Advantages of Using a 203k Renovation Loan

203k renovation loanWhen it comes time to buy a home, consider using a 203k renovation loan. There are many advantages to using a 203k loan for your mortgage financing. There is a growing trend of homeowners buying a fixer upper house and then doing repairs to their liking. The government now offers a mortgage loan to specifically meet that need.

How Does a 203k Renovation Loan Work?

Shows like Property Brothers on HGTV give great examples of a circumstance of when you’d use a renovation loan. You purchase an outdated home and pay the purchase price. You then will be allowed to use money from a rehab escrow account to do repairs on the property. The purchase price of the home plus what is used from the rehab escrow account will be the new principal amount of the loan that you will make payments on.

Smaller Down Payment

A smaller down payment will be required on a 203k renovation loan compared to buying a fully upgraded house. Your down payment amount will be determined by the purchase price of the house. Since you are purchasing a home in need of repairs, the purchase price will be much lower and so will your required down payment amount.

Less Money Out of Pocket

Not only will you make a smaller down payment when purchasing the home, you will also be spending less money out of pocket renovating the house. You won’t be accessing personal funds to purchase new appliances or countertops, you will be taking advantage of the rehab escrow account. You’ll also be paying a small affordable monthly payment with a low fixed interest rate. All of these factors will save you money in the long term.

Customize Your Home How You’d Like

Purchasing a fixer upper allows you to upgrade the home to your specific taste. If you purchase an already upgraded home, you may not like the dark cherry wood cabinets, but not want to replace them because they are in great condition. Doing renovations after you purchase allows you to select finished that suit your taste.

Your Money Goes Further

One of the biggest advantages of using a 203k renovation loan is that you get much more for your money. By purchasing a home that needs repairs, you can purchase a home for a lower price. You can also afford a property that may have been out of reach with a move in ready house.

Gain Equity on Your Home

After doing all of the renovations to your home, your overall property value will have increased. Gaining equity on your home is a big selling point to using 203k loan. Instead of needing to wait several years to see increases in equity, you will see a large jump once your renovations are done.

The next time you are in entering the real estate market, consider using a 203k renovation loan for your mortgage financing. You can take advantage of its many benefits and end up in the perfect home for your family.

What Consumer Debt Means To Your Mortgage Application

consumer debt

According to a recent survey done by NerdWallet, the average amount of debt carried by American households is rising. The average amount of consumer debt that the American household has is over $16,000, almost as high as its peak in 2008. Overall, the amount of total debt carried by American households is over $132,000 up from $88,000 in 2002. However, as the debt amounts continue to rise, incomes have not kept up with these increases. This means the average household is more indebted potentially  impacting  their ability to get approved for mortgage loans. 

Is All Debt Bad?

Usually when people think about debt, it’s with a negative connotation. No one likes making debt payments and even worse, paying interest, but carrying some debt is somewhat of a necessary evil.

Here are some of the benefits of carrying debt:

  • Your open tradelines will establish a FICO score.
  • A manageable amount of debt on your credit report establishes a payment history.
  • Mortgage underwriters can examine your payment history and see your ability to manage money and pay your bills on time.

So while you don’t want to have an excessive amount of debt, having some established credit lines will help you maintain a strong FICO and show your credit history. 

Are All Debts Created Equal?

There are many different types of debt that borrowers may have. Consumer debt includes credit cards and unsecured personal loans. Borrowers may also have student loans or secured auto loans. Typically,  underwriters are more concerned about the overuse of unsecured consumer debt. They look to see how much unsecured debt a borrower has in relation to their annual salary. They are also looking how much of the credit line is being utilized in comparison to what is available. They typically want to see that no more than 50% of the credit line is charged. 

Installment loans show underwriters how large of payments you’ve been able to handle. They show your responsibility in handling consistently big sums each month in comparison to a small minimum payment. 

Other Ways Consumer Debt Impacts Your Mortgage Application:

  • Debt affects your FICO score. Your utilization ratio, payment history, and types of trade lines opened all impact your  credit score.
  • It contributes to your debt to income ratio. The amount of debt payments you are obligated to pay each month are added in addition to your new mortgage payment to calculate your debt to income ratio. If your debt to income ratio is too high your loan application can be denied. 

Having debt is a common occurrence in our society. Maintaining a manageable amount of debt will allow you to establish a strong credit history and help your mortgage application. An excessive amount of debt can eliminate your chances of being approved for a mortgage. Find the balance between establishing credit and charging too much debt.

Advantages of Selling a Home During the Holiday Season

advantages of selling a home

Selling a home is not the first thing people think about when it comes to the holiday season. However, it can be a great time to sell your house. Consider the following advantages of selling a home during the holiday season and sell your house quickly.

Your Home Is Beautifully Staged

One unique perk of selling your home during the holiday season is that your home is decorated for the holidays. Having seasonal decorations around your house creates a warm inviting environment for prospective buyers. It also offers a nostalgic feeling for anyone touring your home.

Tip: Don’t forget to include your curb appeal when decorating your house. Be sure you don’t overdo it with decorations. You want your home to create an inviting holiday atmosphere, you don’t want buyers to feel like they’ve walked into Santa’s workshop.

Motivated Buyers

Most people buying a home during the holiday season are motivated and have a reason for doing so. They want to find a home quickly and may be willing to make competitive offers to get into a home quickly. Buyers  know what they are looking for during the holidays and won’t hesitate once they find it.

Tip: Take advantage of this time of year to find buyers who are in a time crunch. Focus on buyers that want to close before the end of the year due to various life circumstances. Some examples are military personnel relocating, buyers looking to get the tax benefits and people relocating to your area for a job.

Motivated Realtors

The holiday season is a time when realtors are looking to increase their sales to finish the end of the year strong. In order to reach their goals, they are more likely to hustle to get your home sold. Also, since it is a slower time of year for real estate, they will have even more drive to close on your home. They’ll have time and focus to dedicate to ensure you get the best price for your home.

Tip: Make sure your realtor is planning on taking extended vacation time during the holidays. Ensure that they are committed to being available to show your home and get you the best price on your house.

Focus on the advantages of selling a home this time of year and use them to your benefit. Follow the tips above and you’ll find yourself signing at the closing table in no time leaving with an impressive check and peace of mind. Find yourself approaching the new year with fresh opportunities ahead.

Things to Be Grateful For in the Current Real Estate Market

current real estate market

This Thanksgiving week we wanted to take the time to reflect on the positive aspects of our current real estate market. There are many reasons to be grateful for the trends we have seen in the housing market. Homeowners, potential buyers and real estate professionals can all find something that they are thankful for. Here’s a list of the reasons why we are grateful for what our real estate situation is today.

Interest Rates Have Remained Low

Interest rates have been lingering around historic lows for some time now. Currently, the interest rates are still low making purchasing a home affordable for all buyers. There is ongoing speculation that interest rates will be on the rise. So take advantage of the current low rates and apply for a mortgage today.

Values Are Increasing

The housing market has been steadily improving over the past years. Homeowners are seeing a steady but sustainable increase in property values. This has also lead to more mortgage refinances and many homeowners moving up in properties. All of these factors are strong contributors to a thriving real estate economy.

New Construction is Growing

Over the past few months the housing market has seen new construction starts at its highest in the last 9 years. The surge of new construction shows the vitality of the housing market. It also means an increase in inventory of homes available to prospective buyers.

Availability of Affordable Mortgages

Not only are interest rates low, making mortgages more accessible, but there are still so many affordable mortgage options for homebuyers. First time homebuyers no longer need to wait until they’ve saved a 20% downpayment to purchase a home. They can take advantage of many low or no down payment programs that allow them to purchase a home much sooner saving them thousands of dollars in rent.

Here at Aceltis we are also grateful for  the many clients we’ve able able to assist this year. It is our pleasure to find the right financing for homeowners. Give us a call to see what the current real estate market means for your financial picture. We’d love to give you even more reasons to be grateful.

Advantages of Buying a Home During the Holiday Season

buying a home during the holidaysMost people do not think about buying a home during the holiday season. However it can be a great time to get a great house at an excellent price. Don’t overlook the advantages of buying a home during the holidays and miss out on a great opportunity.

Lower Competition

One of the biggest advantages to buying a house during the holiday season is the reduced competition in the real estate market. The most popular time to buy a home is during the spring and summer months. Toward the end of the year the amount of buyers in the market is significantly reduces. This means there is a smaller chance of ending up in a bidding war over a property. You may also have more time to determine whether or not to place an offer on a house.

Lower Prices

Since there is less competition in the market during the holiday season, the prices of homes may also be more affordable. Sellers who are looking to close on their home quickly may be more willing to negotiate on price.

Lender Incentives

Mortgage lenders have goals quarterly and annually. Toward to the end of the year they assess how far off they are from reaching their annual goals. Most lenders have a big push to close more loans at the end of the year. This benefits buyers as lenders typically offer incentives to have you close your loan with them. Find out what incentives you can utilize while closing a loan this time of year.

Motivated Sellers

Many homes that are on the market during the holiday season have been listed for a longer period of time. Also, homes that were recently listed most often have sellers who are eager to close before the end of the year. Either way, sellers are quite motivated during the holidays to sell their home quickly. Many will want to close quickly and will make concessions for the buyer. Take advantage of this while negotiating on a property to get the home you want for a great price.

Tax Advantages

There are many tax advantages to being a homeowner. If you purchase a home before the end of the year you can claim some of the closing costs on your tax return. The money you paid toward mortgage interest and discount points can be itemized on your tax return. This may yield a higher tax return in the beginning of the year.

Although the holiday season is not the busiest time for buying or selling real estate. There are many advantages of buying a home during the holiday season. Consider the benefits to buying this time of year and give us a call if you want to take full advantage of what the holiday real estate market has to offer.

Page 1 of 2812345...1020...Last »