home buyer

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

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

First Step: getting pre-approved for a loan

If you are actively searching for a home, there is one thing that absolutely must be on the top of your “to do” list.

Pre-approval.

It is a (conditional) written commitment from your mortgage lender that states the loan amount you are approved for. Pre-approval should not be confused with a pre-qualification on a loan, however. Pre-qualification is a preliminary step that does not require as much financial information and, because of that, is not a sure thing. In order to get pre-approved for a loan, you will need to provide all of the information necessary for your lender to conduct an extensive review of your financial background.

Getting approved for a loan is something that, of course, needs to happen regardless. So taking the time to get pre-approved with your lender will make your home buying process significantly easier.

First, once you have been pre-approved for a certain amount it allows you to start shopping within your budget. If you are approved for a $100,000 loan and are able to contribute a $40,000 down payment, you know exactly what price range you should be looking in. Without the pre-approval, you may spend a significant amount of time and energy looking at homes that you will never be able to buy.

Besides making the entire home shopping experience easier, there are many sellers who will only consider buyers who have been pre-approved. And the sellers who do not require a pre-approval letter? Well, there are many who will take your offer more seriously because you have been pre-approved. While that is not a guarantee, having it will definitely put you ahead of the game.

Key

As if that was not quite enough, having a pre-approval letter can even save you some money. Sellers may be more willing to lower the asking price, cover closing costs or even make other allowances.

Now, how do you get started? Start talking with your mortgage lender. The sooner you have been pre-approved, the sooner you can start a home buying experience with ease (and potential savings)!

First Step: getting pre-approved for a loan2020-09-28T15:14:21+00:00

So, You’re A 1st Time Home Buyer

Top Tips for First Time Home Buyers

You’re on the hunt for your first home. It is an exciting milestone in your life. Not to mention one of the largest financial decisions you may ever make. Don’t fall into the “rookie” home-buyer category. Our advice? The more you know about the process, the easier (and less daunting) it is going to be.

We are here to help. These are some of our “top tips” for you to remember when buying a home.

 

The (sometimes) forgotten credit score

The credit score. Your mortgage company, of course, will pull that score, but it is still a good number know before starting the home-buying process. If there are any mistakes or issues with your score, it is easier to remedy those before you have found that perfect home. Additionally, knowing your score in advance will allow you the opportunity to repair any minor blemishes. One more good thing to know- your mortgage banker (and us!) can sometimes provide tips on how to deal with those flaws.

 

Pre-approval letters are an absolute must

So, what is a pre-approval letter? It’s a letter from your mortgage lender stating what loan amount the borrower (you) is qualified for. So, yes, stating how large of a loan you are able to take out.

Now, why they are important? First and foremost, it allows you to look for homes that are in your price-range. It will save you a lot of time (and potentially a lot of stress) knowing what you can afford and searching accordingly. Then, when you do find a home you want to put an offer on, having that pre-approval letter puts you ahead of the game. While not a guarantee, sellers may take your offer more seriously since you have already been pre-approved for a loan. Not to mention, they may be more willing to lower the asking price, cover closing costs or make other allowances.

 

Down payments made easy

Whether you are a first time home-buyer or are looking to buy again, you have probably been thinking about that “down payment.” The larger down payment you make, the smaller mortgage you have. And, subsequently, the less you have to pay back over the course of the loan.

Is there such thing as “too big” of a down payment? Actually, yes! A 20% down payment is typically viewed as “ideal” by lenders. When you put 20% down, you don’t have to pay private mortgage insurance (PMI) which provides insurance to your lender, in the chance you default on your mortgage. Additionally, it can qualify you for a lower interest rate than someone who makes a smaller down payment.

Realistically, however, 20% is a significant sum of money, especially depending on the house you are looking at. A lower down payment does allow you to become a homeowner faster because you won’t have to save up as much money before buying.

Whether you have the 20% readily available or not, there is one important fact to remember- making a down payment is never a bad investment. Putting money into your home is lower risk than, let’s say, investing it in the stock market. It is a good idea for any homebuyer because it ultimately reduces your risk and allows for immediate home equity. If you have questions or wonder what size down payment is best for you, we recommend discussing your particular situation with your lender. They can provide insight into your unique situation.

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Life happens- be prepared!

You’ve found the house. You’ve been approved for a loan. You’re good to go, right? One thing we always recommend is reserving cash for emergencies. Because, life happens! The last thing you want is to move into your new home and find yourself in dire need of money (and fast!). So, plan accordingly when making your down payment and considering your loan options. It’s better to be prepared!

 

Consider the resale

It’s your first home, you’re excited! You may not be planning to sell in the foreseeable future, but it is important to think about selling your home. If (or when) the time to sell your home comes, will it be easy or difficult to do so? Thinking about the preferences of the “average” homebuyer and keeping those preferences in mind while finding your own home will make reselling the home that much easier.

One huge factor is the school district. Maybe you don’t have children in your home right now, so you’re not thinking about schools. But finding a home in a desirable school district, or even one with a school of choice nearby, could be an added benefit for the resale of your home.

 

Full disclosure and home inspections

While most states do require sellers to disclose any potential problems with the home or the property, they may not always be aware of existing structural issues. Although most purchase agreements are dependent upon a home inspection, you should 100% demand one. Spending the money to hire a licensed professional to inspect your potential new home is the only way to guarantee there are no major structural issues with the home.

What will a comprehensive inspection include? Heating and cooling systems, plumbing and electrical systems, structural integrity of walls, floors, ceilings, foundation and roof. The condition of gutters, insulation, ventilation, major appliances, garage… Finding an issue with any of these things can be extremely costly, so discovering them before signing any paperwork is a huge money saver.

You should also be present for the inspection. Ask questions as you go through the house. Sure, houses need repairs, but there may be a chance the problems with the house will be so expensive it is no longer a home you are interested in. It may seem like a lot of money now to pay for a home inspection, but you could ultimately be saving yourself thousands in the future if the house does have major issues.

 

The hidden costs

Buying a home can feel like a whirlwind. But while you are thinking about a down payment, an affordable monthly mortgage payment and even realator costs, there are a few “hidden” costs that many first time home buyers forget about. Homeowners insurance, property taxes, appraisal fees, moving costs, escrow costs, tax service fee, credit report fee… Just to name a few.

Ask questions. Make sure you are aware of any and all fees, taxes and additional costs you may need to pay before the “buying” process is complete. And, finally, be prepared for just about anything. When it comes to owning your own home, there’s nothing wrong with being a little “over-prepared.”

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By Natasha Mason

So, You’re A 1st Time Home Buyer2020-09-28T15:14:21+00:00
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