Questions a First-Time Home Buyer Should Ask Their Lender

What are questions a first-time homebuyer should ask their lender?
1. How do I know what type of mortgage is best for me?
2. What kinds of mortgages do you offer?
3. How much should my down payment be?
4. What will my interest rate be?
5. Do you offer a mortgage rate lock?
6. Are there income requirements for buying a home?
7. Do you offer pre-approval or prequalification?
8. What will the costs of closing be?
9. What should I do to prepare my financials when considering buying my first home?
10. Are you doing a hard credit pull on me today?

The current market is definitely a hard one to navigate especially for first-time homebuyers. When purchasing a home for the first time there are so many overwhelming important decisions to make. Here are ten questions to ask your mortgage lender when purchasing a new home.

1. How do I know what type of mortgage is best for me?

There are many options available and finding the right one for you is very important. Your mortgage lender can help you with the process of choosing which mortgage will be best for you. A mortgage lender can help you list the pros and cons of each loan option.

2. What kinds of mortgages do you offer?

There are two major types of mortgages which are conventional loans and government-backed loans. A mortgage lender can help you with choosing the best loan for certain circumstances. They can determine what type of loan you are qualified for.

3. How much should my down payment be?

Usually, a 20% down payment is preferred, especially if you want to avoid PMI (private mortgage insurance). If this is not a figure you can afford, a lender can work with you on the amount you can put down. Depending on what you are approved for, it can be as small as a 3% down payment.

4. What will my interest rate be?

This is usually the first question most people ask a lender. Your interest rate will determine how much you can borrow. There are fixed-rate loans and adjusted rate loans. A 1% difference does not sound like a big difference but it can save you a lot over the lifespan of your loan.

5. Do you offer a mortgage rate lock?

This is important because a rate lock can keep you at a predictable loan cost. This is basically an agreement between you and your lender that the interest rate will not change until closing. If the rates start to rise, this does not matter, you will still get the lower rate.

6. Are there income requirements for buying a home?

There are lending requirements. A lender can help you and they do this case by case with what you will need. It can depend on your credit score and your source of income.

7. Do you offer pre-approval or prequalification?

First, you need to know the differences. Pre-approval means that a lender has verified your income, credit score and assets through documents such as your W-2s, tax returns and bank statements. Prequalification is based on what you tell your lender about your income, assets and credit. Then your loan amount is based on an estimate.

8. What will the costs of closing be?

Closing costs are the fees for processing your loan. These will be paid to the lender. The appraisal fees, origination fees, attorney fees, and title insurance are included in the closing cost. Your lender will provide you with an estimate of closing costs based on the type of loan you go with.

9. What should I do to prepare my financials when considering buying my first home?

There are many things you can do to get your finances in order. Make sure your credit is in good standing. If not, find ways to strengthen your credit. Always determine your budget before you start the process. Do your shopping and compare rates. Always get prequalified before you start looking for a home.

10. Are you doing a hard credit pull on me today?

This is important to ask because a hard credit pull can have an effect on your score. Do not let a lender do a hard credit check until you have agreed to work with that lender.

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Five Designer Tips To Do First When Buying a New Home

Custom hood in kitchen of this home.

What are the first five things to update when buying a home?
1. Don’t Seek Instant Perfection
2. Start With The Bones
3. Practice Patience
4. Know Yourself
5. Have A Plan Before You Start

Buying a new home is an exciting time for anyone. It is a big step in life’s journey and can be a very stressful one. If you are purchasing a home, professionals agree that these tips should be followed from the start.

1. Don’t Seek Instant Perfection

“One of my big beefs with home improvement shows is that they set new homebuyers up for failure,” Karlie Adams, a Denver interior designer said. “People watching these shows think everything comes together so easily, then feel they need to have perfection instantly, when, in fact, they need to take their time.”

2. Start With The Bones

Instead of starting with the little design elements in a room, start with the floors, walls and windows. Once these are tackled you can slowly move inward in the space. “That may not seem so gratifying at first,” Adams said, “but it’s more prudent. People would rather buy toss pillows at Pottery Barn when they really should replace their baseboards.”

3. Practice Patience

Like with everything in life, a little patience can go a long way. Take your time and go slowly purchasing quality pieces that will be more of a design investment in your home.

4. Know Yourself

Figure out who you are as a person and build your look around your unique characteristics. The look of your home should be based on who you are. If you are a nature lover, using worn leather, weathered wood and rustic finishes are best. A perfect coffee table would be a three cross-section of tree trunks.

5. Have A Plan Before You Start

Don’t go into the kitchen and add a new sink and faucet to later realize you should have updated the whole kitchen. Have a plan in each space before you add anything. This will save you time and money in the long run. Remember your home is a big investment.

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What To Do and Not To Do When Choosing a New Garage Door

A side entry garage is perfect for this nice farmhouse look home.

A garage is an important part of a home, in fact, it is front and center and plays a big part in a home’s curb appeal. Replacing an old garage door can give you curb appeal a big lift. Not only will it look better, but it will also perform better. Here are some do’s and don’ts when it comes to choosing a new garage door.

DO select the right style.

A home’s curb appeal is important when it comes to resale. A worn-out garage is not a good first impression to a potential home buyer. Replacing a garage door will enhance the exterior of your whole home. It is very important to choose the right style of door. The most important tip is to choose a door style that complements your house. If you have a Craftsman bungalow, then you would want a door with deeply overhanging eaves, extensive woodwork, and divided-light windows. If you have a modern home you will want a simple garage door with clean lines.

DON’T forget insulation.

Many homeowners skip the front door and use their garage door as their primary entrance. If this is the case, then it is a good idea to insulate the garage door. Insulation will allow a more comfortable garage when entering and exiting your home. A garage is usually 10 to 20 degrees different from the temp outside. This is a big opening in your home, and insulating it can also save you money on energy expenses. A room next or above a poorly insulated garage will be very hot in the summer and very cold in the winter.

DO choose a practical door type.

Just like there are different styles of garage doors, there are also different types of garage doors. Some homeowners want to have a traditional swinging door that opens outward from a central split or others want an old barn door that opens right to left. The most popular are overhead sectional doors because they roll up and down on mounted racks and are easy to pair with an automatic door opener.

DON’T ignore care requirements.

The garage door is one of the most important entryways of a home. It needs to be maintained properly and perform its bests. Wood garage doors are very popular nowadays but they require refinishing. If you want the wood look, composite is the way to do it. Steel is a good choice no matter what climate you live in.  Understand the upkeep requirements of any door on your radar, and don’t commit to purchase one that you’re unable or unwilling to take care of.

DON’T underestimate severe storms.

Even though a garage door is big, a storm can still hurt it. They can be very vulnerable to high winds such as a tornado or hurricane which can break through a garage door. It is important to become familiar with the code-compliant doors. A local garage door dealer can tell you what the regulations are in your area.

DO experiment with visualization tools.

A dealer showroom is a great place to start. There you can see how different styles, construction and colors actually look and feel. There are also online tools that can help you visualize a certain door on your home. A great online tool is the Door Imagination System. You can simply upload a picture of your home and see different designs, colors and hardware on your home.

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Tips for Getting the Lowest Mortgage Rate

Side entry that goes into the main home.

This time last year the 30-year mortgage rates were just over 3%, but they are rising and now are over 5%. Professionals in the industry say that we will see more rate increases throughout the year. Here are some tips from the experts on how to make sure you get the best mortgage rates for your home.

1. Raise your credit score as much as possible

The higher your credit score, the lower your interest rate. LendingTree’s data shows borrowers with credit scores of 760 or higher were offered an average APR that was 16 basis points lower than the average rate for borrowers with scores between 680 and 719. A basis point is equivalent to 0.01% and therefore one hundred basis points equals 1%.

Always know your credit score. Take a look at your credit report and make sure there are no errors. In order to raise your score, you should pay your bills on time and reduce your amount of debt. When you decide to get a mortgage, do not apply for too many new credit lines at the same time.

2. Get your finances in order

Your credit score is just one of the things a lender will take a look at. In order to make sure you are able to repay the loan, a lender will delve deep into your finances. Before they do this, you want to make sure you have the entire picture of your income and you will want to pay down any major debts.

To do this, you will need to know your debt-to-income ratio (DTI). Your DTI is the total of your monthly debt divided by your gross monthly income. A lender will want this figure to be 43% or less of your assets. Prepare a record of your steady income by collecting your pay stubs for a 30-day period as well as your W-2s from the past two years. If you are self-employed, you will also need to submit profit-and-loss statements along with your tax returns.

3. Save big for your down payment

You will want to make the largest down payment possible. The more you put down upfront the lower your interest rate. You will also want to make sure you put down at least 20% to avoid PMI. PMI stands for private mortgage insurance, which is around .05% to 1% of the loan amount.

4. Get quotes from 3-5 lenders

Shop around for the best deal. According to Greg McBridge, chief financial analyst at Bankrate, you should compare around three to five lenders to see who will offer you the best rate and other incentives.

“Be sure to look at closing costs, fees, points and tax credits. This can get a bit overwhelming, so if you have a financial planner, be sure to include them in the discussion,” says Jen Grant, certified financial planner at Perryman Financial Advisory.

“Gather all your rate quotes on the same day. Rates fluctuate daily and lenders should be able to give you their best rate out of the gate,” says Denny Ceizyk, senior staff writer at LendingTree.

5. Lock in the rate

This is important especially when rates are rising. Locking in your mortgage rate early on means your lender can’t raise your interest rate between the time you apply for a loan and the time you’re approved. That way, should the market fluctuate during the application process, you’ll be spared from paying higher interest rates if they go up.

6. Weigh the pros and cons of buying points

Discount points can be used to reduce interest rates. They are fees that you pay upfront to reduce your interest rate on your mortgage. One point usually costs around 1% of your mortgage amount. One point can lower the interest rate by one-eighth to one-quarter of a percent. “The lowest rates quoted often come with mortgage points, a minimum loan amount requirement or a certain amount of equity,” says Ceizyk.

7. Consider first-time buyer programs

First-time home buyer programs include aids such as down payment assistance, funds available for repairs and remodeling, no-interest second loans and reduced interest rates. These programs are used to lure first-time home buyers to certain areas. FHA loans, USDA loans and VA loans are common for home buyers with lower credit and smaller down payments.

8. Apply for a shorter loan term

Shorter term loans (such as a 15-year loan) can offer better rates than loan term loans (such as a 30-year loan. “Lenders price loans based on risk. If you can pay your loan off faster at a higher payment, lenders reward you with a lower payment because as your balance is paid down, there’s less risk you’ll default,” Ceizyk says.

If you are in the market for a new home, turn to a Realtor in your area. A Realtor can not only help you find the right home for the right price but can also lend a hand in finding the right mortgage lender.

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Cost-Effective Durable Alternatives to Hardwood Floors

Most everyone loves natural hardwood floors because they can bring beauty and charm to almost any space. The downside is their durability. Pets, kids and everyday wear and tear can wreak havoc on real wood floors. To get them back looking new is a feat within itself. There are several great alternatives that give the same look.

Scratch- and Water-Resilient Substitutes

This option is great for everyday wear and tear, spills, kids and pets. Laminate options not only look good but withstand water damage and scratches because they have extra protection. These floors look and feel like hardwoods but last much longer.

“Laminate’s core is made from wood byproducts,” says Randy Lovelace, executive vice president of sales and merchandising at Southwind Building Products. “It’s environmentally friendly but has extreme wear resistance.”

Long-Lasting Vinyl

Like laminate, vinyl is water-resistant and resists scratches, dents, and fading. Vinyl alternatives are much cheaper than hardwood floors and easier to clean and install. Experts say they can last up to fifty years or more! In fact, vinyl is a top choice for commercial buildings. Vinyl can look like hardwoods and can be installed by gluing down and click-together the pieces.

Waterproof Protection

Over time, hardwood floors can be severely damaged by even small sprinkles of water. Damage can consist of warping, buckling, and staining. Usually when this happens hardwood floors have to be completely replaced. Alternative flooring has several layers of protection which include a UV surface layer so they will not fade, a urethane layer to protect from stains and scratches, a dent-resistant film layer, several waterproof core layers, and an underlayer cushion.

Classic Color Options

Vinyl and Laminate flooring can come in many colors which resemble natural hardwoods.  One of the most remarkable things about today’s wood floor alternatives made of vinyl is their uncanny resemblance to the real thing. The latest products are designed to closely mimic the grains, colors and textures found in natural hardwood flooring.

If you are in the market for new flooring, check these products out. They are easy to install, easy on the pocket and great to look at. A great tip to follow is to find a style and color that compliment your existing home.

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The Impact Current Mortgage Rates Have on Home Purchases

A nice home that is custom built in a beautiful community.

The is a relationship between mortgage rates and purchasing power. The lower the mortgage rate, the higher your purchase power. Rising mortgage rates will increase your monthly payments.

According to Freddie Mac, the average 30-year fixed mortgage rate is above 5%. Professionals in the industry are saying that they are more than likely going up. If you are thinking of purchasing a home, now is the time before your purchasing power is too impacted.

Your mortgage rate will determine how much your monthly payments will be which in turn shows how much home you can afford. For example, if your monthly mortgage payment is between $2,100 – $2,200 with the current mortgage rate, you would be able to purchase a home for over $400,000. If the mortgage rates were to increase to 5.75% you would be looking at a house between $360,000 to $380,000.

“Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response,” says Danielle Hale, Chief Economist for realtor.com.

If you are ready to purchase, find a trusted Realtor and mortgage lender who can help you through the buying process. Remember, mortgage rates are predicted to be rising, which will impact your purchasing power.

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Pros and Cons of Buying a House That Is Still Under Construction

A farmhouse feel in this open floor plan home with a nice custom wood beam and fresh hardwood floors.The home inventory shortage is making purchasing a home still under construction a normal financial decision. The National Association of Realtors (NAR) says that the country is facing a sharp decline in available housing to purchase. The NAR report includes housing such as condos, castles, and everything in between.

Once again, this shortage is stemmed from low-interest rates and high buyer demand. Soaring home prices and low listings mean this is a seller’s market. Professionals in the industry are seeing 20 to 30 offers on the same property. In fact, buyers are willing to put a contract on a homesite and wait up to six months to close and start construction.

A new construction home purchase is a lot different than purchasing a traditional resale. The biggest difference is that you are purchasing a home that does not exist yet. The seller is the builder or a company instead of the owner of the home. If you are closing on a home that is not yet built, you will not be able to obtain a traditional mortgage instead you would pay cash or finance the land purchase at the beginning and then take out a separate construction loan to build.

One of the biggest benefits of new construction is a buyer will get a brand new never lived-in home. A buyer will not have to battle the market and get outbid on an existing home. If you get in at the beginning you can have a say in your home design.

On the flip side, there is a chance that the construction of your new home is terrible and there are delays on materials and workers. “If you’re not buying from a really good builder, the odds of problems cropping up increase substantially,” Sheehan says. “It’s quite important who is doing the work,” says Realtor Joey Sheehan.

If you do decide to go this route, do your homework on the builder. Go to some of his existing projects and get testimonies. Remember open communication is the key, stay in communication with your builder and record both verbal and written conversations. New construction is an exciting way to go, especially in today’s housing market.

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Using Alternative Building Products

The shortage of building products has been a big issue for home builders these days. With the delay in orders and shortages of home building materials, home builders are choosing alternative products for their home building projects.

The alternative materials include some such as rammed earth, adobe brick, and volcanic rock. These natural materials are great for insulation with heating and colling benefits. The downside is higher costs for skilled labor. Home inspectors and energy consultants could also have a hard time evaluating these items because they are unfamiliar with them.

An important long-term effect that builders do not want to ignore is mold. Earthen materials are made up of many organic substances that house mold. Natural building materials include cellulose or carbohydrate-based products which are a great source of food for mold.

Mold can be avoided by builders, it is important to understand the relationship between construction materials and their susceptibility to mold in the presence of moisture.  “Buildings will never be designed, built, maintained, or utilized perfectly; and weather and natural disasters cannot be predicted. The one thing we can have complete control over, the materials within the building, should be selected wisely,” reports Aaron Cooper.

The National Association of Home Builders has a guide for reviewing building materials called Assessing Building Materials. Builders can assess these materials by talking with the manufacturers and distributors. A couple of the questions they can ask do I understand the make-up of the building materials is similar to building materials available from another manufacturer that can provide more data, is the data that was provided complete, do I have confidence in the manufacturer and does another manufacturer improve my confidence in these building materials?

NAHB wants to help its members find the most important and pertinent information when it comes to evaluating new materials or products. Builders can make more informed decisions with this guide.

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Essential Questions To Ask When Buying a Home

Buying a home is a huge deal in anyone’s life. It is said to be one of the most stressful times in someone’s life. Here are some questions to ask to help you make an informed decision when it comes to buying a home.

Is now the time to buy a home?

Again this is one of the most important purchases a homeowner will ever make. Determining to take the leap of homeownership, is one of the most important financial decisions to make. Make sure your finances are in order before you decide to start your home search.

Are you ready to invest in a home?

A home is a wonderful investment, however, it is a big expensive one. Assess where you are in your life, is homeownership right for you? Make sure you want to stay in the home. Selling a house right after you purchase it will cost you a good bit of money.

Do you have a target home price?

Currently, we are in a seller’s market which means homes are going to have multiple bids and sell at higher asking prices. December 2021 reported the median home price in the country was up 15.1% higher than the same time last year. Before you start your search, find a number that you are comfortable with and stick with it.

Do you have enough savings?

Purchasing a home is not just paying the listing price. You need to have some savings not only set aside for any home updates or projects but also for other costs associated with purchasing a home. Here are some of the costs associated with buying a home. You will need 3-5% of the purchase price for a downpayment and money for closing costs and inspection fees.

Do you have credit concerns?

In order to obtain a mortgage, you will need a good credit score. By rule of thumb, anything under a 620 will not qualify. Anything between 620 – 740 will get you qualified but with a higher rate. Anything over a 740 will not only get you qualified but will get you the best available rates.

Do you have money allocated for unexpected costs?

Don’t get caught off guard by surprise costs through the process of buying a home. Remember inspections, insurance, taxes, and utilites. The more informed you are, the better decision you will make. Contact a Realtor who knows the process from start to finish.

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The West Bank Will See 154 New Homes Thanks to Habitat For Humanity and One Gracious Donor

Habitat for Humanity is building a new 154-home community close to Terrytown. The New Orleans affiliate says this is the largest-ever project that they have built in the New Orleans metro area. Fifty of the homes will be built for people 55 or older.

Billionaire philanthropist MacKenzie Scott has given the local Habitat for Humanity $4.5 million for the project. Marguerite Oestreicher, executive director of the local chapter, praised Scott for her generosity. In fact, Scott’s donation is the largest donation both the local and national Habit organizations have ever been given.

“When you get a transformative gift like this it gives you an opportunity to innovate,” said Oestreicher.

The new community will be located on the property site that was formerly Plantation Golf & Country Club. The 44-acre tract is off Behrman Highway and is planned to be called Rising Oaks. The $56 million project will be developed by Woodward Design & Build along with architect Garrity & Accardo.

The neighborhood will consist of a mix of two, three, and four-bedroom homes. The remaining 50 homes will be cottage-style homes for older residents. The remaining land will house a community center and retail center, including a health center, restaurant, pet store, bank, and many other retailers.

This will be one of the first projects Habitat has started from the ground up in the area. It was a rare opportunity for the chapter to build a live, work, and play community from scratch.

“It has allowed us to plan a community that is livable, walkable, green, and beautiful,” she said.

In order to be allowed to live in these mid-century architecture homes, you will have to qualify. Residents will qualify if their income is between 30% and 80% of the median New Orleans income which is around $20,000 to $57,000 a year.

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