Jeff Cook Real Estate BlogRecently posted or modified blog posts by tag - Mortgagehttps://www.jeffcookrealestate.com/blog/Copyright JeffCookRealEstate.com2023-08-30T11:43:58-07:00tag:jeffcookrealestate.com,2012-09-20:15142What is a 3-2-1 Buydown Program?Many incentives exist to make homes more attractive to buyers. One that can be particularly interesting is a 3-2-1 Buydown Program. “A <a href="https://www.investopedia.com/terms/1/3-2-1_buydown.asp">3-2-1 Buydown Mortgage</a> is a type of loan that starts out with a low interest rate and rises over the next several years until it reaches its permanent rate.”
A new home buyer agreeing to a buydown mortgage would agree to a set price, but the interest rate during the first three years of the mortgage is graduated. In the first year, the rate is 3% less than the final, long-term rate; in the second year it is 2% less; in the third year it is 1% less. Beginning in the fourth year, the home owner pays the full interest rate for the remainder of the mortgage period.
As an example, for a 30-year mortgage at 5% interest, the interest rate would be 2% in year one, 3% in year two, 4% in year three, and 5% for the remaining 27 years.
Another benefit of this program is that it doesn’t have to be over 3 years. It can be over 2 or 1 years along with several other options the seller and buyer can negotiate.
Who Pays for a 3-2-1 Buydown Mortgage?
Of course, <a href="https://www.nerdwallet.com/article/mortgages/the-property-line-october-2022">someone pays for the privilege of lowered interest rates</a> and resulting monthly payments over the first three years of the mortgage. If not, the bank is essentially giving away money, which banks never do. Therefore, someone must subsidize the reduced interest rates, or cover the remaining portion (in the year you only pay 2%, someone else pays the remaining 3% in our 5% interest example above).
In the majority of cases, home builders or sellers pay this cost at closing. These funds are placed in escrow and are drawn out by the bank every month to make up the difference between the full loan payment and the discounted payment the homeowner pays.
In some cases, a third party will pay for a buydown. For instance, an employer that relocates an employee to a new location may pay for a buydown to help ease the financial burden of moving and purchasing a new home.
Who Benefits from a 3-2-1 Buydown Mortgage?
Both buyers and sellers can benefit from a 3-2-1 buydown mortgage, although buyers are traditionally viewed as getting the better end of the deal, especially if the seller or another party pays for the buydown.
Buyers save considerable money during the first three years
Buyers can use this period to buy now at a reduced rate, and either keep the already locked-in final rate or refinance for a lower one.
Buyers can use the monthly savings to manage initial expenses or set aside funds for repairs or remodeling.
Buyers can refinance before this buydown benefit is over and can apply remaining funds as a “credit” to closing costs or buying the new mortgage rate down.
One warning — buyers need to be sure they can afford the final, full mortgage payments and not place themselves in a financial bind.
For sellers, paying for a 3-2-1 buydown can help them sell their property faster, making it more attractive for buyers who are ready to purchase a home now. The buydown may be less than how much a price reduction would become if the home stayed on the market too long.
Many <a href="https://interlincmortgage.com/north-charleston">Charleston area lenders</a> are taking a fresh look at 3-2-1 buydown mortgages as interest rates have hit the highest point in two decades. Contact Interlinc Mortgage or a real estate professional from <a href="https://www.jeffcookrealestate.com/">Jeff Cook Real Estate</a> to learn more about this attractive incentive and if it could be an available option for you.
Interlinc Mortgage, Charleston SC
<a href="https://interlincmortgage.com/north-charleston">https://interlincmortgage.com/north-charleston</a>2022-12-13T07:43:24-07:002023-01-05T09:59:00-07:00Patricia Utseytag:jeffcookrealestate.com,2012-09-20:10659What to Keep for Taxes after Buying a Home<img src="https://assets.site-static.com/userfiles/1451/image/Homeowner_Taxes.png" width="2674" height="1783" alt="Taxes for Homebuyers" />
Buying your very first house is an incredibly large step, plausibly an overwhelming decision to make as a part of one's life. It is, however, a good investment and could signify the results of your fruitfulness and years of hard work. Financially speaking, being a real estate owner entails a more complicated taxation process than when you do not own a property. This does not mean it is all complex and stressful. Having your own home could also give you tax advantages, making you save more money than you anticipated. Here is everything you need to know about what is recommended when doing your taxes after purchasing a home, including the benefits of being a homeowner when it comes to taxes.
Tax Breaks
Homeownership offers numerous perks and introduces a new world of tax breaks. Before owning a house, the standard deduction is what you most likely have been claiming, but upon possessing a home you can opt to itemize deductions on your tax returns. Once you begin the process of itemizing, the things you usually pay can now earn you tax-saving deductions. Enumerated below are some of the tax breaks that will come to your attention after entering the world of real estate.
Interest on your mortgage
The <a href="https://www.jeffcookrealestate.com/blog/mortgage-payment-structure-explained/">mortgage</a> interest deduction is one of the largest tax breaks for most homeowners. You can withhold your investment's mortgage interest, with a few situational exemptions, like a yearly cap, for instance. The odds of this happening are low, nevertheless. A tax year usually ends in January, and afterward, you will have to expect your lender to point out the IRS form particularizing your annual interest paid. You have to ensure that you will also include further interest you funded since this is essential to your closing balance. These should be written on your settlement sheet for the house purchase. Lenders will also send the first months' interest of your loan. You may seek assistance from the person or institute who lent you the money to specify this to you. However, you have to add this to the sum of your interest when you do your taxes in case it is not included in your 1098.
Taxes on the properties
The cash you fund in local charges can be put under deductibles. If you have your taxes sorted out through a moneylender <a href="https://gofirstnations.com/what-is-an-escrow-account/">escrow</a> account, you will discover the sum on the form you submitted. Personal records through checks and transfers, among others, are what you will be having if you go directly to the tax authorities in your area. Furthermore, plausibly discoverable on the settlement sheet are the off chances that you repaid the vendor for any land charges they paid ahead of time while you claimed the home. Note that you also have to incorporate those installments.
Points to pay
Upon <a href="https://www.jeffcookrealestate.com/blog/process-of-buying-a-home/">purchasing</a> a home, you may need to pay "points." This charge is normally communicated as a level of the advance sum. If the credit is received by your home and the measure of points you pay is in accordance with your space, the points are deductible as "interest" so long as the money you paid at your closing through your down payment can be equated to the points.
The world of homeownership
Now that you are equipped with this knowledge, buying a house and immersing yourself in paying taxes, mortgages and loans is less "taxing" now, right? Sure, purchasing your first home can be quite an overwhelming decision initially, but through a guided mindset and a decent knowledge about the workings of taxation in the field of real estate, homeownership can go by like a piece of cake.
2021-05-10T08:00:00-07:002023-08-29T08:11:18-07:00Lee Willeytag:jeffcookrealestate.com,2012-09-20:10361Mortgage Payment Structure Explained<img src="https://assets.site-static.com/userfiles/1451/image/Untitled_design_23.png" width="800" height="524" alt="Mortgage Payment Structure" />
If you're like many new homeowners, you most likely write a new check every month for your mortgage without understanding how mortgage payments work. Mortgages <a href="https://www.jeffcookrealestate.com/blog/budget-tips-to-relieve-the-stress-of-high-house-payments/" target="_blank">can be stressful</a>, and many property owners have no idea how much interest rate or what they owe on the mortgage balance.
They spend a lot of their time attempting to acquire favorable loan terms, only to forget all about it once they buy their dream house. All homeowners need to at least have basic knowledge about their mortgage payments
So, what is a mortgage?
This is a long-term loan that is purposely designed to help home buyers purchase a house. Besides reimbursing the principal amount, it is also required that you pay the lender interest. The house, along with the land surrounding it, is collateral. However, if you want to own a home, you need to have more than this basic knowledge.
The four parts of your mortgage
1. Principal
The principal is the original amount given by the lender. This is the part of the reimbursements utilized to reduce the amount you owe. The bigger the balance, the higher the mortgage repayment.
If you chose the fixed-rate alternative, your principal reimbursement would be constant until you finish paying off the loan. There are plenty of details about your repayment on your amortization schedule. It is an analysis of each <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/" target="_blank">type of available payment</a>. Usually, a significant portion of the principal is reimbursed on the back half of your mortgage.
2. Interest
This is a percentage added to the loan balance as reimbursement to the creditor. Banks do not lend people funds expecting nothing in return. Typically, interest is the amount the banks charge on the principal amount.
3. Tax
As a home buyer, you must be prepared to make house payments in the form of property tax and mortgage repayments. Typically, the municipal taxes are arrived at depending on your house's value.
4. Insurance
Mortgages also include the buyer's insurance, which lenders need to cover any damage to the house, which is seen as collateral, together with everything inside it. Additionally, it covers particular mortgage insurance, which is a requirement if the buyer makes a down payment of less than 20% of the house's buying price. Generally, insurance is engineered to shield the creditor if the borrower is unable to pay back the mortgage.
Conclusion
Whether you're purchasing a home for the first time or utilizing customary funds to invest, it is vital to comprehend every factor of your mortgage. Begin by familiarizing yourself with the mortgage components and make sure any questions you might have, have been answered exhaustively. More knowledge about your mortgage repayment translates to <a href="https://www.jeffcookrealestate.com/sellers/jeff-cook-offers/" target="_blank">better decisions</a>.
2021-03-29T06:00:00-07:002021-05-27T07:23:28-07:00Hunter Cooktag:jeffcookrealestate.com,2012-09-20:10205Why Should I Refinance?<img src="https://assets.site-static.com/userfiles/1451/image/Untitled_design_22.png" width="2750" height="1833" alt="Why Refinance?" />
Owning a house is most people’s dream. Though, a mortgage is not accessible to everyone, which makes owning a home quite a hassle. Many people don't even know the <a href="https://www.jeffcookrealestate.com/blog/5-important-things-to-know-about-your-home-mortgage/" target="_blank">important factors</a> that go into your mortgage. When you get a mortgage, you always have the option to refinance your mortgage after some time. Most of the time, refinancing turns out to bring more good than bad. Unfortunately, most people don’t understand the importance of refinancing a mortgage. Most importantly, they don’t know how refinancing a mortgage works. In that case, this article will explore the benefits of refinancing and touch base on how the whole process works.
The process of refinancing is less complicated than purchasing a home. Here is a snippet of the process;
1. Applying
You must present recent paystubs and prove that your credit score qualifies. Your lender will also look at your assets, debts, and bank statements
2. Lock in your interest rate
After approval, you have the choice to lock your settled interest rate before the loan closes. This might take a minimum of 15 days to a maximum of 60 days. You also can float your rate, which allows you to get lower rates and puts you at risk of getting higher rates.
3. Underwriting
At this level, your lender begins to verify your information to make sure everything is accurate. They also verify your appraisal to determine the value of your home. This determines the options available for you.
4. Home appraisal
This is when your lender uses an appraiser to estimate the value of your home. For better preparation, it would help if you keep your home at its best. You can also put a list of the upgrades you’ve made since you purchased your home. If your home value turns out to be the same or higher than the refinance amount, then your underwriting is complete.
5. Closing your loan
Once the underwriting and home appraisal are set, you can confidently close your loan. Your lender will then send you a closing disclosure that contains all the figures for your loan. Usually, this process is faster than closing for a house purchase. People on the loan and title plus a representative from your lender must attend the closing. After going through all the documents, you have to pay the closing costs, which are not part of your loan.
So, why should I refinance?
As a homeowner, it is an excellent idea to refinance your mortgage for one good reason – to help you improve your finances. For example, refinancing could help lower your mortgage interest rates, which, in turn, may reduce your borrowing costs. In simple terms, refinancing allows you to lower your monthly mortgage payments and create more flexibility on your monthly spending.
The Benefits of Refinancing Your Mortgage.
1. Reduces your interest rate.
A higher interest rate means you have to pay more on your monthly mortgage payments. Refinancing your mortgage can bring these rates down, which puts more money on your savings. Furthermore, a reduction in mortgage rates reduces your total interest costs.
When you bring your mortgage rates down, it is possible to qualify for another mortgage at a lower rate than your current payments. There are factors such as improved credit score that may help you be eligible for lower mortgage rates. Before refinancing, it would be best to shop around to get the best mortgage rate from a suitable lender.
2. You can alternate your payoff timeline when you refinance.
In the real estate industry, refinancing a mortgage can reduce your loan payment duration. For example, if you have 18 years left to repay your mortgage. In that case, if you land better, lower interest rates, you could reduce the repayment to 15 years. A shorter repayment period, however, may increase your monthly payment. To understand the relationship between the interest rate and your monthly payments, you can use the mortgage calculator to get the real-time values.
3. Refinancing can Change the type of loan you have.
When you refinance your mortgage, you have the flexibility to go back and forth between adjustable-rate mortgages and fixed-rate loans. With a fixed-rate loan, you stay worry-free from future increased rates. Alternatively, suppose you have an <a href="https://interlincmortgage.com/fha" target="_blank">FHA loan</a> that requires you to pay insurance premiums. In that case, you can choose a conventional loan that allows you to eliminate insurance costs.
4. Refinancing allows you to tap into your home equity.
If you own a significant portion of your home, you can direct that money on other expenditures. A good example is to use the money on home improvement, educational purposes, or paying off debt. Still, you have the flexibility to spend the money anywhere however you want.
Wrap Up.
To learn more about your options when it comes to refinancing on your house payments, visit our <a href="https://www.jeffcookrealestate.com/buyers/refinancing/" title="Refinancing" target="_blank">Refinancing</a> webpage.
Refinancing your mortgage is the best option you can use to save more by paying lower interest rates. Always feel free to consult a professional to get a better understanding of how the whole process works. Still, this information can help you understand the importance of refinancing your home loan.2021-03-19T10:00:00-07:002023-08-30T11:43:58-07:00Hunter Cooktag:jeffcookrealestate.com,2012-09-20:10308When is the Best Time to Buy a Home?
Have you ever wondered if now is the “right time” to make a move and buy or sell your home? It’s important to take into consideration the interest rates and how they will affect your monthly house payment. The cost to wait to purchase a home or <a href="https://www.jeffcookrealestate.com/buyers/refinancing/" target="_blank">refinance</a> your current home loan could be significant if the interest rate increases.
Did you know that for every 1% increase in interest rate, you lose 10% purchasing power?
For example, if you wanted to buy a $300,000 house, but the rate increased by 1%, you could then only afford a $270,000 house in order to have the same monthly payments. You could see your monthly house payment drop by hundreds of dollars just by making a move quickly when interest rates are low.
Just imagine what you could do with the money you’re saving by locking in a low-interest rate!
Jeff Cook Real Estate understands that making a decision on your home is a big deal and we don’t take that lightly. Our team of experts stay up to date on local market trends and gives you the resources to make the best decisions on when to refinance, buy, or sell your home. Give us a call at 855-HEY-JEFF to speak with an agent today!2021-03-19T07:59:00-07:002021-03-19T11:01:59-07:00Megan Garrelltag:jeffcookrealestate.com,2012-09-20:10062Budget Tips to Relieve the Stress of High House Payments<img src="https://assets.site-static.com/userfiles/1451/image/JCO_March_2021_FB_Ad.png" width="1200" height="628" />
Buying a home is one of the <a href="https://www.jeffcookrealestate.com/blog/5-tips-for-first-time-home-buyers/" title="5 Tips for First Time Home Buyers" target="_blank">biggest purchases</a> you will make, but maintaining a high monthly payment can be stressful. While it is important to save money and budget when you’re preparing to buy a home, it’s equally important to continue budgeting and tracking your finances. Many people find themselves in unforeseen situations where they are no longer able to meet their monthly payments on their homes.
Here are a few financial tips on how to relieve the stress of high house payments by budgeting:
Understand How Much You Can Afford
When <a href="https://www.jeffcookrealestate.com/blog/process-of-buying-a-home/" title="Process of Buying a Home" target="_blank">purchasing a home</a>, keep in mind the 28% rule; you should aim to only spend at or below 28% of your monthly income. This can ensure that you’re able to afford your house payment each month and avoid becoming house-poor.
Consider Refinancing Your Home Loan
If your <a href="https://www.jeffcookrealestate.com/blog/what-is-a-mortgage/" title="What is a Mortgage?" target="_blank">mortgage</a> is already locked into a high-interest rate, you should consider refinancing your home loan! Keep up with the market trends to potentially take advantage of a lower interest rate on your mortgage. You could see your monthly house payment drop by hundreds of dollars just by making a move quickly when interest rates are low!
Download a Budgeting App
Seeing your finances in front of you every day will keep your spending front of mind and apps are a great way to track where you spend your money most frequently. Mint, EveryDollar, and Pocket Guard are great examples of free apps you can download to your phone and securely connect to your accounts.
Track & Celebrate Your Progress
While the act of budgeting can seem intimidating, taking control of your finances allows you to feel freedom within the boundaries you set. Set goals for yourself such as paying off a car or student loans and celebrate those wins by setting aside extra cash to treat yourself.
If you feel your situation is beyond the point of a budget and you’re in need of expert help, Jeff Cook Offers can assist homeowners with the stress of late payments. Jeff Cook Offers’ mission is to serve those in the community who are in need of solutions that go beyond traditional real estate services. Jeff Cook Offers can provide you with a customized plan for your home depending on your situation.2021-02-17T13:47:00-07:002021-02-19T11:10:54-07:00Megan Garrelltag:jeffcookrealestate.com,2012-09-20:8427How to Stop a Foreclosure: Get Back on Track & Keep Your Home<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-to-stop-foreclosure.jpg" alt="Everything You Need to Know About Stopping Foreclosure" width="475" />Foreclosure is what occurs when a homeowner defaults on their mortgage payments and the bank begins proceedings to evict them and gain control of the property. Foreclosures can be devastating for a variety of reasons; for any homeowner who experiences the foreclosure process, it can take years to recover financially and in other ways, as foreclosure can cause a homeowner's credit to drop significantly. Fortunately, foreclosures can take months or even years from start to finish, and during that time, the homeowner has the possibility to stop the foreclosure from occurring.
A homeowner who is able to catch up on their payments, refinance their mortgage or reach an agreement with their lender may be able to stop the foreclosure process; therefore, it is important for homeowners to take action immediately. If homeowners know in advance they will not be able to make an upcoming payment, then they must contact their lender. Most lenders are wiling to work with homeowners to help them with an action plan to catch up on their payments.
If an agreement is not reached with the lender, however, there are other steps homeowners can take to avoid foreclosure.
Foreclosure Do's and Don'ts
While experiencing the foreclosure process, it is important for homeowners to remain focused on the tasks at hand that can prevent foreclosure from occurring, as it is easy for homeowners who are uninformed of their options to make mistakes. Generally speaking, the best course of action is for homeowners to maintain open lines of communication with their lender and to take the advice of knowledgeable professionals.
Foreclosure will not disappear if the homeowner ignores the phone calls and inquiries from the lender. Homeowners who are proactive and explore all the possibilities are more likely to come to an agreement with their lender.
Do's
Below are some options homeowners may have to prevent a foreclosure from occurring. Homeowners must follow these suggestions from the first late payment, or even before if they believe they may be in danger of missing a payment.
Contact Lender Right Away
Lenders work with homeowners who contact them from the first moment the homeowner is in financial distress. Sometimes, lenders provide payment relief programs homeowners can take advantage of, which can help them get back on their feet before their situation gets worse.
Understand the Foreclosure Process
The foreclosure process is long and complex and involves many steps; therefore, homeowners who want to protect themselves from foreclosure should first understand <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">how foreclosure works</a>. By becoming knowledgeable of the process, homeowners can anticipate the next steps and identify ways to stop foreclosure from occuring. The more the homeowner knows, the easier it will be for them to navigate the process.
Contact a HUD-Approved Housing Counselor for Assistance
A HUD-approved housing counselor can give advice to the homeowner, which can help them take early action and prevent a foreclosure. Potential topics that a HUD-approved housing counselor can discuss include loan modification and short sale options.
Avoid Foreclosure Rescue Scams
Homeowners in financial distress sometimes fall victim to foreclosure rescue scams. In general, if something sounds too good to be true, it probably is. Homeowners who believe they've found financial help from an unknown organization should investigate and research that organization before proceeding.
Document Communications with Servicer
Foreclosure can be so complicated that many homeowners can easily become lost in the process, forgetting deadlines and next steps. Therefore, they should write everything down to make it easy to remember these deadlines and document all conversations with their lender, including the name of who they spoke with and what they learned in the conversation.
Don'ts
Below are some mistakes homeowners can make in the foreclosure process.
Don't Ignore Phone Calls or Notices
Lenders remain open to communication and will work with homeowners who communicate with them about their troubles. If the lender cannot reach the homeowner, then the homeowner is likely to miss opportunities to stop or slow the foreclosure process.
Don't Wait Until the Foreclosure Is Almost Over to Take Action
Foreclosures are much easier to manage during the early stages. In the later stages, after fees and penalties have been incurred, many homeowners are unable to prevent the foreclosure from taking place. Homeowners who want to stop foreclosure often can only do so by working with their lender from the beginning.
Don't Move Out Early
Most assistance programs require the homeowner to be living in the home to qualify for help. If possible, homeowners should remain in the home until they are required to move out.
Don't Assume the Servicer is Always Correct
Loan servicers make mistakes throughout the foreclosure process, which is why working with a HUD-approved housing counselor can help. The HUD-approved housing counselor will understand the foreclosure process and can help the homeowner catch errors to ensure the homeowner is following the correct procedures during the foreclosure process.
Don't Pay Upfront Fees
Foreclosure rescue companies are often prohibited from asking for a large upfront fee without preventing the foreclosure from taking place. Homeowners should not pay a large upfront fee if it is not necessary. If the rescue company the homeowner is thinking about hiring asks for a large upfront fee, then it is wise for the homeowner to keep exploring other options.
Alternatives to Foreclosure
For homeowners in financial distress, foreclosure is not the only available option. Knowing what alternatives exist can help homeowners explore their options.
Deed in Lieu of Foreclosure
The deed in lieu of foreclosure, also known as a quit claim, is a document that transfers the title of the house to the lender. The document is signed by the lender and notarized. This alternative to foreclosure is generally seen as a simple process compared to foreclosure itself, as it is less expensive for the bank and results in a less direct hit to the homeowner's credit.
Under the right circumstances, many banks will be inclined to accept a deed in lieu of foreclosure. Unfortunately, the circumstances are not always right for this kind of process, including:
There is a judgement or lien against the house that will follow the deed after it is transferred to the mortgage lender.
The terms put forth by the lender are not acceptable to the borrower.
Homeowners who are thinking about pursuing a deed in lieu of foreclosure should ensure that the paperwork releases them from the obligation to pay for any loan deficiency. Sometimes, lenders try to get homeowners to pay for the difference owed between the value of the property and the value of the loan. However, many banks will negotiate this point. Homeowners who cannot afford to pay this amount can work with their lender to prevent this from happening.
Additionally, a deed in lieu of foreclosure can prevent homeowners from purchasing another home for several years after the deed goes into effect.
Partial Claim
Borrowers with FHA loans must pay an <a href="https://www.bankrate.com/mortgage/fha-mortgage-insurance-guide/" target="_blank">annual mortgage insurance premium</a> for their mortgage, equal to about one percent of the loan amount. Most of the time, borrowers must make monthly payments toward the premium, and the money is pooled in an account. Lenders affected by defaulting borrowers can file a partial claim to bring the loan current. The partial claim may be used to pay the legal fees associated with foreclosure, but cannot be used to pay late fees.
Homeowners who want to use the partial claim option must eventually pay that money back. To ensure the money is paid back, HUD files a lien on the home, which will stay until the amount is repaid or until the house sells.
To make a partial claim on a delinquent loan, the homeowner must notify their lender of their hardship. The lender must then analyze the claim to ensure the homeowner does not qualify for the HUD special forbearance program that can give the homeowner temporary mortgage relief.
In order to qualify for a partial claim, the homeowner must demonstrate ability to begin repaying the mortgage. Additionally, the homeowner must have missed no fewer than four mortgage payments and no more than 12.
Forbearance
Mortgage forebearance allows a lender to temporarily reduce or suspend a homeowner's payments on their mortgage for a specified period of time. Forebearance is designed to allow the homeowner time to get their finances situated until they can start making payments once again, and it may be an option for people who are behind on their mortgage payments or about to miss an upcoming payment. Forebearance can be a good option because it allows homeowners to stabilize their financial situation while doing less damage to their credit score.
Additionally, forebearance allows homeowners to stay in their home. Once the forebearance period has ended, the homeowner will need to repay the amount they would have paid during the forebearance period. To repay the amount owed, the homeowner will either have to make a one-time payment, pay an increased mortgage until the amount has been repayed (known as a repayment plan) or make a modification to reduce the past-due amount.
Homeowners who want to apply for a forebearance on their mortgage should gather their financial information to share with their mortgage company, including pay stubs, mortgage statements and monthly debt payments and should be prepared to explain what they are going through, including why they are having a hard time making their mortgage payment and how they will be able to repay after the forebearance ends.
Permanent Hardship
Permanent hardship is a type of repayment program for homeowners who are going through a difficult life situation. During a permanent hardship program, regular payments are made, but the lender may reduce interest to make payments less.
Permanent hardship programs are handled on a case by case basis and usually begin when the homeowner writes a letter to the lender to explain their problem. In the letter to the lender, the homeowner must explain they would like to continue to make regular payments as well as include their request, whether that is a reduction in interest rates or a reduction in payment amounts. In some cases, permanent hardship accomodations involve refinancing the loan.
Either way, permanent hardship programs are designed to help homeowners who want to continue making payments and who do not want to default. It is important for the homeowner to explain they do not want to default on their payment, and the requested accommodations are the best way to ensure the homeowner is able to avoid that.
Short Sale
A short sale is a sale performed even though the home is being sold for less money than is owed on the mortgage. Short sales are a helpful tool for homeowners who are "under water" on their mortgage, meaning they owe more money to the lender than the true value of the home.
In order for a short sale to go through successfully, the homeowner must first apply for their short sale to be approved by the bank. This can be a long process, as banks can take weeks or even months to respond to a short sale application and may take even longer to respond to an offer on the home.
<a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">Short sales are considered a better alternative to foreclosure</a> because they can have less of an impact on the homeowner's credit. However, for a homeowner seeking a faster solution to their financial problems, short sales may not be the best option.
South Carolina and North Carolina Foreclosure Intervention
South Carolina's foreclosure intervention process is designed to ensure that homeowners have options when they are facing a potential foreclosure. In order to take advantage of these foreclosure interventions, homeowners must submit an application to the lender, and it is up to the lender to determine whether the borrower qualifies for any of the potential foreclosure alternatives.
Homeowners who choose to participate in foreclosure intervention must be allowed to do so, and the servicer must put aside foreclosure action until the intervention process is complete. Foreclosure cannot take place until:
Notice of foreclosure intervention has been sent.
The lender has reviewed the documents from the homeowner to determine whether the borrower qualifies for foreclosure.
A determination is made that the homeowner does not qualify for foreclosure alternatives and the borrower and lender are unable to reach a settlement.
The notice showing that the homeowner does not qualify for the foreclosure alternative has been mailed and the homeowner has had a specific amount of time to respond.
Additionally, courts may require the homeowner and lender to go through mediation to prevent foreclosure. This mediation process brings the homeowner and the lender together to discuss their problem and reach a resolution that is not foreclosure. For a homeowner in financial distress, foreclosure intervention in South Carolina the best possible opportunity to avoid foreclosure.
In North Carolina, homeowners may have access to counseling and legal aid during their foreclosure proceedings. Homeowners in North Carolina who are in danger of foreclosure should work with their HUD-approved housing counselor to explore the possibilities.
Last-Minute Strategies to Stop Foreclosure
While it is always encouraged that homeowners are proactive from the beginning to stop their foreclosure, sometimes even homeowners who wait until the last minute are able to take advantage of the strategies and services available that can prevent foreclosure. The following strategies may still be able to help.
File for Bankruptcy to Stop Foreclosure
Filing for bankruptcy creates an automatic stay of all debt collection, including collection calls, letters and foreclosure. This happens the minute the homeowner submits the paperwork to file for bankruptcy.
Often, homeowners wait until the very last minute to file for bankruptcy when their home is facing foreclosure, a strategy popular because homeowners are often reluctant to take drastic measures to file for bankruptcy. Additionally, waiting until the last minute makes it possible for the homeowner to extend foreclosure and thus the amount of time they may spend in their house.
Homeowners who file for chapter 13 bankruptcy must go on a payment plan and continue paying their mortgage in order to complete the bankruptcy process.
While filing for bankruptcy to stop foreclosure may sound drastic, many homeowners use this tool to keep their house, get caught up on payments and work out other debts. Most important to remember is that the bankruptcy must be filed before the <a href="https://www.jeffcookrealestate.com/blog/how-to-buy-a-foreclosure/">foreclosure is bought</a> at auction, or the foreclosure cannot be stopped. Homeowners who choose to file chapter 13 bankruptcy will be able to keep their house as long as they can keep up with the payment plan.
Apply for Loan Modification
Loan modification is an alternative to foreclosure that enables the homeowner to reduce their payments and make owning their home more affordable. During the recession, many homeowners applied for loan modification, and their bank continued foreclosure proceedings even while processing their modification application. Whichever process was completed first, whether that was modification or foreclosure, was the ultimate conclusion of the matter and known as dual tracking.
Often, it was the foreclosure process that completed first. Homeowners who believed they were in the process of having their loan modified were shocked when their home was foreclosed. Today, federal law prohibits dual tracking in many cases. In North and South Carolina, homeowners have foreclosure intervention strategies to help them avoid foreclosure. Additionally, laws are structured to prevent homeowners from being foreclosed upon without having access to these intervention strategies.
File a Lawsuit to Stop the Foreclosure
In the event the foreclosing party fails to follow foreclosure laws, the homeowner may sue the lender. It is up to the homeowner to prove the foreclosing party did not follow the proper laws, and working with a lawyer can help them through this process. In states like North and South Carolina, where laws are designed to help homeowners protect themselves from foreclosure, the lawsuit may not be an option.
Homeowners Should Contact Their Lender
Homeowners in financial distress who would like to avoid foreclosure should know their rights, work with a lawyer, know the foreclosure process in their state and work with their bank from the very beginning to discuss potential options that can help them avoid foreclosure.
Not all options to avoid foreclosure are palatable to homeowners. However, by working with a financial counselor and by maintaining good communication with their lender and lawyer, they increase the possibility of saving their home.2020-06-09T08:39:00-07:002021-08-30T12:20:42-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8428How to Buy a Foreclosure: Getting Ahead By Purchasing a Foreclosed Property<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/how-to-buy-a-foreclosure.jpg" alt="Everything to Know About Buying a Foreclosure" width="475" />Buying a <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">foreclosed home</a> is different than the usual home buying process. Homeowners on a budget, concerned with monthly mortgage payments, or want a home outside their budget may find the right solution in buying a foreclosed home, as they are offered at lower prices through a bank or lender. Purchasing a foreclosed home gives buyers the opportunity to purchase a home that would otherwise be more expensive.
Although a few extra steps are involved, these tips can help home buyers decide whether buying a foreclosed home is the right option. Before they get started, homeowners should be prepared to research and put in more effort in the purchase of a foreclosed property. Additionally, they should work with a real estate professional along with other experts throughout the process to make the experience better overall.
Where Can Buyers Find Foreclosed Homes?
In addition to being more difficult to purchase than standard homes, foreclosed homes can be more difficult to find. Home buyers should work with their real estate professional to locate foreclosed homes in the area where they would like to purchase, as real estate professionals have access to listings and directories of foreclosures that may not be accessible to the public. There are other ways to find foreclosed homes as well, including:
Public records. Check the public records in your local county or municipal offices; look for homes that are listed under notice of default and notice of sale.
Standard listings. Many foreclosed homes are eventually listed on the standard listings websites; home buyers can check on real estate listings just like they can look for standard homes as well.
Local newspapers. Local newspapers are a good resource for home buyers, as they have access to the same public records that everyone else can access and will publish foreclosed homes for everyone to see.
Attorneys and real estate wholesalers. These professionals have inside knowledge of foreclosures and will sometimes release this information to people who they know.
Getting Pre-Approved for a Mortgage
The first step to buying a foreclosure property is for buyers to get pre-approved for a mortgage. A mortgage pre-approval is different than a mortgage pre-qualification, as mortgage pre-qualification is the first step in the mortgage approval process. To get pre-qualified, home buyers must contact a lender and answer questions about their financial status.
After completing the pre-qualification process, the lender will determine how much money the buyer will be able to borrow if the answers the home buyer gave to the lender are accurate. Since pre-qualification is based on the answers the buyer gives and not the facts, a pre-qualified buyer is not necessarily a sure thing.
The pre-approval process requires the home buyer to submit documentation that supports the answers to the questions in the pre-qualification process. Pre-approved buyers are more likely to be approved for their mortgage, so pre-approval is the proper first step to buying a foreclosure.
To become pre-approved, the home buyer must contact a lender and start the mortgage approval process well before the date they hope to buy a foreclosed home.
How to Buy Different Types of Foreclosed Homes
Foreclosure occurs in stages; foreclosed homes can be bought during these different stages, with the purchase process depending on the stage of foreclosure the home is in. Therefore, undestanding the different stages can help home buyers determine what they will have to do in order to purchase a foreclosed home. Additionally, understanding the different processes can help home buyers decide what type of pre-foreclosed homes they would like to purchase.
Pre-Foreclosure
Pre-foreclosed homes can be sold in a process known as a short sale. <a href="https://www.jeffcookrealestate.com/blog/short-sale-vs-foreclosure/">Short sales are not technically foreclosed homes</a> because the foreclosure process has not been completed. Pre-foreclosed homes are sold by homeowners with the permission of their lender. Often, homeowners who sell their home as a short sale are in financial distress, and they are seeking to sell their home to <a href="https://www.jeffcookrealestate.com/blog/how-to-stop-foreclosure/">stop the foreclosure process</a>.
Pre-foreclosed homes take longer to sell than standard homes, as they are often sold for below market value. Home buyers who wish to purchase a pre-foreclosed home must display patience, as sometimes purchasing pre-foreclosed homes can take months. Benefits of pre-foreclosed homes include:
Pre-foreclosed homes are a good deal.
Homes sold in pre-foreclosure are sometimes in better condition than fully foreclosed homes.
However, there are many disadvantages of purchasing a pre-foreclosed home.
Even after the home purchase offer is accepted by the homeowner, the lender may reject the contract.
Pre-foreclosed homes can take many months to purchase.
Sometimes, lenders simply ignore purchase offers from home buyers.
In order to purchase a pre-foreclosed home, it is important for home buyers to work with an experienced real estate professional.
The short sale process proceeds like this:
The homeowner turns in an application to the lender requesting for the home to be sold as a short sale.
The buyer makes an offer and the homeowner accepts it.
The homeowner submits the accepted offer to the bank.
The bank accepts, ignores, rejects or counters the offer.
When there is an offer accepted, the sale of the home proceeds much like any other home sale.
Short sales generally occur because the home is worth less than the value of the mortgage, a condition known as being "under water." The reason the homeowner must get permission to sell the home as a short sale is because the homeowner can sell the home in a standard sale if the home was worth more than the mortgage. As long as the home is worth less than the mortgage, the lender must take a loss.
Auction
Homes that are foreclosed upon are typically sold at auction, which are public and sometimes very large events. Foreclosed homes are often sold at a heavy discount. The process for <a href="https://www.auction.com/blog/buying-foreclosures-at-auction-the-basics/" target="_blank">purchasing a home at auction</a> is below.
Find Auctions
Auctions are listed in local papers and are also posted on websites dedicated to foreclosure home purchases. The home buyer can find auctions for homes they're interested in purchasing.
Do Research
Before making a purchase, the home buyer must do research to find out the condition of the home, whether there are any liens on the home, and how much the current homeowner owes on their mortgage. Having this information is important—especially information regarding any liens—because the new home buyer may have to pay the liens themselves.
Often, it is difficult or impossible to find out much about the condition of the home. Buyers interested in purchasing a foreclosed home can find out a little information by driving by the home. However, these homes are often still occupied by their owner, and there is no way for the interested buyer to go inside.
Prepare Financing
Home buyers must know how they plan to purchase the home. This can be done by cash or with a mortgage unless otherwise noted as cash only. Many states require the winner of the auction to produce the money for the house as soon as the purchase is made; therefore, all financing must be ready before the home is purchased.
Attend the Auction
Foreclosed home auctions are often cancelled or postponed, as events take place behind the scenes relating to the foreclosure. Home buyers who would like to purchase a foreclosed home should confirm on the day of the auction to ensure it is still taking place.
At the auction, the home buyer who wins will get a certficate of sale and eventually, a certificate of title. During that time, the original homeowner may take some action to get their home back, which is why it is important for the home buyer to avoid making any changes to the home until they have the title.
REO
If a foreclosed home does not sell at auction, then it becomes real estate owned, or REO, meaning the property is owned by the bank. Real estate owned properties are often listed on the MLS website and are sometimes listed on the bank's website as well. Banks often have an entire section dedicated to the sale of REO properties.
REO properties are not often sold at a major discount; sometimes, REO properties have been standing vacant for a long time. Even if they look fine on the outside and did not have major damage when the house went vacant, time without maintenance and occupancy can have a detrimental effect on a home. Home buyers who are considering an REO property should get an appraisal and a home inspection before making an offer.
Most REO properties are sold "as-is," meaning they come with no warranty and banks will not make any repairs. Therefore, home buyers interested in REO properties must be prepared to make major repairs, upgrades or renovations when they move into the house. Sometimes, this makes an REO property ideal for a home flipper or someone who has strong DIY skills.
Banks that will not negotiate on price may negotiate on the terms of the loan, if the home buyer applies for a loan through the same bank that owns the property. Additionally, some banks may allow the buyer to finance the entire price of the home or more, if extensive repairs are necessary.
Home buyers should run a title search before making an offer. Most of the time, banks will clear the title before listing the house for sale, but it is important to check either way. Sometimes, home buyers have difficulty purchasing an REO property with loans such as VA loans and FHA loans, as these loans require the property to be "turn key." This gives more reason to apply for the loan through the lender that owns the home, as the flexibility on the loan could become important.
Additionally, it is important for buyers to work with a real estate professional who has experience with REO properties, as they can help the home buyer negotiate the terms of the home. REO properties are similar to short sales in that they can take a long time to be approved; therefore, buyers must exhibit patience when negotiating the purchase.
Government-Owned
When a homeowner defaults on a government loan, or when a homeowner fails to pay property or income taxes, the government may foreclose on the house. Buying a government-owned home is not much different from buying any other foreclosed home. Government-owned homes are available for sale on government sites where they are listed together with information about their auction day, the value of the home and pictures of the interior.
Government-owned homes are often in relatively good condition because the government will often make repairs for the home and sell the home for a competitive price. There is some misconception that government-owned homes are available at a discount. Typically, this is not the case, unless there is something wrong with the home.
Additionally, government-owned homes are sold through auction, just like standard foreclosed homes. Homeowners who bid on a government-owned home can secure financing after the auction.
An experienced real estate professional can help the home buyer determine what would be a fair price for the house. Having this kind of direction before attending the auction can help the home buyer decide what the limit is on what they are willing to spend. Purchasing a government-owned home is different from purchasing other types of homes, which is why a real estate professional can give the home buyer advice and answer their questions, walk them through the process, and make the home purchase process easier and less stressful overall.
Government-owned homes are different from standard foreclosures in some ways. For example, in the first round of auctions for government-owned homes, the only people who are allowed to bid are people who plan to use the home as their primary residence. People who wish to flip the home or rent it out will not be able to bid in the first auction. Having this information and other information like it can help make the process of buying a government-owned foreclosure easier overall.
Do Your Research, Work With the Experts
If you're a home buyer thinking about purchasing a foreclosed or pre-foreclosure home, work with the experts throughout the process. By contacting a reputable lender and working with a real estate professional who has experience these these kinds of purchases, home buyers will find that purchasing a foreclosed home can be worthwhile.
Home buyers should do their research before getting started and should know what kind of home they would like to purchase and what they will need to do. The more home buyers know in advance of making a purchase, the better.2020-06-08T08:42:00-07:002021-08-30T12:21:23-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:8430Short Sale vs. Foreclosure: Understanding the Difference & Discovering Which One is Right for You<img style="display: block; float: right; margin-bottom: 30px; margin-left: 15px; width: 475px;" src="https://assets.site-static.com/userfiles/1451/image/short-sale-vs-foreclosure.jpg" alt="What Is a Short Sale? What Is a Foreclosure? Differences" width="475" />Short sales and foreclosures can happen under similar circumstances, but the actual processes are very different. Most important to know is that a short sale is a voluntary event, initiated by the homeowner and requiring the approval of the lender. A foreclosure is an involuntary process wherein the lender takes legal action and eventually assumes control of the house.
During a short sale, the homeowner is allowed to sell the house for an amount that is less than what is owed on the mortgage. During a foreclosure, the homeowner is required to leave the house, and the bank can sell the home at an auction.
Short sales and foreclosures were very common events during the recession. Homeowners who had lost all equity in their home and were left with toxic loans were forced to either sell their house as a short sale or be foreclosed upon. This happened all over the country and in neighborhoods of all kinds. Although short sales and foreclosures may happen less today, they do still occur. If you're a homeowner in financial distress, you may be faced with a short sale or foreclosure sometime in the future. Knowing the difference between these two processes can help you decide what is the best path for you.
Short Sale
A <a href="https://www.jeffcookrealestate.com/blog/what-is-a-short-sale/">short sale</a> is an option for many sellers when the home has lost so much value that the amount owed on the loan is far more than the market value of the home. Homeowners who owe more than they're able to sell the home for are faced with a difficult choice: either seek permission to sell the home for less than the loan, or sell the house and pay back the difference to the mortgage company. Many homeowners, faced with the impossibility of paying back large sums of money to their mortgage lender, often eventually decide to seek permission to hold a short sale.
The lender must grant the homeowner permission before the short sale begins. Before permission can be granted, the homeowner must fill out documentation that proves that the short sale is justified. This documentation includes the letter of hardship, financial statements, preliminary marketing analysis and a net sheet that shows the amount the home would sell for is less than the amount owed on the loan.
After analyzing all of this information, the bank will decide whether the home buyer will be allowed to sell the home as a short sale. If the bank grants permission, the homeowner may present the bank with one or more offers to buy the house.
Benefits
There are benefits of selling a house as a short sale. For a homeowner who is <a href="https://www.moneyunder30.com/mortgage-underwater-options" target="_blank">underwater on their property</a>, a short sale represents a way to sell the house and start anew with a new property, although many loans require homeowners to <a href="https://www.jeffcookrealestate.com/blog/how-long-does-a-short-sale-take/">wait a certain period of time after a short sale</a> before they can qualify for a mortgage again.
There are other benefits as well.
Homeowner is in Control
Although the bank must give permission to the homeowner to sell the home as a short sale, the homeowner remains in control of the home sale process. The homeowner decides to initiate the short sale and can also decide to cancel the short sale if they choose.
Short Sale Homes Attract Buyers Seeking Low Prices
Short sale homes have some disadvantages, but the primary advantage for home buyers is that short sales are generally sold as a discount. Short sale homes are sold for less than their market value to make up for their disadvantages, which are listed below. For a home buyer on a budget or a home buyer who is open to making DIY home improvements, short sales are an excellent opportunity to get a home for a good deal.
Short sales are also an excellent opportunity for home buyers to purchase a home that they might otherwise not be able to afford. For home buyers who have big dreams but a small budget, short sales can be the perfect opportunity. It's important for the home buyer to work with a real estate professional who can help them achieve their home-buying goals. Without help from a real estate professional, it becomes much more difficult for home buyers to get what they need.
Less Competition
Many home buyers want their home purchase process to be as simple as possible. Home buyers shy away from home sales that are likely to be complex and drawn-out. As a result, short sales are likely to have less competition than many other home sales even in a hot real estate market. For a home buyer who is willing to put the time and effort into a short sale, the process could be very fruitful.
Disadvantages
Short sales do have their downsides. For many home buyers, the biggest disadvantage of a short sale is how much time it can take to purchase a short sale. In North and South Carolina, short sales can take an average of about four months to complete. Short sales take a long time because most banks are reluctant to approve the transaction.
Banks draw out the process because they have limited resources to dedicate to managing short sales, and because they hope to attract higher offers. The longer the short sale process takes, the more likely it is the bank will attract a higher offer from an interested buyer. Another reason short sales take so long is because banks have many levels of bureaucracy. Even if the bank were an enthusiastic seller, the short sale process would probably still take a long time. In addition to this one obvious downside (the length of time a short sale can take), there are others.
Lender Could Counter
Once the homeowner accepts an offer from a home buyer, they must send the offer to the bank. Even after the homeowner has accepted the offer, it is the bank that ultimately gets to decide whether an offer will go through. The counter from the lender could be a much higher purchase price suggested by the buyer. The bank may even reject the offer or refuse to respond. The home buyer could be waiting for a long time only to realize that the bank will not respond at all.
Property is Sold "As-Is"
There is very little negotiating with a bank. Short sale properties are bought "as is," which means that any damage from deferred or poor maintenance will be the responsibility of the home buyer once they've purchased the house. Homeowners selling their house as a short sale are in financial distress and often do not keep up with maintenance. Therefore, short sale homes are frequently in poor condition.
Properties that are sold as is often do not meet the standards of home loans that require properties to be "turn key" upon purchase. This limits the home buyer's mortgage options, and also exposes the buyer to the risk that the home they purchase will require thousands of dollars in repairs after they move in.
Seller May Not Be Approved
Sometimes, homeowners put their home up for sale believing that they qualify for a short sale, only to realize later that they do not. It's important for the seller to get an approval before putting their home up for a short sale. Buyers must be careful to ensure they work with a real estate professional who knows how to identify when a short sale is proceeding as it should.
Lender May Accept Another Offer
Even after the home seller accepts the offer, the seller may continue to send the lender other offers, and the lender may pick any of those offers they want. This means that the buyer may believe that they have gotten very close to purchasing the house only to discover this was not the case.
Foreclosure
Foreclosure is generally the bank's last resort to reclaim a property when a homeowner falls behind on their payments. Foreclosure laws can vary by state and can occur when a homeowner abandons their home; other times, foreclosures occur when the homeowner is living in the house. Foreclosure in South Carolina can take between 150 and 180 days, and in that time, the homeowner often does not care for the house. In fact, many homeowners who go into foreclosure stop caring for their home long before default occurs.
As a result, <a href="https://www.jeffcookrealestate.com/blog/what-is-foreclosure/">homes that are foreclosed upon</a> are often cosmetically and structurally damaged. These homes sometimes need months of maintenance and repair after they're purchased to be brought up to their potential. The foreclosure process generally goes like this:
Buyer defaults on payments
Lender sends a notice of default to homeowner
Lender creates a notice of trustee's sale
The house is sold at auction
The homeowner is evicted
Benefits
For homeowners and home buyers, there are advantages to foreclosure. For the homeowner, the main advantage of going into foreclosure is the length of time that the foreclosure takes. Homeowners who are in financial distress have months to work with their bank to try to get out of foreclosure. For those homeowners who don't want to save their house, foreclosure is often easier and less work than a short sale.
There are many reasons that home buyers seek to purchase foreclosed homes at auction, but the primary reason is because they're often sold for well below their market value. For a variety of reasons, banks are not motivated to sell foreclosed homes for a high price. Banks do not want to make repairs, nor do they want to fix the home up (staging and so on) to make the home selling process more profitable. Lenders who foreclose upon homes will often sell the home at auction, allowing buyers at the auction to determine how much the home will sell for.
The fact that the lender does not have to make repairs and the buyer can get a home for a good deal makes foreclosed homes relatively easy for all parties involved. Although foreclosure is a long process while the homeowner is still living in the home, once the foreclosure goes through, the purchase process (at auction) is easy.
Disadvantages
Unfortunately, foreclosures can also be a painful process for the homeowner who is being foreclosed upon. Foreclosure is involuntary. Often, foreclosures occur when a homeowner accidentally falls behind on payments, after falling into financial distress. The homeowner who goes through the foreclosure does not get to control whether, when or how the bank chooses to foreclose on the homeowner. For a homeowner who is trying to save their own house, trying to get caught up on payments can be stressful.
The foreclosure process is established by law, and the bank must follow that process. This generally involves forms and notices sent to the homeowner on a schedule. Although the process may be stalled by certain actions, most of the time, the homeowner can only stop the foreclosure process by catching up on payments. In addition, there are disadvantages for home buyers as well.
High Competition
Foreclosed homes are sold at auction, often with many buyers present. Because foreclosed homes can be very low cost, competition for foreclosed homes can be fierce. High competition means that home buyers who are trying to get a foreclosed home may need to go through the home buying process at auction several times before they're able to get a home that's right for them.
Home is Often Distressed
Foreclosed homes are sold "as is." Buyers who purchase foreclosed homes generally need to be prepared to make significant repairs to any home they would like to buy. This can require a major investment on the part of the home buyer. Since home buyers who purchase foreclosed homes are often looking for a deal, this can mean that the buyer may not benefit financially as much as they wanted.
What's the Better Option?
Deciding between buying a short sale and a foreclosure, or deciding between starting either process, can be a challenge. Home buyers and homeowners alike should consult with the experts in order to make the right choice for them. They must start by consulting with a professional.
If you're a homeowner who believes that a foreclosure or a short sale may be in your future, talk to your real estate professional. A real estate professional can help you get started with the short sale process. If you're a home buyer, talk to a real estate professional and a lawyer to get the right legal and tax advice. Working with a real estate agent and a lawyer throughout the process, regardless of which process you choose, can help you decide which one is right for you.
It's also important to communicate with your lender. If you're a homeowner in financial distress, you may be able to avoid a short sale or a foreclosure by communicating with your lender as soon as your financial troubles begin. By maintaining open lines of communication throughout the process, you can help ensure your real estate transaction will go well.2020-06-04T08:44:00-07:002021-08-30T12:23:40-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:71895 Important Things to Know About Your Home Mortgage<img src="https://assets.site-static.com/userfiles/1451/image/5ImportantThingstoKnowAboutYourHomeMortgage.jpg" width="450" height="300" alt="5 Important Things to Know About Your Home Mortgage" />
Owning a home is a big deal that requires proper and adequate preparation. You need enough finances but you also need the right knowledge about mortgages. You should learn about all the processes involved to have a smooth transition and own your home. Most people usually find solace in taking mortgages but sometimes that relief turns to grief especially if they take the mortgage without doing enough research. Here are some mortgage tips to make your home buying process simpler.
Credit
Although you don't need to have a perfect credit score, you still need a good enough credit. This is because the financial institution that will be giving you the loan will be taking a big risk by giving you the money. They need some sort of reassurance that you'll hold up your end of the deal. This is shown through previous proof of payments you've made. It is, therefore, a good idea to start by building your credit score before applying for a home loan. You don't have to perfect the score, you just need to make it good enough. Check out our helpful tips on <a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/">How To Improve Your Credit Score</a>!
Special Mortgages
If you're a first time home buyer, you may have some trouble finding a good lender to give you a loan. Most first time buyers are young and therefore don't have a reputation when it comes to loan payments or a good background in terms of mortgages. First time home buyers can turn to special mortgages such as VA Home Loans for veterans and their families or Rural Housing Mortgages. These are mortgages that don't require the 20% down payment that some lenders implement as a mandatory part of the process. This means that you can own a home even if you don't have enough money as capital. Check your eligibility for a VA Home Loan <a href="https://www.veteransunited.com/v3/lp/?src=adw&adg=genhmtg&desc=eligibility&matchtype=p&gclid=EAIaIQobChMIhrv1tKjp6wIVBrLICh3dXgXBEAAYBCAAEgI5SfD_BwE">here</a>.
Refinancing
Mortgage rates usually change and that means that you can get a better deal. You just need to be careful about why you're refinancing. If done for the wrong reasons you can reap a lot of benefits. Only refinance your home if the mortgage rates are better or if you have improved your credit score. Second mortgages are also a good choice to consider if you have a good home value. Just make sure you weigh all the advantages and disadvantages before making your decision.
Closing costs
Buying a home involves paying for various costs that can take a financial toll on you. However, these closing costs may seem like small amounts but when you add them up they become too expensive. The best move is to ask whoever is selling the home to cater for those costs. They may include escrow fees, inspection costs, appraisal services, and insurance fees,
Mortgage testing
You don't have to delve into getting a mortgage straight away. You can opt for the option of <a href="https://www.jeffcookrealestate.com/blog/how-do-i-get-pre-approved-for-a-home-loan/">getting a pre-approved home loan</a>. Ask the lender if this option is available for you and make sure you get all the details such as the cost and eligibility factors. You should also find out whether you can borrow more and pay less.
Before getting a loan from any lender, make sure you find out important aspects such as the interest rates. This will help you prepare properly and as such, help you make the payments smoothly. 2019-12-04T10:33:00-07:002021-01-22T13:12:14-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:7188What You Need to Know Before Applying for a Home Loan<img src="https://assets.site-static.com/userfiles/1451/image/NeedToKnowBeforeApplyingforaLoan.jpg" width="450" height="253" alt="What You Need to Know Before Applying for a Home Loan" />
Whether you're taking out a loan to purchase a new home, or you're applying for a home equity loan (taking out a loan with your home as collateral), there are some important things you should be aware of ahead of time and keep in mind. Being well informed will help you make it through the process successfully, and also have more confidence.
It's important to do your research before applying for a home loan. There are a number of online resources with helpful information and advice, such as Zing! by Quicken Loans, or millionacres by Motley Fool. If you'd like professional help from experts, Jeff Cook Real Estate is a great company that can help you make the best decisions. Here we'll give you five important tips to get you started.
Raise and Maintain Your Credit Rating
This is something you'll want to be aware of well ahead of applying for a loan since it takes time to raise your credit score if it's gotten low. Your credit score is one of the key factors a lender will consider when determining whether or not to extend a loan and what interest rate you will pay. Many services and companies provide credit ratings, and you can find it online.
Once you know what your score is, you can determine whether you need to raise it. There are a number of <a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/">ways to increase your credit rating</a>. A good first step is to look over your credit report and make sure there are no mistakes or inaccuracies. If there's anything on there that doesn't look right and it may be adversely impacting your credit, you should look into it. If you have a substantial credit card balance that you can afford to pay off, that will usually help your credit. It's hard to do a lot with short notice, but not opening new accounts or taking out other loans is very important if you're concerned about your loan application.
Avoid Changes in Employment
Having steady, reliable employment is a crucial consideration in the loan approval process. If possible, avoid making any major job changes prior to applying for a loan or during the process. They want to see that you have a job that you have and will stick with and that you'll have regular income to make payments from.
Create a Budget
Before you apply, it's important to have a good idea of what you can afford as far as monthly payments. You don't want to overextend yourself, and your application likely won't be approved if it doesn't look financially feasible. It's a good idea to put together a budget of all your income and expenses. Be sure to include everything, within reason; remember, it all adds up. Doing this is extremely important for determining how big of a loan you can afford to take out, and what type of house you'll be able to buy.
Prep for What You’ll Need
When making a loan application, financial institutions will ask you for quite a bit of <a href="https://www.bankofamerica.com/mortgage/learn/how-to-apply-for-a-mortgage/">information to aid in the review and decision</a>. This may include pay stubs, financial account statements, and tax filings. It's important that your taxes have been filed and that everything is in order. It relieves a lot of stress and hassle if you have what you need ready for when they ask.
Do Your Research & Choose Carefully
It's important to do thorough research so you know what you're getting into. As mentioned earlier, there's a wealth of helpful information online. Talking to a professional can be a good idea to get personalized assistance. You'll want to research the current housing market and be aware of current interest rates, which will help you know the best time to apply for a loan. You should also look around at different lending institutions to determine which ones have the best offerings and will provide the best service. Entering into a financial agreement with an institution of people you feel you can trust is really important, so take time to talk to folks.
The process can be a little intimidating, but if you do your research ahead of time, you'll find it's really not bad because you'll know what to expect. At the end of the day, this process is incredibly rewarding, especially when you are preparing to <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">move to South Carolina</a>!2019-12-04T10:26:00-07:002021-01-22T13:07:21-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:5945August 2019 Columbia Real Estate Market UpdateAs we have seen over the past several months, the interest rate drop from July 31 has not caused the upturn in sales that one would have thought it would. There is a lack of affordable housing and that lack, along with higher housing prices are affecting the number of home sales. First time home buyers are unable to buy at the higher price levels, even though the lower rates would be a help.
Here is a brief summary of the numbers from the August Columbia Market: and what they mean for anyone thinking of buying or selling.
New Listings - 1620 (up 8.3% from 8/18)
Rending Sales - 1346 (up 6.2% from 8/18)
Closed Sales - 1376 (down 1.4% from 8/18)
Days On Market - 50 (down 5.7% from 8/18)
Median Sales Price - $185,000 (up 11.8% from 8/18)
Percent of Asking Price Received 97.7% (up 0.3% from 8/18)
Months Supply of Inventory - 2.9 (up 3.6% from 8/18)
The number of new listings coming on to the Columbia market in August has increased from August of last year, and the number of days on the market is shortening. The number of pending sales has increased 6.2% and median prices are up almost 12% from this time last year. These statistics are all indicating that it is a great time to be a seller. This is obviously not great news for buyers. Additionally, the monthly supply of homes is only at 2.9, which is low, and sellers are receiving 97.8% of their asking price. If you are considering <a href="https://www.jeffcookrealestate.com/blog/why-now-is-the-best-time-to-sell-your-home/">selling your home</a>, do it now while interest rates are low and more buyers can afford to purchase. For more information on key indicators of a healthy housing market, click <a href="https://www.jeffcookrealestate.com/blog/key-indicators-of-a-healthy-housing-market/">here</a>.
Here at Jeff Cook Real Estate, we work hard to help you with integrity and honesty. We have many eager buyers wanting to purchase. It is an excellent time to give us a call to list your home. Call-855-HEY-JEFF today.
Stay up-to-date and check out the <a href="https://www.fortunebuilders.com/columbia-real-estate-market-trends/">most current Columbia market updates</a>!2019-09-23T11:21:00-07:002021-01-22T11:05:00-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5944August 2019 Greenville Real Estate Market Update There are multiple opposing factors and trends that are affecting the market in Greenville. The interest rate reduction from the beginning of the summer has not spiked sales the way one would have thought that it might have. Pending sales for the month are down by 55% and the number of days on market is up to 69 days.
The number of new listings has increased and closed sales have increased from last year at this time. Inventory is staying under a 5 month supply, which is still positive news for sellers. The median price is up almost 9%. There seems to be a demand for housing, but rising prices are preventing more people from buying.
Here is a brief summary of the numbers from the August Greenville Market and what they mean for anyone thinking of buying or selling.
New Listings - 1864 (up 8.7% from 8/18)
Rending Sales - 521 (down 55.0 % from 8/18)
Closed Sales - 1505 (up 10.7% from 8/18)
Days On Market - 69 (6.5% from 8/18)
Median Sales Price - $220,000 (up 8.9%% from 8/18)
Percent of Asking Price Received 98.1% (0% from 8/18)
Months Supply of Inventory - 4.7 (up 34.3 % 8/18)
The number of new listings coming on to the market is 8.7% higher than last August but has slowed from last month. Pending sales continue to trend down having decreased 55% to 521 homes. Home prices have gone up 8.9% from last year at this same time. The number of closed sales this August compared to last August has gone up 10.7% and the supply of inventory has gone up to 4.7 months. For more information on key indicators of a healthy housing market, click <a href="https://www.jeffcookrealestate.com/blog/key-indicators-of-a-healthy-housing-market/">here</a>.
If you are looking to sell your home, call Jeff Cook Real Estate because we are experts at pricing your home correctly in this type of market. If you are a buyer, you need one of <a href="https://www.jeffcookrealestate.com/blog/get-to-know-our-greenville-agents/">our experienced agents</a> on your side to help you navigate the market, call us at 855-Hey-Jeff.
Stay up-to-date and check out the <a href="https://www.rate.com/research/greenville-sc">most current Greenville market updates</a>!2019-09-23T11:18:00-07:002021-01-22T11:02:55-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5943August 2019 Charleston Real Estate Market UpdateIn general, the trends that we have seen so far this year are continuing, which means that there are fewer homes for sale and the prices are inching up. The lack of available homes is particularly evident in the lower price range, where there are most of the buyers who are looking to get into the market. Interest rates are low which is good but the lack of affordable housing is starting to impact the market.
Here is a brief summary of the numbers from the August Charleston Market: and what they mean for anyone thinking of buying or selling.
New Listings - 2,184 (down 0.9%% from 8/18)
Rending Sales - 1,893 (up 25% from 8/18)
Closed Sales - 1,800 (down 4.6% from 8/18)
Days On Market - 54 (up 17.4% from 8/18)
Median Sales Price - $285,000 (up 9.4% from 8/18)
Percent of Asking Price Received -96.2% (- 0.6% from 8/18)
Months Supply of Inventory -3.5 (down 12.5%% from 8/18)
The number of new listings in the Charleston area has remained almost constant in August, and the inventory of available homes has dropped to 3.5 months. This is, of course, not great news for buyers. The number of pending sales is up 25% from last year at this time, which again could be a benefit of the drop in interest rates. Along with this good absorption rate, the slow down in the rate of new listings coming on to the market will keep us in a seller’s market. The median sales price has gone up and the percentage of asking price received has stayed been hovering at around 96%. The month's supply of inventory has been edging downward, which means that it is a good time to sell your home. The home type that is most in-demand in our area is a 4 bedroom home priced between $200,000 and $300,000. For more information on key indicators of a healthy housing market, click <a href="https://www.jeffcookrealestate.com/blog/key-indicators-of-a-healthy-housing-market/">here</a>.
Here at Jeff Cook Real Estate, we have many more eager buyers wanting to purchase. If you are thinking of <a href="https://www.jeffcookrealestate.com/blog/scrambling-to-sell/">selling your home</a>, now is a great time to give us a call to list your home. Call-855-HEY-JEFF today.
Stay up-to-date and check out the <a href="https://www.rate.com/research/charleston-sc">most current Charleston market updates</a>!2019-09-23T11:15:00-07:002021-01-22T11:01:16-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5942August 2019 Rock Hill Real Estate Market UpdateAs we head into fall, opposing factors and trends continue to influence the direction of the Real Estate market. The interest rate reduction from earlier this summer has not spiked sales the way one would have thought that it might have. Prices have risen and the supply of houses has dropped. In particular, the supply of affordable houses has dropped and there are not enough homes that first-time home buyers, who want to buy, can afford. The Rock Hill area, in general, is more affordable than other areas in greater Charlotte, which makes it very attractive to buyers.
Here are the numbers for August 2019, Rock Hill/Charlotte Region:
New Listings - 5,621 (down -1.4%)
Rending Sales - 5,096 (up 18.6%
Closed Sales - 4735 (down 2.9%)
Days On Market - 38 ( same 0%)
Median Sales Price - $257,850 (up 5.2%)
Percent of Asking Price Received 96.9% (up 0.1%)
Months Supply of Inventory 2.3 (down -17.9%)
Demand is strong and there are more buyers in the market than houses on the market. New listings are down, prices are higher and houses are selling quickly. As you can see, the supply of Inventory is very low, making it firmly a seller’s market. If you are a seller looking to sell your home, this is a great market in which to do that. For more information on key indicators of a healthy housing market, click <a href="https://www.jeffcookrealestate.com/blog/key-indicators-of-a-healthy-housing-market/">here</a>.
Give us a call at <a href="https://www.jeffcookrealestate.com/blog/who-is-jeff-cook-and-why-is-he-in-rock-hill/">Jeff Cook Real Estate-Rock Hill</a> for an accurate estimate of your house’s value in this market. If you are looking to buy, reach out to us for help finding a house. We can give you referrals for financing to purchase and are experts at negotiating. Call us today at 855-Hey-Jeff.
Stay up-to-date and check out the <a href="https://www.rate.com/research-old/rock_hill-sc-29730">most current Rock Hill market updates</a>!2019-09-23T11:12:00-07:002021-01-22T11:00:07-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5946Here Are The Types of Mortgages ExplainedThe easiest step when buying a home is learning <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">why people are moving to South Carolina</a>! On the other hand, homebuyers face an overwhelming decision when considering what type of mortgage loan is right for them. In this scenario, a single decision is enough to affect a buyer’s finances, and in the case of a rash decision, one that can negatively plague them indefinitely. If you’re in the process of deciding which mortgage loan is right for you, it is important to know the basic types of mortgage loans available. The following are popular mortgage loans to help you get a grasp on the information to help you decide which financing option is the one for you.
To start off, it is important for a borrower to decide if they want a <a href="https://www.investopedia.com/mortgage/mortgage-rates/fixed-versus-adjustable-rate/">fixed-rate or adjustable-rate mortgage</a>. A fixed-rate mortgage loan keeps the same interest rate throughout its term entirely, which means that monthly payments are predictable and will never change. On the contrary, an adjustable-rate mortgage loan will have an interest rate that will adjust over time, resulting in either increases or decreases in payments based on the adjusted interest rate. It is also important to note that there are also hybrid loan options, which start as loans that start off with fixed-rates for a period of time and then adjust from thereafter.
Furthermore, borrowers can decide between more conventional loan options or those insured by the government. A conventional home loan is a loan that is not insured or guaranteed by the federal government as opposed to <a href="https://www.usa.gov/mortgages">government-secured mortgages</a>, such as FHA, VA, and USDA/RHS mortgage loans, which are. One of two popular types of conventional loans includes conforming loans that fall within limits set by government agencies that back most U.S. mortgages, such as Fannie Mae or Freddie Mac.
The other types of conventional loans are non-conforming loans, which don’t meet the standards mentioned previously. For example, jumbo loans are one of those loans that don’t meet the standards of either mortgage agencies. Rather, these loans are much riskier for the lender as they are larger in size, which is why they have larger interest rates and resulting in bigger monthly payments. Borrowers must meet certain requirements, such as good credit and having a larger down payment, for jumbo loans to be appropriate.
Deciding on a type of mortgage is only one step in <a href="https://www.jeffcookrealestate.com/blog/how-to-apply-for-a-home-loan/">the home loan application process</a>, but it is so important to do your research on what options are available to you and what will best suit you. With a preface to mortgage loans available, consider all your financial planning budgets and homeowner needs to ultimately help you determine what mortgage loan is best for you. 2019-09-19T11:23:00-07:002021-01-22T10:58:08-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:59903 Steps Everyone Should Take if They Want to Own Real Estate by Age 30The term “adulting” typically describes the time in life when people assume more responsibility, and find it time to start making grown-up decisions. This time may include becoming steady in one’s career or relationship, paying bills you didn’t realize existed, and even considering purchasing your first real estate property! As scary as it may sound, and as many doubts as you may have about affording it, yes it is possible to own real estate by the age of 30! In order to do so smartly, it is crucial to do research and educate yourself.
If you are someone under 30 looking to purchase real estate, amidst the high priced real estate market, and potential student loans from college, you can still buy your first home or rental property! However, it is important to follow these three vital steps when starting <a href="https://www.jeffcookrealestate.com/blog/process-of-buying-a-home/">the home-buying process</a>. First things first, create a goal for your property. Next, quantify what your down payment will need to be. And lastly, make sure you do ample research on the real estate market.
Establishing your property goal price is important because it will allow you to determine what you can currently comfortably afford and what should be left for your dream house goals in the future. It’s important to decide if you’re looking for a residential property or a commercial property, and establishing whether it will be a place you reside or an income property. <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">Location</a> is also an important aspect of your property goal. Currently, the median value for a home in the United States is $226,800, according to <a data-cke-saved-href="https://www.zillow.com/home-values/" href="https://www.zillow.com/home-values/" rel="nofollow">Zillow</a>, but that can vary greatly based on location and the size of the property you are looking to purchase. Decide how much space you need, and how much you’re looking for before searching for a property. It is also imperative to consider the costs of utilities that may be associated with your property if you plan to live in it. Heating and cooling a smaller home is much cheaper and more efficient than heating and cooling one that has more space than you need!
Figuring out what your down payment will be is the next crucial step in the process. If you quantify how much money you are looking to put down, based on your established price goal, you will be able to <a href="https://www.daveramsey.com/blog/save-down-payment-while-renting">calculate how much you need to save</a>. If you know exactly what age you’d like to purchase a property by, decide how much money you will need to save each month before then to efficiently accumulate your down payment goal. This process of saving can occur much quicker if you are purchasing the property with another owner’s assistance!
The last step is to do your research on the real estate market itself in your desired area. This is imperative when purchasing a property. For example, researching the school district for the town you’re looking to move into can be vital to your search. Although a better school district may mean higher taxes, this may be something important to consider if you plan on starting a family or eventually reselling your home. Taking note of fixer-uppers on the market is also an important step in purchasing a property. Buying a fixer-upper is often overlooked, but it can be a great way to save money when purchasing your first property. If you’re deciding to go down the route of a fixer-upper, make sure you create a budget that incorporates both the price of the home and the renovations. Overall, these are three steps that young aspiring property owners should take to ensure that they can achieve their goal by the age of 30. With the proper planning and knowledge, your dream property by 30 is definitely attainable!
Ready to get start your process? Click <a data-cke-saved-href="https://www.jeffcookrealestate.com/c/Get-Pre-Approved/" href="https://www.jeffcookrealestate.com/contact/" rel="nofollow">here</a> to get pre-approved for a mortgage loan!2019-08-29T06:41:00-07:002022-10-20T21:19:34-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5290Is Getting a Home Mortgage Still Too Difficult?<img src="https://assets.site-static.com/userfiles/1451/image/getting-a-home-mortgage.jpg" alt="Is Getting a Home Mortgage Still Too Difficult?" title="Is Getting a Home Mortgage Still Too Difficult?" height="410" width="750" />
Potential homebuyers are always cautioned to be aware of mortgage lending standards and the difficulty they might face when trying to obtain a mortgage. Credit availability is expanding, making it easier to get a mortgage now than it was a year ago. The market is still tight however, and homebuyers should be prepared to shop around until they find a lender who is offering something that will meet the needs of their family.
Mortgage lending companies have high standards so it is important to make sure you and anyone else who will be included on the mortgage have their credit in check. <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">The mortgage market</a> is strict because lenders do not want to be put in a situation where they are forced to repurchase loans that are not paid on. They also do not want to end up in a litigation situation due to loan issues.
What Has Happened to the Number of Mortgages?
Due to the strict nature and requirements of the lending companies, the number of mortgages given out has significantly dropped. A report by the Housing Financial Policy Center at the Urban Institute showed that about 6.3 million fewer mortgages were given out between 2009 and 2015. The reasons behind this statistic are strict regulations and policies. These mortgages would have been granted if the lending standards where more reasonable.
Mortgage companies rely on calculations to determine if a home buyer will become delinquent on their payment. They will not give you a loan if you are too much of a risk for them. Credit history has a huge impact on this decision since lenders can see how often you pay back your debts. The history they receive is extensive. This view into your financial past causes lenders to take less risk when lending to you for your mortgage.
The Effect on the Economy
<a href="https://wallethub.com/edu/hl/mortgages-and-the-economy/117/#:~:text=When%20the%20economy%20is%20strong,lead%20to%20an%20economic%20boom.">Mortgages and the economy are highly connected</a>. The housing market is recovering at a slower pace than it should since less potential homebuyers are being offered loans. While the market is still recovering with positive trends, fewer buyers can create a strain on other economic factors like home goods or construction jobs.
Bottom Line
After the housing market boom and bust, mortgage lenders became stricter in their lending standards. It is not impossible to get a mortgage loan, but it can still be difficult for potential home buyers. Stay on top of your credit and make sure you and anyone else who is applying are in a good financial position so you can be approved for a loan. It is important to research different companies and their requirements to ensure success in getting a mortgage. <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">Move to South Carolina</a> and let the expert Jeff Cook Real Estate Team help you throughout the entire process!!2019-07-18T11:32:00-07:002021-01-21T13:51:50-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5289Common Things to Look Out for Before Buying Your Dream Home<img src="https://assets.site-static.com/userfiles/1451/image/3-questions-to-ask-before-buying-your-dream-home.jpg" alt="Common Things to Look Out for Before Buying Your Dream Home" title="Common Things to Look Out for Before Buying Your Dream Home" height="410" width="750" />
It is easy to become overwhelmed when you enter the home buying market, especially when you're unsure about <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">where to move</a>! Friends, family, colleagues, and even acquaintances will give you their opinions if you are a first time home buyer. While most of them are looking out for your best interest, they are not fully aware of what is happening in the housing market.
It is important for you to be prepared and have your own questions ready. No matter what other opinions you are getting, you are the one buying the home and your comfort level will help make your final decision. Here are three important questions to ask before you purchase a home.
1. Why am I Buying a Home?
Regardless of the finances, it is important to think about what made you want to buy a home in the first place. Usually, the reasons don’t have to do with money. Instead, home buyers are focused on how the house will impact their family in the future. A study done by the Joint Center for House Studies at Harvard found there are four reasons people buy a home. Those reasons include schools for your children, a safe environment, more room for your family to grow, and control of your own space.
These factors are the most common reasons people look to buy a new home. When you ask yourself why you are looking to purchase a home, do any of those factors come up? Spend time with your spouse or family members who are involved in this decision and determine why you want a home in the first place. Creating this list will help when searching for a home and can help your real estate agent find the best home for your needs.
2. What is the Trend with Home Values?
Our current economy and <a href="https://www.realtytrac.com/statsandtrends/sc/">the housing market</a> are strong. That means home values and mortgage rates are increasing. If you are looking to purchase a home but want to stay within a budget, it may be in your best interest to move quickly. It is forecasted for these trends to continue in an upward motion, causing home values to continue to increase.
3. What About Current Mortgage Rates?
The ticket price is not the only thing you should be concerned with when purchasing a home. Mortgage rates are always changing and can have a huge impact on your monthly payments. Current trends show mortgage rates are rising. This is something to consider if you are debating the right time to purchase a home, since the rates may be even higher down the road.
Bottom Line
You and your family are the only ones who can <a href="https://www.jeffcookrealestate.com/blog/when-is-the-best-time-of-year-to-buysell/">determine the right time to purchase your dream home</a>. It is important to decide exactly why you want a new home for your family and decide on a budget that will be comfortable moving forward. This budget may affect the amount of time you have to search for a home since home prices and mortgage rates are increasing. 2019-07-18T11:31:00-07:002021-01-21T13:45:03-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:5288Will Increasing Mortgage Rates Impact Home Prices? <img src="https://assets.site-static.com/userfiles/1451/image/mortgage-rate-projections.jpg" alt="Will Increasing Mortgage Rates Impact Home Prices? " height="410" width="750" />
There has been some discussion recently on<a href="https://wallethub.com/edu/hl/mortgages-and-the-economy/117/#:~:text=When%20the%20economy%20is%20strong,lead%20to%20an%20economic%20boom."> home prices in relation to mortgage rates</a>. Some believe if there is a rapid rise of mortgage rates, home prices should decrease. Logically it makes the most sense for the price of the house to drop when interest rates are rising, but this is not always the case.
This theory of home prices decreasing is typically discussed by future home buyers. As a buyer you would like to think if you are paying higher rates on <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">your mortgage</a>, you should be able to see a decrease in cost somewhere else. Unfortunately, these rates are rising because the economy is in better shape. As the economy succeeds, incomes rise, rates go up, as well as the price of the home.
A recent study by the John Burns Real Estate Consulting found mortgage rates have very little impact on the cost of the home. The housing market and price increases are affected by things like job growth in the area and rising wages. Coincidentally, these same factors are causing the rise in mortgage rates since people can afford to take out more.
Bottom Line
As the economy progresses and strengthens, mortgage rates and home prices will fluctuate. It is a misconception as rates increase, home prices will decrease. Advances in the economy have shown that rates and home prices are more likely to increase together. <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">Make the move to South Carolina</a> and our team of experts will help you every step of the way to navigate the housing market.2019-07-18T11:26:00-07:002021-01-21T13:28:35-07:00Cory Towlertag:jeffcookrealestate.com,2012-09-20:6006What is a Mortgage?To a<a href="https://www.jeffcookrealestate.com/blog/5-tips-for-first-time-home-buyers/"> first time home buyer</a>, the world of mortgages is intimidating, confusing, and downright overwhelming. In fact, even experienced home buyers dread the word “mortgage.” Borrowing thousands of dollars and committing to pay for the long haul is a naturally overwhelming step, but with a little research, anyone can become more comfortable and prepared for their<a href="https://www.forbes.com/sites/trulia/2016/10/25/mortgage-101-breaking-down-the-basics/?sh=e3781b841c7b"> first mortgage</a>. Pro tip: A good credit score will help lower your monthly payments and/or your interest rate. See how you can<a href="https://www.jeffcookrealestate.com/blog/how-to-improve-your-credit-score/"> improve your credit score </a>before applying for your mortgage.
What is a mortgage?
A mortgage is a loan that will enable the buyer to pay for a home. Most mortgages cover 80% of the cost of the home. The loan can be paid back in 15- 30 years. There are a surprising <a href="https://www.jeffcookrealestate.com/blog/here-are-the-types-of-mortgages-explained/">number of mortgage types</a> out there, so shopping for a mortgage lender is an important first step in the home buying process. Getting “pre-approval” for a mortgage will show you what amount of money you can comfortably afford to borrow and repay. This will help you narrow your home search to properties within your budget.
Where can I get a mortgage?
Mortgages can be obtained from several different sources. Banks and Credit Unions and easy places to start if you already have a bank with which you work comfortably. This will give you some interest rates to compare and will provide an idea of a typical monthly payment in your price range.
Nonbank lenders such as Quicken Loans are also places to check for your home loans as well. They are often willing to work with borrowers that may have a less than perfect financial history and maybe a great place for a first-time borrower.
Mortgage brokers are financial experts who can help you find loans quickly because they work with many various lenders and basically do the “shopping around” for you. Once you have found a lender, you will be expected to put down a downpayment to show that you are committed to this investment. Many lenders require 20% of the purchase price to be paid upfront, but you can find others that will require less than that if you shop around. After your down payment, the rest of the money that you borrow is called the principal, and the extra money that you are charged for the privilege of borrowing is called the interest. (The interest rate is calculated as a percentage of the amount that you borrow.) Interest can be called a fixed interest rate which remains the same for the life or the loan or an adjustable interest rate which starts lower and then adjust upward during the life of the loan to reflect the current lending rates. Adjustable interest rates can be risky because your loan payment can increase to a point that may not keep you within your budget.
Once you are armed with some knowledge about what mortgages are, what type of lenders are available, and what amount of money you can be pre-approved to borrow, you are well on your way to buying your first home! Your realtor can also be very helpful in pointing you to a great loan advisor and in suggesting lending options with which you may not be familiar. Realtors are excellent coaches in the homebuying process, so be sure to take advantage of their experience and expertise as you embark on the adventure of a lifetime!
Happy Home Buying!2018-06-26T07:22:00-07:002021-08-30T12:31:38-07:00Thomas "Jeff" Cooktag:jeffcookrealestate.com,2012-09-20:6043The Home Buying Process<img src="https://assets.site-static.com/userfiles/1451/image/Buying_A_Home.png" width="1200" height="800" alt="How to Buy A Home" />
<a href="https://www.hgtv.com/lifestyle/clean-and-organize/10-best-kept-secrets-for-buying-a-home">Buying a home</a>, especially a <a href="https://www.jeffcookrealestate.com/blog/why-are-people-moving-to-south-carolina/">first home in South Carolina</a>, is such an exciting time in your life. However, it can also be a nerve-wracking experience. A home will most likely be the biggest purchase you will ever make, therefore, no decision can be taken lightly. Are you ready for it?
As much as we would like to assist you in a home purchase, we want to make sure owning a home is the best thing for you. So how do you know if you should buy or rent? Buying a home starts an investment where you can build equity. You are no longer throwing away money on rising rent, that can often be more expensive than a mortgage. However, now you are responsible for home maintenance. If the HVAC unit goes down, that’s on you to fix. But if you’re renting, your landlord incurs all costs and their property management company oversees the repair process. Plus, if you don’t know where you’ll be in the next few years, renting can be more convenient. Now that you’ve thought that through, are you ready to go? If so, let’s follow the steps of the home buying process.
Step 1: Pre-Qualify
To begin the home buying process, you need to get connected with a buyer agent and a loan officer. We work closely with Tabor Mortgage to provide the best mortgage services to our clients. Tabor will get you pre-qualified for a loan that best fits your budget/price range. The loan officers will gather tax returns and any other loan/credit card payments to determine your debt-to-income (DTI) ratio. It is best that your DTI ratio is no more than 43%. With preapproval in hand, you are ready to start home shopping!
Step 2: Find Your New Home
Now that you know your price range, you need to decide on your parameters. What area of town would you like to live in? Are you looking for a starter home or would you like to find something that can fit a future growing family? Does the home need to be located in a specific school district? Do you need one story or two? How many bedrooms and bathrooms do you need? It may be overwhelming with how many options are out there. Make sure to lean on us for advice on what’s going on in the market so you can get the most home for your money.
Step 3: Make An Offer
Once you’ve found your dream home, it’s time to put in the offer! We are here to research the comparable homes in the area to make sure the listing price of the home is a fair one and write up your offer to submit to the listing agent.
Step 4: Escrow Period
<a href="https://www.jeffcookrealestate.com/blog/explaining-escrow/">Once under contract</a>, it’s time for our closing team to step up to bat. Our closing coordinators are the liaisons between the 52 people involved in the contract to close process! They will assist you in getting an appraisal and home inspection scheduled. If any red flags show up on either report, your Jeff Cook agent will negotiate any changes in price, repairs, and closing costs. Then we’re headed for a clear to close. Your lender will also be in constant communication with you, continuing to request updated documents from you for the clear to close. It is crucial that you do not anything to affect your credit and loan approval during the ratified period as the lender will pull credit again during closing. This means do not open any new credit cards, finance big purchases, buy a car, or change jobs.
Step 5: Closing Day
The closing day is upon us! It is extremely important to do a final walk through the day of your closing. Make sure anything you negotiated to have left in the house is still there. Flip the light switches, turn on the water, run the appliances, and flush the toilets. Make sure there are no new issues before you sign your name on the dotted line. Don’t forget to bring a cashier’s check for any closing costs including title search fees, attorneys’ fees, and taxes, and homeowner’s insurance payments for escrow. Once all closing documents are signed by all parties, copies will be made and the keys will be turned over to you! Now it’s time to celebrate!2017-08-16T10:42:00-07:002020-12-10T14:22:31-07:00Cory Towler