Mortgage Preparation Tips

As I’m sure everyone has heard, right now in the Phoenix Valley it is a great time to buy a house.  Whether or not you are able to make this commitment right now, you can still get yourself ready for when the time comes you can purchase. 

1. Check your credit now!  If you haven’t recently checked your credit, right now would be a great time to do so.  There are plenty of sites that offer free credit reports for you but make sure you check with all 3 bureau’s (Equifax, TransUnion and Experian).  Get a copy of your report and check for inaccuracies and surprises.  You want to make sure there are no surprise accounts that you are not familiar with and you want to make sure everything that is being reported is correct. 

This is especially important for anyone who has gone through a short sale.  It is not that uncommon for your short sale to be reported as either a foreclosure or still being reported as unpaid every month even after your short sale has closed. 

2. Start saving!  While there are programs available to help with down payment assistance, it is often encouraged to put as much down as possible.  There are two main reasons for this… the more you put down means the less you finance, which lowers your monthly payment.  Also, typically if you put less than 20% down on a home you will have to obtain Private Mortgage Insurance, which will increase your monthly payment. 

3. Keep your credit card balances UNDER your limit!  If your credit card balance is above your credit limit due to finance charges or anything else, it will impact your credit.  Make sure your limit isn’t exceeded and if it is, pay it down immediately!

4. Make your payments on time every month!  Every time you make a late payment it affects your credit but it also shows instability to a mortgage lender.  Set everything up on auto pay if you can.

5. Locate all your financial documents!  When you are applying for a mortgage you will need to provide bank statements, tax returns, pay stubs, proof of payoff on recent loans and other financial documents.  Keep these all in a safe place so they are easily accessible when the time comes.

6. Determine where your down payment will come from!  If you are going to be withdrawing your down payment from an investment, retirement account or other source, check with the financial institution to find out the withdrawal policy.  You may have a holding period, early withdrawal fees or other stipulations to obtain your money. 

7. Meet with a mortgage lender at least 3-6 months before you think you will be ready to buy!  Even if you aren’t quite ready to buy, most mortgage lenders will be willing to meet you with.  They can run your credit and let you know if there is anything you can do to improve your credit score.  Also, they can discuss your options to ensure you are fully prepared for the mortgage process when the time comes. 

8. Don’t change careers!  Mortgage lenders want to see stability in your career so don’t change careers prior to (or during) the mortgage application process.  Most lenders will allow you to change jobs as long as it is in the same field but double check with your mortgage lender to be safe. 

9. Don’t make any large purchases!  If you are planning on buying a house don’t go out and purchase a new car, boat or other item if it’s not needed.  Your mortgage lender will be checking your debt to income ratio to make sure you don’t already have too much debt and unnecessary purchases can hurt your income to debt ratio. 

10. Talk to a qualified Realtor!  Even if you aren’t ready to buy a good Realtor can help you understand the home buying process.  You also might want to determine which areas you are interested in so you can see what home prices are in that area. 

 

If you would like to talk to a great mortgage lender let me know.  I have a few great lenders that I work with and would highly recommend! 

 

Advertisements

Why waiting to purchase a home may end up costing you

 

 

Cost of wiaitng   2012-2013

The Cost of Waiting  2013-2014

 

Lower home prices fueled a home buying frenzy for the last 9 months.  Recently, he have seen a shift in the market causing some to think that we may see another “housing bust.”?

However, will waiting for rock bottom prices end up hurting you?

The last few years interest rates were at all time lows making home ownership a little easier for some to achieve.  In 2013 we began seeing interest rates rise and are now hearing that they are not expected to go back down.  In fact, they will continue to rise.

An FHA loan is the most popular loan for first time home buyers. Although FHA allows you to get into home with as low as 3.5% down, over the past year the Federal Housing Administration has raised the monthly mortgage insurance premium and extended the length in which it is required to carry this insurance resulting in increasing monthly mortgage payments.

Conventional interest rates have risen over the past year from on average of 3.6% to 4.6%.  (Diagram above depicts monthly payment increase)

So what are you waiting for?  Another decline in the market?  The “shadow inventory” banks are supposed to release?  The problem with these strategies are that they are uncertain.  We don’t know if a bust will occur or if banks even have “shadow inventory.”

The one thing we do know is that rates are on the rise!  “Every tenth of a point that rates go up makes buying more expensive,” says Jed Kolko, Trulia’s chief economist. “It will almost certainly be more expensive to buy six months, a year or even two years from now.”

Now that the holidays are behind us and the New Year is here, don’t delay any longer!  There is no better time than now to buy a new home.

When you make the decision to purchase a home, call a PRO.

Barry Home Pro

Danielle Barry

Direct: (480) 253-9286

barryhomepro@gmail.com

http://www.facebook.com/daniellebarryhomepro

http://www.barryhomepro.com

 

 

 

2014 Housing Market News! Are you ready?

Image

Were you a victim of the housing crash?  Are you wondering what 2014 holds for our real estate market?  Here what experts are saying….

Rising Confidence
A slowly improving economy along with a steady increase in employment is eliminating uncertainty and raising confidence in the real estate market. According to a survey from the Urban Land Institute, the real estate market should continue on its steady road back to health over the next three years.

Real Estate transaction volume in 2014 should reach $340 billion, up from $290 billion in 2012, an increase of over 17%. Mortgage backed securities, a major funding source for commercial real estate, is expected to almost double from $48 billion in 2012 to $80 billion in 2014. The forecast on real estate investments is also strong even though REIT (Real Estate Investment Trusts) returns are expected to be 12% this year and fall to 10% in 2014. Total returns from investments in apartments and from retail, industrial and office real estate are forecast to be 9.5% this year and to fall to 9% in 2014. That’s less than 2012 but very much in line with historical trends.

Particularly encouraging for rental property owners is that the apartment sector is providing the biggest investment return in 2013 with a projected 10%. Though a slight decline is expected next year, that sector should still top the real estate investment list.

Residential Market Growth
The news is also good for the residential housing market, according to MSN Real Estate. By mid-2014 prices are expected to climb back 7% from 2010. The leading housing markets are the state of Washington, Oregon, Michigan, Napa region of California, Nevada, Florida, Arizona, New Mexico, Wyoming and Alaska.

The real estate market clearly turned the corner in 2012. Existing and new home sales and housing starts are all up significantly this year as compared to the low activity of the past four years. The forecast for 2014 is for 1.13 million housing starts, up from 776K in 2012. Apartment construction will be uneven, concentrating in about 15 submarkets.

Red Flags
There are some things that could dampen the real estate market next year, including restrictions on availability of mortgage credit or any further “fiscal cliff” type disruptions at the federal level. That said, inflation will likely be on the rise as a result of pressure from the increasing federal deficit, rising rents, quantitative easing by the fed (adding cash to the money supply), and a national debt of 10% of gross domestic product. With home prices expected to rise by 5-6% in 2014, that once again makes real estate a solid hedge against inflation.

So all in all after more than a half-decade of bad news, the real estate market is slowly returning to health.

*content credit to Aimee Miller of appfolio.com

 

http://www.barryhomepro.com

http://www.facebook.com/daniellebarryhomepro

barryhomepro@gmail.com

 
 

Real Estate Wednesdays

Image

The bell ringing season starts in November and runs through the Christmas Eve. It only takes one shift to raise enough money to provide two nights of shelter and four warm meals for the men, women and children who enter the Salvation Army doors every day!

The Real Estate Community is coming together as a whole to ‘ring the kettles’ for Salvation Army each Wednesday during the Christmas Holiday.  I will be doing my part to help the Salvation Army by ringing the bell on Wednesdays at the Basha’s on Power Rd and Chandler Heights in Queen Creek, AZ.

I’d love to see everyone come on by and help donate to this worthy cause!  If interested in helping with volunteering please contact me at anytime.

http://www.barryhomepro.com

http://www.facebook.com/barryhomepro

480-544-4710

 

 

 

Buy VS Rent?

rent-vs-buy

With rising rents, fallen home prices and still historically low interest rates- is now a good time to buy a house?

In the US it has always been more attractive to own a home over renting.  However, in the last few years for many renting was a must.   After the housing crash some people  weren’t able to buy a house or weren’t ready to become homeowners again– at least not right away. They would rather rent until they feel comfortable again investing into the housing market.  Landlords have been able to really relish in the housing decline.  We have seen rents rapidly increase.  Rising rents can sometimes make a mortgage payment look good again.  Especially when you consider the mortgage interest tax deduction.  Although, having a landlord just a phone call away to fix that leaky sink or replace the never ending running toilet often times keep renters from making the home ownership plunge.

2007 marked the beginning of drastically dropping real estate in our areas.  In the past year we have seen those home prices finally start to increase again.  The Phoenix, AZ market saw large swings in home prices.  We are now hearing that the inventory has leveled out and we should see an equal playing field for both buyers and sellers.

Rates are still low.  Can you afford to miss the boat on that lower rate?  Yes, we have seen a small increase in interest rates, however historically they are still very low.  According to market reports, housing experts expect rates to creep up in 2014.  Will the same home that you are interested in now be within your buying power if rates rise a point or two?

Making the decision to purchase a home is a big one and requires a lot of thought.  Only you will know when you are really ready to dive into home ownership.  When you do, always remember to call a PRO!  Barry Home Pro.

Danielle Barry

|www.barryhomepro.com|www.facebook.com/barryhomepro|barryhomepro@gmail.com