Why Millennials Choose to Buy

kim Kardashian

April 11, 2017Buying, First Time Home Buyer, Important, Millennials, Real Estatebuy, buyrealestate, gina villanell, invest, Millennials, sells, villanellsells, why choose to buy, younginvestors[email protected]

7 Steps to Buying a Condo

Thinking about buying a condo? Great! It can be a very exciting process, and even more so when you know what you’re doing.

But when you don’t know what you’re doing, a condo purchase can be downright scary and costly. No need to fear though, because we’re going to cover the top seven things you should do when buying your first condo.

1. Get pre-approved for a mortgage.

When you’ve been pre-approved by a mortgage lender, you’ll have more leverage with sellers. Pre-approval means a lender has carefully reviewed your financial situation and found you capable of taking on a loan up to a specified amount. It doesn’t guarantee that you’ll get the loan, but it shows sellers you’re serious about buying.

2. Choose the right location.

“Location, location, location” is one of the most commonly used expressions in the real estate industry, and with very good reason. People often choose condo units over traditional homes with a certain lifestyle in mind. So be sure your condo’s location can accommodate that lifestyle. Experiment. Test out the drive from the potential condo to your work, school, shopping, etc. Does it offer the features and amenities you are seeking?

3. Conduct thorough research.

Condo life usually comes with a number of bylaws, association rules and other declarations. Be sure to get this documentation up front to avoid any surprises later on. You’re making a big financial investment, so you’ll need to obtain all of the facts about what’s permitted and what’s prohibited. While you’re at it, get to know the developer too. Find out their history and expertise. Talk to a few of the residents (when applicable) to get their input.

4. Ask about building services.

Condos often have “built-in” services that residential homes do not, such as recreational space. This can be part of their overall appeal. But don’t assume your prospective condo comes with a certain service. Find out to be sure. Is there a door man? Is there a maintenance man or building engineer? If so, what hours will they be available? What other facilities does it provide?

5. Learn about pre-construction pricing.

Developers will sometimes offer significant price breaks in the early stages of development. They do this to attract buyers during the pre-construction phase, when it’s harder to sell a unit. As construction begins on the new development, demand usually goes up. And we all know what happens to prices when demand rises! So if you take advantage of pre-construction pricing, you could save a lot of money in the long haul.

6. Remain flexible.

If you’re buying a condo during the pre-construction phase, give yourself plenty of flexibility with the closing date. Construction delays are not uncommon, so it’s important to consider this when locking in your interest rate, setting a closing date, scheduling a move, etc.

7. Take advantage of tax deductions.

Speak with your accountant to find out what portion of your assessment is tax-deductible. Other expenses that add value to your condo may also be tax-deductible. Get an understanding of these tax implications before making your purchase.

What Real Estate Agents Do for Home Buyers

What is the role of a real estate agent during a home buying transaction? If you ask a hundred different agents this question, you will likely get just as many different answers.

In truth, the primary role of a real estate agent when working with buyers is a simple one. Your agent’s primary obligation is to help you find a home that meets your needs, and to help facilitate the purchase. In exchange for this service, the real estate agent is paid a commission.

The Commission Earned

Traditionally, real estate agents have earned a six-percent commission for services rendered. The commission is typically split evenly, with three percent going to both the buyer’s and seller’s agent. The commission is usually paid by the seller involved in the transition.

These days, some real estate companies offer “stripped down” services at a reduced commission. For instance, they might only help with the paperwork and closing process, once you have already found a home. They charge a lower commission rate because they offer fewer services than what you would get from a traditional agent relationship.

The Duties Performed

The roles and duties performed may also vary depending on the agent. Some consider themselves selling agents, concentrating their efforts on assisting home sellers. Others consider themselves buying agents and focus their efforts on helping buyers primarily. The majority of real estate professionals assist both buyers and sellers (though usually not within the same transaction).

In the early stages of buying a home, the agent plays an important role. This person will (or should) serve as your guide on the quest to find a new home. He or she should listen to your needs and ask questions in order to determine what is the right kind of home for you, and where to find them.

Your agent should be able to compile a list of potential homes that may suit you. This list will point you in the right direction when you start the house hunting process. Once you find the home you are interested in buying, your agent will help negotiate the deal between you and the seller, serving as a go-between to make offers and counter-offers until an agreement is made.

The Process Delivered

Your agent should also keep the communication flowing and the process moving. This will be done through follow-up phone calls and emails, keeping tabs on paperwork, etc. He or she should keep you updated on a regular basis, and should keep an open line of communication with you.

During the pre-closing inspection (a.k.a. final walk-through), your agent should be with you in case you find any issues that need to be addressed, such as scheduled repairs that were never made. In these cases, your agent will attempt to negotiate some type of agreement regarding the damage.

Depending on the state where you live, your agent may also play an active role in the closing / settlement, or they may not be involved much at all. Either way, it’s helpful to have a professional on hand who is familiar with the transaction from start to finish, just in case additional information or negotiations are needed.

The role of the buyer’s real estate agent is an important one. For this reason, it’s important that you meet with prospective representatives and choose one you are comfortable with. You should be equally confident in their professional abilities and their communication skills. After all, the person you choose will be your direct representative through the entire home buying process.

How Will Spouse’s Bad Credit Affect Our Mortgage Loan?

Question: “I have excellent credit. But my husband has bad credit. We want to buy a house together, using our combined income. How will his credit situation affect our chances of getting approved for a home loan? Can we just use mine?”

For richer or poorer, in sickness and in health, and with good credit or bad. Marriage is all about sharing!

All jokes aside, here is the short answer to your question:

If you plan to use both incomes to qualify for a loan, the lender will probably look at both of your credit scores as well. If they only looked at your excellent score, you would have an easier time getting approved and would probably qualify for a great interest rate. But your husband’s low score will likely come into the picture, and it could affect your ability to secure financing. It could also cause you to take on a higher rate.

Here’s the longer answer to your question:

When you marry somebody, your credit scores remain separate. Yours is yours, and his is his. They do not merge in any way. You share everything else in marriage — just not your credit scores.

Of course, if you apply for some kind of financing as a couple (like a mortgage loan), the lender will review both of your scores. They do this to see how both of you have borrowed and repaid money in the past. But they’ll also look at your combined income, and that could work in your advantage in terms of securing a loan. So it often becomes a tradeoff. Having two incomes could help you qualify for a loan, while the lower credit score could create problems. It all comes down to how the lender views you as a “total package.”

This is actually a common scenario. A lot of married couples are in the same situation as you. One person will have excellent credit, while the other spouse will have bad credit. But they want to use their combined incomes in order to qualify for a certain loan amount. The bottom line is that if both names are on the loan documents, and both incomes are being used to qualify, then both credit scores will be reviewed as well.

There’s an article about this on myFICO.com, a website owned by the company that created the FICO credit-scoring model. Here is what they said to someone asking the same question as you:

“Even if your wife’s good score would qualify her for a loan with a good interest rate, your bad score may mean that, as a couple, you would only qualify for a loan at a worse interest rate. If your score is very bad, you may not qualify at all.”

Can You Get a Loan on One Income?

If your spouse’s credit is so bad that it will affect your ability to secure financing, you basically have two choices. One option is to apply for the loan by yourself, using only your income to qualify. The drawback here is that you’ll qualify for a lesser amount, when using a single income instead of two.

You could also wait until your spouse has a better credit score, and then apply for a loan. How to improve a score is another lesson entirely. In short, it is best accomplished by paying all of your bills on time, and by reducing credit card usage and balances for a more favorable “utilization ratio.”

Having a spouse with bad credit is not necessarily a deal-breaker as far as mortgage loans go. The lender will consider the bigger picture, including your income stability, employment, debt-to-income ratio, and other factors. But it does require some extra consideration on your part. Hopefully this article gives you some things to consider. Good luck to you and your spouse in your home buying ventures!

FHA Mortgage Insurance Premiums Have Been Reduced for 2017

Do you plan to use an FHA loan to buy a home in 2017. If so, I have some good news. The Department of Housing and Urban Development (HUD) announced this week that it would reduce the FHA annual mortgage insurance premium (MIP) for 2017. This change will take effect later this month, and it could save homeowners an average of $500 this year according to officials.

In 2017, the annual MIP for most home buyers who use a 30-year FHA loan will be reduced to 60 basis points, or 0.60% of the loan amount. See the table below for details.

Mortgage Insurance Premium Table, and Additional Details

Borrowers who use the Federal Housing Administration (FHA) loan program to purchase a house are generally require to pay two different mortgage insurance premiums, or MIPs. This insurance protects the lender in the result of borrower default.

There’s an upfront premium, usually set at 1.75% of the loan amount.
There’s also an annual premium, which is the one being reduced for 2017.

On January 9, 2017, HUD officials announced they would be lowering the annual mortgage insurance premium rate by 25 basis points, or 0.25%. This is great news for borrowers who plan to use an FHA loan to buy a house, because they could save an average of $500 per year according to HUD.

The revised annual mortgage insurance rate will apply to most new FHA mortgage loans with a closing / disbursement date on or after January 27, 2017.

The table below was published along with the official policy update sent out by HUD on January 9, 2017. You’ll see the reduced mortgage insurance premiums under the “New MIP” column on the right.

The FHA’s MIP tables can be confusing at first glance. But there’s a method to reading them. For starters, you’ll want to find your loan’s term or length. If you’re going to use standard 30-year FHA loan, refer to the top half of the table where it says: “term > 15 years.” Next, use the loan amount column that applies to you. The “LTV” column is essentially the inverse of your down payment. Most FHA borrowers put down 3.5%, since that’s the minimum down payment for the program; so the LTV in this case would be 96.5%.

Bottom line: Most FHA borrowers in 2017 will end up with an annual mortgage insurance premium rate of 60 basis points, or 0.60% of the loan amount.

Pros and Cons of the Program

There are pros and cons to every kind of mortgage loan, and this applies to the FHA program as well. Borrowers who use this program generally encounter the added cost of mortgage insurance.

On the surface, this might seem like a drawback to using an FHA loan to buy a house. But this insurance coverage allows people to buy a home who wouldn’t otherwise qualify for a mortgage loan with such a low down payment.

In order to avoid mortgage insurance entirely, you would have to make a down payment of 20% or more, or use a “piggyback” loan strategy. Thus, the FHA program is a viable option for home buyers with limited funds saved up for a down payment.

You Won’t Use Zillow Again After Reading This

Did you know that by using Zillow you’re missing out on a ton of listings?! National Real Estate Websites focus on Big Geographic Areas and spend most of their money on advertisements making it harder to find accurate information regarding the properties you’re interested in. As a Local Realtor, Buying/Selling/Renting, Market Data, and Neighborhood Resale History are conversations that I have daily. Don’t roll the dice on one of the Largest Financial Transactions you will have by using National Real Estate Websites. If you’re searching for a home and want reliable information you can trust visit my MLS Search at https://ginavillanellrealtor.com/search-mls/ and take advantage of all the properties you won’t be seeing on the other sites!

Questions, Comments or Concerns? Please Feel Free to Contact Me using the ‘Contact’ Button in the upper right corner or to Text/Call (954) 812-2832, I look forward to speaking with you!

Gina

House Hunting: 10 Tips for a Smoother Home Search

House hunting is one of the most exciting parts of the home buying process. But it’s also where a lot of first-time buyers make mistakes. Without a solid plan in place, the house hunting process can be a lot of effort with little reward. That’s where this checklist comes in!

Here are ten tips to help you get the most out of your house hunting experience.

1. Create a Realistic Checklist

Get out a sheet of paper, put on your “realism” hat, and start writing down the things you need in a home versus the things you want. You can organize them on the page however you like, as long as you separate the needs and the wants. Put a box next to each item, and then make photocopies.

When you visit a home, take a copy of the checklist with you and write the home’s address at the top. Then move through the house and check off what it does and does not offer. This will help you remember which house had what, especially when you’re looking at many properties.

2. Be a Proactive Hunter

Your real estate agent will help with the house hunting process. (You are using an agent, right?) But don’t rely solely on your agent. Go out there and do some hunting yourself. Check out the websites listed below for starters, and then start driving through neighborhoods and communities.

3. Get Web Savvy

The Internet can reduce your house hunting time by 50% or more. By previewing homes and researching neighborhoods online, you can weed out the ones you don’t want to visit. This will save you time, energy and gas money! At a minimum, check out Realtor.com, Trulia.com, and Zillow.com. If you’re considering foreclosure homes as well as regular listings, check out RealtyTrac.com as well.

4. Play Detective

When visiting a home, don’t be shy about asking the sellers (or their agent) plenty of questions. Be friendly about it, but be thorough. Likewise, feel free to do a reasonable amount of “snooping.” Don’t violate the seller’s privacy — just be sure to look in all the dark corners, the basement, tools sheds and the like.

5. Validate the Asking Price

If asking prices were set in stone, they would be called “selling prices” from the start. But that’s not how it works. You should always compare the asking price of a home to recent sales in the area. Your agent should be expert at providing such “comps” to help you validate (or debunk) the seller’s asking price.

6. Visit During Rush Hour

That peaceful property you visited at 10:00 in the morning might be totally different at 5:30 in the evening. By visiting a home during rush hour, you’re evaluating two things at once. First, you’ll find out if traffic snarls make it hard to enter or exit the neighborhood. Secondly, you’ll be able to judge the noise factor at its loudest time of day.

7. Test the Drive

While we’re talking about rush hour, why not test out the morning commute to your work? It might seem silly to do a rush hour commute from a home you’re only considering, but think about how much time you’ll spend commuting day after day. It’s a major quality-of-life issue, so it deserves some consideration.

8. Look into the Future

Will that beautiful meadow across the street be a shopping center or a highway in two years? You won’t know unless you do the research. Talk to the city or county to find out what their plans are for the area around the home. Don’t expect the sellers to volunteer such information, because it’s not in their interest to deliver bad news about the neighborhood. Nor are they required to provide such information.

9. Bring a Digital Camera

Digital cameras are ideal for house hunting. You can take pictures of the homes you visit and save them in labeled folders on your computer. Which home had the swimming pool? Which one had the wood floors and crown molding? Just look at the photos and you’ll remember.

10. Bring a Devil’s Advocate

When visiting a home that could potentially become your own, it’s easy to be emotional. That’s good and bad. Sometimes, emotion has a way of clouding our better judgment. You can counter this by bringing a friend or family member along on house hunting trips. In addition to keeping you company, a “disinterested witness” can offer an objective point of view. This is crucial when making such a large purchase.

January 7, 2017Buying, First Time Home Buyer, Moving, Real Estate, Tipschecklist, florida, fort lauderdale, house, house hunting, hunting, miami, Real Estate, south florida, tips[email protected]

Should I Buy My First Home in 2017?

Happy New Year! Will 2017 be the year you buy your first home? Are you still on the fence about it? Here is some updated information to help you make an informed decision, and to answer the question: “Should I buy my first home in 2017?”

Buying Your First Home in 2017

In most U.S. cities, buying a home makes a lot of sense right now. The housing market is stable, with rising home values reported across the nation during 2016. The job market and the broader economy have improved significantly since the recession years. And in many areas, owning a home is actually more affordable than renting right now.

But these are just the external factors. There are personal considerations as well. You have to make sure buying a home makes sense for you, based on your current financial and lifestyle situation.

For starters, ask yourself the following questions:

Do you plan to live in the area for at least the next few years? If so, buying might make sense for you.
Do you have steady and reliable income right now, with a reasonable expectation for continued employment and income? If so, you can put another check mark in the “buy” column.
Would owning a home improve your quality of life in some way?

If you answered yes to these questions, then 2017 might be a good time to buy your first home.

Mortgage Rates Have Risen

As a first-time home buyer, you should be aware that mortgage rates have risen in recent weeks. In fact, by the last week of December 2016, the average rate for a 30-year home loan had risen to its highest point in more than two years.

At the start of 2017, the average rate for a 30-year mortgage was 4.32%. Analysts with the Mortgage Bankers Association expect rates to rise gradually throughout 2017, possibly reaching 4.7% (for a 30-year loan) by the end of the year.

The point is, if you postpone your home-buying plans until later in 2017, you could end up paying more for a home — and for a mortgage loan. So a strong case could be made for buying sooner rather than later.

I Can Help You Every Step of the Way

I specialize in helping first-time home buyers succeed. I can help you find a home that meets all of your needs, and make a smart offer based on current market conditions. This is the first step to success when buying your first home, and it all starts with market research. This is one of my key skills.

I can help you navigate the complexities of the local real estate market in order to find the ideal home. Please contact me at your convenience so we can talk about your home buying needs.