buying a home

Add A Personal Touch When Submitting Your Offer

Business women hands working writing notebook on wooden desk, lighing effect

Business women hands working writing notebook on wooden desk, lighing effectJust because you have your eye on a property and have been shown around the premises by a professional real estate agent, it does not mean that you will be the only person interested in submitting an offer. In fact, there could be multiple people making an offer at the same time, which is why it is imperative that your offer really stands out!

It is rare for a buyer to offer the seller the asking price, with most buyers putting their haggling skills to the test in order to land their dream home for a desirable price. So, how can you peak the seller’s curiosity and improve your chances of receiving a positive response?

Capture the seller’s attention with a personal letter. A traditional tactic that has not lost its touch, personal letters can make you stand out among a sea of bidders.

How to Write the Perfect Personal Letter

Including a personal letter with your offer is known to help get an offer accepted. Below, we discuss the three main points to include in your letter:

  • Personal Information - Opening up to the seller will strike a chord with them. It will help them to get to know you, without even meeting you. Furthermore, it will allow them to make a choice based on who they would (ideally) like to transfer home ownership to. Including personal information in your offer letter that is related to your profession, your pets (if any), and your family size will make your offer stand out. Plus, the inclusion of personal information will prove to the seller that you are a serious and honest buyer.
  • Express Emotion - Connecting with the seller on an emotional level can be a challenge, but if you accomplish it, the chances of your offer being accepted are far greater. Perhaps you have decided to buy a new home so that you can use the leftover expenses to fund a relative’s surgery or a child’s college education? Maybe you want to relocate as a way of feeling safer in the neighborhood? Whatever your reason(s) for wanting to buy a particular property, don’t be afraid to express emotion in your letter.
  • Show Appreciation - It is nice to be nice! Even if the seller already has someone else in mind, this doesn’t mean that they don’t deserve some gratitude. After all, they invited you into their home and took the time to read your letter, right? Be polite and you never know – the seller could change their mind and accept your offer over someone else’s.

When you realize the difference a personal offer letter could make to your chances of being accepted for a property purchase, you won’t want to approach a seller without writing a letter ever again! A well-written letter that demonstrates your suitability for the house can be read over and over by the seller, thus enabling them to make an informed decision. After all, it is their pride and joy they are selling, so they won’t be willing to hand the keys over to just anybody.

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5 Questions to Ask During an Open House

Home for sale

Home for saleOne of the longest standing real estate traditions is an open house. If you are new to buying properties, take a moment to understand what an open house is and how it could aid you in making a purchasing decision. A way of generating traffic and luring in interested buyers for a potential sale; open houses are usually organized on weekends. The real estate agent will do a number of things to prepare for an open house, such as create ads in the local newspaper, put signs up in the surrounding area, and even embellish the property with banners and balloons to capture the attention of passers-by.

It’s not just the real estate agent who has a duty during an open house, however. As someone who is considering investing in a property, it is your duty to ask questions at this stage. Below, we expand on the five main questions you should be asking prior to purchasing a commercial or residential property.

  1. Why do the sellers want to move? - By asking this question face-to-face, rather than over the phone, you can get an honest answer from the seller or the seller’s realtor. Should the homeowner be transferring ownership of the premises due to relocation, work-related issues, or finances, you needn’t worry. If the seller is transferring home ownership because of constant repairs or if the area or schools are unsafe, you should think about this decision further.
  2. How long has the property been on the market? – The longer a property has been on the market, the more questions you should be asking. A desirable piece of real estate will not be on the market for long before it is snapped up. If a home has been on the market for a while, be sure to check the market value and condition of the home. Some seasons attract more buyers than others, so take this into account as well.
  3. How many offers have been made? - When you know you are competing with other offers, decide whether or not you want to proceed or walk away. Asking this question is essential because it gives you an idea of what the seller deems a reasonable offer. Additionally, it enlightens you about how much interest the property is getting.
  4. Are there any issues with the home? – Not every property featured on the real estate market will be perfect. In fact, a lot of buyers will be on the hunt for properties that they can acquire for a discounted price and renovate. If you are looking for a home that doesn’t need too many repairs, be sure to ask major repair questions, such as when the roof was last repaired.
  5. When was the house last updated? – You can figure out if the property is worth the asking price based on how often it has been maintained and/or updated over the years. If you are looking to avoid making updates down the road, we suggest finding a property that has been recently updated.

Take your time looking around when you attend an open house and try your hardest to envision yourself living in the home. Think about how your furnishings will look inside each room, and if the price of the home falls within your budget. Don’t forget to factor in the closing costs, to avoid unexpected surprises.

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How to Understand the Impact of your Debt-to-Income Ratio and How It Affects the Loan Process

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FGearing up for a loan application can stir up a mixture of emotions, from euphoria to anxiety about the entire process. All that is required for a plain sailing experience is knowledge on the subject and in particular, on the topic of debt-to-income (DTI) ratios. Many loan applicants will be unaware of the fact that this is considered by a lender before the applicant is accepted for a loan.

What is considered a good debt-to-income ratio?

Dividing your total gross income with your recurring monthly debt is the easiest way to understand what your DTI income ratio is. Once you are aware of this, you can take a step forward and arrange a meeting with a lender. By doing so, you can discuss your loan options and talk about whether your DTI is good or could do with some improvement.

The Negative Impact on Financing

Put it this way: if a lender looks at a borrower who has a DTI of 50% or above, you are instantly in the red. In many cases, they will not give you a second look since you will be deemed “dangerous” in their strict book of lending. This can make it a struggle to obtain financing. On a brighter note, there are multiple lending options out there now that consider applicants with a poor credit history and DTI.

Tips for Being Approved for a Loan

Fear not if you fall into the red category when it comes to calculating DTI because it does not mean that your chances of loan approval have gone completely out the window. In fact, the following tips could actually teach you how to handle your finances overall:

– Pay off any debts you have accrued.

– Reduce your DTI by paying in affordable amounts.

– If you are able, settle high-interest debts.

– Stop spending so much and start saving more.

– Write a monthly budget and stick to it.

– Cut off direct debits or subscriptions that you no longer require.

Improving the Debt-to-Income Ratio

Sit down and really get stuck into your finances. It will be worth it when you get one step closer to being accepted for a loan, despite having a low DTI at the beginning. Pay attention to the higher debts on your list, if possible. Paying off larger amounts faster will ensure that your credit rating boost at a quicker rate. This will also lift that credit rating arrow from the red spot to the amber or, if you really commit, close to the green.

There are plenty of ways in which you can improve your DTI, prior to applying for a loan. This will boost your chances of acceptance and will have a positive effect on your credit score as a whole. Take it upon yourself to perform a recalculation of your DTI every month, as this will paint a clearer picture of how your financial situation is changing, for the better!

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Millennials and Mortgage

Content couple eating pizza on floor

Content couple eating pizza on floorTimes are changing and so are the home buying options for millennials. Home ownership is a big stage to take. It means you are an adult and are responsible for making mortgage payments on your personal palace. A place to make memories with loved ones or witness your company flourishing (if you are acquiring property for business purposes), the investment is an exciting one.

According to Politifact.com, affordable housing is a challenge faced by many. In fact, less than 13% of millennials are proud to be homeowners nationwide. Nonetheless, homeownership options are being made available to millennials. Furthermore, financing is an option that could lead to you making the most important investment of your life.

Why are millennials such an integral component in the mortgage sector?

Everyone craves the American dream and millennials are no different. Home ownership for millennials aged 35 and under is decreasing, but things need to change. Younger people owning homes could mean fantastic things for the economy. Generally, a homeowner will have been born sometime between the 1980’s and mid-2000’s. For a huge chunk of them, now is the time to be starting a family and settling down.

Consider this – millennials account for approximately 80 million people in the U.S. alone. This is the largest population of them all! The more educated they are on the subject of financing, mortgages, and home ownership, the higher the chances of them standing out to a financing option for consideration.

Mortgage Facts Millennials Must Know

If you are on the fence about becoming a homeowner for the very first time, you should be up to scratch on your millennial mortgage knowledge. Property hunters aged in their 30’s are searching for a place to call “home” and this group of real estate-hungry people cannot be ignored. Take the following facts into account to ease your mind about mortgage approval for millennials:

Down Payments need not be huge. Millennials can get a chance at homeownership if they secure the investment by making a down payment on the purchase price.

Buying properties for lower prices could aid you in building equity. This equity can be put towards mortgage adjustments, should you wish to close one deal and start another.

Credit score does affect your eligibility. Nonetheless, there are a few ways in which you can build your credit score to avoid higher interest rates. Start making the smallest of repayments on any bills or outstanding debts you have to improve your chances at securing a home mortgage.

Separating the Myths from the Facts

Instead of becoming perplexed by the whole situation as a millennial in the home-hunting stage, know what is a myth and what is a fact. Below, we debunk some common myths:

Buying is more expensive than renting - No, it isn’t if you think long-term and select a low interest rate mortgage.

Payment for buying is higher - Not necessarily; some flexible loans have small starting interest rates.

The process is complicated – This is what financing experts are there for. They will guide you through the process seamlessly.

Since millennials are the biggest group of potential homebuyers out there right now, understanding what financing options are available is essential. In order for this to be achieved, not only do they need to be on top of their finances but also, they ought to proactively engage with lenders who can convince them to make that all-important transaction.

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Why You Should Buy Your New Home Instead of Renting

Why You Should Buy Your New Home Instead of Rent

Why You Should Buy Your New Home Instead of RentWhether you’re considering relocating across town or across the country, you’ll be making one major decision about your living arrangements: buying a new home or renting. Signing a lease is certainly convenient in that there are fewer worries about maintenance or repairs. You simply contact your landlord, and he or she will solve problems according to the lease. But convenience isn’t the only factor, as you’ll see when you look at the many reasons buying is a better option for most people.

You’re making an investment that increases in value. Real estate has an excellent return on investment as compared to other assets, even if you do nothing to the place. But there’s more incentive to improve upon it when that property is the house you live in – and when you renovate, you add value. Typically, you’ll gain more than what you put into home improvements and you’ll reap the rewards when you sell.  (more…)

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How a Good Realtor can Make or Break the Home Buying Process

Even after you’ve made the big decision to buy a home, there are still other choices you’ll have to make as you’re looking for the perfect place. One of the first tasks you’ll need to accomplish is finding the right realtor to assist you in your house hunting efforts. There are countless real estate professionals out there, but you must separate the good from the bad to make the home buying process run smoothly. Here’s why a qualified realtor is important and some pointers on what to look for.

A Good Realtor is Critical for Several Reasons  (more…)

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Are Investment Homes Worth the Investment?

You’re thinking of investing in another home. You can rent it out to tenants and make some extra money, hardly without any work or effort on your part! Seems like a dream come true. But is it really? What can you expect out of an investment home? What are the benefits, and what do you need to be careful of? In short, when are investment homes worth the investment?

A Long Term Investment

The first thing to be aware of is that investment homes aren’t a get rich quick scheme. The process can take decades. It needs to be well-researched and planned out in advance, so that you know exactly what you’re getting into. What kind of home are you buying, and what’s the neighborhood like? How much can you reasonably charge in rent? How long will it take to make back your investment and yield a profit? (more…)

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Getting Ready for Home Ownership

Getting Ready for Home Ownership - Paramount Equity®

Home Ownership - Paramount Equity®Buying your own home is an exciting event, but it is also nerve-wracking. For home ownership to be a success, you need to do things right, and planning starts well before you actually sign on the dotted line.

As you start getting ready for home ownership, think about these three key areas.

1. Finances

When you are getting ready for home ownership you need to think, not only about the costs of actually buying the house, but also the on-going costs of owning it.

The biggest costs are the down payment and closing costs. (more…)

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