Getting a Loan in Today’s Environment Is Easier Than Most People Think

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We often get asked about the ease of getting mortgages and it’s an understandable question given the rollercoaster ride our industry has faced since 2007. But today, things are a lot different than they were just a few years ago. Banks are still particular but they are not afraid of lending. In fact, they have plenty of money to lend.

The real question is “how has the process changed?” and also whether or not it is actually difficult to obtain a mortgage. And the answers will surprise you. Not only is the process to obtain a mortgage easier than most people seem to think but also it is really not too much more a changed process than a few years ago.

Banks Are Simply More Cautious

It used to be that most people could walk into a bank, present their ID and almost literally walk out with a bank note and keys in hand. Well, ok not exactly but it was almost that easy and credit scores were not as important as they are today. What has changed is that banks now take extra precautions to ensure borrowers’ financial viability and ability to repay the loan. There has never been a more thorough documentation process involved and for good reason.

Today, a borrower must show that they are responsible citizens that are worthy of paying back their debts. They must have a credit score of 620 or higher and income must be proven with at least 2 months’ pay stubs, two yeas of employment on record and 2 years of tax returns to corroborate the financials. Bank statements are also required as part of the process.

The bottom line is this: if you pay your bills on time, can prove a reasonable income level and a low enough debt-to-income ratio that supports the mortgage you are looking to obtain, chances are you will be approved. Making payments on time is critical as it is the primary source of information that lenders will review when they look at your credit report.

Many Loans Offer Low or No Down Payment

As far as the ease of being able to actually obtain the home, a lot of people are unsure of lenders’ down payment requirements these days. The truth is there are many programs out there that allow buyers to put only 3%, 5% or even NO money down. Depending on which program and financing options you select, there are benefits offered to military veterans, people seeking homes in certain areas in the outskirts of the city and also income-based low down payment programs as well.

One of the most popular financing options that many buyers choose is FHA financing which requires just 3.5% down on the purchase of a home. Since this option is not limited just to first-time buyers it is a great choice for many buyers.

Buyers Can Contribute to a Smoother Process

Some of the things that buyers can do to prepare in advance and to help the financing process go as smoothly as possible include preparing two years of tax returns, employment pay stubs and the two most recent months of bank statements. In addition, retirement statements, divorce decrees and rental histories showing responsible repayment habits.
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Now is a great time to buy a home! Don’t let the rumors out there discourage you from starting the process. Lenders are lending. Right now homeowners are able to function in a home for far less than it would cost to rent each month. In fact, it often costs less to move into a home than it does to move into a rental unit, considering the first and last month’s rent and security deposit.

If you would like to explore your options, we invite you to contact us today! We look forward to making your real estate dreams become a reality.

Fast-Tracking Foreclosures Have Many Homeowners Jumping for a Short Sale Before It’s Too Late

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Are you behind on your mortgage payments? Does it seem that you have no way out and a foreclosure is inevitable? Well before you give up, consider a short sale. In fact, now may be the best time for you to sell your home as a short sale because of what may be soon to come. Banks are filing for foreclosure faster than ever before – and this comes at a time when many homeowners with underwater mortgages have become complacent, expecting more time.

Not only should you put your home on the market now as a short sale to avoid a foreclosure but also, making the move quickly could possibly save you thousands of dollars in taxes.

Right now, and through December 31, 2012 any forgiven debt may be discharged under the Mortgage Debt Forgiveness Relief Act. What this means is that any money you are discharged from paying back that would otherwise be considered as income by the IRS, is exempt from taxation through the program period. But as soon as January 1, 2013 rolls around, unless the program is extended, you would have to pay taxes on that “income”.

So if you are behind on your payments and it seems the bank is getting antsy, take this advice: consider short selling today.

We deal with many of these and would be happy to sit down with you to discuss your options. Contact us today!

Help Us Help Our Community this Saturday, October 6th!

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Join us from 10 A.M. to 2 P.M. Saturday, October 6th and help us fill our 20-foot moving truck with non-perishable food for the Harford County Food Bank.  We will be located in the Greenbrier Safeway Shopping Center just off of Route 22.  Diane Lyn from 101.9 Lite FM will also be there giving away great prizes.  So come on out and support your community. We hope to see you there!  Click here to see the flyer and find out all of the details on how you can join our team to help feed Harford County. >>

Determining an Accurate Selling Price of Your Home

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It’s very common to want to overprice your home but the truth is it can really backfire. It is important to make sure you are getting good market statistics that accurately depict the goings on of your marketplace and once you have those numbers that you use those statistics in determining your pricing benchmark. Since real estate is very local, anything that goes on in the next state or even the next region may not have much impact on your particular neighborhood. In fact, within one area there may be several different results when looking at and studying buyer trends and habits.

Have an Appraiser Evaluate Your Property

One of the ways we suggest sellers get an idea of what they might expect for their home is to get an appraisal done on your home as that will likely provide a true estimate of the home’s value. At the time of purchase, lenders will require that a buyer have an appraisal done anyway. Getting one done ahead of time will not only help to determine your price but also serve as a tool to corroborate the price you set during negotiations.

Get a Comparative Market Analysis

Another excellent tool used by those in the real estate profession to help determine the right price range for your home is a Comparative Market Analysis. Your real estate agent will do an in-depth analysis of all the similar homes in your area that have recently sold. Considering the previous six months’ sold homes, they will end up at a price based on what the market will likely accept.

Accurately Priced Homes Sell Faster

It is not an easy feat to have a home on the market with all the showings, keeping the home in tip-top condition and presentable as well as the uncertainty factor of not knowing when the home will sell. That is why the more accurately you price your home to begin with, the faster it will sell and the more money you can expect to get for the home.

Keep in mind that buyers these days are usually already well into their buying cycle, particularly since they are using the Internet and other resources online to conduct thorough searches of available properties. Chances are that by the time they make it to your home, they have already looked at many other properties and probably any that were for sale in your neighborhood. These are the buyers that make offers on properties quickly and they are most serious.

To have a home that is overpriced is a missed opportunity especially if you are serious about selling and want to sell as quickly as possible. That is why it is critical to price it right the first time.
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If you would like to evaluate what your home would sell for in today’s market – contact us today and we would be glad to assist you with the process.

What To Ask Before Choosing to Hire An Agent to Sell Your Property

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One of the most common things we hear as top-producing real estate agents is about how homeowners had neglected to properly interview the agent they had for their home. To help avoid that from happening, here are some factors to consider before you hire a real estate agent to sell your home.

Amount of Time Devoted to Profession

The real estate industry is one that can be very flexible for some yet completely encompassing for others. Your challenge will be to look for an agent that has made the profession their full-time career. The difference will be in the amount of time you can expect them to give you and the expertise level you can expect in return.

Level of Demonstrated Expertise

Experience comes from working with multiple clients in many different situations. As you interview prospective agents, take the time to inquire about past and current clients. Find out about the types of deals the agent specializes in. Are they specifically geared toward buyers or do they have experience with listing transactions? Don’t be afraid to check whether they are good at their job through references.

Length of Time Other Listings Remain on Market

Look into the length of time other listings they have taken have remained on the market. If you see a predominantly long number of days their properties sit on the market then it might indicate a lax marketing strategy – or worse, none at all. Marketing is a key component that you should be looking for and if a prospective agent lacks a viable marketing plan, you may want to think twice about that agent.

List to Sale Ratios

A lot of agents use less than scrupulous tactics to gain sellers’ business. One example is promising their clients higher selling prices only to disappoint their clients when the market dictates their home is worth less. Look for an agent’s list-to-sale ratios on other listings they have had. Are they being sold at or at least very close to the listing price? If not, it could be an indication of bad pricing advice or worse, evidence of those sneaky tactics to reel in business.
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Keep in mind that these are just a few of the things that impact the success rate of a strong real estate agent. What you need also to be looking for is a winning combination of character, values, tech-savvy and market-smart techniques. No two attributes will be enough – rather it is essential that you feel comfortable with your agent, can trust them and are fairly certain that they deliver on their promises.