A neighborhood street covered 3 foot deep in snow


While the danger from winter weather varies across the country, nearly all Americans, regardless of where they live, are likely to face some type of severe winter weather at some point in their lives. Winter storms can range from a moderate snow over a few hours to a blizzard with blinding, wind-driven snow that lasts for several days. Many winter storms are accompanied by dangerously low temperatures and sometimes by strong winds, icing, sleet and freezing rain.

One of the primary concerns is the winter weather’s ability to knock out heat, power and communications services to your home or office, sometimes for days at a time. Heavy snowfall and extreme cold can immobilize an entire region.

The National Weather Service refers to winter storms as the “Deceptive Killers” because most deaths are indirectly related to the storm. Instead, people die in traffic accidents on icy roads and of hypothermia from prolonged exposure to cold. It is important to be prepared for winter weather before it strikes.


Winterize Your Home
  • Winterize your home to extend the life of your fuel supply by insulating walls and attics, caulking and weather-stripping doors and windows, and installing storm windows or covering windows with plastic.
  • Winterize your house, barn, shed or any other structure that may provide shelter for your family, neighbors, livestock or equipment. Clear rain gutters; repair roof leaks and cut away tree branches that could fall on a house or other structure during a storm.
  • Maintain heating equipment and chimneys by having them cleaned and inspected every year.
  • Insulate pipes with insulation or newspapers and plastic and allow faucets to drip a little during cold weather to avoid freezing. Running water, even at a trickle, helps prevent pipes from freezing.
  • All fuel-burning equipment should be vented to the outside and kept clear.
  • Keep fire extinguishers on hand, and make sure everyone in your house knows how to use them. House fires pose an additional risk, as more people turn to alternate heating sources without taking the necessary safety precautions.
  • Learn how to shut off water valves (in case a pipe bursts).
  • Insulate your home by installing storm windows or covering windows with plastic from the inside to keep cold air out.
  • Hire a contractor to check the structural ability of the roof to sustain unusually heavy weight from the accumulation of snow – or water, if drains on flat roofs do not work.
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How To Prepare Your House For Sale


Prepping and staging a house. Every seller wants her home to sell fast and bring top dollar. Does that sound good to you? Well, it’s not luck that makes that happen. It’s careful planning and knowing how to professionally spruce up your home that will send home buyers scurrying for their checkbooks. Here is how to prep a house and turn it into an irresistible and marketable home.

Difficulty: Average

Time Required: Seven to 10 Days

Here’s How:

  1. Disassociate Yourself With Your Home.
    • Say to yourself, “This is not my home; it is a house — a product to be sold much like a box of cereal on the grocery store shelf.
    • Make the mental decision to “let go” of your emotions and focus on the fact that soon this house will no longer be yours.
    • Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!
    • Say goodbye to every room.
    • Don’t look backwards — look toward the future.


  2. De-Personalize.
    Pack up those personal photographs and family heirlooms. Buyers can’t see past personal artifacts, and you don’t want them to be distracted. You want buyers to imagine their own photos on the walls, and they can’t do that if yours are there! You don’t want to make any buyer ask, “I wonder what kind of people live in this home?” You want buyers to say, “I can see myself living here.”
  3. De-Clutter!
    People collect an amazing quantity of junk. Consider this: if you haven’t used it in over a year, you probably don’t need it.

    • If you don’t need it, why not donate it or throw it away?
    • Remove all books from bookcases.
    • Pack up those knickknacks.
    • Clean off everything on kitchen counters.
    • Put essential items used daily in a small box that can be stored in a closet when not in use.
    • Think of this process as a head-start on the packing you will eventually need to do anyway.


  4. Rearrange Bedroom Closets and Kitchen Cabinets.
    Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:

    • Alphabetize spice jars.
    • Neatly stack dishes.
    • Turn coffee cup handles facing the same way.
    • Hang shirts together, buttoned and facing the same direction.
    • Line up shoes.


  5. Rent a Storage Unit.
    Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room’s purpose and plenty of room to move around. You don’t want buyers scratching their heads and saying, “What is this room used for?”
  6. Remove/Replace Favorite Items.
    If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won’t want it. Once you tell a buyer she can’t have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.
  7. Make Minor Repairs.
    • Replace cracked floor or counter tiles.
    • Patch holes in walls.
    • Fix leaky faucets.
    • Fix doors that don’t close properly and kitchen drawers that jam.
    • Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
      (Don’t give buyers any reason to remember your home as “the house with the orange bathroom.”)
    • Replace burned-out light bulbs.
    • If you’ve considered replacing a worn bedspread, do so now!


  8. Make the House Sparkle!
    • Wash windows inside and out.
    • Rent a pressure washer and spray down sidewalks and exterior.
    • Clean out cobwebs.
    • Re-caulk tubs, showers and sinks.
    • Polish chrome faucets and mirrors.
    • Clean out the refrigerator.
    • Vacuum daily.
    • Wax floors.
    • Dust furniture, ceiling fan blades and light fixtures.
    • Bleach dingy grout.
    • Replace worn rugs.
    • Hang up fresh towels.
    • Bathroom towels look great fastened with ribbon and bows.
    • Clean and air out any musty smelling areas. Odors are a no-no.


  9. Scrutinize.
    • Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
    • Linger in the doorway of every single room and imagine how your house will look to a buyer.
    • Examine carefully how furniture is arranged and move pieces around until it makes sense.
    • Make sure window coverings hang level.
    • Tune in to the room’s statement and its emotional pull. Does it have impact and pizzazz?
    • Does it look like nobody lives in this house? You’re almost finished.


  10. Check Curb Appeal.
    If a buyer won’t get out of her agent’s car because she doesn’t like the exterior of your home, you’ll never get her inside.

    • Keep the sidewalks cleared.
    • Mow the lawn.
    • Paint faded window trim.
    • Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
    • Trim your bushes.
    • Make sure visitors can clearly read your house number.


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Rent It Out or Sell It? Options for a Home You No Longer Love

You might be one of the countless homeowners who’ve fallen out of love with your current home. Maybe it’s the general area, the neighbors or the house itself. Or maybe the “dream” of homeownership has become a nightmare for some reason. Regardless of your situation, push has come to shove, and it’s time to make a decision on where to go from here.

Your choices are to keep the house as a rental property for investment purposes or sell it and maybe buy elsewhere. Answering the questions below should help you decide which route is best for you.

Do I have the money to purchase another property if I hold this one?

When you purchase a home you need to have enough cash for a down payment and closing costs, plus funds for moving expenses and associated costs. A 20 percent down payment is ideal because you’ll avoid paying private mortgage insurance (PMI). Therefore, take a look at your savings. Do you see enough cash to be able to put down a hefty chunk of change on a new property? If you don’t, it’s probably best to sell your current property, and hopefully that will generate the cash needed to put down a large down payment on your new home.

Do I want to be a landlord?

Yes, all the TV shows make it look like owning property is fun and doesn’t take up too much of your time, energy and effort. Unfortunately reality TV isn’t reality rental property investing. You do have the good fortune that your current home is probably already in good shape, so at least there won’t be a lot of money out of pocket to make it rental-ready. But you will still have to educate yourself, obtain leasing documents, advertise and show the property and screen prospective tenants. It really can take a fair amount of time, so is that within your interest? Alternatively you could have a property management company handle it, but that would wipe out a lot of your potential wealth generation from the property.

Would this property even be a good investment?

Good real estate investments are cash-flow positive and provide a fair rate of return on the equity you hold in the property. Will the rents less all the expenses and mortgage be positive? If the answer is no — and this is often the case — that particular property probably isn’t a good investment. Talk to your financial adviser or accountant and ask for help penciling out your real estate deal based on the cash flows and current equity in the property. Once you figure out your current investment returns — free cash flow divided by your equity — you can compare those returns to other investments.

Maybe it’s better to invest elsewhere

If you could sell and generate a large chuck of change, like $100,000 or $300,000, you could invest that money elsewhere. Considering the risk factors for real estate, a well-diversified large capitalization stock mutual fund, with long-term returns of 7-9 percent per year probably is a better deal than owning real estate. Note: As an added bonus on financial assets, no mutual fund has ever had a clogged toilet that flooded the house.

Those are some items to consider just to get into the landlord game. If none of those look appetizing related to your current home, sell it! Then you can decide whether to take a step back and rent for a while or try to find a new home and not repeat the home buying mistakes of your past. Good luck!





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One Thing Renters and Landlords Should Agree On: Renters Insurance

Given the high potential for disputes about rent and repairs, landlords and tenants often find themselves at odds during their relationships. Both sides should agree about one thing: renters insurance.

Renters insuranceRenters insurance protects both the interests of the tenant (by protecting their belongings from covered perils) and the landlord (by keeping tenants safe, satisfied and paying rent for the full term of the lease).

However, only about 35 percent of renters purchase insurance protection; that compares poorly with the percentage of homeowners who purchase coverage — around 96 percent, according to the Insurance Information Institute.

A big reason for the disparity: Virtually all lenders require mortgage holders to buy and maintainhomeowners insurance. But that doesn’t explain why more renters don’t protect their valuables. Likely reasons include mistaken assumptions about tenant/landlord responsibilities.

  • Property owner: Your policies don’t cover everything (see what types of things that may not be covered). Landlord insurance protects only the structure of your rental property from named perils such as wind and fire. If your tenants lose possessions in a natural disaster and can’t afford to pay rent, you’re out income. Encouraging — or even requiring — your tenants to buy insurance can help make sure that doesn’t happen.
  • Renter: Your landlord is not responsible for your possessions; you are.

Here are three scenarios in which renters insurance can benefit both renters and landlords:

Scenario No. 1: Theft

Renter: If thieves break into your apartment and steal your valuables, your renters insurance policy will pay for the items’ replacement or repair. If you don’t purchase renters insurance, you’ll have to replace the items on your own dime.

Landlord: If burglars rob one of your rental properties, your tenants’ insurance policies can be helpful in a couple of ways. Renters who don’t have coverage might not be able to replace everything stolen — particularly gaming systems, computers and televisions — and still pay rent. They could break their leases, leaving you with vacant properties. If you didn’t deliver the security measures specified in the lease, they could even blame you for the break-in and cause disruption to your business and rental income.

Scenario No. 2: Storm and fire damage

Renter: If your apartment or rental home becomes damaged in a fire or other named peril, your renters policy can help to repair or replace your possessions. Standard policies also typically come with loss of use coverage, which can help pay your expenses if you have to relocate for repairs.

Landlord: Your landlord insurance policy will pay for lost income while your rental property undergoes repair. During the repairs, the tenants must make other arrangements. Those with insurance can be reimbursed for expenses, which means they’re much more likely to make temporary arrangements and move back in once the property is habitable again.

Scenario No. 3: Liability

Renter: The injured person decides to sue. If you have renters insurance, the personal liability portion of your policy can help you with legal expenses, including any damages awarded in the case. Without renters insurance, you could find yourself in the middle of a pricey legal battle.

Landlord: Most insurance carriers and some landlords put restrictions on the kinds of dogs allowed on the premises, but even dogs of docile breeds can lash out. If they do, one tenant could become embroiled in a legal battle with another. You could even become involved in the dispute. Even if you aren’t, your professional reputation and profit could suffer.


Considering that the cost of renters insurance ranges between $15 and $30 per month, according to the National Association of Insurance Commissioners, the pros of purchasing protection typically outweighs the cons. Renters also could qualify for discounts for common apartment features such as smoke detectors and deadbolt locks. Those with good credit also could qualify for price breaks on premiums.



By Katherine Wood

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What Real Estate Marketers Need to Share on Social Media

Posted on April 21, 2014 by 
Image for What Real Estate Marketers Need to Share on Social Media

Social media can be very useful if you are marketing a product or a service. It’s a big help if you want to hit as many people as possible without even spending so much. It’s also been proven that it’s a great way of increasing client or customer engagement. Social media is great and all, but there is a small downside to all this freedom. There’s a really big chance that you might lose your goal or alienate potential clients with the social media posts that you share.


It can be a costly mistake, but a mistake that can be easily avoided by real estate marketers. We at Agent Image will always be behind you and help you out in any way we can. This is the reason why we’ve cobbled together a list of pointers you might want to consider whenever you use social media for your website or company.

  • Humor – humor posts will always sell really well with people. It can also be used for a general audience and for a specific target audience. Tell cat jokes if you don’t have anything to post but share real estate jokes and photos if you are targeting property hunters or individuals involved in real estate.
  • Interesting Business Tips – if you have great business tip in mind, you can share it on social media. Just be sure to brand it properly so people will know it’s you or can find out more about you and the services or products you offer.
  • Motivational Quotes – people can find inspiration in the unlikeliest places, so why not have that unlikely place be your social media post. The best moment to post this is in the morning and when there’s a specific occasion. This definitely drives the engagement higher.
  • Start a Poll – another unlikely addition to the list is creating a question that has people answer or share opinions. It doesn’t even have to be related to your business. It’s a great way to gather data and it has a natural vibe to it as opposed to something like a focus group.
  • Link to Other Posts – monotony will get the best of you if you keep posting just your content. There’s a reason why it’s called ‘social media’ remember? If you continually share posts on Facebook or Twitter, then it would be a great idea to share other interesting materials from other interesting websites or people.

Source: Agent Image

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When is a real estate agent a REALTOR®?

A real estate agent is a REALTOR® when he or she becomes a member of the NATIONAL ASSOCIATION OF REALTORS®, The Voice for Real Estate®, the world’s largest professional association. The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and abides by its strict Code of Ethics.

Founded in 1908, NAR has grown from its original nucleus of 120 members to more than 1 million today. NAR is composed of REALTORS® who are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors, and others who are engaged in all aspects of the real estate industry.

Members belong to one or more of 1,700 local associations/boards and 54 state and territory associations of REALTORS® and can join one of our many institutes, societies, and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections. REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.

Working for America’s property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research, and exchange of information among its members.



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Property Manager Or Landlord? Whats Your Preference?

As you are looking for a place to rent, the differences between how places are managed—either by a property manager or landlord—may not seem to make much difference. But not all property bosses are created equal. Whom you choose to rent from can make a big difference in your whole rental living experience.

So before you sign on the dotted line, make sure you know the subtle (and significant) differences between the two.


When you rent directly from a landlord, you’re renting from the owner. Landlords often create their own leases, determine rent and security deposit amounts, and handle maintenance requests and other management business. Landlords are common when you’re looking for a private home, but many also own small apartment complexes or duplexes.

A property manager typically works as the middleman between renters and an individual landlord or a larger property management company. For example, a property manager may work with several landlords who own private homes or small apartment complexes. The property manager handles maintenance requests, collects rent, and deals with tenant disputes. As a renter, you may never meet the landlord.

Property managers may also work as part of a company that owns several large apartment complexes. These property management companies typically have a corporate office that creates lease agreements, property rules and determines fees.


Individual landlords and property managers have to follow the landlord and tenant laws in your state. For example, if your state has a five-day grace period to pay the rent at the beginning of the month, a landlord cannot charge you a late fee on the 2nd. Beyond the legality, however, you may see differences between the two.

Property management companies usually have a blanket lease and policies for every complex they manage. For example, with pets, many property management companies have breed restrictions and weight limits. If your pet isn’t included, you may not be able to lease in any building managed by the property manager. Individual landlords, since they own and operate their buildings, may be more willing to negotiate lease policies regarding such matters as the breed and size of your pet.

Maintenance requests may also be handled differently. Many property managers keep a maintenance crew on site. In such situations, repairs to your apartment may be handled more smoothly. Individual landlords do not typically have a maintenance crew. Instead, they make small repairs themselves or hire out for larger problems. Since landlords often have day jobs, you may wait longer for repairs.


Both landlords and property managers try to offer a competitive rental rate, but there are differences between the two that could save you money.

You may notice the first difference during the walk-through. Many property managers have a standard application fee for all potential tenants, while landlords may waive this fee.

When it comes to rent, property management companies often run special deals — such as a month of free rent for any tenant who signs a one-year lease. Landlords don’t usually offer specials on their rentals, but they can offer something a property manager can’t — negotiation. Many landlords may be willing to negotiate the rent with you, which could save you a chunk of change in the long run.

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5 Ways Home Sellers Can Be Ready For Spring!!

With spring being the busiest time for real estate, homeowners planning to put their homes on the market shouldn’t wait for flowers to bloom before getting ready to sell. Having a few months to prepare can make for a much smoother selling experience.

If you’re a prospective home seller, here are five things you can do now to get ready for a spring sale:

Start Packing

It may sound crazy to start packing months in advance of your move, but since you’ll eventually need to do this anyway, you might as well get organized now. We’re not suggesting you pack up your kitchen and eat off paper plates, but you can sort through your storage closets, attic, basement or garage to determine what you want to keep, what to give away and what to sell. Boxing up items will make your space look larger and neater when it’s time to show your home. You can also get an idea of whether you need to rent a storage facility while your home is on the market.

Clear Away the Clutter

If you visit model homes or open houses of homes that have been staged, you’ll never see a stack of unread magazines, children’s artwork loosely hanging on the refrigerator, or a cluster of unpaid bills on a table. While everyone has clutter, buyers want to see a fantasy version of your house, in which they can envision living. Once your home is on the market you’ll need to keep it as neat as possible. One way to make that easier is to reduce the amount of clutter you have on your shelves and surfaces. Put away items that are regularly on your kitchen sink and pack away the family photos that gather dust.

Improve Your Home

While you don’t necessarily want to do a major, expensive renovation project before you sell, you can make minor repairs and improvements that will make your home look fresher to buyers. Try things such as replacing the caulk and grout in your bathroom, updating old or rusted ceiling fans and light fixtures, and changing switch plates, doorknobs and other hardware for a clean and neat appearance. Consider painting your front door and trim even if your rooms don’t need new paint.

Interview REALTORS®

Your choice of a listing agent will make a big difference in how quickly your home sells and how much of a profit you’ll realize. Get recommendations from friends and interview several listing agents to see which ones have the right experience with similar homes in your price range and area. A REALTOR® with a great marketing plan and deep local knowledge is extremely important. Don’t just go with the one who tells you they can sell for the highest price; choose someone who can present you with a detailed market analysis.

Research Your Market

If you plan to buy another home, an important decision to make is whether to sell your home first or make an offer on a new home before putting yours on the market. A knowledgeable REALTOR® can help you evaluate how fast homes are selling in your market and help you estimate how long it will take you to find a home. This decision also depends on your financing, so you may want to consult with a lender to see how you can finance the transition from one home to another if you choose not to sell your home first.

If you spend the winter months preparing for spring, you’ll find yourself ready to move fast when buyers come out of hibernation.

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Self Employed? the Mortgage Rule You Need To Know.

When applying for a mortgage, lenders will classify you as a wage earner employee or self-employed. Furthermore, if you also own a business or a percentage of a business, you might be considered self-employed even though you are a W-2 wage earner. If this is you, here’s what you’ll need to know to complete a mortgage application.

To start with, here are the income classifications for lending:

  • Employee: Individual is a W-2 wage earner and receives a paycheck. Taxes are withheld from the paycheck.
  • Self-employed: This includes everything else — a sole proprietorship, any business entity where income is derived or lost (including all affiliated corporations), and income derived from real estate or dividend income.

Where the Two Worlds Intersect

Bona fide employees who also have an ownership interest in the company can actually be considered self-employed. For example, if you’re a W-2 wage earner employee and you also have more than a 25 percent ownership interest in the company that employs you, this would earmark you as‘self-employed for the purposes of completing a mortgage application. If you happen to be a W-2 wage earner, but you have a percentage of ownership in another business, you would be considered both an employee and self-employed.

Business Ownership and Getting a Home Loan

Your federal income tax returns are required for the purposes of documenting your ability to repay when securing a new mortgage. On your tax returns, as a sole proprietor you file a Schedule C, and this income carries over to Schedule A. Most sole proprietors don’t have separate business entities, so corporate returns are not required as it is 100 percent ownership. However, things are different when you have an ownership interest in a company.

  1. Schedule E identifies whether there is additional business income and/or that you are an owner in an additional business.
  2. If an additional business is present on the return, the mortgage lender will require a K-1 to determine the percentage of ownership.

Mortgage Tip: If you own 24 percent of a business, you are not considered self-employed for the purposes of the loan application, and the lender will not need to obtain the corporate income tax returns. However, if you own 25 percent or more of a business — whether it’s your current employer or another business entity, as identified on the K-1 — then, yes, you’ll need to provide additional income tax returns for the entity in addition to your personal tax returns for obtaining the mortgage.

Why All Income Examination Matters

An ability-to-repay analysis is required on all mortgage loans. Simply providing W-2s, pay stubs and personal tax returns is not enough if you have more than a 25 percent business ownership interest in another company. If you’re receiving additional income from another business, and that income is tied to your personal tax returns necessary for securing that mortgage, it becomes necessary for the lender to have the additional tax returns because they support your reported income and subsequent ability to repay. Lenders are required to average your income in most cases during the past 24 months (including the business income) and that averaged income or loss will be used on the application in accordance with obtaining the new mortgage.

A financial word to the wise for the self-employed: You don’t need to provide the additional tax returns if you are a small minority share owner in a company.


This article was written by Scott Sheldon and originally published on

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The Worst Things You Can Do Before Buying A Home…

Cynics may scoff, but getting under contract on the right home can turn even the most stoic shopper into a bit of a dreamer. From paint colors to planting a garden, picturing yourself in that property is critical for many buyers.

But leave a little room for pragmatism. Remember that getting pre-approved for a mortgage and even under contract isn’t a guarantee. That prefix is there for a reason. Loan pre-approval is not loan approval.

You’ll have more hurdles to clear before a lender legally commits to funding your home loan. Buyers who don’t know any better can inadvertently add obstacles to that path – or even kill the entire deal – between contract and closing day.

Some missteps can be costlier than others. Here’s a look at five of the worst things you can do before buying a home.

1. Go Credit-Crazy

It’s almost become cliché in the mortgage industry, but the warning still bears repeating: Don’t buy a truckload of furniture until after your loan closes. The prohibition goes beyond sofas and settees – avoid obtaining credit for any major expense, like a car, a boat or, yes, a new bedroom set.

Be careful with even minor expenses. If you absolutely need to obtain new credit or accrue debt before closing, talk with your loan officer as soon as possible.

New payments are going to affect your monthly debt-to-income ratio (and residual income on a VA loan), and not in a good way. Hard inquiries on your credit report could also lower your credit score. That might hurt your interest rate if you haven’t locked or even knock you out of qualifying range all together.



2. Shuffle Dollars & Cents

Lenders will scour your most recent bank statement as part of the pre-approval process. It’s not like they forget about it after that. They’ll take another look at your assets and bank records again during the underwriting process.

You’ll need to explain any unusual deposits or withdrawals. Lenders will require clear documentation and a paper trail if you’re putting gift funds toward a down payment or closing costs. Stuffing a wad of undocumented cash into your account is going to raise some red flags.

3. Get Behind on Bills

Having a late payment hit your credit report before closing can devastate your deal. Payment history comprises about a third of your credit score.

One solitary 30-day late payment can clip 60 to 110 points from your credit score. Maybe not a huge deal if you had an 800 score, right?

Possibly. But if that 30-day late blemish is a mortgage or rent payment, some lenders will boot your application altogether. Many will require at least 12 consecutive months of on-time payments in order to qualify for a home loan.

4. Co-Sign on a Loan

Co-signing a loan is arguably a bad financial move whenever you make it. But it’s especially risky during the mortgage lending process. It means you’re financially liable for someone else’s debt.

Yes, that someone else might be the most responsible person on the planet. Lenders will still need to factor that new monthly obligation into your overall affordability profile. Adding one more debt to the list could stretch too thin your debt-to-income ratio and assets.



5. Changes in Employment

Probably goes without saying, but losing your job is going to be a big problem. Even job-hopping can present some major hurdles. Lenders crave stable, reliable income that’s likely to continue.

Lenders are likely to slam on the brakes if you take a new job in a different field. Or if you decide to start your own business. Or even if you get a promotion but see some or all of your income shift to a commission basis.

The bottom line: Any change to your employment is significant. Keep your loan officer in the loop, and ask questions when in doubt. The last thing you want is to waste time and money on a home loan you’re never going to get.

Throughout the mortgage process, it can also be helpful to monitor your credit scores for changes so you can know whether you need to address any problems. To do that, you can use a free tool like’s Credit Report Card, which updates your credit scores and an overview of your credit report every month.

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Mortgage Basics: What Is A Mortgage?

mortgage — a loan to finance the purchase of your home — is likely the largest debt you’ll ever take on. A mortgage is actually made up of several parts — the collateral you used to secure the loan, your principal and interest payments, taxes and insurance.

Since most mortgages last 15 to 30 years of monthly payments, it helps to understand the working parts.


When you agree to a mortgage, you’re signing a legal contract promising to repay the loan plus interest and other costs. Your home is collateral for that loan.

If you don’t repay the debt, the lender has the right to take back the property and sell it to cover the debt, a process known as foreclosure. In a foreclosure, you will lose your home and you will likely damage your credit rating, affecting your ability to buy a new home in the future.

Principal and Interest

The principal is simply the sum of money you borrowed to buy your home. To lower your principal amount upfront, you can put down a percentage of the home’s purchase price as a down payment. Typically, lenders require you to make a down payment equal to 20 percent of the home’s purchase price to get a mortgage.

Interest is what the lender charges you to use the money you borrowed, usually expressed as a percentage called the interest rate. In addition to the interest rate, the lender could also charge you points and additional loan costs. Each point is one percent of the financed amount and is financed along with the principal.

Principal and interest comprise the bulk of your monthly payments in a process called amortization, which reduces your debt over a fixed period of time. With amortization, your monthly payments largely go toward paying off the interest in the early years, and gradually reduce the principal later on.


In addition to your principal and interest, your mortgage payment will likely include taxes. The taxes are property taxes your community levies based on a percentage of the value of your home. These taxes generally go towards financing the costs of running your community — for example, to build and maintain schools, roads and other infrastructure, and to provide certain public services.

Generally, if your down payment is less than 20 percent, your lender considers your loan riskier than those with larger down payments. To offset that risk, the lender sets up an escrow account to collect those additional expenses, which are rolled into your monthly mortgage payment.

Even if you don’t have an escrow account, you’ll likely have to pay property taxes as long as you live in your home.


Lenders won’t let you close the deal on your home purchase if you don’t have home insurance, which covers your home and your personal property against losses from fire, theft, bad weather and other causes.

If your home is in a federally designated high flood-risk zone within a flood plain and you are signing for a federally insured loan, federal law mandates that you must buy flood insurance.

If you choose a conventional loan and put down less than 20 percent of your home’s total value at closing, your lender will likely require you to pay private mortgage insurance.  PMI protects the lender from you defaulting on the mortgage. You will have to make PMI payments for two years or until your mortgage balance shrinks to 78 percent of the home’s original purchase price.

If you choose a loan backed by the Federal Housing Administration, you will have to pay mortgage insurance. Mortgage insurance works the same as PMI, however, you will have to make these payments for 11 years or for the life of the loan, depending on your loan terms and down payment amount. basics.

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Home Inspections, Finding Home Inspectors…

Home Inspections


A Great Tool For Buyers And Sellers

The question of whether or not to have an inspection should actually not be a question at all. One of the most common com­plaints against home sellers is in the area of condition, specifically disclosure of the condition. A home inspection is a valuable tool in deter­mining and disclosing condition to both buyer and seller. The inspection promotes a better understanding of a home’s structural and mechanical features and can provide a more efficient transaction for the buyer and seller.

What An Inspection Is..And Is Not

If you decide to have a home inspection, the major components of the home will be visually inspected and in some cases, tested by a trained professional. You will receive a written report outlining details about the home and the inspection results. Com­ponents inspected generally include the roof, heating unit, plumbing, electrical system, structure, foundation, major appliances and much more.

The purpose of the home inspection is to dis­cover and disclose the condition of the principal struc­tural and mechanical components of the home. Because this is a visual examination, an inspec­tion does have limitations. The inspection is not:

• A code compliance or safety inspection

• A valuation of the premises

• A detailed report of minor defects

• A representation of whether or not a buyer should purchase the home

• A warranty

Keep in mind, an inspection is made as of a particular date. It is  possible that the condition could change after that point in time.

No Home Is Perfect

One of the most common “myths” about hous­ing is that a newer home is  “OK” because of its young age. Although it may be statistically less likely for a new home to have problems, they can and do occur. The best way to reduce those surprises is to inspect the home. I have actually seen brand new homes with defects, remember, not all builders are created equal either.

Even though each individual’s idea of the “perfect” home is different, every home has some flaw, no matter how minor it might be. Neither buyer nor seller should be surprised to have one turn up in an inspection.

Our Recommendation

We recommend and urge the seller to have an inspection when the home is listed. A home inspection at that time will provide the seller with:

• a reduced chance of liability

• control and stability during price negotiations

• assistance with disclosure responsibilities

• confidence and efficiency throughout the process

A last minute inspection can cause delay frus­tration and unnecessary concerns. Why not be upfront right from the start? If you are concerned about the outcome of an inspection, that is even more of a reason to have an inspection completed. As a seller, you should be able to present your home with confidence, disclosing its limitations and highlighting its luxuries. A home inspec­tion will help you do just that.

Buyer Beware

Although we believe that the ideal time for a home inspection is when the seller “lists”, in many cases, it will be up to the buyer to have the home inspected. The reason for this is simple. Understanding condition is an fundamental part of determining value, and an inspection helps give you that vital understanding.

For the seller, we know that a home inspection provides confidence and assistance. For the buyer, it will give you information, and con­sidering that you are probably making the most significant investment of your life, you should take advantage of all the information available to you. Whether you are a seller looking for support, or a buyer looking for peace of mind, a home inspection will help you find it.

Helpful Hiring Tips

Not all home inspectors are created equal. So choosing a home inspector requires the same kind of due diligence that is required when selecting an agent, a mortgage provider, a builder and other service providers. I recommend interviewing three of them by telephone, or better yet, email your questions to them if you have the capability. Here are some requests for them:

  • Ask that a copy of the typical inspection report they perform be sent to you to review.
  • Ask for three recommendations.
  • Ask if they are covered with “errors and omissions” insurance.
  • Ask if the inspection is transferable to the buyer. It should be, or they may charge a smaller re-inspection fee.
  • Ask if the inspector is associated with any company that repairs inspected items. If they are, seek second opinions and multiple proposals on any work to be completed.

– See more at:

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How to buy a foreclosed home.

Things to know when buying a foreclosed property

If you’re pursuing purchasing a foreclosed property, there is a lot you should know if you have never done it before. Yes, there are tons of great deals to be had in the market these days, but there are different stages of foreclosure and the more you know, the more you can protect yourself.

This is when the homeowner still owns the property and knows there is potential for foreclosure. They’re likely not current on their payments and are in danger of destroying their credit and losing any equity they have. Buying at this stage is tough – the sellers may be on a deadline and things have to happen quickly. The sellers will be extremely motivated and may work out a short sale if the bank allows and they can find a buyer fast enough.
The second option is to buy at auction.

This should be approached with caution – there is a lot of risk such as liens on the title and unknown repairs. Also, cash is typically required on hand at this stage if you beat the bank’s bid and win the auction.
The last chance to get these great deals is post-foreclosure.

At this point, the home is known as REO – real estate owned property by a bank or lender. The bank won at the auction and is now selling the home to recoup as much money as possible – at least what is owed on the property. The bank will likely hire a local real estate agent to put it on the market. The longer the home is on the market, the more willing the bank is to work with you on selling price. Keep in mind, banks do not enjoy the business of owning real estate – they want to get rid of it as quickly as possible.
A few things to keep in mind when purchasing a foreclosed property:

  1. Get a full approval from a mortgage lender who has verified your income and assets. This will give you more negotiating power.
  2. Pick a zip code you are interested and do research on what homes are selling for and the recent trends with property values in that area.
  3. Get an inspection done and make your offer contingent on satisfactory result from the inspection.
  4. Determine potential repairs and their costs.
  5. Remember you have the upper hand in negotiations with regards to the bank paying closing costs and making repairs.

To find foreclosures, you’ll want to work with an experienced real estate agent who has access to local multiple listing services and can pinpoint the potential deals for you. Be cautious and patient in the process of buying a foreclosure. If done right, you will find a great home in which you may have some instant equity.

By Diane Tuman

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