as you make payments. Home equity loan interest payments are generally not tax deductible.

Second Mortgage – in order to qualify for a second mortgage on your home, the lender would require you to meet specific credit requirements as well as certain debt-to-income ratios. Generally, new mortgage borrowers will not qualify for a second mortgage.

In most cases, lenders will require borrowers to have had their mortgage at least one year before they are allowed the option of any type of cash-out refinance.

What’s So Special About One Year?

The one year may seem subjective but there are some important things to keep in mind. When you applied for your original mortgage, your lender based their decision on your existing credit.

Before you can take cash out, you may need to demonstrate a history of making your mortgage payments on time, as agreed.

While you may already have a substantial amount of equity in your home, lenders are taking an additional risk if you are allowed to “tap into” that equity. Before you make the decision to access the equity, talk to your lender regarding possible restrictions including prepayment clauses.