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Adding the 2nd Floor

Renovations. Remodeling. Home Improvement.

This can be anything from a new front door to an entirely renovated kitchen. But what about the addition of a second floor?

For many homeowners living in single-storey homes, the idea of expansion may only be possible by building up. Especially in quickly-growing cities or in already established neighborhoods, up is the only option.

 

The rationale

A growing family, the need for more space, or even increasing the value of the home. All excellent reasons to expand. There are a few facts to take into consideration before shooting for the stars.

 

Getting down to brass tax

Any renovation or remodeling project involves cost. And first and foremost, calculating the approximate cost of the project. That includes the materials, labor, design, furnishings… Not to mention heating and cooling.

The actual cost of renovation depends on the area you are living in, the average cost of labor, and the size of the renovation you are planning. Adding one bedroom and a bathroom is going to cost much less than adding four bedrooms, two bathrooms, and a shared living space.

But you do not need to let this deter you from an addition to your home. Like most everything, you can take a project like this on in stages. Start by having your foundation inspected to ensure you are actually able to build up. Then begin laying the “groundwork” for your second floor. It can be as simple as the base structure, as well as the roof (to guarantee you are actually able to continue living in your home throughout the entire process).

 

Not the shortest undertaking

It is safe to plan on spending quite a bit of time on this project. At the very least, the project will take anywhere from 4 to 6 months. And that is if you are jumping in full-force. For many people, this project can take a bit longer, depending on how much you are able to spend month-to-month.

While, realistically, you can start the project while still living in the home, especially if you are working on a slightly tighter budget, it is safe to plan on finding another place to stay for the duration of the remodel. Especially when there will be contractors in and out of your home on a daily basis building an additional floor, there is great reason to find a place to rent short-term (or find family you can handle living with for a few months).

Benefit, benefit… And more benefit

While it may be expensive (and a bit time consuming), the addition of a second floor could, possibly, be the perfect addition to your life and, of course, your home.

The addition of another storey will definitely increase the value of your home. Extra bedrooms, bathrooms, and additional living space will definitely make your home more attractive to potential buyers. So whether you are planning on selling now or later, an addition of this magnitude will increase your home’s value significantly.

Have you ever said NO to extra space? More living space just for you. An additional bedroom for friends and family. Extra space for your growing family. Increased area for pets to roam and play. Whatever the reason, if you want a larger space and this is the road you are planning on taking, building up is well worth it.

 

Final tidbits for thought

It is important to come to the table prepared. Write down a list of questions you have and actually ask them. The last thing you need is to refrain from asking a question and end up regretting it later.

Lay out your budget. Have you ever planned a party without a definitive budget? And, did you go over that budget? When you don’t have a set plan for exactly how much you are able to spend, you are more likely to overextend yourself. Besides, if you have a perfect plan for how you are allocating your funds, it will make the entire process much less stressful.

Finally, you just need to pick a contractor. Ask around, do your research online. Essentially, do your research. Take your time to find someone who is best suited for your project and your needs. Just like when you are picking a mortgage lender, hand-picking the best contractor is well worth your time.

Maybe you choose to renovate. Or maybe you don’t. Either way, it is essential to weigh both the pros and the cons before you make a final decision.

 

 

Total Home Lending

 

 

Natasha Mason

 

Adding the 2nd Floor2020-09-28T15:14:20+00:00

Picking Your Mortgage Lender

A mortgage definitely does not fall into the “small” or “short term” category. Whether you have a 10, 15, or 30 year mortgage- you have signed yourself up for the full marathon. Yes, you are in it for the long haul.

Since you will be working directly with your mortgage lender throughout this entire period of time, it is smart to shop around and educate yourself on the best lenders available.

Not all lenders are made equally

Some lenders are known for their work with borrowers with low credit scores. Others are known for their low rates. Others are just well-known because they are one of those larger institutions. That being said, it is essential to shop around- double dip- to take a look at all of the options available to you before selecting your lender.

And it is never a bad idea to find a lender you feel comfortable with, whether is is with the rate they can offer or their focus on excellent service.

 

The “how to”

We have a few recommendations when it comes to selecting your mortgage lender. First and foremost, take a look at all of your options. Because there are quite a few options when it comes to mortgage lenders. There are credit unions, mortgage bankers, correspondent lenders, savings & loans, and mutual savings banks.

Credit unions are member-owned institutions that will generally offer favorable interest rates to shareholders. And many have more relaxed membership restrictions, so more people are eligible to join.

Mortgage bankers are actually bankers who work for a larger financial institution and are responsible for packaging mortgages for consideration.

Correspondent lenders typically are local mortgage companies. They have the resources to offer loans, but they do rely on larger lenders (these are companies you will most likely recognize from mainstream advertising).

Now, Savings and Loans are the foundation upon which the entire mortgage industry has been built. While they are few and far between, they are typically much smaller than your typical mortgage lender and are very involved in the surrounding community.

Finally, mutual savings banks are similar to Savings and Loans. They are community oriented, but much more competitive.

Double dipping

While it may be frowned upon with the salsa dish at parties, there is nothing wrong with looking at a few different lenders to compare rates.

Based upon your credit score, debt-to-income ratio, and a few other qualifications, different lenders will, generally speaking, offer different rates. By looking at all of your options, you will be able to effectively and efficiently decide which lender is best suited for your needs.

 

Our final word of advice?

Talk to actual people. Ask questions. And don’t settle. Because you are going to be working with them for the entire duration of your mortgage.

 

 

Total Home Lending

 

 

Natasha Mason

Picking Your Mortgage Lender2020-09-28T15:14:20+00:00

Your Fall-Ready Home

There are more than a handful of different ways to get your home “ready” for the fall. And that can include checking on your house’s gutters, yard clean-up, and more.

But there are a few things that definitely will not be on that list. Like ensuring your home is cozy, warm, and 100% ready for fall (in a more decorative sense). Now that the end of summer is just a few weeks away, it is time to start thinking about making the season change yourself. And we definitely don’t mean just pulling out all of the winter coats in preparation of snow.

 

The steps

First and foremost, the best way to convert your home from fall to summer is to pull out all of the comfortable and cozy items in your home. The best place to start is with your bedding. Yes, pull out the big comforters, the warm sheets, and the heated blankets. But that’s not all- this is the time to pull out the thicker blankets for your couch and spare rooms. Not only are they functional, by placing the thicker blankets around your home you are welcoming the change of the season and “warming” your home up for anyone who may stop by.

Now is time to pull our your fall and winter tools. There is not much need for pruning shears, gardening gloves, and the variety of other tools you have easily accessible throughout the spring and summer. And, yes, this is the opportunity to pull your shovels, rakes, ice scrapers, snow blowers… You know what we are talking about. Because there is nothing worse than digging through a pile of things in your garage in the midst of a snowstorm.

Finally, now is the opportunity to highlight the parts of your home that aren’t as essential during the summer. Let’s think: fireplace and chimney. Clean them up, hang a new photograph or art-installation above the mantle. Maybe even consider sprucing up or replacing your mantle. From a more logistical standpoint, get the chimney cleaned and start stocking up on firewood. It will help make your fall and winter nights by the fire much more enjoyable (because there is nothing like a minor chimney fire or running out of firewood to ruin a perfect evening).

100% fall ready

While you may have the perfect decorations and your home may look fall ready, it is still important to keep a few other fall upkeep tips in mind. Make sure your gutters are functioning. Check your furnace and boiler, even turn on your heat to ensure everything is working properly.

If you have a place for them, time to bring out your rubber shoe mats and fall-themed floor mats. Pull out your dishrags decorated with colored leaves. Getting ready for the change in season takes more than the typical things you absolutely need to do before colder weather hits.

For more tips, check out your friends homes, peruse Pinterest. And find the best way to get your home ready for fall!

 

 

Total Home Lending

 

 

Natasha Mason

Your Fall-Ready Home2020-09-28T15:14:20+00:00

The Big Day: Closing Day

The big day has come.

Homeowners insurance- check

Home inspection- check

Now comes the day you have been waiting for. The day you officially close on your home. If everything is in place, the day itself should be a breeze.

 

What exactly should you expect?

First and foremost, give yourself ample time and bring as much patience as you possibly can. One big mistake people make is not allowing enough time for the actual closing. Your lunch break may not actually be enough time to close.

Besides, if you give yourself a half day (or even a full day) for the closing, you can always take time to enjoy and celebrate your new purchase!

In addition to planning for the time out of your day, it is typically a good idea to schedule your closing close to the end of the month, but not right at the end of the month. That will allow for enough time to address any issues or concerns that may come up over the course of the closing.

Don’t be afraid to ask for a final walk through

Many buyers are often allowed to do one final walk through 24 hours before the closing. This will allow for you to see if any damage has been done to the house or property since you signed the contract. If there is something to note, this final walk through provides the opportunity to negotiate any necessary repairs.

 

There are a few things to bring to the table

It is extremely important to bring all the papers you have collected and accumulated over the home-buying process. That means the good faith estimate, the proof of homeowners insurance, contract, your inspection reports, and any other documents that you have sent to the bank as a proof of your mortgage.

Besides the piles of paperwork, there can also be a handful of people present at the closing. While the actual people required to be present can vary from state to state. The people involved can range from your attorney, the home seller, your mortgage lender, and, of course, you.

Yes- it is a big day

But that does not mean it needs to be stressful, chaotic, or have anything go wrong. Talk it over with your attorney (if you have one) and definitely your mortgage lender. All of the preparation will be worth it- so you can sit back, enjoy the experience, and take the keys to your new home.

 

 

Total Home Lending

 

 

Natasha Mason

The Big Day: Closing Day2020-09-28T15:14:20+00:00

Credit Dispute & A Mortgage

 I’m sure if we asked each of you, right now, to name one thing that you think can make you ineligible for a mortgage, you could each name at least two.

 

One of those is a credit dispute.

What exactly is a credit dispute? When you have found a discrepancy or inaccuracy on your credit report and have reported it so it can be resolved, that is a credit dispute. Essentially, you are disputing the credit score that has been provided to you by a credit bureau. And, of course, law requires credit bureaus to release accurate credit scores.

 

 

But that won’t happen to me, right? Actually, discrepancies in credit scores is much more common than people think. There was a study done in 2012 by the Federal Trade Administration that recorded one in every five Americans have some error on their credit report.

That doesn’t necessarily mean your identity has been stolen or someone has taken a credit card out in your name. It can be a simple as an incorrect address or point of contact. Regardless of how big or how small, once you have reported it, it has become a “dispute.”

And a dispute automatically means an inflation of your credit score.

 

It’s all about accuracy

Unfortunately, even though your score has been temporarily inflated while the dispute is being resolved, it may prevent you from getting approved for a loan. And that’s simply because lenders want an accurate representation of your credit report; the one you are giving them is subject to change.

There are just a few things to keep in mind, moving forward with your mortgage. Credit disputes are not resolved overnight. They can take months to handle. And depending on your situation, you may not actually have that kind of time.

If you are in the middle of purchasing a home or refinancing on your home, it is best to speak with a mortgage expert first. The higher interest rate, the additional costs from delaying the closing may not be worth the wait. Especially if it is a very simple dispute, such as one over an address.

 

 

We have said this before, but it is definitely true: everyone’s situation is a unique situation. In order to determine the best next steps, talk to one of our mortgage experts- they can evaluate the situation and may shed some light on the situation that would not have occurred to you otherwise.

 

Total Home Lending

 

 

Natasha Mason

Credit Dispute & A Mortgage2020-09-28T15:14:20+00:00

Renting vs Buying: the breakdown

You are a recent college graduate, saddled with student loans and a monthly rent payment that is much higher than you ever expected.

Or… You have been a long-time renter because you never thought you were able to afford a mortgage.

Or maybe you were a homeowner who either sold or lost their home and have been renting ever since.

To Be A Renter…

Regardless of which category you fall into, the one common factor is- you are a renter. Not an owner. And while the concept of owning a home can be quite daunting and even downright scary, it does not need to be a foreign concept. While owning a home was commonplace for the “baby boomers,” it has become much less so today. In fact, many view owning a home a huge luxury.

 

There is one thing to keep in mind though: what is the more financially responsible decision in the long run?

Yes. It may have been the “cheaper” option to rent, at one point. However, now it is actually significantly cheaper to go through the mortgage process… And buy a home. Here are the statistics.

The percentage of income needed to buy a median home in today’s economy is 15.8%. That doesn’t seem too high, does it? Wait for it… The percentage of income needed to afford median rent is 29.2%.

It is a significant difference. So while it does sometimes seem like renting is the cheaper option, there are many first time (or fifth time) homeowners who pay significantly less for their mortgage payment each month on an actual home, backyard included, than many people pay for a just-1,000sq ft apartment.

Is it your time?

Do you think you are ready to take the plunge? Or at the very least begin exploring your options?

The only way you will ever know what your options are, if owning a home is in your near future, is by asking. Pick up the phone. Visit us online. Either way- talk to someone about your situation to find out what ALL of your options are, before you sign on for another year on your lease.

 

Total Home Lending

 

 

Natasha Mason

Renting vs Buying: the breakdown2020-09-28T15:14:20+00:00

Down Payments (even if you have the cash)

Mortgages are not just for the average American. They are actually for everyone- regardless of how much cash they have on hand.

Fun fact- the Facebook founder Mark Zuckerberg refinanced on his home in 2012 which ultimately saved him a significant amount of money each month. So, yes, even billionaires have mortgages.

So, there are a few things to keep in mind. Yes, paying cash up front wins bidding wars and even helps cut costs. And, generally speaking, when developers are buying up abandoned lots or foreclosed homes, they will pay cash up front.

As an individual looking to purchase a home, having a mortgage is actually an excellent option. The mortgage debt is relatively low, plus the liquidity you also receive, often makes a mortgage the smarter option.

Additionally, while you may have the money to pay the cash up front, it may not always be the most sensible option- tying up all of your finances in a house mortgage. Truthfully, it can tie your hands further on down the road. Having cash available and on hand is extremely important, as many homeowners know.

Preparing for the little (or big) surprises

The unexpected basement flooding. Replacing the furnace. Fixing the roof. All of these things are “complications” every homeowner will experience at some point throughout the duration of their home owning experience.

If you tie up all of your money in your own home, these “unexpected” expenses can actually cause you your house.

 

To get a mortgage or to pay in cash: that is truly the question.

If you are looking for more specific answers to your unique situation, talk to our experienced mortgage lenders. They can advise you on the best next-steps.

 

Total Home Lending

 

Natasha Mason

Down Payments (even if you have the cash)2020-09-28T15:14:20+00:00

15 vs 30

Finding the mortgage that is best for you, best for your family, and best for your unique situation can take a little time (and a little research). So we decided to get down to the basics on the differences between short-term and long-term loan options.

If you have any experience in the world of home-buying and mortgages, you have, most likely, heard the terms 15-year fixed mortgage and 30-year fixed mortgage. These are the two standard types of fixed mortgages available.

Other than the duration of the payment period, are there many other differences? Well, yes! And the biggest one is whether or not you are in a financial situation to take on a shorter term loan.

To break it down- a 15-year mortgage cuts the repayment period in half, making your monthly mortgage payments higher.

 

Things to consider

There are two different frames of thought on this topic. The first is if you can realistically afford the higher mortgage payment each month. Now, if you can afford it and still have some disposable income remaining for other bills and emergency situations, repaying your loan over a shorter period of time may be ideal for you. Now, the other frame of thought is simply the amount of money you can save with a shorter term mortgage.

Over the span of 15 years, versus 30, you will save significantly on interest alone (usually 40 to 50% of the loan balance).

Is it too late to switch?

Regardless of the term you originally settled upon for your mortgage, there is a possibility of changing it, if the time is right. You are able to switch over to a shorter repayment period, but it definitely one that you need to make carefully.

While it is much simpler to switch to a lower repayment period, if things begin to get difficult, you are not simply able to fall back on your original 30-year mortgage. Rather, you will have to completely refinance the loan in order to do so. And refinancing, as we discussed in one of our previous blogs, comes with some additional costs of its own.

Getting down to the brass tax

Realistically, this is something to consider and to keep in mind as you begin your home-buying journey. And, honestly, it is a great idea to talk it over- with your mortgage lender, with your significant other, with your friends- before you are even ready to take the plunge.

Having a comprehensive understanding of mortgages and your options before getting pre-approved for a loan is one of the best pieces of advice we can give you. The more you know, the more you have discussed your options, and the better you understand the entire process will leave you feeling better equipped to move forward with your decision to purchase a home.

We do pride ourselves on providing excellent customer service, as well as making it our goal to ensure your entire mortgage process is as quick and as easy as possible. So if you have questions or need someone to talk loan logistics with- our experienced loan officers are available.

While we may have said it before, we are going to say it again, making a plan that is 100% right for your personal situation is the best first step you can take after beginning to educate yourself on the options available to you.

This is especially true when it comes to solidifying the length of your repayment period. Just because it seems ideal in the future, it may not be realistic for you to take on a 15-year mortgage at this point in your life. That is why it is great to keep in mind- there is always the opportunity and possibility of making adjustments to the loan (through refinancing and other tools) later on in the future.

 

Total Home Lending

 

 

Natasha Mason

15 vs 302020-09-28T15:14:20+00:00

Buying After Bankruptcy

When the economy fell just over a decade ago, many of American’s lost their careers and their homes. And since then they have been struggling to bring themselves back to where they came from.

If you fall among the percentage of American’s who declared bankruptcy during this period in time, you are not alone. But you should definitely not think that it means you can no longer buy a house.

 

Do not let bankruptcy be the end of your home-buying journey.

Generally speaking, foreclosure leads to bankruptcy. Foreclosure means deficiency (or lacking). So, let’s say you owe $150,000 on your home still and in the foreclosure or sheriff sale, it is sold for $50,000. That means, realistically, you still owe $100,000 on the home.

Now, generally speaking, this final amount is unrealistic for an individual or a family to pay. So declaring bankruptcy to clear their name of the foreclosure and the deficiency.

 

While this may seem like the end of the line, it most definitely is not. First and foremost, there is a waiting period between declaring bankruptcy and applying for another mortgage to purchase a new home.

Here are the waiting periods for the four major loans available:

FHA Loans 2 years

*note: this 2 year waiting period is for Chapter 7 FHA Mortgage. You can actually be paying on a Chapter 13 Mortgage and still be approved.

VA Home Loans 2 years

Conventional Mortgages 4 years

USDA Home Loans 3 years

Once you have surpassed this time frame, you can then begin to entertain the idea of applying for a new mortgage. There are always exceptions to every “rule,” and this is the standard across the board. But at times, there are some circumstances where you can qualify for additional loans before this time period is up.

Now, these guidelines are when your foreclosure is tied up in your declaration of bankruptcy. The foreclosure waiting period for a conventional loan is seven years. But, depending on the period of time between the foreclosure and your declaration of bankruptcy (either before or after), you may qualify for a reduction in the waiting period.

 

Foreclosure then bankruptcy

When your house is foreclosed upon before you declare bankruptcy, things are much more simple. The waiting period begins at the date of the bankruptcy discharge date. For example, if your home was foreclosed in January 2005, filed for bankruptcy in October 2005, and the bankruptcy was discharged in December 2005- the waiting period begins in December 2005. Based on the standards for the conventional mortgage waiting period, you would be eligible for another mortgage in December 2009.

Bankruptcy then foreclosure

Sometimes the roles are reversed. Whether intentional or not, there are times where the bankruptcy discharge date is prior to the actual foreclosure date. When that happens, as long as your foreclosure is tied to your bankruptcy, your waiting period will still fall within the conventional waiting periods listed above.

This is slightly more complicated, but definitely still understandable in layman’s terms. It varies from loan to loan what the waiting period or leniency will be.

For more information on the exact waiting periods for your unique situation, please consult a mortgage consultant. Since each situation is different, it is important to understand exactly where you stand.

 

 

Total Home Lending

 

 

Natasha Mason

Buying After Bankruptcy2020-09-28T15:14:20+00:00

The Reverse Mortgage

If you are considering a reverse mortgage, there are a few key things to consider before taking the plunge. Like any financial undertaking, it is important to ponder these decisions.

First, we should start with what a reverse mortgage actually is. Essentially, it is a type of home loan that allows you to turn the equity you have on your home into cash. So, all of the equity you have built over the years from paying on your mortgage can become accessible funds for you to use. Typically referred to as a Home Equity Conversion Mortgage (HECM), these loans do not need to be paid back until you move out of the house. And generally speaking, with a reverse mortgage, you do not have to make a monthly mortgage payment.

And for a bit of history- the first FHA-insured reverse mortgage was issued back in the late 1980’s. Generally speaking, these types of loans allow older, long-term home owners to access part of their home equity without ultimately having to move.

Now, who actually benefits from a reverse mortgage? People who do not plan to move, people who can afford the cost of maintaining their home, and people who want to access the equity on their home (whether it is to supplement their income or simply to have for one of those “rainy days”).

The longer that you have been living in your home and the older you are, typically your mortgage balance is much smaller and you have built up more equity in your home. So, life expectancy does play a factor in your reverse mortgage and how much money you will receive.

 

Here’s an example: Bill and Sue are both 80 years old. They do not have any plans to move and are looking for a way to supplement their monthly income. After meeting with a loan officer, they get their house appraised at $300,000. With only $35,000 left to pay on their mortgage, the available reverse loan amount available to them is about $195,000. After settlement costs, their remaining mortgage balance, and other taxes & fees, there is still a sizable amount of money left to supplement their monthly income. Even to take a small vacation.

While a reverse mortgage sounds like a great idea, they are most beneficial when you have been living in the same home for quite some time (and have been regularly paying on your home mortgage) and if you are planning on staying in the same home.

Wondering if you are in a good situation for a reverse mortgage or simply want to discuss all of your options, speak with one of our loan officers. We are happy to talk through your unique situation and find out what options are best for you.

 

 

Total Home Lending

 

Natasha Mason

The Reverse Mortgage2020-09-28T15:14:20+00:00
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