Stay Within Your Means to Get the Best Value When Buying a Home!

Before you make any kind of investment in a home, check your financial "pulse" to make sure you're financially healthy and able to comfortably afford both the down payment and the monthly payments. Below are common-sense guidelines to follow in this regard:

Guideline 1: Check your credit rating!

One of the first things lenders will check before loaning you money is your credit rating. If it’s good to excellent, your chances of borrowing money for a mortgage are very much improved. Currently, depending on circumstances, you need a credit score of at least 620 and the money for a down payment (the percentage varies with the type of loan).

If you have a credit score below the 620 benchmark, then additional documentation (and more time) will be required to prove to the lender that you're worthy of a loan - and even then there's no guarantee that the mortgage will be granted. So, as you can see, it's important to know what your credit score is before you approach a lender. You can find out this information from one of the "Big Three" major credit reporting agencies shown below:

• Equifax (exquifax.com)
• Experian (experian.com)
• Transunion (transunion.com)

If you're wondering exactly what such agencies do, the best explanation is that they act as a clearinghouse for lenders. That means they collect financial information. They then sell it to banks, credit card companies, mortgage companies and other lending agencies. In essence, lenders use that information to decide if you’re a good financial risk.

So, if you have a credit score of 620 or better, no problem! But what if that score is below 620? What can you do then? Follow the guideline below.

Guideline 2: Reduce or Eliminate Debt!

The only method of raising your credit rating is to pay off credit cards or any other kind of debt you have. Now, no matter what you hear or see on television, radio or the Internet, there's no "magic bullet" for reducing or eliminating debt. It has been and always will be a matter of personal discipline on your part! You can accomplish that discipline by taking the following steps:

Step 1: Pay your bills on time—all the time.
Step 2: Don’t open unneeded credit card accounts to increase available credit.
Step 3: This is the most important step. You must figure out where you stand financially by budgeting. In other words, you have to reduce unnecessary expenditures so you can apply saved monies to your debt and improve your credit score.

In this step, you must analyze your current financial situation. The first question to ask yourself is, "How much debt is too much?"There’s an easy formula for coming up with an answer to that question. It’s called the debt to income ratio. It’s a simple method of measuring your net monthly income against your debt.

For purposes of illustration, let's assume the following: Your net monthly income is $2,000. Your monthly debt payments are $500. Divide $500 by $2,000, and you’ve calculated your debt to income ratio:

500÷2000 =.25 (25%)

Financial experts generally agree that debt expenses should be 25% or less of your income. A ratio of 10% or less is great. Anything above 25% waves a red flag in the face of lenders in general. In that case, you definitely need to reduce or eliminate debt. So, what is your debt to income ratio?

Answer that question by doing the following:

• Review last month’s bills. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)

• Review your credit card bills. Add up the minimum payments owed on each card.

• Figure your monthly take-home pay (net salary).

• Now divide monthly fixed expenses by monthly income.

What percentage did you get? If it’s 25% or greater, then it's time to take action to reduce your debt. It’s time to budget!Okay, let's assume that your credit rating is in the good to excellent category and you have the money for a down payment on a house. That's great news!

But, you still need to stay within your means! So, upfront decide what you want in a home (two bedrooms, attached garage, etc.) and then stick to those guidelines!

Don't get swayed by an ultra-beautiful home with, say, four bedrooms and a state-of-the-art kitchen. If such a house is beyond your means, it won't look very beautiful when you can't make the monthly payments!

The best approach to take is to tell your Realtor upfront about your guidelines and ask him or her to show you only homes that meet them.

Believe me, I or any other Realtor love to work with customers who know what they want! It not only helps you but us as well because we can locate such properties faster and easier and get you into a new home that much more quickly!Please contact me so I can answer any more questions you might have about buying a great new home within your means!

Discover the 3 Best Things to do to Sell Your Home for the Highest Price

I want to tell you about the three best and most cost-effective strategies to follow in order to get the highest price on your home. Let’s get right to it!

The three best strategies are staging, paint and carpet, and curb appeal. Below, I explain these strategies and the benefits of each.

Staging

If you’re not familiar with the concept of “staging,” it’s simply a method of showing off your home to its best advantage by re-arranging furniture, paintings, etc.

Now, sometimes, people get the mistaken idea that staging involves taking out all your furniture and replacing it with temporary new items.

That’s not what we do at all!

We simply look at methods of making the best possible impression by placing furniture, etc. in the most pleasant and welcoming arrangement possible. Plus, we may add some temporary furniture or paintings to heighten the sense of a warm and comfortable home.

If it helps, think of a home stager as a person who’s similar to a set designer for movies – they use their expertise to achieve the effect they desire.

We do the same! Believe me, home staging will give you one of the highest returns on investment in terms of achieving more dollars on the final sale!

Paint and Carpet

Paint and especially carpets can have a huge positive or negative impact on potential buyers.
Believe me, you can have a beautiful, beautiful home, but if buyers see a ragged, threadbare or dirty carpet, it may end up being a deal killer!

The same is true of paint! These two items have a huge impact on the all-important first impression.

So, you want visitors to focus on the house as whole, not on paint and carpet. And, remember, when you repaint and clean or replace the carpet, you’ll get $2 to $3 back for every dollar you spend!

In terms of paint, definitely do not go for the cheap stuff! Choose a high--quality paint. It simply looks better and emphasizes the quality of care you’ve put into your home. You can bet buyers will notice that!

In terms of carpet, you have two choices, depending on the state of that carpet. If it’s simply dirty, have it professionally cleaned so it looks like new.

If it’s threadbare or worn or has an out-of-fashion color, replace it. I know this may seem like an expensive improvement, but it can actually add several thousand dollars to the sale price and end up being a great return on investment!

Curb Appeal!

The term “curb appeal” refers to the first impression potential buyers receive when they first see your home. As we all know, first impressions are everything, especially with such a large investment as a house!

So, it’s in your best interest to make your home as attractive as possible outside as well as in. Great curb appeal can complete the sale and increase your final profit as well!

And here’s more good news – you don’t need to spend a lot of money to get fantastic curb appeal. Depending on the structure of your house and type of lawn, use one or more of the following methods:

Manicure That Lawn!

A mowed and edged lawn really enhances the curb appeal of your home and shows potential buyers that you take good care of your place. Sometimes, you can really emphasize the beauty of your home by adding colorful flowers, bushes, etc.

Wash the Walls (Siding, etc.)!

If you live in an area where there’s lot of dust, using your own hose or renting power washing equipment can make a home look brand new! And you do it all at no cost or very little cost!

Paint!

If you have a house that requires painting, then you’re in luck – repainting is one of the most cost-effective ways of improving appearance and adding value to a house! You’ll get back $2-3 for every dollar you spend!
Whether you do the job yourself or hire a service, make sure a high-quality paint is used for the brushes and/or sprayer. It makes a great first impression. Of course, choose colors that are appropriate for the house and the area.

So, there you have it – three great ways to increase the final sale price of your home!

If you’d like to learn about more cost-effective methods for increasing the sale price of your specific home, give me a call right now.