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Getting the “Right” Home

Getting the “Right” Home

Finding the right home is still the biggest challenge buyers are faced with in today’s market as is shown in the latest Confidence Index Survey.  Assuming the buyers find the “right” home with determination, perseverance and the help of a real estate professional, 88% of all transactions last year required financing to get the buyer’s address on the home.  93% of first-time buyers needed financing.

Pre-approval is an essential step that needs to be handled before buyers begin searching for a home.  The benefits to the buyer fall into the category of confidence.

PRE-APPROVAL GIVES YOU CONFIDENCE

  • Knowing the amount you can borrow
    the mortgage amount decreases as interest rates rise
  • Looking at the right priced homes
    price, size, amenities, location
  • Comparing and identifying the best loan
    rate, term, type
  • Uncover issues early that could affect the most favorable loan terms
    time to cure possible problems
  • Bargaining power to negotiate with the seller and possibly, competing buyers
    price, terms, & timing
  • Settlement can occur sooner after contact is accepted
    verifications have already been made

Items Needed for Pre-Approval

  • Photo ID
  • Two months current pay stubs
  • Last two year’s W2s
  • Complete copies of checking and savings statements for last three months
  • Copies of statements for IRAs, 401k, savings, CDs, money market funds, etc.
  • Employment history for last two years with addresses and contacts
  • Proof of commissioned or bonus income
  • Residency history for last two years with addresses and contacts
  • Assets for down payment, closing costs, and reserves; must provide paper trail
  • If self-employed, last two years tax returns, current profit and loss statement and balance sheet; copy of partnership/corporate tax returns for last two years if owning more than 25% of company
  • FHA requires driver’s license and social security card
  • VA requires original certificate of eligibility and DD214
  • Other things may be required such as previous bankruptcy, divorce decree

Contact us at (206) 979-9632 or David@TheHarlanTeam.com if you’d like a recommendation of a trusted mortgage professional.

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Maybe It Is Time To Get Rid Of That HELOC

In September, the Federal Reserve raised interest rates for the third time in 2018 and they’re expected to go up one more time this year and three times next year.  If you have a Home Equity Line of Credit, HELOC, you’re paying more to use that money and it is going to become more expensive.

It may make sense to refinance your home and consolidate the balance of your HELOC to lock in a lower mortgage rate.  Most lenders require that the combination of these loans should not exceed 80% of the home’s fair market value and that you have good credit and adequate income to support the payment.

A HELOC is a first or second mortgage that allows the borrower to withdraw money as needed, up to the line of credit provided by the lender.  A draw period is established where the borrower is only required to pay interest.

Since all HELOC loans are variable rate mortgages, during periods of rising rates, the cost of the funds increase.  However, unlike adjustable rate mortgages that have specified adjustment periods and caps, a HELOC adjusts when the prime interest changes.

The formula for determining available funds on a refinance are to take 80% of the fair market value, which will probably have to be verified by appraisal, less the existing first mortgage and the costs to refinance.  The balance would need to cover the cost of replacing the HELOC.  Any remaining balance may be available for cash to be taken out.

Now is a great time for a mortgage review. In many cases, the equity you have in your home may allow you to eliminate mortgage insurance and substantially lower your monthly payment. As with all tax matters, always consult with a tax professional before making any decisions.  Call us at (206) 979-9632 for a recommendation of a trusted mortgage professional.

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Is Your Home Ready For A Home Inspection?

Pending Inpection.jpgHere is a Seller’s Home Inspection Check List

Exterior Items

    • Trim all vegetation at least 12 inches away from siding.
    • Keep earth 6 inches below / away from siding and all other wood while maintaining a gentle slope away from the structure.

Roof

    • Remove moss from the roof.  Pressure washing can often cause more damage than good.  Cleaning solutions and instructions can be found at most home improvement centers.
    • Extend downspouts that drain above ground at least 6 feet away from the structure.
    • Clean the gutters as even small amounts of debris can clog downspouts.
    • Keep trees and branches pruned at least 6 feet away from roof and power lines.

Crawl Space

    • Check for signs of rodents.  Obtain the assistance of a pest control operator to clean and repair any rodent damage.
    • Be certain all earth is covered with a 6 mm vapor barrier with 6 inch overlaps
    • Remove all cellulose debris large enough to be picked up by a standard garden rake.
    • All crawl space vents should be open and screened for proper ventilation.

Attic

    • Be sure all bathroom exhaust vents are still attached and lead to the exterior of the structure.
    • Keep insulation clear of soffit vents.

Furnace, A/C Units and Hot Water Tanks

    • Heating and cooling systems should be professionally inspected annually.  Be certain you can demonstrate this has been done within the past 12 months.
    • Hot water tanks are required to be strapped to the wall to reduce the possibility of tipping.

Bathrooms

    • Correct slow draining sinks and tubs.  Fill sinks then drain while looking for leaks below.  Repair all leaks if any.  

Interior

    • Clear storage away from electric panels, hot water tanks, attic and crawl space entry points so that the inspector does not have to make extra trips back that will slow the process.
    • Remove clothing from laundry equipment and dishes from the dishwasher.  These items will likely be tested by the inspector.
    • Keep the house clean and show ready for the inspection.  Remember the house probably looked great when the Buyer fell in love with the home and made the offer.  Now is not the time to let a messy house cause the Buyer to change their mind.
    • Smoke Detectors more than 10 years old should be replaced.
    • Washington State law requires Carbon Monoxide Detectors be installed at least one per floor and within 15 feet of all bedrooms.  Detectors more than 5 years old should be replaced.
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It is time to clean the gutters

How to Clean Gutters

The gutters and downspouts on your home are intended to channel rainwater away from your home and its foundation.  When they’re blocked and not functioning properly they can lead to the gutters coming loose, wood rot and mildew, staining of painted surfaces, foundation issues or even water penetration into the interior of the home.

Most experts recommend cleaning the gutters at least once a year.  More often might be necessary depending on the proximity of leaves and other debris that could collect.

If this is a task that you feel comfortable about tackling yourself, there are few things to consider.  If the debris is dry, it will be easier to clean the gutters.  Safety is important, and precautions should be taken such as using a sturdy ladder and possibly, having someone hold it while you’re on the ladder.

Other useful tools will be a five-gallon plastic bucket to hook on the ladder to hold the debris; work gloves to protect your hands from sharp edges of the gutters; a trowel or scoop and a garden hose with a nozzle.

?         Start by placing the ladder near a downspout for the section of gutter to be cleaned.

?         Remove large debris and put it into the empty bucket. Work away from the downspout toward the other end.

?         When you’re at the end of the gutter, using the water hose and nozzle, spray out the gutter so it will drain to the downspout.

?         If the water doesn’t drain easily, the downspout could be blocked.  Accessing the spout from the bottom with either the hose with nozzle or a plumber’s snake, try to dislodge the blockage.

?         Reattach or tighten any pieces that were removed or loosened while working on the downspout.

?         Flush the gutters a final time, working from the opposite end, as before, toward the downspout.

There are specialized tools at the home improvement stores like Lowes and Home Depot that can make this job easier.  Check out their websites and search for “gutter cleaning”.