Real estate agent vs. realtor

Learn the difference between real estate agents and realtors, as well as how to choose one.

If you will soon be buying or selling a home, you will need the assistance of a professional real estate agent or realtor. You have probably heard these terms used interchangeably, but real estate agents and realtors are not precisely the same.

All realtors are real estate agents, but not all real estate agents are realtors. In the United States, the realtor designation applies to those real estate agents who are members of the National Association of Realtors (NAR), or whose firms belong to that organization. The National Association of Realtors, founded in 1908, is the largest professional organization for real estate agents. It has over three quarters of a million members in the United States, and it is divided into state and local organizations.

Is There an Advantage to Using a Realtor?
If you belong to a professional organization yourself, you know how much you benefit from the chance to keep up in your field and communicate with your colleagues. Real estate agents who join NAR reap similar benefits. While all real estate agents must pass a licensing test before they are permitted to enter practice, attaining the realtor designation adds an extra layer of certification. Realtors agree to adhere to a strict Code of Ethics and Standards of Practice which protect you as a home buyer or seller.

NAR offers additional certifications that extend beyond the realtor designation. The organization encourages it members to be strong generalists, but also to develop an area of specialty. To that end, it offers a number of designations that a member can achieve, based on the kind of property they handle most often. When you are investigating real estate agents, you can ask about these designations in addition to asking if they are NAR members. The designations that a homebuyer is most likely to be interested in are ABR (Accredited Buyer Representative), which reflects expertise in representing buyers, CRS (Certified Residential Specialist), which reflects expertise in listing and selling residential properties, and ALC (Accredited Land Consultant), which reflects expertise in dealing with undeveloped land, including individual lots.

Certified Residential Specialists have their own organization alongside NAR, the Council of Residential Specialists, with more than 30,000 members. Attaining this designation shows that a real estate agent is committed to working with homebuyers and sellers, has reached a certain volume of transactions, and has completed their education requirements.

Choosing a Realtor
Going with a real estate agent who can use the realtor designation means working with a committed professional. Once you’ve decided to work with a realtor, however, you will need to choose one, and not all realtors are created equal. The NAR and CRS websites both have search functions to help you locate their members, and this can be a place to start. Ask friends, family members and colleagues who have moved recently about their experiences with their realtors. Talk to several realtors to see who might be a good fit, and ask about the realtor’s special qualifications and experience, particularly with any special needs you might have. Ask the agent if he or she represents mostly buyers, mostly sellers, or an even split. If you’re buying, you’ll want an agent who specializes in working with buyers, and vice versa.

Be especially careful if you’re selling your home. You might be tempted to work with the realtor who quotes you the highest price for your house - but this realtor might take longer to sell your house (and at a lower price than you first talked about) than a realtor who is realistic with you from the beginning.

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Market value vs. appraised value

The difference between market value and appraised value can be easily explained with the definition of each term

Market value can be defined as the highest price a buyer is willing to pay and the lowest price a seller is willing to accept on a particular piece of property. Another definition for market value is the price a house will sell for within a certain amount of time. One more definition for market value is that it is the most probable price a particular property should sell for in a competitive and open market with all conditions for that market being met by the property, such as the buyer and seller acting on their own and the price not being affected by any undue stimulus. Market value is usually not the price the property could have been sold for, but is the price the property is sold for. Several factors influence market value. These are location to a good school district, well fitting additions to the existing house, well-maintained neighborhood, the house not being over improved or the largest house on the block, and the last is that the style of the house matches the neighborhood it is in. Other factors to consider are the motivation of the buyer and seller, how well informed both parties are, the amount of time the property has been on the market, payment arrangements, and the final price being normal, not being affected by any special or creative financing or sales concessions by any party to the sale.

Appraisal value is defined as the opinion of a qualified appraiser, based on the knowledge, experience and analysis of the property being sold. A thorough property appraisal generally scrutinizes factors that may benefit the homeowner to become acquainted with. These factors include the current market value for same type home, in same condition and in the neighborhood of the homeowner’s property. Considering fluctuations in the real estate market is important as well as the considering the demand for housing of that type at that particular moment must be another consideration.

Appraisal companies generally have access to census data for the particular area as well as the statistics regarding local home sales for the city, county and state where the property is located. These appraisal companies will also have the ability to research the previous sales as well as the tax records of the property. Having access to these records affords the appraisal company the ability to acquire all the facts pertaining to the property and consequently to present a clear value of the property. Getting a thorough appraisal offers many advantages to the seller as well as the buyer.

The difference between market value and appraised value can be easily explained with the definition of each term. The market value of a home, based on the buyer, is the price the market is willing to pay for the property in question. The appraised value is the unbiased value of the property after a qualified person who is generally employed by an appraisal company, real estate company, lending institute or a bank, has completed an inspection on the property.

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Comparing neighborhoods: schools, traffic, taxes and other concerns

Issues and concerns when comparing neighborhoods, such as schools, taxes, traffic, and availability of services

Shopping for a new house or apartment can be fun and exhilarating, or extremely tiresome, as all the properties start to resemble one another after you have looked at several dozen. When this occurs, other important aspects of home hunting, which should be priorities, are oftentimes ignored; the neighborhoods themselves, and other items of issue when choosing a place to live, such as traffic issues, schools, taxes, and other properties that are adjacent or nearby. In addition, in these modern times, some issues that in the recent past, never even existed, such as accessibility to high-speed internet.

A real estate agent can help you on some of these issues, others will be affected by personal preference, and others still, will need to be investigated by you, the shopper, yourself.

Tax Issues

A real estate agent will answer tax questions, in part, but knowing if there are any pending tax milleages, or other ongoing issues, such as a new development nearby that may change the tax base, need examining. What the previous owners paid in taxes is a major part of the overall tax picture, but bear in mind, it is not the complete tax picture.

Traffic

Sometimes, traffic can be an obvious concern when house shopping. The property may be located on a busy street or near a known busy intersection. However, sometimes, the traffic issues at hand are not so obvious. The time of day that you visit a property may give a false sense of quietness, when in reality other times of the day the traffic is both heavy and loud. Inquire of the real estate agent if traffic is busy at certain times, and, before committing to a property, visit the property at different times of the day. Car and truck traffic are not always the only forms of traffic that need consideration either, nearby train tracks, flight paths of airports, and bus traffic all need consideration.

Schools

Where are they, how many, any private schools nearby, what types of transportation are offered, what, if any, special subjects do they offer, what grades do they encompass…The list of questions of inquiry into the schools that service the locale you are interested in, should be as specific as can be. If possible, visit schools that your children would attend if you were to choose a particular property. If you, as an adult, are considering going back to school or college, are there any colleges or adult education centers located within a convenient distance. Are there any residency rules required for attendance, and would you qualify if you chose a certain residence over another.

Availability of Services

High-speed internet is a convenience that many of us take for granted, yet it is not available everywhere. Many rural and urban locales do not offer any type of internet service, or if they do, it is commonly dial up.

Cable is another service that many take for granted, yet also, is not always available. Satellite service can usually fill the gaps, but even satellite does not work everywhere, or is not an option for different reasons.

Cellular phones are one more convenience of the times, and a growing portion of the population choose to use their cellular service as their main type of telephone, often because they can move, and they do not ever have to change their telephone number. Check that your current cellular service will work in the new home, and if not, will it be that big of an issue to change providers.

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Tips for seller financing

Seller financing can accelerate the sale of your home and can maximize your return on your real estate investment. Learn how to finance the sale of your home.

When selling your home, there are many ways to attract prospective buyers and to maximize your profit. One way to attract a larger pool of buyers is to offer to finance the purchase of the home yourself. While this is a potentially lucrative position, it can be wrought with perils if you aren’t careful.

First, ensure what you want to do it legal. Homes with an existing mortgage may not always be titled to the new buyer without paying off the first mortgage. As soon as the deed is titled, your existing mortgage lender may call the loan. If you cannot afford to pay off the existing mortgage and the new buyer cannot obtain financing, you could face a lawsuit. Check with the current lender if you have a mortgage to make sure you can carry a note for the new buyers.

In some cases, a lease/option is the better way to go. You are still financing the purchase of the home, and ensuring the sellers can buy the home at a reasonable price within a set period of time. The only difference is the home is not deeded to the new buyers, and part of each payment is credited toward the purchase price. This option is best exercised when the person buying your home cannot obtain traditional lending at this time. Typically, lease/options are two years in duration and afford the buyer time to build a high enough credit score to complete the purchase with traditional bank financing.

If you do not have an existing mortgage or are cleared by the current holder of your mortgage to complete the transaction, you will still want to secure a significant down payment. Pull a credit report on the prospective buyers. If their score is particularly low, ask why. Ask for a higher down payment the lower the score goes. The higher the down payment, the less risk you take in offering to hold the mortgage. Down payments are not refundable, and if your buyer walks away, he loses his investment. A struggling family is a lot less likely to leave behind a $15,000 deposit than a $1,500 one.

Review the published mortgage rates before deciding how much interest to charge. Excellent credit scores afford more consideration than poor ones. Bad credit lenders often charge in excess of 13% for the mortgages they write. Next, determine the duration of the loan. You can decide to carry the mortgage as long as you wish. Many people are comfortable with a 30 year note, though you may not want to wait 30 years to fully cash out from your property. Mortgages are amortized over a set period of time. You can carry a mortgage for one, two, five, ten or twenty years or anything in between and base it on a 30-year amortization schedule. This provides you with the highest rate of interest return while lowering the borrower’s monthly payment.

You will use a title company to record the transfer of the deed in most cases. You may also wish to have the title company collect the monthly payments from your borrower and to disperse the monthly payments in accordance with your wishes. They assume the responsibility of reporting the loan to the credit agencies and for ensuring the interest is calculated correctly. This is especially helpful come tax time when your buyers may want to write off their interest. They also prepare the W-9 form you will need to attach to your tax return to report your interest as earnings.

You need to ensure the title company records the mortgage on the property properly, and secures a lien against the property in the event the buyers stop making their payments. Foreclosing on a property can be difficult and can take a long time to complete. During that time, your buyers can cause a lot of damage. Take out an insurance policy to guard against this type of damage in the event you need to foreclose on the property.

You may wish to consult with a lawyer to have the loan documents created. Many lawyers will be able to insert clauses that will help you recoup some of your losses in the event you need to foreclose on the property. Consider adding rules about the way the buyers shall maintain the property until bank financing is secured. This helps to ensure the property is kept in good shape while the buyers occupy it. By maintaining the property’s value, it makes certain you can sell your property with a minimal amount of effort to a new buyer in the event the current buyer’s deal falls through.

Offering seller financing can be a lucrative way to increase your net worth if you follow these tips.

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Real estate tips: determining property value

The ability to assess property values is not just for professionals, research and comparison of recent sales will allow you to develop house valuation acumen.

Maybe it is time to buy a house or maybe you are considering selling or refinancing one you already own. Chances are you have been keeping an eye on the real estate market and what is available. If that is the case, congratulations! You’ve taken the first step towards determining the market value of your current or future home! However, the work does not stop with merely knowing recent sales in your area. Quite a lot goes into determining the actual value of any home. Square footage, special features, neighborhood, age, and condition are among the many things appraisers consider when establishing the value of a home. That said, you do not have to be an appraiser to gain insight into the value of a particular property. The best way to achieve a basic skill in determining the value of any home is through researching and comparing homes that have recently sold.

Realtors have at their fingertips current home listings as well as recent sales. They, and mortgage companies, refer to homes sold within two miles and 6 months of a home in question as “comps”. So, how important is a comp, or comparable listing, to your research? Well, suppose you are interested in buying a 4 bedroom, 2 bath home that is listed at $225,000. How do you know if it is a fair value? A good place to start is to compare it with recent comps of similar size. Is the list price in line with recent sales? What should you think if that amount is $15,000 more than another 4 bedroom, 2 bath that sold two weeks ago not two streets over? Is the seller asking too much? Not necessarily. Now is the time to look more closely at comparable home sales and take note of any differences between the house in question and the closest comps. For instance, does the more expensive property have special features? Is the lot especially large? Does it have more square feet, extra buildings, or a pool? If so, the asking price may be more than justified. In order to know how much those extras add to the value of a property you may need to move beyond what you can glean from public information sources and start creating comps of your own. In other words, if you are serious about getting a good idea of property values, you would be well advised to learn as much as you can about homes currently on the market. Start by compiling detailed records about those properties. If a basic 3 bedroom, 2 bath house on an average sized lot sells for $185,000, but the same model house on a lot twice the average size recently sold for $195,000 you can be fairly certain that an extremely large lot adds $10,000 to the value of a home in that neighborhood. Comparing recent sales of similar homes and listing their attributes versus their sales price can help you come up with a good idea of the basic value of certain property characteristics. This may entail much more effort than merely scanning the Sunday paper and using a search engine designed to find recent sales in your area. So, be prepared to not only keep up with online listings, but also to visit open houses, take notes, and follow up on sales prices. Still, keep in mind that even your estimates based on this information are only as good as the amount of time that has elapsed since you gathered your facts.

Timing in the real estate market can have a tremendous effect on home values. Prices tend to be higher in the summertime because there exists a preference to move during that season. The weather tends to be warmer and parents appreciate the benefits of not changing their child’s school during the academic year. Since demand is greater, prices are usually higher. The reverse is true for the wintertime. Houses may remain on the market longer and the sales price may be lower than expected. In short, comparing sales of homes in opposite seasons could lead to a slightly skewered determination of value. Also, season aside, a lot can change in six months. Major employers can cut employees or add more jobs and that directly affects the demand and, hence, value of property in a relatively short amount of time. In other words, it is smart to gather information, but do not forget to take into account the larger picture of season and events when seeking to apply it to home valuation. This especially holds true if the house market is hot. During times of particularly high demand and low supply, home values can double within a year. This is a glorious time for a home seller, but a very dangerous time for a homebuyer. Home prices tend to inflate rapidly as bidding wars ensue. Tensions may run high as buyers, eager to snatch up the house of their choice, get caught up in the chase and try to out do their competitors. When that happens, it can be very difficult to assess the real value of a home. When what was worth $175,000 three months ago is now valued at $200,000, what will it be next week? An even more frightening question for the buyer (and any potential lenders) is whether or not rapidly elevated values are genuine. Will they hold if the supply increases? Will they plummet if one business eliminates jobs? Even armed with the best knowledge, a seller is well advised to consider carefully the long-term stability of prices before jumping into an intense market. If you have any doubts about what decision to make, consult several professionals and get their take on the longevity of recent prices. They make it their business to cultivate contacts that will provide them with information regarding future plans that may impact the real estate market. Generally speaking though, unless you plan on investing in multiple properties or the market is unusually fast paced, you can get a pretty good idea of property values without the assistance of a professional.

Whatever your real estate goal, understanding property values can be done by anyone from a housewife to a retiree. Even just by keeping track of recent sales and noting the value of different amenities, you can build up a storehouse of knowledge with which to ascertain the value of other comparable properties. The caveat is that you must know how and when to apply your newfound skill. Even though you may develop a valuation sense that is always right on the money, some real estate markets demand the expertise of a skilled professional. Yet, that does not mean you should not arm yourself with all the information you can gather. Having a feel for the market will allow you to be more comfortable in the choices you make and, if necessary, more easily justify the value of a house in the face of a recalcitrant lender. Knowledge is, as the saying goes, power and that definitely holds true when it comes to the home valuation process.


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Pros and cons of buying foreclosures

Learn what a foreclosure is and if buying foreclosed property can be a wise investment. Information on buying properties.

Buying foreclosed real estate can be quite risky, but it can have its rewards too. If all goes well, you can have a home that was purchased at possibly 25% less than its market value. That means you can put money into the property, and still be ahead. If you do not do your homework though, the property that you purchased can become a thorn in your side.

What is foreclosure?

When you borrow money from a bank to purchase a piece of property, you sign an agreement saying that you promise to pay that money back. The bank will set up a monthly payment schedule to repay the money borrowed. If you fail to keep your promise, the bank can begin foreclosing on your property. This means that eventually, the bank gets the property back. Once the bank takes back the property, it then goes for auction. The highest bidder gets the property.

One would assume that when a property is foreclosed on that it is now “free and clear” of all liens. That is not so. When the bank takes back the property, they do nothing to improve the property, and the property is sold “as is”. That means if it is rental, the tenants may not be evicted and may have tenant’s rights. That means if you want to evict them, you may need to pay the legal expenses in order to do so. Property taxes are another issue. If the homeowner has defaulted on their mortgage, most likely their real estate taxes are delinquent. Most banks require homeowners to escrow their real estate taxes, which a portion is incorporated in the mortgage payment, so if the monthly mortgage payments have not been kept up to date, chances are the taxes have not been either.

You will need to consider other creditors that may not have been paid for an outstanding debt and my have filed a lien against the property in order to hopefully, someday receive payment. Filing a lien on a piece of property is an assurance to the creditor for payment. If the homeowner ever sells the property, the lien will need to be paid in order to be sold “free and clear”. A creditor may have missed the boat by not filing a lien against the property prior to the notice of foreclosure and will file it anyways. They may not have a legal right to their debt; however this may cause a “cloud” on the title.

Buying a foreclosed piece of property can be a very wise investment. In fact there are individuals and companies that make a very modest income by doing just that. So be prepared for the competition that awaits you. Before you make a bid on a piece of property, do some homework first. Go to your local county courthouse and do a quick title search. Check to see how many mortgages and/or liens may be filed against the property, as well as any docketed judgments against the owner(s); and check to see if the property taxes are current. With interest rates at record lows, buying a piece of property well below its market value, that appreciates annually, can be a sound investment; and knowing all the information that is available to you, can lead you down the path to homeownership with peace of mind.


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Real estate tips: choosing a good home inspector

Having a home inspection done can give a buyer peace of mind knowing that the house is is buying is structurally, mechanically, and electrically sound.

A home inspector is a certified inspection contractor that examines a house on your behalf for structural, mechanical, and electrical problems before you buy it. These inspections aren’t required in all states, but it’s a good idea to know what may be wrong with the house that the naked eye just can’t see. Having a very meticulous and unbiased home inspector is very important for the buyer, so he or she can get an educated opinion of the general integrity of the structure.

To find a good home inspector you should ask your mortgage broker for some names and numbers of home inspectors their clients have used in the past. If they don’t have any ideas, asking your real estate agent is a good idea. Real estate agents usually develop a relationship with home inspectors, which can be beneficial to the homebuyer. If you aren’t working with a realtor, home inspectors should be easy enough to find in your local phonebook. It doesn’t matter how you find your home inspector--you should check his or her credentials and be sure he is certified by one of the inspection trade organizations such as American Society of Home Inspectors. Inspectors certified by this organization have proven their skills in the various areas of mechanical, structural, and electrical inspections. Also, home inspectors should happily provide references upon request so that you may contact previous customers and inquire about their satisfaction.

When your home inspector comes to the property, it will probably take a couple hours or more, depending on the property size. Everything will be examined: water will be run to check plumbing, the breaker boxes will be checked, heaters and air conditioners will be tested, and the structural integrity of the foundation, supporting walls, and roof will be closely examined. Every aspect of the house will be put under a magnifying glass and any current or potential problems will be recorded. Then, armed with a full inspection report a potential buyer can decide if they are prepared to deal with any problems, or request that the seller make some repairs. Usually, the seller is willing to contribute to any major repairs, but if they aren’t, the seller needs to be prepared to either foot the bill or decide not to purchase the house.

A home inspection usually costs from two hundred to five hundred dollars, depending on the square footage of the house. If there are problems that need to be remedied and retested, most inspectors will come out again for just a fraction of the original charge to issue a clear report. The cost may seem a bit steep, but when you consider the money it could cost you in future repairs, it’s more than worth the expense.

A home inspector can really give you peace of mind when it comes to buying a new home. Buying a home is the largest debt most people will ever enter into; you want to make sure you are doing it in the most responsible manner. And, knowing what is going on behind the paint, under the foundation, and inside of the walls is responsible. Find a good home inspector, and get an inspection done for your peace of mind.

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Real estate tips: best times to shop for homes

When to shop for the best house for the best price! Some general guidelines to help you get the best deal!

Shopping for a new home can be very exciting. You have decided you’re ready to take the plunge and either buy another house, or become a first time homeowner. You have an idea of what you’re looking for, you know what area you’d like to live in, and your financing is in order. Now, all you have to do is shop--right? Well, you could just go out and shop, but you also want to know when to shop to get the best price on the best house.

Each area differs in the most popular selling time. It’s really dependent upon the weather, holidays, and how the market is overall. Obviously, sellers want to get the best price for their home and buyers want to buy a home for the most reasonable price. Is there a time of year to shop when you can get the seller to come down on the asking price?

First thing you may want to do is talk to a realtor about your specific area. Your realtor is familiar with your area and may have some tips that apply only to that area. If you do not want to employ a realtor there are some general guidelines that may help.

The summer time tends to be a slow time, and many homeowners are just ready to get out of under their house payment. Typically, if a house is for sale in the summer it’s been for sale since the spring and the seller is getting anxious. So, if you are ready to make an offer during the summer this may be the best time! The seller may accept an offer that is very reasonable for both parties!

Another very slow time, when many people take their house off the market, is during the winter season. For some reason, there just aren’t many people looking to buy a home during this time of year. It probably has to do with gift buying and such for the holiday season, and not having the financial resources available to buy a house. So, if you find a house you love during the winter holidays you may get a great deal on it as the seller may be ready to take any reasonable offer!

The spring is the most common time to list a house for sell. This is good for the seller, because the buyers are also out and about ready to look at a whole new group of homes for sell. But, the seller will usually hold out for the best price possible. It won’t be until the house has been on the market for a few months that he’ll get a little bit anxious and be ready to negotiate a bit more. So, if you see a house that you love and your offer is rejected, wait a few months, and offer again.

These are just some general guidelines. There are some sellers who are willing to negotiate from the first day their house is for sale, and there are others who refuse to negotiate and will let the house sit on the market for as long as it takes to sell at their asking price. Time really is on the side of the buyer here, as sellers get anxious and will usually drop the price.

So, any time of year is a good time of year to shop for a house. But, there are better times of year to get the best price on that house. Good luck and happy house hunting!

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Pros and cons of lease options

A lease option purchase is creative way of purchasing a home.

A lease option is an agreement to lease a home and purchase it within a certain period. The renter/ purchaser pays an additional fee each month above the rental price that goes toward the down payment on the house. A lease option purchase is creative way of purchasing a home when you do not have the down payment or when you need time to clean up your credit report. For the seller, it is a great way to sell a home for top price if they have a little patience. Just as it can be a great way to purchase a home, there are also some negative aspects to it.

Pros for seller/landlord:

1. The seller/landlord receives above market price rent for the property. Because the tenant is paying extra each month as a down payment on the property, the property owner essentially gets extra rent for the unit.
2. The seller/landlord receives top dollar for properties. Since rent lease options are in high demand, the owner does not have to discount the sales price on the property.

3. The seller/landlord will get the best tenants. A tenant interested in a lease purchase option is usually a quality tenant who will treat the home like it belongs to them.

Cons for the seller/landlord:

1. The sale on lease purchase properties often fall through. Some tenants decide to purchase a different property, or wind up not being able to purchase at all. Therefore, they often back out of purchase, so a rent lease option is not an automatic sale. 2. Seller may miss house appreciation. The seller usually sets the sales price in the beginning of the lease purchases. When doing this they take the chance that they may miss extra income if the value of the home appreciates quickly.

Pros for buyer/ renter:

1. The renter/purchaser gets to try the house before they buy. This will help them ensure they want to want to buy the house, or might they find out that the house has hidden defects and can back out of the sale.

2. The renter/purchase gets to live in the home while saving for the down payment. This allows them to feel like they are in their own home.

3. In many cases, only a small down payment is required from the buyer/renter at the start of the lease purchase. It is much easier to have the buyer hold the money through the lease purchase agreement than to save on their own.

Cons for buyer renter:

1. Unscrupulous property owners will cancel the lease option because of one late payment and keep your money. They count on the tenant not being able to buy the house or make on time payments every month for three months, allowing them to pocket the down payments. You can avoid this by writing into the contract an allowance for three late payments before forfeiting the rent lease option.

2. If you decide not to go along with the purchase, you lose your down payment, which could be one-month rent to several months rent, plus the lease option amount being paid monthly.

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When, and when not, to invest in real estate

A guide to help you decide when it makes sense to invest in real estate and when it does not.

A guide to help you decide when it makes sense to invest in real estate and when it does not.
Real estate can be a great investment or a very poor one. More than two thirds of Americans are home owners, so the majority of people will chose to invest in some form of property. By carefully avoiding a few pitfalls it should be very easy to make sure your real estate investment pays off nicely.

Investing in your own home is a complex decision that you should investigate thoroughly before setting out to purchase a home. By far the most important factor when choosing buying a home is your time frame. Unless you plan to be in an area for at least three years you should probably rent rather than buy.

There are several reasons most people should not house hunt if they don’t they don’t plan to stay in one area very long. In the first place, home ownership usually has more upfront costs than renting. Most renters are asked in advance for a month’s rent and a deposit fee. In contrast buying a home involves closing costs and often a significant down payment. Closing costs include everything from an attorney’s fee to title insurance to fees banks charge to create the mortgage. A down payment is usually at least five percent of the purchase price.

In the short term home ownership poses some very real financial risks. The biggest risk is that real estate prices may drop. This can cause the home owner to face a situation where the mortgage and closing costs exceed the current value of the house. If you have to sell the house at this time you may not get your money back. On the other hand renters face no such risks. If real estate prices fall he may even benefit because rents may actually go down as landlords compete for tenants.

You should also avoid buying a house if you have just changed jobs or have a lot of other debt. A job change can make lenders reluctant to approve a mortgage because newly hired employees face greater economic instability. If you have lots of other debt this can also be a red flag for a loan officer. Lots of debt may indicate an individual has problems managing money. It’s much better to wait a while and pay down as much of the debt as you can before rushing to invest in real estate.

If you are planning to live in one place for at least three years buying a home can be a terrific financial decision with a nice payoff. First of all, most people who purchase their homes do not buy them outright. They put down a small down payment and then seek a home loan or mortgage from the bank for the balance of the house and closing costs. At first this decision may seem contrary to popular wisdom, which asserts that debt should be avoided whenever possible. As a general rule that’s true. This rule does not apply to home mortgages because of one crucial difference: home mortgage interest and property taxes are tax deductible. This means that whatever you spend on a mortgage will not count as part of your income. It also means most homeowners will be able to afford more in monthly mortgage payments then they would in rent. For example, if you were able to get a nice two bedroom apartment for $800 a month, you might be able to afford a $1000 a month mortgage.

Another reason why long term home ownership can be a good financial boon is appreciation. As home prices go up your house is valued more. You can sell your house for a higher price than you paid for it. The profit you earn from selling a primary residence has traditionally been tax free and is likely to remain so in the future.

Equity is the amount of money in your house once you’ve subtracted the mortgage. Investing in a house long term will build up your equity. If you don’t want to sell your house and move you can tap into the money in your house with a second home loan. Like the first mortgage the second home loan is still tax deductible. You can use that money for anything from medical expenses to college tuition. If you study your finances carefully you should have no problem deciding exactly when to invest in real estate.

http://www.essortment.com/home/whennotinves_skaa.htm

Are you selling your home for too little? 10 questions to ask yourself

The price per square foot method is often used to establish the price of a home, but there are other factors to keep in mind.

1. What is the trend; is it a buyer's market or a seller's market?

In a seller's market, a seller can expect a good price for his property, because the supply of homes can not keep up with demand.

Obviously, a buyer’s market is just the opposite of a seller’s market. It occurs when the supply of homes outweighs the demand. This doesn’t mean you won’t be able to sell your home for a reasonable price, but it does mean you will have to be more competitive. This is especially true if the economy is not seen as good, because even if interest rates are low, consumers tend to postpone making large purchases due to issues like fear of being laid off.

In a buyer’s market, you need to make the deal as attractive as possible. You should be willing to slightly reduce the price or make other concessions such as paying closing costs. Or, you may want to wait to sell until the market begins to change, if possible.

2. How are comparable homes in the area priced?

To determine the value of your home, you will need to establish what is happening with similar homes in your area. This will give you a starting point. You’ll need to figure out if your home is worth more, less, or about the same as comparable properties.

You’ll need to examine the condition of other homes and learn whether yours is in better, worse, or similar shape. Perhaps your home offers more square footage, an extra bathroom, a newer roof, a larger yard. Perhaps yours has been better maintained, or you’ve recently painted, installed new carpeting, or improved the landscaping. Or, maybe your home offers fewer of the above items than comparable homes. These things add to or subtract from the value of your home and must be taken into consideration.

3. Should I have my home appraised?

An appraisal is a great help in determining the fair market value of your home, and having one done has become standard procedure in the world of real estate. Having your home appraised is of benefit to you for many reasons. You may discover that your home has been unfairly assessed and therefore the property taxes should be lowered. Lower property taxes are a good incentive for a buyer.

A professional appraiser may also help you avoid making costly mistakes. If you are considering remodeling a bathroom before putting your home on the market, an appraiser will let you know if the investment will prove valuable. While most improvements will add to the value of your home, the effort and cost of a remodeling project may or may not be justifiably reflected in the sales price.

You may also learn that your home is worth far more than comparable homes in your neighborhood due to any number of things, such as more square footage or better condition.

4. Is my home buyer friendly?

When a prospective buyer enters your home, you want her to feel comfortable, to make herself at home. Also, remember that most buyers are looking for homes in “move in” condition. If not, they are certainly looking for a bargain if they have to do some of the work.

Make sure that clutter is minimized and space is maximized. Be sure high traffic areas are open and have good flow. Even though (in most cases) your furniture will be moving out with you, the buyer likes to picture his or her own furniture in your space. If you have an awkward arrangement, she may feel that the room doesn’t flow well, and may feel that her furniture would not fit comfortably either.

Everything should be sparkling clean and your home should smell nice. You can use fabric refreshers, room fresheners, or scented candles as long as they are not overpowering. Many realtors suggest throwing a frozen pie or a pan of sliced apples and cinnamon in the oven. The scent of a baking pie creates warmth and a sense of hominess.

A gallon or two of paint can go a long way toward making your home seem in move in condition. If you have chartreuse walls in one room, paint them a neutral color. Buyers may not share your love of chartreuse and may not feel like repainting before moving in. Even if they don’t mind painting, they will expect to be compensated for it, and they will be silently deducting from the amount they intend to offer.

It’s also a good idea to open drapes and blinds, turn on lights, or light candles. You want your home to appear as bright and airy as possible.

5. Are there repairs that I can complete myself or have done inexpensively, which will ultimately increase the value of my home?

You may be unwittingly knocking thousands of dollars off the purchase price by leaving minor repairs unfinished. A couple of hundred dollars and a couple of hours of work may significantly affect the final price.

For example: A crack in the wall or ceiling may cause the buyer to think there is other damage. They may not want to take the chance and may go on to the next house on the list. Or, they may decide that since they have to do such work, they will lower the amount they intend to offer. Taping, mudding, sanding, and repainting the wall or ceiling is not expensive or difficult, but it will make a big difference when it comes to the bottom line.

6. Does my home have curb appeal?

Make sure the lawn is freshly cut and etched if needed. Seed any bare areas, and be sure the yard is free from debris and clutter. If your mailbox or house numbers are missing or are in disrepair these items are simple and inexpensive to fix. Little things make a big difference.

Have overgrown trees or shrubs trimmed, and make sure the entrance to the home is easy to see and welcoming. Many realtors suggest that even if you do nothing else to the exterior, you should at least apply a fresh coat of paint to the front door.

7. Have I included every “extra” in my price?

If you are including appliances, furniture, or window treatments in the sale of your home, or have made recent improvements and repairs, be sure you have covered all of these items in the sales price.

8. Have I (or has my agent) advertised enough?

Don’t cheat yourself out of offers by skimping on advertising. The more people that know your home is for sale, the better. This doesn’t just mean newspaper ads and market listings either. Word of mouth is an important form of advertisement. Tell everyone you know that your house is on the market.

Also consider having at least one open house. Some people are uncomfortable with this idea, but it gives buyers a chance to really check out your home in a more comfortable manner. They won’t feel funny about peeking in closets if other people are doing it too.

9. Do I really know how my home presents to other people?

It may not be easy to hear constructive criticism, especially about something as personal as your home, but it is best if you have an honest evaluation. Even if you have done everything on the list plus had an appraisal done, have a brutally honest friend or neighbor give you their opinion and tell you what stands out to them. Do not take what they say personally. Use this information to make your home more valuable.

Your fond memories and sentimental attachment to your home may keep you from recognizing things that others can plainly see. Be ready to hear things you don’t want to hear, but take the advice in the spirit in which it is intended.

10. How much are my closing costs, mortgage payoff, and other costs; have I priced my home sufficiently to include these items?

Many people, especially those whom have never sold a home before, do not realize the many different costs associated with selling their home. The buyer may ask you to pay down points (to lower their interest) or to pay the closing costs, or you may want to offer to do so to make purchasing your home a more attractive deal.

You also need to make sure you will have enough left to complete your mortgage payoff, if any, and to cover the realtor’s commission and any other costs. Be sure to speak to your lender and your realtor about any costs you are unsure of before setting a firm price, and especially before considering any offers.

http://www.essortment.com/home/moneyhousehold_sdmy.htm

Home buyers guide: what is a certificate of occupancy (co)?

Learn what a certificate of occupancy is, and when one is required.

A certificate of occupancy is a document authorizing occupancy and use of a building. When any new construction or modification of an existing structure that requires a building permit has been completed, a final inspection of the building is done. Upon approval of the inspection, the building inspector, allowing the owner or tenant to take residence, will issue a certificate of occupancy.

Here are some examples of when a certificate of occupancy needs to be issued

• When a residential newly constructed home has been completed and complies with municipal building codes.

• When a restaurant expands occupancy.

• When a multi-family home is converted to a single family home.

• When an owner of a building has zoning of the premises changed. (Authorized use of a piece of real estate for business purposes)

• Extensive remodeling projects which include changes to the plumbing, electrical, heating and cooling.

Who is responsible for getting the certificate of occupancy?

Once the building plans are drawn up, the contractor will apply for a building permit at the public works and building planning office located at your local municipal building in which the property is located. Upon approval of the plans, the building permit is issued. The fee for the permit is based on square footage of the structure. Depending on the municipality, additional permits may be needed for electrical, plumbing, heating and cooling, however only one certificate of occupancy will be issued. Inspectors from the municipal building department come in stages to inspect the work that has been done and report the approval back to the building department. Once all the work has been done and construction completed, a final inspection is done of the premises. If the work has been done correctly and there are no building code violations, a certificate of occupancy will be issued to the contractor.

Is a certificate of occupancy always required before taking residence in the home?

A certificate of occupancy is not required before residing in a newly purchased home where no major alterations requiring a building permit have been done. Under certain circumstances a partial certificate of occupancy may be issued. Examples of unavoidable delays would be weather conditions or being unable to meet a certain deadline. However, the property must be in a safe and useable condition. The partial certificate is only a temporary one. Depending on the type of work, the partial certificate may be valid for only 30 to 90 days to allow the contractor enough time complete the work.

Does issuance of the certificate of occupancy always mean the residence is in usable condition?

The certificate should not be issued if the property violates any building codes, and is not in usable condition. However, some inspectors may authorize issuance of the certificate of occupancy when the work has not been completed, with the understanding that the contractor will finish the work. This is when the property is very close to completion and is in useable condition and the work needing to be completed is minor.

Can the certificate of occupancy be revoked?

The building official does have the authority to revoke a certificate of occupancy when issued in error or when false or misleading information is given in order to obtain occupancy of the premises

http://www.essortment.com/home/certificateoccu_sbmn.htm

Home buyers guide: defining exactly what you want in a home

Don't get suckered in by the luxury features - here's how to find an affordable, quality house that is exactly what you want.

It's tempting to go a little crazy when browsing for a new house, especially if you're lucky enough to be in a good market where sellers are plentiful and you have lots of options. Want marble bathroom floors? Jacuzzi on the deck outside the master bedroom? Perhaps that luxurious foyer with built-in mirrors from floor to ceiling will impress guests more than a grand fountain in the front yard?

There are literally hundreds of luxury features available, and following the home refinance and remodel craze after the 9/11 attacks it seems every little shack in the boondocks now come with granite countertops and dual-showerhead bathrooms.

But hold on a second. While it is in our nature to enjoy being pampered, bear in mind that you're buying a house, not a weekend getaway at a spa. If you're like most people, you have a limited budget, and that means you make trade-offs in one form or another.

Your first concern should always be to cover the basics. The location is important. What good is a fantastic house if it now tacks on an extra hour each way to and from work? You won't be able to enjoy your house, because you'll be stuck in traffic most of the evening! Secondly, shake off the idea that bigger is better.

How big of a house do you actually need? How many rooms and how much storage space at roughly how many square feet? Keep this in mind as your realtor starts talking about twice as large mansions that just so happen to be just north of your upper limit (and the termites and rot in the basement that knocks the price down is for you to find out later!)

When it comes to houses, quality is king. Pay more for a modest house with a solid structure and you'll save yourself a lot of costly and inconvenient repairs down the road. The bargain mansion with problems may seem like a fair trade-off now, but wait until the basement toilet blows up at 3 AM and you may get second thoughts.

Maintenance is another issue that is easy to poo-poo away when looking at houses. An elaborately landscaped yard looks great when kept in shape; it looks like something out of a horror movie when it's not. If you haven't dealt with this before, here's a newsflash: it takes a LOT of time and hard work to keep all those bushes, flowerbeds, trees and lawns in check.

This is great news if you're newly retired and need something to keep yourself occupied. A family with two working parents and a few young kids may not be interested in doing the work. If you like a landscaped yard you can of course hire someone to do it for you, but then you should budget money for a landscaper as part of the cost of the house. The same applies to outdoor decks and the like that also needs time-consuming maintenance.

Next, let's look at the bells and whistles. The first question you should ask yourself is: will I actually use this? If you don't see yourself deriving much benefit from something, then what's the point? Buy it in the hope that some future buyer some day will decide that this particular gizmo makes all the difference and happily overpay you? Get real - you're buying a house for YOUR benefit, so that YOU can live there.

The quality aspect carries over to the luxury features. Is this something that is likely to break some day? If so, can you repair it or will it become a big chunk of trash lodged in or around your house - the bragging point turned into an embarrassment? Does it have potential to cause damage if it breaks?

Lastly, don't stretch as far as you can just because, well, you CAN. When a lender gives you an upper limit that they are willing to give you, that doesn't mean you should necessarily aim for that much. Focus on what you really need and a few select comforts that you're confident will be put to good use and declare victory there.

So what if you could have gone another $50,000 and gotten yourself another 1,000 square feet? All you'd really get is more to clean, fatter property tax bills and more uninvited relatives making use of your spare rooms. And if your finances turn sour for some reason, you have much better odds of pulling through with the smaller house. The bottom line: keep your focus on your needs and keep your cool.

http://www.essortment.com/home/homebuyersguid_sdjq.htm

Financial advice: pros and cons of a home equity loan

So, you are considering a home equity loan. There are several things that you should know when considering this type of loan. There are many pros and cons to this situation, and it really just depends on your personal situation if this would be a good or bad decision for you and your family.

Firstly, what are you planning on using the home equity loan for? Do you desperately need the money for paying bills or paying off credit card debt? Are you considering major home improvements? There are probably very few times when a home equity is a great idea. For example, home equity loans are usually not a good idea to buy depreciating items, such as a new living room set, a big vacation, etc. Paying off credit card debt may be a decent move since you will change from interest that is not tax-deductible to interest that is tax-deductible. That is all nice and fine, but make sure that you do not take advantage of the fact that your credit cards are all now ready to be taken advantage of again. However, home equity loans may be a very good idea to use for an adoption of a child, or major home improvements.

Consider that you will have to pay back the home equity loan with interest. The interest will be tax-deductible, so that will be a major plus. However, if for some reason you can’t pay back this loan, your home will be on the line, and that is a very big con, and you should probably take this into consideration before even considering a home equity loan. Taking out a home equity loan takes some planning and self-discipline financially.

Buying depreciating items will the home equity loan is not usually a very good idea. Months or even years after your big vacation is over, you will still be paying for it, including large amounts of interest. Yes, the interest is tax-deductible, but is that really a good reason to feel good about your big luxury purchase? You can be the judge of that one.

Using a home equity loan for adoption is of course worth the money because you will be saving another human’s life and adding to your enjoyment and quality of life for the rest of your lifetime. Most people would be willing to go through the financial strain for a child. After all, many people spend thousands of dollars on fertility treatments to have children anyhow. With adoption, you definitely get a child out of it.

Home improvements are probably the best use of a home equity loan. Your equity will be working for you in this way, instead of sitting in an account somewhere. Improving your home will usually increase the value of your home, and its resale value. Before you do home improvements, you might want to look into what home improvements are the best investments, and which ones usually pay you back when you sell the house. In this situation, you may just get your money back when you sell it, which would basically be the smartest move on your part. Investments are usually a good idea. If you have the money and the power to make more money, this is usually the best use of your money.


http://www.essortment.com/home/financialadvice_sbhq.htm

Massachusetts Home Loans

Whether you're buying your first home just outside of Boston or building elsewhere in the state, Quicken Loans is your trusted source for a Massachusetts home loan. We have become America's #1 online mortgage lender because of our innovative products, personalized service, and easy process. Apply online or call 800-414-3811 to speak with a Quicken Loans Massachusetts mortgage expert today.

Choose From Our Diverse Massachusetts Home Loans

Quicken Loans offers a wide selection of Massachusetts home loan products for all types of goals.

Our Most Popular Home Loans

• Fixed-Rate Mortgages - Fixed rate and payment make budgeting easier.
• Smart30 Loan - Interest-only payments with the security of a fixed rate.
• Smart Choice Interest-Only Loan - Low monthly mortgage payments.

Loans for First-Time Home Buyers

• Flex100 - Buy a home with no down payment.
• Power Buyer^® - More than pre-approved, shop with a full approval.

Home Loans for Special Situations

• Jumbo Loans - Borrowing more than $417,000 to buy a home.
• Advantage1st - A no-documentation (no doc) loan with low rates.

When considering a home loan in Massachusetts, be sure to use our convenient online home loan calculators. In addition to getting a monthly mortgage payment quote, our calculators can tell you how much you can afford in a home, compare the costs of renting versus buying and calculate the tax advantages of owning a home.

Personalized Service, Satisfied Clients

Simply fill out our short application, and Quicken Loans will provide you with one of our mortgage bankers. After researching and reviewing all of your options, your personal mortgage expert will help you find the best home loan in Massachusetts for your financial needs. We can then close your Massachusetts home loan in just a few weeks.

Getting Started

Still not sure which Massachusetts home loan is right for you? Call 800-414-3811 today or get started online. Come see why 9 out of 10 clients say that they would recommend Quicken Loans to friends and family.

http://www.quickenloans.com/home-loan/massachusetts-home-loans.html

QUICKEN LOANS BECOMES ONLINE MORTGAGE

Agreement brings together popular online real estate site and
leading online lender to create an invaluable home-buying resource

Livonia, MI (February 13, 2002) -- Quicken Loans Inc., a leading online mortgage lender, today announced an agreement with Yahoo! Inc. (NASDAQ: YHOO) to offer online mortgage services and content on

Yahoo!� Real Estate (http://realestate.yahoo.com). These features already have been launched on the Yahoo! Real Estate site.

Yahoo! Real Estate is a comprehensive site that brings information and services together on a wide variety of home-related topics, offering consumers fast and easy tools to buy, sell or improve a home. Under the terms of the agreement, Quicken Loans�, the mortgage lending subsidiary of Intuit Inc. (NASDAQ: INTU), will integrate Quicken Loans' educational content and mortgage tools into Yahoo! Real Estate. This agreement offers Yahoo! Real Estate consumers access to Quicken Loan's innovative home loan options and powerful tools, including various calculators and content to help educate people on the home buying and mortgage process. For example, Quicken Loans' Mortgage Payment calculator is built in to each individual property listing, enabling customers to quickly estimate the monthly payments for that particular home.

"Quicken Loans has taken the headache out of getting a mortgage," said Dan Gilbert, Quicken Loans Chairman. "Our customers tell us they want to be empowered to make good financial decisions, so we've developed materials to help them understand the mortgage process and feel more confident in their decisions. Yahoo! Real Estate consumers will now be able to use these materials and the services of nearly 1,000 Quicken Loans mortgage experts who have made the mortgage process almost as simple as applying for a credit card."

"We are pleased to work with Quicken Loans to provide Yahoo! Real Estate consumers the resources they need to learn more about the home buying process and to quickly and easily apply for home loans online," said Elizabeth Blair, senior vice president of Yahoo's Listings division. "We continue to improve our offerings on Yahoo! Real Estate to ensure it's an invaluable resource for people making the largest buying decision in their lives."

http://www.quickenloans.com/about/press_room/news_releases/yahoo_real_estate.html

Interest-Only Mortgages

An interest-only loan is one that gives you the option of paying just the interest or the interest and as much principal as you want in any given month during an initial period of time after your closing.

At Quicken Loans, we offer a variety of interest-only home loan options, including 30-year fixed-rate mortgages and adjustable-rate mortgages. Our interest-only home loan programs are offered as interest-only loans for periods of either three, five, seven or ten years.

For many, the most appealing feature of an interest-only loan is that you control your payment amount and your cash flow in any given month during the interest-only period, and your monthly mortgage payment will be lower than it would be with an interest plus principal payment. Your interest rate may or may not be lower than a traditional mortgage, depending on your specific situation, but you will have the option of flexible payments.
Who Is an Interest-Only Home Loan For?

There are a number of good reasons to consider an interest only loan. For instance, it might make good financial sense. On a traditional 30-year fixed-rate mortgage, roughly 70% of the payment goes toward interest during the first six or seven years of the loan. If your interest rate is low, then you've borrowed money at a good rate.
SmartChoice Interest-Only Home Loan

Instead of paying down that low rate loan, you could take the extra money you'd have each month from making interest-only payments, and invest it in something that would bring you a higher rate of return. Depending on your loan amount, you could have access to thousands of dollars over the course of several years to invest or reduce high interest debt, including credit card debt.

An interest-only home loan may also be a good option for people who expect to be in their homes for less than ten years. The average homeowner stays in their home between five and seven years. As mentioned before, home mortgage payments are mostly interest for the first years of the loan. Many homeowners like the option of making interest-only payments and using the extra money as they please - save for college tuition, make home improvements, or buy a much-needed new car.
Common Misconceptions About Interest-Only Loans

While an interest-only loan may be an appealing option to many, there are a number of common misconceptions that you should be aware of prior to making any final decisions.

One common myth is that if you're not paying down your loan's principal, you're not building equity in your home. This is not necessarily true. Homes in the U.S. have been appreciating between 5 and 6% a year. Chances are that even if you're not paying down your principal, you're building equity in your home through appreciation.

You should also know that with any Quicken Loans interest-only home loan, there are never any prepayment penalties. You can refinance anytime.

http://www.quickenloans.com/mortgage/articles/interest-only-loans_pur.html?lid=1623

Getting Pre-Qualified or Pre-Approved. What's Better?

Confused about what getting pre-qualified or pre-approved means? You're not the only one. There's a big difference between a mortgage pre-qualification, a pre-approval and an actual mortgage approval.

Getting Pre-Qualified for a Mortgage

Getting pre-qualified for a mortgage helps give you an idea of how much you might qualify to borrow. But since you have not actually applied for a loan, and the lender only has your word on your credit, income, assets and liabilities, a home loan or mortgage amount is not guaranteed. With a pre-qualification, no information has been verified. If you receive a letter from the lender, it may only state that you are likely to be approved for a mortgage.

Getting a pre-qualification can be easy and fast. At Quicken Loans, you can get an online mortgage pre-qualification in minutes.
Getting a Pre-Approved Mortgage

A pre-approval goes one step further than a pre-qualification. When getting pre-approved, you may receive a letter stating how much you qualify to borrow. Your lender will pull your credit report and find out what liabilities you have. However, not everything (namely your income and assets) is verified.

Pre-approvals don't always guarantee financing since the buyer's information has not been verified. Think of it this way: a mortgage pre-approval is like getting a pre-approval letter in the mail for a credit card. You can't go to the store and buy anything with that letter—you have to have the approved credit card. Having a firm mortgage approval is like having the actual credit card.

And unfortunately, sometimes not all buyers are completely honest or accurate when they give their financial information to a lender. It's not unusual for some buyers to inflate their income or savings. Issues like these have caused many real estate agents and home sellers to distrust pre-approval letters.

The Solution - a Power BuyerSM Approval
Power Buyer - Get more bargaining leverage than a pre-approval!

The best way to guarantee that you'll have the financing to buy the home you really want is to skip the pre-qualification and pre-approval processes. Quicken Loans offers an exclusive Power BuyerSM approval a mortgage approval* that's good for four months while you shop for a home.

With a Power BuyerSM approval, all of your information will be verified and you will know exactly how much you can spend on a house. Therefore, you won't waste time looking at homes outside of your price range.

While it's helpful to be pre-qualified or pre-approved for a home loan, it doesn't always guarantee you'll be approved for a loan. A pre approved mortgage ensures your financial information has been verified, and really puts real estate agents and home sellers at ease. At the same time, you're in control when making an offer to a seller. They'll know you're a serious buyer who's ready and able to make a deal.

If you would like to learn more about the getting approved for a home loan, call us at 800-251-9080 and talk to a Quicken Loans Home Loan Expert today.

*With a Power BuyerSM, your loan will close as long as the property gets a satisfactory title and appraisal and your financial situation remains the same.

http://www.quickenloans.com/mortgage/articles/prequalified_vs_preapproved.html?lid=240

Applying for a Mortgage:

The following is a list of documents generally required when applying for a home loan. For a fast and easy loan process, have the following items available when you talk to one of our Home Loan Experts:

1. Credit History

When you apply for a mortgage, Quicken Loans must access your credit report to know how credit worthy (or risky) you are as a borrower. The higher your credit score, the more likely that you will qualify

for a larger loan, better loan options, and/or a more favorable interest rate . In order to access your credit report, we'll need to know your Social Security number and date of birth.

2. Signed Purchase Agreement

The purchase agreement is the contract between home buyer and home seller that defines the terms and conditions of the sale. It's possible to get approved based on your income and asset information, but having a signed purchase agreement makes the process faster and easier.

3. Proof of Income

In order for us to be sure that you are able to make your mortgage payments, we need to see proof that you have a source of income. You'll usually be required to show original pay stubs for the last 30 days. You may also show two years' worth of W-2s (see #4 below), a verification of employment (VOE) or two years' worth of tax returns. How you prove your income can differ based on your situation, and what home loan is best for you. Your Home Loan Expert will explain what type of proof of income you'll need to show.

4. Copies of Your W-2 Forms

Advantage1st No Doc Home Loan

Your W-2 forms will help your lender verify that you are employed and will show your income history.

5. Copies of Asset Information

To qualify for a mortgage, you need to be able to show that you have some money for the closing costs. Acceptable sources of funds may come from other homes with equity ; a savings or checking account; proceeds from the sale of a house; stocks, bonds, mutual funds, a 401k or a money market account; or gift funds. For some home loans, you may need to show statements and/or investment records for these accounts.

6. Copy of Your Earnest Money Deposit

The earnest money deposit is a deposit made by a buyer towards the down payment in evidence of good faith when the purchase agreement is signed. The deposit becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal. Be ready to show a copy of the earnest money deposit if asked.

7. Copy of Homeowners Insurance

Just like when you show proof on insurance when buying a car, you have to have homeowner's insurance to verify that you'll have sufficient coverage on the property when getting a mortgage. Homeowners insurance covers any damages that may affect the home's value.

8. Copy of Title Insurance

Title insurance protects a buyer against any errors in the title of the property. Having a copy of your title insurance will help verify the legal description of the property, the taxes, and the names on the title.

Once you've begun the loan process, your Home Loan Expert will let you know exactly what documentation you'll need to get approved.

If you would like to learn more about the process of getting a home loan, call us at 800-251-9080 to talk to a Home Loan Expert.

http://www.quickenloans.com/mortgage/articles/home_buying.html?lid=3713

What to Do Before You Start Shopping for a Home

Looking for a home can be stressful and daunting. But there are things you can do to decrease your stress level and make the home buying process easier.

Before you even think about what kind of home you want, you have to decide on what kind of home you need. Doing this will narrow down the number of houses you look at and will save you valuable time. At the same time, you should make a list of things you don't want in a home so that you don't waste time looking at houses that don't fit your needs or your budget.

To set your priorities, ask yourself these questions.
Where do you want to live?

Location is one of the most important elements to choosing the right home. So, not only are you looking for the right home, you're looking for the right neighborhood. Among all your decisions, you should consider things like: how far or near do you want to live to your other family members? If you have your own family, what kind of schools you want your children to go to? How important is it to you to be close to the highway or public transportation, shopping, work, hospitals, entertainment, community amenities?
How long do you expect to live in your new home?

Most people end up moving within seven to nine years of living in a home and move for several reasons: job transfers, starting a family, needing a bigger home, don't like the area, etc. If you plan on living in your new home for only a few years, or if you don't have children, then proximity to schools may not be an issue, but resale value may be. On the other hand, if you have a family and plan on staying in the home for ten years or more, schools, as well as size of the home, will be priorities. How long you expect to stay in your home can have a large impact on which home you choose as well as what type of mortgage you choose.
Consider your lifestyle
Power Buyer - Get more bargaining leverage than a pre-approval!

As you make a list of your wants and needs (as well as what you don't want), it may also be important to consider the type of lifestyle you have. If you like to entertain a lot, then you'll want a spacious home that lends itself to that. If you work from home, or have your own business that you run out of your home, you'll need space for a home office. If you're a gardener, then lot size may be your priority.

Put these items on your list in order of importance. For instance, a large kitchen may be more important to you than a fireplace. Remember, your list should be somewhat flexible in case you can't find a home in your price range with all the amenities you need or want.
How much home can you afford?

Few things are more frustrating than falling in love with a home only to discover it's out of your price range. But, how do you figure out what you can afford? You should consider two major factors when determining how much home you can afford:

1. Your Credit Score

Your credit report determines your credit score, which is needed for qualifying for a home loan. Your credit score can help you qualify for a bigger loan amount and/or better interest rate . It's important to check your credit report carefully for discrepancies and errors. You can order your credit report from the three major credit bureaus, Experian, TransUnion and Equifax. There are many other ways you can improve your credit score to get the best loan possible including paying your bills on time, paying off debt and keeping credit card balances low.

2. Mortgage Payment

It's possible you may qualify for a loan amount that would require a higher monthly mortgage payment, but you may not want to stretch yourself too far financially. If that's the case, you should calculate how much you'd be comfortable paying for your mortgage payment. Use the Quicken Loans Home Affordability Calculator to give you an idea of your potential monthly mortgage payment, and how much you'll be able to borrow.

Mortgage Basics

Once you've figured out what you want in a home, how long you plan on living there, and what you're comfortable paying each month, you need to shop for a mortgage.

A mortgage is a legal document by which real property (your house) is pledged as security for the repayment of a mortgage loan. You can think of a mortgage loan like an auto loan, but instead of getting a loan to finance the purchase of a car, you're getting a loan to finance the purchase of a home. It's a legal contract stating that you promise to pay back the loan on a monthly basis over a certain amount of time. Your monthly payment typically goes toward the loan principal , interest , taxes and insurance . Although there are hundreds of loan options, you only need to know a few basics to understand how they work:

* Fixed-rate mortgages have a fixed interest rate over the term of the loan. Most people opt for 30-year terms, but 15- and 20-year terms are available. The biggest advantage of a fixed-rate mortgage is that your interest rate and monthly payment do not change over the term of the loan. However, if interest rates happen to fall below your current fixed rate, you may be "locked in" to a higher rate and should consider refinancing .
* Adjustable-rate mortgages (ARMs) usually start with a lower interest rate than a fixed-rate mortgage for an introductory period—typically one, three, five or seven years. After that initial introductory period, the rate adjusts—usually annually—based on a pre-determined index . As a result, the interest rate on your loan and the monthly payment will rise and fall with increases and decreases in overall interest rates. An interest rate cap limits the amount by which the interest rate can change. An ARM is a good choice if you're expecting to live in your home for seven years or less and it may also allow you to borrow a larger loan amount.
* The down payment is the amount you plan to pay up front, in cash, when you buy a home. It is typically the difference between how much you borrow and the purchase price of your home. To avoid paying private mortgage insurance (PMI), a 20 percent down payment is usually required. However, lenders like Quicken Loans offer many low and no down payment loans.

Get a loan before you house shop

It sounds counter-intuitive: why would you apply for a mortgage when you haven't even started looking for a house yet? The answer is simple. When you take advantage of our exclusive Power BuyerSM loan option, you're in a better position to negotiate.

Here's why:

* The seller knows that your offer is serious and valid, giving you a stronger edge over other buyers.
* You know exactly how much home you can afford, saving you valuable time since you won't be looking at homes outside of your price range.
* You can close on the home you want in days—not weeks.
* Your Power BuyerSM approval is good for four months* while you shop for homes.


https://www.quickenloans.com/mortgage/articles/home_loans_before.html?cm_ref=/mortgage/articles/smooth_home_purchase.html

Buying a Home

If you're thinking about purchasing your first home, remember—it's a big decision and several things should be taken into consideration. Here are the top 5 questions you should ask yourself.
1. How long do you plan on living in the home?

The national average for how long people live in their homes is approximately seven to nine years. Reasons for leaving a home can vary widely, but if you purchase a home and decide to move after only a short time, you may end up paying money in order to sell it. Generally, the shorter you're in your home, the less time your home has to appreciate in value—perhaps not enough to recover what it cost to buy and sell the home.

The amount of time it takes to recover those costs can depend on various economic factors. In most parts of the country, homes appreciate at an average of five percent per year. If this is the case in the area you are looking to buy a home in, you should stay in your home at least three to four years to recover buying and selling costs. If the area where you buy your home experiences an economic upturn, it may take less time to recover those costs. Conversely, if the local economy is not doing well, it may take longer.

The amount of time you plan on living in your home will have an impact on what home loan you choose. If you plan on staying there for more than ten years, a long-term fixed-rate mortgage might be a sensible choice. But if you know you're going to move within three to five years, an adjustable rate mortgage (ARM), with its lower payment options, might be a better choice.
2. Can the home meet your future needs?

It's important to find a home and a home loan that satisfy your needs in the present, as well as in the future. Do you plan to have kids in the next few years? Do you plan on starting a business out of your home? Be sure that the home has what you'll need now, and in the years to come, so that you don't outgrow the home and have to leave it prematurely.
3. What does your financial picture look like?
Power Buyer Home Purchase Loan

It's possible to find a lender for almost any financial situation. However, if your past financial history is good, you will have better home loan options to choose from. Generally, a couple of late payments on a credit report won't affect you that much and you will be considered a good credit risk, qualifying for lower interest rates . If you have more issues on your credit report, lenders like Quicken Loans may still provide you with a home loan, but because you're more of a risk to the lender, you may have to pay a higher interest rate and fees.

Some people believe you should refrain from borrowing as much as you qualify for so as not to stretch your financial boundaries. Others feel you should stretch to buy as much home as you can afford because with expected increases in your earning potential, a big payment today will seem like less of a payment in the future. Only you can make this decision.

A popular guideline is to follow the "28/36" rule. This rule says that your monthly housing costs shouldn't exceed 28 percent of your monthly income, and your total debt payments shouldn't exceed 36 percent of your total monthly income. If your payments do not follow the 28/36 rule, don't worry. Lenders offer mortgages customized to each borrower's individual situation. Depending on your assets, credit history , job potential and other factors, lenders can work with ratios 40-60% or higher.

While we are not advocating that you should purchase a home utilizing the higher ratios, it's important for you to know there are other options available.
4. Where will the money come from?

Typically, home buyers will need money for the down payment and closing costs in order to close the loan. However, you don't always have to have a lot of money for a down payment, as long as you're a good financial risk to a lender. Several loan options today offer zero down and low down payment home loans. Even if your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still have some very good mortgage options.
5. Have you considered the ongoing costs of home ownership?

Maintenance, improvements, taxes and insurance all add to the costs of owning a home. And if you buy a condominium or a town home, some communities require a monthly homeowner's association fee.

If you're concerned about these types of additional costs, you should look for home loan options that minimize fees and lower your mortgage payment relative to other home loan options. Be sure to make your realtor and your lender aware of your concerns.

If you'd like to know more about the home buying process, call us at 800-251-9080 to talk to a home loan expert.

http://www.quickenloans.com/mortgage/articles/buying_home/buying_first_home.html?lid=3752

Purchasing a Vacation Home

It's vacation season. Whether you're enjoying a beachfront house, country cottage, or mountain chalet, chances are you have a vision of calling your favorite vacation spot "home" one day.

With an expected increase in demand, today's favorable interest rates, and creative vacation home mortgage options, it's a great time to invest in a second home. In fact, it's a wise investment.

CNN recently reported that homes in 13 top seasonal (vacation) counties appreciated by 49% between the fourth quarters of 2000 and 2003.*

This trend will likely continue. As baby boomers begin to retire, it's expected that more than 30 million Americans will buy a vacation home within the next decade.

With rising demand in popular vacation areas, knowing your vacation home mortgage options and how much you can afford can make a big difference in getting your perfect vacation home. Many homeowners use the equity in their primary home to finance their vacation investment, or take advantage of other vacation home mortgage options such as interest-only programs. Calculate your potential monthly payments using our payment calculator to see if you can afford to invest in a vacation home, or call a Quicken Loans home loan expert at 800-251-9080 for creative financing advice.

Before you begin your search, here are a few things you should consider:

• Family appeal: How does it fit the needs of your family? Will there be space and activities for family members who visit?
• Travel time: If it takes all day to get to your vacation home, you may not visit it as frequently. Two to three hours travel time is ideal.
• Climate: What is the area like year-round, especially during off-season? What are the political and tax issues? Browse through local newspapers as a guide.
• Healthcare facilities: If your vacation home becomes your primary residence one day, quality healthcare may be one of your top priorities.

It has never been easier to bring your vision of beachfront, mountain, or lakeside properties into focus. With the proper planning and home financing, your dream of owning a vacation retreat can be a reality.

http://www.quickenloans.com/mortgage/articles/buying_home/buying_vacation_home.html?lid=804

Getting a Home Equity Line of Credit

Credit cards are a good thing, but a home equity credit line is a great way to use the equity in your home to finance big ticket items such as home improvements, paying off high-interest debt, financing a car, or paying for college tuition.

A credit card is a revolving line of credit that you use when you need it, and make payments only if you use it. But credit cards can charge very high interest rates. A home equity line of credit (HELOC) is also a revolving line of credit. You draw from it again and again as you need it, and make payments only if you use it. But, unlike most credit cards, you get a much lower interest rate with a home equity line of credit than with a credit card.

Using a home equity line of credit is a way to turn bad debt into good debt. In other words, the interest on the debt you have on your high-interest credit card cannot be deducted from your taxes. But the interest on your HELOC is usually tax-deductible*.

There is also flexibility that can be built into home equity loans that you wouldn’t get for say, an auto loan. There are different home equity programs that have an interest-only option. With an interest-only loan, you can pay only the interest for a pre-determined amount of time and pay as much principal as you want, even none. You can’t do that with an auto loan. Most lenders offer home equity lines of credit for up to $100,000. But Quicken Loans offers a line of credit for up to $500,000! This is a great option to have when buying your dream vacation home.
Get a Home Equity Line of Credit

It’s fairly easy to get a home equity line of credit. That’s one of the best things about it! Nowadays, many companies allow you to apply online and close within a very short period of time, 7-10 days typically. There’s less paperwork to deal with, the closing costs are less expensive and the process is just as easy as applying for a credit card. If you get a home equity line of credit at the same time as your first mortgage with the same lender, you only have one closing to go to for both loans.
Learn about a Home Equity Line of Credit

A home equity line of credit can be thought of not as a mortgage or a loan, but as a smarter way of using your home’s equity to finance big-ticket items. Think of it as a low-interest alternative to high-interest credit cards that comes with greater flexibility and tax advantages.

If you are wondering whether a home equity line of credit is right for you, call us at 800-251-9080 to talk to a home loan expert or click the button below and a home loan expert will contact you.

http://www.quickenloans.com/mortgage/articles/home_equity_line_credit.html?lid=965

House shopping: house hunting journal

A house-hunting journal can be made simply and easily and reduce both stress and time when comparing houses.

A house-hunting journal is a very useful tool to use when searching for a new house. It can be made simply and easily and reduce both stress and time when comparing houses. You will no longer need to make repeated trips to the same houses to determine which house had what feature. In addition, you will be better able to compare your house choices at a glance. All of the information of each house will be at the tip of your fingertips making your decision much easier to make.

You will need:

A loose-leaf binder, to hold the pages of your notebook

A digital camera for taking picture of the house and its features

Computer for creating your customizes journal pages

A printer that will also print your photos

A hole-punch to make the pages fit into your journal

Once you have gathered all of your items you will need to create a spreadsheet or checklist that details possible wants and amenities in the house. Try to keep the spreadsheet to two pages that you can view at a glance. In addition to the spreadsheet, make space for several pictures for each property. Each property should consist of five pages each. Page 1 should have pictures of the front of the house including the street numbers in case the pictures ever get confused. Page two and three should have the checklists. Page four should contain pictures of extra amenities and features the house has and page five should contain pictures of any damage or concerns. Never house hunt without a camera.

On your checklist or spreadsheet, use items that are important to you from the following questions. This will help you measure the amenities of each home you visit.

What is the square foot of the house?

Is the space well used?

What is the lot size?

What is the garage size and were is it located?

How many bathrooms?

How many bedrooms?

What kind of flooring is in the house?

Does the house need renovating, and in what rooms?

Does the house need redecorating and in what rooms?

Is the house in move-in condition?

Is there evidence of wear?

Is there a basement, and is it finished?

Is there an attic and is it finished?

Is the yard fenced?

Is the yard high or low maintenance?

What is the condition of the foundation?

What is the condition of the foundation?

What are the neighborhood property values?

What are the zoning ordinances?

How are the crime rates?

How are the schools rated?

Are their any local services?

How long is the commute to your job and activities?

Of course, this list is not exhaustive. You can remove anything that is not important to you and add things that are. The key is to detail has both the standard and extra amenities in each property so that you can make an educated decision instead of an emotional one.

Unless you absolutely hate a house, fill out a checklist for every property. Do not be shy about taking pictures, as this part is vital to saving time. The pictures will job your memory. If anyone has problems with you taking pictures, chances are that you should probably not buy that house.

http://www.essortment.com/home/househuntingjo_sdrj.htm