WHY YOU SHOULD BUY A HOME DURING THE HOLIDAYS

Being at home for the holidays is one of the best things about the season itself. After all, there’s nothing like lying by a warm fire with hot cocoa in your hands, just listening to flames crackle. But many people don’t realize that shopping for the perfect home during the holidays can be a great idea. In fact, here are some reasons why you should consider house hunting when the temperatures drop.

Motivated Sellers and Agents        

If a seller puts their home on the market in an off-peak season, like winter, that could be a major indicator that their sale is a time-sensitive one, possibly involving a job relocation that needs to happen as soon as possible. Because winter sellers potentially need to get moving, buyers could be positioned for a better deal overall.

Something similar can be said about real estate agents attempting to move properties around during the holidays. As the year begins to come to a close, agents are working hard to wrap things up in time for the end of the year to close their books out on a good note.

Less Competition

As most buyers believe the holidays aren’t ideal for house hunting, there is less competition surrounding this time of year. This gives you an upper hand, unlike peak seasons where a property might have multiple bidders. With less competition and offers for a property, sellers will more likely be open to negotiating a favorable price that can put additional savings in your pocket.

Faster Closings

Motivated parties in the middle of a holiday home sale want to sell their homes as quickly as possible. In short, everyone is looking to “play nice” – sellers want to reach their new location before the holiday, buyers want a good deal and agents want to include their commission for the year. Make sure you’re prepared to make the closing process as smooth as possible by having all the necessary paperwork at the ready.

Home Prices Can Be Lower

Sellers looking to shed their home for the holiday are serious about getting things moving. This particular aspect can work in favor of buyers looking! Buying a home just the day after Christmas could save you as much as $2,500, according to Bankrate. In fact, Dec. 26 and six other December dates are among the top 10 best daysto buy a home, based on median sales price and discounts.

Holiday homebuying isn’t for everyone, but the benefits may just make it the perfect time for some to start their homeownership journey. Ready to go ho-ho-home for the holidays? Contact one of our loan experts today to get started.

YOU’VE MADE AN OFFER, NOW WHAT?

By Vanessa Suarez

After weeks (or months) of looking for just the right home with all the things on your wish list (a decent closet, plenty of guest bedrooms and a to-die-for kitchen), you’ve found the one. Great! But like most first-time home buyers, you’re probably wondering, what happens now?

The only thing standing between you and the finish line is the offer. If you’re not sure what that means for you, no need to fret. We’re here to break down what happens after you’ve decided on the perfect home.

Extending an Offer

When you’re ready to make an offer and purchase your home, expect some negotiations until you reach a final price the seller is willing to accept. It’s a good idea to work with a real estate professional to conduct the negotiations, be your advocate and serve as a trusted advisor. The written offer is normally guided by laws and is legally binding. Your real estate agent can provide you with a legally approved form to make the offer.

When you extend your offer:

• Make sure the seller knows you’re prequalified, which will make your offer more attractive.

• Make sure ALL negotiations are in writing and that you receive copies.

• You’ll need to make an earnest money deposit. Typically, the deposit is 1-2% of purchase price (varies by state). This deposit shows the seller your offer is serious and made in good faith. It’s given to the escrow company and will be applied to the final purchase price at closing.

Counteroffers

It’s likely that you’ll find yourself competing with other offers if you’re in a market with lower inventory and higher demand.

Looking to stand out?

• Write a personal letter: Sharing a little about yourself or your family can help your offer stand out above the rest. This isn’t recommended in all cases, but if a seller has a sentimental attachment to a property, it could help.

• Closing date or occupancy date: If the seller needs to more time to move out, being flexible to their needs can give you a leg up on the competition.

• Find out what the seller wants: Sometimes finding the criteria that matters most to the seller is the best way to go. They may want a cash offer, a higher price or a fast close. Work with your realtor to determine the best route.

Pre-Closing.

When the seller accepts your offer, here’s what’s next:

• Review the loan commitment, make sure you understand the loan’s rate terms, requirements and details.

• Have the home inspected by a certified home inspector.

• Obtain homeowner’s and any other required insurance.

• Verify with the closing agent or attorney that a property survey was ordered.

• Set a closing date and time.

• Start preparing to move.

• Confirm that you have met all the guidelines and conditions in the purchase agreement established by the seller (see below).

• Be prepared to pay final closing costs at your closing appointment.

Remember, your PrimeLending loan officer will answer your questions, stay involved and guide you through the process all the way to closing.

The Purchase Agreement

At this point, money has officially changed hands. You’re almost done. Now the purchase agreement must be finalized. This is a legal contract between you and the seller of the property. It outlines all terms and features of the final transaction, including:

• Property address and legal description.

• Sales price and the loan, down payment and deposit amounts.

• Names of all parties involved including the buyer, seller, buyer’s agent, seller’s agent, mortgage broker/banker and any attorneys.

• Time limits that might apply to the transaction.

Any contingencies that must be addressed prior to the deal being completed and finalized (such as the sale of the buyer’s present home, issues from the home inspection that might need to be repaired, etc.).

Every home transaction is different, so not all contracts are the same. Turn to your real estate professional, title company or an attorney to help you through the negotiations and execution of a purchase contract.

At Closing

Closing day is exciting but can be a bit hectic if you don’t know what to expect. Don’t leave room for surprises and find out what to bring to closing day here.

If you’re ready to get started on your homebuying journey, a PrimeLending loan expert is the perfect partner to have on your side every step of the way.

UNDERSTANDING THE FINANCIAL BENEFITS OF HOMEOWNERSHIP

Homeownership marks one of the biggest milestones in life for many people. It can also be one of the most intimidating and stressful experiences, especially for first-time home buyers. But there are some definite perks to owning a home, and some extra benefits that await first-time homebuyers.

If you’re purchasing your first home, here’s what you should know about the financial benefits available to homeowners and first-time buyers.

Tax Deductions* & Savings

Mortgage interest — This benefit allows you to deduct any interest you pay toward your home mortgage from your taxable income. There are a few exceptions. This rule doesn’t apply to homeowners with a mortgage over $1 million who purchased their home prior to 2018, or homeowners who purchased after Jan. 1, 2018 with a mortgage over $750,000. If you are considering purchasing a more expensive home in the near future, plan to make a larger down payment to keep your mortgage below the $750,000 mortgage interest deduction cap.

If you are married, this deduction comes whether you own the home, your spouse does or you own it together. At the end of the year, your lender will send you a form 1098, which shows just how much interest you paid during the year.

Points — Points are essentially extra interest that you pay at closing to secure a lower interest rate on your mortgage. If you meet the long list of criteria for points deductions, you may qualify in the year you pay them. A few of the key qualifications for this deduction include that points must be on a secured loan on your main home. In addition, they must be used to purchase or build your primary residence.

PMI — This tax deduction does not apply to every homeowner, but in some years, depending on your income, you may qualify to deduct what you paid toward private mortgage insurance during the year. PMI is a requirement on some loans, such as FHA loans or loans with a down payment under 20%. Consult with your tax professional to find out if you are eligible to deduct PMI on your taxes.

Real estate taxes — With the new tax law, homeowners are eligible to deduct any amount paid out of pocket or out of your escrow account toward property taxes up to $10,000. (In the past, homeowners could deduct the full amount.) Again, this number will be included in the form 1098 issued by your lender at the end of the year.

Itemized Deductions — The standard deduction nearly doubled in 2018, so this applies to fewer homeowners. If your mortgage insurance and other deductible amounts paid toward points or PMI push you over the amount of the standard deduction, then be sure to tally up any charitable donations, medical expenses or unreimbursed job expenses, as these only matter to those who choose to itemize their deductions.

Additional Perks & Benefits

Penalty-free IRA payouts for first-time homebuyers — If you’re building or buying your first home, no matter your age, you can withdraw up to $10,000 from your retirement account penalty-free to put toward the purchase of your new home. To qualify, the money must be used within 120 days from when it’s withdrawn. It’s important to note that although you won’t pay the 10% penalty, you will still be taxed on the distribution based on your tax bracket.

Penalty and tax-free Roth IRA payouts for first-time buyers — First-time homebuyers may  be eligible to withdraw up to $10,000 from their Roth IRA account penalty and tax-free. To qualify, you must have had your Roth IRA for a minimum of five years prior to taking the withdraw.

Keep in mind that many of the perks for homebuyers are only accessible to people who use the home as their primary residence. So be sure to consult with your trusted tax professional and an experienced lender to find out what benefits await you with the purchase of your first home.

If you are purchasing your first home and don’t have cash or the equity of an existing home to use for a large down payment, there are several home loan programs that may be ideal for you. FHA loans, USDA loans and VA loans require little or no money down, which is often ideal for first-time buyers. Subsidized interest and limited fees may also be available to you as a first-time buyer. Contact a home loan expert at PrimeLending today to discuss your options.

*PrimeLending is not authorized to give tax advice. Please consult your tax adviser for tax advice for your specific situation.

Sources:

Mortgage Interest, real estate taxes, IRA payouts: Source

Points: Source

PMI: Source

Itemized Deductions: Source

KEEP CALM AND EASE HOMEBUYING ANXIETY LIKE A BOSS

KEEP CALM AND EASE HOMEBUYING ANXIETY LIKE A BOSS

By Vanessa Suarez

You’ve decided to make the leap and buy your first home. That’s great! Now that you’ve made your decision, you may be realizing that there’s a lot that goes into buying a house: things like interest rates, down payments and credit scores may be buzzing around in your head.

If you’re not sure where to start, don’t worry — that’s where we come in. We’ve compiled a list of need-to-know info. as you enter the next exciting step of your homebuying journey below

Get educated about the loan process.

Research. Research. Research. Although your loan expert will be at your side to answer questions, it’s best to begin the homebuying process with some understanding of what will happen. Learn what you can about your lender’s loan process and what you’ll need to bring to the table, document-wise. At PrimeLending, we make our process as simple and as streamlined as possible! It starts with a prequalification that helps you determine your potential loan amount, an appraisal and verification of the property you’ve selected, processing and underwriting of your loan and eventually closing on your property.

There are also probably a lot of terms you may hear, like, “escrow,” “market value” and “refinance,” that you’re not familiar with. Sure, you might not need to know all of these terms, but having a place that can easily define them is good to have on hand. That’s why we have a handy Mortgage Glossary.

Learn about your financial situation.

Preparing to buy a home is a big deal, so you’ll want to make sure you’re in the right financial spot to make what for most is the biggest purchase of your life. Before beginning the formal loan process, getting prequalified* is a must. During the prequalification process you’ll be asked about your credit score, your income, your current cash situation, assets and debt. Getting this research completed during your prequalification helps you:

• Know the loan amount you could qualify for, which can ultimately determine how much home you can afford.

• Save time by only reviewing homes in your price range.

• Discover any credit problems that can be resolved sooner rather than later.

• Confidently make an offer as soon as you find a home you like.

• Have your offer stand out compared to offers from a buyer who is not prequalified.

Getting prequalified with PrimeLending is free, it doesn’t affect your credit score and doesn’t require any additional documents other than your application. Knowing you’re financially ready to move forward helps you understand what lenders are looking for and identifies potential problem areas during the formal loan process.

Know your options.

At PrimeLending, we offer various loan types that will fit your specific needs. If you’re a first-time homebuyer, there are plenty of options to choose from, like an FHA loan (Federal Housing Administration). This home loan is backed by the government and offers lower down payment options, flexible income and credit requirements and low closing costs to help first-time homebuyers. We also offer down payment assistance programs that make homebuying a little more affordable for qualified borrowers. You can speak with your loan expert to find the right loan and program to fit your needs.

Although you’d like to be in your new home ASAP, buying a home is a process and there’s no guaranteed timeline. Remember to keep communication lines with your loan expert open and lean on their expertise to help answer any questions you might have. Speak with a loan officer today!

* A prequalification is not an approval of credit and does not signify that underwriting requirements have been met.

** Certain restrictions apply. Not available in all areas. Please contact your PrimeLending loan officer for more details.

SETTING THE RECORD STRAIGHT ON 6 COMMON MYTHS ABOUT CREDIT

By Mandy Jordan

What You Really Need To Know About Improving Your Score

Do you know your credit score? That three-digit number represents the risk lenders take when you borrow money and determines the spending limit creditors put on your credit card, if you qualify for a mortgage, what interest rate you get on loans for homes, cars and other purchases and can even play a role in whether or not you get that new job you’ve applied for.

Your credit score is a calculation based on information found on your credit report. Keeping track of and working to improve your credit score is essential, especially if you’re considering making a major purchase — like buying a new home — in the near future. But what factors actually affect your credit score and how can you improve your credit? Let’s clear up a few common myths about how credit works and how to improve your credit score.

Myth #1: Checking your own credit hurts your score.
Fact: Requesting copies of your credit report from sites like AnnualCreditReport.com or Credit Karma is considered a soft inquiry, which will not affect your credit score. When you apply for a credit card, bank loan, mortgage, auto loan or another type of credit, that is a hard inquiry, and will affect your credit score. Regularly checking your credit score helps you stay on top of that number and watch for errors and inaccuracies on your report.

Myth #2: You only have one credit score.
Fact: You have multiple credit scores, and the one you see in your credit report may not be the same score your lender sees. Credit scores vary depending on the type of inquiry made. For example, a credit score for a credit card is often different than that for an auto lender or mortgage lender. Your score also depends on what credit bureau data is being pulled (Experian, Equifax or TransUnion) and the model used (FICO, VantageScore, etc.) That said, your credit scores — while maybe not identical — should be similar.

Myth #3: Closing credit cards hurts your score.
Fact: This is only partially true. Closing an old credit card account doesn’t erase that card’s history from your credit report, thereby shortening your overall credit age (the longer your credit history, the better your score), but credit bureaus will remove closed accounts from your report after ten years. Here’s how closing a credit card could affect your credit score: credit utilization rate. Most experts recommend keeping this number below 30 percent. To determine your utilization rate, divide your total credit card balances but your total credit card limits. If you close a card with a high limit, you may see your credit utilization spike, which would then in turn drop your credit score a few points. You’d be better off to keep credit cards open, use them occasionally and pay them off immediately.

Myth #4: Making more money will raise your credit score.

Fact: Your income is not found on your credit report, so don’t assume that making more money will help improve your credit score. That score is dependent on factors like your credit history, credit usage, on-time payment record, public records, inquiries and new accounts and is not impacted by the amount of money you bring in.

Myth #5: Carrying a balance on your credit card will increase your score.
Fact: No need to maintain a balance on your card from month to month to show credit utilization and increase your score. Carrying a balance from one month to the next will only cost you in interest payments. Instead, aim to use your card on a regular basis and pay it off each month so you’ll get the benefit of utilizing credit without paying interest.

Myth #6: Paying debts clears up bad credit history.
Fact: Payment history makes up 35 percent of your credit score, so paying down debts — and paying on time — is always a good idea. If you have a history of missed or late payments in your payment history, unfortunately, paying off that particular debt won’t erase those delinquent payments from your credit history. Late payments over 30 days remain on your credit report for seven years, so be sure you’re making at least the minimum payment in plenty of time for that payment to post before its due date.

If you are considering applying for a mortgage loan soon, now is the time to start working on improving your credit score. Here are a few tips to help:

• Know your credit score and keep an eye on your report for any errors or inaccuracies. If you notice an error, contact the credit bureau immediately to dispute it and get it cleared off your credit report. You can request one free report from each credit bureau each year from AnnualCreditReport.com.

• Pay your bills on time. Set up auto pay for recurring bills so you never miss a payment and keep an eye on your bank accounts to ensure you have enough money in the account to pay those bills.

• Keep credit card balances low (remember the 30 percent rule). Mortgage lenders will look at how responsible you are with credit, so live within your means and don’t overextend yourself financially. Create a budget so you know just how much you can afford to spend each month after you’ve made monthly payments.

Are you ready to take the next step toward purchasing a new home? Getting prequalified* can help you know how much home you can afford and may identify any credit problems that need to be resolved before you apply for a mortgage loan. Contact PrimeLending today to speak with a home loan expert who can help you get prequalified for a mortgage.

*A prequalification is not an approval of credit, and does not signify that underwriting requirements have been met.