Key Steps to Take Before Buying Your First Home

First time homebuyersAre you a first time home buyer starting to think about purchasing a home? Take steps now to make sure everything moves forward once you are ready to buy. Consider these tips from author Karen Cheney of Money Magazine to get you positioned to buy your first home.

  • Make sure the timing is right to purchase vs. rent
    Find out details such as current loan rates, taxes and the cost of renting in your area. Nationwide it’s 38% cheaper to buy than rent.
  • Save, Save, Save
    You will need at least 3.5% down for an FHA loan or 10% to 20% for a conventional mortgage.
  • Secure a Stable Job
    Lenders prefer home buyers with stable employment.
  • Consider what options you want and need in a home
    Snap photos, create a Pinterest page, or try a home buying app like Swipe which lets you browse listing photos and save the properties that you are interested in.
  • Review your credit report
    Order a free copy of your credit report and fix any errors that you find. Make sure you pay your bills on time and decrease your outstanding debt. The average credit score for approved mortgage applicants is 755.
  • Determine your housing budget
    Use an online calculator to estimate how much house you can afford based on your income, savings, bills and debts. Be realistic when planning your budget to avoid ending up house poor.
  • Add in future costs
    Consider what your homeowners insurance will cost, determine any monthly HOA fees, get an estimate on utility costs, etc.  Money Magazine also suggests adding on 1% of your home’s value for yearly maintenance costs.
  • Get preapproved for a mortgage
    Being preapproved when you are ready to go home shopping gives sellers the impression that you are a serious shopper.
  • Find the right realtor
    Once you are ready to move forward, make sure you have a realtor you can partner with for your home search.

For more details, see Money Magazine’s article entitled, “Be Ready to Buy Your First Home” by Karen Cheney.

Staging Your Home to Sell

Staging Your Home to SellStaging is the process of presenting your home in a way that makes it most attractive to a large number of buyers. A properly staged home often decreases the time a property is on the market and can lead to a higher sales price. Here are a few tips used by professional stagers to prepare a house for a successful sale:

  1. Think Curb Appeal
    To sell your home, you need to get prospective buyers to walk through your front door. Keep your lawn mowed, plant fresh flowers depending on the time of year, and keep your garden weeded. Power wash the front of your house and consider re-sealing your driveway. Paint your front door and replace the hardware if it looks worn. Splurge for a new doormat. Cozy up your front porch and make your home look inviting. Make sure the front of your house (as well as the interior) is well-lit.
  2. De-Clutter
    You may not consider your clutter to even be “clutter.” Look at it from the perspective of a buyer. People prefer clean, organized spaces. Clutter-free environments actually make homes appear larger and more open. Remove all knickknacks, mail and papers. Pay special attention to closets. Yes, people will open those doors. Reorganize your pantry so it appears spacious and clean. Use model homes or homes that are featured in magazines as your inspiration.
  3. Make it Sparkle
    Think of this step as a super-charged spring cleaning. Clean your baseboards, walls, kitchen cabinets, tile grout and ceiling fans. Wash your curtains and rehang them. Thoroughly clean your kitchen appliances inside and out. Make sure bathrooms shine. If you have a wood burning fireplace, eliminate signs of soot and messy ashes. Pay to have your carpets cleaned. Keep hardwood floors dust-free and gleaming. Consider hiring a professional cleaning team.
  4. Tackle Those Handyman Projects
    Fix dripping faucets, nicks on wood cabinets and furniture, old caulk, are just a few projects that need to be fixed before you place the For Sale sign in your yard.
  5. Depersonalize Your Space
    Go through and remove the things that make the space “your house” so potential buyers can see themselves in the house instead. This step will also help prepare you for leaving your home.
  6. Go for Neutrals
    You may love your bright pink master bathroom but it may not be everyone’s cup of tea. Keep it neutral and help potential buyers envision themselves in the space.

8 Places to Go When Your Mortgage Lender Says No

Mortgage approval8 Places to Go When Your Mortgage Lender Says No
Article from
By: Dona DeZube
Published: February 04, 2014

New mortgage rules draw some pretty clear lines about who should — and shouldn’t — get a mortgage. If you fall outside the lines and your lender says no, you have eight other options.

New mortgage rules are pretty clear about what you have to do to convince a lender you’re a qualified mortgage borrower. Meant to measure your ability to repay, the new rules created a list of eight things  lenders had to check to make sure you could repay your mortgage.

Those protections help ensure we’re not going to see a repeat of the mortgage crisis any time soon. The new rules are also designed to reward banks for staying away from risky products like interest-only loans. But if you can’t meet any of the eight standards you’re going to find it harder to get a new mortgage or refinance your existing mortgage.

The National Association of Realtors predicts the changes will slice about 5% to 7% of borrowers out of the market. Where do you turn if you’re in that 5% to 7% or you like your balloon loan and want to refinance into another balloon loan?

The fine print in the new rules created some exemptions that you can use to try again if you don’t meet one or two of the eight qualified mortgage checks, or if you want to go with a loan product that the rules discourage lenders from making.

  1. Your State Housing Finance Authority
    State Housing Finance Authorities specialize in helping first-time and low-to-moderate income home buyers and homeowners. They’ll often give you a below-market interest rate or the option of putting down as little as 3%.In exchange, you’ll likely have to agree to complete a financial education course and prove every penny of your income. Historically, HFAs have had much lower rates of late payments and foreclosures than for-profit lenders, so they’re exempt from the rules.
  2. An Itty-Bitty Bank
    Banks and credit unions that have less than $2 billion in assets and make 500 or fewer first mortgages don’t have to follow the same rules as larger lenders.That’s because they didn’t make the risky loans that led to high foreclosure rates during the mortgage crisis. Plus, they tend to hold on to the loans they make (rather than selling them to investors). That makes it easier for the bank to work with customers who run into financial trouble.Small lenders can charge higher fees and interest rates than big banks, which they need to do if you have a tiny loan amount, because some fees, like a title search, cost the same no matter how big or small your loan is.For example, if you had a $20,000 mortgage, the fee cap would limit you to $1,000 in fees, which probably isn’t enough to cover a title search and appraisal. Although the bank would still earn interest on your loan, it would have to pay the fees for you — and no bank wants to do that.Some small lenders can still make balloon loans, where you owe one big payment at the end of your loan. A balloon loan has a lower monthly payment than a regular mortgage loan where each month you pay back some of the money you borrowed instead of just interest.

    The catch is that the small lender has to hold on to your loan for at least three years and can’t sell it into the secondary market.

    So you’ve got to persuade the bank that your mortgage is a good investment. Small bankers can be very conservative lenders, which is another reason they didn’t end up with a lot of foreclosures on their hands during the real estate crisis.

    Right now, any lender who meets the size rule can use the small lender exemption. Starting Jan. 10, 2016, only small lenders in rural under-served areas will get to use the exemption, so don’t delay trying this avenue unless you live in a sparsely populated place.

  3. A Government-Guaranteed Loan
    The new rules set a clear line for how much of your income, max, you should be using for debt: 43%. If you’re above that limit because you have too much debt or not enough income, there’s a work-around.You can go over the 43% limit if your loan is guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration, the VA or the U.S. Department of Agriculture’s rural housing loan program.
  4. Community Development Nonprofits
    Nonprofit lenders who work with low- and moderate-income borrowers don’t have to follow the new mortgage rules. As long as they don’t make more than 200 loans a year, they can create special loan programs to help the people in their community.Community Development Financial Institutions set up shop in areas undergoing revitalization. They target a particular community for assistance, including homebuyer incentives. CDFI lenders also don’t have to follow the new mortgage rules.
  5. Homeownership Preservation and Foreclosure Prevention Programs
    If you’re underwater on your mortgage, meaning you owe more than your home is worth, you can still get a loan from a foreclosure prevention program or a homeownership stabilization organization. Because these groups have a history of knowing how to help troubled homeowners, they don’t have to follow the new mortgage rules.
  6. A Safer Loan
    If you’re in a dangerous, unfair loan right now and you want to refinance into a safer loan, your lender doesn’t have to follow the eight standards when it gives you a better loan. There’s an exemption from the ability to repay standards when a lender is moving a borrower out of:

    • An adjustable-rate mortgage  that’s about to adjust to a much higher payment
    • An interest-only loan
    • A loan with negative amortization (meaning the amount you owe can go up even if you make all your payments)

    Your new standard loan:

    • Has to have a fixed rate for the first five years.
    • Must lower your monthly payment.
    • Can’t have fees of more than 3% of the amount you’re borrowing.
  7. A Work-Around
    If you’re rich enough that your bank has assigned you a personal wealth manager, that’s the person to talk to when it’s time to refinance. Your bank will want to keep you as a customer and will find a work-around to fund your loan.For example, if you’re using more than 43% of your income for debt but you can show you have millions in assets, your personal banker will make the case that you’re quite able to repay your mortgage even though you don’t meet the debt-to-income rule.
  8. Another Kind of Loan
    The new mortgage rules don’t apply to all loans. It specifically doesn’t include open-ended loans, Timeshare Loan, Reverse Mortgages, temporary loans, including bridge and construction loans, and loans from the bank of Mom and Dad. If one of those types of loans will work instead of a mortgage, you won’t have to meet the new mortgage rules.

A former Gannett assignment editor, Dona DeZube is an award-winning professional writer with more than two decades of experience. Today, her specialty is translating complex financial and health news into the kind of how-to stories consumers can really use. Her financial work has appeared in major dailies, such as the Miami Herald and the Chicago Tribune, top trade magazines including Today’s Realtor and Mortgage Banking Magazine and online at Inman News, the leading electronic broadcast service in real estate.

Visit for more articles like this. Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®.