Lower your mortgage rate

Five tactics for lowering your mortgage rate
When it comes to mortgage rates, a little bit of wiggle room could help you save big.
From Yahoo Homes 5/22/14

When you first realize the cost of buying a home, you may experience some serious sticker shock. Or perhaps you’re feeling overwhelmed by the monthly payments on your current mortgage. But you don’t have to feel stuck with that price or your payments.

In order to save big over the life of your loan, you can try to negotiate another significant figure in the home buying process – your interest rate.

“It is important to realize that mortgage rates fluctuate constantly,” says Joe Parsons, senior loan officer at California-based mortgage servicing company PFS Funding and author of its blog, “The Mortgage Insider.”

“The normal fluctuations of the market from day to day are about 1/16 of a point from one day to the next. Some days the rates may be up a little, some days down a little,” he explains. “Some lenders work on a lower profit margin than others, so their rates may be lower at any point in time.”

So how can you take advantage of interest rates in constant flux? You must be willing to shop around and negotiate with lenders. But be realistic and knowledgeable about how much negotiating can lower your interest rate.

“Rates are always about .125 to .1 negotiable,” says Bishoi Nageh, vice president of the Somerset branch of New Jersey-based Mortgage Network Solutions.

But how can you negotiate your way into a lower rate? Well, you can use any of the tactics outlined below as well as simple verbal negotiation. According to Nageh, lenders can play within a certain margin of interest rates when cutting deals with homebuyers.

So whether you’re refinancing or looking for your first home loan, locking in a low interest rate is key to saving big bucks in the long run. For maximum savings, read on for our tips on how to negotiate your rate and how to spot what’s too good to be true.

Five tactics for lowering your mortgage rate
When it comes to mortgage rates, a little bit of wiggle room could help you save big.
By Danielle Blundell May 22, 2014 7:33 PM

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Five tactics for lowering your mortgage rate

When you first realize the cost of buying a home, you may experience some serious sticker shock. Or perhaps you’re feeling overwhelmed by the monthly payments on your current mortgage. But you don’t have to feel stuck with that price or your payments.

In order to save big over the life of your loan, you can try to negotiate another significant figure in the home buying process – your interest rate.

“It is important to realize that mortgage rates fluctuate constantly,” says Joe Parsons, senior loan officer at California-based mortgage servicing company PFS Funding and author of its blog, “The Mortgage Insider.”

“The normal fluctuations of the market from day to day are about 1/16 of a point from one day to the next. Some days the rates may be up a little, some days down a little,” he explains. “Some lenders work on a lower profit margin than others, so their rates may be lower at any point in time.”

So how can you take advantage of interest rates in constant flux? You must be willing to shop around and negotiate with lenders. But be realistic and knowledgeable about how much negotiating can lower your interest rate.

“Rates are always about .125 to .1 negotiable,” says Bishoi Nageh, vice president of the Somerset branch of New Jersey-based Mortgage Network Solutions.

But how can you negotiate your way into a lower rate? Well, you can use any of the tactics outlined below as well as simple verbal negotiation. According to Nageh, lenders can play within a certain margin of interest rates when cutting deals with homebuyers.

So whether you’re refinancing or looking for your first home loan, locking in a low interest rate is key to saving big bucks in the long run. For maximum savings, read on for our tips on how to negotiate your rate and how to spot what’s too good to be true.

[Ready to refinance or take out a new home loan? Click to compare rates from multiple lenders now.]

Tactic #1: Pump up your credit score.
“Credit score, credit score, credit score!” That should be your battle cry when applying for a mortgage. According to Nageh, you should work on keeping this magic number high if you want to secure a competitive mortgage rate.

“On conventional loans, the biggest factor on rates is the credit score,” explains Nageh. He says your rate is significantly affected by your credit score, which is split into the following tiers: 640-659, 660-679, 680-699, 700-719, and 720-740.

If you’re in the top tier with a credit score of 720 or higher, you have the best chance at getting a lower rate, Nageh says. The logic behind that is the better your credit score, the less risk you pose to your lender. So lenders are more likely to offer you a lower rate, he explains.

What if your credit score isn’t that great? Then working to improve it should be your goal, according to Parsons.

“Oftentimes, increasing a FICO score by just 10 points can save thousands of dollars in fees or get a better rate for the borrower,” he says.

Not to worry if your significant other has less than perfect credit, says Thomas Nitzsche, a credit counselor and senior media relations coordinator at ClearPoint Credit Counseling Solutions, a Georgia-based credit and housing advice agency.

“If one person in a couple has bad credit, they can be left off the loan so long as the person with good credit can support the loan on their own income,” explains Nitzche. “The person with the low credit score can still be on the title.”

Tactic #2: Treat finding a lender like speed-dating.
You don’t have to commit to the first lender you meet. Instead, treat your search for the right lender like speed-dating – keep your options open, meet multiple prospects, and don’t settle for less.

How could this strategy help you secure a low rate? According to Nitzsche, you should absolutely shop around, because any difference in your interest rate can be more effective than you think.

“As far as going from lender to lender, the rate will usually be close but can depend upon who the investor of the loan is,” says Nitzsche. “You can save money by shopping around with different lenders. One-fourth of a percentage point may not seem like much, but it could save thousands of dollars over the life of the loan.”

But beware of any rate that sounds too good to be true, because it probably is. “Remember there is always a trade-off and a risk you take when you underpay for something,” says Nageh. He adds that in the mortgage business, that trade-off is usually honesty and ethics.

So don’t automatically go for the lender offering the lowest rate – working with someone you trust is just as important, he explains. For Nageh, looking for a lender with the best total package is key. When comparing your options, try to find a lender who is trustworthy, accessible, and offers competitive rates.

Tactic #3: Lock-in your rate as close to the closing date as possible.
So what do you do once you find the right lender and rate? Lock it down. More specifically, you should lock in your interest rate – otherwise known as a mortgage rate lock or lock-in.

According to the Federal Reserve, a rate lock is a lender’s promise to hold a certain interest rate for a period of time while your loan application is processed, which protects you (the borrower) from potential rising interest rates during the application process.

In order to get the best interest rate, Nageh recommends asking your lender the following questions: What is the lock policy after a homebuyer locks? For example, is a float-down possible? That’s the option to reduce a locked interest rate if rates fall during the lock period.

With lock-in rates, timing is also an important factor. A rate lock usually lasts as long as the mortgage application process. And the common rate lock period ranges from 30 to 60 days, but it could be longer, says Nageh. However, locking in your rate for a shorter term, as close as possible to your actual closing date, can be a smart financial move, he explains.

“Mortgage rates are costlier and higher for lengthier lock periods,” because the longer a lender freezes a rate, the more time there is for interest rates to go up. That means you pose a higher risk of less profit for lenders in the long run since you’re locked in at a lower rate.

Typically, lenders do not charge an actual fee to lock in a rate, but lenders will charge a higher rate the longer the lock. For example, the interest rate on a 30-day rate lock could be as high as 0.25 percent more than a 15-day rate lock, according to Zillow, an online real estate database.

So what’s the take-home here?

“The interest rate quoted is always relative to the lock period,” explains Nageh. “The longer you lock your interest rate, the more costly it gets. If you’re closing is 90 days away, and you lock your rate for 90 days, that locked interest rate will be higher than [on] a 30-day lock period.”

He explains that on a 90-day lock, a lender may give you an interest rate that’s anywhere from 0.5 to 0.75 of a percentage point higher than on a 30-day lock.

Nageh’s advice? “Most of my clients, depending on market conditions, will wait 20 to 30 days before the closing date to lock,” he says.

Some other tips from Nageh: Get your rate lock in writing (so it’s binding). And ask your lender upfront how long the application process will take to make sure the entire transaction can be completed during your lock period.

Tactic #4: Offer a higher down payment.
Sure, this isn’t a strategy for those with a cash flow problem. But if you’ve got a nice nest egg hiding out somewhere, offering a larger down payment may be a bargaining chip to lower your mortgage rate.

While our experts say that your credit score is the biggest factor involved in calculating your interest rate, a larger down payment decreases risk for lenders. And that does have an effect on your rate.

If you have a down payment of 25 percent or more in addition to a high credit score, you could reduce your interest rate by 1/4 of a percentage point, says Parsons.

But even if the rate reduction is small, your savings magnify over the life of the loan, whether it’s a 15-year or 30-year term.

So the moral of the story – if you can afford a larger down payment, you could lock in a lower rate and that could help you save big over the life of your loan.

Tactic #5: When refinancing, loyalty pays off.
You know how small businesses – your local deli, the hardware store, and even your handyman – are sometimes willing to cut you a deal if you buy in bulk or if you’re a repeat customer? Or how getting cable, internet, and phone service from one company is cheaper than from three separate ones? Believe it or not, customer loyalty can work in your favor when it comes to refinancing your mortgage, too.

“Loyalty is very important,” says Nageh. “Lenders can waive administration fees, lock-in fees, and pay for some closing costs.”

Why? Well, because you’re bringing them more business and could continue to do so in the future, either on your next home purchase or through referring friends and family, Nageh explains.

How much will you save with this kind of repeat customer discount? While it’s hard to put a number on it, fees associated with home loans, from processing to document preparation charges, can increase the total cost of the loan dramatically – by thousands, even.

So if you’re looking to refi, you might want to consider calling your old lender, who might be willing to cut you a small break. Repeat business can be a major motivator, according to Nageh. “Most mortgage advisors are 100 percent commission, and a loyal book of business [clients] alleviates the hardest part of the job,” he says.

Home Improvements

Home improvements that really pay off

From Investopedia 5/29/14

Despite what you see on TV and what the conventional wisdom says, most of the home improvement projects with the greatest return on investment are unglamorous. According to Remodeling Magazine’s 2014 Cost vs. Value report, you’ll recoup the greatest percentage of your investment on projects such as replacing the front door with a steel one, adding a wood deck, replacing old siding, replacing the garage door and replacing old windows. Also contrary to conventional wisdom, most home improvement projects do not return more than your investment when you sell. In fact, the average remodeling project only recoups 66 cents for every $1 you spend on it. To get the highest percentage of your remodeling dollars back when you sell, here’s what to improve, what not to improve and why.

Best Options: Practical, Midrange Projects

Do you want to get back 96.6% of what you spend on a home upgrade? Then replace your old front door with a new, mid-range steel door with a clear dual-pane half-glass panel and a new lockset. You’ll spend an average of $1,162 for this project, but you’ll get back $1,122 when you sell, Remodeling Magazine reports. Another project in the same price range is replacing your garage door for $1,534; you’ll recoup $1,283, or 83.7%. You won’t need a home-equity loan to tackle these projects, and their low cost and high impact on curb appeal make them smart choices.

“Curb appeal is the biggest selling factor,” says Diana George, founder of Oakland, Calif.,-based Bay Area real estate brokerage Vault Realty Group. “If the house looks unkempt on the outside, buyers automatically assume the same will apply to the interior of the house.”

If you can afford to spend more, consider projects such as adding a 16’ x 20’ wood deck, which costs $9,539 on average but recoups 87.4% of its cost; replacing 10 old 3’ x 5’ windows with new, double-hung, wood or vinyl ones, which costs close to $11,000 for wood and nearly $10,000 for vinyl but recoups about 79%; or replacing vinyl siding, which costs $11,475 for 1,250 square feet but should bring back $8,975 when you sell.

“Windows, garage doors and decks aren’t necessarily big-ticket items in terms of price or luxury,” George says, but “updating these items gives the home an instant facelift and contributes to a modern aesthetic, which is exactly what potential homebuyers want to see when they drive up to look at a new home.”

Pricier Projects

Two of the priciest – but still relatively worthwhile – improvements include attic bedrooms and basement remodels. These projects will set you back tens of thousands of dollars, but are a relatively inexpensive way to increase your home’s useable square footage compared with an addition. Minor and major kitchen remodels also make the cut, as do bathroom remodels. However, while it may be true that kitchens and bathrooms sell houses, forget about doubling your money. You’re likely to recoup just 82.7% of your $18,856 cost on a minor remodel of a functional but dated 200-square-foot kitchen; 74.2% on a $54,909 major kitchen remodel and 72.5% on a $16,128 remodel of a 5’ x 7’ bathroom. These are the types of expensive projects you might be tempted to finance with a home-equity loan, but you should think twice before borrowing money and paying 6% interest or more to finance a project with a negative return.

The costs Remodeling Magazine provides are averages. If you can get a project completed well for less, you might be more satisfied with the percentage of its costs you get back when you sell your home. Costs vary by geographic region, project size and scope, and the quality of finishes you choose.

“Bathroom upgrades can be done for a minimal cost using materials that look expensive, but are quite affordable,” says Jeff Dumas, owner and broker at Home Ventures Realty in Tempe, Ariz., where he’s rehabbed and sold residential properties for more than 10 years. “Most of the time, I can take an average starter home, put in a new tub with a porcelain tile backsplash, new toilet and vanity, tile the floor, and use some decorative hardware for about $1,500 to $2,000. The results are amazing and help the wow factor when potential buyers are viewing the property,” he says.

Surprising Disappointments

Backup power generators and roofing replacements are among the projects on which homeowners will recoup the least at resale. You might get back just 67.5% of the $11,742 you spend on a generator and 67.6% of the $18,913 you spend on a roof. Also at the bottom of the list are sunroom additions, bathroom additions and master-suite additions. These projects are expensive and involve weeks or months of disruptive construction, so don’t take them on unless they’re for your personal enjoyment and you’re planning to stay in your home for years to come. Remodeling a home office is the least worthwhile project on the list, recouping just 48.9% of the $28,000 it’s likely to cost.

That being said, some of these projects are more valuable if you live in areas where they’re in higher demand. In the West South Central region, which includes storm-prone areas in Texas, Oklahoma and Louisiana, a backup generator will recoup 86% of its cost, on average.

Other Cases Where the Rules Don’t Apply

In some circumstances, the report’s findings on the most valuable home improvements might not apply to your house. For example, adding a wood deck would not be a smart investment if decks are not popular in your neighborhood. Also, if your home’s overall condition is poor, one or two improvements are not likely to make a big difference in sale price.

It’s also possible that you will see a return on your investment if you live in a hot market and complete a popular project. Homeowners in San Francisco will likely see huge payoffs on midrange attic bedroom, kitchen, basement and bathroom remodels; bathroom, deck, family room, second-story and garage additions; entry-door and garage-door replacement; and siding replacement. Returns range from 109.8% to 177.6%.

Even if you don’t live in a hot market, you might see a significant jump in your home’s resale value when you make changes that bring it in line with the majority of homes in the neighborhood, such as adding a second bathroom when yours is the only one-bathroom house. In these cases, financing the improvements with a home-equity loan or home-equity line of credit might make sense.

The Bottom Line

If improving resale value and recouping remodeling costs are important to you, don’t let TV shows, your personal taste, your family’s unique needs or your emotions guide your home improvement decisions. Consult with a real estate agent about the conditions in your local market, consult the Cost vs. Value Report’s averages for your region, and stick to the upgrades that research and experience have proved worthwhile.

~Take a look at our Area Map and the Data Provided. Hope this helps you make a decision on what improvements you should make~

Home Improvements

Home Improvements

Bathroom, Front Door

Protect yourself from DIY Disasters

11 ways to protect yourself from DIY disasters
From USNews 5/57/14

It looks so easy, and the idea of saving hundreds, or maybe even thousands, of dollars is enticing. Surely you can repair those cracks in the wall, right? Or caulk around the bathtub. Or install a new toilet. Or change a light fixture. Or, emboldened by the seeming ease of repairs on home renovation TV shows, tear down a wall in your house.

Maybe you can handle all these do-it-yourself projects – but, then again, maybe you can’t.

“The road to the hardware store is paved with good intentions,” says David Pekel, president and CEO of Pekel Construction in Milwaukee and a master certified remodeler. He is often greeted at his office on Monday by frantic calls from homeowners who failed in their DIY weekend projects.

There are many projects that virtually any homeowner can accomplish, but others should be left to those with experience. Either way, it’s important to plan and understand a project before you launch into it.

Just know this: “It takes twice as long as you think it’s going to and generally costs twice as much,” Pekel says.

~In my experience it always takes longer, but not usually twice as much since I put a lot of planning into my projects beforehand~

Kelly Whalen and her husband thought that redoing the carpet, painting the paneling and ripping out some built-ins in the outdated family room of their 1970s home near Philadelphia would be an easy project.

But once they got started, they discovered asbestos tile under the carpet, which required removing the tile. That, in turn, damaged the paneling and an unknown layer of paneling underneath. They ended up gutting the room, adding new insulation, putting up new drywall and adding some wiring. A project that looked simple at first glance ended up taking six months to finish.

“The moral of the story is never think paint and new flooring will fix a room in an aging house,” says Whalen, who shared the details of her project in several posts on TheCentsibleLife.com. “Be prepared for a full gut job.”

Even professionals run into unexpected problems once they open walls, including ductwork or plumbing they didn’t realize was there and substandard work done by previous renovators. If you’ve ever watched “Love It or List It” on HGTV – a show where homeowners are advised on whether to renovate or sell their homes – you know that every one of those home improvement projects runs into snags that mean extra costs and more time. And those are teams of professionals doing the work.

Andy Prescott, who publishes the blog artofbeingcheap.com, does whatever repairs he can on his rental house and his own house. Plumbing is the one exception. Doing his own plumbing does not save money, and he learned this the hard way.

He once replaced the flushing mechanism on a rental house toilet and thought he’d done a great job. But he didn’t attach the hose tightly enough, and a leak ruined the downstairs carpet. That cost $1,000 to replace.

The next time he replaced a flushing mechanism, at his own house, he made sure the hose was tightly attached. But the toilet still leaked. He ended up taking the toilet apart and redoing the job four times, but he couldn’t stop the leak. “I finally gave up and called the plumber,” he says. “Not only did it cost me $150, but my family didn’t have water in our house for two days because we had to turn the water off to stop the toilet from leaking. No more plumbing for me. I stick with only the most simple repairs now.”

Here are 11 tips for avoiding your own DIY disasters.

Measure twice, cut once. There is a reason this proverb has been around for decades. If you cut your crown molding, tile or paneling too short, you can’t go back and make it longer.

Beware of plumbing projects. Most people can change the insides of a toilet, but problems can still arise, as Prescott discovered. If you have just one bathroom, be prepared to stay overnight elsewhere if something goes wrong. Make sure you turn off the water before you start any plumbing project.

Leave electrical projects to the professionals. If you know what you’re doing, you can change a light fixture. But replacing a light fixture with a ceiling fan involves more than just changing the fixture. Other electrical projects are even more complicated. If you do give it a shot, turn off the breaker before you touch anything.

Look for instructions online. You can find a YouTube video or detailed instructions for any project. But if that’s all the information you have on a project that you’ve never done before, beware. A video on building a deck from someone in Florida may not tell you what you need to get the deck to withstand 80 inches of snow, and a video from Minnesota on building a deck may not have the instructions you need to ensure your deck can survive a hurricane.

Take a class at Home Depot. Nearly every week, Home Depot stores nationwide offer free classes on everything from replacing a faucet to tiling a room. Be mindful that you need to register ahead of time to participate in these workshops.

Ask questions at the hardware store. Most hardware stores, and even some big-box stores, have experts on staff who can answer questions about home projects. If you’re replacing specific parts, bring along the parts if you can rather than trying to remember what they look like.

Use the right tools. You can rent or borrow some tools if you don’t own them yourself. Hint: If you’re going to assemble a lot of Ikea furniture, invest $20 in an electric screwdriver.

Know which work requires a permit. Some cities are stricter than others about permits, and only licensed contractors can obtain permits for some work. Doing major renovations without a permit could cause problems when you sell your home. Some cities require presale inspections, which can result in fines and the need for retroactive permits. That can mean redoing the job to city specifications.

Know what you can and can’t do yourself. “If you have to go to YouTube to learn something, you probably don’t know what you’re doing,” Pekel says. Homeowners often “don’t know what they don’t know.” If you mess up a painting project, you can always redo it. But if you take down a load-bearing wall and bring the second floor down with it, you’ve created a very expensive problem. With DIY projects, being cautious is typically the way to go.

Consider what your time is worth. If you earn $100 an hour and replacing a faucet takes you three hours, you would probably save money by hiring a plumber.

Be prepared to live with the results. That includes both the quality of work and the time your house will be in disarray. Can you install crown molding well enough to be happy with the results? Or will it forever bug you that it’s not exactly straight? That goes for more complex projects, too. If you gut the kitchen and end up taking six months to redo it, can you live without a kitchen that long?

These home improvements put green in your pocket

From CNBC.com 5/25/14

These home improvements put green in your pocket

From insulated windows to geothermal heat pumps, the range of home improvements eligible for tax credits or deductions is as wide as it has ever been.

Ah, Memorial Day. Time to fire up the barbecue, break out the shorts and sandals, and make sure the air conditioning is working.

Along with summer fun comes heavy energy use in many parts of the country. But there are more and more ways to cut that usage—and to be rewarded for doing so with money in your pocket.

The federal government has long offered tax credits and deductions for homeowners who install things like solar panels and geothermal heat pumps. States also offer myriad tax benefits for energy-saving home improvements. Utilities, too, offer incentives to consumers who make their homes more energy efficient.

The real trick is figuring out which of the myriad tax incentives out there make the most sense for your plans and your home.

On the federal level, taxpayers can receive a 30 percent tax credit for a variety of improvements. There is no limit on the credit available for solar-electric improvements, small wind-energy systems, and geothermal heat pumps, and those credits can be used on improvements to primary residences and vacation homes. There is a $500 limit on the credit for fuel cells, and it is applicable only to a primary residence.

Among states, green tax incentives vary widely, but the Department of Energy and the North Carolina Solar Center have pulled together a list of incentives across the country.

Utilities also offer incentives of various kinds to customers who make changes to cut energy use. For example, Duke Energy (DUK) offers a range of rebates, discounts, and other incentives, from pointing customers to contractors to selling discounted energy–efficient lightbulbs.

Of course, you may be planning to sell your home, and the idea of improvements that will save the next owners money is less than appealing. Even then, however, you can benefit from going green.

Researchers at the University of California, Berkeley and the University of California, Los Angeles have measured the effect of green home improvements on the price of a house in California. Using an average California home price of $400,000, they found that in their most conservative estimate, homes with a green home label sold for at least $8,400 more than homes without that designation, a 2.1 percent premium.

“Green homes transact for significantly higher prices as compared to other recently constructed homes that lack sustainability attributes,” the paper concluded. And Nils Kok, one of the paper’s authors, said the premium, at least on rental properties, existed during the housing downturn as well.

Energy-efficient cars also come with significant financial incentives. Consumers who buy plug-in hybrid vehicle or electric cars can receive a federal income tax credit of as much as $7,500, and there are some incentive programs at the state level as well.

The incentives made it easier for Richard and Nancy Rabe to make their La Crosse, Wisconsin, home greener. They replaced old windows with new, highly insulated ones, and replaced the central air unit with a heat pump they used for both heating and cooling.

When they recently relocated to Grand Rapids, Michigan, Rabe said the improvements they made to their Wisconsin house “were part of the pitch sheet” for the real estate agent. And while Rabe can’t measure the impact of the improvements on his home’s value, he points out that it sold in three weeks, while a similar house on the street took six months.


Rabe also looked for a home with green features, ssuch as a high thermal-resistance value, when buying in Grand Rapids.

“We found a place with high R-value windows, high efficiency furnace and hot water heater, newer energy efficient appliances, and good insulation (and only four miles from work!)” he said.

Rabe said his main reason for cutting his energy use is environmental. “We have taken and will take advantage of tax incentives when available, but they are not the primary reason we have made the ‘green improvements’ we have made. Our primary reason is reduction in energy consumption with the corollary benefits of conservation and long term economics.”

But any way you slice it, Rabe said going green makes both environmental and financial sense.

Ask these 5 questions before choosing a loan officer

From USNews.com 5/22/14

If you’re in the market for a new house or condo, you may also need a loan officer to help with underwriting and securing a mortgage.

David Stevens, president and CEO of the Mortgage Bankers Association, suggests talking to two or more loan officers to find one who instills confidence. “There is a trade-off,” he says. “Sometimes the best rate doesn’t always mean the best service, but the vast majority of loan officers are now under a federal supervision rule that went into effect in 2010, so the environment is far more regulated to the consumer’s best interest.”

Here are some questions to ask before choosing a loan officer.

1. What is your fee? You won’t pay the loan originator’s fee directly because it’s embedded in the price of the mortgage. Even so, it’s a good question to ask, according to Jack Guttentag, a professor emeritus of finance at the University of Pennsylvania’s Wharton School who runs an informational website on mortgages called mtgprofessor.com. “There can be a lot of variation, but not as much as there used to be,” he says. “To protect themselves [against allegations of discriminatory lending], lenders now require that the brokers post their prices with them, so there’s no possibility of any price disparities between different types of borrowers.” However, brokers who work with multiple wholesalers can still have different fees with different wholesalers, he adds.

Mauricio Rodriguez, who teaches real estate finance at Texas Christian University’s Neeley School of Business, suggests asking about all possible fees. “See if the broker is patient in explaining all potential fees and their relationship with available interest rates,” he says.

~Any Loan Officer or Loan Broker worth their salt will answer these questions and then some~

2. How many lenders do you deal with? A mortgage broker typically works for a single brokerage company, while a loan officer or loan originator works with several lenders, giving you more options. According to Guttentag, mortgage professionals working with one wholesaler may get better service from that wholesaler because they bring them more business than brokers who spread out their clients. “They will rationalize it by telling the borrower that they do periodic surveys to make sure,” he says. “Of course, just because they say it doesn’t mean it’s true, since the price relationships at the wholesaler level can change.” Ultimately, it’s up to you to decide what you prefer.

~Remember that Direct Lenders i.e. Chase, Bank of America, Wells Fargo, etc only have their own programs, but that does not mean that they are not able to offer as many options of some of the Brokers as well~

3. How long have you been in the mortgage business? Rodriguez recommends asking about their personal background. “How long has the individual been working as a licensed broker?” he asks. “How many loans did the broker underwrite in the past year?”

Due to upheaval in the real estate industry over the past several years, it’s not unusual for a mortgage professional to have switched companies, Stevens points out, so focus on his or her length of time in the industry, not at one company. “A lot of lenders went out of business, through no fault of the loan officer,” he says. He also suggests researching their company online to see if the company has a history of complaints filed with the Better Business Bureau.

4. Do you have any special expertise? If you’re planning to get an Federal Housing Administration or Veteran Affairs loan, look for a loan officer with experience and contacts in that market, Guttentag says. Or if you need a jumbo loan larger than a conventional loan (often half a million dollars or higher, depending on where you live), “you want to deal with a broker who has wholesalers in that marketplace,” he adds.

Self-employed borrowers may face extra hurdles in verifying their income, so Stevens recommends choosing a loan officer with experience in this area if you fall into this camp. Criteria can vary by lender, so Stevens suggests asking what kind of documentation you’ll need to supply and what could potentially cause the loan to be denied or delayed. If the loan officer can give a clear explanation of the process for self-employed borrowers, that can help instill confidence in his or her ability to close the deal.

5. Does your company hold loans or flip them after they’re originated? If you’re working with a mortgage broker at a specific brokerage company, you should “understand if the broker’s company holds loans or just flips them right after they are originated,” Rodriguez says. “If the latter, understand that future payments and contact will be with some yet-to-be-identified third party.”

The most crucial questions, though, are the ones you ask yourself after talking to loan officers: Do I feel comfortable with this person? Do I trust him or her to answer my calls promptly and act in my best interest? “Only work with a broker that is ethical and professional,” Rodriguez says. “Do not work with a broker that tries to put pressure for a fast decision.”

Lifestyle budget cuts to afford a mortgage


From Zillow 5/22/14
~read below and see that even the financial experts took time to manage and save their downpayment~

For first-time home buyers, setting aside enough money for a down payment and closing costs is often one of the biggest hurdles to homeownership. And when you factor in insurance, taxes, maintenance and other costs associated with owning a home, the total amount of money needed can seem overwhelming.

So how can you stop spending and start saving? We asked a few personal finance bloggers to share their tips and tricks for building a home-buying nest egg.

What saving strategies did you use for your mortgage down payment?

My wife and I worked out how much money we would need and set about saving it each pay period. This diverted a large part of our salaries into a specific savings account. We bought our first home in our mid-20s and upgraded when we were 30. The trick is to get a foothold in the property market and build on it. – Colin Williams

What is the primary expense you cut to save money for a down payment?

Cable television was the biggest expense I got rid of. It helped me save $1,000 yearly. With video streaming services like Netflix and Hulu, I felt I didn’t really need cable TV anymore. I started watching the free over-the-air channels more frequently. It just cost me the value of an antenna. – Edwin C.

What is the most valuable budgeting guideline you’ve learned and live by?

I think it’s simply to have a budget, track your spending against that budget and review your progress regularly. The old saying that you can’t manage what you don’t measure is quite true when it comes to family spending. When an individual or family tracks their spending for the first time for a month or two, they’re invariably amazed by how much they’re spending on certain things: $62 last month at Starbucks, $223 on shoes?!? I think many people refuse to budget because they fear having their eyes opened to how much they’re spending and on what. But meeting your goals is a lot easier if you track your progress. – Kurt Fischer

How did you determine how much home you could afford?

I used many different tools that were available for free at the time. I also spent what may be considered as an unhealthy amount of time on Zillow looking at every bit of information about the process. I felt that the more I knew about my finances and the market, the better armed I would be when we had the money to purchase. – Warren Talbot

Did anyone advise you on how much home was affordable? Was the guidance helpful?

My wife and I have always earned more than we spent, so we were able to accumulate a large savings. But, we did not spend all of our savings on the down payment for our house. Most buyers, like us, rely on a bank or a mortgage broker to tell them how much home they can afford. My wife and I actually laughed at what we were told. We ultimately purchased a house that cost half of what our bank told us we could “afford.” If you use all of your savings on a down payment, then you can’t afford the immediate expenses that arise the day you move in: furniture, paint, decorations, landscaping — just to name a few. – A Blinkin

~When my husband and I purchased our 1st home we were approved for up to $100,000, but we planned on only buying a home worth about $80,000 to $85,000. You can’t forget to count on how much your utility costs increase, plus furnishing and etc~

Which financial books helped you stay on track to save money?

When my husband and I were first really getting into learning about smart personal finance, business and entrepreneurialism, we read a lot of books. We found that after awhile you stop learning, as each author just sort of says the same thing in a different way, but the most memorable of the books I would say would be “Rich Dad Poor Dad.” It motivated me to dig deeper into the personal finance world. –Pennysaver Pam

Do you use any budgeting apps to save for major purchases?

Currently, I’m using HandWallet, which is pretty useful to keep track of my expenses. – ChampDog

~I use Mint.com which is a useful tool as well~
When you purchased a home, did you reserve savings for an emergency fund? What do you recommend for future buyers?

We budgeted for a modest emergency fund after taking into account closing costs on the new home. It was not sufficient to cover all the expenses we faced, so the first couple of years were tight financially. Home maintenance costs are always higher than anticipated, especially with an older home.

With my recent home purchase I was unpleasantly surprised to discover the HVAC inspector missed a major problem that will cost me hundreds of dollars to repair. The best advice I can give future homeowners is to educate yourself about the entire process before you engage [an agent]. Hire competent home, HVAC and mold inspectors and know your rights as a buyer. – Paul Vachon

7 Must-Dos on the Day You Show Your House

From Houzz.com 3/22/14

Don’t risk losing buyers because of little things you overlook. Check these off your list before you open the front door.

The “For Sale” sign is up. You’ve completed the big projects and the little tweaks, so you’re hopeful your efforts will pay off with a quick and profitable offer. But now comes the most critical part of the home-selling cycle: the day of a showing or an open house. A negative first impression can directly translate into dollars off a full asking price. Before opening the door to potential buyers the day of a showing, follow these tips from top Realtors and stagers all over the world.

Gary J Ahern, AIA – Focal Point Design
1. Detach from the stuff. Home experts agree the first and most important step to a successful listing is to emotionally separate from the house and the objects within it. “Many clients I work with battle to let go of their property and refuse to take down family photographs and religious items,” says Gregg Churchill, owner of Mr. Home Staging & Design in Perth, Western Australia.

Letting go of the emotional connections to the items inside the home will make you more objective about any necessary changes and more open to Realtor and buyer feedback. To ease the selling process, embrace the idea that your house is a commodity that needs to be sold, and transfer any emotional connections to your new destination, Churchill advises.

Don’t forget: Foyer tables, fireplace mantels and refrigerator doors are popular display spots for loads of personal items like holiday cards, children’s artwork, pictures and trophies. Pare down or clear off these spots for showings.

Blackband Design
2. Make sure it looks clean. Cleaning seems so obvious, and is inexpensive, but the lack of it is one of the biggest complaints agents hear. Hopefully, you’ve done the big scrub leading up to open-house day: carpets steamed, floors mopped, windows wiped, appliances scoured. But on the day of a showing, don’t overlook little details like crumbs on the table from breakfast, toothpaste remnants in sinks, half-full trash cans on display and dust bunnies in rooms you don’t frequent. Do a quick walk-through with a duster, reaching into recessed lights and corners, suggests Charlie Buckley, associate broker at Mr. Waterfront Team at Long & Foster Real Estate in Annapolis, Maryland.

Straighten the bedspreads in all the rooms, put away loose shoes in hallways and tuck away pet beds and bowls, Buckley says.

For added visual appeal and a more spa-like vibe, switch to new, clean towels just before a showing, say Liz Larson and Jan Poulain of Perfectly Placed for You in Chelmsford, Massachusetts.

Don’t forget: Wipe down surfaces that people would naturally touch, such as stair banisters, hand rails and items that have inviting textures. “People love touching things. Textures change everything, as they propel people into various good spots in their memories. Candles. Shells. A leafy houseplant that says, ‘Touch me,’” says Mathieu Nakkach, CEO ofSignature Stagers in Dubai, United Arab Emirates.

Polhemus Savery DaSilva
3. Make sure it smells clean too. Besides a home’s visual appeal, nothing triggers more comments than scents. Diffuse cooking, pet and musty odors by airing out the home with open windows or air purifiers.

Comforting smells, like baking bread or brewing coffee, can be appealing to most potential buyers. “I always recommend fresh flowers. Cider on the stove in the colder months is a nice touch,” says Travis Gray, an Annapolis, Maryland realty agent at Coldwell Banker.

But beware of strong spray scents, candles or other products. “Don’t leave plug-in air fresheners around your home. Some people are allergic to scents, and it only highlights that you have an odor problem,” says Monique Shaw, chief designer atHomes Sold Beautifully in Calgary, Alberta.

Don’t forget: Pet foods, toys, litter boxes and blankets may have distinct smells. Stow these items or take them out of the house during showings.

James McCalligan Architect
4. Remove sight-line impairments. Artists, architects and designers are well versed in the simple trick of drawing the eye to something appealing, whether it’s a unique color, the next room or a special view. Eliminate items such as knickknacks, toys, small appliances and bath products that stop the eye, or worse, make spaces look smaller. “I am selling the space and finishes of the house, not your personal property,” explains Beth Tyler, a Realtor at Long & Foster in Annapolis.

Though many rugs add warmth and color, consider rolling them up if they break up a room disjointedly or if they obscure attractive selling points like stunning hardwood floors or beautiful tilework. “Bathrooms, especially small ones, will look bigger without the rugs. If it’s a huge master spa bath with a coordinated rug, then it can stay if it warms up a big, cold space,” Tyler says.

LiLu Interiors
Have bins or baskets on hand to clear off countertops, floors, tables and desks. “It’s a lot easier to put away one or two small bins than it is to have to find a spot for 15 different toiletry items,” says Annie Pinsker-Brown, owner of Stage to Sell in Los Angeles.

Don’t forget: Store tablecloths and dish towels to accentuate a kitchen’s workspace and appliances. “Kitchens look bigger if your eye does not stop at the dishtowel on the oven, dishwasher and sink,” Tyler says.

Claudio Ortiz Design Group, Inc.
5. Improve traffic flow. Over time, homeowners become desensitized to what their possessions look like and where they are placed, note Laura Grindrod and Carolyn Kibby of Annapolis Staging and Design. The coatrack by the kitchen door, for example, might be practical for your family, but it can look like poor storage to a potential buyer.

Walk through each room and determine if the furniture arrangement contributes to a comfortable flow and use of space, or if it simply is that way because that’s how it has always been, Grindrod and Kibby advise.

Don’t forget: Too little furniture can be just as bad as too much. A tiny couch in a largefamily room might prompt buyers to worry they’ll never be able to furnish the whole space. If needed, repurpose pieces from spare rooms to comfortably fill out an area.

SLC Interiors
6. Create the “Goldilocks Effect.” No matter what time of day or year, the home’s temperature, lighting and noise levels should be just right during an open house. Room temperatures should be not too hot and not too cold. Blinds, shades and drapes should be open, and lights should be on, says Margaret Melvin, a Columbia, Maryland, associate broker at Prudential PenFed Realty. “A dark house may work when filming a vampire series, but not for selling a house,” she says.

AMS Landscape Design Studios, Inc.
Don’t forget: Let in pleasant ambient sounds, from birds chirping outside to a soothing water feature. Calming music in the background, high enough to hear but low enough to not overwhelm, can do wonders, Nakkach says.

Katie Leede
7. Be strategic about handouts and valuables. Documents about the home, especially with attractive photos, should be readily accessible. “I prefer that property brochures and information are in the foyer area, located on a console or table with some fresh flowers. Buyers can pick up that information upon entering or leaving,” says Melvin.

Whether it’s an invitation-only showing or a large opening for the masses, it’s important to safeguard valuables, personal information and sensitive items. Stow small items like electronics, jewelry and prescription medications, and protect financial statements and documents, recommends Pinsker-Brown.

Don’t forget: “Shut off and password-protect computers too,” Pinsker-Brown adds


~see this handy dandy checklist is have attached~