A good credit score is important if you’re thinking about purchasing a home. Your credit score impacts the interest rate that you can get for a mortgage. It also can impact your ability to qualify for certain types of home loans. And if it’s really low, you may have to work on it for a while before qualifying for a home loan.

What’s the best way to increase a credit score? Here are three things that people with good credit scores have in common:

Consistent, on-time payments. On-time payments can provide a big boost to a person’s credit score. Likewise, late payments can dramatically lower it. Your credit score reflects how well you make your payments on your mortgage, credit cards, student loans and other financial obligations. Your payment history is responsible for as much as a third or more of your overall score. Consistent, on-time payments are vital.  Even if you can’t pay it off every month, don’t be late on a payment.

A reasonable amount of debt.  Aim to use only a small percentage of your available credit. Maxed out credit cards or balances all approaching a credit limit will certainly lower your credit score. Have you heard the term credit utilization? That’s the percentage of your available credit that you actually use. Generally, a good credit utilization rate is less than 30 percent. Simply put, that means you’re using less than 30 percent of the total credit that is available to you. On a credit card with a $10,000 limit, that means keeping your balance below $3,000.  Ironically it is also good to have some credit.  Even if you don’t carry a balance, having either a zero balance card or a car payment helps show ability and responsibility of paying off debt.  You can have a poor score if you have no credit which is unfortunate.

An error-free credit report. Credit bureaus can make mistakes. Checking your credit report at least once each year is key to making sure that the right information is being reported to the credit bureaus. Credit scores reflect the quality of your credit record, and mistakes can lower your credit score.

Consumers with high credit scores often enjoy lower rates for mortgages and other types of consumer loans and lower premiums on some types of insurance policies.  If you need help fixing your credit let me know.  Some lenders specialize in helping you get your credit on track, or they are able to work with you on financing options that allow for a bit lower of a credit score.  Before you pay for someone to help you fix your credit, it is worth it to talk to a lender for some free advice and ideas, you might not need to employee a service to help increase your score.

There’s nothing like moving — whether it’s across town or across the country — to make you realize just how much stuff you have! When moving, you’re likely to let some things go, but probably also add some new appliances, furniture and other items to your list of possessions.  Some people like to do this as they are packing up their possessions, that way you have the most up to date written inventory. However, once you are settled you will want to finalize the process. This is helpful for not only moving, but for insurance purposes too.

Here are the three components of an effective home inventory:

Photos or video. You can take photos or video, but you’ll want shots of entire rooms and close-ups of items such as electronics, jewelry, collectibles, guns and any individual items of significant value. It’s a good idea if you’re using video to provide narration as you walk through each room, explaining what you are recording. Take your time while taking photos and videos. If you ever have to make an insurance claim, you’ll want as detailed information as possible about what you own. Don’t forget to include items inside closets and in drawers.  Anytime you get a new piece of art, change your room around or add furniture remember to update your inventory and the photos.

Take video outside the home as well, including the interior of any outbuildings or storage.

A written inventory. You’ll also want to prepare a written inventory of your belongings. You can create a Word document on your computer or use a blank sheet of paper. Keep your written inventory with receipts for items you’ve purchased. Include as much detail as you can about each item. Rather than ’55-inch television set, include the year, manufacturer and model if you can. The more expensive the item, the greater your detail should be.

It’s a good idea to get in the habit of keeping receipts for big-ticket items in a file that can be included as part of your home inventory.

Safe storage. If you have a fireproof safe, keep both your visual and written inventories there or in another safe place. You also may want to keep a copy off-site as well, in a safe deposit box or with a trusted friend or family member. If your written and visual inventory is saved electronically, make sure it’s backed up.

Having a home inventory makes surviving and dealing with a home disaster a lot less stressful. Hopefully, you’ll never need one. But if you do, it can make all the difference in the world. Can you imagine trying to recount every single item in your home that was damaged, destroyed or stolen? With a home inventory, you’re more ready for the unexpected.

#homemaintenance #homebuying #homeselling #homeownersinsurance #moving #614living #realtortips #katieconwayhomes #homeinventory #columbusrealtor #cbusrealestate

Spring is often thought of as the best time for planting, but planting in the fall can offer some significant advantages for your plants.  Below are some reasons why fall is the best time for planting perennials, trees, and shrubs. 

Perfect Planting Weather

The cooler weather of fall is easier for plants and gardeners alike.  The ground isn’t dry or frozen, and temperatures are mild and enjoyable. Your plants aren’t stressed out by extreme conditions, so they acclimate to their new environment quickly.  Plus, you can tend to them without excessive sweating or sunburn!

Flexibility and Rampant Roots

There is no need to rush to prevent plants from drying up in their containers or delay because the ground is too hot. You can plant whenever is convenient for you. As for trees, planting them when they’ve lost their leaves is actually better because they won’t have to exert energy growing leaves and can focus on growing roots.  This is the biggest fall advantage – plants can grow better roots, which will allow for gorgeous foliage and blooms come springtime. 

Lower Maintenance, Lower Bills

Cooler weather means less frequent watering. You can relax with more free time, a lower water bill and the knowledge that your plant babies will not shrivel and roast in the heat of the day. 

A good tip for planting in the fall is to water the plants in their pots fa few hours before you transport them to their new homes.  This lets them soak up water and be better prepared for planting. Pre-water the hole they” be placed in as well. 

Devise Your Plant Plan

Fall allows you to see sparse areas of your garden that need more foliage.  It is the best time to plan out next year’s garden and get a head start on planting.  You’ll know exactly how the other plants look at the full bloom and how much space they take up, allowing you to add pop of color where you know you need it.

Supply Sales

Gardening supplies are typically at their peak prices in spring, but prices drop in fall when shops need to clear space and some even close their business for the winter.  Fall is a great time to shop for non-perishable supplies, seeds, and even some bulbs.  You can often get gardening tools at discounted prices along with some fertilizers, netting, pebbles, and similar things. Watch out for sales on pots and containers too!

Stop for a moment and really think about this one: What are you looking for in your next home? The National Association of Realtors surveyed home buyers nationwide on the home features that are most important to them and found that home buying needs and preferences often vary by age.

According to the survey, family needs are the biggest factor in prioritizing home amenities for home buyers under the age of 55. For many families with small children, for example, features such as the number of bedrooms, school quality and yard size can be important considerations. Proximity to schools — walking distance being a priority — is another item on most parents’ wish lists. For those 55 years and older, privacy—having a space solely their own—is often the main goal. In that age group, the number of bedrooms and lot size are not as important for many home buyers.

Contemporary and colonial homes are the overall preference of Millennials, while ranch-style homes, which typically have a single level and no stairs, are the most popular home style for buyers 55 and older. Many home buyers in that age group are also looking for properties that can accommodate adult children and/or elderly parents. Lastly, while many home buyers age 55+ are moving from other homes, many Millennials are moving from rentals and purchasing or building their first homes.

Some home-buying preferences are the same among all age groups. Among those who work, a reasonable commute is a priority. Most people don’t want to be too close from a grocery store and other shopping options. A safe neighborhood is another top priority. People of all ages love parks and walking trails.

Take some time to drive around, grab a coffee or maybe grocery shop in a few neighborhoods where you are searching.  Keep a list of must haves, would be nice to have, don’t need but want and share with your Realtor.  This will help your pinpoint potential houses and save you time seeing homes that don’t interest you.  Need a checklist, give me a call I am happy to help get you started.

#newhome #firsttimehomebuyers #homesearch #realtor #614living #cbusrealestate #columbus #newhome #downsize #columbusliving

The appraisal is an important part of the home buying process. But what happens if an appraisal comes up short of the agreed-upon selling price?

Here’s an example: A home is listed for sale at $350,000. It’s a multiple bidding situation, so you offer a higher price of $370,000 to gain an edge over other buyers. Your offer is accepted by the seller. However, your lender’s appraisal comes back and it shows the value of the home is only $350,000. That means the lender is only going to provide you with a loan based on that value.

All lenders order an appraisal during the home loan process as a way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate. It’s designed to be an independent and unbiased estimate of a home’s value.

When an appraisal comes in lower than expected, home buyers have a few choices. If you really want the home and have the cash on hand, you could make up the difference with a larger downpayment. You also could try to negotiate a lower selling price. The seller doesn’t have to lower the selling price, of course, and will understandably be reluctant to do so. In some cases, the buyer and seller each give a little.

Another option is to see if it’s possible to order a second independent appraisal or to appeal the existing appraisal. Your lender can let you know if there’s any type of appraisal review process. You and your real estate agent will have to analyze the appraisal to make sure the appraiser included all relevant comparable sales on the report

Lastly, if you have an appraisal contingency in your offer, you have the option of walking away from the home purchase. It’s a last-ditch option if all other efforts fail.

The Columbus market has been crazy and for the first time I started seeing and using “Appraisal Gap” language when writing an offer on a property.  This became the norm in multiple offer situations.  What an appraisal gap does is guarantee that the buyer will make up the difference between the appraisal price and the offer price in cash if the appraisal came in low.  If this is something that you want to do, you need to make sure that your pre-approval letter from your lender includes language that your appraisal gap funds have been verified.  The sellers want to make sure you not only have the ability to secure a loan for the property, but that you have enough liquidity to bring that extra cash at closing.  Be careful however, because if you have been saving money to make improvements, buy furniture or appliances bringing more money to the closing table can quickly eat up that extra cash you have on hand.

#appraisal #appraisalgap #columbusliving #columbusrealestate #614living #614realtor #cbusrealtor #homebuying #newhome #homebuyertips

You want to sell your home, but you don’t have a lot of money to invest in repairs and upgrades before it hits the market. Plus, you want to spend the money you do have on your new home. There’s a lot you can do to make your home more inviting to potential buyers that doesn’t cost a fortune. Here are some fairly inexpensive steps you can take before you list your home:

Clean the carpets. Investing in a professional carpet cleaning can be a great move, especially if you have small children and pets. Stained carpets aren’t exactly aesthetically appealing, and carpets can harbor all kinds of odors. Even cleaning your couches will help add some sparkle, usually you can get a deal when you do more than one area or piece of furniture.

Make small repairs. Little things that aren’t right can make home buyers wonder what larger things may be wrong with your home. That’s why it’s always a good idea to fix things such as a leaky faucet, wobbly toilet, a missing roof shingle or a broken door handle before your home hits the market.

De-clutter. Reducing the amount of furniture and other items in your home can make your rooms look bigger. When trying to decide which items should go, consider giving anything that’s stained or broken the boot.

Clean walls. Handprints and dirty walls are a definite turnoff. Clean your walls, using a Mr. Clean Magic Eraser (or the same type of product) to get rid of scuffs and crayon marks. If your walls are really in bad shape or you went crazy with colors a few years ago, consider adding a fresh coat of paint.  A fresh coat of paint also makes the home smell new, brightens it up and looks amazing.

Clean, clean and clean some more. If you have a pet open windows and continually try to circulate fresh air through out the home. Aside from the cost of cleaning supplies, elbow grease is free! A home that’s clean is more inviting to buyers, period.

#newhome #sellingyourhome #newhomebuyers #realestate #homeselling #homebuying #614realestate #614lving #columbus #homemaintenance #realtor

There’s more to your monthly mortgage payment than the amount you borrowed to purchase your home. When you’re calculating how much house you can afford, be sure to consider all of the components that typically make up your monthly home loan payment.

Start with the principal. The principal is the amount of money you borrowed to purchase your home and have to pay back.

Add interest. The interest is what the lender charges for lending you the money.  Rates are low right now, so make sure you shop around to get the best rate you can.  Further, take a look at a 15 year mortgage instead of a 30 if you can.  Many times the monthly payment won’t be as high as you think, because the interest rate is lower than a 30 year mortgage. You might be surprised!

Don’t forget the taxes. Property taxes can be a significant amount of your monthly payment, depending on where you’re buying property. These taxes fund schools, city and county services and other local entities, and are based on the tax rate for each of those taxing authorities applied to the appraised value of your property.  In Ohio property tax is paid in arrears, meaning your 2020 taxes are paid in 2021.  The first half of 2020 taxes are due on January 20, 2021 and the second half of your taxes are due June 20, 2021 and so forth.  Many borrowers escrow their tax payments, meaning it is rolled into your mortgage payment and the bill goes to the lender.  Your lender will then pay your property taxes twice a year for you ensuring they are always on time.  Some people are not disciplined enough to save throughout the year and it is just easier to have their lender take care of it.  Franklin County properties are reassessed every 3 years or at the time of a sale.  Make sure you understand how your taxes will increase based on the purchase price.  More often than not your taxes will increase after the sale is recorded.

Lastly, the insurance. Homeowners insurance payments are typically bundled into your mortgage payment. Most lenders require it. If you made a downpayment of less than 20%, private mortgage insurance (PMI) will be a part of your mortgage payment as well.  Some lenders have special programs where you don’t have to pay PMI for down payments less than 20%.

Make sure you are getting a few insurance and lender quotes.  You want to not only protect your investment, but ensure that you are getting the best product for your individual situation.

#newhomebuyer #mortgage #homebuying #homeselling #614living #614realestate #614realtor #loanofficer #columbus #homesearch #cbusrealestate #614columbus

Have you refinanced your home into oblivion? Tapped out every available money resource with a myriad of loans and credit cards? There is one last option: borrowing from your 401(k). With the 401(k) growth the last year, you may have more in there than you think.

Before you go off half-cocked, it is crucial that you understand the pros and cons. Don’t forget that your 401(k) is your retirement nest egg, and you are putting that nest egg into possible jeopardy. If you’re thinking of borrowing from your 401(k) to buy a luxury automobile or a larger home, stop. Mortgaging your future to live a lifestyle that’s beyond your income, while it’s become the American Way, is a mistake. But if you’re trying to get out from under high-interest debt and plan to use this opportunity to live within your income, it could be your ticket to becoming debt-free. Don’t finance luxury.  Do not use 401(k) money for a strong WANT that will not get you some long term value. 

Here’s how they work: most plans allow you to borrow up to half of your vested balance, but not more than $50,000. You apply to the company that manages your 401(k) plan, but you don’t have to “qualify”—after all, you’re borrowing money from yourself. You sign a promissory note and receive the money within a couple of weeks. The interest rate is usually equal to the prime rate or slightly over, so currently you’d pay 3-4 percent interest. You then have five years to repay the loan, and most of the time, you make payments through payroll deductions.  However, some plans do not allow loans unless it is for a specified emergency…and still then some plans do not allow it at all. If you are considering this as an option, check your plan first before you mentally spend the money. 

Now let’s look at the pros and cons of borrowing from your 401(k):

Pros:

• A 401(k) loan does not appear on your credit report. They are not reported to Experian, and do not become a part of your credit history.
• The interest on these loans is some of the lowest out there—right now, 3-4 percent.
• You’re paying yourself the interest, not some bank.
• You’ll get your money more quickly than if you were using another means of borrowing.
• Since it’s a loan, you will not be charged the 10 percent early withdrawal penalties plus income taxes you would have to pay if you withdrew the money.
• You don’t have to qualify for the loan through the usual long, painful credit approval process, because in effect, you are the lender.
• No assets or collateral are needed to secure the loan.   

Cons:

• The biggest con is that you are forfeiting the accrued interest you would earn if your money stayed in the 401(k). Calculated over the long term, it can cost tens (even hundreds) of thousands of dollars in potential gain.
• Unlike a home equity loan, the interest is not tax deductible.
• Some plans do not allow contributions to the 401(k) for the period of the loan.
• If you lose or quit your job, the loan is often due in full in 30-60 days (although some plans are open to renegotiating the terms of the loan. Find out before you sign the papers.)
• If you default on the loan, it is considered a withdrawal and you will owe a 10 percent penalty plus a hefty tax payment. So if you had borrowed $50,000 and couldn’t pay it back, you would have to pay a $5,000 penalty and federal and state taxes that could take another $20,000 of the amount.

To calculate the actual cost of borrowing from either source: for a home equity loan, ignoring upfront costs, the after-tax cost is the interest rate minus your tax savings (interest rate times 1 minus your tax rate).

The cost of borrowing from your 401(k) is what your loan would have earned had you kept the money in the 401(k). Since your 401(k) accumulates tax free, the total return on the fund is a close approximation of the after-tax cost.

Let’s say you need to borrow $10,000 and you have $100,000 in your 401(k) earning an average of 10 percent a year. Interest on a home equity loan is 8.5 percent and you are in the 28 percent tax bracket. The after-tax cost of the home equity loan is 8.5x(1 – .28) or 6.12 percent. The 10 percent cost of borrowing from the 401(k) is higher than the 6.12 percent cost of the home equity loan.

If both loans are repaid in full after one year: if you use a home equity loan, you will have $110,000 in your 401(k), you’ve paid the lender $10,850 in interest and you have a tax savings of $238. Your financial wealth will therefore be $110,000 – $10,850 +$238 = $99,388.

If you borrow from the 401(k), you will have only $99,000 in your 401(k) at the end of the year because you haven’t earned the 10 percent on the $10,000 you borrowed. Whatever you pay back to the fund does not affect your wealth. You are thus $388 poorer if you borrow from your 401(k).

#614living #614realestate #columbus #newhome #homebuyer #homeseller #investmentproperty #401k #cbusrealtor #investing #homebuyingtips #firsttimehomebuyers

Are you looking for a home your children and pets will enjoy? You’re not alone. Many people make home-buying decisions on the needs of not only their children but their pets, too.
Surveys show that home buyers with children are looking for homes near quality schools, with child-friendly amenities and enough elbow room.

According to the National Association of Realtors, nearly half of all home buyers who have children consider the quality of the school district in which a home is located as being a priority in the home search process. Forty-three percent said a close proximity to neighborhood schools was important.

The study also found that buyers with children tend to purchase larger homes — an average of 2,100 square feet with four bedrooms and two full bathrooms. Those with no children living with them purchased homes with an average of 1,800 square feet with three bedrooms and two full bathrooms.
According to the study, children affect the home buying process in other ways. For nearly one-quarter of all buyers with children, the cost of child care delayed the home buying process and ultimately led to compromises on the price, style and size of the home purchased.

Like children, pets have a substantial impact on home searches as well. Eighty-percent of surveyed Americans said that pet-related factors played a role in their housing choices. Some home buyers said they simply would not purchase a property that did not adequately accommodate their pet(s).

It probably comes as no surprise that 99 percent of pet owners in the survey said they consider their pet to be part of the family. About 89 percent of respondents said they would change their living situation before getting rid of their pet. Of those surveyed,12 percent of of pet owners said they already had moved to accommodate their animal in some way. Dogs and cats top the list of pets in the survey, although others made home buying choices based on other animals, such as horses and birds. Some home buyers are specifically searching for properties that can accommodate farm animals.

In the survey, 52 percent of respondents said they had completed a home renovation project specifically to accommodate or make life easier for their furry (or feathered) friend. Top pet-related home improvements included installing outdoor fencing, easier-to-clean laminate flooring and pet doors.

I found this sticker on my front step the other day.  It started me thinking about the crazy market we are in and what buyers are giving up just to get a house.  Many buyers are forgoing their inspection so they can win the multiple offer scenario.  In my opinion this is a huge mistake.  Unfortunately, homes don’t come with an owner’s manual and not every owner is handy.  If you are lucky, you will get a seller who is organized and documented all the mechanical maintenance done during their ownership, provide a list of upgrades and dates and give you any potential warranties that are transferable.  Please know that this is NOT the norm.  It is up to the buyer to uncover safety and health issues, if any, with the home.

I like to think of inspections as your “owner’s manual” or the “annual physical”.  Inspections were created so that the buyer can understand what they are buying and how best to prepare and budget for future home maintenance.  Going through your new home with an inspector will give you insight into how your home operates.  Inspections should not nit pick at minor issues; no home is perfect.  Any home you buy will require some TLC and maintenance right off the bat.

Mechanicals still work when they are old.  Just because something is older doesn’t mean it should be replaced before it’s time.  If you are buying a home with older functioning mechanicals, you know that you may need to replace that sooner rather than later, so you might start saving a little to prepare for that.
Failing to inspect your potential new home could end up costing you thousands of dollars.  What if you are at the top end of your budget, brought all your available cash to close and uncovered a foundation or structural issue?  What if after the first heavy rain your basement is full of water? What if there are termites? Uncovering major defects that will cost $1,000 or more to fix should be essential to your process. Health and safety issues should be your priority.

If you have plenty of cash to cover a major defect, then waiving inspection might be fine for you. However, I would still inspect after you purchase so you know what you need to do to keep your home safe and strong. There are ways to reassure the seller that you are not walking away after inspection.  Need help navigating this tight market?  Give me a call.  Not only do I have a handful of great inspectors that will give you the tools you need to understand your new home and how to best care for it, I have strategies to set your offer ahead of the rest without leaving you open for risk.

#homemaintenance #homeinspections #homebuyers #newhome #cbusrealestate #614living #columbus #realestate #realtor #katieconwayhomes #firsttimehomebuyer #614realestate #columbusrealtor