Topics:Homeowner Tips Downpayment Home Improvement First-Time Homebuying Working With An Agent Successful Selling House Hacking Best Mortgage Rates Companies real estate investing Closing Costs Home Loan Research
Guest Post by Baruch Mann (Silvermann) When you've fallen in love with a prospective home that checks off your "must haves" — the extras from your wishlist, the neighborhood you really love, the garage space you've dreamed about — it is time to move on to the next steps. While you’ll get more important details about the property, it must pass the inspection process. Additionally, since you’ve fallen in love with the property, others may feel the same way, so you’ll want to move on with the process as quickly as possible. If the property is attractive, there may be a lot of competition from other buyers. So, is it possible to deal with both tasks — passing a home inspection and beating out competing buyers — simultaneously? Can you learn if it’s the right location for your specific needs? Can you win a bidding war? How do you deal with the inspection process? And what about your finances? Figure out the final details Now that you’ve found the home that you’re interested in, use these strategies to figure out a bit more about the home and your new location: Ask the right questions — You can obtain lots of information with some basic questions. You should start by asking why the seller is selling the home and how long they lived there. Start to build a relationship that could be helpful during the negotiation process. If you're looking to buy a house that has been frequently moved out of, it could be a sign that there is something wrong in the area that requires closer attention. Are there any problem neighbors? Are there traffic issues, crime, or local businesses that could pose a difficulty? You may notice the neighborhood has lots of litter or bright lights. Conversely, there could be barking dogs at all times of the day and night and broken street lamps. Any of these issues could be a warning sign not to buy, so it is crucial to ask early on and avoid homebuyers' remorse from not asking enough questions. Talk to an agent — While you should know what's going on in the area, you may lack local knowledge. It is crucial to talk to a real estate agent to gain real insight into the area. If you're new to the area, you may not be comfortable with certain aspects of the neighborhood. Ask about issues such as school catchment areas, litter problems, parking, traffic, and noise. Think about all the things that could bother you and ensure you ask the agent about the possibilities. Visit the property at different times of the day and night, so you can get a realistic picture of the neighborhood. Use online neighborhood comparison tools — Numerous online tools can give you a general overview of new neighborhoods. Realtor and HomeFinder will not give you the skinny about the home, neighborhood, crime, schools, and more. GreatSchools.org, on the other hand, can help you to find out where the schools rank. You can compare new neighborhoods with where you currently live. This will help you to find a similar neighborhood or one with better schools or lower crime rates. Win a bidding war on the house you really want How do you win a bidding war on the house you want? It’s a very important question to consider, and here are some steps you can take to help ensure that the home will be yours: Make a good impression when you initially visit the home. Be polite, ask questions, and develop a rapport. Real estate can be a highly emotional process — the seller may be emotionally attached to their property, so it is nice to express what you like about it and why you want their home. Work with your realtor to compare listings in the area, so you can determine the right amount to offer. Generally, the more competitive the market, the nearer to the asking price you'll need to be. Come with cash. Not everyone is able to do this, but if you're in a position to make an all cash offer, you'll have an advantage. In very hot markets, with heavy investors, there are usually cash offers on the table. Sellers will be reluctant to deal with the possibility of loans now coming through, or they may not want the delay needed for mortgage processing, so cash is preferred. Develop a relationship with the seller. In the end, real estate is all about people. As we touched on above, a good relationship with the seller could help you to win a bidding war. So, you should start working on your relationship from the moment you initially visit the house. You could try writing a personal letter to the seller, explaining why you want to buy the house. If you have a young family, you could write about picturing your kids enjoying the cozy family room or playing in the yard. You could also write about how much you love the neighborhood and are looking forward to becoming an active part of it. Use the win/win perspective when negotiating Your best strategy is to position yourself as a strong buyer who’s serious about getting to the closing table. However, don't skip negotiations and be ready to walk if necessary. One of the worst things you can do is get over emotional and overextend yourself. Many people make the mistake of starting each negotiation like going into battle. This will not only annoy the listing agent you're likely to work with again in the future, but it could hurt you in the long run. Instead, focus on solutions. This will help you to avoid turning every point into an adversarial crisis. Understand what is important for the seller and aim to allow them to feel that they also won. For example, if there is a roof issue, but the seller wants to sell and move now, you could ask for a discount and do the repair yourself. If the seller is unwilling to compromise on the price, you could request extras that were not included in the home inspection report. Dealing with a rejected offer If your offer is rejected and there is no counter offer, you need to ask the seller’s agent for a reason why. There are limitless reasons why sellers choose not to move forward with an agreement. For example, the seller may have received several offers, and yours may not be the most attractive. Alternatively, the seller may decide to wait for an even better offer. If you discover your offer was rejected due to a better offer from someone else, find out if the other offer has been accepted. If the offer has already been accepted, you’ll need to start shopping for a new home. However, if the offer is still in the negotiation stage, there may be time to present a new offer. This will mean working with your agent in a bidding war. If you’re a first-time home buyer, reach out to your agent for tips on making an attractive offer. An agent familiar with the local market, who has negotiation experience will provide an invaluable resource for you during the home-buying process. Managing the inspection process When dealing with inspection, it’s recommended to have someone who understands the process with you. Understanding the inspection process is mainly based on experience, but if you know someone who deals with inspections this can be even better. When I bought my first home, I had no real idea of how it worked, so I called my father. He had a lot of experience and knowledge, so he paid attention to the details, asked the right questions, and helped me to understand potential problems. Although you'll get a report, it will be easier to understand a problem that's been explained to you, so you can see what the issue is. To negotiate for credits or repairs, you should start by obtaining a local contractor or construction professional estimate for how much the repairs should cost. If you're working with a real estate agent, they can handle the negotiations on your behalf. Supply your agent with a copy of the inspection report, so they can use it as leverage when working with the listing agent and the sellers. Make sure you get the right mortgage for your needs You need to ensure you weigh things out appropriately, and you work on which mortgage lender will be best for you and your family in the long term. This may be paying equally from the beginning or paying a little now and more later. This is based on three different things: The mortgage term — The loan term has an impact on every aspect of the loan. It affects how much you pay every month, the interest costs, and other expenses. With a longer term, you will have lower payments, making it attractive for many people, but you need to be prepared to pay more in the longer term. Interest rates and types — A fixed rate means that there will be no change in how much you'll pay. Adjustable rates are subject to interest changes, usually at specified times. Which type is preferable will depend on your specific circumstances. Mortgage types — In addition to choosing between a fixed and adjustable rate mortgage, you should look at conventional mortgages versus government loans. Each of these has drawbacks and benefits, so carefully consider these before you make a final decision. Buyers should have their funds for closing costs readily available. You'll need to be ready to wire the funds or present a cashier's check on the day prior to closing. Lenders require proof of sufficient funds for a down payment and closing costs before closing. You should also bring copies of the paperwork you received or signed during the home-buying process, plus two forms of ID and the payments you need to make. Baruch Mann (Silvermann) is a personal finance expert and founder of The Smart Investor, a financial online academy for millennials that helps thousands invest smartly and make better financial decisions.
A mortgage is a type of loan that is used to finance a home purchase and gives your lender the right to take your property if you fail to make your payments. Most homebuyers need to get a mortgage, unless you can pay for the full cost of the home out of pocket. Julie Aragon, a trusted mortgage expert at Julie Aragon Lending Team, explains that getting a mortgage should always be your first step in the homebuying process: “Talk to a licensed loan officer (aka mortgage lenders) as soon as possible (definitely before you fall in love with a property) so you can understand how much you can qualify for and what types of up-front and monthly payments scenarios you'd be looking for at different purchase price points. If you're already using a real estate agent, get a recommendation from them.” To qualify for a mortgage loan, certain eligibility requirements must be met, including having a good credit score (generally at least a 580), and a low debt-to-income ratio of less than 50 percent. How does a mortgage work? Like other types of loans, your lender gives you a set amount of money that you are required to pay back over a set period of time. In addition to your loan balance, you will also be required to pay interest on your loan, which will be determined in large part by your creditworthiness and how much of a risk you pose to your lender. In most cases your home is used as collateral, meaning that the lender has the right to foreclose on your property if you miss a mortgage payment — foreclosure generally doesn’t occur until you’ve missed two or three consistent payments. How do I get a mortgage? Getting a mortgage can seem like a daunting process, but it really comes down to choosing the right lender and mortgage loan type for you. 1. Check your finances Because your mortgage interest rate and ability to qualify for a mortgage is reliant upon your creditworthiness, it is important to check your credit score. You may even need to work to improve it if possible, allowing you to get better rates and terms. Andy Kolodgie: Owner of The House Guys industry expert Two important things when qualifying for a mortgage: The two most important things when qualifying for a mortgage are credit score and debt to income (DTI) ratio. However, there are a multitude of other requirements that you can get caught up in (such as a minimum 2 year job history). Your DTI ratio ideally needs to be 43% or less but certainly no more than 50%. In terms of credit score, the higher the better — but any higher than 760 won’t make a difference for qualifying). The minimum credit score (unless you’re doing a VA loan, which has no minimum) is 540. While there are mortgage options if you have bad credit, doing what you can to ensure that you have a healthy credit score could save you a lot of money in the long run. In most cases, you should strive to have a credit score of at least 700. 2. Determine what you can afford It is important to take stock of your finances, make a budget, and crunch some numbers so you know how much money you will need to buy a house, including a down payment and closing costs. Ensuring that your finances are in order could save you time in the mortgage process, especially if you have an idea of what size down payment you can make. It can also provide you with peace of mind, knowing that your finances are in order and that you’re prepared to meet the costs of buying a home. How much money do you need to buy a house? Calculate how much money you will need upfront to buy a house — including a down payment, closing costs, moving expenses, etc. Calculate 3. Build your savings Buying a house is a large expense, and so it is likely that you have already built up your savings to make a down payment and pay closing costs. But, even beyond those expenses, you'll want to build up your savings so that you have some wiggle room if an emergency arises or you are met with more costs than you initially anticipated. 4. Choose a mortgage lender There are a lot of different mortgage companies to choose from, so how do you pick one? A good place to start is by comparing interest rates, fees, and down payments across lenders. Interest rates vary by loan type and term, but the average rate you will see across the industry is approximately 3 percent APR. Many lenders offer lower rates, such as AmeriSave with rates as low as 2.328 percent. The interest rate you will receive will be dependent on your credit score and current finances, so it can be helpful to pre-qualify with various lenders to compare the rates that you would get. Many mortgage lenders have an application fee, loan origination fee, third-party fees, and other government processing fees. The cost of these fees may vary by lender, and some lenders may not have certain fees, and so it is important to do your own research to see what fees your top lenders have. For a conventional loan you can generally make a down payment as low as 3 percent, but this will also depend on the lender that you choose. Sundance Brennan: American Financial Network, Inc. Industry Expert Tips for choosing a mortgage lender: There are a lot of mortgage lenders in the marketplace. When people ask me who they should be working with, it’s usually less about the rates and fees and more about service and trust. The playing field has been leveled in terms of rates and fees that are allowed to be charged and there isn’t really a wide range of costs in today’s market. You can certainly find some price differences, but in the macro sense, our borrowers are savvier than they have ever been. With information readily available on the internet, lenders have found that they need to be priced very near their competitors to find success. That should give the borrower some peace of mind knowing that reasonable prices happen when there is an open competitive market. Read reviews online, find a personal referral if at all possible, and make sure that when you speak to your loan officer you are comfortable with all of their answers and guidance. In addition to typical mortgage factors such as rates and fees, we wanted to know what mortgage consumers were most concerned about in a mortgage lender. So, we took a look at the mortgage company reviews left on BestCompany.com. From these reviews, customers most often mentioned the following in their mortgage loan experience: 65% mention customer service 38% mention speed and efficiency in the overall mortgage process 20% mention transparency 16% mention interest rates Customer service For the majority of consumers leaving reviews, customer service is one of the most important aspects of the mortgage process. In many reviews, consumers name specific loan officers that they worked with, either describing positive or negative experiences. On many mortgage company websites you can search for loan officers to try and find the best fit for you and your needs. Speed and efficiency It takes an average of 30 days to process a mortgage loan application, but in many cases, this process can take a much longer amount of time, up to 60 days. But, consumers prefer companies that can process an application quickly and efficiently. Transparency In many negative mortgage company reviews, customers detail experiences in which companies were not transparent with costs — customers were hit with much higher costs at the close of the mortgage loan process than they were given at the beginning of the process. Interest rates It is surprising that mortgage consumers are quick to mention customer service, speed and efficiency, and company transparency before interest rates. Thus, it can be inferred that customers are more concerned about the overall experience of working with a company than rates and terms. However, this is still an important factor in the mortgage loan process, and consumers do want low rates. Julie Aragon: Julie Aragon Lending Team Industry Expert Make sure you read mortgage lender reviews: We recommend finding someone who has a lot of experience in the area(s) you're eyeing for your purchase. Start with recommendations from local friends and/or family who've had good experiences with lenders in the past. No matter what, research online reviews. Read Top Mortgage Company Customer Reviews Compare top-rated mortgage companies and read reviews from real customers to find the best lender for you. Compare 5. Choose the right mortgage for you Since mortgages aren’t “one size fits all” there are a variety of loan options available, allowing consumers to tailor their mortgage to their needs and finances: Conventional loan — The most common type of mortgage loan. A conventional loan isn’t backed by a government agency and is instead backed by a private lender. Generally, this loan type will require a down payment of at least 3%. Adjustable rate mortgage (ARM) loan — With an adjustable rate mortgage loan, your interest rate will vary throughout the loan. This means that your initial interest rate will be lower than with another type of loan, but that rate will fluctuate, raising and lowering your monthly payment as you’re paying off your mortgage. FHA loan — An FHA loan is backed by the Federal Housing Administration and accepts down payments as low as 3.5% with a credit score as low as 580. This loan type can be a great option for first-time homebuyers. VA loan — VA loans are offered by private lenders and are partially backed by the U.S. Department of Veteran Affairs. This loan type offers mortgages to military service members, veterans, and select military spouses with a 0% down payment. USDA loan — Only available to eligible rural homebuyers, a USDA loan is backed by the U.S. Department of Agriculture. This loan type offers low interest rates and a 0% down payment, but you must buy a home in a designated rural or suburban area. Jumbo loan — A jumbo loan is used to finance expensive properties that exceed the limits of a conventional loan. This list is not exhaustive, and it is important to note that not all lenders offer all loan types. But, the lender you choose to work with will be key in helping you know which loan type will best fit your needs. 6. Get pre-approved for a mortgage Mortgage pre-approval is a preliminary evaluation by a lender to determine whether or not a borrower is eligible for a mortgage loan. If you are pre-approved, the lender will provide you with a letter, which will be necessary to have when you’d like to place an offer on a house. In general, it takes 1 to 3 days to receive a pre-approval letter. 7. Go house hunting When you’re ready to start the house hunting process, it will be important to find a real estate agent. While you can buy a home without using an real estate agent, it is recommended to use one to simplify and help throughout the house hunting process. "Real estate agents take a bigger responsibility with the whole process in buying a house. When you are a first-time home buyer it is best to ask for assistance from real estate agents since they will make your home hunting easier," says Ben Singh, Owner/Founder of SEEB Homes. "They will be alert for issues that might not cross your mind when buying a house and they will address it quickly. It will save you a lot of time and money since they can give you researched, current, and reputable data regarding a neighborhood's demographics, crime rates, schools, and other important factors." 8. Close on a home Once you’ve found the home of your dreams, it’s time to close — transfer the ownership of the home from the seller to you, the buyer. If you have a real estate agent, they will take care of the majority of the closing process. But, this process generally includes getting a home inspection, renegotiating the home sales prices, if necessary, completing your mortgage application, getting homeowners insurance, and then signing on the dotted line of the closing documents. Who are the top mortgage lenders? We took a look at customer reviews for the top-rated mortgage companies on BestCompany.com, and we noticed that customers most often outlined sentiments and experiences with customer service, the overall loan process, and interest rates. Keep reading for a breakdown of customer reviews for each company. AmeriSave Mortgage search Highlight: AmeriSave offers an efficient loan process and low rates. AmeriSave Mortgage is one of Best Company's top picks for a mortgage lender, offering low rates and a quick and easy loan process that will get you to closing faster. AmeriSave Mortgage was founded in 2002 and has funded over $55 billion in home loans and has been trusted with over 280,000 homes. As the top-rated mortgage company on BestCompany.com, 87 percent of AmeriSave Mortgage reviews are 4 or 5 stars. From these positive reviews, we gained the following insights*: 59% of customers mentioned positive experiences with customer service. Loan officers were professional, knowledgeable, and quick to respond. 42% of customers mentioned that AmeriSave’s loan process was fast and easy. In addition, 21% of customers specifically noted how they appreciated that the AmeriSave loan process was almost entirely done online. 23% of customers mention low and competitive rates. AmeriSave Mortgage Customer Review: Joyce from Newport News, Virginia “They were very quick, efficient, and handled everything well. They knew all the answers to questions I had and they were just fantastic. They had my process finished in a month and a half. The whole experience was just fantastic.” *Data and insights are taken from a sample of 100 AmeriSave Mortgage reviews. Learn more about AmeriSave Mortgage New American Funding search Highlight: New American Funding offers outstanding customer service. New American Funding is one of Best Company's top picks for a mortgage lender, offering outstanding customer service with loan officers who will help you at every step of the loan process. New American Funding was founded in 2003 and has funded over $33.6 billion in over 137,000 home loans. Ninety-nine percent of New American Funding reviews are 4 or 5 stars. From these positive reviews, we gained the following insights*: 82% of customers mention positive experiences with customer service. Customers were able to receive personalized help quickly and loan officers were reliable and knowledgeable. 35% of customers mention how fast and easy the New American Funding loan process was from application to close. 16% of customers mention low and competitive rates. Speaking to these points, and especially to providing exceptional customer service, Rick Arvielo, New American Funding cofounder and CEO, states: “New American Funding considers itself to be a family, and our clients are part of the family too. We believe in developing industry-leading technology and combining it with unparalleled customer service to create the best possible mortgage experience for our borrowers. That philosophy has led our company to become one the nation’s largest and most respected lenders.” New American Funding Customer Review: Mark from Columbus, Ohio “They frequently checked in with me during the house buying process to make sure I had everything I needed. Once I found the home I was ready to purchase, they made sure I was informed and understood each step along the way until I closed on my new home!” *Data and insights are taken from a sample of 85 New American Funding reviews. Learn more about New American Funding NBKC Bank search Highlight: NBKC Bank offers an efficient loan process and oustanding customer service. NBKC Bank is one of Best Company's top picks for a mortgage lender, offering outstanding customer service with top-notch loan officers that customers frequently mention positively by name in reviews, and a quick and easy loan process that will get you to closing faster. NBKC Bank was founded in 1999 and offers a full suite of traditional banking services. The company has a top-ranked mortgage program and offers discounts to Costco members and home loan savings for all. Ninety-eight percent of NBKC Bank reviews are 4 or 5 stars. From these positive reviews, we gained the following insights*: 89% of customers outline positive experiences with customer service. The majority of reviews mention specific loan officers by name and that customers felt like they were receiving prompt and personal care. 50% of customers mention how fast and easy the NBKC Bank loan process was from application to close. 14% of customers mention low and competitive rates. In addition, customers also frequently mention low fees and closing costs. NBKC Bank Customer Review: Alexander from Alpharetta, Georgia “I am a first-time home buyer, and despite the whole process is pretty complex, I found all communication to be amazingly swift and smooth. NBKC offered us a great mortgage rate, and our agent, Ryan, managed to get to the closing even faster than we expected…” *Data and insights are taken from a sample of 100 NBKC Bank reviews. Learn more about NBKC Bank Compare Top Mortgage Companies Learn more about top-rated mortgage companies and read reviews from real customers to find the best lender for you. Compare Expert contributors: Julie Aragon, mortgage expert at Julie Aragon Lending Team. Andy Kolodgie, owner of The House Guys. Sundance Brennan, Branch VP of Training and Sales at American Financial Network, Inc. Ben Singh, owner/founder of SEEB Homes.
Even before you start looking at real estate, asking yourself how much money you need is a very good place to start in the home-buying process. If you’re already aware of down payments and closing costs, you can give yourself a pat on the back, but make sure you plan for all costs and expenses, even the smaller ones that you might forget about. So, how much money do you need to buy a house? Honestly, it's probably going to be even more than you thought. But this is no reason to despair. Armed with knowledge of the required costs and a thorough budget, you will be in a good place to start the home-buying process. Continue reading for detailed information on specific costs involved in buying a house, as well as a handy calculator that can help you see how much money you might need to buy a house. Down payment Maybe you’ve heard before that you need to make a 20 percent down payment to buy a home. While this can significantly reduce the size of your loan and cut out the cost of paying mortgage insurance, saving you more money on your monthly mortgage payment, this doesn’t mean that you must pay 20 percent down. In fact, most people make a down payment of 6 to 12 percent. And, there are mortgage loan options that only require 3 to 5 percent down, or no down payment at all: FHA loan — insured by the US Federal Housing Administration and intended for low-credit score borrowers with a minimum down payment of 3.5 percent VA loan — guaranteed by the US Department of Veteran Affairs with a 0 percent down payment USDA loan — offered to rural property owners by the US Department of Agriculture with a 0 percent down payment The majority of loans offering low down payments are backed by government entities, but that doesn't mean that you must pay 20 percent down if you choose a conventional mortgage loan. In many cases, you will be able to negotiate your down payment on a conventional loan, but you will likely get a higher interest rate because your loan will be backed by a private lender instead of a government entity or agency. Dan Green ceo of Homebuyer, a mortgage lender for first-time homebuyers What size down payment should you make? Down payment requirements are flexible, and it’s important to stay within your means. Just because you can make a large down payment doesn’t mean that you should. To find a suitable down payment figure, calculate how much money you’ll need for six months of living expenses and set that money aside. Whatever you have left is safe to use for buying a home. If you would like help in making a down payment, you can look into payment assistance programs. There are 2,000 of these programs available nationwide, and they are generally run by state, county, or city governments. Most down payment assistance can be broken down into two categories: grants or second mortgages. Determining the best down payment for you depends on your personal finances, but there are some helpful things to consider that can help you in that decision process: When is it best to make a large (or at least the 20%) down payment? If you have the means and financial stability, making a larger down payment can significantly cut down your monthly mortgage payments. But, you should consider how much more you will then be paying up front, which may be a large financial hit that could be difficult to recover from. “It's not always better to make a big down payment. The best down payment is the one that doesn't deplete your savings. Life rarely moves in straight lines. It's important to keep cash for emergencies,” says Green. When is it best to make a small down payment? “Small down payments work best when you earn good monthly income and don't have big savings,” adds Green. Especially for first-time homebuyers, it is wise to make a smaller down payment, as this will provide you with greater cash flow in the future, as opposed to putting a large amount of money down up front and depleting your savings. Closing costs While the down payment on a home is a large and important expense, don’t forget about closing costs. Closing costs cover a myriad of fees involved in processing and finalizing a mortgage, and generally come out to 2 to 5 percent of your loan amount. This may not sound like a lot, but say you buy a $300,000 home, your closing costs would range from $6,000 to $15,000. Closing costs generally include the following: Loan application, origination, and underwriting fees Home inspection and appraisal fees State recording fees Property taxes Homeowners insurance Private mortgage insurance (PMI) Escrow fees Warranty HOA costs If you would like to lower your closing cost, since it can be quite a hefty amount of money, there are a few options you could look into, such as grants, or simply asking about discounts and rebates. However, the best thing you can do is plan ahead so that you won't be surprised when it's time to close on your home. Additional costs/fees After determining what percent down you will put on your house and how much money you will need to put aside for closing costs, there are just a few more costs to consider: Moving expenses Unless you have a lot of charitable friends with trucks and a day to spare, you will likely need to consider what it could cost to hire a moving company and/or rent a moving truck. Especially if you are moving across state or across the country, it is very important to consider how much it will cost you to move. On average, the cost of hiring professional movers for a local move will range from $300 to $1,500, according to Move Buddha; if you are moving a long distance it could cost you $2,400 to $5,000. If you’re moving across the country, your costs will increase, and there are other important considerations like the cost of shipping a car. Depending on the distance of your move, be prepared to set aside at least $300 if not more. Home furnishing and maintenance If you don’t have many belongings and/or pieces of furniture to move into your new home, consider the cost of home furnishing. This could include couches, a dining room table, rugs, etc. It is also important to set money aside for home maintenance, such as gutter cleaning or yard upkeep. Be sure to budget for the items you know you will need up front, as this will save you from financial stress down the road. Jeff Beck, CEO and President of Leaf Home Solutions, expands on these points: “According to a recent report, lumber costs have surged more than 170% over the past year, which can add nearly $24,000 to the cost of a new home. Materials such as concrete, metal products, appliances, and other expenses are also increasing due to supply chain disruptions caused by COVID-19 shutdowns. Many first time home buyers, especially in this market, are so motivated to put in the highest potential offer, that they aren’t thinking about maintenance expenses. For example, if gutters are not cleaned within the first six months of owning your new home and water overflows from the gutters, it can fall along the foundation of your home, freeze, and result in cracks. Gutters should be cleaned at least twice a year to prevent damage to your roof and foundation. Certain homes, potentially both new and old, don’t always have proper windows installed to match the weather conditions of the area. Areas susceptible to hurricanes and tornadoes need to consider storm tight windows that properly seal, which as a new owner, you may not notice right away. The upkeep of maintaining a home through your changing needs is important. Many of our customers invest in their homes by introducing features and amenities that represent convenience and accessibility, such as walk-in tubs and high-quality stair lifts. Our products and installations provide peace of mind to customers that their home is secure for every phase of life.” How can I save money on my home purchase? After reading through all the costs involved in buying a home, making some estimated total cost calculations, and likely coming face-to-face with one intimidatingly big number, you might be wondering if there is any way that you could save money on your home purchase. You might be able to save some money, but the truth is, it really comes down to the mortgage lender you choose. From our review data, we were able to get an idea of some of the “cost experiences” consumers were having with different mortgage lenders in the industry: (*Note: “reliable” and “unreliable” costs refer to whether or not costs changed from application to closing) 5% of all reviews mentioned costs — either low or high costs, or getting hit with costs they weren’t aware of when they applied with a mortgage lender. 21% of reviews mentioned NBKC Bank’s low and reliable costs*. 12% of reviews mentioned Quicken Loans’ high and unreliable costs*. *Taken from a sample of 121 reviews. If you are looking to keep costs as low as possible, NBKC Bank may be a good choice. Of the more than 400 customer reviews, 95 percent of customers award NBKC Bank 5 stars, highlighting low rates and fees, and a painless process with no surprises. NBKC Bank is an online bank with physical branch locations in the Kansas City area, and it also offers a discount to Costco members. Read NBKC Bank customer reviews As a well-known mortgage company, Quicken Loans is a popular choice, but customer reviews are almost an even split between 1 and 5 stars. Many positive reviews highlight good experiences with customer service, but many negative reviews outline very high costs which, in some cases, were tacked on at the end of the loan process, giving customers a rude awakening. Read Quicken Loans customer reviews Compare Top Mortgage Companies Learn more about top mortgage companies and read reviews from real customers. Compare Expert contributor: Dan Green, CEO of Homebuyer, a mortgage lender for first-time homebuyers
Guest Post by Bill Gassett Do you want to buy a home but have awful credit? Buying a home with bad credit can be seemingly impossible. You’ve probably heard before that you need a good credit score to buy a home, which is part of the truth. While having a top-shelf credit score can certainly help you get the best loan terms and conditions, it isn’t a necessity. In fact, there are mortgages such as bad credit home loans that are available to anyone with a bad credit score. So all is not lost! In this article, we’re going to go over just how you can buy a home with bad credit and how your overall credit score might not be as big of an issue as you think it is when you’re trying to fly the nest. What is considered to be a bad credit score? Before we get into the loans available to you, let’s first talk about what is considered a bad credit score. Unfortunately, there is nothing set in stone when it comes to knowing whether or not you have the minimum credit score required by a lender to buy a house. Mortgage lenders set their own requirements when it comes to lending money to those with bad credit, but there are some general rules you can apply to find out whether or not you would be eligible for a loan. Perhaps most important, it is essential to have a firm grasp on specific credit score ranges and where you fall into the mix. You’re going to find that if you have a credit score lower than 500, it will be difficult to get yourself a home mortgage. A score between 580–669 is considered to be a fair score, while one that is from 300–579 is considered to be very poor. But remember, even if you have a bad credit score, it doesn’t put you in the same scenario as someone else with a similarly bad credit score. There are other factors that mortgage lenders consider before declining or accepting your mortgage request. Can you buy a house with bad credit? As mentioned above, even with a low credit score, a mortgage lender will consider additional factors to your credit report when you apply for a mortgage. Lenders will also consider the following: How much debt you currently have The amount of money you have available for a down payment How much money you’re bringing in each month Essentially, even with a lower-end credit score, as long as you have a sizable down payment, you’re more likely going to be considered for approval for a home loan. Since your credit score will only qualify you for a certain loan amount, if you have a sizable and consistent monthly income, then you can make up the difference with that instead. Though, as mentioned before, the lender you choose to go with also matters because the requirements you’re going to need to meet will vary. If you are serious about buying a home, you should also get your mortgage pre-approval squared away before you start looking at homes. What are the bad credit loan options? FHA loans An FHA loan is a great choice if you’re a first-time buyer. One of the significant benefits of an FHA mortgage is that you will only need to come up with 3.5 percent for a down payment. The Federal Housing Administration (FHA) backs these loans. The minimum credit score requirement for a loan is usually around 580. If you can make a sizable down payment of at least 10 percent or have a high income, then you could be approved for a loan even if you have a score as low as 500. However, many lenders may shy away from granting financing when you're under 580. Conventional loans There are no real specifics tied to getting a conventional mortgage loan, though you will need a minimum credit score of 620+ if you’re looking to qualify for a loan like this. Typically, if you have a high down payment ready or high monthly income, it will be much easier to qualify for this type of loan even if your credit score is below 620. It is advised to speak to multiple lenders or find a reputable mortgage broker who has access to numerous lenders. The benefit of using a mortgage broker is that you are not locked into one lender's standards. Mortgage brokers can seek out and find the best loan for your specific financial circumstances. USDA loans Another loan backed by the government, a USDA, allows you to buy a home in a qualifying rural area with a zero percent down payment. You will need a credit score around 640 to be qualified for this loan, along with other specifics. A USDA loan can only be used to buy a home in what's considered a rural area. By definition, that is an area whose population is no more than 10,000 or a population that is no higher than 20,000 while also not in a metropolitan statistical area and lacks mortgages available for low to moderate-income families. Lastly, an area that used to be classified as a rural area but was changed due to census figures might still qualify if the area's population doesn’t exceed 35,000 and still has rural characteristics. A lender will be able to tell you if the area qualifies for a USDA mortgage. VA loans If you’re a veteran or you’re currently an active-duty member of the armed forces, then choosing a VA loan could be best for you. A VA loan allows you and your spouse to buy a home with zero down payments, although just like the other loan options on this list, you’re going to need a credit score around 620 to be eligible for a VA loan in the first place. Other than USDA loans, a VA mortgage is the only other no down payment option. What about a hard money loan? A hard money loan should be your last resort if other lenders turn you down due to your bad credit score. Hard money loans are not based on the borrower's creditworthiness but on the value of the property used for collateral. Traditional lenders do not grant hard money loans. They are typically given by private investors, or hard money lenders, who see an opportunity to make money by charging a borrower a much higher interest rate, which can be a big downside for the borrower. But on the positive side, it is usually a short-term loan that allows someone to purchase a home. The borrower has to feel confident that their current lack of good credit standing is short-term, and they expect a rapid improvement. The goal would be to refinance out of a hard money loan as quickly as possible. How can I improve my credit? For obvious reasons, anyone looking to buy a home should strive to increase their credit score. A good credit score comes in handy for so many things in life, whether buying a home, car, or credit cards; having a good credit score can also save you an incredible amount of money by lowering your mortgage loan interest rate. Besides spending money going to a credit improvement company, you can do another highly recommended thing to improve your credit. Sign up for a free service like Credit Karma or Experian to find advice on how to improve your credit scores. Many people often make poor credit choices because they don't know what negatively impacts it and what doesn't. For example, many people might think canceling a credit card is a good move when, in fact, it will drop your credit score. Being aware of credit myths such as this can make the biggest difference in improving your credit score. Final thoughts Whether you are buying a traditional house, modular home, townhouse, or condo, your credit score will play a significant role in what you "really" pay for a home. While most people look at the purchase price as what they have paid, it really is the interest on the loan you end up paying over the term of the loan. When you have a bad credit score, you have a higher interest rate, which in turn makes for higher monthly payments, which is very important to consider. Striving to obtain the best score possible is worth the effort, but if it isn’t where you’d like it to be right now, take heart in knowing that there are some other options available to you, allowing you to fulfill your dream of buying a home. Bill Gassett has been a real estate agent for the past 34 years working for RE/MAX Executive Realty in Hopkinton, Massachusetts. He is also an avid writer for numerous real estate publications including The National Association of Realtors, RIS Media, Inman, as well as his own blog "Maximum Real Estate Exposure."
Guest Post by Bill Gassett What is a modular house? If you've always wanted to build your own home, many things can put you off the idea. You would need to hire architects and a team of contractors, as well as manage the build. This could lead to a lot of stress and certainly a lot of expense. However, a modular home offers you the chance to build your own property without many of the problems associated with a traditional build. Lots of folks wonder exactly what is a modular home. Let's take a look at what you need to know about modular homes to help you decide if this type of home is right for you. How are modular homes different? With traditional home building, the construction process can take many months, with delays due to the weather being a common problem. A modular home can be constructed in a matter of weeks, with most of the work being carried out off-site in a factory. These can sometimes be referred to as factory-built or prefab homes. They are then transported to the construction site, where a crane lifts them onto the foundations. The prefab sections fit together, allowing the home to be assembled very quickly. There then needs to be work carried out to finish the home. This means connecting the utilities and adding the finishing touches to the home. They are permanent homes that appraise the same way as traditional home construction. You can expect to pay the same taxes and insurance as you would for a regular house. Are modular homes more expensive? Thanks to how these buildings are put together, there are many cost savings for the owner. Since the homes are built in a factory, this saves a great deal as they can be inspected on the production line. Typical costs for a modular property are around $100 per sq ft. However, this can increase if you opt for a more complex or unusual layout and design. The cost to build a traditional home starts from around $150 per square ft, so the savings are quite clear. Are modular and prefab homes the same thing? Generally speaking, they are the same thing. Prefab, short for prefabricated, refers to homes constructed off-site in sections, which is essentially the same thing as modular buildings. Are modular homes the same as manufactured homes? Manufactured homes, often referred to as mobile homes, aren't the same as modular homes. Manufactured homes aren't permanently located in one place, as modular constructions have to be. You can choose to move your manufactured home to a new location, but this isn't possible with a prefab or modular home. The term mobile home officially refers to manufactured homes constructed before 1976. Though the term is still commonly used, the U.S. Department of Housing and Urban Development officially calls this type of housing manufactured. Do modular homes all look the same? While manufactured homes look very similar, this isn't the case with modular properties. There are many styles of modular homes available, and you can customize as you wish. There aren't any design limits. You can make changes to a manufacturer’s design to create the home of your dreams. What are the pros and cons of choosing a prefab home? There are many reasons this type of housing might be right for you, but they're also negatives you need to consider. Let's take a look at the upsides and downsides of modular construction. The advantages of choosing a modular building If you like the idea of a shorter build time and lower costs to complete the home, a modular build could be more attractive. You also won't have to worry about inspections during the build; this is all done during construction in the factory. You can have the home customized to your specifications without the need to hire an architect. There won't be so many worries about the weather delaying the build process, and the construction will be completed much faster. Since the home sections will be constructed in a factory, they can be built using environmentally friendly materials and methods. They can also be manufactured to a higher energy efficiency standard and higher tolerances. Typically, modular homes are constructed to green building standards. The downsides of modular constructed homes You need to own the land you build the modular home on, but it can't just be any building plot. This type of property is usually harder to be constructed in a stick-built neighborhood. In fact, on many occasions, there will be restrictive covenants prohibiting modular homes. You'll need to check on this situation before moving forward with your plans. There is still some work that needs to be done before the prefabricated home sections arrive at the construction site. There also has to be foundations and connections to utilities, such as plumbing and electrical wiring. Usually, you can't finance a modular build through normal mortgage loans. It is possible to get a construction loan to cover the costs, but this is usually only good for a year. Once the home has been constructed, you can then turn the construction loan into a normal mortgage for a longer period. Before you order your prefab building, you need to do your research on the manufacturer. Though these types of homes have to be built following building code, not all manufacturers produce the same product standard. Like any other builder, there are what would be considered great and not so great modular companies. It will be just as essential to do your due diligence when buying a modular home as you would with a stick-built property. Remember, there are pros and cons to consider when buying new construction. At times, folks regret their decision to build a home versus buying an existing property. Does the modular home stigma still exist? Years ago, when you heard modular home, you would immediately think of a cheap, inferior product. Not surprisingly, it was understandable and, in fact, true. More often than not, a modular was constructed with shallow-pitched roofs that made the home look like an army barracks. The interior had limited quality features like crown moldings, and popcorn ceilings were standard. Today, when people do a little research, they quickly discover these downsides no longer exist. Modular homes are now considered to be an excellent product. Does that mean some people don't incorrectly assume there is still inferior quality? No, they do. Real Estate agents and those in the modular industry often have to educate consumers on how things have changed. How do I buy a modular home? There are many options available if you've decided modular is the right type of property for you. You can order homes that have already been fully designed and only need a few things done to them once they've been assembled. If you have a larger budget or looking for certain features in your home, you can customize the design before manufacture. Like most things these days, you can even buy modular homes on Amazon. Despite this, you will probably be better off going directly to a manufacturer in your area. This will allow you to customize the home as you need it. Final thoughts Choosing the modular option when building a home has a lot of advantages. You are likely to save money and be able to move into the home faster. You can go to a manufacturer and buy a design off-the-shelf or create something that exactly fits your requirements. Whichever approach you take, you will end up with a home that is a permanent structure that should be equal to any site-built home. It might have cost you a lot less than a traditional home would have cost to build, meaning you can make your money go further. Bill Gassett has been a real estate agent for the past 34 years working for RE/MAX Executive Realty in Hopkinton, Massachusetts. He is also an avid writer for numerous real estate publications including The National Association of Realtors, RIS Media, Inman, as well as his own blog "Maximum Real Estate Exposure."
Are you considering buying a foreclosed home? Perhaps the ROI potential and success stories have enticed you to entertain the idea of fixing and flipping a house in foreclosure. Buying a foreclosed home to fix up for profit is a common strategy that many seasoned real estate investors have. However, a novice investor may overlook some of the complexities and red tape that make foreclosures risky. By understanding the risk, you’ll be more equipped to understand if a foreclosure has potential cash rewards or if it's a financial trap that you should avoid. To help you understand the ins and outs of buying a foreclosed home, we’ve put together this comprehensive guide that answers some of the most basic foreclosure questions: What is the difference between pre-foreclosure and foreclosure? Do banks negotiate foreclosures? Can you get a loan to buy a foreclosed home? Is it a good idea to buy a house in foreclosure? Bonus foreclosure tips What is the difference between pre-foreclosure and foreclosure? It is typical to lump the foreclosure process together, but it is wise to know how different points in the buying process could affect your purchase. Let’s breakdown a foreclosure into three main phases: Pre-foreclosure Foreclosure Post-foreclosure Pre-foreclosure is the phase when you can potentially buy the house directly from the homeowner. It is typical for a homeowner to have 90 days notice before the bank seizes the property. During this time many homeowners are trying to get out of their house quickly and recoup any sort of money that they will potentially lose. This short timeline mixed with a need to pay back the bank encourages homeowners to sell their home for a low price in hopes that the home will be purchased quickly. This type of sale is often referred to as a short-sale. Foreclosure is the stage where the home actually goes to a foreclosure auction. Real estate investor and co-founder of SparkRental, Brian Davis, shares his insight on why this stage of the foreclosure process is often the riskiest and most expensive. “You can buy properties at an actual foreclosure auction, but this rarely happens in practice, for two reasons. First, you can’t inspect the interior of the property, because at that time it’s still legally owned by the homeowner. Second, lenders usually set the starting bid around the total balance they’re owed, which is often higher than the market value given the accumulated late fees, legal fees, etc.” Post-foreclosure is when the ownership of the house transitions from the homeowners to the bank. This is the most common phase that buyers purchase a foreclosed property. At this phase in the process the bank work with local real estate agents to list the house on the public market, making it easily visible for an everyday buyer to purchase. During post-foreclosure you're able to approach the buying process like a normal house — agents can give you tours of the house, and you can receive an inspection before you pull the trigger. Do banks negotiate foreclosures? Banks take on a lot of time, risk, and stress when dealing with a foreclosed home and so they are motivated to sell quickly. Negotiating with the banks over a post-foreclosed home may require a few extra hoopes to jump through, but overall the process is relatively similar to negotiating for any kind of home. Banks don’t love sitting on a property for too long, so they are motivated to negotiate with a potential buyer on the price. If a buyer extends an all cash offer they may be even more inclined to take it. Real estate professional, Luke Smith, adds that, “the banks often get flooded with inventory so they are willing to negotiate. They are less likely to allow a short sale then they are to negotiate during post-foreclosure so that they can make a little profit.” Plus, if a foreclosed home has been sitting on the market for a while your odds of scoring a great deal with the bank are even better. Can you get a loan to buy a foreclosed home? Yes, you can get a loan to buy a foreclosed home. There are several different types of loans that you could use to pay for a foreclosed home such as a 203K loan, FHA loan, VA loan, conventional loan, HELOC and more. Kenny Dahill, realtor, landlord, and founder of Burbz comments on what the loan selection may look like for your investment property. “Buying a foreclosed home is similar to a non-foreclosed home. Due to the nature of foreclosures being under market value, there are loan options that will allow you to finance the remodeling costs as well. Loans will typically be based off the habitability of the property — a foreclosed home in major disrepair will have challenges getting a loan compared to a foreclosed home that is move-in ready which can easily get a loan.” If you are worried about fronting the cash for a loan and are wondering how you can buy a foreclosed home with no money down, then don’t stress — there are options. Melissa Zavala, real estate broker and owner of BroadPoint Properties, lays out what you should do if you are wanting to put no money down or as little down as possible. “Check with your local lender to see whether no money down programs are currently available. There are many FHA programs available that only require 3.5 percent down and VA loans require no money down. There may be other programs available, so it is good to check with your local lender.” There are no money down and some barely money down options, you just have to find the right lender. To help you compare possible lenders and find the right lending solution for you, you can easily compare mortgage lenders at BestCompany.com. (Bonus: LoanDepot is one of the few lenders that offers a 203k loan, which is great for financing foreclosures. Check them out.) Is it a good idea to buy a house in foreclosure? The honest answer — it depends. It depends on your experience and the homes available. To help you get started on making your pros and cons list for purchasing a foreclosure, you need to look at the good, the bad, and the alternatives. Why is it a good idea? Buying a foreclosed home can unlock the potential for major cash flow. Foreclosed homes often sell for below their market value making them a great investment for buyers that are able to buy low, fix repairs, and sell high. A pre-foreclosed home often sells for below market value when the current homeowner is not able to afford their house. Before the bank seizes the home, the house is sometimes available for a discounted price by the homeowner — known as a short-sale. Additionally, if the bank does seize a home it will often be listed on the market for a reasonable price. The banks are motivated to sell the house quickly, alleviating the risk and and cost of hanging onto it. Potential buyers can benefit from either situation if the home is in good shape and on the market for below its value. Why is it risky? First you need to realize that foreclosed homes play by a different set of rules. For one, if the house does not sell in a short sale the ownership shifts from the personal homeowner to the bank. Real estate professional and owner of CapstoneHomeBuyers Colby Hager, walks through what a bank-owned home may entail: “There is a certain amount of risk because most banks are unaware of the actual condition of the house when they seize it. The bank typically does not allow for a home inspection nor are they usually willing to negotiate for repairs in an auction. Depending on the overall condition of the foreclosed home, financing through traditional sources such as an FHA or VA loan may be difficult.” In addition to the condition of the home posing a risk to your investment, legal red tape and the overall timeline can complicate the process as well. Unexpected time and legal issues can be costly and stressful. What’s an alternative? If you are wanting to buy a foreclosed home but are a little nervous to work through its complexities and risk, try investing in a different kind of property at the start. Get your feet wet by choosing an older home with good bones. You’ll have the luxury of shopping around for the right home and getting an inspection, while lowering your odds of major financial surprises. Real estate agent and founder of Quadwalls, Chuck Stelt, puts it best by advising buyers to avoid foreclosures and instead invest in what is called a grandma’s house. “Grandma's house is usually in really good condition and most everything is in working order, but it is often dated. These are the best homes to look for if you are buying a home to live in and want quick equity.” Bonus foreclosure tips: Get Homeowners Insurance: “Lenders will almost always require that you have homeowners insurance lined up, make sure you compare quotes and settle on a policy ahead of time to prove to your lender that you are able to purchase insurance for the foreclosure." — Melanie Musson, home insurance expert for USInsuranceAgents.com. Consider an Eviction Attorney: “If you are buying a foreclosure on the courthouse steps make sure to get a good eviction attorney. Oftentimes when you buy foreclosures at the courthouse steps, the previous owner is still living there. If the occupant doesn't leave on their own or doesn't take your ‘cash for keys,’ then you have to go through the eviction process.” — Rick Albert, Broker Associate with LAMERICA Real Estate, and investor/house hacker. Get a Second Opinion: "With every home, you want to do your due diligence—this rings especially true for foreclosed properties. If you are not allowed a formal inspection, then you want to find a local General Contractor to accompany you on your walkthrough. This way you'll have an idea of what costs could be needed.” — Brad, MBA, founder of 401HomeBuyers, a reputable house-buying firm.
Guest Post by Victoria Araj Buying a house is a difficult, often lengthy, process that requires buyers to consider numerous logistical factors – all while dealing with the emotional stress of making one of the most significant financial transactions of their lives. For a buyer to get the best price on a home, it’s extremely important they understand the makeup of the market. There used to be a very particular demographic majority of home buyers: married couples, often with children. The landscape has evolved through the years, however, and more single people are purchasing homes. In fact, single women purchase more homes than single men – though a Yale study revealed those women see a lower return on investment compared to men. This inequality is especially concerning when considering how this financial difference can play out later in life at retirement age. This disparity is known as the women’s housing gap. In this piece, we’ll cover what it is, why it may exist, why it’s significant, and how we can work to close it. What is the women’s housing gap? The women’s housing gap is the difference that single men and women see when buying and selling their homes. The Yale study revealed that single women pay about 2 percent more than men when buying a house, yet sell it for around 2 percent less. That’s an average of $1,600 per year that single women are losing out on, in comparison to their male counterparts in similar homes. The actual difference varies depending on the cost of the house and additional factors. Interestingly, the study showed no difference when women bought from and sold to other women. Possible reasons this gap exists Some potential reasons that may explain this gap include differences in negotiation results and market timing, as well as looking at the wrong factors when evaluating the value of a home. A number of studies have found that women are less likely to negotiate. A more recent study challenges that idea — finding that even when women ask for just as much, or more than, men, they still receive less. This suggests that if women want to achieve equal or better results, they have to surpass their male counterparts through higher-caliber negotiation skills. The Yale study also suggested that single men had better market timing than single women, providing a better ROI on their home. It is important to note that women may not have as much flexibility when selecting a home if they happen to be single mothers. This group may end up overpaying for a property because they need to quickly provide shelter for their children. While this also applies to single fathers, single mothers outnumber their male counterparts in the United States, which could make it a factor to consider when evaluating this gap. Why it matters Property investments are one of the most frequently mentioned ways to build wealth. As a result, the lead Yale researcher also suggested this difference in real estate returns could contribute to the gender wealth accumulation gap at retirement age — which can affect quality of life and the ability to pay for increasing medical needs. We should be pushing for equity on every front. One of the best things women can do to improve their outcomes in the home buying arena is to educate themselves, so they can stand their ground and get the best value when purchasing their home and the highest price when selling. 10 tips to help decrease the gap While no one can control another’s’ biases or actions, you must position yourself for the best chance of success by doing thorough research and working to improve negotiation skills. Here are 10 tips to help you achieve a more positive home buying experience and outcome: 1. Be familiar with your rights Know your rights so you can recognize when someone is engaging in discriminatory practices. Being able to identify this can protect you from being taken advantage of when buying a home. Rights vary by state, so you can visit your local Housing and Urban Development (HUD) site for more information. 2. Build your credit score Improving your credit score can help you secure a great mortgage. It’s important to build good credit before applying for a loan so you can get the best interest rates. Lower interest rates will result in lower monthly payments and an improved cash flow. In order to improve your credit score, make payments on time, stick to a realistic budget, and look into credit repair services if needed. 3. Seek professional advice Talking to a mortgage specialist can help you make informed decisions when buying a home. To make the most of their services, come prepared with mortgage questions such as “How much home can I afford?” and “What is the interest rate and the annual percentage rate?” Try writing out your list beforehand so you don’t forget any important questions. 4. Focus on investment potential, not aesthetics It’s easy to get caught up in a property’s appearance when you visit it or see a property online. Try to set that aside and consider whether the house can be renovated to boost its value. Disregard changeable things like wall color or kitchen counters and focus on elements like location, home safety and structural integrity. 5. Take statistics into account To discover the true value of a home, look beyond the home itself. When evaluating a home, consider the area’s job and population growth, unemployment rate, school district, and historic price increases for homes in the area. You’ll likely maximize your profits if you’re able to land a property while the neighborhood is still up and coming. Look at year-over-year changes as opposed to just viewing current stats. 6. Research comparable sales Researching comparable properties can provide you with a better idea of a fair price for the house you’re looking at so you don’t overpay. You may even stumble upon better-valued properties that pique your interest. Look for properties of a similar size, location, number of rooms and big-ticket amenities (i.e. pool, over-sized garage, etc.). 7. Get a professional home inspection Always pay for a professional home inspection. It will allow you to ascertain any existing issues. This helps you identify potential repair costs, allowing you to negotiate the sale price to account for serious repairs that need to be completed. Skipping or skimping on your inspection is not an option — those who have, deeply regretted doing so. 8. Understand the seller’s motivation Understanding the seller’s motivation helps you tailor your negotiation tactics. Doing your research can provide you with information about how badly the owners want to sell and how much you can negotiate the price down. For example, try a public record search — you may discover insights into how quickly the seller is trying to move as well as the reason behind their relocation. 9. Use targeted negotiation tactics Equip yourself with a variety of negotiation tactics so you can adapt your strategy to fit the specific market, property, seller and their personal situation. Come prepared with your completed research of comparable listings, sales and exact numbers to show you’re informed. You should also know your max price ahead of time. Depending on the situation, you may want to start 15 percent below that top number. Consult with your real estate agent, who has detailed knowledge of the area, to decide the best negotiation strategy. Negotiation tactics to add to your tool kit: Tailor wording to the seller’s individual situation Include a personal letter detailing why you would like the house Support your claims and offers with statistics and data Find ways to save money in places other than the house’s price Use home inspection findings to your advantage Begin negotiations around market value, not asking price Aim for a reduced price by offering to close quickly 10. Show you’re a serious buyer (but know when to walk away) Make it clear that you have the resources to purchase the home and are ready to act quickly. This can help expedite the home buying process. On the other hand, you don’t want to come across as too eager. It’s a fine line to walk because while you want to show that you are a serious buyer, you should also keep a healthy emotional distance. Be prepared to walk away from the home should the negotiations surpass what you’re willing to spend. Remember that there are other viable options out there! The bottom line The women’s housing gap can put women at a financial disadvantage and limit their opportunities. To combat this gap and achieve better outcomes, women should stay informed, conduct ample research, practice negotiating ahead of time, hold their ground, and know when to walk away. For more tips on home buying and information on the women’s housing gap, check out the visual below (provided by Rocket Mortgage): Victoria Araj is a Section Editor for Quicken Loans and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.
Guest Post by G. Brian Davis If you’ve never bought a rental property before, it feels incredibly overwhelming. Between choosing a town and neighborhood, learning how to score good deals, analyzing cash flow, finding financing, advertising vacant units, screening tenants, signing lease agreements and beyond, there are a lot of moving parts. Rental investing comes with a steep learning curve, and new investors inevitably make mistakes. But in the beginning, focus on the fundamentals: the core investing skills that prevent you from losing money. That starts with knowing what to look for in a good rental property, both at the neighborhood level and the property level. Not all cities or neighborhoods make for profitable places to invest. Before buying properties in your local area by default, evaluate your local market carefully, and consider investing elsewhere if you don’t like what you find. 1. Low vacancy rates Vacancies are expensive for landlords. It sounds obvious, but you should look for cities and neighborhoods with strong demand for rental housing, so you don’t have trouble filling vacancies. In fact, the quality of your tenants largely determines the quality of your returns. The more rental applications you get for a vacant property, the better your odds of choosing a high-quality renter who will treat your property well, pay the rent on time, and stay long-term. You can check vacancy rates through the Census Bureau, but for the most up-to-date information, ask around among other landlords and property managers who operate in that city and neighborhood. Ask a professional real estate agent or property managers who operate in that city and neighborhood for rental reports. Ask them for data on vacancy rates, tenant turnover rates, days on market, and the quality and quantity of rental applications It helps if the area already sees strong demand, but you can also keep an eye on future demand. 2. Population growth Areas with healthy population growth indicate not only good demand right now, but growing demand moving forward. Again, you can check the Census Bureau, but also check other local resources for indications of population growth. Also keep an eye on job growth. Because where local economies thrive and generate new jobs, they draw workers from elsewhere, driving population growth and therefore demand for housing. You can find job growth data at the BLS. 3. Diverse job market with low unemployment With vibrant job growth comes low unemployment and reduced odds of rent defaults. Where residents are earning money, they can and do generally pay their rents. But beyond local unemployment rates, also look at the diversity of the local job market. If most of the town depends on one employer or industry, the entire economy of the town could collapse alongside them. Look no further than old steel mill towns in the rust belt, after steel largely moved overseas. Check resources like City Data or Area Vibes to read up on local cities’ economic diversity. Also consider investing in towns with military bases, as they tend to provide extremely stable employment and demand for housing. Resources like AHRN.com can help you specifically rent to military families. Here’s an interactive map showing unemployment rates by county for Spring 2020. Speaking as a landlord who spent years hassling with rental properties in high-crime areas, let me offer some simple advice: don’t do it. Sure, the rental cash flow numbers can look more attractive in these areas (more on cash flow calculation shortly). But those numbers exclude hidden costs like high crime rates. Crime affects landlords in multiple ways. Sometimes directly, in the form of vandalism or theft of your appliances or fixtures. But crime also drives away good tenants, leaving you with high vacancy rates and high turnover rates. And remember: the quality of your renters determines the quality of your returns! You can check local crime rates through City Data and Area Vibes as well. 4. Landlord-friendly regulations The local landlord-tenant laws play a greater role in your returns than you realize. I’ve had “professional tenants” draw out the eviction process to nearly a year, in one tenant-friendly jurisdiction. After a year without rents, I was left with a nearly-destroyed property. Invest in areas with laws that make it easy for you to remove tenants who damage your property, harass the neighbors, or break the law. The last place you want to find yourself is paying for your tenants to live for free for an entire year because the local landlord-tenant laws favor tenants so heavily that you can’t evict bad tenants. 5. Cash flow While you can stress endlessly about choosing properties with the most popular amenities at any given moment, keep it simple and look for properties that clearly meet local renters’ expectations. But physical amenities make up only one piece of the puzzle. Most important of all is learning how to calculate rental cash flow — a skill too many new investors gloss over. New investors tend to ignore infrequent-but-inevitable expenses like vacancy rate, repairs, maintenance, accounting costs, and so forth. But when you run cash flow numbers, you need to calculate the long-term average of all expenses, not just regular monthly expenses like the mortgage payment. Use a rental cash flow calculator to run the numbers, and be sure to include all expenses including: Repairs and maintenance Vacancy rate Property management fees (not just the monthly fee, but the new tenant placement fee too) Property taxes Property insurance Mortgage principal and interest Accounting, bookkeeping, legal, and other miscellaneous expenses For any given property, calculate both the monthly cash flow and the annual yield, in the form of cash-on-cash return. That refers to your net annual income divided by your personal investment, to calculate your personal return on investment. It is also recommended you create a line item expense called reserves. This allows you to save up funds on a monthly basis to be used at a later date for a big project, like replacing the roof, buying new appliances, or paying the mortgage when the property is vacant. Think of it like a rainy day fund for your rental property. To use simple numbers, imagine you put down $10,000 in a down payment and closing costs, and you earn $1,000 in net annual income from the property. That would leave you with a cash-on-cash return of 10 percent. When you know how to accurately calculate rental cash flow, you never make a bad investment again in your life, because you know the return before shelling out a cent. A good general rule of thumb is that if the monthly rental amount is equal to or greater than 1% of the purchase price, the property should provide a decent positive cash flow. 6. Manageable repairs Many real estate investors opt to buy fixer-uppers, in order to “force equity” by renovating them. It works great — for investors who know what they’re doing. But new investors don’t typically know what they’re doing, and often get themselves in over their heads with renovation projects. If you’ve never managed a renovation before, and want to buy a fixer-upper rather than a turnkey property in rent-ready condition, start with a property that needs only cosmetic repairs. You can work your way up to more complex mechanical repairs like replacing HVAC systems, or structural repairs like fire damage restoration, which usually require you to pull permits. But start with cosmetic repairs only. That lets you build experience hiring, screening, and managing contractors, which proves one of the most difficult tasks that real estate investors undertake. Start with smaller-scale projects to limit costly mistakes. As you develop confidence and trust with certain contractors, you can then gradually start tackling larger renovation projects. But keep it simple in the beginning, while you learn the ropes of real estate investing. Begin your rental investing career focusing on the fundamentals, and you’ll avoid the costly mistakes that so many new investors make! G. Brian Davis is a real estate investor and co-founder of SparkRental.com, which helps everyday people build passive income from rental properties on the side of their full-time jobs. Brian’s goal is simple: to help as many people as he can reach financial independence, so they can cover their living expense entirely with rental income. Connect with him through SparkRental at any time.
Read more about NBKC's home loans. Read Full ReviewVisit Site NBKC has earned the title as the best mortgage lender of 2020, standing out among 156 other home loan companies. To be ranked as one of the top mortgage lenders, a company needs to separate itself from the competition from a number of different vantage points — NBKC does just that. NBKC thrives when it comes to customer service and care, with an overall rating of 4.9/5.0 stars from hundreds of its customers. Director of Mortgage at NBKC, Chad Cronk, highlights three more unique characteristics that have contributed to NBKC's success in the eyes of its customers: "There is one point of contact throughout the entire process and an entire team behind the scenes. We leverage the latest technology to save our customers time and money. Customers receive highly competitive rates and fees." Check out the infographic below to see why NBKC has earned the Consumer's Choice Award for home loans in 2020! Take some time to explore this awesome home loan company if you are currently on the hunt to buy or refinance a house. Read more about NBKC's home loans. Read Full ReviewVisit Site
If you find yourself twiddling your thumbs with extra time spent at home, perhaps you need a small push to help make your days at home more meaningful and productive. Cleaning, organizing, and DIYing offer endless at-home activities to help keep your mental and physical spirits high. Below are 17 ideas to help you fill your spare time with some meaningful activities. Master organizing tips In-home projects DIY cleaning hacks Outdoor projects 18 bonus self-care tips Master organizing tips 1. Organize messy areas Jenna Haefelin, professional organizer and owner of SPIFF: "Now is the time to purge! Trust me, you’ll want to after sitting home for a while! Try tidying up sink cabinets, closets, and your pantry: Under the sink — Clear out what you don’t need — move excess items, if you have any, in the basement or a cleaning closet. Organize the remaining ítems with stacking drawer options and turntables. Keep it simple and label! Closet — Matching hangers are a must! Place a quick online order for some hangers, 100+ are usually sufficient. Fold items that lay nicely (ex: chunky sweaters and jeans, not flimsy shirts) and hang up the rest. If you only have shelving, invest in some lined baskets with labels — file fold your clothes, color coordinated, so you can easily see what you have. Pantry — Stackable canister options mixed with baskets is my go to for the pantry. Consider what is functional for you and your home. For example, kids snacks would be more accessible in baskets vs a canister." 2. Declutter cramped spaces Vinay Amin, health expert and CEO of Eu Natural: "Now is the perfect time to get to all those little annoying projects done that you only remember when you are in the middle of something else. That cluttered space in: The kitchen junk drawer Under the bathroom sink The top shelf of the hall closet The spice containers — are all the perfect fodder for your new found extra time at home. Bonus: If you have already tackled those cluttered areas, I would suggest trying out new and different furniture/room/decor arrangements. You may not be able to obtain supplies for other DIY projects, but you already have everything you need to simply try out a new look in your living room or home office." Better yet, don’t let those areas keep piling up as commonly cluttered areas. Make it a daily, weekly, or monthly habit to regular keep these areas clean and neat. 3. Working from home? Take a second look at your desk Sofia Wilson, CEO of Daily Detox Hacks: "Ask yourself, 'What will have the most impact?' For me, my answer was my living environment. I had been busy and my house had become neglected with excess clutter. I started a project to declutter my desk and I felt great after, increasing my productivity with my newly organized desk space. The great thing about this type of action is that you feel great afterward and it really does not cost much to reorganize and find a home for you excess things. I recommend using containers that you already own before you give into the urge to buy more containers." 4. Good, better, best: Closet edition Abe Navas, general manager of house cleaning service Emily's Maids: "Do you feel like your closet is never quite tidy enough? Shoes tend to make closets feel especially messy. If you are the kind that has many shoes, then let’s start there — I have the perfect DIY solution for decluttering your closet, a DIY shoe shelf. Stop putting your shoes one on top of the other. A shelf is easy to create, very customizable, and a fun project that you could extend to a couple of weeks. Take the opportunity to rearrange your closet to be more space-efficient with your new, custom shoe rack.” 5. Know when it’s time to let go Amanda Clark, owner of full-service home organizing company Ever So Organized: "When deciding what items to let go during your closet purge, ask yourself these questions: When was the last time this was worn? If it's been over a year, it's time to let it go. Would I purchase this again if given the choice? Would I want to run into an ex while wearing this? Not willing to leave the house for a Goodwill run right now? Also, take some time to really go through your clothes and shoes to see what you don’t need. Most people wear 20% of their clothes and shoes 80% of the time. Find those 80% of items you don’t often use and either sell or donate them. Instead, order a free bag from ThredUp. You fill it up and leave it out for your USPS carrier to pick it up. ThredUp will pay you for items they sell and donate the rest for you. Win, win!" In-home projects 6. Bring the outdoors in Matt Daigle, CEO and founder of home improvement company Rise: "Ever wonder why windows and plants make you so happy? Apparently it's only natural that humans look to nature, hence the love of biophilic design in the home. Here are some easy ways to boost your mood by bringing the outdoors in: Add plants, plants, and more plants in your home! Succulents are easy in-home plants. Plants help filter the air in your house and can make your home smell better too. Improve your view of the outside by granting more access to your windows — remove obstructions like furniture and unnecessary wall coverings. Build your next shelf, table, or accent wall with natural materials like wood or stone. The sound of water makes us happy. Making a small indoor water fountain is a very quick one-day project." 7. Write a meaningful note Heidi Bender, owner and blogger for company Tons of Thanks: "To help past the time, I suggest writing thank-you notes. Focusing on gratitude and sharing those feelings with others can be a very positive distraction. Start by making lists of what you are grateful for as a way to help you identify who exactly you want to thank. Who keeps showing up in your list and needs to hear words of gratitude and appreciation from you?" Buy a box of 50 standard thank you cards and envelopes every month. Make it a goal to write and mail two thank you cards every business day of the month. Write a card to whomever you are thankful for: friends, family, coworkers, clients, or a random connection. People will absolutely open (and most likely keep!) a handwritten, mailed thank you card. 8. Reuse wicker baskets Channa Alvarez, interior designer at Living Spaces: "There’s just something about wicker storage baskets that infuses a space with so much character. If you have a set of old baskets you want to recycle and give new life to, try painting them with a color that matches your room. With wicker baskets you can create a stylish and practical storage solution that can add a layer of color and texture to a room while helping you stay tidy." 9. Sleep a little sounder Matt Clayton, founder of Pet Hair Patrol: "Being stuck at home is a great opportunity to make sure your bed is clean and hygienic — especially for the 68 percent of U.S. households that own a pet! Soley washing the bed linens is not enough. All the sweat, dirt, and dander penetrates all the fabrics on your bed and ends up in your pillow, mattress, and comforter as well. To ensure maximize bed cleaning, I recommend the following: Vacuum your mattress Toss your pillow and comforter into the washing machine, if possible Use the dryer to remove more dust and dander Having a clean bed will help you sleep like a baby and promote your well-being!" There’s nothing better than the feeling of falling asleep in bed on clean sheets day. 10. Easy bathroom renovation project Lisa Torelli-Sauer, editor of home investment website Sensible Digs: "Replacing old and discolored grout can upgrade the appearance of your bathroom or shower within a week's time. Replacing stained/damaged grout can not only make a dingy bathroom shine, it can also prevent water damage in your home. When water seeps through run-down grout, it can cause serious damage to the floor beneath your tiles. Grout replacement only requires a few tools and supplies, plus it is not a very difficult task to complete. You will need the following supplies: Grout (either ready-made or powdered) Grout saw Grout float or spreader Grout finisher A few soft cloths or rags A large sponge A bucket Be sure to let the grout dry for at least 24 hours before you use the wet spaces again to ensure the maximum hold on the grout. DIY cleaning hacks 11. Make your own cleaning products Jennifer Willy, Editor of travel company Etia: "DIY cleaning products consist of on-hand ingredients that can most likely be found in your pantry. For a natural, all-purpose cleaner all you need to do is mix the ingredients below: One part of white vinegar One part water Lemon rind and rosemary sprigs (simply for smell) Then pour the mixture into a spray bottle and let the concoction sit for a week before using. After a week, you can use this to remove hard water stains, clean trash cans, wall smudges, and much more. Bonus: If you want to make a homemade glass cleaner, the process is very similar. This mixture requires: 2 cups of water 1/2 cup of white/cider vinegar 1/4 cup of rubbing alcohol with 70% concentration Like the above-mentioned DIY cleaner, mix the ingredients together and pour it into a spray bottle." 12. Give your couch a deep clean Joshua Miller, Director of Technical Training at Rainbow International Restoration: "Furniture is often the culprit behind persistent unpleasant smells in the home, as upholstery often retains odors from past stains. If the upholstery can be cleaned with water, use a water-based solution for the simplest and fastest option. 1. Clean the spots with an easy, homemade mixture of: 1 oz. dishwashing detergent 12 oz. water 2. Blot to dry. 3. Add to spray bottle: 5–10 drops of essential oil (lavender can be a great choice here) in the spray bottle 1 cup of water 4. Spray and saturate the stained area with the solution. The oils will help eliminate the odor and leave a pleasant scent behind. Pretest solution in an inconspicuous location and allow to dry to test for colorfastness before using on the rest of the upholstery." 13. Scrub-a-dub-dub your tub Erin Ford, writer for travel website Hotels4Teams: “I’ve tried every cleaning supply that I could get my hands on in an attempt to get the tub white and shiny again. No matter what I used, nothing seemed to work. That's until I discovered this immensely simple, two-ingredient bathtub cleaner: Mix equal parts warmed-up white vinegar to dish soap Pour evenly on the bottom of your tub. Let the mixture sit for at least an hour When you wipe it up, it easily eradicates all soap scum! When I first found this cleaning hack on Pinterest, I thought it was too good to be true. But ever since I started using it, I haven't looked back. With this mixture around, you can bet I have a clean tub to relax in.” Outdoor Projects 14. Try out your green thumb Shawn Breyer, owner of Atlanta House Buyers: Head to your local nursery to try out your green thumb.Going to the local nursery not only lets you support small businesses in your community, they also provide better service and lower prices than the big box stores. "When you are buying plants for your home, make sure that it suits your lifestyle: If you have bad allergies, don't buy flowering plants, but do buy air purifying plants. If your home is dark because you keep your blinds shut then don't buy plants that need full sun. Buy plants that thrive in the shade. No matter what your lifestyle is, you can find plants that can enhance your life and wellbeing. If you have old plants that have not received new soil in one to three years, then consider buying larger pots for them and re-soil the plants. As old soil runs out of nutrients, the plants will stop growing. Plants can outgrow their containers as well. Giving a plant a larger container and new soil can allow it to be more healthy and grow larger." Don’t have a green thumb at all? Not to worry! Try something quick and easy like adding fresh mulch to an existing flower or garden bed. 15. Give the earth some love Brent Campton, director of partnerships at recycling company Hillside: “In the same way that people are thinking about how to have more resilient practices at home like water filters and bidets, starting a composting pile is a great family activity that will also support the planet. As long as you have space in your backyard, there’s a way to do it without spending a dime, without any smells or bugs (apart from your curious dog), and with things you have already laying around the home. Check out this great video for a step-by-step process on how to start composting in your backyard.” A great tip to make composting even easier is to have a dedicated box or container in your kitchen - preferably somewhere that’s out the way - that allows you to collect your kitchen composting materials. That way, you can collect your leftovers and scraps over a period of a few days and make one trip to the compositing piling, without having to go outside every time you have leftovers. 16. Spring-clean the exterior of your home Sara Bendrick, landscape contractor, author, and TV personality for STIHL: “Homeowners and renters should head outside for a few minutes a day to exert some control over their outdoor spaces. Working outside has proven therapeutic benefits, and it’s the perfect time to do some of those outdoor tasks. Below are five garden tasks that you can start tackling today: Clean your gutters Pressure wash Clear weeds and debris Get planting Start composting" 17. At-Home pest prevention Arrow Exterminators team, pest control company: “Pest-proofing the home does not always have to be a professional endeavour. Below I've provided a list of activities people can do from the comfort of their own home in order to prevent pests as the weather changes: Kitchen: Do a quick inventory of food and make sure everything is stored in airtight containers Bedrooms and bathrooms: Run fans and dehumidifiers to eliminate damp conditions Living spaces: Wipe down and clean the furniture Give the family pet a bath and ensure their flea and tick prevention is current Garage: Reorganize seasonal items in airtight plastic storage bins, storing them off the floor if possible Sweep or blow dirt and debris out of the garage as much as possible. Dust, dirt, grass, and all sorts of things accumulate on your garage floor. Outdoors: Seal all cracks and small openings around the foundation of the home, including entry points for wires and pipes Eliminate sources of standing water and moisture Clean (and keep clean) garbage collection areas and ensure all receptacles are tightly closed Trim back branches and shrubbery away from the house" Bonus: 18 self-care tips In addition, here are 18 quick bonus tips provided by Liana Pavane, digital wellness coach and founder of TTYL. Here she gives an array of ideas on how to spend your time at home. This list will inspire you take care of yourself — mentally, physically, and emotionally: Get fresh air as much as possible, even if it's just for a walk around the block or sitting on your balcony/backyard if you have one. Keep your body active by going outside for a walk, run, or even following a YouTube workout video. Have an indoor cycling bike? Even better. Keep a schedule for yourself and keep up with your normal routines. Don't allow yourself to sleep in too much or binge too much as a means of distraction. Put upbeat music on and have your own dance party! Break out a sheet of blank paper (or coloring book if you have one) and doodle your heart out. Download a meditation app (like Insight Timer or Headspace) and hold space for yourself. Create a vision board with old magazines. Declutter/organize your space! Giveaway clothes and throw out unnecessary items. Practice a foreign language for 10 minutes a day. Read a new book (or a few!) Start a giant puzzle. Go around your house and order anything that needs replacing/fixing. Write out your fears to get them off your chest, read them, and rip them up. Light a candle and take a hot bath (bubbles optional!) Have a FaceTime sesh with all your family or friends (maybe try Zoom!) If you have roommates, have a game night! Make a decadent meal for yourself that you never had time to do before. Sleep! Catch up on those zzzz's