Buyers: Your 3 Common Mortgage Options

As a home buyer you have different options when buying a home.  Below are the three most common

type of loan programs provided by mortgage companies.

Conventional loans

Who they're for: Conventional mortgages are ideal for borrowers with good or excellent credit.

How they work: Conventional mortgages are "plain vanilla" home loans. They follow fairly conservative guidelines for: 

• Borrower credit scores.
• Minimum down payments.
• Debt-to-income ratios.

Cost: Closing costs, down payments, mortgage insurance and points can mean the borrower has to show up at closing with a sizable sum of money out of pocket.

What's good: Conventional mortgages generally pose fewer hurdles than Federal Housing Administration or Veterans Affairs mortgages, which may take longer to process.

What's not as good: You'll need excellent credit to qualify for the best interest rates.

FHA loans

Who they're for: Federal Housing Administration mortgages have flexible lending standards to benefit:

People whose house payments will be a big chunk of take-home pay.

Borrowers with low credit scores.

Homebuyers with small down payments and refinancers with little equity.

How they work: The Federal Housing Administration does not lend money. It insures mortgages.

The FHA allows borrowers to spend up to 56% or 57% of their income on monthly debt obligations, such as mortgage, credit cards, student loans and car loans. In contrast, conventional mortgage guidelines tend to cap debt-to-income ratios at around 45% and sometimes less.

For many FHA borrowers, the minimum down payment is 3.5%. Borrowers can qualify for FHA loans with credit scores of 580 and even lower.

Cost: Each FHA loan has 2 mortgage insurance premiums:

An upfront premium of 1.75% of the loan amount, paid at closing.

An annual premium that varies from a low of 0.45% to a high of 0.85%. This premium is rolled into the monthly mortgage payment for the life of the loan. See how the premiums vary by loan term and amount of equity.

What's good: FHA loans are often the only option for borrowers with high debt-to-income ratios and low credit scores.

What's not as good: FHA mortgage insurance premiums usually are higher than premiums for private mortgage insurance. To get rid of FHA premiums, you must refinance the loan.

VA loans

Who they're for: Most active-duty military and veterans qualify for Veterans Affairs mortgages. 

Many reservists and National Guard members are eligible. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply.

How they work: No down payment is required from qualified borrowers buying primary residences. The VA does not lend money but guarantees loans made by private lenders.

Cost: The VA charges an upfront VA funding fee, which can be rolled into the loan or paid by the seller. The funding fee varies from 1.25% to 3.3% of the loan amount.

The VA allows sellers to pay closing costs but doesn't require them to. So the buyer might need money for closing costs. Borrowers may also need money for the earnest-money deposit.

What's good: VA borrowers can qualify for 100% financing. Veterans do not have to be first-time buyers and may reuse their benefit.

What's not as good: There are limits on loan amounts. The limits vary by county.

Tips To Sell Your Home In Winter

Are you planning on selling your home?  Winter doesn't have to be a harsh, unappealing time of year

to sell your home. With 2016 about to rev up, it's especially important to make your home stand out if you want to sell in the New Year. Here are some essential tips for making your house #1 on the market as the year begins:

#1 Warmth is top priority.

Your home should always be warm when a realtor conducts a walk-through with buyers. Set a timer on your thermostat so it's warm when they arrive. Also make sure to check there are no leaks or problems with your ducts and vents, as this could make rooms cold during a walk-through.

#2 Keep the house bright.

It's also important to ensure that your home is adequately lit in each room. You want buyers to feel welcome and impressed with the kitchen, bathroom and bedrooms of your home. If a room has dim lighting or a burned-out bulb, it could take away from the overall appeal of the room. You should also consider spending a little extra money to upgrade your lighting fixtures -- installing recessed lighting in certain rooms will give your home a little extra "pop." Standing lamps are also a fantastic, affordable alternative to lighting additions

#3 Try to make your landscape appealing.

Although your yard will be mostly winterized during this time of year, there are several ways to spruce up your cold weather landscaping. Start by clearing your yard of any broken branches or large patches of fallen leaves. It's also important to ensure that any ice or snow on or near your home's walkway is removed. If needed, you can hire a weekly snow removal service to keep your home safe for buyer walkthroughs.

#4 Make the interior cozy.

In addition to keeping your house well-lit and warm, there are other ways to make your home cozy and welcoming to buyers. This includes:

Classical music (at a low volume)

Homemade treats (candy, cookies)

Holiday decorations (tinsel on the mantle, for example)

You want buyers to feel as though they already live in your home when they walk through the door. When you offer them a cozy setting, they will want to spend more time in your home and admire its features.

#5 Keep the fireplace lit.

While you should have the heat on during a walkthrough, another warm and cozy feature is the fireplace. If you've got a wood-burning model, this means you'll need to have coal or wood handy. You don't want to have multiple showings a day and a fireplace that roars for only half the visitors. This is especially important if the fireplace is close to the entrance (all of that cold air gets in!).

20 Tips To Get Your Credit In Check In 2016

Struggling to get your credit cards paid off? Juggling balances between several cards? Just plain tired of paying interest? Make this the year you get your credit in order. Whether your goal is to buy a new home, become debt free and raise your credit score, or just make your payments more manageable, these 25 tips for handling your credit can help get you there.

1. Talk to a lender - If you're planning to buy a home anytime soon, a call to a lender can clarify what you'll need to do in order to qualify (and qualify for the best rates).

2. Check your credit - You can pull your report once a year at AnnualCreditReport.com for free.

3. Dispute anything that's incorrect - It may take some time and effort, but removing incorrect items from your report can have a great impact on your score.

4. Don't waste your time trying to get collection accounts off your credit report - "Be aware that paying off a collection account will not remove it from your credit report," said myFICO. "It will stay on your report for seven years."

5. Set little goals - Paying off a large balance can seem overwhelming. Setting weekly or monthly goals to pay down your credit can make it feel for manageable, and also help keep you on track when that handbag is calling your name.

6. Pay off the smallest accounts first - It may seem smarter to attack the large balances first, but getting small balances paid off will lower your monthly output and allow you to redirect those funds to other balances once they're paid off.

7. Or, pay off the account with the highest rate first - Since this is the one that's costing you most every month.

8. Contact your creditors - It might be that they have a program to help you pay your debt.

9. Negotiate your rates - A call to your creditors may yield a lower rate.

10. Transfer balances - You can make it easier to pay your balances by taking advantage of an existing card with low or no interest?

11. Don't have a card with a low rate? Open a balance - transfer credit card - "This allows you to move expensive debt over to a new card, with a low - often 0% - APR for a set time period," said Bankrate.

12. Get a secured card - If you're trying to reestablish credit after a bankruptcy or after paying off old delinquent accounts, a secured card from a bank can help you build it back up.

13. Even if you can't wipe out all your debt now, pay down your balances - "One of the major factors in your credit score is how much revolving credit you have versus how much you're actually using," said Bankrate. "The smaller that percentage is, the better it is for your credit rating. The optimum: 30 percent or lower."

14. Pay your bills on time - It's the easiest and most effective way to keep your score good - or improve it.

15. If you're buying a home, don't apply for any more credit cards without your lender's approval - That Kohls card may save you 15% on your first purchase but it can also ding your credit score.

16. Set up payment reminders - If you're the type that forgets or overlooks payments, make sure you've got it covered. Setting a reminder from the creditor or putting a reminder in your phone can help.

17. Set your accounts on auto pay - You're less likely to miss a payment if you have it set up automatically to draw from your account. Just make sure you keep enough money in your account to cover the payments or you'll have to pay overdraft fees.

18. Use cash for everything - Financial experts often recommend this tactic to keep us in check about what we're actually spending. There aren't any surprises at the end of the month when you're only using the dollars and cents you have in your wallet.

19. Think about debt consolidation - Many experts consider this a last-ditch resort because its "quick fix" solution may actually cause more problems down the line. Be sure to read up to make sure this is the right step for you.

20. File for bankruptcy, but only if you have no other option - "While going this route allows you to wipe the slate clean, it also has a devastating impact on your credit," said Smart Asset. "Bankruptcy is meant to be a last-resort option but there are certain situations when filing may be your best bet:

You're being sued by debt collectors

Your wages are being garnished

You can't pay your bills (due to a job layoff or an unexpected illness)

You're in danger of losing your home"

How To Unclog A Toilet Without A Plunger Or Plumber

If you’re faced with a clogged toilet and you don’t have a plunger or don’t want to use a plunger because it’s too disgusting  try this trick .  Pouring some dish soap into the toilet bowl followed by some hot water may be all that's needed to get things flowing properly down the toilet's drain. In as little as 15 minutes, your toilet can be unclogged, and no one else in the household has to be the wiser.

Here are the steps:

1. Pour a healthy amount of liquid soap into your toilet bowl, about half a cup. The soap is denser and heavier than water and should drop to the bottom of the bowl.

2. Let the liquid dish soap sit in the bowl for 20-30 minutes. Over time the soap will seep into the clog lubricating the trap way.

3. After 20 minutes fill up a container with hot water and pour it into the bowl. Make sure not to overflow the toilet bowl. Slowly the clog should work it’s way free.

This does not work for all clogs but people have reported success by repeating steps 1-3 again if it doesn’t clear the clog the first time. Some said they did this at night and the clog was gone in the morning.

Mistakes Sellers Often Make When Selling Their Home

A recent survey by the National Association of Realtors (NAR) found that Eighty-three percent of people view their home as a good financial investment.  Not only is their home the biggest single asset most people own, but it’s also filled with memories — the average seller has lived in his house for a decade, according to the NAR. So it’s no wonder that when it comes time to sell property, people can get a little emotional.

Yet if people actually want to get a return on their investment in their home, they need to be smart about how they approach selling it. Letting emotions, not logic, drive decisions means you’re more likely to make mistakes that can make it difficult to find a buyer or force you into accepting a lower offer than you would like.

The good news for sellers is that the market is tight. That’s pushing home prices higher across the country, and the number of homes being sold is also up. The typical seller receives 97% of his final asking price, and his home was on the market for about a month, says the NAR.

But those numbers don’t mean that every homeowner sells his property quickly or gets the price he wants. You can increase your chances of a successful real estate transaction if you avoid these five mistakes when listing your home.

1. Not being realistic about your home’s value

What you think your home is worth and the price you can actually sell it for are often two very different numbers. “Nobody cares what you paid for it,” one frustrated home seller told the Wall Street Journal. He’d bought a home for $325,000 and spent another $150,000 on renovations, but the property eventually sold for $83,000 less than he originally paid for it.

Even in markets where inventory is tight, sellers need to be careful not to get too greedy when picking a listing price. Properties that are overpriced at the outset tend to eventually sell at a lower price than they would have if they’d been appropriately priced in the first place. Choose a reasonable price based on factors like how much comparable properties are selling for and the home’s appraised value. If you’re not getting any interest, adjust your strategy.  No offers within a 30-45 day period can mean the price is too high.

2. Not making your home look its best

You probably have seen enough home improvement shows by not   to know that good staging and curb appeal help to sell homes. At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues. More elaborate staging, such as repainting with neutral colors, sprucing up landscaping, or purchasing new furniture can also help. Overall, professionally staged homes can sell five to seven times faster than non-staged homes, according to the Real Estate Staging Association.

3. Refusing to negotiate

You should start by setting a fair and reasonable price for your home, but you also need to build in some wiggle room, especially if you need to sell quickly. Many buyers will start with an offer well below your asking price, particularly if they think it’s a buyer’s market. Naturally, their goal is to pay as little as possible for the home they want. Plus, many people want to feel like they’ve snagged a deal on what may be the biggest purchase of their lives.

You can make your buyers happy while also getting the price you need by being willing to accept slightly less than asking price for your home. Alternatively, you might agree to concessions like paying the closing costs, throwing in appliances, or making certain repairs to the property in order to sweeten the deal. Working with an experienced agent can help you negotiate the tricky dance of getting the price you want without scaring off a buyer.

4. Hiding the Truth About Your Home

Sellers who want to be rid of their property quickly may be tempted to try to hide problems with the home from prospective buyers. But trying to cover up serious flaws, like foundation problems, leaky roofs, or mold, could come back to haunt you later. If you aren’t up front about your home’s issues, the buyer may well discover them during the home inspection. At that point, they’ll probably either back out of the deal or ask you to cover the costs of fixing the problem. If the issues are serious and are discovered after the sale goes through, you could end up caught in a messy, protracted legal battle.

You should always be upfront with both your listing agent and your buyer about potential issues with the home. Price your home appropriately given its condition and document the problems you’re aware of and have your buyer sign off on them. Full disclosure is the best way to avoid a lawsuit.

5.  Having A Back Up Plan

In a perfect world, you’re able to smoothly navigate the transition between selling your current home and buying a new one. In reality, things rarely go as planned. Savvy sellers have contingency plans in place to avoid either getting stuck with two mortgages at once or not having a place to live, or to protect them if a deal falls through.

Some people insert clauses into their contracts that make it clear that they won’t move forward with the sale unless they are able to purchase a new home. You may also want to be prepared to find temporary housing, like a rental or staying with family, in case your home sells quickly. If you must move before your home sells, make sure you’ve budgeted to afford the carrying costs of the old home. Finally, if there are multiple people interested in your home, you may be able to accept backup offers, which involve agreeing to sell to a second buyer if the first one backs out.

HOW BARGAIN-HUNTING CAN BACKFIRE ON HOME BUYERS

It's natural to want to save money when you're making a purchase as large as a home. You want to buy the best hom

e in the best neighborhood at the best price, and you may think the only way to accomplish your goals is to look for bargains. So instead of hiring a real estate agent, you scour the market for FSBOs, short sales, foreclosures, or homes that have been on the Internet too long.

While you're bargain-hunting, here are five things you should keep in mind:

Low-balling sellers doesn't work.

They don't waste time with low-ball offers that they find insulting. Just as you want the home you buy to appreciate in value, sellers purchased their homes as investments, too. They want to net as much as possible, because they took a financial risk and had the foresight to buy the home they chose.

This sense of entitlement -- that homes should only be sold at a profit - may cause them to overprice their homes or be less willing to negotiate. You'll feel the same way when it comes time for you to sell your home, so make your offer reasonably and respectfully. Show the comparables that led you to make the offer. Be open to compromise.

Other buyers are getting professional help.

Ninety percent of buyers use a real estate agent while you're spinning your wheels driving around neighborhoods and calling FSBO sellers who aren't home to take your call. Soon, you'll notice that the homes you're watching are going under contract with other buyers.

True bargains are rare.

Sometimes a distressed home will impact the prices of the other homes because they typically sell at a discount of 17 percent, according to the National Association of Realtors. The other sellers may discount their homes somewhat, but if they're not in distress, don't expect them to negotiate as if they are. A bank foreclosure or bank-approved short sale could take months to close.

If a home has been on the market for a long time without a price reduction, there's usually a good reason. You have an unmotivated, unrealistic, or upside-down seller, any of which could waste your time without resulting in a purchase. Move on to a deal that you can actually make.

The home needs work.

Sometimes a home will be marketed "as is," which suggests that it needs a lot of work. Or, a home may be well maintained, but it's so out of date it looks like a vintage sit-com set. You could be looking at a money pit.

Are you willing to perform the work or pay someone else to do the work? Before you buy, get a home inspection and then get bids from contractors who can help you bring the home up to today's standards. If the purchase price and repairs come to approximately the same price as an updated home in the same area, then go for it.

It's not a bargain if it doesn't suit your needs.

A home is a good buy only if it suits your family's needs for space, features, comfort, and function. If you buy a home without enough bedrooms or baths, you'll pay more in transaction costs to sell the home and buy another that's more suitable. Choose wisely in the first place because it takes time to build equity. Your home should meet your needs for a long time.

Low Home Appraisal Valuation: Now What?

In seller's markets, multiple offer situations often drive up

the purchase price higher than any comparable sales in the area, so sellers worry the appraisals will come in low. In buyer's markets, when prices are soft or falling, sellers are also concerned that the home will bring a low appraisal. Low appraisals can happen in any marketplace: hot, cold or neutral.

Why Do Low Appraisals Happen?

There are a number of reasons why appraisals come in low. Here are a few:

• Artificially inflated prices resulting from multiple offers.

• Declining market values due to fewer buyers shopping among a larger inventory of homes.

• Fallout from an abundance of foreclosure or short sales in the neighborhood, especially when no other comparable sales exist.

• Incorrect evaluation by the underwriter.

• Overpricing by the seller.

• Inexperienced appraiser who doesn't understand influences on value.

• Appraiser overlooked pending sale data, which could reflect higher comparable sales when closed, or the appraiser selected comparable sales from the wrong neighborhoods.

• Buyer receives cash back from the seller, causing lender to believe the price has been inflated.

• One factor that does not come into play is whether the lender wants to make the loan. Lenders want to lend money, and lenders are prohibited from redlining.

Solutions for Low Appraisals

Don't panic if the appraisal comes in low. It's tough to remain calm when it appears the pending sale will fall apart, but both parties have options:

1. Reduce the price of the house to the appraised value

As the seller, you can always sell the house at the appraised value without negotiating with anyone. This is the fastest way to “recover” from a low appraisal, but it could mean leaving money on the table. (And that’s always hard to swallow.)

2. Have the buyer make up the difference

In some cases, the buyer will have enough cash on hand to cover the difference between the appraisal and the selling price at closing. If the buyer feels confident that the value is there for her — despite the appraisal — she can simply add cash to the down payment, and the lender should be satisfied.

3. Meet in the middle

If both parties still want the sale to go through, it could make sense to split the difference, with the seller dropping the price a bit and the buyer adding cash to the down payment.

For example, if the difference between the sales price and the appraised value is $10,000, the seller could lower the price by $5,000 and get the buyer to bring another $5,000 to closing. This solution depends entirely on the relative willingness and financial positions of the two parties.

4. Challenge the appraisal

This option is a bit of a long shot. Only the appraiser’s client — the lender — can demand a review of the appraisal, and only the buyer can request a review or a second appraisal.

As the seller, you can support the buyer in this effort by sharing the competitive market analysis that you received from your agent or by giving her the results of an independent appraisal, if you have one. You also can offer to split the cost of a second appraisal if the lender agrees.

This route has long odds because the decision is ultimately up to the lender, and the lender doesn’t have the same investment in the transaction that the buyer and seller have. If the lender doesn’t have a compelling reason to doubt the appraisal, then that tends to be the end of the line. (In my experience, only a small percentage of these requests are granted.)

5. Put the house back on the market

If the buyer can’t or won’t put more money down, and you’re not interested in reducing the price, you can take your chances by allowing the deal to fall through and putting the house back on the market.

This can be disappointing to everyone involved. But if you’re in this situation because multiple offers brought the offer price above the asking price, then it might not be a bad way to go. You could get lucky and receive a cash offer when your agent relists the home. In that scenario, the appraisal won’t be an issue. Plus, even without the cash offer, another lender’s appraiser could have a more favorable point of view.

When considering scrapping your deal, don’t forget that at this point your house has been off the market for several weeks and you’re putting yourself that much farther from a closed sale.

This is where your agent is especially helpful. Your agent understands what the market is doing and can clarify your options so you can make the best decision for that moment.