Investing In Real Estate: What You Should Know

The decision to make a real estate investment is a good one. To have success in this area, one needs to do their homework. You must do adequate research and gain all the information you can before investing. There are some great tips below to help you get started. Location is critical in terms of […]

6 Reasons to Buy a New House Before You Sell

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Caucasian couple admiring new home
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It’s not uncommon for sellers to search for a new home while simultaneously hosting open houses to encourage buyers to make an offer on their current home. But while common, being both a buyer and a seller is difficult enough, and even more so when you’re trying to time a sale with the purchase of a new home. If your current home sells quickly, you might feel rushed into your next home purchase if you want to avoid a move into short-term housing while you continue your search.

While the prospect of paying two mortgages for your current home for sale in San Diego, CA, and a new property across the country may send shivers up your spine, there are some definite advantages to buying a house before selling your current home. Plus, if you take advantage of the protections in place for sellers who are also looking for a new home, there is little risk in purchasing a new home before your current home sale is complete.

Here are some considerations to help determine when to buy a house before selling your current one.

  1. You enjoy knowing what’s ahead of you. If you’re the type of person who feels nervous leaping into the unknown, you may find you’re more emotionally equipped to part with your current home when you know you’ve got your next place lined up.
  2. You have time to hold out for what you want. You won’t feel rushed into settling for a home that’s less than perfect just so you have somewhere to live (or because your friends are getting sick of your crashing in their guest room). You’ll be able to wait for the perfect house, whether it’s in the perfect neighborhood, has a perfect layout, or is the perfect price (or all three!).
  3. You could still bring cash to the table. You may qualify for a bridge loan if your credit is good and you have enough equity in your current home. Bridge loans allow transitioning homeowners who haven’t yet sold their current home to access the money they need for a down payment on a new home.
  4. You save on extra moving costs and hassle. If you sell your home before you buy the next one, you may wind up moving twice – first to temporary housing and then to your new home. If you buy first, you’ll need to move only once. If your temporary residence is small, like a studio apartment or a guest room in a friend’s house, you’ll also face storage fees for all your furnishings in limbo.
  5. You have a safety net. Although it’s not as attractive to the sellers you’re buying from, an offer that’s contingent on the sale of your current home allows you to put your next house under contract while still giving yourself extra time to find a buyer for your current home. In theory, that’s the best of both worlds.
  6. Your next home is too good to pass up. You’ve found your dream home, and the seller is extremely motivated. If you love the home so much that you know you’ll regret letting this opportunity pass you by, then it could be worth taking a leap.

How do you decide when to buy a house? Have you bought a new home before selling your current home? Share your experience in the comments below!

 

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ABCs of Real Estate: Quick Guide To Common Terms

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Home-buying and selling is stressful – and with industry acronyms and real estate terms flying at you from all directions, you may feel overwhelmed navigating your new real estate reality. Whether you’re a first-time homebuyer sifting through home for sale in Chicago, IL, or a seasoned investor, there’s always more to learn. Trulia’s quick guide to common real estate terms is a good place to start. Download the PDF here and find more helpful information in the articles below.

Trulia
Trulia

 

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How Long Does It Actually Take to Get a Mortgage?

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By Christine DiGangi

It may have happened several years ago, but Americans haven’t forgotten about the financial crisis.

Perhaps no one knows that better right now than the Quicken Loans social media team, which has dealt with an onslaught of criticism since a commercial for its mortgage app aired during Super Bowl 50.

“You could get a mortgage on your phone,” the commercial narrator says, as people tap a “BUY A HOME” app button while doing everyday things, like working and exercising. The commercial goes on to theorize the app – dubbed the Rocket Mortgage in reference to the eight minutes it takes a space shuttle to reach orbit – would make the mortgage process easier, which would lead to more homebuying, which would lead to the purchase of goods, which would then lead to more homebuying.

Some viewers, however, did not appreciate this message and, instead, interpreted the spot as a call for a new housing bubble. Here are a few tweets that went out after the commercial aired.

  • “Rocket Mortgage: Like The Housing Crisis Never Happened!” – John Ezekowitz (@JohnEzekowitz) February 8, 2016
  • “I’m sorry, but did Rocket Mortgage just describe the 2008 Financial Collapse in their ad? I’m pretty sure they did.” – David Sibley (@davidsibley) February 8, 2016
  • “The subprime crisis was so nice, let’s do it again #RocketMortgage #sb50 ad” – Evelyn Rusli (@EvelynRusli) February 8, 2016

Given the role of loose lending standards in the financial crisis, it’s understandable why some people would not respond well to a company touting quick and easy mortgages. Still, it’s important to keep in mind that, even with technological advancements, you generally can’t get a mortgage in eight minutes.

There are still underwriting requirements introduced post-2008 that lenders have to meet. And the Quicken isn’t really selling an 8-minute mortgage anyway. Its Rocket Mortgage references pre-approval, the first step in the mortgage process in which a lender looks closely at your credit report, your employment history and your income and determines which loan programs you qualify for, the maximum amount that you can borrow, and the interest rates you will be offered. Following pre-approval, Quicken’s loans are still subject to other steps in the mortgage approval process, such as the home appraisal.

“Rocket Mortgage isn’t about changing the RIGOR of the underwriting – rather it’s about dramatically increasing the efficiency of the process,” Jordan Fylonenko, a public relations manager for Quicken Loans, wrote in an email statement to Credit.com. “While clients can complete Rocket Mortgage quickly, the entire process is in their control and done at the speed they desire.”

The Mortgage Application Process

In reality, it generally takes roughly a month and a half, on average, to get from start to finish in the mortgage process. In December, the average time to closing was 49 days (that’s for all purchase and refinance loans), according to data from Ellie Mae, a software company that processes a massive amount of home loans.

As far as speed goes when it comes to buying a home, technology like Quicken’s Rocket Mortgage app could be helpful. (The app is designed to simplify things by reducing paperwork and leveraging Big Data to verify your application information.) Still, it’s important to remember to still do your due diligence when looking for loan. For instance, you’ll want to comparison shop for mortgage lenders.

You’ll also want to make sure your credit is in tip-top shape so you can qualify for the best terms and conditions. It’s a good idea to pull copies of your credits reports prior to filling out mortgage applications to check for errors and to see if there is anything you can do to improve your credit scores. (You can do so by pulling your reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.) If necessary, you can rebuild credit by pinpointing your areas of opportunity, disputing inaccurate information and establishing a positive positive history. You can learn more about fixing your credit here.

 

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Mortgage Rates Fall Further, Hitting 3.50%

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans fell this week, with the rate borrowers were quoted on Zillow at 3.50 percent Tuesday, down 11 basis points from last week.

The 30-year fixed mortgage rate fell throughout the week, reaching 3.47 percent on Sunday before rising slightly.

“Mortgage rates fell last week, touching their lowest levels since mid-2013 before edging slightly higher on Monday,” said Erin Lantz, vice president of mortgages at Zillow. “This week, markets will look toward Friday’s monthly jobs report and should move upward if the data exceeds expectations.”

Additionally, the 15-year fixed mortgage rate was 2.72 percent. For 5/1 ARMs, the rate was 2.73 percent.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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30-Year Mortgage Rates Continue to Trend Lower

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans fell this week, with the current rate borrowers were quoted on Zillow at 3.59 percent, down nine basis points from last week.

The 30-year fixed mortgage rate fell throughout the week, reaching 3.56 percent on Monday before rising slightly.

“Mortgage rates fell last week to their lowest levels since last April on the heels of falling oil prices and continued global turmoil surrounding growth worries in China,” said Erin Lantz, vice president of mortgages at Zillow. “With little U.S. economic data on the docket this week, more ‘flight-to-quality’ should dominate headlines until markets find a bottom.”

Additionally, the 15-year fixed mortgage rate was 2.79 percent. For 5/1 ARMs, or adjustable-rate mortgages, the rate was 2.66 percent.

Check Zillow for mortgage rate trends and up-to-the-minute rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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