Understanding Your Home Inspection

If you’re going to spend this much money on something, you want to know exactly what you’re getting. A home inspection is a great way to ensure the largest investment of your life, your home, is worth buying. From the roof to the foundation, a home inspector’s report should cover the overall condition of the home.

How to Get a Home Inspection

The home inspection usually comes after the purchase agreement is signed. Both parties want to make sure they have agreed on a price before anyone spends money on the inspection, which can range anywhere between $350-600 in Washington, depending on the size of the property.

Here are a few of the main areas a home inspector will be checking:

  • They should look for any cracks, dents, or leaks in the foundation, floors, walls, ceilings, siding, windows, doors, and the roof.
  • Inspectors are trained to check the condition of cables, conductors, and panels. They’ll also note the number of installed light fixtures, switches, and outlets.
  • The inspector should check out all the faucets, drains, and pumps. They’ll document things like poor water pressure and corrosion, as well as the age and condition of the water heater.
  • Inspectors will usually note the age and energy rating of furnaces and air conditioners. However, not all inspectors will check solar heating and air conditioning systems.

What to do with the results

It’s unlikely that the home inspector’s report will come back with a perfect score. If you find the damages to be too bad, you still have time to back out of the deal. If not, you can ask the seller to fix it before closing or negotiate a lower purchase price.

Either way, a home inspection is going to give you a better idea of the condition of a home, allowing you to make a better-informed decision to either move in or continue your search for the perfect Washington home.

If you are looking for a home in Washington, give me a call at 360.798.4161 to find out how you can get pre-qualified for a mortgage!

5 Things to Know About Homeowner’s Insurance

Your home is one of the most significant investments you’re likely to make, and it’s important that you are able to protect it. Homeowner insurance is a way to safeguard your home against any potential damage. Here are a few essential things you need to understand about your homeowner’s insurance:

  1. Be aware of exclusions to your coverage

You don’t want to wait until after a Washington storm to find out your homeowner’s insurance doesn’t cover flood damage. Stay up to date on what your policy will cover, so you don’t get caught off guard when disaster strikes.

  1. Look for limitations on your claims

Many policies put a cap on the amount that they will put forward for stolen items unless you insure them separately. When you invest in expensive items, such as fine jewelry or art, know whether you should have a separate rider.

Your policy should have a declarations page that summarizes the percentages that you can expect back on certain items, depending on their value at the time of your claim. If an insurance policy has low limits, you may want to keep shopping around.

  1. Understand replacement cost

The replacement cost will come in handy if your home becomes destroyed due to unpredicted circumstances. These funds can be used to rebuild your home and restore it to original quality.

The key words here are “unpredicted circumstances” – your policy won’t cover purposeful damages!

  1. Understand actual cash value

Your actual cash value will be the reimbursement you receive for damaged belongings after depreciation, meaning your insurance provider will take into consideration the age and condition of your claimed items.

Ease any future heartbreak by coming to terms with not coming out even when it comes to insurance.

  1. Understand liability

In most cases, your homeowner’s insurance will back you up on any medical or legal costs if you are ever sued for accidents that happen on your property. However, you will want to make sure your policy allows for a large enough reserve to handle any worst-case scenarios.

If you are looking for a home in Washington, give me a call at 360.798.4161 to find out how you can get pre-qualified for a mortgage!

Terms to Watch for in a Purchase Contract

A purchase agreement is a legally binding contract that is signed by homebuyers and sellers that confirms that all parties agree on the purchase price, closing date, and other terms.

Reviewing your purchase contract is crucial as it contains relevant information including how much you’re paying, when you are to pay it, under what conditions you can back out, and more. While it can vary, there are certain things you will want to be familiar with when purchasing your Washington home.

Settlement Date

Also known as your closing date, your settlement date will be the day that all involved parties will meet and officially make the sale. This date is usually negotiated by you and the seller.

When choosing a date, make sure to give yourself plenty of time to fulfill the home inspection, appraisal, and any other contingencies. If you fail to meet the obligations in the purchase agreement by the settlement date you may risk losing the sale.

Possession Date

The possession date is the day when you can actually move into your new home. In general, this day is 30 to 45 days after the closing date but can be as little as the day of.

This date is negotiable and can affect the strength of your offer. For instance, if the seller is still living in the home, allowing a few weeks (or even months) for them to find a new place could make your bid more attractive.

Earnest Money

Earnest, or “good faith,” money is the money the home buyer commits to completing the sale to show the seller that they are serious about buying the home.

A purchase contract will require you to put some money upfront in the form of an Earnest Money Deposit (EMD). This amount is negotiable between both parties and is usually 1-2% of the purchase price. Once accepted, the money is generally held by a title company to be used as credit towards your down payment and/or closing costs. The amount of your EMD may play an important role, especially if the home is receiving many offers.

Fixtures and Appliances

It’s important not to assume anything when purchasing a home. If you’re expecting the home to come with the refrigerator, oven, washing machine or more, these items should be included in the purchase contract.

Contingencies

To continue with the home buying process, you may have a few contingencies listed in your purchase contract such as selling a property you already own, getting a home appraisal, inspection or mortgage approval. Contingencies will protect you by allowing you to back out of a sale if something doesn’t feel right, usually without losing your earnest money deposit.

While you should review the entire purchase contract when purchasing your home, these are a few key points that you are guaranteed to see.

If you are looking for a home in Washington, give me a call at 360.798.4161 to find out how you can get pre-qualified for a mortgage!

Are You Ever Too Old to Get Approved for a Mortgage?

Many retired folks in Washington want to downsize into the upgraded home of their dreams or refinance for some extra cash for retirement. I want you to know that nobody is ever too old to qualify for a mortgage loan.

Age is, by law, not a factor in loan approval. As a lender, I will never discriminate against a borrower because of age. In my eyes, age is just a number.

Eagle Home Mortgage offers a financing option for homebuyers age 62 and older. It gives you the funds you need to buy your dream home.

TAP INTO YOUR HOME EQUITY

The Home Equity Conversion Mortgage (HECM) is different than a traditional mortgage. The HECM loan allows you to waive your monthly mortgage payment, increasing the cash in your pocket. You are still responsible for the maintenance of the property, as well as the payment of annual property taxes and homeowner’s insurance. You retain ownership of the home as long as you reside there. The loan is due when you move and/or sell the home.

A HECM loan can help you:

  • Consolidate debts
  • Refinance mortgage debt
  • Give you extra cash
  • Fund large purchases like a new car
  • Give financial support to a college age child or grandchild

This loan is available for all single-family homes, townhomes, and Federal Housing Administration (FHA)-approved condos nationwide, including our state of Washington. Vacation homes or investment and rental properties are not included, the home you buy must be your primary residence.

Ask me if a reverse mortgage makes financial sense for you!

5 Tips for First Time Homebuyers

Buyers save for many years before they are able to purchase a home. If you’re like these first time homebuyers, it is important to be ready for the loan process and to do your research. You’ve put a lot of time and money into taking this next big step in your life. I’m here to help you by letting you in on these 5 common mistakes—so you don’t make them too!

According to a survey by Trulia, close to 50 percent of fist time homebuyers in the U.S. experience unforeseen disappointments about certain aspects of their new home. My job is to ensure that you don’t have any regrets about the purchase of your home. A little preparation can prevent that from happening to you. Here are 5 tips that I give to my first time homebuyers:

Ask me more questions!

A lot of firsttime home buyers are apprehensive about asking questions. Don’t be afraid to ask me too many questions! I will do my part to take the time to understand you and your financial situation before suggesting loan options. But don’t hesitate to ask me questions in addition to my suggestions. Ask me about all of the loan options available to you, so that you know you’re getting the best deal. Here are great examples of the questions you should ask me or any lender:

  • What is the interest rate?
  • What are the lender fees?
  • What is the minimum down payment to qualify?
  • What kind of loan is it, and what are the pros and cons of each type?
  • How long will the loan process take?

Take the time you need but not too long!

Many first time buyers don’t make the decision quickly enough to close the deal. I know that deciding on your dream home in Washington is not a choice that you can make easily, but keep in mind that other buyers will be interested in the home you choose. Properties remained on the market for about 27 days in July 2018.[1] But a little over half of homes were sold in less than a month![2]

FIRST TIME HOMEBUYERS GUIDE

Make sure you’re working with an experienced real estate professional.

Buying a home comes with complicated forms that first time homebuyers have never previously encountered. A good real estate agent can explain every step of the process and how to fill out each form correctly. Their experience is worth investing in. A real estate professional can also guide you when ready to make an offer on your new home.

Calculate your offer before you make it or risk losing your dream home.

Based on how long the house has been on the market, you must gauge what the seller is willing to accept. In this stage, it is especially important to research prior to making an offer. Compare the property you want with alike homes in the area. Then, make your best offer first.

Think about the resale before you buy.

It may seem far away, but the average first time buyer lives in their home for about 11 years.[3] Consider the location, age, and size of the home before you buy to determine if it’s up to par with what you want to sell it for in the years to come.

Consider these 5 tips to ensure a great start to your home buying process in Washington. If you have any additional questions, please contact me at theresaspringer@eaglehm.com or visit eaglehm.com/theresaspringer to pre-qualify today!

Sources

[1] https://www.nar.realtor
[2] https://www.nar.realtor
[3] http://nahbclassic.org

If you are looking for a home in Washington, give me a call at 360.798.4161 to find out how you can get pre-qualified for a mortgage!

Into the Breach – The Equifax Hack

Everyone has already heard about the Equifax breach from May 2017-July 2017.   The news makes it sound like not ALL adults in the US have been affected, well this is simply wrong.  If you have ever had a credit profile, you are at risk.  Even if you are cash based now.  The credit bureaus hang on to all our info regardless if you see it on your report or not.  So, just like everyone has said – freeze your credit right now.  It is a pain and will cost you when you need it unfrozen; however, it is the only way to protect your credit.

The other aspect of this which NO ONE is reporting on is your federal tax returns.  This is just as big of an issue as the credit side.  Not many folks have heard of fraudulent tax returns yet it does happen and is increasing in how often it happens.  How this works is someone takes your social security info, address etc. and literally files a fake tax return with W-2’s or other fraudulent supporting documentation and then gets a refund.  Mind you they do not take YOUR refund they are creating their own refund scenario.

So, not only do you need to watch your credit, you also need to watch your tax returns too.  From my perspective, this is also a big issue since we have to verify your W-2’s and tax returns with the IRS directly.  Many of you know we order transcripts (You sign a form called the IRS 4506) to compare the returns and W-2’s that you have provided so we know there is no fraud going on and that we have the accurate data when selling the loan.  If you have had fraudulent returns filed, that goes out the window and now you must do this yourself since we and anyone else requesting info is locked out and it is done via the phone with the IRS.  You cannot “unfreeze” your returns, it is blocked and that is that.  This may have as large if not larger impact on you financially and cause serious pain and frustration when trying to get it corrected.  Here are some handy links on this topic: