The Complete Guide on How to Get a Mortgage

 

Follow these steps on how to get a mortgage, including checking your credit and finances, saving for a down payment, choosing a lender and getting pre-approved. 

NMLS ID 394275 | DRE ID 01769353

8 Foolproof Packing Tips for Moving

Whether you’re traveling across the country or down the block, moving can be quite nerve-wracking for everyone involved. Gathering boxes, packing those boxes to the brim and then transporting them to a new location without damaging or losing anything in the process is never an enjoyable experience, not to mention the arguing between family members that usually starts a couple of hours in. But the thing about moving is that the benefits (hopefully) come along later.

Regardless of whether you’re moving yourself or you’ve hired a moving company, these tips are easy to implement and will save you time, space and frustration. So gather those boxes and get moving!

1.) Create Throw Away and Giveaway Boxes

First things first, do not pack unnecessary items. That unsightly 50-year-old kitchen spatula that was passed down to you? Consider donating it or giving it to a loved one, then treat yourself to a new one after the move. Creating a throwaway and giveaway box before you start packing helps eliminate clutter and will pay off once you get to your new home. This is also your chance for a fresh start, so don’t be afraid to replace a few items that were on their way out anyway, especially if you'll use the new ones every day. Buying a few new pots and pans, instead of taking my partially broken hand-me-downs along with me, was one of the best things I did during my last move.

2.) Keep Clothes on Hangers

This is one of my of favorite tips, and it happens to be one of the easiest to implement. Simply keep clothes on their hangers throughout your move. Wrap a garbage bag around as many hangers as will fit and tie it around the top, leaving the hook free. This method allows you to keep your clothes protected and clean from any surfaces they may touch in transit, while eliminating the stress that comes with rehanging every item of clothing. Just rip off the garbage bags once your clothes are in their new home, and you're all set.

3.) Take Photos

The last thing you may want to do during the middle of packing is whip out your camera, but I promise it’ll be worth it. Whether on your television console, mantel or nightstand, we all have a few knick-knicks that bring us comfort. If you’ve spent time organizing them in a specific way and like the way they look, take a picture of their placement so you can reference it when redecorating after the move. Then, pack them all together in the same box so they’re easy to find.

4.) Use Bulky Clothing for Added Protection

Don’t waste time trying to fit winter coats, fluffy robes and oversized sweatshirts into a suitcase. While packing your clothes, make a pile of those larger, bulkier items. When you’re ready to pack picture frames, artwork and other fragile decor, come back to this pile for added support. You can even use the sleeves of sweatshirts or ties on your robe to secure larger pieces of art. However, if you have any oversized or extra delicate decorations, you may want some more added protection.

5.) Label Tools and Wires

You will thank yourself later when you’re replugging in your desktop, televisions and other electronics or rebuilding anything you may have had to take apart. When you’re ready to pack any wires or tools, grab some large Ziploc bags and a Sharpie. Unplug all your wires that belong to one space or electronic device and secure them in the bag. Then, label the bag with whatever device they belong to.

When it comes to any chairs or dressers that may have had to come apart during the moving process, follow the same steps. Keep the instruction manuals, screws and other tools all in one bag with the name of the furniture written on the outside so you have easy access when you’re ready to rebuild. Then, gather these different “tool-kits” and put them in one box or bag so they’re all in one place.

6.)  Pack Inside ALL of Your Bags

This includes suitcases, duffels, totes and hampers! Keep clothes neatly folded and pack all of your bags so you don’t have to refold them once you’re ready to unpack. You can also pack any other belongings that fit. Think towels, smaller decorative items and anything else you can safely squeeze in. This way, you’re saving space by not having to pack those bags elsewhere, while also gaining more space for clothes and other belongings. It’s a win-win.

7.) Assemble an Essentials Box

Save yourself the frustration and fill a box or bag with anything you may need during or immediately after the move. Having an “essentials” box will provide easy access to your laptop, chargers, favorite clothes and more. The last thing you’ll want to do after a long day of moving is sort through a ton of boxes to find your AirPods. Try doing this for essential toiletries as well. In a separate box, gather toothbrushes, toothpaste, soap, toilet paper, paper towels and any other essentials you’ll need soon after the move.

8.) Schedule a Grocery Delivery

A day or two before moving, make a list of all the groceries you’ll need. Scheduling a grocery delivery to your new home or apartment will eliminate the stress of having to go to the store on the big day. Plus, nobody wants to be hangry on move-in day.

Source

NMLS ID 394275 | DRE ID 01769353

How Much House Can I Afford?

How to Calculate How Much House You Can Afford

If you want to dig a little deeper on how much house you can afford and get into more nitty-gritty details, I’ve got you covered. We’re going to go over all the numbers step by step. 

1. Figure out 25% of your take-home pay.

To calculate how much house you can afford, use the 25% guideline we talked about earlier: Never spend more than 25% of your monthly take-home pay (after taxes) on monthly mortgage payments. That includes your mortgage principal, interest, property taxes, home insurance, private mortgage insurance (PMI) and homeowners association (HOA) fees.

Just add up how much you (and your spouse, if you’re married) bring home each month and multiply that by 0.25. For example, here’s what that would look like with a household take-home pay of $7,000 a month: $7,000 × 0.25 = $1,750

Easy, right? Stick to that number and you’ll have plenty of room in your budget to tackle other financial goals, like investing for retirement or saving for your kid’s college.

2. Use our Mortgage Calculator to determine your home budget.

Now that you’ve calculated 25% of your take-home pay to figure out your maximum monthly payment, we need to translate that into the amount you can afford to spend on a house—and how much you should budget for a down payment. 

By the way, you should aim for a down payment of at least 20%. Not only does a bigger down payment mean smaller monthly payments and less debt, but putting 20% down means you won’t have to pay for PMI—potentially saving you hundreds every month. A 5–10% down payment is fine if you’re a first-time home buyer, but get ready for bigger monthly payments and PMI.

3. Calculate your closing costs.

A down payment isn’t the only cash you’ll need to save up to buy a home. There are also closing costs to consider. Things like . . .

• Appraisal fees
• Home inspections
• Loan origination fees
• Credit reports
• Attorney fees
• Home insurance
• Property taxes

On average, closing costs for buyers are about 3–4% of the purchase price of the home—and you need to be able to pay for them with cash. On top of those costs, it’s also possible that you’ll have to pay for your real estate agent’s services (for example, 3% of the home’s purchase price). To sweeten the deal, the seller might offer to cover part or even all of what it costs you to work with your agent. But don’t count on it. Before you commit to working with an agent, be sure to discuss what they charge so you know your maximum potential costs.

A good number to shoot for when saving for a house is 25% of the home’s sale price to cover your down payment, closing costs and moving expenses. But whatever you do, don’t let the closing costs keep you from making the biggest down payment possible. The bigger the down payment, the less you’ll owe on your mortgage!

4. Factor in homeownership costs.

Here’s the truth: Owning a home is expensive. Between repairs, upgrades and maintenance, those bills can add up. Bills such as . . .

• Increased utilities: On average, if you’re used to paying $100–150 on utilities as a renter in an apartment, you might need to bump up that budget closer to $600 a month as a homeowner.
• Maintenance and repairs: Most homeowners spend about $1,750 a year on home maintenance projects. This could include things like landscaping or routine services like pest control and HVAC tune-ups.
• Furnishings and upgrades: These can cost major bucks, so plan for them in your budget ahead of time if you’re going to want them when you move in. For example, the average cost to furnish a house is around $16,000. Meanwhile, a minor kitchen remodel can cost over $27,000.

That’s why you should save up an emergency fund worth 3–6 months of your typical expenses before you buy a house (in addition to paying off all your consumer debt). When you don’t have an emergency fund, any unexpected expense that pops up can become a crisis. But with an emergency fund, an unexpected expense becomes nothing more than an inconvenience. 

So, when you’re figuring out how much house you can afford, don’t forget to factor saving for emergencies into the equation. Source

NMLS ID 394275 | DRE ID 01769353

Happy Labor Day!

 

“Today is your opportunity to build the tomorrow you want.” — Ken Poirot

Happy Labor Day!

Work and Associates Home Loans 

(916) 847-3090

margeate@workhomeloans.com

NMLS ID 394275 | DRE ID 01769353

How Important Is Curb Appeal When Selling a Home?

The old adage “never judge a book by its cover” is an important one. But the truth is, first impressions are hard to recreate – especially when it comes to house hunting. According to a RE/MAX Twitter Poll, a majority of responders – 46.2% – agree that a shabby exterior is the biggest turn-off when touring homes.

Here’s why curb appeal may be critical to selling a home;

Exteriors reflect interiors

Curb appeal is the external appearance of a home, comprised of landscaping, painting, staging and overall aesthetic. Acting as a hint of what’s to come, the exterior of a home speaks volumes to its interior in terms of maintenance and style. If the outside displays the wear and tear of a home, homebuyers may never open the front door to see if the inside is in sync or not. Even if the kitchen has been renovated with stainless steel appliances or the floors received an upgrade to hardwood, unpleasant or outdated curb appeal will have certain buyers passing by the listing before peeking inside.

When a home has an unkempt exterior – think dead grass, chipped paint or overgrown weeds – prospective buyers could assume the inside needs repairs, too.

According to Torrence Ford, a real estate agent and owner of RE/MAX Premier in Georgia, “move-up buyers” – those upgrading from their current home – set much higher standards for a home’s exterior presentation than first-time homebuyers in today’s market.

“First-time homebuyers just want to lock down a house. A move-up buyer, however, will be more affected by curb appeal and consider it alongside their lifestyle,” he says.

And it’s not just the prospective buyer that forms an impression when looking at the house from the outside. Ford says that appraisers, inspectors and real estate agents likely are also taking a home’s curb appeal into account.

Listing photos (almost always) open with exterior shots

The assessment of curb appeal begins long before buyers arrive on site for a showing.

According to the RE/MAX Future of Real Estate Report, 94% of North Americans searching for properties are doing so online, allowing for them to view a larger quantity of properties in a shorter period of time, even on the go. With photos becoming the catalyst for a buyer’s initial impression, many online browsers could skip over a listing due to an unsightly appearance from a quick snapshot. Plus, staging eye-catching steps, a stoop or a porch adds trendy detail or color, creating more compelling shots for a photographer.

Money talks: Curb appeal could add to overall value

According to REALTOR® Magazine, a study revealed that homes with an appealing exterior sell, on average, for 7% more than comparable homes with a rundown appearance.

In his experience, Ford believes that buyers are more likely to write a higher offer when the entirety of the property feels well cared for. Each small detail that impresses buyers will count toward their overall impression of the home’s worth.

Revamping the front yard and home exterior also increases the value of the neighborhood and surrounding area. “It has a domino effect. It leaves a lasting impact on the longevity of the neighborhood,” Ford says. “Work on curb appeal and the neighbors will start jumping in, too. When one neighbor starts making upgrades, everybody else tends to want to clean up their property, whether it’s with painting, replacing the roof or even just mowing the lawn.”

The most important aspect of curb appeal is to ensure the exterior is cleaned up even before sinking money into improvements. This is as simple as mowing the lawn, trimming shrubbery, pulling weeds and eliminating miscellaneous items or garbage.

Creating inviting ambience goes beyond yard care. Sellers can consider adding a number of inexpensive finishing touches, like potted plants or flowers, a new welcome mat, new light fixtures or patio furniture staged on the front porch. Though minor, these accents can help a prospective buyer envision coming home to the space. “[When updating a home], we will replace shrubbery, repaint the front door, and repaint the house’s foundation so the landscape has a clean backdrop,” Ford says.

He adds that implementing new house numbers, like swapping small, cursive numbers for larger contemporary ones, can help older properties get a quick and easy revitalization. Sellers may also consider a fresh coat of paint on the home’s exterior, a newly paved driveway or a new roof if its rusty or damaged. “Curb appeal makes all the difference,” Ford says. Source

Big Bank vs. Mortgage Broker: What's the Difference?

Yes - we can compete with Big Banks and win on terms, pricing and service in most situations!! I get this question often…so throwing out to you differences!

Are you planning to buy a home and wondering where to get your financing? Here's a quick comparison to help you make an informed decision!

**Big Bank**

• Convenience: If you already have accounts with a big bank, it might seem convenient to get a mortgage with them.
• Reputation: Big banks have established brands and reputations.
• Limited Options: Big banks typically offer their own mortgage products, which might limit your choices.
• Stricter Criteria: Banks often have stricter lending criteria, which can make it harder to qualify for a loan.

**Mortgage Broker**

• Wide Range of Options: Mortgage brokers have access to a variety of lenders and mortgage products, giving you more options to find the best rate and terms.
• Personalized Service: Brokers work for you, not the lender, so their goal is to find the best mortgage for your unique situation.
• Flexible Criteria: Brokers often have relationships with a variety of lenders, some of whom may be more flexible with their lending criteria.
• Negotiation Power: Brokers can negotiate on your behalf to get better rates and terms than you might get on your own.

**Your Dream Home is Within Reach!** As a dedicated mortgage broker, I'm here to help you navigate the complexities of home financing and find the best mortgage for your needs. Let's work together to make your homeownership dreams come true!

 Contact me today to learn more and get started!

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8 Steps to get the Best Mortgage Rates

Ready to learn how to get the lowest possible mortgage rate? Follow this eight-step process...

1. Improve your credit score

Boosting your credit score is a great first step to getting a lower mortgage interest rate. 

“A credit score is always an important factor in determining risk,” says Valerie Saunders, past president of the National Association of Mortgage Brokers (NAMB). “A lender is going to use the score as a benchmark in deciding a person’s ability to repay the debt. The higher the score, the higher the likelihood that the borrower will not default.”

To be considered for a conventional mortgage, you’ll generally need a score of 620 or higher. However, the best mortgage rates go to borrowers with credit scores of 740 or above.

To improve your score, pay your bills on time and pay down or eliminate credit card balances. If you must carry a balance, make sure it’s no more than 20 percent to 30 percent of your available credit limit. Also, check your credit score and report regularly and look for any mistakes. If you find errors, correct them before applying for a mortgage.

2. Build a steady employment record

Lenders prefer you to have at least two years of steady employment and earnings, ideally from the same employer. Be prepared to show pay stubs from at least 30 days prior to your mortgage application and W-2s from the past two years. If you earn bonuses or commissions, you’ll need to provide proof of those, as well.

It can be more difficult to qualify if you’re self-employed or have multiple part-time jobs, but it’s not impossible. If you’re self-employed, you might need to furnish business records, such as profit and loss statements, in addition to tax returns, to round out your mortgage application.

What if you’re a graduate just starting your career, or you’re back in the workforce after time away? Lenders can usually verify your employment if you have a formal job offer in hand, so long as the offer includes your income. The same applies if you’re currently employed but have a new job lined up. Lenders might flag your application if you’re switching to a completely new industry, however.

Gaps in your work history won’t necessarily disqualify you, but the length of those gaps matters. A short period of unemployment due to illness is easier to explain to a lender than, say, unemployment of six months or more. 

3. Save up for a down payment

Putting more money down — ideally, at least 20 percent — can help you get a lower mortgage rate. Of course, lenders accept lower down payments, but putting down less than 20 percent usually means you’ll pay a higher mortgage rate, and you’ll have to pay private mortgage insurance (PMI). PMI costs about $30 to $70 per month for every $100,000 borrowed, according to Freddie Mac. The sooner you can pay down your mortgage to less than 80 percent of the total value of your home, the sooner you can get rid of mortgage insurance, reducing your monthly bill.

4. Understand your debt-to-income ratio

Your debt-to-income (DTI) ratio compares your total monthly debt payments to your gross monthly income.

In general, lenders prefer your mortgage cost no more than 28 percent of your gross monthly income, and that your mortgage and other debt payments total no more than 36 percent of your monthly income. For a conventional loan, lenders may approve DTI ratios of up to 45 percent. This is more likely if you have significant savings or a strong financial profile otherwise. 

If you make $5,000 per month, you’ll want a mortgage payment of no more than $1,400 ($5,000 x 0.28). Your mortgage and other debt payments should ideally remain below $1,800 ($5,000 x 0.36). You can improve your DTI by increasing your income or paying off debt.

5. Check out different mortgage loan types and terms

If you think you’ve found your long-term home and have good cash flow, consider a 15-year fixed-rate mortgage instead of the traditional 30-year fixed-rate mortgage. You’ll pay more each month, but you’ll pay off your home sooner. Plus, you’ll pay less in interest since interest rates on 15-year mortgages tend to be lower than those of other mortgage options. You can also choose a 15-year term if you’re refinancing your current mortgage.

Alternatively, while rates are high, you might consider an adjustable-rate mortgage (ARM). With these types of loans, you’ll start with a fixed rate for a set time — often five or seven years — which is typically lower than what you’d get with a fixed-rate mortgage. After this period ends, your interest rate can increase or decrease for the remainder of the term. When that happens, or whenever rates fall, you could refinance an ARM loan into a fixed-rate mortgage.

Finally, government-backed loans may offer lower rates than conventional loans. Your options include:

• FHA loans: Insured by the Federal Housing Administration, FHA loans are popular with first-time homebuyers because of their flexible financial requirements.
• VA loans: If you or your spouse have served in the military, you could consider a VA loan, which is guaranteed by the U.S. Department of Veterans Affairs. These loans typically have no down payment requirement.
• USDA loans: Guaranteed by the U.S. Department of Agriculture, the USDA loan program is designed to help low- and moderate-income people in rural areas buy a home. There’s no down payment needed, but your home must be in an eligible area, and your income cannot exceed a certain amount, based on your location and household size.

6. Consider paying mortgage points

If you’re willing to pay a fee, you can buy your way to a lower interest rate using mortgage points. Each point costs 1 percent of your mortgage amount and typically reduces your interest rate by 0.25 percent. You can think of mortgage points as a form of prepaid interest.

Let’s say that you have a $400,000 home loan with a 7 percent interest rate. If you want a lower rate, you could buy a mortgage point for $4,000 and knock your rate down to 6.75 percent.

However, buying mortgage points isn’t right for everyone. Recouping the upfront costs typically takes around five years, so this strategy isn’t ideal if you plan on selling within a few years.

7. Compare offers from multiple mortgage lenders

When you’re looking for a mortgage, even for a refinance, don’t accept the first rate you’re quoted. Shop around with at least three lenders, including your own bank or credit union and at least one online option. 

“Shop and compare based on the loan estimates received,” Saunders says. “You wouldn’t normally purchase a car without test-driving it first. Test drive your loan before proceeding with your purchase.”

Even if the interest rates are comparable, lenders’ offers come with different fees, closing costs, private mortgage insurance premiums and more. By shopping around, you can choose the offer with the most favorable terms.

8. Lock in your mortgage rate

Sometimes the closing process takes several weeks, during which rates can fluctuate. After you sign the home purchase agreement, ask your lender to lock your rate. The service sometimes comes with a fee, but it often pays for itself, especially in volatile rate environments. Source