Last week we discussed the basic steps in the mortgage process. There is a lot of complicated detail in a new home loan. Reading the fine print can be overwhelming if you’re not sure what it all means. Here are a few things to de-mystify the information coming your way.
#1: Choosing a good mortgage company and experienced loan officer.
An experienced loan officer will sort through all the financial complexities: the mortgage type of mortgage, closing costs, and monthly payment requirements. It’s in your best interest to meet with your loan officer before you make an offer—the purchase contract requires you declare your mortgage company within five days of agreement.
#2: Reviewing loan documents.
The multitude of documents you’ll be reviewing is quite daunting, but your loan officer will wade through them with you. At the onset, your loan disclosure will lay out all the details, and keep you from being surprised with closing costs. These costs generally include lender fees, closing fees, prepaid interest/insurance, prorated taxes, and HOA dues. There is a lot to create confusion! This is why a good working relationship with a lender is essential.
#3: Lock in your interest rate.
It’s important when your loan professional advises you to commit, that you lock in your rate ASAP—they can change by the hour! Most lending institutions are bound by the same guidelines, meaning that though one lender might offer a better rate, the quote can be manipulated by changing fees, especially the “loan origination fee.” If you want to shop around for rates, be sure that you’re comparing apples to apples. Rates are constantly in flux, so what might look good from one lender today could change tomorrow.
#4: Understand the terminology.
Feel free to ask your loan officer to define specific terminology that you should know. For example, what is APR? This is a universally term that defines the actual cost of your loan. It rolls lender fees into the cost, then recalculates the annual percentage rate—not to be confused with the “note rate” on which your payments are based. The general rule of thumb: the greater difference between the APR and the note rate, the more the lender is charging you for services.
Feeling confused? You’re not alone. You can see that a trusted mortgage professional is essential to understanding what you’re committing to. I have long-standing recommendations for competent, accessible, trustworthy mortgage professionals—seeing firsthand how they have worked with clients’ best interest in mind. Choosing one will serve as a major ally as you navigate financial details, paperwork, and terminology.
Congratulations! You’re planning to buy a house, and springtime is the perfect season to consider how your financing can lead you to purchasing a home. Here are some basic steps you’ll need to obtain a mortgage.
Step 1: Find a reputable mortgage professional
I can recommend several local mortgage professionals and loan officers that will discuss with you which loan type works best for your specific situation. The goal is to land on a comfortable purchase price and consider your monthly payment options. It also determines if we need to ask for “seller concessions,” such as having the seller pay closing costs. The loan officer will ask a variety of questions including:
-How much do you have to put down on the house?
-Do you have gift funds available?
-Do you plan to sell your current home before you buy or afterwards? If afterwards, how are you going to “bridge” across from one to the other?
Once you have your questions answered, you can fill out the loan application either in person or online. You’ll get a pre-approval letter from the lender and we can start shopping for homes!
Step 2: Provide your lender with necessary documentation
Providing your lender with supporting documents is key, and you’ll be asked to provide a significant amount of documentation. Lenders are under strict guidelines since the mortgage meltdown in recent years, so remember to be patient. You’ll need to document specific areas of your financial life, and keep documents up to date.
Step 3: Underwriting
Your lender will start the underwriting process, which has two parts they approve: you and the house. So, even if you haven’t found the right house, you can still “get approved” for one. This avoids potential setbacks or slowdowns once we have found the home that you want to move forward with buying.
Step 4: Contract paperwork
Once you’ve found a home you’re ready to purchase, we’ll get it under contract, and I provide the lender with the necessary contract paperwork. After your home inspection the lender orders the appraisal– through an independent process so the lender, you, or I cannot alter the property’s evaluation.
Step 5: Final underwriting
Once you receive the appraisal information, your file will go through underwriting for a final time. You’re issued some important paperwork, and loan documents are drafted. Then, we meet and sign final papers– showing you are the new homeowner.
Congratulations! You’ll get keys and be ready to move into your new home!
I often have people ask me which home updates will provide the most value, especially when they’re looking to list their home for sale soon. There are several home remodeling projects that can reap good returns when it comes time to sell the house – some renovations add more value than others. Here are some home improvements and upgrades that can increase your home’s value.
#1: Updated kitchen.
A remodeled or updated kitchen can bring a great return. If you list the house with a kitchen that needs significant updating or repairs, a potential buyer could come in and think that they need to completely redo it and overestimate how much it will cost, when a kitchen remodel could actually be less than a buyer might think.
#2: Updated bathrooms.
Similar to updating your kitchen, remodeling or revamping your bathroom can yield great returns when you sell the home. Simple updates like new sinks and toilets or new paint and flooring can be a great way to add value.
#3: New windows.
Old windows – especially those in older homes – are usually not energy efficient and can get drafty, allowing cold or hot air in throughout the year. Replacing the windows in your home will not only add value to your home, but they’ll keep your home cooler and warmer during the year and can even provide a cost savings on your monthly utility bill.
#4: Updated flooring.
Floors have a big job and over time, they’ll show regular wear and tear. Updating your flooring can make a huge difference in the look of your home and can also add some big value. Adding new carpet or new hardwood or laminate floors is a great investment and if you have old hardwood floors, you can consider refinishing them to their original state instead of completely replacing them.
#5: New paint and caulking.
This is a simple and fairly inexpensive way to create curb appeal and add value at the same time. If the exterior of your home hasn’t been painted in a while, springtime is a great time to repaint. New coats of paint for the inside of your home is a great idea too and while you’re doing that, caulk around the windows and doors.
If you’re looking to make some upgrades to your home, call me for the names of some local contractors. Or, I am happy to do a quick preview of your home to help you decide what should be done for the best return.
Looking for a contractor or local company to help with some of those home improvement projects around the house that you’ve let go during the winter? Spring is a busy time for contractors and unfortunately, it’s a time where scammers go through neighborhoods and start offering seasonal services to homeowners. Whether it’s a window repair, window washing, leaf raking, or HVAC installations, there are people out there that will make promises on doing a great job, take your money, then never deliver the service they agreed to do. In addition to asking me for recommendations on reputable contractors, here are some other ways to avoid contractor scams.
Tip #1: Know what some of the popular scams are.
Most of the time, the person pretending to be a reputable contractor will come to your door and claim that he or his team is already in the neighborhood doing work on other people’s homes. The company or individual will claim to provide you a large discount because they’re already in the area doing a job. Then, the person will ask for partial payment upfront in order to secure your place, then will promise to return the next day after he finishes his other job in the area. It’s likely that the person will take your money and run – you’ll probably never see him or that money again.
Another common scam happens when contractors enter your home to work on it and they start adding in extras to the job that were not part of the original price and scope of work. If the contractor does not want to write up something that includes all of the details regarding what work will be done and how much it will cost, this should be a red flag.
Tip #2: Know how to protect yourself from scams.
There are several great ways to stay alert to possible scams. First, work with reputable local businesses. To find out if someone is part of a reputable business, ask for proof of their business license, ask for a business card or examples of estimate sheets, and look to see if their vehicle has professional signage on it. Next, do your research online to see what kind of reviews are there. Look at sites like Yelp, Google, Better Business Bureau, or Angie’s List to start. If you notice a lot of negative reviews, you should probably consider looking for a new contractor.
One of the unique services I offer is the ability for you to call me and ask for recommendations on contractors or companies that are reputable. If I don’t have a specific recommendation for what you’re looking for, I can check with over 120 Windermere agents in Vancouver who do.
Moving can be a challenging time for people of all ages, but as a teenager, it can be even more life-changing. Emotions and hormones are changing and developing and for a teen, it could feel like you’re changing everything about their life. They may feel uprooted or feel like you’ve taken the foundation out from underneath them – especially if the move is far away. Here are some helpful tips on how to help your teenager deal with an upcoming move.
Tip #1: Give them time to prepare.
Give your teen plenty of warning and time to process the move that’s coming up. Communicating about it well in advance will be helpful. It might be tempting to hold off on breaking the news to her/him, but in the end this could be detrimental, because they may feel like it’s been “sprung” on them with little time to contemplate what changes will need to happen. Keep communication open and let them know various details about the move and let them do some research on the new neighborhood or city so they can get an idea of what it will be like.
Tip #2: Give them some input.
Allowing your teen some input on the process will help them take ownership of it a little bit and it could also help them get excited about the prospect of change. Consider what your teen has to say about neighborhoods and schools, explore places in town that are popular, and make sure that their voice is heard. Allowing them to express their feelings about it will not only help them deal with the upcoming change that’s about to happen, but it will also help them contribute to decisions that may need to be made. Whether it’s decisions on neighborhood or just picking out the styles/designs in their new room, your teen wants to be heard.
Tip #3: Give them opportunities to stay in touch with old friends.
Goodbyes are not always easy. The teenage years are immersed in building friendships and one of the hardest parts of moving for your teen might be that you may not ever see your friends again. Encourage your teen to stay in touch through social media, phone calls and texts, or if you will still be within driving distance, let them know that you are committed to helping them stay in touch by driving them back to the area to visit.
Tip #4: Talk positively.
Your teen will pick up a lot about your feelings, stress, and attitude about the move, sometimes without you even knowing it. So if you want them to react as positively as possible, you’ll need to talk about the move in a positive and encouraging way.
Moving can be difficult, but communication throughout the process can help greatly. New memories are waiting to be made and a new chapter in your new home will be an exciting time.
In 2016, common décor colors used in homes were known to be soft, calm, and tranquil, but 2017 will bring brighter, more vibrant colors to the home decorating scene. Green has been named this year’s top color choice for decorating, which is sure to add pizzazz to any space. Here are some great ways to incorporate this color into your home’s style.
Incorporate natural greenery:
If green is the color of the year, integrating natural greenery into your home a great option to make your home warm and inviting. Real greenery throughout your home will bring new life to your space. Potted plants with brightly colored ceramic pots are great options. Or, consider adding indoor hanging succulents or other hanging plants with trailing stems for dramatic beauty in any room of your home.
Pillows, pillows, pillows:
If you don’t want embrace green completely, but you’re looking for an added pop of color, green accent pillows can be a good way to bring in the green to living room or bedrooms. Or, add green throw blankets to your couches, love seats, or beds.
Change out window dressings:
New window coverings can make a huge difference in the look and feel of a room. If you’ve considered making a change to your window dressings, green curtains could be a fun option. Curtains can make a dramatic statement, even on a small budget.
Add color to your walls with new wallpaper and paint:
Wallpapers today are elegant and gorgeous, unlike wallpapers of the past that curled easily or were almost impossible to remove. If you’re not sure about using wallpaper on all of the walls, put it on just one wall, then find an accent paint color that will make the room stand out. There are some unique tropical wallpapers and other bright floral wallpaper designs available right now that could be a great way to change the whole look of your favorite room in the house.
There are lots of ways that you can integrate green into your home’s decor this year. No matter how big or small your decorating budget is, it can add distinct color and vibrancy to the space that it may have been missing before!
Winter isn’t over yet and chances are, your heater has been working hard already these last couple of months. But did you know that your heater can only do so much in keeping you comfortable? Your thermostat plays a direct role in how your heating and cooling system operates. If you have an old thermostat, consider upgrading it. Here’s why:
Reason #1: The temperature in your home will be accurate.
Older thermostats are likely not efficient and usually, they have great variation between temperatures. This could mean that the rooms in your home could be unevenly heated on those cold days of winter. In addition, inefficient thermostats can also cause utility bills to increase, which means you’re paying more than you need to every month. By upgrading to a digital thermostat, you’ll be able to use digital display or push buttons that can help you set the temperature to exactly what you want. This ability to have an accurate set temperature translates to having a warmer, more comfortable home throughout.
Reason #2: Convenience.
Programmable thermostats will change how you interact with your home’s heating system. You won’t need to worry about manually adjusting your thermostat every time you want to make an adjustment. Instead, set the temperatures one time and let the thermostat do the rest of the work. For instance, if you program the thermostat to turn off or turn down the heat when you go to work, then have it set to come back on right before you get home, you’ll save yourself time.
Reason #3: Utilize smart technology.
Technology is always changing and it’s integrated into almost all parts of our daily lives. Your thermostats, heating system, and other appliances in your home aren’t any exception. If you choose to upgrade your thermostat to one that uses “smart technology”, you could connect it to your Internet and keep track of your energy usage. You could also set it up so you can program your thermostat while you’re away from the home and you can even access energy reports, which could help offer tips on how to minimize any negative impact you’re having on the environment.
There are a variety of smart thermostats on the market today for your home. You can contact your local heating and cooling supplier or make a trip to your nearest home improvement store to see what is out there. Research which one might work best for your specific space and soon you’ll be comfortable while saving money!
The warm days of summer are long gone and the frost of winter is now part of our everyday routine. But just because the weather is cold, doesn’t mean you need to give up on your gardening routines. Here are some helpful winter gardening tips that will help keep your garden growing all winter long.
Tip #1: Keep your plants for becoming frozen.
January and February are some of the coldest months of the year in the Pacific Northwest, so be sure to protect them from frost and frozen temperatures. If you have herbs that you’re growing, keep them undercover or near the house if they’re in containers. If you have grape vines or wisteria growing, be sure to prune them back. If you have other container plants, you can cover them with a frost cloth or other heat retentive blanket that will keep them from dying.
Tip #2: Grow plants that can easily endure the cold weather.
Lettuce, kale, chives, parsley, and cabbage can all withstand the cold days of winter quite well. Evergreen boxwood hedges, witch hazel, and winterberry are all easy to grow and withstand winter easily. They also add greenery and color to an otherwise gray and sometimes bleak winter landscape.
Tip #3: Continue to plant.
As long as the ground is soft enough to dig a hole, you can still plant throughout the winter. Be sure to add mulch and compost, too. This will help keep root temperatures stable and the compost will help provide organic nutrients to the soil that are important to keep the plants growing well.
You don’t need to worry about maintaining a regular watering cycle, either. When the ground is not frozen and it’s dry, watering once a week is usually all that’s required. Maintaining a healthy garden and yard isn’t impossible in frigid temperatures. In fact, it’s a great way to stay busy, while getting outside and enjoying some brisk fresh air. Keeping your garden growing will keep your yard looking great and before you know it, it will be time to start thinking about all of the new growth that will happen once springtime rolls around!
Winter weather has arrived and we’re likely to have more snow and ice in the coming months. When the frozen weather hits, we want to stay warm and cozy, but not break the bank on heating bills. Here are some simple winter energy savings tips that can help you save energy and keep your heating bill under control.
Tip #1: Don’t let air leaks go unattended.
If your home is leaking cold air in and warm air out, you’re likely wasting hundreds of dollars every year. Be sure to caulk and seal around any small openings around windows or doors. Door frames should have weather stripping secured around door frames, especially if they are showing signs of deteriorating. If you have old ductwork in your home, call a professional heating and cooling company and ask about duct sealing. This can be an affordable and effective way to seal air duct leaks and will help keep harmful particles out of the air you breathe inside the home.
Tip #2: Service your furnace.
Plan on having your HVAC system serviced once a year. These regular check-ups are helpful because technicians can take a close look at the furnace or heat pump and be sure that everything is working at its peak. They’ll replace air filters, offer solutions on how to make the system more efficient during the winter, and will point out any problems that may need repair.
Tip #3: Turn your thermostat down.
When you keep your thermostat in the 60 to 70 degree range without changing it all the time, you can save up to 5% on heating costs. If you keep your thermostat down to 68 degrees at night and instead use extra blankets while you sleep, you could be saving a lot of money every year. In addition, if you plan on being away from your home for an extended period of time, set the thermostat to 55 or 60 degrees. There’s no need to keep the heat on in an empty house.
Tip #4: Replace old appliances.
Has it been a while since you’ve replaced your appliances? Did you know that old appliances (especially old refrigerators) are huge energy drains! Replacing your old gas or electric appliances with those that have Energy Star® labels can be a great way to save energy and decrease your monthly utility bills.
These tips aren’t just helpful in the winter, either. They’re helpful all year long! Stay warm this winter!
If you have lived in your home for a while and you’re considering completing a refinance, you likely have some questions as to when or if it’s the right time to do so. Refinancing is a big decision, as it requires a lot of details and time, but it can have some great benefits to it once it’s all said and done. When deciding whether or not you want to refinance, one of the key questions is to ask yourself how long you plan on being in the home. If you intend on staying in the home for several years, a refinance could be a great choice, as you’ll likely recoup the closing costs over your time spent there. For those that are looking to move in a couple of years, refinancing might not make as much sense.
Aaron Hicks, Mortgage Consultant at HomeStreet Bank in Vancouver provides some great reasons to take into consideration on when a refinance might make sense for you.
Reason#1: Reduction in interest rate
Refinancing to lower your interest rate and payment is one of the main reasons why people choose to refinance. Hicks says, “There are still many people out there that have a much higher interest rate on their home loan than they should considering the current market. Refinancing could very well favor a lower interest rate or reduced monthly payment that reduces a person’s overall outgoing monthly debt.”
Reason #2: Reduction in loan term
If you want to pay off your loan faster, refinancing to significantly lower your loan term could be a fantastic idea. In most situations for example, if a borrower wants to refinance from a 30-year fixed mortgage to a 15-year fixed, the borrower will save a substantial amount of money in interest every year.
Reason #3: Cashout.
If you have been in your home for a while and it has gained significant equity, many homeowners choose to refinance and take cash out of the equity. Hicks says, “Some people do this to consolidate liabilities, make home improvements, or use the cash to invest in additional real estate. The ultimate goal here is to have the cash you are taking out work toward future financial freedom.”
Reason #4: Change loan programs.
If you have an adjustable rate mortgage (ARM), it can be very helpful to refinance to a fixed rate loan. Hicks shares, “ARMs carry the risk of having their interest rate increase significantly. When this happens, this can cause severe financial burden on a person’s finances.”
There are many reasons to consider a refinance, but each homeowner’s situation is different. What may work for one, may not work for another. Sit down and look closely at your home loan and what is left to be paid back and consider whether a refinance is right for you.