Posted by Andrew Abu Realtors on 11/27/2017

Once you have gone through the pre-approval process and have narrowed down your home search, there’s a good chance you’ll soon find a place that you want to make an offer on. This can seem like a huge step for any first time homebuyer. Even seasoned home buyers feel butterflies when the time comes to make an offer on a home they love. Before you even start your home search, you should become educated on how to make a good offer in order to land the property that you really want. There’s so many factors that effect your offer including the surrounding properties and the current state of the market. Here are a few very important pieces of advice that you should heed in order to have a successful time securing a home and closing the deal. 

Craft A Persuasive Offer

In many areas there’s a low inventory of homes and a high number of those seeking to buy. This means that you’re not guaranteed to get a property that you have made an offer on. Lowball offers might not be at all competitive and even insulting to sellers in certain markets. Often, you may need to make an offer of more than the asking price if you’re in love with a home. By working with your real estate agent and doing the right research, you can craft an offer on a home that will be compelling for sellers.    

Decide On Your Contingencies 

Once an offer has been accepted, it’s time to get to work on those contingencies. Be especially mindful of financing contingencies. If something falls through in the process, you’ll want to be sure you can get the deposit you made back. Also keep in mind that sellers love reliable buyers who have already been preapproved.  

Home inspection contingencies are another area of importance. After you sign the purchase agreement and the inspection is complete, you’re allowed to ask the seller to make repairs or provide you with a counter offer. While this can be one of the more nerve-wracking aspects of home buying, it has many positives. Home inspections protect buyers from purchasing a home that they can’t live with in cases of extreme mold, termites and other environmental and structural issues. 

The appraisal contingency is also important. In order for you to qualify for a loan, the property must be appraised. The property must be valued at or above the purchase price. A loan will only be approved by a lender up to the appraised value. If your home loan is $400,000 but your home of choice is appraised at $390,000, you’ll have a problem.       

Your Finances Matter Until You Get To The Closing Table

Don’t go crazy with all kinds of purchases before you reach the closing table. Opening a new credit account at your favorite furniture store, for example, could lead to a disastrous surprise on closing day. Hold off on big purchases until after you secure your home. Also avoid making large transfers or deposits from your bank account. don’t do anything to negatively affect your credit score

  

Know What To Bring To The Closing

Don’t show up to the closing for your home purchase unprepared. You’ll need to have the following items: 


  • Photo ID
  • Checkbook
  • Cosigners 



Think Ahead


Be sure that you think of the future when you’re purchasing your home. You’ll need to have enough cash flow to pay for things like property taxes, home insurance, utility bills and even new furniture for your home. Plan your future mortgage payments accordingly. Some companies have payments that are monthly or bimonthly. 


While buying a home is a huge undertaking, with the right plans in place, the process will be as seamless as possible. With the right plans, the moving truck will be pulling into the driveway before you know it.      





Posted by Andrew Abu Realtors on 10/23/2017

Many Americans who purchased their home when they had lower credit, a shorter employment history, and less money stand to gain from refinancing their mortgages. However, most miss out on this opportunity or don’t realize it in time to save potentially thousands in interest payments.

According to recent data, 5.2 million Americans could save, on average, $215 per month if they refinanced their loan. But many homeowners are hesitant to refinance.

Whether it’s because of the inconvenience, the cost of refinancing, the worries about something going wrong, or uncertainty about whether they’ll actually save money if they go through the process, millions of homeowners are missing out.

So, in this article, we’re going to talk about some reasons it may be a good idea for you to refinance. If you’re one of the millions of Americans with a mortgage who are thinking about refinancing, this post is for you.

Riding the wave of the economy

Interest rates on home loans are historically low right now. As a result, homeowners can save by refinancing simply due to changing tides of the real estate market. Although mortgage rates have increased slightly over the past two years, they’re still on the low end, so this could be your last chance to save.

To consolidate your debt

Credit cards, auto loans, and other forms of debt can add up quickly. If you have a high-interest rate on your other debts, refinancing could be a good way to consolidate and save.

This can be achieved through a home equity loan or by refinancing with a cash-out option. This means you refinance your mortgage for more than you currently owe and take the remainder in cash to pay off your other debts with high-interest payments.

Typically, you need to have at least 20% equity (or have paid off 20% of your mortgage) to be eligible for this option.

Small percentages count for more now

It was once said that refinancing only made sense if you would receive a lower interest rate of at least 1-2%. However, with the prices of homes increasing over the years, sometimes even a small change, such as .75% is enough to save you substantial money on your repayment.

You’re able to repay early

One of the best ways to save on a home loan is by refinancing to a shorter term. Going from a 30-year loan to a 15-year loan can save you thousands. There are several calculators available for free online that will enable you to estimate how much you could save by refinancing to a 15-year mortgage.

You got a raise

One of the best times to refinance is when you can be certain that you can afford to pay off your loan sooner. As people progress in their career, it isn’t uncommon for them to refinance their loan so that they can spend more each month but save in the long run.

Since you have a higher income, and likely higher credit, you can also refinance a variable rate loan to lock in a lower fixed rate.






Posted by Andrew Abu Realtors on 9/25/2017

For the generation that grew up at the height of the subprime mortgage crisis, buying a home is a scary concept. Many young people in the 18-34 age range are dealing with high rent, a poor job market, unpaid internships, and student loans the size of a home loan. Yet, others are finding their footing and realizing that owning a home is advantageous in the long run. If you're thinking of delving into the world of home ownership for the first time here's a crash course in Home Buying 101.

Figure out your finances

You should be an expert at you and your significant other's personal finances if you are thinking about buying a home. The first thing to look at is your income and expenditures. Put the following information in a spreadsheet:
  • Total monthly income
  • Total monthly expenditures (bills, gas, food, etc.)
  • Total monthly savings
  • Total savings and assets
  • Credit and FICO score (request both of these online)
When crunching these numbers you should (hopefully) find that your income is higher than your expenditures and your savings should account for most of the difference. If your savings is lower than it should be, you either missed something on the expenditures list or you are spending more than you should be if you want to buy a home. Down Payments Down payments on a home, post-financial crisis, range from anywhere between 0-25 percent of the price of the home, 20 being the median. A down payment ideally shouldn't break your savings in case you have any unforeseen expenses once you buy your home. Moving is time-consuming and can be pricey, so you'll need to account for this in your finances.

Lock Down Your Financing

There are several types of mortgages that you'll need to choose from, and you'll want to learn about fixed and adjustable mortgage rates. This information should be informed by your long-term plans. Are you looking for your first home or your forever home? If you don't plan on fully paying off the home you might look for a low, adjustable rate while you earn money. But if you want to stay in your home until it's paid off, a fixed rate might be better for you.

Finding and buying your home

Once you've determined your price range, start thinking about things like location and the kind of home you can afford. If you're handy with tools and have the time, it might be in your best interest to buy a home than needs some work at a lower cost. If you'd rather put in more hours at work, go with the home that needs less work and save money that way. Depending on whether or not you're in a buyer's market or a seller's market, the ball can be in your court or the seller's. In a seller's market, which is more likely today in many parts of the country, the seller will have more leverage in negotiations, including closing dates and move-out dates. Due to high competition, you should also be prepared to miss out on some offers. But be patient, and you should find the home you're looking for.  





Posted by Andrew Abu Realtors on 7/10/2017

Houses located in emerging or progressive areas under development could yield a rewarding financial return. These houses could also yield social rewards. During the early years of development, you might have to endure construction sites and noise. Several months or a year or two might pass before houses in the community fill with neighbors, people who may quickly become among your closest friends.

Hidden costs of buying a house

A place to call your own, great neighbors and a community that is growing and increasing your house's value can make buying a house a solid financial and personal decision. To truly be advantageous, you need to know everything that you're taking on when you buy a house.

The principal is the largest part of your mortgage. It's also the part of owning a house that you might pay the most attention to. What you don't want to do is make the mortgage principal the only part of the owning a house that you focus on. In addition to the principal, when you buy a house, you will likely have to pay expenses like those listed below:

  • Loan interest - Mortgages with adjustable rate interest can start low, but may not stay that way. A variable rate mortgage and a tracker mortgage are other types of mortgages that could increase should interest rates hike. A fixed rate might be higher, depending on when you buy a house, but a fixed rate mortgage could keep your monthly output steady.
  • Closing costs - Items included in closing costs are the first month's homeowners association fees, prepaid interest and points.The more points that you pay upfront, the more you could lower your monthly mortgage installments.
  • Mortgage insurance - Depending on the lender,you may have to pay mortgage insurance that covers 10% or more of your total mortgage. A way around the insurance or a way to lower the insurance is to invest more in your down payment.
  • Homeowners insurance - Mortgage insurance and homeowners insurance are different. Mortgage insurance protects the lender.Homeowners insurance protects you and the lender.
  • Homeowners association fees - Although homeowners association fees might be included in your closing costs, you will generally have to make these payments monthly. Don't overlook homeowners association fees and rules when you start looking for a house.
  • Property taxes - The value of your property, the age of your home and the jurisdiction that your house is located in impact property taxes.
  • Mortgage broker or realtor fees and commissions - These fees are higher in some parts of the country.
  • Home inspection - Factor in the costs of getting a thorough home inspection.
  • Home appraisal - You'll also need to get your house appraised to realize the actual value of the property.

Because there are additional costs that you must generally be responsible for after you buy a house, shop for property that you can easily afford. In other words, don't buy a house that leaves you with only $100 or less left each month after you pay your mortgage. After all, there are other costs involved in owning a house that you will surface during and after closing.




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Posted by Andrew Abu Realtors on 2/6/2017

Do you know the difference between adjustable-rate and fixed-rate mortgages? An adjustable-rate mortgage (ARM) includes an interest rate that will change periodically based on market conditions. In many cases, homebuyers prefer fixed-rate mortgages (FRMs), as these mortgages enable homebuyers to pay the same monthly mortgage payment for the life of their loan. Conversely, an ARM may start with lower monthly payments but could rise over an extended period of time. This means that an ARM is likely to result in mortgage payments that vary over the years. Although an ARM may seem like an inferior option to its fixed-rate counterpart, there are several scenarios in which a homebuyer may prefer an ARM, including: 1. A Homebuyer Is Purchasing a Residence for the First Time. A first-time homebuyer may enter the real estate market with lofty expectations. But upon realizing there are few housing options that meet his or her needs, this buyer may settle for a house that represents a short-term residence. In this scenario, a homebuyer may be better off selecting an ARM. With an ARM, a first-time homebuyer may be able to make lower monthly payments in the first few years of homeownership. And then, when a better homeownership opportunity becomes available, this buyer may be able to work toward upgrading from his or her starter residence. 2. A Homebuyer Expects His or Her Income to Rise. The economy may fluctuate at times, but those who are assured of a higher income over the next few years may be better equipped to handle an ARM. For example, a student who is enrolled in a medical residency program may be a few years away from becoming a doctor. At the same time, this student wants a nice place that he or she can call home and may consider an ARM because it offers lower monthly payments initially. After this student completes the residency program, he or she likely will see a jump in his or her annual income as well. Thus, this homebuyer may be best served with an ARM. 3. A Homebuyer Is Facing an Empty Nest. Will your children soon be moving out of the home in the next few years? If so, now may be a great time to consider an ARM if you'd like to move into a new residence. Parents who are facing an empty nest in the next few years may be better off living in a larger residence for now, then downsizing after their children leave the nest. Therefore, with an ARM, parents may be able to buy a nicer home with lower monthly payments. And after their kids move out, these parents always can look into downsizing accordingly. Deciding which type of mortgage is right for you can be challenging for even an experienced homebuyer. Fortunately, lenders are available to answer any concerns or questions you may have, and your real estate agent may be able to offer guidance and tips as well. Explore all of the mortgage options at your disposal before you purchase a new residence. By doing so, you'll be equipped with the necessary information to make an informed decision that will serve you well both now and in the future.