Author - Angel Capacia

HOW TO PREPAY YOUR MORTGAGE?

Over the course of a 30-year mortgage, you may end up paying more than twice the amount of your principal. The rest goes towards paying interest. That interest is money in the bank’s pocket, not in your bank account. Prepaying your mortgage is paying extra principal, especially during the early years of your loan, meaning that your house will be paid off that much sooner, and you will pay less total interest over the life of the loan. It could put you that much closer to retirement.

 

What are the Steps?

I. Evaluate whether prepaying is right for you. In the short term think of prepaying your loan as investing, but investing in a large, illiquid asset. That is, you must sell the house to get the money out again. If you have a low interest rate and you are making good returns on investments, it may not be worthwhile. If other debts are costing you more or if you have little or no savings, focus on those priorities first. The long term prepayment is by far the best thing to do. When the mortgage is paid off 100% of the money you would have paid can now go for investments.

II. Find out the interest rate on your mortgage and the remaining balance. If it isn’t on your statement, call your bank or whoever is carrying your mortgage to find out.

III. Use a mortgage calculator (there are many available online or make your own) to find out how much you are paying in interest over the life of the loan.

  • Look for a calculator that gives you an amortization schedule, preferably with a graph of interest and principal paid over time.
  • Look for a calculator that will let you run scenarios and see what happens if you prepay at various rates.

IV. Decide how much you will prepay. There is no one right answer to this question. Here are some possibilities:

  • Prepay a certain percentage of your income. One or even half a percent might be small enough to be painless and still make a big dent.
  • Prepay a certain amount each month. Choose a nice, round number that seems right to you.
  • Pay a monthly amount that you were paying before on a different loan. If you just paid off a car loan or credit card, put that amount towards prepaying your mortgage instead.
  • Continue to pay the monthly amount that your mortgage cost before refinancing, even though the new monthly payment is less.
  • Pay the amount of a raise you have just received. The advantage of choices like these is that they keep the rest of your finances the same as they were before. You will not notice that new, “extra” money is going elsewhere.
  • Make one extra payment per year. Divide your monthly payment by 12 and pay that much extra each month. Don’t wait until the end of the year or rely on your memory.

V. Phone your bank or mortgage company and verify that any extra payment will get applied immediately toward paying down the principal. They may ask that you enclose a form letter or add a memo to each check to this effect. Prepaying a mortgage is still uncommon enough that some companies don’t seem to know what to do about it.

  • Check that your first couple of payments went to the right place. Read your statement after the first extra payment and verify that the payments are being correctly applied against your principal.

VI. Automate your payment. The mortgage company may be able to do this for you, or if you have online bill pay with your bank, you can make either a separate payment or an increased payment automatically that way. While you could theoretically make the extra payment manually each month, it is probably easiest to automate it once and let the bank remember the new schedule for you.

  • Make sure to include your account information and prepayment instructions with your payment.
  • It may help things get processed correctly if you send a separate check or payment for the part you are prepaying. If you are using an online bill pay service, simply set up two payments at the same time each month.

VII. Look into a biweekly payment plan. Many people prefer this option because it is simple and lines up with their biweekly paycheck schedule. With a biweekly payment plan, you simply pay half the monthly amount every two weeks. This has the effect of paying one extra payment per year. Set up a biweekly payment plan through your mortgage company or through an independent service. A phone call or two should be enough to set up the payments.

  • With this choice, you must generally set up a plan specifically.
  • Make sure, if you are paying biweekly, that the mortgage company knows what to do with the extra payments.
  • Ask whatever institution sets up your biweekly plan whether the payments get applied immediately, and don’t sign up if the answer is no. Some companies, especially third party services, withdraw the funds biweekly and only make the additional payment at the end of the month or year, earning interest on your money in the meantime.
  • Expect a setup fee of a few hundred dollars, and ask what the fees will be before you sign up. Although this sounds like a lot of money, the money you save over the life of the loan will be much more. If you still don’t like the fee, set up an automatic transfer yourself.
  • You do not necessarily need to pay someone else to set up your payments for you once you have calculated what they need to be. It’s free to do it yourself, and you will save more money (the fee associated with this plan).

Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Superior Mortgage Co., Inc. at 845-883-8200 or email sales@superiormci.com for additional information. Let us help make your dreams a reality.

 

ctto: https://www.wikihow.com/Prepay-Your-Mortgage

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THINGS NEEDED FOR PRE-APPROVAL

In lending, pre-approval is the pre-qualification for a loan or mortgage of a certain value range. Although, to a typical consumer, “you’re pre-approved” means “you already passed the approval process and therefore are guaranteed to be immediately granted the loan.

I. PROOF OF INCOME

Proof of income is a document or set of documents that someone, like a lender or landlord, requests to verify your income and determine your ability to pay

II. PROOF OF ASSETS

Full documentation means that you have proof of everything — income and assets — that you’ve put down on your application.

III. EMPLOYMENT VERIFICATION

The practice of verifying the employment eligibility and past work history of current or potential employees. Employers often verify employees prior to hiring or promoting them, to ensure that the employee’s employment history, education, and other details match the information provided by the employee.

IV. DOCUMENTATION

loan documentation. credit-related documents, including the loan contract, financial statement, business plan, documents of the lender’s security interest, and other papers that are used by the lender in evaluating creditworthiness of a prospective borrower.

V. ACCEPTABLE CREDIT

Acceptable Credit Support means Acceptable Collateral and Acceptable Letters of Credit (including the proceeds of any Acceptable Letter of Credit); provided that Acceptable Credit Support does not include any Bank Credit Support that is not Retained Bank Credit Support.

“CONTACT INFORMATION”

WE ARE HERE TO HELP MAKE YOUR DREAMS IN TO REALITY!

LISA FERRARA

PRESIDENT – 914-755-3942

lisa@superiormci.com

MAX OZKURAL,

VICE PRESIDENT – 845-928-2845

max@superiormci.com

KEI KULLBERG

BRANCH MANAGER – 845-238-7673

kei@superiormci.com

LYDIA SYMOSKEVICH

LOAN ORIGINATOR

lydia@superiormci.com

ISHA O’GRADY

PROCESSOR

isha@superiormci.com

ROSETTA RICHARDSON

PROCESSOR

rosetta@superiormci.com


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Superior Mortgage Co., Inc. at 845-883-8200 or email sales@superiormci.com for additional information. Let us help make your dreams a reality.

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How to Approach a Mortgage Refinance Loan?

Home refinancing is a great way to lower your mortgage interest rate and reduce your monthly payments. However, if you’ve never gone through a home refinance, then there’s a ton to know. Before you apply for a refinance loan, check out the home refinance articles, guides, and additional resources.

Learn about refinancing your mortgage. Refinancing a mortgage is in some ways similar to getting your first mortgage, with a few important differences. Since you already own the home, you don’t have to go through a pre-approvals process or find a Realtor and a home to buy. Unfortunately, you’ll still have a lot of paperwork to do, but savings thousands of dollars over the life of the loan is worth it.

Determine if Refinancing is Right for You.

There are tools like mortgage calculators to determine whether a mortgage refinance loan will save you money. Factor in your current interest rate, future interest rate if you have an adjustable loan, and closing costs. If you want to take cash out, include that amount in your new mortgage balance for the calculations. Remember, refinancing creates a new loan, usually with a full loan term. If possible, you can make extra payments to finish the loan at the same time as your original loan, and that will save you more money than the calculator predicts. For the calculation, assume you’ll only be able to pay the amount due.

Check Your Credit Reports and Scores.

  • Even if you already own a home, your lender will still use your credit scores and credit reports to determine which rate you qualify for.
  • Order scores and reports for each spouse if both of you will be on the mortgage.
  • You want to get best rate possible. Ideally your scores should be above 720 to get the absolute best rate, but 680-700 will get you a good rate.
  • You can still refinance if your scores are low, but it might cost you more, especially if your scores were high when you got the first mortgage.
  • Carefully review your credit reports for errors. 80% of all reports have errors.
  • Common errors include listing accounts that don’t belong to you, late payments that weren’t really late, and items that were supposed to be removed.
  • Follow the instructions at each credit agency to correct the errors.Next, do what you can to fix black marks like recent defaulted loans, recent collections, and high credit card balances.
  • You may have to spend a little more money to accomplish this, but it’s worth it if it saves interest on your mortgage, which will ultimately cost you more over 30 years.

Research Rates, Fees, and Lenders.

  • Before you contact any lenders, research current interest rates and fees for the type of loan you’re interested in. Comparison shop to see which banks is offering the best rates. Note the terms, closing costs, and whether or not the rates are fixed or adjustable.
  • In addition to rates and fees, check reviews of the lender online and at the Better Business Bureau. If the lender has a history of making late property tax or insurance payments or providing poor customer service, find a different lender.

Contact Your Current Mortgage Servicer

  • Your current lender wants to keep you as a customer. If they still own the loan, they may be able to modify your current loan to a lower rate with just a little paperwork and a low fee.
  • Unfortunately, most lenders sell their loans to larger mortgage servicers, so it’s unlikely that you’ll be able to take advantage of this.
  • If you want to pull cash out, refinancing is the only option.
  • If you can’t modify your loan, your lender or mortgage servicer may offer a streamlined refinance.
  • You’ll get a new loan at a better rate, but with fewer fees and a little less paperwork.
  • It may also take less time to close. Of course, you may not want to accept their offer if the rate is higher than what you found at other lenders.
  • Consider the closing costs when deciding which mortgage refinance loan will save you more money.
  • Using your current lender could save on closing costs, but a higher rate could cancel out the savings.
  • If you found a better rate elsewhere, ask your current lender to match it. If they want to keep you, they might do it.

Contact Other Lenders

  • If your current lender can’t get you the best refinance rate, contact other lenders about refinancing with them. Your goal is to find the best rates with the lowest fees and closing costs (without adding those fees to your loan balance).
  • Some lenders now offer refinance loans with 25 and 20-year terms so your new loan will end at the same time as your original loan.
  • If it will save you money and you can afford the payments, consider the offer.

Refinance. Refinancing to a lower rate can save you a lot of money over the life of the loan. A mortgage refinance loan can also help you get much-needed cash to remodel your home or pay down credit card debt. It’s not hassle-free, but saving money is worth the effort.


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Lisa Ferrara – 914-755-3942 or Max Ozkural – 845-928-2845 or email lisa@superiormci.com for additional information. Let us help make your dreams a reality.

ctto: https://www.wikihow.com/Approach-a-Mortgage-Refinance-Loan

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Here’s a Key Factors in Choosing an Experienced, Professional Realtor

When you are ready to buy or sell a home, a realtor will provide professional guidance from a market perspective. Few of us have enough up-to-date knowledge and experience to pull this all together on our own. Thankfully, there are many fabulous agents who have the skills, capabilities, experience, resources, ambition and personality to get the job done to your advantage.

If you’re thinking that it can’t be that hard to put a sign out front and sell a home, you might have overlooked a number of important factors that impact a good selling experience. Buying also can look like an easy task. After all, you just drive around and walk through a few homes, right? Let’s discuss a few of the considerations when buying or selling a home and hiring the agent who’s up to the task. We want you to be successful in your endeavor. Let’s take a look.

First, let’s look at the selling experience.

The reasons for selling vary, and most carry with them some fairly strong emotions and/or high levels of stress. Even though the process is similar for most sales, results can range from horrible (as in the “I can’t wait to forget the whole thing and try to recoup and recover” kind of horrible) to those heartwarming cases that were nothing short of a made-for-TV miracle story line. What makes the difference? I’m sure the list would be long but a good attitude, some reasonable research, realistic expectations and a professional realtor you can count on are high on that list.

Unless you have a very good offer from a buyer who has serious interest in your home because they have always wanted it, hiring a realtor is a sensible starting point. Where do you find that person?

Some people ask that question because they don’t know any realtors. Others ask that question because they know many, including friends and family, and don’t know how to make the choice without hurting the feelings of those important people in their lives. Interview your people, but then, rely on your honest opinion and gut feeling after conducting interviews, calling references and making comparisons.

Selling your home and buying another are serious financial decisions and can’t be taken lightly. Think of it as a business decision, and it might be a bit easier on your nerves. Once you ask good questions and make comparisons, the best choice will usually stand out. There’s no guilt in making the decision that is best for you.

Here are some basic considerations when looking for a realtor who will help you cover all the bases, stay focused and get a good price for your home.

A. Real estate agent search and interviews

You can find a realtor by asking trusted friends, colleagues and family for referrals. Also, ask for a referral on Superiormci.com. Ask about their selling experience with that realtor and include questions on areas of concern. Then, interview the agent and ask direct questions. Some possible questions are:

1. How long have you been in real estate?
2. Are you in real estate sales full time or part time?
3. What percentage of your business comes from referrals?
4. What was your dollar volume in sales in the last two years?
5. What was the price range of homes sold?
6. How many homes have you sold in the last year? In this part of town?
7. What was the average days to a sale?
8. For sale prices, what was the average percentage of your original list price?
9. What do you like best about helping homeowners sell their homes?
10. Do you have a team backing you up with paperwork and marketing?
11. How would you market this home?
12. Do you use a professional photographer?
13. Will you be available during our expected sales cycle or will you be on vacation—or overbooked?
14. What are your strongest skills in real estate sales?
15. How do you communicate with your clients?
16. How do you help your clients get the best price in this market?
17. Ask about the realtor’s fees and contract to make sure you’re comfortable with the terms.

Interview several. You’ll find that a good conversation will help you compare realtors and their capabilities. If you have hesitation or feel it’s not a good fit, it probably isn’t. Experience, dedication, skills and personality all play a part in how well you’ll work together. And you will be spending a lot of time together. Communication will be important. Lack of it will cause stress—and possibly some challenging mistakes.

B. Important qualifications

Look for a realtor who has at least 2 busy years as a full-time realtor or 4 solid years as a part-time realtor. You’ll be a step ahead if you’re able to engage someone who has first-hand knowledge of your neighborhood or section of the city. Expertise in the local market will help you price correctly and highlight local features that are in demand.

The agent should be up to date on market trends and have good marketing and negotiation skills. Don’t be afraid to ask questions or specifically ask how a certain situation would be handled. You can also ask if they have earned awards in the industry which they’ll be happy to discuss.

C. Online reviews 

Check online sources for possible reviews for the agent and the company. You’ll get an idea of what it might be like to work with the realtor from client comments. You can also check the Better Business Bureau and Zillow.com to see how the company/agent is rated and if there are any registered complaints. Ask for at least 5 references for transactions like yours, call the clients and ask candid questions as well as open-ended questions, such as “what did you like most about working with this agent” or “what would have prepared you better for your sale.

D. Realtor’s website

A real estate company website will provide insights into its business philosophy, market territory, agents and client reviews. The individual realtor will generally have a dedicated page or unique website for their own accomplishments and relevant information. These can be good indicators of your level of comfort with that agent and company. Be sure to ask about the individual realtor’s performance, rather than just that of the company. It’s the agent you will be relying on for guidance, clear and timely communication, market knowledge, attention to detail and accuracy.

Second, let’s look at the buying experience.

Buying a home is equally as important as selling. You want to find a location and house that will suit your lifestyle and align with your financial goals. Finding the best realtor for the job will be a key factor in how much you will enjoy the process or how stressful it will be. Again here, it’s well worth the effort and extra time to compare realtors and give yourself an honest opinion on which one will make the search successful.

A. Real estate agent search and interviews

If it’s time for you to buy a house, many of the points in #1 above will apply here as well. Rather than focusing on the selling aspects, you can ask these additional questions:

1. What do you like best about helping clients buy a new home?
2. How many transactions did you complete in the last year? In this part of town?
3. How do you educate first-time home buyers?
4. What is the average number of homes you show your clients before a purchase?
5. What are your strongest skills?
6. How do you help your clients find the home that best meets their criteria?
7. What is your communication style?

Again, interview several agents. If you are selling and buying, be sure to ask questions for both phases to find a realtor who will be a strong advocate for you in both the selling and the buying process.

B. Important qualifications

Your realtor should be well qualified in residential sales. A commercial realtor will be extremely knowledgeable in business properties, but you will want someone working with you who has several years of experience in the residential arena. Look for a real estate agent with great reviews and a personality that works for you.

C. Specific knowledge

Once you’ve narrowed your desired locations down, you can ask specific questions to find a realtor who has a good track record in the neighborhood(s) you are considering. With the agent’s market knowledge, you’ll find a wealth of information to validate your choice of neighborhood and find the best lot/location in the neighborhood. You can also expect current information on taxes or tax increases, possible assessments, growth or zoning changes, or plans for new nearby developments that may impact your purchase and future value of the home.

D. Making the most of showings

When house hunting, you’ll want to create a list of features that must be present if you will spend time looking at the house. It might be an attached, double garage, four bedrooms, three bathrooms, and a large kitchen. Whatever your needs and desires, be sure the realtor understands that your list of items is non-negotiable, so you don’t waste your time looking at homes you would never buy anyway.

Depending on market demand and your motivation and timelines, the realtor should check new listings daily, so you don’t miss an opportunity. Be sure the agent is available to attend showings at the same time and days that you will be available. Ask what the process is for looking at homes and what type of advice the agent is likely to provide.

Buying and selling a home are important decisions for your lifestyle and your finances. There’s a lot to consider, and choosing the right realtor will make all the difference in your real estate experience. Your agent can be a valuable advocate, source of relevant information and your guide to success. Choose carefully to find someone who knows the area, has the experience, and will be there for you!

If you have enjoyed this article and gained some perspective about finding a realtor to help make buying and/or selling a positive experience, please share it with a friend who might also benefit. Thank you and best of luck with your next real estate adventure.


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Lisa Ferrara – 914-755-3942 or Max Ozkural – 845-928-2845 or email max@superiormci.com for additional information. Let us help make your dreams a reality.

 

ctto: https://homeia.com/key-factors-in-choosing-an-experienced-professional-realtor/

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How to Be a Mortgage Broker?

I. Obtaining a License

1. Check job prospects in your intended market. Check listings for open loan originator positions to see if the jobs you want are available and plentiful. Because your license is not transferable from state to state, you’ll want to become licensed in a place where you feel you can find work.

  • There’s little sense in becoming licensed in an area you only intend to work for a short time or one that has no job prospects.

2. Meet the educational requirements. Get your high school diploma or take and pass the GED test, which is the professional equivalent of a high school diploma. Use GED.com to find study materials and a test center near you. The test is only administered in person on certain dates, so study with a test date in mind.

  • A successful loan originator will have a basic understanding of math, and preferably deeper knowledge in accounting and business principles. To gain further knowledge in these areas, consider earning a college degree in a related discipline or taking online classes to sharpen your skills.

3. Take the prelicensure class. Find the prelicensure program in your area by visiting the Nationwide Multistate Licensing System & Registry (NMLS) at https://mortgage.nationwidelicensingsystem.org/. This program is a required, specialized 20-hour class that will educate you about local and federal laws pertaining to being a loan originator as well as any ethics information.

4. Study for the NMLS test. Contact some classmates from your prelicensure class to form a study group to prepare for the licensing test. If you prefer to study alone, set aside some time to review your notes from class and make flashcards about key concepts.

  • Try different study methods to see what works best for you.
  • The NMLS has a test prep handbook available on their website.

5. Take the NMLS test. Register for the NMLS test online and find a test center near you. You may need to pay certain fees depending upon your state. Once you register for the test, you’ll have 180 days to take the test. You’ll need to pass this test in order to be a licensed loan originator.

 

II. Working as a Loan Originator

1. Search for a job at an established brokerage. Search job engines online such as Monster, CareerBuilder, and your local newspaper for entry-level jobs. Established brokerages have good existing connections with clients and lenders, so by working there you can begin helping clients right away.

2. Complete on-the-job training. Most loan originators get trained in the nuances of their work by their employers. Actively participate in any new-employee training programs or workshops to learn as much as you can about being a broker at work. Ask questions of your coworkers and supervisors if you’re unsure how to interface with clients or have questions about loans.

3. Build connections with clients and lenders. Advance your career whenever possible by networking with lenders and other brokerage professionals. You can attend workshops for brokers, ask your boss to coffee for a professional development meeting, attend broker happy hours, go to client meet-and-greets and more.

  • The more connections you make, the larger your network will be when you need to change jobs, ask a professional favor, or negotiate a loan.

4. Take continuing education courses to keep your license current. There are some annual training hours you must complete to keep your broker license up to date in each state. Contact the NMLS to stay current on the latest developments on licensing and lending in your area.

  • Keeping your skills fresh will allow you to provide your clients the most up-to-date service.

Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Lisa Ferrara – 914-755-3942 or Max Ozkural – 845-928-2845 or email us at max@superiormci.com for additional information. Let us help make your dreams a reality.

ctto: https://www.wikihow.com/Be-a-Mortgage-Broker

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Save Up and Prepare to Buy Your First Home

After years of ups and downs in the real estate market, the American Dream of owning your own home has become more and more of a stretch. The game has changed, and for some, the idea no longer carries much appeal. However, for many, the idea of home ownership still has value and is a definite dream, if not a goal. Often, the dilemma is how to save enough money for a down payment while managing your finances, credit score and other financial roadblocks such as student loans or bankruptcy.

To save for the down payment and the dream, one must have a realistic plan, determination and a fair amount of patience. In this article, we’ll discuss some ideas for making a plan and saving enough for the down payment to make that dream an eventual reality. Let’s get started.

A. Detail Your Dream

The first step is to visualize, verbalize and validate your dream. This isn’t about anyone else. It’s about you and your dream. If you have no desire to own a house and you don’t want to be tied down to property ownership, this is not for you—at least not now. However, if you can honestly say that you really wish you could own a house, call it home and make it your own personal paradise, you have a dream, and that’s the beginning of a goal. Now, you need a plan.

What I’ve learned about dreams, goals and plans is that they can be fun to think about, but unless you have a fairy godmother with a magic wand, they won’t materialize unless you do something to make it happen. Depending on the size of your dream, it can take a lot of time and a lot of work, but you can make it happen with reasonable expectations. This applies to home ownership. There’s always a way.

Take your time to really think about your dream. Don’t copy someone else’s dream or home. Write down what you would like in a home.

  • Where is it?
  • What is it like to live in it?
  • How large is it?
  • Do you live there alone or with someone?

The questions are endless. Get a good picture of what would make you happy and what would make your life enjoyable and less stressful. The less stressful part might help you think in terms of affordable, comfortable living rather than dreaming of a rock star’s mansion.

Once you have drawn an accurate, detailed picture of the home, think of the probable cost of that home, in that neighborhood. Then, decide on the down payment you’d like to have to make the purchase. Most people will strive for 20% down which will lower monthly payments. It should also provide a better interest rate and savings on private mortgage insurance. When the time comes, you’ll look for an excellent mortgage lender who will help you decide on the best options. For instance, sometimes a 18% down payment can give you better results than 20%.

The down payment amount will be your minimum savings goal. If you decide to re-think your choice of home to make the numbers more realistic, second versions are often even better than the first. Aim for the home you will be able to comfortably live in and afford. The idea behind this exercise is to get a solid idea of what you are working toward. Now you can look at real estate ads or talk with a realtor to find out what that style of home would cost in today’s market.

B. Make Your Plan

With your dream in hand and a good idea of the purchase cost and down payment, you can now make a plan to get there. Think about your timeline. When do you want to buy the home — in 7 years? by your 35th birthday? etc. To get a better idea of what is practical for you, divide the desired down payment by the number of years. That’s what you would need to save each year — with one major exception.

The exception is to add a cushion. These extra dollars may be needed for closing costs, maintenance, renovations, insurance, taxes, furniture, etc. Once you are determined to make this happen in a specific length of time, you will include money-saving ideas and possibly lifestyle changes that will support your plan. If you have daily reminders, like pictures of your dream home, expense tracking, a goal board, etc., it will be easier to stay on track.

I. Money-saving Lifestyle Changes

People can get creative when they have a goal that is meaningful. They are determined to get there within the set time, and they adjust their lifestyle and habits to ensure results.

Two methods that work are to increase your income and cut back on expenses. Here are some ideas that have worked for others and might work for you.

II. To increase income or create multiple streams of income:

  • When you receive extra money in the form of a raise, bonus or larger commissions, tax returns or gifts, save that money for your down payment.
  • Save wedding, anniversary or birthday money.
  • Work overtime, get a second job or a part-time job.
  • Find out what experience or education you need to be promoted, then make a plan to get it.
  • Ask for a raise by providing documentation of what you are doing to warrant it.
  • Look for a new job with an employer offering higher pay and better benefits.
  • Turn your hobby into a second income.
  • Teach a class through community education.
  • Join forces with a small business owner to conduct a workshop.
  • Open an online Etsy store; sell on eBay; sell your craft items online or at craft shows; sell clothes and accessories on Poshmark.
  • Organize a neighborhood garage sale weekend.
  • For couples, live on one income and save the other income (or as much as possible).

III. To save on expenses:

  • Move back in with parents, or with a sibling or friend, to save on monthly rent.
  • Rent a less expensive apartment so you can save more each month.
  • Find a long-term house sitting job so you can rent your space or give it up entirely.
  • Get an apartment caretaker position with apartment rent included.
  • Cut down on luxuries and name-brand products (understand your wants vs. needs).
  • Buy things on sale or clearance (only when you really need them).
  • Take in a roommate so you spend less on rent and utilities.
  • Save on energy bills by being aware of your usage and adjusting your habits.
  • If you can rent your current space as an Airbnb for occasional weekends, set that up.
  • Save by carpooling, taking a bus, riding your bike or walking.
  • Clip coupons and buy at consignment shops, thrift shops and garage sales.
  • Ask for discounts and reduced rates or switch to another provider for services.
  • Evaluate hair, nail and massage services for ways to cut back.
  • Keep your car rather than buying a new one. If well maintained, they last a long time.
  • Sell your car and buy a less expensive model that is dependable and less costly to maintain.
  • Cut back on your cable package or subscriptions you no longer need or use.
  • Shop for a less expensive phone and pricing plan.
  • Save fitness club expenses by dancing, swimming, playing a sport with friends, walking, and working out at home with the help of exercise programs and cheap equipment.
  • Plant a garden to save on fresh fruit and vegetables.
  • Inventory your groceries and stop buying unhealthy food and snacks.
  • Cook healthy meals at home; eat out less often.
  • Make your entertaining potluck instead of providing everything yourself.
  • Use your special skills to barter for another skill that isn’t your forte.
  • Cut back on your excess spending: vices, travel, entertainment, expensive hobbies.
  • Evaluate and track every purchase. Is it something you really need?

These ideas are a good start, and you’ll find other sources of income or ways to cut expenses once you focus in on it. It can be challenging, yet fun and encouraging, when you see the results!

C. Manage your debts and savings

If you have credit card debt, request a reduction in interest rate, then pay it off as quickly as possible to save on the interest. One good method for paying off credit card debt is to pay off the smallest balance first, then the next highest, and so on, until all are paid off.

Another method is to pay off the card with the highest interest rate first. It will be easier to reach your down payment savings goal once the credit card debt is gone, and it will help when qualifying for your mortgage loan.

Keep up with your regular savings account for those emergencies or larger expenses that come up along the way. It might be unexpected medical or dental bills, new tires for your car, etc. Having money saved for these types of issues will reduce future stress.

This could also be your slush fund that will help you once you move into your new house. There are always additional costs like appliance repair, roofing, landscaping, etc. Some experts recommend having a cushion to cover expenses for 6 months. You can work up to that over time.

In the meantime, keep up with your retirement savings plan. Be sure to take advantage of any matching programs your employer may offer. That is free money on the table; don’t miss out on it. Your financial advisor can advise you on strategies for your 401(k) plan and other retirement options.

D. Keep your eye on the prize

Knowing your goal and destination and having constant reminders will help you stay focused. Continue to save monthly and if something gets in the way, manage that and get back to your plan as quickly as possible.

Have a set amount of money deposited automatically from your paycheck to the down payment savings account each month. Automatic deposits hurt less because you aren’t as aware of the perceived loss and aren’t as tempted to use that money for something else. Be sure to set this up. It will help you achieve steady results. You’ll be even more motivated when you see the savings balance continue to increase.

Where do you keep the money you’re saving for the down payment? If your timeline is relatively short, it would be wise to use a traditional savings account, certificate of deposit or money market. Don’t use a risky program since you want the money to be there when you’re ready. You can ask your financial advisor about this as well. There are other investment options if the waiting time is lengthy.

Finding and buying the right home is an exciting task that takes a lot of planning. Being clear and realistic about your goals and timeline will help you put a plan in place to save for a down payment. There are many ways to cut back on expenses and boost your income and savings. You’ll find even more ways when you are focused on your dream of home ownership. A support team can also keep you on track. Ask for advice from your realtor, mortgage loan officer and financial advisor.

If you have enjoyed this article and gained motivation to set your goals and start saving, please share it with a friend who might also benefit. Thank you!

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How to Buy a House – Beginner’s Guide

For a first-time home buyer, the process of buying a house can seem a bit intimidating. Yes, there are many steps to buying the house you’ll want to call home, and we can break it down into manageable pieces. As with any project, you’ll gain the confidence and desire to learn more, take it one step at a time and achieve your goals.

In this article, we’ll discuss those key steps to confidently buying your first home. We’ll also look at several professionals who can help guide you on the journey, so all the details are handled correctly and professionally. Let’s get started on your next adventure.

1. Know what you want

The best adventures start with some serious dreaming. Imagine where you’d like to go, how you’ll be spending your time and what means the most to you for lifestyle and convenience.

  • Where is the best location?
  • What will life be like in next 5-10 years?
  • What will you be doing?
  • How big is your family?

This is the first step. Dream about all the many factors in your life and how they will affect the decision of a location and style of home. Make a list of what will be important in your life and how the home can add to your level of enjoyment. You’ll want a location that will be convenient to friends, work, school, shopping and activities.

Look at a map and highlight those areas you will be frequenting the most. Then, draw a circle to indicate the area that would provide convenient access to your most-visited places. Check out the commute experience to see if it’s acceptable to you.

Once you narrow down the cities or suburbs that would align with your life’s activity, you can start zeroing in on specific neighborhoods. You’ll have time to dream a little here too, and the idea is to visualize what it would be like to live there and if it feels right to you. You can also check out the neighborhoods during different times of the day to see what’s going on and if it feels comfortable.

While you’re dreaming, throw in a little realism. Save what you can for a down payment, which can be from 3.5% to 20% of the purchase price. It’s also good to have some savings for those unexpected expenses that can come with home ownership. Saving is a good thing, but don’t get too nervous about not having enough. Do your best and, later, you’ll talk with your mortgage loan officer about creating the best plan for financing.

2. Know what you need

Even before you start working with a realtor, you can start thinking about what style of housing will be best for you. If you’ve been renting, you can make a list of what you liked about it and where you’re ready for a change.

Whether you want something quieter, more spacious or more private, make notes about your preferences and must-have features. This list will be valuable in helping you stay on track and find the right home for this stage of your life.

Typical options are a single-family home, condo or townhouse. They each offer something different. If you want privacy, a backyard and a garden, you might opt for a single-family home. Or, if you travel a lot, dislike yard work and cringe at outdoor maintenance projects, you might enjoy the convenience of a condo or town home.

Whether priorities include an attached garage, home office, tennis courts or fenced-in yard, you’ll know which style of home is more likely to fill your needs. Refer often to your list of priorities so you don’t miss out on something that was really important in favor of a feature that seems awesome at the time but might be unnecessary.

If you’ve decided that a single-family home is the best choice for you and your family, eliminate the other choices. If you know what you want and need, you won’t waste time looking at homes that don’t fit your criteria.

3. Mortgage consultant

When buying a home, your guide for all things financial will be your mortgage consultant or mortgage loan officer. This person is a key player on your team and will start working with you in the early planning stages. Since most first-time home buyers need a loan to buy their house, there is work you can do ahead of time to make the financial piece less stressful.

An experienced mortgage broker will help you find the best loan and rates, even at times when you thought that would be difficult to accomplish. They have a full understanding of the various types of loans available, rate structure, how to qualify and how to work around any possible issues. You will check your credit report and credit score and gain tips to improve them if needed. For all of this, it’s best to start as soon as possible.

Be open and honest with this key adviser to find the best solutions for your future financial stability. Discuss your finances and any potential changes in your circumstances in the next few years. This could have a bearing on what level of commitment makes sense for you and how to avoid a possible financial burden. When applying for financing, it’s best to maintain your status quo. Don’t quit your job, don’t make a major purchase or don’t get another credit card. Your loan officer will explain this in more detail.

Getting pre-approval for a loan helps lessen the stress and removes those nagging questions from your mind, so you can focus on finding the right house in the right neighborhood. Another advantage is that, with pre-approval, your offer on a house will be more attractive to the seller than a competitive offer with no financing in place.

Your mortgage broker will help you understand what size loan you can afford (according to the lending institution), and you can decide (within those parameters) how much house you want to afford. There’s a difference. Take time to think about the mortgage payment and how it will impact other areas of your life. You might have other expenses coming up, such as education, travel or a new child. Factor in dollars for hobbies and recreation, and save for unexpected purchases like a new appliance, replacement shingles or major auto repair.

It’s really important to carefully examine how much you can spend on a house and still live the life you want. Working with your lender will help you come up with that number—that comfortable monthly mortgage payment—knowing that it will be with you for a very long time. This is a decision that will seriously affect your finances and happiness meter. Give it plenty of thoughtful consideration.

4. Real estate agent

Your realtor will be your advocate and help you every step of the way in this major purchase. Your job is to clearly understand and express your priorities, so that your real estate agent can guide you and help you find the best house at the best price.

Now’s the time to find that experienced realtor and discuss your priority list, desired mortgage payment and timetable. This transaction will be one of your most important and most expensive. It’s essential that you find a realtor who knows the industry and the local market and can work well with you as a client. If you don’t have a preferred realtor, ask for recommendations or, better yet, submit your request on HOMEiA.com and we will send you contact information and profiles for some of the best real estate agents in your area, at no charge.

Here are some questions you can ask the real estate agent in your interview:

  • How long have you been in business in this local market?
  • How do you work with clients to accommodate their schedule?
  • Do you have vacations or activities planned that will interfere with our search and transaction?
  • Do you have a team backing you up?
  • What is your communication style?
  • How many clients do you work with at one time?
  • How many clients have you worked with in the last 12 months?
  • Would it be okay with you if I contact a few of your recent clients for reference?

When you interview an agent, you’ll know if they are more interested in talking or listening. Look for an agent who will listen to your priorities and help you get the job done. During a conversation, you can quickly tell if you will work well together. It’s a long process, and you need someone you can count on, communicate with and trust. Choose the best person for the job, not the one you’ve known longest or the one that is a friend of a distant relative.

Once you’ve made that connection, you’ll work with your realtor to check neighborhoods in your desired area. Review your financial priorities, so that you can be clear with the realtor about your price range. It’s easy to consider moving up in price when you see a home with attractive features. However, sticking to your budget commitment and your list of must-have features will eventually get you a house that works for your lifestyle and your finances.

Be realistic when you look at houses. Look for the necessary features to make sure they are what you had in mind. Assess the condition of the house and possible expenditures needed to make it a home. Imagine what it would be like to actually live there. Listen to your intuition and have a little patience. With your realtor’s help, you’ll find a perfectly wonderful neighborhood and house in your price range.

When you find the home that meets your needs and brings a smile to your face, you will make an offer. Your realtor will help you make a fair and reasonable offer and will also handle any negotiations needed. Once the offer is approved, you’ll provide a deposit of earnest money. This amount varies per transaction and is placed in an escrow account until the deal is done.

The lender will also arrange for an appraisal of the property to make sure you’re not paying more than the actual value. The appraiser will visit the house, verify information, make comparisons with other properties and substantiate a market value.

At this point, there is a major sigh of relief because all your hard work has paid off in finding a home you would love to own. You’re almost there and have just a few more details to complete.

5. Home inspector

Once you’ve made your offer, a home inspection is critical and requires much more than a quick look. This is your opportunity to find out the real facts about the house—those that will affect your satisfaction with the house and your bank account.

professional home inspector is another key player on your team. It’s not a good idea to rely on opinions of well-meaning relatives or friends. If you don’t know a well-respected home inspector, ask for referrals or check online for favorable testimonials and reviews. It is well worth the fee to understand the condition of the home you’re buying.

A home inspector knows what to look for and will spend several hours checking out the condition of the home and taking photos. You should receive an extensive opinion in writing, highlighting important factors and possible expenditures or even problems looming on the horizon. This lengthy document provides facts, photos and professional opinion if you need to re-negotiate. It will also serve as a future reference when considering equipment or appliance replacement or renovation projects.

6. Insurance agent

Unexpected things do happen, and your insurance agent will talk with you about proper coverage for your new home. There’s more to it than with renter’s insurance, and a knowledgeable insurance agent will look out for your best interests. You are making a substantial investment in this property and need the proper protection for you and your family.

As with other agents, you can ask friends and colleagues for a good referral and check online for reviews. Your agent should understand the potential natural risks in your area and proper coverage for your home and belongings.

If you are buying a condo or town home, there are special considerations to be certain you are covered appropriately for the association insurance deductibles. For this, be sure to choose an agent who is educated and experienced in policies for associations.

The agent will ask a lot of questions about the house and your possessions to make sure you are covered sufficiently in case of a loss. It’s advantageous to meet personally with the agent, so you know exactly who you are working with and how to reach them. A good business relationship is much more reassuring than only a 1-800 number.

7. Title company

Sealing the deal on a new house can induce that enthusiastic feeling of anticipation and adventure. You’ve thought it all through, made a great choice, received financing, had the home inspected and now your realtor and closer will guide you through the final details.

By this time, the seller has cleaned and vacated the property, and you have walked through the house to make a visual inspection confirming that it is in the expected condition and all agreed-upon components are still at the house.

The mysterious “closing” that people refer to is the meeting of all parties to close the deal. This usually occurs at the title company’s office. The title company has researched the title to make sure you will have clear title to the property. This means that no other person or organization has a lien or claim against it.

The closer explains all the closing costs and manages the documentation, signatures and payment process. Be prepared to sign a lot of papers! If you don’t know a closer, you can ask for recommendations from your realtor or mortgage broker. Or, look online for good reviews and rankings. Once all documents are signed and payment is processed, the seller turns over keys to the new owner—you—and the celebration begins!

8. Celebrate

Now that you’re in your new home and it’s properly insured, say thank you to all those who helped you along the way. Maybe you’ll even give them glowing recommendations on their websites, Google Reviews or Superiormci.com. They’ll appreciate it! And, as you would for any joyous occasion, enjoy it to the fullest and take lots of photos for lifelong memories!

If you enjoyed this article and are ready to embark on your house-hunting journey, please share it with a friend who might also have interest. Thank you!


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Lisa Ferrara – 914-755-3942 or Max Ozkural – 845-928-2845 or email lisa@superiormci.com for additional information. Let us help make your dreams a reality.

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What to Consider in Buying a House?

When buying a house, everyone has priorities. The buying process is complex and takes time, and it’s easy to get off track. Having written priorities is a helpful way to guide you through the process without forgetting some of the features that are important to you and your family. Your realtor will also want to understand your prioritized list. Understanding which features mean the most will help eliminate houses that won’t work for you and compare the homes that will.

In this article, we’ll discuss about things to consider when buying a new house. Each will rank differently in importance for individual buyers, but all points are worth examining. If you haven’t already thought seriously about these factors, now’s your chance. And, if you’re buying the home with your special someone, talk it over to make sure you agree on the importance of each feature. Let’s check it out.

1. Location of the house

2. The size of the lot

3. Number of bedrooms

4. Number of bathrooms

5. Kitchen layout

6. The age, style and condition of home appliances

7. Age of the house

8. Purchase price

9. Seller’s incentive to sell

10. Maintenance mode

Here is 10 Important Things to Consider When Buying a House:

1. Location of the house 

Buyers want to find a location that allows easy access to the places they frequent the most (work, school, shopping, recreation, place of worship, friends and family). Look for easy access to the main roads and check traffic flow. Checking this out before a purchase can help save you from hassles getting out of the neighborhood and onto the main thoroughfare or from an unreasonably long commute.

The location of the home within the neighborhood is also important to many people. Some people prefer a lot near the main entry, while others like to be away from traffic and further into the development. If there is a park, pool or recreation area, some owners would choose the closest available lot. Cul-de-sacs are favored by some, and some people like living on the main boulevard. Talk about your preferences, and ask your realtor if certain lot locations bring a higher purchase price.

 

2. The size of the lot

Many people give little thought to the size of the lot the house sits on. Within a neighborhood, the lot sizes might be fairly similar. Once you’re going to showings and looking at what’s available, you’ll soon see if you have a clear preference of large or small, corner or interior. Some lots are pie-shaped; some are rectangular, and some are irregular in shape. Depending on the level of privacy, how you will use the lawn, and the length of the driveway, this might matter to you.

If there seems to be a question about where one lot ends, and another begins, check the lot description and dimensions with your realtor. If you find a house that includes two lots, think about the possibilities. If the second lot is buildable, you could possibly add another building (extra garage, workshop, etc.) or you might split the property, build a second home and sell it, or sell the lot as is.

3. Number of bedrooms

Each family will have an idea of how many bedrooms they would like. Most people will want at least two, and if there are children, the number increases. Some families like their kids to share bedrooms, while others like separate bedrooms for each to accommodate different bedtimes and study habits. If you have regular visitors for any length of time, it’s nice to have a bedroom that is designated as a guest room.

An extra bedroom often doubles as an office, den, kids’ playroom, or exercise room. Many hobbies can require working space and storage for supplies, and an extra bedroom serves this purpose well. Think carefully about your lifestyle and what will enhance it.

4. Number of bathrooms

Decide ahead of time how many bathrooms you prefer. Older homes might have only one bathroom, and buyers will often look for ways to add another. If there is only one bathroom, be sure you can live with that arrangement if remodeling isn’t feasible. Newer homes generally have two or more bathrooms, although some bathrooms might not have a tub or shower.

The size and style of bathroom is important as well. Do you want a bathtub or shower or both? Jacuzzi tubs are popular for relaxing, and some people prefer a shower stall for easy access. If you need a handicap accessible bathroom, you can look for that, or a sizable bath that could be remodeled. Think about the people (including guests) who will be using the bathrooms, and you’ll get a clearer idea of the size and style of bathroom that will work best for your family.

5. Kitchen layout

The kitchen truly seems to be the heart of the home. It is where great food is created for the family and friends who gather there. When guests arrive, they usually end up hanging out in the kitchen, and because it’s a center of activity and entertainment, the size and layout are important. Be clear on whether you need a large gourmet kitchen with lots of counter space, sinks and storage or if a typical kitchen will suffice.

Each family has different ideas about cooking. There’s the person who said the only reason there was a kitchen is because it came with the house! In that case, any kitchen would do. Then, there’s the vegetarian who cooks daily and uses a lot of fresh ingredients, or the quick cook who microwaves all the meals. Some people entertain a lot or have large families to feed. Whatever style of cooking you are into, the kitchen will require a close look.

If you have one person doing all the cooking for only two people, a modest kitchen might be adequate. Parents who are teaching children to cook healthy meals might like more space. Whatever your preferences in the kitchen, jot them down and discuss them with your realtor so you’re looking for the best option for your family.

6. The age, style and condition of home appliances

Appliances are expensive to replace. Take the time to estimate the age and condition of each. You may also have some strong preferences. For instance, you might enjoy cooking on a gas stove and dislike using an electric range. For some people, these types of differences can be deal breakers. If they are for you, let your realtor know.

A typical kitchen has many appliances. If there are any you can’t do without, check to see that the home provides that convenience or that there is room to add it later. Some are easier to add than others (microwave compared to a dishwasher if space is limited). Check the washer, dryer, water heater and water softener as well as the furnace or boiler, air conditioner and humidifier. If there are fireplaces or wood-stoves, it’s good to know if they have been maintained properly.

You can make an educated guess at the age of the appliances, and your home inspector can report on it later. When looking at a home, don’t assume that all appliances will stay with the house. Check the property listing to see which are part of the purchase and which are not. If most of the appliances and mechanical systems seem dated, you need to be aware of replacement costs.

7. Age of the house

If you are only interested in new construction, this is irrelevant. However, if you are willing to look at all houses in your price range that meet your basic requirements, you may see homes from several decades. Older homes can have a character that appeals, and they may also need more repairs and upgrades. Make sure you have the time, inclination and budget to enjoy managing these projects.

Building codes change over the years, and it would be good to have a basic understanding of some of the more impactful differences when looking at homes built under a different set of rules. Your realtor might have this knowledge or would know where to find the answers. If you’re looking for a certain vintage and style, you might already be aware of how homes were constructed at that time.

8. Purchase price

Before even looking, you should determine your price range and get pre-approved for a loan. Buying a single-family home is a huge investment, and there’s always more to it than just the purchase price. Think about how all costs will affect your finances and stick to your decision on price range and mortgage payment.

 

9. Seller’s incentive to sell

When looking for homes, you will find that some sellers are more motivated than others. Some people will place their home on the market but don’t really care if it sells or not. If not, they are happy to continue living there and will try again later. With this type of sale, there is not usually much wiggle room on the price.

There are times, however, when a seller is highly motivated to sell. Examples might be: an estate sale, a job relocation and need to move out of state, or someone paying two mortgages and wanting to sell and get back to only one payment. Your realtor will help you determine how motivated the seller might be and how to draft the offer and counteroffers to get the best price.

10. Maintenance mode

Unless you’re buying new construction, there is generally quite a list of potential maintenance items. When looking at the house, you are probably making a written or mental list of all the things that could use a little help. They might be repairs, large or small, replacements or additions that would make the house a home.

Some items might be mainly cosmetic, and others might take a lot of time and money to complete. Be sure you write them down and add it up. Is it a reasonable list or would it disrupt your family life or present a financial crunch?

Staying true to your priorities will be important in finding the right home for you and your family. Location, lot size, bedrooms, bathrooms and kitchen are as important to your enjoyment of the home as they will be for the resale. Understanding the age and condition of the home, appliances and components will help you determine how much work (and money) will be needed to maintain it over time. Once you know this, you can look at possible price offers that could make it a worthwhile investment for you.

You’ll put in a lot of time and effort while looking for the perfect (or close) next home for your family. Be sure to tap into the knowledge and support of your realtor, mortgage professional, and home inspector to guide you along the way. If you have enjoyed this article and gained motivation in your search for your next family-friendly home, please share it with a friend who might also benefit. Thank you!


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Superior Mortgage Co., Inc. at 845-883-8200 or email sales@superiormci.com for additional information. Let us help make your dreams a reality.

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How COVID-19 Has Affected Real Estate And The Housing Market In The United States?

Read more on our COVID-19 Resource Guide.

Spring is typically considered the best time of year to buy or sell a home, but this year, real estate transactions are slowing to a halt. As the number of COVID-19 cases increases exponentially each day, stocks have dropped, businesses have closed, unemployment has risen, and millions of Americans have been mandated to stay at home. With the uncertainty surrounding our current situation, it’s no surprise that the housing market has also taken a substantial blow.

If you were planning to buy or sell a home now and are unsure of where you stand, you’re not alone. As federal and local governments continue to enact new rules for our new reality, it’s hard to know what to expect. To help you make sense of what COVID-19 means for the housing market, we’ve gathered the latest information on home purchase trends, so you can get a better handle on where you and the real estate industry are headed.

How State Mandates Are Impacting The Real Estate Industry

Real estate transactions typically require many in-person interactions from open houses and showings to appraisals, inspection and closings. As more states enact shelter-in-place orders, there has been an extreme amount of confusion surrounding the real estate industry. While the rising number of COVID-19 cases has created plenty of uncertainty in its own right, the fact that individual states have been left with the task of setting new policies has aggravated the situation.

State officials have responded with varying levels of restrictive measures. The lack of alignment on business closures has left individual cities and states scrambling to determine what qualifies as an essential business. While supermarkets, pharmacies, banks, transportation and healthcare facilities clearly fall under the category of essential, there is little consensus as to whether or not real estate services should qualify.

In New York and California, real estate agents have been told that they must conduct business from their homes, which has led to a vast increase in virtual showings. All open houses, in-person showings and pitches have been explicitly banned. However, not all states are following suit. In Connecticut, Indiana, Illinois, Ohio, Wisconsin and Hawaii, real estate has been deemed an essential business, allowing all rental and sales transactions to proceed. In states like Massachusetts, Michigan and Louisiana, the industry’s status is still unclear.

“As coronavirus news continues to dominate the headlines and everyone looks to take social distancing seriously, buying and selling a home the traditional way with guided tours and handshakes is now out of the question,” says Corey Walters, CEO of Homeworthy, a digital home-selling platform based in the Pacific Northwest. “Like so many industries across the country and world right now, the real estate market is sort of waiting with bated breath as rules and regulations continue to unfold.”

How COVID-19 Has Affected The Housing Market

Recently, the National Association of REALTORS® conducted a series of flash surveys to gain better insight into how COVID-19 has been affecting consumer behavior in the housing market. Having now conducted two surveys, the first on March 9 and the second on March 16, NAR was able to compare the results to determine how the industry’s pulse has changed over the course of a week. Their findings, as well as observations made about local housing markets, paint a clearer picture of how these unprecedented circumstances have affected real estate across the nation.

How COVID-19 Has Affected Real Estate Buyers

Between the NAR’s two studies, buyer interest dropped significantly. On March 9, 78% of REALTORS® reported there had been no change in buyer behavior. Only 16% of those surveyed noticed a decrease in buyers’ interest. However, by March 16, as schools began to close and social distancing guidelines ramped up, nearly half of agents claimed that buyers had become less inclined to purchase residential properties.

A similar trajectory was seen in New York City, which has not only the largest real estate market in the country but now also 10 times more COVID-19 cases than any other state. Open house traffic steadily declined before such gatherings were banned altogether. According to Fritz Frigan, executive director of sales and leasing for Halstead Real Estate in New York City, attendance at open houses across the Big Apple’s five boroughs dropped 42% between March 8and March 15, and a whopping 58% between February 23 (before the news had hit home) and March 15 (the day NYC public school closures were announced).

“When the lockdown was announced – it went into effect on this past Sunday – some brokers still scheduled open houses, but the number dropped dramatically,” says Frigan, whose Open House Index tracks weekly attendance throughout the city. “I counted approximately less than 800 open houses scheduled for that weekend. To give you a comparison, on a normal weekend, without the virus, we have between 5,500 and 6,000 open houses in New York City.”

Although the survey Frigan sent out this past Sunday only received 10 responses, six reported zero traffic, and four had only two people show up. As for the reason behind the dramatic drop in attendance, Frigan believes that the primary driver is “fear of infection, and not just from the buyers but also from the brokers and from the owners, who didn’t want strangers coming into their homes who may be infected.”

This sentiment is echoed by real estate professionals across the nation. “The housing market in each state we operate has clearly been impacted by COVID-19. However, we believe the impact to date is negligible compared to the upcoming months,” says Glenn S. Phillips, CEO and lead economic analyst for Lake Homes Realty, a 29-state real estate brokerage firm. “In the most recent few weeks, COVID-19 fears were minimized by most. At the same time, many were excited about the drop in interest rates. This leads these two factors to offset each other to some extent. Moving forward, the housing market will be far more influenced by COVID-19 than interest rates.”

Phillips’ insights are supported by NAR’s research into buyers’ feelings about the changing climate. Although lower mortgage rates initially increased buyers’ enthusiasm, according to 37% of REALTORS®, that enthusiasm began to wane within the 7-day period as concerns over the stock market correction increased. On March 16, the number of agents who reported that their buyers were motivated by lower interest rates fell by 9% as those who claimed that the stock market had caused their buyers to lose confidence increased by 15%.

How COVID-19 Has Affected Real Estate Sellers

As cases of COVID-19 increased across the country, sellers’ morale was also shaken. NAR’s studies show a clear decline in sellers’ confidence as news about the virus intensified. Although 81% of REALTORS®initially reported that sellers had kept their homes on the market, that number dropped by 20% on March 16. And 16% of agents noted that sellers had decided to pull their homes from the market, marking a 13% increase from March 9.

Considering how quickly the situation has escalated, the NAR’s figures fall short in elucidating the full effect COVID-19 has had on home sellers and the housing inventory. Through Frigan’s more timely NYC data, we can see a far greater impact.

According to Frigan, 1,778 properties’ status changed to either permanently or temporarily off the market in January. In February, as dozens of cases began popping up around the country, 3,047 properties were removed. As of March 25, 4,454 homes were taken off the market this month alone. “So, the number of properties taken off the market literally tripled in March when the disease started spreading in New York City,” adds Frigan.

For sellers who have kept their homes on the market, their behavior has become increasingly cautious. Of the REALTORS® included in NAR’s March 16 survey, approximately 60% said that sellers had taken extra precautions when showing their homes. These precautions include canceling open houses, restricting the number of showings and requiring buyers to remove their shoes and wash their hands or use hand sanitizer upon entrance.

Gina Mattern, a real estate agent and advisor for Willis Allen Real Estate in Del Mar, California, says that the last time she showed a property, “The house was vacant, which made the risk for all much lower. I opened the house (wearing gloves) prior to the buyers’ arrival. The buyers arrived 10 minutes later and let themselves in for a self-guided tour. The buyers locked the door upon departure. We did not have any contact with each other. I remained in my car until their departure.” Despite her careful measures, Mattern adds that she would not show a home that was currently occupied, given the increased risks involved.

However, contagions are not sellers’ only concern. Buyers tend to distrust homes that linger on the market, and during these times, the potential for listings to be considered stale is high. To help support sellers whose homes are currently being listed, the Real Estate Board of New York has decided to eliminate the “days on market” calculation from their listings. This move, which will likely be followed in other areas, is intended to assuage sellers’ fears that their homes will receive less attention from buyers once the market recovers.

What To Expect From The Future Housing Market

Although there are some closings currently taking place throughout the country, the number of transactions has been greatly diminished by both the virus and orders to stay at home. Appraisers and inspectors have struggled to gain access to homes, and government recording offices have closed their doors, making crucial aspects of the closing process challenging to complete.

Amidst the growing concerns over COVID-19, the housing market has clearly come to an impasse. The spring selling season will not reflect the vitality it has in previous years. Most sellers will choose to hold off before putting their homes on the market, but those who cannot wait will list now and show their homes virtually. While the extreme shift in the industry seems alarming, the future may not be as bleak as some expect.

Frigan says that if there’s a dramatic drop in the number of COVID-19 cases and the stay-at-home order is lifted by mid-June or mid-July, “I firmly believe there will be a really strong push for new properties hitting the market and buyers will come in droves because everyone is now hunkered down and cannot do business. I think this is going to have an incredible effect on the strength of the market once the order is lifted.”

To learn about how the virus is affecting the mortgage industry and what you can do to protect your financial well-being, visit our COVID-19 Resource Guide.


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Superior Mortgage Co., Inc. at 845-883-8200 or email sales@superiormci.com for additional information. Let us help make your dreams a reality.

ctto: https://www.quickenloans.com/learn/coronavirus-affecting-housing-market

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HOW TO ASSUME A MORTGAGE?

HOW TO ASSUME A MORTGAGE?

Assuming a mortgage is a process by which you take over the payments on an existing loan rather than secure your own financing to purchase the house. Most lenders include a due-on-sale clause that prohibits a buyer from assuming a mortgage by making the note payable upon the transition of ownership of the mortgaged property. However, some loans, like VA, USDA, and FHA loans, are inherently assumable. If you’re thinking about taking over someone else’s payment, make sure you know how to assume a mortgage before you sign any paperwork or hand over any funds. Assuming a mortgage is not limited to “underwater” mortgages.

I. QUALIFYING TO ASSUME THE MORTGAGE

1. Learn whether you are permitted to assume the loan. Certain types of government-backed loans are much easier to assume than conventional loans. In most cases, you must meet the qualifications of the government agency in order to assume the loan.[1]

  • Conventional loans usually prohibit assumptions;[2] however, a bank may be willing to allow you to assume a mortgage if the current owner is in a financial bind that jeopardizes the payback of the note.
  • Additionally, if the buyer has the potential to add a large down payment to the current loan, the lender may be more likely to allow the assumption of the loan.
  • Always talk with the lender, a real estate professional, and a lawyer to ensure you can assume the loan.

2. Decide whether assumption of the mortgage is a good idea. There are certain situations where you may want to assume a mortgage. For example, when you assume a mortgage you keep the interest rate that the original owner has on the loan. If interest rates have risen, then assumption may make financial sense.

  • People also assume mortgages when awarded a property in divorce or as a gift in a will.
  • An assumption can also save you time. Typically, it only takes 30 days to approve a mortgage assumption.[3]

3. Find out how much it costs. You will have to pay the owner for the equity that he already has in the property. For example, if the owner has $140,000 remaining on a mortgage but the selling price is $200,000, then you need to come up with a down payment of $60,000 to cover the equity that has built up in the house.[4]

  • Furthermore, the lending company may expect you to put a substantial amount of money down in order to qualify you for the assumption.
  • Assumption fees also apply, depending on where the property is located. Average assumption fees can range from $562-1062 or more.[5]
  • Also understand that assuming the mortgage does not necessarily mean that you will be able to have identical terms as the current mortgage terms. Lenders often have the ability to alter loan terms if the loan is assumed, which could negate any benefit from assumption. Be sure that you understand precisely the terms of the mortgage before assuming it.

4. Check whether you can obtain funds. If you need to make a down payment, then you should figure out how to come up with the money. If you do not have the necessary amount in cash, then check if you can borrow the money from a bank or credit union.

  • You should approach a mortgage assumption in a similar fashion as buying a house with traditional financing.

II. ASSUMING THE MORTGAGE

1. Request an application from the lender. In order to assume a mortgage, you must qualify with the current lender.[6] Without the lender’s consent, you cannot assume the mortgage.

  • To start the process of assuming the loan, request the assumption package from the current lender. The seller should let you know who this is.

2. Gather financial information. Along with your application, you will have to submit proof of your financial condition. For example, you may need to provide evidence of pay stubs, as well as W-2 or other tax forms, some going back several years. You will also need information on the year and make of any vehicles you own, as well as the value of retirement accounts, life insurance, and other real estate.[7]

  • You may also need to get the current property tax statement for the property.[8]
  • Employment references will probably be requested. Find the address and the telephone number for any employer you have worked for during the past several years.
  • The self-employed will need personal and business tax forms going back at least 2 years.

3. Complete the application. You will have to fill out many forms: an application with the lender, a real estate agent agreement, paperwork with a title company, and other necessary forms. To see an example of an application packet to assume a mortgage from Bank of America, click here.

  • You will also have to complete an authorization to release information. This authorization allows the bank to call employers and others to double-check your financial information. This form should be in the packet as well.
  • You should keep a completed copy of the forms in a safe place, such as a home safe. Also keep copies of any financial information you submitted along with the completed form.

4. Answer follow-up questions and complete forms. After you submit an application, your credit scores will be pulled. You will also be sent forms mandated by the Real Estate Settlement Procedures Act. You must fill them out and mail them back.

  • Your completed application will then be forwarded to a Senior Loan Processor, who may call with follow-up questions.[9]
  • If you have questions, you should always contact your Senior Loan Processor.

5. Sign an assumption agreement. Typically, this agreement is between the seller and the buyer. Depending on the loan, the bank or a government agency (such as a governmental housing authority) may have to sign the agreement as well.

  • You can also sign this agreement before applying with the lender. In this situation, the agreement should state that it is contingent on the buyer being approved by the lender to assume the mortgage.[10]
  • Always be sure to sign a release from liability for the seller. If this form is not completed, then the seller will still be liable on the mortgage should the new mortgage holder not make payments. A real estate agent should also have this form.

6. Attend the closing. Anytime a house sells, whether you assume the note or not, you should have a closing process to sign all of the documents. However, with an assumption, the closing costs will be significantly less than with a conventional mortgage.


Superior Mortgage Co., Inc. specializes in residential and commercial loans, providing a wide range of products and services to give you the best options for your mortgage loan. Regardless of whether your credit score and DTI ratios need improving, we want to help. We will help you make the smartest choice because our experience and skills are second to none. Call Superior Mortgage Co., Inc. at 845-883-8200 or email sales@superiormci.com for additional information. Let us help make your dreams a reality. 

ctto: https://www.wikihow.com/Assume-a-Mortgage

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