The Overlooked Financial Advantages of Homeownership

The Overlooked Financial Advantages of Homeownership | MyKCM

There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with homeownership:

As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home sooner rather than later is right for you.

Ready to start looking for a new home? Begin your search at https://nexthomevictors.realgeeks.com/dani-hallsell/ .  Have a real estate related question? Call, text or email me; I answer questions for free!

Dani

Three Reasons Why Pre-Approval Is the First Step in the 2020 Homebuying Journey

Three Reasons Why Pre-Approval Is the First Step in the 2020 Homebuying Journey | MyKCM

When the number of buyers in the housing market outnumbers the number of homes for sale, it’s called a “seller’s market.” The advantage tips toward the seller as low inventory heats up the competition among those searching for a place to call their own. This can create multiple offer scenarios and bidding wars, making it tough for buyers to land their dream homes – unless they stand out from the crowd. Here are three reasons why pre-approval should be your first step in the homebuying process.

1. Gain a Competitive Advantage

Low inventory, like we have today, means homebuyers need every advantage they can get to make a strong impression and close the deal. One of the best ways to get one step ahead of other buyers is to get pre-approved for a mortgage before you make an offer. For one, it shows the sellers you’re serious about buying a home, which is always a plus in your corner.

2. Accelerate the Homebuying Process

Pre-approval can also speed up the homebuying process, so you can move faster when you’re ready to make an offer. In a competitive arena like we have today, being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams.

3. Know What You Can Borrow and Afford

Here’s the other thing: if you’re pre-approved, you also have a better sense of your budget, what you can afford, and ultimately how much you’re eligible to borrow for your mortgage. This way, you’re less apt to fall in love with a home that may be out of your reach.

Freddie Mac sets out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

Local real estate professionals also have relationships with lenders who can help you through this process, so partnering with a trusted advisor will be key for that introduction. Once you select a lender, you’ll need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac also describes the ‘4 Cs’ that help determine the amount you’ll be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or Cash Reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

While there are still many additional steps you’ll need to take in the homebuying process, it’s clear why pre-approval is always the best place to begin. It’s your chance to gain the competitive edge you may need if you’re serious about owning a home.

Looking for a reputable local lender to get your pre-approval started? Call, text, email or PM me today! 

Dani

Taking the Fear Out of the Mortgage Process

Taking the Fear Out of the Mortgage Process | MyKCM

A considerable number of potential buyers shy away from the real estate market because they’re uncertain about the buying process – particularly when it comes to qualifying for a mortgage.

For many, the mortgage process can be scary, but it doesn’t have to be! 

In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and a good credit history.

Once you’re ready to apply, here are 5 easy steps Freddie Mac suggests to follow:

  1. Find out your current credit history and credit score– Even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score® for all closed loans in September was 737, according to Ellie Mae.
  2. Start gathering all of your documentation– This includes income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
  3. Contact a professional– Your real estate agent will be able to recommend a loan officer who can help you develop a spending plan, as well as help you determine how much home you can afford.
  4. Consult with your lender– He or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
  5. Talk to your lender about pre-approval– A pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) and demonstrates to home sellers that you’re serious about buying.

Bottom Line

Do your research, reach out to professionals, stick to your budget, and be sure you’re ready to take on the financial responsibilities of becoming a homeowner.

Ready to start looking for a new home? Begin your search at https://nexthomevictors.realgeeks.com/dani-hallsell/ .  Have a real estate related question? Call, text or email me; I answer questions for free!

Dani

How Property Taxes Can Impact Your Mortgage Payment

How Property Taxes Can Impact Your Mortgage Payment | MyKCM

When buying a home, taxes are one of the expenses that can make a significant difference in your monthly payment. Do you know how much you might pay for property taxes in your state or local area?

When applying for a mortgage, you’ll see one of two acronyms in your paperwork – P&I or PITI – depending on how you’re including your taxes in your mortgage payment.

P&I stands for Principal and Interest, and both are parts of your monthly mortgage payment that go toward paying off the loan you borrow. PITI stands for Principal, Interest, Taxes, and Insurance, and they’re all important factors to calculate when you want to determine exactly what the cost of your new home will be.

TaxRates.org defines property taxes as,

“A municipal tax levied by counties, cities, or special tax districts on most types of real estate – including homes, businesses, and parcels of land. The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor.”

This organization also provides a map showing annual property taxes by state (including the District of Columbia), from lowest to highest, as a percentage of median home value.How Property Taxes Can Impact Your Mortgage Payment | MyKCMThe top 5 states with the highest median property taxes are New Jersey, New Hampshire, Texas, Nebraska, and Wisconsin. The states with the lowest median property taxes are Louisiana, Hawaii, Alabama, and Delaware, followed by the District of Columbia.

Bottom Line

Depending on where you live, property taxes can have a big impact on your monthly payment. To make sure your estimated taxes will fall within your desired budget, let’s get together today to determine how the neighborhood or area you choose can make a difference in your overall costs when buying a home.

Thinking about buying a home? Download my free Buyers Guide, “Things to consider when buying a home”.

Dani

Streamlining the Lending Process

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If you are starting a search for a new home, most likely you will need to get a home loan. The process might seem overwhelming if you have not obtained a loan in a long time, even more so for first time home buyers. The lending process does not need to be difficult, and by being prepared, you can streamline the process and ensure you can get the best loan for your needs.

  1. Choose a Lender: The first step is to find a lender. You might start at your bank or credit union. Another good source for referrals is your REALTOR®, family, and friends. The lender should have access to a variety of programs as well as the government options; VA and FHA programs.
  2. Be Prepared: Before you meet with the lender, gather the information you will need. Generally, you will need to provide current pay stubs, W2s, bank account statements, and the last two years of your tax returns. If you are divorced and, or, have child support obligations, bring the final court document with you as well.
  3. Understand Your Limits: Typically, you will be able to borrow up to 31% of your gross monthly income. Also, the lender will require that you have no more than total monthly debt of 36% of your gross income. Be prepared to disclose all your debt, even if it does not appear on your credit report. Your loan officer is your advocate and there to help you succeed.
  4. Please Don’t Make Any Credit Changes: Once you have started the loan process, it is critical that you make no changes to your credit. Postpone any big purchase, do not apply for new credit of any kind and do not pay off any credit cards. It’s also important not to change jobs during the approval process, even if it’s for more money. Before you do anything, talk to your lender.

Getting a home loan is not as difficult as it was a few years ago, but it is essential to plan early and do the right things. Once you decide to buy a home, speak to a lender immediately and then follow their advice, and you will find the loan process simple to manage.

Ready to buy and/or sell a home? Call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Home Buyer: The Internet Can’t Replace Your Real Estate Agent

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We live in the information age and the Internet offers advice on every topic; real estate is no exception. With more and more home buyers starting their home search online, they are bombarded with advice and information-it can be easy to think that you can learn everything you need to know just by reading articles online.

The truth is that your real estate agent does much more than answer your questions and open doors with a special key. A professional real estate agent will be there every step of the way. They have the experience necessary to navigate the complicated home buying process and solve common hiccups that present themselves in every real estate transaction.

Your real estate agent is a local professional. They know the local housing inventory, what is happening in the community that may affect home prices, and they have access to the local Multiple List Service that provides the latest homes for sale (real time), and sold homes.  They have a network of professionals who will work as a team to help you through the process. These include such professionals as lenders, title companies, transaction coordinators, home inspectors, contractors and handymen, home warranty companies and moving companies.

Most importantly, your agent is your ally in the home buying process. They negotiate on your behalf, armed with experience and understanding of customary charges, costs, and terms. They will ensure that the price you pay for the home is fair for the conditions and neighborhood. They will negotiate repairs, if needed and make sure you are protected with the proper contingencies.

The Internet offers lots of great information, but the most critical step you can take when buying a new home is hiring a local professional real estate agent. Their knowledge and expertise can’t be found by reading an article or two online.

Ready to buy and/or sell a home? Call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Home Buying Myths

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Buying a home can seem like a massive undertaking. You don’t need to be a first time home buyer to find the process overwhelming. There is so much information available, how can you tell what’s right and what’s a myth? Understanding the difference can help you make the best decision for you and your family goals.

Here are few home buying myths, and the truth behind them.

  • The first step is finding the Right House: Before you head out shopping, speak with a lender to understand your financial options and the monthly payment you can afford.  There is nothing more disheartening than finding the “home of your dreams,” only to find out it is out of your price range.
  • You can’t buy a home without perfect credit: The truth is there are many loans available which still offer reasonable interest rates for those without that ideal credit score.  Once again, start your home buying process by speaking with a lender.
  • You need 20% down payment: First time home buyers can use FHA financing for as low as 3.5% down. There are other programs too, such as VA and some conventional loans with less than 20% down.
  • Interest rates are going up; I can’t afford a home: Back in the 1980’s interest rates were up to 18% and people still bought and sold homes! No matter what the interest rates are, your lender will tell you what you can afford to buy considering principal, interest and tax payments.
  • You don’t need an Agent: An agent not only knows the market and can help you with value, but also customary charges, negotiations, and solutions to common hiccups. Your agent will also be your liaison with lenders, Title companies, home inspectors, Home Warranty companies and home contractors.
  • New homes don’t need a home inspection: Every home should have a home inspection by a licensed inspector to check for existing or potential problems.

Buying a home is one of the most important financial decisions you are likely to make in your lifetime. Take the time you need to understand the process and learn from the professionals; don’t assume that everything you read is right.

Ready to talk with a lender? Send call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Buying Your Dream Home When Inventory is Low

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If you are actively searching for a new home, you know that low inventory of homes for sale has made things difficult for buyers.  In a “Seller’s Market” there are not many homes for sale, and when a new home comes on the market, it is met with multiple offers.  Not only do these homes sell within days, but often over asking price.

If you are a buyer in this market, you may feel overwhelmed. However, with a solid strategy, you can still find your dream home, even when inventory is low.

  • One Step at a Time: Home buying is not a one-time moment, but a series of steps. Make decisions as they come, as you move through the process; make sure each discovery is one you can live with. Your REALTOR should provide you with a Home Purchase Process to help with the buying process.
  • Start with a Lender: Understand your financial possession and lending options before looking for a new home. There is nothing more disappointing than finding the “home of your dreams,” and then discovering that you cannot qualify for the loan to buy it.   Most buyers have an “idea” of how much they can afford to buy, but a lender can tell you what mortgage you can qualify for and the monthly payments with principal, interest, and taxes.  You will also receive a Pre-approval letter from your lender so the seller will feel comfortable accepting your offer when submitted.
  • Write a Competitive Offer: You don’t want to over-pay for a new home, but if the property is priced at Market Value and you want it, offer that amount. If you don’t, the next buyer will.
  • Keep Contingencies to a Minimum: Stick to the basics: home inspection, well and septic, attorney approval, and finance approval. If you are buying with FHA financing, you may ask for 3% towards your closing cost, and if you have a home to sell, you may include a 72-hour contingency.
  • Write a Clean Offer: Make it easy for the sellers to say “Yes!”.

Ready to look at new construction options? Please send me a message using the box to the right, or call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

What to Look For in a New Home Builder

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You’ve found the perfect patch of land, and now you’re ready to build your new home, from scratch. Or, you have decided that a new home in a developing neighborhood is the right choice for your new home. The right home builder is the key between a beautiful custom home and a project filled with delays and extra cost. If you don’t have a great builder on speed dial, how can you find an excellent new home contractor? Here are a few tips for making sure you get the best builder for your project.

• Build a list of options: The first step is to find local builders who create homes which suit your lifestyle and taste. Know what you are looking to build before looking for a builder to take on the project. Do you want to build a custom home on the property your purchase, or do you want to build a production home in a developing neighborhood?

• Know your budget: Talk to a local lender to find out what you are comfortable spending on a new construction home and what payment options are available.

• Do your homework: Get a list of local builders from your REALTOR®, then speak to the builder’s who do they type of construction you are looking for. Ask for references and take your time in doing your due diligence. Ask for past clients who will be willing to meet with you and show you the actual homes they have built. Ask about the process and if they finished on time. Ask about problems and find out how the builder solved them.

• Learn about the subcontractors: A strong builder works with the best craftsmen in the area. Ask about the subcontractors and interview them and check their references as well.

Learn all you can about the builder and their projects. Make sure the homes are built with solid materials and construction techniques. Before you choose anyone, you should feel wholly assured they will create a great home and completely understand your vision.

Ready to look at new construction options? Send me a message using the box to the right, or call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.
Dani

Five Things You May Not Have Considered When Selling Your Home

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How are your closets looking? Are they stuffed to the brim with never-used guest towels, old toys and the fine china you never use? Here is a tip: if your closets look like they can’t fit another thing inside, buyers are going to assume your house does not have enough storage space. And storage space is as important to most buyers as the number of bedrooms and bathrooms!

Here are five home selling secrets to consider when selling your home. 

  1. Your Closets Should be Mostly Empty: Every buyer is looking for storage, and you’ve likely outgrown yours. Appeal to potential buyers by de-cluttering your closets, or even putting some of your extra items into an off-site storage unit while your home is on the market. Make sure that what you do leave behind is neat and organized. For advice on how to prepare your home for a move, download the Betty-on-the-Move-Your-Moving-eGuide.
  2. Web Appeal is the New Curb Appeal: By the time a buyer shows up to look at your home, they will have likely toured it via online photos. What does this mean? First, your home needs to look its absolute best when the listing photos are taken. Second, it’s essential to include all the home’s best features in the online listing photos. Whether it be a hot tub, a large backyard or an excellent basement bar area, your buyers should know what to expect when they arrive for a showing or open house.
  3. The First two Weeks are the Most Important for Sellers: If you think you’ll price your property high and bring down your price gradually if needed, think again. Homes receive four times the traffic in the first two weeks after listing so a property lagging on the market can be a red flag to today’s buyers. Think about the eager buyers who will see your home in “Just Listed” ads across the web and in email alerts, and offer them a fair price right away. The feeling of getting early showings or an offer will far outweigh the feel of an offer that comes after you’ve lowered your price a month later.
  4. You Need to be Ready to Show at Any Time: Today’s buyers are excited and competitive. They may be willing to drop everything to see your home the minute it comes across their screen. As a result, you must be vigilant to clean your house after every meal and between laundry days. Don’t leave for work, or even a quick trip to the store, without making sure your home could be toured before you return.
  5. Be Ready to Sweeten the Deal: We are still in a moderate seller’s market, so most sellers are at an advantage. But if your home isn’t quite modern enough, or isn’t as nice as the one down the road, you may have to sweeten the pot by paying closing costs, buying a home warranty for the buyer, or even just getting a pre-sale home inspection so buyers are confident in your home’s ability to sell as-is.

The takeaway? Don’t assume that a seller’s market means you’ll get multiple offers and your choice of well-qualified buyers. Be realistic about how your home will be received, and you could end up selling sooner.

Ready to list your house and start looking for Your NextHome? Send me a message using the box to the right, or call, text or email me! If you are active on social media, please look me up on Facebook, LinkedIn, Twitter and Instagram using the icons on the bottom right of this page.

Dani