Lynn Rand's Blog
While buying a home is a huge decision that should entail a lot of planning and preparation, applying for a mortgage can be surprisingly easy. Just like with other lenders and creditors, a mortgage lender will want to know that letting you borrow money will be a safe investment. Applying for a mortgage is all about ensuring just that.
In today’s post, we’re going to breakdown the home loan application process to help you have the best chances at a smooth and successful mortgage approval. We’ll also define some of the common terms used in mortgages that might leave you scratching your head so you have a better idea of what your options are.
Prequalification and Preapproval
Getting prequalified and preapproved for a mortgaged can both be helpful steps toward securing your home loan. The two terms mean two entirely different things, however.
In order to be prequalified for a mortgage, you typically need to only fill out a simple form (sometimes directly through a lender’s website). On this form, you won’t need to provide specifics or official documents.
Why is this process so simple? Well, that’s because getting prequalified for a loan doesn’t ensure that you’ll actually receive one. Rather, it is simply the first step toward finding out what type of mortgage and interest rates you could receive.
The next step after prequalification is preapproval. To get preapproved, you’ll have to fill out an official mortgage application. Your lender of choice will request a few pieces of information from you, including tax returns, proof of employment for the last two years, and a list of your debts. The lender will also perform a credit check to determine your loan eligibility.
At this phase, lenders will also run your credit report. This is a type of “hard credit inquiry” that details your payment history, the number of accounts you have open, and other factors that help make up your credit score.
To secure the lowest interest rate possible, it helps to have a high credit score. So, in the years and months leading up to your mortgage application, focusing on building credit will pay off.
To increase your credit score, you’ll need to focus on paying your bills on time each month. You should also avoid opening new accounts within a few months of applying for a mortgage because this will count as a new credit inquiry. New credit inquiries--including applying for a mortgage--lower your score temporarily, so it’s best to avoid them when possible.
Additional paperwork required for mortgage applications
Not every mortgage application will be the same. Depending on the type of income you receive, you may need to provide different forms of income verification.
Each person will also have to claim different debts and assets. When buying a home with a spouse or partner, it’s important to consider your debts, assets, and credit scores to determine if it’s better to apply jointly or separately.
In today's real estate market, hardwood floors are a highly desired feature in a house. Potential buyers are often turned off by homes with carpeted floors because it's almost impossible to keep them clean. Time is not on your side when it comes to maintaining nice-looking carpeted floors!
No matter how careful you are, sooner or later someone's going to knock over a glass of grape juice or wine -- and that's only the short list of accidents waiting to happen! While dogs and cats can be a wonderful addition to any family, they are not a friend of floors -- either carpeted or hardwood.
In theory, hardwood floors are easier to clean than carpeting because of the absorbency factor. If your carpeting hasn't been treated with a stain-resistant chemical, it will quickly absorb stains, spills, and pet accidents faster than you can clean them up! Although the latest carpeting materials are much more stain resistant than earlier versions, spills that are not noticed and cleaned up quickly may cause permanent damage.
Spills, water, and pet urine can also wreak havoc on hardwood floors, so a quick response is essential to preventing damage. Here are a few other tips for keeping your floors looking clean and beautiful.
- Door mats can be helpful in minimizing the amount of dirt and grit that gets tracked into your home. What homeowners and even housekeepers sometimes forget is that door mats need to be shaken out on a regular basis. If they're not, dirt, soil, and other debris will accumulate on the mats, causing them to create more of a problem than a solution! Door mats need to be replaced periodically, too, when they become too worn down or wet to be of any use.
- Shoe removal: This is a difficult policy to enforce, but it will make house cleaning and floor maintenance easier and more effective. Whether you're talking about carpeting or hardwood floors, shoes are invariably going to track in dirt, grime, water, mud, and other miscellaneous contaminants!
- The right cleaning methods: Although it's always a good idea to follow manufacturer recommendations when cleaning any type of flooring, hardwood floors often need to be treated with more care than their carpeted counterparts. Since there are a lot of ways to scratch, dent, or gouge hardwood floor surfaces, it's crucial to avoid trying to scrub away spills or stains with any abrasive material. To remove potentially damaging grit, floors should be regularly cleaned with a soft dust mop or broom with soft bristles. Ideally, your vacuum cleaner should also be padded on the bottom to avoid scratching the finish of your wood floors.
Selling a condo may seem like a tall task, particularly for those who plan to list a property on the real estate market for the first time. However, condo sellers can take the guesswork out of listing a property and maximizing its value if they consider a few simple questions, such as:
1. How Much Is My Condo Worth?
The price that you paid for your condo initially is unlikely to match your property's worth today. As such, you'll want to conduct plenty of research into the real estate market to assess your condo's worth and price your property accordingly.
Hiring a home appraiser is ideal, as this professional will be able to evaluate your residence and establish a value for it. Plus, a home appraiser can help you identify any "red flags," i.e. problem areas that may prevent you from maximizing the value of your condo.
Don't forget to assess the prices of similar condos in your area too. By doing so, you can get a better idea about how much comparable residences are selling for in your city or town and set a competitive price for your residence.
2. What Sets My Condo Apart from Others That Are Available?
Before you add your condo to the real estate market, you'll want to consider features that may help your property stand out from others that are available.
For example, if you live in a condo community that offers access to a swimming pool and tennis courts, you'll want to include this information in your property listing. Or, if your condo provides a reserved parking spot for you and additional parking for guests, you'll want to provide condo buyers with these details as well.
As a condo seller, you'll want to do whatever you can to differentiate your property from others, regardless of whether you list your residence in a buyer's or seller's market. If you highlight features that help your condo stand out, you can stir up significant interest in your residence as soon as it becomes available.
3. How Can I Optimize the Value of My Condo?
Unfortunately, the real estate market can be unpredictable. And even if you perform ample housing market research, there is no guarantee that you'll be able to streamline the condo selling process and maximize the value of your residence. But if you hire a real estate agent, you can boost your chances of selling your condo.
A real estate agent may boast many years of condo selling experience and understand what it takes to generate interest in a property. He or she also will be able to provide valuable tips and guidance to ensure that you can list your property at the right price in any real estate market. In addition, if you ever have concerns or questions about selling your condo, your real estate agent will be able to respond to your queries without delay.
Employ a real estate agent to help you sell your condo, and you can move one step closer to maximizing the value of your property.
Home insurance can be one of the more significant expenses when you’re a homeowner. You may feel that you’ll be stuck in the same monthly premium month after month, but there’s plenty of ways that you can save on your home insurance by making a few cuts here and there.
Get A Higher Deductible
Just like any kind of insurance, the higher that your deductible is, the lower your premiums. The main problem with this is that when you need to make a smaller claim, the insurance may not cover any of the cost. Compare the risk of paying for expenses out of pocket to the benefits of a lower insurance premium.
Get An Alarm System
Having an alarm system can help you to save money on your home insurance. The types of alarm systems that are directly connected to police departments or a central monitoring place will save you more money. You’ll need proof of this in order to get a discount.
Other alarm systems like CO2 detectors and smoke alarms are generally required by law in a home, but check with your insurance company. You could save a little extra for your efforts to protect your family and home.
Use One Insurance Company For Everything
Most insurance companies offer more than one type of insurance. This means that they love customers who use their policies to cover everything. Bundling your home, auto and life insurance with one company can help to save you some cash.
Own Your Home
Yes, paying your mortgage off completely sounds like a feat. Once the mortgage is paid off, however, you’ll have lower insurance premiums. This is for the simple reason that insurance companies feel that once you own the home, you’ll be more mindful of taking care of it.
Think Before You Build
Building an addition on a home or putting in a swimming pool may sound like a great idea at first. You’ll need to think of how these construction projects will affect your premiums. A swimming pool raises your liability risk. Wood structures are considered highly flammable and cost more to insure. Many things that you put in your home can drive up the cost of your policy.
Review Your Policy Often
You always have the right to do some comparison shopping once you get an insurance quote from one company. The place you work for may even offer some sort of group rate for insurance. Associations that you belong to may also be able to help save you some money. Do a little ground work and you may be able to save big just by comparing policies and levels of coverage.
Assess Your Valuables
The whole point of insurance is for you to be able to replace your valuables if damaged or stolen. If items in your home have changed, you may want to reassess the contents of your home and just how much coverage you need. If you have less to replace, you’ll save on your insurance premiums because the value of your policy will go down.
When you’re buying a home, it’s important to offer a good price to be able to land the property of your dreams. You also don’t want to overpay for the house you’re buying. If you want to know for sure that you’re paying a good price for a home, you’re going to need to do some price comparisons. Take a look at recently sold homes in your neighborhood of choice and see what the going rate is. If all of the homes are similar in the area, it will be easy to find out how much the home you’re buying is worth. There are a few ways that you can do comparisons to make it easier for you to determine the right price for the home you want to buy.
Take A Look At The Neighborhood
There are certain features that attract nearly everyone to certain neighborhoods. From the safety and friendliness of an area to the schools that are nearby, to the stores, and public transportation access, people are attracted to what makes their lives easier and more enjoyable. The bottom line is the more desirable the neighborhood, the higher the price of the homes in it.
Check Out Public Records
With the Internet, it’s pretty easy to access public records these days. You can take a look at what properties have been bought and sold for in recent times int the area of the homes that you’re looking at. You can even take a peek at some historic information to help you see if the area is up-and-coming.
Is The Neighborhood Going To Become Trendy?
Sometimes, you can find a great property for less in a neighborhood that hasn’t quite reached it’s full potential yet. If there’s a slot of new construction going on, that’s a good sign that the neighborhood is moving on up! Especially attractive features in a neighborhood are new schools, new shopping centers, or new parks.
There Is A Tipping Point To Growth
If it seems that a neighborhood is growing a bit too much, it may actually decrease the value of your home. Huge commercial developments can actually be detrimental to the value of a property. Where there’s a lot of people, there’s also a lot of noise and traffic. That’s usually not a desirable factor in a neighborhood.
Meet In The Middle
When you’re looking at the price of properties, the best bet is to meet somewhere in the middle for what is reasonable. While you don’t want to buy the highest priced home in the neighborhood, you probably don’t want to lowest price for that neighborhood either. Working with a more average number is a good option because your home helps any home lower priced than yours, while any higher priced homes help to increase the value of your home. It’s a win-win situation when you choose a property based on price and keep this strategy in mind.