Mortgage Preapproval vs. Prequalification: What's the Difference?

What Is a Mortgage Prequalification?

A mortgage prequalification is a quick estimate of how much home you can probably afford. (At least according to the lender—your actual home budget should be a separate conversation.)

Why is it a quick estimate? Because, honestly, you don’t need to do much to get one. All you need is your name, phone number, and some numbers (real or fake) that show your income, assets and debts. Give these to your lender over the phone, online or in person—and they’ll give you a prequalification on the spot.

When is the best time to get a mortgage prequalification?

First, decide if you’re ready to buy a home. If you are, get prequalified.

Yeah, it’s really that simple. Since a prequalification gives you a big picture idea of how much mortgage you would be approved for, the best time to get one is in the very beginning—when you’re reviewing your budget. Think of it as the first step in the mortgage process.

What do you need to get a mortgage prequalification?

Here’s the truth—you need a lender and that’s about it. As long as you have numbers in your head or on paper, you can get prequalified.

What Is a Mortgage Preapproval?

A mortgage preapproval is a step above a prequalification. It’s a thorough investigation of your income, assets, credit history, rental history and debts. It will give you a concrete idea of how much home you can afford—according to your lender. When you get preapproved, a lender verifies you’re employed, checks that you aren’t falsifying the facts, and makes sure you aren’t swimming in debt up to your eyeballs.

When is the best time to get a mortgage preapproval?

The same as with mortgage prequalification, the best time to get a mortgage preapproval is when you’re ready to start shopping for a house. In fact, we’re going to let you in on a little secret—you can skip prequalification and go straight for preapproval.

When you receive your preapproval, keep one important fact in mind: Your lender will likely approve you for way more money than you should consider spending on a home. Stick with these two guidelines and you’ll have a home you can truly afford, while you work toward bigger financial goals like saving for retirement or paying for your kids’ college:

1. You need to put at least 5–10% down (20% will help you avoid paying private mortgage insurace). So if you have $20,000 saved, you can afford the down payment on a $200,000 home.
2. Your payments on a 15-year mortgage should be no more than 25% of your take-home pay. You’ll pay thousands less in interest with a 15-year mortgage than you would with a 30-year mortgage—and you’ll be out of debt in half the time!

You’ll be tempted to look at more expensive homes, especially when you see how much your lender thinks you can afford. But a huge mortgage payment will ultimately make your home a curse, not the blessing it should be. Source

How to Perform a Roof Inspection

A routine roof check is an essential homeowner box to check. A damaged or leaking roof can cause a lot of problems and even make your A/C work overtime. Use these tips to inspect your roof safely. Your roof is one of the most important parts of your home. A well-maintained roof in good repair protects your home from water intrusion, which is why it’s so important to inspect your roof regularly. Use these tips for how to perform a roof inspection on your own time.

1. Look for Algae, Moss, or Piles of Leaves

If you have binoculars, you can begin your DIY roof checkup from the ground. Start by walking around your house and checking your roof for piles of leaves or other growth or debris, all of which can cause serious damage to a roof. They can trap moisture, which can seep into the sheathing below your shingles and even into the structural elements of the roof itself. You should clear these away immediately.

Moss is especially dangerous because it soaks up rainwater like a sponge. The moisture can cause the wooden structure underneath your roof to mold and decay, which can compromise the structural integrity of your roof.

So, how do you get rid of pesky moss? You can apply moss killer and brush the offending moss away with a broom or brush, especially if the infestation is new. When you have your roof re-shingled, consider buying moss- and algae-resistant shingles—they may be more expensive than the regular shingles, but they can keep moss away for the lifetime of the roof.

2. Look for Buckled or Curled Shingles

Hot air in your attic can cause your shingles to warp, buckle, or curl. (This is typically an issue with asphalt shingles.) Misshapen shingles can compromise the integrity of your roof, letting in water and causing poor ventilation, so they should be replaced. If more than one-third of your shingles are curling during your roof inspection and repair process, it’s time to re-shingle the entire roof.

3. Check for Damaged, Missing, or Old Shingles

Missing or damaged shingles can also let water seep through your roof. If you have wooden shingles or wood shake shingles, inspect them for signs of dry rot, either from the ground or from a ladder (don’t walk on a wooden shingle or shake roof). Asbestos, slate, or clay tile roofs can suffer from breakage, so look for cracked, chipped, broken, or altogether missing shingles. If you’re performing a metal roof inspection, check for signs of corrosion, rust, stress wrinkling, or other wear. If you have asphalt shingles, check for signs of wear as you clean your gutters. Asphalt contains gravel-like granules. As the shingles age, these granules will break free and find their way into your gutters. If you see a lot of asphalt granules in your gutters, check the roof carefully for damaged or missing shingles.

4. Inspect the Roof Up Close

If you can, get up on a ladder and perform your roof inspection up close. While you’re up there, look for damage to the flashings around the chimney, dormers, and vent pipes. (Flashings are the metal materials on your roof that redirect water.) Damaged or corroded flashings can let water into the interior structure of your roof and could contribute to rot in the structure of your roof and the walls of your home. If you see damage, you’ll probably need to replace the flashings.

5. Investigate Your Attic

If your home has an attic, it’s important to get in there and look for signs of water leakage through your roof, especially after heavy rain. Doing so can help you spot damage that may not have been visible from the ground or your ladder. While running through your roof check, inspect your rafters and the wooden interior of your roof for signs of moisture, mold, and rot. If you see any water damage, you may need to fix your leaking roof.

Your roof is your home’s first line of defense against the elements. Even if you can’t afford to have a professional roof contractor inspect your roof twice a year, you can safely and cautiously check it yourself for signs of damage and wear. Regular DIY roof inspections will also help you get to know your roof, so you’ll be able to recognize problems before they get too serious. Source

When to Refinance Your Mortgage

Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many reasons why homeowners refinance:

• To obtain a lower interest rate and smaller monthly payments
• To shorten the term of their mortgage
• To convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa
• To tap into home equity to raise money for a large purchase, to consolidate debt, or to deal with a financial emergency,

Since refinancing can cost between 5% and 7% of a loan's principal and—as with an original mortgage—requires an appraisal, a title search, and application fees, it's important to know when it's worthwhile and when it's better to wait.

When Should You Refinance?

Refinancing your mortgage is a big step. As such, there are several things you should consider before you sign the paperwork. Most borrowers consider mortgage rates they want to refinance. Locking in a lower rate is an important factor to consider when you want to refinance because it effectively lowers your payments. But it shouldn't be the only thing to focus on when you want to renew your mortgage.

Here are a few other factors to consider before you apply:

• Your home equity. Make sure you have equity available in your home. This is key if the value of your home drops below the value when you purchased it. It's also important to note that many lenders (especially conventional lenders) won't refinance your mortgage if you don't have enough equity in your home.
• Your credit history. You won't qualify for a refinance if your credit score doesn't meet the minimum requirements. Take the time to build up your credit score before you apply.
• Refinancing costs. If you have a mortgage, you'll know how much you paid in additional costs. As such, you'll have to pay these expenses again—usually a small percentage of the loan. Try to find ways to negotiate so you can reduce the costs.

Other points you'll want to note are your debt-to-income (DTI) ratio, the overall term of the refinance, and whether you qualify for refinance points to reduce the interest rate on the loan. Source

Understanding 5 Different Mortgage Loan Types

You're thinking about buying a home — but do you know which type of mortgage is best for you? Let's go over the pros and cons of conventional loans, jumbo loans and government-backed loans, as well as the difference between fixed rate and adjustable-rate mortgages, so you can determine the right mortgage option for you.

Here are the 5 most common types of mortgage loans (loan guidelines may vary from lender to lender);

1.) Conventional loans

There are two categories of conventional loans — conforming and non-conforming.

A conforming loan is the most common conventional loan. It meets the guidelines to be sold to Fannie Mae or Freddie Mac, two of the largest mortgage investors in the country. You’ll need a minimum credit score of 620 to take out this loan, and lenders typically prefer a maximum debt-to-income ratio of 43 percent. You’ll also need at least 3% down — but if you put less than 20% down keep in mind that you’ll need to pay for private mortgage insurance (PMI).

Pros: More common loan option

Cons: Limited to $766,550 in most areas

A non-conforming loan does not meet the guidelines of Fannie Mae or Freddie Mac. For this loan you can take out a loan with a lower credit score. The maximum debt-to-income ratio and minimum down payment that is required varies from lender to lender.

Pro: Typically no limits on loan size (loan guidelines will vary from lender to lender)

Con: Usually more expensive than a conforming loan

2.) Jumbo loans

A jumbo loan exceeds the loan-servicing limit that’s set by Fannie Mae and Freddie Mac, which is currently $766,550 for a single-family home in every state except for Hawaii and Alaska. There are also a few federally designated high-cost markets where the limit is $1.149M.

Pro: You only need to put 10%-15% down

Con: You’ll need a really good credit score for this loan, at least 740 or higher. You’ll also need a debt-to-income ratio that’s closer to 36% than the normal 43%

3.) Government backed loans

Government-backed loans are offset by the federal government or they’re subsidized. Applicants applying for one of these loans can usually obtain one from a private lender of their choice, depending on its size. Below are specific government-backed loans:

An FHA (Federal Housing Administration) loan can be used to buy a property of up to four units, as long as one of those will be your primary residence. This loan will also require a special FHA appraisal, which can be completed by an FHA-approved home appraiser.

Pro: This loan is easier to qualify for if you’re building credit or need to make a smaller down payment. FHA loans have more flexible credit guidelines where you only need to put 3.5% down.

Con: You’ll need to pay PMI, which adds more money to your monthly mortgage payment.

You’ll have to pay the 1.75% mortgage insurance premium up front, then an annual premium of 0.15% to 0.75%. You’ll have to pay this for the life of the loan, unless you have a down payment of 10% or more — then the PMI will be dropped after 11 years. 

A VA loan is a loan offered by the Department of Veterans Affairs that helps service members, veterans and their spouses purchase a home. The VA sets the terms for the loan qualification, not the lender. One of the biggest qualifications for this loan is serving a certain amount of time in active duty. You can find those qualifications and amount of time here.

Pro: You may not need a down payment, as long as the sale price doesn’t exceed the appraised value, so you also don’t need to pay PMI.

Con: Sometimes the interest rates are higher than a conventional loan, although there’s a chance that they could be negotiable; most borrowers also need to pay a VA loan funding fee (usually between 1 and 3% of the loan amount).

4.) Fixed-rate mortgage loans

For this type of mortgage, the interest rate won’t go up (or down), like it would with an adjustable-rate mortgage

Pro: Your rate won’t increase over the course of the loan (no matter how high rates get).

Con: If interest rates are high, payments may be higher than a comparable adjustable-rate mortgage.

5.) Adjustable-rate mortgage loans

Also referred to as an ARM, this adjustable mortgage type has an interest rate that fluctuates over the course of the loan. This type of loan is a little complicated and is different for everyone, so If you want to learn more about ARMs, there’s a lot of great info here.

Pro: Your mortgage interest rate can go down if interest rates go down.

Con: If interest rates increase, so will your mortgage payment. 

Source

DRE ID # 01769353

NMLS ID # 394275

Happy Fathers Day!

 

 

“Today we celebrate the fathers whose embrace is more than home. It’s the safest place we’ve ever known.”- Unknown

Wishing all the fathers a very Happy Fathers Day! Hope you know how special you are!

(916) 847-3090

margeate@workhomeloans.com

Renting vs. Buying a Home + Pros and Cons

Buying a home has long been part of the American dream, but homeownership isn’t for everyone. Sometimes, renting makes more sense and offers greater freedom. Have you been wondering about renting vs. buying? Choosing whether to invest in a home or pay rent is a big decision that depends on your finances, lifestyle, and personal goals. One isn’t inherently better than the other. Both require an income to afford housing payments unless you have enough money on hand for an all-cash purchase, but even then, you need to consider your overall financial picture. Renting and buying come with various degrees of maintenance responsibility and commitment. Whether renting or buying is right for you depends on your current situation and an honest look at where you think you’ll be years later.

Renting a Home 

Renting a home offers flexibility. There’ll typically be someone else to tend to maintenance issues. You’ll probably have predictable monthly expenses, so you can likely count on extra cash in your budget. However, many rentals require you to adhere to a list of community and individual unit rules (e.g., your landlord might not be flexible if you want to paint your bedroom bright pink).

When you rent, you’re not necessarily throwing money away (you have to pay to live somewhere, even if you buy), but you’re not building wealth either. Here are some pros and cons for renting a home;

Pros 

• Many people find immense benefits to renting. The following are reasons why you might want to rent your next house.
• Flexibility. You can probably move quickly if you need to (as long as you’re not in a lease or are willing to pay to break your lease)
• Predictable housing payment. Your housing costs (including utilities) may be consistent each month since you won’t have to factor in repairs and other expenses.
• Low maintenance. You’ll likely have a landlord or property manager who will handle major maintenance tasks (but be prepared to change your own lightbulbs or fix minor problems).
• No property taxes. The owner of your rental is responsible for paying taxes on the property.
• Less strict financial standards. Getting approved for a rental unit is often much easier than qualifying for a home mortgage.

Cons 

• Renting can seem like the best option if you don’t want to deal with surprise expenses or repairs, but there are some drawbacks.
• Rent increases. Landlords can raise your rent after your lease expires, especially in areas with high housing demand.
• Possibility of a property sale. The owner of your rental may decide to sell the property, especially during times of rising home values, leaving you looking for a new place to live.
• No tax benefits. You won’t get to claim homeowner deductions on your taxes.
• Limited personalization. When you rent, you usually can’t do what you want with the home (no building your dream kitchen or entertainer’s backyard, in most cases).

Owning a Home 

When you own your home, you get to make decisions about what to do with almost all aspects of your property (condos, townhouses, and other properties with homeowners associations may significantly limit your freedom). But you’re the one responsible when something goes wrong too. Purchasing your next house can provide pride of ownership—a place to truly call your own. However, picking up and leaving may be difficult if you change your mind, have a job transfer, or experience an emergency that uproots you.

Pros 

• Is owning a home right for you? There are benefits to purchasing, including the following.
• Sense of stability and community. Owning can offer more assurance that you’ll enjoy the fruits of a neighborhood for an extended period.
• Builds equity. Most real estate increases in value over time.
• It’s yours to improve. Decorate, renovate, and add on as your heart desires.
• Tax benefits. Homeowners can claim a mortgage interest deduction on their taxes.

Cons 

• Wondering what might not be in your best interest when it comes to owning a home? Here are some reasons you might want to give homeownership a second thought.
• Responsible for maintenance. As a homeowner, you’ll have to tend to all repairs (or hire someone) and bear the cost of all maintenance.
• Requires a sizeable financial commitment. You’ll have long-term expenses like property taxes and homeowners insurance, along with a hefty initial investment (including a down payment and loan closing costs).
• Property value may decrease. While most real estate increases in value, you might lose your equity in the property. Difficult to change your mind. It’s not easy to pick up and move if you change your mind about where you want to live or if life’s circumstances call you elsewhere. Still not sure if you should rent or buy? Ask yourself the following questions to help make the decision easier.
• How long do I plan to live in the area?
• What are my finances like?
• What is the state of the housing market?
• How does my job factor into this choice?
• What are the costs of renting vs. owning this particular property?

Source

How To Find Open Houses Near You

Attending an open house is a great way to check out a potential home in person to see if it lives up to your expectations. While the way we shop around for houses online has made huge improvements in recent years, sometimes nothing beats examining a property yourself.

What is an open house?

An open house is a scheduled event where a home that is listed for sale is opened to the public for viewing. This differs from a private showing, which is essentially the same thing but is only available to serious potential buyers rather than open to anyone driving by. At an open house, the homeowner or their listing agent welcomes potential home buyers into the house to look around the property. A real estate agent or REALTOR® may take potential buyers on a tour of the home or just allow them to wander and explore the home’s features themselves. The purpose of an open house is usually to attract potential buyers who may be interested in the property after seeing it. An open house can also be a great way for the seller or their real estate agent to get feedback on the home to get a better idea of what potential buyers might want improved or fixed on the property.

How to find open houses in your area

Interested in checking out some of the homes in your area? There are plenty of different ways to track down homes for sale near you that may be opening their doors to the public. Let’s take a look at a few strategies;

1. Search the internet

The internet is a fantastic resource for finding open houses in your neighborhood. Many real estate listing websites will not only show you homes for sale in your area, but also when you can come take a look at them in person, if possible. Simply searching “open houses in my area” will often find you exactly what you’re looking for. Virtual open houses and showings are also an online option that has grown significantly in popularity since the beginning of COVID-19. Many listing websites now offer virtual tours, which use a video or 3D model of a home to give you a detailed look at a property’s interior without actually ever stepping foot there.

2. Set app alerts

Speaking of finding open houses online, you can also do the same through an app on your phone. There are plenty of real estate apps out there that can not only show you homes for sale in your area, but also other valuable information like real estate trends in your neighborhood. Some apps may even offer you the ability to set up app alerts to be notified when there’s going to be an open house near you or near an area you’re looking to move.

3. Take advantage of social media

Social media is a great way to reach a large audience quickly and easily, so many sellers and real estate agents use it to show off homes to potential buyers or promote upcoming open houses. You can follow real estate agents or REALTORs® on social media for updates or seek out open houses yourself by searching “open house” and the name of your city on platforms such as Instagram or Facebook.

4. Work with a real estate agent

If you’re working with a real estate agent or REALTOR® to find your dream home, they can often help you find open houses as well. Your real estate agent is likely very knowledgeable about the area you’re looking to buy a home in and can potentially point you toward upcoming open houses they know of. Real estate agents and REALTORs® also have access to a multiple listing service (MLS), which is a database of all homes for sale in a given area. With MLS access paired with their local knowledge and experience, your real estate agent can likely find you open houses that way.

5. Look for yard signs

Sometimes to find an open house, all you have to do is look around. If you’re looking to buy a home in a fairly populated area, drive around and see if you can find any yard signs indicating a home is for sale. Most for-sale signs will have a number you can contact with any inquiries about the property. Though it requires taking the time to drive around, this method works well for buyers looking to find a house in a specific neighborhood.

6. Contact local real estate offices

Even if you aren’t working with a buyer’s agent yet, you can contact local real estate offices to ask what open houses they might have coming up. This also gives you a chance to talk to agents in your area and potentially get an idea of who you may want to work with when starting your home buying journey.

Source

NMLS ID 394275 | DRE ID 01769353

What To Do After Your Home Offer Is Accepted

Having your offer accepted on a house can create a wonderful feeling, but that feeling can be all too fleeting. Once you’ve been notified your offer has been accepted, your thoughts may quickly shift to, “What do I need to do next?” A seller accepting your offer on a home doesn’t mean the home is yours or that the sale is official. In fact, there’s still lots left to do. 

Here are 11 important actions you’ll need to take before you’re handed the keys to your future house;

1. Deposit earnest money

Earnest money is a payment you’ll deposit with a third party, such as a law firm, real estate broker or title company. This money is held in escrow until closing, when it’s then applied to your down payment or closing costs. An earnest money deposit is refundable in certain situations, and the amount will be a very small fraction of the sales price (usually 1% – 3%) that you can typically pay with a check, money order or wire transfer. Combined with a preapproval letter from a lender, earnest money should instill confidence in the seller that you’re a serious buyer with the financial means to close the deal.

Although highly recommended, an earnest money deposit isn’t legally required. However, the terms of a purchase agreement often call for it.

Pay the seller a due diligence fee

Similar to an earnest money deposit but only applicable in some states is what’s known as a due diligence fee, which you’ll pay directly to the seller within a day or two of signing the purchase agreement if it’s negotiated as part of the offer on the home (like an earnest money deposit, a due diligence fee isn’t legally required).

Usually less than an earnest money deposit, the due diligence fee is a non-refundable, “good-faith” payment to the seller for taking their home off the market for the duration of the due diligence period. Over this stretch of 14 to 30 days, the house will usually be professionally inspected and appraised, and the buyer can do additional research on the home and request repairs based on the inspection’s findings.

If the home sale goes through, the due diligence fee will be applied to the purchase.

2. Secure a home loan

If your finances are in good enough standing that you can afford the home you wish to buy, you should be able to get a home loan. It can be a time-consuming process for your lender’s team to review your application documents, but much of the work is already done if you received loan preapproval before making your offer. Once you have an accepted offer and you’re later formally approved for a mortgage through a process known as underwriting, your lender will be able to generate documents using the property address that show you exactly what your monthly mortgage payment and interest rate will be.

3. Have the home inspected

Another to-do list item after having your offer accepted is to schedule a professional home inspection. Although an inspection isn’t mandatory with some loan programs, it’s a very good idea, and some real estate agents will recommend including language in your offer stating that the purchase is contingent on the house passing inspection.

Here’s how the home inspection process should play out:

• Find a home inspector. You can look for a home inspector yourself, but your real estate agent should also be able to recommend one based on their professional relationships.
• Pay the inspection cost. The buyer is responsible for paying the inspection fee. Inspection costs vary based on the location and square footage of the home but are generally in the $200 – $500 range.
• Review the inspection report. The inspector will provide you with a detailed report listing all of the home’s issues (or potential issues).

If necessary, negotiate repairs with the seller. Once you’ve reviewed the inspector’s report, you can negotiate with the seller based on the findings. For example, you could ask the seller to lower their asking price or fix certain issues before closing day.

4. Have the home appraised

Another hurdle to clear after your offer is accepted and before you can close is the home appraisal. A lender orders a home appraisal for their protection as well as yours. The appraiser will carefully assess the value of the house through an examination of the property and the sales prices of similar, recently sold homes nearby.

5. Review the title

A house title isn’t a physical document but an abstract legal concept that states who’s the rightful owner of the property. (The deed is the physical document proving who holds the home’s title.) The title will also reveal the prior owners and whether the property has any liens on it. The seller holds the title, but you’ll be able to have it inspected by a title company, which you’ll hire. The key fact you’ll need to establish here is that no other entities, such as the mortgage company of a previous owner, have a claim on the title.

6. Transfer the utilities

It’s important to set up utility services for your new home well ahead of moving day. First, identify the utility providers in your area. Depending on the home’s location and which utility or utilities you’re having set up, you may be able to choose from multiple companies. As soon as you know your move-in date, contact all of the utility companies you’ll be using and set up a start-of-service date since some companies schedule installations as far out as 2 or 3 weeks. Nobody wants to move into a house that’s too cold, too hot or without water service. Ideally, you’ll have all of your utilities up and running the day before you move in.

7. Obtain homeowners insurance

You’ll need to show your mortgage lender proof of homeowners insurance before your home purchase can be finalized. Sign up for a homeowners insurance policy online or by contacting an insurance provider. Basic coverage includes home repairs or replacement of your home in the event of damage by fire, vandalism, accidents or natural disaster. Policies often exclude flood and earthquake damages, which can be covered by purchasing supplemental insurance specific to these disasters.

8. Schedule home repairs

If the home inspection brought to light issues that required negotiations with the seller, those negotiations are presumably settled. Now it’s time to schedule repairs that are necessary before you move in – such as replacing the furnace or fixing a dangerous wiring issue. If your agreement was for the seller to address these issues, the repairs should be done before you close on the house. If you and the seller agreed for you to handle the repairs but with financial compensation from the seller, you can schedule the work to take place after closing but before you move in.

9. Complete a final walk-through

The final walk-through is your last chance to see the house before completing the home purchase. The walk-through can be as simple as a brief once-over look around the premises to give you peace of mind that everything that was in satisfactory condition when you first saw the home is in the same condition you remember it being in.That said, if the seller agreed to make some repairs after the inspection, the final walk-through is also the time for the buyer to ensure those repairs were actually made.

10. Schedule your closing

Once you’ve gone through the steps above and the seller has accepted your offer and earnest money, you still need to schedule your closing. The various parties involved in the transaction will settle on a closing date that’s agreeable to everyone. Usually, the closing date will be 30 – 60 days after the seller accepts the offer.

11. Close on your new home

Several people typically attend the closing. Among those who may join the buyer on closing day are the buyer’s agent, the sellers, the listing agent and title company representatives. Some states require that an attorney also be present. You’ll be signing a number of documents to finalize the sale. You’ll also bring a certified or cashier’s check for the down payment and closing costs, or you might be able to send this money via wire from your bank to the closing attorney’s office. Once you’ve signed all the papers, you should get the keys to your new home. Source

Mortgage Rate Buydown Strategy: How $10K Could Save You $164/Month

You’ve found the home you love. The list price? $400,000. You’re ready to make an offer, and naturally, you’re wondering if you should come in a little under asking — maybe $390K — to save some cash.

It feels like the smart move, right? But what if I told you there’s a strategy that could save you way more than just $10K off the purchase price — not just once, but every single month? Yep. Let’s talk about the $10K trick most buyers don’t even know exists.

The Smarter Play: Offer Full Price, Ask for a Concession

Instead of offering $390K on that $400K home, what if you offered full price — but negotiated a $10,000 seller concession?

Here’s what that could look like:

You offer the full $400,000…But ask the seller to give you back $10,000 to cover mortgage points.

What are mortgage points? Mortgage points (aka discount points) are upfront fees you pay at closing to reduce your interest rate. One point typically costs 1% of your loan amount and knocks off about 0.25% from your rate.

So let’s break it down with real numbers.

Real Life Example: Why This Trick Works

Let’s say you’re putting 5% down on a $400,000 home. That gives you a loan amount of $380,000.

Now imagine this:

•  You spend $10,000 on points (about 2.5 points)
•  Your interest rate drops from 7% ➝ 6.38%
• Your monthly mortgage payment goes from $2,661 ➝ $2,497

That’s $164/month saved — every month — for as long as you have the loan. Over just 5 years, that adds up to $9,840. Over 10 years? Nearly $20,000.

So instead of saving $10K upfront by offering a lower price, you’re creating thousands more in long-term savings — simply by shifting how the money is used.

But Why Would a Seller Agree?

Here’s the thing: a seller is usually more focused on the sales price than the net proceeds — especially if they want to keep the comps strong in the neighborhood. An offer at $400K with a $10K concession can be more appealing to a seller than an offer at $390K — because it still shows as a $400K sale on paper.

And for you? That $10K turns into serious savings over time.

Win-win.

When This Trick Works Best

This strategy isn’t one-size-fits-all, but it’s golden in a few key scenarios:

• You’re buying in a balanced or buyer-friendly market
•  The home’s been sitting for a few weeks and the seller is motivated
•  You want a lower monthly payment without waiting for rates to drop
•  You’ve got a little wiggle room in your loan approval for concessions

It’s also perfect if you’re planning to stay in the home for several years and want to maximize long-term savings.

How to Run the Numbers (The Easy Way)

You can Google a “mortgage points calculator” and plug in your scenario to see what the potential savings look like. Or… you can reach out to your mortgage pro (👋 that’s me!) and we’ll do it together.

I’ll help you compare both scenarios side by side — and show you if this strategy makes sense for your specific situation. Home buying is all about the strategy. And sometimes the best financial move isn’t the most obvious one.

So before you try to save a few thousand off the purchase price, ask yourself: Could I make my money work harder by using it to buy down my rate instead? Because while $10K might sound like a small shift… that $164/month in savings could be the difference between stress and stability.

How to Find Cash-Flowing Rental Properties Online: 4 Game-Changing Tool

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Let me take you back to when I bought my very first rental property...

I was excited, motivated… and completely overwhelmed. Zillow felt like a black hole. Facebook Marketplace was giving sketchy Craigslist vibes.

And every time I thought I found a good deal, I wasn’t even sure what “good” meant.

• I didn’t know which numbers to trust.
• I didn’t know if I was running the math correctly.
• I didn’t know where to look for real deals — let alone ones that actually cash flowed.

But after lots of trial, error, and late-night Googling, I found some tools that changed everything. If you’re thinking about investing in a rental property — especially your first one — these are the platforms I wish I had from day one. They make the process so much easier, and more importantly, they help you make smarter, more confident decisions.

1. Roofstock — For Buying Rental Properties… Without Leaving Your Couch

If the idea of buying a rental sounds intimidating — especially if it’s out of state — Roofstock is a dream come true. It’s a marketplace that lets you buy fully leased, single-family homes that are often already generating cash flow. Yep, that means rental income from day one.

What makes Roofstock awesome:

•  Properties are vetted and inspected
•  You can shop and buy entirely online
•  You can filter properties by price, cash flow, cap rate, location, and more

Whether you’re looking to invest locally or buy your first out-of-state rental, Roofstock makes it super beginner-friendly.

2. Rentometer — For Making Sure Your Rent Estimates Are Legit

Let’s be real: one of the trickiest parts of analyzing a rental property is estimating rent. You don’t want to guess. You want to know what similar units are renting for — and that’s where Rentometer shines.

Here’s what you can do:

• Plug in any address and get instant rent comps
•  See what other similar homes are renting for nearby
•  Get insights into rent trends in specific neighborhoods

This tool is clutch before making an offer. It helps you price competitively and back your numbers with data instead of vibes.

3. DealCheck — For Running the Numbers Like a Pro

You don’t have to be a spreadsheet wizard to analyze a deal. With DealCheck, you can quickly run all the numbers that matter — like ROI, cap rate, cash flow, and break-even point. You can even plug in renovation costs, financing terms, and see how it affects your profit.

Highlights:

• Analyze deals in minutes
• See long-term projections based on appreciation and rent growth
• Save and compare multiple properties

This is the tool that takes you from “this feels like a good deal” to “I know this is a smart move.”

4. Propstream — For Finding Off-Market & Distressed Properties

Want to go beyond what’s listed on Zillow and the MLS? Propstream is your secret weapon. It gives you access to a nationwide database of properties — including ones that are off-market, in pre-foreclosure, or owned by people who might be motivated to sell.

What makes it powerful:

• Search by location, equity, ownership type, and more
• Identify leads no one else is looking at
•  Reach out directly to property owners

This is a great tool if you’re looking for hidden gems and don’t want to compete with 30 other investors for the same listing. Buying your first rental doesn’t have to be overwhelming. With the right tools, you can skip the stress, stop second-guessing yourself, and start investing with confidence.

These four platforms — Roofstock, Rentometer, DealCheck, and Propstream — take the guesswork out of the process and put the power in your hands. So if you’ve been dreaming about getting into real estate investing… maybe this weekend is the time to finally take action.