We get this question a lot around this time of year: Is now a good time to buy or sell my home during the holiday season? There’s a myth that the holidays aren’t a good time to buy or list, but it’s not necessarily true.
There are actually many opportunities for both buyers and sellers during this time of year. There are typically fewer people looking for homes around the holidays, meaning buyers will experience less competition. Sellers are also more determined to sell their homes.
There’s a myth that the holidays aren’t a good time to buy or list.
Sellers experience a smaller buyer pool, but those buyers will be motivated to find a new home quickly. While it’s true that you’ll do fewer showings, they’ll be with high-quality potential buyers who are ready to make a decision.
We see a lot of buyers come out during the summer months, but most of these people do not have much motivation to buy. This changes during the holidays.
If you’re a buyer or seller who is looking to take advantage of these current opportunities, feel free to reach out to me. I look forward to hearing from you.
After my last few videos, I did a quick survey of my past, present, and future clients about what questions they want answered. The most common response I got was, “What’s mortgage insurance?” so in today’s video we’re going to discuss exactly that. Mortgage insurance is insurance that a lender requires a homebuyer to pay if their down payment is less than 20% of the home’s value. It protects the lender in the event that the buyer defaults on the loan. There are two main types of mortgage insurance. There is private mortgage insurance, or PMI, which is associated with a conventional loan. There is also mortgage insurance premium, or MIP, that is associated with FHA loans.
There are a few more things you should know about mortgage insurance:
The lower your down payment is, the higher your mortgage insurance will be.
The amount is based on your credit score, interest, and debt-to-income ratio.
There are two types of mortgage insurance.
How long does mortgage insurance last? If the buyer is using an FHA loan, the mortgage insurance will last for the life of the loan. If the buyer is doing a conventional loan with less than 10% down, the mortgage insurance will also last for the life of the loan. If the buyer is doing a conventional loan with more than 10% but less than 20% down, the buyer will have the opportunity to eliminate the PMI at a later date. A buyer with a conventional loan can also request to eliminate their PMI when they have built up 20% equity in their home or after five to seven years of good payment history, regardless of the down payment amount. If you have any questions about this topic or anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
There are many things included in your closing costs when you buy a home. Today, we’ll be going over the ones you’ll primarily find:
1. Down payment balance. Let’s say you’re purchasing a $400,000 property with an FHA loan that has a minimum 3.5% down payment. This would come to $14,000, but the buyer may choose to only use $10,000 of that as the down payment when signing the contract. The remaining $4,000 will be rolled into the closing costs.
2. Appraisal fee. Once the buyer has financing to secure the purchase, the bank will hire an appraiser to assess the property’s value.
3. Home inspection. This isn’t mandatory, but it’s recommended to hire a certified inspector or engineer to look at home systems.
4. Home insurance. Most banks require that you buy at least one year of home insurance up front or before closing.
5. Lender fees. These are what the bank charges the buyer directly.
6. Attorney fees. Whenever a buyer uses financing, they typically pay two attorneys throughout the transaction. One is working for you and one works for the bank. Both fees are passed to you.
It’s recommended to hire a certified inspector
or engineer to look at home systems.
7. Title search and title insurance. A search is done on the property to see if there are liens or gaps in title transfers from previous owners. The buyer will also secure a title policy to guard against any claims after the transaction.
8. Mortgage tax. This is calculated based on the amount of money borrowed from the bank.
9. Mortgage insurance premium. Depending on the type of loan selected and if you’re putting down less than 20%, the bank may require you to pay one to two months’ worth of mortgage insurance premiums.
10. Escrow fees. At the time of closing, the bank will create an escrow account to pay taxes and insurance on your behalf.
11. Deed and recording fees. These are associated with recording you as the new owner of the property and the mortgage.
12. Survey. This is done to record the boundaries of the land you’re purchasing, as well as where the building is included on the property.
If you’d like to talk about your real estate needs, have any questions, or would like further information, feel free to give me a call or an email. I look forward to speaking with you.
Home sellers often ask me, “David, what are the kinds of home improvement I can do that are going to increase value and boost resale price?” Renovation can be a great investment, whether you’re considering selling your property in the near future or you simply want to renovate for your own comfort (with an eye on recouping costs in the future). Let me share with you the top six home improvements that will boost the resale price and increase home value:
1. Minor kitchen renovations. Simple projects such as changing hardware or refacing your cabinets can go a long way. Upgrading laminate countertops to a different material, such as quartz or granite, will increase value tremendously.
2. Bathroom upgrades or additions. Renovating your bathrooms can add a lot of value, and the process is becoming less and less expensive due to the availability of affordable, quality materials on the market. Even simple tasks, such as changing out old tiles, upgrading to a modern vanity, or replacing a faucet will add value.
3. Stone-manufactured veneers. If your home is not made of brick, an inexpensive and effective way to boost value and get a modern, brick appearance is to use a stone-manufactured veneer.
Renovation can be a great investment,
whether you’re considering selling
your property in the near future or you
simply want to renovate for your own comfort.
4. Siding replacement. A good siding job can make your home look brand new, boosting home value.
5. Entry door replacement. This can be as simple as re-staining or re-painting the door. This helps immensely with curb appeal, as it’s one of the first things appraisers and buyers notice when they see your home.
6. Garage door replacement. According to a 2018 report, a garage door replacement will return 114% of the original amount invested. You’ll recoup the money you spent, as well as a little extra.
If you have any questions about these tips or anything related to real estate, feel free to contact me. I look forward to hearing from you.
Here are the top four things that you should not do when applying for a mortgage:
1. Don’t make any large transfers or unaccounted-for deposits. The banks like to know where every dollar in your account is coming from.
2. Don’t quit your job or get fired. Banks will consistently verify your employment status as a buyer, even up until the day of closing.
Large purchases with existing credit will affect your debt-to-income ratio.
3. Don’t apply for new credit. Let’s say you have the minimum credit score required to get a mortgage already. If you apply for new credit, you could potentially lower your score and get your mortgage denied. Even if you have a higher than average score, applying for new credit could also lower your score and increase your interest rate by a significant margin.
4. Don’t make any large purchases. You want to make sure you have enough funds available for your closing costs when the time comes. Large purchases with existing credit will also affect your debt to income ratio, which will, in turn, affect your loan.
If you have any questions about any of the points above or anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
Have you ever wondered what is Closing Cost and why you pay them when buying real estate?
This video explains exactly that.
3 Ways to Save on your Closing cost
1: Shop around for your mortgage.
While some closing costs are standard, different lenders have different rates on some fees. This means your overall closing costs can vary depending on the lender you choose. Always ask your lender for a buyer's estimated cost sheet.
2: Ask the Seller to Contribute
A strong buyer's agent like David Johnson from the Long Island Queens Home Team can negotiate for the seller to contribute to your closing cost. This strategy is most effective in a BUYER'S MARKET.
3: Don't pay for points while interest rates are low
Paying down points was an effective way of lowering your monthly payments when interest rates were as high as 17% years ago. However, the low-interest rates that we are experiencing in today's market may not make it worth paying extra to lower your interest rates.