The One Question That Saves Thousands of Dollars

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I’ve been working with homeowners for many years and I discovered long ago that eager buyers set themselves up to fail by taking the wrong approach in their excitement of making what is often the largest purchase of their lives.

Whether I’m advising couples, divorced women, single men or anyone else across all demographics, the majority of these home buyers start house-hunting with the amount of money in mind that has been determined with their pre-approval. It’s a mistake and can lead to serious financial issues.

The question I start with is a simple one: What do you need to live happily and comfortably over the next several years? That change of mindset–focusing on their needs rather than what the bank tells them they can afford–makes a huge difference.

Let’s face it: in many ways, we are a nation of impulse buyers. Why buy a Toyota when you can buy a Lexus, right? I’ll tell you why. Because you can’t afford it. You only think you can.

First-time homebuyers often find themselves in serious debt when they learn of unexpected costs to maintain their homes in addition to their monthly mortgage payment, property taxes, utility bills and more. Then suddenly one winter they have ice dams and roof repairs and mold remediation. The typical homebuyer thinks of a dream home, not a nightmare scenario that stretches their budget to the limit and beyond.

When buyers work with me they have a professional who helps them make practical decisions that will serve them well over the life of the mortgage. Consider me the reality check you never asked for, but really need. You can’t put a price on good advice, but you can always afford it. I’m happy to help.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

Appraisal vs Assessment: What’s the Difference?

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The difference between an assessment and an appraisal is significant. The two words are not interchangeable, contrary to popular thought. A look at each of these terms will show two very different looks at your home’s value.

An appraisal determines the market value of a specific home at a specific time. The appraiser determines this value based on recently sold homes within the past 90 days. They are of equal (or similar) comparison and are located within approximately one mile from your home. Adjustments are made for differences that might include location and square footage as well as the number of bathrooms.

An assessment, on the other hand is notably different. It is determined by the town or municipality to set property taxes. The amount of taxes you’ll pay is based on the assessment. But here’s the thing: the number is based on stats from previous fiscal years.

For example, a home sold in 2016 has a tax assessment based on sales from 2013 or 2014.

In a nutshell, an appraisal is based on very recent sale prices and are used to determine value. Assessments are based on the past and are specifically used for taxes.

I hope this helps clear up any confusion. If you need further clarification, please contact me at 617-965-1236.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

Second Home vs. Investment Property

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If you ever hear someone say they are interested in buying a second home as an investment property, stop them right there. A second home and an investment property are not the same thing. There are several distinctions that set them apart. Let’s take a look.

A second home is just what it sounds like: another location for you to reside at various times of the year. So let’s say you own a home in Needham but you’re interested in buying a winter home in Miami. That falls into the “second home” classification.

An investment property, on the other hand, is intended to generate a return on investment, either through rental income or resale (or both). Examples of investment properties include two-family houses and renovation/flipping projects.

To avoid charges of fraud, your second home should be a considerable distance from your primary residence. The rule of thumb is approximately 50 miles (Wellesley to the Cape, for example, is about 80 or 90 miles.) A two-family second home is unlikely to be approved because it is, by design, intended to be a revenue generating property.

A downpayment on a second home carries less risk and therefore may be the home purchase you can make with the least amount of money down. Your downpayment on an investment property, however, will be higher because the risk is higher. The two-family investment is viewed as a risk by the banks because you’ll be counting on the rent coming in. There’s no guarantee of tenant reliability or year-round occupancy.

I hope this helps clear up any confusion. If you need further clarification, please contact me at 617-965-1236.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

Being Grateful for Those Who Are Thankful

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Sometimes the most important job I have is to talk someone out of buying a home. It sounds counterintuitive, but I can tell you after many years of working in this profession that some of the best mortgage advice I could ever give is to hold off on it.

Buying a home is a deeply emotional investment. Once someone decides it’s the right thing to do, it can be difficult to talk them out of it. But I believe it’s my ethical responsibility to help people succeed, even when it goes against my clients’ requests.

I know some serious, go-getter mortgage professionals who close more loans every year than I ever will. But their style is different from mine. You ask for a mortgage and they find a way grant it, no questions asked. I can’t work that way with so much at stake for people making such a big investment.

I think about a recently divorced woman with two young children. She wanted a fresh start in a new home. After reviewing her financials and understanding her situation I gave her the news she didn’t want to hear. It simply made more financial sense for her to rent for at least a year. In that time she could increase her credit score along with a salary bump from an impending promotion.

It was a difficult conversation. As you can imagine, she was disappointed. I knew, however, that it was the right thing to do. And 18 months later, after I helped her with her mortgage, she called to thank me for not moving forward with her original request. The timing, she realized, just wasn’t right.

These are the stories that make me grateful for what I do. I see it all the time from the professionals I work with regularly. When you put people ahead of profit you’ll always have thankful clients — and that’s what makes me grateful.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

FHFA Increasing Loan Limits in 2017

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There’s some good news for those homebuyers looking for a larger loan amount in 2017. The Federal Housing Finance Agency recently announced that loan limits for are rising. The limit on conforming loans moves up from $417,000 to $424,100. This is the first increase in the baseline loan limit since 2006. That’s good news for those of us in the industry, but it’s better news for homebuyers.

A conforming loan — not to be confused with a conventional loan — is a mortgage loan that follows Fannie Mae guidelines. On its surface a $7000 increase may not seem like much when considering a $400,000 mortgage, but that extra bit of cash can come in very handy for those seeking the best financial advantage as possible when purchasing a new home.

Loans that exceed this new limit are considered high balance loans. This translates to higher pricing with the least flexibility. Staying under the cap will get a mortgage with the most underwriting and highest flexibility. Nonconforming or jumbo loans carry a higher interest rate than conforming loans, increasing monthly payments and negatively impacting affordability.

The new loan limit will allow more buyers to borrow more money without having to put more money down. Homeowners can refinance bigger loan sizes while staying within the conforming loan limits.

This increase comes at a time when mortgage rates have increased slightly to just over 4.0%. That’s still an excellent rate, compared to 6% in 2008 and 8% in 2000.

This bodes well for the real estate industry as a whole, with the Federal Housing Finance Agency showing greater confidence in the recovery of home prices across the country. 2017 will be another great year for homebuyers.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to answer your questions and help guide you through the process. I look forward to speaking with you.

It’s No Treat to Be Tricked Into a Mortgage

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You may have noticed that once you apply for a mortgage, you are almost instantly flooded with emails, calls and letters of pre-approval from competing mortgage companies, even though you’ve never contacted them.
Don’t be fooled into thinking your mortgage company is selling or sharing your information. What’s happening is a function of the Fair Credit Reporting Act (FCRA). This law permits consumer credit reporting companies like Experian, Equifax and Transunion to add your name to lists of companies that provide mortgages, credit or insurance. This process is triggered automatically upon the initial credit check for your mortgage.
The onslaught of calls and mail can be prevented, especially when you’re already working with a mortgage professional you trust. The companies soliciting you may very well be legitimate enterprises, but it’s always a risk when you are unsure about their business practices, service and attention.
To opt out by phone, call 1-888-5-OPTOUT (1-888-567-8688) or visit OptOutPrescreen.com.
When you opt out online or by phone, your name will be removed from lists for five years. If you would like to permanently opt out, you’ll need to fill out a form downloaded from the OptOut site and mail it in.
Note: Your credit score will not be affected by these companies and they do not have permission to run additional credit checks. All they can do is send you firm offers of pre-screening or pre-approval.
For more information, download this pdf from the Federal Reserve.

October’s Home Improver

Do I Need a Backup Generator?

No matter where you live in the United States, there is always the possibility of a weather-related incident that could leave you without power for days or even weeks.
Hurricanes, tornadoes, earthquakes and blizzards are all capable of leaving you without electricity. A backup generator can keep you safe and comfortable until power is restored. It also keeps your refrigerator cool so you don’t have to throw out all your food that would otherwise spoil.
There are two common types of generators: the standby and the portable. The standby generator is also called a “whole house” generator. It is installed permanently outside your home and it runs on either propane or natural gas. The minute you lose power, the generator kicks in and power is restored almost immediately. This type of generator is recommended for homes that are prone to hurricanes and flooding.
The portable generator is usually powered by gasoline or diesel fuel, though natural gas and propane portables may also be available. These are ideal for rare power outages lasting only a short time. Although they are significantly smaller and cheaper than standby generators, they should be used with caution. Because of the carbon monoxide discharge, there is a major risk of poisoning if the generator is run indoors or in crawlspaces, garages or any enclosed fixture. Be sure to run it outdoors only.

Getting Divorced? Here’s Your Mortgage Timeline

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Divorce is rarely a sudden action. Removing oneself from what was once a life-long commitment often takes time and consideration. It also requires planning and strategy which generally takes place with an attorney who specializes in divorce and family law.

Next, it’s important to contact a mortgage professional. There are many questions to ask along with information to gather and understand.

You’ll need to know the answers to questions like these:

  • Can I stay in my home? Will my spouse move out?
  • Should I buy a new home?
  • Does my downpayment come from my assets?
  • Should we sell the house and split the money?
  • How much debt have I accrued?
  • What’s my debt-to-income ratio?
  • What’s my credit score?

After answering these questions, you’ll need to get your name off your current mortgage. This is especially important before securing a mortgage for your new home, even if you’re divorcing and planning to sell. If your name is still on the mortgage in your current home, you may be denied approval for a new one.

In addition, the closing date on your current home must occur before the date of the purchase of your new home. Be careful. You’ll risk getting approved if these timelines are not followed.

Making it through the emotionally difficult process of divorce is hard enough without having the right people in your corner. Please contact me after you’ve met with your attorney — or recommend me to women who are planning a separation or divorce.

Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to help guide you through the process. I look forward to speaking with you.

August’s Home Improver

Which Kitchen Trash Can?

In the good old days when you needed a kitchen trash can you’d go to the supermarket or local hardware store and grab a plastic can and cover and a box of tall kitchen garbage bags. Done! These days, that same simple need is now a quest for the perfect receptacle for your kitchen.

Looks, location and functionality all need to be considered. Plastic or metal? Inside or outside the cabinet? Mechanized cover or old school step-to-open lid? So many choices!

Once you make up your mind, there’s a bigger issue. We know, you thought you were done, but there’s more. Here’s the deal: It’s less about the look than the lid. Covering your trash not only stops odors from spreading, but it also prevents insects from landing on bacteria and then happily spreading it throughout the rest of your house. Yes, people, this is a thing! Your neighbor the germaphobe isn’t as crazy as you thought, now is she?

Those hidden trash cans that hang off the inside of a cabinet door rarely have covers. Your can might be out of sight, but left uncovered it’s quietly inviting flies, ants and mice to feast on whatever you’ve discarded.

So take our advice when it comes to choosing the right kitchen trash can. Pick the style you like most, but remember that an uncovered can is a bacteria-spreading deal-breaker.

3 Things That Can Blow Up Your Mortgage After It’s Been Approved

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A solid income stream, manageable debt and good credit are some of the factors you need to consider when applying for a mortgage. But just when you think you’ve done all the work involved in shaping up your financials and getting your mortgage approval, the whole deal could blow up on you. If you make one of the following very big mistakes, the bank may decide to rescind its offer before you make it to the closing.
1. Keep working. Even if it’s your plan to retire immediately, doing so before you close on your home could be a disaster. Your bank has every right to verify your employment and financial status within 48 hours of closing on what might have been your new home. This also applies to reducing your hours or going from full- to part-time. And by all means, no matter how difficult your boss may be, don’t quit your job until all the papers are signed.
2. Be patient with purchases. You may want a shiny new car to park in your driveway, but that impulse buy may put the kibosh on your brand new home. A fancy new car may be fun to drive, but it’s a little cramped to live in. Any significant shift in your debt-to-income ratio can send your mortgage approval swirling down the drain. So avoid overspending on furniture, appliances, new construction or other pricey purchases before you close.
3. Keep (or raise) your credit score. The weeks before your closing are definitely not the time to get creative with your bill paying. Staying on top of your bills and avoiding maxing out your credit card will keep your approved mortgage on track. Your financial status should remain at least as it was at the time you submitted your application. Anything less could put your mortgage in jeopardy.
A lot can happen between a pre-approval and your closing. It is important to remain vigilant about your financials when making what may be the biggest purchase of your life.
Ready to buy a new home or refinance the one you own? Please get in touch and I’ll be happy to help guide you through the process. I look forward to speaking with you.

June’s Home Improver

DIY: Get Rid of Fruit Flies
Make a do-it-yourself fruit fly trap for pennies.
Fruit flies are nothing but trouble. Those tiny airborne pests love seeking out and eating fruit that is ripe or overripe. Ever wonder how they seem to show up out of the blue as they flit around a bunch of bananas or over a bowl of peaches? Contrary to the popular myth, they don’t spontaneously appear. It just seems that way.
Fruit flies have a remarkable sense of smell and can detect the scent of fruit from quite a distance. They are tiny enough to squeeze through the smallest window screens and hunt down your fruit stash.
Here’s how to make your very own fruit fly trap to keep them away from all that delicious summer produce.
You will need:
1. A bowl or container.
2. Plastic wrap.
3. Apple cider vinegar.
4. Dish detergent.
Pour enough apple cider vinegar to cover the bottom of the bowl. Next, pour a drop or two of dish detergent in the vinegar to break the surface tension. This keeps the flies from sitting on top of the vinegar and laughing at you. Now cover the bowl with plastic wrap and poke some holes in it so the flies can make their way in. Once they go for the vinegar they will drown themselves and you’ll be rid of your fruit fly problem. It sounds mean, but we’ll take a bowl of dead fruit flies over a swarm of live ones any day.
Try it for yourself and let us know the results!
P.S. You may not want to display this trap on your table. It’s effective but it’s kinda gross. Good luck!

How to Qualify for a Mortgage When the Banks Say No

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People sometimes ask me why they should use Westchester Morgtage instead of one of the big banks. It’s a fair question, with an answer that goes beyond great service.

The lending industry bases their approval decisions on the following three criteria. Banks tend to take a conservative approach but mortgage brokers have more flexibility to offer their clients.

1. Credit score. Are you paying your bills on time? Have you defaulted on a credit card or fallen behind on your car payment? The bank will determine the risk of lending you money based on your previous bill-paying history.

2. Income. The bank will take a look at your income and assess your ability to repay both your existing debts and your future expenses. You’ll need to earn enough for them to feel confident in your ability to pay all your expenses while comfortably paying your mortgage premium each month.

3. Equity. This is your collateral available to secure the mortgage. The bank will offer you better rates when you pay a higher amount on your downpayment.

If the bank feels your credit history, income or equity are questionable, they will decline your mortgage application. So now what?

Here’s where an experienced mortgage professional can get a “yes” when the banks say “no.” First, I will get your paperwork and documentation organized up front. If you are divorced or in the process of divorcing, it is critical to show the divorce decree or separation document.

My job is to understand all your income sources and represent them properly for the underwriter. I also look for additional income. Alimony, child support and bonus income are sometimes left off the application and could very well be the difference between the approval or denial of the mortgage.

I dig much deeper than the banks for my clients. If you want the best chance to be approved for a mortgage, starting with Westchester Mortgage is the best path to take. Do you know someone who is thinking about using a bank for their mortgage? Please have them call me so I can help them gain every advantage in securing a mortgage approval.

 

April’s Home Improver

Grimebusters: Silly Putty and Alcohol
That is one grimy keyboard. Grab your silly putty and alcohol.
When was the last time you took a good long look at your computer keyboard? If you haven’t cleaned it in a while you may have noticed anything from dust and crumbs between the keys and dirt and grime smudged on the keypads and spacebar. Pretty gross.
Now before your inner germaphobe starts freaking out about the bacteria you’ve been dabbing onto your fingers with every word you type, there is a fast and easy solution to cleaning up your keyboard without a lot of effort.
1: Silly putty. Remember this stuff? If you’re over 35 or so, you may have used silly putty to pull up cartoon images from newspaper ink when you were a kid. Silly putty can also pick up those pretzel crumbs, pet hair and lint that may have found their way into your keyboard. Just press on some silly putty and all that garbage that’s been hiding between those hard-to-reach nooks and crannies around the keys will be lifted right up into the putty. Awesome! But what about the grimy keypads?
2: Rubbing alcohol. Pour a small amount of alcohol onto a paper towel or cloth. Next, gently rub the alcohol into the keypads until they start to sparkle. Important: Do not use water. Water has a way of ruining keyboards. Instead, use rubbing alcohol. It dries quickly and won’t short circuit your keyboard.
Here’s a video link. Click the image below.
The result should be a keyboard that looks brand new. Enjoy!

Tax Advantages of Your Mortgage

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It’s tax time already. Although we get a few extra days with this year’s tax deadline falling on April 18th, we’re only a month away. Today we’re discussing the tax advantages and incentives that come with owning a mortgaged home.
If you have recently purchased or are planing to buy a new home, you may not be aware of the significant tax breaks that come from your mortgage and your home itself.
One of the largest tax breaks for homeowners is the
deduction of interest paid for the year. By now, you should have received documentation from your lender indicating the total interest you’ve paid.
Have you recently refinanced? There is a tax benefit. Because you pay more interest than principal in your first few years of a new mortgage, your deductions are higher.
Your property taxes are also a major deduction, especially if you are in a highly taxed city or town. This also applies to homeowners without a mortgage to pay.
Home improvement costs may lead to additional tax breaks. Look for the Energy Star logo on new appliances in your home. Energy-saving water heaters, windows, doors and more may give you a bigger tax break than you had imagined. Check out the Energy Star website to see which changes to your home are tax deductible.
I strongly recommend you meet with a tax professional to understand the opportunities for tax deductions and learn of other breaks you may qualify for as a homeowner. Need a recommendation? I have someone I trust who can help. Call me at 617-965-1236 for the referral or to answer any mortgage-related questions.
Ready to purchase a new home or refinance the one you own? Please get in touch and I’ll be happy to help guide you through the process. I look forward to speaking with you.

March’s Home Improver
When Should I Seed My Lawn?
A beautiful, green, well-kept lawn makes your home more attractive to potential buyers while becoming the envy of your neighbors who struggle with patchy grass that just can’t compete.
Here are some grass-growing secrets that can help you upgrade your home’s curb appeal.
1. When is the best time to seed my lawn? You would think it would be right now, with the first day of spring just a few days away. Typically, the best time to seed a lawn is in the fall. This is due to cooling temperatures and soil that isn’t too moist from melting snow and seasonal rains.
2. What problems may I run into by seeding now? Cool soil temperatures can slow or prevent seed germination. Springtime weeds can sometimes be a cause for concern.
3. Can I use a weed killer? Bad idea. Liquid and granular weed preventers can prevent germination and kill immature seedlings. In effect, you’re killing weeds and your grass at the same time. The rule of thumb is to work on weeds only after your young grass has been mowed at least four times.
4. What are my options for spring seeding? First, test your soil. Most turf grasses work best with neutral soil. Ask your landscaper to test it before planting. If it’s a DIY project, you can buy a soil test kitfor under $25. Also, be sure to choose a grass that works best for New England climate and sun exposure.
5. How do I improve my lawn quickly before putting it on the market? Calling a professional is always recommended. An experienced landscaper has the knowledge to get the seeding job done with a better chance of success than a homeowner who is not working in lawn care on a daily basis. It may be well worth the investment if your current lawn is an eyesore and you’re getting ready to list your home.
6. What about sod? If you need a lawn in a hurry, sod is the way to go. Although the initial cost is higher and lots of watering is critical, your instant lawn is installed free of weeds and can be walked on very soon after it’s planted.