Why it may be better to buy a home in the fall

I am sure you have heard that the best time to buy a home is in the spring because there is an abundance of listings but many people are now saying that fall is when the real magic can happen and here is why.

High inventory of leftover homes from the summer are readily available. Come October sellers are ready for something to bite because their homes have been sitting on the market all summer.
Which then leads to another reason as to why the fall might be best.
Sellers are motivated to close by the end of the year. Everyone wants a fresh start come January 1st, so the sooner they can sell their home before the desire to start fresh at the beginning of the year, the better.

My third point then follows.

Fall landscaping is the best, I mean come on, beautiful changing of colors, cool weather, piles of bright, fresh smelling leaves. This is the perfect scene for staging and selling a home.

Next to landscaping, many families want to be in a new home before the start of school so that their children don't face too much of a disruption. Therefore, the competition is much lower in the fall to buy a home.

Fall begins the start of holiday season, you begin with Halloween and then comes Thanksgiving and before you know it Christmas is here and everyone is holding parties and having family over to celebrate. The last thing a seller wants or needs is a sale looming overhead.

Sure the spring is great, the flowers are blooming the birds are chirping but the fall truly may sneak up to the first place spot for buying a new home.

Rely on a Realtor's Recommendations?

Learning from the experience of others holds a lot of value, especially for first-time homebuyers. While consumers are more knowledgeable than ever about the housing market with blogs available (like this one), reading professional recommendations and ratings, or doing a little market recon before even picking up the phone, at some point they have to trust the professionals they’ve so dutifully researched.

Photo by Lukas from Pexels

While a mortgage lender will always argue that they need to be hired first, starting with a Realtor you trust can be a great move! They make it their business to know who does good business. A Realtor’s connections and recommendations will be properly vetted as reliable, friendly professionals and most importantly - get the job done.

There are plenty of skeptics out there who feel like using referred business lends way to some dubious profiteering. I’m glad to assure you that the Real Estate Procedures Act (RESPA), a piece of legislation designed to protect homebuyers, strictly prohibits kickbacks for referring mortgage lenders.

Realtors more than anything want your deal to go through and have a successful sale with happy customers, which is why they make recommendations based on their client’s needs. They’re familiar with lenders’ products and what might be a most successful path for their clients whether they are first-time buyers, renovators, investors, etc. Their recommendations are based on who they’ve worked with and who has the follow-through to make the deal happen.

Believe it or not, the rate isn’t the most important quality of a lender. Typically, many larger lenders remain competitive by offering similar rates, anyway. A Realtor doesn’t know rates, they know service and they’ve already weeded through the non-closers. Taking a .05% lower rate won’t mean anything if the lender fumbles at closing. So if you’ve already found a Realtor you trust, their recommendations for mortgage lenders are likely to be trustworthy professionals, too.

No matter who you hire first— a Realtor or a Mortgage Professional— getting pre-qualified (or at the very least, pre-approved) before home shopping is MUST!

How to work toward more home loan options

Photo by Andrii Nikolaienko from Pexels

There are many perspectives when it comes to how long getting a mortgage takes. Many articles read that it doesn’t take as long as you think, just one to three days! Some articles warn that it’s a many month process toward reaching the final goal. Having seen everything in-between, it can easily be said that you never know just how long it will take.

For buyers who have planned ahead, done any credit repair work that needed to be done (i.e. not zeroed out any self-employed tax returns for two years or saved for a downpayment) then the process will be smooth as silk! But truthfully, that is rarely the case. Many individuals don’t find out that this kind of effort is necessary until after their initial meeting with a loan officer.

The spring market is fast-paced and sometimes pre-qualification letters aren’t enough to out-compete another bidder. In a seller’s market, like the current Richmond market, many sellers won’t entertain offers without a pre-approval letter, meaning your credit and income have been verified. 

So if you missed out on this spring market, take the opportunity during the "slower" real estate months of summer to get your financial house in order and broaden your mortgage options.

Save money!

The larger your down payment, the wider your mortgage options.

Adjust your debt-to-income ratio

Get your credit card balances down as low as you can, or consider consolidating debts into one low monthly payment the bank know is achievable along with a mortgage payment.

Don't borrow any more money

Don’t buy a new car when applying for a loan. Don’t take out a loan on something else while applying for a loan. Don’t stretch your credit so thin that the bank questions your repayment ability, okay?

Student Loans won't stop you

“Almost 60 percent of first-time homebuyers said that student loans delayed their saving for a down payment” according to the National Association of Realtors. Having that debt is commonplace and won’t necessarily prevent you from getting a mortgage as long as you’ve managed it wisely.

Credit Repair

Many mortgage lenders are willing to give mortgages to individuals with a credit score of at least 620, depending on their financial history. If your credit is less than perfect, remember that it is only one part of a whole equation. However, if your score is in need of an overhaul here are some general credit rebuilding tips:

• Look at your credit report for any past due accounts or late payments. If you have accounts, like a student loan payment, that is 90 days or more overdue, pay those off first. Accounts that are 60 to 30 days late will have a less negative impact than accounts that are 90 days or more late.
• If your credit report is showing that an old bill is unpaid, you should not pay it unless you are able to pay it back in full. A partial payment may make the debt more relevant, which can hurt your credit score.
• Lenders will see that you have been making an effort to pay off overdue accounts and reduce your existing debt. This will bring your credit score up and help improve your chances of qualifying for a mortgage. 

Resources: 

Inc.com

Time.com

Homebuying Documents 101

The home buying process can be rife with complications and legalese for anyone who isn’t paying cash upfront, depending on your circumstances. For example, if you are trying to qualify for an FHA loan the home you’re buying needs to meet certain expectations and therefore could require multiple addenda. Or, if you are self-employed, there tends to be an extra burden of proof when it comes to showing the bank how much you make a year (deductions or business expenses can mean “less” take-home pay)!  There are certain extra steps the homebuyer needs to take in order to satisfy every institution involved in the homebuying process.

With that in mind, if your transaction isn’t as straightforward as you hoped, consult a professional who wants to make your experience as transparent as possible! Here are some of the main documents you’ll need throughout the home buying process:

Mortgage/Pre-Approval:

1. Tax Returns (at least one year, if self-employed or commission typically 2 years)

2. W2s (last 2 years)

3. Pay Stubs (last 2 years with year-to-date earnings)

4. Bank Statements (last 2 months)

5. Investment Account Statements

6. Copy of Your Driver's License or Photo ID

7. Credit Report

Submitting an Offer:

1. Copy of Your Pre-Approval Letter

2. Sales Contract (signed and dated)

3. Any Addendum

Closing:

1. Sales Contract (signed by Buyers and Sellers)

2. Title

3. Title Insurance

4. Copy of Your Driver's License or Photo ID

5. Deed

6. HUD-1 Statement

7. Survey

8. Proof of Home Insurance (if required by lender)

9. Proof of Required Repairs

10. Checks 

Local Lenders Do It Best!

It’s that time of year again! The Spring Real Estate buzz has already started and it’s time to get busy on your pre-approval to be a competitive shopper in this low-inventory market!

By now you’ve probably been bombarded by pop-up ads and indiscriminate commercials on how to “simplify” your way to hundreds of thousands of dollars in mortgage loans. In an industry that now boasts mobile ready money, a personal touch can still make all the difference in getting to buy your dream home— or not.

Source: pixabay.com

Flexibility

The benefit of many local lenders is that they have a “people first” mentality when it comes to doing business. Often times applicants don't qualify right away if they are in need of credit repair or even need help proving income after having written off everything possible as self-employed tax filer. When you work with a local lender there are often programs, workshops, and in some cases, workarounds when it comes to getting you a great mortgage.

The reason many local lenders have flexibility over larger lenders and may even be able to approve applications rejected by conglomerates because their guidelines and criteria often differ. The bigger guys tend to sell their loans to Fannie Mae or Freddie Mac which also ties them to their strict guidelines. With a smaller lender there’s more opportunity for special financing and often the person receiving your application is has the final say in approving your loan.

A local lender's focus is on the community around them and helping local businesses and homebuyers qualify. Loan Officers have direct access to managers and a team of professionals that are excited about getting creative to help their clients.

Source: pixabay.com

Accountability

As a local lender, we meet with clients face to face every day. We are reminded that time really is money and closing on time is important. I’ve personally experienced working with a buyer who switched lenders for the promise of half a percentage point savings. After I had filed all the paperwork and submitted their pre-approval letter before the switch, the buyers didn’t let their agents know the financing on the deal had changed. When it came time to close, their new lender had done none of the paperwork to move the deal forward and they ended up not getting the house. The lender had no accountability or urgency for their closing date or sale. 

While this is a special circumstance, the fact remains that giant mortgage lenders deal with clients in bulk and meet their own deadlines— not yours. When it comes to accountability, that 24/7 customer service hotline only gets you so far.

Source: pixabay.com

Accessibility

Due to their volume, many national lenders simply treat their customers like a bottom line. While having an 800 number to call might be convenient, you never get the same person twice. Working with a local lender means they have a personal interest in your loan and in working with you to get the best option available. Many online reps follow prompts themselves to lead you toward a box-sized solution. Ultimately, they’re not mortgage lenders they’re tech support. 

Many larger banks brag about their around-the-clock service, however, I have yet to meet a dedicated mortgage professional that doesn’t pick up their phone on a weekend! Not to mention many local lenders have their own specialized apps and technology for easy access to your application and status updates.

Photo by picjumbo.com from Pexels 

Ultimately, If you have a standard W-2 based income at a job you’ve had for years, with no hiccups in your credit history, perhaps a mortgage app is a great tool for you. However, like most of us dealing with life; changing jobs, freelancing or self-employment, non-liquid assets, small business ownership, missing a payment here and there— it may be difficult to fill in all that information with two thumbs.

Don’t leave money on the table or wonder if you’re getting the best mortgage for you. Work with a local lender! 

3 Reasons Homeowners Should Itemize

 Photo: Vladimir Solomyani on Unsplash

While the new standard deduction has recently been increased by the Tax Cuts and Jobs Act ($12,000 and $24,000 for single filers and joint filers, respectively) if you qualify for these 3 tax breaks, it may still be worth it to itemize.


Mortgage Interest
Writing off the interest on a home loan from federal income tax is a major homebuying incentive. While the maximum deduction was capped at $750,000 on mortgage loans taken after December 15, 2017, that still leaves many Americans eligible to take advantage of the tax incentive.

However, did you also know that you can write off your points?  Points refer to one percent of your loan’s total value. While you can’t claim origination points, discount points— or those you pay upfront to reduce your rate—  are very much deductible.

Property Tax
Many major cities have high property taxes and a homeowner's ability to deduct them from
Federal Income tax is a relief to those who live in high property taxed areas. Take as much advantage of your property tax deduction this tax season because in 2018, these property taxes will be capped at $10,000.

If you just bought your home, don’t forget to include the taxes you paid toward the seller for reimbursement. These are the taxes the seller paid before you took ownership.  You can find this amount on your settlement sheet. http://intuit.me/2DOu0rz

Photo: Bernadette Gatsby on Unsplash

Home Equity Loans & Medical Home Improvement
The only way to deduct interest on future home equity loans is if the funds are used to significantly improve the value of your residence. Conversely, Medical Home Improvements are deductible to the extent that they don’t increase the value of your home.

An example from Fool.com:
“For example, if your house was worth $200,000 and adding an elevator cost you $80,000 but increased your home’s value to $250,000, then you could only deduct $30,000 of the expense.”  If it doesn’t change the value of your home, then you can deduct the entire amount. You can also deduct upkeep expenses for medical improvements in future years. 

Photo: LES CUNLIFFE/ISTOCK/THINKSTOCK

While the standard deduction has increased, in the case of being able to claim all of these deductions, itemizing may be your best bet!

Most Americans can still take advantage of the many homeowner incentivizing tax breaks this year and next. Be sure to talk to your local tax expert to make sure you’re getting the maximum allowable deduction!

Meet Your Builder!

Being in my industry right now is great. The housing market is better than it has been in many years. The economy and jobs have been making a steady comeback for the past few years and we're finally seeing some of those benefits. The only problem is that even though people are looking to buy homes, there isn't a ton of inventory out in the market. Why? Interest rates were high when people bought a number of years ago and people want to make sure they aren't losing money when they sell. It's a reasonable way of thinking but it puts potential buyers in a bit of a bind!

So as you can probably imagine builders are trying their best to provide more housing opportunities for buyers. There's lots of builders out there right now and getting to know them all can be overwhelming. Realtors should get familiar with all the different builders because it opens up a whole other market for their buyers.

Different builders have different: styles, quality, locations and square footage. Each builder brings something to the table that the next doesn't and it's important for lenders and realtors to get familiar with those differences. At the end of the day if we find the right home for our clients, we are successful at our job.

This is why I love being part of the Home Building Association of Richmond, there's so many great events that help connect Realtors, Builders and all sorts of Contractors. One of their biggest events is coming up soon, Builder Bash. The tickets for this event are sold out and it will take place at Bon Secours Washington Redskins Training Center on June 8th at 5pm. I suggest that you visit http://hbar.org/ to keep up with coming events if you'd like to get involved and get to know some really great people in the industry. I'm glad I joined!

Golfing for a good cause: Special Olympics VA

I believe in giving back to the community and as my personal business grows, I want to make sure I am doing so. The Special Olympics is a great cause that I encourage people to get familiar with. We live in a very sport centered culture and I believe that everyone should be able to participate, the Special Olympics allows just that. We're not all the same and it is incredible to see an organization dedicated to embracing physical diversity.

This year, I decided to do a small part in making their Golfing Tournament a possibility. First Home Mortgage and myself are sponsoring one of the golf holes at this year's Golfing Tournament. I encourage friends and colleagues to register to play or support this cause by also becoming a hole sponsor. We all know someone with a disability and it is important to show them our support, no matter how big or small.

I hope to see some of you out there and if you're curious on how to get involved, click here to visit and get more tournament information or click here to learn more about the Special Olympics in VA.

No Matter The Loan, Big or Small, We Can Make Our Customers Homeowners

I want to take a moment to talk about one of my clients Zach, who was looking to buy a new home in the Richmond Area. Zach works in non-profit meaning that he works for a good cause but doesn't have a lot of disposable income. Having a restricted budget it was my job to figure out how to get him in a home that he would be happy with and that wouldn't strain him too much financially. 

Even though he didn't have a large budget, he also wanted to buy something that was move in ready and that didn't need a lot of renovations - with the help of Kristina Davis Denzler from Clocktower Realty, we are able to find something that checked off all of Zach's needs and wants. 

His monthly payment is something that he can easily handle, just under $1,000 a month. It's close to the city, just a few minutes away and with enough room to entertain and have people over. 

Having the RIGHT Realtor and the RIGHT Lender can really make all the difference. I want to make a difference when it comes to your Real Estate needs. If you want to find out more of what I can do for you and your family, please give me a call! Spring is just around the corner and it would be really great if can get you into a new home then! 

Loan Options

Loan Options

As a home buyer, your mortgage is specific to your situation and lifestyle. First Home Mortgage specializes in a variety of loans that can meet your needs. Your Loan Officer will explain your options and deliver a mortgage with the best loan terms available.

PURCHASE AND REFINANCING LOANS

Conventional Home Loans

Conventional mortgages are loans that are insured by private companies. Typically, these loans meet the funding criteria set by Fannie Mae and Freddie Mac. There are a number of conventional loan types offered by First Home Mortgage:

FIXED RATE

A fixed-rate mortgage has an interest rate that stays the same for the entire life of your loan. This offers a predictable monthly payment for a term of 10 – 30 years.

Highlights
– Interest rate security
– Monthly payment stability
– Best for buyers planning to stay in their homes for a long time

ADJUSTABLE RATE

Adjustable rate mortgages (ARMs) may allow you to lock in a low, introductory interest rate that could increase over time. A hybrid ARM offers a fixed period (typically 3-10 years) followed by a yearly adjustment to the interest rate. Hybrid ARMs are often represented by fractions, such as 5/1 – meaning the first rate reset takes place after five years and continues to reset each year for the life of the loan.

Highlights
– Low starting interest rate
– Lower monthly payments during the initial term
– Best for buyers planning to keep their loan for a shorter period

JUMBO

Jumbo loans typically have higher loan amounts not allowed for standard conforming programs (set by Fannie Mae and Freddie Mac). This allows borrowers to a purchase a higher priced home with an affordable down payment.

Highlights
– Fixed and ARM options
– Loans up to $3 Million
– Best for borrowers who are in the market for higher priced homes

Government Loans

The government guarantees certain programs through various agencies to better serve borrowers with unique circumstances. These loans can only be offered through an approved lender such as First Home Mortgage.

FHA

FHA loans are insured by the Federal Housing Administration (FHA). Programs are available for borrowers with limited savings for a down payment.

Highlights
– Down payment as low as 3.5%
– Flexible use of gifts and grants for down payment
– Best for borrowers with limited assets for purchase

VA

VA loans are insured by The Department of Veterans Affairs (VA).Service members and their spouses are eligible to purchase with little to no down payment or cash to close.

Highlights
– Low to no down payment
– Refinance within the VA program without re-qualifying
– Specifically for eligible past and present service members and spouses

USDA

The U.S. Department of Agriculture (USDA) insures loans to home buyers with low to moderate income moving to designated rural areas. These loans can provide up to 100% financing.

Highlights
– Down payment not required
– Specific benefit needed here
– Best for borrowers with limited assets looking to buy in rural areas

State Housing Finance Agency Programs

Housing Finance Agencies (HFAs) are state specific and offer programs to residents to help purchase a home. Conditions and guidelines vary depending on the agency. These programs offer special incentives for first time home buyers:

• VHDA (Virginia Housing Development Authority)

I do both Construction & Renovation Loans!

Renovation and Construction

RENOVATION

A renovation loan can help fund home improvements, allowing you to turn a house into your dream home.

Renovating for a new home purchase

If you’re a buyer who’s found a home with great potential, but needs some repairs, First Home can provide a loan for the purchase and renovation costs. We offer a number of loan types that cover minor to major rehabilitation, all included with one mortgage payment.

Improving your current home

If you’re a current homeowner who’s interested in making updates that would enhance the look and layout of your house, a renovation might be the solution. Based on the type and scope of your remodel, we can offer a variety of loans that will help with the cost.

Types of repairs and remodels include:

• Room addition
• Garage, driveways
• Roof & gutters
• Plumbing & electrical
• Decks, patios, porches
• Basement finishing
• Doors, windows
• Landscape, fencing

For a full list of eligible improvements and considerations, contact a First Home Mortgage Loan Officer.

CONSTRUCTION

Building a Home

Breaking ground and watching your custom home take shape is possible with a construction loan from First Home Mortgage. You have the option to apply for a loan that covers construction only, or a loan that finances the construction and later transfers to a standard mortgage.

Talk to us about what you envision for your new home, we’ll help you make it happen.

Ask yourself the following questions when buying a home

Questions to consider as a home buyer:

How much can I afford?
Before you starting house hunting, you need to make sure you are looking in the right price range. Getting pre-qualified by your Loan Officer will give you a better idea of how much home you can afford based on your current financial situation.

How long do I want to stay in my home?
Think about where you will be in the years to come; whether you want to move again or planning to stay long term. This is an important factor when deciding which type of mortgage is best for you.

What am I looking for in a home?
As you begin to contemplate buying, make a list of the most important things you want in a home. For example: a condo or single family home, monthly mortgage payment, location to work and school zones, neighborhood amenities, and yard size. Not only will this list help your real estate professional find the perfect home, it will also help your Loan Officer tailor a loan program that fits your needs.

Should I consider a second home?
Buying another property as a rental can provide ongoing income from tenants, and a vacation home on the beach or mountains is equally attractive. However, you will need to decide whether the home will be a place to live (primary residence) or a place to rent (investment property). Loan specifications are different based on how you plan to utilize the home. Your Loan Officer can explain the different requirements and help navigate through the process.

Thinking of buying? Here's some benefits of Homeownership!

Benefits of homeownership:

• Build Wealth  Although home value may increase or decrease short term, if you decide to stay in your home long term, it could gradually increase in value. This would provide you with a significant return on your investment.
• Build Equity  Equity is the amount of money your house is worth minus what you still owe. Every time you make a mortgage payment, the amount you owe reduces and increases overall equity. This is beneficial, because equity can be accessed and converted to cash. See our Refinancingpage to learn more.
• Tax Deductions  As a home owner, your mortgage interest and property tax payments may be deductible from your federal taxes and possibly state taxes.*
  *Consult a tax professional for more information.
• Strengthen Credit History  Making monthly loan payments is evidence that you are a responsible borrower, which builds your credit history. This will help you take out loans for other purchases, such as a car or even home renovations.
• Create the Home You Want  Owning a home gives you the freedom to create your dream living environment. Whether you want to update appliances, paint rooms, landscape a yard, own pets – you will have a house that is completely yours to customize.

The Fall breeze brings exciting changes!

Hello and Happy Fall!

As a part of my preferred network of clients, I wanted you to be the first to know my exciting news!  I have made a change, and have accepted a new position as a Senior Loan Officer at First Home Mortgage.  This decision came after a lot of research, and ultimately I felt like First Home offers everything that I need to provide the ultimate service that you, my clients, and your referrals deserve.  At First Home I will have access an even wider range of mortgage products.  I will be able to help you and your referrals directly and will be available by phone, text, and email just like before.  My favorite part of the change is that I will have more control over the processing of applications and loans, and can ultimately be more successful at getting your referrals into the homes of their dreams.

I would like to invite you to visit our webpage and learn more about my new company.  You can find find my updated contact information at the bottom of this email.  Please make sure to save that for your records. I look forward to talking with you about my new capabilities and services.  Any questions, comments, or additional information you'd like, just reach out to me any time.   I’d love to hear from you!

Thank you for your continued support,
Clay