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A Beginner’s Guide to Real Estate Investing

Posted on by Ali Palacios - Broker

A Beginner’s Guide to Real Estate Investing

Despite the grim economic outlook for some industries, one sector is gaining viability — real estate. According to the 2016 Emerging Trends in Real Estate, which was released by the Urban Land Institute earlier this year, trends such as “18-hour cities” and millennial parents increasing moving from urban areas out into the suburbs signal that real estate as an industry is gaining strength every passing day in 2016. One lending officer at a large financial institution even went to far as to say that “the next 24 months look doggone good for real estate.”

These trends means that real estate is a smart place to make an investment and grow your wealth. A housing shortage means that flipped homes tend to sell quickly and for high prices, and an increased demand across all age groups for rental properties means that finding tenants for your buy-and-hold properties should be a breeze.

Of course, these trends also mean that the real estate market is highly competitive right now. If you want to make a foray into real estate investing, you’ll need to educate yourself and be strategic in who you work with and where you look for investment opportunities. Read on for our beginner’s guide to real estate investing.

Assemble your real estate team before you buy

Building relationships with your team will empower you to make serious offers that will more likely get accepted by sellers. Among your team members, you will want to include:

  • A mortgage broker or banker, who can help you get the financing for your deal
  • A real estate attorney to protect you by reviewing and revising contracts
  • An appraiser who can help you get a correct appraisal for your potential property
  • An accountant who is well versed in real estate investments
  • A good contractor, for repairs whether you’re rehabbing or buying rental property

How to find rehab or wholesale deals

You can buy properties to fix up and resell (flip) or you can buy and hold properties that you rent out for monthly cash flow.

The advantage of flipping properties is that you can end up with a good return on investment (ROI) in the short term. For example, you buy a property for $100,000, and invest $50,000 into repairs. Once it’s rehabbed, your property is valued at $200,000, and you sell it for a $50,000 profit.

This is an extremely simplified version of ROI. There are many other factors that you need to determine to see if the numbers work in your favor — that is, you’re not overpaying initially when you buy the properties or for the renovations or holding costs.

Flipping properties means that you will need to spend more time looking for fixer uppers that may be under market value. These may be more difficult to find in a hot market with rising property prices. Beyond the actual purchase price, you will also need to factor in fixed purchase costs for inspections, closing, and lender fees.

You’ll also need to factor in holding costs. Your budget should include funds for making repairs, whether you are doing them yourself or hiring contractors. While you’re upgrading the property, you’ll need to carry mortgage payments, property taxes, utilities, and insurance.

Because of rising property values, fix-and-flip deals in good neighborhoods can be hard to find. But once you know where to find rehab opportunities, you can easily repeat the process by reinvesting proceeds from a previous flip into the next property, which can be bigger, in a more desirable neighborhood, or finished out more luxuriously, and therefore sold for more cash!

Working with the right real estate professionals will help you learn which neighborhoods to consider and determine where you should focus your search. We can help you find the right fixer-uppers that may be under market value. Also, a Realtor will have access to many properties that may not be publicly available.

Finding buy-and-hold rental properties

A buy-and-hold rental property is one that your purchase with the intent of renting it out to tenants. If you find the right long-term buy-and-hold rental property, you can earn consistent cash flow each month, which can be a great source of supplemental income.

You’ll need to carefully review the operating expenses on the property and what tenants are willing to pay for the space to know if you’ll make or lose money each month. For example, say your total costs to buy a duplex was $20,000, including down payment and closing costs. You can rent each of the units for $600. Assuming your building is 100% occupied, you’ll make $1200 per month in income. Your expenses include mortgage payments, taxes, insurance, utilities, and management fees, and you want to set aside some cash each month for capital expenditures and routine repairs. You calculate that your expenses add up to $1100 per month. Once you subtract your expenses from your income, you’ll have a positive cash flow of $100 per month.

Of course, this is a very simplified example, and it doesn’t take into account that problems will inevitably arise. Emergency roof repairs, heating system breakdowns, broken windows that need replacing, and other unexpected expenses can eat away at your profits. One of your units may be vacant for a month or more — for example, vacancies are high in the summer months in buildings around universities — or you could have a tenant who fails to pay their monthly rent.

The more you can anticipate problems before they happen, however, the easier it will be for you to recover from setbacks! Moreover, rent isn’t the only way to make money on a buy-and-hold property. You can also add amenities, such as coin laundry and vending machines, to increase your potential monthly income. If your property has space to add a billboard, you can earn advertising revenue from renting that space, too. And when you decide to sell, your property’s value will likely have increased both from the overall rising property values and by the improvements you made to increase the cash flow.

Once you find and invest in your rental property, you’ll need to decide how you want it managed from month to month.

Getting the right property manager

Do you want to manage your own property or hire a manager? Property management can become a full-time job. As a property manager, you’ll have to deal not only with maintenance, repairs and tenant issues, but also with insurance, fair rental regulations, and building code compliance. So if you’re not an expert in these areas, managing your own properties may not be worth your time and effort.

Hiring a professional manager can save you headaches over the long term. While you’ll have to factor in management as a fixed expense, your property manager will likely know how to better take care of routine repairs, tenant issues, and keeping your property near 100% occupancy.

Your real estate professional can refer you to reputable property management companies to help you take care of your investment.

Where should I start investing in local real estate?

Work with a knowledgeable real estate professionalwho knows about the different neighborhoods. We can help you find properties that will fit into your budget and your overall goals. Whether you’re seeking a duplex or multifamily property so you can maximize your rental income or whether you want a condo or single-family home to improve for resale, we can guide you to the best property to suit your needs.

Contact your us to learn more about investment properties in our area.

Get Your Credit Score in Shape Before Buying a Home

Posted on by Ali Palacios - Broker

Get Your Credit Score in Shape Before Buying a Home

How strong is your credit? Cleaning up your credit is essential before you make any major financial moves. Having a bad score can hurt your chances of being able to open a credit card, apply for a loan, purchase a car, or rent an apartment.

It is especially important to have clean credit before you try to buy a home. With a less-than-great score, you may not get preapproved for a mortgage. If you can’t get a mortgage, you may only be able to buy a home if you can make an all-cash offer.

Or if you do get preapproval, you might get a higher mortgage rate, which can be a huge added expense. For example, if you have a 30-year fixed rate mortgage of $100,000 and you get a 3.92% interest rate, the total cost of your mortgage will be $170,213. However, if your interest rate is 5.92%, you’ll have to spend $213,990 for the same mortgage  – that’s an extra $43,777 over the life of the loan! If you had secured the lower mortgage rate, you could use that additional money to fund a four-year college degree at a public university.

So now that you know how important it is to maintain a good credit score, how do you start cleaning up your credit? Here, we’ve collected our best tips for improving your score.

Talk to a loan professional

You can protect your score from more damage by getting a loan professional to check your credit score for you. A professional will be able to guide you to whether your score is in the ‘good’ range for home buying. Plus, every time that you request your own credit score, the credit companies record the inquiry, which can lower your score. Having a professional ask instead ensures that you only record one inquiry. Once you know your score, you can start taking action on cleaning up your credit.

Change your financial habits to boost your score

What if your score has been damaged by late payments or delinquent accounts? You can start repairing the damage quickly by taking charge of your debts. For example, your payment history makes up 35% of your score according to myFICO. If you begin to pay your bills in full before they are due, and make regular payments to owed debts, your score can improve within a few months.

Amounts owed are 30% of your FICO score. What matters in this instance is the percentage of credit that you’re currently using. For example, if you have a $5000 limit on one credit card, and you’re carrying a balance of $4500, that means 90% of your available credit is used up by that balance. You can improve your score by reducing that balance to free up some of your available credit.

Length of credit history counts for 15% of your FICO score. If you’re trying to reduce debt by eliminating your credit cards, shred the card but DO NOT close the account. Keep the old accounts open without using them to maintain your credit history and available credit.

Find and correct mistakes on your credit report

How common are credit report mistakes? Inaccuracies are rampant. In a 2012 study by the Federal Trade Commission, one in five people identified at least one error on their credit report. In their 2015 follow-up study, almost 70% thought that at least one piece of previously disputed information was still inaccurate.

Go through each section of your report systematically, and take notes about anything that needs to be corrected.

Your personal information

Start with the basics: often overlooked, one small incorrect personal detail like an incorrect address can accidently lower your score. So, before you look at any other part of your report, check all of these personal details:

  • Make sure your name, address, social security number and birthdate are current and correct.
  • Are your prior addresses correct? You’ll need to make sure that they’re right if you haven’t lived at your current address for very long.
  • Is your employment information up to date? Are the details of your past employers also right?
  • Is your marital status correct? Sometimes a former spouse will come up listed as your current spouse.

Your public records

This section will list things like lawsuits, tax liens, judgments, and bankruptcies. If you have any of these in your report, make sure that they are listed correctly and actually belong to you.

A bankruptcy filed by a spouse or ex-spouse should not be on your report if you didn’t file it. There shouldn’t be any lawsuits or judgments older than seven years, or that were entered after the statute of limitations, on your report.  Are there tax liens that you paid off that are still listed as unpaid, or that are more than seven years old? Those all need to go.

Your credit accounts

This section will list any records about your commingled accounts, credit cards, loans, and debts. As you read through this section, make sure that any debts are actually yours.

For example, if you find an outstanding balance for which your spouse is solely responsible, that should be removed from your report. Any debts due to identity theft should also be resolved. If there are accounts that you closed on your report, make sure they’re labeled as ‘closed by consumer’ so that it doesn’t look like the bank closed them.

Your inquiries

Are there any unusual inquiries into your credit listed in this section? An example might be a credit inquiry when you went for a test drive or were comparison shopping at a car dealer. These need to be scrubbed off your report.

Report the dispute to the credit agency

If there are major mistakes, you can take your dispute to the credit agencies. While you could send a letter, it can be much faster to get the ball rolling on resolving a mistake by submitting your report through the credit agency’s website. Experian,Transunionand Equifaxall have step-by-step forms to submit reports online.

If you have old information on your report that should have been purged from your records already, such as a debt that has already been paid off or information that is more than 7 years old, you may need to go directly to the lender to resolve the dispute.

Follow up

You must follow up to make sure that any mistakes are scrubbed from your reports. Keep notes about who you speak to and on which dates you contacted them. Check back with all of the credit reporting companies to make sure that your information has been updated. Since all three companies share data with each other, any mistakes should be corrected on all three reports.

If your disputes are still not corrected, you may have to also follow up with the institution that reported the incident in the first place, or a third-party collections agency that is handling it. Then check again with the credit reporting companies to see if your reports have been updated.

If you can keep on top of your credit reports on a regular basis, you won’t have to deal with the headaches of fixing reporting mistakes. You are entitled to a free annual credit report review to make sure all is well with your score. If you make your annual credit review part of your financial fitness routine, you’ll be able to better protect your buying power and potentially save thousands of dollars each year.

How to clean up your credit now

Does your credit score need a boost so you can buy a home? Get in touch with me. I can connect you with the right lending professionals to help you get the guidance you need.

La guía para el comprador – prepararse para la hipoteca

Posted on by Ali Palacios - Broker

La guía para el comprador – prepararse para la hipoteca

No espere hasta que esté listo para mudarse para comenzar a prepararse financieramente para comprar una casa.

Si usted es como la gran mayoría de los compradores de vivienda, elegirá financiar su compra con un préstamo hipotecario. Al prepararse de antemano, puede evitar los retrasos comunes y los obstáculos que muchos compradores enfrentan al solicitar una hipoteca.

Los requisitos para asegurar una hipoteca pueden parecer abrumadores, especialmente si es la primera vez que compra. Sin embargo, hemos descrito tres pasos simples para comenzar su camino hacia la propiedad de vivienda.

Incluso si eres un propietario actual, es una buena idea prepararte con anticipación para que no te encuentres con sorpresas en el camino. Los requisitos de préstamos se han vuelto más rigurosos en los últimos años, y los cambios en su historial crediticio, niveles de deuda, tipo de trabajo y otros factores podrían afectar sus posibilidades de aprobación.

Nunca es demasiado temprano para comenzar a prepararse para comprar una casa. ¡Siga estos tres pasos para comenzar a sentar las bases para su futura compra de vivienda hoy!

PASO 1: REVISE SU PUNTUACIÓN DE CRÉDITO

Su puntaje de crédito es una de las primeras cosas que un prestamista verificará para ver si califica para un préstamo. Es una buena idea revisar su informe de crédito y calificarlo usted mismo antes de estar listo para solicitar una hipoteca. Si tiene un puntaje bajo, necesitará tiempo para elevarlo. Y, a veces, en su informe aparecerá actividad fraudulenta o información errónea, que puede tardar meses en corregirse.

La calificación crediticia que utilizan la mayoría de los prestamistas es su calificación FICO, una calificación ponderada desarrollada por Fair Isaac Corporation que toma en cuenta su historial de pagos (35%), los montos adeudados (30%), la duración del historial crediticio (15%), el nuevo crédito (10%), y mix de crédito (10%). 1

 

Fuente: myFico.com

Los puntajes FICO base varían de 300 a 850. Un puntaje FICO más alto lo ayudará a calificar para una tasa de interés hipotecario más baja, lo que le ahorrará dinero.2

Por ley federal, usted tiene derecho a una copia gratuita de su informe de crédito cada 12 meses de cada una de las tres agencias de crédito principales (Equifax, Experian y Transunion). Solicite su informe de crédito gratuito en https://www.annualcreditreport.com.

Requisitos de puntaje mínimo

Para calificar para las tasas de interés más bajas disponibles, generalmente necesitará un puntaje FICO de 760 o superior. La mayoría de los prestamistas requieren una puntuación de al menos 620 para calificar para una hipoteca convencional.

Si su puntaje FICO es menor a 620, es posible que pueda calificar para una hipoteca no convencional. Sin embargo, debe esperar pagar tasas de interés y tarifas más altas. Por ejemplo, puede obtener un préstamo FHA (uno emitido por un prestamista privado pero asegurado por la Administración Federal de Vivienda) con una calificación crediticia tan baja como 580 si puede hacer un pago inicial del 3.5 por ciento. Y los préstamos FHA están disponibles para los solicitantes con puntajes de crédito tan bajos como 500 con un pago inicial del 10 por ciento.

Aumente su puntaje de crédito

No hay una solución rápida para un puntaje de crédito bajo, pero los siguientes pasos lo ayudarán a aumentarla con el tiempo.5

  • Hacer pagos a tiempo

Con un 35 por ciento, su historial de pagos representa la mayor parte de su puntaje de crédito. Por lo tanto, es crucial ponerse al día con cualquier pago atrasado y hacer todos sus pagos futuros a tiempo.

Si tiene problemas para recordar pagar sus facturas a tiempo, configure recordatorios de pago a través de su plataforma de banca en línea, una herramienta gratuita de administración de dinero como Mint o una aplicación como BillMinder.

  • Evite solicitar un nuevo crédito que no necesita

Las nuevas cuentas reducirán su antigüedad promedio, lo que podría impactar negativamente en la duración de su historial de crédito. Además, cada vez que solicite un crédito, puede resultar en una pequeña disminución en su puntaje de crédito.

¿La excepción a esta regla? Si no tiene ninguna tarjeta de crédito, o ninguna cuenta de crédito, debe abrir una cuenta para establecer un historial de crédito. Solo asegúrese de usarlo responsablemente y pague en su totalidad cada mes.

Si necesita comprar una nueva cuenta de crédito, por ejemplo, un préstamo para automóvil, asegúrese de completar sus solicitudes de préstamo dentro de un corto período de tiempo. FICO intenta distinguir entre la búsqueda de un solo préstamo y las solicitudes para abrir varias líneas de crédito nuevas por la ventana de tiempo durante la cual se realizan las consultas.

  • Pagar tarjetas de crédito

Cuando cancela sus tarjetas de crédito y otro crédito renovable, reduce sus montos adeudados o el índice de utilización del crédito (proporción de saldos de cuenta a límites de crédito). Algunos expertos recomiendan comenzar con su deuda de mayor interés y pagarla primero. Otros sugieren pagar primero su saldo más bajo y luego transferir ese pago a su siguiente saldo más bajo para crear un impulso.

Sea cual sea el método que elija, el primer paso es hacer una lista de todos los saldos de sus tarjetas de crédito y luego comenzar a abordarlos uno por uno. Haga los pagos mínimos en todas sus tarjetas, excepto una. Pague todo lo que pueda en esa tarjeta hasta que se pague por completo, luego táchela de la lista y continúe con la siguiente tarjeta.

Pago de la deuda Tipo de interés Pago total Pago mínimo
Tarjeta de crédito 1 12.5% $ 460 $ 18.40
Tarjeta de crédito 2 18.9% $ 1,012 $ 40.48
Tarjeta de crédito 3 3.11% $ 6,300 $ 252

  • Evite cerrar cuentas antiguas

Cerrar una cuenta antigua no la eliminará de su informe de crédito. De hecho, puede afectar su puntaje, ya que puede aumentar su tasa de utilización de crédito, ya que tendrá menos crédito disponible, y disminuir su longitud promedio de historial de crédito.

Del mismo modo, el pago de una cuenta de cobro no lo eliminará de su informe. Permanece en su informe de crédito durante siete años, sin embargo, el impacto negativo en su puntaje disminuirá con el tiempo.

  • Corregir errores en su informe

Los errores o la actividad fraudulenta pueden afectar negativamente su puntaje de crédito. Por eso es una buena idea revisar su informe de crédito al menos una vez al año. La Comisión Federal de Comercio tiene instrucciones en su sitio web para disputar errores en su informe.

Si bien puede parecer mucho esfuerzo elevar su puntaje de crédito, su trabajo arduo se verá recompensado a largo plazo. No solo lo ayudará a calificar para una hipoteca, sino que también le ayudará a obtener una tasa de interés más baja en préstamos para automóviles y tarjetas de crédito. Incluso puede calificar para tarifas más bajas en primas de seguros.

PASO 2: AHORRE PARA UN PAGO INICIAL Y COSTOS DE CIERRE

El siguiente paso para prepararse para la compra de su casa es ahorrar para el pago inicial y los costos de cierre.

Enganche

Cuando compra una casa, normalmente paga una parte de ella en efectivo (pago inicial) y obtiene un préstamo para cubrir el saldo restante (hipoteca).

Muchos compradores primerizos se preguntan: ¿Cuánto necesito ahorrar para un pago inicial? La respuesta es … depende.

En términos generales, cuanto mayor sea el pago inicial, más dinero ahorrará en intereses y comisiones. Por ejemplo, usted calificará para una tasa de interés más baja y evitará pagar el seguro hipotecario si su pago inicial es al menos el 20 por ciento del precio de compra de la propiedad. Pero, ¿qué pasa si no puede darse el lujo de pagar un 20 por ciento?

En un préstamo convencional, se le solicitará que compre un seguro hipotecario privado (PMI) si su pago inicial es inferior al 20 por ciento. PMI es un seguro que compensa a su prestamista si no cumple con su préstamo.

El PMI le costará entre el 0,3 y el 1,5 por ciento del monto total de la hipoteca cada año. 8 Entonces, en un préstamo de $ 100,000, puede esperar pagar entre $ 300 y $ 1500 por año para el PMI hasta que el saldo de su hipoteca caiga por debajo del 80 por ciento del valor de tasación. 9Para una hipoteca convencional con PMI, la mayoría de los prestamistas aceptarán un pago inicial mínimo del cinco por ciento del precio de compra.7

Si un pago inicial del cinco por ciento sigue siendo demasiado alto, un préstamo asegurado por la FHA puede ser una opción para usted. Debido a que están garantizados por la Administración Federal de Vivienda, los préstamos de la FHA solo requieren un pago inicial del 3.5 por ciento si su puntaje de crédito es 580 o más.7

¿El inconveniente de obtener un préstamo FHA? Se le pedirá que pague una prima de seguro hipotecario por adelantado (MIP) de 1.75 por ciento del monto total del préstamo, así como un MIP anual de entre 0.80 y 1.05 por ciento del saldo de su préstamo en una nota de 30 años. También hay ciertas limitaciones en los tipos de préstamos y propiedades que califican10.

También hay una variedad de otros programas patrocinados por el gobierno creados para ayudar a los compradores de vivienda. Por ejemplo, los veteranos y los miembros actuales de las Fuerzas Armadas pueden calificar para un préstamo respaldado por el VA que requiere un pago inicial de $ 0. 7 Consulte a un prestamista hipotecario sobre las opciones disponibles para usted.

TIPO MÍNIMO ABAJO CUOTAS ADICIONALES

  • Préstamo convencional 20% Califique para obtener las mejores tarifas y no se requiere seguro hipotecario
  • Préstamo convencional 5% Debe comprar un seguro hipotecario privado con un costo de 0.3 a 1.5% de la hipoteca anual
  • Préstamo FHA 3.5% de la prima del seguro hipotecario por adelantado del 1.75% del monto del préstamo y una tarifa anual de 0.8 – 1.05%

Propietarios actuales

Si usted es un propietario actual, puede tener capital en su hogar que puede usar para el pago inicial de una nueva casa. Podemos ayudarlo a calcular el rendimiento esperado después de vender su casa actual y pagar su hipoteca actual. Póngase en contacto con nosotros para una evaluación gratuita!

Costos de cierre

Los costos de cierre también deben tenerse en cuenta en su plan de ahorro. Estos pueden incluir tarifas de originación de préstamos, puntos de descuento, tarifas de tasación, búsquedas de títulos, seguros de títulos, encuestas y otras tarifas asociadas con la compra de su casa. Los costos de cierre varían, pero generalmente oscilan entre el dos y el cinco por ciento del precio de compra.

Si no tiene los fondos para pagarlos en el momento del cierre, a menudo puede agregarlos al saldo de su hipoteca y pagarlos en el tiempo. Sin embargo, esto significa que tendrá un pago mensual más alto y pagará más a largo plazo porque pagará intereses sobre las tarifas.

PASO 3: ESTIMAR SU PODER DE COMPRA DE LA CASA

Una vez que tenga el puntaje de crédito requerido, los ahorros para un pago inicial y una lista de todas sus obligaciones de deuda pendientes a través de su informe de crédito, puede evaluar si está listo y puede comprar una casa.

Es importante tener una idea de cuánto puede pagar razonablemente, y cuánto podrá pedir prestado, para ver si la propiedad de una vivienda está al alcance.

Su relación deuda-ingreso (DTI) es uno de los principales factores que utilizan las compañías hipotecarias para determinar cuánto están dispuestos a prestarle, y puede ayudarlo a determinar si sus objetivos de compra de vivienda son realistas dada su situación financiera actual .

Su relación DTI es esencialmente una comparación de sus gastos de vivienda y otras deudas en comparación con sus ingresos. Hay dos relaciones DTI diferentes que los prestamistas consideran:

Proporción frontal

También llamado el índice de vivienda, este es el porcentaje de sus ingresos que se destinaría a los gastos de vivienda cada mes, incluido el pago de su hipoteca, el seguro hipotecario privado, los impuestos a la propiedad, el seguro del propietario y las cuotas de asociación.12

Para calcular su proporción de DTI al inicio, un prestamista sumará sus gastos de vivienda esperados y los dividirá por sus ingresos mensuales brutos (ingresos antes de impuestos). La proporción máxima de DTI al inicio para la mayoría de las hipotecas es del 28 por ciento. Para un préstamo respaldado por la FHA, esta proporción no debe exceder el 31 por ciento.13

Proporción de back-end

La proporción de servicios de fondo tiene en cuenta todas sus obligaciones de deuda mensuales: sus gastos de vivienda esperados MÁS las facturas de tarjetas de crédito, pagos de automóviles, pensión alimenticia o pensión alimenticia, préstamos estudiantiles y cualquier otra deuda que aparezca en su informe de crédito.12

Para calcular su relación de respaldo, un prestamista tabulará sus gastos de vivienda esperados y otros pagos mensuales de la deuda y los dividirá por sus ingresos mensuales brutos (ingresos antes de impuestos). La proporción máxima de DTI de back-end para la mayoría de las hipotecas es del 36 por ciento. Para un préstamo respaldado por la FHA, esta proporción no debe exceder el 41 por ciento.13

Calculadora de asequibilidad para el hogar

Para tener una idea de cuánto puede pagar por su hogar, visite la Calculadora de Asequibilidad del Hogar gratuita de la Asociación Nacional de Agentes de Bienes Raíces en https://www.realtor.com/mortgage/tools/affordability-calculator.

Esta práctica herramienta lo ayudará a determinar el poder de compra de su casa según su ubicación, sus ingresos anuales, sus deudas mensuales y el pago inicial. También ofrece un desglose mensual de la hipoteca que proyecta lo que pagaría cada mes en capital e intereses, impuestos a la propiedad y seguros de hogar.

La Calculadora de Asequibilidad del Hogar tiene como valor predeterminado una proporción DTI de back-end del 36 por ciento. Si la estimación del costo mensual en esa proporción es significativamente más alta que la que actualmente paga por la vivienda, debe considerar si puede compensar o no la diferencia cada mes en su presupuesto.

De lo contrario, es posible que desee reducir su precio de compra objetivo a un índice DTI más conservador. La herramienta le permite desplazarse a través de puntos de precio más altos y más bajos para ver el impacto en sus pagos mensuales para que pueda identificar su punto de precio ideal.

(Nota: esta herramienta solo proporciona una estimación de su poder de compra. Deberá obtener la aprobación previa de un prestamista hipotecario para saber el monto real de su aprobación de la hipoteca y las proyecciones de pagos mensuales).

¿Puedo permitirme comprar la casa de mis sueños?

Una vez que tenga una idea de su poder adquisitivo, es hora de averiguar qué vecindarios y qué tipo de casas puede pagar. La mejor manera de determinar esto es ponerse en contacto con un agente de bienes raíces con licencia. Ayudamos a los propietarios de viviendas como usted todos los días y podemos enviarle una lista completa de viviendas dentro de su presupuesto que satisfagan sus necesidades específicas.

Si hay hogares dentro de su rango de precios y vecindarios específicos que cumplen con sus criterios, ¡felicitaciones! Es hora de comenzar su búsqueda de casa.

De lo contrario, es posible que deba continuar ahorrando para un pago inicial más grande … o ajustar sus parámetros de búsqueda para encontrar hogares que se ajusten a su presupuesto. Podemos ayudarlo a determinar el curso correcto para usted.

COMIENCE A COLOCAR SU FUNDACIÓN HOY

Nunca es demasiado temprano para comenzar a prepararse financieramente para comprar una casa. Estos tres pasos lo pondrán en el camino hacia la propiedad de vivienda … ¡y un futuro financiero seguro!

Y si está listo para comprar ahora pero no tiene un puntaje de crédito perfecto o un gran pago inicial, no se desanime. Hay recursos y opciones disponibles que podrían permitirle comprar una casa antes de lo que cree. Podemos ayudar.

¿Quieres saber si estás listo para comprar una casa? ¡Llamanos! Lo ayudaremos a revisar sus opciones, lo conectaremos con uno de nuestros prestamistas hipotecarios de confianza y lo ayudaremos a determinar el momento ideal para comenzar su nueva búsqueda de vivienda.

Lo anterior hace referencia a una opinión y es sólo para fines informativos. No pretende ser un asesoramiento financiero. Consulte a un profesional financiero para obtener asesoramiento sobre sus necesidades individuales.

Sources:
  1. Quicken Loans Blog – 

https://www.quickenloans.com/blog/how-does-your-credit-score-affect-your-mortgage-eligibility
  2. myFICO – 

https://www.myfico.com/credit-education/credit-report-credit-score-articles/
  3. Bankrate – 

https://www.bankrate.com/mortgages/what-is-a-good-credit-score-to-buy-a-house/
  4. Bankrate – 

https://www.bankrate.com/finance/mortgages/7-crucial-facts-about-fha-loans-1.aspx
  5. myFICO – 

https://www.myfico.com/credit-education/improve-your-credit-score/
  6. The Balance – 

https://www.thebalance.com/having-good-credit-score-960528
  7. Bankrate – 

https://www.bankrate.com/mortgages/how-much-is-a-down-payment-on-a-house/
  8. Bankrate – 

https://www.bankrate.com/finance/mortgages/the-basics-of-private-mortgage-insurance-pmi.aspx
  9. Bankrate – 

https://www.bankrate.com/finance/mortgages/removing-private-mortgage-insurance.aspx
  10. The Balance – 

https://www.thebalance.com/fha-home-loan-pitfalls-315673
  11. Investopedia – 

https://www.investopedia.com/terms/c/closingcosts.asp
  12. Bankrate – 

https://www.bankrate.com/finance/mortgages/why-debt-to-income-matters-in-mortgages-1.aspx
  13. The Lenders Network – 

https://thelendersnetwork.com/fha-debt-to-income-ratio/

Cómo aumentar el valor de su hogar para vender

Posted on by Ali Palacios - Broker
1303 SPRING CITY COURT
HOUSTON, TX 77090

Cómo aumentar el valor de su hogar para vender

Ya sea que ponga su casa en el mercado este año o en los próximos cinco años, es una decisión inteligente comenzar a construir el valor de su casa ahora. Estas son algunas formas de crear un hogar cómodo y, al mismo tiempo, facilitar el ingreso de más dinero en su cuenta bancaria el día del cierre.

Pequeñas reparaciones y mantenimiento.

Si piensa que el mantenimiento del hogar los fines de semana pierde su tiempo y energía, piénselo nuevamente. Las pequeñas tareas que realiza en su hogar evitan que pierda valor. Si se descuida el mantenimiento y las reparaciones pequeñas, el 10% del valor de su hogar saldrá de su puerta. La mayoría de los tasadores afirman que las casas que muestran poco o ningún mantenimiento preventivo pueden depreciarse de $ 15,000 a $ 20,000.

Un estudio realizado por investigadores de la Universidad de Connecticut y la Universidad de Syracuse muestra que el mantenimiento regular aumenta el valor de su hogar en aproximadamente un 1% por año. Sin embargo, los costos continuos de mantenimiento compensan ese valor, lo que significa que el mantenimiento regular en realidad reduce la tasa de depreciación. Además, debido a que los compradores de vivienda generalmente notan las reparaciones necesarias al comprar una casa nueva, el mantenimiento proactivo le permite al comprador saber que no tendrá que gastar dinero extra para mantener lo básico. Esto hace que su hogar sea más atractivo y, por lo tanto, es más probable que obtenga ofertas a precios más altos.

Mantener lo básico puede costarle poco dinero y, ciertamente, algo de esfuerzo, pero hay una manera de realizar esta importante actividad de manera inteligente. Este artículo de HouseLogic, por ejemplo, le muestra cómo mantener el mantenimiento del hogar por debajo de los $ 300 al año. Planear con anticipación también ayudará a facilitar el mantenimiento de su hogar. La mayoría de los tasadores profesionales y agentes de bienes raíces recomiendan un programa de mantenimiento proactivo que incluya:

  • Mantener suficiente efectivo a la mano para reemplazar sistemas y materiales.
  • Creación y seguimiento de un programa de mantenimiento.
  • Planificación de una habitación rehacer cada año.
  • Manteniendo un cuaderno de todos sus mantenimientos y reparaciones.
  • Paisajismo

La Extensión Cooperativa de Virginia en Virginia Tech publicó un estudio que muestra que el paisajismo puede aumentar el valor de una casa en un 15%. El estudio afirma que una casa valorada en $ 150,000 podría aumentar su valor entre $ 8,300 y $ 19,000 con la adición de paisajismo. Elementos particulares del paisaje añaden valor diferente. Por ejemplo, el diseño del paisaje puede aumentar el valor de su hogar en un 42%, el tamaño de la planta puede aumentar el valor de su hogar en un 32% y la diversidad de plantas puede aumentar el valor de su hogar en un 22%.

Reemplazar puertas de entrada

Si las puertas de entrada son de madera, considere cambiarlas por puertas de fibra de vidrio o de acero. Las puertas de acero agregan estilo e interés arquitectónico a su hogar al tiempo que mejoran la seguridad; puede agregar un cerrojo y teclados electrónicos para evitar la entrada de intrusos. A diferencia de las puertas de madera, las puertas de acero no se pudren ni se astillan.

Alternativamente, las puertas de fibra de vidrio se pueden diseñar para que se parezcan a las puertas de madera y le den a su hogar un aspecto moderno. Las puertas de fibra de vidrio conservan más energía que las puertas de acero.

En lo que respecta al precio, una puerta de acero le costará $ 1,335 con un 91% de retorno de la inversión, mientras que una puerta de fibra de vidrio le costará $ 3,126 con un 82.3% de retorno de la inversión.

Reemplazo de la puerta del garaje

Al principio, es posible que no piense que la puerta de su garaje aumenta el valor de su hogar. Sin embargo, la puerta de su garaje distingue su hogar de los otros hogares en su bloque. Como la entrada más grande de una casa, las puertas de los garajes se notan primero porque son el punto focal de su casa. Si desea aumentar rápidamente el valor de reventa de su hogar, necesita aprovechar al máximo este espacio.

Algunas cosas interesantes que se hacen con puertas de garaje incluyen:

  • Mayor tamaño: las puertas de garaje más grandes ayudan a que las casas se destaquen más, y los propietarios de viviendas pueden hacer más creativamente con ellas.
  • Colores audaces: los colores brillantes y audaces ahora pueden complementar el color de su hogar, o puede crear un concepto alrededor del color de su hogar.
  • Faux Wood: puede instalar puertas de garaje de fibra de vidrio o acero que parecen puertas de garaje de madera. Esto le da a su hogar un nuevo nivel de sofisticación.
  • Ventanas: las ventanas grandes en la puerta de su garaje mejoran la estética de su hogar y brindan luz en su garaje para que ya no sea un espacio oscuro.

Más importante aún, un reemplazo de la puerta del garaje le costará $ 1,652 y agregará $ 1,512 al valor de su hogar; Eso es un retorno de su inversión de 91.5%.

Aislamiento de fibra de vidrio en el ático

Si bien la eficiencia energética aún no es el punto de venta más atractivo de su hogar, la instalación de aislamiento de fibra de vidrio en el ático ahorra energía y le proporciona una gran recompensa a su inversión. Según el informe de tendencias principales Costo vs. Valor de Remodeling Magazine de 2016, el aislamiento de fibra de vidrio del ático obtuvo el mayor retorno de la inversión entre los 30 proyectos del informe de este año. Usando Remodel / Max como la fuente de costos, un proyecto de aislamiento de fibra de vidrio para áticos cuesta $ 1,268 en todo el país. Los profesionales inmobiliarios encuestados estimaron que el trabajo aumentaría el precio de una casa en reventa, dentro del año de su finalización, en $ 1,482. Eso es un 116.9% de retorno sobre la inversión.

Reemplazo de Windows

Reemplazar sus ventanas es otra forma de ahorrar energía y aumentar el valor de reventa de su hogar. Reemplazar sus viejas ventanas con modelos de ahorro de energía embellecerá su hogar, lo mantendrá cómodo y facilitará la carga de trabajo de su sistema de HVAC. Según HGTV, verá una reducción en su factura de servicios públicos entre un 7% y un 15%. Sin embargo, si está vendiendo su casa, podría esperar una recuperación de su inversión del 60% al 70%. Los dos tipos de ventanas de reemplazo que traen el mejor retorno son vinilo y madera.

Remodelando tu cocina

La remodelación de la cocina puede ser costosa, pero las pequeñas renovaciones pueden hacer que su hogar sea más fácil para el comprador. Cambiar la textura y el color de su cocina con un acabado mate y colores neutros como masilla o gris mejora el valor de reventa de su hogar. Debido a que los acabados mate tienen cualidades de transición, su potencial comprador de casa puede igualar fácilmente sus electrodomésticos de acero inoxidable o blanco y negro. Además, el reacabado de gabinetes o el cambio a los electrodomésticos Energy Star ™ brindan la comodidad que usted desea y el gusto de los compradores.

El flujo es importante para cualquier diseño interior de una casa. Si sientes que tu cocina dificulta un buen flujo, cámbiala. Una pequeña inversión para derribar un muro no estructural o remover una isla de cocina crea espacio y proporciona el flujo que los compradores adoran.

Una remodelación de la cocina de menor importancia puede costarle $ 20,122 mientras que pone $ 16,716 de valor de reventa en su hogar; eso es un 83% de devolución en el proyecto. Si desea hacer un modelo de cocina importante, esto le puede costar alrededor de $ 60,000 y poner alrededor de $ 39,000 de valor de reventa en su hogar, lo que representa solo un 65% de reembolso en el proyecto. Por lo tanto, considere una remodelación de cocina menor primero.

Adición o remodelación de baños

Asimismo, considere cuidadosamente agregar un baño o remodelar su baño. Cambiar las puertas de la ducha de vidrio esmerilado por puertas de vidrio, limpiar la lechada, reemplazar la ducha y los azulejos del piso, cambiar el fregadero o el inodoro o reemplazar los accesorios del lavabo y la ducha puede costarle poco dinero.

Agregar un baño puede ser costoso, pero puede reducir la congestión durante los tiempos agitados y proporcionar a sus invitados un baño. Consulte con su agente de bienes raíces o con un tasador local antes de decidir si una remodelación completa o una adición es adecuada para su situación. Mientras que la remodelación de un baño le costará alrededor de $ 18,000 con un retorno de la inversión de aproximadamente el 66%, la adición de un baño le costará aproximadamente $ 42,000 con un retorno de la inversión de aproximadamente el 56%. Por lo tanto, es mejor hacer su diligencia debida antes de trabajar en su baño.

Sus necesidades y deseos de los compradores

En esa nota, si necesita renovar su casa, asegúrese de considerar cómo esos cambios afectarán su atractivo para los futuros compradores. Conocer las tendencias de diseño le dará la oportunidad de realizar cambios en su hogar en función de dónde se intersectan sus necesidades y los deseos de su comprador potencial, lo que aumentará drásticamente el valor de reventa de su propiedad.

Los diseñadores y los sitios web de diseño ofrecen excelentes ideas cuando está realizando una lluvia de ideas sobre las renovaciones en el hogar. Sin embargo, tenga en cuenta al investigar, que no desea sacrificar sus necesidades por un hogar cómodo solo por lo que cree que querrá un futuro comprador.

Por lo tanto, antes de comenzar a realizar cambios en su hogar, consulte a su agente de bienes raíces. Los agentes de bienes raíces, ya que trabajamos constantemente con nuevos clientes compradores, tenemos información privilegiada sobre lo que los compradores de viviendas están buscando ahora y en el futuro. Podremos ayudarlo a tomar decisiones inteligentes al remodelar o renovar su hogar.

Si piensa que puede querer remodelar o renovar su casa en un futuro próximo, o si simplemente tiene curiosidad acerca de otras formas en que puede aumentar su valor de reventa, comuníquese conmigo.

How to Amp Up The Resale Value of Your Home

Posted on by Ali Palacios - Broker

How to Amp Up The Resale Value of Your Home

Whether you’re putting your home on the market this year or in the next five years, it is a smart decision to start building your home’s resale value now. Here are some ways to create a comfortable home while making it easier to put more money into your bank account on closing day.

Small Maintenance and Repairs

If you think that home maintenance on the weekends waste your time and energy, think again. The small chores you do around your home prevents it from losing value. Neglecting small maintenance and repairs causes 10% of your home’s value to walk out your door and slip through your windows. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000.

A study conducted by researchers at the University of Connecticut and Syracuse University shows that regular maintenance boosts your home value by about 1% per year. However, ongoing maintenance costs offset that value, which means that regular maintenance actually slows down your rate of depreciation. Furthermore, because homebuyers generally notice any repairs needed upon buying a new home, proactive maintenance lets the homebuyer know that he or she will not have to spend extra money to maintain the basics. This makes your home more attractive, and thus more likely to get higher priced offers.

Maintaining the basics can cost you little money and certainly some effort, but there’s a way to accomplish this very important activity smartly. This article by HouseLogic, for example,shows you how to keep home maintenance below $300 a year.  Planning ahead will also help make maintaining your home easier. Most professional appraisers and real estate agents recommend a proactive maintenance schedule that includes:

  • Keeping enough cash on hand to replace systems and materials
  • Creating and following a maintenance schedule
  • Planning a room redo every year
  • Keeping a notebook of all your maintenance and repairs

Landscaping

The Virginia Cooperative Extension at Virginia Techpublished a study that shows landscaping can increase a home’s value by 15%.  The study claims that a home valued at $150,000 could increase its value between $8,300 and $19,000 with the addition of landscaping. Particular landscape elements add different value. For instance, landscape design can increase your home’s value by 42%, plant size can increase your home’s value by 32%, and diversity in plants can increase your home’s value by 22%.

Replace Entrance Doors

If your entry doors are wood, consider switching them out for either fiberglass or steel doors. Steel doors add style and architectural interest to your home while improving security; you can add a deadbolt and electronic keypads to keep out intruders. Unlike wood doors, steel doors do not rot or splinter.

Alternatively, fiberglass doors can be designed to look like wood doors and give your home a modern look. Fiberglass doors conserve more energy than steel doors.

Pricewise, a steel door will cost you $1,335 with a 91% return on investment whereas a fiberglass door will cost you $3,126 with an 82.3% return on investment.

Garage Door Replacement

 At first, you might not think that your garage door increases the value of your home. However, your garage door distinguishes your home from the other homes on your block. As the largest entryway of a house, garage doors get noticed first because they’re the focal point of your home. If you want to quickly increase the resale value of your home, you need to make the most of this space.

Some interesting things being done with garage doors include:

  • Increased Size:Bigger garage doors help homes stand out more, and homeowners can do more creatively with them.
  • Bold Colors:Bright and bold colors now can complement the color of your home, or you can build a concept around the color of your home.
  • Faux Wood:You can install fiberglass or steel garage doors that look like wood garage doors. This gives your home a new level of sophistication.
  • Windows:Large Windows on your garage door improve the aesthetic of your home, and provide light into your garage so that it’s no longer a dark space.

 More importantly, a garage door replacement will cost you $1,652 and add $1,512 to the value of your home; that’s a return on your investment of 91.5%.

Fiberglass Attic Insulation

While energy efficiency is still not the sexiest selling point of your home, installing fiberglass attic insulation saves energy and garners a big payback on your investment. According to Remodeling Magazine’s 2016 Cost vs. Value top trends report, fiberglass attic insulation gained the top return on investment among the 30 projects in this year’s report. Using Remodel/Max as the cost source, a fiberglass attic insulation project cost $1,268 nationwide. Real estate professionals surveyed estimated that the work would boost the price of a home at resale, within a year of its completion, by $1,482. That’s a 116.9% return on investment.

Replacing Windows

Replacing your windows is another way to save energy and increase your home’s resale value. Replacing your old windows with energy saving models will beautify your home, keep it comfortable, and ease the workload of your HVAC system. According to HGTV, you’ll see a reduction in your utility bill by 7% to 15%. However, if you’re selling your home, you could expect a 60% to 70% recoupment of your investment. The two types of replacement windows that fetch the best returnare vinyl and wood.

Remodeling Your Kitchen

Kitchen remodeling can get expensive, but small renovations can make your home more buyer friendly. Changing your kitchen’s texture and color using a matte finish and neutral colors such as putty or grey enhances your home’s resale value. Because matte finishes have transitional qualities, your potential homebuyer can easily match his or her stainless steel or black and white appliances. Also, refinishing cabinetry, or switching to Energy Star™ appliances provide comfort you like and pizazz buyers adore.

Flow is important to any interior design of a home. If you feel that your kitchen hinders a good flow, change it. A small investment to knock out a non-structural wall or remove a kitchen island creates space and provides flow that buyers love.

A minor kitchen remodel can cost you $20,122 while putting $16,716 of resale value into your home; that’s an 83% payback on the project. If you want to do a major kitchen model, this can cost you about $60,000 and put about $39,000 of resale value into your home, which is only about a 65% payback on the project. Therefore, consider a minor kitchen remodel first.

Bathroom Addition or Remodel

Likewise, carefully consider adding a bathroom or remodeling your bathroom. Switching out your frosted glass shower doors for glass doors, cleaning the grout, replacing the shower and floor tiles, switching out your sink or toilet, or replacing your sink and shower fixtures can cost you little money.

Adding a bathroom can get expensive, but it can reduce congestion during hectic times and provide your guests with a bathroom. Consult with your real estate agent or a local appraiser before deciding whether a full remodel or addition is right for your situation. While a bathroom remodel will cost you about $18,000 with a return on investment of about 66%, a bathroom addition will cost you about $42,000 with a return on investment of about 56%. Therefore, it’s best do your due diligence before working on your bathroom.

Your Needs and Buyers’ Wants

On that note, if you need to renovate your home, be sure to consider how those changes will affect its appeal to future buyers. Knowing design trends will give you the opportunity to make changes to your home based on where your needs and your potential buyer’s desires intersect, thus increasing your property’s resale value drastically.

Designers and design websites provide great ideas when you’re brainstorming home renovations. Keep in mind as you research, however, that you don’t want to sacrifice your needs for a comfortable home just for the sake of what you think a future buyer will want!

Therefore, before you begin making any changes to your home, consult your real estate agent. Real estate agents, because we are constantly working with new buyer clients, have insider insight into what home buyers are looking for now and in the future. We’ll be able to help you make smart choices when remodeling or renovating your home.

If you think you might want to remodel or renovate your home in the near future, or if you are just curious about other ways you can increase its resale value, please reach out to me!

The Home Buyer’s Guide to Getting Mortgage Ready

Posted on by Ali Palacios - Broker

The Home Buyer’s Guide to Getting Mortgage Ready

Don’t wait until you’re ready to move to start preparing financially to buy a home.

If you’re like the vast majority of home buyers, you will choose to finance your purchase with a mortgage loan. By preparing in advance, you can avoid the common delays and roadblocks many buyers face when applying for a mortgage.

The requirements to secure a mortgage may seem overwhelming, especially if you’re a first-time buyer. But we’ve outlined three simple steps to get you started on your path to homeownership.

Even if you’re a current homeowner, it’s a good idea to prepare in advance so you don’t encounter any surprises along the way. Lending requirements have become more rigorous in recent years, and changes to your credit history, debt levels, job type and other factors could impact your chances of approval.

It’s never too early to start preparing to buy a home. Follow these three steps to begin laying the foundation for your future home purchase today!

 

STEP 1: CHECK YOUR CREDIT SCORE

Your credit score is one of the first things a lender will check to see if you qualify for a loan. It’s a good idea to review your credit report and score yourself before you’re ready to apply for a mortgage. If you have a low score, you will need time to raise it. And sometimes fraudulent activity or erroneous information will appear on your report, which can take months to correct.

The credit score most lenders use is your FICO score, a weighted score developed by the Fair Isaac Corporation that takes into account your payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).1

Source: myFico.com

Base FICO scores range from 300 to 850. A higher FICO score will help you qualify for a lower mortgage interest rate, which will save you money.2

By federal law, you are entitled to one free copy of your credit report every 12 months from each of the three major credit bureaus (Equifax, Experian and Transunion). Request your free credit report at https://www.annualcreditreport.com.

 

Minimum Score Requirements

To qualify for the lowest interest rates available, you will usually need a FICO score of 760 or higher. Most lenders require a score of at least 620 to qualify for a conventional mortgage.3

If your FICO score is less than 620, you may be able to qualify for a non-conventional mortgage. However, you should expect to pay higher interest rates and fees. For example, you may be able to secure an FHA loan (one issued by a private lender but insured by the Federal Housing Administration) with a credit score as low as 580 if you can make a 3.5 percent down payment. And FHA loans are available to applicants with credit scores as low as 500 with a 10 percent down payment.4

 

Increase Your Credit Score

There’s no quick fix for a low credit score, but the following steps will help you increase it over time.5

 

  1. Make Payments on Time

At 35 percent, your payment history accounts for the largest portion of your credit score. Therefore, it’s crucial to get caught up on any late payments and make all of your future payments on time.

If you have trouble remembering to pay your bills on time, set up payment reminders through your online banking platform, a free money management tool like Mint, or an app like BillMinder.

 

  1. Avoid Applying for New Credit You Don’t Need

New accounts will lower your average account age, which could negatively impact your length of credit history. Also, each time you apply for credit, it can result in a small decrease in your credit score.

The exception to this rule? If you don’t have any credit cards—or any credit accounts at all—you should open an account to establish a credit history. Just be sure to use it responsibly and pay it off in full each month.

If you need to shop for a new credit account, for example, a car loan, be sure to complete your loan applications within a short period of time. FICO attempts to distinguish between a search for a single loan and applications to open several new lines of credit by the window of time during which inquiries occur.

 

  1. Pay Down Credit Cards

When you pay off your credit cards and other revolving credit, you lower your amounts owed, or credit utilization ratio (ratio of account balances to credit limits). Some experts recommend starting with your highest-interest debt and paying it off first. Others suggest paying off your lowest balance first and then rolling that payment into your next-lowest balance to create momentum.

Whichever method you choose, the first step is to make a list of all of your credit card balances and then start tackling them one by one. Make the minimum payments on all of your cards except one. Pay as much as possible on that card until it’s paid in full, then cross it off your list and move on to the next card.

 

Debt Interest Rate Total Payoff Minimum Payment
Credit Card 1 12.5% $460 $18.40
Credit Card 2 18.9% $1,012 $40.48
Credit Card 3 3.11% $6,300 $252

 

  1. Avoid Closing Old Accounts

Closing an old account will not remove it from your credit report. In fact, it can hurt your score, as it can raise your credit utilization ratio—since you’ll have less available credit—and decrease your average length of credit history.

Similarly, paying off a collection account will not remove it from your report. It remains on your credit report for seven years, however, the negative impact on your score will decrease over time.

 

  1. Correct Errors on Your Report

Mistakes or fraudulent activity can negatively impact your credit score. That’s why it’s a good idea to check your credit report at least once per year. The Federal Trade Commission has instructions on their websitefor disputing errors on your report.

While it may seem like a lot of effort to raise your credit score, your hard work will pay off in the long run. Not only will it help you qualify for a mortgage, a high credit score can help you secure a lower interest rate on car loans and credit cards, as well. You may even qualify for lower rates on insurance premiums.6

 

STEP 2: SAVE UP FOR A DOWN PAYMENT AND CLOSING COSTS

The next step in preparing for your home purchase is to save up for a down payment and closing costs.

 

Down Payment

When you purchase a home, you typically pay for a portion of it in cash (down payment) and take out a loan to cover the remaining balance (mortgage).

Many first-time buyers wonder: How much do I need to save for a down payment?The answer is … it depends.

Generally speaking, the higher your down payment, the more money you will save on interest and fees. For example, you will qualify for a lower interest rate and avoid paying for mortgage insurance if your down payment is at least 20 percent of the property’s purchase price. But what if you can’t afford to put down 20 percent?

On a conventional loan, you will be required to purchase private mortgage insurance (PMI) if your down payment is less than 20 percent. PMI is insurance that compensates your lender if you default on your loan.7

PMI will cost you between 0.3 to 1.5 percent of the overall mortgage amount each year.8So, on a $100,000 loan, you can expect to pay between $300 and $1500 per year for PMI until your mortgage balance falls below 80 percent of the appraised value.9For a conventional mortgage withPMI, most lenders will accept a minimum down payment of five percent of the purchase price.7

If a five-percent down payment is still too high, an FHA-insured loan may be an option for you. Because they are guaranteed by the Federal Housing Administration, FHA loans only require a 3.5 percent down payment if your credit score is 580 or higher.7

The downside of getting an FHA loan? You’ll be required to pay an upfront mortgage insurance premium (MIP) of 1.75 percent of the total loan amount, as well as an annual MIP of between 0.80 and 1.05 percent of your loan balance on a 30-year note. There are also certain limitations on the types of loans and properties that qualify.10

There are a variety of other government-sponsored programs created to assist home buyers, as well. For example, veterans and current members of the Armed Forces may qualify for a VA-backed loan requiring a $0 down payment.7Consult a mortgage lender about what options are available to you.

 

TYPE MINIMUM DOWN ADDITIONAL FEES
Conventional Loan 20% Qualify for the best rates and no mortgage insurance required
Conventional Loan 5% Must purchase private mortgage insurance costing 0.3 – 1.5% of mortgage annually
FHA Loan 3.5% Upfront mortgage insurance premium of 1.75% of loan amount and annual fee of 0.8 – 1.05%

 

Current Homeowners

If you’re a current homeowner, you may have equity in your home that you can use toward your down payment on a new home. We can help you estimate your expected return after you sell your current home and pay back your existing mortgage. Contact us for a free evaluation!

 

Closing Costs

Closing costs should also be factored into your savings plan. These may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys and other fees associated with the purchase of your home. Closing costs vary but typically range between two to five percent of the purchase price.11

If you don’t have the funds to pay these outright at closing, you can often add them to your mortgage balance and pay them over time. However, this means you’ll have a higher monthly payment and pay more over the long term because you’ll pay interest on the fees.

 

STEP 3: ESTIMATE YOUR HOME PURCHASING POWER

Once you have the required credit score, savings for a down payment and a list of all your outstanding debt obligations via your credit report, you can assess whether you are ready and able to purchase a home.

It’s important to have a sense of how much you can reasonably afford—and how much you’ll be able to borrow—to see if homeownership is within reach.

Your debt-to-income (DTI) ratio is one of the main factors mortgage companies use to determine how much they are willing to lend you, and it can help you gauge whether or not your home purchasing goals are realistic given your current financial situation.

Your DTI ratio is essentially a comparison of your housing expenses and other debt versus your income. There are two different DTI ratios that lenders consider:

 

Front-End Ratio

Also called the housing ratio, this is the percentage of your income that would go toward housing expenses each month, including your mortgage payment, private mortgage insurance, property taxes, homeowner’s insurance and association dues.12

To calculate your front-end DTI ratio, a lender will add up your expected housing expenses and divide it by your gross monthly income (income before taxes). The maximum front-end DTI ratio for most mortgages is 28 percent. For an FHA-backed loan, this ratio must not exceed 31 percent.13

 

Back-End Ratio

The back-end ratio takes into account all of your monthly debt obligations: your expected housing expenses PLUS credit card bills, car payments, child support or alimony, student loans and any other debt that shows up on your credit report.12

To calculate your back-end ratio, a lender will tabulate your expected housing expenses and other monthly debt payments and divide it by your gross monthly income (income before taxes). The maximum back-end DTI ratio for most mortgages is 36 percent. For an FHA-backed loan, this ratio must not exceed 41 percent.13

 

Home Affordability Calculator

To get a sense of how much home you can afford, visit the National Association of Realtors’ free Home Affordability Calculator at https://www.realtor.com/mortgage/tools/affordability-calculator.

This handy tool will help you determine your home purchasing power depending on your location, annual income, monthly debt and down payment. It also offers a monthly mortgage breakdown that projects what you would pay each month in principal and interest, property taxes, and home insurance.

The Home Affordability Calculator defaults to a back-end DTI ratio of 36 percent. If the monthly cost estimate at that ratio is significantly higher than what you’re currently paying for housing, you need to consider whether or not you can make up the difference each month in your budget.

If not, you may want to lower your target purchase price to a more conservative DTI ratio. The tool enables you to scroll through higher and lower price points to see the impact on your monthly payments so you can identify your ideal price point.

(Note: This tool only provides an estimate of your purchasing power. You will need to secure pre-approval from a mortgage lender to know your true mortgage approval amount and monthly payment projections.)

 

Can I Afford to Buy My Dream Home?

Once you have a sense of your purchasing power, it’s time to find out which neighborhoods and types of homes you can afford. The best way to determine this is to contact a licensed real estate agent. We help homeowners like you every day and can send you a comprehensive list of homes within your budget that meet your specific needs.

If there are homes within your price range and target neighborhoods that meet your criteria—congratulations! It’s time to begin your home search.

If not, you may need to continue saving up for a larger down payment … or adjust your search parameters to find homes that do fit within your budget. We can help you determine the right course for you.

 

START LAYING YOUR FOUNDATION TODAY

It’s never too early to start preparing financially for a home purchase. These three steps will set you on the path toward homeownership … and a secure financial future!

And if you are ready to buy now but don’t have a perfect credit score or a big down payment, don’t get discouraged. There are resources and options available that might make it possible for you to buy a home sooner than you think. We can help.

Want to find out if you’re ready to buy a house? Give us a call! We’ll help you review your options, connect you with one of our trusted mortgage lenders, and help you determine the ideal time to begin your new home search.

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

 

 

Sources:
  1. Quicken Loans Blog – 

https://www.quickenloans.com/blog/how-does-your-credit-score-affect-your-mortgage-eligibility
  2. myFICO – 

https://www.myfico.com/credit-education/credit-report-credit-score-articles/
  3. Bankrate – 

https://www.bankrate.com/mortgages/what-is-a-good-credit-score-to-buy-a-house/
  4. Bankrate – 

https://www.bankrate.com/finance/mortgages/7-crucial-facts-about-fha-loans-1.aspx
  5. myFICO – 

https://www.myfico.com/credit-education/improve-your-credit-score/
  6. The Balance – 

https://www.thebalance.com/having-good-credit-score-960528
  7. Bankrate – 

https://www.bankrate.com/mortgages/how-much-is-a-down-payment-on-a-house/
  8. Bankrate – 

https://www.bankrate.com/finance/mortgages/the-basics-of-private-mortgage-insurance-pmi.aspx
  9. Bankrate – 

https://www.bankrate.com/finance/mortgages/removing-private-mortgage-insurance.aspx
  10. The Balance – 

https://www.thebalance.com/fha-home-loan-pitfalls-315673
  11. Investopedia – 

https://www.investopedia.com/terms/c/closingcosts.asp
  12. Bankrate – 

https://www.bankrate.com/finance/mortgages/why-debt-to-income-matters-in-mortgages-1.aspx
  13. The Lenders Network – 

https://thelendersnetwork.com/fha-debt-to-income-ratio/

Child Advocates of Fort Bend – Donate Today

Posted on by Ali Palacios - Broker

I recently had the pleasure of touring the facility. I was moved by the dedication and enthusiasm that every employee/volunteer showed during the visit. They are doing AMAZING work. 

Child Advocates of Fort Bend is a nonprofit agency serving child victims of sexual abuse, physical abuse and neglect through two nationally-affiliated programs:  Court Appointed Special Advocates (CASA) and the Children’s Advocacy Center (CAC).  Started in 1991, it is celebrating its 25th anniversary in 2016 having served over 14,000 children ages birth – 18+ years old over these years.  Its mission is to:  Provide a Voice, Heal The Hurt and Break the Cycle of Abuse and Neglect for Children in Fort Bend County.

With a staff of 35 professionals, volunteer corps of 200 child advocate volunteers and collaborations with 40 partner agencies, it is consistently ranked as the “best practices” model for the investigation, treatment, advocacy and prevention of child abuse.  It employs a Multi-Disciplinary Team approach and practices trauma-focused, evidence-based practices.  Child Advocates of Fort Bend is community supported, public/private partnership that provides all its services at no cost.

For more information

This holiday season I will be collecting new toys, clothing, shoes, backpacks, stuffed animals or blankets for the Child Advocates of Fort Bend. Wish list: 2018 Child Advocate Donation 

I will be collecting items through December 15, 2018. 

I’d be happy to pick up items or you can mail the items to me . Email me for my address. ali@happyclientsrealtygroup.com

Thank you in advance!

Compre y venda su casa con nosotros y ahorra en sus costos de cierre!

Posted on by Ali Palacios - Broker

 

¿Estás planeando vender una casa en los próximos 18 meses? Permítanos ayudarlo a vender y comprar su nuevo hogar. Como agradecimiento por su confianza en nuestros servicios, contribuiremos con $ 2,500 * para usarlos en los costos de cierre de su nueva casa. El crédito no vence y se puede transferir a un amigo o familiar para comprar una casa con nosotros.

Esto es lo que puedes esperar:

  1. Valor actual de la casa: ¿pensando en vender en los próximos meses? Si es así, hagamos un análisis de precios en su hogar actual. Le proporcionaremos un precio de venta sugerido y una hoja neta aproximada. Juntos podemos revisar el proceso de ventas y elaborar un plan de acción.
  2. Obtenga pre-aprobación: hable con un banco acerca de obtener pre-aprobación para un nuevo préstamo. El prestamista revisará sus opciones y le proporcionará un estimado de préstamo. Esta información nos ayudará a planificar con anticipación la compra de su nueva casa.
  3. Prepare la casa para la venta: programe su consulta de preparación. Le proporcionaremos una lista de verificación de los elementos para reparar / reemplazar o eliminar a fin de comercializar su propiedad a su máximo potencial. Una vez que la casa esté lista, programaremos fotografías profesionales.
  4. La propiedad se activa: la propiedad se activará en el mercado. Revisaremos las ofertas a medida que lleguen y tomaremos una decisión conjunta sobre el mejor comprador.
  5. Búsqueda de viviendas: ¡Una vez que tengamos un contrato, podemos comenzar a buscar su nuevo hogar!
  6. Haga una oferta: trabaje con nosotros para crear una oferta competitiva.
  7. Cierre: Trabajaremos juntos para asegurar que todas las inspecciones, contingencias y detalles sean atendidos. Se aplicarán $ 2500 para cubrir los costos de cierre en su nuevo hogar.
  8. Celebre: ¡Celebre su nuevo hogar!

¿Listo para empezar? Nunca es demasiado temprano

Envíenos un correo electrónico a ali@happyclientsrealtygroup.com o texto al 832-418-0670. Haga referencia al “crédito de costos de cierre”

* Restricciones: El crédito solo es válido en una compra con una comisión mínima de comprador de $ 5,000 ofrecida por la vendedora y la compra debe ocurrir dentro de nuestra misma área de mercado.

Si termina comprando una casa antes de vender su propiedad actual, le reembolsaremos $ 2,500 de la commission al vender su casa.

Find your dream home and save on closing costs!

Posted on by Ali Palacios - Broker

Are you planning on selling a home within the next 18 months? Let us help you sell and buy your new home. As a thank you for your trust in our services we will contribute $2,500* to be used towards your new home’s closing costs. The credit does not expire and can be transferred to a friend or family member to purchase a home with us.

Here is what you can expect:

  1. Current home’s value – Thinking about selling in the next few months? If so, let us run a price analysis on your current home. We will provide you with a suggested sales price and an approximate net sheet. Together we can review the sales process and come up with a plan of action.
  2. Get Pre-Approved: Speak to a lender about getting pre-qualified for a new loan. The lender will review your options and will provide you with a loan estimate. This information will help us plan ahead for your new home purchase.
  3. Prepare home for sale – Schedule your staging consultation. We will provide you with a check list of items to repair/replace or remove in order to market your property to its highest potential. Once the home is ready, we will schedule professional pictures.
  4. Property goes active – Property will go active on the market. We will review offers as they arrive and decide together on the best offer.
  5. Search for Homes: Once we are under contract we can start looking for your new home!
  6. Make Offer: Work with us to craft a competitive offer.
  7. Closing: We will work together to assure that all inspections, contingencies and details are taken care of. $2500 will be applied towards your closing costs on your new home. This will be reflected in your closing disclosure.
  8. Celebrate: Celebrate your new home!

What to get started? It’s never too early

Email us at ali@happyclientsrealtygroup.com and references “closing costs credit”

*Restrictions: Credit is only valid on a purchase with a minimum $5,000 Buyer Broker commission offered by the listing brokerage and the purchase must occur within our same market area.  

If you end up buying a home before you sell your current property we will refund $2,500 off the listing fee at closing.

 

 

 

How to spot a meth lab

Posted on by Ali Palacios - Broker



Recently, I had a customer call me to consult on a purchase she was getting ready to make. She found a home that was a steal and was super excited! Every sounded great until she mentioned the fact that the home was possibly a meth lab in the past. Wait, what? Yes, this is a problem for resale and as an investor.

Every year meth labs are busted and closed down but many home meth labs go unbeknown. These homes eventually get sold to unsuspecting buyers.

The problem is that these home’s surfaces, insulation and carpeting may be steeped in poisonous substances. These contaminates can make home owners sick over time.

When someone sells a home they are asked to fill out a seller’s disclosure form. In it there are two places that address possible issues. One section will ask if you know if the premise was used to manufacture methamphetamines. The other area will ask if the seller knows of any condition that will affect the health and safety of the individual. The homeowner is suppose to tell you but if they are the ones cooking the meth, it’s very unlikely they will disclose this info.

If the home has been foreclosed and it’s being sold by a bank, it’s also unlikely that the buyer will know if the home was being used to produce meth.

Beware of cheap foreclosed properties, which are usually sold “as is”. We can assume that persons’ producing meth are more likely to lose, trash and abandon their home. In fact, they might not own it at all. It’s likely they are renting or squatting in an abandoned home. Banks can resale the home and landlords can easily rent the property without you knowing.

There are a few signs you can look for, assuming the home has not been cleaned out. Look for the following:

  • Old bottles of acetone, muriatic acid, brake cleaner, drain cleaner, iodine, paint thinner, phosphorus laying around.
  • Rubber gloved, tubing, dust masks, propane tanks, coolers and camp stoves.
  • Yellow discoloration on walls, drains, sinks and showers.
  • Blue discoloration on valves of propane tanks and fire extinguishers.
  • Fire detectors that are removed–or taped off.
  • Burning in your eyes, itchy throat, a metallic taste in your mouth, or breathing problems when in the home.
  • Strong odors that smell similar to materials often found in a garage, such as solvent and paint thinner, or odors of cat urine or ammonia.

When it doubt or just to be proactive you can purchase a test kit for about $50 or you can hire a professional to do the testing for significantly more. You can also check with local police to see if the home was ever linked to drug arrests or complaints. Talk to the neighbors, most will be more than happy to tell you what they have seen and heard.

Something to consider: smoking meth in a home might also leave enough residue to cause health issues; it’s not just producing meth. It might be prudent to test before renting a home/apartment, buying vehicles, home and/or commercial buildings.

It’s best to be proactive because once you find out that the home is contaminated the clean up cost can easily run $10,000+.

To make matters worse there doesn’t seem to be a whole lot of concrete information about clean up and testing. The EPA does provide clean up guidelines but they are listed as “voluntary” clean up guidelines. In doing research, I found that the testing and clean up industry is not regulated and everyone seems to do their own thing.

If you find yourself in this situation do your research and see what’s best for you. Here are a few more sources:

There is a database where you can search for address. Keep in mind these are the meth labs that have been identified. The issue is mainly with those that haven’t been identified.

National Clandestine Laboratory Register Data

EPA guidelines

Sources: CNN Money, Realtor.com, NPR