As you begin searching for the home you've been dreaming of, it is important to think about the loan that will help you make this dream a reality. It is important to get pre-approval from a bank before beginning the hunt for your dream home. This will prevent your dream from turning into a nightmare. No one wants to find the perfect home and then have their loan application denied. Not only do pre-approvals help to determine the price range you can afford so that you are not wasting your time looking for a home that is out of your price range, but they also give you a bargaining tool when making an offer to the seller. When you are pre-approved for a mortgage, a lender has looked closely at your credit report and income in order to determine that you qualify for a loan. The lender will tell you which loans you qualify for, the maximum amount you are eligible for and possible interest rates that are available to you.
Pre-approval letters are formal agreements between the buyer and lending institution that offer a guarantee of loan approval for a specific amount. The financial institution issuing such a letter may or may not charge for this service. Keep in mind that even with a pre-approval letter, your bank may deny the loan on the specific house you wish to purchase. As one example, banks will deny the loan for a specific property if the appraisal is significantly less than the sale price.
Pre-qualification letters are different from pre-approval letters in that they do not include an analysis of your credit report or your true ability to purchase a home. All it means is that someone has taken a general look at your income and expenses in order to determine your debt-to-income ratio. This gives you a general idea of the price range you can afford. There is no charge to obtain pre-qualification letters.
Pre-qualification letters are a good idea to obtain so that you have an idea of the price range to begin looking at. However, as soon as you are seriously looking for a new home, it is important to get pre-approval. This will save you time and give you more buying power.
Contact us to start the process and get out in front of your home search.
Keep it clean. Even though you have thoroughly cleaned and prepped the home to put it on the market, you must still live in it between showings. Be prepared to tidy up and vacate your home at a moment's notice so it can be shown. Make up beds first thing in the morning so that they are not forgotten. Keep disposable floor wipes handy to be able to quickly mop floors as well as freshen up bathrooms and kitchen sinks.
Open all window coverings to let in as much lights as possible. Turn on lights in smaller rooms, such as bathrooms and the laundry room, to help them appear larger. You want to create a lighted environment without overdoing it. If the weather is nice, open a couple of windows to create a breeze and get some fresh air into the house.
If you have ceiling fans, turn them on to help circulate air. In winter, think about turning the heat up slightly to make it cozy feeling to potential buyers who walk in from the nippy outside. You will also want to create a pleasant mood as the house is being shown. One way to create this mood is to is to play soft music while the buyer is there. You may also wish to place fresh flowers around the house to create a cheery atmosphere. You may wish to create visual ambiance by turning on key lights such as chandeliers or scones.
Finally, make sure the home is vacant as it is being shown. You and your family should take a walk or otherwise do something outside of the house. Make sure the pets are gone too; put them in cages or take them to a neighbor.
Your goal is to make home buyers fall in love with the house as soon as they see it from the street. And that comes with a bonus--a great overall impression is often enough to make a buyer more lenient about minor repair issues. Every house is different, and no one expects you to be a professional home stager. But taking the time to prepare the house to the best of your ability can put extra dollars in your pocket, and in less than average time.
For more information on selling your Arizona home, contact the Arizona Key Team.
Moving can be a stressful time, but planning ahead will help you from becoming overwhelmed. Below are some helpful hints to ease you through the process.
First and foremost, it is essential to purchase the proper packing materials, such as bubble wrap, boxes, peanuts, paper and tape – all of which can be bought from moving or truck-rental companies. They often sell kits; for example, a dish cell for protecting china and crystal, or wardrobe boxes that allow you to keep clothes on hangers.
If you are hiring a professional moving company, it is a good idea to inquire for estimates approximately 6-8 weeks prior to moving, if possible. This is especially important if you are moving during the peak summer season between May and September. There are two types of estimates offered; a binding estimate, which guarantees the total cost of the move based on the quantities and services shown on the statement, and a non-binding estimate, which is an approximation of the cost and is subject to change. Once you have decided on a company to use, call to schedule the date of the move. As your moving date approaches, call to confirm the arrangement with the company.
It is important to plan ahead and start packing early. Choose a "packing room" where you can store packed boxes and packing materials. Begin packing items that you won’t need a few weeks before the move and box up a few items each day. Because many things cannot be done until the last minute, it is essential to do as much as possible before that time.
Pack one room at a time and be sure to label each box with its destination as well as a description of its contents. This will make unpacking easier.
When packing a box, pour a layer of packing peanuts on the bottom for cushion. Make sure to place the heaviest items on the bottom. Once the box has been packed, use packing peanuts or crumpled packing paper to fill empty spaces and prevent contents from shifting. Make certain after you pack a box that you can still lift it easily. To reduce the chance of breakage, unpack fragile items over the box that you are taking them out of, so if you accidentally drop it, it will land on some cushion.
Remember that hazardous materials may not be shipped. These items include paint, nail polish and remover as well as cleaning and laundry products. It is best if you personally transport irreplaceable items, such as keepsake photos, financial and legal documents, medical records, jewelry and other valuables. Also, make certain that each family member has a bag packed with essential items for the first few nights. These items should be carried with you rather than packed in the moving truck. It might be a good idea to have some snacks as well as a simple meal that you can just heat and serve for when you arrive in your new home. Don’t forget to have sheets, bath towels and kitchen utensils handy.
Once everything is packed, it is important to have a strategy to load the truck. It is best to first load items that you need the least and make sure to put the heaviest items on the bottom. House plants should be loaded last and unloaded first.
Make arrangements for children and pets to spend moving day with a family member or close friend. If you can, move on a weekday, when banks and utility companies are open. Most moving companies only accept cash, certified check or money order. All charges must be paid before your shipment is unloaded at your new house.
To make the change-of-address process smoother, order preprinted address labels with your new address as soon as you know it. Send out change of address notices to family, friends, employers, schools, banks, credit cards, doctors’ offices, utility companies, etc. Keep a checklist so that you know who you have informed of your address change. Don’t forget to transfer services for your utilities. If possible, make sure that power and water are functioning properly at your new home before you arrive and leave them on at your old address for a few days so you can do any necessary clean-up after the move.
Getting Rid Of Extra Items
The idea of moving can seem daunting, but it is also the perfect opportunity to get rid of the extra items that you have accumulated. Now is the time to go through your house room by room and toss out any possessions that you do not need. This will prevent you from spending time and money packing things you will not want.
Develop criteria that will help you to weed out items that are not worth taking with you to your new home. Here are some questions to consider:
Take inventory of everything you decide to keep and assign replacement values for insurance purposes. Plan to sell or donate anything that does not make the cut. Make sure to properly dispose of any hazardous materials, such as cleaning products and paint.
Pack away stuff that you know you will not use for a while. Since so many things need to be done at the last minute, it is a good idea to pack as much as possible before crunch times comes. Use up items that cannot be moved, such as foods that are stored in your freezer.
Search Arizona homes for sale, contact the Arizona Key Team for real estate information.
Are you excited about moving into your new home? Along with all the expectation, you are most likely feeling some anxiety over preparing to move. However, following the suggestions below can help you anticipate each step of the process and hopefully avoid any last minute hassles.
7 Weeks Before Moving
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After You Move
Disconnect Your Emotions
When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.
You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.
The first step in getting your home ready to sell is to "de-personalize" it. You should remove all photographs and other small items from table-tops. Buyers should be allowed to imagine their personal possessions in the home, not look at yours.You should also put away your personal collections so that buyers don't get so interested in looking at them that they forget to look at the house.
Create A Mood
Make Sure It's Your House They Come Back to for a Second Look
Here's a critical bit of home selling advice: don't even think of putting your house on the market until you've taken a close look at its condition. You usually only have one shot at impressing potential home buyers, so take some time now to prepare the house for showings and you might be rewarded with a faster sale and a higher offer. In order to do so though, you must trust your instincts. Ask yourself what changes would make immediate improvements and what features you want to show off the most. Evaluate your own home as if you were a first time homebuyer.
Home Prep Advice Tips
Contact the Arizona Key Team to learn more about starting the process of selling your home.
Search Chandler homes for sale on one of Arizona's best real estate websites. The Arizona Key Team is dedicated to helping you make the most informed decision for you and your family. Search our real estate knowledge base and learn about the market you are thinking of investing in.
Chandler homes for sale are located in several different types of neighborhoods including golf communities, active adult communities and traditional family communities.
Chandler, AZ is a city in Maricopa county and a major suburb of Phoenix, AZ. Chandler is home to many technology companies including Pay Pal, Intel and Orbital ATK. In 2010, Chandler's population according to the Census was 236,123 people. The top employers in Chandler, AZ include companies like Intel, Wells Fargo and PayPal.
There are many parks, recreation facilities, aquatic centers and museums located in Chandler, AZ including Tumbleweed Recreation Center, Chandler Museum, Chandler Aquatics, Dog Parks and Chandler Senior Center.
Chandler is well known for its Annual Ostrich Festival held in March. Activities feature food, music, ostrich races, petting zoo and many more family friendly events.
The city of Chandler has seen tremendous growth since the early 1990's, holding its rank amongst the fastest growing cities in America. With nearly 100,000 homes and over 236,000 people, Chandler was named an All-American City and celebrated its Centennial in 2012.
If you are interested in learning more about Chandler, or starting a home search, contact the Arizona Key Team.
Check Your Own Credit Report
Lenders analyze your credit scores to determine whether or not to approve a loan, including a home mortgage. Creditors are more likely to lend you the money, if they feel like you will repay it in a timely manner. Credit scores help lenders determine how much risk you are. The higher your score, the less risk they think you will be. Your credit score is the three-digit number that compares your credit performance to that of similar consumers. Scores range from 300 to 850.
You are entitled to a copy of your credit report, including a list of everyone who has requested your report within the past year. It is best to review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan.
To obtain a copy of your report, visit www.annualcreditreport.com. It is important to request reports from Equifax, Experian, and TransUnion because each bureau may have different information depending on which companies have reported to them on your accounts. Mortgage lenders often look at all three of the bureaus' FICO scores and take the middle score to assess your eligibility.
Correct Credit Report Mistakes
Your credit score is only as good as what shows up in your credit report. If there are any inaccuracies, it is important to dispute them by enclosing supporting documents in a letter to the bureau.
Always Pay Bills On Time
It is imperative to avoid late and missed payments because your payment history is the single biggest factor in a credit score, accounting for about 35% of the score. Since recent history carries more weight than what happened years ago, making on-time payments is a powerful way to rebuild your credit. If you know you will be unable to pay bills on time, contact your creditors to work out a payment arrangement and negotiate to keep the late notations off of your credit reports.
Keep Your Credit Card Balances Low
Pay off debt, don't move it around. Owing the same amounts, but having fewer open accounts, can lower your score because lenders look at the total amount of debt you have in comparison to the total amount of credit available to you. The more debt you pay off, the wider that gap and the better your credit score. It's ideal to keep your balances below 25% of your credit card limit. Another way to keep a healthy balance-to-limit ratio is to charge less. Regardless if you pay off your debt each month, credit scores do not distinguish between those who carry a balance on their cards and those who do not.
Do Not Close Unused Accounts
A credit card with a zero balance might help your score. Closing credit accounts lowers the total credit available to you, which would increase your balance-to-limit ratio and, therefore, lower your credit score. Plus, closing an account does not necessarily remove it from your report. Payment history may still be considered for scoring purposes.
Do Not Apply To Open Multiple Accounts At Once
No matter how tempting those pre-approved credit card offers are, adding accounts too rapidly sends up a red flag that you might not be able to handle your credit responsibly. In addition, a new account will lower the average age of your accounts, which is another factor in your FICO score.
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So you are considering buying rental property. You are now among the millions of people each year who consider buying investment real estate. Owning rental property can be very rewarding financially.
Becoming a successful rental property owner requires some work on your part. While it is possible to sit back and collect income year after year without doing any other work on your property, it is not a very realistic expectation if you want to maintain a profitable investment for years to come.
Before you go out and purchase a rental property do some research so you understand what to expect before you jump in and buy an income property. Your job is to rent out your property, keep your tenants happy and maintain your property so it can be easily rented out. This means you must fill your vacancies, respond to your tenants needs, and take the time to make repairs that will last and even increase your property’s value. Take some time to read articles on renting and becoming a landlord before you move ahead and buy a rental property. Investment real estate can be a worthwhile investment if you are well prepared to face any challenges that may come along.
Investing in income property is riskier than buying a second home, because rather than having a vacation home to go to relax and enjoy the weekend, an income property is purchased to generate income. A duplex may sound easy to rent and maintain. But if one unit is empty, 50% of your rental income isn't coming in that month. Rental income is usually aimed at paying off a mortgage used to purchase the income property. Valuing an income property is more complex than valuing a residence. When you buy a residence, you are calculating your ability to pay a mortgage out of your own earnings. When you buy an income property, you're calculating how the income will help pay the mortgage.
Deciding where to buy a rental property, there are several things you should consider. The supply of potential tenants, the average rents you can collect, and the ability of tenants in that area to pay are all important factors that you should research before your purchase. There are many advantages in purchasing income property in college communities, like Tempe, Arizona. There is always a need for rental units and an endless supply of renters each year. Rental income tends to be higher in college communities versus other areas and vaccines are limited. When deciding whether to buy a single family home or multiple units, remember that units tend to be far easier to rent out. Look for a property that can be sold quickly. Look for properties with features that will attract renters such as an apartment with a garage or private laundry facilities. If the property you are interested in purchasing is currently being rented, ask about its tenant’s rental history.
An income property has an annual net operating income. This is a figure of rental income less anticipated vacancies, maintenance and other expenses. Most investors divide the net operation income by something called the "cap rate"to come up with the proper value for one apartment in a complex. The cap rate relates to the expected annual rate of return on the property, and most income property buyers recommend using a cap rate of 10% when evaluating a property. This kind of simple calculation isn't perfect, but in a real-estate market that is increasingly frantic, doing even simple math can help you understand if you're overpaying for a property. Like investing in stocks, investing in real estate works best when you don't overpay.
Search Arizona homes for sale. Contact the Arizona Key Team for real estate assistance.
Do you make your payments on time? Since this determines approximately 35% of your score, it is certainly in your best interest to make all payments on time! Your payment history includes credit cards, car payments, mortgages, student loans and other loan types. Other public records on file, such as a bankruptcy, will be calculated in this group as well. If you have been late on payments, information such as how recently these payments were made and how much time elapsed between the due date and pay date will also factor into your score.
How much debt do you have? All outstanding balances for credit cards, car loans, mortgages, etc. will determine about 30% of your score. How many of these accounts have balances? For example, if you can possible pay down significantly or pay off credit card debt, you’ll be in much better shape during loan approval. Eliminating some avenues of credit can demonstrate your willingness and ability to responsibly pay back new loans.
How long have you been establishing your credit? Specifically, how long have your current accounts been opened and how long as it been since you used each of them? This usually determines approximately 15% of your score. If no credit history exists, you should begin by establishing credit accounts and be sure to keep them spotless. The less history that exists, the less the loan amount you’ll likely be able to obtain.
Pursuit of New Credit
Each time you apply for credit, there is an inquiry into your current credit score. If you recently applied for a VISA card, Nordstrom account and car loan, you may want to hold off applying for a home loan for a few months. Each inquiry may slightly reduce your FICO score and may portray you as someone overindulging in credit. This usually accounts for approximately 10% of your total score.
Types of Credit in Use
The number of accounts (such as ATM cards, car loans, credit cards) you have determines approximately 10% of your final score.
Once your bank is aware of your FICO score they may or may not choose to share this information with you. Assuming they do share your score with you, it is important to remember the higher the score, the more likely you are to obtain a loan. Also, a higher score directly translates to lower interest rates. Over time with home loans, lower interest rates can play a significant role in the total amount you SAVE!
Other Factors That Determine Loan Approval
Now, a great FICO score will not be the only determining factor in loan approval. Some additional factors that figure into the approval process include the following:
Here are some tips on how to save for the down payment on your future home. We hope this will help you to most effectively tap into your resources and budget your finances. The more money you have saved for a down payment, the more choices you will have when negotiating your mortgage.
Keep Track of your Finances and Cut-back on Non-essential Spending
Write down your monthly income, savings, and spending. Even a couple bucks for your daily Carmel Macchiato at Starbucks adds up. So instead of spending money on the small stuff, put that into your savings. Open a savings account specifically for the down payment. Calculate how much you can afford to contribute to this account and arrange to make regular deposits.
Pay Off your Debt
Don't focus solely on saving for your down payment at the expense of paying interest charges on credit cards. The interest rates on these loans are much higher than the average rate for a home mortgage, meaning you are actually wasting money by accumulating a larger down payment while carrying credit card debt. Also, realize that the amount of debt you already have will determine how much you can borrow for your home. After minimum payments, start with the card with the highest interest rate and pay as much as you can. If you have more than one card, repeat this process after you've eliminated the debt in the first account. You'll be amazed how much money you can put into savings once it is not paying for interest on credit card debt.
Make your Savings Work for You
Rather than saving all of the money yourself, let what you've already saved earn you interest at the best rate possible. Often the best option is a Certificate of Deposit. Although the earnings on CDs are lower than some other types of investments, this is offset by a lower amount of risk. However, CDs can carry very low rates of return when interest rates are low. In these times, it is advisable to buy several certificates with different maturity dates. This strategy is known as laddering; if interest rates rise, the short term certificates can be reinvested at a higher rate. If rates should fall, then the longer term CDs have locked in a higher rate of return.
Use Special Programs
There are many programs for homebuyers in down-payment distress. Borrowers in a wide range of incomes, locales and professional groups may have access to aid from Fannie Mae and Freddie Mac, the government-sponsored offices that buy mortgages and package them as investments. Some lenders and government agencies will let you buy a foreclosure with no down payment if you have good credit and they are anxious to have the home occupied, or if you have skills that you can use to increase the home's value. Various nonprofit and community groups also lend a hand to buyers struggling to put money down on a home. And don't forget about assistance from state agencies. To qualify for a down-payment assistance program, the purchaser typically can earn no more than 80% of a region's median income.
Use IRA Funds
Tax laws allow you to use up to $10,000 in Individual Retirement Account funds as a down payment if you have never owned a house. If you are married and you both are first-time buyers, you each can pull from your retirement accounts, meaning a potential $20,000 down payment. The IRS defines a first-time buyer as one who did not own a principal residence at any time during the two years prior to the purchase of the new home. If you are eligible, the IRS waves the penalty fee for early withdrawal. Although, you are likely to owe state and federal income tax on the amount withdrawn depending on the type of IRA you have. If you do not qualify as a first-time buyer, early withdrawal will include a 10 percent penalty as well as income tax
Borrow from your 401(k)
Consider borrowing against your 401(k) for the down payment. Unlike an IRA home-related withdrawal, you'll have to pay back any money you take out. Even though your account contributions were made with pretax money, your repayment will be made with after-tax dollars.
Make Money on Items Lying Around the House
One person's trash is another person's treasure. Go through your house and sell unwanted items. Have a garage sale or post items on eBay. Perhaps you'll even find a savings bond hiding in a drawer that is ready to be cashed in!
Receive a Gift
Tax law allows gifts of several thousand dollars a year to be bestowed without tax consequences to either the giver or recipient, and it is not limited to relatives. Check with the IRS to determine the gift-exclusion amount as it is adjusted annually to reflect inflation. If no one is in a position to give you the money, perhaps they will agree to co-sign a loan.