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Mortgage News Matters

Home Renovations with the Greatest ROI

As a homeowner, you may have some spaces within your home that could benefit from a little upgrading. Whether or not you plan on selling your property or would just like to enjoy a few simple upgrades to make your home feel newer, there are several ways to increase your return on investment through home improvements. Before you begin renovating your home, you might want to ask yourself these important questions:

  1. Is my home at least one step above comparable properties in my community?
  2. Will upgrading my home increase its value?
  3. Is my home updated and attractive to potential buyers?

Housing prices are continuing to rise, so a home improvement project can increase your home’s value even more. The first places buyers look for in a home are kitchens and bathrooms. These two areas can be a great place to begin your first project. A renovation project doesn’t have to be a complete remodel either. A few minor changes can bring a major return.

Kitchen Remodel

According to Remodeling magazine’s annual analysis of cost versus value, a kitchen “face-lift” will return more than a full redesign. These changes can include a fresh paint job, refinished surfaces, or new appliances. According to a post made by Fortunebuilders, the average cost of a minor kitchen remodel is about $15,000 with an ROI of 98.5%.

Bathroom Renovation

A minor bathroom remodel may only include replacing the shower head or changing the lighting to give a brighter appearance. These changes could cost you less than $5,000 and bring you a 100% return on your investment. If you want to take things a bit further and undergo a major bathroom renovation, then it would be best to start with a clean slate. If fixtures aren’t adding to the bathroom’s overall look, they are hindering it. When you fully upgrade a bathroom, especially a master bath, that can be the deciding factor for someone purchasing your home.

Landscaping

No matter the home type, a property’s landscaping will give off a strong first impression. If a yard is maintained and well kept, then potential buyers will assume the same for the interior of the home. The average cost of new landscaping can cost around $3,500 bringing you a return of $4,900. An often-overlooked aspect of a home’s landscaping is the outdoor lighting. If the lighting in the front yard is outdated, invest in a replacement. Be sure to test the lighting at night to see if any elements need rearranging. If you live in a condo or apartment, a few thoughtful touches on a patio or deck can go a long way.

Flooring

Another great home improvement project that can completely change a home’s look is replacing the flooring. Changing out carpeted areas for hardwood floors can make a home feel brand new again, which can convince a buyer to pay more for the home. In some cases, you can have a return of up to 80% when you update the flooring. If you have existing hardwood floors, consider having them refinished by a professional to bring them back to life. In no circumstances should you cover up existing hardwood with carpet or you are guaranteed to lose money. Along with these different home improvement projects, there are plenty of other ways to upgrade your home on a smaller scale. A fresh paint job to either the interior or exterior of the home can neutralize its appearance and bring a fresh fragrance to a home. Another option is to change the old blinds for modern ones. Replacing old shades/blinds can make buyers believe a home is much newer than it is. Regardless, if you are planning on living in your home for the long term then you should make any upgrades that fit your desired lifestyle. However, if you plan on turning a profit when you sell, you should try upgrading your home to bring you the greatest ROI. The highest home renovations for increasing your return on investment can improve the demand and value at the same time. It’s important to make the right upgrades to your home because the highest ROI improvements will show to be most effective and worthwhile.

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Mortgage News Matters

Costs to Consider When Purchasing a New Home

When purchasing a home, it is important to keep in mind that the total cost includes more than just the original sale price. Planning for these unexpected costs is the best way to ensure a seamless home-buying experience. So, what are they?

Down Payment

A down payment is the cash you pay upfront when purchasing a home. This is your contribution toward the purchase and represents your initial ownership stake in the home. The required amount will vary by mortgage type.

Closing Costs

Closing costs are expenses, above the property’s price that are incurred at the closing of a real estate transaction. These costs can include application fees, origination and/or underwriting fees, title insurance, title search fee, and in some cases a transfer tax.

Insurance

There are two types of insurance to consider when purchasing a new home:

Homeowner’s Insurance

This type of insurance protects you from unexpected damages to your home such as effects from a natural disaster, theft, or vandalism.

Private Mortgage Insurance

PMI provides protection for the lenders if the buyer defaults on their loan and is required when a homebuyer puts down less than 20% of their down payment. For FHA loans, insurance is required regardless of the amount of the down payment.

H.O.A.

Homeowner’s Association fees are applicable when buying a home or condo in a community that is run by a homeowner’s association. They are used for services and amenities like security, landscaping, and recreation centers.  

Property Taxes

Property taxes are used to fund services like education, transportation, and community parks. They vary by geographic location and can increase along with the value of your home.

Move-In Expenses

Often overlooked, moving expenses are necessary to any home-buying experience. Some of these include hiring a moving truck or purchasing cleaning supplies.

Maintenance, Repairs, Utilities

Having a fund available for things like maintenance, repairs, and your new utility bill is always a good idea when purchasing a new home. Some experts suggest saving 1% of the home’s value as an emergency maintenance fund when these almost certain expenses arise.

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Mortgage News Matters

Declined for a Mortgage? You Could Still be Eligible for Homebuyer Assistance

According to an analysis done by Down Payment Resource, there has been an overwhelming amount of mortgage loan applications declined. It was determined that it was due to either insufficient cash-to-close or disqualifying debt-to-income ratios. These declined loan applications represent $3.7 billion in volume furnished by mortgage lenders. Most of these denied applications would have been eligible for homebuyer assistance if they had applied.

Report Findings:

A significant portion of denied loan files were eligible for assistance programs.

  • This large portion of loans that were potentially recoverable with homebuyer assistance at the time of denial demonstrates an extremely low-cost opportunity for lenders to have increased their purchase volume.

Denied applicants were found to have been eligible for multiple programs.

  • Findings reported that declined applications were eligible for an average of 10 homebuyer assistance programs.

 Declined loans had the potential for recovery with homebuyer assistance.

  • Applying homebuyer assistance to a denied loan application on average would have reduced loan-to-value by almost 6%. This would have recovered the application and welcomed more opportunities to achieve a more affordable mortgage with different financing options, lower insurance, and interest rates.
Categories
Mortgage News Matters

What Do I Need to Apply For A Mortgage?

In order to apply for a mortgage, you will need to have a few important documents on hand for your VanDyk Mortgage Loan Originator. This will help verify your employment history, creditworthiness, and overall financial situation. This will also ensure that you can easily make your payments and that you meet all the underwriting guidelines.  

The first step in applying for a mortgage is to submit a Uniform Residential Loan Application. This is something that each borrower must do to simply tell a lender about you.  Following that application, you will be asked to provide documents that support your application. Below is a list of some of the items you are going to need.  

Proof of Income. 

One of the first things you should gather is your tax return. This will allow lenders to make sure that your annual income is consistent with your reported earnings. Our VanDyk Loan Originators will also want to see your pay stubs. Although your tax return shows your annual earnings, your pay stubs will represent your current earnings and will help to confirm that you can pay back the amount that you want to borrow.  

Bank Statements and Assets. 

Next, you will want to provide bank statements for all financial accounts, including investments. This is to ensure you will have the funds to cover your down payment, and closing costs, and maintain cash reserves if it is required. When assessing your risk profile, our Loan Originators may want to look at your bank statements and other assets such as your investments and insurance. These documents can be requested so that our Loan Originators can ensure that you have several months of reserves to make payments in case of an emergency. 

Credit Report. 

Your credit history will be checked by your Loan Originator with your permission when applying for a mortgage as it is a big part of the process. Minor hiccups won’t prevent you from becoming a homeowner, however, an accumulation of late payments, collections, or any other derogatory marks on your credit report will prompt a lender to ask for an explanation. The better your credit score, the lower your interest rate will be.  

Alimony or Child Support Documents. 

If you are someone who relies on this type of income, then you must show proof that you will continue to receive additional payments for at least 3 years. 

Self-Employment 

 If you are self-employed, generally most Loan Originators will require you to have at least a steady 2 years in the same industry. Ways to prove this can be by providing client contracts or providing your business license or proof of insurance.  

The list of documents that are required may vary based on the type of mortgage you are applying for, and your current financial status. These are just the initial documents that you will need, and additional information might be requested once the underwriter has reviewed everything. Ask your VanDyk lender for a list of paperwork you might need to provide and start collecting prior to beginning your application process. Gathering these documents can take some time but by remaining organized and staying ahead can help you get to the closing table faster.