Tag Archives: mortgages

Finding the Right Mortgage Officer


Finding the Right Mortgage Officer

Anyone who has bought a house will tell you that finding the right REALTOR® and the right mortgage person is absolutely critical.  If you talk to a REALTOR®, they will tell you that you should select your real estate agent first; if you talk to a mortgage person they will say you should select your mortgage person first.  In reality it doesn’t matter which one you select first as long as you select people who are going to do a good job for you.

There is one factor that is critically important when selecting a mortgage person that I think warrants discussion.  If you are like millions of people in this country who may have less than stellar credit, or do not have a gazillion dollars to put down, it is important to have a mortgage person who can guide you in making those decisions.

All too often I have clients who talk to a mortgage person only to be told that they do not qualify for a mortgage without telling them what they need to do to correct the matter.  The good news is that there are some mortgage officers who have the computer programs and the desire to provide this information to clients.

I have had clients who thought they needed to have no debt in order to buy a house and have used all their money to pay off credit card debt but then did not have the money for closing costs or down payments.

Before you make that decision I would encourage you to talk to a mortgage person or a REALTOR® who can get you in touch with a mortgage officer who can advise you on what to pay down and what not to pay down.  It really does matter.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

 

 

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What Every REALTOR® Wants You to Know About Credit Scores


What Every REALTOR® Wants You to Know About Credit Scores

 Unless you are paying cash for a house, you will need to have a loan or mortgage, to buy the house.  Having a good credit rating will make that task a lot easier.

magnifying-glass-on-levels-of-credit-scores_573x300

First, let me start by saying that I am not a mortgage broker, however, many of the questions I get from real estate clients involve mortgages.  If you are working with a REALTOR® they should be able to refer you to a mortgage person who can answer any questions and to get the ball rolling for an approval.

Nevertheless, there are many things we can talk about to help buyers, especially first time home buyers with questions they may have.  It is important to understand that the news indicates that you must have 20% down to buy a house – not true.  FHA requires as little as 3.5% and the USDA has programs in specific areas that will require 0% down!  There are far too many programs to discuss here.  That is where a mortgage officer can help, but there is some basic information that can help a home buyer understand the approval process.

Recently I talked to a potential client who was aggressively paying down his credit card debt, which is not a bad thing.  However, the client was under the impression that he had to have all his credit cards paid off before he could apply for a mortgage – again, not true.  It is important to pay down debt to a level that helps your credit score, but it is also important to have cash on hand when buying a house.  That is where a mortgage person can help.

Here is some basic information to help you understand how your FICA score is computed.  Probably the most important factor is your payment history.  Your payment history is the best predictor of future behavior and therefore one of the most important factors in a credit score.  Your payment history accounts for 35% of your credit score.

Another important factor is the amount you owe, and it’s not just how much you owe, but how much you owe compared to the amount of credit you have available.  If a person is maxed out on their available line of credit they are more likely to be over extended and miss future payments.  This accounts for 30% of your credit score.

These two factors account for 65% of your credit score.  New credit and length of credit also count for your credit scores.  Talking to a mortgage officer can help you to determine where you stand and what you need to do to improve your score to enable you to buy a house.

If you are thinking of buying or selling talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Things Every REALTOR® Wants You To Know – Pre-Qualified vs. Pre-Approved


Things Every REALTOR® Wants You To Know – Pre-Qualified vs. Pre-Approved

The age-old question of which came first, the chicken or the egg, can certainly apply to home buying. If you talk to a REALTOR® they will most likely tell you the first person you should contact is a REALTOR®. If you talk to a mortgage broker they will undoubtedly tell you the first person you should talk to is a mortgage broker.

Pre-Approval-vs-Pre-Qualification

Breaking with tradition of REALTORS® I will tell you it really does not make to much difference who you contact first – as long as both the real estate agent and the mortgage broker are in lock step. That being said, I will say that I believe that it is more critical to talk with a REALTOR® first. The reason is that the REALTOR® will be with you during the entire process. Because of that it is important that you are comfortable with your REALTOR®. The mortgage broker will handle a much smaller portion of the process.

Nevertheless, applying for a mortgage is a critical step and should be done early on in the process. First of all, buyers must determine the amount of mortgage they will be approved for in order to determine what price range of homes they should look at.

As a REALTOR®, one of the first questions I will ask a potential buyer is whether or not they have talked to a mortgage broker and whether or not they have been “pre-approved.” If not, most REALTORS® can refer you to a mortgage broker that they are confident will work hard to be able to approve a loan for a potential buyer. Not only that, the relationship between the REALTOR® and mortgage officer is critical during the process should there be a glitch along the way. It is always important that if there is a glitch – and there often is – that the REALTOR® or mortgage officer can pick of the phone and talk to each other, as opposed to emails from Internet based mortgage companies.

There is a lot of confusion between a pre-qualified and pre-approved. It is very important that buyers understand the difference and get pre-approved for a mortgage. Here is why.

Any real estate agent can pre-qualify a potential buyer for buying a home. This process is a very simple process and only crunches a few numbers. Basically, the buyers state how much income they have and how much debt they have. If the total debt and mortgage payments, including taxes and insurance is less that 36% of their gross income and their mortgage payment is less than 28% of their gross monthly income, then they will LIKELY qualify for a mortgage.

I say ‘likely’ because in the pre-qualify process it does not take into account if the potential buyers are current with payments; it does not verify the income, nor does it review their overall credit worthiness. Personally, I have not done a pre-qualify for years. It is more effective for potential buyers to obtain a “pre-approval” letter from a qualified mortgage broker. Even then it is a first step in obtaining a mortgage.

There is another major reason why I require buyers to get pre-approved prior to showing properties, at least not too many.

Often times potential buyers will decide that they can afford a $500,000 home only to later find out that they will only be approved for a $350,000 mortgage. If I have shown them homes priced at $500,000 every home that I now show them priced at $350,000 will fall short of what they have looked at before. This makes home buying very difficult.

In addition, if I am representing the sellers, I want to see a “pre-approval letter” from a qualified mortgage broker along with the offer to determine how serious the offer really is.

If you are thinking a buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Home Buying – and Selling – for 2016


Home Buying – and Selling – for 2016

The groundwork is in place for a major jump in home buying for 2016 – especially this spring. Experts range the prospect from moderate to “robust.” It doesn’t appear that it will be the frenzied sales we saw just before the market went bust, but it appears that it will be healthy growth.

Real Estate Market Trend is Strong
Real Estate Market Trend is Strong

If you are even remotely thinking of buying – or selling for that matter – anytime in 2016, I would suggest that you take some time now to meet with a REALTOR who can help with a game plan to put you on the right path in obtaining your new home. If you are thinking of selling, a review by an objective REALTOR may help to point out areas that need to be improved to maximize your sale amount.

If you are thinking of buying in 2016 – especially if you are a first time home buyer, I suggest that you meet with an agent as soon as possible. I generally advise that first time homebuyer’s meet with a REALTOR about a year before they plan on closing on their house.

A year may seem like a long time, but there are times when you will discover that there are items on your credit bureau that may need to be corrected, or that you will need more money in your bank account than you thought. The earlier you find these issues and work to correct them, the better.

There are one of two issues that mortgage brokers and real estate agents will tell you are important. They will either say to “Pay down your debt” or “Save every penny you can.” These obviously can be conflicting goals and may lead to frustration on the part of the first time home buyer’s.

My suggestion is this: You have to have a balance between the two. Yes, reducing your debt may help to get a better interest rate, but if you put all your money on your debt and have not saved enough you will not be able to purchase that home.

For most home buyer’s, especially first time home buyer’s, its the down payment that gets in the way. Mortgage brokers will tell you that you should have 20% down payment in order to buy a house. The good news is that the 20% down payment will most likely prevent you from having to pay PMI insurance, but it is not necessary in order to buy a house. Many transactions are made with 3.5% to 5.0% down.

Here’s the good news: Say you buy a house for $250,000. For simplicity, we are not going to figure in any downpayment. If your home increased in value 3% every year, at the end of seven years you would have approximately $57,467 to put towards a down payment of your next home. That does not include any reduction in the principle you made with your payments.

If your home increased in value 4% a year; after seven years you would have approximately $78,982 to put towards a down payment of your next home.

Home ownership is one of the best ways to increase your net worth.

If you are thinking of buying – or selling – talk to a real estate professional; talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

How Much is Enough?


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One of the more difficult challenges to buying a home, whether you’re a first time home buyer or a tenth, is the amount of down payment required.  Generally speaking first time home buyers are the ones who struggle the most with coming up with the down payment.

Recent studies have shown that most people overestimate the down payment that is needed to purchase a home.  The survey conducted of renters and non-home-owners revealed that 39% of those surveyed believed that at least 15% of the purchase price would be required to buy a home.

Asked whether they felt they would qualify for a mortgage, only 28% said they believed they would qualify.  Respondents in this survey were not verified as to whether or not they would qualify, but in other surveys upward of 70% of participants would in fact qualify.

The truth of the matter is that home buyers can purchase a home with as little as 3.5% down.  Tennessee has a program that will enable first time home buyers who qualify to get a mortgage with zero down! Under the program a first time home buyer is someone who has not owned a home for three years or more. Certain restrictions apply.

If you are thinking of buying or selling, talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 615-417-8182 or email me at RolandLow1@gmail.com.

Roland

Great Real Estate News for Williamson County Tennessee


The real estate market has been improving steadily for the last couple of years.  Yes, it climbs up, then drops down a bit, but the overall trend has been a steady increase.  That is about to get even better.

Real Estate Market Trend is Strong
Real Estate Market Trend is Strong

The Agricultural Act of 2014 provides incentives to rural areas with populations up to 35,000.  The program provides support and incentives to businesses, farms and even purchasing of homes.  This program has now been expanded and includes Spring Hill – both Maury County and Williamson County!

This means that home buyers who meet certain criteria will be eligible for low interest rates competitive with market rates; no down payment, no PMI insurance and a FICO score as low as 640.  To make the program even better, this is NOT for first time homebuyers only!  There are other benefits that may make this an ideal program for anyone thinking of buying or selling in the Spring Hill area.  If you would like more information on this program, drop me an email.

I say selling, because if your property is determined to be eligible for the program it can be marketed as such and attract more potential buyers.

If you are thinking of selling anytime in the near future, give me a call.  I would be happy to do a CMA (Comparative Markey Analysis) to determine the selling price of your home.  There is no cost or obligation to this service.

If you or someone you know is thinking of buying anywhere in the area, please give me a call so I can help you with all the options that are out there today.  From a mortgage person who suits your needs to moving a company and everything in between.

Roland

What’s The Big Hold-Up In the Real Estate Market? – Read On


What’s The Big Hold-Up In the Real Estate Market? – Read On

You cannot pick up a paper or turn on the news without hearing something about the real estate market.  If the market so much as hiccups – “The Market Has Plummeted” the next day “The Market Has Soared.”  But the truth of the matter is that there has been fantastic head way in the real estate market for the last year or two, depending on where you live.

 up and down

The number of short sales and foreclosures has dropped dramatically; mortgage interest rates remain very low; mortgages are easier to obtain and more homes are coming on the market for sale.

But there are two areas that still remain a problem.  The first is the amount of debt that many buyers, especially first time home buyers have, and the second issue is that there are not enough homes on the market, especially in some geographical areas.

As more and more buyers come into the market, sellers are often times winding up with asking price or bidding wars.  This will encourage more potential sellers to place their home on the market.

But there are four reasons why many people who may want to sell, may not.

  1. Low Equity: Approximate 19% of the homes on the market have low equity established. A home owner who wants to list his house because that is what they owe, rather than the market price is wasting their time. These homes will undoubtedly stay off the market or will not sell for quite some time.
  2. Low Mortgage Rate: Homes owners that may want to sell, but have a very low interest rate may be reluctant to sell their home only to pay a higher interest on the next home they buy.
  3. Purchased or refinanced in the past seven years: A recent study showed that 14% of the homes were purchased or refinanced in the past seven years giving the home owners a reduced interest rate. Couple that with the idea that home owners are not moving every few years as in times past, and many of these homes will remain off the market.
  4. Company or investor owned: Approximate 3% of the homes are owned by a company or an investor. With home prices dropping so dramatically in the last few years and interest rates so low, many companies and investors swooped up properties. With home prices rising somewhat, but interest rates still low, and rental rates increasing, many of these homes will stay off the market for the foreseeable future.

Whether you are thinking of buying or selling, talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland