For most people, purchasing a home is the single largest investment they will ever make. And while many are well-versed in paying a down payment, mortgage and insurance, a lot of homeowners are caught by surprise when faced with another expensive part of owning a home: major repairs. Owning a home comes with the inevitability of things wearing down over time or breaking suddenly, and rather than simply calling the landlord, the homeowner is responsible for paying the costs. If you own a home or are thinking about buying one, these tips can help you to prepare for the major home repairs that will come your way:
No matter who you are, paying for home repairs ideally will not land you up to your ears in debt. You may be tempted to pull out the credit card or delay paying other hefty bills (e.g., mortgage, student loans, etc.), but this can get you into a lot of financial trouble. The best way to handle major home repairs is to be prepared when they happen. Start an emergency fund that is dedicated solely to covering the costs of such repairs. This can either be done through a savings account with your bank or by keeping an old-school cash envelope at home.
Many experts suggest setting aside at least 1 percent of your home’s value each year for repairs and maintenance. For instance, if your home is worth $660,000, you would put $6,600 in your emergency fund every year. Such savings can quickly add up, leaving you in a better position to cover the cost of that roof replacement or plumbing disaster.
Refinancing Your Home
Another option for paying for a major repair is refinancing your home, which allows you to take advantage of your home’s equity. With cash out refinancing you can get a new loan for your home that has a higher balance. Then, you receive the difference between the two loans in cash. Thus, you can then use the cash to cover the cost of the repair. It’s also worth noting that the new loan could end up coming with more favorable terms than the previous one, making it a win-win situation. Here at MAE Capital we can walk you through this process.
Taking Out a Personal Loan
If you don’t have an emergency fund built up or refinancing isn’t an option, you could explore various types of personal loans out there. These days, it’s easy to apply online for a personal loan. Moreover, some loans even start at under 4 percent interest, and that’s much lower than using a credit card.
Selecting a Contractor
The contractor you use for each home repair can make a big difference in the time and money you spend. For example, if you choose a contractor simply because they offer their services for the lowest price, you could end up with shoddy work; this means you would then have to go through a lengthy legal process to get your money back or pay a different contractor to come and fix the bad repair.
To avoid a situation like this, be sure to ask around for referrals and interview several candidates. Check the licensing and insurance of each candidate, look into their job history, and get estimates for the work needed. Then, you will be ready to compare bids and qualifications to determine which contractor is best for the project. Furthermore, you will want to be sure to get a detailed contract in writing before any work has begun.
Homeownership comes with the costs of major home repairs, and it will save you a lot of stress and financial trouble if you have a plan when the day comes. Start contributing to an emergency fund today. Look into cash-out refinancing and personal loans to see if those options will work best for your situation. Finally, be diligent when choosing a contractor for each project.
Article by: Natalie Jones
Photo Credit: Pexels
Have you been thinking about refinancing your home and not sure if you want to go through the hassle? Not sure what to expect or afraid you won’t qualify or just don’t know where to start? These questions are the typical questions Homeowners have today. But if you think about it, how long will it take out of your day to make that simple phone call or complete a refinance questionnaire? The answer is about 10 minutes, that’s shorter than a Geico phone call and could save you far more money. We know you don’t this everyday so we try our best to make it as smooth as possible for you and answer all the questions you have. So let’s to answer some of your questions in this post.
Let’s start by seeing what your existing interest rate is on your property. Then let’s take a look at what your home is worth in today’s marketplace, we can run that evaluation in about a minute. We will also want to know what type of loan you currently have on your property such as a Conventional loan, FHA loan, VA loan or some alternate type of loan to evaluate if you are paying mortgage insurance or not. The government has lowered the FHA monthly mortgage insurance rates by .5% in 2015 so you might get a double savings. So a typical FHA loan that was taken out in 2014 with an interest rate of 4 % with a loan balance of $250,000 would be a saving of $140 just on the mortgage insurance savings a month and all you would have to provide is a current mortgage statement, your home owner’s insurance policy, and a copy of your Note. That is all you would need, no income verification, no bank account verification, no appraisal. This is called an FHA Streamline Refinance by clicking on it will take you to the detail page. The FHA Streamline loan only works when you have an existing FHA loan. If you are a veteran, and have a VA loan on your home, the VA has a similar program called an Interest Rate Reduction Refinance Loan or IRRRL. If you have a FNMA or FHLMC loan (a conventional 30 year fixed) the similar type of program would be the HARP program. The HARP program or the Home Affordable Refinance Program is really designed for those home owners that owe more than their home is worth and wish to lower their monthly payments. If you have equity in your home with a conventional loan on it, you would need to fully qualify again for a new loan.
Once we determine that a refinance is the right avenue for you we will continue by completing a simple refinance form online or we will talk and get some basic information and formulate the best possible scenarios for you. We will tell you if it is worth your time to do a refinance before you have to gather anything. The information you send us, either online or over the phone, is secure and will not be used for spam or any other kind of mass marketing. Refinancing can save you thousands of dollars a year so don’t take this lightly as we don’t and we do our very best to formulate the very best loan scenario for your financial situation that will save you the most over the long run.
What do you need? If we are not doing a FHA Streamline you will need to gather your Federal income taxes for the last 2 years and W2s, your current mortgage statement, your home owners insurance declaration page, bank statements for the last 2 months, and your last 30 days of pay statements. Will do the rest for you, like open escrow, order an appraisal and process the paperwork. It does not matter who your existing lender is, we are completely refinancing that old loan and you will have new mortgage company that you will make your payments to. You might ask if it would be better to go to your existing lender to refinance your home, and in most cases it is no better and in some cases, I have seen the existing lender charge more and you end up with a slightly higher interest rate. It is always good to get a few quotes, but make sure you talk with someone who can actually give you an accurate quote. The interest rate on your new loan is based on several variables such as equity, credit score, loan program, and whether you are taking cash out to pay off a second mortgage or other debt. So it is always best to have the rate calculated for you based on your situation. Lenders and Brokers all have to go to the same places to get the rates for you, so rates should not vary that much from lender to lender, but the fees charged can.
So what happens when once you decided to start the process? Once you have supplied the paperwork we have requested, we are tasked with providing you with disclosures that spell out all the charges and the payment on the new loan. We will go to an Escrow or Title Company and order a preliminary title report to make sure there are no liens on the property that you did not know of. We will order the appraisal (if necessary). We will do all the necessary verifications of your employment, credit, and assets (if necessary). Once we have everything back we submit the file to underwriting. When the loan is approved we draw the loan documents and send them to the Escrow or Title Company and have you sign them. Most of the time we can arrange that you sign in our offices, if that is more convenient, or we can have a notary come to your home, or you can go to the Escrow or Title Company to sign them. Once you sign the documents, they are set back to the lender to be reviewed. Then the new loan is funded and the old loan is paid off through the Escrow. You new first payment will be the following month.
What will this cost me? In most cases we make the new loan where you have no out-of pocket expenses. This is done either within the interest rate you decide to take or included in the loan amount or both. This is done upfront before you make a decision to refinance and is part of the analysis we do to make sure it will be a good investment to refinance. A general rule I like to follow is to find out how long you plan on being in the home and fit the loan that plan. An example would be if it costs $5,000 to refinance, either included in the loan or paid in cash, and you save $250 a month in your payment, it will take 20 months to recoup that amount to make it worth the refinance. But if you plan on selling your home in that time frame it is not worth it. On a FHA Streamline the loan amount can’t be raised so the analysis is easy, if you save money it is worth it to do.
So how do you get started? Well that is easy simply give us a call, it is free, and could save your thousands of dollars. Our phone number is (916) 672-6130 or Click Here and fill in the simple questions and we will contact you. We can only refinance California properties as that is where we are licensed to do business.
FHA Loans were born from the great depression in 1933 when the Federal Housing Administration was established. The idea of the Government insuring a Real Estate loan, at the time, was groundbreaking. In today’s world we expect the Government to step in and try to fix things when the economy is sluggish or depressed. Back then our government was far less apart of the ordinary citizen’s life. So when the private sector was approached by the Government to insure mortgages that were traditionally insured privately by large down payments was a ground breaking concept. At the time Banks and Brokers were the only way to get a home loan and they required that a potential home buyer put 25-50% or more down to buy a home. So when the Government said they would insure mortgages up to 95% of the value of the home, you can imagine how this changed the way Real Estate Loans were originated. It was designed to stimulate housing growth to get the country out of the grips of the Great Depression. It worked, along with a whole new age of people relying on the government to help them when things were tough. Out of the Great Depression we also got a welfare system, unemployment insurance that the government collected from employers to help with displaced workers, and a whole litany of other programs that expanded the scope of the Government. The Federal Housing Administration (FHA) was designed to be a short-term way to get the housing markets stimulated to get out America out of the depression. As with most Government Agencies the program still exists today, and you can take full advantage of it.
Today FHA loans are alive and well and are used still today to get people into homes with a small down payment. FHA loans are still a viable loan for those that have a small amount of money to purchase a home. The way an FHA loan works is very similar to Conventional Loans in that a potential borrower must qualify for the loan with their income and current credit. When we say "qualify" there are several factors that a lender must review in order for a client to “qualify” for any loan. These factors are but not limited to having shown the ability to handle credit or in today’s word have a credit score that meets the criteria of an FHA loan (550 or better). Generally speaking FHA loans are more accepting of psat credit issues than that of it’s Conventional counterpart. If a borrower has a low credit score due to circumstances out his or her control and has shown that they are trying to take care of it and that is the only factor with regards to their financial situation they generally can get approved for a FHA Loan. In order to qualify for an FHA loan a potential borrower must have a two year history of working that could be multiple jobs or a combination of school and a job and must be able to show that their income will be stable enough to maintain the mortgage payment. Next, a borrower has to be able to prove they have enough money for the 3.5% down payment. This money can come from savings or can be a gift from a relative or a close family friend, or an approved Down Payment Assistance Program. At MAE Capital Mortgage we can do this for you over the phone.
FHA loans are a federally insured loan, but what exactly does that mean? Simply put there are two payments to the insurance fund a borrower will have to make; One the upfront insurance is 1.75% of the loan amount (Sales Price minus the 3.5% down payment requirement) this is actually added to the loan so you don’t have to come out of pocket for this; Two the monthly payment of the mortgage insurance is a small percentage of the Loan amount every month .(5%). This insurance makes FHA loans more appealing to lenders and thus lenders have more flexible underwriting guidelines and can get more people into homes utilizing the FHA Loan.
When talking about flexible Underwriting guidelines your eyes probably just rolled to the back of your head. Not to worry I am here to help break it down to simple bullet points that you may not have heard of before. Being evaluated for loan approval seems daunting but that is why we have a team of folks to walk you through the whole process. Our highly qualified loan originators will walk you through the process. The Loan Officer will gather your pay-stubs, tax returns, bank statements and W2’s and they will do the analysis for you. Your Loan Officer will check your credit, check your debt-to-income ratio, and make sure you have enough money verified to close the transaction. The Loan Officer’s job is to paint your financial picture with your financial information and present it to the underwriter, who will approve your loan. Our Loan Officers do this every day, multiple times, so they are experts at what it takes to get an FHA loan approved, so when you are looking for expert advice and guidance please let us at MAE Capital Mortgage walk you through this process.
The benefits of using an FHA Loan are:
Now that we have explored the history and the benefits of using an FHA loan you may ask: “How do I apply for an FHA Loan?” At MAE Capital Real Estate and Loan, we have over 35 years’ experience working FHA loans, so we should be your logical choice, not to mention our interest rates are better than the rest. Simply click on this link and you can start the process or call us at 916-672-6130 and we can do it for your over the phone.
When you’re ready to sell your home, you may think about upgrades that will attract buyers. As nice as it is to have all the best features, what’s even more important is for your home to be clean, clutter-free, and staged for wide appeal. This advice may sound obvious, but it’s a process that’s often easier said than done. That’s why we’re here to walk you through prepping your home for sale so it's easier and affordable.
Why Stage Your Home?
A home is more than just a structure — it’s a place that reflects your style and feels like you. The problem is that you want potential buyers to walk in and feel like they could be at home there. Staging is the process that removes personal items and clutter while highlighting the home’s best features. When you stage your home right, the result is a boost in the number of buyers who want to see more — and who will pay top dollar.
Start with a Plan
The best plan of action is to tackle it one room at a time, and maybe even use a guide so you don’t overlook anything. Make sure you have all the supplies you need too, like boxes, tape, markers for labeling, and trash bags. This is the perfect time to sort through your belongings so you don’t move anything you no longer need or use. In the process, you will naturally end up packing, donating, or trashing some of the clutter you need to get rid of.
Cut the Clutter
You may think of clutter as junk mail lying on the counter, but for home buyers, clutter is really anything that makes a space look crowded, small, or that detracts from it in any way. The Huffington Post explains that this is why decluttering to stage your home should be all about taking a less is more approach. Besides the obvious things (like the mail on the counter), pay special attention to decluttering these areas:
We tend to focus on the wide-open spaces and surfaces when decluttering, but buyers will also look in, under, and around just about everything. This is why Apartment Therapy recommends cleaning all storage spaces, including closets, shelves, sheds, and cabinets. Everyone wants lots of storage space, and keeping these areas neat and clutter-free is how you give the impression that there is plenty of space available.
Everyone wants their home to be livable, and that often means having lots of furniture for seating and storage. The problem is that buyers are going to notice how large and open a space feels — not how much furniture it can hold. This is why you may need to remove some furniture so that your home has an open and airy vibe. The furniture you do leave should be set up the way it would be used and around a focal point. An inexpensive idea from Forbes is to set up a bar or dining room table for entertaining so buyers will picture having their own meals there.
Decor Should be Tasteful, Not Personal
The great thing about staging is that when you focus on the less is more perspective, you realize that you can achieve this goal without spending a lot of money. After all, you’re ultimately taking away more than you’re adding. For example, you can free up wall space by removing personal items like family photos. Then all you really need to add back is tasteful art and mirrors to give the room a lighter and larger feel.
Spruce Up Outdoors
Decluttering and depersonalizing inside is necessary, but don’t forget about outdoor spaces. The outside of your home is where first impressions are made. Fortunately, you can get curb appeal by doing a little yard work and a few easy, inexpensive DIY projects.
These projects are seemingly small, but sometimes the smallest changes can make the biggest difference. Getting your home ready to sell requires a whole different mindset. This is why it’s all about decluttering and lightening up so buyers see its full potential.
For more information of selling a house click here.Article by: Natalie Jones
Photo credit: Pixabay
If you have never purchased a home before you are reading the right article. This blog will give you some tips and show you the transaction flow of a typical Real Estate transaction. These are the steps and the tips that will help you move smoothly through the process.
This process is the same for every house you will purchase. It looks an sounds complicated but your team at MAE Capital Real Estate and Loan we will walk you though the process and tell you what you have to do and when you have to do it by. We try really hard to make a complicated process fairly easy. We look forward to assisting you with your home buying needs. Call us today at 916-672-6130 or click here to have one of our team members call you.
Buying a house is a goal for many people in the United States, with some 79 percent of those surveyed agreeing that homeownership is part of the American dream. There’s no doubt that this is a monumental life event — and the hefty financial investment it requires reflects its significance. If you are purchasing real estate, you want to make sure the property you receive is in great condition. To assure this, part of the buying process involves determining the type of repairs the structure requires. You can even ask the seller to cover certain maintenance works. Find out how it works below.
Review the Disclosure Documentation
So-called “disclosure laws” require the seller to reveal problems related to the property, such as a leaky roof. This involves the seller filling out template documents answering a series of yes-or-no questions. Topics covered include former renovations and home improvements, as well as any past defects, property line disputes, and pest infestations. This list of disclosure laws by state will help you determine what the paperwork in your area should cover.
Check the disclosure forms against city building and zoning reports for the property. If the seller completed improvements without the proper permit or municipal approval, for example, then these may not have been done according to health and safety codes. There are also financial aspects to review; for instance, if the home was repossessed in bankruptcy proceedings in the past, you want to be sure the seller (and not the bank) is the rightful owner according to the property title.
Schedule a Home Inspection
A home inspection is needed to check for additional issues. Hire a third-party inspector to review diverse property components, including the roof and HVAC system. They will produce a written report detailing any red flags, such as mold in the basement. As the buyer, you are responsible for bearing the costs of a home inspection. According to HomeAdvisor, the average cost is $278 to $390 — but this is just for the report. If problems arise, you also need to factor in repairs. A new furnace can easily cost over $13,000, for example.
There are some renovations that you should simply resign yourself to covering as the buyer. Cosmetic issues, for example, are not something you should demand the seller cover. If the deck needs staining, kitchen tiles are cracked, or paint is nicked, handle these improvements yourself once you've moved in. Outdoor landscaping and fence repairs are also something you can add to your own “to do” list. However, there are some elements that you can ask the seller to cover, as discussed in the next section.
Negotiate with the Seller on Select Repairs
Major home inspection items to bring up with the seller include water drainage problems, wildlife infestations, elevated radon levels, and significant plumbing impediments that interfere with the home's day-to-day use. This list from Clever includes more such points, like lead paint and a leaking roof. When these problems turn up, you should ask the seller to cover them. If the seller is to cover improvements, this needs to be confirmed in writing.
When negotiating costs, you can ask the seller to cover repairs up front or request that they reduced the home's sales price, leaving you with the extra funds needed to undertake repairs. This latter option has the advantage of giving you full agency over who does the work. Any larger issues that affect the house's overall safety — such as asbestos removal — should be a priority and addressed before you move in.
The above pointers will help you determine which problems exist with a property before you have invested money in it. Unfortunately, a lack of agreement between buyer and seller regarding repairs can lead to a deal falling through. Even major problems in the home inspection may be grounds to keep looking. Don’t get discouraged: You want your dream home to be safe for you and your family. This guide assures your peace of mind. Please fine more information at https://www.maecapital.com/RealEstate or call us and we can help you with all aspects of buying a home.Article by: Natalie Jones
It is summer and the home improvement projects are heating up. Weather you are replacing your kitchen or refinancing your home to a lower interest rate this summer seems to be the time to get these projects done. The economy is doing great and you are pretty secure with your job, or jobs if you are a 2-income family. With the economy strong and employment being as strong as it is you should feel comfortable with your financial situation. You may have projects around the house that need your attention that you have been putting off due to finances or time. It’s probably is not a better time to get started than now. If you need to do major projects like a kitchen or bathrooms or even adding on to the square footage and you need money to do it, you probably have the equity in your house or the money your bank account to get this done now.
If you have decided to remodel your existing home, you will not only be making your home more pleasant to live in, but you will be increasing the value of your home. If you remodel your kitchen your home could go up 1.5 times the cost to remodel to remodel. For example, if you pay $30,000 to remodel your kitchen your home would probably increase in value by $45,000 depending on your area, of course. If you plan on selling after remodeling you will make your home more desirable and will sell on the upper end of the market. This holds true with bathrooms as well.
If you re-do you front yard this too will increase the value of your home as it would be more desirable to potential buyers as it is the first part of your home a buyer will see. A fresh coat of paint makes the curb appeal greater as well. The back yard is not as important to potential home buyers as it is the last thing people see when looking at homes. Also, most home buyers will want to put their own personal touch on the backyard anyway. So, if you are looking to do projects that increase value of your home do the back yard last. But if you are living in your “Forever Home” a backyard remodel may be just what your family needs.
Anything you do to your home to make your space more appealing to you is invaluable as this is where you live every day. In this Real Estate Market know that the money you put into your home will probably stay in your home, at least for the next several years. I see no major slow down in the Real Estate Market, as far as values goes, for the next several years. Next Year is an election year and typically the Real Estate Market slows down in anticipation of the what the next administration will do to their employment situation. I will not predict the outcome of this election, but whoever is elected you will have at least a year after they are elected to screw up the economy, or keep the same course of the current economy. Whatever the outcome there are at least 2 years of a good Real Estate Market.
In addition to a strong Real Estate Market Interest Rates have remained low. So, if you need money to remodel your home now is the time to borrow the money to do it. The neat thing about a remodel is that your home will generally increase by at least the cost of the remodel and in most cases the value will increase by even more than the cost of a remodel. With interest rates as low as they are you might not even raise your monthly payment at all by borrowing the costs of the remodel. How is that possible you ask? If you bought your home originally with an FHA loan and have a 4.875% rate say 4 years ago the value of your home may have increased to the point where you do not require Mortgage Insurance so when you refinance today with a conventional Loan for say 4.125% with no mortgage insurance the additional money you took may actually keep the payment about the same as it was with your old loan.
Remodeling your home or just doing simple improvements will not only make your home a better place for you to reside it will increase the value of your home. Coupled with a low interest rate environment your home, if you were to sell it, would probably surprise you in how much it would sell for. Or if you have no desire to sell but to make your place more livable for you and your family you will have peace of mind that every dollar you put into your home is still there in the equity of your home. If you have questions or wish to see these numbers in action, we are here to help. If you are simply looking to refinance to a lower interest rate, please give us a call we would love the opportunity to assist you. One of our Loan Officers or Realtors can answer your questions today at www.maecapital.com or call at 916-672-6130
The Real Estate business has been done the same way for decades and the only thing that has changed is how we deliver information to our clients. The internet has made the business easier without a doubt, in the way we can see homes for sale and do research on neighborhoods and schools and crimes in specific areas. The invention of digital documents has helped with signatures and the delivery of necessary disclosures to our clients. However, the core business model has not changed for most Real Estate firms. That model is to market to your clients and potential clients for their business, ascertain what they wish to do buy or sell, then have your clients contact a lender for pre-approval for a mortgage. Then once the Agent knows how much their client can afford, they then start searching the MLS for homes in their client’s desired area and price range. Or for listings they determine how much they can afford for their next home, as to not sell a home with no possibility of their client buying another one, in most cases. If they are working with a home buyer or when the seller becomes a home buyer upon the sale of their existing home, they then find properties in the area they wish to be in knowing what they qualify for from the client’s lender. Once a property has been identified as a property their client wishes to make an offer on the Agent then contacts the lender for a letter of qualification to be submitted with their offer to purchase. When the offer is accepted the documentation has to be disseminated to the lender and the Escrow/Title Company and the lender. Then the Agent arranges inspections and the lender sends out disclosures and orders the appraisal the Escrow/Title company orders the preliminary title report. When the documentation comes in it has to be shared with all involved. The Agent will periodically check with the lender for progress reports, but has no say at all in the loan, and the Loan Officer will give updates to all but has no say in the Real Estate transaction at all and may not know if things have changed with the disposition of the property and or contract and inspections. When the lender has completed their process, they send the legal Loan Documents to the Escrow/Title Company for the buyer and seller to sign. After everyone has signed and all the monies have been accounted for the loan funds the transaction closes and all the service providers get paid. This is the way Real Estate Transaction have been done since the beginning of modern times.
When you read this transaction flow you see there a several people and companies involved in making a Real Estate transaction close. When you have that many people, they all need to be paid and that is why it is so expensive to buy or sell a house. When you sell a house, you will pay an Agent or Agents, I most cases, 5 or 6% of the sales price and that is well worth not having the liability as a seller alone in the transaction. A highly qualified Agent will make that money back in many ways such as piece of mind that all the laws of selling your home are being met and all the required disclosures and inspections have been completed and done correctly. In many cases a good agent will price your home and market your home so that you get the highest and best price for your home thus making you more money than you probably could have trying to sell it on your own or using a cut rate internet real estate firm where you have to do most of the work. When you are the home buyer in a Real Estate transaction your Agent is paid by the seller out of the 5-6% commission that has been pre-set when the listing was originally taken. The commission to a buyer’s Agent is usually split between the listing Agent and the Selling Agent (the Agent representing the buyer). Why this is important I will get to in a bit.
When you work with a lender, in a traditional Real Estate Transaction, they are independent of the Real Estate Company and they get paid from the fees charged and rebates from the Interest rate on the loan. This may be confusing but usually a lender will make between 2 and 3% of the loan amount to keep it simple. Again, I will tie this in as to the importance of who gets paid what later. Remember in the transaction that the lender orders all their own disclosures orders the appraisal and has to communicate to all the Agents and title company. The lender also needs most of the documents that the Agent has signed such as the contract and any inspections the Agents have had done all the while keeping the Escrow/Title company informed of the progress.
As you can see the typical Real Estate Transaction still has many inefficiencies and redundancies in the typical transaction. I offer, as a solution to efficiency, to merge some of these functions together to make the transaction smoother and more cost efficient. I would merge the Real Estate and the Loan Functions together in order to be more transparent with the information in the transaction. This would cut time frames down and the client would only have to make one phone call to get the status of the loan and the Real Estate. This would cut out any miscommunications with the inspections as all eyes could offer advice as the inspections come in. Not to mention, prior to the contract being written the Agent and the Loan Officer are under the same roof so an efficient plan can be put together to benefit the buyer in an approach to making an offer that will get the buyer the best deal possible coupled with the best financing. If the Agent also is representing the seller and the buyer and the loan things can really be done efficiently.
Picture this, as a home buyer, you make one call to a company and you get your home loan pre-approved and you are looking at houses that same day. Then when you make an offer on a home your Agent and Loan officer already have made a strategic plan for you in the office they both work in, or they are one and the same person. When you make the offer there is no worry about the financing as your Agent has seen everything the Loan Officer has and vise versa. In addition, your loan officer is not tied to one lender he or she can find the best financing sources across the country saving you even more money. The Loan officer can offer tips with financing to negotiate a better price on the home. Some of the commission from the sale, that we talked about earlier, can be used to buy down the loan interest rate and fees. Remember the 5-6% commission the seller splits with the buyer’s Agent and the Seller’s Agent, well some of that commission can be used to get you a lower interest rate thus a lower payment. The additional monies can be used to lower your loan costs as well. If you have the same office collecting 5-6% on both the loan and the Real Estate Commission the company can afford to give back money so that you as a buyer get a lower interest rate and a lower monthly payment than you would have got buy using an Agent from separate firm as the Loan Officer. The trading of information will also speed up the transaction and make it far more efficient. As a Home buyer you would only have to meet at one office or talk to the same office to get all your information and within the office the loan and the Real Estate transaction are being completed at the same time under the exact terms of the contract with both the Agent and the loan officer working together and in some cases if the Agent is a Broker he or she can do both the Real Estate and the Loan.An Example will look like this: A First time home buyer contacts the Real Estate and Loan Firm and wants to buy a house. The Agent prequalifies the buyer over the phone or computer and gives them a list of items they need to become fully approved for the home loan. The Agent can run credit and run the information through automated underwriting and receive the approval with the client still on the phone. The Agent then can determine from the client where they wish to live and provide current listings in that area for the client to view. The client can ask to see specific houses and the Agent can then arrange to show them with the sellers. Knowing the client needs and financing options the Agent can make an offer that is the best for the client and provide the approval to the seller with the offer thus making the client's offer more attractive than other offers they may have received. The client throughout the process only needs to make one call as does the Agent. The agent can get the Loan information and the Real Estate information at the same time. On the other side of the transaction the listing Agent only needs to make one call to get everything they need to keep the seller informed. The Buyer's Agent finds the best lender in the country for their client getting them the lowest interest rate possible as well as contributing to their closing costs lowering their rate and monthly payment. The buyer gets into their house with very little running around and stress of the transaction. Everyone wins.
This may sound like utopia, but it is reality here at MAE Capital Real Estate and Loan. We have perfected this system and we are saving our client thousands of dollars when we represent them as their Realtor and their Lender. We can save home sellers thousands as well when we represent them as the seller of their home and find their next home for them and do the financing. The efficiency in bundling these services in incredible and saves our clients thousands of dollars and countless hours tracking down their Agents and Loan Officer. If you would like to see this in action, please give us a call at 916-672-6130 or click here to email us. We are looking forward to showing you this incredible modern system.
Here is an interesting topic as I fit the category myself. Hopefully once you have made it to the ripe old age of 50 you still have good health and are financially grounded. Financially grounded means that you have taken the proper steps for saving for retirement that is looming, in the not too distant future. This also includes college for you kids and any future weddings or large expenses that are to be incurred. You may not be rich by any stretch, but you have done what it takes for your family to be secure. It is time to protect your assets.
So, lets take a look at your home, it may only be the one piece of real estate you have ever owned and you have paid it down substantially over the years. Now you hear the commercials advertising using your equity for things like college and weddings and large family expenses. Is this prudent or a play from mortgage companies to sell you additional financing? Having been in the Mortgage Business for the last 35 years I can tell you it is a play for your business. However, if you need the money and it is the only way then you do have it at your disposal. My advice would be, even though I am in the business of selling you that loan, is to really evaluate your finances and see if there are other ways to get the funds you need. I say this as you home is your family’s shelter the place where your kids grew up and to put additional financing on it may put it in jeopardy.
How could financing a home when I am over 50 jeopardize my home, I have a good job? This is a good question and can be answered by those that have come before you. 50 doesn’t mean that you are not capable of working or staring at your death bed what it does mean is that you no longer will have the energy to keep up with 20 and 30 somethings in the work force. Large employers have traditionally let go people over 50 to make room for the younger more energetic workers. I am not saying this will happen to you but to guard what you have attained in life is important. If something like a loss of a job or an illness were to happen it is a lot harder to find a new job so protecting your assets is super important, even more so when you are over 50.
In addition, if you have been in the private work force your entire career you may not have built the retirement that you may need to have when it comes time to retirement. Your home can be used to assist in retirement if the is the case. When you are over 62 and have equity in your home you can utilize a reverse mortgage to use the equity for additional income or erase your monthly mortgage payment so the income you do have doesn’t need to go to a mortgage payment. You can’t get a reverse mortgage unless you have enough equity (generally you would need about 30-50% equity depending on your age). So, if you mortgage your house to pay for stuff in your 50’s you may not have enough equity to get a reverse mortgage in the future. Another reason why you need to evaluate your finances when getting any financing when you are over 50.
Reaching the age of 50 and being financially stable is a great accomplishment and you don’t want to jeopardize your finances at this age. When evaluating your mortgage when you are over 50 and you have windfall like an inheritance or an insurance claim you may want to consider paying down your mortgage. This I have done for my clients a lot lately and it is a financially smart move. As an example; a 54 year old receives an inheritance and she owes $300,000 on her current home loan with 20 years left to go. She gets an inheritance of $400,000 and she already is financially stable with a good paying job. She may elect to pay off the existing loan, or pay it down, or refinance the existing loan to a lower balance and lower payment with a lower term of the loan. This would be a financially prudent thing to do as she would save tens of thousands of dollars in interest and have a lower payment to allow her to save even more monthly.
Being over 50 and financing stuff should be done with care to make sure you are not risking your home and your assets. Here at MAE Capital Mortgage we can do all the numbers for you and help with the planning of your future. If you are looking for a Reverse Mortgage, we also provide those to our clients and deliver the most aggressive programs available on the market today. As with any financial moves you make you should also consult your Tax consultant or Financial planner to make sure you are making the right decisions with your finances. We are here to help so if you have questions or please give us a call at 916-672-6130.
This is an interesting dilemma, to stage or not to stage? Staging is not for every property but if you have a nice home and want to get top dollar this is something I would strongly recommend. For those of you that don’t know what staging is, it is when an outside company that specializes in making your house look modern, clean and up to date through the use of furniture and accessories. The staging process starts before you list your home for sale. An expert will come to your house and see how many bedrooms and bathrooms you have and will measure the rooms. The stager will be an interior design expert and will get an idea of the flow of the house as well as the style of the house.
Once the Stager has completed the measurements and taken pictures, he or she will devise a plan for furniture and accessories that will accentuate your house. Mind you that you will have to completely take out all of your furniture and stuff from the home and have it cleaned. The stager will give you a price based on the size of your home and also offer suggestions of what you may be able to leave so it can be used it may be just a few items or nothing at all. The price will range from $2,000-$3,500 based on the size of your home. This will have to be paid for before the Stager does anything, so put this in your budget for selling.
The price may seem like a lot of money with no guarantee that your house will sell, but with the right Agent from MAE Capital Real Estate and Loan it will be priced right to the attention of potential buyers. We have done this many times and every time it has been done the house has sold for more than the list price. We can’t guarantee that will happen every time but it sure will give your home an edge on other homes for sale in the same area. The homes we have sold that have been staged have sold on average of only being on the market for 5 days or less. The track record we have of homes that have been staged and those that have not been is far better than you would expect.
The Staging company we use is second to none in the Greater Sacramento and Placer County area. Not only to they do all the set up they also provide us with professional Photos to put in in the MLS listing. The presentation from the inside of the home both in person and on the internet is second to none. As you know most home buyers will start their home search online to see homes that are appealing to them. The interior of the house will look so good that they will most all the time put a staged home on their list of homes to see for their Realtor. Staging will make your home look like a model home and buyers will see a staged home more favorably as the stager has strategically put minimal amount of furniture in a room to make it appear bigger than it is and since there is no clutter a potential buyer will be able to see the house arranged with furniture so they can see that everything they need will fit.
Although staging is not for everyone it is strongly recommended if you can get all of your personal belongings out of the house before you put it on the market. If you are living in the home and have to have your furniture in the home to live a stager can come out to your home and suggest that you put all the clutter in storage and give suggestions on what to leave and they can make your home show worthy with your own stuff in some cases. If nothing else a professional stager consultation may be worth the money just to get suggestions and the cost for a consultation is just a few hundred dollars and could make you thousands of dollars in the sale of the house by just doing some simple tricks to get your home ready for sale. In the end our Agents at MAE Capital Real Estate and Loan can set up the appointment with our stager to give you suggestions before you sell your home. In today’s Real Estate Market you need every edge on your competition you can get. In addition, we will help you with the costs of staging if you bundle our services with the sale and purchase of your next home or the loan on the next home or all 3. Doing business with MAE Capital will save you thousands of dollars and we are here waiting to show the tips and tricks to get top dollar from selling your home and buying your next home. Call us today at 916-672-6130 or click here for a free consultation.
Aging in place is becoming a norm rather than an exception. About 76 percent of people over the age of 50 want to remain at home for their senior years, according to AARP. Aging in place tends to give people a higher quality of life, but also comes with its fair share of risks. Did you know that an older adult is treated in the emergency room for a fall every 11 seconds? Fortunately, many fall injuries are preventable. Here are some critical steps you can take to protect your well-being while aging in place.
Start an Exercise Routine Today
Keeping your body strong, balanced, and flexible is critical for protecting yourself from injury. Get an early start to keep your body resilient. This will help prevent muscle loss and maintain joint mobility as you grow older. In fact, a recent study revealed that long-term exercise significantly reduces the risk that an older adult will experience a fall. Research suggests that about three hours of weekly exercise is your best bet. Exercise at home or head to the gym — it’s your choice! If you're a Medicare subscriber, you may be eligible to access 13,000 nationwide fitness centers through the SilverSneakers fitness program. Certain Humana Medicare Advantage plans include this benefit. So, consider switching your plan during the Medicare enrollment period if you're not already enjoying this valuable perk.
Engage in the Right Types of Exercise
Not all forms of exercise are equal. While aerobic activity has amazing benefits for your heart, digestive system, and mental health, strength training may be the most important when it comes to fall prevention. Core muscle strength will catch you when you start to stumble. If you’re new to weightlifting, talk to your doctor before you begin. Start slow — using your body weight or resistance bands at first — and work your way up to heavier weights as your muscles grow stronger. You can try some of these senior-friendly resistance exercises to get started.
Balance and flexibility exercises will also improve your stability and reduce your risk of falls. Static stretches (held for 20 to 30 seconds) and dynamic stretches (moving stretches) have surprisingly positive effects on overall mobility. This list of stretches from Yurielkaim includes examples of both static and dynamic stretches that are good for seniors. Additionally, try yoga or tai chi for an excellent combination of flexibility and balance practice. These activities are also wonderfully meditative!
Make Some Home Modifications
In addition to key lifestyle changes, you can further prevent falls while aging in place by making some home modifications. Start by clearing clutter from your home and giving each item you own a special storage place. This will prevent things from ending up on the floor and becoming tripping hazards. Remove slippery area rugs and use rubber-backed non-slip rugs in your kitchen and bathroom. Lighting that is too dim or too bright can also be a problem, so set up night lights to illuminate paths you may need to walk at night and install dimmer switches throughout your home. Use curtains to block out disorienting glare from the sun. Also, grab bars by your toilet, bath, and bed can be very helpful.
If Finances are a problem to do the home improvements consider a Reverse Mortgage to utilize the equity in your home to fund these modifications. With a Reverse Mortgage you can use the equity and never make a payment until you move from the residence.
Finally, pay attention to your clothing. Clothes that are too tight may restrict your blood flow and make you lightheaded, while clothing that is too loose can catch on items as you navigate your home. Avoid loose-fitting shoes or those with slippery soles. Try to find shoes that fit comfortably and support your feet properly.
Install Life-Saving Technology
Don’t let your home modifications stop there. Technology can help you get assistance more quickly if you do have an accident in the home. Smart shoes, tracking devices, and fall detection, as well as automated lights and thermostats, will help you maintain your independence and safety while living in your own house.
As with every aspect of health, preventing falls will take some preventive effort. Maintain your muscle strength and flexibility, take special precautions, remain aware of your surroundings, and remove anything from your environment that could become a hazard. By reducing your risk of falls, you’re securing a future for yourself in which you have the independence and confidence you need to live in the home you love.
Take the Financial Worry Out of Staying in Your Home
Don’t let the financial worry of the home effect your health. Money worries can cause health problems. As the price of goods and services continue to rise the income of seniors may not keep up with the rising costs of living and this can cause undo stress and lead to health issues. A Reverse Mortgage from MAE Capital Mortgage Inc. may the answer. These mortgages have come a long way over the last 30 years. The extra income generated from a Reverse Mortgage may be the difference every month in being able to live and enjoy the retirement years instead of worrying about the rising costs of goods and services and medical expenses. There are protections built into these loans to insure the seniors will be able to leave their home to hires when they are gone.
Taking some of these steps will ensure that the “Golden Years” are, in fact, Golden. Here at MAE Capital Real Estate and Loan we know the value of our senior population and hope to make all lives better with our services.
When shopping for a home loan even your Realtor may not know the differences between a Broker and Banker, so even if they recommend a Loan Officer to you, because they have used them in the past, you should do your research as you might be able to save yourself thousands of dollars. Your Agent may think a direct lender is a better deal for you as they underwrite their own loans “in house”, but the fact is it might be in the Realtor’s best interests not yours. “In House Underwriting” sounds sexy, however, in today’s automated world every Loan Officer be it from a Banker/Direct lender or a Mortgage Broker has the same automated underwriting systems available to every underwriter. So when you apply for a loan with either a Big Banker or a Small independent Mortgage Broker they all have the same access to an underwriter or underwriting systems. So the myth of having your own underwriter as a selling point is just that a myth and what happens when their underwriters have a bad day, you pay the price. A Mortgage Broker can deliver your loan file to several different underwriters that will have different rules and guidelines to get your loan approved. Technology has improved so much that all of the paperwork necessary to process a loan can be uploaded and transmitted to an underwriter instantly and that underwriter can make a decision quickly and if a Banker’s Underwriter declines your file you are done with them. If a Mortgage Broker submits your file to an underwriter and they decline it a Broker can take your file to another underwriter without you having to gather all your information again and again. Most underwriters today use either the Federal National Mortgage Association’s or the Federal Home Loan Mortgage Corporation (Fannie Mae or Freddie Mac) automated underwriting systems to underwrite traditional home loans and those same systems are available to all Loan Officers either from a Large Banker/Direct Lender or a Small Mortgage Broker.
You may say that all of that is good but all I care about is getting the lowest monthly payment and the lowest costs. Although both a Banker and a Broker inevitably get their interest rates from the same sources it is how much that is charged by the company that makes the difference in interest rates and fees that are quoted to you from lender to lender. We have already discussed earlier that Bankers have bigger and shinier offices than that of Brokers and with that comes a larger overhead and more expenses than that of a smaller Mortgage Broker. That all has to be paid for and they do that in the form of higher interest rate and fees. The smaller firms like MAE Capital Real Estate and Loan can keep that overhead low thus being able to offer a lower interest rate and lower fees and can save you thousands of dollars upfront and monthly.
In addition, the regulator in California for Bankers is the Department of Business Oversight (DBO) and they have different laws then that of the Department of Real Estate (DRE) who regulate Mortgage Brokers. We talked earlier about Bankers having a larger overhead and expenses than that of a Mortgage Broker and thus the need to make more profit per loan closed for the company than that of a Mortgage Broker but what exactly does that mean? The Direct lender has to pay more staff, more rent, more insurances making their costs much higher than that of a Mortgage Broker and their Regulator, the DBO, knows this so the Banker has no limit on the amount they can add to the interest rates and fees to maintain their profitability . A Mortgage Broker, on the other hand, is limited to a maximum of 3% of the loan amount they can make on any one loan from the DRE. A Direct lender does not have that limitation and they can charge what they want to be profitable costing you money. The Mortgage Broker has to keep their overhead as low as possible being limited by law on how much they can charge is your benefit with lower interest rates and fees.
Having been on both sides of the fence I understand completely how this process works and will tell you that you will save thousands by working with a company like MAE Capital Real Estate and Loan. Every Loan we close is a testimony to this as the client’s rates and fees are significantly lower than that of a Banker on every loan transaction. As a Mortgage Broker we can also offer other loan products that a Banker can’t such as Private Money Loans for investors, Certain Bank Statement only loans to qualify borrowers that can’t show enough income to qualify traditionally. Overall we as a small Mortgage Broker can find the best loan for your needs with he lowest interest rates and fees. An example of this is; MAE Capital closed a VA loan that came to us from a Veteran who works for the VA and he received a quote from one of the Veteran’s Administration’s “Approved Lenders” that is a Banker/Direct Lender and we beat them by .5 in interest Rate and $13,000 fees. We closed the loan a 3.875% and the veteran paid $0 down and $0 closing costs, saving him $13,000 in costs and has a lower monthly payment. We have many stories like this and most of our clients don’t even realize the savings they are receiving as most clients don’t shop for a loan. So if your Agent is recommending a Loan Officer Check the rates and fees and then check with MAE Capital Real estate and Loan and you will be shocked at what you will save. If you are buying in the Greater Sacramento Area (El Dorado, Placer and Sacramento Counties) ask about our Bundling of Services where we represent you as the Realtor and the Loan. This has saved our clients even more money as we can bundle our commissions and get you a home warranty and even lower interest rates and fees. MAE Capital Real Estate and Loan is one of California’s best kept secrets when it comes to saving people money on their home financing. Trying to change this secret into mainstream facts by educating our clients and future clients. Call us today to find out more or have us compare your Direct Lender’s Loan Estimate with ours and see how we can save you thousands of dollars. We can Lend all up and down the State of California. Our phone number 916-672-6130 or go directly to our site at www.maecapital.com.
FICO and Finances
It’s an unfortunate reality, but due to fewer work opportunities and high medical debt, ability-disadvantaged individuals tend to hold a lesser share of wealth than the general population. For this reason, it can be harder to save for a down payment and ensure that your credit score is high enough to qualify for a loan. Down payment assistance, housing counseling, and other resources for disabled buyers are available through HUD, the FHA, and Fannie Mae. The Simple Dollar has more information about these and additional resources.
As for your credit, when it comes time to apply for a mortgage, the higher the credit score, the better. It’s possible to obtain a mortgage with a credit score as low as 550, but you’ll definitely get better rates and terms as you inch closer to 700. Try to raise your credit score by paying your bills in full and on time and taking care of any misreported information on your credit report, which you want to get a copy of from each of the major reporting agencies: TransUnion, Equifax, and Experian. Keep in mind that saving for your new home and improving your credit takes time. Neither will be achieved overnight, and you don’t want to rush through either step.
Know Your Needs (and Plan Ahead for Them)
As you get your finances in order, it’s a good idea to identify your needs so that you can maintain an open dialogue with your real estate agent. If you are in a wheelchair, for instance, you may ask them to help you find a home all on a single story and with doorways that have already been widened. Many builders are now incorporating elements of universal design into new construction. If you aren’t familiar with the term, you should know that universal design is essentially inclusive design. It is an approach that strives to address barriers of usability incurred by people of all abilities and in all stages of life.
If your disability requires you make frequent trips to your healthcare provider, let your realtor know this information, too. He or she can help you locate a home where you will have access to public transportation or ridesharing services if needed.
Since not all properties are already configured for those with disabilities, it may be wise to put aside some cash to make upgrades. Good Financial Cents explains that saving money is much easier if you have it set up automatically. The site also suggests stashing any cash windfalls or raises. This advice applies to saving for any specific goal, including home renovations.
Get Ready to Go
When it’s time to finally move, there are a few things you should do before opening your new front door. One of these is rekeying or changing the locks, which will add between $96 and $210 to your moving expenses. If anyone in your family has allergies, it’s also wise to bring in a cleaning crew to get rid of dust, dander, smoke and other potential irritants left behind by the previous owners. Don’t forget to have the utilities turned on and make sure to keep a few boxes of your belongings with you in case the movers get delayed. This should include a weeks’ worth of clothing, basic kitchen utensils and gear, and any medications and toiletries you use daily.
Moving can be exhausting and intimidating, especially if you have special needs. But it’s not impossible, and the sooner you begin planning, the easier the process will be. Here at MAE Capital Real Estate and Loan we understand and can help folks that have special needs for housing. We have the ability to find and finance such housing and are looking forward to assisting you on your journey. Call today 916-672-6130 Special Thanks to Natalie Jones for providing the content of this article.
Excellent, you have decided to pursue the American Dream of home ownership. Now what do you do? Well you need to know how much of a home you can afford with the income and bills you have. This step is the single most important step to your process of obtaining a home. This process is called getting pre-qualified or pre-approved. Although, the thought of shopping for a home may be an appealing one you should not even look at homes until you know for sure what you can buy or if you can buy. The Pre-Approval process is where you will gather all of your financial documents together and get them to a licensed Loan Officer so he or she run the numbers and your credit report and derive a number to which you can qualify for. You can read more about this process on our Pre-Approval page or our Process Flow page. Your Loan Officer will give you a loan amount, a loan program, and a sales price you qualify for based on your finances.
Once you have the Pre-Approval letter in your hand with the terms and amounts you qualify for it is time to find a Realtor to look for homes with. You may ask why you need a Realtor, and a simple answer will be it doesn’t cost you anything to be represented by one that knows the laws, the inspections requirements, contracts, and inventory. Yes, it doesn’t cost anything for you, as a home buyer, to be represented by a licensed Real Estate Agent as the sellers pay the real estate commissions to both the listing Agent and the Selling Agent. If the free service is not enough to convince you to contact an Agent to work for you how about the laws, unless you happen to be a Real Estate Attorney the laws with regards to real estate process and procedures are many. If that doesn’t scare you enough to be represented, how about the contract itself, there are items in a professional Real Estate contract that, if missed, could cost you thousands of dollars. Then there is the inventory, or shopping help an Agent can provide for you. Again you might say I can find anything I need on the internet. Again true, but, the problem with internet data is the updating of the data is old. In some cases like Zillow it requires that the listing Agent actually input the data into the system in order for the world to see it. Whereas the Multiple Listing Service or MLS is required to be used by licensed Realtors for every listing they have or they will be fined.
Now, that you are convinced to find an Agent to represent you, who do you use? I would, of course, recommend one of our qualified Agents, but if you are out of our service area we can always screen Agents for you in the areas you are looking to buy. This is a little know service, again its free to you as a buyer, that we offer to assure our clients are represented by an Agent who knows their stuff. You see, if you go dialing for dollars, as we call it, you will undoubtedly end up with an un-experienced Agent. This is because the experienced Agents are out working not sitting in the office waiting for the phone to ring, the Agents that are in the office waiting for the phone to ring are generally new to the business trying to get call in business. Another pitfall buyers run into is calling the listing Agent on a house they wish to buy and have them represent you. This is called dual Agency, and we as listing Agents love this as we get both sides of the commission, however, undenounced to the un-educated home buyer, the listing Agent’s allegiance is to the seller first, by law. So it can really pay to be consulted first by one of our Agents to have them either represent you or screen other potential Agents to represent you and your needs.
Shopping for the perfect home should not be taken lightly either. You should have a list of items that are “must have” items in a home such as number of bedrooms and bathrooms, updated kitchen, new or existing home, and most importantly location. Making this list is crucial for your Agent as they will be able to search for properties that fit your exact criteria, so you are not wasting your time looking at homes that don’t fit your needs. In addition to the “must have” list you should do a “wish list” like granite counter tops, hardwood floors, a pool etc. You should also do a list of items you absolutely do not want. You Agent has the ability in the MLS system to put in exacting parameters that you can’t get on the consumer version on the internet. Your Agent will put your parameters into the MLS system and put you on an automatic drip of homes in the area(s) you are looking in with the exacting parameters you have. Your first email of homes will be the largest as the initial search will pull all the current listings that fit your parameters. The emails you will get after that are “as they hit the market” emails, in other words you will be the first to see the properties come on the market. This is great if you are in a competitive price range as you will be able to see properties as they come on the market with no delays. This could be the difference of you getting the best home or not.
A great strategy to look at homes is to drive the properties that look good in the listings that you have viewed on line. Driving the properties will give you a real idea of where they are, what they really look like, and how they have been maintained. When driving the properties you don’t have to include your Agent as you are simply doing your own diligence. Make notes of the ones you would like to see and then call your Agent to make appointments to see the homes. Never go up to the door and disturb the occupants it is not nice nor is it safe. To see the homes your Agent will need to make appointments with the listing Agents or the owners directly for you to get inside. Your Agent will put together “a tour” that will include your availability to see them and the seller’s availability to show them. When you go to view the home take pictures and take notes so you can remember the ones you liked and disliked. You may not find the perfect house after several showings, don’t get discouraged homes are coming on the market every day and with patience you will find what you are looking for.
You did not expect to go looking for houses today and find the perfect one, but that is the way it happens, one minute you think you will never find the perfect house the next you find one you can’t live without. You now need to get it tied up so no one else can have your perfect home. Your Agent will write an offer for you and ask you to provide your pre-approval letter and a Ernest Money Deposit (EMD). The offer will be on a 10 page form that has all terms in it from the offer price to the loan amount, to the items that need to be inspected, and it also spells out who pays what. Remember you can ask for anything in the offer and your Agent will go over those details with you. Once you have decided the price and terms you will be offering you will sign the offer and your Agent will then submit your offer to the listing Agent. Within the offer you wrote a time period the seller has to get back to you with a response. When the seller reviews your offer they will either accept it as is or they will counter offer your offer with different terms. This is all part of the negotiation process. Once you and the Seller have reached an agreement and both have signed and accepted the terms you are now officially in contract.
Once in contract you will have certain dates that you must adhere to in the contract such as inspection periods. The inspection periods include your right to get a home inspection, appraisal and any other inspections you and your Agent deem fit. Those inspections periods are about 2 weeks so you should be prepared to start paying for them right away. Your Agent will know good inspectors to use so rely on them to guide you through this time period. A special note about home inspections is that they cover everything from cracks in the driveway to mold in the attic and sometimes it is difficult to determine what items are important to have repaired or if they need repair. You can talk with the inspector directly to determine this or talk with your Agent or both. If you determine you require additional repairs in order to buy the house you will have your Agent prepare a repair addendum, and submit it to the seller. The seller has the right to say that they will or will not do the repairs. If the Seller says that they will not do the repairs you may need to make the decision to renegotiate price or back out altogether. If you do back out during the inspection periods you are entitled to a refund of your deposit. If you miss the time frames in the contract and decide to back out you could very well lose your deposit. Your Agent will work with you to make all of this legal. Another variable inspection is the appraisal. If the appraisal comes in lower than the offering price your Agent will discuss your options with you. Those options will be to give the seller a counter offer with the lower value as the price, or you could pay the difference in down payment if you are so inclined. If you decide to pay the difference be prepared to make the down payment on the lower of the sales price or appraised value and pay the difference. For example if the sales price is $250,000 and you are putting 10% down for a 90% loan to value (LTV) or $25,000, and the appraisal came in at $245,000 you will be required to put your $25,000 down and you will have to add an additional $5,000 for a total of $30,000 and you will still be at a 90% LTV.
Once you have made it through the inspection periods and everything has passed your standards, we are full steam ahead to the closing of this transaction. At this time I would suggest you get back with your MAE Capital Loan Officer and make sure they are on schedule to close and see if they need any more documentation from you or explanations. By now the loan should be approved, and hopefully you are just waiting for the legal paperwork to be delivered to the escrow so you can sign and bring in the remainder of down payment and closing costs. You can always refer to the closing diagram on our Process Flow page to see where you are at in the process. There still may be a few weeks left in your escrow process so be prepared to provide more information for your Loan Officer. Now would be a good time to start preparing to transfer your utilities so you have no interruption when you move.
OK, you signed brought your money in to the Escrow and are ready to close. The lender must review everything before they release funds to Escrow to make sure all signatures are correct and the all the conditions the underwriter put on the file have been met. Once everything is good the lender funds the loan to the Escrow and they then take the Deed to the county to record the transaction to make the house legally yours. Congratulations you are now a home owner and you can move in and do anything to the home you wish. Your first mortgage payment will be due the first of the following month and be sure to make that payment on time or it will affect your credit. I hope this helped you with some basics to buying a home. If you go to our Pre-Approval page and complete the form at the bottom of the page we will contact you are start your process or give us a call we would love to talk to you at (916) 672-6130.
This subject is a little uncomfortable for most people. When the Bank tells you that you don’t qualify for the loan you have applied for it can be very frustrating. If the Bank tells you No not only do you feel defeated you are also left feeling embarrassed. So, what do you do; do you just stop trying, or quit? Or do you move on to alternate plans or search for different options from different sources? We are going to cover the latter and what you can do to be proactive in obtaining financing for a home or an Investment property.
First, we need to determine why you were declined by the bank. Was it due to bad credit or credit that didn’t meet this lender’s standards? Was it due to the fact you did not have enough money to put down? Was it because you could not show enough income, on paper, to qualify? Or a combination of all of these? These are common issues when trying to qualify for a loan, but they can be overcome in most instances. In order to fix the problem, we have to first identify it and that is usually done by analyzing your financial paperwork such as your credit report, pay-stubs, bank statements, and Tax Returns to determine where the problem lies. Then we put together a plan to fix the problems.
Let’s start with the Credit and if you were declined due to poor credit. If you have applied for a home loan and the lender has declined you for poor credit we must look at what that lender’s credit score requirement is. If the lender will not approve loans for people with credit scores less than 640 or 620, 600 or lower then we have to see exactly what you credit score is and that lender should be able to provide you with the credit report that they ordered. The reason this is important is that a lender’s credit report is different than the free stuff you can get online like Credit Karma or a service like this, not to me3ntion if too many people pull your credit it could hurt it even further. A lender’s credit report takes into consideration the 3 major credit reporting bureaus and merges the data into one report that has all 3 credit scores. A lender will look at your middle score or if you are married, they will look at the low-mid score of the two people. It is important to know that there are many ways to view a credit report and how to present it to an underwriter, who will make the decision on your loan. If you are the bread winner in the family and your spouse has the poor score that is dragging you down, you might try applying as sole and separate and adding your spouse to the title after the loan closes. Or you could look to the reasons for the bad credit and see how hard it would be to fix it and how long it would take to fix it and if the transaction you are in today could be stretched out long enough to get it fixed. If your scores are too low for the lender you are with there may be other lenders out there that will take the lower scores. At MAE Capital Mortgage we are a Broker so we have many lender’s we deal with, and we know what lenders will take the lower credit scores. We also show you how to fix your credit and tell you how long it will take. One option might be an FHA loan as many lenders we deal with will go down to a 580 or even as low as a 550 credit score. If you have a large down payment and poor credit, we have sources that can fund that with a little higher interest Rates. There are ways to help and we can surely show you the way.
If your lender has declined you for not enough money to buy a home, there are ways to overcome this as well. We would have to look at the home or property you are trying to purchase to determine what type of financing would fit the Real Estate you are trying to buy. If you are trying to buy a single-family home and you are going to occupy the property as your primary residence, we again might look to an FHA loan as you can get into a home with as little as 3.5% down. With an FHA loan you could also use a gift from a family member, or employer for that 3.5%. This option helps our clients in many situations that they didn’t believe they had enough money to buy a home. If you are looking to buy an investment property and you don’t have enough money for the down payment there are option for this as well. You could negotiate with the seller to carry a second mortgage and you could buy an investment with as little money as $0 down. This would be coupled with a non-traditional loan or a Private/Hard money loan, but it can be done. There are also down payment assistance programs that come in an out of the market that you may be able to qualify for as well for a single family owner occupied home. So, don’t always looks to the lack of money as the deterrent to purchasing a property.
Another common problem when trying to qualify for a loan is the lack of provable income. A lender may have declined you for a loan due to the fact that your “ratios” are too high. This is a lender’s way of telling you that you don’ make enough money to qualify for the loan products they offer. A ratio is the mortgage payment with taxes and insurance and your monthly bills added together then divided by your income that you show on your tax returns, pay-stubs, bank statements or a combination of all. Most traditional financing will require you provide Pay-stubs and your Federal Tax Returns to determine your income. This doesn’t always work for people as income can be subjective especially if you are self-employed. People try hard not to owe the Government taxes at the end of the year and for folks that are self-employed can, and do, show more deductions for the expenses of running a company or their personal business’. This is well known in the industry, but many lenders don’t have any other options for those folks that write off too much on their Tax Returns. At MAE Capital we have several options for those that can’t qualify for a traditional loan with Tax Returns. The most popular is the Bank Statement Loan that uses the deposits made by the borrower each month to determine what they actually make. By averaging the deposits over the last 2 years we can see if a borrower is making enough money to actually qualify. Another type of loan that will not require Tax Returns is the W2 only loan. This loan will use your pay-stubs and your W2s but will not use your Federal Tax Returns. The W2 only loan will help those that make a W2 wage but may write off too much on their Taxes to qualify for what they want. At MAE Capital Mortgage we offer both of these loans from a variety of lenders across the country.
If you are an Investor and the Banks have turned you down or they just take too long, we have great options for you. Our sources of Private Money Loans or Hard Money Loans are second to none. Private money loans allow borrowers with 20% or more down to qualify without providing proof of income. Private Money Loans for Investors will also allow for poor credit. If you are an investor and the Banks have said no look no further, we can help. Learn more on our Private Money page.
You may have a combination of the above issues and there are ways to deal with your problems. If you simply can’t show anything and have bad credit and no money, then it may not be the time for you to purchase. This is not the end; however, you may simply need a plan to work towards. We work with folks every day to plan for their future. Getting into a home or buying a piece of property takes planning and guidance and that is our function. The American dream should not be closed to those that do things a little different or don’t work inside the “the box”. We are here to work you through the maze of financial options. At MAE Capital Real Estate and Loan we have the ability to work with all types of borrowers and home buyers and Investor’s. Call us today to get qualified 916-672-6130.