first time home buyers

Improve Your Credit, Avoid These Things

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When you’re purchasing a home, your credit score matters. After all, your score will play a major role in whether or not you will get approved for a mortgage at a rate you can afford.

But, what if you need to improve your credit prior to applying for a mortgage? Many potential homeowners find themselves in this position and as such, need to know what to do (and what not to do) to boost their credit. And in this article, we discuss the top five mistakes to avoid when you’re looking to boost your credit. Let’s get started!

 

  1. Cancel Old Credit Cards/Request Limit Reductions

Did you know that 15% of your credit score is determined from the length of your credit history? It is and as such, cancelling old cards will make it seem as if you have more debt than you actually do (because your amount of available credit will decrease).

Relatedly, you shouldn’t request to decrease your limits either. Doing so will also make it appear as if you have more debt than you do, having the same impact as cancelling old cards.

 

  1. Staying Current on Only Some of Your Cards

We all have months where we must prioritize where we spend our money to pay off debts but you can’t fall behind on your cards! Approximately one third of your score is determined by whether or not you pay your cards on time and as such, it’s vital to stay current on every card.

 

  1. Having Too Much Credit

Was there a point in your life where you had to open credit cards to balance all of your purchases? Doing so may not seem like a big deal at the time but unfortunately it will influence your overall credit score.

If you have too much credit, you may be viewed as a risk because you could accumulate a significant amount of debt rather quickly. As such, you should avoid signing up for new cards (particularly impulse decisions at stores for discounts) since doing so will further jeopardize your chances of receiving an attractive mortgage.

 

  1. Maxing Out Credit Cards

You never want to reach your credit limits when managing your debt. After all, maxing out cards will negatively affect your credit, even if you’re staying current on your payments.

Don’t buy what you don’t need. Doing so will help you pay down the cards and manage your debt more effectively (especially when you’re looking to improve your credit score.

 

  1. Never Avoid Opening Cards or Securing Loans

Some individuals have the opposite problem than many others: They don’t have enough credit to build up their score. As such, it’s important to not fear cards or loans and instead, open and use them effectively.

For example, you may want to open one credit card for a store you shop at regularly. By using it on a frequent basis and paying it off each month, you’ll build credit that will give you a much better deal once you’re ready to purchase your home.

 

United Real Estate Can Help You Purchase Your Home

If you’re building credit in the hopes of purchasing your first or next home, the team at United Real Estate can help!

Since 1925, our team has worked across the United States to provide guidance, support, and expertise to homeowners just like you. Contact us to begin the search for your home, today!

Buying Your First Home: How to Get Started

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Have you recently been feeling that now is the “right” time to purchase your first home? If so, it’s an incredibly exciting time in your life. However, there is also a lot of stress and anxiety that can come with the process.

If you’ve never purchased a home before, chances are that you have some questions. The most pressing of which is: “How do I even get started in my search?” And if you’ve been wondering the same thing, you’ve come to the right place.

Start the Process With a Few Key Questions

We’re going to answer your question with another question (or rather, questions). After all, it’s important to ensure you’re really ready to buy rather than doing so on a whim.

Some questions you should consider before going further in the process include:

  • Should I be purchasing a home at this time or is renting a better option/ Am I planning on staying in this area for the next three to five years?
  • What are my reasons for purchasing my home? Am I buying for the “right” reasons?
  • Am I at the right place in my life (relationships, job, financial stability) to purchase a home?

If these questions don’t slow you down or give you pause, it’s time to consider the next part of the process: Financing your home.

 

Get Your Finances in Line

Purchasing a home is one of the most significant investments you’ll make in your lifetime. And as such, it’s important to make sure your finances are in order before beginning the actual house hunt.

When you’re considering financing, it’s important to research available loan programs as well as potential mortgage rates and fees. Often, this means you should order your credit report, correct any errors, and pay down current loan balances before going to a lender.

Once your credit is in order, you can visit multiple lenders (beginning with your own financial institution) to interview mortgage brokers, determine potential loan programs, and figure out your potential monthly mortgage payment (depending on the home you can afford). You will want to get a preapproval letter since doing so will give you more leverage in negotiations with sellers once you find the home you want.

 

Next, the Home Search Can Begin

After these vital preparatory steps, you can begin the home search. It’s best to do so with an experienced real estate agent, helping you avoid common mistakes and get the best value for your money.

The best way to find a qualified agent is to ask for referrals from family members, friends or colleagues. By doing so, you can avoid the headache that comes with choosing an agent whose expertise might not fit your needs.

 

United Real Estate Can Help You Purchase Your First Home

If you’re interested in purchasing your first home and are looking for an agent to help you do so, the team at United Real Estate can help.

With decades of experience in helping individuals just like you, we can help find the perfect first home no matter your budget or needs. Contact us to begin the search for your home, today!

Get Your Credit Mortgage Ready

The path to homeownership can be stressful and often difficult. If you have less than perfect credit history, the obstacles might be even greater. Even if your credit is good, there are a few red flags that might prevent you from getting a mortgage (or the mortgage rate/type) that you are hoping for. Below is a list of items that can hinder the process of obtaining a mortgage:

Don't leave your credit score up to chance.

Don’t leave your credit score up to chance.

  • Bankruptcy– Some mortgages will work with a past bankruptcy. But you usually need to be several years past the discharge date and have rebuilt your credit. A bankruptcy, even when discharged, can stay on your credit report for up to ten years.
  • Foreclosure short sale – Some mortgages will work with a past foreclosure short sale. But you usually need to be several years past the sale date and have rebuilt your credit. Even when finalized, a foreclosure short sale can stay on your credit report for up to seven years.
  • Unpaid judgments– No mortgage lender wants to take the risk that an earlier debt could take precedence over their loan. All judgments must be satisfied, removed or vacated from your credit report. And, if paid, your judgment will stay on your report for seven years. Solve open judgments. Try to vacate them first or pay them and get proof that they’re paid. Yes, I know it hurts to take money out of your hard-earned down payment savings account. But that down payment won’t do you a bit of good if you can’t get a mortgage because of an old judgment from the cable company you fought with in your first apartment.
  • Open collections– If you don’t pay a bill, the company you owe may sell your debt to a collection agency who will try to get you to pay. ONLY PAY THEM OFF IF YOU ARE TOLD TO DO SO. Keep in mind that paying a collection will not raise your credit score, but LOWER YOUR SCORE. Once a debt has gone to collections, your credit is hit and can only recover over time.
  • Too much monthly debt– A good rule of thumb is that if you’re paying more than 5 percent of your gross monthly income for debt payments (credit cards, student loans, car payments, personal loans), you’re decreasing the amount of mortgage you’ll be approved for. If your income is high and housing prices are reasonable, high debt might not hurt you much. But if you have a modest income, debt can price you right out of a mortgage.
  • Pay your current bills on time, religiously – You’ll need the boost to your credit score if you’ve had problems in the past. And you’ll want to prove to a lender you’ve gotten past old issues and made a fresh start in rebuilding your credit.
  • Make sure the problems are right – If not, you must dispute them off. Experts disagree about how many people have serious errors on their credit reports, but I have witnessed a client who discovered that someone had posed as his spouse after finding lots of strange information on his credit report. Don’t pay the price for someone else’s mistake.

This piece is guest written by our partner, Credit Law Center (CLC). CLC helps clients achieve financial success by cleaning up their credit history and putting them on track for financial freedom. Contact them today at (800) 994-3070 or by visiting creditlawcenter.com.

The Skinny on Home Warranties

Your furnace goes out. Now what? It’s a costly repair that can really take a toll on your pocketbook.

Do home warranties protect your new investment?

Do home warranties protect your new investment?

There are many people that rely on home warranties to repair their appliances. Home warranties are service contracts that are designed to cover appliances and other items that can break within the home. However, the age old question is – are home warranties worth it?

First, it’s important to understand the difference between a home warranty and home insurance. A home warranty typically covers repair and replacement costs for appliances – with a service fee. Home insurance covers appliances, but normally won’t cover them unless damage occurs to the house – for example, a fire, flood or theft.

The Pros – For sellers, home warranties that are included on a home they are selling can be a big bonus. According to a recent survey by a large home warranty provider, homes that come with a warranty sell 11 days quicker and make an average of $2,300 more that those that do not. Buyers can have the reassurance that their appliances are covered and possibly save up to thousands of dollars.

The Cons – Many consumer reports argue that home warranties aren’t worth the cost – $400 to $600 a year. One complaint is that many claims are denied because it is determined to be a pre-existing condition. Claims are also denied because the appliance hasn’t been maintained properly. Other problems included no coverage on more expensive items like leaky roofs or basement moisture and extra charges for things like plumbing and heating.

If you’re ready to purchase a home warranty, here are some tips to consider:

  • Check out multiple providers. Just like with any purchase, review your options. Also, make sure the company has the proper licensing and other requirements to provide a home warranty.
  • Review the contract carefully. As mentioned, there are many reasons a claim can be denied. There are also many appliances that could possibly not be covered under your plan. Read the contract carefully, including the fine print.
  • Create a budget. Add in the payment to your monthly budget. Include a possible service charge – which could range from $50 to $100.
  • Talk to your real estate agent. Keep your agent in the loop about your search for a home warranty. They may have a good relationship with a company and know who to watch out for.

United Real Estate is here to help you make the best decisions for you and your family.  If you are ready to get started on the home buying process, or if you have questions about buying, contact our support team.

 

Sources:

http://www.consumerreports.org/cro/news/2014/09/why-you-should-avoid-home-warranties/index.htm

http://www.latimes.com/business/realestate/la-fi-lew-20140511-story.html

Four Things to Avoid When House Hunting

  • What neighborhood works best for you?

    What neighborhood works best for you?

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House hunting can be exciting but there’s also plenty to consider when you’re conducting your search. When looking for a house, most people have a good understanding of what features they want.  But what about the things you need to avoid?

To dodge some major house hunting pitfalls, take a look at our quick tips below.

Looking outside of your price-range. Find out how much you can borrow from your home lender and stick to it.  While it can be tempting to stretch your budget for a home that appears to be just right, people often forget about hidden costs like taxes, insurance, utilities and fees that will be tacked onto the purchase price or the monthly payment. To avoid temptation, scratch any homes off your list that are clearly out of your price-range.

Buying the first home you see.  There’s a lot to consider when buying a home and without a strong basis of comparison, you could be making the wrong decision. Make sure you’ve done your research and have a good idea of what average prices are in the area you’re looking in and see how each home stacks up. You’ll also need to investigate the neighborhood to make sure it’s on par with your family’s needs. Once you’ve had a chance to look at some options, you’ll feel great knowing that you’ve made an informed decision.

Homes that need major renovations. Unless you have the cash flow and ability to renovate, these homes are best left untouched, especially for first time home buyers. Think about how much time you’re willing to wait while your house is being renovated – are you prepared to wait even longer? Renovation projects tend to go over-time and over-budget, so unless you’re looking to stay put for several years, this home might not be worth the headache.

Not getting inspections. Make sure you arrange an independent inspection to assess the overall state of the home, even if your lender doesn’t require it. Since sellers may not disclose all issues, an inspection is a great chance to discover any potential roadblocks and decide if they will make or break your buying decision.  Knowing the true state of the home can also provide some great bargaining power.

Whether you’re searching for your first home or your thirtieth, our expert team is here to help make your home-buying process as smooth as possible. Contact them for more information today.

Sources:

http://www.trulia.com/pro/buyers/house-hunting-pitfalls-to-help-buyers-avoid/

http://www.forbes.com/sites/learnvest/2013/03/06/the-7-top-home-buying-mistakes-you-should-avoid/

5 Signs You’re Ready to Buy a Home

  • Are you ready to buy a house?

    Are you ready to buy a house?

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For some, home ownership seems to be a natural part of life. After all, many individuals don’t want to rent forever and when the market is right, there are a lot of individuals that jump at the opportunity to make a purchase.

But, how are you supposed to know when it’s the right time to make a purchase versus when it feels right to make a purchase?

Luckily, there are 5 questions you can consider and, depending on the answers, use to guide your decision as to whether home ownership is the right decision for you.

  1. Do my finances support my decision to purchase a home?

No matter how badly you want to be a homeowner, you simply can’t decide to make such a significant purchase if your finances aren’t in order. Of course, feeling financially secure will be different for different people, but you should have enough money for a 10% down payment as well as for mortgage insurance depending upon the amount of your down payment.

If you haven’t saved for a down payment, it’s unlikely that you’re ready to purchase a home. But if you have, you can answer “yes” to this question and continue considering the following questions.

  1. Will I be in this area for awhile?

In the past, staying put for just three to five years was enough to purchase a home. But nowadays, you should want to stay put for at least seven years to consider home ownership.

Primarily, this is because there are a lot of associated costs with purchasing a home including closing on the sale and moving, among others. And, when it comes time to sell your home, you’ll lose even more money.

So, if you aren’t willing to settle down or can’t count on settling down depending on your job and unique situation, it’s probably best not to buy.

  1. What are the standard costs of ownership?

What will you be spending, and how does this break down on a month-by-month basis? The simplest way to determine the standard costs is to calculate your home price minus your down payment into a mortgage calculator.

You can even plug in costs like property taxes and homeowners insurance to get a more accurate picture.

  1. What hidden expenses are there in homeownership?

While most homeowners understand the standard costs they can expect, few understand that there are many hidden expenses as well.

Hidden expenses include everything from homeowner association fees, routine maintenance costs, and significant expenses like a new roof or a new paint job. You can’t plan for all of these costs, so having a comfortable savings account is necessary to ensure that should something arise, you can handle it.

  1. What’s going on in the market in my area?

Even if you’ve answered “yes” or “I’m prepared” to all of the questions above, there’s one more you have to consider: what’s actually happening in the market where you live?

Home prices in some cities are skyrocketing at the moment whereas others are remaining more stable. Meanwhile, those who are renting may experience an increase in their income but in all likelihood, their rent is increasing as well.

Consider the market in your area and by doing so, you can better determine whether or not a home is the right investment at this time.

If You’re Ready to Purchase a Home, United Real Estate Can Help

If you’ve read through this article and are convinced that now is the right time for you to buy a home, the team at United Real Estate can help.

As a national leader in the real estate industry, we have the experience and expertise to assist with all of your needs. Contact us to purchase your dream home, today!

10 Real Estate Terms You Need to Know

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When it comes to buying and selling homes, part of walking the walk is talking the talk. After all, it will be difficult to search for and land your dream home or sell your current home if you aren’t quite sure what all the terms mean.

Below, we’re going to detail 10 of the most important real estate terms you’ll encounter as you look to buy or sell your home. And by learning them all, you’ll have the tools you’ll need to go through either process with confidence.

  1. Buyer’s Agent vs. Listing Agent

In any home-related deal, there are two agents: the buyer’s agent, who represents the buyer, and the listing agent, who represents the seller. Both will get a percentage of the final sale price of the home as their commission, meaning that you don’t pay your realtor regardless of whether you’re buying or selling.

  1. Fixed Rate vs. Adjustable Rate Mortgages

Many individuals, including you, might need a mortgage to purchase a home. Fixed rate mortgages have a fixed interest rate for the entire loan (which is generally about 30 years) whereas adjustable rate mortgages have variable rates (which are generally 5, 7, or 10 years).

  1. Pre-Approval Letter

If a buyer needs a mortgage, it’s important to seek pre-approval from the bank to determine how much they’ll lend. This will determine which properties buyers can consider and show sellers whether or not a buyer is qualified.

  1. Listings

Homes that are on the market are commonly known as “listings.” Listings will provide vital information about a property such as the price, number of bedrooms and bathrooms, square footage, and other details.

  1. Inspections

After making an offer, it’s essential that a buyer gets an inspection on the home they’re interested in. An inspector will evaluate potential issues like plumbing, electric, heating, appliances, the foundation, and more.

  1. Appraisal

Lenders require property appraisals to determine the home’s value. Typically, appraisals are based on the sale prices of homes that have sold in the area as well as the current condition of the property.

  1. Contingencies

Contingencies are included in offers on a home and specify conditions that must be met in order for the deal to get through. Of course, there are other contingencies as well, including:

  • Financing Contingency – Demonstrates a buyer’s loan approval.
  • Inspection Contingency – Demonstrates inspection results.
  • Appraisal Contingency – Demonstrates the appraised value in comparison to what you’re willing to pay.
  1. Offers

Offers are often made by agents or attorneys to show sellers the potential offers being made by buyers on a property. It’s common for sellers to counter an offer as well.

  1. Closing Costs

There are several fees that come with purchasing a home, commonly known as closing costs. Often, closing costs total 2 to 5% of the purchase price of the home (not including a down payment).

  1. Title Insurance

Once a seller has accepted an offer, buyers should receive a home title report that shows whether or not the seller has rights to the title and there are no liens on a home.

Looking for Assistance in Buying or Selling Your Home?

An agent is an indispensable resource when it comes to buying and selling homes.

And, when you’re looking for more than just terms to negotiate on your dream home or obtain an offer on your current home, United Real Estate can help. Contact us today to get started!

First Time Home Buyer FAQs

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Buying a home is one of the largest financial decisions most people will make in their lifetime.  Naturally, this means that potential homebuyers are going to have a lot of questions.

This list of FAQs will help prepare you for answering your customers’ most important queries.

Q: What are the most important things to consider when looking at the condition of a home?
A: There are several things to look at when determining whether or not to purchase a home. One is the age of the roof. A roof usually lasts between 15-50 years depending on its materials. Another area to look at is whether the foundation is raised or slab. Newer homes tend to have slab foundations, but a raised foundation makes it easier, and usually cheaper, to access underneath the home to address electrical and plumbing issues.

Q: Do I need an attorney to be involved?
A: It depends on the state. Some states require attorneys to draft a real estate transaction contract or purchase agreement, while others use an escrow company instead. Check with a real estate agent to find out the laws in a specific state.

Q: How do I decide what to offer the seller?
A: How much the seller paid for the home, how much the seller still owes on the home, and how long the home has been on the market are all things to consider when coming up with an offer. In addition to questions about the house, it is important that the buyer asks themselves how much they can feasibly afford and how valuable the house is to them when considering an amount to offer.

Q: Do I need to get a home inspection?
A: While it is typically an additional expense for the buyer, a home inspection will cover the entire house- inside and out- and can prevent costly surprises down the road. At the end of the inspection, a signed report of the findings will be given to the buyer. No other party is entitled to see the report unless the buyer allows them to.

Q: What is a house closing?
A: This refers to the final transfer of ownership from the seller to the buyer. This transaction usually takes place in the office of someone who is licensed in initiating the transaction and purchase agreement such as a real estate lawyer or title officer. The date for closing is set during the negotiation phase and usually takes places several weeks after the buyer’s offer is officially accepted by the seller. There are several fees involved in closing, which can be paid either by the buyer or the seller- depending what they established during negotiation.

Q: Do I need title insurance?
A: Title insurance covers you in case the title search missed something that would make the purchase of the home invalid. While a title search is conducted during the home buying process, there can be things that aren’t caught until after the buyer has moved in, meaning they could potentially lose their house. If this were to happen, the buyer is likely to receive damages if they purchased title insurance at closing. Two title insurance policies are needed- one for the buyer and one for the lender.

This post is provided by our mortgage partner, Supreme Lending, using the following sources: 

http://realestate.findlaw.com/buying-a-home/questions-to-ask-when-buying-a-home.html
http://www.homeclosing101.org/costs.cfm
http://www.zillow.com/home-buying-guide/what-is-title-insurance/

The Challenges Facing First Time Home Buyers

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In 2013, 38 percent of home buyers were first-time buyers. Because first-time buyers can face unique challenges that other buyers may not, Supreme Lending and United Real Estate have partnered together to assist more people in achieving the dream of home ownership.

The statistics on first-time home buyers.

First-time home buyers tend to be young adults with an average age of 31. Around 56 percent of first-time buyers are married and 30 percent are single. The majority of first-time buyers, 59 percent, don’t have children. They tend to purchase homes around 1,570 square feet, and they have an average income of $64,400.

Specific challenges first-time home buyers face.

Did you know:

  • The average age range for first time home buyers is 25-35, which also happens to be the age group hardest hit by the recession. This means that they may still be building their careers or do not have the employment history that older buyers do.
  • Credit scores can also be a challenge for first-time home buyers because they may not have the long, established credit histories lender look for.
  • Down payments can be a problem for first-time home buyers. Some lenders require first-time buyers to put down 10 to 20 percent of the purchase price of the home, which can be difficult to come up with when the buyer might be just starting in their career.
  • Many buyers in this age group are also dealing with paying back substantial student loans. Having student loans can significantly impact the approval and even size of a home loan.
  • It’s their first time. Many first-time buyers are simply overwhelmed by the home buying process. This can result in them agreeing to a term or percentage without really knowing what it means for them or giving up the process entirely.

What you can do:

  • Make a list of must-haves and nice-to-haves. Buying a home can be an emotional experience, but it is important to try to put emotions aside and focus on finding a house that has what you’re looking for AND you can afford.
  • Take ALL of the expenses into consideration when deciding on your budget. Don’t forget to add in utilities, cost of commuting, insurance and other fees.
  • Read the homeowners association contract before you put in an offer. It could have conditions that make or break your decision.
  • Ask for help! You don’t have to go through the process alone. Make sure that you choose loan officers and real estate agents who are dedicated to making the process as simple as possible.

Sources: https://www.discover.com/home-loans, http://www.realtor.org, http://blakesloanradio.com

 Questions for us?  Email info@supremelending.com or call (877)316-0296

Supreme Lending
NMLS ID #2129
14801 Quorum Drive, Ste 300
Dallas, Texas 75254
www.gregorylaywell.supremelending.com

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Can People Still Buy a Home with No Money Down?

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    mortgages

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Although it’s highly unlikely, yes – it is still possible to get a home without a down payment.  Prior to the mortgage crisis and recession, many lenders offered mortgages without any down payment. Some lenders even allowed consumers to borrow up to 105 percent of the home’s purchase price so they could finance their closing costs.  While we all know that mortgage requirements are much stricter, there are still loan options that can make homeownership a reality.

Today, a handful of government sponsored programs allow consumers with good credit and a steady income to buy a home. Here’s the low-down on loans with low/no down payment requirements.

VA Loans

These loans are only available to veterans, current members of the military and their spouses. While these loans don’t require a down payment or mortgage insurance, there is a funding fee that can be wrapped into the loan.

USDA Rural Development Loans

The U.S. Department of Agriculture offers loans to those with qualifying credit scores and income levels. Candidates for these loans must be able to afford payments but have a low or moderate income. Additionally, you must purchase a property in a designated area. These loans are primarily designed to help low-income families in rural areas purchase homes.

FHA Loans

Insured by the Federal Housing Authority, FHA loans come with a minimum down payment of 3.5 percent. FHA charges an upfront premium and additional premiums each month. The standards are usually pretty lenient but a series of guidelines are published and will give you exact eligibility requirements.

If you are interested in getting approved for a loan or learning about types of loans available,
contact our preferred mortgage partner – Supreme Lending. Their team is passionate about helping consumers make homeownership a reality.