What Buyers Should Know About Qualifying for a Mortgage

real estate mortgage

real estate mortgage

The prospect of buying a new home is exciting, but what happens when you aren’t qualified for as much as you hoped? In a post pertaining to new rules about mortgage qualification, Dean Graziosi discusses how the qualified residential rule affects buyers.

 

According to an article in the Washington Post, “Regulators initially defined qualified residential mortgages as those with at least a 20 percent down payment and no more than a 36 percent debt-to-income ratio.” This can make buying a home a little scary, especially for someone who has never done it before.

 

When you begin your home hunt, you need to find out how much you will most likely be able to spend on a home. This is what is known as pre-qualification. This involves talking to a mortgage professional who can then run your credit and provide you with an amount. This is what you will need to base your property searches on. For example, if you are pre-qualified for $150,000, it would not work in your favor to look at homes selling for over $300,000 since the odds of you talking the home seller down to half the asking price would be impossible. Knowing what you will most likely be able to spend will help narrow down the homes you actually view and bid on.

 

Also when beginning your search for a new home, you’ll want to make sure your credit is in good standing. This is what will help you become qualified for a higher amount, along with your sallary and other stipulations. The better your credit score, the higher the pre-qualification amount. Less debt will also give you more money to put on a down payment and monthly house payments.

 

Dean Graziosi points out that risk sharing is addressed in the new qualified residential mortgage rules. This new change could potentially make lenders responsible for at least a part of risky loans. This could also make it more difficult for buyers to obtain loans. That is why as a byer, you want to present as low a risk as possible to lenders. This may, in turn, result in fewer loan approvals by lenders.

 

Save for a down payment. While this may not have anything to do with the amount you are actually qualified for when it comes to applying for a loan, it will surely make your monthly payments less. The more you are able to put down in the beginning, the less you’ll pay each month. This will make it easier to pay off bills and take care of regular bills and expenses.

 

Deminish your debt. This is absolutely essential. Pay off all credit card bills beginning with the lowest and making your way up to the largest balance. Work to pay more on one at a time while continuing to make minimum payments on the others. That way you can begin seeing resultsmore quickly. Once you’ve paid one off, move onto the next.

 

Applying for a loan may seem daunting, but it doesn’t have to be. To learn more about the new rules pertaining to the qualified residential mortgage, visit Dean Graziosi’s site.

Why Renovate Your Investment Property

147697193Real estate is a great investment, especially when you take the time to make the necessary improvements that will either attract renters or help it sell. Whether you wish to rent or flip it, renovations are often needed, or at the very least advised. As Dean Graziosi points out, investment properties can be quite lucrative if you keep up with them along the way. According to an article in Forbes, sellers should think long-term when it comes to making changes.

 

A well-maintained investment property can keep renters in it for a very long time. Each time a tenant moves out, take a look at every aspect of the home to see what needs to be replaced or even completely remodeled. Sometimes just updating appliances and color schemes whether they really need it or not can make a huge difference. A property that is in great shape will attract renters who will continue paying money to live in your home. Failing to update your property can mean huge problems for you in the long run.

 

When fixtures and appliances get old, they stop working properly. Letting the plumbing and electric go without maintenance results in leaks and a high risk of fire or other problems. Upon buying a home, an inspection should have been performed, but it never hurts to go over all aspects again.

 

Begin by replacing warn fixtures. If the home is older, it may be time to install siding or new windows. This will help it remain more energy efficient which will save both you and your tenants more money in the long run.

 

If you are planning to sell it, making renovations will raise its value. Adding more modern fixtures or replacing flooring will make it look brand new even if it is an older home.

 

As Dean Graziosi explains, “There are certain home improvements that will be best for your investment property.” When it comes to making renovations, you need to think about profit.

 

You should begin by assessing both the exterior and interior of your property. Look at not only the home itself, but the rest of the land it sits on and any other outbuildings that may reside there. This includes, of course, the garage. What needs replacing? You’ll want to take care of the actual needs before making other improvements that only serve to raise the value.

 

If you are able to do the work yourself, you’ll save a lot of money. Hiring contractors can get expensive very quickly, but it important if you need them. Doing the work all by yourself will take longer but will be worth it in the long run, and is okay if you have the time. If you need to flip the investment property quickly, you’ll definitely want to have help.

 

Look at the inside of the home. What do the individual rooms need? Make a list of all the renovations that will be necessary and assess the cost of materials. This will help you figure out what the overall cost will be.

 

For more information and tips, visit Dean Graziosi’s site. Be sure to check out his posts on other relevant real estate topics as well.