Why Now Is A Great Time To Apply For A Home Loan

Why Now Is A Great Time To Apply For A Home LoanThe idea of owning a home is enough to bring joy to nearly anyone’s eyes. The reality is that many people are a bit skeptical about looking for a home in the present climate. While the pandemic can make it hard for people to go outside and explore, now is still a great time to apply for a home loan.

This is a great opportunity for people to fulfill their homeownership dreams. There are a few reasons why now is a great time to look for a home.

The Property Prices Are Low

First, property prices are low right now. There are a lot of people who are looking to move and not many people are looking to buy a home. This means that property prices are lower now than they have been in the recent past.

There are a few reasons why this matters. First, those who had a home in mind might be able to buy one for a lower price. Second, with a cheaper purchase price, the taxes on the home are going to be lower. This could also mean that a potential homebuyer might be able to put down a lower down payment.

Interest Rate Are Low

In addition to property prices being low, interest rates are low as well. Some people might only focus on the sticker price of a home; however, the interest rate on a potential home loan is even more important. Even a few points of interest could end up making a difference of hundreds of thousands of dollars over the life of a loan.

Lenders are looking for people to take out home loans right now. This means that they might be willing to give someone a break on their interest rate, particularly if they have money to put down.

Now Is A Time To Buy

There aren’t a lot of times like the present when it comes to buying a house. There are many people who have been looking to buy a home but might not have been able to afford one. The current climate makes it a great time to apply for a home loan.

Why not get pre-approved and become a more competitive applicant for a current house on the market?

Why Every Home Buyer Needs A Pre-Approval Before Home Shopping

Why Every Home Buyer Needs A Pre-Approval Before Home ShoppingThere are many people who are considering buying a home because the current market is so attractive. With the ability to carry out virtual tours, this makes it even easier for people to find the home of their dreams.

While the fun part is looking at houses, it is important to get pre-approved for a home loan first. There are a few reasons why everyone must get pre-approved before they start the process of shopping for a home. 

This Provides A Chance For People To Get Their Finances In Order

Buying a home is a major decision. For many people, this is going to be their biggest investment. For this reason, it is critical for everyone to have their finances in order.

Of course, some people might think that their finances are fine when, in reality, this might not be the case.

For example, someone might be self-employed and think they are doing well; however, many lenders will not accept self-employment income as “reliable” unless they see at least two years of tax records. Furthermore, because those who are self-employed often take large tax deductions (due to business expenses being deductible), their gross taxable income is also lower.

This can be a problem for lenders who want to make sure their borrowers have a high gross taxable income to pay back the loan.

Increases The Attractiveness Of An Offer

If someone finds a house they love, there is a strong chance that someone else has fallen in love with the home as well. The seller wants to make sure that whoever is providing an offer on a home is a serious candidate. With a pre-approval letter, this makes the offer far more attractive.

This is because the seller knows that nothing is going to hold up the sale. If someone isn’t pre-approved, there is a chance that they might make an offer on the home only to have it stonewalled by the lender. This can be frustrating for someone who is trying to sell a home.

Avoid These Problems By Getting Pre-Approved

In order to avoid these problems, everyone must get pre-approved before they start the process of searching for a home. By getting pre-approved, people can expedite the home buying process.

Some Millennials Are Finding Home Buying Overwhelming

Some Millennials Are Finding Home Buying OverwhelmingMany millennials are reaching the age where they are thinking about buying homes for the first time. It turns out that many members of this generation are finding this process challenging. Even though the housing market is great for those looking to buy, surveys indicate that this generation also finds the process overwhelming.

Reports have been published showing that many millennials are planning to buy their first home in the next year, showing that owning property is still a strong part of the American dream. Furthermore, many millennials also know that this is a great time to buy. Why are millennials finding this process so challenging?

Student Loan Debt

One of the biggest reasons why millennials are having issues purchasing a home is student loan debt. When someone is looking for a home, any potential lender is going to take their existing debt into account. It is no secret that student loans are a major issue right now.

With numerous millennials saddled with student loan debt, this makes it hard to qualify for a mortgage. While other forms of debt are easier to pay back, student loan debt is not. Some millennials have student loan debt that looks like a mortgage. 

A Poor Understanding Of Costs

Even though millennials may look at their rent payments as a solid barometer for their mortgage payment, there are other costs that millennials need to consider. These include real estate taxes, HOA fees, homeowners’ insurance, and potential repairs. Therefore, they might need to reset their expectations.

Comparison Is A Dangerous Temptation

Finally, too many millennials are tempted by what they know. Many millennials end up moving back into their parents’ house after they finish school. The job market can be tough and they think this is a great way to save money. On the other hand, this also means they might end up looking for a house that is similar to their parents’. 

Many millennials have set the bar high for their first home. A property like their parents’ simply isn’t within the budget. An unwillingness to accept this makes it harder to find a home. On the other hand, there are affordable homes out there. Millennials simply need assistance to find them.

5 Options To Consider When Your Appraisal Comes In Low

5 Options To Consider When Your Appraisal Comes In LowYikes! You are set on buying the home that you picked out and the appraisal comes back at a lower amount than the amount needed for the home loan to be approved. What do you do? After you calm down your significant other and then take three deep breaths, here are some options to consider.

Request A New Appraisal

Appraisals are only one person’s professional opinion. There are rules that must be followed when making an appraisal; however, there is still some flexibility in how to apply the rules. Check the comparables (also called “comps”) that the appraiser used as the basis for setting the appraised value.

There usually have to be at least three houses that are a similar size, similar age, have a similar condition, and are located in a similar neighborhood. If the home that you want to buy just had major renovation with a lot of work done on it, the appraiser may have missed this and should add more to the appraisal for the home having a better condition than the comparables.

Check to determine if any of the comparables are wrong. For example, if the appraiser uses a home that is in poor condition that may cause the appraisal to be too low. When there is another choice of a home in a better condition, which is more similar to the one being sold, the appraisal might be higher.

If you find problems with how the appraisal was done, request a review from your lender and see if they will allow you to pay for a second appraisal. Getting a new appraisal with a higher value is the easiest way to fix this problem.

If that does not work, then you can try these other options:

Negotiate With The Lender

Some lenders may cooperate with a loan restructuring if you qualify for a program with a higher loan-to-value (LTV). This may also require private mortgage insurance (PMI) if your loan amount exceeds 80% of the appraised value of the home. Working with your trusted mortgage professional can lead to unexpected options to get your home purchase completed.

Negotiate With The Seller

Trouble may come up if an appraiser cannot find comps that meet the selling price of the home. This may be caused by the home having unique qualities, a market that does not have other homes like it, or possibly that the sale price is more than the home is actually worth. If the price of the home is actually too high based on the appraisal, the seller might lower the sales price in order to keep the transaction together.

Increase Your Down Payment

If the amount of the difference is small and you can cover it, you can still proceed by taking a lower amount for the loan and adding money to your down payment to make up the difference.

Find Another Home To Buy

Your purchase offer should be subject to obtaining financing. If the appraisal comes in low and that prevents you from obtaining financing at the original sales price, you likely will be able to cancel the purchase agreement without penalty and search for a new home.

Your trusted home mortgage professional is well-versed in these types of issues and ready and willing to assist you with your successful home purchase transaction.

Auction 101: Bidding On Your First Property

Auction 101 Bidding On Your First PropertyWith the right combination of strategy, knowledge, and luck, flipping houses can create big profits for short-term investors. However, your path to success starts at your first auction.

For first-timers who are intimidated by their lack of experience at public auctions, follow these steps to ease the confusion of your first property purchase.

Locate Auctions In Your Area

Finding live auctions is as simple as an internet search. Websites run by government agencies list homes that have been seized due to tax liens or foreclosures. Try searching databases maintained by:

  • Fannie Mae
  • The FDIC
  • The US Department of Housing and Urban Development

Another option is your local newspaper. Banks publish foreclosure notices in the public notice section. You can also find advertisements from auction companies and information from the sheriff’s or county tax collector’s office that helps you hunt down low-cost properties.

For busy investors who plan to use real estate as an extra income, it could be worth your while to enlist the help of a professional real estate agent. They often keep lists of homes in foreclosure in the surrounding area.

Assess Available Properties

All properties are not created equal. To find the right fit for your project, find the following information for each potential listing.

  • Current bid price
  • Previous purchase price
  • Length of time property has been unoccupied
  • Property condition
  • Number of bedrooms and bathrooms
  • Sales history of homes in the surrounding neighborhood

This information isn’t always readily available. You may be able to find more information via an MLS search, public lands records, or various real estate websites that publish property data. Of course, if you’re working with a real estate agent, they will provide all the data you need to make the right decision.

Some auction sites include pictures and map data. At other auctions, bidders may be allowed to visit the property or hold open houses before the sale occurs.

Perform A Title Search

When you’ve found a few properties that you like, take some time to do a thorough title search. This process ensures your property doesn’t come with some unfortunate surprises.

During your search, you’ll need to:

  • Obtain records from the tax assessor to verify the tax status of the property.
  • Locate the property’s deed either physically or online.
  • Investigate the property’s sales history to ensure no one else can claim ownership.
  • Check for liens, unpaid mortgage commitments, and legal judgments against the property.

Once a property has cleared these steps, you’ll be ready to start placing bids on your first investment property.

Last but not least: Don’t overlook your financing options. Be sure to meet with your trusted home mortgage professional to get your pre-approval in place. This important step will help you create an affordable budget.