Sunrise Homes & Renovations, Inc.

The Pros and Cons of ‘Mortgage Before Marriage’ for Young Couples

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The Pros and Cons of 'Mortgage Before Marriage' for Young CouplesThere was a time when a higher percentage of people were married before they committed to buying a home together, but it’s a lot more common to co-habit and invest in a home together. If you’re considering the commitment of a mortgage without being married, here are some things to be aware of before you start searching the market.

Relationship Status Won’t Affect Your Rates

It might seem like there are greater risks involved if two individuals purchasing a property are not legally bound, but it actually makes no difference to the mortgage lender. If two people are buying a home together, the lender is going to be assessing their credibility based on their individual credit reports and financial history, not on their relationship to each other. While it may seem like co-habiting will have an impact, the proof – as far as lenders are concerned – is in the numbers.

What’s Your Credit History?

Most people are aware of their credit history, whether they’ve had financial hiccups in the past or are still paying off a significant amount of debt. However, it is more difficult for some to know the financial background of their partner, and this can be more common when it comes to co-habiting. Because the lender will be looking at both credit scores, if you or your partner have had financial issues in the past, it can have an adverse impact on your application. While you may have a nearly perfect credit history, if your partner does not this can make mortgage approval more difficult.

In The Event Of Separation

Home ownership can involve significant hurdles after a divorce, but there will still be some legal and financial issues to wade through if you’ve never been married. Since it’s likely that you won’t want to continue to co-habit, there’s the possibility that one party will have to buy the other out, which can be a sizeable financial burden. While this type of situation may never come to fruition, it’s important to be aware of what might occur so you can be prepared.

There can be a lot of complexities involved in co-habiting whether you’re married or not, but it’s important to have an awareness of your partner’s financial history and be prepared for financial hurdles. If you’re currently on the market for a new home, contact one of our mortgage professionals for more information.

A Guide To Investing In Real Estate Rentals

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A Guide To Investing In Real Estate RentalsIf you are thinking about purchasing an investment property, you probably understand this is a great way to diversify your investments. On the other hand, you also need to understand how to evaluate potential rental properties and how to make sure you can generate enough income to cover the overhead expenses related to the property. What do you need to know?

Pay Down Personal Debt First

Before you decide to take on a second mortgage, you need to pay down as much of your existing debt as possible. If you have unpaid medical bills, student loans, and car loans, you need to pay down the step before you decide to purchase an investment property. You need to have cash available to pay down your current and second mortgage, so you do not want to have other sources of debt dragging you down. 

Have Enough Money For A Down Payment

Investment properties typically have more stringent requirements regarding down payments. Even though you might have qualified for a first-time homeowner loan for only 3.5 percent down, that is not going to cut it for an investment property. You will probably need to have at least 20 percent of the property’s value available for a down payment. Mortgage insurance generally is not available on rental properties.

Consider Location

Just as you did with your original property, you need to think carefully about the location of your rental property. You need to purchase a property that has the potential to go up in value. You should also think about properties that have a strong school system, easy access to amenities, and relatively low property taxes. You also need to pay attention to crime rates and the health of the job market.

Consider Rent And Unexpected Costs

Finally, after you find a lender who can help you, make sure you think about your rental stream and any unexpected expenses. You need to have enough rent coming in every month to cover your mortgage, real estate taxes, and homeowners insurance. You should also have money set aside to cover unexpected expenses such as roof damage, HVAC issues, and plumbing problems. Stay on top of these issues to protect the value of your property. 

 

Understanding Your Debt To Income Ratio: What It Means

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Understanding Your Debt To Income Ratio: What It MeansIf you are looking for a home, you might need to finance it using a lender, such as a bank or a credit union. There are a number of factors that will influence whether your mortgage application is approved. Then, these same factors will play a role in the terms the lender might offer you. One of the most important factors is called the debt to income ratio, or DTI. It is important to understand how this will impact your mortgage application.

What Is A Debt To Income Ratio?

Your DTI is important to the lender because this allows the lender to figure out the likelihood of you paying your mortgage on time. The less debt you have, the more financial stability you have to pay a potential mortgage. 

To calculate your debt to income ratio, you need to calculate all the bills you have for the upcoming month. For example, if you have rent and a car payment, you add these numbers together. Then, you divide this number by your gross monthly income. If your rent is $900 and your car payment is $200, your total debt is $1100. Then, if you earn $3300, divide $1100 by $3300. This is about 33 percent.

Student Loan Debt Is A Driving Factor

With many members of the younger generation getting ready to purchase a house, it is important to understand the impact of student loan payments. Because a lot of potential home borrowers have student loans to pay back, their debt-to-income ratios will be significantly higher. This could make it harder for younger borrowers to get qualified for a mortgage, particularly one with favorable terms.

How To Improve Your Mortgage Application

Before you apply for a home loan, you should try to improve your debt to income ratio by paying down your existing bills. For example, if you have credit card debt, this will be included in your debt to income ratio. Try to pay this off before you apply for a mortgage. You should try to pay down your student loans as much as possible before applying for a mortgage as well. The less debt you carry, the more likely your mortgage application will be approved. 

 

Sale Pending: What Does This Mean?

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Sale Pending: What Does This Mean? The search for a house can be stressful and filled with lots of jargon that can make it difficult for someone new to the real estate world to figure out what is going on. One of the most common terms that people might see on the MLS is “sale pending.” What does this mean, and how should people interpret this?

An Overview Of Sale Pending

If a listing says that it is “sale pending,” it means that the buyer and the seller are under contract. While the deal is not yet set in stone, it means that the seller has accepted an offer, and there is a contract in place for the sale of the house. There might also be some contingencies to meet before the sale is finalized. 

Making An Offer On A Sale Pending House

This is something that someone can certainly do, but it might not be worth the time of the prospective buyer. If a higher offer comes in, the seller is still contractually obligated to honor the original offer. Buyers that want to make a backup offer should talk to a real estate professional to make sure they submit an offer properly. 

Why A House May Come Back On The Market

There are a few reasons why a house might come back on the market after being listed as pending. Sometimes, the home inspection doesn’t come back favorably, and the buyer might elect to withdraw the offer to find a house with fewer problems. Or, the buyer might have had a hard time finding financing, and cannot buy the house without a home loan. The seller might also be trying to force a short sale, which the bank might not approve, thus canceling the transaction.

Pending Versus Contingent: What This Means

Pending and contingent are similar terms, but they are not the same things. If a listing has gone “contingent,” it means that an agreement is in place but the buyer has to meet a number of contingencies before the sale can be finalized. If a sale is listed as pending, it means that all of the contingencies have been met and the sale is likely to close. Buyers may want to reach out to the seller agent for clarification if they are confused. 

Many Millennials Need More Space

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Many Millennials Need More SpaceThere are many Millennials who are looking for a home, and many of them are getting ready to trade up for more space. If you think you need more space, you may have more buying power than you realize. The coronavirus pandemic has led to a lot of changes, and you might be able to use the equity in your home to purchase a bigger house with more features.

Why Millennials Are Looking For Bigger Homes

There are a few reasons why many Millennials are looking for bigger homes. First, the coronavirus pandemic forced many people to work from home. This meant that a lot of people, including Millennials, needed a home office. In some cases, this means looking for a home with an extra room. 

In addition, many Millennials have had children during the past few years. This means they need one or two extra bedrooms, and probably another bathroom. This means moving into a home that has more space. 

Millennials Can Use The Equity In Their Homes

A lot of Millennials are still cash-strapped by student loans, but they might have more buying power than they realize. Due to the skyrocketing home prices during the past few years, Millennials may have built up a lot of equity in their homes. They can tap into this equity by selling their current houses for a significant profit. Then, they can roll this profit into a bigger house with a home office, extra bedrooms, more bathrooms, and a variety of extra features. 

How To Choose A New Home

Many Millennials are ready to use their newfound purchasing power to purchase a bigger house, but it is important to find the right one. Just because the house has more space doesn’t necessarily mean it is laid out properly. The bedrooms have to be the right size, particularly if their children are going to have a lot of toys. The home office also needs to be in a location where people will not be distracted while working. Finally, it might be beneficial to find a home office that can be used for more than one purpose. Some Millennials may be getting ready to go back to a physical office in the near future, and it would be beneficial to have a home office that can be used for different things. 

 

There Are Several Great Reasons To Consider Buying A Condo Today

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There Are Several Great Reasons To Consider Buying A Condo TodayMany would-be homebuyers are now considering buying a condominium instead. Condominiums may be a good option for first-time buyers who are experiencing obstacles when searching for properties that meet their budgets and other criteria. Here’s why:

Condos Might Offer More Budget-Friendly Options

In today’s housing market, supply constraints are a fact of life. Including condominiums in a home search might expand the pool of alternatives. Remember, condos are often less expensive because they have less room—the owner won’t have their own garden, for example—and the overall square footage is typically less than that of a single-family house. Still, if budget is the obstacle, condos could be the solution.

Condos Let Buyers Get Their Feet In The Door

Purchasing a condo is a terrific way to get a foot in the door and begin accumulating equity for a future move up. The sooner the purchase, the more equity can be gained. The condo that is purchased now may not be an everlasting home, but it might serve as a terrific stepping stone toward an ideal house purchase.

Determine If Living In A Condo Suits The Desired Lifestyle

Owning and living in a condo is a lifestyle decision that is right for some but wrong for others. While condominiums are smaller than single-family houses, the features they offer may be a selling point for many purchasers. With less room in the condo, owners typically have less day-to-day care, lower maintenance bills, and more time to spend with family and on leisure and recreation activities.

For instance, if a person dislikes lawn maintenance tasks such as mowing the grass and trimming the hedges, condo living might be ideal. Even spending time power cleaning a driveway is unnecessary, as is spending money on renting or buying a power washer that also needs to be maintained.

Condominiums are a terrific alternative for many consumers, particularly first-time homebuyers who match the profile of ideal condo dwellers. If you’re willing to look at condominiums in your search, you might be able to discover something that fits your budget and needs. To learn more, contact a reputable real estate agent in the area who is familiar with the condo-buying market and process.