Author Archives: kkre704

Buying a Foreclosure: House to Home Chronicles

First time home-buyers may come in to the process with many preconceived notions about real estate. This couple learned a lot and shares their advice on working with a real estate agent and what others can expect. In the video they explain what it was like buying a foreclosed property and how they were able to maximize their budget.

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View the full video here:
https://youtu.be/9doBoRuiXnM

South Carolina Relocation: House to Home Chronicles

Charlotte is a unique spot in North Carolina because of its proximity to South Carolina and many surrounding neighborhoods. Moving from another region or just down the road can seem overwhelming. In this chronicle, the Nugents explain why Rock Hill, SC worked for them when looking to purchase their first home.

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View the full video here: https://youtu.be/reUjo7tcpPI

Tips to Prepare Your Home for Winter Weather

Winter is here, and with it comes beautiful snow and comforting fireplaces. However, this time of year also brings the very real chance of severe winter storms. Blizzards, ice storms and dangerously low temperatures can pose serious threats to you and your home.

Having your home ready to combat the worst of winter weather is something no homeowner should take lightly. The mercury is dropping — are you prepared?

Inside the Home

Make sure these indoor winterizing tasks are squared away before it’s too late.

Add weather stripping to windows and doors. Once the wind starts whipping through the neighborhood, you’ll be able to feel the cold air slipping through cracks and gaps in windows and doors. The first step to sealing out drafts is to measure the gap around the window or door. Then buy weather stripping that’s wider than the widest point of the gap. That way, when you close the window or door, it’ll compress the weather stripping, plug up the gap and seal out any drafts. And don’t forget to block gaps beneath exterior doors. Specially designed door sweeps and tubular rubber weather stripping are highly effective at blocking out wind, rain and snow.

Flush the water heater. Sediment and gunk can accumulate in the bottom of a water heater, causing its efficiency to dip considerably. It’s fairly easy to flush the water heater yourself, but always consult a professional if you have any questions. Water heaters all have a drain valve at the bottom of the unit. If your water heater is electric, make sure you turn off the electricity to the heater before it’s flushed. Hook up a hose to the drain valve, attaching it carefully to prevent flooding, and run it outside to a safe place to drain the water. Then open the valve and let it drain before cleaning out any gunk and rust.

Prepare the fireplace. Whether you have a traditional wood fireplace or a gas fireplace, you’ll need to make sure it’s burning safely and efficiently.

Clean the chimney. Wood-burning fireplaces can produce a great deal of creosote buildup inside the walls of your chimney from casual use, which could cause problems with smoke and carbon monoxide escaping into the living area. If you use the fireplace frequently — say, three to four days per week all winter long — it’s smart to hire a chimney sweep to clean the flue once a year.

Prep gas fireplaces. Have the gas burner inspected by a professional to ensure there are no leaks or buildup in the lines.

 

ISlu5f24e0kmw41000000000Courtesy of Zillow Digs.

Find alternative heat sources. When the power goes out during a winter storm, it won’t be long before you start to feel the temperature in your home dropping. That’s why it’s crucial to have alternative sources of power and heat — ones that don’t require the electricity of your home to operate. Consider investing in a temporary wood-burning stove, or a kerosene or gas heater.

Prepare for ice dams. Ice dams are potentially the most damaging of problems that can arise from a severe winter storm, and although they occur on the outside of your home, preventing them actually begins inside. When snow and ice accumulate on your roof, they melt in locations where heat has built up and warmed the underside of the roof. That melted snow and ice will travel down to the cooler edges of the roof and freeze, causing a large buildup, or dam, of ice.

Water traveling from the top of the roof backs up against the newly-formed ice dam. That water then begins penetrating the roof, leaking down into the walls and ceilings, and damaging drywall. On top of that, the water can get inside insulation, creating excess moisture leading to further damage, and even dangerous mold.

To prevent ice dams from occurring, check insulation in your attic and top floor, including around electrical boxes and recessed light fixtures, and make sure the roof is adequately ventilated.

Outside the Home

Now that your house is ready for winter weather inside, it’s time to prepare the outside of your home. Snowstorms can bring their own problems, but ice is a bigger winter storm worry, and power outages can cause serious issues if you’re not prepared.

Caulk windows. When you install weather stripping inside, check the exterior of your window for gaps as well. On occasion, the frame can separate from the exterior, allowing cold air to sneak inside. Grab some exterior window/door caulk in a color similar to your window frame, and run a bead around the gap to make sure you have the drafts covered from both sides.

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Wrap pipes and faucets. Outside, your home likely has at least one exposed faucet used for watering and outdoor activities. But in the winter, these faucets can pose a hazard, allowing winter air to infiltrate the water running through your underground pipes. When it gets cold enough, the water could freeze and expand in the pipes, causing them to burst. Then you have major problems. Covering the exposed faucet heads with hard foam covers is a must when you get a “hard freeze,” meaning the temperature drops below 28 degrees.

Also, if you have any underground sprinkler systems, they may have an exposed supply line near the home. Wrap and tape these with pipe insulation and duct tape to make sure they don’t freeze as well.

Clean gutters and add gutter guards. Leaves can muck up the gutter works, so it’s important to make sure you get all the blockage out of the way before melting snow and ice backs up on your roof and causes damage.

Trim your trees. Take a minute to identify branches that may cause a problem in the event of heavy ice, and hire a professional to trim them away from your home.

Combat power outages with a generator. Power loss from iced-over power lines is an outdoor problem with big indoor consequences. A generator is the perfect way to avoid the hassle of finding an alternative heat source or overusing your fireplace. But be careful: Every winter brings news reports of deaths due to carbon monoxide from improperly used generators. Consumer protection agencies recommend that you never use portable generators indoors or in garages, basements, or sheds. They should always be used outside, well away from windows, doors, vents, or any other opening. Keeping a working CO alarm in your house is also a good idea.

Don’t let winter take you by surprise! Make sure your home is protected against snow, ice and freezing wind. Install your alternative heat sources and generators before a storm warning even arrives, and keep plenty of water and easy-to-store food on hand. When severe weather hits, you’ll be prepared for whatever comes your way.

From: Zillow

TRID Blog

What is TRID?

TRID translates to TILA-RESPA Integrated Disclosure and it went into effect on Oct. 3 of 2015. Simply put, TRID combines the Good Faith Estimate and Early Truth-in-Lending disclosure into the loan estimate and the HUD-1 and Final TIL into the closing disclosure.

Why does TRID matter?

TRID is one of the largest obstacles to purchasing, thanks to its mandatory waiting periods and lenders lacking experience with the process. Buyers who pick inexperienced lenders risk additional delays in rate-lock extensions and/or missed deadlines on purchase contracts.

Further complicating matters is that each lender interprets TRID in their own different way. Finding a lender who has the most favorable interpretations is crucial.

How do I find the right lender?

Find a lender that will pre-approve and not just pre-qualify. A pre-approval is actually having your loan submitted, underwritten and approved with conditions as a property to be named later. Pre-approval saves about two days.

Also, select a lender who issues the CD before being clear to close. A lot of lenders will only issue CDs after your loan is clear to close.

The CD requires a three-day wait period before closing. So if you receive it after you are clear, then you are sitting around for three days doing nothing.

On the other hand, if the lender issues it before the clear to close, you can begin your wait period working on other conditions with the lender. This saves buyers three days.

From: SF Gate

10 Terms First-Time Homebuyers Should Know

In about a month or so, it won’t just be spring. It’ll be home selling and buying season, and you’ll start seeing the “For Sale” signs posted in yards as well as online advertisements beckoning prospective homebuyers.Vocabularly_FullSize

But before you allow yourself to be beckoned, it would behoove you to familiarize yourself with the following 10 terms – especially if this is your first time making one of the biggest purchases of your life.

1. Fixed-rate mortgage.
This means the interest rate you pay on your home loan won’t change. Over the years, your mortgage payment will likely change some – property taxes will likely rise, your homeowners insurance might climb or fall, or you might shed your PMI (a term we’ll come back to). But generally, if you have a fixed-rate mortgage, your monthly mortgage payment won’t change much over the years.

2. Adjustable-rate mortgage. Also known as an ARM, this is essentially the opposite of a fixed-rate mortgage. You’ll have a fixed rate for several years, maybe five or 10, and then the interest rate adjusts according to the fully indexed interest rate, often the prime rate, which is what banks charge their most creditworthy customers. So while your interest rate and payments will likely be lower in the beginning than those of the homeowner with the fixed-rate mortgage, hope that interest rates remain low throughout the life of your loan. As interest rates climb, so too will your own interest rate and monthly payments.

3. Prequalified.
This can be a confusing term, mostly because homebuyers tend to mix it up with preapproved, says Rick Hogle, chief strategic officer at Supreme Lending, a mortgage company in Dallas.

If your lender tells you that you’re prequalified for a house, that’s a good start – but you’re still a long way from being a homeowner. “Prequalification requires less documentation,” Hogle says. “It provides a general idea of the loan amount in which a homebuyer might qualify.” This way, you can start looking a home and have a sense of what type of house you can afford.

Preapprovals are a much bigger deal, Hogle says. These require the submission of many more documents, such as pay stubs, bank statements and tax returns.

Preapprovals are really for homeowners who are ready to commit to buying a house. If you’re preapproved, you’ve basically been told that the bank will lend you money for a house, provided you don’t blow things in the meantime, while you’re house hunting, like missing a bunch of payments or racking up credit card debt before you’re actually approved.

4. Conventional loans.
These are the typical loans that many people, but not all, apply for when they want a mortgage.

“Those with low credit scores usually won’t qualify for conventional loans,” says Passard Dean, associate professor of accounting at Saint Leo University in Saint Leo, Florida. “In the past, you were also required to put a down payment of at least 5 percent. However, with the new guidelines from Fannie Mae and Freddie Mac, you can now put a down payment as low as 3 percent.  These loans generally require a credit score of above 650.

5. Federal Housing Administration loan. Have poor credit? You’ll probably get one of these, also known as FHA loans.

“These are excellent for first-time homebuyers with subprime credit scores,” Dean says. “In addition to more relaxed credit scores and lower upfront costs, the down payment can be as low as 3 percent.”

6. Appraisal.
This is an estimate that determines what your property is worth. Banks need homes to be appraised, in part, so they don’t lend you, say, $300,000 for a house that’s only worth $175,000. After all, if you can’t pay the loan, the bank will send you packing and will sell the home. But most people won’t buy a $175,000 home for $300,000, and knowing that, the bank doesn’t want to lend you more than your house is worth.

7. Private mortgage insurance.
This is a monthly insurance payment you’ll have to pay if the down payment on your house is less than 20 percent of the appraised value or sale price. If you don’t want to pay the PMI fee – which often ranges from .03 to 1.15 percent of the original loan, divided into 12 monthly payments – you’ll have to fork over a bigger down payment or buy a cheaper house. Usually, PMI insurance isn’t something you pay forever (it just seems like it, if you have a small down payment.) Typically, after your payments reach 20 percent of the value of your home, you stop paying PMI.

8. Closing costs. These are fees related to buying a house that your lender charges you, or you rack up from various third parties, such as a home inspector. According to the online real estate database Zillow.com, expect your closing costs to be 2 to 5 percent of the purchase price of your home. That may sound like a lot, but there are many costs involved in closing the deal, from buying title insurance to paying for points and attorney and surveyor fees.

9. Points. One point is a charge equal to 1 percent of the loan amount. So if you’re buying a $200,000 house, and a lender is charging you 2 points, that’s $4,000. Three points, $6,000. And why do you care? Because points are prepaid interest. The more points you pay, the lower your interest rate will be. If you’re planning to live in your house a few years, you could make a good argument for not paying points, but if you believe you’ll go the distance with a 30-year mortgage, it generally makes financial sense to pay as many points as you can afford to snag that lower interest rate, which, in the long run, should save you money. Ask your lender to do the math.

10. Escrow.
When you hear your real estate agent throw this word around, you’ll know you’re probably near the end of the home buying process.The word can be used in a few different ways, but when you think escrow, think of a third, neutral party. For instance, you may have looked at a house, loved it, made an offer and offered a deposit – which would then be put in escrow.

That is, it’ll be put in a third-party account, probably set up by your real estate agent. This way you aren’t giving the homeowner your deposit, also sometimes called earnest money. Usually you can’t recoup these deposits if you back out of the contract, but if the seller decides to sell the home to somebody else, you most certainly would get your deposit back. The escrow account keeps your deposit safe so the homeowners don’t inadvertently spend your money and put you through the hassle of having to get them to repay you.

You might also hear your lender talking about an escrow account where your property taxes and homeowners insurance go until they’re paid.

Of course, you can buy a house without truly understanding real estate and lender speak. Those professionals will walk you through everything, and you can likely nod your way through it all. But that doesn’t mean you should. After all, some would argue that’s how many homeowners got themselves in trouble before the 2007 recession, making decisions they shouldn’t have, and buying homes they didn’t realize they really couldn’t afford.

From: US News

How to Buy in New Construction

new home buildBuying “new construction” is a bit different from buying a previously-owned home. For one, because there is no previous homeowner, you don’t have to deal with a seller’s emotional tie to the property, which typically influences the negotiating process. Whether you’re designing and building a custom home or buying a home that’s built on spec in a new subdivision, you’ll only have to work with the builder.

As with buying a previously-owned home, you have to figure out your budget and secure financing before you even begin house hunting. Get pre-approved by a bank or mortgage lender. Decide how much money you want to invest in a new home. And don’t overlook the extras like property taxes, insurance, furniture, window treatments, landscaping costs and maintenance that can drain your bank account.

“It’s absolutely critical for new homeowners to know what they can afford based on their income, debt and credit score,” says Rosy Messina, vice president of sales and marketing for ICI Homes in Daytona Beach, Fla. If you’re considering buying a newly-constructed home, follow these five steps to guide you through the process:

Step 1: Weigh the Pros and Cons

Nothing beats the feeling of being the first person to live in a newly-built home. Everything is shiny and untouched. You can buy a brand-new home in one of three ways: buying a house already built on spec; having a semi-custom home built as part of a development (you can choose from a set palette of finishes and upgrades); or having a purely custom home designed and built to your specifications.

But before you get caught up in the sparkling new paint and granite countertops, evaluate your situation and see if new construction fits your lifestyle. Here are some questions to ask yourself, particularly if you fall within the first two methods of new-home buying:

  • New homes are typically far from the city center; will you mind the commute?
  • Are you willing to coax a new lawn into existence, and can you wait 20 years for sapling trees to mature?
  • Will the cookie-cutter nature of new subdivisions drive you bonkers?
  • New houses tend to be built right on top of each other. Do you mind the closeness and potential lack of privacy?

Step 2: Research Neighborhoods and Builders

When buying in a new subdivision, consider working with a buyer’s agent who knows the area well, can set up home tours and walk you through the closing process. When researching real estate agents:

  • Remember, the listing agent works for the builder, not for you. They’re trying to hit a quota, not help you make the right decision for you and your family.
  • Many states regulate how agents deal with new subdivisions. If you have your own agent, tell him up front that you’re interested in looking at new homes. He must accompany you on your first visit to any new subdivision; if he doesn’t, the builder’s sales rep will get the full commission if you buy a home there.

When researching neighborhoods:

  • Look online for listings for new home construction.
  • Drive around the neighborhood and check out the amenities and the quality of the homes.
  • Walk the community. Ask homeowners about their experience.
  • Go to model open houses, keep a journal and take photographs. Don’t try to cover every model house in the area in one day.
  • Check with the developer about potential homeowners’ association (HOA) fees and rules; some are incredibly expensive — and strict. They may not allow storage sheds, certain paint colors or finish materials, solar panels or even vegetable gardens. Be sure to find out if the HOA can assess penalties for infractions.
  • Ask whether cable and Internet are readily available and from what companies; your new house will be wired for cable but that does not mean the cable company offers service to your neighborhood.
  • If the development is still under construction, you’ll be dodging giant contractor trucks and facing jackhammering at 7 a.m. for a while.
  • Research the zoning laws for the neighborhood, as they can change quickly.
  • Visit the city planner’s office to see what’s in store for a particular location.
  • Ask your agent about plans for the area.

Whether you’re buying a new home that’s being built or building a new home from the ground up, you can choose the builder you work with.

“The buyer is more educated today,” says Rhonda Hoeft, area sales manager for The Estridge Collection in Carmel, Ind. “It’s amazing how much they know as opposed to five years ago. At least 80 percent of prospective buyers who walk into our sales office have researched our homes and the builder.”

In this uncertain economy, builders are feeling the pressure. To make certain you choose a financially-sound builder, Sharon Hanby-Robie, real estate agent and American Society of Interior Designers (ASID) in Lancaster, Pa., suggests, “Go to the courthouse to see if a lien’s been filed against the builder, then go to the construction site. Talk to subcontractors to see if they’re being paid.”

When researching builders:

  • Make sure there are no Better Business Bureau complaints on file against your builder’s company.
  • Ask local real estate agents if the builder has a good reputation in the community.
  • Visit your builder’s previously constructed homes; ask the occupants whether the craftsmanship has stood up to time, use and weather.

Step 3: Know What’s Standard and What’s Extra

Ask the builder about amenities and upgrades. Amenities are features that benefit the entire community like a clubhouse, health and fitness center or a gated entrance. Upgrades refer to added features or items you pay extra for to enhance your home, like certain types of flooring or appliances.

Get a feature sheet on the line of homes you’re interested in and read them very carefully, then compare feature to feature. Find out what comes with the base home price. If you don’t understand exactly what the builder is offering, ask and take notes. There are no dumb questions. Not knowing can cost you real money. Some things to keep in mind:

  • If the stove is included, visit the showroom to see the model. If you’re offered the basic stove and you’re a gourmet cook, it makes sense to buy the upgrade.
  • Make decisions on upgrades early in the process — every change costs money.
  • Have a good idea of what you need and want. They are two different things when it comes to upgrades.
  • Builders rake in the cash on upgrades because they can get parts and labor relatively cheaply. The markup is huge, so investigate each option you’re considering to see whether it would be cheaper to bid it out after you move in.
  • Builders, in general, need to sell quickly to make a profit. If you’re stuck haggling over price, get them to throw in the upgrades you want at a reduced cost or for free — it’s a way to get more value that’s appealing to both sides.

Step 4: Get an Inspection and Home Warranty

Once you decide to buy a new home, make your sales contract contingent on a final home inspection by a professional you hire. Never assume that because a home is newly constructed, it isn’t going to have defects. Municipal inspections for code violations are nowhere near as thorough as an independent professional inspection. If possible, have the home checked during each phase of building, when potential problems are easier to spot. If the builder objects to this, consider it a red flag.

Protect yourself with warranties. All new homes come with an implied warranty from the builder stipulating that any major defect of the structural integrity of the home must be repaired. Ask for a builder’s warranty for a period of time following move-in (a year, for example) that covers any defects in craftsmanship. Preferably, this warranty should be backed by insurance.

Home warranties vary in length, what they cover and typically run from one to 10 years; the manufacturer covers appliance warranties. Make sure any warranty you receive explicitly states what is covered and what isn’t, and what the limitations for damages are. For extra peace of mind, have your real estate attorney look over the warranty to make sure it’s kosher.

Step 5: Close the Deal

Builders often have in-house mortgage lenders or ties to an outside lender. New homebuyers can use the builder’s lenders or find their own financing. Ask your agent for information on special funding programs available for first-time buyers. Contact at least two lenders and compare terms, fees, rates and points.

“You are committing 30 years of your life to the process of homeownership,” says Messina. “Learn as much as possible about the mortgage process by reading everything you can find.”

Kriss Lindblom did just that before he and his partner, Angela Diesner, closed on a Pulte-built home in Maricopa, Ariz., last year. “I read every piece of paper they gave me, every contract, disclaimer, declaration of covenants and restrictions, the bylaws of the community association.”

“I sat there with a pen and paper and anything that stood out I called the sales associate and questioned it,” Lindblom says.

If you’re not comfortable with the legal process, get an attorney. Remember, sign nothing until you fully understand the meaning of the words.

From: HGTV