Difficult Homes to Mortgage

Sometimes it’s not necessarily the financial state of the Edmond or Greater Oklahoma City borrower that kills the chances of a mortgage approval.  Sometimes it’s the actual house, and choices made by previous owners.  Here’s a list of three home situations that are potential hurdles between you and your new mortgage.

  1. Over improved home.  These are the homes that stick out like sore thumbs among their neighbors.  Could be a house that is twice the size of any other comps, has unique features like an indoor pool or a five car garage, or has been constructed with only the finest materials and top of the line upgrades.  These homes never appraise high enough to justify the money put into them.  That doesn’t mean a mortgage is completely out of the question.  You might still be able to gain loan approval on an over improved home, you just may have to come up with a larger down payment to satisfy the bank.
  2. Flip houses.  Banks are skeptical of homes that have been sold often over a relatively short span of time, afraid an over-inflated sales price by money hungry real estate flip investors isn’t justified.  A solution for homeowners wanting to sell would be to stay in the house for longer than 90 days.  For buyers it may mean a larger down payment.
  3. Unpermitted improvements.  Appraisers use county records which list improved square footage when calculating an appraised value of a home for mortgage underwriters.  Likewise, appraisers are looking for building code violations like garages turned into bedrooms.  Solutions for unpermitted improvements aren’t as easy increasing your down payment.  The home seller may need to bring all improvements up to code.

 

 

‘Tis the Season

Before we plunge into the holiday season we want to send a gentle reminder out to all our Edmond and Greater Oklahoma City friends and family:  ’Tis the season to replace the batteries in your smoke detectors.  While you’re out on Black Friday why not pick up a couple extra packs of nine volt batteries to swap out with the tired old used ones that have done their job well over the last year?  So here’s the first of our holiday wishes:  That while the turkey is baking you go ahead and walk your home, count the number of smoke detectors you have combined on all levels, add replacement back-up batteries to your Black Friday’s shopping list, and have a happy and safe holiday season!

New or New to You?

Ever wonder at the appeal of buying a brand new home over buying existing?  Yeah, really not a mystery, right?  With a brand new home you have the opportunity to pick out exactly what you want, within your budget, and put it on the lot of your choosing.  With existing homes you’re always looking at what someone else decided should go into a perfect house, or if the house actually is just perfect you feel stuck with the location.  You never get both.  Maybe that’s a little harsh.  You are still getting a home that’s new to you, but with a brand new home everything is, well, new…

By no means are we knocking existing housing, it’s just there are certain enticements to a new home – some obvious, some not so.  So, without further ado, here are some of the understated attractions of buying a brand new Edmond or Greater Oklahoma City home.

  1. New means under warranty.  New appliances, water heaters, furnaces…a new roof, whatever.  A new home is like a new car with no miles on it.  You expect them to last for a long time, and if something does go wrong early on you have your warranties to cover repairs.
  2. Deferring (not deferred) maintenance.  With a new home everything is in the best shape it will ever be in at any point in time.  New lasts longer than used, and in an existing home how long can you expect the water heater or the dishwasher to last before a breakdown?
  3. Energy efficiency.  New homes use better construction technology including double and triple pane windows, energy efficient doors, energy efficient appliances, and more.  An existing home of the same size built 10, 15, 20 years ago will cost more to heat in the winter and cool in the summer.
  4. Community comforts.  New homes are more likely to be built nowadays in communities that also feature community clubhouses, playgrounds for children, easy access to hiking trails and other neighborhood amenities unavailable in older subdivisions.

Walk-In Closet Woes

If your Edmond or Greater Oklahoma City walk-in closet is more like an obstacle course and less like an organized repository for your wardrobe you might want to try some of our closet makeover tips.

According to this video people only wear 20% of their clothes 80% of the time.  That means 80% of your clothes are either out of fashion, do not fit, or no longer appeal to you.  Go through that 80%, decide what you can do without, and make a nice donation to a local charity.  Purging helps to clear away clutter and free up space your favorite apparel.

Box seasonal clothing up in plastic bins and stack (safely) overhead on shelves.  Plastic bins and containers allow you to see at a glance what’s inside while keeping seasonal clothing dust free for months.  Luggage and weekend bags should be stored overhead and out of the way as well.

Shelving should be only as deep as a folded sweater (approximately 12 inches) so space is not wasted.  Use baskets and drawers for smaller items like rolled ties, socks and underwear, and position them low enough on the wall so you can see inside easily.  Empty spaces on shoe racks like these can hold scarves, belts, or other small accessories, and if you have more shoes than space on your shoe rack less bulky footwear like flip-flops, sandals, and flats can go two pair to a slot.

Winter Home Buying

Who wants to trudge out in the weather during winter months looking for a new Edmond or Greater Oklahoma City home when you could be inside sipping hot chocolate or outside running from store to store shopping for holiday gifts?  Ok, I know we’re jumping ahead a little bit on the calendar here, but there are some benefits to consider when buying a home during the winter months:

  1. There are generally fewer homes on the market during the winter as many home sellers wait until spring and summer to list their home for sale.  Decreasing inventory generally increases demand which can turn seller’s and flat markets into a buyer’s market.
  2. Winter home sellers are generally more motivated.  Whether the home has been on the market for a lengthy period or circumstances like a job relocation force the issue, winter sellers get restless and are ready to sell!
  3. Just as Real Estate sales slow down in the winter, so too do the peripheral businesses supporting Real Estate.  Mortgage lenders, moving companies, Realtors, all experience a slow down.  Many like lenders and movers offer incentives for hiring their services when business is slow.  Others, like Realtors have fewer clients they’re working with and have more time to devote attention to helping you find your dream home.

Avoiding the Earnest Money Conflict

Ok, first of all any offer to purchase a Edmond or Greater Oklahoma City home submitted to the seller’s agent without a down payment/earnest money deposit very likely will NOT be received well by the sellers.  That doesn’t mean it can’t be done, it’s just not very likely to fly.  At worst you might insult the sellers, they will decline your offer, and good luck getting them to work with you on future offers.  At best the sellers may counter offer, asking you for an earnest money deposit as part of the counter, and then be less willing to work with you on other concessions like purchase price.  I would still call this one a swing and a miss.

If you are concerned with a potential battle over your earnest money should the deal fall apart (ie. you are unable to secure financing, or you are unable to resolve issues that arise out of your property inspection report) you might want to consider the source of your unease.  I like to think people will do the right thing if a deal is just not meant to be, but there are those out there that may refuse to sign off and release your earnest money back to you even though they are obviously in default of the terms of your contract.  Still, it takes money to enforce contracts, which means someone has to pay an attorney.  What can you do to allay your fears?

Like I said earlier you can submit your offer without an earnest money check.  I don’t advise it, and good luck winning over the confidence of the seller without it.  There are more acceptable alternatives.  You can offer to submit earnest money in phases like this article suggests, for example $1,000 upon acceptance of contract with another $5,000 after buyer contingencies are cleared, like home inspection issues for example.  You could also add a clause to your offer stating your broker will hold all earnest money until closing instead of the seller’s broker.  This in effect would minimize the chance your money gets “mistakenly” disbursed to the wrong party.

Identifying Mortgage Fraud

Mortgage fraud was often a hot topic in the news during the last five to six years, admittedly less so today than when the housing bubble originally burst.  But that doesn’t mean the companies scamming consumers are no longer in business.  Although fraud may no longer be as prevalent a headline you still need to keep your guard up, especially if you’re one of our Edmond or Greater Oklahoma City friends or neighbors considering one of the foreclosure rescue or loan modification programs to save your home.  Following are some tips direct from Freddie Mac on how to spot potential mortgage fraud.

  • A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
  • A company/person guarantees they can stop a foreclosure or get your loan modified.
  • A company/person advises you to stop paying your mortgage company and pay them instead.
  • A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand.
  • A company other than your lender claims to offer “government-approved” or “official government” loan modifications.
  • A company/person you don’t know asks you to release personal financial information online or over the phone.

Protect yourself and protect your home.  If you suspect mortgage fraud you can report it here.

Check and Seal Drafty Windows

Do you remember that old black and white movie where the heroine walks by candlelight through the spooky Edmond or Greater Oklahoma City mansion searching for that mysterious scratching sound she keeps hearing in the middle of the night?  She gets to a certain spot in the hallway where the candle starts flickering, and it leads her (by discovering this draft) to find a gap in a secret door and the ultimate source of that awful scratching in the walls…

Ok, you see where this one’s going.  My intro was for all you Halloween fans (I hope you got lots of candy), but the subject of this blog is really for all you do-it-yourselfers out there looking for a small and inexpensive project that can save you cash on your utility bills: checking for and sealing drafty windows.

New homes nowadays have higher quality and more energy efficient windows, but there are still those fixer uppers out there with drafty frames and single panes.  So why not try the trick used by Mrs. Curiosity above?  Take a lit candle and pass it a short yet safe distance along window seams.  If the candle flame bends you might very well have an energy wasting draft.

If you find a draft you can refer to this handy article from the DIY Network on removing old  and brittle caulk and reapplying new to cut out the draft and save on your heating and cooling bills.

And thanks for indulging us on the Halloween themed intro.

Mortgage Market Update

Here’s a quick mortgage market update for all our Edmond and Greater Oklahoma City friends and neighbors.

By the end of last week the national average for 30 Year Fixed rate mortgages was at 4.13% with 0.8 points.  The rate was 0.15% lower than the prior week, but 0.1 higher on points.

The 15 Year Fixed average rate was 3.24% with 0.6 points, 0.09% lower than the previous week, with points also lower by 0.1.

5 Year ARMs were at 3.0% with 0.4 points, down from 3.07% the previous week.  Points remained unchanged.

1 Year ARMs were at 2.6% with 0.5 points, down from 2.63 % the previous week.  Points were 0.1 higher.