Posts for Syndication

Having a low FICO score usually means there is no way for you to quality for a FHA mortgage, but changes to the underwriting process August 2015 means that more borrowers may qualify. According to some analysts of the new policies, up to 100,000 new potential borrowers may now qualify if you can convince underwriters that you can make the payments.

Loans based on FICO score

Since the sub-prime meltdown, mortgage loans to borrowers with FICO scores below 660 fell below $150 billion per year overall and remain there. This lower number of loan originations, due to lenders shying away from loaning to borrowers with scores under 640 results from poor lender performance reviews for higher-than-average loan defaults.

Neighborhood Watch System

To encourage more borrowing to the subprime market, the Federal Housing Administration made enhancements to their Neighborhood Watch Early Warning System to better compare the performance of loans to borrowers with lower credit scores. The FHA hopes that more accurate assessment will improve underwriting processes to include other characteristics outside of FICO scores for determining creditworthiness.

FICO scores

The Fair Isaac Corporation (FICO), a company that provides software to calculate potential creditworthiness, developed a scoring system ranging from 300 to 850 points based on their specific formula. Access to your FICO score comes via the three major credit bureaus (Equifax, TransUnion and Experion). The FICO score, based on information each credit bureau keeps about you in your credit file, includes your credit history—loans and repayment, credit card usage, etc.—the age of your credit, and the types of credit you use. Your score can differ among the three bureaus depending on the information they have in their system about you.

What’s new?

Under the new system, FHA’s system for judging lenders changes to offer a more fair metric so that lenders to communities with a higher concentration of residents with lower than average FICO scores may offer loans without the fear of penalties simply because of where they focus their loan business. Borrows falling into the potential new category include:

• Younger buyers
• First-time buyers
• Minority households
• Moderate-income working families

Potential buyers recovering from job loss during the recession when they may have gotten behind on paying bills may now have an opportunity to prove their creditworthiness despite their FICO score. These are the people with a reliable income, an ability to repay their loan and acceptable debt-to-income ratios.

While some lenders may wait to see how the new metrics will work, others may begin offering loans and programs to take advantage of the opportunity. If you’re hoping to buy a home in the near future, but have wounds from the recession, don’t count yourself out … shop different lenders to see if you can qualify under the new underwriting guidelines.

If you’re looking for a lender, ask your real estate professional for recommendations for your situation.

Compliments of Virtual Results

Most people think of downsizing as something you do in retirement. The kids are grown, the nest is empty and you have all this space just gathering dust or taking up your free time with maintenance and upkeep. So, you sell the large family home to moving to a smaller, retirement-style home, free up some cash and have more to spend on leisure.

To many, downsizing is a negative: smaller house, less space, cutting back. But, downsizing can be an important step in “upsizing” your life. You just have to determine what “downsizing” means to you.

Smaller Space, Bigger Life

Moving to a smaller space (as in “fewer square feet”) doesn’t have to mean that you have less living space. Many family homes have large square-footage cut up into little spaces to house multiple family members. When downsizing from a large family home, look for a layout that maximizes the living space so that you don’t feel closed in. That might mean an open floor plan, more windows, adding outdoor living space, foregoing formal spaces or even choosing a wall-less loft.

An important idea to keep in mind is that downsizing shouldn’t mean moving into a smaller version of what you already have. Moving from a four-bedroom/three-bath 5000 square-foot home into a four-bedroom/three-bath 1800 square-foot home just feels cramped and crowded. Moving your living area, home office and master bedroom into an 1800 square-foot two bedroom, open floor plan, however, can seem like a mansion. In fact, some people find that fewer rooms mean more living area to enjoy.

Freed-Up Cash? Or, Freed-Up Life?

Okay, yes, for some people, the purpose of downsizing is to free up cash for other things. If however, freeing up cash isn’t your aim—for example, if you need to reinvest all the money from the sale of your family-sized home as part of your financial plan—downsizing into an upscale high-rise condominium or townhome in your favorite urban area can massively upgrade your lifestyle.

Think of it … spend your evening at the theatre, dining out or entertaining friends at the rooftop pool. Just being able to lock the door and head to the airport for some long-anticipated trip without having to arrange for a house-sitter, lawn-care and yard work, or the myriad other requirements of property frees you to travel on a whim, be spontaneous, grab a good deal on a weekend cruise or visit the kids and grandkids as often as you like.

Even if you can’t afford a luxury place, where you locate your new home can free up your life from the tedious efforts of maintaining a larger property. If having freedom to do other things is important to your new life goals, make certain your real estate professional knows: lifestyle options may exist that you’ve never thought of.

Preparing to Downsize

Whether by choice or necessity, moving from a larger space to a smaller one requires devising a plan.

Prioritize: As the lyrics to “The Gambler” go, “Know when to hold ’em, know when to fold ’em.” Determining the most important items to keep and what to give up means examining both your logical brain and your feelings. Logic might dictate that you massively pare down your belongings, but your heart knows you’ll regret getting rid of your grandmother’s cedar chest. Experts suggest separating your belongings into four or five categories:

• Trash — of course, getting rid of trash includes broken items that can’t be repaired or items too stained or dirty to be given away. You can call a trash removal company to come and collect your trash or you can take them to a recycling center yourself.
• Use/Keep — in this category, place items that you would just have to replace in your new home (appliances, basic furnishings, tools). Just don’t keep extras of these items. In a smaller space, you probably only need one.
• Love — some things just need to be kept in the family. This category might mean keeping the item or finding a family member that wants to enjoy it for a while. Sharing heirlooms can bring a family closer together.
• Sell — E-bay, craigslist, yard-sales … the list for making money from your belongings goes long. If you don’t want to handle it yourself, you can even hire a service to do it for you.
• Give — Charities always appreciate clean, useful items. Just make sure to separate trash from the items you’re giving.

If you’ve thought about downsizing, your real estate professional can help you determine the best options for your lifestyle and goals.

Compliments of Virtual Results

Contemplating buying a new home or remodeling the one you have? Before you call your real estate agent, hire a designer or head to your local Do-It-Yourself superstore refine your ideas by creating an idea book.

An idea book, exactly as the name implies, is a repository for all the ideas you have about what you’d like. These include style—a Ranch, Cape Code, Victorian, French Country or maybe an Arts and Crafts style home—colors, size, layout and all the other things that go into the perfect home of your imaginings.

Old School

Using a notebook or scrapbook, include cutouts from magazines, advertisements and brochures. Or, hang pictures on a corkboard or stick them up on the refrigerator. You can go simple with a notebook, scissors and glue stick or fancy with a 12″ x 12″ scrapbook with decorative pages and embellishments in slip-sheets.

Virtual

Using Houzz, Pinterest, Photo Stream or other virtual options helps you focus on what you really want. In fact, many contractors suggest using one of these boards to help you show them what you’re really looking for.

Get Started

At first, add whatever tickles your fancy. If you see it and like it, stick it in the book or on the board. Your idea book might seem cluttered and disorganized at first. You can help this by dividing it into sections such as: rooms (kitchen, bath, living), architectural style (mission, craftsman, modern), colors (blues, greens, reds or cool vs. warm), even feelings (happy, restful, family-friendly). As your ideas grow, reorganize the sections or re-combine images and colors to whatever pleases you.

Over time, you’ll refine what you like. You’ll notice that you’re drawn to a certain style of melbourne home, specific types of flooring, cabinets and finishes, fixtures and countertops, even distinct roof shingles and slopes. You’ll see drawer pulls and doorknobs appear over and over in your additions to your book. Get as specific as possible, or leave yourself open to options, but use your idea book to frame the things that are most important to you. When a dominant style, color or type appears, move it to the front of the idea book and narrow down your choices even more. Go look at samples of tiles for the backsplash, flooring and hardware. Take pictures of what you like with your smart phone and add them to your board. Look at model homes and attend open houses (but if a home is occupied, get permission before taking pictures).

When you keep coming back to the same images, you have a pretty good idea of what you want. Take time to remove items that no longer inspire you or that you realize don’t work for your situation, family size, living style (i.e. do you truly want a formal dining room, or just a bigger family eating area?).

Now, you can take that book to your real estate professional or designer to get an idea of how to locate the perfect home for you, or remodel the home you have into the one of your dreams.

Compliments of Virtual Results

Once you get into your new place, you want to paint, upgrade fixtures and add window coverings. While at it, consider extras that improve your bottom line. Some simple ideas that lower electricity and gas bills put your personal decorative stamp on your home at the same time:

By far, you lose the most energy lost in your home through the combination of walls (35%) and roof (25%). Both areas benefit from additional insulation. The next place you lose energy, via the windows and doors— those beautiful openings that let in sunshine—results in another 25% of your energy loss.

Eventually, you want to upgrade your insulation if you lose energy through the walls and roof, and lower U-value windows and frames if your windows are older, but in the interim—especially to stretch your budget after buying your home—you can save on energy bills and decorate at the same time by careful selection of window coverings.

Thermal window coverings

We think of “thermal” as keeping heat in (as in waffle-weave thermal underwear), but thermal window coverings keep the cold air out in the winter and the heat out in the summer. No matter what the season, they allow you better control of your indoor temperature and therefore a reduction in your energy expenditure.

• Cellular shades: These “honeycomb” shades create trapped pockets of air between two or more layers. The more layers of cells, the more energy efficient these blinds are. They create an “airspace” barrier between your window and the interior room.
• Thermal interior blinds (mini-blinds, plantation-style blinds, etc.) have varying degrees of thermal protection. The advantage to slatted blinds is more control over the light that enters the room, and the ability to direct the light upwards or downwards to diffuse its strength and glare. In addition, the curve of the slat allows moving air to become trapped in the interior of the curve or flow over the exterior of the curve so you can adjust how much air comes into the room from an open window. More useful information on blinds found in the website of SONA.
• Thermal exterior blinds: typically made of aluminum, bamboo, wood, steel or vinyl, exterior blinds lower or raise onto rods and channels and are mounted above the window. While these blinds provide shade and privacy, they, some homeowners associations to not allow their installation as they change the appearance of the home’s exterior.
• Draperies and curtains: by far the easiest to install, thermal draperies and curtains reduce heat loss in the winter and keep the heat out in the summer. They provide “blackout” conditions for improving sleep or for use in media rooms. With various levels of thermal curtains on the market, the greatest gains keeping heat out come from those with white acrylic backings—the more “passes” (layers) of acrylic, the thicker and more efficient the fabric. Additionally, the thicker the lining, the more they block light, making these ideal for bedrooms.
  To keep cold out in the winter, layers control temperature better because heated air becomes trapped between the layers. Installing a lining between your decorative curtain and the window, or attaching a thermal lining to the back of your curtain improves the R-value of your window covering.

Other options to adjust how heat and light enter your home include reflective window films and mesh window screens, folding arm awnings Melbourne and roof overhangs. You may consider getting awnings from a legit residential and commercial awnings supplier.

Ask your real estate professional to help you determine which changes (exterior or interior) to make for improving your energy efficiency in your new home.

With school starting, it’s time to do a little reorganizing to make early mornings and after-school activities run smoothly. When starting school after moving to a new home, consider some of the additional challenges your children face and plan accordingly. Implement changes to the household gradually so that your kids adjust before that big first day!

Bedtime

Over the summer, kids typically wake later in the morning and fall asleep later in the evening. To ease the adjustment, begin walking back the bedtime hours until you reach the optimum time at least a few days before the start of school. To help in the transition, install blackout curtains in bedrooms and avoid blue light from television, computer, tablet and phone screens.

If it is not possible and they have to spend a lot of time in front of the blue light, my recommendation would be to get a prescriptions for anti blue light glasses.

Breakfast and Lunch

Stock your refrigerator with quick, nutritious options for breakfast and to-go lunches. Choose health-conscious options that your kids like and have them help you pack their lunch the night before school.

Clothing

If your children wear uniforms, having several options so that you don’t have to launder them at night during the week is helpful. Have children pick out their clothes the night before. Create a special space in their closets just for school clothes so you can tell at a glance if you need to replenish their wardrobe before the weekend.

Shoes

Creating a shoe station at the door saves time on hunting for that lost shoe and keeps wet, dirty or muddy prints from tracking through the house. Consider a separate shoe cubby for each child and hang hooks above each cubby for jackets and backpacks. If your child plays sports, create a separate cubby for uniforms, equipment and sports shoes.

After-School Snacks

Set up an afterschool snack station in a basket or decorative bin on your counter and a specific shelf in your refrigerator for juice, sports drinks and veggies or fruit. Dates Malaysia are a great tasting and filling snack.

Homework

Create a homework station. For younger children, a specific space off the kitchen or living area keeps supplies and assignments contained and organized. Set up organizer boxes for each child to place assignments and set a calendar and bulletin board above the station to keep track of due dates, after-school activities and special events.

Older kids benefit from having a desk or study area in their rooms or a quieter office space, but a calendar on the outside of the door lets you keep track of their schedule while offering them some privacy.

Preparing For the Big Day

Starting a new school in a new neighborhood requires advance preparation. If your child walks to school, take the time to go over several routes to and from school. Learn where crossing guards assist on busy streets and where sidewalks offer safety as they walk to and from school. Locate bike lanes and the safest biking routes from your home. Locate bus stops and learn the correct bus numbers.

If you’re child has a health concern, make sure you pack his meds and inform his school. You can click here now to set an appointment with a pediatrician and check your child’s health.

If you’re looking for a home in a specific school district or need information about your neighborhood schools, check with your local real estate professional for up-to-date statistics and data.

Compliments of Virtual Results

As a first foray into investment property, buying a duplex, triplex or quad and living in one unit might be the way to go. In the current market, entering into rental ownership might give you the benefits of homeownership with the additional benefits of rental income under just one mortgage.

Some advantages to buying a multi-family property and living in it include:

• Paying yourself rent
• Have multiple units inside one mortgage
• Create cash flow and live less expensively while tenant(s) pays the bills
• Access to long-term financing

Of course, a deal is not a deal is not a deal!

So if you buy a property where no one wants to live or pay too much for the property you won’t reap the benefits, but if you do some homework, you might find a gem that can give you ongoing income stream. Importantly, the property needs to be in an area YOU are comfortable living. Typically, that means you’ll be looking at investment properties in the mid- to higher price range or distressed properties in a great area that need fixing up.

Finding the Great Deal

To find a great deal, you need to educate yourself on the process. If you’ve never purchased any property before, don’t rely on what you see on television “Flip” shows. You need to find a real estate professional that knows the area you’re interested in, and knows both the rental market and the real estate market. It also helps to read some solid real estate investment books or take a class, but don’t fall for the “zero-cost investment schemes” that abound. Real business decisions require research, a plan, real investment of time or money (and most often both time and money) and great advice from a knowledgeable team.

Finding Financing

The tightened credit market doesn’t just apply to single-family homebuyers. The best possible financing comes from having a solid plan and borrowing from a position of strength. Debt-to-income ratios need to be 45 percent or less for a conventional loan, but can be slightly less for FHA borrows.

Ordinarily, federal mortgage insurance doesn’t cover investment properties except under specific conditions (five units or more) and only at 85%, so you’ll need to have at least 20% available as a downpayment. In fact, if you put 25% down you might qualify for an even better deal with a lower interest rate. But, if you intend to live in the property you are eligible for either a FHA or VA (if you’re a qualified veteran) loan on the multi-unit property.

Just remember that if the additional unit(s) is vacant, you’ll have to qualify for the entire mortgage based on your current income. If you have a signed lease for any/all of the additional units the FHA lender may consider the rent(s) as part of your qualifying income. Additionally, the FHA requires higher cash reserves for a triplex or quad (not a duplex) so you’ll need to have 90 days worth of mortgage payments in the bank. Additionally, when utilizing an FHA loan, any co-signer must also occupy one of the units.

A final note on FHA loans is that the property has to meet occupancy-readiness standards unless you request an FHA Insured HUD 203(K) loan.

All loans, conventional or FHA, will have specified limits based on the number of units and the county it is located in.

Other Financing

Cities, counties and states often have programs that may provide grants or other assistance for downpayments and might even offer low-cost loans.

Your local real estate professional can help you navigate your first investment in rental property, so take advantage of their expertise.

Compliments of Virtual Results

Whether you’re moving across the country (or even across the state) to attend school, take a new job or to retire and enjoy the fruits of your labor, a long-distance move is different from an across-town move. To take some of the stress out of the move, and to avoid some costly mistakes, it is recommended that you work with an experienced full-service senior moving company that can take care of the larger share of this task for you. As for what you would have to do, perhaps you would like to follow some of these helpful guidelines.

Sort, Filter, Discard

When you’re moving across town, it’s not too difficult to rent a truck, grab all your stuff and load it up with the help of a few friends, than unload it into your new place in the space of a morning or afternoon. You can even pile your things into a friend’s pickup, use some tie-downs and even make several trips. When moving across the country, however, the logistics differ in several important ways.

Making several trips or using a friend’s pickup isn’t realistic, so you’ll need to consider either (a) driving a rental truck across the country; (b) hiring moving companies; or (c) utilizing a pod-type unit. Each has obvious advantages and pitfalls, but all of them base cost on size and distance. The larger the vehicle/pod and the more miles traveled, the more expensive the cost.

To keep your costs down, you need to reduce the size (since you can’t really reduce the distance). To do that, take a critical look at what you own.

• Furniture: By far the largest space in the moving vehicle is for your furniture. Moving subjects furniture to extra stresses and strains. Low quality furniture—that made from particleboard, for example—often does not hold up well during moves and is susceptible to chipping, ripping or joints loosening. Consider if the cost (the space required in the vehicle) is worth the cost of the piece, especially if there is a chance it won’t survive the move. If you can sell the piece, or donate it and take a tax credit, you may be farther ahead. Use the money made or saved to purchase just the right piece for your new home in your new city.
  If the pieces you’re taking come apart, you’ll be much farther ahead in the “space” department. Taking legs off tables, dismantling bookcases and other options can reduce the size of vehicle needed to transport it. On the other end you’ll need less space to store it if you’re arriving without a new home picked out.
• Clothing: If your new hometown will be in a different climate, be ruthless in your sorting. In addition, get rid of anything torn, stained or that doesn’t fit. The cost to move it often is more than the cost to replace it. The same holds true for children’s clothing.
• Toys: If you’re moving with children, have them help you choose their favorite toys that they currently use, and perhaps one or two smaller keepsakes. Then pass on the rest to friends and family or donate to a shelter or charity.
• Craft and hobby supplies: It’s easy to hoard up hobby and craft supplies, bits and pieces of leftovers from projects and stashes of extra fasteners, buttons, bolts, or old patterns. Pare down your supply to the important things like tools and sell or give away the rest. Truly, the space they take up in the moving van far outweighs the cost to replace them most of the time.
• Garage and outdoor items: Hoses, planters, garden tool, trash cans and other outdoor items take up space, and may be a hazard to move. The prevalence of invasive species of weeds or insects moved from one locale to another makes moving these items dangerous to your new home. Certain things you might be used to, like having a generator for backup, cannot exactly follow you along on your move. If you count on this functionality for work or health related reasons, you should do your research ahead of time and find a home generator service that can facilitate one for your promptly.
• Linens: Part of the enjoyment of a new home is having fresh, new sheets and towels as part of the experience. But, rather than discarding the old ones, use towels and sheets as packing material for breakable items. Blankets and comforters can protect furniture in the moving truck. Just have them cleaned or discard them once you arrive in your new home. Moving is dusty, dirty work and linens full of dust and kick up allergies.
• Food, candles and other stuff: Use up or donate all of your food. Don’t move it to your new home. That includes items in your deep freeze. Get rid of those bottles of condiments. Even during a well-planned move, delays or weather changes can damage foodstuffs, so why take the risk. Candles often melt or become misshapen in temperature changes, so get rid of them too.

Once you’ve pared all of your belongings down, go through them one more time to see if you’ve kept anything that you don’t really like or have a use for. If it’s a family heirloom, offer it to another family member for their “turn” to use it before passing it on.

Now you’re ready to reassess the size of moving container or truck you will need.

To make the arrival smoother, contact a real estate professional that specializes in relocation to help you find temporary housing and to begin your search for the perfect new home in your new city.

Compliments of Virtual Results

One of the first places homebuyers want to make changes is to an outdated kitchen. Visions of an elegant quartz countertop from a Quartz Countertop Fabrication center, new cabinetry and shiny appliances grace the pages of architectural and remodeling magazines and websites and get our creative juices running … only to come to a screeching halt when we starting to price those new cabinets, countertops and appliances.

There are some things you can do, however, that cost just the price of a quality can of paint (and some wood filler). One of these is open shelving.

You mean … taking the doors off and exposing my messy cupboards?

Well … sort of. First of all, when planning a kitchen remodeling project, you’ll need to consider who uses your kitchen. If you have small children or grandchildren that visit frequently, you won’t want to remove all the lower doors. After all, you need to keep cleaners and other potential dangers locked away out of sight. You also might think twice about this if you’re in a very earthquake prone area, but, historically, many homes utilized open shelving for dishes and glassware, dry goods or canned goods and to display decorative items.

In fact, removing old doors and painting the open shelving can give your kitchen an immediate upgrade and added personality to boot. Other ideas include backing the cabinets with a bright wallpaper or painting them a deep contrasting color to give your kitchen character and personality. You can also add molding and trim to make the open cabinets appear original or intentional.

Be sure to use a quality wood fill to fill in the holes left by removing the door hinges and follow manufacturer guidelines when painting previously stained wood or fiberboard products.

If your cabinets are in rough shape, or they don’t lend themselves to the sizes you need to store your items, consider removing them and replacing them with floating shelves. You’ll achieve a sleek, modern look to brighten a dark space and give you the sizes of shelves that you need.

Here are some best practices for open shelving and attaining the look you want:

1. Dishes: Remember that anything stored on open shelving is exposed to gathering dusts, so consider them for dishes and glass wear that you use frequently, or that you use infrequently but won’t mind giving them a quick rinse before using (large serving bowls, soup tureens and platters, fancy glass wear you only use occasionally, or pretty vases).
2. Cookbooks: Open shelves are perfect for cookbooks and remind you to try new recipes periodically.
3. Wine racks: Turning open shelving into a wine rack gives you a place to display your favorite vintages.

If you’re not sure about having open shelving, start slowly by just removing the upper doors and living with that for a few weeks, or just have one or two open cabinets. If you like it, you can move forward, but if you don’t, you can just put those doors back on and start saving

Compliments of Virtual Results

During the past several years, as folks struggled to survive the economic downturn and job loss, many smart people turned to entrepreneurship. In fact, working for yourself, either part-time or as your full-time gig is the reality for millions of Americans. Additionally, many companies turned to hiring freelance or contract labor (1099 status) rather than fully employed workers (W-2 status) in order to cut costs and reduce both overhead and employment expenses such as benefits, labor insurances and employment taxes.

While many of us returned to regular full-time employment since the economy started improving, a large segment of the population continue to earn income through self-employment, free-lance or contract work, enjoying the freedom from dress codes, specific work hours and income limitations of regular jobs. Additionally, as “business owners,” self-employed taxpayers qualify for a whole host of tax breaks that reduce their bottom line and consequently, their provable income. The freedom is great, but how do you qualify for a mortgage?

Since the mortgage industry bases credit-worthiness on provable income, using W-2 forms and tax returns, qualifying for a conventional loan may prove difficult for many self-employed would-be homeowners. Consider getting help from a self employed mortgage advisor if you want to find the best deals.

Conventional lenders

Since conventional lenders follow prescribed formulas in proving income and credit-worthiness, most mortgage underwriters only look at the after-tax and post-deduction income, resulting in a far lower provable income than most entrepreneurs or self-employed workers believe expresses the reality of their situation. In a few cases, certain lenders allow specific deductions to be added back into your income including some one-time investment expenses, depletion or deductions for business use of your home. But for the most part, qualifying for a conventional loan is much more difficult for the self-employed buyer with an irregular income.

Alternative lenders

While a conventional loan (salable to government-controlled agencies such as FannieMae and FreddieMac) may not be an option for you, some investors see an opportunity and are funding smaller lenders that offer loans outside these restrictions. For these loans, the risk is higher, so to hedge their investment, these loans typically have a higher interest rate and require a down-payment of at least 20 percent and sometimes more, or a large portfolio, or really great credit.

The bottom line

If you’re newer at the self-employed lifestyle but know you want to buy a home in the near future, you’ll need to start now to position yourself to qualify. Here are the best practices to incorporate into your business and personal life to set yourself up to be approved:

• Be organized: Keeping organized and accurate business and financial records supports your income claims. Most lenders will request a couple years (or more) of tax returns to prove your average monthly income. If your first year was low (this is true for most), give yourself three years or more to back up your income claims. Lenders take the net income from two years and divide it by 24 to get an average, so if in your first year you had only two or three sporadic clients and now you have 10 or 12 regular clients, that additional year will allow you to increase the verifiable income your lender uses.
• Keep track of your earnings: Use an accounting system that can give you earnings or revenue statements, expense reports, profit and loss statements and a balance sheet. If you’re looking for simple workable accounting systems, a couple to check out include QuickBooks online and Freshbooks. Either of these systems is created for the non-accountant give you access to a variety reports, support and useful information. You may also consider hiring a trusted firm that offers professional accounting services.
• Work to improve your credit score: Your credit score may seem out of your control—after all, some companies only report your bad habits and not your good ones—but there are some areas you can take charge of. Your payment history makes up more than a third of your score. Position yourself to make payments early and on time. Another thirty percent of your score is based on the amount you owe compared to the amount of credit you already have, and other loans such as school and vehicle loans. That means if you have a credit card with $5,000 available and only owe $250 on it, you’re at just 5% of your available credit and you’ll receive more points in this area, but if you have a credit card with $500 on it and you owe $250, you’re at 50% of your available credit, so expect that scenario to negatively impact your score. In other words, pay off what you already owe. The rest of your score is a mixture of the length of your credit history, new credit accounts and the mixture of types of accounts you have. Contrary to some popular practices, closing your oldest accounts when you open new ones is a bad idea. The older accounts that are in good standing offer you more points than a newer account.
• Report your payments: If you don’t currently use credit (i.e. have no loans or credit cards), but you consistently pay your bills like rent, electricity, insurance or subscriptions, consider utilizing one of the alternative reporting services to prove you make your payments on time and consistently.

Don’t wait until you want to buy a house to start getting your financial house in order. If may take several months to up to two years to create a provable paper trail for yourself.

Compliments of Virtual Results

This year, the Consumer Financial Protection Bureau (CFPB) begins requiring banks to provide consumers with a longer window in which to review loan documentation. The new rule, potentially in effect October 3, 2015, can push closing by as many as six days—to more than a week—longer than usual. Buyers needing to close quickly may need to begin negotiations sooner in order to meet a move-in deadline.

Conversely, the changes could give an advantage to all-cash buyers over those needing conventional financing, since sellers looking to close quickly may choose a faster close over a higher take. In a hot seller’s market, cash may be king for the buyer.

Here’s a breakdown of the new ruling:

Originally slated to roll out August 1, in October, the federal government will require that loan disclosure documents contain a combination of both the Real Estate Settlement Procedures Act (RESPA) and the Federal Truth in Lending Act (TILA) in a document known as the TILA-RESPA Integrated Disclosure (TRID). The ruling, known as “Know Before You Owe” must accompany the Loan Estimate and include all charges, fees and line items at least three (business) days before closing. In the past, this information was given to consumers on the day of closing on the HUD-1 form (which no longer will be necessary).

The purpose of the changes is to mitigate the potential for surprises at the closing table and offers an advantage to buyers since any increase of more than one-eighth of a percent during the three-day window—or other changes such as pre-payment penalties, additional fees or other items that increase the consumer’s financial responsibility—requires entirely new documentation and another three-day window. Note that a decrease in interest or fees will not cause such a delay.

According to the CFPB the new forms are easier to understand and use. During testing, participants returned more correct answers about their sample mortgage using the new forms as compared to the traditional forms. The new form lists the total loan amount, interest rate, monthly principal and interest and projected payments on the first page of the form. Closing costs and cash required to close appear at the bottom of the easy to read page.

Specifically, the first section on the face of the document clearly indicates if the amount of the loan, interest rate and monthly principal and interest can increase after the closing, and prepayment penalties and balloon payments are plainly indicated.

In the second section, projected payments for the life of the loan, including the years in which increases may occur, gives the buyer the needed information to plan for the future.

The primary advantage for home-buyers is that the three-day window allows them to walk away from a deal without penalty in certain circumstances and allows them to more quickly understand the terms of their mortgage.

A disadvantage for those needing to close quickly is that bankers, mortgage lenders, escrow officers and other real estate professionals will need to learn the new documentation and set up computer software and other systems to prepare it.

If you have questions about the new forms and how to understand them, contact your real estate professional for advice and information. When buying a home with a mortgage this fall, be certain to calculate additional time in closing to accommodate the new ruling.

Compliments of Virtual Results