Exploring different financing options for buyers

Hey there, home buyers! If you’re in the market for a new home, you’ve probably realized that financing can be a bit overwhelming. There are so many options out there, from traditional mortgages to government-backed loans to alternative financing. So, let’s take a closer look at some of the most popular financing options and find the one that’s right for you!

1. Traditional Mortgages: Let’s start with the most common financing option – the traditional mortgage. With a traditional mortgage, you’ll put down a certain amount of money as a down payment, and then make monthly payments over a set period of time. These loans can have fixed or adjustable interest rates, and the terms can range from 10 to 30 years.
2. FHA Loans: If you’re a first-time home buyer or have a lower credit score, an FHA loan might be a good option for you. These loans are backed by the Federal Housing Administration and often have lower down payment requirements and more flexible credit score requirements.
3. VA Loans: If you’re a veteran or active-duty service member, you may qualify for a VA loan. These loans are backed by the Department of Veterans Affairs and often have lower interest rates and no down payment requirements.
4. USDA Loans: If you’re looking to buy a home in a rural area, a USDA loan might be a good fit. These loans are backed by the U.S. Department of Agriculture and often have low interest rates and no down payment requirements.
5. Alternative Financing: If none of the traditional options work for you, there are a variety of alternative financing options out there, including private lenders, crowdfunding, and even seller financing. Just be sure to do your research and understand the risks involved with these options.

So, which financing option is right for you? Well, that depends on a variety of factors, including your credit score, income, and the type of property you’re looking to buy. It’s important to do your research, shop around, and talk to a qualified lender to find the best option for your unique situation.

One last piece of advice – don’t forget to factor in additional costs like closing costs, property taxes, and insurance when considering your financing options. Buying a home can be a big investment, but with the right financing, it can also be a great way to build long-term wealth and security. Happy house hunting!

Investing in Rental Properties: The Pros & Cons You Need to Know!

Hey there, fellow money-makers and future landlords! Welcome to another fun, chatty, and enlightening blog post. Today, we’re diving deep into the rollercoaster world of investing in rental properties. If you’ve ever wondered whether it’s a worthwhile endeavor, buckle up! We’re about to spill the tea on the pros and cons you need to consider before taking the plunge.

🏡 Pro #1: Passive Income, Baby!

Who wouldn’t want to kick back and watch the dough roll in while someone else pays off your mortgage? Rental properties are a great source of passive income, and as long as you have tenants, you’ll be enjoying that sweet, sweet cash flow.

🌪 Con #1: Oh, the Maintenance!

Just like owning any property, rental homes come with a side of wear and tear. It’s important to budget for maintenance and repairs, as well as the time and effort you’ll need to invest in keeping your rental property in tip-top shape. Because let’s face it, not all tenants will treat your property like their own.

📈 Pro #2: Appreciation Appreciation!

Here’s a fun fact: real estate tends to appreciate over time. So, while you’re raking in the rent, the value of your property may also be going up, up, up! In the long run, you could be sitting on a goldmine when you decide to sell.

🚪 Con #2: Knock, Knock. It’s Tenant Turnover.

Finding great tenants can feel like trying to find a needle in a haystack. Tenant turnover can be a major headache and a drain on your wallet. Prepping your property for new renters and dealing with vacancies can add stress to your landlord life.

💰 Pro #3: Tax Benefits Galore!

Rental property owners, rejoice! You can potentially benefit from tax deductions for things like mortgage interest, property taxes, insurance, and depreciation. Cha-ching! Of course, always consult a tax professional for advice tailored to your situation.

🔍 Con #3: Market Research Required

Investing in rental property isn’t as simple as buying a house and renting it out. You’ll need to do your homework on the local market, property values, and rental rates. This can be time-consuming, but it’s essential for success.

🏠 Pro #4: You’re the Boss!

Being a landlord means you’re in control. You make the decisions about your property, from setting the rent to choosing the tenants. It’s a great opportunity to flex your entrepreneurial muscles and build something you’re proud of.

🕰 Con #4: Time Investment

While rental properties can be a fantastic source of passive income, they do require a substantial time investment. From finding and managing tenants to dealing with emergencies and keeping up with legal requirements, being a landlord is not always a walk in the park.

So, there you have it, folks! The pros and cons of investing in rental property. As with any investment, it’s important to do your research and weigh the potential risks and rewards before diving in. If you have the time, resources, and patience to manage a rental property, it can be a great way to generate passive income and build long-term wealth. But if you’re not up for the challenge, there are plenty of other investment options out there. Happy investing!

How often do closings fall through?

Closing on a new home is an exciting time, but it can also be stressful, especially if there is a possibility that the closing might fall through. Unfortunately, there are many reasons why a closing might not go as planned, and it can be difficult to predict when and why it might happen.

A common reason for a closing to fall through is because of a problem with the property

This can include issues with the title, zoning, or a lack of necessary permits. Even something as simple as a lack of proper documentation can lead to a closing falling through. This is why, before buying a property, it’s important to have a thorough home inspection and title search done, to ensure that there are no major issues that can cause delays or complications during the closing process.

Another reason for a closing to fall through is because of a problem with the financing

This can happen when the buyers are not able to obtain the necessary financing to purchase the property. This can be due to a lack of credit, a change in interest rates, or a problem with the buyer’s income or employment status. It is important to work with a lender early in the process to ensure that you are aware of any potential issues that could arise during the closing process.

Another common reason why closings fall through is because of a change in the buyer’s circumstances

This can happen when the buyer’s employment changes, they get a better job offer, they change their mind about the property, or they experience a change in their personal circumstances, such as a divorce or the birth of a child.

Another reason for a fall through is when the parties are unable to agree to terms on the purchase contract

This can happen when the seller and the buyer disagree on certain terms or conditions of the sale, such as the closing date, the purchase price, or the contingencies included in the contract. It’s important to have a good real estate agent who can help facilitate a smooth negotiation process that can prevent this kind of scenario

The good news is that, despite these potential obstacles, the majority of closings do not fall through.

On average, most experts estimate that about 5-10% of closings fall through due to various factors.

However, these numbers can vary depending on the market conditions, the region, and the specific circumstances of the sale.

To prevent a closing from falling through, it is essential to work with a qualified and experienced real estate agent, lender, and attorney, who can help you navigate the process and identify any potential issues that may arise. It is also important to be transparent and communicate clearly with all parties involved in the transaction, including the seller and the lender. By doing so, you can increase the chances of a smooth closing process.

In conclusion, while closings can fall through due to a variety of reasons, it is not as common as people might think. However, it is essential to be prepared for any potential obstacles and work with the right professionals to ensure that the closing process goes as smoothly as possible. Good communication and transparency can also help prevent closing falling through. By following these guidelines, you can feel more confident and secure in your home buying process, and increase the chances of a successful closing.

The benefits of downsizing to a smaller home

Downsizing to a smaller home can be a major life decision, but it can also come with a variety of benefits. As people get older, they may start to consider downsizing in order to reduce costs, simplify their lives, and increase their mobility. Here are just a few of the benefits of downsizing to a smaller home:

Lower costs

One of the biggest benefits of downsizing is the potential for lower costs. A smaller home typically means lower monthly mortgage payments, lower property taxes, and lower utility bills. This can be a major financial advantage, especially for those on a fixed income. In addition to the ongoing costs of homeownership, downsizing can also help to reduce the upfront costs of moving. With a smaller home, there is typically less stuff to pack and move, which can save money on things like movers and storage.

Reduced maintenance

Along with lower costs, a smaller home means less space to maintain. This can be a major advantage for those who are unable or unwilling to take on the upkeep of a larger home. A smaller home means less time and money spent on things like yard work, cleaning, and repairs. This can be especially beneficial for those who are looking to downsize in order to simplify their lives and reduce their workload.

Increased mobility: A smaller home can also provide increased mobility. With less stuff to pack and fewer rooms to worry about, it can be easier to move to a new location. This can be especially beneficial for those who are looking to downsize in order to be closer to family or to take advantage of new job opportunities. In addition, a smaller home can be more practical for those who are planning to travel frequently or who are considering retiring to a different part of the country.

Simplified living

Downsizing can also be a great way to simplify your life. With less space to fill, you may find that you are able to declutter and get rid of possessions that are no longer necessary. This can lead to a sense of freedom and a more organized, peaceful living environment. In addition to decluttering, downsizing can also make it easier to simplify other aspects of your life, such as your daily routine, your social calendar, and your home office.

Increased sense of community

Living in a smaller home can be an opportunity to get to know your neighbors and your community more. By living in a smaller house in a neighborhood with a strong sense of community, you may find that you have more opportunities to participate in local events, volunteer, or get involved in community projects. You may also find that you have more time to pursue hobbies and interests that you are passionate about.

Environmental benefits

Finally, downsizing to a smaller home can also have environmental benefits. A smaller home means less energy and resources are used to heat, cool, and maintain it, which can be good for the planet. Additionally, smaller homes tend to have smaller ecological footprint and are more energy efficient.

While downsizing to a smaller home can be a difficult decision to make, the benefits can be well worth it in the long run. It can be a great way to reduce costs, simplify your life, increase your mobility, and make the most of your golden years. If you are considering downsizing, it is important to consider all of the options available to you, including renting, buying a smaller home, or even downsizing to a retirement community. It is important to talk to a real estate agent, a financial advisor, and a lawyer to ensure that you make the best decision for your needs.

Is 2023 a Good Time to Build your Forever Home?

Rising inflation rates caused increased prices in building materials and, therefore, homes. If
you’re like millions of others, you’ve held off on building your dream home, hoping that prices
would fall again.

The unfortunate truth is that real estate prices won’t fall within the next few years, so the
question is, should you build your forever home in 2023?

The answer for most people is yes, as long as you can afford it.

Here’s why.

You Can’t go Back in Time

Building your dream home in 2019 would have cost a lot less, but we can’t go back there. Prices
won’t reverse, and no one has a time machine to go back in time.

So instead, it’s time to take control of the future. What you can do is lock in today’s prices. The
good news is lumber prices aren’t as crazy high as they were this time last year, so you’ll save
some money on materials.

That’s not to say they are as low as before the pandemic. However, that’s par for the course,
even without a world crisis.

You can Cut Corners

Even though you’re building your dream house, you can cut corners. I don’t mean you must
sacrifice what you have in your house. Instead, you can find cheaper ways to make them
happen, including DIY.

For example, if you’re handy and can install cabinets or take on another task in building the
home, you’ll save money on the labor and still get what you want in the home.

You’re Investing in your Future

When you build your forever home, you’re investing in your future. Real estate goes through
cycles, but overall, it appreciates. Even with higher prices for lumber and labor today, you’ll see
a return on your investment if you keep the home long-term.

You can Build What you Want

When you build your own home, you get what you want rather than buying an existing home
and taking what’s available. If this is your forever home, you can put the features in it that will
last for your intended duration.

You can Refinance your Mortgage

Even if you have to take higher interest rates than you intended to build a home, you can
refinance the mortgage in the future. This is because interest rates won’t stay high forever;
eventually, they will come down, even if it takes a few years.

Final Thoughts

2023 could be the perfect time to build your forever home. Even if it’s not the home you’ll live
in for your lifetime, as long as you stay there for three to five years, you may see a return on
your investment.

While higher material and labor prices can be prohibitive right now, your investment will pay off
in the future. If you want to learn more about the pros and cons of building your forever home
in 2023, contact me today, and let’s discuss your options.

Closing on a House – How Long Does it Take?

Buying a house is exciting, but it can feel like it takes forever to get from the offer to the closing
table.

On average, it takes 30 – 45 days to get to the closing table, and that’s in a perfect situation.
Sometimes you may close faster or slower, but keep 30 – 45 days in mind when signing a sales
contract.

The Process to Close on a House

The house closing process is complex. Not only must you find the house you want to buy, but
you must sort out your financing. Here’s a quick rundown of the typical timeline.

Get Pre-Approved

Start the process by getting pre-approved with a lender. This tells you how much you can afford,
on what terms and the conditions you must satisfy.

A pre-approval letter also gets your foot in more doors with sellers. Most sellers only want to
work with pre-approved buyers.

Find a Home

Once pre-approved, you can look at homes. Pre-approvals usually last 30 – 60 days, so it works
best if you can find a home within that time.

You’ll sign a sales contract when you find a home and negotiate the price and terms. The sales
contract starts the clock, which is why getting pre-approved is essential. After that, you’ll have a
majority of your personal underwriting completed.

Submit your Contract and Order the Title and Appraisal

After signing a contract, you’ll submit your sales contract to the underwriter, and they’ll order a
title search and appraisal on the property.

In the meantime, you’ll provide any missing documentation or updates the lender needs to
finish underwriting your qualifying factors.

Get the Clear to Close

Your goal in underwriting is to get the clear to close. This happens after the appraisal, title
search, and your qualifying factors pass the underwriter’s requirements. Then, with the clear to
close, you’re ready to head to the closing table.

Receive your Closing Disclosure

Lenders must send you the Closing Disclosure before the closing. By law, they must send it at
least three business days before you close. This allows you time to review your loan terms,
costs, and interest rate to ensure everything looks how the lender initially promised.

If everything looks good, you get your cashier’s check or bank wire to close the loan and get
ready to become a homeowner.

Closing the Loan

The last step is to close the loan. You’ll attend the closing with your attorney, loan officer,
possibly the sellers, and a closing agent. You’ll sign documents and disclosures, exchange funds,
and receive the keys to your new home.

Final Thoughts

Typically it takes 30 to 45 days to close on a house, but there can be delays. The key to avoiding
them is to get pre-approved for your loan and satisfy any conditions the underwriter needs.
Once you find a house, the only conditions you’ll have to focus on are those about the house,
many of which are outside your control.

What Should you Ask Lenders When Buying a Home?

Buying a home requires more than finding the perfect home. First, you need financing, or you won’t be able to buy the home.

Lenders have specific requirements when considering buying a home, so knowing what questions you should ask them is important.

How Much do I Need for a Down Payment?

Your down payment depends on the loan program you choose. For example, VA loans don’t require a down payment, but FHA loans require 3.5% down. Conventional loans require 5% down in most cases, and if you put down less than 20%, you’ll pay Private Mortgage Insurance.

Discuss your down payment options and how much you should put down to get the best rate and terms on your loan.

What’s the Best Interest Rate I can Get?

Interest rates are much higher this year than last, so you should talk to your lender about how you can lower your rates.

They’ll look at your qualifying factors and tell you what you can improve to ensure you get a lower rate. You can also ask about the possibility of buying the rate down (paying points) to lower the interest rate to keep it even lower.

When Should I Lock my Interest Rate?

You must lock your interest rate before closing on the loan, but your loan officer can tell you the best time to do it. Most rate locks are free for 30 days, but if you must lock it for longer, it might cost you.

It’s best to lock your rate after you sign a purchase contract, so you have a better chance of closing on the loan before it expires, but always ask your lender when it’s the best time to lock.

How Much are Closing Costs?

You’ll need more than the down payment to close on your loan. You’ll also pay closing costs. Most lenders charge 3% – 5% of the loan amount in closing costs. Ask your lender what the total cost of the loan is so you can budget accordingly.

Some loans allow you to wrap some closing costs into it if you don’t have the funds upfront. If you’re worried about affording the closing costs, talk to your lender about your options.

Final Thoughts

Knowing what to ask lenders before you buy a home is important. Mortgage financing is one of the most important aspects of buying a home. Without a mortgage, you’d need cash to buy a home, and most people don’t have enough cash for a purchase of that size.

It’s a good idea to get quotes from at least three lenders and to get to know their process. No two lenders offer the same rates and terms or have the same process. You might find one lender has an easier process and better rates than another, which can mean the difference of thousands of dollars!