I’ve sold hundreds of houses over the course of my career and while every single client and every single house is unique, one thing always remains the same: houses cost money.
I know, I know – that’s the worst part, isn’t it? You’re all wrapped up in the glorious backyard and the stainless appliances and the fabulous school district and just as you are dreaming about paint colors and Thanksgiving tablescapes – WHAM – the money monster starts creeping in.
Don’t panic. Mortgage rates may not be at an all-time low right now, but they have found a nice, cozy spot at approximately 4.5 percent for a 30-year fixed loan. And while they may continue to rise, experts don’t foresee and huge jump on the horizon, which is good news for buyers now and in the near future.
So while luck (and a very good Realtor…ahem) may have led you to your dream home, finding the best mortgage deal takes a little more than good fortune. A recent article in The Denver Post simplified the process of securing a mortgage and, being the nice girl I am, I thought I’d share some advice:
Do Your Homework:
- Check your credit report with the three credit reporting agencies: Equifax, Experian and TransUnion. Don’t be nervous – I equate this to going to the dentist – it never is as bad as you expect.
- If you notice errors, get them corrected.
- If possible, pay down outstanding debt to improve your score.
- Resist buying new cars or other big ticket items (yachts, castles, Hope Diamonds) while applying for a mortgage and during the time until your closing date.
- Get pre-approved before shopping for a home – this will classify you as a strong buyer and sellers will be more attracted to your offer if they know it is solid. Looking for a good lender? Call me! I know the best lenders in town; people you can trust and who can get the job done quickly!
- Define how much you want to spend, or better yet, what you can afford. This will help you narrow your search and help you avoid over-spending when shopping for a home.
Find the Best Rates:
- A standard loan offers fixed interest rates for 30 years, while an adjustable-rate mortgage (ARM) provides a fixed rate for the first five to seven years.
- ARMs make sense for buyers planning to be in the house for a short period of time. Because ARMs offer a lower initial rate, but will grow exponentially in the years ahead, they aren’t the best bet for long-term, financially stable buyers.
Determine the Length of Your Loan:
- Ideally, a 15-year mortgage is a best bet for those buyers who can swing it. Actually, a cash purchase is fantastic (oh how I love the cash buyer!) but, alas, most of us are not floating in dough.
- A 15-year mortgage offers lower interest rates, but a higher monthly mortgage. Still, at the end of those 15 years, you will have paid significantly less in interest than those under a 30-year loan.
- A 30-year loan, the more typical choice for first-time or younger buyers, gives homeowners a little more financial freedom on a regular basis. For example, if your home carries a $300K mortgage, you pay approximately $1,520 per month on a loan with a 4.5 percent mortgage but a total of $248K in interest. That same mortgage with a 15-year term requires a payment of $2,182 per month, but the interest is significantly less at $93K. Either way, paying a bit more towards principle is always wise, if possible. And refinancing to a 15-year mortgage down the road is always an option. You know, once your money tree is in full bloom.
Lock It Down:
- Once you do land a great rate, lock it in. This can usually be handled at no cost or for a fee that is refunded at closing.
- Don’t play the guessing game when it comes to mortgage rates. Buyers trying to time their purchases to the fluctuating market usually wind up worse for the wear. And you’re going to need all your energy to pick out paint colors and get to work on those Thanksgiving decorations.
Thinking of Thanksgiving in a new home? Let’s talk turkey. Call me at 303-478-1201 or send me an email – email@example.com I’d love to help you!
In December 2011, luxury home prices across the Metro Denver area jumped eight percent, showing signs that the high-end market was alive and well at the end of the year.
The median price for a million-dollar-plus home in the Metro Denver area was $1.35 million in December 2011, up from $1.245 million in November 2011 and $1.25 million in December 2010. Overall home million-dollar-plus home sales in December dropped slightly to 41 homes from 45 homes one month prior and 51 homes one year prior. However, multi-million-dollar home sales increased to nine homes in Denver, up from five in November and eight in December 2011.
Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado, stated, “We’ve seen really good activity in the upper end of the market for the better part of the past year. That’s a healthy sign for the overall market because history has shown that sustainable recoveries in the housing market typically begin with the luxury segment.”
The challenge seems to be that there are too few homes on the market, not a lack of buyers. This presents a unique opportunity for Denver home sellers as there is still a healthy demand right now, just not the selection of homes that home buyers would like.
Visit Coldwell Banker Residential Real Estate Table Talk for more information about the latest Metro Denver real estate figures and information. If you would like to take advantage of listing your home in a market with low inventory, call me today!
Image via Flickr
If you are looking to buy a new home in Denver, you might want to act quickly. Newly proposed changes would limit the loans that can be insured by the Federal Housing Authority (FHA). If passed, Colorado borrowers would receive a smaller loan than they would currently receive beginning as soon as October 1st.
Nearly every Colorado county would see a drop in FHA loan limits if the proposal is passed. I work in Adams, Arapahoe, Broomfield, Denver, Douglas, and Jefferson counties which all currently have FHA loan limits of $406,250. If the proposal is passed, these limits would drop $38,250 to $368,000. This is a significant amount if you are attempting to purchase a home in Denver.
A couple of other counties in Colorado would be hit even harder. Eagle and Lake Counties’ FHA loan limits would drop from $729,720 to $625,500 for a total of $104,250. Hinsdale County’s loan limit would drop from $557,500 to $427,800 for a total of $129,700.
For Denver buyers on the fence, it is crucial that you take advantage of higher FHA loan limits while you still can. For more information about the proposed limits and current Denver inventory, give me a call at 888-860-1931.
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If you are a Denver homeowner that is reluctant to put money into your home, think again. Home improvements will increase the value of your home and will reduce the taxes due on your financial profit after selling the property.
Inman News recently discussed how home improvements can benefit those not looking to sell immediately, as well as the differences between improvements and repairs since they are different in the eyes of the tax code. A new bathroom or kitchen would be classified as a home improvement, while fixing up a leaky roof qualifies as a home repair and will not earn you any tax benefits in the future. In this scenario, you would need to add a new roof to your Denver home in order to benefit from any tax breaks.
These home improvements are added to the basis of the house for tax purposes. By putting $50,000 worth of work into your Denver home, your profit from selling the property is taxed by $50,000 less. Keep in mind that according to the home sale tax exclusion, single homeowners receive $250,000 in tax-free profit when they sell their home, while married homeowners receive $500,000 in tax-free profit. By completing home improvements as needed, you may be able to reach a point where you won’t have to pay any taxes when you sell your home!
For more information about local real estate and events, bookmark my Denver real estate blog. Leave a comment to share your experiences with home improvements and how they have affected your taxable financial gain after selling your home.
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