The Difference Between Pre-Approval & Pre-Qualification

Preapproval

PreapprovalReal estate agents often suggest to buyers that they become “pre-approved” or “pre-qualified” before beginning the home search process. While these mortgage terms sound similar, they carry very different meanings. For a homebuyer, a pre-approval letter is more beneficial to have in the homebuying process than a pre-qualification letter because it indicates a more serious offer to the seller.

A mortgage pre-qualification is an initial assessment by a lender of a borrower’s ability to qualify for a mortgage loan. When buyers are pre-qualified, the credit report may or may not be pulled, and information about employment, income, assets, and liabilities is given to the lender by the borrower. However, none of this information is verified by the lender, which makes it less accurate than a pre-approval. In the case of a pre-qualification, the lender is reliant on the buyer to provide an accurate estimate of these items.

In contrast, A pre-approval is determined after the lender’s more in-depth analysis of the borrower’s income, expenses, assets, liabilities, and credit score. Generally, documentation is provided by the borrower for each of the above items so that the lender can verify the information that was provided verbally at the pre-qualification stage. A pre-approval is not a commitment to lend, as only an underwriter can provide that. However, a pre-approval letter lets the seller know that the information provided to the lender has been verified and it appears that the borrower will be approved for the loan.

Once you become serious about purchasing a home, you should consider getting pre-approved for a mortgage so that you know how much home you can afford. It is important to remember that neither a pre-approval letter nor a pre-qualification letter guarantees you will be approved for your mortgage. However, by applying for a pre-approval, you are one step closer.

When you are ready to purchase a home, I would love to meet with you to go over your finances and credit report and begin your pre-approval. Let’s make your dreams of homeownership a reality!

Real Estate Market Trends Defining the Remainder of 2021

Real estate

Real estateIt’s no secret that the late 2020 and early 2021 housing market has been hot nationwide. While we’ve seen many trends filter in and out over the last several months, experts say there are few that are here to stay:

Inventory problems – Throughout the entirety of 2021, we have seen historically low housing inventory across the US. The low inventory coupled with the high demand for housing has caused buyers to compete for properties offering prices far above the listing price. As we continue into the rest of 2021, low inventory may slightly improve, but for the most part is expected to stay.

Low interest rates – The low interest rates we have seen through 2020 and 2021 caused not only a refinance boom, but also an increase in interest to purchase. While home prices are higher than average, buyers can offset this by locking in a low interest rate. According to real estate professionals, rates are expected to stay relatively low through the rest of the year.

Increased tech – The COVID-19 pandemic forced the mortgage and real estate industries to go digital on many of their processes. While some of this has gone back to the way it was done pre-pandemic, many of the digital processes such as virtual home touring and 3D renderings will likely stick around.

To learn more about trends to look for in the remainder of the 2021 market, click here.

 

Prepare Your Home for Fall

Suburban home in early Autumn as the leaves begin to turn

Suburban home in early Autumn as the leaves begin to turnAfter a long, hot summer, it’s time to prepare your home for cooler weather! With the autumn months around the corner, here are some things you can do to get your home ready for the change of seasons.

Clear out gutters – To prevent clogs, be sure to remove leaves and other debris from your drainpipes and gutters.

Seal air leaks – Check your home for drafts that may occur due to cracks around windows or doors. Use a calking material to fix cracks in stationary house components such as doorframes and weather stripping.

Check your furnace – Sediment buildup can cause your system to work less efficiently or potentially become a fire hazard. Have your furnace inspected annually to reduce the risks.

Examine your air ducts – Properly seal and insulate air ducts to make sure they are working to their fullest potential. This simple step can keep you from losing 20% of the air that moves through the duct system.

Prepare the water heater – Drain the water heater to clear out any debris that has collected in the bottom of the tank.

For more information on prepping your home for autumn, click here or watch the video below.

Cities Leading the Hot Housing Market

Phoenix, Arizona, USA Downtown Skyline Aerial.

Phoenix, Arizona, USA Downtown Skyline Aerial.

The most recent edition of S&P CoreLogic Case-Shiller Home Price Index reported a 18.6% annual gain in home prices in June, up from 16.8% in May. This marks the third consecutive month of record growth across the U.S. in the 30-year history of the index. According to the report, the largest price gains in recent months were in the following markets:

  • Phoenix, AZ
  • San Diego, CA
  • Chicago, IL
  • Boston, MA
  • Charlotte, NC
  • Cleveland, OH
  • Dallas, TX
  • Denver, CO
  • Seattle, WA

A separate survey conducted by the Federal housing Finance Agency showed that home prices rose almost 5% between the first and second quarters of 2021, which adds to the 40 consecutive quarters of rising home prices. States leading these increases were Idaho, Utah, Arizona, Montana, and Rhode Island.

To learn more, click here.

Can I help you with your home financing needs today? Give me a call!

Fannie Mae to Include Rent History in Mortgage Approval

Mortgage

MortgageFannie Mae aims to make loans more accessible to homebuyers by including rent payments as part of the mortgage approval process. This action is intended to help borrowers with limited credit histories have better accessibility to home loans.

According to an article by Realtor.com and The Wallstreet Journal, Fannie Mae will start helping lenders factor in borrowers’ history of rent payments with mortgage applications beginning in September. While including rent history will be an option, Fannie Mae does not require lenders to consider rent history if a borrower has a credit score that meets the criteria. Typically, credit reports do not include rent payments as most landlords do not report data to credit-reporting firms.

Speaking about this shift, Hugh Frater, Fannie Mae’s chief executive, said: “In some markets, it’s just as expensive to rent as it is to own. Many renters have the history of making payments, which in my opinion should be equally and fairly considered in their ability to pay a mortgage.

Changes to Fannie Mae’s underwriting system will allow them to automatically identify rent payments from an applicant’s bank account information.

To learn more about this change, click here.

If you are interested in purchasing a home or refinancing your current home, call me today!

America’s 10 Most Affordable Markets

Aerial view of suburban houses and sunset sky - West Chester, Pe

Aerial view of suburban houses and sunset sky - West Chester, PeWith the soaring prices of real estate nationwide, it can be tough to find areas with more reasonably priced homes. A survey was recently conducted by the data team at Realtor.com to identify America’s most affordable metro-area housing markets. After analyzing the 300 largest metros in the U.S., following are the 10 that had the lowest median home price in July 2021:

  1. Pottsville, PA
  2. Peoria, IL
  3. Terre Haute, IN
  4. Youngstown, OH
  5. Huntington, WV
  6. Saginaw, MI
  7. Davenport, IA
  8. Albany, GA
  9. Wichita Falls, TX
  10. Joplin, MO

To learn more about the market in these cities, click here.

Are you interested in purchasing a new home or refinancing your current home? I’d love to help! Call me today.

Create an Outdoor Entertaining Space

Cozy wicker sofa set and hanging chair in the garden

Cozy wicker sofa set and hanging chair in the gardenAutumn is almost here! We know this means cooler weather and the chance to fully enjoy your outdoor living spaces is nigh. Whether it’s football on the big screen or simply indulging in a glass of wine by the fire, your porch or patio is the perfect place to enjoy all that the season brings.

Here are some terrific tips to help you outfit your outdoor entertainment space:

  1. If you have an enclosed or screened-in porch, consider mounting a television for viewing fall sports and movies. This provides an outdoor living space for hosting your friends and family.
  2. Install a fire pit! What better way is there to enjoy the crisp weather than cozying up by the fire with loved ones? Find easy ways to build your own fire pit or purchase one for around $100.
  3. Consider investing in a new outdoor furniture set. Many outdoor furniture sets are on sale this time of year due to summer clearance, making it a great time to purchase one to spruce up your patio. Check with stores such as Target, Walmart, Home Depot, and Lowe’s for great end-of-summer savings.
  4. Outfitting your patio furniture with autumn-hued pillows and blankets is a wonderful way to add a touch of fall. To view some beautiful outdoor entertaining spaces, click here.

Are you interested in buying a home during the fall season? If so, please call me! I would love to discuss your home financing options and get you moving before the holidays.

US Home Prices Jumped During the Second Quarter of 2021

A neighborhood of new homes in a suburban community in the rural

A neighborhood of new homes in a suburban community in the ruralDuring the second quarter of 2021, as extreme demand continued to overwhelm the housing inventory, home prices soared nationwide. According to the National Association of Realtors (NAR), the median sales price for single-family existing homes was higher compared to the second quarter of 2020 in 182 out of the 183 metro areas surveyed. In 94% of those metro areas, prices rose by more than 10% from the year before.

Over the past year, low interest rates and increased remote work have sparked demand in housing across the country. As a result, housing inventory is a record lows, which is driving up home prices. In some areas, prices are increasing so swiftly that they are outweighing the benefits of low mortgage rates. However, experts predict that the market may begin to slow slightly as we move forward into the end of 2021 and beginning of 2022. NAR’s chief economist, Lawrence Yun, said that “the housing market looks to move from ‘super-hot’ to ‘warm,’ with markedly slower price gain.”

For more information on the current market, click here.

Are you interested in purchasing a home or refinancing your current home? I’d love to help! Call me today to set up an appointment so we can review your financial goals.

Fall Gardening Tips

A fan rake and gloves lie on the grass next to fallen autumn lea

A fan rake and gloves lie on the grass next to fallen autumn leaWith the first official day of autumn drawing near, it may be time to begin thinking about preparing your garden for cooler temperatures. There are many things you can do to make the most out of the crisp autumn weather as well as prepare some beautiful blooms for next spring. Here are some great fall gardening tips:

Grass – The first six weeks of autumn are the best time to plant and fertilize cool-weather grass such as fescue and rye. This gives the grass seed time to germinate and develop a good root system before colder temperatures arrive.

Vegetable Gardens – To prevent pests and diseases from overwintering in old plant debris, remove old plants and add them to your compost pile. If you’re growing cool-season crops such as broccoli and lettuce, floating row covers can provide protection from light frosts.

Landscaping – If you intend to plant any trees or shrubs, fall is the best season to do it. The soil is still warm enough for roots to develop a healthy root system before the cold months of winter. Once trees or shrubs are planted, be sure to water them regularly since the winds of cooler weather can dry out the plants. If rain is sparse, it is best to water once a week.

Flowers –Tulips, daffodils, crocus and iris are all great bulbs to plant in the fall for spring blooms. In cooler climates, bulbs can be planted in October. In warmer climates, mid-to-late November is ideal. This is also a wonderful time to divide perennials and plant perennial seeds for spring.

Mulch – As you plant new items this fall, don’t forget to cover them with a layer of mulch. You can also use this time to replenish mulch around already existing plants. Mulch keeps the ground moist and also provides a layer of protection to your plants in cooler temperatures.

For more fall gardening tips, click here or watch the video below.

Video For Real Estate

Video

VideoIn the world of real estate, using video is one of the best ways to market for your business. According to the National Association of Realtors, 37% of people use video as an informative source during the home search. As a real estate professional, sharing market insights, listings and more can provide your customers a source of education. Following are some great tips to create professional videos for your business.

Setting the stage:

  1. Be mindful of what’s behind you for the shoot. Whether it’s a light source, an animal or a strange thing on a shelf, it’s always good to take a look at the shot before hitting record.
  2. Have a good light source in front of you. Natural light is the best.
  3. A smartphone or computer will often be sufficient for video. If you would like to take it a step further, you can purchase a ring light with a phone holder as it illuminates the video and keeps the phone still.
  4. There are many editing programs available that will allow you to make simple alterations to the video. Here are some simple and free programs.

Setting yourself:

  1. Avoid wearing light colors. Dark or bright always work best in video.
  2. While a suit may seem too formal, casual or professional clothing are great options.
  3. Don’t overthink it! Try to be your natural self on camera.

For more tips and information about videos for real estate, click here.