July 25th, 2017

Home insurers can “non-renew” for too many claims

Posted by at 8:44 am

If you have a home mortgage loan, then your lender is going to require you to carry homeowner’s insurance. It may be the biggest purchase you’ve ever made, but the lender has a lot invested in that home too – and wants its investment protected. But be warned. Insurance is not a maintenance plan – home insurance coverage is designed for sudden and unexpected large losses. Homeowners who file more than one claim unrelated to weather in less than three years can expect to be “non-renewed.” Non-renewal is not cancellation. Insurance companies cannot cancel a policy that has been in force for more than 60 days except for failure to pay the premium, fraud, or serious misrepresentation in the application. But like any business, an insurer “reserves the right to refuse service to anyone,” so long as they provide you with...
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July 18th, 2017

Improving your Credit Score

Posted by at 5:05 pm

One of the biggest misconceptions about buying a home is that you need perfect credit in order to qualify. In fact, many programs allow much lower credit scores when qualifying a home buyer. But there are still certain minimums that you have to meet. So, how do you go about improving your credit scores? Home loans that are insured by different departments of our federal government (FHA, VA and USDA) all allow lower credit scores with almost no impact to the interest rate. On the other hand, a conventional loan through Fannie Mae or Freddie Mac will most certainly result in a higher interest rate with lower credit scores. But what if you have some credit – enough to create a credit score – but that score isn’t high enough to qualify? Yes, we can help people get an FHA loan...
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July 17th, 2017

Adding up the costs when selling

Posted by at 4:30 pm

The price of selling a home is about $15,190, according to a recent study.by Zillow. The price? But isn’t selling about making money? Sellers often forget there is also going to be money going out – staging, painting, landscaping and cleaning. Then there are the big chunks – the real estate agent’s fee and the closing costs. Since 63 percent of today’s sellers have never sold before, the “price of selling” can be a big surprise! Let’s start at the top. Most real estate agents’ fees are paid through a commission. Usually about 6 percent of the purchase price, the commission is subtracted from the proceeds of the home sale. The problem is thinking of the commission as something you are losing. A good agent builds the commission into the price of the home, and adjusts accordingly. The amount collected...
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July 14th, 2017

Credit Reporting Changes may Improve Mortgage Approvals

Posted by at 7:32 am

There are some changes coming to credit reporting guidelines, and it could help more people qualify for a home mortgage. Already, qualifying for a home mortgage is getting easier each year. Guidelines are being loosened, debt-to-income ratios raised, co-signed debt is easier to disregard, and reserve requirements lowered. It’s worth noting, however, that guidelines are no where near as loose at they were in 2006, which is a good thing. Yes, it’s harder to get a mortgage today, but it should be. Now comes a change to credit reporting which could help more people. Currently guidelines state that if a borrower has an outstanding judgment or a tax lien, those items must be paid off before buying a home or at the closing table before they can get a new home mortgage. Lenders know about these items because they appear on their...
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July 13th, 2017

Spec construction poised for comeback?

Posted by at 10:10 am

With the rising price of existing starter homes, one segment of the new construction marketplace may be poised to take off at a pace not seen since the days following World War II. By the end of the 1940s, America had essentially ceased building homes – diverting usable materials to support the war effort. The demand for affordable homes created by the returning soldiers fueled the new “spec” home industry. “Spec” is another name for “speculative” construction, building new homes for sale with no particular buyer in mind. In the 1950s and 1960s, many builders turned out thousands of simple, mass-produced homes at an affordable cost. Most sold and the builders turned a tidy profit. Insert Millennials into the equation in place of GIs. Today, there are at least 30 million potential buyers younger than 36 looking to settle down. And it’s not...
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July 13th, 2017

Updated USDA Income Limits for 2017

Posted by at 8:31 am

This article outlines the updated income limits for USDA financing in 2017 for each county throughout Washington State. The USDA Rural Housing program is a wonderful zero down payment home purchase option for many people in rural areas, and especially those in Northwest Washington, where most areas are eligible. As you can see in the overview of this program, one of the limiting factors of getting 100% financing with a USDA Rural Housing loan program is household income. As opposed to most programs which have a primary limited factor of a loan amount, USDA limits it’s loan programs by income limits. The USDA income limits are intended to limit the program’s availability to households that have no more than 115% of the area’s median family income. Unlike the debt-to-income ratio that’s used to calculate the borrower’s ability to repay their mortgage loan, the USDA...
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How to Make your Offer Stand Out in a Seller’s Market with a Cover Letter

Posted by at 8:38 am

This article covers how to make your offer stand out in a seller’s market with a cover letter. Think of the difference. If you’re selling your home, and you’re reviewing several offers that you’ve received for your home, you’re seeing different factors such as closing date, down payment, loan program, addendums and exceptions, but what you really key in on is the bottom line to you – how much will you net from each different offer. All you’re seeing is data and numbers – terms and conditions. What if one of those offers included a heart-felt letter, hand written by the buyer that read like this: “Thank you for considering our offer on your lovely home. We have viewed your home twice, and we love what you’ve done with it. It’s also the perfect fit for me and my family...
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May 15th, 2017

Dual Market Strategy – How to Get more Listings

Posted by at 5:41 pm

An amazing opportunity exist to help those who want to move up to their dream home, and helps provide the market with more listings. The analysis below is an example of what can be customized for your client’s exact scenario to show the power of the dual market strategy, as well as the cost of waiting for a later date: Dual Market Strategy: https://mcedge.tv/1c267p  This graph shows the pent up demand for sellers since 1985. In a normal market, home owners typically sell their homes every 6 years, but since the great recession, it’s up to 9 to 10 years. That means there are a bunch of homeowners anxious to sell. Listen to this dual market strategy, and reach out to your clients who you know have been wanting to move up to their dream home. Then, contact me with any...
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May 4th, 2017

Can’t Qualify for a Home Mortgage because you’re Self-Employed?

Posted by at 1:21 pm

We all know the challenges that self-employed individuals have when it comes time to qualify for a home loan. Being self-employed, you have the opportunity to write off as many expenses as you can, which helps you show a lower net income and pay less federal income taxes. Unfortunately, that works against you when it comes time to qualify for a home loan. That net income figure is the same number we use as your income for qualifying. Note that there are some adjustments to that net income figure for depreciation, meals and mileage which can make the final figure a bit different than what’s showing on your taxes. The message here is we don’t use your sales as your qualifying income – just your net income. Here’s a scenario that happened just the other day. A self-employed gentleman came...
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April 26th, 2017

Top 5 Reasons People Fear Running their Credit Report

Posted by at 9:33 am

This article highlights the top 5 reasons people fear running their credit report. As a mortgage provider, we must run a credit report in order to have an accurate picture of how you might qualify for a home loan. Every now and then, I run into someone who is concerned about having their credit run. They want me to give them an idea of how they might qualify, but they don’t want me to pull their credit report. However, without it, anything we say is purely conjecture. It’s just like going to see your doctor for an illness. She will want to have have a thorough evaluation (blood pressure, pulse, lab work) in order to provide an accurate analysis. Without that information, it’s malpractice. The concerns that I see most people have about having their credit report ran can be...
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