When looking to buy a home, it takes a team of people to assist you with that goal. The real estate agent is a key member of the “team” you build while home-shopping. Just like anybody you work with on this important project, you want somebody who is knowledgeable, a strong advocate during sales negotiations, and whose personality fits well with your own. There are many avenues for seeking a real estate agent, and a few things to keep in mind as you go about that search.

Word-of-mouth is possibly the best way to find an agent. The agents who build the most successful businesses, whether or not they’re part of a larger firm, are those who satisfy their clients. Their business thrives based on the referrals those clients give. If somebody you trust has recently purchased a new home, ask how they liked their experience. You can also check online listings, which may include customer reviews. These may be less reliable than a personal referral, but they can give you some insight. Finally, ask your mortgage broker or other professional about the people they prefer to work with…this can help you build a team that’s completely on the same page as you. I am more than happy to offer some options based on my 10 years of experience of working with the real estate community.

Some real estate agents advertise their specific expertise in a region or neighborhood—they may do a lot of business helping homebuyers purchase property in these areas. If you’re looking for a specific location, check listings online or in print to see if you can find an agent who focuses on that location. These “regional experts” will know the properties very well, and can often help save time by avoiding homes that they know will not interest you.

No Comments »

Here we are again. The temperature dips and Christmas music can be heard everywhere. November means preparing for family visits and Thanksgiving dinner, and it also means it’s time to start preparing for the winter ahead. Here’s an overview of the things you’ll need to check and maintain in order to “winterize” your home.

Windows and Doors – These are often the biggest culprits when it comes to losing heat or allowing cold air to come in. Inspect all external windows and doors for cracks or holes, and replace as needed. Use weather stripping around the edges and install storm windows if available.

Structure and Foundation – As the weather fluctuates throughout the year, cracks can occur in the foundation and walls. When winter arrives, mice and other pests will find these cracks, trying to escape the cold. Seal and tuck-point these cracks, and make sure that there are no food sources near the inside or outside of your home.

Roof and Gutters – Adding insulation to your attic and replacing old or worn shingles will help keep heat from escaping as it rises. Keeping the gutters clean will direct water away from your home before it starts to freeze.

Plumbing – Frozen water in pipes can cause costly damage. Make sure you know how to shut off your water main in the event of an emergency, insulate any pipes exposed to the outdoors, and drain other tubing such as hoses or air conditioner pipes.

Miscellaneous – If you have snow removal machines, or even just a shovel, make sure they’re in full working order. Since heat or fireplaces will be running more often, be sure that smoke and carbon monoxide detectors are functioning and have fresh batteries. Finally, winter storms can knock out power and other systems—have an emergency kit handy.

No Comments »

Most of the factors that go into the underwriting approval process of a mortgage application are fairly straightforward—a first-time homebuyer can understand the basics of what is being assessed in their debt, income, and credit history. The debt-to-income ratio, however, is a unique instrument of the mortgage lender, and might not be as clear on the surface.

Underwriters review two different values to determine the debt-to-income ratio: a front-end percentage and a back-end percentage. The front-end refers to the amount of a prospective homebuyer’s income that goes towards their current housing costs (rent, current mortgage payments, condo assessments, and property insurance/taxes). The back-end refers to all debt payments for which the borrower is currently responsible, including the front-end percentage. These two percentages together create the borrower’s debt-to-income ratio, expressed as (front-end percentage) / (back-end percentage). By multiplying the borrower’s monthly income by each side of this ratio, the lender can determine what they can afford in a mortgage.

This ratio compared to the standard debt-to-income ratio. In the United States, the standard conforming loan ratio is 28/36 (signifying that the borrower should currently have 28% of their monthly income available for housing expenses and 36% for housing expense plus all other debt). For FHA-approved loans the ratio is 31/43, rural properties purchased with USDA loans are calculated with a debt-to-income ratio of 29/41, and Veterans Affairs loans are assessed on a single standard of 41 (meaning that the borrower must simply have 41% of their monthly income allowed towards all debt).

Although this ratio is a significant part of any mortgage application review, as with any application, the underwriter will be looking at the borrower’s entire financial situation. The general strategy for any hopeful borrower should be to reduce debt obligations and maintain a history of financial responsibility.

No Comments »