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What should be your first step when buying a home?
One of the first steps in your homebuying journey should be getting pre-approved for your mortgage. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you.
A preapproval involves a mortgage lender advising you on what types of loans you qualify for, how much you may be approved to borrow, and what interest rate you might pay.
Basically, pre-approval gives you critical information about the homebuying process that will help you understand your options.
How does it work? As part of the pre-approval process, a lender will look at your finances, credit and other financial information to determine what they would be willing to loan you. They calculate in the current mortgage interest rates and give you a pre-approval letter to help you understand how much money you can borrow. When you begin to search for homes, you’ll know what you can afford and be able to adjust your search appropriately. With higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is critical.
Another added benefit is that a pre-approval helps a seller feel more confident in your offer . It shows you are serious about buying their house.
“From the seller’s perspective, a preapproval letter from a reputable local lender often can make the difference between accepting and rejecting an offer,” according to a recent Forbes article.
Even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool, stated that it may be the most important part of making an offer.
“Pre-approval maximizes the chances you’ll be able to actually close the deal, and sellers want to see that. The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step … ”
The bottom line is that getting pre-approved is an important first step towards buying a home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their home. Connect with me to begin creating your home-buying plan and for a free copy of my Buyer’s Guide for more tips on getting you home! Karen Daugerdas, Coldwell Banker REALTOR®.
Is Buying your First Home on your New Year’s List?
Is buying your first home on your list for the New Year? If so, one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are a few financial fundamentals to focus on.
Your credit rating is critical, since it helps determine the type of home loan you will be able to get as well as your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.
So how do you make sure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:
- Tracking your credit and disputing any errors that show up on your reports.
- Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
- Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able.
You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:
“One of the best ways to save for anything, including a down payment, is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”
As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.
Pre-approval from a lender lets you know how much money you can borrow for your home loan, in other words, how much you have to spend for your purchase. And having that knowledge, plus an understanding of your savings, can help you decide on your target price range for a house.
From there, you can start browsing for houses in the areas you’d like to live to see what the prices are and what is available in your price range. This can help you really understand your options so you can start to picture your future home.
Call me so we can set up a plan and begin to build your team for your home buying purchase. It’s never too early! Karen Daugerdas, Coldwell Banker Real Estate Broker, 847.494.1102.
Your Real Estate Needs in Retirement
From 1985 to 2008, the average length of time homeowners typically stayed in their homes was six years. But according to the National Association of Realtors (NAR), that number is rising today. Homeowners are staying in their houses even longer.
If you’ve been in your home for more than a few years, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it is to have grown in value due to home price appreciation.
While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.
Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to loved ones, that equity can help you achieve your homeownership goals. NAR states that for recent home sellers, the primary reason to move was to be closer to loved ones. Plus, retirement played a large role for those moving greater distances.
Whatever your home goals are, as a Senior Real Estate Specialist (SRES®) I can work with you to find the best option. I can help you sell your current house and guide you to the home that’s right for you and your lifestyle today. #retirementliving #sellyourhome #yournextmove #karenisourfamilyrealtor #coldwellbankerrealty
Buyer’s Need to Make their Wish List
The best way to determine this is to put together a list of desired features, your Wish List,for your home search.Should you sell during the Holidays?
If you think the Holidays should STOP you from listing your home now, here are 11 reasons to reconsider.
- People who look for a home during the Holidays are more serious buyers.
- The serious buyers have fewer houses to choose from during the Holidays. Less competition means more money for you.
- The supply of properties will dramatically increase in January. Less demand means less money for you.
- Houses show better when decorated for the Holidays.
- Buyers are more emotional during the Holidays, and more likely to pay your price.
- Buyers have more time to look for a home during the Holidays than they do during a work week.
- Some people buy before the end of the year for tax reasons.
- January is traditionally the month employees begin new jobs. Since transferees cannot wait until Spring to buy, you must be on the market now to capture these buyers.
- You can still be on the market but have the option to restrict showings during the six or seven days during the Holidays.
- By selling now, you may have an opportunity to be a non-contingent buyer during the Spring, when many more houses are on the market for less money. This will allow you to sell high and buy low!
- The agents that are working this time of year have the same intense commitment level as the buyers that are looking during the holidays. If you have any questions, feel free to contact me at 847.494.1102 or karen.daugerdas@cbrealty.com. Whatever you celebrate, Happy Holidays!
Understanding VA Loans
For over 78 years, Veterans Affairs (VA) home loans have provided millions of veterans & their loved ones with the opportunity to buy homes of their own.
“VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy,” according to the U.S. Department of Veterans Affairs.
In addition to helping eligible buyers achieve their homeownership dreams, VA loans offer other benefits to those who qualify:
- Qualified borrowers can often purchase a home with no down payment.
- Many other loans with down payments under 20% require Private Mortgage Insurance(PMI). VA Loans do not require PMI, which means veterans can save on their monthly housing costs.
- VA-Backed Loans often offer competitive terms and mortgage interest rates.
Veterans United states:
“For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”
John Bell, Acting Executive Director of the Department of Veterans Affairs Loan Guaranty Service, also explains why this program is so powerful:
“It provides early ownership for many people that would not have that opportunity to begin with. Since there’s no down payment, it allows people to hold their wealth and it gives them the ability to have long term financial security by being able to own a house and let that equity grow.”
Homeownership is the American Dream. Our veterans sacrifice so much in service of our nation, and one way we can honor and thank them is to ensure they have the best information about the benefits of VA home loans.
Thank you for your service!
Should You Still Consider Buying in this Real Estate Market?
The rise in mortgage rates & mounting economic concerns have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges, it’s important to think about the long-term benefits of homeownership before making a decision, according to reports from Keeping Current Matters.
If you know people who bought a home five, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why? The reason is tied to how you gain equity and wealth as home values grow with time.
The National Association of REALTORS® (NAR) says “Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”
Even though home price appreciation has slowed lately, home values have still increased significantly in recent years.
Data from the Federal Housing Finance Agency (FHFA) shows just how noteworthy those gains have been over the last five years. Home prices grew on average by almost 64% nationwide over that period.
That means a home’s value can increase substantially in a short time. And if you expand that timeframe even more, the benefit of homeownership and the drastic gains you stand to make become even clearer:
Nationwide, home prices appreciated by an average of over 290% over roughly a 30-year span.
While home price growth varies by state and local area, the nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. This is why so many homeowners who bought their homes years ago are still happy with their decision.
The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and fight annual lease increases with no long-term financial benefit? Instead, consider buying a home. It’s an investment in your future that could set you up for long-term gains.
The bottom line? Don’t let the shifting market delay your dreams. Data shows home values typically appreciate over time, and that gives your net worth a nice boost. If you’re ready to start your journey to homeownership, reach out to me at 847.494.1102 & we’ll get you started. Karen Daugerdas, Coldwell Banker Real Estate Broker.
Multiple Generations Sharing Homes Is On The Rise
For some families, having multi-generations living in one home is common. For others, it’s a necessity. Are you planning to have multi-generations living under one roof?
Whether by choice, economics or necessity, more and more parents, adult children & grandparents are choosing to live together, & those numbers are on the rise.
This “multi-generational living arrangement” comes with benefits for families, but also creates challenges. So how can you make preparations for an easier transition?
- Before you start moving in the packing boxes, have a serious discussion with everyone about their expectations. If you’ve not lived with these family members for years (or ever!) it can be a big adjustment. Be open about privacy concerns, household chores, financial responsibilities, & any family rules so everyone is on the same page.
For example:
Which spaces will be shared & which are off limits?
Will everyone be paying rent, buying groceries, paying electric, heat, insurance or otherwise contribute financially to the household? How will that be divided?
Will someone need access to your vehicle?
How will chores be divided, including cleaning, laundry, shopping, maintenance & food preparation?
What about house rules regarding “quiet hours” or curfews?
What is each family member hoping to gain from the arrangement?
- Check in regularly. Checking in even with the adults, but especially with seniors, gives each person a chance to voice their thoughts & concerns. Make plans to meet on a regular basis to discuss what’s working & what’s not working. Don’t wait until a problem escalates to have a meeting. You will most likely need to do these “check ins” more at the beginning of the transition and less often as rules & “kinks” get worked out. Remember that sometimes these conversations can be difficult. That’s why it’s good to schedule the meetings in advance & allow participants a chance to mentally prepare (or cool down!) for the discussion.
- Plan an end date. If living together is NOT a permanent solution, work together to make an “exit plan” that is clear & that everyone agrees to & understands. Plans change, & you may decide to live together for more or less time, but at least have a blueprint that gives everyone an idea of what to expect. In situations where aging parents move in with their adult children, it’s helpful to decide what will happen if the arrangement does NOT work out. Having a backup plan can preserve relationships when difficult circumstances arise.
Whether you are taking care of an older parent, moving into your child’s home, or have adult children moving back in with you, these strategies can help you navigate your multi-generational living with added success.
For more information, contact Karen Daugerdas, Real Estate Broker & Senior Real Estate Specialist (SRES) at 847.494.1102, karen.daugerdas@cbrealty.com
Selling in Today’s Market
If you’re thinking about selling your home, you may have heard about the housing market slowing down in recent months. While it’s still a sellers’ market, the peak frenzy the market saw over the past two years has cooled some, according to the real estate information base “Keeping Current Matters”.
If you think you’ve missed your chance to sell your house & make a move, the good news is―you haven’t. Motivated buyers are still out there. But you do need to price your house correctly for today’s market.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says: “Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
It’s true that buyer demand has slowed over the past few months. Higher mortgage rates made it more expensive for buyers to qualify for a mortgage & reduced their buying power. Buyers that could afford a $350,000 house in some cases saw their purchasing power drop to below the $300,000 limit. The result is fewer bidding wars and less competition among buyers.
But don’t forget that this is in comparison to the severely overheated market we saw over the past two years. According to the latest Confidence Index from National Association of REALTORs®:
“ … 39% of homes sold above list price, down from 51% a month ago and 50% a year ago.”
While this is a slower pace, serious buyers are still active in the market & they’re buying homes that are priced right. In fact, the Confidence Index also notes the average home is selling in just 14 days.
If you’re planning to sell, work with me to price it for today’s housing market. As buyer demand softens, it’s important to understand this isn’t the same market as last year. It’s not even the same market as just a few months ago. But it is still a Seller’s Market.
You’ll need to adjust your expectations accordingly to meet the market where it is today. Selma Hepp, Interim Lead, Deputy Chief Economist at CoreLogic, explains what’s happening and what it means when you sell:
“Signs of a broader slowdown in the housing market are evident … This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates … Nevertheless, buyers still remain interested, which is keeping the market competitive, particularly for attractive homes that are properly priced.”
If you’re considering selling, call me at 847.494.1102 & we’ll create a strategic plan.
Karen Daugerdas, Coldwell Banker Real Estate Broker
Six Factors that Affect the Sale of your Home
The six factors that influence the sale of your property are:
*Location
*Competition
*Available Financing
*Buyers Likes & Dislikes
*Marketing
*Price
Out of these six, we only have control of the last two: Marketing & Price. I can take care of the Marketing. But you, as the Seller, control the Price. By pricing COMPETITIVELY, you’ll be able to negotiate UP, rather than having to negotiate DOWN. Call me today & we’ll make a strategic plan to get your property sold! Karen Daugerdas, Coldwell Banker REALTOR®. 847.494.1102
