Tip Tuesday: Why Mortgage Rates Matter to Both Buyers and Sellers

Is it a good time to buy?  When should I list my home?  We hear both of these questions a lot.  Both questions are valid and both questions have multiple factors to consider. But, one common factor is what the mortgage interest rates are.

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You could be a happy new homeowner!

As a Buyer, you want to make sure that you’re buying at a time that the interest rates are low and thus, making your purchase a good financial investment.  Right now, interest rates are low.  But, will they stay low?  You’ll want to find a mortgage broker that helps get you pre-approved and be sure to ask them about how to lock-in your interest rate. But maybe you can’t get pre-approved and you need to fix some items on your credit.  So 6 months from now, will the rates still be low?  There are many things that affect interest rates and First World Mortgage of Southington has a great weekly Real Estate Market Overview that gives you a weekly mortgage rate summary.  Call a mortgage broker today before you see today’s impressive rates vanish!

As a Seller, mortgage rates will absolutely affect your ability to sell and when.  If

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Your home could have a sold sign!

rates are high, there will be less buyers out meaning that a high inventory and low buyer atmosphere may be created, leaving you struggling to sell your home because buyers have their choosing.  However, if rates are low, you’ll see yourself in a situation where there are a lot of buyers and not enough inventory (which is what we’re currently dealing with).  Therefore, a home priced appropriately for the market should sell within a great timeframe.  According to the CT Association of Realtors, homes are currently selling at a 1.8% increase from this same time last year and there has been a 6.4% increase in the amount of homes sold compared to last year.  In addition condos and townhouses, are seeing an 8.8% increase in price and 8.9% increase in total units.  In essence, sell now!

Whether you’re a Buyer or Seller or both, the mortgage interest rates will affect your next real estate transaction so be sure to stay up-to-date on them.  Then, when you’re ready contact us to Buy and/or Sell!  Until then, find out your current budget affords you in today’s market….or find out what your home will sell for here.  

Tip Tuesday: Getting Your Credit Ready!

Remember our blog post about the first thing you should if you’re thinking about purchasing a home?  If not, you can review it here.  The sum of the article is the first thing you should do is talk to a Mortgage Lender.

There are 3 main reasons for this:

  1. Competitive offer.  Home inventory is low right now so to craft an attractive offer you need to make sure that the seller knows that you’re serious.  A good way to do this is to get pre-approved in order for the seller to know that you can afford the home and are ready to begin the mortgage process as soon as an offer is accepted.
  2. It keeps you in perspective.  Why look at and fall in love with a home that’s $300,000 only to find out that you can’t afford it and can only afford $225,000.  No other home will compare and you’ll be heartbroken.  On the other hand, you may be surprised at what you can get approved for and can afford higher than you thought.
  3. It will set you up for the future.  The lender may tell you that you can’t get qualified right now, but they’ll also tell you why not and what you can do about it.

This brings me to today’s Tip Tuesday….Get Your Credit Ready!

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Credit: LA Times

The Spring and Summer real estate market is on its way and you’re excited about potentially buying a home!  But, can you?

  •  You might be worried that your credit isn’t in the shape it needs to be to get pre-approved for a mortgage.  
  • Or you may not know if your credit is in the shape it needs to be.  
  • Or you may have good credit but want to improve it to get a better interest rate.  

So what can you do today about it?  

The Simple Dollar recommends 3 main items:

1) Find out what’s currently appearing on your credit score.

2) Talk to a Mortgage Lender about which balances would help your credit score by paying them down and which ones are fine to keep in installment payments.

3) After you get approved for a mortgage or even after you get an accepted offer on a home, don’t open new credit accounts!  It will decrease your credit score and thus affect your mortgage application.

A preferred Lender that many of our clients work with, Ed Angiollo of Trademark Financial Group recommends:

“Make sure you’re not late on your payments, which seems obvious but many people assume that being late on one month isn’t a big deal and it is.  Also, keep your credit card balances below 50% balance to available credit.”

Finally, don’t hold off on buying a home just because you think it requires a significant down payment.  The National Association of Realtors found that the average home buyer in the past few years paid a 6% down payment, but there are mortgage programs that require as low as 3.5%, 1% and even 0% down payment.  

  • How can you find out about these mortgage programs?
  • How can you get referred to a Lender to find out what shape your credit is in?

Contact us at harrisonrealtyteam@gmail.com or 860-539-9076 and we’ll make the appropriate referral based upon your needs!

Tip Tuesday: Recognizing and Creating a Strong Offer

Are you selling or buying?  Is it hard to understand what factors make a deal strong?  

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Know what to look for and what to offer in home negotiations

Let us help you with these 5 tips!

  1. Finances: Every offer should be accompanied by a pre-approval letter from a mortgage lender.  If you’re selling, ask your agent if they know anything about the buyer’s lending company.  Is it efficient?  Does it tend to close on time?  As a buyer, ask your agent for recommendations to a lender because they know those that are easy to work with and great at their job so that you can get into your dream home with no issues!  Also, offer a 2nd deposit. Upon presenting a contract you put forth a deposit to secure the home.  Consider putting forth a 2nd deposit in another 7, 10 or 14 days.  As a seller, its important to know that this is the buyers way of showing that they are serious enough about the home and confident in their ability to purchase that they’re willing to put forth more money up front.  As a buyer, this is a great offer but only do it if you’re truly confident in your ability and intent to purchase the home.  For example, if you could possibly get transferred for a job and end up getting transferred much further than you’d really like to drive from your home and no longer want this home, its now a breach of contract and you won’t get your deposit make.  Make sure everything is secure!
  2. Remove or Modify Any and All Contingencies: If possible, remove any contingencies such as needing to sell a home first.  Also, modify other contingencies such as inspection.  The average time line for getting an inspection is 14 days from date of contract.  Reduce that to 10.  Contingencies mean risk to a seller so lowering or removing them means lowering or removing risk.
  3. Be Responsive: As both a seller and buyer, its important to respond quickly to each other.  (This is an important factor when choosing a Realtor: how quick are they at responding?!)  Working with each other’s timelines only proves to be someone that’s easy to work with and thus, an attractive business deal.
  4. Be Aggressive: With low-inventory, well-priced, good condition homes will go fast.  As a seller, price your home according to the current market.  And as a buyer, be quick about making your offers.  This includes any resources your agent may have.  Do they have electronic signatures if you want to write up an offer later at night and submit it before anyone else does in the morning?
  5. Write a letter: Sometimes pulling at the heartstrings and giving a face to your offer is more successful than any number can be.

Whether you’re a buyer or seller, it’s important to create a strategy and know off-the-bat what you’re willing to offer/accept and negotiate/not negotiate on.  Find partners that you really feel comfortable with and who you can trust in the process.  This includes your Realtor, Mortgage Lender and Attorney.  As always, Harrison Realty Team is here to give you the service you deserve from a team you can trust.

 

Photo Credit: http://www.forbes.com

Tip Tuesday: Watch Your Debt…Even After You’ve Had An Accepted Offer

You’ve gotten pre-approved for a mortgage!  Great!

You’ve gotten an accepted offer! Great!

You’re only days away from closing!  Even Better!

But….your debt is still being watched.  You’re not in the clear until you walk away from the closing table with the keys in your hand.  Therefore, be cautious when spending money while leading up to the closing of your home.  While some of these “commandments” below are pretty obvious, others do provide some trouble for people.  In particular, the furniture one and the one regarding making large deposits.  Keep your debt and bank account under control in the time leading up to your closing day…it could be the reason that you lose out on your home at the very last minute.

 

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Photo Credit: Lighter Side of Real Estate

 

 

 

 

Tip Tuesday: Pay Off Your Mortgage Faster

Buying a home is the largest financial decision and investment you’ll ever make….but it’s also the largest debt.  We’ve rounded up some tips from Mortgage Brokers on how to pay off that debt faster!

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  1. Make 2 Extra Paments a year: A growing number of banks are offering bi-weekly payment options so rather than paying once a month, you pay twice a month.  This works out to 2 extra payments per year; helping you pay off your debt faster and spend less on interest!
  2. Shop Around: Who doesn’t love to shop?  Call multiple mortgage companies and see what they offer, especially when interest rates are low.  Often times you can refinance for less interest, less years and end up paying the same amount monthly but you’re saving money in the long run!
  3. Change Your W-4 Form: Many times we’re very excited about the potential refund we are eligible for after filing our taxes.  However, it is possible to claim more exemptions on your W-4 form, get less of a refund at the end of the year, but add money to your monthly paycheck that you could utilize to add to your mortgage.
  4. Round Up Your Payments: Round up as much as you can, even if its only by $10 or $100.  $1490 become $1500 or $1000 become $1100.  You’ll shave months off of your mortgage.
  5. Take Advantage of Any Pay Raises:  Raise?  Yes, please!  When you get a raise, utilize it to pay off your mortgage.  For example, if 30% of your monthy income goes to your mortgage.  When you get a pay raise, continue to use that same percentage.  So 30% of your new monthly income will still go to your mortgage.  It is another way to shave months off of your mortgage.

 

Having a debt for 30 years is no fun.  Put these tips to use in 2016, stay dedicated to your plan of paying off your mortgage faster and you can easily cut 30 years to 20 or less!  Good luck!

 

 

Photo Credit: http://www.zillow.com