Aug 19, 2015 | Home Mortgage Tips
Mortgages are expensive, and closing costs only add to the financial burden that homebuyers face. But with a little knowledge, you can pinpoint places to save on your mortgage closing costs and keep more money in your pocket. When you’re negotiating your next mortgage, use these tips to reduce required closing costs and keep more of your hard-earned money.
Title Insurance: Request The Simultaneous Issue Rate
Title insurance is an important add-on that no buyer should go without. At the time of closing, there may be a variety of title problems that could arise, such as like encroachments, easements, unpaid liens, and fraud. If a previous property owner wasn’t properly discharged from the title, they may have a claim to the property.
In the event that title ownership challenges arise later on, your title insurance will compensate you for any losses and expenses you incur when trying to prove your ownership. Buying title insurance may help you to avoid the hourly fees you’d pay a lawyer or notary to investigate your title. Typically, when you receive title insurance, you and your lender will each have separate insurance policies on the title.
You can minimize the out-of-pocket expense by asking the insurance provider for their simultaneous issue rate. This is a highly discounted rate that applies when both the borrower and lender title insurance policies are issued at the same time.
Origination Fees: Negotiable If You Have Good Credit
An origination fee is a kind of prepaid interest fee that you surrender to your mortgage broker when you apply for a mortgage. It only applies when you use a mortgage broker.
However, it’s not a mandatory fee for most buyers – even if they go through a broker. The purpose of an origination fee is to compensate the broker for the time and effort they need to invest to get your loan approved. If you have good credit and you can prove your income, then this fee isn’t necessary – and you shouldn’t have any trouble getting your broker to eliminate this fee.
Also note that an origination fee is the same thing as a broker fee. If your agreement includes both, you’re getting charged for the same service twice. Ask for one of them to be removed.
Mortgage Application Fees: Typically A Money Grab
A mortgage application fee is another common fee that you can usually avoid. This fee – which typically runs about $50 or so – is something your lender charges you in order to cover the cost of running your credit report. However, since banks and brokers order hundreds of credit reports every day, they can pull your credit report for next to nothing.
The $50 fee they charge you is, essentially, free money for them – and you can usually get them to drop this fee if you ask.
Underwriting Fees: Your Broker Shouldn’t Charge You For Underwriting
Brokers don’t underwrite loans – lenders do. That means if you’re getting your loan through a broker, you shouldn’t have to pay any kind of underwriting fee – it should already be included in the loan terms the bank set. It’s perfectly valid for a bank to charge you an underwriting fee, but ask your broker to take underwriting fees out of your agreement.
Courier Fees: Handling Documents Should Be A Standard Business Practice
One common closing cost is courier fees. These fees come in different amounts and go by different names. It may be $20 or $50, and it may be called a courier fee or a document handling fee.
Title companies might very well use couriers to send documents, but lenders most likely won’t – and $50 is excessive. Document handling fees are a standard cost of doing business, and that means they should already be included in the lender’s core billed services, not added as an extra fee. Use this argument when you ask your lender to remove the fee – they’ll likely comply.
Aug 18, 2015 | Home Buyer Tips
If you’re moving to a new city and you’re looking for an affordable home in a nice neighborhood, one great way to get a fantastic home without paying sky-high prices is by choosing a home in an up-and-coming neighborhood. Communities that are starting to gentrify make it easy to find an affordable home, especially if you buy before the prices start to rise.
So how can you spot a neighborhood that’s on the rise? Here’s what you need to know.
Look For Neighborhoods Popular With Artists & Young People
Young people, artists, musicians, performers, and other bohemians tend to lead the way when it comes to neighborhood revitalizations. These are the kinds of people who typically don’t have copious amounts of disposable income, so they’re looking for something affordable. But they also want to live in a hip, trendy part of town.
And as the area gains more and more creative types, it starts to take on its own creative personality. That makes it attractive to all manner of buyers, which starts driving more and more sales. So if you want to find an up-and-coming neighborhood, just follow the artists, musicians, and Gen Y buyers.
Track The Area’s Average Days On Market
One great way to find which neighborhoods are the most popular with buyers is to track the average number of days on market for properties in those neighborhoods. Your real estate agent can help you find this information. If you notice a slow decrease in days on market over time, it’s a good sign that the neighborhood is on the up and up.
Oftentimes, in an up and coming area, the days on market will decrease before prices start to rise – which will help you get a great deal.
Look Up Building Permits To See Where The Renovations Are
You can also tell if an area is up and coming if there’s a lot of renovation activity happening. Visit your municipal government office and see if you can find information on which neighborhoods are seeing more and more building and renovation permits. Lots of construction and renovation activity in an area indicates that it’s a great place to move to.
Finding a great neighborhood is critical to being satisfied with your home purchase. There are lots of things about your home that you can change, but the neighborhood isn’t one of them – so make sure you’re happy with the area before you buy. Local real estate agents are a great source of information about neighborhoods – contact a trusted real estate agent near you to learn which neighborhoods are most popular with buyers.
Aug 17, 2015 | Market Outlook
Last week’s economic reports related to housing were few and far between other than weekly reports on new jobless claims and Freddie Mac’s mortgage rates survey.
Mortgage Rates Mixed, Jobless Claims Up
Freddie Mac reported that average mortgage rates rose for fixed rate mortgages and dropped for 5/1 adjustable rate mortgages. The average rate for a 30-year fixed rate mortgage rose by three basis points to 3.94 percent. The rate for a 15-year fixed rate mortgage rose by four basis points to 3.17 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.93 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and rose from 0.40 percent to 0.50 percent for 5/1 adjustable rate mortgages.
Jobless claims rose to 274,000 last week from the prior week’s reading of 269,000 new jobless claims filed. Analysts expected a reading of 270,000 new jobless claims. New claims were lower by 1750 claims for the past month at a seasonally adjusted rate of 266,250 new jobless claims. This was the lowest level since April of 2000. Analysts consider the four week average a less volatile reading for new jobless claims than weekly readings, which fluctuate more due to transitory influences.
What’s Ahead
Next week’s scheduled reports include several releases related to housing. Expected releases include: the National Association of Homebuilders Housing Market Index, Commerce Department reports on Housing Starts and Building Permits and the National Association of Realtors® report on sales of previously owned homes.
Aug 14, 2015 | Home Seller Tips
Millennials are finally starting to enter the real estate market, but as is expected with a generation as different as Gen Y, they’re buying homes in a completely different way. Millennial buyers intend to own for shorter periods of time and want to live in metropolitan areas, and they’re also actively interested in real estate as an investment.
If you want to sell your home to a Millennial, you’ll need to change the way you stage and market the house in order to make the sale. Here’s how you can make your home more attractive to Millennial buyers without having to plan a massive renovation.
Millennials Want Investment Properties, Not Storybook Homes
One of the major characteristics that defines the Millennial generation is that they are nomads. Millennials don’t want to hear about how a property is the perfect place for them to live out their Happily Ever After. For a Millennial, marriage and kids and the white picket fence are still a long ways off – and that’s if they’re in the picture at all.
Instead, present your home as the ideal investment property – something they can easily renovate and flip for a nice, tidy profit, or something they can rent out to help pay their student loans. Millennials are entrepreneurial by nature, so appeal to that entrepreneurial zeal.
Convert An Unused Room Into A Home Office
Millennials are also very career-minded and tend to be passionate about side projects. Millennials are leading the charge in the work-from-home movement, and the more easily they can see themselves working out of your home, the more likely they are to buy it.
If there’s a room in your home that you aren’t using, converting it into a home office will help you show Millennials that they can run their online business in a great environment.
Ditch The Carpets And Opt For Hardwood Instead
Millennials want their homes to look modern, and carpets will simply make them think of every 1970s stereotype there is. If you want to reach a Millennial buyer, an easy way to make them see your home as more desirable – and more valuable – is to tear out your carpets and replace them with hardwood flooring. Hardwood is also easier to clean, which will appeal to Millennials’ desire for a low maintenance home.
Millennials have traditionally been difficult to understand, but an experienced real estate agent can help you navigate the Millennial market’s demands and stage your home in an appealing way. Contact a trusted real estate professional near you to learn how you can turn your home into something no Millennial can resist.
Aug 13, 2015 | Real Estate Tips
If you’re in the process of simultaneously buying and selling a home, you may be in for the most stressful experience of your life. One UK-based real estate survey of over two thousand people found that buying and selling a house is more stressful than divorce, bankruptcy, a death in the family, becoming a parent for the first time, and even planning a wedding!
It’s not easy, but staying calm will help you to plan for your upcoming home purchase and sale and make the process easier. So how can you avoid the stress? Here are three strategies that will keep you calm, no matter what may happen.
Have A Thorough Plan In Place…
Much of the stress that you’ll experience will probably be the result of poor planning. You may feel stressed if you don’t have enough time to move or if you have to pay mortgages on two homes because your old home isn’t selling fast enough.
Before you get too far into the buying and selling process, talk with a real estate agent and ensure you have a solid plan in place for how you’ll manage buying and selling at the same time. Leave a time and expense buffer for unexpected complications – even if nothing goes wrong, it’s still nice to know you have some room to work with.
…But Be Ready To Improvise If Things Go Sideways
There are a number of ways that buying and selling at the same time might result in complications. Poor timing might mean you need to move out before you have a home to move into, or it might mean you don’t have the money for your new home if your old home hasn’t sold. Be prepared to rent a hotel room, take out a short-term loan, or move your belongings into storage if the sale doesn’t go according to plan.
Talk Out Your Problems With Loved Ones
In times of stress, it’s helpful to turn to friends and family for a helping hand. Studies have shown that having a strong social support network can mitigate the effects of stress, and even the Mayo Clinic suggests reaching out to loved ones when you feel overwhelmed. Don’t be afraid to ask your friends for emotional support, and whenever you have an opportunity to socialize, take it – you’ll find it easier to handle stress after a fun night out with friends.
Buying and selling a home at the same time is bound to be stressful, but an experienced real estate agent can minimize the agony. Call a real estate agent near you to learn how you can successfully buy and sell a home at the same time.
