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Naturally, home buyers are always especially eager to get the lowest mortgage rate possible. Here are three insights you can use as you work to secure a mortgage loan in Lexington and Central Kentucky.
In order to take advantage of today’s low interest rates, it’s important to demonstrate that you have the ability to repay your mortgage. When looking over your loan application, your lender will closely review your credit score and history, income history, savings and other financial factors.
Typically, the ideal borrower needs proof of stable income, preferably a tenure of two or more years at the same employer, a high FICO score and a verifiable down payment — plus cash reserves.
If you don’t fit the above description (and many borrowers don’t), it’s still possible to secure a loan that fits you and your financial goals. There are options for first-time buyers or those who don’t meet the ideal borrower standards.
Mortgage loans can be approved with as little as 3 percent down, but borrowers who put down more than the requirement may secure a lower interest rate. Similarly, if a borrower is approved for a $300,000 loan, but only takes out a loan for $250,000, they may receive a lower interest rate.
Why is this? When a buyer voluntarily takes out less than what they qualify for — either because they increase their down payment or select a less expensive home — it shows they are very serious about their financial responsibility. When your lender sees that you are doing everything you can to minimize your borrowing risk, they may offer a lower rate.
If you plan to shop for loans to get the best rate, wait until you’re ready to buy. When you apply for a mortgage, each lender will inquire about your credit. If these inquiries continue over a long period of time, your credit score could temporarily be lowered, impacting your interest rate once you do finalize a loan application. Experts recommend confining your mortgage shopping to less than 14 days to protect against this.
Even though our current housing market remains very strong, the period from list-to-close can be many weeks.
How can sellers protect their valuable equity in the home during that time? With a home warranty!
A warranty placed during the listing period can eliminate many out-of-pocket expenses sellers often experience from unexpected breakdowns and repairs to mechanical systems and appliances.
Seller coverage is free to the seller for up to six months when they commit to purchase coverage for the buyer at closing. If the property never closes, the seller owes nothing, even if claims were paid.
Coverage while your home is on the market. Mechanical system failures are covered during the listing period for up to six months. This means if something goes wrong, you can continue to concentrate your efforts on selling your home instead of worrying about repairs.
A powerful marketing tool. Research shows that 8 out of 10 buyers prefer to buy a warranted home. It’s added incentive that gives you the edge and sets your home apart from the competition.
Help prevent post-sale disputes. If an unexpected failure occurs in the home after the sale, the buyer will turn to the warranty company — not you — to solve the problem.
Avoid the worry and inconvenience of dealing with unexpected home repairs!
With a home warranty provided by Rector Hayden Realtors, you get reliable protection backed by great service. Want more information about our Home Warranty partner, HMS? See more on our website at: www.rhr.com/homewarrantyprogram
How does the appraisal process work and what influences it? If you’re selling your home, here are insights you can use to get a fair, informed appraisal for your property.
In short, an appraiser determines the current value of a property. They do this by performing a walk-through of the interior and exterior of the property and making note of any amenities such as a finished basement. They will also note health and safety code violations or other areas of concern. Most appraisers will utilize comparable home data (often referred to as comps) of nearby recent sales and neighborhood statistics to help determine a home’s value.
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Since appraisers are independent contractors (hired by the lender and typically billed back to the buyer), it’s important to understand that they have their own preferences and work styles. While they are on your property, it’s essential to allow them one to two hours to complete the inspection without interruption. However, there are things you can do to make the appraiser’s job easier — and help your home get an accurate valuation.
If a property appraises under the sales price, your options will then be:
Hooray, your property appraised at the sales price! All systems are go and you’re on your way to the closing table. Now the buyer’s financial and credit history will be verified, the lender will approve the home mortgage loan and the loan package will be submitted to the title company to prepare the documents for closing.
Be sure to check out our exclusive Market Report — with all the latest information on the local real estate market – compiled by the experts at Rector Hayden Realtors!
5 reasons to consider downsizing
According to the National Association of REALTORS® (NAR), nearly 70 percent of homeowners over the age of 65 have paid off their mortgage, allowing them more options than younger homeowners. With equity built up, the ability to sell for a profit is more likely for this demographic, who can then choose to spend their earnings however they choose.
Here are five reasons you should consider downsizing your home this year.
Buy a smaller home with cash
Some homeowners will find that by downsizing, they can earn enough to buy a less expensive home in cash, and end up mortgage-free in a new abode. NAR says this is a very common route for those nearing retirement. Last year, homeowners between ages 55 and 74 who sold their home for a median price of $250,000 went on to purchase a home that was worth a median price of around $215,000.
Less time and money spent on upkeep
Larger family homes can take up tens of hours a week to keep up and cost more to cool in the summer and heat in the winter. Those who raised families may find that the three-story home they needed in the past is impractical now. NAR’s data supports this, showing that the median size home purchased by those over the age of 55 was between 1,800 and 1,930 square feet. This is a major downsizing from the age group of 35-44 years old, whose median home purchase size was 2,600 square feet.
Embrace the now
Many homeowners will find that their four bedroom split level was great for raising a big family, but now they tend to use their home for weekend visitors and casual get-togethers. The right home for this new lifestyle may be an open floor plan that includes guest quarters and attached bathrooms instead of many smaller bedrooms and bathrooms. Last year, NAR found that homeowners over the age of 55 had a median of three bedrooms and two full bathrooms. Great rooms also tend to replace living rooms and dining rooms — and larger, eat-in kitchens are common to save space and keep the floor plan open.
Look forward
Last year, NAR reported that 13 percent of buyers over the age of 50 purchased senior-friendly homes or units in active senior communities. In many cases, then, this age group is not only planning for the “now,” they are also planning for the future. One-level homes with open floor plans, larger rooms and wider hallways prove to be great not only for entertaining guests, but they also will be wheelchair and senior accessible in the future.
Gain flexibility
Last, and perhaps most importantly, it’s finally your time to choose. By selling your home, you can regain the flexibility you gave up as you pursued your career and family aspirations. Many approaching retirement in Lexington and Central Kentucky are looking at a downtown condo and a summer rental out of state. Others are looking at townhomes with modern conveniences and a homeowner’s association that handles basic yard and sidewalk maintenance. Still others are wondering if it’s time to retire full-time to the lake home that has been a precious summer escape. Now, unlike any time previously, you can make the choice that best suits you, and no one else!
Great gifts for new homeowners
Here are some thoughtful and easy gift ideas for you to consider if you know young or first-time homebuyers purchasing in Lexington or Central Kentucky (or…maybe you ARE one and could benefit from some gift ideas to share with generous friends and relatives!).
Moving day pizza or local restaurant gift cards
Whether you’ll be helping on moving day or not, consider sending a pizza delivery to the new abode on the night the buyers will be moving in. While a surprise would be fun, it’s best to let them know in advance so they can plan for it. If you’re delivering pizza or dinner in person, bring a set of paper plates and napkins (and maybe a chilled bottle of champagne) so they create a memory they’ll never forget.
An alternative to this plan is to give a gift card to a new local restaurant they can try out in their first few days or weeks in their new area. Check out reviews in advance so you know you’re sending them somewhere great!
Hardware store gift cards
Even the most perfect new house will have a few idiosyncrasies, and you can ease a homebuyer’s burden by giving them a credit to a local hardware store. Big-box stores like Lowe’s and Home Depot are perfect for handy homeowners who have big projects they want to complete.
For those who may need a bit more guidance and who will be tackling smaller projects, a local hardware store gift card works well. If they need a photo-hanging kit, the section at their local Ace Hardware may be less intimidating than the full aisle of options at a larger hardware store.
Address label changes
Buyers often overlook the need for new address labels or an address stamp so this is a great idea they won’t be expecting. Online sites like Zazzle and Shutterfly have dozens of affordable designs available.
Plants
Most homeowners have plenty of picture frames from their previous residence, but they may not have indoor plants to jazz up the décor. Consider the size of their new home and their style as you select planters and plants.
Sheets, linens and towels
Linens of all kinds — bed sheets, pillow cases, comforters or quilts — will always be appreciated for new bedrooms. Extra towels, whether for the bathroom or kitchen, are also a great gift. Consider giving a gift receipt so they can exchange for the colors or types they prefer.
Homeowner essentials
When you’ve lived in an 800-square-foot apartment, extension cords may seem like a laughable item. Homeowners, on the other hand, will know that items like extension cords, power strips, extra light bulbs, cleaning solutions and even duct tape are must-have homeowner essentials. Deliver a small package of these items within one week of their move.
Our exclusive Market Report has all the latest information on the local real estate market – compiled by the experts at Rector Hayden Realtors!
The holidays are a less popular time to buy a home, so you may see fewer buyers at open houses. Don’t assume this means you are without competition – holiday buyers are more dedicated to getting to the closing table, and multiple offers are still possible due to limited inventory in many areas. Be prepared to move quickly on a home that meets your criteria.
You might think that people selling over the holidays may be extremely motivated to move and willing to accept an offer for well under asking price. While Scrooge would approve of this philosophy, most sellers simply aren’t that desperate. To avoid losing a home you love, make sure your initial bid is competitive.
It can be difficult to slow down during the holidays, but in our fast-moving market, you’ll need to work around seller schedules. Whether you find a house through online searches or your Rector Hayden Agent sends a hidden gem your way, your goal should be to see it in person as soon as possible.
If you’re hoping to get a head start on buying before the hectic spring market arrives, start now! Contact your Rector Hayden Agent today to get started or browse our newest listings at www.RectorHayden.com!
If you are planning on listing your home for sale, make sure that you don’t overlook the condition of your kitchen. A recent article on realtor.com listed “7 Signs Your Kitchen Is Way Overdue for a Renovation,” in which they warned:
“Dated kitchens—just like bathrooms—are a major barrier for resale. Buyers want modern amenities and styling, and most aren’t interested in renovating post-purchase.”
Kitchen remodels can be pricey, with many complete remodels costing $20,000 or more. But not every kitchen needs a full remodel. There are many smaller projects that will help buyers see themselves trying their favorite Pinterest recipe in your home!
Here are a couple of project ideas that, if you’re handy or know someone who is, could end up boosting your home’s value without breaking the bank:
If you decide to complete a full remodel of your outdated kitchen, you can expect a 67% return on a $30,000 upgrade (the national median cost). The benefits of a kitchen remodel aren’t purely financial, according to Houselogic:
“Eighty-two percent of homeowners said their updated kitchen gave them a greater desire to be at home, and 95% were happy or satisfied with the result.”
Kitchens and bathrooms are often make or break for buyers when touring a home or searching through photo galleries online.
posted from Keeping Current Matters – November 23, 2016