Articles Tagged "Homebuyer Tips"

With the rising prices in the housing market skyrocketing over the last couple of years, potential homeowners have often lost hope in achieving their goals. If that includes you, don't give up now. Financial indicators point to the very real possibility of significant price drops in 2023, once again opening the door to your home purchase. Our real estate agents want to help you make sure your finances are in order by sharing these five focal points for your consideration.

• Safeguard Your Savings
  Now is not the time for extravagant purchases. Your available cash must be sufficient to cover the down payment, pay for inspections and closing costs, and cover moving expenses. Remember, the higher the down payment, the lower the amount you will be required to finance and, subsequently, the lower your monthly payment. 
  
  
• Clean Up Your Credit Report
  While credit cards often provide a monthly score to their holders, most Americans are in the dark about how the process works, the errors that can damage their credit score, and how they can repair it. A credit report is a guide to lenders as to the creditworthiness of the borrower. It records the individual's debt and payment status and history. From those facts, the reporting bureau assigns a score. If those facts are incorrect, the impact on the score can be negatively affected without merit.
  
  For this reason, the Federal Government passed the Fair Credit Reporting Act in 1970. It guarantees the creditor a free report from each bureau once a year via the website Annualcreditreport.com. This is the only authorized website, although plenty of pretenders can recommend actions that will damage your credit. Don't fall for their offers to clean up your score quickly. If you need assistance understanding the report, contact a credit counseling agency approved by the Department of Justice, which will provide free counseling, including specialized programs for first-time homebuyers. 
  
  
• Increase Your Credit Score
  In addition to correcting erroneous information on your credit report, you must also address the financial habits that affect your creditworthiness. Pay all of your bills on time, every time. A forgotten purchase on a seldom-used card can make your score plummet. You can avoid the issue by setting up each card to draw a minimum payment each month. Your bank won't forget to make your payment even if you do.
  
  
• Lower Your Debt Level
  Following your payment history, your debt load is the next greatest factor in determining your credit score. A healthy debt-to-income ratio is 15% or less, while 20% or higher is considered a red flag to creditors. The only ways to reduce your debt load are to pay down your current obligations and avoid incurring any more. It may be tempting to use a credit card to avoid dipping into your savings. But when you're planning a home purchase, the debt load is critical to the viability of the loan. Use cash when you must and avoid the purchase when you can. Put off large purchases such as new vehicles or furniture until after you buy your home.
  
  
• Seek Loan Preapproval
  Before you shop for North Canton homes for sale or Akron homes for sale, shop for a lender. By doing so, you will learn how much you can spend on a house and how much you will need for a down payment. Compare rates and terms to find the best deal for you. 

Whether you're at the beginning of the process or ready to buy, contact us to help you with your next steps toward homeownership. 

How big should your down payment be?

When home prices rise, so do the down payments required to purchase those homes. This has long posed a roadblock for many would-be first-time homebuyers. But it doesn't have to be the case.

Our real estate agents share everything you need to know about making a down payment on a home.

Down Payments: How They Work, How Much to Pay

A down payment is simply the part of the home's purchase price you pay upfront. It might be the biggest check you ever write in your life, and the amount you pay could impact your finances for years, if not decades.

Contrary to conventional wisdom, you don't have to put 20 percent down on a house. There's no law or rule for a universal minimum down payment. The amount you should put down is a personal decision that depends on what's best for your finances. Lenders require homebuyers to make a down payment for most mortgages. For instance, the amount is usually 3% of the home's price for conventional mortgages.

On that note, most lenders will require a down payment of 20 percent to avoid paying private mortgage insurance (PMI)—in case you're wondering where the 20 percent number comes from. Far from most types of insurance, this legally binding document protects the lender's vested interest in the home, not the homeowner.

When you make a down payment of less than 20 percent, your mortgage loan-to-value (LTV) ratio is over 80 percent. As such, you present a higher risk profile to the lender, which necessitates purchasing private mortgage insurance to offset this risk. PMI will increase your monthly mortgage costs until you have accumulated enough equity in the home that the lender no longer considers you high risk. So, there are advantages to making a larger down payment.

Another advantage is lower interest rates. A solid down payment may signify that you're less likely to default on your loan, which may prompt lenders to reduce your mortgage interest rate. Even saving a fraction of a percent on your interest rate could save you thousands of dollars over the life of your loan. Still, your overall interest will depend on factors other than your down payment, such as credit scores, home price, and loan term.

Down Payment Requirements by Loan Type

As mentioned, down payment requirements vary depending on the type of mortgage you qualify for. For instance, if you qualify for government loans, your down payment may be as low as zero.

There are several options for a mortgage with no or low down payment:

1. Veterans Affairs (VA) Loans
   The Department of Veterans Affairs partially guarantees these loans. VA loans typically have low down payment requirements, are more flexible in terms of credit score, and carry lower interest rates than conventional mortgage products. However, you must be a veteran, active-duty service member, member of the National Guard, reserve, or an eligible surviving spouse of a veteran to qualify.
   
   
2. FHA Loans
   Insured by the Federal Housing Association, these loans require a lower minimum down payment than many conventional loans. Many first-time buyers may find FHA loans the more affordable mortgage option.
   
   
3. USDA Loans
   The U.S. Department of Agriculture (USDA) provides zero-down homeownership opportunities to low- and moderate-income Americans. However, you must live or plan to live in an eligible rural area to qualify.

It's important to weigh your mortgage options before committing to a down payment amount. Even though a 20 percent down payment is ideal, you shouldn't fixate on it. The right amount depends on numerous factors, including how much you can comfortably afford. You don't want your down payment to be so large that it leaves you with too little savings.

Ready to Purchase Your First Home?

Our agents have the expertise and years of experience to guide you through the process. Contact us today to view North Canton homes for sale.

It's always lovely when schedules line up perfectly. But, the reality is that when it comes to real estate transactions, there's likely to be a slight lag between the day you buy the home and the day you can move in. You may sell your home before you find a new home, may need to wait until the seller can move into their new home, or wait while the renovation company completes any necessary repairs or upgrades. Or, you may want to wait until you find the best deal on a house that fits within your budget. Our real estate agents know there are plenty of reasons you may need to rent a home, and we advise all clients to carefully think over the possibility of living in a short-term rental before moving into their new home.

• Hot Markets May Cool Off
  One of the biggest reasons homeowners sell their homes and rent is that the real estate market is still red hot. While prices for North Canton homes for sale are cooling down and stabilizing, they aren't dropping. Many homeowners who sold their homes made tidy profits and have chosen to invest those profits and rent until housing cools down. The market may cool, and prices could fall in the next couple of years. But rent could go up as rental properties become scarce. This means that any savings gained could easily be lost in the form of increased rental costs.
  
  
• Watch Out for Mortgage Rates
  Inflation is going up, far above anything the country has seen since the early 1980s. This means that the Fed is strongly considering raising interest rates to throw some water on the fire before it burns through everyone's savings. Interest rates will likely rise this year, which means that waiting to buy a home could end up costing you more in the long run.
  
  
• Sellers and Landlords Have the Upper Hand
  It's a seller's market right now, and many homes continue to sell well above the listing price. At the same time, rental inventories are down, and eviction moratoriums have come to an end across most of the country. This means that landlords can command premium prices for rental property. They can also require tenants to sign long-term leases and easily walk away from short-term options. As a result, if you plan to rent, you may end up renting for longer than you want. Thus, if you do intend to keep your eye on Akron homes for sale, we recommend signing a lease that gives you the option of subletting the property so that you can move out and minimize your losses when you find the home you want.

We invite you to contact us to learn more about the best strategy for your specific situation. We're happy to answer your questions and help guide you in the right direction to move into your new home at a time and price that's most convenient for you.

Before you peruse real estate listings or pick out curtains, there's one thing you need to check that's more important than anything on your list. That one thing is your credit score because it will determine your ability to qualify for a mortgage and the amount of money you'll pay over the life of that loan. What you find may surprise you, but our real estate agents know there are some things you can do to get those numbers up to where you can qualify for the most favorable loan terms and the best interest rates.

The average credit score in the United States is 711. That's considered "good" credit. Those with "very good" credit have scores between 740-799, and those with "exceptional" credit fall between 800-850. These three ranges will allow you to qualify for most loans, but the higher the score, the better the loan terms and the lower the lender's interest rates.

• Pay Down Your Credit Card Balances
  It would be best if you got your credit utilization rate down to the point that is far below the credit you have available. Anything above 30% can weigh heavily on your score. Ideally, you want to pay your credit cards down to zero to not waste money each month on interest charges. The exception to this is any 0% interest cards you can pay off at your leisure, but even those should not be higher than 30% of your credit limit.
  
  
• Keep Accounts Open
  Don't close credit accounts! It seems counterintuitive, but the length of credit history accounts for 15% of your score. The longer the history, the better it is for your score. Further, be sure to use old credit cards periodically. Many issuers will close dormant accounts, so spend a few dollars on each card every year to keep them active. 
  
  
• ... But Don't Open Accounts
  Credit inquiries can lower your score, so you want to avoid opening any new accounts prior to purchasing Akron homes for sale or other properties. Unless it's an absolute necessity, focus on paying down balances and paying off installment debt. This will also help to improve your debt-to-income ratio, which is another crucial number lenders will examine.
  
  
• Make Your Payments
  Payment history accounts for 35% of your score. Make sure that you pay existing mortgages, car loans, medical bills, etc., on time, every time. Once payments are missed, they can stay on your credit report for a very, very long time.
  
  
• Check Your Report for Errors
  An alarming number of credit reports have inaccurate information on them. Before exploring North Canton homes for sale, explore your credit report for mistakes made by creditors. If you do discover errors, file a dispute. The creditor then has 35 days to investigate and respond. If it is a true error, they have a legal obligation to remove the offending information.
  
  
• Be Ready to Negotiate
  Creditors don't want to hurt your credit; they want your money and the debts you owe them. Often, creditors will remove negative information from a credit report if you pay the debt early or adhere to an established payment plan. If you've found yourself in a bind, it never hurts to try negotiating a solution.

When your credit is in order, and you're ready to buy, contact us, and we'll help you find the home of your dreams. It's our pleasure to help guide you through the process and give you the reliable advice you need to secure the most favorable mortgage for your future home!

The decision to buy a home is among the most important decisions you'll ever make. As with all big decisions, it isn't one you want to walk into blindly. Our real estate agents understand that it's perfectly normal to want to focus on finding your dream home. However, the largest and most important detail to take care of is the mortgage, and you should get the preapproval process out of the way before ever starting your search. 

The Importance of Preapproval

Preapproval is your ticket to comfortable homeownership. Unlike pre-qualification, the preapproval process is more in-depth and detailed. Your lender will thoroughly review your W2 statements, bank records, credit reports, tax records, employment records, etc. This is often referred to as the "4 C's" since the lender will look at your capacity to pay the mortgage, your credit, the capital/cash reserves you have access to, and the collateral you're putting down for the loan.

The lender will carefully calculate your total liabilities and financial capacity to take on more debt. At the end of the process, the lender will tell you precisely how much they are willing to lend you. This allows you to search with confidence, knowing what you can comfortably purchase in Akron or North Canton.

Further, you can obtain preapproval letters from multiple lenders. This is advisable because it allows you to shop for the best rates and loan terms. When you find the North Canton homes for sale that you want to make an offer on, you can buy with confidence, knowing that you can comfortably afford the mortgage obligation.

One of the most important reasons to secure a preapproval letter is that it can significantly reduce the amount of time it takes to find the ideal home. By removing homes outside of your budget, you can narrow down your search to listings within neighborhoods where you can settle in comfortably without having to stretch your budget to cover the mortgage. 

2021 is Shaping Up to Be a Highly Competitive Market

It's a highly competitive market right now. In much of the country, the number of homes available is far less than the number of buyers in the market. While not guaranteed, this means you need to plan for "bidding wars" to erupt. When you are preapproved, you know precisely how much you can spend to get the home you want. 

A preapproval letter also shows the seller that you can seal the deal without any problem. This gives you a slight edge over other buyers who submit bids without a preapproval. Sellers may be willing to take a risk that a high bid will come through, but more often than not, they will take the offer that is already backed by money in the bank.

When you have a preapproval letter in your pocket, you can move forward quickly and confidently. There's no need to waste time waiting for the bank to review your application because everything is already done. 

We encourage you to contact us for more information about preapproval letters and the ways we can use them to help you secure a contract on the Akron homes for sale that are perfect for your needs.

If 2020 taught us anything, it's that modern technology is a more flexible tool than we ever realized. In the past year, more than just shopping moved online. Businesses big and small realized how productive office workers could be from home. We figured out how to offer even the most location-based services online, and the internet even enabled us to keep some semblance of our social lives, with things like watch parties and Zoom happy hours.

We may be itching to get back to "normal," but we've discovered how some things can be better, too. Buying a home, for instance, will be easier than ever now that we've discovered how much of the traditional process can be done virtually. Here are just a few things that, with the help of one of our real estate agents, are more convenient than ever.

1. Virtual Tours
   Before 2020, many real estate agents were already starting to offer virtual tours in their listings, with video and 3D pictures accompanying regular images. With everything going virtual, of course, these virtual tours have become much more robust, enabling you to get a much better feel for a property house, just from the listing and virtual tour. Many North Canton homes for sale now include these improved virtual tours in their listings.
   
   
2. Virtual Showings
   Showings can easily be done virtually with the help of a dedicated real estate agent. In a virtual showing, your agent goes to the house and shows you everything you want to see via a video chat. It differs from a virtual tour in that you're in charge here. If you want to look at something in more detail, your real estate agent can show you whatever you want to see. The showing is done in real time, in case you have any questions or want to get another look at something.
   
   
3. Virtual Open Houses
   Yes, even open houses may be offered virtually by enterprising real estate agents! They'll be run a little differently than traditional ones, so be prepared. Instead of being able to explore the house independently, you'll be part of a group Zoom led by the real estate agent, where they show the property and answer questions.
   
   
4. Virtual Closings
   Traditionally, the closing was the most tedious part of buying a house. Who wants to sit in a room at the title company for hours and sign document after document? Fortunately, now this entire process can be done much more conveniently with either a hybrid or fully remote closing. Depending on the closing company and local rules, you may or may not have to meet with the notary in person. Some or all of the documents can be digital and signed electronically.

Modern technology and connectivity can offer so many conveniences that we're only just beginning to realize. In some ways, 2020 was the push we needed to let go of traditional notions that were holding us back. If you've been hesitant to buy a home right now, contact us today to find out just how easy it can be.

Virtual home tours have become one of the most popular real estate tools this year thanks to the COVID-19 pandemic, and they won't be going away any time soon. Virtual tours are a convenient way to check-out these North Canton homes for sale from your couch, but they're not without their limitations. It's important to remember that virtual home tours can't completely replace the benefits of an in-person viewing.

Since many people are still unfamiliar with this innovative technology, our real estate agents thought it would be helpful to compile a list of questions you should be sure to ask during your next virtual home tour.

1. Can I see the room from all angles?
   Viewing a room virtually can make it difficult to truly get a sense of the space. Screens can disguise depth, which can make spaces seem larger or smaller than they are in reality. Be sure to ask your real estate agent to walk around each room so you can evaluate the space from all angles.
   
   
2. Do you notice any strong or unusual odors?
   An obvious downside of a virtual home tour is that your sense of smell won't do you much good. When you're in-person, strange, lingering odors are very apparent, so it's important to ask your agent if he or she notices any odd smells, especially in the kitchen, bathroom, and basement.
   
   
3. What is the noise level like?
   Loud traffic and noisy neighbors can be problematic for those who enjoy their peace and quiet. These sounds may not be picked up by your agent's device during your virtual tour or may not come through on the audio stream. Ask your agent to take the time to listen and pay attention to outdoor noises that can be heard from within the home.
   
   
4. Can you zoom in on the appliances?
   During an in-person home tour, future homebuyers naturally take the time to closely inspect the condition and age of kitchen appliances, but during a virtual tour, these details are often overlooked. Ask your agent to zoom in on appliances, so you can get a good look. If you can't determine their condition, ask your real estate agent to provide a description. Remember, if appliances are in bad shape, replacements can quickly eat into your moving budget.
   
   
5. Do you see any signs of damage?
   During a virtual tour, you should rely on your real estate agent to point out any issues that could cause concern, including foundation cracks, water damage, or signs of roof problems. Be sure your agent checks the basement, the bathrooms, and the floors near any appliances for telltale signs of future repairs. Be sure to look at walls, ceilings, and light fixtures for signs of water stains or chipped paint.
   
   
6. How far does the backyard extend?
   It's difficult to get a sense of the size of the backyard through photos or videos, so ask your agent to step outside and walk around the perimeter of the property. Ask to see your neighbor's property lines and how far out your yard extends.

Knowing how to make the most of virtual home tours can save you from wasted in-person visits. Best of all, virtual home tours are easy to fit into your busy schedule. If you're interested in one of these Akron homes for sale, simply contact us today to set up your tour today.