Easy Agent Blogs

Although lenders talk a good game in their marketing, true zero-down mortgages are a rarity. Two credit unions offer them to their members – Navy Federal Credit Union and NASA Federal Credit Union.

The only two government-backed no-down-payment mortgages come from USDA’s Rural Development program and the U.S. Department of Veterans Affairs (VA). If you are active-duty military a veteran or a surviving spouse, the VA-backed home loan is one worth taking a look at.

Aside from waiving the down payment requirement of conventional loans, the VA mortgage has no mortgage insurance requirement and rates are typically lower, making the loan less expensive every month.

Since we celebrate Veteran’s Day this month we thought we’d remind about just one of the many benefits you’ve earned for serving our country.

Eligibility

Some of the eligibility criteria may be confusing, but let’s take a look at the basics:

• The borrower must have sufficient income to pay his bills and the mortgage every month.
• Although the lender will eventually determine your credit-worthiness, the VA states that the borrower must have what it considers “suitable credit.”
• The veteran or service member must plan on occupying the home.
• The applicant must obtain a valid Certificate of Eligibility (COE). Many VA-approved lenders are able to access the Automated Certificate of Eligibility system (ACE) and retrieve the applicant’s COE online. If your lender can’t, she’ll tell you how to go about getting your COE.

 The Lender’s Role

The VA doesn’t lend money; it merely offers a guarantee (up to 25 percent of each VA loan). Applicants need to see a private lender that participates in the VA loan program. In addition to meeting the VA’s requirements, the borrower must also meet lender requirements.

The Purchase Process with a VA Loan

The actual home purchase process for the veteran is very much like that of a conventional buyer with the exception of the initial steps. Let’s take a look at the steps that you need to follow to get into a new home:

• Find a lender that participates in the VA loan program. Ask for a pre-approval letter outlining how much you can spend on a home.
• Obtain your COE.
• Hire a real estate agent to assist you in finding a home.
• Submit an offer on the home of your choice, reminding your real estate agent to insert a “VA Option Clause” and an escape clause, allowing you to cancel the purchase agreement without penalty if you aren’t approved for the VA loan.
• Apply for the loan. The quicker you gather the required documents for the lender, the quicker the rest of the purchase process can move.

If at any time during the process you have questions that the lender can’t answer, contact a representative at your regional loan center. You can find the contact information on the VA website.

Happy Veteran’s Day and thank you for your service.

What if we told you that you should fear not the big-box retailer that is rumored to be eyeing that vacant parcel near your neighborhood as a new location?

Sure, it might bring a lot more traffic to the area and, if you live right across the street, you may be kept up at night with the additional noise from the delivery trucks, but would it be worth it if that retailer helped boost your property value?

I thought it might be fun to take a look at some of the things that boost home values that might surprise you.

The Big-Box Effect

ABC News actually calls this one “The Walmart Effect.” Critics of Walmart have been trying for years to prove that when the retail giant moves into a neighborhood, property values plummet.

Guess what? It’s just the opposite.

A study from the University of Chicago and Brigham Young University finds that the when Walmart moves into a neighborhood, home values actually increased as much as 3 percent for homes within 0.5 miles of the huge retailer and up to 2 percent for those located 1 mile from the store.

Then, there’s the “Whole Foods Effect.” While it may not directly cause values to rise it does set in motion a whole slew of events that eventually gentrifies the run-down neighborhoods in which they choose to build.

Why?

Several reasons, but chief among them is that “… proximity to a store like Whole Foods, often thought of as more high-end than other grocery stores, adds an air of prestige to a neighborhood,” according to Dana Schulz at 6sqft.com.

She goes on to cite an example from Detroit, Michigan.

On 2013, Whole Foods opened a store in downtown Detroit. “In 2009, the median home sale price here was $19,000. By 2015 [just two years after Whole Foods opened the store], it had skyrocketed to $80,000. And during this same time period, the median home price throughout the entire city quadrupled.”

Naturally, it’s not an overnight occurrence, Schulz cautions. But if you’re planning on being in the home for the long haul, don’t let news of a big-box store opening nearby dissuade you from buying that house.

I See Dead People

This one always throws folks for a loop. “Homes less than 50 feet from a cemetery sell for more money per square foot than homes farther away,” say the findings of a study commissioned by a national real estate chain.

The downside is that these homes sit on the market longer, but when they eventually do sell, they tend to bring in a higher price than homes located further from the cemetery.

In fact, the study broke down the prices of homes according to their proximity to graveyards. Those within 50 feet brought in the highest prices and prices went down until the 1,000 foot mark where they shot back up to be equal to the first category.

So, if you can’t buy within 50 feet of a cemetery, make sure the home you do buy is at least 1,000 feet away.

While these location-related value boosters may be surprising, something like a new garage door or roof may have a bigger impact on the value of a home.

Most of us are familiar with buyer’s remorse. It’s that sinking feeling that, for any number of reasons, we shouldn’t have made a recent purchase. We become filled with regret, second-guessing our decision to buy.

Buyer’s remorse is so prevalent that the Federal Trade Commission created the “Cooling-Off Rule,” which gives the buyer “… three days to cancel certain sales … but not all sales are covered,” including real estate, says an unknown writer on the FTC’s website.

Seller’s remorse is the flip side of buyer’s remorse and doesn’t get nearly the attention that the latter does. This is because we typically don’t sell something that we don’t want to get rid of. When we do sell something that we don’t want to, remorse may set in.

Selling a home is often a tough decision. You may have scores of rational reasons but when push comes to shove, the memories you’ve built in the home may cause a gut-wrenching reluctance to leave.

If you’re emotionally attached to the home, it’s time to separate those emotions from the business aspect of what you are about to undertake. After all, selling a home is, at its core, a financial and business transaction.

Let’s take a look at a few tips to help you overcome some common emotional pitfalls in the process.

Turn a blind eye (and ear) to criticism (real and perceived)

Following your agent’s advice about preparing the home properly for the market is critical. Not only will it help the home sell for the amount you hope, but it may sell quicker.

Another bonus is that a well-prepared home should give you confidence in how it  presents to potential buyers. Hold on to that confidence because you’ll need it in the face of any criticism that might come your way.

I think that most of us have read at least a couple of reviews of products and services online. Regardless of the number of consumers who give rave, 5-star reviews, there is always a handful of them that find fault with it. A 100% 5 stars rate seems an impossibility.

Keep that in mind while your home is on the market. You may receive negative feedback from a buyer’s agent. You may receive a lowball offer that borders on insulting. You may be asked to rip out your “ugly wallpaper.”

Should this occur, remember that the criticism or insult isn’t meant to be taken personally. This, as I mentioned earlier, is a financial/business transaction. Try to brush it off as such and keep your emotions in check.

Disrupters

You wouldn’t be the first home seller to feel that their home has become the “Grand Central Station” of the local real estate market. Especially in our current market; buyers are clamoring for homes.

On the flipside, sellers still have lives to lead, jobs to go to, kids in school and participating in athletics, etc. Then, there is the family time at home that many busy families treasure.

Despite this, you’ll need to remain flexible for showings. Naturally, we’ll help you find a balance between your life and home showings. It’s up to you, however, to understand that the home is now akin to a product and, if you want to sell it, you will try your hardest to accommodate those who want to view it.

A few coping mechanisms to help you let go

“Everything I’ve ever let go of has claw marks on it,” said author David Foster Wallace. If you can relate to that, especially when you think about selling your home, read on.

From the time you sign the listing agreement until the ink is dry on the closing papers is dangerous territory for those who are prone to seller’s remorse.

It seems, however, to get worse the closer we get to closing. Panic sets in and remorse and regret are typically not far behind.

One suggestion we often provide to our clients is to focus on the future. Think about the new home, how you’ll furnish it, landscape it or whatever else may be planned for the future that keeps you optimistic.

Take photos of the current home, inside and out. Plan on taking a favorite plant to the new home (dig it up before the home goes on the market). Plan a goodbye-party and invite neighbors you’ve grown especially fond of.

Then, focus on why you planned on selling it to begin with. Think about the current home’s short-comings, such as how cramped the kids are in their bedrooms or how far the commute is.

Turn your attention to items that the new home offers that excite you. Concentrate on those. “It will be so nice to have a bigger pantry,” or “The new backyard is perfect for the dog.”

Finally, work closely with your real estate agent. Ensure the agent you hire understands how your connection to the home is deeply emotional and how that is impacting you. Ensure as well that the agent is a positive person, able to handle the ups and downs you may throw his or her way.

Yes, selling a home is stressful, even if you aren’t that fond of it. But when you focus on what the future holds instead of what you’re giving up, the entire process will be much smoother.

 

The biggest myth about mortgages (aka “home loans”) is that they’re hard to get. From how to qualify to acceptable credit scores to down payments, mortgage myths abound.

Today, we’ll debunk those that may be keeping you from confidently walking into a lender’s office and asking for a loan.

My credit score is too low

While a homebuyer’s credit score is scrutinized, and a lot is riding on it, it’s common for a borrower to be granted a home loan even with a less-than-perfect credit score.

FICO (Fair Isaac Corporation) scores range from 300 to 850. Keep in mind that “Only about 1.6% of the U.S. population with a credit score has a perfect 850,” according to Elizabeth Gravier, citing recent FICO statistics at cnbc.com.

Since that pool of Americans represents such a tiny fraction of the homebuying pool, obviously a perfect credit score isn’t required to get a home loan.

In fact, the “ideal” credit score is 760, according to experts that Gravier consulted.

“Reaching a credit score of 760 will likely get you all the same benefits — and the best deals — on everything from mortgages and car loans to credit card rewards,” she said.

On the flipside, a credit score below 500 will probably keep you from your dreams of owning a home.

500??? I can get a mortgage with a 500 FICO score?

“If you can make a 10% down payment, your credit score can be in the 500 – 579 range,” to obtain an FHA-backed mortgage, according to Victoria Araj at rocketmortgage.com.

Naturally, approval of a loan for a borrower with a 500 FICO score depends on more than just your credit score such as other items in your credit reports, your debt-to-income ratio and more.

If all else looks good, however, you may just score yourself a mortgage with a good down payment.

No, you don’t need to have a 20% down payment

When you take out a mortgage, you’ll need to come up with a down payment and closing costs. The former is a source of confusion among many homebuyers.

While financial experts recommend a large down payment on a home loan, it is often not a hard and fast requirement. Depending on your income, your debt and your credit history, you may qualify for a far lower down payment than 20%.

• If you qualify for a USDA loan or a loan backed by the U.S. Department of Veterans Affairs (the VA), you may pay nothing down.
• The Federal Housing Administration (FHA) has loan programs that requires as little 3.5 percent of the loan amount (for those who qualify).
• Fannie Mae and Freddy Mac offer 3% down payment mortgage products.
• Down payment assistance programs are offered by the federal and state governments and, sometimes, local municipalities. Some of these programs are for specific ethnic groups, such as Hawaiians, Native Americans and Alaskans. Others are provided to teachers and first responders.

These are just two of the many mortgage myths swirling around today. Suffice it to say, you may qualify for a mortgage without having to save for the down payment for the rest of your life.

Feel free to reach out to us with any questions.

In 1973, the median U.S. home size was 1,525 square feet. Since then, builders have gradually increased the square footage of the homes they construct.

In 2007, home sizes hit their peak (2,227 square feet) and have been dropping ever since, according to the Census Bureau.

Although Americans aren’t quite ready to completely give up their McMansions, the trend appears to be toward smaller homes.

A smaller footprint has its advantages. Let’s take a look at some of them.

Money Saver

The most obvious advantage to buying a smaller home is that the monthly payment will typically be lower than it would be if you bought a large home.  Less obvious money-saving advantages include:

• Lower utility bills – less area to heat and cool.
• Smaller houses require less maintenance, which can cost a bundle with a large house — a smaller roof requires fewer materials to repair it, for example.
• Small homes cost less to keep clean – you’ll spend less on cleaning supplies and whatever you estimate your time is worth.
• Small houses cost less to furnish – the furniture that you do purchase will be smaller as well.
• Smaller homes have smaller tax bills.

The case for downsizing to save money is even more urgent if you are nearing or in retirement. Annual property taxes and home maintenance can eat up a huge amount of your savings.

If you aren’t near retirement, think of what you can do with the money saved by downsizing – like furnishing it with high-quality furniture and appliances that will last longer; another cost-saving advantage.

No Wasted Space

Lifestyles have changed since the days when formal dining and living rooms were in vogue. Americans are awake to the fact that they have been paying for huge amounts of space that they seldom use.

Today, a country kitchen or informal dining room suffices for our smaller families and any extra space is typically devoted to a home office or larger kitchens and bathrooms.

One of the most common fears when considering a smaller home, however, is the lack of storage space. The solution? Downsize all your “stuff” too.

“We use 20 percent of what we own, 80 percent of the time,” according to Regina Brett at cleveland.com. This means that 80 percent of our “stuff” just sits, taking up valuable space.

If you feel that you absolutely can’t live without these belongings, put them in storage and pull them out on the rare occasions you need to use them.

The rest can be stored creatively in a smaller home. Utilize the vertical spaces in the home, such as placing shelves above the washer and dryer or the clothing rod in the closet. Raise the beds to create storage space beneath them.

Peace of Mind

While living large is impressive, living small brings happiness, according to Stephanie Rosenbloom of the New York Times. Smaller homes require less work thus freeing up time for leisure activities and time to make memories.

Since they also cost less, the extra money can be used to create happiness. “Current research suggests that, unlike consumption of material goods, spending on leisure and services typically strengthens social bonds, which in turn helps amplify happiness,” Rosenbloom claims.

Yes, large homes still signify status – especially if the home is of the luxury variety. If you aren’t a member of the country’s 1 percent, however, smaller may just be better.

Reach out to us for more ideas on downsizing to a smaller home.

When looking at homes for sale you may see in the listing description that a home isn’t on “city services.”

What this means is that the home has its own “sewer,” known as a septic system.

We frequently field questions about septic systems, so we put together this report with the basics you’ll need to know about buying and owning a home that isn’t on city services.

The anatomy of the septic system

Let’s face it: Sewage is probably the least glamorous topic to consider. But bodily fluids have to go somewhere and sewers and septic systems are our current choices.

Whatever is put down the drain, from the toilet, shower, washing machine and sink, ends up in the septic tank.

That tank is located underground and it’s watertight. This is where all the incoming “stuff” is treated. The solids are trapped on the bottom of the tank and the wastewater that’s left over is released into the leach field (sometimes called a “drain field”).

The solids, or sludge as it’s called in the septic business, are broken down by bacteria naturally found in wastewater. Not all of it is broken down and what’s not remains in the tank until the homeowner has it pumped out.

As mentioned earlier, this is a basic description. If you want to dive into the technical aspects of septic systems, you’ll find lots of information online.

Septic system maintenance

If you purchase a home with a septic system, you will be responsible for its maintenance. Defer maintenance on the system and problems will get worse.

In fact, the national average cost for septic system repair is around $2,700.

Aside from a hefty bill, if the tank isn’t maintained it may spring a leak, saturating the leach field. You may end up with sewage coming back into the home, into the bathtub or another plumbing fixture.

Allow the problem to get so bad that you need a new system and you’re looking at a cost of around $4,600 (but it can go higher).

When considering purchasing a home with a septic system you’ll want consider basic maintenance costs. This includes paying for an annual inspection and having the tank pumped every three to five years.

The cost to pump the tank varies according to the tank’s capacity. The national average, according to HomeAdvisor.com, is $381.

Your due diligence

Aside from the whole house inspection every smart homebuyer should have performed, we recommend that you also hire a professional septic contractor to inspect the septic system.

The inspection will include looking for leaks, ensuring that the sludge levels are below the outlet tee, checking to ensure the electrical and mechanical components are in good condition and more.

Typically, it’s the homebuyer’s responsibility to hire and pay for the contractor, but not always. In some regions, such as Central Virginia, for instance, the seller must have the septic system inspected “within 30 days of the closing date,” according to information posted at Realtor.com.

Septic systems aren’t as scary as many homebuyers think. Yes, they aren’t as convenient as being on city services, but as long as the system is inspected each year and you keep up the maintenance, you should have no worries.

And, it beats having to pay to get the home connected to the city’s sewer system.