What Size Mortgage Can You Afford? – Part 1
Posted by RealEstate_Guru
With so many homes for sale in Raleigh NC, it’s virtually certain you’ll find just the perfect property in just the perfect location. Whether urban or suburban, your home in this vibrant region is a great investment. But let’s backtrack a moment. Before you look at any homes, you need a good idea of how much you can afford to spend per month. Here’s some general information about determining the amount you can afford, so there won’t be any surprises when you actually do apply for home financing.
Banks and other entities that offer mortgages generally use fixed, basic formulas or “qualifying ratios” to determine your eligibility. These calculations help the lender determine how much you can afford to borrow and what your monthly payment would be. Always remember, though, that each mortgage application is evaluated on an individual basis, so you shouldn’t be reluctant to apply, even if the formulas don’t seem calculate favorably for you. At this point, formulas are just tools and models to help you choose the best financing option.
To qualify for a conventional mortgage, you need to show lenders that you can afford to spend somewhere between 28% and 32% of your gross monthly income on the payment. When lenders calculate your estimated payment, they include the following factors: mortgage principal, mortgage loan insurance, private mortgage insurance (PMI) and, if applicable, homeowners insurance and state, local and federal taxes. This aggregate of associated expenses is abbreviated PITI.
Here’s an example: If your annual gross income is $50,000, then your monthly gross income is $4167. This amount multiplied by the ratio used by the lender equals the payment you can afford. If the lender uses a 30% ratio, then your payment would be $1250 per month. But it’s not that simple. There are other factors that effect the sale of homes in Raleigh NC [Continued below in Part 2].
What Size Mortgage Can You Afford? – Part 2
Posted by RealEstate_Guru
Many people have other long-term debts besides mortgage payments, such as car payments or student loan payments. These need to be added into the calculation when you’re considering houses for sale in Raleigh North Carolina.
Lenders like to see a total monthly debt load not greater than 38% to 48% of your gross monthly income. In our example from Part 1 of this article, if the monthly gross income of $4187 is multiplied by a mid-range debt load percentage of 40%, the result equals a monthly payment of $1675 that includes both the mortgage and other long-term monthly debt obligations. Unfortunately, with the use of “automated underwriting,” in which loan determinations are made by computers rather than people, the debt-to-income ratio can be as high as 50%. Underwriting is the process of assessing the risk of lending to a borrower by applying a specific set of parameters.
Another important expense borrowers need to consider is the cost of homeowners or property insurance. Lenders usually require properties to be insured for the amount of the mortgage, which may or may not be the full value of the home. If the lender doesn’t require insurance for the full value of the home, borrowers should consider purchasing supplemental insurance so that the complete replacement value of the home is fully covered. Two other factors to consider are the total monthly utility bills and ongoing maintenance costs like home owner’s association fees.
Borrowers should consider pre-qualifying for a loan, which gives them a true idea of the type and amount of home and mortgage they can afford. Finally, it’s possible to find a good variety of low-cost loan programs, both government and conventional, for moderate- or low-income families that apply to the sale of houses in Raleigh North Carolina. In some cases, borrowers can receive reduced rates in exchange for undergoing financial and/or credit counseling.
Selling A Home: Some Practical Advice – Part 1
Posted by RealEstate_Guru
In a recent article on about.com, “Home Staging & Staging a House – What is Home Staging?,” Elizabeth Weintraub presents a novel idea that might just help sellers obtain top dollar for their homes. The article’s subtitle, “Dressing a House for Success,” reminds readers that home staging is “more than decorating.” What the author means is that this is a process that helps sellers engage the imaginations of potential buyers by presenting a house in a manner calculated to emphasize its strong points and minimize its weaknesses. The whole point of home staging is to excite and involve buyers and make them want to live in the home. This is likely to have a positive impact on real estate sales in Raleigh North Carolina.
So how does it work? One of the most fundamental processes in home staging is called “depersonalization,” meaning the removal or reduction of religious items, certificates, cultural items, awards, trophies and similar objects that refer to the current occupants. Along with decluttering, depersonalization makes potential buyers feel comfortable in the property and, more importantly, helps them imagine how their furniture and possessions will look in various rooms and locations in the house. This, in effect, transforms them into buyers long before they make an offer for the home. Depersonalization also makes the home appealing to the widest possible universe of potential buyers while downplaying its flaws.
If you want to try some staging tricks on your own, here are a few key tips:
Apply a conditioner like orange or tung oil to wooden surfaces in the home like cabinet doors and to give them a glow.
Place a large bowl of appetizing fruit on a kitchen counter. Also scatter some cookbooks and cooking accessories around the kitchen like baskets or crocks containing wooden and metal tools.
In bathrooms, have scented soaps and lotion dispensers on hand in decorative baskets. Fill another basket with towels tied with ribbon.
Remove wallpaper and give the walls a fresh coat of paint in a neutral color. This is especially important in the living room and kitchen.
Accent patios and decks with potted plants and flowers.
Draw attention to the entry and foyer by painting the door in a vibrant color and using a complimenting color in the foyer. A small table and mirror on the wall add functionality and give a “lived-in” feel.
Give living rooms and family rooms an open and airy look. Use slip covers on worn furniture and arrange furniture in a “conversational” way that invites people to sit down and enjoy the room.
Properly done, home staging presents your home in the best possible light. It’s not hard to learn and will maximize the property’s appeal to the largest number of potential buyers, which will in turn stimulate sales of real estate in Raleigh North Carolina.
Selling A Home: Some Practical Advice – Part 2
Posted by RealEstate_Guru
It’s not hard to sell real estate in Raleigh NC if you follow a few relatively simple steps. Along with sprucing up your property inside and out, you should also make a frank assessment of what a potential buyer might see as problems with your home. There’s no better way to do this than to have a professional inspector evaluate the property inside and out. Since it’s virtually certain that any serious buyer will engage an inspector, why not be proactive and do so yourself before putting your home on the market.
Here are just a few of the benefits of having an inspection before putting your home on the market:
A home inspection gives you an evaluation of your home as seen through a buyer’s eyes. Your inspector’s report, even if highly negative, will help you develop an unbiased opinion of the property and what’s required to get it ready for sale.
Using an inspector helps you to determine a realistic price for your home.
An inspection may turn up issues that need to be handled ahead of time. This assures that buyers won’t consider them to be factors that drive your asking price lower. The inspection may also identify safety problems that need to be fixed before agents and potential buyers tour your home.
The inspection may discover immediate hazards such a radon gas, natural gas leaks or electrical problems that put you and your family in danger.
If your locality requires sellers to furnish disclosure statements to buyers, including an inspection by a certified professional along with the disclosure gives the seller increased credibility from the buyer’s point of view. Be sure to enclose receipts for any repairs you make along with the inspection report.
Finally, a certified and credible inspection may lead the buyer to waive the inspection contingency in the sales contract because it reduces the inevitable suspicions a buyer may have. From the seller’s point of view, an inspection may reduce liability because it adds supporting documentation from a qualified professional inspector. So if you have real estate to sell in Raleigh NC, having an inspection done before putting your home on the market is a sound and prudent step to take.
Buying A Home: Just A Few Simple Steps – Part 1
Posted by RealEstate_Guru
Looking for real estate to buy in Raleigh NC? If you’re a first-time home buyer, the process might seem daunting. While there are a lot of details to handle, the process is actually quite simple. Here’s a step-by-step plan that can help you buy real estate in Raleigh NC.
1. Determine whether buying a home would be more advantageous for you than renting. Home ownership isn’t for everyone. It requires a certain degree of commitment and can have substantial ongoing costs. Every home needs upkeep and maintenance that take both time and money. If you aren’t financially or mentally ready to commit to owning a home, then it’s best to stay put.
2. Put your financial affairs in order. If you’re going to need a mortgage, be sure your credit is in top shape. Since lenders will be getting your credit report, it makes sense to obtain one yourself and resolve any problems before applying for a mortgage.
3. Know your financial boundaries. Investigate the various types of mortgages and financing that are available in your area. Find out what lenders are offering the most attractive terms and rates. At the same time, do the math to determine the monthly payment you can afford. Be sure to factor in property and school taxes and ongoing expenses such as garbage collection and homeowner’s association fees.
4. Choose several neighborhoods where you would like to live. Even if you have your heart set on a certain neighborhood, it’s wise to investigate other locations to get a balanced picture of property values.
5. Decide on the style of house you prefer but keep an open mind, especially if you’re buying your first home. Don’t pass up a bargain simply because it’s not your preferred architectural style. That cozy Cape Cod may be a stepping stone to that sprawling ranch you really want.
6. Interview several real estate agents and get recommendations from friends, family and co-workers. You need to have an open and honest relationship with your agent, so be sure that the person you choose is someone you can both trust and talk frankly with. Continued in Part 2. See below.
Buying A Home: Just A Few Simple Steps – Part 2
Posted by RealEstate_Guru
In Part 1 of this article about how to purchase real estate in Raleigh, North Carolina, we discussed the steps needed to get ready to buy a house. In Part 2 of this series about finding real estate to purchase in Raleigh, North Carolina, we’ll discuss how to find a property and negotiate a fair price.
1. Get everything in place. You’re going to need a loan officer at the bank, a real estate attorney and a home inspector, at the very least. If you’re planning on buying a “fixer upper,” have a reputable contractor on your team as well. Depending on the locality, you may need contacts in the zoning or building departments of the town where you’re buying the property, especially if you’re planning on remodelling or any work that may require permits from the local municipality.
2. Use all possible resources. The Internet is a great source of information and education. Also, your agent may be able to get you access to listings available through his company or through others. Some towns and cities have real estate TV and radio shows that can be a wealth of good information about local issues. Be sure you understand the local government and its policies.
3. Visit properties with your agent. Draw on your agent’s understanding and expertise. He or she can point out feature or facets of a property that you might miss or be unaware of.
4. Place a reasonable offer. Even if a property is in relative disrepair, it has intrinsic value. Placing an offer can be tricky because although you want to get the property for the best possible price, you risk alienating the seller if your offer is excessively low. Be sure your offer is in the proper legal form on the correct legal form or document.
5. Negotiate the price. Although this can be the most exciting part of buying a home, it can also be the most stressful. Keep your emotions and impulses in check and let reason and common sense rule the process as much as possible. Rely on your agent’s expertise and advice and try to see the seller’s side of any issues that might crop up.
6. Once the offer is accepted, sign the contract and have your attorney review it
7. Have the property inspected by a professional.
8. Apply for a mortage.
9. Handle other legal issues like being sure there’s a clear title to the property.
10. Close the deal and take possession of the property.