Somethings in life take a little preparation. Like going on a first date, decorating for the holidays, and applying for a mortgage. Imagine the outcome if you did zero prep work for the first two occasions? So why do so many people miss the obvious fact that applying for a mortgage has its own set of behind-the-scenes preparations? Yes, you could find a house and connect to a mortgage company on the spur of the moment act of bravado. But are you sure about what the lender will tell you? Do you already…
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Home Buying Process
11 Tips For Millennial First Time Buyers. My #CreditChat with @Experian
I was recently invited by Experian to attend their #CreditChat on Twitter to answers some of the top burning questions for the Millenial First Time Home Buyers. Here are the 11 questions and my answers. Q1: What are some important things millennials should keep in mind before they begin the homebuying process? A1: If you think your job is extremely mobile and/or your income uncertain, you shouldn't be buying a home yet. If renting offers the flexibility like dating, home buying requires the commitment of being married. So, home buying is as much a…
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How to Calculate Cash Flow When Buying an Investment Property
Whether you're a seasoned or new investor, calculating cash flow on a potential rental property is a critical part of your analysis before buying. You need to make sure you crunch the numbers completely before deciding to invest your money and getting the cash flow calculation right might be the best investment you can make. Basic Ingredients of Cash Flow First, gather the property's current and potential rental income. Whether you're buying one unit (single family home) or a multi-unit property, find out what the current rental income is and compare it to…
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Here’s What You Need to Know About a Condo Loan
On the surface, everything looks the same when you apply for a mortgage to purchase a condominium. You get pre-approved for the mortgage before you ever make an offer on a home so you know your purchase price range and maximum mortgage amount. Once you have an accepted offer, you take all the steps to comply with your purchase agreement like making your initial deposit into escrow, locking in your interest rate and paying for the appraisal. Although you know your new home comes with a monthly Homeowners Association dues payment, that's got…
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What Exactly Do You Get Pre-Approved For?
You're finally ready to become a homeowner, and you want to do everything right in the process. According to your research, realtor, family, and friends - the first step is getting pre-approved by a mortgage lender. The problem is, no one can explain what exactly 'pre-approved' means. A mortgage pre-approval approves you for only one number and that is NOT the purchase price. A loan pre-approval is not a loan officer doing a quick review of your information and generating a maximum purchase price that you can afford. In reality, a pre-approval is…
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My Offer for a Home Purchase Is Accepted! Now What?
You finally get the call from your Realtor and hear the words “They accepted your offer!” It’s been a long, hard road to find a home you love, and harder still for a seller to agree to let YOU be their buyer. Now you’ve crossed this hurdle, but you’re not sure what happens next. Does your Realtor take it from here or your loan officer? Are you supposed to do anything? The answer is - it’s a team effort -- the team of professionals you assembled before making offers, and that includes you.…
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The Rest of the Four C’s: Credit, Capital, and Collateral
To understand how the underwriter looks at your information, you need a detailed explanation of the remaining three C’s. Each C covers a lot of information, and the impact of government regulations push and pulls all of it outside the boundaries of common sense. Looking at the process may shed light on the underwriter's decision process. This blog post is second in the series of two blog posts. Read the first here about the 1st C - Capacity Credit is the most well known of these three categories, and the least understood. A…
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Borrowing Down Payment from 401k or IRA for Home Purchase
Securing a down payment is often cited as the biggest challenge for buying a home - both for First Time Home Buyers and Move-up Buyers. To overcome these challenges, you can consider borrowing from retirement funds - 401k and IRA. Here is how it works. Borrowing Against 401k for Down Payment How Much Can I Borrow From My 401k? You can borrow 50% of your vested balance or $50,000 whichever is lower. How Do I Pay It Back? The repayment term is usually between 5 and 15 years. The payment which includes…
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Can I Buy A Home Before Selling My Current Home?
If you have lived in your current home for a few years and thinking of moving up, i.e. buying a bigger and better home, the question that you are most likely thinking is - "Can I buy that home before selling my current home?" Advantages of Selling before Buying: You won't have to qualify for two mortgages at the same time. You will have more cash to put down on the new home (assuming you have built some equity in your current home). Since you would know exactly how much you netted from…
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Get Your Offer Accepted in a Seller’s Market
Even with a minor slow down in home sales during recent months, desirable properties are still getting multiple offers. Make no mistake, we are still very much in a seller's market. Available housing inventory ranges from low to non-existent in many neighborhoods. With low mortgage rates still pervasive and rapidly increasing home values - buyers and soon-to-be sellers are eagerly hitting the market in search of a home. It might be their first home or it might be a long awaited move-up home purchase, regardless the buyers are ready and waiting for any…
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