Tips for #NewHomebuyers

Tips for New Homebuyers:

1. Saving money for down payment. The least amount needed to buy a home is 3.5% of the purchase price of the home. Keep this in mind when wondering how much is needed for a down payment. The more money you have to put down, the better.
2. Improve credit. Most lenders will require a middle credit score of at least 640 and each person’s credit is unique. There are many assumptions and myths about credit. Please don’t hesitate to call with questions or come attend one of our free credit classes to better understand how credit works and what you can do to improve your scores.
3. Get Pre-Approved. It’s extremely important to sit down with a loan originator to go over your credit and documents to figure out what mortgage payment and house value you can afford to buy. Each person’s situation is unique and there are multiple factors that go into qualifying for a loan. Call us today to sit down for a free consultation and better understand what you qualify for.
4. Create list of wants and needs in a house. What neighborhood you want to move to, how many bedrooms and bathrooms you need, what schools do you need to stay by, do you prefer a garage and/or basement, what’s your minimum requirement for square footage, what monthly mortgage payment would you be comfortable paying, etc.
5. Interview for an agent. It’s important to make sure you hire a real estate agent that knows the process and works well with not only you, but the loan originator and seller’s realtor. We recommend you call and interview at least 3 agents to make sure you get paired with the right one. I work with some of the top agents in the Denver metro area and can recommend a couple for you to contact.
6. Understand what type of market you’re in. Denver is currently in a strong seller’s market. This means there’s a lot of competition for houses and you will probably have to make an offer immediately on a house you like, overbid and expect not to get seller concessions to cover some of your closing costs.
7. Ask questions. The process of buying a home can be frustrating and confusing. There’s a lot of information, fees and new regulations. Don’t hesitate to ask questions and trust your gut. If you’re not getting answers or don’t feel comfortable with the process, look into working with someone else. Buying a house will probably be the largest purchase of your life and you need people that are going to guide you through the process and look out for your best interest.

Let me know if you have any questions, comments or referrals.

Your Lender for Life,

Lauren

How Your #CreditScores are Calculated

We still don’t know how credit is exactly calculated by the 3 bureaus (TransUnion, Experian and Equifax), because they will not release their algorithms. But they have given a percentage of how things are broken down:

– 35% Payment History:   This includes how many times you’ve been late on accounts, when the last late was and how severe you’ve allowed accounts to go delinquent.

– 30% Amounts Owed: Total amounts owed on all accounts as well as the difference between your balances and limits (utilization). People who max out their limits have a greater risk for default. If your accounts are over 50% of your limit, this will negatively affect your credit, and under 50% will start positively affecting your credit. Keep your balances as low as possible.

– 15% Length of Credit History: The bureaus want to see a long history of credit. If you have to close accounts, choose to keep the old ones open so you don’t lose all that history.

– 10% New Credit: New credit isn’t always a bad thing. Although it does affect your length of credit, it’s another account on your credit that can help improve your scores. Do not apply for a lot of new accounts at one time or your scores will be hit hard.

– 10% Types of Credit: The bureaus want to see a healthy mix of accounts. Have a balance of revolving credit like credit cards and installment loans like auto loans and mortgages.

 

Please do not hesitate to let me know if you have any questions, comments or referrals.

Your Lender for Life,

Lauren

Are You Ready to Buy a Home?

With house values increasing and historically low rates, some renters are still wondering why they should own their own home. Here are some reasons you should consider buying a home:

1. You no longer have to answer to a landlord, worrying about whether you’re going to get back your full deposit or not and if things are going to get repaired and taken care of.

2. With each payment you’re making towards your mortgage, you’re investing in your home by increasing the equity. You could see this money down the road when you decide to sell your house or do cash out refinance. When you’re renting, you’re paying for someone else’s mortgage and investment.

3. You can change the look and layout of the house to fit your style. You can paint, remodel and change the house without worrying about asking for permission from the landlord.

4. Depending on your situation and what you qualify for, you could be saving money on a mortgage payment vs. a rent payment. Trulia just released that in 2013, buying a home in Denver was 45% cheaper than renting (http://trends.truliablog.com/vis/rentvsbuy-summer-2013/)

5. Low interest rates and affordable homes will not last forever. Although buying a home makes more sense financially now, that gap will start closing as rates and home values continue to increase.

6. Guidelines and regulations to buy a home have gotten stricter within the past few years and will only continue to make it harder to buy a home. Buy a home now while you can before income guidelines become stricter and make it impossible for you.

7. Tax Benefits – You’re able to write off a lot of expenses and costs of owning a home. I recommend consulting your accountant for specifics, but there’s many tax benefits of owning a home.

8. One thing to keep in mind is the upkeep of a house once you own it. There isn’t a landlord to call and take care of repairs and damages. You’re on the hook if anything happens to the property, so saving money is even more important than before.

 

Don’t hesitate to let me know if you have any comments, questions or referrals.

Your Lender for Life,

Lauren