Real Estate Made Simple

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Don’t Make these Mistakes as a New Homeowner

Moving into a new home is an exciting time, but it can also be stressful. There are so many things to do and decisions to make! But if you want your new house to feel like a true home, there are some mistakes that you should avoid. We’ve compiled this list of four mistakes that people often make when they’re first starting as homeowners:

Not getting to know the neighborhood

One of the best things about moving into a new home is getting to know your neighbors. But this can only happen if you take the time to get to know your neighborhood. Spend some time walking around and talking to people. Find out what kind of activities going on in the area, and see if there’s a neighborhood watch program or community garden that you can get involved in. The more connected you are to your neighborhood, the more comfortable you’ll feel living there.

Not decorating enough

It’s easy to want to just move all of your furniture in and call it a day, but unless you’re good at arranging furniture, your house is going to look pretty boring. Take the time to decorate your home in a way that reflects your personality. Hang pictures on the walls, put up some shelves, and buy some plants. Not only will it make your house more comfortable to live in, but it’ll also make it feel like home.

Not taking care of the basics

It’s easy to get caught up in the excitement of moving into a new home and forget about all of the basic upkeep that needs to be done. But if you want your home to last, you need to take care of the basics like painting, caulking, and repairing broken appliances. You don’t have to do all of this yourself, but it’s important to have a plan in place for who is going to do it and when.

Not getting organized

One of the best things about having your place is being able to finally organize all of your stuff the way you want. But this can only happen if you take the time to get organized right from the start. Create a system for everything and stick to it. This will make finding things a lot easier, and it’ll also help keep your home clean and clutter-free.

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Why Mortgage Reserves Matter

Mortgage reserves, also known as cash reserves, are finances available to lenders after paying their deposit and closing their home acquisition. The cash should be in liquid or able to be converted into cash quickly. The purpose of mortgage reserves is to secure several months of mortgage installments in case of any financial constraint. It is generally determined by the number of monthly deposits one can make based on the saved cash. The monthly installments should comprise the principal, interest, property taxes, and mortgage or homeowners’ policy. It also involves any payments for homeowners available, secondary, and leasehold disbursements.

Generally, purchasing a home requires a lot of money. Therefore, apart from saving for your deposit and closing price, you must keep your mortgage reserves for various months. The mortgage lenders must ascertain that one can afford the monthly installments after any financial challenges. Cash reserves also help individuals to become satisfied with their choice of purchasing a home. There are also various costs associated with buying a house. These include maintenance payments and getting extra furniture.

Regardless of the lender’s requirements, the homebuyers should save not less than 3 to 6 months of their mortgage and home payments. As a result, the housing expenditure should not be more than a quarter of the monthly income. One should save proper reserves in bank accounts or from profitable businesses. Lack of savings may lead to serious debt. However, staying without investing is also not a good idea.

Acceptable Assets for a Lender’s Reserve Requirements

In cases where reserves are needed, one has to provide evidence of the owned assets. An account with stocks and bonds, for example, is an easy way of transferring the required cash. The other assets comprise of:

  • Retirement accounts such as Roth and IRAs
  • Regular earnings
  • Trust and saving accounts with a bank or credit union
  • Committed finances in employee 401k accounts
  • Vested amount from life insurance
  • Court settlements, lottery wins, and disaster relief funds
  • Money market accounts, CDS, and short term treasury bills

It is advisable to budget for mortgage reserves for anyone planning to own a home. Using a mortgage calculator helps to determine the amount that someone needs to save. One should also seek advice from mortgage lenders to make an informed decision and plan accordingly.

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What to Know About Buying a Foreclosed Home

As a prospective home buyer, you may wish to purchase a foreclosed home due to various reasons. You may want to shop on a budget or extend your real estate business portfolio. Regardless, you have to prepare for the things that lie ahead when buying such a home.

Fortunately, this guide looks the things to know about buying a foreclosed home:

Learn About the Foreclosure Categories

Foreclosures fall into two main categories, which are the judicial and non-judicial types. The judicial type occurs when a lending service files a court case against the borrower. The court will then rule in favor of the lending service and release the property for auction.

The non-judicial type occurs based on a specific property sale clause for failing to make up for payments. It does not require a court order.

Use Legitimate Platforms to Source Foreclosures

While you may have many options for finding suitable foreclosure deals, some are not legitimate. The list of options you can use include:

  • Use public records that are available in your state or county’s property database. However, this process requires lots of time and research as the records are immense.
  • Consult with a real estate agency or service. A reputable service often has insight into the best foreclosure properties you can buy.
  • A local bank website is also an excellent platform. Some banks facilitate foreclosures and then list the properties on their sites for auction.
  • You can use online platforms such as Auction.com, which lists countless properties across the country.

Your Finances and Preparedness

Before buying a foreclosed home, ensure you have the financial capability and preparedness to handle such a process. Details such as your Social Security Number (SSN), tax returns, and credit scores should be excellent.

Additionally, you also have to determine whether you have adequate funds to buy and develop the property. Ensuring that all these details are intact will smoothen the process of owning a foreclosed home.

Buying a foreclosed home seems like a tough call, but it’s also a lucrative venture when you have the correct information. Additionally, you also have to prepare well for buying such property, including details such as your credit score.

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Closing Costs When Buying a Home

Many individuals save for a down payment for their future home, but they might not be aware of the fact that this isn’t the only money that they need to have when they close on it. Most homeowners have to pay closing costs as well. Here’s a little bit more information about closing costs and some ways to lessen them.

What’s Included

Closing costs tend to be about 4% of the purchase price of a home. This amount can vary slightly. Closing costs tend to include things like origination fees associated with the loan, title insurance, attorney fees, and closing fees. For many sellers, the amount they have to pay in closing costs can equate to thousands of dollars. Buyers will receive an itemized list of their closing costs before their actual closing date. This will allow them to see how much each item is that they have to pay for. Fortunately, they may be able to get some help paying for their closing costs.

Getting Assistance

There are a few different ways that buyers can lessen the amount of money that they have to bring to the table during their closing. In some instances, sellers may actually pay the closing costs themselves. This is common for sellers whose house has been for sale for a long time. There also are a variety of grants available that may be used to pay for closing costs if certain requirements are met. Buyers might also be able to roll their closing costs into the loan of the home. While they still will have to pay all of the closing costs, they may end up being more affordable for those that are limited on cash as they can pay them over the life of the loan.

Buying a home can come with a lot of expenses before the buyer even gets the keys to the house. Fortunately, there are some ways that buyers can get assistance paying for closing costs. It’s best for buyers to be upfront with their realtor and mortgage broker about how much they can afford to pay upfront. They can use this information to help the buyer find a few different ways to make closing costs a little more affordable for them.

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3 Home Renovations for a Faster Sale

When you know you’ll be selling your home a few months or years down the road, it’s a great idea to use this knowledge and make renovations now before the chaos of selling takes over your life. Certain renovations increase the value of your home more than others. If you want your home to sell shortly after being listed, consider prioritizing these upgrades over others.

New High-Quality Flooring

Old, outdated flooring will quickly turn off potential buyers. Carpet that’s peeling away or trodden down by foot traffic over the years makes your home look low value. Installing new floors is an instant way to completely transform the look of a home. Wood floors are a great choice: they look polished and have an estimated ROI of 70 to 80 percent. Another great option, particularly if you live where humidity levels are high, is ceramic tile. It’s pricier than wood but still offers an estimated ROI of 70 percent.

A State of the Art Kitchen

It’s common knowledge that the two most sought-after remodels involve the kitchen and master bathroom. The kitchen is what really sells a home however, and an overhaul can really shorten the length of time a home sits on the market. When remodeling the kitchen, try to keep things neutral. Granite countertops are still popular, as are tasteful backsplashes and white cabinets. Upgraded appliances bring the entire package together.

A Yard Built For Entertaining

A lifestyle that involves a lot of time spent outdoors is currently very sought after. Some people want to grow their own food. Others want more of an outdoor living room, a cozy spot where they can sit in comfort and entertain guests. Make sure your landscaping is on point and has a polished look to it if you want your home to stand out as a luxury home. Firepits, shady areas in which to sit, pools, and hot tubs are all great additions with high return rates.

These are some of the most lucrative home improvement ideas that will help you sell your home fast. It’s important to keep in mind that even with all the renovations in the world, your home still might not sell. Everything depends on your local real estate market. Still, these changes should make a home more likely to sell, anywhere in the country.

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