Topics explored in this months electronic newsletter:
*How to sell in a down market.
*Understanding your credit report.
Selling in a DOWN market (only if you have to)
Many people think there is a perfect time to sell and buy both real estate and stocks, but the reality is you can’t time the market perfectly without the benefit of hindsight. Having said that, I still think it would be beneficial to time your sale and purchase on the right trend line. Sellers selling when the market is moving up and buying on a downward trend. However, not every buyer or seller has the flexibility to time the market. Growing families, job changes, mortgage rates etc. all affect a person’s decision to buy or sell.
Even though we are experiencing a buyer’s market there are ways to strengthen your selling position and get your home to move.
* Prepare your home for sale by clearing it of all personal items and clutter. Rent a storage unit if you must, but empty the house out!
* Leave furniture in place that complements the space. (Or hire a stager)
* Price the home right. Let go of your personal attachment and see it as the buyer will. Go out and view other similar homes. See what a shopper could get for their dollar in todays environment.
* Consider renting your existing residence and buy another. What a great way to take advantage of buying in a lower priced market now and selling in a higher market later.
Call me to discuss the options or read more about whether you are a motivated seller.
What’s up in the Mortgage Market?
Rates are steadily creeping up. For the last 2.5 weeks rates have increased incrementally every day. Along with rate increases, lenders have been adjusting guidelines in ways that make it harder to qualify. In all fairness it is not driven by lenders, but rather by the investors buying the loans on the back end. One result for borrowers is a decrease in the allowable debt to income (DTI) ratio. This number represents a comparison between the total monthly income a borrower has and the total monthly debt load they are carrying. With the mortgage payment including taxes and insurance (PITI) and all other monthly debt this ratio needs to be below 45%. Stay tuned for more mortgage news in the new year. Click here for access to a mortgage calculator.
Understanding Your Credit Report
Credit scores, while important, are not the only thing to take notice of on your credit report. Lenders are particularly focused on ‘mortgage lates’ which is an indicator of how often you fail to pay your mortgage prior to the late date. Even one late payment in the last 12 months can make it impossible to get a loan. Borrowers seeking to cash in on the low mortgage rates can be surprised by the negative consequences of a late payment. As my mom told me growing up, if you are in the difficult situation of having to make a late payment it is better for your credit score to make it the electric bill, the water bill or some other non-reporting debtor. To read more about credit scores click here