Why Mortgage Search Should Precede Property Search?

Mortgage Loan AgreementWhen buying a house, many homeowners shop around for properties first before mortgages. After all, exploring the real estate market is more fun and exciting while negotiating with one lender after another is tedious and overwhelming. Although this is true, focusing on the home loan at the start is more logical.

Here’s why experts at American Bank & Trust think you should consider your mortgage loan application as a top priority:

Narrowing Your Property Options Down

Negotiating with lenders before visiting open houses and calling real estate agents gives you an idea of the highest amount of money you borrow. When you know your price range, you can avoid wasting your time and energy pay attention to properties beyond your means. Unless you want to daydream, getting attached to a house for sale that you can’t afford can be heartbreaking.

Understanding What You Need to Work on

Learning how mortgages work, familiarizing yourself with important jargons, and comparing home loans takes time. You may think that it’s just an inconvenient hurdle, but obtaining financing is an important step to achieve your homeownership successfully. There’s so much to learn about the process that you can’t master overnight.

Paying attention to mortgages early allows you to take a 360-degree view of your financial situation. It tells you about your strengths and weaknesses, giving the chance to continue your good habits and ditch the bad ones consciously. If you’re too concentrated on property search, you might spend years trying to buy a house.

Determining Whether You Can Afford to Buy a Property

Most importantly, mortgage applications are a reality check. Considering that lenders scrutinize not just your credit score but also your income, employment history, and cash reserves, they force you to evaluate your financials.

Many things have to happen before you can say that you’re mortgage-ready. You ought to pay off most of your debts, have an emergency fund, and still come up with a decent down payment. Only when you accomplished them all, you can seriously dream of becoming a homeowner.

Don’t underestimate the effort necessary to obtain a home loan successfully. If you get past the mortgage front, everything else should go smooth sailing.

Three Things You Need to Do First Before Buying a House

new house

new houseBuying a new home is everyone’s dream. It is just natural to harbour fears about making wrong decisions when looking for a new house. If only buying a home were easy — but it is actually a daunting task. The consequences of making a bad decision can leave you with regret for years.

So, when looking for the perfect house, you need to research, canvass and compare rates appropriately. For instance, when you do research on a property, make sure to use a UK stamp duty calculator so you can take all fees are into consideration.

Other than that, here are the three things you need to do before buying your first house.

1. Research is key

Research is an important step in buying your first house. It involves looking for the perfect location, the price of the property and mortgage options available. It is also important to take into consideration the tax fees and property transfer documents, in order to have a smooth transaction.

2. Get your finances in order

It is vital to make sure you have good credit score and history. You must prove to your bank or lending firm that you are perfectly capable to repay a mortgage.

This way, you could have the best deal before you buy your house. Moreover, you could even get bigger loans if the firm sees you are disciplined when it comes to your finances.

3. Take your time

Do not buy anything in a rush. You might end up regretting buying a house at the spur of the moment. It is better to take one step at a time. Take your time, particularly in the research process. Consider all options and weigh them against your preferences and needs.

Buying a house for the first time is not easy. You might feel overwhelmed with all the payments, information, and processes you need to go through. Just keep in mind the tips above as well as advice from experts, and you should do just fine.

9 Tips for Buying a Home Without Regrets

Beautiful home for saleBuying a house is a perhaps one of the biggest things you will pursue this year. The least you’d want is to make a wrong decision because this can instantly turn your dreams into regret. Before you head to buying right away, read this guide and save yourself from trouble.

Do not skip research

Some homebuyers are eager to have a house right away that they neglect research, which is a huge no-no. You should never skip this crucial part because doing so allows you to know your options. Remember to include property taxes and insurance costs as well when you do your research.

Know your needs

Do not focus merely on wants, but more importantly, you should consider your needs. According to a survey by HSH.com, only 20% of 2,000 US homebuyers had no regrets with their home. It turned out the most common complaints of the other 80% were a house that’s too small, not enough storage, a noisy neighborhood, and high maintenance costs. You can avoid regrets like these when you consider your needs and future plans when choosing a property.

Set a budget

Never set a budget that’s far beyond your means. Most lenders would agree that your house should not be three times more than your yearly income if making only a 20% down payment.

Improve your credit score

There’s no better way to get prequalified for a home loan faster than to have a good credit standing. Prmishoreline.com explains that a bad credit score does not only make it difficult to find a lender, but it would also require you to pay bigger down payments.

Apply for a mortgage

Have your financing ready before checking out properties. Explore your options and find a home loan program that fits your means.

Choose a house

It’s easy to pick a house if you will just consider the design and layout. However, choosing a property involves finding the right location, size, neighborhood, and price. Choose wisely, take your time, and don’t miss home inspection.

Get the home appraised

Know the real value of the property when you get it appraised. This could save you thousands of dollars. Through it, you would also know if you’re being duped or not.

Prepare all paperwork

You will be surprised to know that there’s too much paperwork to prepare when buying a property. Your lender and a title company might work together to help you handle this task.

Make the deal

Have all paperwork signed and return this to the lender. It will only take a few days for your loan to become effective. Also, have some cash ready for closing costs.

Buying a home only becomes complicated when you neglect research and planning. Save yourself a lot of troubles when you follow this home-buying guide.

Three 1031 Exchange Details You Should Know

Couple consulting a real estate professional

Couple consulting a real estate professionalMany people who know about Internal Revenue Code Sections never go past the 401(k). However, look a little deeper and you will come across 1031 exchange. A few who can navigate the complexities of the tax codes know that 1031 exchange is a tax deferment loophole associated with real estate investments. However, the scope is broader.

To put it simply, a 1031 exchange swaps investment assets or businesses, for others. Within 1031, you get limited tax or no tax at all. In effect, you change your investment’s form without the IRS recognizing it as cashing out. Nevertheless, there are some things you should bear in mind; companies such as 1031 Exchange Place provide guidance when pursuing a 1031 exchange, so you are not caught on the wrong side of the tax laws.

Considerations include:

Delayed exchanges

A traditional exchange is a simple swap of property between two property owners. However, the chances of finding someone willing to swap whose property is what you are looking are slim. Therefore, you can delay the exchange. Also known as a Starker exchange, a delayed exchange includes a third party who keeps the money after you ‘sell’ and then pays when a replacement property is found.

Designate replacement property

In a Starker exchange, if you receive the money, you spoil your 1031 exchange. The third party receives the money from the sale of your property. Within 45 days of that time, you must designate a property that you want as a replacement, in writing.

You can designate many properties

According to the IRS, you can select many properties, but you must close on one of them in the end. You can also do the same if the properties are a fair market value compared to the property you sold. The properties must not exceed 200% of the total market value of all properties involved in the exchange.

There is no limit to the number of times you can use 1031. You can use it to change real estate investments avoiding taxes until you eventually sell them. However, be careful to use the services of a professional who observes all the rules applicable to property that depreciates.

The 1031 exchange rule is a good way to get around tax commitments, but make sure you have good advice and guidance before you start.

House Buying Tips for Millennials

Young couple holding house keyring

Young couple holding house keyringMillennials, as defined by the duo Neil Howe and William Strauss, are individuals whose birth year fall between 1982 and 2004. Although there are variants of this interpretation, Howe and Strauss’s definition by far is the most accepted given they were the ones who coined the term in the first place.

Millennials exact timeframe of birth aside, the bigger issue is this: are millennials now equipped with all essential faculties to stand on their own in the world of adults?

Millennials and Property

Perhaps one of the most reliable barometers of adulthood is financial independence. This goes hand in hand with your ability invest in property. 

According to statistics, contrary to popular belief, millennials are not investment-averse. In fact, 86% of this demographic consider renting as less cost-efficient compared to owning a home.

Meanwhile, among those who have already made the jump into property investment, 80% say the decision has made a positive impact on their long-term finances. Still, it goes without saying that this is a jump not everyone can and should make.

Things to Consider

Your credit score greatly factors into applying for a home loan. Ideally, your debt-to-income ratio should not fall beyond 43% for you to earn the trust of your lenders.

Other considerations your loan provider will assess include your current income and how long you have been employed in your current company.

There is a rule of thumb that your home, or mortgage for that matter, can cost up to three times your gross salary per annum. Anything beyond that figure is a risky investment.

Working with a house buying solicitor could help you better navigate these risks.

In the end, only one question needs answering when it comes to property. Do you think you are financially ready for it or not? Should the former be your answer, then go for it and make other millennials proud.

Mortgage Evaluation: What Questions to Ask

Couple reading a document

Couple reading a documentIf you’re like most buyers, you will probably have to borrow money to purchase a home. There are a number of financing alternatives, with mortgages as the common choice. Home loans come are available in different lengths, interest types, and terms.

When shopping for a mortgage, it is deal to check with different sources or lenders. This is because loan availability, down payment requirements, interest rates, and closing costs will vary. It is also important to work with a reliable lender.

What to Check

Primary Residential Mortgage, Inc. and other mortgage companies in Oregon noted that you should watch out for those who use high-pressure sales tactics to encourage you in getting a loan more than what you can afford. You can better evaluate a mortgage by asking the following questions:

  • How much is the required down payment?
  • What are my interest rates going to be? Can they change?
  • How much will my monthly loan payment be?
  • What are terms of the loan?
  • What are the hidden costs?
  • Is there a prepayment penalty?

Comparing Loans

If you’re considering an adjustable-rate loan, you can compare loans better with these questions:

  • What is the cap or the maximum interest rate increase over the life of the mortgage?
  • How do adjustments work? What can happen to my payments?
  • What are the risks? What can I do to prepare for them?
  • Can my loan balance increase?
  • What are the good points? Do they outweigh the risks?

You can use a mortgage calculator to know the estimates of your monthly mortgage payment as well as the amount of house you can afford. It is better, however, to work with a reliable to lender learn more about your options. Getting a pre-approval is also ideal, so you’ll have an edge over other buyers when house hunting or buying.

Every buyer is different, so it’s important to find one that suits you best. Research about different loans, costs, and processes involved to make an informed decision. Note that a bad loan can cost you thousands of the money in the long run.

Mortgage Shopping Points to Remember

Couple reading a document

Couple reading a documentUnless you just won the lotto or was born into a wealthy family, chances are you would need to get a mortgage to finance your home. A lot of Americans do this, without correctly understanding what they are getting into. To avoid the fate of some Americans who fell into the mortgage trap, it is important to understand essential points when shopping for mortgages.

Mortgage rates in Salt Lake City and other parts of the country are affected by various factors. City Creek Mortgage notes that as a borrower, knowing the best step to take can only be known for understanding how mortgages work.

Points to remember when shopping for a mortgage

  1. Rates

Mortgage rates are affected by different factors. Before closing a deal, study the rates in your state properly and understand how it will affect you not just at present, but also in the long run. Seeking professional advice to help you better understand the rates and its implications would be a plus.

  1. Fees

Different lenders charge differently. So it is a must to shop around and ask about their fees as well as its inclusions to know which one is the better deal for you.

  1. Types

There are various types of mortgages depending on your preference and financial capability. When choosing a mortgage type, always remember to consider how entering the deal will affect not just your present status but also your future.

  1. Lender

You can choose between a private and a public lender. Regardless of which type you choose, conducting a thorough background check is a must as various lenders have different policies as well as specific types of services.
Shopping for a mortgage is not as fun as shopping for clothes, but it is something that should be done. Be a wise mortgage shopper and educate yourself as much as possible.

3 Signs You Have Found the Perfect Property to Buy

a couple buying a homeWhen you are buying a house for the first time, you may find that you have some fears about making the wrong decision. You are not alone. Buying property is a huge decision, one that you cannot afford to make a mistake, because it may cost you.

Here are three signs that a home is perfect for you.

You can afford the total cost

The property broker will usually quote the price of a property, but not include any other charges you may incur in the purchase. It is up to you to find out what these costs are. Much of this information is usually readily accessible.

To find out how much stamp duty you will need to pay, for instance, you can use a stamp duty calculator available online.

The house feels comfortable when you enter

You will know you want to live in a home within the first few seconds of opening the front door. If the house feels warm and inviting, then it is probably the one. A suitable home invites you to explore.

You do not feel funny about walking into the bathroom, but feel nice about opening the shower door and stroking the marble.

You can already see where everything will go

You will have no trouble envisioning the arrangement of your potential home. If you already see how perfectly the bed will fit a certain wall the moment you enter the master bedroom, you may just have found the right home.

Take a look at the living room. Can you already see where the tree will go come Christmas? Then you are hooked.

There something about a house that tells you that it is the right fit for you. By evaluating how you feel about the property as you go through it and being sure you can afford its overall cost, it becomes easy to know whether this is your home or not.