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November
22

You did it—you worked hard and you're finally ready to apply for a home loan. The dream of homeownership is within your reach. While it's exciting to start planning the next chapter of your life, some actions could give the underwriter the impression that you may be too risky for loan approval.

To avoid jeopardizing your loan status, here are six things you should never do after applying for a home loan.  

Don't apply for new credit

Your credit can be pulled at any time throughout the application process, and any major change could affect your FICO® score. Inadvertently lowering your score and/or changing your debt-to-income ratio could hurt your chances of getting the loan that you want.  

Don't miss any payments

Keep paying your bills on time—especially other credit and loan payments. Payment history is a huge factor in your credit score, and late payments can do a lot of damage. Keeping up with your payments is good advice at any time, but it's especially important when you're waiting on loan approval.  

Don't make major purchases

It might be tempting to run out and start shopping for new furniture—but if you're waiting on loan approval, put that wallet away. Charging substantial purchases will increase your debt-to-income ratio and credit utilization. Any major purchase, even unrelated to your home (like a car), can impact your credit score and affect your loan status.   

Don't make large unexplained bank deposits

Part of the loan officer's job is to source your money, so if you make a big deposit (typically over $1,000) that isn't your usual paycheck, it's going to send up a red flag. We aren't saying you need to stash that money under your mattress until your loan is approved, but always talk to your loan officer about how to properly document your transactions.

Don't change jobs

We realize that this one might be out of your hands in some cases, but if you can help it, don't switch careers (or employers) while you're waiting for loan approval. Lenders are looking for consistent income, so changing jobs in the middle of the loan process could result in revisions to the amount you're approved to borrow. 

Don't close out any credit accounts

This might feel counterintuitive—wouldn't having LESS debt be better? Not in this case. Closing accounts will set off a chain reaction that reduces your available credit and raises your debt-to-income ratio. It can also affect your credit score by changing the landscape of your credit history. Both of these things can put your loan approval at risk.

The Bottom Line

ANY change in credit, income, and assets should be handled in a way that won't jeopardize your home loan approval. The best thing that you can do is be transparent and discuss any significant financial changes with your loan officer. They have the skills and knowledge to help guide you through the entire process, even if there are a few bumps along the way.

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/

  

November
14

Whether you're buying or selling, whether the property is residential or commercial, all real estate transactions have one thing in common: a contract. The goal of a closing contract, or purchase contract, is to protect both the buyer and the seller by ensuring that all expectations are clear. Keep reading to find out what 7 things you don't want to forget in your closing contract.   

Basic Legal Requirements

Like any contract, real estate contracts need a few essential elements to be considered legal (e.i., enforceable in court). A lot of these elements are things that will seem obvious—the correct names and addresses of all parties and properties involved, the seller being the legal owner of the property, both parties being legally competent to enter a contract, just to name a few. However obvious as they may seem, you don't want your contract to be without them! It's worth your time to double-check these little things—trust us!

Price and Financing Terms

Something else that seems obvious but that you wouldn't want to forget is the money aspect of the agreement. That includes the agreed-upon price of the property, as well as how it will be supplied by the buyer (paid full in cash, a new or existing mortgage, any type of loan, etc.). A contract might also include earnest money requirements, which is a fee used to confirm the contract. Earnest money typically ends up going towards the down payment.    

Closing Cost Details

Any real estate contract should also address the terms of closing costs, specifically who's responsible for paying what. Closing costs are typically expenses that aren't included in the property price; for example, escrow fees, title insurance, transfer tax, notary fees, etc. Your contract should cover whether the buyer or the seller will be covering closing costs or if they will be split up between both parties. Some consider it standard practice for one party to cover costs, while in certain circumstances, splitting them may be more likely. If you're not sure where the money is coming from, don't hesitate to ask. Because it may be from you! 

What's Included in the Sale

Certain items may be displayed when a property is staged, but that doesn't necessarily mean that all of those items will be included in the sale. That means things like appliances and light fixtures but also some items that you may not have considered, like window treatments, bathroom fixtures, and heating and cooling equipment. Sellers should make sure that excluded items are carefully outlined in the contract, and buyers—if you want something specific, make sure you negotiate for it.  

Disclosure of Health Risks and Defects

Most states have strict laws requiring sellers to disclose any known defects on the property, especially if they may impact the property's safety and value. Whether or not sellers are required to actively search for defects can vary state by state, and some places may require sellers to search for certain defects but not others. A few commonly disclosed items include lead paint, termite damage, and the presence of radon gas. These things could have serious impacts on your home sweet home (or even your decision to buy it at all), so you should make an honest effort to find out all you can.

Contingencies

A contingency is a condition added to the purchase offer for a piece of property. Generally, a contingency will allow the buyer to default—or walk away from the agreement—if the conditions laid out in the contingency aren't met. While there are many different types of contingencies, some common ones include allowances for appraisal, financing, home inspection, and title report. If you aren't sure what contingencies you may need for a certain property, your real estate agent can help. Taking full advantage of these contingencies can make a big difference in your home buying experience! And offering additional contingencies may be just what it takes to sell.

Important Dates

A few dates that you want to make sure are agreed upon are an expiration date if the offer is not accepted, a closing date that marks the conveyance of the property's title from seller to buyer, and a window of time during which the buyer may withdraw while the contract is still in negotiation, as long as notice is provided. We highly recommend keeping these dates at the front of your mind so that they don't sneak up on you—even if that means sticky note reminders on every mirror, door, and window you have. The last thing you want is for a milestone to hit without you feeling confident in your decision.

Working out a closing contract can feel like a daunting task. But remember—your real estate agent is there for you! At The Masiello Group, we expect our agents to be in your corner and come armed with all the knowledge and experience you'll need to do it right. 

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/.

October
24

There's a lot to consider when you're house-hunting, but one of the biggest questions might be this: Do you want a home that you could move into today, or do you want to fix up and customize your home to your liking? To help you make that decision, we've put together a guide outlining the advantages and disadvantages of purchasing a fixer-upper. 

What Is a Fixer-Upper?

Even if you couldn't define a fixer-upper off the top of your head, you likely know one when you see it. Fixer-upper homes are usually considered technically livable, but often need major maintenance work. Every fixer-upper is different, though. Some fixes might be relatively easy (like replacing outdated appliances or ripping up carpet) while others might require major work to address issues like structural damage or biohazards (like mold or asbestos). 

Pro: Better Value

Because someone hasn't already poured time and money into a fixer-upper, they're often available at lower prices than turnkey homes. You might be able to get a much bigger house for the same amount you'd pay for a smaller move-in-ready home. Fixer-uppers can also be your ticket into a neighborhood where a move-in-ready home would be outside of your budget. 

Con: Red Tape

Some lenders might see a fixer-upper as a risky investment, meaning that you could have a harder time finding someone to finance your dream, or that you could get stuck with a more expensive loan. On top of that, some types of renovations—like room additions and window installation—might require obtaining a permit from your local municipal office, which can drag out your reno timeline.

Pro: You're in Charge

Once the paperwork is signed and a fixer-upper is yours, you can tailor it to suit your needs and style. Don't like the master bath? Remodel it. Wish you had a customized deck in the backyard? Build one. With a move-in-ready home, you're subject to the last owner's (or the construction company's) interests. With a fixer-upper, you're the one who decides where to invest your funds, what materials to use, what contractors to hire, and everything in between.

Con: Unpleasant Surprises = Budget Challenges

What could possibly go wrong? A lot! Even with home inspections, you never truly know what you're getting into, and demolition may reveal significant issues (like structural problems or poorly done updates from previous owners), especially in an older house. And because the likelihood of a nasty surprise is so high, the "fixing" part of a fixer-upper can be difficult to budget for. You may have budgeted the exact right amount for replacing the kitchen floor, but if you find asbestos in the subfloor, you'll have to swallow the cost of removal and disposal, too. 

Pro: Lower Property Taxes

In some places, property taxes are calculated based on a property's most recent purchase price, so purchasing a less expensive fixer-upper could mean paying less in taxes, at least initially. There are many factors that can go into determining how your property tax is calculated, so be sure to do your research carefully.

Con: Construction Zone

Renovations—especially major renovations—take time. Sometimes months. And if you have to pause renovations for any reason (budget problems, permit issues, etc), it could even take years to finish a big project. During that time, you'll either have to secure temporary housing or learn to live in the middle of a construction zone.

Pro: Investment Opportunity 

If you do it right, a fixer-upper is an investment. Transforming a pumpkin into a property that's move-in ready can pay off if you decide to sell later. Even if you purchase your fixer-upper with the intent of making it your forever home, knowing you'll have a better chance at success if you do decide to sell can take a weight off your shoulders.

Making a Decision

When buying a home, everyone's situation is unique. A fixer-upper could be the perfect choice for one person, but a terrible choice for another. Always take your budget, preferences, and lifestyle needs into consideration, and don't be afraid to consult with your real estate agent. Agents from Better Homes and Gardens Real Estate The Masiello Group have the expertise to help you make the best decision for you and your future. 

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/

October
17

If you've heard anything about the housing market over the past year, it might sound something like the gladiator games of ancient Rome—ruthless and not for the faint of heart. But times are changing, and as we move into fall 2022, we can expect some shifts in the market. Here are 6 things that you need to know about the new housing market.

After a long upward climb, prices start to moderate with slower appreciation

Well, a bit! According to Realtor.com, during August, one in five sellers dropped their asking price, which indicates that the annual appreciation rate is slowing. That's about 20%, which doesn't seem like a lot, but at this time a year ago, that same number was 11%—meaning that the number of sellers lowering their asking price has almost doubled. While not all economists agree on the rate at which appreciation will slow, this trend indicates an oncoming change.

Demographics continue to apply pressure

Part of what's made the market so competitive lately is the relatively low number of houses available for sale. This is an issue that's been years in the making and it's largely due to two demographic trends. The first is millennials—62 million of them—entering the housing market to shop for starter homes. On the opposite end of the spectrum, we also have 55 million baby boomers who are living longer, healthier lives than previous generations—and not leaving the housing market. Both groups competing for the same limited inventory has put unprecedented pressure on the market as a whole. This is in addition to home building dropping off by 40% in the last 10 years. 

But options ARE increasing (a bit)

Because of that demographic pressure, demand has been higher than supply, creating an environment that's great for sellers but a challenge for buyers. While the current number of homes available isn't high per se, demand has been lowered by economic uncertainty—meaning that houses aren't getting snapped up as quickly, creating more options for buyers. 

Bidding wars slow down

The "bidding war" has been a major feature of the housing market for the past few years. But because demand has lowered recently, there isn't as much cause for multiple buyers to compete over the same property. While we are still in a seller's market overall, some equilibrium is returning to the market.

Mortgage rates

We probably don't have to tell you that mortgage rates are higher right now, what with the average rate for a 30-year fixed rate mortgage creeping towards 6%. What we can tell you is that some relief for buyers may be in sight. Experts from the Mortgage Bankers Association, the National Association of Realtors, and others have projected that mortgage rates will begin to stabilize in the coming months. By this time next year, average rates could even dip below 5%. In addition, Adjustable Rate Mortgages (ARMS) are making a return, and they will serve to lower rates as well—by offering lower start rates for 3-5-7 year adjustable rate loan options.

Rest easy—it's not 2008

You may have heard some speculation about whether the recent economic downturn (and in particular the issues with the housing market) will result in another housing bubble crisis à la 2008. It's a scary thought, but rest assured that the factors that created the 2008 housing bubble aren't present in today's market. Required credit scores for buyers are much higher, mortgage underwriting standards are much more stringent, and there's no oversupply of housing as there was in '08—among other things.   

The bottom line

Whether you're buying or selling, confident or uncertain, a local real estate agent is still your best bet for navigating a changing market. Agents from The Masiello Group can provide you with the expert insights that you need to come out on top, whether the market is stacked against you or not.

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/.

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