4 Reasons to Buy a Home This Winter!

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 7.0% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.7% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase 

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, you are Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

 

Posted by the KCM Crew

Ready to buy? Visit our website to start your search!

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Buying in 2018? 7 Steps to Take Now

With some careful prep work in the next few months, your family could be in a new home by summer.

Now is the time to get things in order for a home search next year.

If you’re thinking about buying a home in 2018, November and December are the perfect time to “warm up” for the house hunt so you can hit the ground running in the new year. And whether you’re looking in Athens, GA, or Athens, NY, the prep work is relatively the same.

We’ve asked real estate and mortgage professionals to chime in about what prospective homebuyers should do to ready themselves for buying a home. From organizing your finances to save money to finding a real estate agent and mortgage lender, there is plenty to keep you busy!

7 Steps to Be Ready to Buy a House in 2018

  1. 1. Check your credit score.

    A credit score is a numerical representation of your credit report. FICO scores range from 300 to 850, and the higher your score, the better. “Good credit is like gold when obtaining a mortgage,” says Denise Supplee, a Pennsylvania agent. Typically, you’ll get the best interest rate on a loan if your score is 740 and above. “A higher credit score should net you a lower mortgage rate,” says Lee Gimpel, co-creator of The Good Credit Game, which specializes in financial education. “That lower rate, even if it’s only 1 or 2 percent lower, can mean saving thousands of dollars per year.” If your credit score falls short, get busy repairing it. Correct any errors that might be on your report, start paying all your bills on time, and get your credit limit raised. Note, though, that you shouldn’t max out your card each month. It’s best to use 30 percent or less of your total available credit.

  2. 2. Don’t open new credit cards.

    If you think resisting taking a selfie when you’re face-to-face with your fave celebrity is a testament to your willpower, that’s sissy stuff compared with turning down every offer to open a credit card, even if you could save 20 percent (or more!) on your holiday purchases. Tempting as saving at checkout can be, opening new credit may hurt your chances of getting a mortgage, or at least of getting the best rate on a loan.

    “By opening the account, you have created another line of credit,” says Paul Anastos, president of Mortgage Master, a division of loanDepot, a nonbank lender. “That credit line, and what is borrowed, can change the application numbers and jeopardize the application.” What could save you a few dollars now could cost you far more in the long run if your mortgage payments will be higher. And along those same lines, “Don’t overspend during the holiday season,” says Dean Sioukas founder of Magilla Loans, an online lending exchange. “Especially on impulse purchases that can be tempting during the holidays.”

  3. 3. Suggest financial gifts for the holidays.

    Besides the mortgage loan, you’ll need a sizable amount of cash to buy a house. There’s the down payment to consider, closing costs, and moving costs. You should also set aside money for unexpected repairs and costs, says Brian Betzler, regional sales manager at TD Bank. Not being prepared “is probably why nearly half of millennials incurred up to $5,000 in unexpected costs during the mortgage process, according to a TD survey,” he says.

    A potential solution? Bulk up that emergency fund. “Instead of getting gifts for the holidays, [prospective homebuyers] can suggest cash instead that will be put toward their home,” says Paul Sian, a Kentucky and Ohio agent. And remember, you might be getting some money back after you file your tax return. Don’t blow it on vacation. “A tax refund is a great way to add to your cash reserves for a down payment,” says David Hosterman, branch manager of Castle & Cooke Mortgage in Colorado.

  4. 4. Interview potential real estate agents.

    If your neighbor, relative, or friend of a friend happens to know (or is) a real estate agent, that’s great. This person might be the perfect agent for you. But you owe it to yourself to shop around. “Look for [an agent] who is knowledgeable, good, integral, and can assist you in reaching the goal of homeownership,” says Chantay Bridges, a Los Angeles, CA, real estate agent. “Make sure they are not a novice, new, or just unaware of how to do a specific transaction.” The end of the year is usually a slow time for agents, so chances are they’ll be more accommodating to making an appointment on your schedule.

  5. 5. Keep tabs on interest rates.

    If you hear that interest rates are at historic lows or that interest rates are on the rise, you should not assume that you can get the rock-bottom rate. Not everyone gets the same interest rate on a mortgage loan. It depends on your financial picture and on the lender you choose. “Everyone knows that home prices are, at least to some extent, negotiable, but we find loans to be the same,” says Warren Ward, CFP with WWA Planning & Investments in Indiana. He advises that homebuyers shop around for the lowest interest rates. Note that closing costs can vary too, so discuss with your real estate agent ways to keep yours down. “We saved $150 on the closing fees by selecting the cheapest title company,” says Ward. “I guess that’s not much, but I think most people would bend over to pick up three $50 bills if they were lying on the sidewalk.”

  6. 6. Find a mortgage lender.

    Before you even start looking for a home (and yes, we even mean browsing online listings), look for a mortgage lender to find out if you can afford to buy a home. If you can’t right now, there’s no use torturing yourself by finding your dream home that’s just out of reach. But how do you find a lender? “If you have a bank you’ve been with for years, ask them,” says Bridges. “Your [real estate agent] can also refer a good lender to you. Compare [that lender] with two others. Look at what they offer, costs, points, and how long to close.” Once you know how much home you can afford, perform your home search based on your preapproval amount or less.

  7. 7. Get preapproved.

    When a lender gives your financials the once-over and preapproves you for a mortgage, you’ll be able to show sellers that you really can buy their house. But how do you get preapproved? By preparing a few documents, which you can do several months in advance of the actual purchase. Here’s what you need to buy a house.

    • Tax returns for the past two years
    • W-2 forms for the past two years
    • Paycheck stubs from the past few months
    • Proof of mortgage or rent payments for the past year
    • A list of all your debts, including credit cards, student loans, auto loans, and alimony
    • A list of all your assets, including bank statements, auto titles, real estate, and any investment accounts

    Paul Anastos also advises not to change jobs, make big purchases, or miss any debt payments as you prepare to get a mortgage.

    Originally published October 17, 2016. Updated October 30, 2017. 

    Published by Laura Agadoni on Trulia

Your Friends Are Crazy Wrong If They’re Telling You Not to Buy

The current narrative is that home prices have risen so much so that it is no longer a smart idea to purchase a home. Your family and friends might suggest that buying a home right now (whether a first-time home or a move-up home) makes absolutely no sense from an affordability standpoint. They are wrong!

Homes are more affordable right now than at almost any time in our country’s history except for the foreclosure years (2009-2015) when homes sold at major discounts. As an example, below is a graph from the latest Black Knight Mortgage Monitor showing the percentage of median income needed to buy a medium-priced home in the country today in comparison to prior to the housing bubble and bust.

As we can see, the percentage necessary is less now than in those time periods.

The Mortgage Monitor also explains that home affordability is better today than it was in the late 1990s in 47 of 50 states.

Bottom Line

Your friends and family have your best interests at heart. However, when it comes to buying your first home or selling your current house to buy the home of your dreams, let’s get together to discuss what your best move is, now.

 

Posted by The KCM Crew

Ready to buy? Click HERE to start your home search!

Why You Should Still Talk to a Lender Even If You’re Not Ready to Buy a Home

BrianAJackson/iStock

If you’re a first-time home buyer, you might think you’re not ready to purchase a house. Perhaps you’re concerned about your job situation, your previous credit history, or your high monthly expenses. Whatever the circumstances, every borrower and financial situation is unique.

Unless you’re a financial expert, it’s best not to self-diagnose your financial problems. You wouldn’t skip out on the dentist to fill your own cavities, so don’t try to solve your financial troubles yourself either. A loan officer can walk you through your options—and they won’t try to drill your teeth!

When you apply for home loans, mortgage loan officers look at your credit score, credit history, monthly liabilities, income, and assets. These officers see the entire financial picture, not just the investable funds. A reputable loan officer with experience can get you on the right track for buying a home.

Here are three common reasons people don’t want to apply for a mortgage and what you should do if you’re really serious about buying a home.

A less-than-ideal credit report

The reality is that mortgage companies are required to pull a copy of your credit report, which includes scores from all three credit reporting bureaus. Your credit report is the most accurate representation of your credit available. Don’t let your messy credit report keep you from talking to a lender. After looking at your credit report, the lender can actually tell you what debts are the biggest drain on your borrowing power so you can start making smart financial decisions to improve your score.

Not enough income

Let the mortgage company review your pay stubs, W-2s, and tax returns for the last two years. If you were self-employed, let the loan officer look at your tax returns and evaluate your credit to determine what down payment you can afford and what you can buy. The lender can give you an idea of what you need to do to qualify, including how much more money you need to make to offset a proposed mortgage payment. With an action plan and a strategy in place, it may just take you a matter of months to button up your financial picture to qualify.

Too much debt

Debt and liabilities definitely impact spending power. Every dollar of debt you have requires two dollars of income to offset it. So for example, if you have a car loan that’s $500 a month, you will need $1,000 a month of income to offset that monthly liability. If more than 15% of your income currently goes toward consumer debt, you’ll have to either pay off debt or get more income—perhaps via a cosigner—to qualify for mortgage financing. Again, let the lender look at your financial picture so they can tell you what it takes to make it work.

If you’re planning to buy a house in the future but aren’t financially ready, talk to a professional. Meet with them face-to-face, provide them with all of your financial documentation, let them run a copy of your credit report, and go through a pre-home buying consultation so they can either pre-approve you or tell you what to do to become pre-approved in the future.

Many times, potential buyers are not ready, but having a conversation with a professional—so you know where you stand and where you are going—can be tremendously beneficial. You can also take a look at your financial health with a free credit report from Credit.com.

 

Posted on realtor.com

Click HERE to search for your next home!

6 Big Ways to Completely Botch Buying a Home

mevans/iStock; realtor.com

We all make careless mistakes. We accidentally undertip the waiter. We lock our keys in the car. We wear white after Labor Day. We press “send all.” It happens to the best of us.

But some little mistakes can create big problems, like when you’re buying a home.

A house, after all, is a huge purchase; the stakes are extremely high. With that kind of money on the line, you’d better be darn sure you can navigate the home-buying process without a hitch. And avoid self-sabotage!

To help you out, we’ve pinpointed six common ways home buyers botch their property-purchasing prospects so you can sidestep these snafus at all costs.

1. Flying solo

If this isn’t your first time on the home-buying merry-go-round, you might think: Why hire a real estate agent to hold your hand? Well, first, let us remind you: It’s generally free to use a buyer’s agent, because the seller typically pays the commission for both the seller’s agent and the buyer’s agent. And whether it’s your first home or your fifth, you probably want a professional to help guide you through the often-tricky process of writing an offer, negotiating with the seller, and making sure the deal is up to snuff.

Without an agent, you’ll soon be drowning in paperwork and at risk of making a whole bunch of costly mistakes, warns Jennifer Baxter, associate broker at Coldwell Banker RMR in Suwanee, GA.

To find a real estate agent in your area, use online tools such as realtor.com®’s Find a Realtor search, which will give you useful info such as the Realtor®’s number of years of job experience, number of homes sold, and the price of homes typically dealt with.

2. Saying too much—and undercutting your negotiating power

Be careful what you say when you’re viewing a property at an open house or home showing, Baxter warns. For instance, if the listing agent hears you say to your spouse, “I love this house, and it’s way under our budget,” the seller might try to play hardball when you try to negotiate on price. Keep private conversations private.

3. Waiting too long to make your earnest money deposit

The sales contract will specifically state when you need to cough up the earnest money deposit, which is cash you provide upfront to show the seller that you’re serious about buying the property (the typical amount is 3% to 5% of the sales price of the house).

How much time you have to provide the deposit can vary by state. For example, in Virginia the deposit must occur within five business banking days after ratification unless otherwise agreed to in writing by both parties.

“If you don’t turn in the EMD in accordance with the contract, the contract is void,” says Baxter.

Read: You can kiss the home goodbye if you dillydally for too long.

4. Not bothering to read property disclosures

Even if you plan on having a home inspection, you should still read the home seller’s property disclosures in full, advises Seth Lejeune, a real estate agent with Berkshire Hathaway in Collegeville, PA.

“Property disclosures can be long, but that’s where you’re going to find whether the seller knows if there are any pre-existing issues with the house,” Lejeune says.

Most home buyers will receive a property disclosure statement after their offer has been accepted, says Atlanta real estate agent Bill Golden.

Look for major issues like a faulty foundation, leaky roof, HVAC issues, or pest or mold infestations. If you spot something on a disclosure statement that you don’t understand or that raises concerns, have your real estate agent bring it up with the listing agent. The seller might have an explanation that puts you at ease (e.g., “We had bedbugs back in 2012 but hired an exterminator and have been free and clear ever since”). But if the issue makes you seriously question whether you want to move forward, this could be an opportunity to renegotiate the sales price to compensate for the added risk you’re taking on buying this home.

5. Damaging your credit score while you’re under contract

Unless you’re buying a house with all cash, you mortgage still has to go through underwriting to get approved. Since this process typically happens shortly before closing, you don’t want to do anything while you’re in contract that’s going to hurt your credit score. That includes buying a car, boat, or any other large purchase that has to be financed.

One less obvious mistake, however, is applying for a new credit card. Doing so—even for a store credit card like Target’s or Macy’s—triggers a hard inquiry on your credit report, which can ding your score by up to 5 points, says Beverly Harzog, a consumer credit expert and author of “The Debt Escape Plan.” That might sound like a small hit, but it could make a big difference if you’re on the cusp of qualifying for a mortgage.

6. Trusting a verbal agreement

“Some home buyers don’t realize the importance of putting everything in writing,” says Baxter. Unfortunately, that can come back to bite you, hard. For instance, let’s say a seller promises he’ll replace the water heater before closing. Well, if it’s not agreed upon in writing, the seller isn’t required to do it.

“I see this issue come up a lot when people buy new construction” and don’t use a buyer’s agent, says Baxter. “The builder’s agent is always looking out for the builder’s interests.”

This is another reason why you should work with a buyer’s agent rather than trying to muddle through this alone.

 

Posted by Daniel Bortz on realtor.com

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Millionaire to Millennials: Buy a Home Now!

In a CNBC article, self-made millionaire David Bach explained that “the single biggest mistake millennials are making” is not purchasing a home because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial TimesWashington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Posted by The KCM Crew

What To Look For In Your Real Estate Team

How do you select the members of your team who are going to help you make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender?

The most important characteristic that you should be looking for in your agent is someone who is going to take the time to really educate you on the choices available to you and your ability to buy in today’s market.

As Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Do your research. Ask your friends and family for recommendations of professionals whom they have used in the past and have had good experiences with.

Look for members of your team who will be honest and trustworthy; after all, you will be trusting them with helping you make one of the biggest financial decisions of your life.

Whether this is your first or fifth time buying a home, you want to make sure that you have an agent who is going to have the tough conversations with you, not just the easy ones. If your offer isn’t accepted by the seller, or they think that there may be something wrong with the home that you’ve fallen in love with, you would rather know what they think than make a costly mistake.

According to a Consumer Housing Trends Study, millennials have already started to prefer a more hands-on approach to their real estate experience:

“While older generations rely on real estate agents for information and expertise, millennials expect real estate agents to become trusted advisers and strategic partners.”

Look for someone to invest in your family’s future with you. You want an agent who isn’t focused on the transaction but is instead focused on helping you understand the process while helping you find your dream home.

Bottom Line

In this world of Google searches, where it seems like all the answers are just a mouse-click away, you need an agent who is going to educate you and share the information that you need to know before you even know you need it.

Posted by The KCM Crew