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Qualifying

Category : Qualifying

Financially Preparing to Buy a Home.

Shima 0 comments 10.01.2017

When preparing to purchase a home, there are many factors that must be taken into consideration. One of the most important factors is financial preparation.

Below are several suggestions to keep in mind when taking steps to purchase a home. Remember, it is never too soon to financially plan.

Strengthen your credit score

A single 30-day late payment could damage a credit score by as many as 100 points, making home ownership expensive despite today’s low mortgage rates. Taking small steps such as paying your bills on time can have a greater impact in the long run.

Get pre-approved for a mortgage

Different mortgage programs require different credit scores. A financial counselor who knows the range of mortgage products available in the market can explain the various programs and how a consumer’s credit score opens the door to one or more different programs. Learn your mortgage options in advance to expedite the home buying process.

Factor in maintenance

There is more to owning a home than the monthly mortgage payment- maintenance needs to be factored into the budget along the utility and commuting costs, which could be very different when renting. Writing a pros and cons list between different locations can help eliminate any doubts.

Taking a closer look at these key numbers will help you determine if you are truly ready for your first home purchase or your next home purchase.

Call me today to learn the steps to buying a home.

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Appraisals

Shima 0 comments 23.08.2016

Guest Blogger: Yann Fard

What is an Appraisal?
 
An appraisal is an opinion of value that is completed by a professional appraiser who randomly assigned by the appraisal management company chosen by the lender.
What Does the Assigned Appraiser Do?
 
The appraiser visits and inspects the size, condition, function and quality of the home. There are a few steps in the process. First, a licensed appraiser comes to the property and inspects the home. Next, the appraiser will research similar homes in the area and compare recent sales to determine a fair market value. The appraiser will then give a final appraisal report with all the data and research to issue a final "opinion of value."
What Determines the Value?
 
A property's appraisal value is influenced by recent sales of similar properties and by current market trends. The home's amenities, number of bedrooms and bathrooms, floor plan functionality and square footage are also key factors in assessing the home's value. The appraiser must do a complete visual inspection of the interior and exterior and note any conditions that adversely affect the property's value, such as needed repairs.
What Does the Appraisal Report Include?
 
Typically, the appraisers describe the interior and exterior of the property, the neighborhood and nearby comparable sales, the report must include a street map showing the appraised property and comparable sales used; an exterior building sketch; an explanation of how the square footage was calculated; photographs of the home's front, back and street scene; front exterior photographs of each comparable property used. The appraiser then provides an analysis and conclusions about the property's value based on his or her observations.
What May Cause the Appraised Value to come short of the Expected Value?
 
Short appraisals typically arise in a declining housing market because the lack of recent comparable area homes sales, or "comps," making it difficult for appraisers to determine the current market value of a property. When home sales slow, good comps "age" fast. Add foreclosures and short sales to the mix and appraisals can run all over the map.
Things You Can Do to Get the Value Needed and to Stop a Re-inspection?
 
Other than the common sense things like making sure your home is clean and tidy and presentable to make a good impression on the appraiser, pointing out the recent renovations you have made, there are a few things that could cost you money: per the guidelines there are few common requirements that if you do not have a completion report needs to be ordered which could cost you couple of hundred dollars in order for the appraiser to go back in to your home and re-inspect. The most common ones are: having smoke detectors and carbon monoxide detectors, water heater being double strapped and if you have safety bars making sure there are safety latches.
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Benefits to owning a home.

Shima 0 comments 09.04.2016

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Buying a home is the largest single investment most people ever make, and this also makes it one of the most important decisions they will face.

Below are 10 reasons why it is important for everyone to own a home.

Freedom and Privacy

When you own your own home, you are not subject to the occasional inspections of the premises by the landlord.  You can paint, decorate, or improve the property as you like.

Inflation Protection

Your rent can keep going up, as do house prices.  Once you purchase a home, you, not the landlord, reap the benefits of its appreciation in value.  Historically, home prices will maintain value even in recessionary times, and increase in normal or good economies.

Tax Benefits

Many interest deductions have been eliminated from the IRS regulations, yet mortgage interest on your home is a very healthy deduction, especially in the first years when the bulk of your payment is interest.  Other deductions are also available to homeowners for energy credits or other improvements.  Property taxes are also deductible.

Improvements

Speaking of improvements, a renter gains nothing when he improves the house he lives in.  A homeowner reaps a return on those improvements when the house is sold.

Retirement Security

Unlike rent, which goes on forever, a mortgage is paid off at some point in time.  This can provide a “rent-free” retirement dwelling for you.

Environment and Lifestyle

It is usually apparent whether a neighborhood is made up owners or renters.  Homeowners have a financial stake in their neighborhood, and consequently take better care of their property.  This, in turn, helps your property continue to increase in value.

“Trading Up”

In today’s real estate market place, not everyone can afford their ideal home as their first purchase.  By purchasing any home and gaining by its appreciation and any improvements made, many people are able to sell their first house and “trade up” to that ideal home of their dreams.

Investment or Income Property

A second home can be an excellent tax deduction and investment.  Interest on a second home is also tax deductible, and you will be able to gain profits and tax benefits from renters.

“Effective” Interest Rate

The interest you actually pay will be much less than you think, on the first impression.  Because the interest is tax-deductible, you may be able to change your withholding or receive a larger tax refund.

Curious if you're qualified to buy? Give me a call today to find out.

 

 

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Searching for more than just eggs this Easter?

Shima 0 comments 25.03.2016

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We’re not even half way done with the first quarter of the new year and it seems as though all the good homes are tricky to find just like the most rewarding eggs!

Experts predicted early on that the housing market in 2016 would be a seller’s market. Fast-forward to March and it is evident that home prices are increasing, inventory is low, and there are many buyers looking for the same things.

What should you know?

In a seller’s market, there are more buyers than sellers. This tends to cause discouragement in buyers as they find themselves competing amongst others for the home of their dreams.

Certainly, buyers must keep an open mind and stay prepared to move quickly. If one should find the home of their dreams- they should act now as statistics show that 85% of buyers who say they plan to buy a home in the next year, say they will wait until late spring or early summer. Luckily for buyers who begin their house hunt early on, face less competitors with just as many homes for sale.

When choosing a mortgage, it is helpful for buyers to shop around and meet with several lenders. By speaking to different parties, you will find you have multiple options to choose from and are not putting all your eggs in one basket.

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As for sellers, prime home buying season usually begins in April and reaches a peak in June. When choosing to list your home during the prime months, as a seller, you are benefitting from a larger population of buyers and potential bidding wars. Surely, this brings in higher prices and quicker closings.

Frankly, by pricing a home to sell accurately, based on comparable sales, buyers will naturally be attracted to the home. It is therefore essential to price a home adequately for the market.

Undoubtedly, it is important to get the right help when buying or selling.

Remember, you surely don’t have to house ‘hunt’ alone… I’m only a ‘hop’ away from helping you and those you know during such a monumental time.

I wish you a happy Easter and spring!

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Am I Qualified to Qualify?

Shima 0 comments 08.03.2016

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Often times I am asked,

“Shima, how do I get qualified? What are the requirements? Is it easy?” 

In order to better assist all my friends & clients, I’ve asked lender, Pooyan Fard to share below the basics.

Hope you find it helpful and if you have any other questions, don’t hesitate to send me an email and I will gladly answer any questions you may further have.

What are the basic requirements?

 When it comes to loan applications, it really matters to know what is going to make a difference. As most of other things in this blessed country there is no limitation for who can apply for a loan but to actually get the loan it really helps to know what is needed as the basic requirements. Gone are those days that one could get a mortgage for X amount without the lender verifying his/her ability to repay and in order to make sure the are no more malpractices in mortgage lending, very strict rules and regulations are in place. Here I briefly explain the 4 basic requirements that lenders are supposed to verify when granting a loan and the term we use in mortgage industry is the 4 Cs. It stands for; Character, Credit, Capital, and Collateral. In the next section I will briefly explain the 4 Cs.

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 What are the 4 Cs?

        The first C, Character refers to the character of the individual borrowing the money and it will be a very important factor in determining whether the person is going to repay the loan as the payments will fall due. The lenders will use their due diligence to make sure they are going to lend money to the borrowers who are responsible and reliable.

The second C refers to the borrower’s credit. Theoretically, according to FHA guidelines one can get a loan with a credit score as low as 500 but practically the minimum required score is generally 620.

The third C refers to capital which is the amount of liquid asset the borrower has to prove the borrower has some fair amount of savings that can be used for different purposes such as down payment, reserves or impounds and also the cost involved for the transaction. Therefore the liquid assets like the money that borrowers have in their bank accounts or stock or investment accounts play an important role in the decision made by the lenders.

The last but not least C refers to collateral. For residential loans always a collateral is required and it would be the property for which the borrowers are getting the loan. That is why there is always an appraisal needed for the residential loans. The appraisal helps the lender to verify that the property is at least worth as much as sales asked price and then according to the value the loans will be granted. This way in case the borrower defaults on the loan the lender is confident they can get the money they have invested in the property back by taking over the property.

For further questions, please contact Pooyan Fard. 

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Mortgage Pre-Approval: Why A Pre-Approved Mortgage Makes Sense

Shima 0 comments 07.08.2015

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Today, CEO of Alliance West Financial, Kenneth Le is a guest blogger and shares below the importance of mortgage Pre-approvals. 

Mortgage pre-approval for real estate financing will put you in a much stronger position when you’re hunting for the home you want to live in. By having this important pile of paperwork out of the way you can be confident that sellers and realtors will take you seriously. They’ll see it as a signal that you’re prepared to negotiate in good faith. It’s a launch pad to owning your own home.

The Difference Between Qualified and Officially Qualified

When you’re shopping around for home financing you are likely to hear the termspre-qualifiedand pre-approved. The first term gives you a point of reference on how much you can borrow. However, pre-approval says that you’re certified to actually borrow the stated amount from that lender, in writing. Usually, a mortgage pre-approval is good for ninety days. The only thing left is to find a property that you like, and have an appraisal of its value and condition, to receive the go-ahead to fund your new home.

Once you have a letter of approval from one lender it doesn’t mean that you’re bound by their offer. You might still find alternative financing on better terms. What it shows is that you’ve demonstrated you’re really in a position to commit to the home buying process. In the minds of real estate professionals, pre-approval separates the serious buyers from the window shoppers.

Mortgage Pre-Approval Is Two Of Three Keys To Home Ownership

Lenders will be asking two specific questions when you apply for mortgage pre-approval: Are you likely to behave responsibly and do you have the financial capacity to make the payments? You’ll be judged by your behavior, as recorded on your three credit reports. This gives them a pretty good indication of how you’re likely to act over the long term. They’ll pay close attention to your payment history and how you’ve used or abused your borrowing opportunities in the past.

Lenders will then look for evidence that you have the financial capacity to take on the responsibility of a mortgage. They do this by analyzing your income and assets. They’ll be looking to see that you have a stable source of income and that you can meet your monthly obligations.

The Market Starts To Care When You Get Two Thirds Of the Way There

Pre-approval unlocks home financing in principle. To get the loan in practice your lender will have to give an additional approval for the property you intend to purchase, as it’ll be used as collateral to secure the loan. This stage is not part of mortgage pre-approval but it will need to be addressed before they agree to finally lend to you. The most important thing to remember is that you won’t lose a mortgage because you couldn’t get the house but, if you’re not pre-approved, you’re very likely to lose that house that you just fell in love with. Mortgage pre-approval is two thirds of the battle.

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